Satvik Enterprises Ltd., Kolkata V. ACIT, CIR-3, KOLKATA, Kolkata

ITA 1269/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1909 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOUMYAJIT DASGUPTA
• Assessee Lawyers: B K SAHOO
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI M.BALAGANESH, AM & SHRI S.S. VISWANETHRA RAVI, JM] I.T.A NO. 1269/KOL/20 16 ASSESSMENT YEAR : 2009-1 0 SATVIK ENTERPRISES LTD. -VS- ACIT, CI RCLE-3, KOLKATA [PAN: AAGCS 1827 B] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI B.K.SAHOO , C A FOR THE RESPONDENT : SHRI SOUMYAJIT DASGUPTA, ADDL.CIT. DATE OF HEARING : 26.12.2017 DATE OF PRONOUNCEMENT : 05.01.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-1, KOLKATA [IN SHORT THE LD CIT (A)] IN APPEAL NO.966/CIT(A)- 1/CIR-3/2011-12 DATED 04.05.2016 AGAINST THE ORDER PASSED BY THE ACIT, CIRCLE-3, KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 23.12.2011 FOR THE ASSESSME NT YEAR 2009-10. 2. THE GROUND NO. 1 RAISED BY THE ASSESSEE WAS STAT ED TO BE NOT PRESSED BY THE LD. AR AT THE TIME OF HEARING FOR WHICH NECESSARY ENDORSEMENT HAS BEEN MADE BY HIM IN OUR FILE. ACCORDINGLY, GROUND NO.1 IS DISMISSED AS NOT PRESSE D. 3. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN UPHOLDING THE ESTIMATED DISALLOWANCES MADE BY THE LD. AO TOWARDS GENERAL 2 ITA NO.1269/KOL/2016 SATVIK ENTERPRISES LTD. A.YR. 2009-10 2 CHARGES (RS. 112882/-) AT 25% OF TOTAL GENERAL CHA RGES; TRAVELLING AND CONVEYANCE (RS. 198876/-) AT 10% OF THE TOTAL TRAVELLING AND CONVEY ANCE AND MISCELLANEOUS ITEMS ON EXPORT EXPENSES (RS. 311273/-) AT 20% OF TOTAL EXPE NSES THEREON. THIS ACTION OF THE LD. AO WAS UPHELD BY THE LD. CIT(A). AGGRIEVED THE ASSE SSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) IS WRONG AND UNJUSTIFIED IN CONFIRMING THE ACTION OF ASSESSING O FFICER WHO DISALLOWED RS. 1,12,882/- OUT OF GENERAL CHARGES @ 25% WITHOUT SHO WING ANY BASIS AND IGNORING THE FACT THAT EXPENSES CLAIMED WORKS TO 0. 02% OF TOTAL TURNOVER. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) IS WRONG AND UNJUSTIFIED IN UPHOLDING THE ACTION OF ASSESSING OF FICER WHO DISALLOWED RS. 1,98,876/- OUT OF TRAVELLING & CONVEYANCE @ 10% WIT HOUT SHOWING ANY BASIS. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) IS WRONG AND UNJUSTIFIED IN CONFIRMING THE ACTION OF ASSESSING O FFICER WHO DISALLOWED RS. 3,11,273/- OUT OF MISCELLANEOUS ITEMS ON EXPORT EXP ENSES WITHOUT MARSHALLING THE BASIS OF DISALLOWANCE @ 20% AND IGNORING THE FA CT THAT SUCH CLAIM WORKS TO 0.1% OF TOTAL EXPORT VALUE. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A DDUCE OR AMEND ANY GROUND OR GROUNDS ON OR BEFORE THE DATE OF HEARING OF THE APP EAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THA T THE ASSESSEE IS ENGAGED IN IMPORT, EXPORT AND WHOLESALE TRADING OF METAL SUCH AS MANGA NESE ORE, FERRO MANGANESE, SILICON MANGANESE ETC. THE RETURN OF INCOME FOR THE ASSESSM ENT YEAR 2009-10 WAS ELECTRONICALLY FILED BY THE ASSESSEE COMPANY ON 24. 09.2009 DISCLOSING THE TOTAL INCOME OF RS. 1,25,41,170/-. THE BASIS OF DISALLOWANCE OF VARIOUS EXPENSES MADE BY THE LD. AO WHICH ARE IN DISPUTE BEFORE US ARE AS UNDER: 3 ITA NO.1269/KOL/2016 SATVIK ENTERPRISES LTD. A.YR. 2009-10 3 NATURE OF EXPENSES AS PER BOOKS OF ACCOUNTS AMOUNT OF DISALLOWANCES REMARK 1.GENERAL EXPENSES 4,51,530 1,12,882 25% OF TOTAL G ENERAL EXPENSES 2.TRAVELLING CONVEYANCE EXPENSES 19,88,763 1,98,876 10% OF TOTAL TRAVELLING & CONVEYANCE EXPENSES 3. OTHER MISC. EXPENSES RELATED TO EXPORT 15,56,369 3,11,273 20% OF THE TOTAL OTHER MISC. EXPENSES RELATED TO EXPORTS. THE LD. AR STATED THAT ALL THE DETAILS AND DOCUMENT S AS REQUISITIONED BY THE LD. AO WERE DULY FILED BEFORE HIM AT THE TIME OF ASSESSMEN T PROCEEDINGS WHICH WERE ALSO EXAMINED BY THE LD. AO. HE FURTHER STATED THAT THIS FACT IS ALSO MENTIONED IN PAGE 1 OF THE ASSESSMENT ORDER. HAVING DONE SO, HE OUGHT NOT TO HAVE STATED THE NO DETAILS WERE FILED BY THE ASSESSEE IN RESPECT OF AFORESAID EXPEN DITURE WARRANTING DISALLOWANCES ON THE ESTIMATED BASIS. HOWEVER, HE FAIRLY STATED LATER AL L THESE ISSUES BE EXAMINED AFRESH AND ASSESSEE WOULD FURNISH ALL THE DETAILS AS REQUIRED BY THE LD. AO AND PRAYED FOR DE NOVO SET ASIDE OF THESE ISSUES. IN RESPONSE TO THIS, THE LD. DR VEHEMENTLY OBJECTED FOR THE SAME AND RELIED ON THE ORDERS OF THE LOWER AUTHORIT IES. WE FIND THAT THE LD. AO IN PARAGRAPH NO. 2 OF THE ASSESSMENT ORDER HAD STATED THAT THE ASSESSEE HAD FURNISHED VARIOUS DETAILS AND DOCUMENTS AS REQUISITIONED BY H IM AND THE SAME WERE DULY EXAMINED BY HIM. HOWEVER, WHILE MAKING THE DISALLOW ANCES OF THE AFORESAID EXPENDITURES ON AN ESTIMATED BASIS, HE HAD STATED THAT NO DETAILS WERE FILED BY THE ASSESSEE. THIS PROVES THAT THERE IS A CONTRADICTORY STATEMENT MADE BY THE LD. AO. HENCE, WE DEEM IT FIT AND APPROPRIATE TO REMAND THE SE ISSUES WHICH ARE IN DISPUTE BEFORE 4 ITA NO.1269/KOL/2016 SATVIK ENTERPRISES LTD. A.YR. 2009-10 4 US TO THE FILE OF THE LD. AO FOR DE NOVO ADJUDICATI ON IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT THE ASSESSEE BE GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. ACCORDINGLY, GROUND NOS. 2 TO 5 RAISED BY THE ASSES SEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 05.01.2018 SD/- SD/- [S.S. VISWANETHRA RAVI] [ M.BAL AGANESH ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 05.01.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. SATVIK ENTERPRISES LTD., 1, PARK LANE, 3RD FLOOR , KOLKATA-700016. 2. ACIT, CIRCLE-3, KOLKATA, P-7, CHOWRINGHEE SQUARE , KOLKATA-700069. 3..C.I.T.- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S