Nirmala Logistics, Hyderabad V. Asst. Commissioner of Income Tax, Circle-9(1), Hyderabad

ITA 1817/Hyd/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6305 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Assessment Year: 2011-2012
• Appeal Filed On: 17-12-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business expenditure
• Section: 69C; 143(3); 43; 147

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 1817/HYD/2019 A.Y. 2011 - 12 M/S. NIRMALA LOGISTICS, FLAT NO.403, AVANAA APARTMENTS ROAD NO.3, 7 TH CROSS, ROCK TOWN COLONY, L.B. NAGAR, HYDERABAD - 74 VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 9(1), IT TOWERS, AC GUARDS, HYDERABAD 500 004. (APPELLANT) (RESPONDENT) ASSESSEE BY: NONE REVENUE BY: SRI ROHIT MUJUMDAR, DR DATE OF HEARING: 0 7 /07/2021 DATE OF PRONOUNCEMENT: 26 /07/2021 ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A ) - 7, HYDERABAD IN APPEAL NO. 0188/CIT(A) - 7 /2018 - 19, DATED 27/09/2019 PASSED U/S. 143(3) R.W.S 147 AND U/S. 250(6) OF THE ACT FOR THE AY: 2011 - 12. 2. THE ASSESSEE HAS RAISED SIX GROUNDS IN ITS APPEAL AND THEY ARE EXTRACTED HEREIN BELOW FOR REFERENCE: - 1. THE ORDER PASSED BY THE CIT (A) - 7 IS OPPOSED TO LAW AND CONTRARY TO THE FACTS ON RECORD. 2. THE LD. CIT (A) OUGHT TO HAVE NOTED THAT IN VIEW OF DIFFERENCES BETWEEN THE PARTNERS OF THE APPELLA NT FIRM, THE MANAGING PARTNER WAS UNDER THE BONA FIDE IMPRESSION THAT AS PER THEIR UNDERSTANDING, THE OTHER PARTNER WAS TO 2 ATTEND TO THE TAX MATTERS AND HE WAS INFORMED BY THE OTHER PARTNER THAT SINCE THE BOOKS OF ACCOUNT AND OTHER BILLS ETC., WERE MISPLAC ED, HE DID NOT ATTEND TO THE TAX MATTERS BEFORE THE INCOME TAX DEPARTMENT. 3. ON MERITS, BOTH THE LOWER AUTHORITIES OUGHT TO HAVE NOTED THAT IN THIS CASE, TAX AUDIT WAS CONDUCTED AND BEFORE THE TAX AUDITOR THE BILLS, ACCOUNT BOOKS RELEVANT WERE PRODUCED AND THEREFORE, THE AO OUGHT NOT TO RESORTED TO MAKE THE ADDITION AND THE CIT (A) OUGHT NOT TO HAVE CONFIRMED SUCH DISALLOWANCE BY WAY OF ADDITION U/S 69C OF THE ACT FOR THE REASON THAT BILLS AND BOOK S OF ACCOUNT WERE MISPLACED ON ACCOUNT OF SHIFTING OF PREMISES. 4. THAT APART, BOTH THE AUTHORITIES OUGHT TO HAVE NOTICED THAT THE IMPUGNED AMOUNT OF RS. 43 ,30,000/ - WAS PERIODICALLY TRANSFERRED TO THE BANK ACCOUNT OF ONE OF ITS EMPLOYEES (RAGI NAVEEN), FO R MEETING DAY TO DAY BUSINESS EXPENSES AND BY THIS DISALLOWANCE, THE NET PROFIT OF THE APPELLANT FIRM CAME TO MORE THAN 17 PER CENT WHICH IS UNHEARD OF IN THE TRANSPORT LINE OF BUSINESS. 5. THE LD. CIT (A) SHOULD HAVE AFFORDED TO THE APPELLANT SOME MORE OP PORTUNITY TO MAKE ITS SUBMISSIONS ON THE IMPUGNED ADDITION BY WAY OF DISALLOWANCE OF RS . 43,30,000/ - . 6. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 3. AT THE TIME OF HEARING, NONE APPEARED BEFORE US ON BEHALF OF THE ASSESSEE TO REPRESENT ITS CASE. ON EXAMINING THE LD. CIT (A)S ORDER, WE FIND THAT THE LD. CIT (A) HAS PASSED EX - PARTE ORDER PROVIDING SEVERAL OPPORTUNIT IES TO THE ASSESSEE OF BEING HEARD. EVEN BEFORE US N EITHER THE ASSESSEE NOR ITS REPRESENTATIVE APPEARED ON THE DATE OF HEARING . LD. DR SUBMITTED BEFORE US THAT IN THE PRESENT CIRCUMSTANCES THERE WAS NO OTHER OPTION LEFT FOR THE LD.CIT(A) BUT TO PASS EX - PARTE ORDER BASED ON THE MATERIALS AVAILABLE ON RECORD. HENCE, IT WAS PLEADED THAT THE ORDER PASSED BY THE LD. CIT(A) DO ES NOT CALL FOR ANY INTERFERENCE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON EXAMINING THE FACTS OF THE CASE, WE FIND MERIT 3 IN THE SUBMISSIONS OF THE LD. DR. THE LD. CIT (A) HAD POSTED THE CASE ON THREE OCCA SIONS. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE BEFORE THE CIT(A) ON THE DATES OF HEARING. THEREFORE, THE LD. CIT (A) WAS LEFT WITH NO OTHER OPTION EXCEPT TO ADJUDICATE THE APPEAL EX - PARTE BASED ON THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AN D THE MATERIAL S AVAILABLE ON RECORD. HOWEVER, CONSIDERING THE ISSUES INVOLVED IN THE APPEAL, IN THE INTEREST OF JUSTICE, WE HEREBY REMIT THE MATTER BACK TO THE FILE OF LD. CIT (A) IN ORDER TO CONSIDER THE APPEAL AFRESH ON MERITS BY PROVIDING ONE MORE OPPOR TUNITY TO THE ASSESSEE OF BEING HEARD. AT THE SAME BREATH, WE ALSO HEREBY CAUTION THE ASSESSEE TO PROMPTLY CO - OPERATE BEFORE THE LD. CIT (A) IN THE PROCEEDINGS FAILING WHICH THE LD. CIT (A) SHALL BE AT LIBERTY TO PASS APPROPRIATE ORDER IN ACCORDANCE WITH L AW AND MERITS BASED ON THE MATERIALS ON THE RECORD. IT IS ORDERED ACCORDINGLY. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AS INDICATED HEREINABOVE. PRONOUNCED IN THE OPEN COURT ON THE 26 TH JULY, 2021. SD/ - SD/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 26 TH JULY, 2021 4 OKK COPY TO: - 1) M/S. NIRMALA LOGISTICS, FLAT NO. 403, AVANAA APARTMENTS, ROAD NO.3, 7 TH CROSS, ROCK TOWN COLONY, LB NAGAR, HYDERABAD 500 074. 2) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 9(1), IT TOWERS, AC GUARDS, HYDERABAD 500 004. 3) THE CIT (A) - 7, HYDERABAD. 4) THE PR. CI T 7, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE