M/s Maruthi Drug House, Bangalore V. ITO, Bangalore

ITA 142/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7534 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 08-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R RAMESH
• Assessee Lawyers: H GURUSWAMY ITP
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE S HRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER I.T . A. NO. 142 /BANG/20 16 (ASSESSMENT YEAR : 20 08 - 09 ) M/S. MARUTHI DRUG HOUSE , NO.3/1, GROUND AND MEZZAN INE FLOOR, 6 TH MAIN, APPU RAO ROAD, CHAMARAJAPET, BANGALORE - 560 018 . . APPELLANT. VS. INCOME TAX OFFICER, WARD 8(3), BANGALORE. .. RE SPONDENT. APPELLANT BY : SHRI H. GURUSWAMY, ITP. R E SPONDENT BY : SHRI B.R. RAMESH, JCIT (D.R) DATE OF H EARING : 24.08.2017. DATE OF P RONOUNCEMENT : 28 .09 .201 7 . O R D E R PER SHRI VIJAY P AL RAO, J .M . : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DT.10.12.2015 OF COMMISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE ASSESSEE HAS RAISED T HE FOLLOWING GROUNDS : 2 IT A NO. 142 /BANG/20 16 6. THE LEARNED CIT (APPEALS) BANGALORE - 2 HAS ERRED IN CONFIRMING THE ADDITION OF RS.1,11,599/ - MAE BY THE A.O. BY CAUSING DISALLOWANCE U/S.40(A)(IA) OF THE ACT WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE ASSESSEE IS A FIRM AND FILED ITS RETURN OF INCOME ON 28.09.2008 DECLARING LOSS OF RS.4,01,464. THE SCRUTINY ASSESSMENT UNDER SECTION 3 IT A NO. 142 /BANG/20 16 143(3) WAS COMPLETED ON 23.12.2010 WHEREBY THE ASSESSING OFFICER DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.78 ,51,276 AFTER MAKING THE ADDITION ON ACCOUNT OF UNEXPLAINED DIFFERENCE OF CASH BEING EXCESS EXPENDITURE OVER RECEIPTS IN THE CASH BOOK OF RS.81,41,141 AND DISALLOWANCE OF EXPENDITURE ON ACCOUNT OF COMMISSION / BROKERAGE FOR SHORT DEDUCTION OF TDS AMOUNTIN G TO RS.1,11,599. THUS THE MAIN DISPUTE IS ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED DIFFERENCE OF CASH. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER BEFORE THE CIT (APPEALS) BUT COULD NOT SUCCEED. 4. BEFORE US , THE LEARNED AUTHORISED REPRESENTATIVE HAS SUBMITTED THAT THE ASSESSEE HAS PLEADED AND CONTENDED BEFORE THE CIT (APPEALS) THAT THE ASSESSING OFFICER HAS NOT GIVEN SUFFICIENT OPPORTUNITY AND TIME TO THE ASSESSEE TO FURNISH THE DETAILS AND EXPLANATION. THE LEARNED AUTHORI SED REPRESENTATIVE OF THE ASSESSEE HAS REFERRED TO THE ASSESSMENT YEAR AND SUBMITTED THAT THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO FURNISH THE REPLY ON 15.12.2010 AND FIXED THE HEARING OF THE CASE ON 20.12.2010 THEREAFTER THE IMPUGNED ASSESSMENT ORD ER DT.23.12.2010 WAS PASSED. THUS THE ASSESSEE WAS NOT GIVEN SUFFICIENT TIME. TH E ASSESSEE HAS FILED PETITION UNDER RULE 46 OF IT R U LES BEFORE THE CIT (APPEALS) WHICH WAS FORWARDED TO THE ASSESSING OFFICER FOR EXAMINATION AND COMMENTS. THE LEARNED AU THORISED REPRESENTATIVE HAS THEN SUBMITTED THAT THE ASSESSING OFFICER HAD SUBMITTED ITS REMAND REPORT HOWEVER , THE ASSESSEE WAS AGAIN NOT GIVEN AN OPPORTUNITY OF HEARING BY THE ASSESSING OFFICER. HE HAS REFERRED TO THE REMAND REPORT AND SUBMITTED THAT THE ASSESSING OFFICER HAS REJECTED THE ADDITIONAL 4 IT A NO. 142 /BANG/20 16 EVIDENCE FILED BY THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSEE. THUS THE LEARNED AUTHORISED REPRESENTATIVE HAS CONTENDED THAT THE ASSESSEE HAS RECONCILED THE DIFFERENCE BY FILING A NEW CASH BOOK WHICH WAS PRODUCED ALONG WITH THE PETITION UNDER RULE 46A BUT THE SAME WAS REJECTED BY THE ASSESSING OFFICER WHICH WAS ACCEPTED BY THE CIT (APPEALS). 5. ON THE OTHER HAND , THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT THE CIT (APPEALS) HA S DULY EXAMINED THE REMAND REPORT AND REJOINDER FILED BY THE ASSESSEE. THEREFORE WHEN THE ASSESSEE HAS FAILED TO EXPLAIN THE CASH DEFICIENCY IN ITS BOOKS ON VARIOUS DATES, THE ADDITION MADE BY THE ASSESSING OFFICER WAS JUSTIFIED. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS FURTHER CONTENDED THAT THE ASSESSEE MADE AN ATTEMPT TO CHANGE THE CASH BOOK AND ACCOUNTS WHICH WAS AUDITED IN THE FIRST PLACE AND THEREFORE SUBSTITUTED CASH BOOK CANNOT BE ACCEPTED. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BEL OW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. IT IS MANIFEST FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE REASON S FOR NEGATIVE CASH BALANCE AND SOURCE FOR INTR ODUCTION OF THE CASH ON VARIOUS DATES. WE NOTE THAT THE ASSESSING OFFICER HAS STA T ED IN THE ASSESSMENT ORDER THAT ON 15.12.2010 THE ASSESSEE WAS SPECIFICALLY DIRECTED TO SUBMIT THE REPLY BY 20.12.2010. THEREAFTER THE ASSESSING OFFICER PASSED THE ASSESSMENT ORD ER ON 23.12.2010 AND MADE ADDITION ON ACCOUNT OF UNEXPLAINED RECEIPTS. THE ASSESSEE PRODUCED EVIDENCE INCLUDING THE NEW CASH BOOK BEFORE THE CIT (APPEALS) UNDER RULE 46 OF IT RULES, 1962. 5 IT A NO. 142 /BANG/20 16 THE CIT (APPEALS) FORWARDED THE EVIDENCE PRODUCED BY THE ASSESSEE TO THE ASSESSING OFFICER FOR VERIFICATION AND COMMENTS. THE ASSESSEE ALSO FILED THE DETAILS OF THE RECONCILIATION OF CASH BOOK AND BALANCES. THE ASSESSING OFFICER IN THE REMAND REPORT STATED THAT THE NEW CASH BOOK PRODUCED BY THE ASSESSEE AS ADDITIONAL EV IDENCE IS A RECASTED AND FABRICATED DOCUMENT AND IS NOT ACCEPTABLE. IT IS UNDISPUTED THAT THE ASSESSING OFFICER SUBMITTED REMAND REPORT WITH O UT GIVING AN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN AND PRESENT ITS CASE. THE CIT (APPEALS) ACCEPTED THE REMAND RE PORT AND CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. THUS IT IS A CLEAR CASE THAT THE ADDITIONAL EVIDENCE HAS BEEN REJECTED BY THE ASSESSING OFFICER WITHOUT GIVING AN APPROPRIATE AND PROPER OPPORTUNITY TO THE ASSESSEE TO EXPLAIN ITS CASE. ACCORDINGLY, WE SET ASIDE THE MATTER TO THE RECORD OF THE ASSESSING OFFICER FOR DECIDING THE ISSUE AFRESH AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPE N COURT ON 28 TH SEPT., 2017. SD/ - ( INTURI RAMA RAO ) ACCOUNTANT MEMBER SD/ - ( VIJAY PAL RAO ) JUDICIAL MEMBER BANGALORE, DT. 28 .09 .2017. *REDDY GP