Smt. Jyoti Bhatia,Prop. Jyoti electric House, Indore V. The DCIT., Indore

ITA 159/IND/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 47865 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 29-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN DIWAN
• Assessee Lawyers: H P VERMA; G AGRAWAL
• Keywords: Opportunity of being heard; Principle of natural justice; Retraction
• Section: 143(3); 153A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.159/IND/2010 AY: 2004-05 JYOTI BHATIA INDORE PAN ABFPB-5380A ..APPELLANT V/S. DCIT, 4(1), INDORE ..RESPONDENT APPELLANT BY : S/SHRI H.P. VERMA AND SHRI G. AG RAWAL RESPONDENT BY : SHRI ARUN DIWAN, SR. DR ORDER PER JOGINDER SINGH, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) DATED 5.5.2008 ON THE FOLLOWING GROUNDS :- 1. THAT THE ASSESSMENT ORDER PASSED U/S 143(3) IS ILLEGAL, WRONG AND BAD IN LAW. 2. THAT THE AUTHORITIES BELOW HAVE GROSSLY ERRED I N MAKING AND SUSTAINING THE ADDITION OF RS.31,388/- ON ACCOUNT OF GROSS PROFIT. 2 3. THAT THE AUTHORITIES BELOW HAVE GROSSLY ERRED I N MAKING THE ADDITION OF PROFIT OF RS. 3,41,005/- ON ALLEGED UNA CCOUNTED PURCHASE OF 25,00,700/- AND RESTRICTING IT ON THE PURCHASE O F RS.1212423/- WITHOUT CONSIDERING THE FACTS OF THE CASE PROPERLY. 4. THAT THE AUTHORITIES BELOW HAVE GROSSLY ERRED IN MAKING THE ADDITION OF RS. 6,19,175/- ON ACCOUNT OF INV IN UN RECORDED PURCHASES AND RESTRICTING IT ON THE PURCHASE OF RS. 1212423/- WITHOUT CONSIDERING THE CASE PROPERLY. 5. THAT THE ADDITION MADE AND CONFIRMED OF RS. 6427 7/- IS ILLEGAL, WRONG AND BAD IN LAW. 2. THE ASSESSEE HAS ALSO FILED AN APPLICATION FOR C ONDONATION OF DELAY IN FILING THE APPEAL ON THE REASONS AS STA TED IN THE APPLICATION WHICH IS SUPPORTED BY AN AFFIDAVIT OF T HE ASSESSEE. THE SUBMISSION OF THE ASSESSEE IS THAT THE APPEAL W AS FILED BEFORE THE LEARNED CIT(A) ON 10.1.2007 AND THE SAME WAS DISPOSED OF BY ORDER DATED 5.5.2008. IT WAS STRONG LY SUBMITTED THAT THE ORDER DATED 5.5.2008 WAS NEVER S ERVED UPON THE ASSESSEE TILL DATE AND WHEN THE PENALTY SH OW CAUSE NOTICE U/S 271(1)(C) WAS SERVED ON THE ASSESSEE FIX ING THE CASE FOR 29.3.2010 AND ON INQUIRY FROM THE OFFICE OF THE ACIT, CIRCLE 4(1), THE ASSESSEE CAME TO KNOW ABOUT THE APPELLATE ORDER. THE LD. COUNSEL FOR ASSESSEE PLEADED THAT THE PHOTO COPY OF 3 THE APPEAL ORDER WAS OBTAINED FROM THE OFFICE OF TH E ACIT AND THEN THE APPEAL WAS IMMEDIATELY PREPARED AND WAS FI LED BEFORE THE TRIBUNAL, THEREFORE, IT WAS CLAIMED THAT THE AS SESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN FILING THE APPEAL. THE LEARNED SR. DR FAIRLY AGREED THAT NO PERSON SHOULD BE CONDE MNED UNHEARD AND ALSO DID NOT CONTROVERT THE FACTUAL POS ITION MENTIONED IN THE APPLICATION OF THE ASSESSEE DULY S UPPORTED BY AN AFFIDAVIT. IN VIEW OF THESE FACTS, THE DELAY IS CONDONED. 3. THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUND TO THE EFFECT THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE SURRENDER OF INCOME OF RS. 12 LACS MADE BY THE HUSBAND OF THE ASSESSEE ON 28.8.2003 AND CONSEQUENT ADDITION TO THE INCOME WHILE FILING THE RETURN IS QUITE UNJUSTIFIED AND UNREASON ABLE. IT WAS SUBMITTED BY THE LD. COUNSEL FOR ASSESSEE THAT SINC E RETRACTION WAS MADE FOR INCLUSION OF INCOME OF RS. 12 LACS, TH EREFORE, IT IS A LEGAL QUESTION AND CAN BE ADMITTED BY THE TRIBUNA L ESPECIALLY WHEN THE STOCK WAS FULLY EXPLAINED BY DEBIT BALANCE OF RS.2500700/- IN THE NAME OF THE ASSESSEE IN THE BOO KS OF TWO 4 PERSONS OF HYDERABAD WHERE SEARCH WAS CONDUCTED, TH EREFORE, THE VALUE OF EXCESS STOCK WAS COVERED BY THE SAID D EBIT BALANCES, THEREFORE, IT WAS STRONGLY ARGUED THAT NO ADDITION FOR STOCK COULD BE MADE IN THE HANDS OF THE ASSESSEE. ON THE OTHER HAND, THE LEARNED SENIOR DR STRONGLY PLEADED THAT THERE SHOULD BE END TO THE LITIGATION AND AT THIS STAGE, THE ADDITIONAL GROUND SO RAISED SHOULD NOT BE ADMITTED AS FRESH FA CTS CANNOT BE BROUGHT ON RECORD AT THE STAGE OF THE TRIBUNAL T O WHICH THE LD. COUNSEL FOR ASSESSEE STRONGLY CONTENDED THAT NO NEW FACT IS BEING BROUGHT ON RECORD, RATHER THESE FACTS HAVE AL READY BEEN MENTIONED AT PAGE 3 (LAST PARA) OF THE ASSESSMENT O RDER AND PAGE 8 OF THE IMPUGNED ORDER. ON PERUSAL, THIS FACT UAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON FILE AND FIND THAT SINCE AND FACTUAL ISSUES ARE INVOLVED, THEREFORE, KEEPING IN VIEW THE PRINCI PLE OF NATURAL JUSTICE THAT NO PREJUDICE IS CAUSED TO EITHER SIDE, THE ADDITIONAL GROUND SO RAISED IS ADMITTED. 5 4. SINCE THE TRIBUNAL IS THE LAST FACT FINDING AUTH ORITY AND LEGAL ISSUE IS ALSO INVOLVED, THEREFORE, KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE, WE ARE OF THE CONSIDE RED OPINION THAT NO PREJUDICE IS TO BE CAUSED TO EITHER SIDE ES PECIALLY WHEN THE ADDITION OF RS.31,338/- WAS MADE ON DECLARED SA LES OF RS.17,70,580/- AGAINST THE GP OF RS.10.23% SHOWN BY THE ASSESSEE. IT IS FURTHER FOUND THAT THE TRANSPORTAT ION EXPENSES WERE NOT DEBITED WHILE PREPARING THE TRADING ACCOUN T AND THE SAME WERE NOT CONSIDERED DURING SURVEY. THESE REQU IRE FRESH CONSIDERATION. THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) ALSO DIRECTED THE ASSESSING OFFICER TO TA KE UNACCOUNTED PURCHASES AT RS. 12,12,423/- AND TO WOR K OUT PROFIT AND INVESTMENT ON THESE FIGURES. THE ASSESS ING OFFICER TOOK UNACCOUNTED PURCHASE OF FANS AT RS.25,00,700/- AND FURTHER DETERMINED CORRESPONDING SALES AT RS.28,41, 705/- GIVING PROFIT OF RS.3,41,005/- BY APPLYING GP AT TH E RATE OF 12% OF SALES. WE FURTHER FIND THAT IN LAST PARA OF THE ASSESSMENT ORDER, IT HAS BEEN SPECIFICALLY MENTIONED THAT THE LIST OF SUNDRY 6 DEBTORS INCLUDES THE NAME OF JYOTI ELECTRICALS, IND ORE, AND DEEPAK ELECTRIC HOUSE, THEREFORE, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, INFORMATION WAS REQUISITION ED FROM THE INVESTING WING. LIKEWISE, IDENTICALLY AT PAGE 8 (PARA 1) IT HAS BEEN MENTIONED THAT THE ADIT (INV.), HYDRABAD, HELD THAT THE FIGURES REPRESENT UNACCOUNTED DEBIT BALANCES IN THE BOOKS OF M/S VISHESH APPLIANCES FOR THE RESPECTIVE PARTIE S AND THE FIGURES WERE WRITTEN IN CODE OMITTING TWO ZEROES. THE ACIT, CIRCLE 2 COMPLETED THE SEARCH ASSESSMENT IN THE CAS E OF M/S VISHAL APPLIANCES PROPRIETOR SHRI RAJESH NAREDI ON 29.3.2006 U/S 143(3) READ WITH SECTION 153A AND WHILE COMPLET ING THE ASSESSMENT, QUANTIFICATION OF TURNOVER WAS ARRIVED AT ON THE BASIS OF UNACCOUNTED PRODUCTION OF FANS, QUANTIFIED BY THE INVESTING WING AND ULTIMATELY ACCEPTED BY THE ASSES SEE I.E. M/S VISHESH APPLIANCES. IN VIEW OF THESE FACTS, WE FIN D THAT THESE ARE NOT THE NEW FACTS AS HAS BEEN ALLEGED BY THE LE ARNED SENIOR DR AS IT IS A FACTUAL POSITION AND THE SAME HAS NOT BEEN CONSIDERED. THE LEARNED DR ALSO FAIRLY AGREED THAT THERE WAS A 7 MISTAKE ON THE PART OF THE ASSESSEE AS WELL AS OF T HE ASSESSING OFFICER. WE, THEREFORE, KEEPING IN VIEW THE TOTALIT Y OF FACTS, REMAND THIS APPEAL TO THE FILE OF THE ASSESSING OFF ICER WITH THE DIRECTION TO EXAMINE THE CLAIM OF THE ASSESSEE AFRE SH AND TO DECIDE THE SAME IN ACCORDANCE WITH LAW FOR WHICH DU E OPPORTUNITY OF BEING HEARD BE PROVIDED TO THE ASSES SEE. THE ASSESSEE IS ALSO AT LIBERTY TO FURNISH EVIDENCE, IF ANY, TO SUBSTANTIATE ITS CLAIM. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28.6.2011 JUNE, 2011. (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28.6.2011 COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD F ILE DN/- 8