ACIT, CHENNAI V. M/s. Bajrangbali Trading & Co., CHENNAI

ITA 104/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68717 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-09-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 21-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI
• Section: 143(3)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI. BEFORE DR.O.K. NARAYANAN, VICE-PRESIDENT & SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO. 104/MDS/2013 ASSESSMENT YEAR: 2007-08 THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE X, KANNAMMAI BUILDING, 3 RD FLOOR, 611, ANNA SALAI, CHENNAI 600 006. VS. M/S. BAJRANGBALI TRADING & CO., NO. 403/D-4, T.H. ROAD, CHENNAI 19. [PAN : AAAFB6186C] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.N. BETGERI, JCIT RESPONDENT BY : NONE DATE OF HEARING : 17.09.2013 DATE OF PRONOUNCEMENT : 17.09.2013 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IV, CHENNA I DATED 03.09.2012 RELEVANT TO THE ASSESSMENT 2007-08. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A REGISTERED FIRM AND CARRYING ON THE BUSINESS OF TRADING IN IRON AND STEEL PRODUCTS. THE ASSESSEE FILED ITS RETURN DECLARING TOTAL INCOME OF `. 58,51,900/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SE CTION 143(3) OF I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.10 1010 104 44 4/M/ /M/ /M/ /M/13 1313 13 2 THE INCOME TAX ACT BY ASSESSING INCOME OF THE ASSES SEE AT `. 2,69,78,180/- BY ESTIMATING THE INCOME @ 8% OF THE TURNOVER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS OBTAINED A LIST OF SUNDRY CREDITORS, ETC. CORRESPON DED WITH SOME OF THEM AND OBTAINED THE BALANCES APPEARING IN THE BOO KS OF THE RESPECTIVE CREDITORS. THE ASSESSING OFFICER HAS COM PARED THE SAID BALANCE APPEARING IN THE BOOKS OF THE RESPECTIVE CR EDITORS WITH THE BALANCES SHOWN BY THE ASSESSEE IN THE BOOKS AND FOU ND THAT THERE WERE DIFFERENCES OF `. 6,86,58,822/-. THE DETAILS ARE GIVEN BELOW: SL. NO. NAME OF THE SUNDRY CREDITOR/LOAN CREDITOR AMOUNT OUTSTANDING IN THE ASSESSEE'S BOOKS AMOUNT REFLECTED IN SUNDRY CREDITOR'S ACCOUNT WHETHER RECONCILED DIFFERENCE 1. ESTEEM ALLOY CASTING 25,22,694 25,22,694 RECONCILED - 2. SRI BALAJI AGENCIES 20,67,399 ENVELOPE RECEIVED BACK WITH A REMARK OF NO SUCH ADDRESSEE NOT RECONCILED 20,67,399 3. SANGHI TRADING CORPORATION 1,05,00,000 37,42,381 NO 67,57,619 4. SRI KRISHNA CORPORATION 13,50,000 13,50,000 YES 5. BHARAT STEEL TRADERS 2,52,40,488 ENVELOPE RECEIVED BACK WITH A REMARK OF NO SUCH ADDRESSEE 2,52,40,488 6. RADHIKA PERIPHERALS. PVT. LTD. 5,33,10,659 3,14,58,000 NO 2,18,52,659 I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.10 1010 104 44 4/M/ /M/ /M/ /M/13 1313 13 3 7. GANESH ENTERPRISES 1,27,40,657 ENVELOPE RECEIVED BACK WITH A REMARK OF NO SUCH ADDRESSEE NO 1,27,40,657 TOTAL 6, 86,58,822 3. THE ASSESSING OFFICER HAS OPINED THAT THE ASSES SEE HAD MANIPULATED ITS TRADING ACCOUNT BY INFLATING THE PU RCHASE AND OTHER EXPENSES, SO AS TO REDUCE THE TAXABLE PROFITS AND E STIMATED THE NET PROFIT AT 8% OF THE TURNOVER. 4. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MA TTER IN APPEAL BEFORE THE LD. CIT(APPEALS). 5. THE LD. CIT(APPEALS), AFTER CONSIDERING THE DET AILED SUBMISSIONS MADE BY THE ASSESSEE AND AFTER CONSIDERING SOME OF THE ADDITIONAL DETAILS FURNISHED BY THE ASSESSEE, ALLOWED ASSESSEE S APPEAL PARTLY. 6. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 7. NONE APPEARED ON BEHALF OF THE ASSESSEE. 8. THE LD. DR HAS SUBMITTED THAT THE LD. CIT(APPEA LS), AFTER CONSIDERING ADDITIONAL MATERIALS FILED BY THE ASSES SEE, ALLOWED THE APPEAL OF THE ASSESSEE PARTLY WITHOUT CALLING REMAN D REPORT FROM THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.10 1010 104 44 4/M/ /M/ /M/ /M/13 1313 13 4 ASSESSING OFFICER. THE REVENUE HAS RAISED A SPECIFI C GROUND IN 2.3 IN RESPECT OF VIOLATION OF RULE 46A. BY REFERRING LD. CIT(APPEALS)S ORDER, THE LD. DR HAS POINTED OUT THAT IN RESPECT OF SRI B ALAJI AGENCIES, THE ADDRESS GIVEN BY THE ASSESSEE INITIALLY WAS NOT COR RECT. BEFORE LD. CIT(APPEALS), IT WAS SUBMITTED THAT SRI BALAJI AGEN CIES HAS SHIFTED TO NEW PLACE I.E. NO. 27/1, KAMARAJ STREET, RAJAJI NAG AR, CHENNAI 600019. THIS NEW ADDRESS WAS NOT GIVEN TO THE ASSES SING OFFICER AND THEREFORE, THE ASSESSING OFFICER WAS NOT ABLE TO IS SUE NOTICE THE PARTIES. IN SO FAR AS SHANGAI TRADING CORPORATION I S CONCERNED, BEFORE LD. CIT(APPEALS), THE CASE OF THE ASSESSEE WAS THAT THE ASSESSEE WAS MAINTAINING TWO SEPARATE ACCOUNT WITH SHANGAI TRADI NG CORPORATION, ONE IS WITH REGARD TO UNSECURED LOANS AND ANOTHER I S WITH REGARD TO SUNDRY DEBTORS. THIS WAS NOT SUBMITTED BEFORE THE A SSESSING OFFICER AND ALSO FILED A SUNDRY DEBTORS BEFORE LD. CIT(APPE ALS), WHICH WAS NOT FILED BEFORE THE ASSESSING OFFICER. SO FAR AS BHARA T STEEL TRADERS ARE CONCERNED, THE ASSESSEE HAS SUBMITTED THE DETAILS W ITH REGARD TO LC OPENING WITH BANK, WHICH WERE NOT FURNISHED BEFORE THE ASSESSING OFFICER. EVEN IN THE CASE OF RUCHIKA PERIPHERALS PV T. LTD. ALSO THE ASSESSEE HAS SUBMITTED DETAILS IN RESPECT OF LC OPE NING WITH THE BANK SUBMITTED BEFORE LD. CIT(APPEALS) AND NOT FILED SUC H DETAILS BEFORE THE I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.10 1010 104 44 4/M/ /M/ /M/ /M/13 1313 13 5 ASSESSING OFFICER. IN SO FAR AS SRI GANESH ENTERPRI SES IS CONCERNED, THE ASSESSEE HAS NOT ABLE TO FURNISH CORRECT ADDRES S AND WHEN THE NOTICE WAS ISSUED BY THE ASSESSING OFFICER, IT HAS COME BACK UNSERVED WITH REMARK OF POSTAL AUTHORITIES THAT NO SUCH ADDR ESSEE. THE ASSESSEE HAS FURNISHED COPY OF THE CONFIRMATION LET TER FROM GANESH ENTERPRISES BEFORE LD. CIT(APPEALS) ONLY. THEREFORE , THE LD. DR HAS SUBMITTED THAT THE ORDER OF THE LD. CIT(APPEALS) HA S TO BE SET ASIDE AND THE ISSUE HAS TO BE REMITTED BACK TO THE ASSESSING OFFICER. 9. WE HAVE HEARD THE LD. DR AND GONE THROUGH THE O RDERS OF AUTHORITIES BELOW. WE FIND THAT BEFORE LD. CIT(APPE ALS), THE ASSESSEE HAS TAKEN A DIFFERENT STAND AND ALSO SUBMITTED ADDI TIONAL DETAILS AND LD. CIT(APPEALS), WITHOUT CALLING REMAND REPORT FROM TH E ASSESSING OFFICER, CONSIDERED THE SAME AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE, WHICH IS CLEAR VIOLATION OF RULE 46A OF T HE INCOME TAX RULES. WE FIND FORCE IN THE SUBMISSIONS MADE BY THE LD. DR. THEREFORE, WE DEEM IT APPROPRIATE THAT MATTER REQUIRES TO BE R EEXAMINED BY THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(APPEALS) AND REMIT THE MATTER BACK TO THE ASSES SING OFFICER FOR WHO SHALL REEXAMINE THE ISSUE AND PASS FRESH ORDER IN ACCORDANCE WITH LAW BY PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.10 1010 104 44 4/M/ /M/ /M/ /M/13 1313 13 6 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 17 TH OF SEPTEMBER, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) VICE - PRESIDENT (V. DURGA RAO) JUDICIAL MEMB ER CHENNAI, DATED, THE 17.09.2013 VM/- TO: THE ASSESSEE/A.O./CIT(A)/CIT/D.R.