Shri Kushavkant A.Agrawal, Baroda V. The Income tax Officer,Ward-3(1), Baroda

ITA 1989/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9202 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 18-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C PANDIT
• Keywords: TDS; Set aside
• Section: 143(1); 143(2); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: AHMEDABAD BEN CHES C BENCH: AHMEDABAD (BEFORE S/SHRI H. L. KARWA, JM AND A N PAHUJA, AM) ITA NO. 1989/AHD/2009 A. Y.:2005-06 KUSHAVKANT A. AGRAWAL, SAMALAYA, SAVLI, DIST. VADODARA, [PAN: ADSPA 9807 C] VS THE INCOME TAX OFFICER, WARD 3 (1), 3 RD FLOOR, AAYAKAR BHAVAN,RACE COURSE CIRCLE, VADODARA APPELLANT RESPONDENT REVENUE BY SHRI M. C. PANDIT, DR ASSESSEE BY NONE (WRITTEN SUBMISSION) ORDER A N PAHUJA: THIS APPEAL BY THE ASSESSEE AGAINST AN ORDER DATE D 06-3-2009 OF THE LEARNED CIT(A)-II, BARODA, RAISES THE FOLLOWING GROUNDS: UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL II), VADODARA HA S ERRED BOTH IN LAW AND IN FACTS WHILE DECIDING APPEAL EXPARTE. 1. IN CONFIRMING THE ADDITION OF RS.1,88,707/- BEIN G THE GROSS RECEIPT AS INCOME. SHE OUGHT TO HAVE CONSIDERED THE GROSS P ROFIT AMOUNT ON THIS TURNOVER AS INCOME. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR ALTE R THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THA T RETURN DECLARING INCOME OF RS.1,30,969/- FILED ON 31-03-2006 BY THE ASSESSEE, A CATERER, AFTER BEING PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (H EREINAFTER REFERRED TO AS THE ACT) WAS SELECTED FOR SCRUTINY WITH THE ISSUE OF NO TICE U/S 143(2) OF THE ACT ON 08- 03-2007. DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE ASSESSING OFFICER[AO IN SHORT] RECEIVED INFORMATION FROM THE DIT (SYSTEMS) THAT THE ASSESSEE RECEIVED PAYMENT OF RS.1,88,707/- FROM M/S JUBILANT ORGANOSYS LTD.. IN RESPONSE TO A SHOW CAUSE NOTICE DATED 7-9-2007, THE ASSESSEE DID NOT SUBMIT ANY REPLY NOR RESPONDED TO THE SAID SHOW CAUSE NOTI CE. IN THE ABSENCE OF ITA NO. 1989/AHD/2009 SHRI KHUSHVKANT A AGRAWAL 2 RELEVANT DETAILS, THE AO ADDED THE AFORESAID AMOUNT OF RS.1,88,707/- AS INCOME FROM UNDISCLOSED/UNEXPLAINED SOURCES. 3. ON APPEAL, THE ASSESSEE CONTENDED THAT HE WAS RU NNING A CANTEEN ALONG WITH HIS BROTHER. IN DECEMBER 2002, THEY MANAGED TO GET A CONTRACT FROM M/S PANCHMAHAL STEEL LTD., WHICH WAS RENEWED FOR THE YE AR UNDER CONSIDERATION AT THE SAME RATES. WHILE SUBMITTING A COPY OF THE CONT RACT, THE ASSESSEE SUBMITTED THAT THEIR NET PROFIT WAS AROUND 5 TO 6% PER YEAR. AS REGARDS AMOUNT OF RS.1,88,707/- RECEIVED FROM JUBILANT ORGANOSYS LTD. THE ASSESSEE SUBMITTED THAT THIS WAS REIMBURSEMENT OF EXPENSES INCURRED BY THEM . IN THE LIGHT OF THESE SUBMISSIONS, THE LEARNED CIT(A) CONCLUDED THAT THE AFORESAID AMOUNT OF RS.1,88,707/- WAS ADMITTEDLY NOT INCLUDED IN THE TO TAL TURNOVER. IN THE ABSENCE OF ANY EVIDENCE REGARDING PAYMENT RECEIVED FROM M/S JU BILANT ORGANOSYS LTD. AND EXPENSES INCURRED IN RUNNING THE CANTEEN, THE LEARN ED CIT(A) UPHELD THE ADDITION MADE BY THE AO. 4. THE ASSESSEE IS NOW IN APPEAL AGAINST THE AFORE SAID FINDINGS OF THE LEARNED CIT(A). NONE APPEARED BEFORE US AT THE TIME OF HEARING.IN THEIR WRITTEN SUBMISSIONS DATED 18-8-2009, THE ASSESSEE STATED TH AT THE AMOUNT OF RS.1,88,707/- WAS RECEIVED FROM JUBILANT ORGANOSYS LTD. IN TERMS OF A CONTRACT FOR RUNNING A CANTEEN.THIS WORK WAS HANDLED BY HIS BROTHER. SINCE HE INCURRED LOSS, HIS BROTHER DID NOT GIVE THE DETAILS. THEREFO RE, THE ASSESSEE DID NOT CLAIM THIS LOSS NOR CLAIMED CREDIT FOR TDS DEDUCTED ON TH E AMOUNT. IT WAS FURTHER MENTIONED THAT SINCE THE ASSESSEE INCURRED LOSS WHI LE THE ENTIRE GROSS RECEIPT CANNOT BE TAXED AS INCOME,THE AO MAY BE DIRECTED TO ADOPT REASONABLE PROFIT RATE OF 5 TO 6% ON THE GROSS RECEIPTS. IN THIS CONN ECTION, THE ASSESSEE RELIED UPON THE DECISION OF ITAT AHMEDABAD BENCH IN THE CA SE OF GURUBACHAN SINGH JUNEJA (1995) 55 ITD 75 (AHD) ( TM ) AND IN THE CAS E OF MOHAN SAHANI VS CIT (2008) 304 ITR 52 (MP). ON THE OTHER HAND, THE LEA RNED DR POINTED OUT THAT THE FACTS MENTIONED IN THE WRITTEN SUBMISSION WERE NOT AVAILABLE BEFORE THE AO AND THE LEARNED CIT(A) NOR ANY REASON HAS BEEN GIVEN BY THE ASSESSEE AS TO WHY HE DID NOT RESPOND TO VARIOUS NOTICES ISSUED BY THE AO . ITA NO. 1989/AHD/2009 SHRI KHUSHVKANT A AGRAWAL 3 5. WE HAVE HEARD THE LEARNED DR AND GONE THROUGH TH E FACTS OF THE CASE AND THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. SINCE THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 144 OF THE ACT WHILE THE FAC TS NARRATED IN THE WRITTEN SUBMISSIONS NOW FILED BEFORE US WERE NOT PLACED BEF ORE THE AO OR THE LEARNED CIT(A), WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO FOR DE CIDING THE MATTER AFRESH IN THE LIGHT OF FACTS NOW REVEALED BEFORE US AND IN ACCOR DANCE WITH LAW, AFTER ALLOWING SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. WITH THESE DIRECTIONS, GROUNDS RAISED BY THE ASSESSEE ARE DISPOSED OF . 6. NO ADDITIONAL GROUND HAVING BEEN RAISED IN TERMS OF THE RESIDUARY GROUND, ACCORDINGLY, THIS GROUND IS REJECTED. 7. IN THE RESULT, APPEAL IS ALLOWED, BUT FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 4TH SEPTEMBER,2009 SD/- SD/- (H. L. KARWA) (A.N. PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE:4TH SEPTEMBER,2009 LAKSHMIKANT/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE 2. THE INCOME TAX OFFICER,WARD 3 (1), 3 RD FLOOR, AAYAKAR BHAVAN,RACE COURSE CIRCLE,VADODARA 3. CIT(A)-II,BARODA 4. THE CIT CONCERNED 5. THE D.R. ITAT, AHMEDABAD, 6. GUARD FILE BY ORDER DR / AR, ITAT, AHMEDABAD