Shri Vipan Khanna v. Commissioner Of Income Tax & Another

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.394 of 2010 Date of decision: 26.8.2010 Shri Vipan Khanna. Vs. Commissioner of Income Tax & another. -----Appellant. -----Respondents CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Akshay Bhan, Advocatefor the appellant. for the appellant. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the assesseeunder Section 260-A of the Income Tax Act, 1961 against theorder dated 24.7.2009 in I.T.A. No.258/ASR/2009 passed by theIncome Tax Appellate Tribunal, Amritsar for the assessment year2001-02, proposing to raise following substantial questions oflaw:- “i) Whether in the facts and circumstances of thepresent case, the ld. ITAT has erred in concludingthat the CIT had not verified the genuineness of thedocuments supplied by the appellant, when the CIThad in detail examined the same?present case, the ld. ITAT has erred in concludingthat the CIT had not verified the genuineness of thedocuments supplied by the appellant, when the CIThad in detail examined the same? ii)Whether in the facts and circumstances of thepresent case, the ld. ITAT has erred in ignoring thepresent case, the ld. ITAT has erred in ignoring the fact that the appellant assessee was following amercantile system of accounting? iii) Whether in the facts and circumstances of thepresent case, the ld. ITAT has erred in remanding tothe CIT an issue which was not a part of the remandorder and had never been agitated?present case, the ld. ITAT has erred in remanding tothe CIT an issue which was not a part of the remandorder and had never been agitated? iv) Whether in the facts and circumstances of thepresent case, the ld. ITAT has erred in remandingthe entire matter to the CIT for fresh consideration?present case, the ld. ITAT has erred in remandingthe entire matter to the CIT for fresh consideration? 3. The assessee is a carriage contractor and claimedexpenses in the course of execution of the contract. TheAssessing Officer held the expenses to be inflated or bogus andmade additions, which was upheld by the CIT(A). On furtherappeal to the Tribunal, reliance was placed on certain documentsand on consideration thereof, it was thought proper to remand thematter to the CIT(A). Since the CIT(A) failed to deal with thematter in terms of order of remand, the Tribunal once againremanded the matter for fresh decision. The Tribunal held asunder:- “13. We have heard both the parties and perusedmaterial on record. In this case, originally, this wasset-aside to the file of CIT(A) by the Tribunal videorder dated (supra) for fresh consideration on thereason that the documents produced by the assesseedoes not inspire confidence, inasmuch as, havinggone through it. Further, even the vouchers filed bythe assessee do not seem to be of much value. “13. We have heard both the parties and perusedmaterial on record. In this case, originally, this wasset-aside to the file of CIT(A) by the Tribunal videorder dated (supra) for fresh consideration on thereason that the documents produced by the assesseedoes not inspire confidence, inasmuch as, havinggone through it. Further, even the vouchers filed bythe assessee do not seem to be of much value. These vouchers did not contain the complete detailsof the payees or even the truck number. The mainpurpose of set aside to carry out the examinationrelating to the genuineness of the payment vouchersand appraisal of the contract agreement. In thecourse of set aside proceedings, the CIT(A) has notcarried out the enquiry in the true perspective. TheCIT(A) given the finding that the assessee providingdetails of 287 trucks supplied to army authoritiesalongwith truck no., names of drivers, date ofunloading, licence no. of the drivers and the itemscarried with quantity. The question involved is notthese details. The question is genuineness of thesedetails. The CIT(A) requires to go beyond thedocuments to find out the real intention of the parties.Usually, one will proceed on the basis of professedintention, but if that is under doubt or disputed orchallenged, then one has to find out the real intentionof the parties by ignoring the apparent has to be, andhas always been conceded. The CIT(A) actuallyrequired to see whether it is a make believearrangement or dubious or colourable device foradopted by the assessee. The CIT(A) is required toexpose the real intention of the party and if theintention is discovered as genuine, then it should begiven effect otherwise if it is discovered to be themeans to evade the tax, it cannot be acted upon. Theassessee is free to prepare the vouchers and accountthe same in the books of account, but the authorityconcerned should examine it properly when the issueis challenged before the higher authorities. The Ld.CIT(A) appeal cannot remain passive in the fact ofdocuments filed by the assessee, which is apparently in order but call for further enquiry. It is the duty of theCIT(A) to ascertain truth of the facts of the casestated by the assessee when the circumstances of thecase are such as to provoke an enquiry. As in thiscase, the Tribunal on first occasion directed the Ld.CIT(A) to carry out fresh examination. It is incumbenton the part of the ld. CIT(A) to investigate the factsstated in the various documents produced by theassessee when the circumstances would make suchan enquiry prudent. The order of the Ld. CIT(A) isincorrect because such enquiry has not been madeand the ld. CIT(A) is not justified in passing orderwithout making any enquiry regarding correctness ofthe documents filed by the assessee. Accordingly, theissue is set aside to the file of CIT(A) for freshexamination. In the present case, the CIT(A) notpassed the order in accordance with the directionsgiven by the Tribunal in its order dated 11[th] August,2006. Hence, we set aside the entire issue to the fileof CIT(A) considered the entire issue fresh and at thisstage refrain from going into the merit of othergrounds. The other grounds also require to beexamined by the CIT(A) afresh since these arerelating to freight payable, which issue was also setaside on earlier occasion.” 4. We have heard learned counsel for the appellant. 5. Learned counsel for the appellant states that thematter was earlier remanded and repeated remand, particularly inrelation to applicability of Section 40-A(3) of the Act, was notcalled for. 4. We have heard learned counsel for the appellant. 5. Learned counsel for the appellant states that thematter was earlier remanded and repeated remand, particularly inrelation to applicability of Section 40-A(3) of the Act, was notcalled for. 6. We are unable to accept the submission. TheTribunal has held that genuineness of the documents relied uponby the appellant was required to be gone into by the CIT(A)properly and was not gone into in terms of the earlier remandorder. The issue of applicability of Section 40-A(3) of the Act isan inter-connected issue. In the circumstances, the Tribunal hadthe justification to remand the matter and no prejudice has beencaused to the assessee by the said order. 7. No substantial question of law arises. 8.The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 26, 2010MITTAL )ashwani ( AJAY KUMAR JUDGE