The ACIT, Circle 2(2), Baroda V. M/s. Shree Sai Hotel, Baroda

ITA 1796/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94606 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 29-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 19-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOMOGYAN

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ ITA NO.1796/AHD/2013 / ASSTT. YEAR: 2008-2009 ACIT, CIR.2(2) RACE COURSE CIRCLE BARODA. VS M/SSHREE SAI HOTEL NR.AKSHAR CHOWK MANJMAHUDA, BARODA. PAN : ABGFS 4619 A / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI SOMOGYAN, SR.DR ASSESSEE BY : NONE ! / DATE OF HEARING : 29/09/2015 '#$ ! / DATE OF PRONOUNCEMENT: 16/10/2015 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF THE LD.CIT(A)-II, BARODA DATED 11.3.2013 PASSED FOR THE ASSTT.YEAR 2008- 2009. 2. SOLITARY GRIEVANCE OF THE REVENUE IS THAT THE LD .CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.14,16,888/-. THE LD .AO HAD ISSUED NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT ON 21.8. 2009. IT APPEARS THAT THE AO HAS COMMENCED THE INVESTIGATION ON 24.1 1.2010 AND HE PASSED EX PARTE ASSESSMENT ORDER ON 30.12.2010. THE ASSESSEE COUL D ONLY HAVE ONE MONTH AND NINE DAYS TIME TO REPLY VAR IOUS QUERIES OF THE AO. THE AO HAD ISSUED TWO THREE NOTICES TO THE ASS ESSEE GIVING A TIME ITA NO.1796/AHD/2013 2 OF THREE-FOUR DAYS IN BETWEEN EACH NOTICE. HE MADE AD HOC DISALLOWANCE AT 10% OF THE TOTAL EXPENDITURE CLAIME D BY THE ASSESSEE. 3. ON APPEAL, THE LD.FIRST APPELLATE AUTHORITY HAS DELETED THE ADDITION BY OBSERVING AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSE SSING OFFICER. IT IS TRUE THAT THE ASSESSEE DID NOT COOPERATE FULL Y IN THE ASSESSMENT PROCEEDINGS AND ITS ACTION CANNOT BE JUS TIFIED. HOWEVER, A.O. COULD HAVE INITIATED PENALTY PROCEEDI NGS FOR SUCH DEFAULT OF THE ASSESSEE, WHICH HE HAS NOT RESORTED TO. THE A.O. HAS PROCEEDED TO COMPLETE EXPARTE ASSESSMENT AND DI SALLOWED FLAT 10% OF ALL THE EXPENSES WHICH THE A.O. HAS OBJ ECTED. AN OPPORTUNITY WAS GIVEN TO THE A.O. BY WAY OF REMAND PROCEEDINGS, WHERE HE COULD EXAMINE THE ISSUE TO ARRIVE AT A REA SONABLE AMOUNT OF ADDITION BASED ON SOME SCIENTIFIC CRITERI A LIKE TURNOVER, CASH PAYMENTS, COMPARABLE CASE & PAST HISTORY ETC. CIT(A) HAD SPECIFICALLY DIRECTED THE A.O. TO EXAMINE THE EXPEN SES AND ALSO TO SEND THE COPY OF THE NOTESHEET. UNFORTUNATELY, A.O. HAS PREFERRED TO REPEAT HIS EARLIER STAND AND THAT ONLY GOES TO H ELP THE ASSESSEE. AS THE REASONABLENESS OF THE EXPENSES CAN NOT BE REACHED AT THE APPEAL LEVEL, I AM CONSTRAINED TO DE LETE THE ENTIRE ADDITION OF RS. 12,26,161/-. THIS GROUND OF THE APP ELLANT SUCCEEDS. 4. WITH THE ASSISTANCE OF THE LD.DR, WE HAVE GONE T HROUGH THE RECORD CAREFULLY. IN RESPONSE TO THE NOTICE OF HEA RING NONE COME PRESENT ON BEHALF OF THE ASSESSEE. ON PERUSAL OF T HE FINDING OF THE CIT(A) EXTRACTED SUPRA, WE FIND THAT THE LD.AO HAD NEVER MADE ANY SERIOUS ATTEMPT TO CROSS-VERIFY THE CLAIM OF THE AS SESSEE. WHEN THE CIT(A) HAS CALLED FOR THE REMAND REPORT, HE DID NOT BOTHER TO SUBMIT HIS COMMENTS, COMPELLING THE LD.FIRST APPELLATE AUTHORI TY TO DELETE AD HOC DISALLOWANCE. IT IS PERTINENT TO OBSERVE THAT THE ASSESSEE HAS SUBMITTED CERTAIN DETAILS ON WHICH REMAND REPORT WA S CALLED FOR BY THE CIT(A). THE LD.AO DID NOT RESPOND TO THAT SHOW CAU SE NOTICE OF THE CIT(A). THEREFORE, WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION. NO INTERFERENCE IS CALLED FO R IN THE ORDER OF THE ITA NO.1796/AHD/2013 3 CIT(A) ON THIS ISSUE, WHICH IS UPHELD, AND THE APPE AL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 16 TH OCTOBER, 2015 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER