ITO, Ward - 33 (3), Kolkata, Kolkata V. M/s. Perfecto Electricals, Kolkata

ITA 1175/KOL/2011

• Counselvise Citation: 117523514 RSA 2011
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 12-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K CHAKRABORTY
• Assessee Lawyers: SOUMITR A CHOUDHURY
• Section: 144; 143(3)

Judgement Text

I.T.A. NO.: 1175/KOL./20 11 ASSESSMENT YEAR : 2008-09 PAGE 1 TO 5 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA CORAM : SHRI ABRAHAM P. GEORGE (ACCOUNTANT MEMBER) AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO.: 1175/KOL./ 2011 ASSESSMENT YEAR : 2008-2009 INCOME TAX OFFICER,................................ ..........APPELLANT WARD-33(3), KOLKATA, 10B, MIDDLETON ROW, 3 RD FLOOR, KOLKATA-700 071 -VS.- M/S. PERFECTO ELECTRICALS,......................... ..................RESPONDENT TRUST HOUSE, 32A, C.R. AVENUE, KOLKATA-700 012 [PAN: AADFP 4284 G] APPEARANCES BY: SHRI P.K. CHAKRABORTY, JCIT, SR. D.R., FOR THE DEPA RTMENT SHRI SOUMITRA CHOUDHURY, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JANUARY 16, 2014 DATE OF PRONOUNCING THE ORDER : JANUARY 29, 2014 O R D E R PER ABRAHAM P. GEROGE : 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGA INST AN ORDER DATED 30.06.2011 PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-XX, KOLKATA FOR THE ASSESSMENT YEAR 2008-09. GROUND TAK EN BY THE REVENUE IS REPRODUCED HEREUNDER :- THAT THE LD. CIT(A) ERRED IN DECIDING THE APPEAL I N FAVOUR OF ASSESSEE AND IN NOT REMANDING THE MATTER OF VERIFIC ATION OF EXPENSES TO A.O. AS THE ESTIMATED ADDITION IN QUEST ION HAD BEEN MADE BY THE AO ON THE BASIS OF REPEATED NON-COMPLIA NCE. 2. FACTS APROPOS ARE THAT ASSESSEE, A CONTRACTOR, H AD FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR DECLARING I NCOME OF RS.4,01,434/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH WHAT HE TE RMED AS ITS DETAILS. AS PER THE ASSESSING OFFICER, THERE WAS NO COMPLIANCE. ASSESSEE HAD CLAIMED EXPENDITURE OF RS.22,63,91,918/- UNDER GOODS A/C., RS.8,77,17,976/- I.T.A. NO.: 1175/KOL./20 11 ASSESSMENT YEAR : 2008-09 PAGE 1 TO 5 2 UNDER ERECTION CONTRACT EXPENDITURE AND RS.29,28,54 3/- UNDER TRANSPORTATION EXPENDITURE TOTALLING TO RS.31,70,38 ,437/-. THE GROSS CONTRACT RECEIPT OF THE ASSESSEE WAS RS.33,03,90,60 0/-. AS PER THE ASSESSING OFFICER ASSESSEE COULD NOT PRODUCE ENOUGH MATERIAL IN SUPPORT OF THE ABOVE EXPENDITURES. HE, THEREFORE, DISALLOWE D 3% OF THE CLAIMED OUTGO OF RS.31,40,38,437/-. AN ADDITION OF RS.95,11 ,153/- WAS MADE. 3. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE LD. C IT(APPEALS). ARGUMENT OF THE ASSESSEE BEFORE THE LD. CIT(APPEALS ) WAS THAT THE DISALLOWANCE WAS MADE ARBITRARILY. IT WAS NOT FOR A REASON THAT ASSESSEE COULD NOT SUPPORT THE CLAIM OF EXPENDITURE. ALLEGED NON-COMPLIANCE OF THE ASSESSEE WOULD NOT JUSTIFY THE ESTIMATION OF IN COME AT AN ARBITRARY FIGURE. ASSESSEE ALSO POINTED OUT THAT ASSESSMENT W AS COMPLETED UNDER SECTION 143(3) OF THE ACT. RELIANCE WAS PLACED ON T HE DECISION OF THE HONBLE KOLKATA HIGH COURT IN THE CASE OF CIT VS.- RANICHERRA TEA CO. LTD. [207 ITR 979] AND THAT OF THE ORDER OF HONBLE APEX COURT IN THE CASE OF BRIJ BHUSHANLAL PARDUMAN KUMAR VS.- CIT (115 IT R 524). LD. CIT(APPEALS) WAS APPRECIATIVE OF THESE CONTENTIONS. ACCORDING TO HIM, ASSESSING OFFICER OUGHT NOT HAVE ACTED VINDICTIVELY . FURTHER, AS PER LD. CIT(APPEALS), THE ASSESSING OFFICER DID NOT FOLLOW THE RULES OF JUSTICE AND EQUITY. HE HELD THAT THE DISALLOWANCE OF RS.95,11,1 53/- WAS NOT CALLED FOR. SUCH DISALLOWANCE WAS DELETED. 4. NOW BEFORE US, LD. D.R. STRONGLY ASSAILING THE O RDER OF LD. CIT(APPEALS) SUBMITTED THAT ASSESSEE HAD FAILED TO COMPLY WITH THE REQUIREMENT OF THE ASSESSING OFFICER. ASSESSEE HAD NOT PRODUCED RECORDS IN SUPPORT OF ITS CLAIM. ASSESSING OFFICER WAS CONS TRAINED TO MAKE A DISALLOWANCE ON ESTIMATE DUE TO THE FAILURE OF THE ASSESSEE. LD. CIT(APPEALS) HAD SIMPLY DELETED THE DISALLOWANCE WI THOUT CALLING FOR ANY DOCUMENTS IN SUPPORT OF THE CLAIM. 5. PER CONTRA LD. A.R. SUPPORTED THE ORDER OF LD. C IT(APPEALS). I.T.A. NO.: 1175/KOL./20 11 ASSESSMENT YEAR : 2008-09 PAGE 1 TO 5 3 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE FIRST PLACE WHAT WE NOT ICE IS THAT THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER U NDER SECTION 143(3) OF THE ACT. SECTION 143(3) IS REPRODUCED HEREUNDER :- (3) ON THE DAY SPECIFIED IN THE NOTICE,- (I)ISSUED UNDER CLAUSE (I) OF SUB-SECTION (2), OR A S SOON AFTERWARDS AS MAY BE, AFTER HEARING SUCH EVIDENCE A ND AFTER TAKING INTO ACCOUNT SUCH PARTICULARS AS THE ASSESSE E MAY PRODUCE, THE ASSESSING OFFICER SHALL, BY AN ORDER I N WRITING, ALLOW OR REJECT THE CLAIM OR CLAIMS SPECIFIED IN SU CH NOTICE AND MAKE AN ASSESSMENT DETERMINING THE TOTAL INCOME OR LOSS ACCORDINGLY, AND DETERMINE THE SUM PAYABLE BY THE A SSESSEE ON THE BASIS OF SUCH ASSESSMENT; (II) ISSUED UNDER CLAUSE (II) OF SUB-SECTION (2), O R AS SOON AFTERWARDS AS MAY BE, AFTER HEARING SUCH EVIDENCE A S THE ASSESSEE MAY PRODUCE AND SUCH OTHER EVIDENCE AS THE ASSESSING OFFICER MAY REQUIRE ON SPECIFIED POINTS, AND AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL WHICH HE HAS GATHERED , THE ASSESSING OFFICER SHALL, BY AN ORDER IN WRITING, MA KE AN ASSESSMENT OF THE TOTAL INCOME OR LOSS OF THE ASSES SEE, AND DETERMINE THE SUM PAYABLE BY HIM OR REFUND OF ANY A MOUNT DUE TO HIM ON THE BASIS OF SUCH ASSESSMENT. 7. POWER OF ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT IS TO ALLOW OR REJECT THE CLAIM OR CLAIMS, BASED ON ASSES SEES COMPLIANCE TO THE NOTICE ISSUED AND MAKE AN ASSESSMENT DETERMINING TH E TOTAL INCOME. SECTION 143(2)(I) IS NOT APPLICABLE AFTER FIRST DAY OF JUNE 2003. NOTICE ISSUED UNDER SECTION 143(2)(II) IS TO ENSURE THAT A N ASSESSEE HAS NOT UNDERSTATED HIS INCOME OR HAS NOT UNDER PAID THE TA X. ONCE NOTICE IS ISSUED UNDER CLAUSE (II) OF SECTION 143(2) ASSESSIN G OFFICER IS REQUIRED TO CONSIDER THE EVIDENCE PRODUCED BY ASSESSEE. HE HAS ALSO TO CONSIDER ALL RELEVANT MATERIAL HE HAS GATHERED. FAILURE TO COMPL Y WITH THE NOTICE ISSUED UNDER SECTION 143(2)(II) WOULD REQUIRE THE A SSESSING OFFICER TO FOLLOW THE PROCEDURE SET OUT IN SECTION 144 OF THE ACT FOR MAKING A BEST- OF-JUDGMENT ASSESSMENT. HERE THE ASSESSING OFFICER HAD COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THEREFO RE HE COULD ALLOW OR REJECT THE CLAIM MADE BY AN ASSESSEE CONSIDERING TH E EVIDENCE PRODUCED I.T.A. NO.: 1175/KOL./20 11 ASSESSMENT YEAR : 2008-09 PAGE 1 TO 5 4 AS WELL AS ALL RELEVANT MATERIAL AVAILABLE WITH HIM . ASSESSING OFFICER HERE STATES THAT ITS DETAILS WERE NOT SUBMITTED BY ASSES SEE. WHAT WERE THE ITS DETAILS THAT ASSESSEE HAD NOT SUBMITTED AND WHAT HE MEANT BY ITS DETAILS HAS NOT BEEN MENTIONED. ASSESSEE HAD FILED AUDITED PROFIT & LOSS ACCOUNT, BALANCE-SHEET AND SCHEDULES ALONGWITH ITS RETURN. ASSESSEE WAS SUBJECTED TO A TAX AUDIT SPECIFIED UNDER SECTION 44 AB OF THE ACT. IN SUCH TAX AUDIT REPORT, COPY OF WHICH HAS BEEN PLACED AT PAGES 1 TO 16 OF THE PAPER BOOK, IT IS MENTIONED BY THE AUDITOR THAT ASS ESSEE HAD MAINTAINED PROPER BOOKS OF ACCOUNTS AT ITS HEAD OFFICE. IT HAS ALSO BEEN CERTIFIED THAT THE PROFIT & LOSS ACCOUNT AND BALANCE-SHEET WERE IN ACCORDANCE WITH ITS BOOKS OF ACCOUNTS. THERE IS NO QUALIFICATION WHAT S O ERROR EITHER IN THE AUDIT REPORT IN FORM 3CB OR IN THE STATEMENT OF PAR TICULARS GIVEN IN FORM NO. 3CD. ASSESSING OFFICER AT NO PLACE STATE THAT A SSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNTS. WE ARE, THEREFORE, O F THE OPINION THAT LD. CIT(APPEALS) HAD COME TO A REASONABLE CONCLUSION, W HEN HE HELD THAT DISALLOWANCES WERE MADE ARBITRARILY, IGNORING RULES OF JUSTICE AND EQUITY. IN ANY CASE, THE GROUND RAISED BY THE REVENUE ONLY PLEADS THAT LD. CIT(APPEALS) SHOULD HAVE REMANDED THE MATTER BACK T O THE FILE OF ASSESSING OFFICER FOR VERIFICATION. SECTION 251 OF THE ACT, AS IT STANDS TODAY, DOES NOT GIVE ANY POWER TO CIT(APPEALS) TO S ET ASIDE THE ORDER OF ASSESSING OFFICER AND REMITTING THE MATTER BACK TO THE ASSESSING OFFICER, FOR FRESH ASSESSMENT. THEREFORE, WE ARE OF THE OPIN ION THAT NO GOOD REASON HAS BEEN SHOWN BY THE REVENUE FOR INTERFERIN G WITH THE ORDER OF LD. CIT(APPEALS). 8. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DAY OF JANUARY, 2014. SD/- SD/- GEORGE MATHAN ABRAHAM P. GEORGE (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 29 TH DAY OF JANUARY, 2014 I.T.A. NO.: 1175/KOL./20 11 ASSESSMENT YEAR : 2008-09 PAGE 1 TO 5 5 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT(APPEALS) (4) CIT (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.