Srikanta Kumar Sahoo, Bhubaneswar V. IT), Bhubaneswar

ITA 109/CTK/2011

• Counselvise Citation: 10922114 RSA 2011
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 05-08-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 21-02-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTYDR
• Assessee Lawyers: B MOHANTY
• Keywords: Opportunity of being heard; Set aside
• Section: 68; 144

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER, AND HONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER. ITA NO. 109/CTK/2011 (ASSESSMENT YEAR 2005 - 06) SRIKANTA KUMAR SAHOO, PLOT NO.420/2348 , PADMAVATI VIHAR, CHANDRASEKHARPUR, BHUBANESWAR 751 021 PAN: AMVPS 07557 P VERSUS INCOME - TAX OFFICER, WARD 2(2), BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI B.MOHANTY, AR FOR THE RESPONDENT SHRI S.C.MOHANTY,DR ORDER SHRI K.K.GUPTA , ACCOUNTANT MEMBER : THIS APPEAL BY THE ASSESSEE AGITATES THE ACTION OF THE COMMISSIONER OF INCOME - TAX (APPEALS) IN CONFIRMING THE ADDITIONS/DISALLOWANCES COMPUTED UNDER THE PROVISIONS OF SECTION 144 OF THE INCOME - TAX ACT,1961. 2. THE BRIEF FACTS ARE THA T THE ASSESSEE IS AN INDIVIDUAL , FILED RETURN OF INCOME OF 1,03,287 WHICH WAS SUBJECTED TO SCRUTINY U/S.143(3). THE ASSESSEE FAILED TO PRODUCE THE REQUIREMENTS AS REQUISITIONED U/S.142(1) AND 143(2). THE ASSESSING OFFICER MADE ADDITIONS BY COMPUTING THE INCOME AT 6,25,600. AGGRIEVED, THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY WHO CONFIRMED THE ADDITIONS ON MERITS BY HOLDING THAT THE ASSESSING OFFICER PASSED THE ORDER U/S.144 JUSTIFIABLY., 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAD ADDED 25,607 @12% OF THE GRO SS TURNOVER ON VEHICLE HIRING CHARGES OF 2,13,397 WITHOUT APPRECIATING THE ASSESSEES RETURN OF INCOME WHEREIN IT HAD CLAIMED LOSS OF 77,549. THE LEARNED CIT(A) CONFIRMED THE SAME WITHOUT APPRECIATING THE FACTS OF THE ASSESSEES CASE AS INSCRIBED IN THE FINANCIAL STATEMENTS. HE ALSO POINTED OUT THAT THE ASSESSING OFFICER HAD ARBITRARILY ADDED BACK SUNDRY CREDITORS OF 2,27, - 994 AND OUTSTANDING LIABILITY ITA NO.109/CTK/2011 2 OF 1,98,860 DESPITE THIRD PARTYS CONFIRMATION WHEN IT CANNOT BE DO NE SO UNDER THE PROVISIONS OF SECTI ON 144. HE PRAYED THAT AN OPPORTUNITY BE GRANTED TO THE ASSESSEE TO EXPLAIN ITS CASE TO THE ASSESSING OFFICER IN VIEW OF THE FACT THAT THE ASSESSEE IS FORTIFIED WITH ALL RELEVANT EVIDENCE AND DOCUMENTS WHICH COULD NOT INVOLVE DISALLOWANCE AND ADDITIONS AS FRAMED BY THE ASSESSING OFFICER IN HIS ORDER U/S.144. 4. THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW FOR HIS PART OF SUBMISSIONS. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE HAS PRAYED FOR RESTORATION OF THE ISSUES TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERATION AFRESH. WE ARE INCLINED TO AGREE WITH THE PRAYER OF THE LEARNED COUNSEL FOR THE ASSESSEE ON HAVING PERUSED THE ORDER OF THE ASSESSING OFFICER AS W ELL AS THE LEARNED CIT(A) . WE ARE OF THE VIEW THAT JUSTICE HAS NOT BEEN RENDERED FOR COMPUTING A BEST JUDGMENT ASSESSMENT UNDER THE PROVISIONS OF SECTION 144 BY THE ASSESSING OFFICER. HAVING VERIFIED THE FINANCIAL STATEMENTS, THE LEGITIMATE CLAIM OF EXPENS ES FROM THE INCOME OF VEHICLE HIRING CHARGES HAS NOT BEEN COMPUTED AS PER LAW. SIMILARLY, THE ASSESSING OFFICER HAS TAXED THE EXPENSES PAYABLE AND THE SUNDRY CREDITORS FOR EXPENSES WHEN HE ACKNOWLEDGES THAT THE TURNOVER OF THE ASSESSEE REQUIRED INCURRING O F SUCH EXPENDITURE WHICH MAY HAVE REMAINED PAYABLE AT THE END OF THE FINANCIAL YEAR. THE LEARNED CIT(A), ON THE OTHER HAND, CONFIRMED THE ASSESSING OFFICERS ACTION BY HOLDING THAT THE ESTIMATION OF 12% WAS REASONABLE AND ALSO JUSTIFIED THE DETAILED REASON FOR ADDING THE SUNDRY CREDITORS AND OUTSTANDING LIABILITY UNDER THE PROVISIONS OF SECTIONS 68 WHEN THE ASSESSMENT HAD BEEN MADE U/S.144. IT IS ONLY WHEN THE ASSESSEE IS UNABLE TO EXPLAIN SUCH CREDITS IN ITS BOOKS OF ACCOUNT WHEN THIS ADDITION CAN BE MADE HAS BEEN ITA NO.109/CTK/2011 3 LOST SIGHT OF BY BOTH THE AUTHORITIES BELOW. IN VIEW THEREOF, WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERATION AFRESH AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSE AND COMPUTE THE INCOME IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME - TAX ACT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON DT. 12.08.2011 S D/ - S D/ - (K.S.S.PRAS AD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 12.08.2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: SRIKANTA KUMAR SAHOO, PLOT NO.420/2348, PADMAVAT I VIHAR, CHANDRASEKHARPUR, BHUBANESWAR 751 021 2. THE RESPONDENT: INCOME - TAX OFFICER, WARD 2(2), BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.