Sri Manjunath Traders, Nizamabad V. Income Tax Officer, Ward-2, Nizamabad

ITA 1766/Hyd/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1317 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 07-03-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 30-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJEEV BENJWAL
• Assessee Lawyers: P.MURALI MOHANA RAO
• Keywords: Opportunity of being heard; Additional evidence
• Section: 43B; 143(3); 37(1); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE V. DURGA RAO, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1766/HYD/2018 ASSESSMENT YEAR: 2015 - 16 SRI MANJUNATHA TRADERS, NIZAMABAD. PAN: ABNFS 4842 C VS. INCOME TAX OFFICER, WARD - 2, NIZAMABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI P. MURALI MOHANA RAO REVENUE BY: SRI RAJEEV BENJWAL, D R DATE OF HEARING: 07/03/2019 DATE OF PRONOUNCEMENT: 15 /03/2019 ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - 5, HYDERABAD DATED 23/07/2018 FOR THE ASSESSMENT YEAR 2015 - 16. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. CI T(A) ERRED BOTH ON FACTS AND IN LAW IN UPHOLDING THE ASSESSMENT ORDER TO THE EXTENT IT IS PREJUDICIAL TO THE INTEREST OF APPELLANT. 2. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT A.O. ERRED IN LAW IN DISALLOWING THE EXPENDITURE CLAIMED TOWARDS VAT / CST AND OTHER HEADS MERELY RELYING ON A LETTER OF THE CTO WHICH , IN ITSELF IS INCONCLUSIVE ON THE MATTER AND IS NON - COMMITTAL. 3. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT ON FACTS AND CIRCUMSTANCES OF THE CASE THE PROVISIONS OF SECTION 43B FIND NO APPLIC ATION TO THE CASE, AS THERE IS NO CONFIRMED DEMAND FROM THE 2 VAT AUTHORITIES AND VAT AND CST RETURNS FILED BY THE APPELLANT ARE FOUND TO BE GENUINE BY THE SAID AUTHORITIES. 4. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSEE HAS INCURRED THE EXPENDITURE TOWARDS BUSINESS EXPEDIENCY AND SAME IS ALLOWABLE U/S 37(1) OF THE ACT. 5. THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE DISALLOWANCE MADE FOR A SUM OF RS. 3,00,000/ - ON ADHOC AND ESTIMATED BASIS, WITHOUT CLEARLY QUANTIFYING THE UNREFUELLED EXPENDITURE. 6. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT ASSESSEE HAS SUBMITTED THE DETAILS REGARDING THE BILLS AND VOUCHERS WITH RESPECT TO BOOKS OF ACCOUNTS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RICE MILL FILED ITS RET URN OF INCOME ADMITTING TOTAL INCOME OF RS. 8,12,221/ - . THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE ORIGINAL CHALLANS PAID TOWARDS VAT AND CST FOR VERIFICATION. AS THE ASSESSEE COUL D NOT FURNISH THE ORIGINAL CHALLANS, INFORMATION WAS CALLED FOR FROM THE CTO, BODHAN WHO REPLIED THAT THE APPELLANT MADE VAT PAYMENTS OF RS. 29.45 LAKHS AND RS. NIL TOWARDS CST. THEREFORE, THE A.O. DISALLOWED THE DIFFERENCE OF VAT AMOUNTING TO RS. 68,84, 109/ - AND CST AMOUNTING TO RS.2,23,666/ - AND ADDED BACK TO THE RETURNED INCOME OF THE ASSESSEE. A.O. ALSO DISALLOWED A SUM OF RS. 3 LAKHS, EXPENDITURE INCURRED BY THE ASSESSEE AND NOT SUPPORTED BY ANY BILLS, VOUCHERS. ACCORDINGLY, ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 82,19,995/ - . 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO PASSED THE EX - PARTE ORDER CONSIDERING THE ASSESSEES NON - APPEARANCE 3 AND ALSO OBSERVED THAT THE ASSESSEE HAS NOT PRODUCED THE COPY OF THE ORIGINAL CHALLAN OF THE TAX PAYMENT EITHER BEFORE THE A.O. OR BEFORE HIM AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. AGGRIEVED, ASSESSEE IS IN SECOND APPEAL BEFORE US BY RAISING THE ABOVE MENTIONED GROUNDS OF APPEAL. 4. L EARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS MADE ALL THE PAYMENTS THROUGH BANKING CHANNELS AND HE ALSO FILED PAPER BOOK CONSISTING DETAILS OF ITR ACKNOWLEDGEMENT, COMPUTATION OF INCOME TAX, COPIES OF FINANCIAL STATEMENTS FOR THE A.Y. 20 14 - 15, FIR COPY AND OTHER DETAILS AND SUBMITTED THAT THE SAME MAY BE ADMITTED AS ADDITIONAL EVIDENCE, WHICH GO TO THE ROOT OF THE MATTER AND THE APPEAL MAY BE REMANDED TO THE FILE OF THE CIT(A). 5. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE, SU PPORTED THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE A.O. MADE ADDITION IN THE ABSENCE OF ORIGINAL CHALLANS IN RESPECT OF VAT AND CST PAYMENTS AND THE SAME WAS CONFIRMED BY THE CIT(A) WHILE PASSING THE EX - PARTE ORDER OBSERV ING THAT THE ORIGINAL CHALLANS OF THE TAX PAYMENT WERE NOT EVEN FILED BEFORE HIM. CIT(A)S ORDER IS VERY CRYPTIC AND HE OUGHT TO HAVE PASS A DETAILED ORDER ON MERITS . WE FIND THAT THE ADDITIONAL EVIDENCE FILED BEFORE US ARE RELEVANT TO THE CASE ON HAND A ND THEY MAY GO TO THE ROOT OF THE MATTER 4 IN ADJUDICATING THE ISSUES. THEREFORE, WE ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, IN OUR VIEW, THE ISSUE HAS TO BE REMITTED BACK TO THE FILE OF THE CIT(A) WITH A DIRECTION TO ADJUDICATE THE ISSUE AFRESH AFTER TAKING INTO CONSIDERATION ALL THE DETAILS FILED BEFORE US AND PASS A SPEAKING ORDER IN ACCORDANCE WITH THE LAW AND IT IS NEEDLESS TO SAY THE ASSESSEE SHOULD BE GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD IN ACCORDANCE WITH LAW. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH, 2019 . SD/ - SD/ - (S. RIFAUR RAHMAN) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 15 TH MARCH , 2019 OKK COPY TO: - 1) C/O. P. MURALI & CO., CHARTERED ACCOUNTANTSD, 6 - 3 - 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD - 82. 2) ITO, WARD - 2, NIZAMABAD. 3) CIT (A) - 5, HYDERABAD. 4) THE PR. CIT - 5, HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE