LOHIA ENTERPRISES, MUMBAI V. ITO 24(3)3, MUMBAI

ITA 1721/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92782 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 03-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C TRIPURA SUNDARI
• Section: 143(3)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - A - BENCH , , BEFORE S/SH. I P BANSAL,JUDICIAL MEMBER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 1721 /MUM/20 1 3 , / ASSESSMENT YEAR - 20 08 - 09 LOHIA ENTERPRISES 113, TIRUPATI UDYOG,I.B. PATEL ROAD GOREGAON - EAST , MUMBAI - 400 063. PAN: ASSESSEE AFL 0347 D VS INCOME TAX OFFICER - 24(3) - 3 C - 10, PRATYAKSHAKAR BHAWAN BANDRA KURLA COMPLEX BANDRA - EAST , MUMBAI - 400 051. ( / A PPELLANT ) ( / RESPONDENT ) /ASSESSEE BY :SHRI RYAN SALDANHA / REVENUE BY : MS. C. TRIPURA SUNDARI / DATE OF HEARING : 03 - 0 6 - 2015 / DATE OF PRONOUNCEMENT : 03 - 0 6 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT. 11.1 2.2012 OF THE CIT(A) - 34, MUMBAI, THE ASSESSEE HAS RAIS ED FOLLOWING GROUNDS OF APPEAL : 1. THE CIT(A) HAS ERRED IN C ONFIRMING THE ACTION OF ASSESSING OFFICER IN REJECTING THE BOOK RESULTS AND ESTIMATING THE NET PROFIT AT 5% OF THE TOTAL TURNOVER OF THE APPELLANT. VIDE ITS APPLICATION DT.2/6/15, THE ASSESSEE HAS MADE AN APPLICATION FOR ADMISSION OF ADD ITIONA L EVIDENCES. IN ITS APPLICATION THE ASSESSEE HAS STA T ED THAT IT HAD PRODUCED THE PURCHASE VOUCHERS FOR VERIFICATION BEFORE ASSESSING OFFICER ( AO ) , THAT THE AO HAD MENTIONED IN HIS ORDER THAT DOCUMENTS WERE NOT FURNISHED BEFORE HIM THAT IT WAS A FACTUAL MISTAKE ON PART OF THE AO, THAT DOCUMENTS PRODUCED BY IT WERE NOT CONSIDERED IN THE ASSESSMENT AS WELL AS IN THE APPELLATE PROCEEDINGS , THAT THE FIRST APPELLATE AUTHPORITY (FAA) HAD MENTIONED THAT THE ASSESSEE HAD MADE CASH PURCHASES, THAT THE OBSERVATIONS MADE BY FAA WERE FACTUALLY INCORRECT, THAT THE DOCUMENT WERE NEVER ASKED FOR BY BOTH THE AUTHORITIES, THAT EVIDENCES PRODUCED BEFORE THE T RIBUNAL WOULD GO TO THE VERY ROOT OF THE MATTER. THE AUTHORISED REPRES ENTATIVE ( AR ) R EITERATED THE SUBMISSIONS MADE IN THE APPLICATION AND CONTENDED THAT THE A D D ITIONAL E VIDENCES SHOULD BE ADMITTED AS PER PROVISIONS OF RULE 29 OF THE ITAT RUL ES, 1963. THE DEPARTMENTAL REPRESENTATIVE ( DR ) LEFT THE ISSUE OF THE ADMISSION OF TH E ADD ITIONAL EVIDENCE TO DISCRETION OF THE BENCH. WE HAVE PERUSED THE MATERIAL ON RECORD AND FOUND THE EVIDENCE PRODUCED BY THE ASSESSEE WOULD HAVE BEARING ON THE FINAL OUTCOME OF THE APPEAL. THEREFORE, SAME ARE BEING ADMITTED U/R.29 OF THE ITAT, RULES. 2 . A SSESSEE - FIRM , ENGAGED IN THE BUSINESS OF MANUFACTURING M.S. WIRES, FILED ITS RETURN OF INCOME ON 29.9. 20 08 DECLARING TOTAL LOSS OF RS. 2 . 62 LACS, THE AO COMPLETED THE ASSESSMENT U/S. 143(3) OF ACT ON 12.11.201 0 DETERMINING INCOME OF THE ASSESSEE AT RS.2 1.45 LACS. 1721/13 (08 - 09)LOHIA ENTERPRISES 2 THE EFFECTIVE GROUND OF APPEAL IS ABO U T REJECTING THE BOOK RESULTS AND ESTIMATING PROFIT AT 5% OF TOTAL TURNOVER OF THE ASSESSEE . D URING THE ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT THE ASSESSEE HAD FAILED TO FURNISH COMPLETE PURCHASE BILLS/PAYME NT MADE FOR PURCHASES WITH REGARD TO MATERIAL PURCHASED, THAT IT HAD FAILED TO FURNISH NAME AND COMPLETE ADD RESS OF PARTIES TO WHOM PAYMENTS WERE MADE, THAT PURCHASES WERE MADE IN CASH. HE HELD THAT THE BILLS PRODUCED BY THE ASSESSEE SEEMED TO BE BOGUS. HE FURTHER HELD THAT EITHER THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT OR WERE NOT MAINTAINED AS PER THE ACCOUNTING STANDARDS. INVOKING THE PROVISIONS OF S. 145(3) HE ESTIMATED THE NET PROFIT OF THE ASSESSEE AT 5% OF THE TOTAL TURNOVER. 3 . AGGRIEVED B Y THE ORDER OF THE AO THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA .BEFORE HIM, IT WAS CONTENDED THAT THE A O HAD PASSED THE ORDER U/S. 144, THAT THE SAME WAS DEFECTIVE AND BAD IN LAW, THAT THE AO HAD ADMITTED OF PRODUCING THE AUDITED ACCOUNT . AND B ALANCE SHEET, THAT ON THE OTHER HAND HE HELD THAT THE ASSESSEE WAS NOT MAINTAINING BOOKS OF ACCOUNT , THAT ALL THE DETAILS CALLED FOR BY AO WERE PRODUCED ON 20.10. 20 10 , THAT THE DETAILS CONTAINED COMPLETED NAME ADDR ES S OF PURCHASE PARTY AND DETAILS OF SUNDRY CREDI TORS, THAT THE AO DID NOT ISSUE A SHOW CAUSE BEFORE PASSING THE BEST ASSESSMENT. THE ASSESSEE ENCLOSED THE COPY OF SALES TAX CHALLAN. AFTER CONSIDERING THE SUBMISSION OF ASSESSEE THE FAA HELD THAT THE ASSESSEE HAD FURNISHED SOME OF THE DETAILS CALLED FOR TH BY THE AO, THAT ON 20.9. 20 10 IT HAD FILED DETAILS AB OUT THE B A NK ACCOUNT ETC., THAT THE ASSESSEE HAD NOT PRODUCED THE BOOKS OF ACCOUNT , THAT THE ASSESSEE HAD TAKEN TO A COURSE OF NON - COMPLIANCE AND NON - COOPERATION FR O M THE BEGINNING THAT THE ASSESSEE HA D NOT PRODUCED BOOKS OF ACCOUNT, THAT THE AO HAD RIGHTLY INV O KED THE PROVISIONS OF S. 143(3) OF THE ACT. RELYING ON THE ORDER OF KANCHWALLA GEM S ( 288 ITR 10 ) THE FAA , HELD THAT THE AO HAD RIGHTLY ESTIMATED THE NET PROFIT @5% OF THE TURNOVER. FINALLY HE DIS MISSED THE APPEAL FILED BY THE ASSESSEE . 4 . BEFORE US, THE AR STATED THAT ASSESSEE WAS IN POSSESSION OF BOOKS OF ACCOUNT AS WELL AS SUPPORTING D O CUMENTS AS DIRECTED BY THE AO, THAT THE AO/ FAA HAD IGNORE D THE DOCUMENTS PRODUCED BY IT. DR SUPPORTED THE ORDER O F THE FAA . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE F A A HAD MENTIONED THAT THE ASSESSEE HAD PRODUCED CERTAIN DETAILS INCLUDING B A NK STATEMENT S BEFORE AO, DURING THE ASS ESSMENT PROCEEDINGS , THAT THE A O HAD PASSED A N EX - PART E ORDER. IF THE ASSESSEE S BOOKS OF ACCOUNT WERE AU DI TED AND AN AUDIT REPORT WAS FILED ALONG WITH THE RETU R N OF INCOME, THEN IT CANNOT BE SAID THE ASSESSEE WAS NOT MAINTAINING THE BOOKS OF ACCOUNT. CONSIDERING THE PECULIAR FACT S AND C IRCUMSTANCES OF THE CASE, WE HAVE ADMITTED THE ADD ITIONA L E VIDENCE PRODUCE D BEFORE US BY THE ASSESSEE . WE AR E OF THE OPINION THAT IN THE INTEREST OF JUSTICE THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUDIC ATIO N . HE IS DIRECTED T O AFFORD REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE . THE ASSESSEE IS DIRECTED TO PRODUCE ALL THE DOCUMENTS/BOOK S OF ACCOUNT BEFOR E THE AO. THE E FFECTIVE GROUND OF APPEAL FILED BY THE ASSESSEE IS ALLOWED IN F AVOUR OF THE ASSESSEE IN PART. AS A RE SULT,APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD , JUNE ,2015. 3 , 2015 1721/13 (08 - 09)LOHIA ENTERPRISES 3 SD/ - SD/ - ( /I P BANSAL) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, /DATE: 03 .0 6 .2015 . . . JV . SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. TH E CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ / /TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.