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Income Tax Appellate Tribunal, KOLKATA BENCH ‘B’, KOLKATA
Before: Shri Rajesh Kumar & Shri Sonjoy Sarma]
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘B’, KOLKATA [Before Shri Rajesh Kumar, Accountant Member & Shri Sonjoy Sarma, Judicial Member] I.T.A. No. 915/Kol/2023 Assessment Year : 2016-17 Seikh Abubakkar Warish vs PCIT, Asansol PAN: AAQPW 2644 C Appellant Respondent Date of Hearing 19.02.2024 Date of Pronouncement 15.05.2024 For the Assessee Shri Bisweshwar Ghosh, AR For the Revenue Shri Abhijit Kundu, CIT, DR ORDER Per Sonjoy Sarma, JM: The captioned appeal filed by the assessee is against the order dated 09.03.2021 passed u/s 263 of the I.T. Act by ld. PCIT, Asansol for A.Y. 2016-17.
At the outset, we find that there is a delay of 846 days in filing of the appeal by the assessee. We after perusing the petition for condonation are convinced that the assessee was prevented by sufficient cause from filing the appeal in time and hence delay is condoned and appeal is admitted.
Brief facts of the case are that assessee filed his return of income for the A.Y. 2016-17 on 21.10.2016 declaring total income of Rs. 3,27,460/-. The case of the assessee was selected for scrutiny regarding (a) whether sales turnover/receipts has been correctly offered for tax and (b) whether deduction claimed on account of depreciation is admissible followed by notices issued u/s 143(2) and 142(1) of the Act. In response to the
2 ITA No. 915/Kol/2023 AY: 2016-17 Seikh Abubakkar Warish notices, ld. AR of the assessee appeared time to time before the AO. During the scrutiny proceeding, it transpired from ITS detail that there is mismatch of TDS of Rs. 3,081/-corresponding income of Rs. 3,08,109/- credited from Radhakrishna Construction. In this regard, query was made from the AO and the assessee has not claimed TDS of Rs. 3,081/- in return of income. Accordingly, same is not allowed to be credited in assessee’s account. Thereafter, the ld. AO assessed the same income as returned by the assessee. Immediately after framing of the assessment, the ld. PCIT in exercise of power u/s 263 of the Act. On examination and verification of the assessment record, it was observed that the scrutiny was completed at an assessed income of Rs. 3,27,460/- as against return income of Rs. 3,27,460/-. The ld. PCIT found that the assessee had claimed depreciation of Rs. 5,95,050/- on the total assets worth Rs. 85,83,756/- and net block is mentioned therein at Rs. 79,88,706/-. Also from the schedule DPM of the said ITR-4 found that addition of Rs. 24,97,000/- had been made during the year on which depreciation at half rate has been claimed by the assessee. Therefore, the total written down value on the last day of the F.Y. 2014-15 has been disclosed at Rs. 26,36,950/-. However, from the ITR-4 filed for A.Y. 2016-17 notice that the assessee had claimed depreciation of Rs. 23,06,598/- on the total assets worth Rs. 1,20,98,618/- mentioning the net block at Rs. 97,92,020/-. He also noticed that the schedule DPM of the said ITR-4, it is seen that opening WDV is given as Rs. 79,88,706/- and addition of Rs. 41,09,912/- had been made
3 ITA No. 915/Kol/2023 AY: 2016-17 Seikh Abubakkar Warish during year on which depreciation at half rate had been claimed. Further, as per statement of fixed assets as on 31.03.2015, came to his knowledge that the assessee had purchased an excavator of Rs. 47,10,000/- but failed to disclose the same. The view of the ld. PCIT is that submission of the assessee in course of assessment was incomplete and not supported by any documentary evidence. Therefore, the assessment order has been passed by AO without making any enquiry or verification which needed to be made. In this regard, a show cause notice u/s 263 of the Act was issued vide letter dated 08.02.2021 to the assessee. In response to the said notice, the assessee furnished written submission on ITBA portal in following manner:
“Excavator Machine: In this regard | would like to clarify that the excavator machine was purchase on 17/03/2015 from Suchita Millenium Projects Pvt. Ltd. So, the depreciation did not claim during the A.Y 2015- 16 for the non-use of this machine. Therefore, in schedule DPM it was not shown. But in schedule BS in the row of Net block' total asset has shown of Rs. 79,88,706/-[including Rs. 47,10,000/-1 There was no undisclosed asset during the A.Y 2015-16 as in balance sheet of ITR total shown.
For the evidence of purchase of excavator machine, supporting bill has attached in the attachment box.
Other vehicles:-
TATA LPK 2516 tipper (WB 41D0586) Chassis no. 396522CR208722, Engine No. 80c62663431. This tipper was purchase on 14/05/2008 and depreciation did not claim during the A.Y. 2015-16 because of non-use of above mentioned tipper. Supporting bill as an evidence of purchase has given in the attachment. Later on this tipper with same chassis number and same engine number has
2.TATA LPK 2516 tipper (WB 41D2447) Chassis no. 396522FRZ307170, Engine No. 80F62690755. This tipper was purchase on 31/07/2008 and
4 ITA No. 915/Kol/2023 AY: 2016-17 Seikh Abubakkar Warish depreciation did not claim during the A.Y. 2015-16 because of non-use of above mentioned tipper. Supporting bill as an evidence of purchase has given in the attachment. Later on it sold to Md Arif with same chassis number and same engine number. [Supporting bill attached]
3.C. TATA LP/1613/42 (WB15A7696), Chassis No.MAT38834291 N28368, Engine No. 90L62809549. The actual Reg no. of this TATALPT truck is WB15A7696 which was mistakenly wrote as WB13A9696. This absolutely a clerical mistake. The truck was purchase on 04/01/2010 from Bhandari Automobiles Pvt. Ltd. The depreciation also not taken during the A.Y. 2015-16because of non-use of this truck. Supporting bill as an evidence of purchase has given in the attachment. Later on it sold to Dilip Saha with same chassis number and same engine number. [Supporting bill attached]
TATA LPT/1613/TIPPER( WB41G0326): Chassis no. MAT373089C2E10722, Engine No. 697TC69EXY111386. This tipper was purchase on 31.08.2012. Supporting bill as an evidence of purchase has given in the attachment. Later on it sold to Sudip Pan with same chassis number and same engine number. Supporting bill as an[Supporting bill attached]
Therefore, it is my humble requests before your honour kindly go through all details documents and give relief at your earliest convenience. " 4. However, ld. PCIT on submission made by assessee did not find any merit therefore while passing revisionary order observed that the assessee had claimed depreciation of Rs.5,95,050/- on the total assets worth Rs. 85.83,756/- and Net Block is mentioned therein at Rs. 79,88,706/-,Also, from the schedule DPM of the said |TR-4 it is seen that addition of Rs. 24,97,000/- has been made during the year on which depreciation at half rate for period of less than 180 days has been claimed. Thus, total WDV(written down value) on the last day of the F,Y2014-15 has been disclosed at Rs.26,36,950/-, However, from the ITR-4 filed for A.Y. 2016-17, it is seen that the assessee had claimed depreciation of Rs. 23,06,598/- on the total assets worth
5 ITA No. 915/Kol/2023 AY: 2016-17 Seikh Abubakkar Warish Rs.1,20,98,618/- and Net Block is mentioned therein at Rs. 97,92,020/-. Also, from the schedule DPM of the said ITR-4 it is seen that opening WDY is given as Rs.79,88,706/- and addition of Rs, 41,09,912/- has been made during the year on which depreciation at half rate for period of less than 180 days has been claimed. Thus, total WVD on the last day of the F.Y 2015-16 has been disclosed as Rs. 97,92,019/-. Further as per statement of fixed assets as on 31st March, 2015, the assessee was purchased an excavator of Rs. 47,10,000/- but failed to disclose the same. Therefore, Clause (a) and (b) of explanation 2 of section 263(1) are attracted in this case. Thereby he viewed that the order passed by the ld. AO in the instant case was erroneous so far as prejudicial to the interest of revenue.
Accordingly, ld. PCIT set aside the assessment order passed u/s 143(3) to the file of assessing officer with the direction to pass a fresh assessment order considering the observation made by him after giving an opportunity of being heard to the assessee.
Dissatisfied with the above order, assessee is in appeal before this Tribunal against the revisionary order passed by ld. PCIT. The ld. AR submitted that in the course of assessment proceeding, the assessing officer has thoroughly enquired into the issue involved on which the ld. PCIT has initiated proceedings u/s 263 of the Act. Therefore, the allegation of the ld. PCIT that assessing officer failed to look into the issue pointed out by him in the revisionary order or failed to make enquiry in respect of them is totally unfounded and contrary to the material available on record.
6 ITA No. 915/Kol/2023 AY: 2016-17 Seikh Abubakkar Warish 7. On the other hand ld. DR justifying the exercise of power u/s 263 of the Act by the ld. PCIT and submitted that during the assessment proceeding the ld. AO has not enquired into issue on which the revisionary authority has revised the assessment order. He further submitted that due to lack of proper enquiry by the assessing officer, the assessment order not only erroneous but also prejudicial to the interest of revenue. Therefore, the ld. PCIT has correctly exercised his power empowered u/s 263 of the Act.
We have heard the rival submissions of the parties and perused the material available on record. We have also applied our mind to the decision rendered by the parties to the case. We note that ld. PCIT is empowered to exercise his power u/s 263 of the Act on the fulfillment of two conditions cumulatively. First the order sought to be revised must be erroneous and consequently it must be prejudicial to the interest of revenue. Keeping in view, the aforesaid legal position we have to examine the issue on hand. We after examining the fact and material available on record find that alleged issue relating to undisclosed purchase made by assessee relating to excavator machine of Rs. 47,10,000/- as alleged by ld. PCIT while passing the revisionary order has been fully disclosed by the assessee. On this context, the ld. AR stated that the view taken by PCIT is not correct. The ld. AR in order to controvert the fact that he placed before us a paper book containing almost 112 pages and brought to our notice at page no. 55 by showing a statement of fixed asset of the assessee as on 31.03.2015 where serial no. 6 excavator machine has duly shown by the assessee while preparing the statement of accounts. Therefore, the adverse view taken by the ld. PCIT in his order relating to issue as against the assessee is not correct. He, therefore, prayed before the bench to set aside the order passed by ld. PCIT as against the
7 ITA No. 915/Kol/2023 AY: 2016-17 Seikh Abubakkar Warish assessee since the order sought to be revised by the ld. PCIT was not erroneous and prejudicial to the interest of revenue. From the fact, we notice that the assessee has duly shown the fixed asset excavator machine in his statement of fixed assets on 31.03.2015. Therefore, the view taken by ld. PCIT is not correct. Accordingly, we set aside the order of ld. PCIT by allowing the appeal filed by the assessee.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 15.05.2024. Sd/- Sd/-
Rajesh Kumar) (Sonjoy Sarma) Accountant Member Judicial Member Dated: 15.05.2024 Biswajit, Sr. PS Copy of the order forwarded to: 1. Appellant- Seikh Abubakkar Warish, Kanaidanga, Chanchal, Memari-713151. 2. Respondent – PCIT, Asansol. 3. Ld. CIT 4. Ld. CIT(A) 5. Ld. DR