Ramkrishna Marotirao Bangar, Beed V. Income-tax Officer,

ITA 1044/PUN/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2640 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 18-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1044/PUN/2016 / ASSESSMENT YEAR : 2010-11 SHRI RAMKRISHNA M. BANGAR, PROP. VIJAY COTTON INDUSTRIES, AT PATODA, TALUKA PATODA, DIST. BEED PAN : AKMPB6628D . /APPELLANT VS. ITO, WARD-2(4), BEED . / RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : SHRI MUKESH JHA, JCIT / DATE OF HEARING : 26.02.2018 / DATE OF PRONOUNCEMENT: 28.02.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT(A)-2, AURANGABAD, DATED 08-03-2016 FOR THE ASSESSMENT YEA R 2010-11. 2. GROUNDS RAISED BY THE ASSESSEE ARE EXTRACTED AS UNDER : 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN DECI DING THE APPEAL EXPARTE WITHOUT GOING INTO THE MERITS OF THE CASE. THE LD. CIT(A) FAILED TO APPRECIATE THAT THERE WAS SUFFICIENT REASONS FOR NOT ATTENDING BEFO RE HIM AND OUGHT TO HAVE GIVEN FURTHER TIME. 2. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFI RMING THE ORDER OF THE LD. AO WITHOUT GOING INTO THE MERITS OF THE CASE. 3. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFI RMING ADDITION ON ACCOUNT OF INFLATED OPENING STOCK OF RS.51,31,084/- WHICH IS N OT AS PER THE FACTS OF THE CASE AND MAY KINDLY BE DELETED. 4. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFI RMING DISALLOWANCE OF RS.12,00,000/- ON ACCOUNT OF COMMISSION EXPENSES. 2 3. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSES SEE IS AN INDIVIDUAL AND ENGAGED IN TRADING THE COTTON. ASSESSEE FILED THE RETURN OF INCOME ON 30-03-2011 DECLARING TOTAL INCOME OF RS.7,43,527/-. IN THE AS SESSMENT U/S.143(3) OF THE ACT, THE AO QUANTIFIED THE ASSESSED INCOME AT RS.71,29,6 10/-. RELEVANT LINES FROM THE ASSESSMENT ORDER ARE EXTRACTED AS UNDER : ASSESSEE FILED HIS RETURN OF INCOME ELECTRONICALLY ON 30-03-2011 DECLARING TOTAL INCOME FOR RS.7,43,527/-. IN THE ABOVE RETURN OF I NCOME, WHILE PREPARING TRADING ACCOUNT ASSESSEE HAS TAKEN OPENING STOCK OF RS.51,3 1,084/- WHEREAS AS PER RETURN OF INCOME FOR A.Y. 2009-10, THERE WAS NO CLOSING STO CK. THEREFORE, IT IS EVIDENT THAT ASSESSEE HAS INFLATED THE OPENING STOCK OF RS.51,31 ,084/- TO REDUCE GROSS PROFIT. THEREFORE, INFLATED OPENING STOCK OF RS.51,31,084/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S.271(1)(C) OF THE I.T. ACT, 1961 HAVE BEEN INITIATED SEPARATELY FOR FURNISHING OF THE INACCURA TE PARTICULARS OF INCOME. TRADING ACCOUNT AS PER ASSESSEES RETURN OF INCOME DATED 30-03-2011 IS AS UNDER : TO OPENING STOCK : RS.51,31,084 BY SALES : RS.7,95,00,000 TO PURCHASES : RS.8,32,08,934 BY CLOSING STOCK : RS.1,21,97,260 TO GROSS PROFIT : RS.33,51,242 @ 4.22% TRADING ACCOUNT EXCLUDING OPENING STOCK II TO PURCHASES : RS.8,32,08,934/- BY SALES : RS.7,95,00,000 TO GROSS PROFIT : RS.84,88,326 @ 10.68% BY CL OSING STOCK : RS.1,21,97,260/- GROSS PROFIT ARRIVED AT IN II TRADING ACCOUNT IS CO MMENSURATE TO THE GROSS PROFIT SHOWN FOR A.Y. 2009-10 SIMILARLY CLOSING STOCK ARRI VED AT RS.1,21,97,260/- HAS TAKEN AS OPENING STOCK FOR RETURN OF INCOME FILED FOR A.Y. 2011-12 ON 13-03-2012. THEREFORE, FIGURES IN TRADING ACCOUNT IN RETURN OF INCOME FOR A.Y. 2010-11 ARE REALISTIC EXCEPT OPENING STOCK OF RS.51,31,084/- TA KEN REDUCED THE GROSS PROFIT. THEREFORE, ADDED TO THE TOTAL INCOME AS STATED ABOV E. ASSESSEE HAS DEBITED RS.12,55,000/- TOWARDS COMMISS ION. HOWEVER HAS NOT FURNISHED THE DETAILS IN RESPECT OF ABOVE COMMISSIO N AS CALLED FOR VIDE THIS OFFICE LETTER DATED 30-01-2013. THEREFORE, THE ABOVE COMM ISSION EXPENSES HAVE BEEN DISALLOWED TREATING AS NOT PRODUCED FOR VERIFICATIO N . . . . 4. DURING THE FIRST APPELLATE PROCEEDINGS, CIT(A) G RANTED OPPORTUNITY TO THE ASSESSEE ON NUMBER OF TIMES, DETAILS OF WHICH ARE P ROVIDED IN PARA NO.3 OF HIS ORDER. THERE IS NO COMPLIANCE FROM THE ASSESSEES SIDE. EVENTUALLY, CIT(A) PASSED THE PRESENT IMPUGNED ORDER ON EXPARTE BASIS, AS EVI DENT FROM PARA NO.6 AND 7. CIT(A) HELD THAT THE TAX PAYABLE BY THE ASSESSEE WA S RS.25,173/-. AFTER GIVING CREDIT TO THE TDS, THE BALANCE TAX PAYABLE WORKS OU T TO RS.13,080/-. ON FINDING THAT THE SAID AMOUNT IS NOT PAID BEFORE THE APPEAL IS FILED IN VIEW OF THE PROVISIONS 3 OF SECTION 249(4)(A), THE CIT(A) DISMISSED THE APPE AL OF THE ASSESSEE AS NOT MAINTAINABLE. AGGRIEVED WITH THE SAME, ASSESSEE FI LED THE PRESENT APPEAL WITH THE GROUNDS EXTRACTED ABOVE. 5. BEFORE US, THERE IS NONE TO REPRESENT THE CASE O F THE ASSESSEE DESPITE THE SERVICE OF NOTICE ON 04-01-2018. THE SAME IS EVIDE NT FROM THE ACKNOWLEDGEMENT PLACED ON RECORD. CONSIDERING THE SERVICE OF NOTIC E, WE ARE OF THE OPINION THAT THE APPEAL SHOULD BE ADJUDICATED WITH THE HELP OF LD. D R FOR THE REVENUE. 6. GROUND NO.1 RELATES TO GRANTING OF PROPER OPPORT UNITY TO THE ASSESSEE. OTHER GROUNDS NO.2 TO 4 RELATES TO THE MERIT OF ADD ITIONS. THE CIT(A) DID NOT ADMIT THE APPEAL, LEAVEALONE THE ADJUDICATION OF THE GROU NDS ON MERITS. FURTHER, WE PERUSED THE ASSESSMENT ORDER, THE RELEVANT OPERATIO NAL LINES OF WHICH ARE ALREADY EXTRACTED IN THE PRECEDING PARAGRAPHS. IT IS EVIDE NT THAT THE SAME CONVEY THE ADHOC MANNER OF MAKING THE ASSESSMENT AT RS.71,29, 610/- AS AGAINST THE RETURNED INCOME OF RS.7,43,527/-. 7. AFTER HEARING THE LD. DR FOR THE REVENUE AND PER USING THE MATERIAL ON RECORD, WE FIND THE GRIEVANCE OF THE ASSESSEE RELAT ES TO THE LEGAL ISSUE OF GRANTING SUFFICIENT OPPORTUNITY BEFORE THE APPEAL IS DISMISS ED AS NON-MAINTAINABLE. HOWEVER, WE FIND THE APPEAL OF THE ASSESSEE IS DISM ISSED AS THE ASSESSEE FAILED TO COMPLY WITH THE PROVISIONS OF SECTION 249(4)(A) OF THE ACT, IN PRINCIPLE. AS PER THE GROUNDS (GROUND NO.1) RAISED BY THE ASSESSEE, WHO I S NOT PRESENT BEFORE US, WE ARE OF THE OPINION THAT, AS REQUESTED BY THE ASSESS EE, THE MATTER SHOULD BE REMANDED TO THE FILE OF CIT(A) FOR FRESH ADJUDICATI ON SUBJECT TO THE FOLLOWING CONDITIONS : (1) ASSESSEE SHOULD MAKE PAYMENT OF BALANCE TAX PAY ABLE IN COMPLIANCE WITH THE PROVISIONS OF SECTION 249(4)(A) OF THE ACT . (2) ASSESSEE SHOULD DEMONSTRATE THE REASONS FOR NON -PAYMENT OF THE SAME OR BELATED PAYMENT OF THE SAME BEFORE ASSESSEE SEEKS FRESH ADMISSION OF THE APPEAL BEFORE THE CIT(A). CIT(A) IS AT LIBE RTY TO DISMISS THE APPEAL 4 WHEN THE SAID CONDITIONS ARE NOT MET BY THE ASSESSE E. ACCORDINGLY, GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTI CAL PURPOSES. 8. GROUND NOS. 2 TO 4 BY THE ASSESSEE RELATES TO TH E MERITS OF THE ADDITIONS AND ADJUDICATION OF THE SAME BECOMES PREMATURE AS THERE IS NO ADJUDICATION BY THE CIT(A). AS SUCH, THESE GROUNDS BECOME RELEVANT ONL Y WHEN THERE IS FINALITY ON THE ISSUE RAISED IN GROUND NO.1. THEREFORE, THE SAID GROUNDS STANDS REMANDED TO THE FILE OF CIT(A). HE IS DIRECTED TO ADJUDICATE THE S AME ONLY WHEN THE APPEAL IS VALIDLY ADMITTED BY HIM AND CONDITIONS ARE MET BY THE ASSES SEE. IN CASE THE CONDITIONS ARE NOT MET, THE CIT(A) IS FREE TO TREAT THE SAME A S NOT MAINTAINABLE. ACCORDINGLY, THE GROUNDS 2 TO 4 ARE ALLOWED FOR STATISTICAL PURP OSES. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF FEBRUARY, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 28 TH FEBRUARY, 2018 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRI VATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A)-2, AURANGABAD 4. CIT-2, AURANGABAD 5. , , B BENCH PUNE; 6. / GUARD FILE.