Appeal details
Counselvise Citation
[2016] 133 COUNSELVISE.COM (IT) 3130 (ITAT-NAGPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 26 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-02-2016
Appeal Filed By
Department
Order Result
Allowed
Bench Allotted
DB
Assessment Year
2008-2009
Appeal Filed On
09-01-2012
Judgement Text
1 ITA NO. 02/NAG/2012 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. ITA NO . 02 /NAG/201 2 ASSESSMENT YEAR : 20 08 - 09. ASSTT. COMMISSIONER OF INCOME - TAX, SHRI MOHAN FULCHAND JAIN, CICLE - 8, NAGPUR . VS . NAGPUR. PAN AAOPJ 8967D APPELLANT. RESPONDENT. APPELLANT BY : SHRI NARENDRA KANE. RESPONDENT BY : SHRI SANDEEP JAIN. DATE OF HEARING : 0 4 - 01 - 2016. DATE OF PRONOUNCEMENT : 5 - 2 - 2016 O R D E R PER SHRI SHAMIN YAHYA, A.M . THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 11 - 10 - 2011 AND PERTAINS TO ASSESSMENT YEAR 2008 - 09. THE GROUNDS OF APPEAL READ AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN HOLDING THAT TH E INCOME OFFERED BY THE ASSESSEE IN THE P & L ACCOUNT AND ADDITIONAL INCOME OFFERED DURING THE COURSE OF SURVEY IS COVERED WHILE ESTIMATING THE INCOME @ 8% OF THE GROSS RECEIPTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN ALLOWING THE DEDUCTION U/S 24 AND U/S 80C OF THE ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING THE ADDITIONS. 2. THE ASSESSEE I N THIS CASE IS A CONTRACTOR MAINLY WORKING FOR M.S.E.B. IN THIS CASE AN ASSESS MENT WAS FRAMED U/S 144 OF THE I.T. ACT. A SURVEY WAS 2 ITA NO. 02/NAG/2012 CARRIED OUT U/S 133A OF THE I.T. AC T ON 30 - 11 - 2007 IN THIS CASE AND CERTAIN DISCREPANCIES WERE NOTICED DURING THE COURSE OF SURVEY. TO COVER UP THESE DISCREPANCIES THE ASSESSEE FILED A LETTER ON 04 - 12 - 2 007 AND OFFERED RS.90 LACS AS ADDITIONAL INCOME, ALONG WITH A DECLARATION. THE ASSESSEE OFFERED TO TAX INCOME ON ACCOUNT OF CESSATION OF LIABILITY REPRESENTED BY SUNDRY CREDITORS AMOUNTING TO RS.89550590/ - STATING THAT WE NO LONGER OWE, SINCE THE PERSON / PARTIES HAVE SHIFTED THEIR ADDRESSES . 3. IN THE ASSESSMENT ORDER THE AO NOTED THAT DESPITE FIVE NOTICES, NONE APPEARED. THE AO PROCEEDED TO PASS AN ASSESSMENT ORDER AS UNDER : 4. THE CASE WAS SELECTED FOR SCRUTINY SINCE SURVEY WAS CONDUCTED DURING THE RELEVANT PREVIOUS YEAR. NOTICE U/S 143(2) / 142(1) WAS ISSUED TO THE ASSESSEE FIXING THE CASE FOR HEARING AS UNDER. S. NO. DT. OF ISSUE OF NOTICE. CASE FIXED FOR HEARING. COMPLIANCE BY THE ASSESSEE. 1. U/S 143(2) DT. 12.01.2009 27.01.2009 NONE ATTENDED NO WRITTEN SUBMISSION MADE. 2. U/S 142(1) DT. 20.07.2009 29.07.2009 - DO - 3, U/S 143(2) DT. 22.09.2009 12.10.2009 - DO - 4. U/S 142(1) DT. 19.08.2010 26.08.2010 - DO - 5. U/S 144 DT. 11.11.2010 23.11.2010 - DO - 5. THE POINT WORTH NOTING IS THAT, DURING THE RELEVANT PERIOD THE CASE WAS ASSESSED BY ITO, WARD - 8(1) WHO CARRIED ON SURVEY ON 30.11.2007. THERE AFTER DUE TO THE MONETARY LIMIT THIS CASE WAS TRANSFERRED TO DCIT, CIRCLE - 8, NAGPUR. THE CASE FOR A.Y. 2007 - 08 WAS ALS O UNDER SCRUTINY IN THIS OFFICE. INSPITE OF THAT THE ASSESSEE FILED HIS RETURN OF INCOME WITH ITO, WARD - 7(1), NAGPUR WHERE THE JURISDICTION DOES NOT LIE AT ALL. THIS FACT WHEN VIEWED WITH THE NON COMPLIANCE OF THE NOTICES ISSUED SUBSEQUENTLY CLEARLY SHOWS THAT THE ASSESSEE WANTED T O EVADE SCRUTINY BY THE JURISDICTIONAL ASSESSING OFFICER FOR REASONS BEST KNOWN TO HIM. 6. THE ASSESSEE WAS GIVEN AN OPPORTUNITY TO EXPLAIN THE RETURN OF INCOME FILED BY HIM BY ISSUED OF NOTICED U/S 143(2) DATED 22.09.2009 REQUIR ING HIM TO PRODUCE ANY DOCUMENTS, ACCOUNTS AND ANY OTHER EVIDENCE ON WHICH HE RELIES IN SUPPORT OF THE RETURN FILED BY HIM. THE 3 ITA NO. 02/NAG/2012 ASSESSEE DID NOT PRODUCE ANY SUCH EVIDENCE ON THE DATE FIXED. NO WRITTEN SUBMISSION WAS FILED REQUESTING EXTENTION OF TIME OR FU RTHER OPPORTUNITY. IT IS THEREFORE CLEAR THAT THE ASSESSEE DOES NOT HAVE ANY DOCUMENTS, ACCOUNTS IN SUPPORT OF HIS RETURN. 7. SUBSEQUENTLY NOTICE S U/S 142(1) WERE ISSUED. VARIOUS DETAILS AND INFORMATION WITH REGARD TO THE CLAIMS MADE IN THE RETURN OF INCOM E WERE CALLED FOR. THE ASSESSEE DID NOT COMPLY WITH ANY OF THE NOTICES. IT THEREFORE BECOMES CLEAR THAT HE DOS NOT HAVE ANY SUPPORTING EVIDENCE IN RESPECT OF THE VARIOUS CLAIMS OF DEDUCTION ETC. MADE BY HIM IN THE RETURN OF INCOME. 8. THE CASE OF THE ASSES SEE IS COVERED BY SECTION 44AB OF THE I.T. ACT, 1961. THE ASSESSEE HAS CLAIMED GROSS RECEIPTS RS.52109553/ - + OTHER INCOMES. THERE IS A AUDIT REPORT CERTIFYING THE MAINTENANCE OF BOOK AND ACCOUNTS AS REQUIRED UNDER THE ACT. BUT THERE IS ALSO A FACT THAT I NSPITE OF VARIOUS OPPORTUNITY INCLUDING THE SPECIFIC OPPORTUNITY U/S 143(2), THE ASSESSEE HAS NOT PRODUCED ANY BOOKS OF ACCOUNTS OR DOCUMENTS. THEREFORE IT BECOMES CLEAR THAT THE ASSESSEE DOES NOT HAVE OR THE DOES NOT WISH TO PRODUCE THE BOOKS OF ACCOUNTS FOR SCRUTINY BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSEE HAS IMPLICITY ACCEPTED BEST JUDGMENT ASSESSMENT AT THE HANDS OF ASSESSING OFFICER. 9. THEREFORE, THE ASSESSEE WAS ISSUED A SHOWCAUSE NOTICE ON 11.11.2010 U/S 144 INTIMATING PROPOSED COMPUTATIO N OF HIS INCOME. THE CASE WAS FIXED FOR HEARING ON 23.11.2010. THE NOTICE WAS DULY SERVED ON THE ASSESSEE. 10. ON 23.11.2010 NOBODY ATTENDED NOR ANY WRITTEN SUBMISSION WAS FILED, EVEN ON 24.11.2010 NO WRITTEN SUBMISSION HAS BEEN FILED. THEREFORE, I AM CONS TRAINED TO BELIEVE THAT THE ASSESSEE HAS NO OBJECTION TO THE PROPOSED ORDER U/S 144 OF THE I.T. ACT, 1961 AND THAT HE ACCEPTS THE PROPOSED COMPUTATION OF HIS INCOME. 4. UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) AGREED WITH THE ASSESSEES SUBMISSION THAT NO DEFAULT CAN BE ATTRIBUTED TO THE ASSESSEE FOR NON COMPLIANCE OF AOS NOTICES AND NON SUBMISSION OF BOOKS OF ACCOUNTS BECAUSE THE AO HAD ALL THE IMPOUNDED MATERIAL WITH HIM WHICH WERE IMPOUNDED DURING THE SURVEY PROCEEDINGS. HE ALSO OBSERVED T HAT THE ADDITIONAL INCOME OF RS.90 LAKHS SHOULD BE ACCEPTED AS CURRENT YEAR INCOME AND HENCE THERE WAS NO NEED TO MAKE AN 4 ITA NO. 02/NAG/2012 ESTIMATED ASSESSMENT OF NET PROFIT BY THE AO. LEARNED CIT(APPEALS) ALSO OBSERVED THAT THE ADDITION ON THE BASIS OF TUR NOVER AND SURRENDERED INCOME WOULD TAKE THE ASSESSEES NE T PROFIT TO 26.61% IN A BUSINESS OF LABOUR BASED CONTRACT WERE MAINLY BY GOVERNMENT AGENCIES WHICH IS NOT POSSIBLE. HENCE LEARNED CIT(APPEALS) HELD THAT SEPARATE ENHANCEMENT MADE BY THE AO ON THE BAS IS OF TURNOVER DESERVES TO BE DELETED. LEARNED CIT(APPEALS) FURTHER HELD THAT OTHER ADDITIONS MADE BY THE AO ARE ALSO NOT SUSTAINABLE ON ACCOUNT OF INTEREST INCOME AND HIRE CHARGES INCOME AS THEY HAVE BEEN CONSIDERED IN THE PROFIT AND LOSS ACCOUNT AND ARE PART OF THE INCOME DECLARED. LEARNED CIT(APPEALS) ALSO DIRECTED THE AO TO ALLOW DEDUCTION OF INTEREST PAID ON HOUSING LOAN AS PER LAW U/S 24 AND ALSO ALLOWED DEDUCTION U/S 80C AND DONATION AS PER LAW. 5. AGAINST THE ABOVE ORDER REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND T HAT THE ASSESSEE HAS NOT PRODUCED ANY BOOKS OF ACCOUNTS AND RECORDS BEFORE THE AO. FIVE NOTICES FROM THE AO TO THE ASSESSEE REMAINED UNCOMPLIED. JUST BECAUSE THERE WAS A PREVIOUS SURV EY AND CERTAIN RECORDS WERE IMPOUNDED DOES NOT EXONERATE THE ASSESSEE FROM COMPLYING WITH THE AOS NOTICES AND APPEAR WITH BOOKS OF ACCOUNTS AND RECORDS AS REQUIRED DURING THE COURSE OF ASSESSMENT. THE ASSESSEE HAS MADE SURRENDER OF RS.90 LAKHS WHICH IS ON ACCOUNT OF LIABILITY REPRESENTED BY SUNDRY CREDITORS AMOUNTING TO RS.89550590/ - . THE ABOVE CLEARLY SHOWS THAT THE ASSESSEES RECORDING OF LIABILITY/PURCHASES/PAYMENT TO CREDITORS WERE NOT BONAFIDE AND IT BRINGS A QUESTION MARK ON THE VERACITY OF ASSESSEE S BOOKS OF ACCOUNTS AND PROFITABILITY RECORDED EARLIER. IN OUR CONSIDERED OPINION RS.90 LAKHS SHOWN AS CESSATION OF LIABILITY CAN IN NO WAY BE ACCEPTED AS SUBSTITUTION FOR ASSESSMENT OF PROFITABILITY FOR THE CURRENT YEAR. HENCE IN OUR CONSIDERED OPINION LEARNED CIT(APPEALS) HAS CLEARLY ERRED IN DELETING THE ADDITIONS. HOWEVER, WE ALSO NOTE THAT THE AO WHILE MAKING THE ASSESSMENT HAS NOT MADE ANY REFERENCE OR EXAMINATION OF THE PAST RESULTS OF THE ASSESSEE OR THE 5 ITA NO. 02/NAG/2012 PROFITABILITY RECORDED BY OTHER ASSESSES IN SIMILAR BUSINESS. IN OUR CONSIDERED OPINION, THIS IS NECESSARY FOR A PROPER ASSESSMENT. WE HAVE ALSO NOTED THAT THE DETAILS OF PAST DATA WERE SUBMITTED BEFORE THE LEARNED CIT(APPEALS) AND NOT BEFORE THE AO IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINI ON, THE INTEREST OF JUSTICE REQUIRES THAT THE ISSUE BE REMITTED TO THE FILE OF T HE AO. THE AO IS DIRECTED TO CONSIDER THE ISSUE AFRESH AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE AO AND SUBMIT THE NECESSARY DETAILS AND RECORDS AS NECESSARY AND AS PER LAW. 7. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF FEB. , 2016 SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 5 TH FEB. , 2016. COPY FORWARDED TO : 1. SHRI MOHAN FULCHAND JAIN, PROP OF M/S MF JAIN, MOUNT ROAD, SADAR, NAGPUR. 2. A.C.I.T., CIRCLE - 8, NAGPUR. 3. COMMISSIONER OF INCOME - TAX NAGPUR. 4. CIT(APPEALS) - II, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE.
