Bagadi Exports Pvt. Ltd., Surat V. The Income Tax Officer, Ward 1(1), Surat

ITA 1861/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0230 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-07-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 28-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: HARSH BHUTA
• Keywords: Additional evidence
• Section: 143(3); 68

Judgement Text

ITA NO.1861/AHD /2013 ASSESSMENT YEAR: 2003 - 04 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD SMC BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM ] ITA NO . 1861 / AHD/ 201 3 AS SESSMENT Y EAR : 2003 - 04 BAGADI EXPORTS PVT LTD .APPELLANT B/5, D K INDUSTRIAL ESTATE BEHIND GURUDHWARA, UDHANA MA IN ROAD, UDHANA SURAT - 394 210 [ PAN: AABCB5143A] VS. INCOME TAX OFFICER WARD 1(1), SURAT ...... . RESPONDENT APPEARANCES BY: HARSH BHUTA , FOR THE A PPELLANT S ATISH SOLANKI F OR THE RE SPONDENT DATE OF CONCLUDING THE HEARING : 2 6.07 .2016 DATE OF PRONOUNCING THE ORDER : 25 .10 .2016 O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNES S OF THE ORDER DATED 5 TH APRIL 2013 PASSED BY THE LEARNED CIT(A), IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1 961, FOR ASSESSMENT YEAR 2003 - 04 . 2. GRIEVANCES OF THE ASSESSEE, IN SUBSTANCE, ARE AGAINST (A) CIT(A) S CONFIRMING THE ADDITION OF RS 1,38,000 UNDER SECTION 68 OF THE ACT; (B) CIT(A) S CONFIRMING THE ADD ITION OF RS 10,51,377 OUT OF TRADING AND OPERATING EXPENSES; AND (C) CIT(A) S CONFIRMING THE DISALLOWANCE OF RS 3,18,903 OUT OF SALES AND ADMINISTRATIVE EXPENSES. BY WAY OF AN ADDITIONAL GROUND, WHICH WAS ADMITTED UPON CONSIDERATION ITA NO.1861/AHD /2013 ASSESSMENT YEAR: 2003 - 04 PAGE 2 OF 3 OF THE PETITION SEEK ING ADMISSION OF MODIFIED ADDITIONAL GROUND AND AFTER CONSIDERING RIVAL STANDS ON THE SAME, THE ASSESSEE PRAYS THAT IN THE EVENT OF DISALLOWANCE OF RS 13,70,280 BEING UPHELD, DEDUCTION UNDER SECTION 80 HHC MAY BE GRANTED IN RESPECT OF THE PROF IT SO ENHANCE D DUE TO DISALLOWANCE. 3. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, LEARNED COUNSEL INVITED MY ATTENTION TO THE FACT THAT THE MATTER HAS BEEN DISMISSED, ON MERITS, RATHER SUMMARILY BY CIT(A) S SIMPLE ONE SENTENCE OBSERVATION TO THE EFFECT THAT THE DISA LLOWANCES HAVE BEEN MADE DUE TO NON PRODUCTION OF BOOKS OF ACCOUNTS AND EVIDENCES OF EXPENDITURE AND THAT EVEN DURING THE APPELLATE PROCEEDINGS, APPELLANT FAILED TO FURNISH EVIDENCE IN SUPPORT OF CLAIM OF EXPENSES AND SHARE CAPITAL . LEARNED COUNSEL FOR THE ASSESSEE HAS THE INVITED MY ATTENTION TO THE PETITION SEEKING ADMISSION OF ADDITIONAL EVIDENCE. HE SUBMITS THAT AS THE ASSESSEE WAS SUBJECTED TO A DRI (DEPARTMENT OF REVENUE INTELLIGENCE) SEARCH AND THE EVIDENCES NOW BEING FILED COULD NOT BE FILED DUE TO THE FACT THAT THESE DOCUMENTS WERE IN POSSESSION OF THE DRI OFFICIALS. HE THUS SUBMITS THAT THE MATTER MAY BE REMITTED TO THE FILE OF THE AO FOR FRESH ADJUDICATION ON MERITS. HE ALSO REFERS TO HON BLE CALCUTTA HIGH COURT S JUDGMENT DATED 16 TH JUNE 2016 , IN THE CASE OF CIT VS JJ DEVELOPMENTS PVT LTD, AND SUBMITS THAT THE AO MAY BE DIRECTED TO BEAR IN MIND THE LAW SO LAID DOWN BY THEIR LORDSHIPS TO THE EFFECT THAT A RECHARACTERIZATION OF OPENING BALANCE CANNOT BE SUBJECTED TO ADDITION UNDER SECTION 68. 4 . LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSES THE PRAYERS OF THE ASSESSEE AND SUBMITS THAT BY ADMITTING ADDITIONAL EVIDENCE AT THIS STAGE, ALL THE PROCEEDINGS SO FAR WILL COME TO A NAUGHT. WHEN, HOWEVER, HE IS ASKED TO COMMENT UPON THE ITA NO.1861/AHD /2013 ASSESSMENT YEAR: 2003 - 04 PAGE 3 OF 3 CHALLENGE TO REASONS FOR WHICH THESE EVIDENCES COULD NOT BE FILED EARLIER, HE LEAVES THE MATTER TO THE BENCH. 5. IN VIEW OF THE ABOVE DISCUSSIONS, IN MY CONSIDERED VIEW, THE ENDS OF JUSTICE WILL REQUIRE THAT THE ADDITIONAL EVIDENCE BE ADMITTED AS THE ASSESSEE WAS PREVENTED B Y SUFFICIENT CAUSE FROM FILING THESE EVIDENCES EARLIER. THIS MATERIAL WAS NOT EVEN BEFORE THE AO AND IT HAS TO BE PRIMARILY HIS EXAMINATION WHICH IS VITAL. HOWEVER, AS THE AO HAD NO OCCASION TO EXAMINE THIS MATERIAL EARLIER, I CONSIDER IT APPROPRIATE TO RE MIT THE MATTER TO THE FILE OF THE AO FOR ADJUDICATION DE NOVO AFTER GIVING ONE MORE OPPORTUNITY OF HEARING TO THE ASSESSEE, IN ACCORDANCE WITH THE LAW AND BY WAY OF A SPEAKING ORDER. WHILE DOING SO, THE ASSESSEE WILL ALSO TAKE INTO ACCOUNT AND DEAL WITH TH E LEGAL PLEAS AND THE JUDICIAL PRECEDENTS, INCLUDING THE JUDICIAL PRECEDENTS CITED ABOVE BY THE ASSESSE, ON MERITS AND BY WAY OF A SPEAKING ORDER. I ORDER SO. 6. AS THE MATTER IS REMITTED TO THE FILE OF THE AO, I SEE NO NEED TO DEAL WITH THE MATTER ON MER ITS. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON 25 TH DAY OF OCTOBER, 2016. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: T HE 25 TH DAY OCTOBER , 2016 . COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD