ITO, WD-43(4), KOLKATA, KOLKATA vs SRI RITESH KUMAR BOYED, KOLKATA

Income Tax Appellate Tribunal, “D” BENCH: KOLKATA

Hearing: 06.09.2017Pronounced: 20.09.2017

ORDER Per Shri A.T.Varkey, JM Both these appeals filed by the revenue are against the separate orders of Ld. CIT(A)- 13, Kolkata dated 29.04.2015 for AYs 2006-07 and 2008-09. Since the issues are common and facts are identical, we dispose of both these appeals by this consolidated order for the sake of convenience and brevity.

Briefly stated facts of the case are that the assessee is an individual filed his return of income for AY 2006-07 on 31.10.2006 declaring total income of Rs.2,28,726/- which was processed u/s. 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) on 28.09.2007. Subsequently, there was a survey u/s. 133A of the Act had been conducted on 25.01.2008 and certain books of accounts and documents were impounded. Based on the material found in the course of survey, proceedings u/s. 147 of the Act were initiated by issue of notice u/s. 148 of the Act on 27.11.2009. Thereafter, the assessment was completed u/s. 143(3)/147 of the Act on 30.12.2010 computing the total income of Rs.2,67,440/-. Subsequently, the assessment was set aside by the CIT, Kolkata-XIV on 25.03.2013 in the order passed u/s. 263 of the Act with a direction to pass a fresh assessment order after 2 & 978/Kol/2015 Ritesh Kumar Boyed, AYs 2006-07 & 2008-09 examining the evidences and documents in respect of the issues raised and mentioned in the said order. Against the said order passed u/s. 263 of the Act by the CIT, the assessee preferred appeal before the Tribunal; and Tribunal vide its order dated 15.01.2016 quashed the order of CIT by observing as under:

“12. In the light of observations made by the Coordinate bench of this Tribunal, we are of the view that the CIT did not make any specific observation as to how the order of the AO is erroneous and prejudicial to the interest of Revenue as it is a condition precedent to invoke the jurisdiction under section 263 of the Act. Therefore, in the absence of such observation, the impugned order before us is not in accordance wi6th law. Thus, we quash the order of CIT and the grounds raised by the assessee are allowed.” Before the Tribunal quashed the CIT’s order passed u/s. 263 of the Act, on 25.03.2014, the AO passed the order giving effect to the order of the ld. CIT passed u/s. 263 of the Act, which was challenged by the assessee before the Ld. CIT(A), who gave partial relief to the assessee. Aggrieved, the revenue is in appeal before us on the following grounds: “1. During the course of assessment proceeding additions were made of Rs. 11,49,213/- on account of Gross Profit by calculating Gross Profit @17% On the basis of impounding documents vide I.D Marks SM-16 where sales for the period from 01.04.2005 to 31.08.2005 amounting to Rs. 63,51,875/- which was not disclosed in the audited accounts but admitted in reply to show cause notice by the assessee. Purchase in relation to the said sale for the period from 01,04.2005 to 31.08.2005 which was not disclosed in the audited accounts but admitted in reply to show cause notice by the assessee to Which comes to Rs. 54,28,953/- by calculating G.P. rate 17% .

2. Since the assessee had failed to explain the purchase relating to the undisclosed sale of Rs.63,51,875/- , treating the unexplained investment in purchase deem to be income of the assessee u/s. 69 of the I.T. Act 1961 by applying G.P rate of 17% of undisclosed sales the undisclosed purchase arrived at Rs. 54,28,953/- and added back to the total income of the assessee.

3. The discrepancy in sales as per impounded books vide I.D Marks No SM-16 is amounting to Rs.2,26,293/- . Considering the G/P rate @17% , the purchase in respect of the sale comes to Rs. 1,93.413/- is added back to the total income of the assessee. 4.Considering G.P rate @17% on account of sale of Rs. 2,26,293/- which comes to Rs. 32,880/- treated as unexplained/ undisclosed purchase and added back.”

We have heard rival submissions and gone through facts and circumstances of the case. At the outset, Ld. Counsel for the assessee brought to our notice that the impugned order passed by the Ld. CIT(A) dated 29.04.2015 emanates from the order of the AO which was passed giving effect to the 263 order of the Ld. CIT dated 25.03.2013 for AY 2006-07. The order of the Ld. CIT dated 25.03.2013 was challenged by the assessee before the 3 & 978/Kol/2015 Ritesh Kumar Boyed, AYs 2006-07 & 2008-09 Tribunal; and the Tribunal vide order dated 15.01.2016 in ITA No.2299/Kol/2013 for the relevant AY 2006-07 was pleased to allow the appeal of the assessee and quashed the order passed by the Ld. CIT u/s. 263 of the Act (supra). We note that the AO while giving effect to the order of the Ld. CIT passed u/s. 263 of the Act dated 25.03.2013 has passed the reassessment order dated 25.03.2014 which was challenged by the assessee before the Ld. CIT(A); and the Ld. CIT(A) partly allowed the appeal of the assessee. Against the said action of the Ld. CIT(A) the revenue is before us. We note that since the impugned order of the Ld. CIT(A) emanates from the order of the AO giving effect to the order passed u/s. 263 of the Act of the Ld. CIT and the order of ld. CIT has been quashed, all consequential actions of the AO stand null and void in the eyes of law and, therefore, the impugned order of the Ld. CIT(A) also is a nullity in the eyes of law and, therefore, we dismiss the appeal of the revenue.

Likewise for AY 2008-09, the AO has passed the order dated 25.03.2014 giving effect to the order of the ld. CIT dated 25.03.2013 which has been quashed by the Tribunal vide order dated 08.07.2016 in ITA No. 2300/Kol/2013, therefore, all consequential actions taken by the AO stand null in the eyes of law, therefore, the impugned order of the Ld. CIT(A) is null in the eyes of law and, therefore, the revenue’s appeal is also dismissed. 5. In the result, both the appeals of revenue are dismissed. Order is pronounced in the open court on 20.09.2017 Sd/- Sd/- (Dr. A. L. Saini) (Aby. T. Varkey) Accountant Member Judicial Member Dated : 20th September, 2017 Jd.(Sr.P.S.) Copy of the order forwarded to:

1. 1. Appellant – ITO, Wd-43(4), Kolkata 2 Respondent – Shri Ritesh Kumar Boyed, (Surendra Motors), 110/108, B. T. Road, Kolkata-700 108.

3. The CIT(A), Kolkata 4. CIT , Kolkata 5. DR, Kolkata Benches, Kolkata /True Copy, By order,

Sr. Pvt. Secretary

ITO, WD-43(4), KOLKATA, KOLKATA vs. SRI RITESH KUMAR BOYED, KOLKATA