Recently, ITAT Chandigrah bench dismissed the appeals filed against the Himachal Pradesh Chief Minister, Virbhadra Singh on ground that the assessee has failed to prove the genuiness of the return.
The factual settings of the case are that, the appellant-assessee, the Chief Minister of Himachal Pradesh had filed returns for the years 2009-10 to 2011-12 by conceding total income of Rs 44,67,584 along with agricultural income of Rs 15 lakhs. In the year 2012, the assessee filed a revised return in which the agricultural income was shown as 2.8 crores. Against the return, the assessment was completed on 2013, which were rejected by the CIT by invoking revisional jurisdiction u/s. 263 and held that the assessment order was erroneous and prejudicial to the interests of the revenue, on the ground that the revision of return was wrongly accepted, accounting principles were wrongly considered and accepted in as much as the agricultural income was not declared on the basis of mercantile system of accounting.The CIT, on perusal of records, observed that the assessment was completed in a routine and casual manner without making any effective inquiry. Accordingly, the CIT had then directed the assessing officer to frame a fresh assessment in accordance with the law and after making due inquiries.
Before the ITAT, the Revenue contended that assessee had invested Rs 3,84,92,500 in LIC policies, whereas additional income declared in the revised return was only Rs 2,65,92,500. So, AO had further failed to enquire from the assessee about the source of Rs 1.19 crores invested in LIC policies over and above the additional income declared in the revised return.
Dismissing the appeal, the ITAT noted that the assessee did not furnish bills and vouchers of expenses despite being specifically requested by the AO and no record of expenses was available because the same was destroyed after settlement of account with Virbhadra Singh (HUF). It was further noted that the assessee did not even disclose the names of dealers from whom pesticides, insecticides, packing boxes, etc, were purchased. Similarly, names of persons to whom huge labour and freight was paid were also not furnished.
“An overview of the above features indicates that the agricultural produce was not proved; transportation of the same to UAA was also not proved; bills issued by UAA were not genuine; cash received from UAA shown at Rs.1.00 crore did not appear in their books of account; theexpenses claimed were not backed by any vouchers/bills; and all theexpenses were claimed to have been incurred on one single day and that too in cash. We fail to comprehend as to how the assessment order accepting the genuineness of carrying out the agricultural operations and earning a huge income in such circumstances can be considered as an order made after proper inquiry as has been canvassed by the assessee. It is a case of a patent non-application of mind by the AO to the facts, which were loudly calling for in-depth investigation. In our considered opinion, the ld.CIT was fully justified in setting aside the assessment order and directing the AO to frame a fresh assessment.”
Read the full text of the order below.
