M/s Link Roadways Pvt. Ltd., Chandigarh V. ITO, W-5(1), Chandigarh

ITA 1333/CHANDI/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0769 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 23-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GE E TINDERMANN
• Keywords: Opportunity of being heard
• Section: 143(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, SMC, CHANDIGARH .. , BEFORE SHRI N.K.SAINI, VICE PRESIDENT ./ ITA NO. 1333/CHD/2018 / ASSESSMENT YEAR : 2014-15 M/S LINK ROADWAYS PVT LTD., SCF 289,FF, GRAIN MARKET, SECTOR 26, CHANDIGARH VS. THE ITO, WARD-5 (1), CHANDIGARH ./PAN NO: AACCL3108K / APPELLANT /RESPONDENT ! ' # /ASSESSEE BY : SH. PARIKSHIT AGGARWAL, CA $ ' # / REVENUE BY : SMT. GEETINDER MANN, SR.DR % & ' ! ' /DATE OF HEARING : 19.03.2019 ()* ' ! ' / DATE OF PRONOUNCEMENT : 26.03.2019 !' / ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 06.08.2018 OF LD. CIT(A), CHANDIGARH. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL:- 1. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT(A) IN APPEAL NO. 10715/1/16-17 DATED 06.08.2018 HAS ERRED IN PASSING THAT ORDER IN CONTRAVENTION OF THE PROVISIO NS OF S. 250(6) OF THE INCOME TAX ACT, 1961. 2. THAT ON FACTS, CIRCUMSTANCES OF THE CASE AND IN LAW , THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF LD. AO IN MAKING ADDITION OF .18,14,932/- BY ESTIMATING THE PROFIT OF THE APPELLANT @ 2.5% EVEN WHEN THE CIRCUMSTANCES DID NOT JUSTIFY SUCH ESTIMATION. ITA NO. 1333-CHD-2018- LINK ROADWAYS PVT LTD, CHANDIGARH 2 3. THAT ON FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY C1T(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN ESTIMATING THE PROFITS AT 2.5 % OF THE DECLARED TURNOVER EVEN WHEN THE CASE WAS SELECT ED FOR LIMITED SCRUTINY TO EXAMINE LARGE OTHER EXPENSE S CLAIMED IN PROFIT AND LOSS ACCOUNT, DETAILS OF WHIC H WERE DULY FURNISHED AND THE BOOKS OF ACCOUNTS WERE NOT REJECTED BY THE LD. AO DURING ASSESSMENT PROCEEDINGS. 4. THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION , DELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON O R BEFORE THE DISPOSAL OF THE SAME. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 30.11.2014 DECLARING THE INCOME OF 73,930/- WHICH WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (I N SHORT 'THE ACT'). LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. THE A SSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE CLAIMED EXPENSES TO THE TUNE OF 7,23,47,801/- AND HAD SHOWN PROFIT @ 0.09% TO THE TUNE OF 73,929/- ON THE TOTAL RECEIPT OF 7,55,54,430/-. HE OBSERVED THAT THE OTHER TRANSPOR TERS IN THE SAME AREA WERE SHOWING PROFIT @ 2.50% TO 3.00%. THE ASSE SSING OFFICER ALSO OBSERVED THAT THE ASSESSEE FAILED TO SUBSTANTI ATE ITS CLAIM OF EXPENSES IN THE PROFIT AND LOSS ACCOUNT UNDER THE H EAD OTHER EXPENSES. HE APPLIED THE NET PROFIT RATE OF 2.50% AND MADE THE ADDITION OF 18,14,932/-. THE ASSESSING OFFICER MENTIONED THAT THE ASSESSEE HAD NO OBJECTION TO THE PROPOSED ADDITION. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND FURNISHED THE WRITTEN SUBMISSIONS. HOWE VER, THE LD. ITA NO. 1333-CHD-2018- LINK ROADWAYS PVT LTD, CHANDIGARH 3 CIT(A) REPRODUCED ONLY A PORTION OF THE SUBMISSION S OF THE ASSESSEE IN PAR 7.2 OF THE IMPUGNED ORDER. FOR THE COST OF REPETITION, THE SAME IS NOT REPRODUCED HEREIN. THE LD. CIT(A) SUSTAINED THE ADDITION BY OBSERVING IN PARA 7.3 OF THE IMPUGNED ORDER AS UNDE R:- 7.3 I HAVE CONSIDERED THE SUBMISSION OF THE LD. COUNSEL AND PURSUED THE ORDER OF THE ASSESSING OFFICER. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD CLAIMED LARGE EXPENSES AND DECLARED LESS PROFIT AS COMPARED TO OTHER TRANSPORTERS IN THE AREA. HE ISSUED THE SHOW CAUSE NOTICE PROPOSING TO ESTIMATE THE PROFIT @ 2.5% OF THE GROSS RECEIPTS. THIS ESTIMATION OF PROFIT WAS AGREED TO BY THE ASSESSEE AND THIS FACT HAS NOT BEEN DISPUTED. SINCE THIS ESTIMATION OF PROFIT WAS MUTUALLY AGREED BY THE AR AND THE AO, NO FURTHER INQUIRY ON THE EXPENSES CLAIMED IN THE RELEVANT PREVIOUS YEAR WERE MADE. HOWEVER, SUBSEQUENT TO AGREEING TO THE ESTIMATION O F THE PROFIT BEFORE THE AO, THE ASSESSEE HAS TURNED AROUND AND CHALLENGED THE SAID ESTIMATION IN APPEAL . AS STATED EARLIER, THE AO HAS WORKED OUT THE ESTIMATION OF PROFIT IN THE MANNER MUTUALLY AGREED UPON AND THEREFORE IN MY CONSIDERED OPINION SUCH A DISALLOWANCE CAN NOT BE CHALLENGED IN APPEAL. THERE ARE MANY JUDICIAL PRONOUNCEMENTS TO SUPPORTS THIS VIEW, IN THE CASE OF VASANT GOVARDHAN DAS VS CIT 273 ITR 87 (KER), STERLING MACHINE TOOLS VS. CIT 123 ITR 181 (ALL), RAMESH CHANDRA VS. CIT 168 ITR 375 (BOM). ACCORDINGLY I SEE NO REASON TO INTERFERE WITH THE FINDING OF THE AO AND THE ADDITION MADE BY THE AO IS SUSTAINED. THE GROUNDS OF APPEAL NO 1 TO 2 ARE DISMISSED. 6. NOW THE ASSESSEE IS IN APPEAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DETAILED SUBMISSIONS RUNNING INTO 08 PAGES WERE FURNISHED TO THE LD. CIT(A) BUT HE CONSIDERED ONLY A SMALL PORTION OF THE SAID SUBMISSIONS. IT WAS ITA NO. 1333-CHD-2018- LINK ROADWAYS PVT LTD, CHANDIGARH 4 FURTHER SUBMITTED THAT THE LD. CIT(A) WITHOUT CONSI DERING THE SUBMISSIONS OF THE ASSESSEE IN RIGHT PERSPECTIVE, SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 8. IN HER RIVAL SUBMISSIONS, THE LD. SR. DR STRONGL Y SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PR ESENT CASE, IT IS NOTICED THAT THE ASSESSEE FURNISHED A DETAILED SUBM ISSIONS BEFORE THE LD. CIT(A), COPY OF WHICH IS PLACED AT PAGES 1 TO 8 OF THE ASSESSEES PAPER BOOK, HOWEVER, THE LD. CIT(A) CONSIDERED ONLY A PORTION OF THE SAID SUBMISSIONS BUT DID NOT POINT OUT AS TO HOW AN D IN WHAT MANNER THE SUBMISSION / EXPLANATION GIVEN BY THE ASSESSEE WAS NOT PLAUSIBLE. I, THEREFORE, DEEM IT APPROPRIATE TO RESTORE THIS I SSUE BACK TO THE FILE OF THE LD. CIT(A) TO BE DECIDED AFRESH AFTER PROVIDIN G DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE COURT ON 26 /03 /201 9) SD/- ( .. / N.K. SAINI) / VICE PRESIDENT DATED : 26 .03.2019 .. ITA NO. 1333-CHD-2018- LINK ROADWAYS PVT LTD, CHANDIGARH 5 , ' !-. /.! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % 0! / CIT 4. % 0! ( )/ THE CIT(A) 5. .12 !3 , ' 3 , 45627 / DR, ITAT, CHANDIGARH 6. 26 8& / GUARD FILE , % / BY ORDER, 9 $ / ASSISTANT REGISTRAR