M/S KULKARNI & SAHU ASSOCIATES, BHILAI(CG) V. DY.. C.I.T.-1, BHILAI(CG)

ITA 128/BIL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4924 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 01-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R NAMDEV
• Assessee Lawyers: D K DUTTA
• Keywords: Principle of natural justice; Additional evidence; Set aside
• Section: 201; 6; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER . / ITA NO S . 128 /RPR/20 15 / ASSESSMENT YEAR : 2006 - 07 M/S. KULKARNI & SAHU ASSOCIATES, B - 494, CROSS STREET 25, SMRITI NAGAR, BHILAI (C.G.) - 490 020 PAN : AAEFK9416C ....... / APPELLANT / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX - 1, BHILAI.(C.G.) / RESPONDENT . / ITA NO .129/RPR/2015 / ASSESSMENT YEAR : 2011 - 12 M/S. KULKARNI & SAHU ASSOCIATES, B - 494, CROSS STREET 25, SMRITI NAGAR, BHILAI (C.G.) - 490 020 PAN : AAEFK9416C ....... / APPELLANT / V/S. THE JOINT COMMISSIONER OF INCOME TAX , BHILAI RANGE, BHILAI.(C.G.) / RESPONDENT 2 ITA NO S . 128 &129 / RPR /20 15 A.Y S . 2006 - 07 & 2011 - 12 A SSESSEE BY : SHRI D.K. DUTTA REVENUE BY : SHRI R. NAMDEV / DATE OF HEARING : 16 .05 .2019 / DATE OF PRONOUNCEMENT : 17 .05 .2019 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THESE TWO APPEALS PREFERRED BY THE COMMON ASSESSE EMA NATES FROM THE ORDER OF THE LD. CIT(APPEALS) - II, RAIPUR DATED 28.05.2015 AND 24.03.2015 FOR THE ASSESSMENT YEARS 2006 - 07 & 2011 - 12 RESPECTIVELY AS P ER THE GROUNDS OF APPEAL ON RECORD. 2. SINCE FACTS COMMON AND ISSUES ARE SIMILAR, THESE CASES ARE HEARD TOGETHER AND ARE BEING DISPOSED OF VIDE THIS CONSOLIDATED ORD ER. ITA NO.128/RPR/2015 A SSESSMENT Y EAR 2006 - 07 FIRST, WE WOULD TAKE ITA NO.128/RPR/2015 FOR ASSESSMENT YEAR 2006 - 07 FOR ADJUDICATION. 3. THAT ON EARLIER OCCASION, THE TRIBUNAL HAD SET ASIDE THE MATTER TO THE FILE OF ASSESSING OFFICER TO ACCEPT THE EVIDENCE SUPPORTING THE CLAIM OF THE ASSESSEE MADE IN THE BOOKS OF ACCOUNT, IF ANY, IN REGARD TO REPAIR AND MAINTENANCE EXPENS ES. THE ASSESSING OFFICER VERIFIED THE SAME AND FOUND 3 ITA NO S . 128 &129 / RPR /20 15 A.Y S . 2006 - 07 & 2011 - 12 THAT BREAK UP OF EXPENDITURE MADE FOR DIFFERENT ROADS CONSTRUCTED BY THE ASSESSEE WERE NOT SUPPORTED WITH DETAIL FACTS AND FIGURES AND THEREFORE, THE EXPENDITURES ARE NOT VERIFIABLE. HOWEVER, THE ASSESS ING OFFICER DID NOT DENY THAT THE ASSESSEE HAS UNDERTAKEN REPAIRS AND MAINTENANCE WORKS OF ROADS, HOWEVER, SINCE THE EXPENDITURE ARE NOT SUPPORTED BY PROPER FACTS AND FIGURES, HE MADE AD - HOC DISALLOWANCE OF 15% OF THE EXPENSES AND ADDED RS.5,37,311/ - TO THE TOTAL INCOME OF THE ASSESSEE. 4. THE LD. AR OF THE ASSESSE OBJECTED TO THE ADDITION MADE OUT OF AD - HOC DISALLOWANCE OF EXPENSES BY CONTENDING THAT THE FINDINGS OF THE ASSESSING OFFICER IS TOTALLY WRONG, UNFOUNDED AND BASELESS THAT HE HAS VERIFIED T HE BOOKS OF ACCOUNT BY TEST CHEQUE AND WITHOUT IDENTIFYING ANY SPECIFIC DEFECT OR A SINGLE ITEM OF EXPENDITURE NOT VERIFIABLE, HE MADE ALLEGED AD - HOC ADDITION ARBITRARILY. 5. THE LD. CIT(APPEALS) RESTRICTED THE DISALLOWANCE TO 50% OF 15% ADDED BY THE ASS ESSING OFFICER. 6. AT THE TIME OF HEARING THE LD. AR OF THE ASSESSEE RELIED ON THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF DHAKESHWARI COTTON MILLS LTD. VS. COMMISSIONER OF INCOME TAX (1954) 26 ITR 775(SC) WHEREIN IT HAS BEEN HELD TH AT THERE SHOULD BE SOME SPECIFIC EVIDENCE ON 4 ITA NO S . 128 &129 / RPR /20 15 A.Y S . 2006 - 07 & 2011 - 12 RECORD AND THAT THE QUASI - JUDICIAL AUTHORITY CANNOT WORK ON GUESS OR SURMISE. THE ADDITION CANNOT BE MADE ON THE BASIS OF MERE SUSPICION. 7. PER CONTRA, THE LD. DR HAS PLACED RELIANCE ON THE ORDERS OF THE SUB - OR DINATE AUTHORITIES. 8. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS AND WE OBSERVE, THE FACTS DEMONSTRATES THAT THE MATTER WAS ONCE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER BY THE CO - ORDINATE BENCH OF THE TRIBUNAL FOR VERIF ICATION OF ADDITIONAL EVIDENCES ALONG WITH BOOKS OF ACCOUNTS TO THE ASSESSEE REGARDING THIS ISSUE. THE ASSESSING OFFICER ONCE AGAIN HAS NOT BROUGHT IN SPECIFIC GROUND AND COGENT REASON IN MAKING 15% DISALLOWANCE. THE ORDER OF THE ASSESSING OFFICER DOES NOT SIGNIFY TO CARRY OUT SPECIFIC ENQUIRY AND VERIFICATION IN ORDER TO COME TO A CONCLUSION THAT SUCH DISALLOWANCE IS NECESSARY IN THE CASE OF THE ASSESSEE. IN ABSENCE OF SUCH EXERCISE, THIS DISALLOWANCE IS ONLY ON SUSPICION WHICH IS NOT PERMISSIBLE AS PER TH E LAW LAID DOWN BY THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF DHAKESHWARI COTTON MILLS LTD. VS. COMMISSIONER OF INCOME TAX (SUPRA.) RESPECTFULLY, FOLLOWING THE RULING OF THE HONBLE APEX COURT, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND DI RECT THE ASSESSING OFFICER TO DELETE THIS ADDITION FROM THE HANDS OF THE ASSESSEE. 5 ITA NO S . 128 &129 / RPR /20 15 A.Y S . 2006 - 07 & 2011 - 12 9. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.128/RPR/2015 IS ALLOWED. ITA NO.129/RPR/2015 A.Y.2011 - 12 NOW WE WOULD TAKE ITA NO.129/RPR/2015 FOR ADJUDICATION. 10. AT THE TIME OF ARGUMENT, THE LD. AR OF THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING THE GROUND NOS. 2, 3 AND 4 AND FILED SIGNED CERTIFICATE TO THE EFFECT WHICH IS ON RECORD. HENCE, GROUND NOS. 2, 3 AND 4 ARE DISMISSED AS NOT PRESSED . 11. THE ONLY EFFECTIVE GROUND IS GROUND NO.1 WHICH RELATES TO THE GRIEVANCE THAT THE LD. CIT(APPEALS) FAILS TO CONSIDER CONFIRMATIONS FROM DEDUCTOR WHICH WAS ALSO FILED BEFORE THE ASSESSING OFFICER AND IS ON RECORD. 12. THE LD. AR OF THE ASSESSEE VEHEMENTLY A RGUED THAT THE CONFIRMATIONS FROM DEDUCTORS SHOULD BE CONSIDERED BY THE REVE NUE AUTHORITY KEEPING IN MIND PRINCIPLE OF NATURAL JUSTICE HOWEVER WHICH WAS NOT CONSIDERED AND THEREFORE, HE HAS PRAYED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFF ICER FOR VERIFICATION OF THE CERTIFICATES IN THE INTEREST OF JUSTICE. 13. THE LD. DR FAIRLY CONCEDED TO THE REQUEST MADE BY THE LD. AR OF THE ASSESSEE. 6 ITA NO S . 128 &129 / RPR /20 15 A.Y S . 2006 - 07 & 2011 - 12 14. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. IN THE INTEREST OF JUSTICE , WE ACCEPT THE PRAYER OF THE LD. AR OF THE ASSESSEE AND SINCE THE CONFIRMATIONS FROM DEDUCTORS ARE PLACED ON RECORD , THE REVENUE AUTHORIT IES OUGHT TO HAVE CONSIDER ED THE SAME BEFORE ARRIVING AT A DECISION. SINCE THIS EXERCISE WAS NOT COMPLIED WITH IN ACCORDANCE WITH PRINCI PLE OF NATURAL JUSTICE, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION OF CONFIRMATIONS FROM DEDUCTORS AND ADJUDICATE THE MATTER AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY OF H EARING TO THE ASSESSEE IN ACCORDANCE WITH LAW. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.129/RPR/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . 16. IN THE COMBINED RESULT, APPEAL OF THE ASSESSEE IN ITA NO.128/RPR/2015 IS ALLOWED AND APPEAL OF THE AS SESSEE IN ITA NO.129/RPR/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED ON 17 TH D AY OF MAY , 201 9 . SD/ - SD/ - MITHA LAL MEENA PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / RAIPUR ; / DATED : 17 TH MAY, 2019. SB 7 ITA NO S . 128 &129 / RPR /20 15 A.Y S . 2006 - 07 & 2011 - 12 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 2, RAIPUR (C.G.) 4. THE CIT - II, RAIPUR (C.G.) 5. , , , / DR, ITAT, RAIPUR BENCH, RAIPUR. 6. / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, RAIPUR.