JITENDRA C. CHOLLERA, MUMBAI V. ITO WD 24(3)(4), MUMBAI

ITA 1276/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79372 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2008-2009
• Appeal Filed On: 14-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SAHU
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUM BAI , BEFORE SHRI D. MANMOHAN, VP AND SHRI SANJAY ARORA, AM I.T.A. NO. 1276/MUM/2013 ( / ASSESSMENT YEAR: 2008-09) JITENDRA C. CHOLLERA 162/3, JAWAHAR NAGAR, ROAD NO.2, GOREGAON (W), MUMBAI-400 062 VS. ITO WARD 24(3)(4), MUMBAI ! ' ./PAN/GIR NO. AAAPC 7673 D ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) !#&' / APPELLANT BY : SHRI KIRAN MEHTA $%!#&' / RESPONDENT BY : SHRI R. K. SAHU ( )*&+, / DATE OF HEARING : 08.05.2014 -./&+, / DATE OF PRONOUNCEMENT : 10.07.2014 0 O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-34, MUMBAI (CIT(A) FOR SH ORT) DATED 20.12.2012, DISMISSING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S .143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A. Y.) 2008-09 VIDE ORDER DATED 27.12.2010. 2. THE ASSESSEE IS AN IMPORTER-TRADER IN CHEMICALS. ASSESSMENT IN THE INSTANT CASE WAS COMPLETED U/S.144 OF THE ACT ON A FAILURE ON TH E PART OF THE ASSESSEE TO COMPLY WITH 2 ITA NO.1276/MUM/2013 (A.Y. 2008-09) JITENDRA C. CHOLLERA VS. ITO THE NOTICES U/S.142(1), DESPITE SEVERAL OPPORTUNITI ES BEING EXTENDED, BY ESTIMATING NET PROFIT AT 9% OF THE TURNOVER OF RS.71.77 LACS. DEDU CTION/S UNDER CHAPTER VI-A, CLAIMED AT RS.1,09,748/-, WAS ALSO DISALLOWED IN THE ABSENCE O F THE DOCUMENTARY EVIDENCE/S, ASSESSING THE INCOME AT RS.6,45,950/- , AS AGAINST THE RETURNED INCOME OF RS.2,10,464/- . THE SAME STOOD CONFIRMED IN APPEAL IN VIEW OF THE A DMITTED FACT OF NON-COMPLIANCE, SO THAT THE PROVISION OF SECTION 144 STOOD RIGHTLY INV OKED, WITH NO IMPROVEMENT IN ITS CASE HAVING BEEN MADE BY THE ASSESSEE. AGGRIEVED, THE AS SESSEE IS IN SECOND APPEAL. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 THE ASSESSEE, AS BEFORE THE AUTHORITIES BELOW, SUBMITS THAT WHILE THE COMPUTATION OF INCOME, AUDITED FINAL ACCOUNTS, WERE FURNISHED, THE OTHER DETAILS AS CALLED FOR BY THE ASSESSING OFFICER (A.O.) COULD NOT BE SO IN VIEW OF THE CONTINUING FAMILY DISPUTE BETWEEN THE ASSESSEE AND HIS BROTHER, SHRI SANJAY C HOLLERA, WHO WAS LOOKING AFTER THE ACCOUNTS AND TAXATION MATTERS OF THEIR BUSINESSES, SINCE SOME TIME IN FINANCIAL YEAR (FY) 2009-10. EVEN THE ACCOUNTANT, AS INFORMED EARLIER, WAS NOT COOPERATIVE UNDER THE CIRCUMSTANCES AND AT THE INSTANCE OF HIS BROTHER. T HESE AVERMENTS ARE REITERATED THROUGH A DEPOSITION BY WAY OF AN AFFIDAVIT DATED 25.04.2014 (PB PGS.16-19) , FURTHER STATING THAT THE DISPUTE BETWEEN THE BROTHERS HAS SINCE BEEN RES OLVED. LIKEWISE, AN AFFIDAVIT FROM SHRI SANJAY CHOLLERA, OF EVEN DATE, AFFIRMING SO, IS ALS O PLACED ON RECORD (PB PG.20) . FURTHER, IN FACT, IT WAS ON ACCOUNT OF EXHAUSTIVE DETAILS FU RNISHED IN PENALTY PROCEEDINGS INITIATED AT THE CONCLUSION OF THE IMPUGNED ASSESSMENT, THAT THE PENALTY PROCEEDINGS WERE FINALLY DROPPED BY THE A.O. (PB PG.21) . 3.2 WE OBSERVE THAT INCOME HAS BEEN ESTIMATED AT 9% OF THE TURNOVER BY THE A.O., WITHOUT STATING ANY BASIS FOR THE SAME. SECTION 144 CASTS AN ONUS ON THE A.O. TO GATHER AND CONSIDER ALL THE RELEVANT MATERIAL FOR THE PURP OSE OF FRAMING THE ASSESSMENT TO THE BEST OF HIS JUDGMENT. AS CONTENDED BY THE ASSESSEE PER HIS AFFIDAVIT, THE RETURNED NET PROFIT OF 4.75% FOR THE CURRENT YEAR IS, IN FACT, M UCH HIGHER THAN THAT FOR THE PRECEDING YEARS, SUPPORTING THE SAME BY TABULATING THE RESULT S THEREOF. THOUGH THAT MAY WELL BE; THE PROFIT MARGIN BEING NOT CONSTANT, WE FIND A LARGE V ARIATION THEREIN FROM YEAR TO YEAR, APART 3 ITA NO.1276/MUM/2013 (A.Y. 2008-09) JITENDRA C. CHOLLERA VS. ITO FROM THE FACT, AS AFORE-STATED, THAT NO MATERIAL WH ATSOEVER HAS BEEN SPECIFIED BY THE A.O. AS INFORMING HIS ESTIMATE OF THE NET PROFIT AT 9% O F THE TURNOVER. THE REVENUE HAS NOT REBUTTED ANY OF THE CONTENTIONS RAISED BEFORE US. 4. UNDER THE CIRCUMSTANCES, UPON CONSIDERING THE EN TIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED ASSESSMENT IN OUR VIEW MERITS BEING SET ASIDE AND RESTORED BACK TO THE FILE OF THE A.O. TO FRAME THE SAME DE NOVO IN ACCORDANCE WITH LAW, ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES ALLOWED FOR STATIS TICAL PURPOSES. 1/+23451+& 6& 789:) ; +&+< ORDER PRONOUNCED IN THE OPEN COURT ON JULY 10, 2014 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) / VICE PRESIDENT / ACCOUNTANT MEMBER ( =* MUMBAI; > DATED : 10.07.2014 )3 ROSHANI , SR. PS !' # $%&' ('% COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. ( ?+ @ A / THE CIT(A) 4. ( ?+ / CIT - CONCERNED 5. B)CD$3+3E4 ,E4/ ( =* / DR, ITAT, MUMBAI 6. D5F* GUARD FILE !' ) / BY ORDER, */)+ (DY./ASSTT. REGISTRAR) , ( =* / ITAT, MUMBAI