Sh. Tarak Jain, Ludhiana V. ACIT, C-7, Ludhiana

ITA 113/CHANDI/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5676 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 04-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUBHASH AGGARWAL
• Keywords: Depreciation; Additional evidence; Set aside
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 113 /CHD/2019 / ASSESSMENT YEARS : 2013-14 SHRI TARAK JAIN, 7, RAKH BAGH, LUDHIANA VS. ! THE ACIT, CIRCLE-7, LUDHIANA ' # ./ PAN NO: ACUPJ3374B '$/ APPELLANT &' '$ / RESPONDENT & ./ ITA NO. 114 /CHD/2019 / ASSESSMENT YEARS : 2015-16 SHRI TARAK JAIN, 7, RAKH BAGH, LUDHIANA VS. ! THE DCIT, CIRCLE-7, LUDHIANA ' # ./ PAN NO: ACUPJ3374B '$/ APPELLANT &' '$ / RESPONDENT ()*+ /ASSESSEE BY : SH. SUBHASH AGGARWAL, ADVOCATE *+ / REVENUE BY : SH. G.S. PHANI KISHORE, CIT DR , -*) .# /DATE OF HEARING : 21.08.2019 /0 *) .# / DATE OF PRONOUNCEMENT : 30.09 2019 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEALS HAVE BEEN PREFERRED BY THE ASSE SSEE AGAINST THE SEPARATE ORDERS DATED 27.11.2018 OF THE COMMISS IONER OF INCOME TAX (APPEALS)-3, LUDHIANA [HEREINAFTER REFERRED TO AS CIT(A)]. ITA NOS. 113 & 114-CHD-2019 SHRI TARAK JAIN, LUDHIANA 2 2. FIRST, WE SHALL TAKE UP THE ASSESSEES APPEAL IN ITA NO. 113/CHD/2019 FOR ASSESSMENT YEAR 2013-14. ITA NO. 113/CHD/2019 (A.Y. 2013-14: 3. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A)-3 HAS ERRED IN SUSTAINING THE ORDER OF THE ASSESSING OFFICER DISALLOWING TRADING LOSS OF RS. 8,25,32,413/- WITHOUT POINTING OUT ANY DEFECT IN THE ACCOUNTS REGULARLY MAINTAINED BY THE ASSESSEE AND DULY AUDITED BY CHARTERED ACCOUNTANT. 2. THAT THE LD. CIT(A) HAS IGNORED THE FACTS THAT DUE COMPLIANCE WAS MADE ON ALL THE ISSUES RAISED BY THE ASSESSING OFFICER THOUGH THERE WAS A LITTLE DELAY IN FILING THE INFORMATION WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE. 3. THAT IN ANY CASE THE ORDER OF THE CIT(A) IS AGAINST LAW AND FACTS OF THE CASE. 4. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE SUBMISSIONS OF THE ASSESSEE, AS W ERE MADE BEFORE THE LD. CIT(A) AND DULY RECORDED IN THE IMPUGNED ORDER OF THE CIT(A), WHEREBY, THE ASSESSEE HAD CONTENDED BEFORE THE LD. CIT(A) THAT DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSESSEE TH E ASSESSEE COULD NOT FURNISH THE REQUISITE DETAILS BEFORE THE ASSESSING OFFICER WHICH RESULTED INTO THE IMPUGNED ADDITIONS. THAT THE ASSESSING OFF ICER VIDE DIFFERENT ITA NOS. 113 & 114-CHD-2019 SHRI TARAK JAIN, LUDHIANA 3 LETTERS RAISED VARIOUS QUERIES / QUESTIONNAIRE, HOW EVER, SINCE THE ACCOUNTANT OF THE ASSESSEE NAMELY SHRI SHIV KUMAR HAD SUFFERED A HEART ATTACK IN THE MONTH OF MAY 2015 AND WAS OPERATED F OR HEART SURGERY, HENCE, HE DID NOT ATTEND TO HIS DUTIES FOR ABOUT 4 -5 MONTHS. THAT DUE TO THE ABOVE FACT, THE ASSESSEES COUNSEL COULD NOT FU RNISH THE REQUITE DETAILS TO THE ASSESSING OFFICER. MOREOVER, THE TI ME GRANTED BY THE ASSESSING OFFICER WAS NOT SUFFICIENT TO PROCURE ALL THE DETAILS AND FURNISH THE SAME. THAT FOR THE REASONS BEYOND THE CONTROL OF THE ASSESSEE, THE ASSESSEE COULD NOT FURNISH THE REQUIS ITE DETAILS AND EVIDENCES BEFORE THE ASSESSING OFFICER. THAT EVEN, THE ASSESSEE LATER ON, FILED CERTAIN INFORMATION / DETAILS BEFORE THE ASSE SSING OFFICER, HOWEVER, THE SAME WERE NOT CONSIDERED BY THE ASSESSING OFFIC ER WHILE PASSING THE IMPUGNED ASSESSMENT ORDER. THE LD. COUNSEL HAS FURTHER INVITED OUR ATTENTION T O THE RELEVANT PART OF THE IMPUGNED ORDER OF THE CIT(A) SHOWING TH AT THE ASSESSEE HAD FILED AN APPLICATION FOR ADDITIONAL EVIDENCES BEFOR E THE CIT(A) AND THE LD. CIT(A) HAD CALLED FOR THE REMAND REPORT IN RES PECT OF THE AFORESAID ADDITIONAL EVIDENCES FROM THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFICER INSTEAD OF CONSIDERING AND VERIFY ING THE ADDITIONAL EVIDENCES, OPPOSED THE FILING OF THE ADDITIONAL EV IDENCES ON THE GROUND THAT THE ASSESSEE DID NOT FURNISH THE SAME DURING THE ASSESSMENT PROCEEDINGS. THE LD. CIT(A) CONSIDERING THE REMAND REPORT OF THE ITA NOS. 113 & 114-CHD-2019 SHRI TARAK JAIN, LUDHIANA 4 ASSESSING OFFICER DID NOT CONSIDER THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE AND UPHELD THE ORDER OF THE ASSESSI NG OFFICER OBSERVING THAT HE ASSESSEE WAS GIVEN SUFFICIENT TIME BY THE A SSESSING OFFICER TO FURNISH THE REQUISITE DETAILS. 5. THE LD. DR, ON THE OTHER HAND, HAS RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES. 6. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE ARE OF THE VIEW, THAT THE ASSESSEE HAD DULY EXPLAINED BEFORE THE LD. CIT( A) THE REASONS THAT HIS ACCOUNTANT HAD SUFFERED HEART ATTACK AND DID N OT ATTEND TO THE DUTIES FOR 4 5 MONTHS. HENCE, THE ASSESSEE COULD NOT FUR NISH THE LENGTHY REQUISITE DETAILS / EVIDENCES BEFORE THE ASSESSING OFFICER, HENCE, UNDER THE CIRCUMSTANCES, THE LD. CIT(A) OUGHT TO HAVE LOO KED INTO AND CONSIDER THE ADDITIONAL EVIDENCES FILED BY THE ASSE SSEE. THE POWERS OF THE CIT(A) ARE CO-TERMINUS WITH THAT OF THE ASSESSI NG OFFICER AND UNDER THE CIRCUMSTANCES, A DUTY WAS CAST UPON LD. CIT(A) TO DULY CONSIDER THE DOCUMENTS AND EVIDENCES FURNISHED BY THE ASSESS EE WHICH WERE NECESSARY FOR THE JUST AND PROPER DECISION OF THE C ASE. IN VIEW OF THE THIS, THE ORDER OF THE CIT(A) IS SE T ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFF ICER FOR DE NOVO ASSESSMENT IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT THE ASSESSEE WILL PROMPTLY APPEAR BEFORE THE ASSESSING OFFICER, AS AND WHEN CALLED ITA NOS. 113 & 114-CHD-2019 SHRI TARAK JAIN, LUDHIANA 5 FOR, AND WILL NOT CONTRIBUTE IN DELAYING THE PROCEE DINGS. THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSE S. ITA NO. 114/CHD/2019(A.Y. 2015-16) 7. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A)-3 HAS ERRED IN CONFIRMING THE INCOME OF THE APPELLANT AT RS. 91,37,812/- BY TREATING THE GROSS PROFIT AS UNEXPLAINED INCOME U/S 68 OF THE I.T. ACT. 2. THAT THE ACTION OF THE CIT(A) IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER IS WITHOUT APPRECIATION OF MIND AND PROBABLY DISMISSING THE APPEAL ON THE BASIS OF DIRECTIONS OF THE BOARD ENCOURAGING THE CIT(A)S TO REJECT THE APPEALS AS FAR AS POSSIBLE. 3. THAT THE LD. CIT(A)-3 HAS ERRED IN COMPLETELY IGNORING THE SUBMISSIONS OF APPELLANT AND THE AUDITED ACCOUNTS PRODUCED BEFORE THE ASSESSING OFFICER WHERE NO DEFECTS HAD BEEN FOUNDS IN THE SAME. 4. THAT THE LD. CIT(A) HAS ERRED IN NOT CARRYING FORWARD THE BROUGHT FORWARD LOSSES AND IN NOT ALLOWING THE EXPENDITURE CLAIMED IN P&L ACCOUNT WITHOUT POINTING OUT ANY EXPENDITURE OF INADMISSIBLE NATURE. 5. THAT IN ANY CASE THE ORDER OF THE CIT(A) IS AGAINST THE LAW AND FACTS OF THE CASE. ITA NOS. 113 & 114-CHD-2019 SHRI TARAK JAIN, LUDHIANA 6 8. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEA L RELATES TO THE ADDITION MADE BY THE ASSESSING OFFICER BY HOLDING T HAT THE PURCHASES MADE BY THE ASSESSEE FROM SEVEN PARTIES WERE BOGUS. 9. THE LD. COUNSEL FOR THE ASSESSEE IN THIS RESPECT HAS SUBMITTED THAT CONFIRMATION FROM TWO PARTIES WAS FILED BEFORE THE ASSESSING OFFICER AND IN RESPECT OF THE CONFIRMATIONS FROM THE REMAI NING PARTIES, EVIDENCES OF THEIR EXISTENCE DURING THE PERIOD WH EN THE TRANSACTION TOOK PLACE HAD BEEN FILED. HOWEVER, SOME OF THE PAR TIES HAD LEFT THE BUSINESS BECAUSE OF THE HEAVY LOSSES OR FOR BECOMIN G NPS WITH THE BANK. FURTHER, THAT THE SALES HAD BEEN ADMITTED BY THE ASSESSING OFFICER AND UNDER THE CIRCUMSTANCES THERE WAS NO QUESTION T O DISBELIEVE THE PURCHASES. THAT THE ASSESSEE WAS MAINTAINING A REGU LAR STOCK REGISTER OF THE PURCHASES AND SALES, WHICH HAD NOT BEEN DOUBTED BY THE ASSESSING OFFICER. FURTHER, THAT IF THE SALES WERE NOT DOUBTE D, THE PURCHASES COULD NOT HAVE BEEN DOUBTED BY THE ASSESSING OFFICER. THE LD. COUNSEL HAS FURTHER SUBMITTED THAT THE LOWER AUTHORITIES WITH OUT GOING THROUGH THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND WITHOUT PROPE R APPRECIATION OF THE EVIDENCE ON THE FILE HAVE ALSO DISALLOWED THE CLAIM OF DEPRECIATION AND BROUGHT FORWARD TRADING LOSSES. THE LD. COUNSEL IN THIS RESPECT HAS SUBMITTED THAT THE ASSESSEE IS REQUIRED TO BE GIVE N OPPORTUNITY TO PROPERLY REPRESENT HIS CASE BEFORE THE ASSESSING OF FICER. ITA NOS. 113 & 114-CHD-2019 SHRI TARAK JAIN, LUDHIANA 7 10. THE LD. DR, ON THE OTHER HAND, HAS RELIED UPON THE FINDINGS OF THE LOWER AUTHORITIES. 11. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE LD. REPRESENTATIVES OF THE PARTIES. IN THIS CASE, THE SUBMISSIONS OF THE ASSESSEE IS THAT THOUGH THE ASSESSING OFFICER DOUBT ED THE PURCHASES BUT HE HAD NOT POINTED OUT ANY DEFECT IN THE SALES SHOW N BY THE ASSESSEE. THAT ONCE THE SALES WERE ADMITTED BY THE ASSESSING OFFICER THERE WAS NO QUESTION OF DOUBTING THE PURCHASES. THE SALES COUL D NOT HAVE BEEN MADE WITHOUT PURCHASES OF THE SAID STOCK BY THE ASSESSEE . THAT THE ACCOUNT OF THE ASSESSEE WAS DULY AUDITED AND NO DEFECT HAS BEE N POINTED OUT IN THE SAME AND THAT THE ACCOUNTS HAVE BEEN REJECTED BY TH E LOWER AUTHORITIES MERELY ON THE ASSUMPTION BASIS. THAT COMPLETE STOCK ACCOUNT OF PURCHASES / SALES IS MAINTAINED BY THE ASSESSEE AND THE SAME WAS FILED BEFORE THE LD. CIT(A). THE ASSESSEE HAS ALSO EXPLAI NED THE REASONS BECAUSE OF WHICH SOME OF THE PARTIES COULD NOT BE P RODUCED BEFORE THE ASSESSING OFFICER. FURTHER, CONSIDERING THAT THE AS SESSEE HAD FURNISHED WRITTEN DOCUMENTS TO PROVE THE EXISTENCE OF THE PAR TIES BEFORE THE ASSESSING OFFICER, WE ARE OF THE VIEW, THAT THE E NTIRE MATTER IS REQUIRED TO BE LOOKED INTO AFRESH BY THE ASSESSING OFFICER. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE ASSESSING OFFICER FOR DE NOVO ASSESSMENT IN ACCORDANCE WITH LAW AFTER DULY CONSIDERING THE SUBM ISSIONS OF THE ITA NOS. 113 & 114-CHD-2019 SHRI TARAK JAIN, LUDHIANA 8 ASSESSEE AND ALSO THE REASONS OF THE ASSESSEE FOR N OT PRODUCING THE CONCERNED PARTIES FROM WHOM THE PURCHASES WERE MAD E AND FURTHER OTHER EVIDENCES FURNISHED BY THE ASSESSEE. BOTH THE APPEALS OF THE ASSESSEE ARE TREATED AS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30.09.2019 SD/- SD/- ( . . / N.K. SAINI) ( ! / SANJAY GARG) '#$ / VICE PRESIDENT %& / JUDICIAL MEMBER DATED : 30. 09.2019 .. 2*&)3454) / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. &' '$ / THE RESPONDENT 3. , 6) / CIT 4. , 6) ( )/ THE CIT(A) 5. 47 &)8 , . 8 , 9:;< / DR, ITAT, CHANDIGARH 6. ;= - / GUARD FILE 2 , / BY ORDER, > / ASSISTANT REGISTRAR