PRAKASH BABURAO BAWGE, MUMBAI V. ITO 20(2)-3, MUMBAI

ITA 1570/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48865 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 16-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 26-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S RAWAL
• Assessee Lawyers: S V NAVALKAR
• Keywords: Business income

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. K.AGARWAL (JM) AND SHRI RAJENDRA SI NGH(AM) ITA NO.1570/M/2010 ASSESSMENT YEAR 2005-06 MR. PRAKASH BABURAO BAWGE THE ITO 20(2)-3, MUMBAI FLAT NO.180, LOKNAYAKNAGAR, VERSOVA LINK ROAD, ANDHERI(W), MUMBAI 400 053. PAN : AATPB 5555 E APPELLANT RESPONDENT ASSESSEE BY : SHRI S.V.NAVALKAR REVENUE BY : SHRI R.S. RAWAL ORDER PER RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 9.11.2009 OF CIT(A) FOR THE ASSESSMENT YEAR 2005-06 . THE ASSESSEE IN THIS APPEAL HAS RAISED DISPUTE ON SEVERAL GROUNDS WHICH RELATE TO DISALLOWANCE OF EXPENSES, ADDITION ON ACCOUNT OF DEBTORS, ON ACCOUN T OF INTRODUCTION OF CAPITAL, ON ACCOUNT INCOME FROM HOUSE PROPERTY ETC. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE WHO WAS A CIVIL CONTRACTOR HAD RETURNED TOTAL INCOME OF RS.1,87,196 /- ON THE TOTAL BUSINESS RECEIPTS OF RS.48.15 LACS. THE AO COMPLETED THE ASS ESSMENT EX-PARTE AS THERE WAS NO COMPLIANCE TO THE NOTICES ISSUED. AO ADDED A SUM OF RS.5,15,410/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES; RS.1,34,069/- ON ACCOUNT OF CURRENT LIABILITIES; RS.4,07,216/- ON ACCOUNT OF SUNDRY DEB TORS; AND RS.31,600/- ON 2 ACCOUNT OF DEPOSITS. THE TOTAL INCOME COMPUTED BY T HE AO WAS RS.13,36,220/- IN PLACE OF RETURNED INCOME OF RS.1,87,196/-. IN AP PEAL CIT(A) FIXED THE APPEAL FOR HEARING ON 10.9.2009 WHEN AT THE REQUEST OF THE ASSESSEE THE CASE WAS ADJOURNED TO 5.10.2009. THE ASSESSEE AGAIN SOUGHT A DJOURNMENT WHICH WAS ALLOWED TO 13.10.2009. AGAIN THERE WAS NON COMPLIAN CE AND CIT(A) RE-FIXED THE HEARING ON 4.11.2009 WHEN AT THE REQUEST OF THE CA OF THE ASSESSEE THE APPEAL WAS ADJOURNED TO 20.11.2009. AGAIN NO ONE AP PEARED AND CIT(A) DISPOSED OFF THE APPEAL EX-PARTE IN WHICH VARIOUS A DDITIONS MADE BY THE AO WERE CONFIRMED. AGGRIEVED BY THE SAID DECISION THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. BEFORE US THE LEARNED AR FOR THE ASSESSEE SUBMIT TED THAT THE CA OF THE ASSESSEE WAS HOSPITALIZED WHICH WAS THE REASON FOR NON APPEARANCE BEFORE THE CIT(A). IT WAS ALSO POINTED OUT THAT THE CIT(A) HAD ADJOURNED THE CASE TO 20.11.2009 AS MENTIONED BY HIM IN PARA 2 OF THE APP ELLATE ORDER BUT THE ORDER HAS BEEN PASSED ON 9.11.2009 WITHOUT WAITING FOR TH E ASSESSEE TO APPEAR. THE AO HAD MADE HIGH PITCHED ASSESSMENT ON A TOTAL INCO ME OF RS.13,36,220/- IN PLACE OF RETURN INCOME OF ONLY RS.1,87,196/- WHICH WAS NOT JUSTIFIED. THE LEARNED AR FURTHER ARGUED THAT BEFORE THE AO, THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNTS WHICH HAD GOT MISPLACED BUT N OW THE NECESSARY DETAILS WERE AVAILABLE AND IF GIVEN AN OPPORTUNITY THE ASSE SSEE WILL BE ABLE TO PRODUCE THE SAME BEFORE THE AO. THE LEARNED DR HAD NO OBJEC TION IF THE MATTER WAS RESTORED TO THE AO FOR FRESH ASSESSMENT. 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE M ATTER CAREFULLY. THE ASSESSEE IS A CIVIL CONTRACTOR WHO HAS RETURNED NET INCOME AT ABOUT 4% OF THE GROSS RECEIPT OF RS.48.15 LACS THE AO HAD MADE SEVE RAL ADDITIONS AND HAD 3 ASSESSED THE INCOME AT RS.13,36,220/- WHICH COMES A NET PROFIT OF MORE THAN 25% . IT IS OBVIOUS THAT THE AO HAD MADE HIGH PITCHED A SSESSMENT. WE ALSO FIND THAT CIT(A) AS PER HIS OWN ORDER HAD FIXED LAS T DATE OF HEARING ON 20.11.2009 BUT THE ORDER HAD BEEN PASSED ON 9.11.20 09. THEREFORE IT CANNOT BE SAID THAT PROPER OPPORTUNITY HAD BEEN GIVEN BY C IT(A). SINCE EVEN THE AO HAD PASSED THE ORDER EX-PARTE IN OUR VIEW IT IS PRO PER THAT THE MATTER IS EXAMINED AFRESH BY THE AO AFTER CONSIDERING THE DET AILS AND EVIDENCE AS MAY BE MADE AVAILABLE BY THE ASSESSEE AND AFTER ALLOWIN G OPPORTUNITY OF HEARING. WE THEREFORE SET ASIDE THE ORDER OF CIT(A) AND REST ORE THE MATTER BACK TO THE AO FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMIN ATION AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 5 .05.2011. SD/- S D/- ( D. K. AGARWAL ) (RAJENDRA SIN GH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 25.05.2011 AT :MUMBAI COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR C BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI 4 ALK