M/s. Prerna Design Studio, Surat V. The ACIT.,Circle-2, Surat

ITA 1979/AHD/2009

• Counselvise Citation: 197920514 RSA 2009
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 17-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Corroborative evidences
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.1979 & 2165/AHD/2009 ASSESSMENT YEAR:2005-06 M/S PRERNA DESIGN STUDIO C/O MRS LENA RODRICKS, H- 13, NAND NIKETAN, ESSAR TOWNSHIP, VILL. BED DIST. JAMNAGAR -361006 PAN NO. AAGFP9266R ACIT, CIRCLE-2, ROOM NO.110, 1 ST FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT V/S . V/S . ACIT, CIRCLE-2, SURAT M/S PRERNA DESIGN STUDIO C/O MRS LENA RODRICKS, H-13, NAND NIKETAN, ESSAR TOWNSHIP, VILL. BED DIST. JAMNAGAR - 361006 (APPELLANT) .. (RESPONDENT) /BY ASSESSEE SHRI RAJESH UPADHYAY, AR /BY REVENUE SHRI VINOD TANWANI, SR-DR /DATE OF HEARING 07-03-2012 /DATE OF PRONOUNCEMENT 20-04-2012 O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THESE ARE CROSS-APPEALS FILED BY THE ASSESSEE AND THE REVENUE ARISING FROM THE COMMON ORDER OF LD COMMISSIONER OF INCOME -TAX (APPEALS)-II, SURAT ITA NO.1979 & 2165/AHD/2009 A.Y. 2005-06 M/S PRERNA DESIGN STUDIO V. ACIT CIR-2 SRT PAGE 2 DATED 24-03-2009 FOR ASSESSMENT YEAR 2005-06. THE A SSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ITA NO.1979/AHD/2009 (BY THE ASSESSEE) 1. LR. A.O. ERRED IN LAW AND ON FACT TO ADD AN AMOU NT OF RS.9,61,870/- BEING FRESH CAPITAL INTRODUCED IN THE ACCOUNT OF TH E PARTNERS. LR. CIT(APPLS) HAS SUSTAINED ADDITION OF RS.2,33,355/- AND RS.40,000/- AS INCOME OF A FIRM WITHOUT APPRECIATING FACTS OF T HE CASE AND EVIDENCES PRODUCED BEFORE HIM. 2. WITHOUT PREJUDICING MY CONTENTION IN GROUND NO.1 , IF SUCH AMOUNT IS TREATED AS INCOME OF THE FIRM, ONLY PERCENTAGE OF P ROFIT CAN BE ADDED AND NOT THE WHOLE OF AMOUNT OF RS.2,73,355/- (RS.2, 33,355/- + RS.40,000/-. 3. LR. A.O ERRED IN LAW AND ON FACTS TO ADD AN AMOU NT OF RS.28,24,844/- U/S 69C OF THE ACT ON UNDISPUTED FACT THAT EXPENSES / PURCHASES WERE NOT FOUND UNACCOUNTED IN THE YEAR UNDER APPEAL . WHEN INCOME OF RS.11,43,531/- IS SHOWN AS PER BOOKS OF ACCOUNT IS ACCEPTED, IT IS NOT CORRECT TO ADD DIFFERENCE IN CLOSING BALANCE OF SUPPLIER OF GOODS / EXPENSES AS INCOME OF THE APPELLANT FIRM. LR. CIT(A ) WHICH DIRECTING A.O TO CONSIDER THE FACT OF MISTAKE CREPT IN BY WAY OF ADOPTING CLOSING BALANCE OF F.Y. 2005-06 AS POINTED OUT BY T HE APPELLANT. LR. CIT(APPL) IS THEREFORE NOT JUSTIFIED TO PRESS RULE 46A OF I.T. RULES TO RESTRICT ADDITION OF RS.27,38,824/-. THE REVENUE HAS RAISED THE FOLLOWING GROUND:- ITA NO.2165/AHD/2009 BY THE REVENUE. 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED A) IN DELETING THE ADDITION MADE BY THE A.O OF 27,3 2,849/- ON ACCOUNT OF ESTIMATION OF NET INCOME. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFF ICER. 2. ITA NO.1979/AHD/2009 (BY THE ASSESSEE ) WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD AN D THE ORDERS PASSED BY THE AUTHORITIES BELOW. AFTER HEARING THE PARTIES AT LENGTH AND PERUSING THE RECORDS IT APPEARS THAT LD. CIT(A) HAS FAILED TO TA KE NOTE OF THE EVIDENCE PRODUCED BY THE ASSESSEE. IT WOULD SUB-SERVE THE IN TEREST OF NATURAL JUSTICE, IF THE MATTER IS REMITTED BACK TO THE FILE OF ASSESSIN G OFFICER FOR FRESH DECISION. THEREFORE, WE SET ASIDE THE IMPUGNED ORDER AND THE ASSESSING OFFICER IS ITA NO.1979 & 2165/AHD/2009 A.Y. 2005-06 M/S PRERNA DESIGN STUDIO V. ACIT CIR-2 SRT PAGE 3 DIRECTED TO DECIDE THE MATTER AFRESH AFTER GIVING OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM WITH SUPPORTING EVIDENCE. ITA NO.2165/AHD/2009 (BY THE REVENUE) WE HAVE SET ASIDE THE IMPUGNED ORDER IN ITA NO. 197 9/2009 WITH A DIRECTION TO THE AO TO DECIDE AFRESH AFTER PROVIDING OPPORTUN ITY TO THE ASSESSEE AND IN VIEW OF THIS THE ISSUE RAISED IN THIS APPEAL IS ALS O REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION. 3. IN THE RESULT, ASSESSEES APPEAL IN ITA NO.1979/AHD /2009 AND THAT OF REVENUE IN ITA NO.2165/AHD/2009 ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 20/04 /2012 SD/- SD/- (A.K.GARODIA) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, *DKP - 20/0 4 /2012 !' # $ % % % % &''()* &''()* &''()* &''()* +) +) +) +) / COPY OF ORDER FORWARDED TO:- 1. *-( ./ / APPELLANT 2. &01./ / RESPONDENT 3. #'3 1 14 / CONCERNED CIT 4. 1 14- *-( / CIT (A) 5. )7 8-1 &'''3, 1 *-(-1 '3, !' # / DR, ITAT, AHMEDABAD 6. 8 ;< = >( / GUARD FILE. BY ORDER/ % , /TRUE COPY/ ?*/! 1 * - 1 *-(-1 '3, !' # $