M/s. Beardsell Eastern (P) Ltd., Kolkata V. ITO, Ward - 5(3), Kolkata, Kolkata

ITA 1581/KOL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83084 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 18-11-2011
• Court: TRIBUNAL
• Department Lawyers: SUBASH AGARWAL SHRI RAV
• Keywords: Depreciation; Opportunity of being heard
• Section: 144; 44AD

Judgement Text

ITA NO.1581/KOL/11-B-AM M/S. BEARDSELL EASTERN P.LT D VS. ITO, W 5(3), KOL. 1 , B IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH: KO LKATA ( ) , , BEFORE HONBLE SRI MAHAVIR SINGH, , JM & HONBLE SRI SHAMIM YAHYA, AM / ITA NO. 1581/KOL/2011 A.Y 2005-06 M/S. BEARDSELL EASTERN (P) LTD. PAN: AACCB1980F - - - VERSUS - . I.T.O WARD 5(3), KOLKATA ( ' / APPELLANT ) ( #$' / RESPONDENT ) FOR THE APPELLANT: FOR THE RESPONDENT : /SHRI SUBASH AGARWAL, ADVOCATE / SHRI RAVI JAIN, LD. CIT/SR.DR ' ( /DATE OF HEARING: 04-09-2014 ' ( /DATE OF PRONOUNCEMENT: 8/9/-2014 / ORDER , SHRI SHAMIM YAHYA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD. CIT(A) DATED 05-09-2011 PERTAINING TO ASSESSMENT YEAR 200 5-06. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER:- 1. FOR THAT THE ORDER PASSED BY THE LD. CIT(A) AS A LSO THE LD.AO U/S 144 IS ARBITRARY, UNLAWFUL, VINDICTIVE, EXCESSIVE A ND BAD IN LAW. 2. FOR THAT THE LD.CIT(A) AS ALSO THE LD.AO WERE WR ONG IN REJECTING THE BOOKS OF ACCOUNTS ON THE GROUNDS OF PETTY DIFFEREN CE IN SOME ACCOUNTS AND ESTIMATION OF WIP WHICH WERE DULY EXPLAINED AND SUP PORTED BY DOCUMENTARY EVIDENCES AT THE TIME OF APPELLATE AND REMAND PROCEEDINGS. 3. FOR THAT THE LD.CIT(A) WAS WRONG IN UPHOLDING T HE APPLICATION OF PROVISION OF SEC 44AD & 44AF OF THE I.T ACT BY THE LD.AO AS THE GROSS RECEIPTS OF THE ASSESSEE WAS 152.75 LAKHS. THE ABOV E PROVISIONS ARE APPLICABLE ONLY TO ASSESSEE WHOSE GROSS RECEIPTS ARE BELOW 4 LAKHS. 4. FOR THAT THE LD.CIT(A) AS WELL AS THE LD.AO HAS ERRED BY NOT ALLOWING DEPRECIATION AS PER PROVISIONS OF INCOME T AX ACT AFTER CALCULATING ITA NO.1581/KOL/11-B-AM M/S. BEARDSELL EASTERN P.LT D VS. ITO, W 5(3), KOL. 2 PROFITS OF THE ASSESSEE AS PER GROSS PROFIT RATES A S SPECIFIED IN SEC. 44AD & 44AF OF INCOME TAX ACT. 5. FOR THAT THE LD.CIT(A) AS WELL AS THE LD.AO WERE WRONG IN DISALLOWING THE EXPENDITURE FOR NON-DEDUCTION OF TD S WHEN HE HAS DETERMINED THE INCOME APPLYING THE PROVISIONS OF S ECTION 44AD & 44AF OF INCOME TAX ACT. 6. FOR THAT THE LD.AO WAS WRONG IN INITIATING THE PROCEEDINGS U/S. 271(1)( C) AS THE ASSESSMENT MADE BY THE LD.AO WERE AN ESTIMATED BASIS CREATED OUT OF HIS ASSUMPTIONS AND FOR WHICH NO PEN AL ACTION CAN BE INITIATED. 3. IN THIS CASE ASSESSMENT WAS FRAMED U/S. 144 OF THE I.T ACT 1961. AO NOTED THAT THERE WERE VARIOUS DISCREPANCIES FOUND IN THE ASSE SSEES BOOKS OF ACCOUNT. THESE DIFFERENCES ARE RELATED TO THE FOLLOWINGS:- A. CONTRACTUAL RECEIPT FROM M/S. VOLATAS LTD. B. CONTRACTUAL RECEIPTS FROM M/S. GANGARAMPUR C OLD STORAGE, AND C. CONTRACTUAL RECEIPTS FROM BURDWAN LAMPS. 3.1 THE DIFFERENCE IS ALSO IN INCOME AS SHOWN IN TH E ACCOUNT AND INCOME AS PER TDS CERTIFICATE. FURTHERMORE, THE ASSESSEE COMPANY DID NOT FILE ANY VALUATION OF STOCK, STOCK REGISTER AND VALUATION OF W.I.P [WORK IN PROGRESS] ETC. THE AO FURTHER NOTED THAT THE ASSESSEE HAS ALSO FAILED TO SUBSTANTIATE WITH PROP ER ACCOUNTS ABOUT STORES CONSUMED. IN THIS REGARD A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE MENTIONING WHY THE BOOKS OF ACCOUNT SHOULD NOT BE REJECTED. HOWEVER, THE ASSE SSEE DID NOT FILE ANY EXPLANATION DESPITE SEVERAL REMINDERS SENT BY THE AO. IN THESE CIRCUMS TANCES THE AO PROCEEDED TO MAKE ASSESSMENT U/S. 144 OF THE I.T ACT. THE AO MADE T HE ASSESSMENT AT RS.19,57,270/- U/S. 144 OF THE I.T ACT 1961 . 4. AGAINST THE ABOVE, THE ASSESSEE APPEALED FILE BE FORE THE LD.CIT(A) 5. AGAINST THE ACTION OF THE AO THE LD.CIT(A) INTER -ALIA HAS HELD AS UNDER:- ITA NO.1581/KOL/11-B-AM M/S. BEARDSELL EASTERN P.LT D VS. ITO, W 5(3), KOL. 3 PAGE 6 PARA 8. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AS WELL AS GONE THROUGH THE ASSESSMENT ORDER AND REMAND REPORT OF THE ASSESSING OFFICER. THE COUNSEL COULD NOT REBUT THE FINDINGS OF THE AS SESSING OFFICER, EVEN THOUGH THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS READY T O RECONCILE THE DIFFERENCES, YET THE ASSESSEE FAILED TO DO THE SAME EVEN DURING INQUIRY BEFORE ASSESSING OFFICER BEING CONDUCTED AS PER SEC 250(4) AFTER A N OPPORTUNITY WAS PROVIDED BY THE CIT(A)-VI, KOLKATA TO ASSESSEE TO EXPLAIN IT BEFORE THE ASSESSING OFFICER. EFFECTIVELY COMPLETE BOOKS OF ACCOUNTS WER E NOT PRODUCED. IN THE ABSENCE OF COMPLETE BOOKS OF ACCOUNTS, THE AO WAS NOT ABLE TO EXAMINE/VERIFY THE BOOKS OF ACCOUNTS AND THE DIFFERENCES POINTED BY HIM ON THE ORDER SHEET HAD LATER ON COMMUNICATED IN THE LETTER ALSO. THE A SSESSING OFFICER WAS JUSTIFIED IN REJECTING THE BOOKS OF ACCOUNTS AND ES TIMATING THE PROFIT IN ABSENCE OF COMPLIANCE. THE ASSESSEE DID NOT GIVE ANY GENUIN E REASONS TO EXPLAIN THE NON-COMPLIANCE BEFORE THE THEN ASSESSING OFFICER D URING ASSESSMENT PROCEEDINGS U/S. 143(3). MANY DISCREPANCIES WERE NO TICED BY THE ASSESSING OFFICER AND AFTER THAT THERE WAS DELIBERATE NON-COM PLIANCE ON THE PART OF THE ASSESSEE. THE ASSESSEE DID NOT WANT TO PRODUCE THE BOOKS OF ACCOUNTS AGAIN AND AVOIDED DELIBERATELY TO EXPLAIN THE DISCREPANCI ES TO THE THEN ASSESSING OFFICER. THE ASSESSEE WANTED NOW ANOTHER OPPORTUN ITY BEFORE ANOTHER ASSESSING OFFICER KNOWING THAT THE ISSUE WILL BE L IMITED. THE ASSESSEE CANNOT TAKE THE BENEFIT OF ITS OWN DEFICIENCIES AND NON-C OMPLIANCE. HOWEVER, EVEN NOW THE ASSESSEE HAS NOT COMPLIED FULLY BEFORE THE ASSESSING OFFICER AS SUBMITTED BY HIM IN THE REMAND REPORT. THERE IS A L EGAL .. I.EVIGILANTIBUS, NON-DERMIENTIBUS, JURASUBVENIENT, MEANING THEREBY THAT THE LAW ASSIST THOSE WHO ARE GVIGILANT AND NOT THOSE WHO SLEEP O VER THEIR RIGHTS. 6. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APP EAL BEFORE US. 7. WE HAVE HEARD BOTH THE LD. COUNSEL AND PERUSED T HE RECORD. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THERE WAS A MISTAKE ON THE PART OF THE ASSESSEE IN NOT FURNISHING NECESSARY DETAILS BEFORE THE AUTHORITIES BELOW. HE NCE, HE PRAYED BEFORE US THAT THE ASSESSEE MAY BE GRANTED AN OPPORTUNITY TO SUBSTANTIATE IT S CASE. HE FURTHER SUBMITTED THAT NOW THE ASSESSEE IS READY TO SUBMIT NECESSARY BOOKS OF ACC OUNTS. THE ASSESSEE IS ALSO READY TO RECONCILE ALL THE DIFFERENCES AS POINTED OUT BY TH E AO. THE LD.CIT/DR, ON THE OTHER HAND, HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT DESPITE REPEATED OPPORTUNITIES THE ASSESSEE HAS NOT CO-OPERATED WITH THE AUTHORITIES BELOW AND GIVING THE ASSESSEE FURTHER OPPORTUNITY WOULD NOT SERVE ANY P URPOSE. ITA NO.1581/KOL/11-B-AM M/S. BEARDSELL EASTERN P.LT D VS. ITO, W 5(3), KOL. 4 7.1 UPON CAREFUL CONSIDERATION AND PERUSING THE RE CORD, IN OUR CONSIDERED OPINION IN THE INTEREST OF JUSTICE, THE MATTER NEEDS TO BE REM ITTED TO THE FILE OF THE AO. ACCORDINGLY, THE AO IS DIRECTED TO CONSIDER THE ISSUE AFRESH AFT ER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. + ( ORDER PRONOUNCED IN THE OPEN COURT ON 8 /09/2014 SD/- SD/- [ , ] [ , ] [ MAHAVIR SINGH, JUDICIAL MEMBER ] [ SHAMIM YAHYA, ACCOUNTANT MEMBER ( ( ) DATED :8/9 /2014 ** PRADIP SPS ' #. /. / COPY OF THE ORDER FORWARDED TO: 1. . ' / THE APPELLANT : M/S. BEARDSELL EASTERN (P) LTD A/3/1, GILLANDAR HOUSE, 8 N.S ROAD, KOL-1. 2 #$' / THE RESPONDENT- I.T.O W 5(3), AAYKAR BHAVAN, P -7 CHOWINGHEE SQ, KOL-69. 3. 5. / THE CIT, 4. ( )/ THE CIT(A) # / DR, KOLKATA BENCH 6.GUARD FILE . $. # / TRUE COPY, / BY ORDER, / ASSTT REGIST RAR