M/s. Nandighosh Infrastructure and Logistics, Jajpur V. ACIT, Circle-2(2), Bhubaneswar

ITA 148/CTK/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5370 (ITAT-CUTTACK)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 17-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A TIGGA
• Assessee Lawyers: P K MISHRA
• Keywords: Depreciation; Opportunity of being heard; Corroborative evidences
• Section: 144

Judgement Text

1 ITA NO.147/CTK/2017: ASSESSMENT YEAR : 2009 - 2010 ITA NO.148/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 ITA NO.149/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 1 47/ CTK/201 7 : ASSESSMENT YEAR : 20 09 - 2010 ITA NO.148/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 ITA NO.149/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 M/S. NANDIGHOSH INFRASTRUCTURE AND LOGISTICS, C/O. SATYABRATA MOHAPATRA, AT: NATAPARA, PO: JAJPUR ROAD, JAJPUR. VS. ACIT, CIRCLE 2(2), BHUBANESWAR. AT PRESENT: ITO, JAJPUR WARD, JAJPUR PAN/GIR NO . AAGFN 4860 K (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.K.MISHRA , AR REVENUE BY : SHRI A.TIGGA, DR DATE OF HEARING : 0 9 / 0 4 / 201 8 DATE OF PRONOUNCEMENT : 10 / 0 4 / 201 8 O R D E R PER PAVAN KUMAR GADALE, JM THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST SEPARATE ORDERS OF THE CIT(A) - 2, BHUBANESWAR FOR THE ASSESSMENT YEARS 2009 - 2010 AND 2010 - 2011, RESPECTIVELY. 2. IN ITA NOS.147 &148/CTK/2017, THE ASSESSEE HAS RAISED COMMON GROUNDS OF APPEAL. HENCE, WE REPRODUCE THE GROUND OF APPEAL T AKEN IN ITA NO.147/CTK/2017 AS UNDER: 1. FOR THAT, THE ORDER PASSED BY THE LEARNED C.I.T.(A) IS NOT JUST AND PROPER UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AS SUCH THE 2 ITA NO.147/CTK/2017: ASSESSMENT YEAR : 2009 - 2010 ITA NO.148/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 ITA NO.149/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 IMPUGNED ADDITIONS MADE THEREIN ARE LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 2. FOR THAT, WHEN IT WAS CATEGORICALLY SUBMITTED THAT, EVEN THOUGH SECOND ADDRESS WAS PROVIDED, THE LEARNED A.O. HAS COMMITTED GROSS ERROR IN NOT SENDING NOTICES IN SECOND ADDRESS AND COMPLETING THE ASSESSMENT EX - PARTE. THE LEARNED C.I.T.(A) S HOULD HAVE ISSUED NOTICE IN THE SECOND ADDRESS AND SHOULD HAVE PROVIDED REASONABLE OPPORTUNITY OF HEARING, AS SUCH THE ORDER PASSED BY THE LEARNED C.I.T.(A) EX - PARTE, BEING PERVERSE IS LIABLE TO BE QUASHED IN THE INTEREST OF JUSTICE. 3. FOR THAT, THE LEAR NED C.I.T.(A) HAS COMMITTED GROSS ERROR IN RESTRICTING THE EXPENSES TO 5% INSTEAD OF DELETING THE ENTIRE ADDITIONS MADE BY THE LEARNED A.O. BY DISALLOWING 10% OF VARIOUS EXPENSES, AS SUCH THE IMPUGNED ADDITION IS LIABLE TO BE DELETED IN THE INTEREST OF JUS TICE. 4. FOR THAT, WHEN IT IS THE SETTLED LAW THAT, WHERE BOOKS OF ACCOUNTS ARE NOT VERIFIABLE, INSTEAD OF DISALLOWING DIFFERENT EXPENDITURES AND MAKING HUGE ADDITIONS, PROFIT SHOULD HAVE BEEN REASONABLY ESTIMATED. BOTH THE AUTHORITIES BELOW SHOULD NOT HA VE IGNORED THIS 3UDICIAL PRINCIPLES AND SHOULD NOT HAVE MADE ADDITION OF RS.75,36,570.00 AND RS.4,21,092.00. THE IMPUGNED ADDITIONS THUS ARE LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 5. FOR THAT, THE IMPUGNED ADDITION OF RS.75,36,570.00 BY THE AUTHO RITIES BELOW BY DISALLOWING 10% OF THE EXPENSES UNDER DIFFERENT HEADS ARE BASELESS AND ILLEGAL, AS SUCH THE SAME IS LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 6. FOR THAT, THE AUTHORITIES BELOW HAVE COMMITTED GROSS ERROR OF LAW IN DISALLOWING RS. 4,21,092.00 OUT OF THE DEPRECIATION EXPENSES, WHEN THEY HAVE ACCEPTED THE ADDITION OF FIXED ASSETS, AS SUCH, THE IMPUGNED ADDITION IS LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 7. FOR THAT, THE AUTHORITIES BELOW HAVE COMMITTED GROSS ERROR OF FACT A S WELL AS IN LAW IN NOT GIVING CREDIT OF TOTAL TDS OF RS.9,29,709.00 AND RESTRICTING IT TO RS.5,75,433.00 WITHOUT ASSIGNING ANY VALID REASON. AS SUCH, THE INACTION IN GIVING CREDIT OF TOTAL TDS BY THE AUTHORITIES BELOW BEING ILLEGAL IS LIABLE TO BE QUASHED AND THE APPELLANT IS LIABLE TO GET CREDIT OF TOTAL TDS CLAIMED BY IT. 8. FOR THAT, THE APPELLANT CRAVES LEAVE OF THIS HON'BLE TRIBUNAL TO URGE OTHER GROUNDS OF APPEAL, IF ANY, AT THE TIME OF HEARING. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF MATERIALS AND OTHER ACTIVITIES. RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 2010 WAS FILED ON 13.2.2010 3 ITA NO.147/CTK/2017: ASSESSMENT YEAR : 2009 - 2010 ITA NO.148/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 ITA NO.149/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 DECLARING TOTAL INCOME AT RS.16,67,480/ - . SIMILARLY, RETURN OF INCOME FOR THE ASSESSME NT YEAR 2010 - 2011 WAS FILED ON 15.10.2010 DECLARING TOTAL INCOME AT RS.17,99,560/ - . THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) WAS ISSUED . SINCE THE ASSESSEE DID NOT COMPLY WITH THE STATUTORY NOTICES AND NO SUPPORTING EVIDENCES WERE FILED , THE AO PASSED THE EX - PARTE ASSESSMENT ORDER U/S.144 OF THE ACT FOR BOTH THE ASSESSMENT YEARS TO THE BEST OF HIS JUDGMENT. 4 . FOR THE ASSESSMENT YEAR 2009 - 2010, THE ASSESSING OFFICER DISALLOWED 10% OF TRANSPORTATION EXPENSES, DONATION & SUBSCRIPTION AND JCB MACHINE FUEL CONSUMPTION EXPENSES AND ADDED RS.75,36,570/ - TO THE TOTAL INCOME OF THE ASSESSEE FOR WANT OF BOOKS OF ACCOUNT AND PROPER BILLS & VOUCHERS AGAINST THE EXPENSES. FURTHER, HE DISALLOWED RS.4,21,092/ - SINCE DATE OF PURCHASE AND USE OF COMMER CIAL VEHICLES & MOTOR CYCLES ADDED TO BLOCK OF ASSET IN THE YEAR UNDER REFERENCE ARE NOT VERIFIABLE. 5 . SIMILARLY, FOR THE ASSESSMENT YEAR 2010 - 2011, THE ASSESSING OFFICER DISALLOWED 5% OF THE EXPENSES ON FREIGHT AND OTHER EXPENSES FOR WANT OF BOOKS OF ACC OUNT AND PROPER BILLS AND VOUCHERS AGAINST THE EXPENSES. 6 . BEFORE THE CIT(A) ALSO, THE ASSESSEE COULD NOT RESPOND THE NOTICE S OF HEARING DESPITE GIVING VARIOUS OPPORTUNITIES. THEREFORE, THE CIT(A) PASSED THE ORDER EXPARTE BY REFERRING VARIOUS JUDICIAL DECISION S IN HIS ORDER AND RESTRICTED THE DISALLOWANCE TO 5% AS AGAINST 10% APPLIED BY 4 ITA NO.147/CTK/2017: ASSESSMENT YEAR : 2009 - 2010 ITA NO.148/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 ITA NO.149/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2009 - 10 AND CONFIRMED THE ADDITION FOR THE ASSESSMENT YEAR 2010 - 2011. 7 . STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION. 8 . AT THE OUTSET, LD A.R. OF THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS PASSED THE EX PARTE ORDER U/S 144 OF THE ACT AND MADE ADDITION S ON ADHOC BASIS WITHOUT GIVING THE ASSESSEE AN OPPORTU NITY OF BEING HEARD. THE CIT(A) ALSO PASSED THE EXPARTE ORDER WITHOUT AFFORDING OPPORTUNITY TO THE ASSESSEE. HE PLEADED THAT AN OPPORTUNITY BE GRANTED TO THE ASSESSEE. 9 . CONTRA, THE LD DR ARGUED THAT ASSESSEE HAD NOT COOPERATED AT ALL. THEREFORE, IN THE ABSENCE OF PROPER VERIFICATION OF EXPENDITURE AND OTHER BOOKS OF ACCOUNTS, VOUCHERS, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING ADHOC DISALLOWANCE OF EXPENSES. HOWEVER, THE CIT(A) RE STRICTED THE DISALLOWANCE TO 5% AS AGAINST 10% FOR THE ASSESSMENT YEAR 2009 - 2010. THEREFORE, HE PLEADED THAT NO INTERFERENCE SHOULD BE CALLED FOR IN THE ORDER OF THE CIT(A). 1 0 . WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE HAVE NOTED THAT ASSESSING OFFICER HAD GIVEN SUFFICIENT OPPORTUNITIES TO ASSESSEE BUT ASSESSEE DID NOT ATTEND THE PROCEEDINGS. THEREAFTER, DURING THE FIRST APPELLATE PROCEEDINGS , THE ASSESSEE ALSO DID NOT BOTHER TO RESP OND TO THE 5 ITA NO.147/CTK/2017: ASSESSMENT YEAR : 2009 - 2010 ITA NO.148/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 ITA NO.149/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 NOTICE OF HEARING. HENCE, THE CIT(A) PASSED THE ORDER ON THE BASIS OF STATEMENT OF FACTS FILED BEFORE HIM. BEFORE US, LD A.R. OF THE ASSESSEE PRAYED FOR AN OPPORTUNITY TO THE ASSESSEE TO FURNISH THE DETAILS. 1 1 . WE FIND THAT HONBLE MADRAS H IGH COURT IN THE CASE OF DHAN LAKSHMNI PICTURES V. CIT 144 ITR 452 (MAD.) HAS HELD THAT ASSESSEE MUST BE GIVEN AN OPPORTUNITY OF BEING HEARD AND IT WAS ALSO HELD THAT WHILE MAKING BEST JUDGMENT ASSESSM ENT ON THE BASIS OF COMPARABLE CASES, THE ASSESSEE MUST BE APPRISED OF THOSE CASES AND GIVEN AN OPPORTUNITY TO HAVE HIS SAY IN THE MATTER. LOOKING INTO THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, TO MEET THE ENDS OF JUSTICE, WITH THE CONSENT OF B OTH THE PARTIES, WE REMIT BACK THIS FILE TO THE OFFICE OF ASSESSING OFFICER FOR FRESH EXAMINATION. THE ASSESSEE IS DIRECTED TO FURNISH THE NECESSARY DETAILS, BILLS AND VOUCHERS BEFORE THE ASSESSING OFFICER. HENCE, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 12. IN ITA NO.149/CTK/2017, THE ASSESSEE IS AGGRIEVED BY THE CONFIRMATION OF PENALTY U/S.271(1)(B) OF THE ACT FOR THE FAILURE TO COMPLY WITH THE NOTICE U/S.142(1) & 143(2) OF THE ACT. 1 3 . SINCE, WE HAVE RESTORED THE QUANTUM APPEALS TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION, THE PENALTY LEVIED UNDER SECTION 271 (1)(B) BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2010 - 2011 IS ALSO RESTORED TO THE FILE OF THE ASSESSING OFFICER TO READ J UDICATE THE 6 ITA NO.147/CTK/2017: ASSESSMENT YEAR : 2009 - 2010 ITA NO.148/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 ITA NO.149/CTK/2017: ASSESSMENT YEAR : 2010 - 2011 PEN ALTY AFTER PASSING THE QUANTUM ORDER. HENCE, THE APPEAL IN ITA NO.149/CTK/2017 IS ALSO RESTORED TO THE FILE OF THE ASSESSING OFFICER. 1 4 . IN THE RESULT, APPEAL S FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 10 / 0 4 /201 8 . S D/ - SD/ - ( N.S SAINI) ( PAVAN KUMAR GADALE) A CCOUNTANT MEMBER JUDICIALMEMBER CUTTACK; DATED 10 / 0 4 /201 8 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT: M/S. NANDIGHOSH INFRASTRUCTURE AND LOGISTICS, C/O. SATYABRATA MOHAPATRA, AT: NATAPARA, PO: JAJPUR ROAD, JAJPUR. 2. THE RESPONDENT. DCIT, CIRCLE 2(2), BHUBANESWAR 3. THE CIT(A) - 2 , BHUBANESWAR 4. PR.CIT - 2 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//