H N Indigos Pvt.Ltd., Surat V. The Jt.CIT.,Navsari Range, Navsari

ITA 1302/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94208 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 31-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C MISHRA
• Assessee Lawyers: S N SOPARKARSR
• Keywords: Rejection of books of accounts; Unexplained investment; Principle of natural justice; Additional evidence
• Section: 143(3); 142(1); 14A; 145; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND S.S. GODARA JUDICIAL MEMBER I.T.A. NO.1302/AHD/2013 (ASS TT. YEAR 2009-10) H.N. INDIGOS PRIVATE LTD., SY.NO.60/1, GROUND FLOOR, PLOT NO.1 & 2, NR. SHUKANBUNGALOWS, OPP. MAHESHWARI BHAVAN, CITY LIGHT, SURAT-395 007. PAN AABCH 2638 F VS JOINT COMMISSISONER OF INCOME TAX, NAVSARI RANGE, NAVSARI. (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI S.N. SOPARKAR,SR.ADV. REVENUE BY SHRI D.C.MISHRA, SR. D.R / DATE OF HEARING : 31-07-2015 / DATE OF PRONOUNCEMENT: 7/8/2015 / O R D E R PER ANIL CHATURVEDI ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF CIT (A), VALSAD DATED 22-02-2013 FOR ASSESSMENT YEAR 2009-10 . 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI AL ON RECORD ARE AS UNDER. ITA NO1302/AHD/2013 ASSESSMENT YEAR 2009-10 H.N. INDIGOS PVT. LTD. 2 3. THE ASSESSEE IS A COMPANY STATED TO BE ENGAGED I N THE BUSINESS OF CULTIVATING PRAWNS FROM SHRIMPS. ASSESSEE ELECTR ONICALLY FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 30- 9-2009 DECLARING TOTAL LOSS OF RS.28,16,274/-.THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S. 143(3) OF THE INCOME TAX ACT,1961 VIDE ORDER DATED 28-12-2011 AND THE TOTAL INCOME WAS DETERMINED AT RS.59,59,910/-. AGGRIEVED BY THE ORDE R OF THE ASSESSING OFFICER ASSESSEE CARRIED THE MATTER BEFORE THE CIT (A), WHO DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A) ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS:- 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS I N DECIDING THE APPEAL OF THE APPELLANT FILED BEFORE HIM EX-PAR TE WITHOUT AFFORDING THE APPELLANT AN OPPORTUNITY OF BEING HE ARD AND REPRESENTED. IT IS, THEREFORE, PRAYED THAT THE IMPUGNED APPELLAT E ORDER PASSED BY THE LD. CIT (A) BE QUASHED AS BAD-IN-LAW AND INV ALID SINCE PASSED IN DEFIANCE OF PRINCIPLES OF NATURAL JUSTICE , EQUITY AND FAIRNESS. 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DECIDING THE APPEAL OF THE APPELLANT EX-PARTE ON THE GROUND OF N ON ATTENDANCE ON THE DATE OF HEARING BEING 25/09/2012, SINCE THE APPELLANT FILED AN ADJOURNMENT APPLICATION DATED 21/9/2012 BEFORE T HE ID. CIT(A) REQUESTING FOR ADJOURNMENT OF HEARING FIXED ON 25/02/2012,WHICH HAS NOT BEEN REJECTED BY THE SAID CIT(A). IT IS, THEREFORE, PRAYED THAT THE IMPUGNED APPELLAT E ORDER PASSED BY THE ID. CIT (A) BE QUASHED AS BAD-IN-LAW AND INV ALID SINCE PASSED IN DEFIANCE OF PRINCIPLES OF NATURAL JUSTICE , EQUITY AND FAIRNESS. 3) THE ID. CIT (A) HAS ERRED IN LAW AND ON FA CTS IN CONFIRMING THE REJECTION OF THE BOOKS OF ACCOUNTS U/S 145(3) O F THE ACT BY THE ID. A.O. WITHOUT ISSUING SHOW CAUSE NOTICE FOR THE SAME. IT IS, THEREFORE, PRAYED THAT THE ACTION OF THE ID. CIT (A) OF CONFIRMING THE REJECTION OF BOOKS OF ACCOUNTS MADE BY THE ID. A.O. ITA NO1302/AHD/2013 ASSESSMENT YEAR 2009-10 H.N. INDIGOS PVT. LTD. 3 IN DEFIANCE OF PRINCIPLES OF NATURAL JUSTICE, EQUIT Y AND FAIRNESS BE QUASHED. 4. THE ID. A.O. HAS ERRED IN LAW AND ON FACTS IN REJECTING THE BOOKS OF ACCOUNTS AND BOOK RESULTS U/S 145 OF THE A CT. 5. THE ID. CIT (A) HAS ERRED IN LAW AND ON FACT S IN CONFIRMING THE ADDITION THE TUNE OF RS.9,07,599/- AND RS.49,36 ,1697- MADE BY THE ID. A.O. ON THE GROUND OF ESTIMATION OF NET PROFIT AND ON THE GROUND OF ALLEGED UNACCOUNTED STOCK OF RAW MATERIAL RESPECTIVELY WITHOUT ISSUING SHOW CAUSE NOTICE FOR THE SAME. IT IS, THEREFORE, PRAYED THAT THE ACTION O F ID. CIT (A) OF CONFIRMING THE IMPUGNED ADDITIONS MADE BY THE ID. A.O. IN D EFIANCE OF PRINCIPLES OF NATURAL JUSTICE, EQUITY, AND FAIRNESS BE QUASHED. 6. THE ID. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING AN ADDITION TO THE TUNE OF RS. 9,07,5997- ON THE GROUN D OF ESTIMATION OF NET PROFIT. 7. THE ID. CIT (A) HAS ERRED IN LAW AND ON FAC TS IN CONFIRMING AN ADDITION TO THE TUNE OF RS.49,36,1697- ON THE GR OUND OF ALLEGED UNACCOUNTED INVESTMENTS MADE IN THE ALLEGED UNACCOU NTED STOCK OF RAW MATERIAL. 8. THE ID. CIT (A) ERRED IN LAW AND ON FACTS I N CONFIRMING DISALLOWANCE TO THE TUNE OF RS.1,16,1397- MADE BY T HE ID. A.O. U/SEC. 14A OF THE ACT. 9. IT IS, THEREFORE, PRAYED THAT THE ABOVE ADDI TIONS/DISALLOWANCES CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) MAY PLEASE BE DELETED. 10. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACT S IN NOT DECIDING THE GROUND NO.7 OF THE GROUNDS OF APPEAL PRAYING FO R ALLOWING OF THE SET OFF OF VARIOUS ADDITIONS AGAINST EACH OTHER TO THE EXTENT POSSIBLE TO AVOID DOUBLE TAXATION OF SAME INCOME. IT IS, THEREFORE, PRAYED THAT THE ID. A.O. BE DIREC TED TO ALLOW THE SET OFF OF ADDITIONS AGAINST EACH OTHER TO THE EXTENT P OSSIBLE TO AVOID DOUBLE TAXATION OF SAME INCOME. 11. THE APPELLANT PRAYS FOR GRANTING SUCH OTHER RE LIEF AS MAY BE DEEMED JUST AND PROPER BY YOUR HONOURS CONSIDERING THE FACTUAL AND LEGAL ASPECTS OF THE CASE OF THE APPELLANT. ITA NO1302/AHD/2013 ASSESSMENT YEAR 2009-10 H.N. INDIGOS PVT. LTD. 4 12. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER , DELETE, SUBSTITUTE OR MODIFY ANY OR ALL OF THE GROUNDS OF G ROUNDS OF APPEAL. 4. BEFORE US AT THE OUTSET, THE LD. A.R. SUBMITTED THAT THE MATTER WAS DECIDED BY THE LD. CIT (A) EX-PARTE WITHOUT GIV ING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. HE THEREFORE, PRAYED TH AT THE APPEAL BE RESTORED TO THE FILE OF LD. CIT (A) FOR RE-ADJUDICA TION SO THAT ASSESSEE CAN PRESENT ITS CASE BEFORE CIT (A). HE FURTHER SUB MITTED THAT THE ISSUES RAISED IN THE PRESENT APPEAL ARE IDENTICAL T O THE CASES OF OTHER SISTER CONCERNS AND IN THOSE CASES, ISSUE HAS BEEN REMITTED BACK TO THE FILE ASSESSING OFFICER BY HONBLE TRIBUNAL. HE ALS O PLACED ON RECORD THE COPY OF THE DECISION IN THE CASE OF YASHSHAVI RASAY AN PVT. LTD., & H.L. EQUIPMENTS, ITS SISTER CONCERNS DATED 24-4-2015 IN ITA NO.1301 & ITA 1303/AHD/2013. HE THEREFORE, SUBMITTED THAT SINCE T HE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF T HE CASE OF THE SISTER- CONCERNS, THE PRESENT APPEAL MAY ALSO BE SET ASIDE TO THE FILE OF CIT (A). THE LD. D.R. DID NOT SERIOUSLY OBJECT TO THE S UBMISSION OF THE LD. A.R. OF REMITTING THE ISSUE BACK TO THE FILE OF A.O . 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE, ON PERUSAL OF THE ORDE R OF LD. CIT(A) IT IS SEEN THAT THE MATTER WAS DECIDED EX-PARTE BY CIT ( A). WE ALSO FIND THAT IN THE CASE OF ASSESSEES SISTER CONCERNS NAME LY, YASHSHAVI RASAYAN PVT. LTD., & H.L. EQUIPMENTS THE APPEAL WAS DECIDED EX-PARTE BY LD. CIT (A). BEFORE US IT IS THE SUBMISSION OF LD. A.R. THAT THE ISSUES IN THE PRESENT CASE ARE IDENTICAL TO THAT OF ITS SI STER CONCERN. BEFORE US, REVENUE HAS NOT CONTROVERTED THE AFORESAID SUBMISSI ON OF LD. A.R. WE FIND THAT IN THE CASES HL EQUIPMENTS & YASHSHAVI RASAYAN PVT . LTD., THE SISTER CONCERNS OF ASSESSEE, THE CO-ORDINATE BE NCH OF TRIBUNAL HAD SET ASIDE THE ISSUE TO THE FILE OF A.O. BY HOLDING AS UNDER:- ITA NO1302/AHD/2013 ASSESSMENT YEAR 2009-10 H.N. INDIGOS PVT. LTD. 5 5. LD. COUNSEL OF THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT ASSESSEE HAS APPLIED FOR ADJOURNMENT BUT LD. C OMMISSIONER REJECTED THE APPLICATION FOR ADJOURNMENT AND DECIDE D THE APPEALS ON MERIT. HE PRAYED THAT IMPUGNED ORDER BE SET ASID E AND THE ISSUES BE RESTORED TO THE FILE OF LD. CIT (A) FOR R E-ADJUDICATION AFTER PROVIDING OPPORTUNITY OF HEARING TO THE ASSES SEE. 6. LD. D.R. ON THE OTHER HAND TOOK US THROUGH THE O BSERVATIONS OF LD. COMMISSIONER IN PAA-2 ON PAGE 2. HE POINTED OUT THAT LD. COMMISSIONER HAS PROVIDED DUE OPPORTUNITY OF HEARIN G TO THE ASSESSEE. THE REPRESENTATIVE OF THE ASSESSEE, SHRI HIREN DIWAN SOUGHT ADJOURNMENT. LD. CIT (A) HAS OBSERVED THAT R EPRESENTATIVE OF THE ASSESSEE IS A HABITUAL ABSENTEE. MERELY BY F ILING ADJOURNMENT APPLICATION DOES NOT MEAN THAT HEARING WILL BE AUTOMATICALLY ADJOURNED ON THE ASKING OF THE ASSESS EE. ACCORDING TO THE D.R., THERE IS NO JUSTIFICATION IN SETTING A SIDE THE ORDER OF THE LD. CIT (A) IN BOTH THE APPEALS. 7. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AN D GONE THROUGH THE RECORD CAREFULLY. BEFORE WE EMBARK UPON AN INQUIRY, WHETHER PROPER OPPORTUNITY OF HEARING WAS GRANTED O R NOT, AND ORDER OF CIT (A) ON THIS ISSUE COULD BE UPHELD OR N OT. WE DEEM IT PROPER TO TAKE NOTE OF THE PROVISIONS CONTEMPLATING THE MANNER, AN APPEAL IS TO BE DISPOSED OF BY THE LD. CIT (A). I THIS RESPECT, IT IS PERTINENT TO TAKE NOTE OF SECTION 250 SUB-SECTIO N 6 WICH READS AS UNDER:- (1) THE COMMISSIONER (APPEALS) SHALL FIX A DAY AND PLACE FOR THE HEARING OF THE APPEAL, AND SHALL GIVE NOTIC E OF THE SAME TO THE APPELLANT AND TO THE ASSESSING OFFICER AGAINST WHOSE ORDER THE APPEAL IS PREFERRED. (2) XXX XXX XXX (3) XXX XXX XXX (4) XXX XXX XXX (5) XXX XXX XXX (6) THE ORDER OF THE COMMISSIONER (APPEALS) DISPO SING OF THE APPEAL SHALL BE N WRITING AND SHALL STATE THE P OINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION. ITA NO1302/AHD/2013 ASSESSMENT YEAR 2009-10 H.N. INDIGOS PVT. LTD. 6 (6A) XXX XXX XXX 8. A BARE PERUSAL OF THIS SECTION WOULD INDICATE TH AT LD. COMMISSIONER HAS TO STATE THE POINTS FOR DETERMINAT ION I AN APPEAL AND THEREAFTER HE HAS TO ASSIGN THE REASONS IN SUPPORT OF HIS CONCLUSION. WE FIND THAT ON EVERY ISSUE THE FIN DING OF THE LD. FIRST APPELLATE AUTHORITY IS VERBATIM. FOR EXAMPLE, IN GROUND NO.1 IN THE CASE OF H.L. EQUIPMENT, ASSESSEE HAS CHALLEN GED REJECTION OF BOOKS OF ACCOUNTS BY THE A.O. U/S. 145 (3) OF TH E INCOME TAX ACT. 9. IN THE CASE OF YASHSHVI RASAYAN PVT. LTD., VERBA TIM SIMILAR OBSERVATION HAS BEEN MADE. IN THE FIRST GROUND OF A PPEAL, ASSESSEE HAS CHALLENGED REJECTION OF BOOKS OF ACCOU NTS U/S. 145 (3) AND THE LD. COMMISSIONER HAS RECORDED THE FINDI NG IN PARA 5.2. THE FINDING RECORDED BY LD. CIT (A) READS AS U NDER:- 5.2. DECISION:- I HAVE SPARED MY THOUGHTFUL CONSID ERATION TO THE OBSERVATION OF THE A.O. IN THE ASSESSMENT OR DER. NO SUBMISSION WAS MADE BEFORE ME INSPITE OF SEVERAL OPPORTUNITIES GIVEN TO THE APPELLANT. IN THE ABSENC E OF ANY REBUTTAL FROM THE APPELLANT IN THIS MATTER, I AM CO NSTRAINED TO AGREE WITH THE FINDING OF THE A.O. THIS GROUND I S ACCORDINGLY DISMISSED. IT IS TO BE NOTED THAT THE RETURNS WERE FILED IN SE PTEMBER, 2009. NOTICE U/S. 143(2) WAS ISSUED ON 25 TH AUGUST, 2010. THE PROCEEDING APPEARS TO HAVE REMAINED DORMANT. THE NO TICE U/S. 142(1) REQUIRING THE ASSESSEE TO SUBMIT DETAIL WAS ISSUED ON 9- 11-2011 FIXING THE HEARING ON 22 ND NOVEMBER, 2011. THE CASE WAS RE-FIXED ON 29-11-2011. IT APPEARS THAT THERE W AS A SURVEY IN THE CASE OF YASHSHVI RASAYAN PVT. LTD., ON 29-9-200 8 AND THE A.O. CONFRONTED THE ASSESSEE WITH THE OUTCOME OF TH E SURVEY MATERIAL. BUT HE HAS GRANTED LESS THAN ONE MONTH TI ME TO COLLECT THE INFORMATION AND PRODUCE THEM BEFORE HIM. EFFECT IVELY, HE HAS STARTED THE ASSESSMENT PROCEEDINGS AT THE END OF NO VEMBER, 2011 AND PASSED THE ASSESSMENT ORDER AT THE END OF NOVEMBER, 2011 IN BOTH THE CASES. THE SETTING OF ALL THESE FA CTORS AS A WHOLE GOAD US TO OBSERVE THAT PROPER AND EFFECTIVE OPPORT UNITY OF HEARING HAS NOT BEEN GRANTED TO THE ASSESSEE. LD. F IRST APPELLATE AUTHORITY HAS NOT RE-APPRECIATED THE MATERIAL ALREA DY AVAILABLE ON RECORD. IN APPELLATE PROCEEDINGS, IT IS NOT THE CAS E THAT SOMETHING NEW IS TO BE PRODUCED. BECAUSE WITHOUT LEAVE OF THE APPELLATE AUTHORITY, NO ADDITIONAL EVIDENCE CAN BE FOUND. THE MATERIAL ITA NO1302/AHD/2013 ASSESSMENT YEAR 2009-10 H.N. INDIGOS PVT. LTD. 7 ALREADY AVAILABLE ON RECORD HAS TO BE RE-APPRECIATE D, FROM THE FINDING OF CIT (A) EXTRACTED (SUPRA), IT IS NOT DIS CERNABLE THAT HE HAS APPRECIATED THE MATERIAL. TO SOME EXTENT, WE AG REE WITH LD. DR ALSO THAT ASSESSEE FAILED TO PROPERLY TAKE CARE OF ITS INCOME TAX PROCEEDING. THE ADJOURNMENT CANNOT BE GRANTED M ERELY AT THE ASKING OF THE ASSESSEE BUT WHEN WE WEIGH THE ALLEGE D NEGLIGENT CONDUCT OF THE ASSESSEE VIS--VIS PUNISHMENT IN THE SHAPE OF TAX LIABILITY THEN THE SCALE WOULD TILT IN FAVOUR OF TH E ASSESSEE BECAUSE THE NEGLIGENCE AT THE END OF ASSESSEE IS NOT OF THA T MAGNITUDE WHICH WOULD ENTAIL THE TAX LIABILITY OF THIS MAGNIT UDE. THEREFORE, TAKING INTO CONSIDERATION OVERALL FACTS AND CIRCUMS TANCES, WE DEEM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER S OF THE LD. CIT (A) IN BOTH THE APPEALS AND RESTORE ALL THESE I SSUES TO THE FILE OF FIRST APPELLATE AUTHORITY FOR RE-ADJUDICATION. W E DIRECT THE ASSESSEE ALSO TO CO-OPERATE WITH THE LD. CIT (A) AN D NOT TO SEEK UNWARRANTED ADJOURNMENTS. IT IS NEEDLESS TO SAY THA T OBSERVATION MADE Y US WILL NOT IMPAIR OR INJURE THE CASE AND A. O. WILL NOT CAUSE ANY PREJUDICE TO THE EXPLANATION OF THE ASSES SEE. LD. FIRST APPELLATE AUTHORITY SHALL PROVIDE DUE OPPORTUNITY O F HEARING TO THE ASSESSEE. 6. IN VIEW OF THE FACT THAT THE ISSUE IN THE PRESEN T CASE BEING IDENTICAL TO THAT OF SISTER CONCERNS. WE THEREFORE FOLLOWING THE SAME REASONING AS GIVEN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL AND WITH SIMILAR DIRECTIONS REMIT THE ISSUE TO THE FILE OF C IT (A). NEEDLESS TO STATE THAT CIT (A) SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE AND ASSESSEE SHALL ALSO CO-OPERATE BY FURN ISHING PROMPTLY ALL THE REQUIRED DETAILS CALLED FOR BY THE LD. CIT (A). SINCE WE ARE RESTORING THE MATTER TO CIT (A) ON PRELIMINARY ISSU E AS DISCUSSED ABOVE, WE REFRAIN FROM COMMENTING ON THE MERITS OF THE ISS UE ON HAND. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ITA NO1302/AHD/2013 ASSESSMENT YEAR 2009-10 H.N. INDIGOS PVT. LTD. 8 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 7 TH AUGUST,2015 AT AHMEDABAD. SD/- SD/- (S.S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDAAD. DATE : 07 -08-2015 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! () / THE CIT(A), AHMEDABAD 5. $%& '', , )*++ / DR, ITAT, AHMEDABAD 6. &,- . / GUARD FILE. / BY ORDER, / ( DY./ASSTT.REGISTRAR) ! '#$, &' / ITAT, AHMEDABAD 1. DATE OF DICTATION- 31-7-2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 3-8-2015 : 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P .S./P.S. 4-8-2015/5-8-2015 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 7-8-2015 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK10-8- 2015: 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 8. DATE OF DESPATCH OF THE ORDER