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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: MS. SUCHITRA KAMBLE & SHRI B.M. BIYANI
आदेश/O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by revision-order dated 13.05.2022 passed by learned Pr. Commissioner of Income-Tax, Central, Bhopal [“Ld. PCIT”] u/s 263 of Income-tax Act, 1961 [“the Act”], which in turn arises out of assessment- order dated 23.09.2021 passed by learned ACIT, Central, Gwalior [“Ld. AO”] u/s 143(3) for Assessment-Year [“AY”] 2020-21, the assessee has filed this appeal on the grounds raised in Appeal-Memo.
Heard the learned Representatives of both sides at length and case- records perused. Page 1 of 8
Ghanshyam Rathore Assessment year 2020-21 3. Briefly stated the facts are such that a search u/s 132 was conducted upon assessee on 09.01.2020. Thereafter, the assessee filed return of income which was subjected to scrutiny and the Ld. AO passed assessment- order u/s 143(3). Subsequently, Ld. PCIT examined the record of assessment-proceeding and viewed that the assessment-order passed by Ld. AO is erroneous in so far it is prejudicial to the interest of revenue, which attracts revisionary-jurisdiction u/s 263. The reason of framing such a view, as marshalled from the show-cause notice dated 01.04.2022 issued by Ld. PCIT, is such that the AO has not made verification/enquiries in relation to following issues:
(i) The assessee claimed to have purchased 601.33 grams of jewellery and recorded the same in books of account; hence explained. Although the invoice of jewellery was put on record but no bank statement was found on record. In absence of bank statement, the AO was not justified to accept the jewellery as explained. Further, on perusal of Balance-Sheet, it is seen that the gold amounting to Rs. 24,14,632/- has been recorded as “fixed asset” whereas gold should have been recorded as “investment”. Further, the assessee claimed to have purchased bullion but no details regarding conversion of bullion to jewellery is found on record.
(ii) The assessee has made cash-deposit of Rs. 3,14,78,37/- during demonetization period (09.11.2016 to 30.12.2016). The assessee had explained the opening balance as on 08.11.2016 and further sale of liquor business as source of such deposits and the AO has accepted the assessee’s explanation without making any verification.
By aforesaid show-cause notice, the assessee was asked to explain as to why the assessment-order may not be revised. In response thereto, the assessee filed a detailed reply which is re-produced by PCIT in Para No. 2 of the revision-order.
Ghanshyam Rathore Assessment year 2020-21 5. However, none of those submissions impressed the Ld. PCIT. The Ld. PCIT further observed that since the section 263 has been amended and Explanation 2, as reproduced below, had been introduced therein, the assessment-order is deemed to be erroneous-cum-prejudicial to the interest of revenue if the same had been passed without inquiries or verification which should have been made:
“Explanation 2 – “For the purpose of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interest of revenue, if in the opinion of the Principal Commissioner or Commissioner - (a) The order is passed without making inquiries or verification which should have been made; (b) The order is passed allowing any relief without inquiring into the claim; (c) …. (d) …”
Finally, Ld. PCIT concluded that there was a complete lack of enquiry on the part of AO; therefore the assessment-order is erroneous in so far as it is prejudicial to the interest of revenue. Accordingly, he passed revision- order u/s 263 whereby the assessment-order was set aside and AO was directed to re-do assessment.
Aggrieved by such revision-order, the assessee has filed this appeal.
By means of various grounds raised in Appeal Memo which are not being reproduced for the sake of brevity, the appellant-assessee requires us to adjudicate whether or not the revision-order passed by Ld. PCIT u/s 263 is valid in the eyes of law?
Submission of Ld. AR:
Ld. AR made strong submissions with respect to the twin-issues raised by Ld. PCIT. We sum up the submissions of Ld. AR as under:
Ghanshyam Rathore Assessment year 2020-21 (i) Regarding the issue of 601.33 grams of jewellery accepted by Ld. AO as explained, Ld. AR carried us to Page No. 128 to 138 of the Paper-Book where a notice dated 23.07.2021 issued by AO u/s 142(1) in placed.
Referring to Para No. 4 of the Annexure to this notice, Ld. AR demonstrated that the AO raised a specific query to the assessee to explain the sources of jewellery. Thereafter, Ld. AR carried us to Page
No. 150 to 152 of the Paper-Book where the reply filed by assessee is placed in which the assessee has clearly explained to AO that he purchased 601.33 grams of gold bullion through invoice dated
02.12.2019 from M/s Divya Diamond. Thereafter, on Page No. 152 of the Paper-Book, the copy of invoice is also placed. Ld. AR demonstrated that the said invoice is issued by M/s Divya Diamond which is a registered dealer under VAT and the invoice contains complete details such as Invoice No., date, seller’s details, assessee’s details as buyer, description of goods as gold bullion, quantity which is 601.330 grams, rate, amount, SGST and CGST charged by seller, etc.
Then, the Ld. AR carried us to Page No. 153 to 154 of the Paper-Book where another reply dated 27.08.2021 filed by assessee is placed. He referred to Page No. 154 where the copy of bank statement filed by assessee is placed. He pointed out that the said bank statement prominently contains “Bank of Maharastra”, A/c No., Branch Code
No., and date-wise transactions from 21.10.2019 to 31.03.2020 of assessee. He submitted that the payment of Rs. 24,14,632/- made by Ghanshyam Rathore Assessment year 2020-21 assessee to M/s Divya Diamonds against the impugned purchase- invoice through cheque No. 32441 is clearly mentioned in this statement on 21.01.2020. He submitted that there is no fallacy in the bank statement. Then Ld. AR carried us to the audited Balance-Sheet of assessee as on 31.03.2020 placed at Page No. 121 to 127 of the Paper-Book. Referring to Page No. 125, he submitted that the assessee has shown gold of Rs. 24,14,632/- in the schedule of “Fixed Asset”. He submitted that it does not make any difference as to whether the same is shown as “fixed asset” or “investment” as long as the same is clearly appearing in the Balance-Sheet. With these submissions, Ld. AR strongly contested that during the course of assessment-proceeding, the AO has raised queries to the assessee qua the jewellery; the assessee has filed all details/documents; and thereafter considering the same consciously and elaborately, the AO has accepted the jewellery as explained but the Ld. PCIT wants to substitute his own view in place of AO’s assessment, which is not correct.
(ii) Regarding cash-deposits in the bank a/c during demonetisation period from 09.11.2016 to 30.12.2016, Ld. AR submitted that the present revision-action relates to AY 2020-21 and the deposits alleged by Ld.
PCIT were made during 09.11.2016 to 30.12.2016 relevant to AY
2017-18 which is totally unrelated to the AY 2020-21 under consideration before us. Therefore, this issue has been wrongly tagged in the revision-proceeding.
Ghanshyam Rathore Assessment year 2020-21 Submission of Ld. DR:
Per contra, Ld. DR strongly supported the revision-order. He emphasized that the bank statement is a simple excel file and not in printed format of bank. He further submitted that the assessee has filed invoice of purchase of gold bullion but no evidence for conversion of bullion into jewellery is filed. He argued that the AO has accepted the assessee’s version without proper verification or application of mind. Ld. DR submitted that the action of Ld. PCIT is very much in consonance with the mandate of section 263 and must be upheld.
Our analysis:
We have considered rival submissions of both sides and perused the case records in the light of provision of section 263. After a careful consideration, we find that in the present case, the Ld. AO has conducted sufficient enquiries qua the jewellery and the assessee has given a thorough explanation in writing. Thus, there cannot be any doubt qua the enquiry conducted by AO. Regarding additional concern raised by revenue- authorities that the bank statement filed by assessee is in the form of plain excel sheet and not in a printed format of bank, firstly we find that the bank statement prominently contains the details such as “Bank of Maharastra”, A/c No., Branch Code No., and date-wise transactions from 21.10.2019 to 31.03.2020 of assessee. Further, the transactions contain cheque numbers.
We also observe that there is nothing alarming in the bank statement, brought on record by revenue, which could reveal that the bank statement or entries therein are fake. In any case, if the PCIT had any doubt on the bank- statement submitted by assessee, he could have carried out a simple
Ghanshyam Rathore Assessment year 2020-21 verification directly from bank also but the same was not done. Regarding next concern that no evidence is filed by assessee with regard to conversion of bullion into jewellery, it is very practical that often persons do not keep such evidences. In any case, during the search-proceeding, the authorities have not found any gold bullion in possession of assessee apart from the jewellery, then its logical to accept that the impugned jewellery is sourced/made from purchased-gold. Finally, we also agree to the submission of Ld. AR that during the course of assessment-proceeding, the AO has raised queries to the assessee qua the jewellery; the assessee has filed all details/documents; and thereafter considering the same consciously and elaborately, the AO has accepted the jewellery as explained but the Ld. PCIT wants to substitute his own view in place of AO’s assessment, which is not correct. Regarding another issue of bank-deposit during demonetisation period, we are in very much agreement with the submission of Ld. AR that the said issue does not relate to AY 2020-21 under consideration and it has been wrongly tagged in revision-proceeding.
In view of above discussions and for the reasons stated therein, we are of the considered view that in the present case, the assessment-order cannot be said to be erroneous-cum-prejudicial to the interest of revenue. Therefore, the revision action taken by Ld. PCIT u/s 263 is not warranted. Hence, we are inclined to quash such revision-order and restore the original assessment-order. Ordered accordingly.
Ghanshyam Rathore Assessment year 2020-21
Resultantly, this appeal of assessee is allowed.
Order pronounced as per Rule 34 of I.T.A.T. Rules, 1963 on / /2023
Order pronounced in the open court on 18/04/2023