Shri Sonia J. Gill, Ahmedabad V. The Asstt. Commissioner of Income Tax, Circel-7(2), Ahmedabad

ITA 187/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8186 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 23-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Assessee Lawyers: PF JAIN
• Keywords: Principle of natural justice

Judgement Text

, ,L ,L,L ,L- -- -,E ,E,E ,E- -- -LH LHLH LH * ** * IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD L LL LK KK KOZJH OZJH OZJH OZJH OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW;] ] ] ] U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 187/AHD/2017 ( / ASSESSMENT YEAR : 2012-13) SONIA J. GILL, A/8, BHOLESHWAR TENAMENT, HANSOL, AHMEDABAD 382475. / VS. ACIT, CIRCLE 7(2), AHMEDABAD 380009. ./ ./ PAN/GIR NO. : ALEPG 6764 G ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI P. F. JAIN, A.R. / RESPONDENT BY : SHRI G. C. DAXINI, SR. D.R. / DATE OF HEARING 31/10/2018 !'# / DATE OF PRONOUNCEMENT 01/01/2019 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)7, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-7 /25/15-16 DATED 17.10.2016 ARISING IN THE MATTER OF ASSESSMENT ORDE R PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATED 12.03.2015 RELEVANT TO ASSESSMENT YEAR (AY) 2012-13. ITA NO.187/AHD/2017 SMT. SONIA J. GILL VS. ACIT A.Y. 2012-13 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE A RE AS UNDER:- 1. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPH OLDING THE ADDITION OF RS.13,93,395/- MADE BY THE AO AS ALLEGE D UNRECORDED RECEIPTS IN THE REGULAR BOOKS OF ACCOUNT ON THE GROUND OF ALLEGED NON RECONCILIATION WITH AIR INFOR MATION WITHOUT PROPERLY APPRECIATING THE SUBMISSION MADE A LONG WITH RECONCILIATION STATEMENT. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN MAK ING OBSERVATION THAT THE APPELLANT FAILED TO FURNISH RECONCILIATION IN RESPECT OF DIFFERENCE OF INCOME AS PER AUDITED ACCOUNT AND TAX DEDUCTED AT SOURCE IN AS MUCH AS THAT THE DIFFERENCE WAS RECONC ILED WITH DOCUMENTARY EVIDENCE AS PER SUBMISSION DATED 12/03/ 2015. 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE GROUND OF APPEAL THAT THE ORDER WAS PASSED WITHOUT GIVING REASONABLE OPPORTUNITY RESULTING INTO VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. 4. ON THE FACTS AND THE EVIDENCE ADDUCED NO SUCH A DDITION OUGHT TO HAVE BEEN MADE. 5. ON THE FACTS OF THE ASSESSEE NO INTEREST U/S.23 4B OUGHT TO HAVE BEEN LEVIED AND NO INTEREST U/S.244A OUGHT TO HAVE BEEN WITHDRAWN. 6. THE APPELLANT CRAVES LEAVE TO ADD TO ALTER AND/ OR TO MODIFY ANY GROUND OF APPEAL. 3. THE ONLY ISSUE RAISED BY THE ASSESSEE IS THAT TH E LD. CIT(A) ERRED IN UPHOLDING THE ADDITION MADE BY THE AO FOR RS. 13,93 ,395/- ON ACCOUNT OF UNRECORDED RECEIPTS. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF CLEARING AND FORWARDING AGENT UNDER THE NAME AND STYLE OF M/S. AVY SHIPPING & LOGISTICS. ITA NO.187/AHD/2017 SMT. SONIA J. GILL VS. ACIT A.Y. 2012-13 - 3 - 4.1 THE ASSESSEE IN ITS FINANCIAL STATEMENT HAS SHO WN GROSS RECEIPTS OF RS. 5,13,86,655/- ONLY WHEREAS AS PER THE AIR INFOR MATION THE GROSS RECEIPT FROM THE BUSINESS OF THE ASSESSEE IS RS. 5, 52,20,171/- ON WHICH THE PARTIES DEDUCTED THE TDS. THE ASSESSEE FILED A RECONCILIATION STATEMENT ON ACCOUNT OF THE MISMATCH BETWEEN THE GR OSS RECEIPTS SHOWN IN THE FINANCIAL STATEMENT VIS--VIS FORM 26 AS. AS PER THE RECONCILIATION STATEMENT, THE GROSS RECEIPT COMES TO RS.5,38,26,77 6/- ONLY. 4.2 ON A QUESTION BY THE AO, THE ASSESSEE PROPOSED TO MAKE THE ADDITION OF THE PROFIT MARGIN ONLY WHICH IS 5 TO 6% FOR SUCH DIFFERENCE AS DISCUSSED ABOVE. HOWEVER, THE AO DISAGREED WITH THE SUBMISSION OF TH E ASSESSEE AND TREATED THE DIFFERENCE OF RS.13,93,395/- AS UNDISCL OSED INCOME OF THE ASSESSEE. ACCORDINGLY, THE AO ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LEARN ED CIT(A). THE ASSESSEE BEFORE THE LEARNED CIT(A) SUBMITTED THAT T HE DIFFERENCE BETWEEN THE GROSS RECEIPT REFLECTING IN FORM 26AS V IS--VIS IN THE FINANCIAL STATEMENT IS ARISING DUE TO THE AMOUNT OF SERVICE TAX, REIMBURSEMENT OF EXPENSES AND PROVISION FOR THE YEA R END EXPENSES ETC. THE ASSESSEE FURTHER SUBMITTED THAT ONLY PROFIT ELE MENT AT THE MOST SHOULD BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ITA NO.187/AHD/2017 SMT. SONIA J. GILL VS. ACIT A.Y. 2012-13 - 4 - 5.1 THE ASSESSEE FURTHER SUBMITTED THAT SHE NEVER A GREED FOR THE ADDITION OF THE ENTIRE AMOUNT RATHER SHE PROPOSED T O MAKE THE ADDITION OF THE PROFIT ELEMENT ONLY. HOWEVER, THE LD. CIT(A) DISREGARDED THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF AO BY OBSERVING AS UNDER: 4.2 I HAVE CONSIDERED THE ASSESSMENT ORDER AND TH E SUBMISSIONS MADE BY THE APPELLANT. THE HAS MADE THE ADDITION OF RS.13,93,395/- SINCE THE APPELLANT WAS NOT ABLE TO FURNISH RECONCI LIATION IN RESPECT OF DIFFERENCE OF INCOME RECEIVED AS PER HER AUDITED AC COUNT AND TAX DEDUCTED AT SOURCE. MOREOVER, NO SATISFACTORY EXPLA NATION WAS OFFERED DURING THE ASSESSMENT PROCEEDINGS FOR THE DIFFERENC E. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS SUBMITTED THAT THE DIFFERENCE AROSE SINCE SOME TRANSACTIONS WERE NOT RECORDED BY HER ACCOUNTANT. AFTER GOING THROUGH THE SUBMISSIONS MADE, I AM NOT INCLINED TO ACCEPT THE APPELLANT'S ARGUMENTS. IT HAS BEEN STATED THAT LOOKING AT THE NATURE OF BUSINESS, THE PROFIT MARGIN OF 5% TO 6% MAYBE AD DED TO THE INCOME. THUS, IT IS CLEAR THAT THE APPELLANT IS HERSELF ADM ITTING THAT INCOME WAS UNDERSTATED BY HER. MOREOVER, EVEN DURING APPELLATE PROCEEDINGS, THE RECEIPTS WHICH HAVE NOT BEEN INCLUDED IN THE INCOME HAVE NOT BEEN EXPLAINED. IN VIEW OF THE ABOVE DISCUSSION, THE ADD ITION OF RS.13,93,395/- MADE BY THE ASSESSING OFFICER IS CON FIRMED. GROUNDS OF APPEAL NOS. 1 TO 4 ARE DISMISSED. BEING AGGRIEVED BY THE ORDER OF LEARNED CIT(A) ASSE SSEE IS IN APPEAL BEFORE US. 6. THE LD. AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1-27 AND DREW OUR ATTENTION ON THE RECONCILIATION STATEM ENT WHICH IS PLACED ON PAGE 5 OF THE PAPER BOOK. AS PER THE LD. AR THERE W ERE CERTAIN GROSS ITA NO.187/AHD/2017 SMT. SONIA J. GILL VS. ACIT A.Y. 2012-13 - 5 - RECEIPTS OMITTED TO BE ENTERED IN THE BOOKS OF ACCO UNTS OF THE ASSESSEE. SIMILARLY, THERE WAS GROSS EXPENDITURES WHICH WERE OMITTED TO BE ENTERED IN THE BOOKS OF ACCOUNTS. AS A RESULT, IF BOTH RECE IPTS AND PAYMENTS ARE ACCOUNTED, THEN THEIR EFFECT WOULD BE THE NET INCOM E OF RS. 89,167/- WHICH AT THE MOST CAN BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 6.1 THE LD. AR FURTHER SUBMITTED THAT LOWER AUTHORI TIES HAVE NOT FULLY CONSIDERED THE RECONCILIATION STATEMENT FILED BEFOR E THEM. THEREFORE, THE LD. AR PRAYED TO RESTORE THE MATTER TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH THE PROVISION OF LA W AFTER CONSIDERING THE RECONCILIATION STATEMENT AS DISCUSSED ABOVE. 7. ON THE OTHER HAND, LD. DR SUBMITTED THAT THE ASS ESSEE BEFORE THE LD. AO AGREED FOR THE ADDITION ON ACCOUNT OF THE DI FFERENCE AS DISCUSSED ABOVE. THE LD. DR OPPOSED RESTORING THE MATTER TO T HE FILE OF AO FOR FRESH ADJUDICATION. THEREFORE, THE LD. DR VEHEMENTL Y SUPPORTED THE ORDER OF AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET, WE NOTE THAT TH ERE IS NO MENTION IN THE ORDER OF LD. CIT(A) ABOUT THE RECONCILIATION STATEM ENT FILED BY THE ASSESSEE. IN OUR CONSIDERED VIEW, THE RECONCILIATIO N STATEMENT FILED BEFORE THE LOWER AUTHORITIES WAS CRUCIAL TO DECIDE THE ISS UE ON HAND. ITA NO.187/AHD/2017 SMT. SONIA J. GILL VS. ACIT A.Y. 2012-13 - 6 - 8.1 WE FURTHER NOTE THAT RECONCILIATION STATEMENT F ILED BY THE ASSESSEE WAS NOT PROPERLY CONSIDERED BY THE LD. AO AS EVIDEN T FROM THE ASSESSMENT ORDER. THE RELEVANT EXTRACT OF AO FINDIN G READS AS UNDER: 1) IN VIEW OF ANY DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE ALONGWITH REPLY OF SHOW CAUSE NOTICE, THE UNDERSIGN ED IS NOT IN THE POSITION TO VERIFY THE CORRECTNESS AND FACTUAL POSI TION OF ASSESSEES CLAIM. THEREFORE, IN VIEW OF ABOVE AND IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE ARE INCLINED TO RESTORE THIS ISSUE TO THE FILE OF A O FOR FRESH ADJUDICATION AFTER CONSIDERING THE RECONCILIATION STATEMENT AS D ISCUSSED ABOVE AND IN ACCORDANCE TO THE PROVISION OF LAW. HENCE, THE GROU ND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 01/01/2019 SD/- SD /- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 01/01/2019 PRITI YADAV, SR.PS ITA NO.187/AHD/2017 SMT. SONIA J. GILL VS. ACIT A.Y. 2012-13 - 7 - !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-7, AHMEDABAD. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD. 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 31/10/2018 (DICTATION PAGE-4) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER : 05/12/2018 3. OTHER MEMBER.. 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 18/12/2018 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT.. 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S .. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER 10. DATE OF DESPATCH OF THE ORDER