M/s SHAKTI OIL MILL, Burdwan V. I.T.O, Wd -(1)4, Durgapur, Durgapur

ITA 2088/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4140 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 22-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-07-2013
• Court: TRIBUNAL
• Assessee Lawyers: P K ROY
• Keywords: Opportunity of being heard; Non passing of speaking order
• Section: 244A; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE DR. A.L.SAINI, AM & SHRI K. NARASIMHA CHARY , JM ./ ITA NO2088/KOL/2013 ( / ASSESSMENT YEAR :2009-2010) M/S SHAKTI OIL MILL, DHUNRA PLOT, BENACHITY, DURGAPUR-713213, DIST-BURDWAN, W.B VS. ITO WARD-1(4), DURGAPUR ./ ./PAN/GIR NO. : AAZFS 9744 E ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI P.K.ROY, ADVOCATE /REVENUE BY : SHRI BISWANATH DAS, JCIT / DATE OF HEARING : 16/11/2016 /DATE OF PRONOUNCEMENT 05/12/2016 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO THE ASSESSMENT YEAR 2009-2010, IS DIRECTED AGAINST THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-DURGAPUR, IN A PPEAL NO.166/CIT(A)/DGP/2011-12, DATED 29.04.2013, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER (AO) UN DER SECTION143(3) OF THE INCOME TAX ACT 1961, (IN SHORT THE ACT), DATE D 19.12.2011. 2. BRIEF FACTS OF THE CASE QUA THE ISSUE ARE THAT T HE ASSESSEE FILED ITS RETURN OF INCOME THROUGH E-FILING ON 30.09.2009 DIS CLOSING TOTAL INCOME AT NIL. THE CASE WAS PROCESSED U/S.143(1) ON 28.10.201 0. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY WITH THE PRIOR APPRO VAL OF CIT, DURGAPUR. THE AO COMPLETED THE ASSESSMENT AFTER MAKING ADDITI ON OF RS.15,04,317/-, ON ACCOUNT OF DIFFERENCE IN ESTIMAT ED GROSS PROFIT. ITA NO.2088/13 M/S SHAKTI OIL MILL 2 3. AGGRIEVED FROM THE ORDER OF AO, THE ASSESSEE FIL ED APPEAL BEFORE THE LD. CIT(A), WHO HAS CONFIRMED THE ADDITION MADE BY THE AO BY OBSERVING THE FOLLOWINGS :- THESE GROUNDS ARE ADJUDICATED TOGETHER BECAUSE COM MON ISSUES ARE INVOLVED. IN THESE GROUNDS THE APPELLANT IS DIS PUTING THE A.O'S ACTION IN REJECTING ITS BOOK RESULTS AND ESTIMATING ITS INCOME. THE FACTS OF THE CASE ARE THAT IN COURSE OF ASSESSMENT PROCEEDINGS THE A.O. HAD CALLED FOR BOOKS OF ACCOUNTS WHICH WERE NO T PRODUCED THOUGH IT IS SEEN FROM THE ASSESSMENT ORDER THAT AU DIT REPORT AND CERTAIN OTHER DOCUMENTS HAD BEEN SUBMITTED. IN THE ABSENCE OF BOOKS THE A.O. HAD REJECTED THE BOOK RESULTS AND HA D PROCEEDED TO ESTIMATE THE APPELLANT'S INCOME ON THE BASIS OF A C OMPARABLE CASE. THE APPELLANT DISPUTES THE A.O'S ASSERTION THAT BOO KS OF ACCOUNTS WERE NOT PRODUCED. HOWEVER, IT IS SEEN THAT THE A.O . HAS ALSO INITIATED PENALTY PROCEEDINGS U/S.271A. FURTHERMORE , I DO NOT SEE IT TO BE THE APPELLANT'S CASE THAT IT IS IN A POSITION TO PRODUCE BOOKS OF ACCOUNTS NOW ALSO. UNDER THE CIRCUMSTANCES, IN MY O PINION, THERE ARE SUBSTANTIAL GROUNDS TO HOLD THAT THE BOOKS OF A CCOUNTS WERE INDEED NOT PRODUCED. IN THAT EVENT IT IS ENTIRELY L OGICAL FOR THE A.O. TO HOLD THAT THE BOOK RESULTS CANNOT BE RELIED UPON. T HE A.O. IS SEEN TO HAVE DONE SO AND IN MY OPINION THAT ACTION CANNO T BE FAULTED. ONCE THE BOOK RESULTS ARE REJECTED THERE REMAINS TH E ISSUE OF ESTIMATION OF INCOME. PERUSAL OF THE ASSESSMENT ORD ER REVEALS THAT THE A.O. HAS ADOPTED A METHOD THE LOGIC OF WHICH IS NOT BEING CHALLENGED BY THE APPELLANT. WHAT IT IS SEEN TO BE CHALLENGING IN ITS SUBMISSION IS THE PERCENTAGE ADOPTED BY THE A.O. HO WEVER, IT IS NOTED THAT THE APPELLANT IS NOT IN A POSITION TO PR ODUCE BOOKS OF ACCOUNTS. GIVEN THOSE CIRCUMSTANCES I DO NOT SEE AN Y NEED TO INTERFERE WITH THE A.O'S ACTION. THE CASE LAWS CITE D BY THE APPELLANT DEAL WITH THE CONCEPT OF APPLICATION OF MIND BY THE A.O. WHEN MAKING A BEST JUDGMENT ASSESSMENT. IN THIS CASE, IN MY OPINION, THE A.O. IS SEEN TO HAVE APPLIED HIS MIND. THE INCO ME ESTIMATED BY REJECTING THE BOOK RESULTS IS CONFIRMED. THESE GROU NDS OF APPEAL ARE DISMISSED. 4. NOT BEING SATISFIED WITH THE ORDER OF CIT(A), TH E ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWI NG GROUNDS OF APPEAL :- 1. FOR THAT YOUR PETITIONER DEALER DID NOT GET REAS ONABLY OPPORTUNITY OF BEING HEARD. 2. THAT THE ORDER IS NON-SPEAKING, BAD IN LAW AND M ANY OF THE OBSERVATIONS PASSED BY THE LD. AO ARE NOT CORRECTLY STATED. WHATEVER EXPLANATION GIVEN BY YOUR ASSESSEE HAS NOT CORRECTLY COME INTO RECORDS THEREFORE THE ORDER IS BAD IN LAW , SHOULD BE QUASHED AND CANCELLED AND A FRESH ORDER IN ACCORDAN CE WITH LAW SHOULD BE MADE. ITA NO.2088/13 M/S SHAKTI OIL MILL 3 3. YOUR ASSESSEE MAINTAINS ALL BOOKS OF ACCOUNTS AS REQUIRED AND THE SAME HAVE AT ALL MATERIAL TIMES BEEN PRODUCED B EFORE THE AUDITOR FOR PREPARATION OF BALANCE SHEET. AUDITOR H AS ADMITTED THAT BOOKS OF ACCOUNTS I.E. CASH BOOK, LEDGER BOOK, PURC HASE AND SALES REGISTER, VOUCHER FILE ETC. ARE MAINTAINED BY THE F IRM AND THE SAME HAVE BEEN PRODUCED BEFORE THE AUDITOR FOR EXAMINATI ON AS ADMITTED IN THE AUDIT REPORT. THE LD. AO HAS ALLEGED THAT QU ANTITATIVE DETAILS WERE NOT REFLECTED IN THE AUDIT REPORT. THE AUDITOR HAS STATED REASON AS 'LACK OF PAPERS AND INFORMATION'. THEN ON BEING ASKED TO PRODUCE DOCUMENTS THE ASSESSEE FIRM HAD SUBMITTED THE SAME BEFORE THE LD. AO. JUST ON THE BASIS OF A COMMENT MADE BY THE AUDITOR IN THE AUDIT REPORT YOUR ASSESSEE FIRM HAS BEEN JUDGED AND HUGE TAXES LIABILITY HAS BEEN IMPOSED ON YOUR ASSESSEE WHICH I S BAD IN LAW, BIASED AND WHICH SHOULD BE QUASHED AND CANCELLED. 4. IT IS A FACT THAT IF SALE PRICES DO NOT RISE AND THE PURCHASE PRICES RISE THEN THE GROSS PROFIT AND THE NET PROFIT SHALL BE POOR. YOUR ASSESSEE TRIED TO EXPLAIN THIS FACT TO THE LD. AO A GAIN AND AGAIN BUT THE LD. AO DID NOT ACCEPT THE EXPLANATION. LD. AO H AS ESTIMATED HIGHER GROSS PROFIT AT THE RATE OF 7% THEN WHY NO E XPENSES SHALL BE ALLOWED FROM THE ESTIMATED GROSS PROFIT AND HOW THI S WHOLE INCREASE IN GROSS PROFIT CAN BE ADDED TO THE NET PROFIT AND HOW TAX CAN BE CHARGED ON THE WHOLE GROSS PROFIT INCREASE. 5. FOR THAT YOUR PETITIONER DEALER CRAVES LEAVE TO ADDUCE FURTHER POINTS, FACTS, GROUNDS AND EVIDENTIAL CIRCUMSTANCES AT THE HEARING STAGE OF THE APPEAL PETITION. 6. FOR THAT IN THE CIRCUMSTANCES YOUR PETITIONER MO STLY PRAYS:- I) PERPETUAL ORDER FOR SET ASIDEING ORDER OF LD. A. O AND CONSIDER THE SAME AND RESTRAINING THE C.I.T (APPEAL), DURGAPUR F OR DOING SUCH NON SPEAKING ORDER AGAINST THE DEALER. II) FOR THAT AN ORDER OF DEMAND IS QUASHED AS YOUR PETITIONER IS A GOOD ASSESSEE AND HAD SHOWN INCOME TRULY AND HONEST LY AND AS SUCH THE HON'BLE COURT MAY DEEM FEET AND PROPER WHI CH SHALL NOT BE DETRIMENTAL FOR PETTY ASSESSEE. III) AN ORDER FOR QUASHING OF NOTICE ON PENALTY INI TIATED AS THE FACTS AND TRANSACTION WAS ABSOLUTELY BONAFIDE. IV) AN ORDER FOR QUASHING OF ADDITION OF RS.1504317 /- TO THE NET PROFIT IS BASELESS BIASED AND DID NOT MAINTAIN ANY NEXUS OF LAW SO SHOULD BE DELETED IN FULL. V) AN ORDER FOR QUASHING THE INTEREST U/S 234B IMPO SED ON YOUR ASSESSEE IS FULLY INCORRECT AND SHOULD BE QUASHED I N FULL. VI) AN ORDER FOR QUASHING THE INTEREST U/S 244A IMP OSED ON YOUR ASSESSEE IS FULLY INCORRECT AND SHOULD BE QUASHED I N FULL. ITA NO.2088/13 M/S SHAKTI OIL MILL 4 VII) AN ORDER FOR QUASHING THE INTEREST U/S 234D IM POSED ON YOUR ASSESSEE IS FULLY INCORRECT AND SHOULD BE QUASHED I N FULL. VIII) AN ORDER FOR THE ENTIRE DEMAND AMOUNT OF RS.6 54630/- SHOULD BE STAYED TILL FINAL DISPOSAL OF THE MATTERS. IX) FOR THAT SUCH FURTHER ORDER TO BE MADE OR DIREC TION TO BE GIVEN AS 'LOUR AFFORD COMPLETE WOULD SUFFER IRREVOCABLE LOSS AND INJURY. X) FOR THAT UNLESS ORDER AS PRAYS FOR ARE PASSED YO UR PETITIONER ASSESSEE WOULD SUFFER IRREVOCABLE LOSS AND INJURY. XI) FOR THAT YOUR PETITIONER PREPARED AND MADE AN A PPEAL WELL WITHIN THE TIME OF 60 DAYS AND WELL WITHIN THE JURISDICTIO N OF HON'BLE MEMBERS OF ITAT, KOLKATA, WEST BENGAL. XII) FOR THAT THIS APPLICATION IS MADE BONAFIDE AND IN THE INTEREST OF JUSTICE AS A PARTNERSHIP FIRM. 5. ALTHOUGH, IN THIS APPEAL, THE ASSESSEE HAS RAISE D MULTIPLE GROUNDS OF APPEAL, BUT AT THE TIME OF HEARING THE MAIN GRIE VANCE OF THE ASSESSEE HAS BEEN CONFINED TO THE ISSUES THAT THE LD. CIT(A) DID NOT GIVE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AO HAS ADOPTED HIGHER GROSS PROFIT RATE @7%, WITHOUT INCORPORATING THE EX PLANATIONS GIVEN BY THE ASSESSEE AND WITHOUT GIVING PROPER OPPORTUNITY TO T HE ASSESSEE. 5.1. LD. AR FOR THE ASSESSEE HAS SUBMITTED THAT ASS ESSEE HAS SUBMITTED EXPLANATIONS AND THE DOCUMENTS TO JUSTIFY THE LOWER PROFIT BUT THE SAME HAS NOT BEEN CONSIDERED BY THE AO. LD. AR FOR THE ASSESSEE ALSO POINTED OUT THAT THE ASSESSEES BOOKS OF ACCOU NTS ARE WRITTEN IN DEVNAGARI LANGUAGE, THEREFORE, THERE SHOULD BE PROP ER PERSON TO EXPLAIN THE DEVNAGARI LANGUAGE TO THE AO. THE PRESUMPTION O F THE AO THAT THE ASSESSEE IS NOT MAINTAINING BOOKS OF ACCOUNT IS WRO NG. IN FACT THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNTS BUT BECAU SE OF A CERTAIN UN- ITA NO.2088/13 M/S SHAKTI OIL MILL 5 INTENTIONAL MISTAKE DONE BY THE TAX AUDITOR IN THE TAX AUDIT REPORT, THE ASSESSEE SHOULD NOT SUFFER. THE ASSESSEE`S ACCOUNTA NT, WHO KNOWS THE DEVNAGARI LANGUAGE, WAS ABSENT WHEN THE ASSESSMENT PROCEEDINGS WAS GOING ON. THEREFORE, ASSESSEE COULD NOT EXPLAIN BOO KS OF ACCOUNTS PROPERLY BEFORE THE AO. MERELY BECAUSE THE BOOKS OF ACCOUNTS ARE WRITTEN IN DEVNAGARI LANGUAGE, DOES NOT MEAN THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE WRONG AND NOT RELIABLE. THEREFORE, THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY TO EXPLAIN THE BOOKS OF ACCOUNTS AND THE FINANCIAL STATEMENTS. LD. AR FOR THE ASSESSEE, THER EFORE, REQUESTED THE BENCH TO SEND/REMIT THE CASE BACK TO THE AO TO EXAM INE THE BOOKS OF ACCOUNTS OF THE ASSESSEE. 5.2. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTA TIVE FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE AO, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. LD. DR FOR THE REVENUE EVEN AGREED TO SEND/REMIT TH E CASE BACK TO THE AO TO EXAMINE THE BOOKS OF ACCOUNTS AND DOCUMENTS A ND MAKE THE ASSESSMENT AFRESH. 5.3. HEAVING HEARD THE RIVAL SUBMISSIONS, PURSED TH E MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN T HE SUBMISSIONS OF THE ASSESSEE, AS THE PROPOSITION CANVASSED BY THE LD AR FOR THE ASSESSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. AS LD AR POINTED OUT THAT BOOKS OF ACCOUNTS OF THE ASSESSEE ARE WRITTEN IN D EVNAGRI LANGUAGE AND THE ACCOUNTANT WHO KNOWS THE DEVNAGRI LANGUAGE WAS ABSENT WHEN THE ASSESSMENT PROCEEDINGS WERE GOING ON. THEREFORE BOO KS OF ACCOUNTS ITA NO.2088/13 M/S SHAKTI OIL MILL 6 WERE NOT PROPERLY UNDERSTOOD BY THE ASSESSING OFFIC ER. THIS COULD BE A REASON, THE ASSESSING OFFICER HAD NOT CONSIDERED TH E EXPLANATIONS AND SUBMISSIONS OF THE ASSESSEE. IN VIEW OF THE ABOVE F ACTUAL POSITION, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES A FRESH EX AMINATION AT THE END OF THE AO. ACCORDINGLY, WE SEND/REMIT THE CASE BACK TO THE FILE OF AO TO MAKE ASSESSMENT AFRESH AFTER CONSIDERING THE BOOKS OF ACCOUNTS, EXPLANATIONS AND DOCUMENTS SUBMITTED BY THE ASSESSE E. 5.4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 05/1 2/2016. SD/ - (NARASIMHA CHARY) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 05/12/2016 & ()* /PRAKASH MISHRA , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) & ' , / ITAT, 1. / THE APPELLANT-M/S SHAKTI OIL MILL 2. / THE RESPONDENT.-ITO WARD-1(4), KOLKATA 3. 4 ( ) / THE CIT(A), KOLKATA. 4. 4 / CIT 5. 56 7 8 , 8 , / DR, ITAT, KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//