M/s. Utkal Highways, Cuttack V. ACIT, Circle-2(1), Cuttack

ITA 200/CTK/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5317 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 19-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BANDYOPADHYAY
• Assessee Lawyers: K K BAL
• Keywords: Principle of natural justice; Corroborative evidences

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ITA NO. 200 / CTK /20 1 6 (ASSESSMENT YEAR : 201 1 - 2012 ) M/S UTKAL HIGHWAYS, SHREEVIHAR COLONY, TULSIPUR, CU TTACK VS. ACIT, CIRCLE - 2(1), CUTTACK ./ ./ PAN/GIR NO. : A AAFU 8445 M ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI K.K.BAL, AR /REVENUE BY : SHRI S.K.BANDYOPADHYAY , DR / DATE OF HEARING : 1 3 / 12 /201 7 / DATE OF PRONOUNCEMENT 14 / 12 /201 7 / O R D E R PER SHRI N.S.SAINI , A M : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), CUTTACK , DATED 15.02.2016 . 2. GROUNDS NO.1, 4 & 5 OF THE APPEAL READS AS UNDER : - 1. FOR THAT THE ORDER OF THE FORUM BELOW IS ARBITRARY AND ILLEGAL IN THE FACTS AND CIRCUMSTANCES OF THE CASE, HENCE LIABLE TO BE QUASHED. 4. FOR THE LD CIT (APPEALS)CALLED FOR A REPORT U/S 250(4) OF THE INCOME TAX ACT AND LD ASSESSING OFFICER WITHOUT PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO FURNISH THE DETAILS IN SUPPORT OF HIS CLAIM SIMPLY SUBMITTED HIS REPORT ON THE BASIS OF ASSESSMENT ORDER. THEREFORE THERE IS GROSS VIOLATION OF PRINCIPL ES OF NATURAL JUSTICE AND THE REPORT SUBMITTED VIOLATING THE PRINCIPLES OF NATURAL JUSTICE SHOULD NOT HAVE BEEN UTILIZED AGAINST THE ASSESSEE TO DISPOSE OF THE APPEAL. 5. FOR THAT OTHER GROUNDS IF ANY WILL BE URGED AT THE TIME OF HEARING . 3. THESE GRO UNDS OF APPEAL ARE GENERAL IN NATURE, HENCE, REQUIRES NO SEPARATE ADJUDICATION BY US. 4. GROUND NO.2 READS AS UNDER : - ITA NO. 2 00 /CTK/201 6 2 2. FOR THAT LD. ASSESSING OFFICER AFTER VERIFICATION FOUND THAT BONUS PAYABLE HAS BEEN PAID IN FOUR INSTALLMENTS IS CASH. IN SUPPORT OF WHICH THE ASSESSEE FURNISHED CONFIRMATION STATEMENT OF THE EMPLOYEES WHO RECEIVED THE BONUS, LEDGER COPY OF BONUS PAYABLE AND EXTRACT OF CASH BOOK OF THE SUBSEQUENT ASST. YEAR. TO ESTABLISH THAT THE BONUS PAYABLE HAS BEEN PAID PRIOR TO THE FILING OF THE RE TURN. ALTHOUGH THESE FACTS ARE THERE IN RECORD, LD ASSESSING OFFICER DISALLOWED THE BONUS PAYABLE, WHICH IS ARBITRARY AND LIABLE TO BE DELETED. 5. BRIEF FACTS OF THE CASE ARE THAT THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED RS.34,07,356/ - AS 'STAFF BON US PAYABLE' AND THE SAME AMOUNT WAS CLAIMED IN THE PROFIT AND LOSS ACCOUNT. IN ORDER TO VERIFY THE VERACITY OF THE CLAIM ASKED THE ASSESSEE TO PRODUCE THE SALARY AND BONUS PAYMENT REGISTER FOR VERIFICATION. FROM VERIFICATION OF LEDGER ACCOUNT OF STAFF BONU S PAYABLE FOR THE F.Y. 2011 - 12, THE AO NOTICED THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF RS.34,07,356/ - PAID IN FOUR INSTALLMENTS AND ALL THESE PAYMENTS WERE MADE IN CASH. THE AO VERIFIED THE CERTAIN VOUCHERS AND REGISTERS AND FOUND THAT THE AMOUNT OF RS.34 ,07,356/ - WAS PAID IN SINGLE INSTALLMENT TO 92 NUMBER OF EMPLOYEES BY OBTAINING SIGNATURE ON REVENUE STAMP FROM THE EMPLOYEES. HE FOUND BOTH THE STATEMENTS AS CONTRADICTORY IN NATURE AND THEREFORE HELD THAT THE VALIDITY OF CLAIM MADE ON STAFF BONUS PAYABLE WAS NOT PROVED BY THE ASSESSEE. THE AO FURTHER OBSERVED THAT THE ASSESSEE SUBMITTED FORM NO. 12 B GIVEN BY SOME OF THE EMPLOYEES FOR THE F.Y. 2010 - 11 AND O N VERIFICATION OF THE SAME OBSERVED THAT THIS DECLARATION ALSO DID NOT MENTION THE BONUS AMOUNT PAI D / PAYABLE BY THE ASSESSEE TO ITS EMPLOYEES. THE AO HELD THAT THERE WAS NO CONCRETE EVIDENCE TO PROVE THE CLAIM UNDER 'STAFF BONUS PAYABLE' AS GENUINE. THEREFORE, THE AO ITA NO. 2 00 /CTK/201 6 3 DISALLOWED THE DEDUCTION AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 6. ON APPE AL, THE CIT(A) CALLED FOR REMAND REPORT FROM THE AO, WHO IN THE REMAND REPORT STATED AS UNDER : - 'AS REGARDS THE DISALLOWANCE IN RESPECT OF 'STAFF BONUS PAYABLE' AMOUNTING TO RS.34,07,356/ - IS CONCERNED, THE A/R OF THE ASSESSEE HAS ONLY PRODUCED THE SAME D ETAILS/DOCUMENTS AS WAS PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. NO NEW OR CORROBORATIVE EVIDENCES WERE PRODUCED BY THE A/R SO AS TO HAVE A DIFFERENT CONCLUSION.' ON THE BASIS OF ABOVE REMAND REPORT, THE CIT(A) HELD THAT THE ASSESSEE DID NOT SUBMIT ANY RESPONSE TO THE REPORT OF THE AO AND THEREFORE, HE SUSTAINED THE ORDER OF AO ON THIS ISSUE. 7. BEFORE US, LD. AR OF THE ASSESSEE SUBMITTED THAT REMAND REPORT RECEIVED FROM THE AO WAS NOT CONFRONTED TO THE ASSESSEE . 8. ON THE OTHER HAND, THE DR SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 9. AFTER HEARING RIVAL SUBMISSIONS AND PERUS ING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE CIT(A) HAD CALLED FOR REMAND REPORT FROM THE AO BUT HAS NOT CONFRONTED THE SAME TO THE ASSESSEE AND THERE WAS VIO LATION OF PRINCIPLE OF NATURAL JUSTICE. HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF CIT(A) FOR ADJUDICATING THE ISSUE AFRESH AFTER SUPPLY COPY OF THE REMAND REPORT TO THE ASSESSEE AND AFTER ALLOWING REASONABL E AND PROPER OPPORTUNITY OF HEARING. HENCE, WE SET ASIDE THE ORDER OF THE CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF CIT(A). THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 2 00 /CTK/201 6 4 10 . GROUND NO. 3 OF THE APPEAL READS AS UNDER : - 3. FOR THAT THE ASSESSEE FURNISHED ALL BILLS AND VOUCHERS IN SUPPORT OF THE EXPENSE CLAIMED UNDER THE HEAD OIL AND LUBRICANT AS PER THE DETAILS OF THE LEDGER ACCOUNT. IT HAS BEEN CATEGORICALLY RECORDED IN THE ASSESSMENT ORDER THAT THE ASSESEE FURNISHED ALL T HE BILLS AND VOUCHERS. BUT UNFORTUNATELY LD ASSESSING OFFICER DISALLOWED EXPENSES TO THE TUNE OF RS.8,20,169/ - , WHICH HAS NO RELEVANCE WITH THE LEDGER ENTRIES. THIS ALLEGATION IS FALSE AND FABRICATED. THEREFORE THE ADDITION MADE BASING ON SUCH FALSE AND FA BRICATED ALLEGATION IS LIABLE TO BE DELETED. 1 1 . BRIEF FACTS OF THE CASE ARE THAT THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED EXPENDITURE OF RS.7,87,43,340/ - UNDER THE HEAD 'OPERATION & MAINTENANCE EXPENSES'. HE OBSERVED THAT AN AMOUNT OF RS.5,80,22,31 1/ - WAS CLAIMED TOWARDS OIL AND LUBRICANTS EXPENSES. ON VERIFICATION OF THE SUPPORTING BILLS AND VOUCHERS PRODUCED BY THE ASSESSEE , THE AO GAVE A SPECIFIC FINDING THAT THE ASSESSEE COULD NOT PRODUCE BILLS AND VOUCHERS FOR THE CLAIM OF EXPENSES OF RS.8,20, 169/ - AND, THEREFORE, TREATED THE CLAIM TO THAT EXTENT AS BOGUS AND ADDED IT TO THE INCOME OF THE ASSESSEE . 1 2 . ON APPEAL, THE CIT(A) CALLED FOR A REMAND REPORT FROM THE AO, WHO SUBMITTED AS UNDER : - AS REGARDS THE DISALLOWANCE OF THE AMOUNT OF RS.8,20, 169/ - IN RESPECT OF OIL AND LUBRICANTS IS CONCERNED, IN THIS CASE ALSO THE A/R OF THE ASSESSEE HAS PRODUCED ONLY THE LEDGER ACCOUNT COPY AND NO BILLS/VOUCHERS WERE PRODUCED AS REQUIRED.' ON THE BASIS OF THE ABOVE REMAND REPORT OF THE AO, THE CIT(A) CONFI RMED THE ORDER OF THE AO. 1 3 . BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 14. BEFORE US, LD. AR OF THE ASSESSEE SUBMITTED THAT REMAND REPORT RECEIVED FROM THE AO WAS NOT CONFRONTED TO THE ASSESSEE. ITA NO. 2 00 /CTK/201 6 5 15. ON THE OTHER HAND, THE DR SUPPORTED THE ORDE RS OF LOWER AUTHORITIES. 16. AFTER HEARING RIVAL SUBMISSIONS AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE CIT(A) HAD CALLED FOR REMAND REPORT FROM THE AO BUT HAS NOT CONFRONTED THE SAME TO THE ASSESSEE AND THERE WAS VIOLATION OF PRINCIP LE OF NATURAL JUSTICE. HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF CIT(A) FOR ADJUDICATING THE ISSUE AFRESH AFTER SUPPLY COPY OF THE REMAND REPORT TO THE ASSESSEE AND AFTER ALLOWING REASONABLE AND PROPER OPPO RTUNITY OF HEARING. HENCE, WE SET ASIDE THE ORDER OF THE CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF CIT(A). THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 17 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICA L PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 14 / 1 2 /201 7 . ( PAVAN KUMAR GADALE ) (N. S. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 14 / 12 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. APPELLANT - M/S UTKAL HIGHWAYS, SHRE EVIHAR COLONY, TULSIPUR, CUTTACK 2. / THE RESPONDENT - A CIT, CIRCLE - 2(1), CUTTACK 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//