Bhramarbar Sahoo, Jagatsinghpur V. ITO, Ward-1, Paradeep, Paradeep

ITA 191/CTK/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81475 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-10-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 25-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI S.V.MEHROTRA (AM) AND GEORGE MATHAN (JM) I.T.A. NO.191/CTK/2013 ASSESSMENT YEAR: 2009-2010 BHRAMARBAR SAHOO, PROP. M/S. B.B. STEEL, BIJAYCHANDRAPUR, AHTARBANKI, PARADEEP, JAGATSINGHPUR. PA NO.AGAPS 4041 F VS. ITO, WARD - 1, PARADEEP. APPELLANT RESPONDENT FOR THE APPELLANT: SHRI SUNIL MISHRA FOR THE RESPONDENT: SHRI ANIL SHARMA, DR DATE OF HEARING: 16/10/.2014 DATE OF PRONOUNCEMENT: 22 /10/2014 ORDER PER S.V.MEHROTRA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST ORDER DATED 18.2.2013 OF LD CIT(A), CUTTACK FOR THE ASSESSMENT YEAR 2009-2010. 2. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. FOR THAT, THE ORDERS OF THE FORUMS BELOW ARE IL LEGAL, ARBITRARY AND EXCESSIVE EXERCISE OF JURISDICTION AS WELL AS PASSED WITHOUT AFFORDING REASONABLE OPPORTUNITY TO ADDUCE THE SUPPORTING EVIDENCES AND AS SUCH ARE NOT SUSTAINABLE IN THE EYE OF LAW AND LIABLE TO BE QUASHED. 2. FOR THAT, THE ORDER PASSED BY THE LEARNED CIT(APPEA L) IS OUT AND OUT ILLEGAL, SINCE, ALL THE EVIDENCES (PRODUCED AND NOT PRODUCED BEFORE THE AO) HAVE BEEN PRODUCED BEFORE THE CIT(APPEAL) AND REQUEST MA DE FOR A REMAND REPORT FOR FRESH INQUIRY WITH DUE ADHERENCE OF NATU RAL JUSTICE, BUT THE LEARNED CIT(APPEAL) WITHOUT DOING SO, CONFIRMED THE ORDER OF ASSESSMENT IN A MECHANICAL MANNER AND AS SUCH LIABLE TO BE QUASHE D/ SET-A-SIDE FOR THE INTEREST OF JUSTICE. 3. FOR THAT, ADDITION OF RS.19,60,481/- UNDER THE HEAD OF STOCK DISCREPANCY IS 2 I.T.A. NO.191/CTK/2013 ASSESSMENT YEAR: 2009-2010 UNCALLED AND BASELESS SINCE THE LEARNED AO FAILED T O RING INTO THE FOLD OF ASSESSMENT ANY COGENT MATERIALS OTHER THAN ROUGH AN D HALF HAZARD VALUATION OF STOCK MADE LATE IN THE NIGHT OF SURVEY DAY WHEN IT WAS NOT PRACTICALLY POSSIBLE TO ARRIVE AT THE QUANTITATIVE DETAILS ON T HE FACE OF SIZE AND VOLUME OF GOODS AND THE DISCLOSURE OF CLOSING STOCK WAS BASED ON PURCHASE, SALES AND STOCK REGISTER DULY MAINTAINED MEETING THE PROVISIO NS OF THE OVAT ACT. 4. FOR THAT, ADDITION OF RS.10,00,000/- UNDER THE HEAD OF UNSECURED LOAN IS ARBITRARY SINCE THE ADDITION WAS MADE W ITHOUT AFFORDING ADEQUATE OPPORTUNITY TO PROVE THE IDENTITY AND CREDITWORTHIN ESS OF THE CREDITORS AND MORE PARTICULARLY BY THE EVIDENCES PRODUCED BEFORE THE LD CIT(A) HAS NOT BEEN CONSIDERED ON ITS TRUE PROSPECTIVE AND AS SUCH THE ADDITIONS DESERVES TO BE DELETED OR AT BEST DESERVES TO SET ASIDE FOR FRE SH APPLICATION OF MIND IN THE INTEREST OF NATURAL JUSTICE. 5. FOR THAT, THE ADDITION OF RS.5,20,000/- ON THE HEAD OF ADVANCE OF PARTY IS ILLEGAL AND IS VIOLATIVE OF PRINCIPLE OF NATURAL JU STICE SINCE THE APPELLANT PROVIDED THE NAME AND ADDRESS AND DETAILS OF MATERI ALS SUPPLIED BY THE PARTIES DURING THE NEXT FINANCIAL YEAR BUT THE LEAR NED ASSESSING OFFICER MADE ADDITIONS WITHOUT AFFORDING ADEQUATE OPPORTUNITY TO PRODUCE THE CONFIRMATIONS AND COMPLETE ADDRESS AND THE LEARNED CIT(A) FAILED TO CONSIDER THE SAME EVEN THOUGH THE SAME WERE PRODUCED BEFORE HIM. 6. FOR THAT, ADDITION OF RS.23,33,120/- ON THE HEAD OF LIABILITY FOR EXPENSES IS COMPLETELY BASED ON SURMISES AND CONJECTURE ON THE FACE OF VERY NATURE OF THE APPELLANT'S BUSINESS, THE APPELLANT HAS TO INCU R CERTAIN EXPENDITURE AS ON THE YEAR ENDING. THE LEARNED AO IN COURSE OF APPEAR ANCE OF THE A/R NEVER RAISED SUCH ISSUE EXCEPTING ORDER SHEET ENTRY DTD.2 8.10.2011, FOR WHICH THE APPELLANT REMAIN UNDER IMPRESSION THAT, THE AO HAS NO DOUBTS AS TO THE LIABILITY FOR EXPENSES FOR WHICH IT MAINTAINED SILE NCE ON THIS ISSUE. THE LEARNED CIT(A) CONFIRMED THE ADDITION IN MECHANICAL MANNER WITHOUT CONSIDERING THE MATERIAL PRODUCED BEFORE HIM AND AS SUCH THE ORDERS OF THE FORUM BELOW ARE LIABLE TO BE QUASHED OF THE SET ASI DE FOR THE INTEREST OF JUSTICE. 7. FOR THAT, ADDITION OF RS.5,00,000/- ON THE HEAD OF UNDISCLOSED INCOME IS COMPLETELY BASELESS AS THE SAME WAS MADE SIMPLY BAS ED ON THE STATEMENT OF THE MANAGING PARTNER MADE UNDER FRUSTRATION AND THA T THE FORUM BELOW FAILED TO BRING INTO THE FOLD OF ASSESSMENT ANY POSITIVE E VIDENCE TO THE ABOVE EFFECT. 3. FACTS IN BRIEF ARE THAT, IN THE RELEVANT ASSESSM ENT YEAR, THE ASSESSEE DERIVED INCOME FROM SALE OF STEEL SCRAP, ANGLES AND TRUCK PLYING. HE FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR SHOWING TOTAL INCOME OF RS .4,99,608/-. A SURVEY ACTION U/S.133A WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE. DUR ING THE COURSE OF SURVEY, BOOKS OF ACCOUNT 3 I.T.A. NO.191/CTK/2013 ASSESSMENT YEAR: 2009-2010 WERE FOUND AND IMPOUNDED. THE ASSESSING OFFICER CO MPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT DETERMINING TOTAL INCOME AT RS.68 ,14,524/-, INTER ALIA, MAKING THE FOLLOWING DISALLOWANCE/ADDITIONS: I) DISCREPANCY IN CLOSING STOCK : RS.19,60,481/- II) UNSECURED LOAN : RS.10,00,000/- III) ADVANCE FROM PARTY : RS. 5,20,000/- IV) LIABILITY FOR EXPENSES : RS.23,33,120/- V) UNDISCLOSED INCOME : RS. 5,00,000/- 4. LD CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. BEING AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 5. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE SUBM ITTED THAT ALTHOUGH THE ASSESSEE HAS TAKEN VARIOUS GROUNDS OF APPEAL, BUT THE MAIN GRIEV ANCE IS THAT LD CIT (A) PASSED THE ORDER WITHOUT AFFORDING REASONABLE OPPORTUNITY TO THE ASS ESSEE. HE SUBMITTED THAT THE ASSESSEE WAS SUFFICIENTLY DEPRIVED FROM REASONABLE OPPORTUNITY O F BEING HEARD BY THE AO AS ALSO BY LD CIT(A). HE SUBMITTED THAT ASSESSEE COULD NOT FURNISH SOME O F THE EVIDENCES WHICH IT HAD IN HIS POSSESSION AND SOME MORE MATERIAL WHICH HE COULD NO T COLLECT CONSIDERING THE TIME CONSTRAINT. AT THE TIME OF FIRST APPELLATE STAGE, ASSESSEE REQU ESTED TO REMAND THE MATTER BACK TO THE FILE OF THE AO FOR FRESH CONSIDERATION/ADJUDICATION. HE SU BMITTED THAT BEFORE LD CIT(A), A REQUEST WAS MADE THAT SINCE DURING THE COURSE OF SURVEY, PURCHA SE, SALE AND STOCK BOOKS WERE SEIZED, DIRECTION BE GIVEN TO THE AO TO RELEASE THE SAME SO THAT ASSESSEE COULD EXPLAIN SUPPRESSION OF STOCK AS NOTED BY LD CIT (A) IN PARA 5.1. HOWEVER, LD CIT(A) DID NOT ISSUE THE DIRECTION. HE SUBMITTED THAT LD CIT(A) CONFIRMED THE ACTION OF TH E AO IN A MECHANICAL MANNER WITHOUT CONSIDERING THE ASSESSEES SUBMISSION. IN VIEW OF THIS LD COUNSEL REQUESTED TO REMAND THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION . THE WRITTEN SUBMISSIONS FILED BY THE ASSESEE ARE PLACED ON RECORD. 6. LD D.R. SUPPORTED THE ORDERS OF REVENUE AUTHORIT IES. 4 I.T.A. NO.191/CTK/2013 ASSESSMENT YEAR: 2009-2010 7. HAVING HEARD BOTH THE PARTIES, WE ARE INCLINED T O ACCEPT THE PLEA OF THE ASSESSEE IN VIEW OF THE FACT THAT THE REQUEST OF THE ASSESSEE WAS NO T CONSIDERED BY LD CIT(A) TO REMAND THE MATTER BACK TO THE FILE OF THE AO SO THAT ASSESSEE COULD PRODUCE THE BALANCE DOCUMENTS WHICH WERE NOT FURNISHED AT THE TIME OF ASSESSMENT STAGE. WE FURTHER FIND THAT LD CIT(A) AT PAGE 6.1, INTER ALIA, HAS OBSERVED AS UNDER: PRODUCTION OF BOOKS OF ACCOUNT, RECEIPTS AND VOUCH ERS COULD HAVE CLARIFIED THE ISSUE. CASE LAWS WOULD NOT SOLVE THE PROBLEM. I REFER HER E TO PARA 7 OF PAGE 623 IN J SUMMERMAL (HUF) VS. ACIT (2012) 344 ITR 618 (KAR). WE ALSO FIND THAT AT THE TIME OF SURVEY OPERATIONS , PURCHASE, SALE AND STOCK BOOKS WERE SEIZED AND IMPOUNDED . IT WAS THE CONTENTION OF THE ASSESS EE BEFORE LD CIT(A) TO DIRECT THE AO RELEASE THE SAME SO THAT THE ASSESSEE COULD SUBSTAN TIATE SUPPRESSION OF STOCK CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE CONSIDERED OPINION THAT IT WOULD MEET THE ENDS OF JUSTICE IF THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND MATTER RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR MAKING ASSESSMENT DENOVO. WE, ACCORDINGLY, SET ASIDE THE ORDER OF LD CIT(A) AND RESTORE THE MA TTER BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION. THE AO IS DIRECTED TO AFFORD REASONAB LE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO COOPERATE WI TH THE AO AND FURNISH THE RELEVANT DOCUMENTS. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 22 ND OCTOBER, 2014. SD/- SD/- ( GEORGE MATHAN) (S.V.MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, CUTTACK 22 /10/2014 B.K.PARIDA, SR. PS 5 I.T.A. NO.191/CTK/2013 ASSESSMENT YEAR: 2009-2010 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT: BHRAMARBAR SAHOO,PROP. M/S. B.B. STE EL, BIJAYCHANDRAPUR, AHTARBANKI, PARADEEP, JAGATSINGHPUR. 2. THE RESPONDENT: : ITO, WARD-1, PARADEEP. 3. THE CIT, CUTTACK 4. THE CIT(A), CUTTACK 5. DR, CUTTACK BENCH 6. GUARD FILE. TRUE COPY// BY ORDER