Devendra Bharatbhai Dhabi, , Ahmedabad vs Assessee

आयकर अपील सं./I.T.A. No.3320/Ahd/2014 ( नधा रण वष / Assessment Year : 2010-11) Shri Devendra बनाम/ The CIT-1 Bharatbhai Dhabi Vs. Ambawadi, Ahmedabad 923/4, Mahadev Valo Khancho, Panchbhai Pole Gheekanta Ahmedabad थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AHWPD 2819 H (अपीलाथ /Appellant) .. ( यथ / Respondent)

अपीलाथ ओर से / Appellant by : Shri S.K. Sadhwani, AR यथ क ओर से/Respondent by : Shri O.P. Vaishnav, CIT-DR

ु वाई क तार ख / सन Date of Hearing 27/01/2015 घोषणा क तार ख /Date of Pronounce ment 29/ 01/2015

आदे श / O R D E R

PER SHAILENDRA KUMAR YADAV, JM :

This appeal filed by the Assessee is directed against the order passed u/s.263 of the I.T.Act, 1961 by the ld.CIT-I, Ahmedabad dated 17/10/2014 for the Asst.Year 2010-11. The assessee has raised the following grounds of appeal:-

1. (a) The learned CIT-1, Ahmedabad has erred in law and fact by cancelling the assessment order passed by ITO u/s.143(3) ITA No.3320/Ahd/2014 Devendra Bharatbhai Dhabi vs. CIT Asst.Year - 2010-11 -2-

dtd. 20.12.2012 and directing to make the fresh assessment by passing order u/s.263 dtd. 17.10.2014.

(b) The issue involved in section 263 is common integrated and already decided by Hon.CIT(A)-VI on dt. 08.10.2014. To that extent the order of CIT(A) was merged with the assessment order passed u/s.143(3) by ITO.

(c) Therefore the order passed u/s.263 by Ld.CIT-1 subsequent to passing of order by CIT(A) is unjustified, bad in law and requires to be quashed.

2. The appellant craves a leave to add, alter and/or modify the grounds of appeal.

2. Brief facts of the case are that the assessee is engaged in the business of readymade garments of purchase and sale of cloth in the name of Harikrupa Garment. As per the trading account of Harikrupa Garment, the assessee showed sales of Rs.6,32,281/- and Gross Profit of Rs.90,148/- which comes @ 14.26% and Net Profit of Rs.17,920/-. In addition thereto, the assessee made some purchases through credit cards of Citi Bank, HDFC Bank Ltd., Kotak Mahindra Bank Ltd., ICICI Bank Ltd. and the Royal Bank of Scotland amounting to Rs.29,39,601/-. The assessee submitted that these purchases are over and above the purchases disclosed in the case of Harikrupa Garment and offered an income of 5% on the said purchases u/s.44AF of the Act. The assessee filed an appeal before CIT(A) against the aforesaid addition. We find that the CIT initiated proceedings u/s.263 of the Act vide notice dated 19/08/2014 on trading purchases made through Credit cards as unaccounted purchases of cloth and stated that order of AO was passed u/s.143(3) is erroneous and prejudicial to the interest of Revenue under the provisions of section ITA No.3320/Ahd/2014 Devendra Bharatbhai Dhabi vs. CIT Asst.Year - 2010-11 -3-

263 of the Act. The same was objected by the ld.AR on behalf of the assessee. Meanwhile, the CIT(A) vide order dated 08/10/2014 deleted the addition of 4,19,187/- and held that there was no reason for AO to reject the income offered u/s.44AF of the Act. The assessee also informed CIT that the issue involved in proposed action u/s.263 being integrated common issue could not be segregated before two different authorities and there cannot be two parallel proceedings vide his letter dated 09/10/2012. In spite of that, the CIT passed order u/s.263 of the Act on 17/10/2014. It means that CIT's order dated 17/10/2014 passed u/s.263 of the Act setting aside the assessment order, i.e. after the order of CIT(A) dated 08/10/2014. The order of AO had already merged with the order of the CIT(A) which is evident from his order dated 08/10/2014. It according to us the CIT under proceedings of section 263 of the Act in its order dated 17/10/2014 cannot cancel the assessment order which has already merged with the order of the CIT(A) by virtue of his order dated 08/10/2014. In view of this, the same is quashed. As a result, grounds raised by the assessee are allowed.

3. In the result, Assessee's appeal is allowed.

Order pronounced in the Court on 29-1-2015, the .................... of January, 2015 at Ahmedabad.

Sd/- Sd/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER

Ahmedabad; Dated 29/ 01 /2015 ट .सी.नायर, व.(न.स./T.C. NAIR, Sr. PS ITA No.3320/Ahd/2014 Devendra Bharatbhai Dhabi vs. CIT Asst.Year - 2010-11 -4-

आदे श क त"ल#प अ$े#षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं*धत आयकर आयु,त / Concerned CIT 4. आयकर आयु,त(अपील) / The CIT-I, Ahmedabad

5. /वभागीय (त(न*ध, आयकर अपील य अ*धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड5 फाईल / Guard file.

आदे शानुसार/ BY ORDER,

स या/पत (त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad

1. Date of dictation .. 27.1.15 (dictation-pad 8- pages attached at the end of this File)

2. Date on which the typed draft is placed before the Dictating Member ...27.1.15

3. Other Member...

4. Date on which the approved draft comes to the Sr.P.S./P.S.................

5. Date on which the fair order is placed before the Dictating Member for pronouncement......

6. Date on which the fair order comes back to the Sr.P.S./P.S.......29.1.15

7. Date on which the file goes to the Bench Clerk.....................29.1.15

8. Date on which the file goes to the Head Clerk..........................................

9. The date on which the file goes to the Assistant Registrar for signature on the order..........................

10. Date of Despatch of the Order..................