Amarjyothi Carrying Corporation, CHENNAI V. ACIT, CHENNAI

ITA 1459/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8034 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 23-05-2016
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHIJCIT D R
• Assessee Lawyers: N V BALAJI
• Keywords: Rejection of books of accounts; Opportunity of being heard

Judgement Text

, SMC/A , IN THE INCOME TAX APPELLATE TRIBUNAL SMC/A BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ I.T.A.NO1459 /MDS./2016 ( ! / ASSESSMENT YEAR :2012-13) M/S.AMARJYOTHI CARRYING CORPORATION, G2,GROUND FLOOR, D BLOCK, 172, THE MOONSTONE MEADOWS, ANA NAGAR, CHENNAI -107. VS. THE ACIT, NON-CORPROATE CIRCLE 7(1), CHENNAI PAN AAAPA 0972 H ( / APPELLANT ) ( / RESPONDENT ) '# $ % / APPELLANT BY : MR.N V BALAJI, ADVOCATE &''# $ % / RESPONDENT BY : MR.ASHISH TRIPATHI,JCIT, D.R ( ) $ * + / DATE OF HEARING : 22.11.2016 ,-! $ * + /DATE OF PRONOUNCEMENT : 22.11.2016 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-7, CHENNA I DATED ITA NO. /MDS/2014 2 14.03.2016 IN ITA NO.93/CIT(A)-7/2014-15 PASSED UN DER SEC.143(3) OF THE ACT. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IN ITS APPEA L IS WITH REGARD TO REJECTION OF BOOKS OF ACCOUNTS BY THE LOW ER AUTHORITIES AND THEREBY ESTIMATING THE INCOME OF ASSESSEE AT 1.5% O F THE TOTAL INCOME. 3. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE FI LED ITS RETURN OF INCOME ON 30.09.2012 ADMITTING AN INCOME OF ` 23,85,480/- AND PAID TAX BY WAY OF TDS AND SELF ASSESSMENT . SUBSEQUENTL Y, THE CASE WAS TAKEN UP TO SCRUTINY AND THE AO VERIFIED THE BOOKS OF ACCOUNTS, VOUCHERS, BILLS, HIRE CHALLANS AND RELEVANT DOCUMEN TS AND THE AO REJECTED THE BOOKS OF ACCOUNTS U/S.145(3) OF THE AC T ON THE GROUND THAT THE ASSESSEE PAID HIGHER HIRE CHARGES AND THE ASSESSEE WAS UNABLE TO PRODUCE EVIDENCE/IDENTITY OF THE PERSONS TO WHOM SUCH PAYMENT HAVE BEEN MADE. ACCORDINGLY, THE AO ESTIMA TED THE INCOME OF THE FIRM @ 1.5% OF TOTAL TURNOVER OF ` 24.44 CRORES FOR THE YEAR UNDER CONSIDERATION AND MADE AN ADDITION OF ` 14,66,850/- TO THE ITA NO. /MDS/2014 3 INCOME OF ASSESSEE. AGGRIEVED, THE ASSESSEE PREFER RED AN APPEAL BEFORE THE LD.CIT(A). 4. ON APPEAL, THE LD.CIT(A) CONFIRMED THE ORDER OF THE AO REGARDING REJECTING THE BOOKS OF ACCOUNTS OF ASSESS EE ON THE REASON THAT IN SPITE OF GIVEN AMPLE OPPORTUNITY TO THE ASS ESSEE, THE ASSESSEE FAILED TO PRODUCE EVIDENCE/IDENTITY OF THE PERSONS TO WHOM THE HIRE CHARGES WERE PAID. FURTHER, EVEN ESTIMATION OF INCO ME AT 1.5% ON THE TOTAL RECEIPT WAS CONFIRMED BY THE CIT(A) AS IT IS REASONABLE COMPARED TO THE ASSESSEES OWN RECORDS. AGAINST TH IS ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE LD.A.R SUBMITTED THAT ASSESSEE HAS FILE D THE COPIES OF THE INVOICES RAISED ON VARIOUS PARTIES, WHICH CONTAINS THE PAN OF THOSE PARTIES. FURTHER, HE SUBMITTED THAT THE ASSESSEE H AD FURNISHED THE REQUISITE DOCUMENTS U/S.44AB OF THE ACT AND THERE W AS NO ADVERSE COMMENT BY THE TAX AUDITOR. THUS, THE REJECTION OF BOOKS OF ACCOUNTS IS NOT PROPER. ON THE OTHER HAND, LD.D.R SUBMITTED THAT IN SPITE OF ITA NO. /MDS/2014 4 GIVING FAIR OPPORTUNITY TO THE ASSESSEE, THE ASSESS EE HAS NOT PRODUCED ALL THE BILLS AND INVOICES RAISED ON VARIO US PARTIES TOWARDS VERIFICATION OF HIRE CHARGES. HENCE, THE AO WAS FO RCED TO REJECT THE BOOKS OF ACCOUNTS AND ESTIMATE THE INCOME OF ASSESS EE. IN OUR OPINION WHEN THE ASSESSEE HAS PRODUCED THE HIRE CHA RGES, BILLS WHICH CONTAINS THE PAN TO THE AO, WHO HAS ANY DOUBT IN THIS REGARD, THE AO HAS TO SUMMON THE CONCERNED PARTY AND VERIF Y THE PAYMENT OF HIRE CHARGES. WITHOUT VERIFYING ANY INVOICE REG ARDING GENUINENESS OF THEM, HE OUTRIGHTEDLY REJECTED THE BOOKS OF ACCO UNTS, WHICH ARE NOT PROPER. HENCE, IN THE INTEREST OF JUSTICE, WE REMI T THE ENTIRE ISSUE IN DISPUTE TO THE FILE OF AO FOR FRESH CONSIDERATION T O COMPLETE THE ASSESSMENT IN ACCORDANCE WITH BOOKS OF ACCOUNTS AS THE ASSESSEE, WHICH WAS SUBJECT TO THE AUDIT U/S.44AB OF THE ACT . IF THE BOOKS OF ACCOUNTS WERE NOT RELIABLE AND VERIFIABLE, THEN ONL Y AO SHALL REJECT THE BOOKS OF ACCOUNTS AND ESTIMATE THE INCOME OF AS SESSEE. WITH THIS OBSERVATION, WE REMIT THE ENTIRE ISSUE TO THE FILE OF AO FOR FRESH CONSIDERATION TO DECIDE AFTER GIVING OPPORTUNITY OF BEING HEARD. ITA NO. /MDS/2014 5 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 22 ND NOVEMBER, 2016 AT CHENNAI. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 22 ND NOVEMBER, 2016. K S SUNDARAM. . $ &*/0 1 0!* / COPY TO: 1 . '# / APPELLANT 3. ( 2* () / CIT(A) 5. 0 5 6 &*7 / DR 2. &''# / RESPONDENT 4. ( 2* / CIT 6. 6 8 9 ) / GF