M/S J.B. TRANSPORT, Sonebhadra V. ACIT RANGE 3, MIRZAPUR

ITA 13/ALLD/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2798 (ITAT-ALLAHABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SB
• Assessment Year: 2010-2011
• Appeal Filed On: 04-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: PRAVEEN GODBALE
• Keywords: Depreciation; Principle of natural justice; Corroborative evidences; Set aside
• Section: 143(3)

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH (THROUGH VIRTUAL COURT) , ALLAHABAD BEFORE SHRI. VIJAY PAL RAO, JUDICIAL MEMBER ITA NO.13/ALLD/2018 ASSESSMENT YEAR: 2010 - 11 M/S J. B. TRANSPORT, SONEBHADRA RENUKOOT, SONEBHADRA 231216 V. ITO, RANGE - 3(2 ), MIRZAPUR TAN/PAN: AAHFM0217E (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PRAVEEN GODBALE , ADVOCATE RESPONDENT BY: SHRI A. K. SINGH , CIT ( SR. DR) DATE OF HEARING: 11 . 11 . 2020 DATE OF PRONOUNCEMENT: 25 . 11 . 2020 O R D E R PER SHRI VIJAY PAL RAO, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 20.09.2017 PASSED BY COMMIS SIONER OF INCOME TAX (APPEALS ) , ALLAHABAD FOR ASSESSMENT YEAR 2010 - 11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT IN ANY VIEW OF THE MATTER ASSESSMENT UNDER SECTION 143(3) DATED 12.03.2013 IS BAD BOTH ON THE FACTS AND IN LAW AND SUCH BY ORDER INCOME AS DETERMINED AT RS. 11,00,380.00 IS HIGHLY UNJUSTIFIED. 2. THAT IN ANY VIEW OF THE MATTER THE LD CIT(A) WAS WRONG IN PASS ING EX PARTE ORDER WITHOUT PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE HENCE THE ORDER OF CIT(A) IS NOT A SPEAKING ORDER IN THE EYES OF LAW. 3. THAT IN ANY VIEW OF THE MATTER ADDITION OF RS. 2,22,709.00 AS PER PARA 3 OF THE ASSESSMENT ORDER IS HIGHLY UNJUSTIFIED AND INCORRECT AND THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRM BY CIT(A) IS HIGHLY UNJUSTIFIED. 4. THAT IN ANY VIEW OF THE MATTER THE DISALLOWANCE OF RS.18,000.00 AS PER PARA 4 OF THE ASSESSMENT ORDER UNDER THE HEAD DIESEL EXPENSES AR E HIGHLY UNJUSTIFIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THAT IN ANY VIEW OF THE MATTER DISALLOWANCE OF RS. 61,795.00 UNDER THE HEAD DEPRECIATION AS MADE BY ASSESSING OFFICER AND CONFIRMED BY CIT(A) IS HIGHLY UNJUSTIFIED. 6. THAT IN ANY VIEW OF THE MATTER ADDITION/ DISALLOWANCE UNDER VARIOUS HEADS MADE BY THE ASSESSING OFFICER ARE INCORRECT AND THE OBSERVATIONS WITH REGARDS TO DISALLOWANCES ARE INCORRECT. ITA NO.13/ALLD/2018 M/S J. B. TRANSPORT, SONEBHADRA ASSESSMENT YEAR: 2010 - 11 2 7. THAT IN ANY VIEW OF THE MATTER THE APPELLANT RESERVE HIS RIGHTS TO TAKE ANY FRESH GROUND OF APPEAL BEFORE HEARING OF THE APPEAL. IT IS THEREFORE PRAYED THAT RELIEF MAY PLEASE BE ALLOWED ACCORDINGLY. 2 . THE ASSESSEE IS A PARTNERSHIP FIRM AND ENGAGED IN TRANSPORT BUSINESS. THE ASSESSEE FILED IT S RETURN OF INCOME ON 27.09.2010 DECLARING TOTAL I NCOME OF RS.7,35,880/ - . DURING THE COURSE OF SCRUTINY ASSESSMENT, THE AO NOTICED THAT THE ASSESSEE HAS SHOWN GROSS RECEIPT FROM HINDALCO INDUSTRIES LTD., VANDANA ENTERPRISES, ASHIRWAD ENTERPRISES AND SRI RAM YADAV. OUT OF WHICH A SUM OF RS.3510173/ - IS REC EIVED FROM M/S VANDANA ENTERPRISES AS SHOWN IN THE PROFIT AND LOSS A/C. HOWEVER, AS PER LEDGER ACCOUNT PRODUCED BY THE ASSESSEE, THE GROSS RECEIPT FOR TRANSPORT SERVICES DURING THE YEAR IS SHOWN AT RS.3684351/ - . ACCORDING TO THE AO, HE PROPOSED TO MAKE AN ADDITION OF RS.174178/ - AS THE DIFFERENCE BETWEEN THE RECEIPTS SHOWN IN THE P&L A/C . SIMILARLY THE GROSS RECEIPTS FROM ASHIRWAD ENTERPRISES IS RS.3543528/ - WHEREAS AS PER THE BANK ACCOUNT STATEMENT, THE GROSS RECEIPT FROM AS HIRWAD ENTERPRISES IS RS.3592059 / - . THE DIFFERENCE OF RS.48531/ - WAS PROPOSED TO BE ADDED TO THE INCOME OF THE ASSESSEE. THE AO FINALLY MADE THESE TWO ADDITIONS ON ACCOUNT OF DISCREPANCIES IN THE RECEIPT FROM THESE TWO PARTIES WHILE COMPLETING THE ASSESSMENT. 3 . THE ASSESSEE CHALLENGED THE ORDER OF THE AO BEFORE THE CIT(A). HOWEVER THE APPEAL OF THE ASSESSEE WAS DISMISSED EX PARTE AS NOBODY HAS APPEARED BEFORE THE CIT(A). THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE AO HAS NOT GIVEN AN OPPORTUNITY TO EXPLAIN THE DIFFERENCE IN THE GR OSS RECEIPT FROM THESE TWO PARTIES SHOWN IN THE P&L A/C IN COMPARISON TO THE LEDGER ACCOUNT AND BANK ACCOUNT STATEMENT. FURTHER THE ENTIRE DIFFERENCES CANNOT BE TREATED AS INCOME OF THE ASSESSEE BUT ONLY THE PROFIT ELEMENT CAN BE ADDED TO THE INCOME OF THE ASSESSEE. HE HAS FURTHER SUBMITTED THAT THE CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE EX PARTE AND THEREFORE THE ASSESSEE HAD NO OCCASION TO EXPLAIN ITS CASE EITHER BEFORE THE AO OR BEFORE THE CIT(A). THUS THE LEARNED AR HAS PLEADED THAT THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO EXPLAIN THESE DIFFERENCES IN THE RECEIPT FROM THESE TWO PARTIES. HE HAS FURT HER POINTED OUT THAT THE AO HAS ALSO ITA NO.13/ALLD/2018 M/S J. B. TRANSPORT, SONEBHADRA ASSESSMENT YEAR: 2010 - 11 3 MA DE SOME AD HOC DISALLOWANCES OF EXPENSES WHICH IS NOT JUSTIFIED WHEN THE NET PROFIT DECLARED BY THE ASSESSEE WAS MORE THAN THE NET PROFIT DECLARED IN THE PRECEDING YEARS AND FURTHER THE AO WAS SATISFIED WITH THE NET P ROFIT RATIO DECLARED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE OBSERVATION OF THE AO ON THE NET PROFIT DECLARED BY THE ASSESSEE WOULD NOT AMOUNT TO ACCEPT THE BOOKS OF ACCOUNTS OF THE ASSESSEE AN D CLAIM OF EXPENDITURE WITHOUT SUPPORTING EVIDENCE. THUS THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS TO SUBSTANTIATE THE CLAIM OF EXPENDITURE BY PRODUCING THE SUPPORTING EVIDENCE. HE HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 4 . HAVING CONSIDERE D THE RIVAL CONTENTIONS AND CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, IT IS NOTED THAT THE AO HAS STATED IN THE ASSESSMENT ORDER THAT THE NET PROFIT RATIO IS SLIGHTLY GREATER THAN THE PRECEDING YEAR, THEREFORE NO ADVERSE INFLUENCE IS FOUND. T HE AO THEN PROCEEDED TO VERIFY THE GROSS RECEIPTS FROM VARIOUS PARTIES DURING THE YEAR UNDER CONSIDERATION AND NOTED THAT THERE ARE DISCREPANCIES OF RS.174178/ - IN THE GROSS RECEIPT FROM M/S VANDANA ENTERPRISES. SIMILARLY A DIFFERENCE OF RS.48531/ - WAS NOT ED IN RESPECT OF GROSS RECEIPTS FROM M/S ASHIRWAD ENTERPRISES. THE ASSESSMENT ORDER IS COMPLETELY SILENT ABOUT ANY SHOW - CAUSE NOTICE ISSUED TO THE ASSESSEE BEFORE MAKING THE ADDITION ON ACCOUNT OF THESE TWO DIFFERENCES OF GROSS RECEIPTS. THUS IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THERE IS A VIOLATION OF PRINCIPLE OF NATURAL JUSTICE AS THE AO HAS MADE THE ADDITION WITHOUT GIVING AN A DEQUAT E OPPORTUNITY OF HEARING TO THE ASSESSEE TO EXPLAIN THE DIFFERENCE AS NOTED BY THE AO. BEFORE THE CIT(A), THE APPE AL OF THE ASSESSEE WAS DISMISSED BY IMPUGNED EX PARTE ORDER. THE CIT(A) HAS SUMMARILY DISMISSED THE APPEAL OF THE ASSESSEE IN PARA 4 AS UNDER: 4. DECISION: THE A.O HAS GIVEN A CLEAR - CUT FINDING IN THE ASSESSMENT ORDER REGARDING THE ADDITIONS MADE. NO CONTR ARY EVIDENCE HAS BEEN FILED BY THE APPELLANT IN THESE PROCEEDINGS. THE ADDITIONS MADE BY THE AO ARE CONFIRMED. THESE GROUNDS OF APPEAL ARE DISMISSED. 5 . THUS THE CIT(A) HAS NOT PASSED A SPEAKING ORDER ON THE GROUNDS RAISED BY THE ASSESSEE BUT CONFIRMED TH E ADDITIONS/DISALLOWANCES MADE BY THE AO. THUS IN THE FACTS AND CIRCUMSTANCES OF THE CASE , WHEREAS THE AO HAS MADE CERTAIN ADDITION WITHOUT GIVING ITA NO.13/ALLD/2018 M/S J. B. TRANSPORT, SONEBHADRA ASSESSMENT YEAR: 2010 - 11 4 ADEQUATE OF HEARING TO THE ASSESSEE WHICH IS FOUND CONFIRMED BY THE CIT(A) WHILE PASS ING THE IMPUGNED EX PARTE ORDER, I AM OF THE CONSIDERED OPINION THA T THE MATTER REQUIRES RE - CONSIDER ATION AT THE LEVEL OF THE AO AFTER GIVING AN EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY, THE MATTER IS SET ASIDE TO THE RECORD OF THE AO FOR AFRESH ADJUDICAT ION. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25 /11/2020. SD/ - [ VIJAY PAL RAO ] JUDICIAL MEMBER DATED: 25 /11/2020 RS COPY FORWARDED TO: 1. APPELLANT - M/S J. B. TRANSPORT, SONEBHADRA 2. RESPONDENT - ITO, RANGE - 3(2), MIRZAPUR 3. CIT(A) - 4. CIT 5. DR - BY ORDER ASSISTANT REGISTRAR