Hotel Bombay Inn, Cuttack V. DCIT, Circle-1(1), Cuttack

CO 1/CTK/2016

• Counselvise Citation: [2017] 119 COUNSELVISE.COM (IT) 3433 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 16-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: D K SHETH
• Keywords: Additional evidence
• Section: 142(1); 194C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ./ ITA NO. 12 / CTK /20 1 6 ( / ASSESSMENT YEAR : 20 11 - 20 12 ) DCIT, CIRCLE - 1(1), CUT TACK VS. M/S HOTEL BOMBAY INN, COLLEGE SQUARE, CUTTACK ./ ./ PAN/GIR NO. : A AA FH 7927 D ( / APPELLANT ) .. ( / RESPONDENT ) AND CROSS OBJECTION NO. 01/CTK /20 16 ( / ASSESSMENT YEAR :2011 - 2012 ) M/S HOTEL BOMBAY INN, COLLEGE SQUARE, CUTTACK VS. DCIT, CIRCLE - 1(1), CUTTACK ./ ./ PAN/GIR NO. : A AAFH 7927 D ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI SUBHENDU DUTTA, CITDR /AS SESSEE BY : SHRI D.K.SHETH , AR / DATE OF HEARING : 2 7 / 0 7 /201 7 / DATE OF PRONOUNCEMENT 01 / 0 8 /201 7 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : TH E REVENUE HAS FILED AN APPEAL AND THE ASSESSEE HAS FILED C ROSS OBJECTION AGAINST THE ORDER OF CIT( A) , CUTTACK PASSED IN I.T.APPEAL NO.040/2014 - 15, DATED 30.10.2015, U/S.143(3)/250 OF THE I.T.ACT. 2 . AT THE TIME OF HEARING THE LD. AR OF THE ASSESSEE WITHDRAW N THE CROSS OBJECTION S FILED AND MADE ENDORSEMENT . ACCORD INGLY, THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED AS WITHDRAWN. 3 . NOW, WE SHALL TAKE UP REVENUES APPEAL IN ITA NO.12/CTK/2016 AND THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : - 01. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN GIVING DIRECTION TO DELETE THE ADDITIONS MADE BY THE AO ON ACCOUNT OF SUPPRESSION OF HOTEL RECEIPTS, REMUNERATION TO PARTNERS, ROOM BOOKING EXPENDITURE, LIABILITY TOWARD SALARY PAYABLE AND ADVERTISEMENT EXPENSES RELYING ON THE WRITTEN SUBMISS ION OF THE ITA NO. 12 /CTK/2016 CO.NO.01/CTK/2016 2 ASSESSEE WHICH WERE NOT AVAILABLE WITH THE AO WHILE PASSING THE ASSESSMENT ORDER. HENCE, ON THE BASIS OF THE FRESH MATERIALS, SUBSTANTIAL RELIEF ALLOWED BY THE LD. CIT(A) APPARENTLY ARE TO BE TREATED AS THE ADDITIONAL EVIDENCE WHICH WERE NOT BEF ORE THE AO WHILE COMPLETING HE ASSESSMENT. LD. CIT(A) IS NOT JUSTIFIED IN DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE WITHOUT AFFORDING AN OPPORTUNITY TO THE AO TO EXAMINE THE ISSUE IN QUESTION IN CONTRAVENTION OF PROVISIONS FO RULE 46A OF THE I.T.RULE, 1962 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE HOTEL BUSINESS AND FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 201 1 - 201 2 ON 20.09.2011 WITH TOTAL INCOME OF RS. 9,47,143/ - AND THE RETURN OF INCOME WAS PRO CESSED U/S.143(1) OF THE ACT. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT . AO ISSUED NOTICES U/S.143(2) & 142(1) OF THE ACT. IN COMPLIANCE TO THE SAME, LD. AR APPEARED FROM TIME TO TIME AND FURNISHED THE DOCUMENTS AND THE AO ON PERUSAL OF THE FINANCIAL STATEMENTS HAS FOUND THE DISCREPANCIES AND MADE ADDITIONS ON SUPPRESSION OF ROOM RENT COLLECTION AT RS.86,65,923/ - AND DISALLOWANCE OF SALARY TO PARTNERS AT RS. 5,40,000/ - AND CLAIM OF EXPENSES OF RS. 1,20,000/ - IN RESPECT OF INS TANT BOOKING CHARGES. HOWEVER, THE AO ALSO OBSERVED THAT THE OUTSTANDING LIABILITY IN THE BALANCE SHEET PERTAINS TO SALARY AND BECAUSE OF NO PROPER CLARIFICATIONS ARE SUBMITTED AND MADE THE ADDITION S . SIMILARLY, THE AO MADE ADDITIONS FOR TDS DIFFERENCE DE PRECIATION ON LIFT AND NON - DEDUCTION OF TDS ON LAUNDRY EXPENSES , TV CABLE EXPENSES , BEDSHEET AND MATTRESS WORK CONTRACT , WHERE THE PROVISIONS OF SECTION 194C WAS APPLICABLE AND OTHER ADDITIONS AGGREGATING TO RS. 1,32,48,298/ - AND ASSESSED THE TOTAL INCOME O F RS. 1,32,48,440/ - AND PASSED THE ORDER U/S.143(3) OF THE ACT, DATED 31.3.2014. ITA NO. 12 /CTK/2016 CO.NO.01/CTK/2016 3 5 . AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). IN THE APPELLATE PROCEEDINGS, LD. AR ARGUED THE GROUNDS AND REITERATED THE SUBMISSIONS MA DE BEFORE THE LD.AO. LD.CIT(A) DEALT ON THE DISPUTED ISSUE GROUNDWISE AND DIRECTED DELETION OF ADDITIONS RELIED ON THE SUBMISSIONS AND EVIDENCES FILED BY THE ASSESSEE AND DEALT ON THE DISPUTED ISSUE S AT PAGES 3 TO 6 OF THE ORDER AND PARTLY ALLOWED THE APP EAL. 6 . AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 7 . BEFORE US, LD.DR ARGUED THAT THE CIT(A) HAS ERRED IN DELETING THE ADDITIONS IN RESPECT PROVISION OF HOTEL RECEIPTS REMUNERATION TO PARTNERS, ROOM BOOKING EXPENDITUR E, LIABILITY OF SALARY, ADVERTISEMENT EXPENSES AND OTHER EXPENSES , WITHOUT CALLING FOR ANY COMMENTS OR REPORT FROM THE AO AND ACCEPTED THE ADDITION AL EVIDENCE FILED BY THE ASSESSEE IN THE COURSE OF APPELLATE PROCEEDINGS AND WHICH IS IN VIOLATION OF PROVISI ONS OF RULE 46A OF I.T.RULES AND PRAYED FOR ALLOW ING THE APPEAL. 8 . CONTRA, LD. AR RELIED ON THE ORDERS OF THE LD. CIT(A). 9 . WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD. THE SOLE SUBSTANTIVE GROUND RAISED BY THE LD. DR THAT THE CIT(A) HAS ERRED IN ADJUDICATING THE ISSUES AND ALLOWED THE CLAIM OF THE ASSESSEE BASED ON THE MATERIAL FILED IN THE COURSE OF APPELLATE PROCEEDINGS. WE ON PERUSAL OF THE ASSESSMENT ORDER AND THE APPELLATE ORDER FOUND THAT THE ASSESSEE HAS SUBMITTED CERTAIN INFOR MATION AS SUBMITTED BY THE L D. DR ON WHICH BASIS THE LD.CIT(A) HAS RELIED AND ALLOWED THE CLAIM OF THE ITA NO. 12 /CTK/2016 CO.NO.01/CTK/2016 4 ASSESSEE. WE FIND THAT THE CIT(A) HAVING RECEIVED THE MATERIAL EVIDENCE HAS NOT CALLED FOR COMMENTS FROM THE AO OR REMAND REPORT AND THE AO WAS DEPRIVED TO VERIFY AND EXAMINE THE EVIDENCE FILED IN RESPECT OF CLAIM S . ACCORDINGLY, WE ARE OF THE SUBSTANTIVE VIEW THAT THE AO WAS DEPRIVED TO EXAMINE AND VERIFY THE SUBMISSIONS MADE BY THE ASSESSEE IN THE APPELLATE PROCEEDINGS AND WE CONSIDER THE PRINCIPLE S OF N ATURAL JUSTICE AND VIOLATION OF RULE 46A OF I.T.RULES AND ACCORDINGLY WE SET ASIDE THE ORDER OF CIT(A) AND REMIT THE ENTIRE DISPUTED ISSUED TO THE FILE OF AO, WHO SHALL VERIFY THE EVIDENCE S AND PASS THE ORDER AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE GROUNDS OF APPEAL OF REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES . 10 . THUS, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED . O RDER PRONOUNCED IN THE OPEN COURT ON TH IS 01/08 / 201 7 . SD/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 01/08 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FIL E. //TRUE COPY//