Mathuraprasad C.Pandey, Ahmedabad V. The Income tax Officer,Ward-9(2), Ahmedabad

ITA 190/AHD/2011

• Counselvise Citation: 19020514 RSA 2011
• Duration Of Justice: 3 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 08-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 25-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: BHARAT R POPAT
• Keywords: Opportunity of being heard
• Section: 68

Judgement Text

, , , , D, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, D BENCH . .. . . .. . , !' !' !' !', , , , #$ #$ #$ #$ # ## #. .. .# ## #. . . . % % % %, , , , &' ( & ' &' ( & ' &' ( & ' &' ( & ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND N.S. SAINI, ACCOUNTANT MEMBER) ITA NO.190/AHD/2011 [ASSTT.YEAR : 2007-2008] SHRI MATRUPRASAD C. PANDEY PROP. M/S.TRANSWORLD TELECOMMUNICATION D/1001 SARTHAK TOWER B/H. FUN REPUBLIC RAMDEVNAGAR, SATELLITE, AHMEDABAD. /VS. ITO, WARD-9(2) AHMEDABAD. ITA NO.362/AHD/2011 [ASSTT.YEAR : 2007-2008] ITO, WARD-9(2) AHMEDABAD. /VS. SHRI MATRUPRASAD C. PANDEY PROP. M/S.TRANSWORLD TELECOMMUNICATION D/1001 SARTHAK TOWER B/H. FUN REPUBLIC RAMDEVNAGAR, SATELLITE, AHMEDABAD. ( (( ( *+ *+ *+ *+ / APPELLANT) ( (( ( ,-*+ ,-*+ ,-*+ ,-*+ / RESPONDENT) ( . / & / REVENUE BY : SMT.SONIA KUMAR, SR.DR 12 . / & / ASSESSEE BY : SHRI BHARAT R. POPAT 3 . 24' / DATE OF HEARING : 8 TH SEPTEMBER, 2014 567 . 24' / DATE OF PRONOUNCEMENT : 17.10.2014 &8 / O R D E R ITA NO.190 AND 362/AHD/2011 -2- PER G.C. GUPTA, VICE-PRESIDENT: THESE CROSS APPEALS OF THE ASSESSEE AND THE REVENUE FOR A.Y.2007-08 ARE DIRECT ED AGAINST THE ORDER OF THE CIT(A). THESE ARE BEING DISPOSED OF WITH CO NSOLIDATED ORDER. ITA NO.190/AHD/2011 (ASSESSEES APPEAL) 2. THE GROUND NO.1 OF THE APPEAL OF THE ASSESSEE IS AS UNDER: 1. REJECTING THE BOOKS OF ACCOUNT, WHICH WAS RIGHT LY NOT DONE BY THE AO WHILE PASSING THE ASSESSMENT ORDER. SHE HAS FUR THER ERRED IN DOING THIS WITHOUT GIVING ANY SHOW CAUSE NOTICE OR WITHOU T AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT PRE SSED THIS GROUND OF THE APPEAL, WHICH IS ACCORDINGLY DISMISSED. 4. THE GROUND NO.2 OF THE APPEAL OF THE ASSESSEE IS AS UNDER: 2. CONFIRMING THE ACTION OF THE AO IN MAKING ADDIT ION OF RS.56,96,645/- IN RESPECT OF OUTSTANDING CREDIT BAL ANCES OF CERTAIN PARTIES BROUGHT FORWARD FROM EARLIER YEARS, BY INVOKING SEC TION 41(1) OF THE ACT. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ISSUE OF ADDITION OF OUTSTANDING CREDIT BALANCE OF CREDITORS BY INVOK ING SECTION 41(1) OF THE ACT, IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECIS ION OF HONBLE GUJARAT HIGH COURT IN CIT VS. NITIN S. GARG, 22 TAXMANN.COM 59 ( GUJ) AND ALSO IN TAX APPEAL NO.588 OF 2013 IN THE CASE OF CIT VS. BHOGIL AL RAMJIBHAI ATARA ORDER DATED 4.2.2014. THE LEARNED DR HAS RELIED ON THE O RDERS OF THE AO AND THE CIT(A). 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). IT IS AN ADMITTED FACT THAT THE AS SESSEE HAS NOT WRITTEN OFF THE CREDIT BALANCE OF THE CERTAIN PARTIES BROUGHT FORWA RD FROM EARLIER YEARS, AND THEY ARE APPEARING IN THE LIABILITY SIDE OF THE BALANCE SHEET OF THE ASSESSEE. THE ISSUE OF DISALLOWANCE THEREOF UNDER SECTION 41(1) OF THE ACT IS COVERED IN FAVOUR OF ITA NO.190 AND 362/AHD/2011 -3- THE ASSESSEE WITH THE DECISIONS OF THE HONBLE GUJA RAT HIGH COURT CITED SUPRA. RESPECTFULLY FOLLOWING THE SAME, WE DECIDE THE ISSU E IN FAVOUR OF THE ASSESSEE, AND THE GROUND NO.2 OF THE ASSESSE IS ALLOWED. 7. THE GROUND NO.3 OF THE ASSESSEE IS AS UNDER: 3. CONFIRMING THE ACTION OF THE AO IN MAKING ADDI TION OF RS.11,01,381/- UNDER SECTION 68 OF THE ACT, IN RESP ECT OF THE CAPITAL INTRODUCED FROM SALE OF ORCHARD EFFECTED BY AN INDE PENDENT PARTNERSHIP FIRM, IN WHICH THE APPELLANT WAS ONE OF THE PARTNER S. 8. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE AMOUNT WAS BROUGHT FROM ANOTHER PARTNERSHIP FIRM, IN WHICH THE ASSESSEE WAS ONE OF THE PARTNERS. IN REPLY TO A SPECIFIC QUESTION, HE COUL D NOT PROVIDE ANY EVIDENCE TO PROVE ITS CASE. THE LEARNED DR HAS RELIED ON THE O RDERS OF THE AO AND THE CIT(A). 9. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IN THESE FACTS, AND IN THE ABSENCE OF ANY EVIDENCE BROUGHT ON RECORD ON BEHALF OF THE ASSESSEE, WE CONFIRM THE ORDER OF THE CIT(A) ON THIS ISSUE, AND THE GROUND N O.3 OF THE ASSESSEE IS DISMISSED. 10. THE GROUND NO.4 AND 5 OF THE ASSESSEE ARE AS UN DER: 4. CONFIRMING THE ACTION OF THE AO IN MAKING ADDI TION OF RS.25,65,634/- BEING 15% OF THE LABOUR CHARGES LEGI TIMATELY INCURRED AND DEBITED TO THE PROFIT & LOSS ACCOUNT. 5. ON THE FACTS AND CASE, THE CIT(A) OUGHT TO HAVE DELETED ALL THE ADDITIONS RATHER THAN JUST GIVING THE BENEFIT OF TE LESCOPING OF THE ADDITIONS OF RS.56,96,645/- AND OF RS.11,01,381/- A GAINST THE ADDITION OF RS.25,65,634/- 11. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TELESCOPING BENEFIT ON SOME ADDITIONS WAS ALLOWED BY THE CIT(A) AND THE IS SUE WAS NOT DECIDED BY HIM. THE LEARNED DR RELIED ON THE ORDERS OF THE A O AND THE CIT(A). WE HAVE CONSIDERED RIVAL SUBMISSIONS. IN THE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE ISSUE IN THESE GROUNDS OF THE APPEALS SHOULD BE DECIDED BY THE CIT(A) ON ITS ITA NO.190 AND 362/AHD/2011 -4- MERITS, AND ACCORDINGLY, WE RESTORE THE ISSUES IN T HESE GROUNDS OF THE APPEAL TO THE FILE OF THE CIT(A) WITH DIRECTION TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NO.362/AHD/2011 (REVENUES APPEAL) 12. THE ONLY GROUND OF THE APPEAL OF THE REVENUE IS AS UNDER: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITIONS OF RS.25,65,634/- MADE BY THE AO U/S.41(1 ) AND U/S.68 OF THE ACT. 13. WE FIND THAT THE ISSUE IS COVERED WITH THE GROU ND NOS.4 AND 5 IN THE ASSESSEES APPEAL FOR THE RELEVANT ASSTT.YEAR 2007- 08. IN VIEW OF OUR DECISION TO RESTORE THE ISSUE TO THE FILE OF THE CIT(A) FOR FRESH DECISION, WHILE DECIDING THE GROUND NO.4 AND 5 IN THE ASSESSEES APPEAL, IN FOREGOING PARA SOF THIS ORDER, WE DIRECT THAT THIS ISSUE BE DECIDED BY THE CIT(A) AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING T O THE PARTIES. WE DIRECT ACCORDINGLY. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AND THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( # ## # . .. . # ## # . . . . % % % % /N.S.SAINI) &' ( &' ( &' ( &' ( /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD