P.Thanga Nadar, Nagercoil V. DCIT, Madurai

ITA 223/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4777 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MURALI MOHAN
• Assessee Lawyers: K RAVI
• Section: 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B (SMC) BENCH : CHENNAI . , [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT M EMBER ] ./I.T.A. NOS.222 & 223/MDS/2017 / ASSESSMENT YEAR : 2008-09 & 2008-09 SHRI. P. THANGA NADAR NO.12, P.S. NADAR & SONS, COURT ROAD, NAGERCOIL. [PAN ACMPT 3069L] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, MADURAI ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : SHRI. K. RAVI, ADVOCATE /RESPONDENT BY : SHRI. M. MURALI MOHAN, JCIT. /DATE OF HEARING : 25-04-2017 !' /DATE OF PRONOUNCEMENT : 26-04-2017 % / O R D E R ASSESSEE IN THESE APPEALS ASSAILS AN ORDER DATED 2 0.12.2016 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS)-19, CHENNAI FOR THE IMPUGNED ASSESSMENT YEAR. 2. THE IMPUGNED ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DEALT WITH ISSUES RAISED BY TH E ASSESSEE, ON AN ITA NOS.222 & 223/MDS/2017 :- 2 -: ASSESSMENT DONE U/S.143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AND A REASSESSMENT DONE U/S.143(3) R.W.S.147 OF THE ACT. 3. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAD DISMISSED THE APPEALS OF THE ASSESSEE FOR A REASON THAT NOBODY HAD APPEARED ON BEHALF OF THE ASSESSEE ON VARIOUS DATES ON WHICH THE APPEALS WERE POSTED FOR HEARING. AS PER LD. AUTHORISED REPRESENTATIVE LD. C OMMISSIONER OF INCOME TAX (APPEALS) HAD NO POWERS TO DISMISS THE A PPEALS WITHOUT DEALING WITH THE MERITS OF THE CASES. 4. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE SUBMIT TED THAT HE HAD NO OBJECTION IN REMITTING THE APPEALS BACK T O THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR CONSIDERIN G IT ON MERITS. 5. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. ISSUES RAISED BY T HE ASSESSEE IN BOTH THESE APPEALS RELATE TO ADDITIONS MADE ON ACCOUNT O F VARIATION IN VALUE OF STOCKS AS ARRIVED BY SURVEY PARTY WHO CONDUCTED A SURVEY U/S.133A OF THE ACT ON THE PREMISES OF THE ASSESSEE ON 04.05 .2007 AND VALUE OF THE STOCK AS ARRIVED BY THE ASSESSEE. CONTENTIO N OF THE ASSESSEE ALL ALONG WAS THAT STOCK VALUE WAS ARRIVED BASED ON SAL E PRICE AND NOT ON ITA NOS.222 & 223/MDS/2017 :- 3 -: COST HENCE INCORRECT. THE APPEALS OF THE ASSESSEE WERE DISMISSED WITH THE FOLLOWING OBSERVATIONS:- CONSIDERING THE VARIOUS SUBMISSIONS MADE, THE CASE WAS FURTHER POSTED FOR HEARING. MEANWHILE THE AO HAD FORWARDED THE COPIES OF THE IMPOUNDED MATERIAL, STATEMENT RECORDED OF SHRI S.NAGARAJAN ON 4.5.2007 IN THE BUSINESS PREMISES OF THE ASSESSEE DURING THE COURSE OF SURVEY. ALL THESE DOCUMENTS ARE ALREADY IN POSSESSION OF THE ASSESSEE. THE CASE HAD BEEN POSTED FOR HEARING ON VARIOUS DATES. SHRI K.RAVI ADVOCATE HAD APPEARED ON 30.6.2011, 26.7.2011, 11.8.2011, 8.9.2011, 13.10.2011, 11.11.2011 BEFORE THE CIT(A). HOWEVER, NOBODY IS APPEARED IN RESPONSE TO THE LATER NOTICES DATED 31.7.2015, 26.10.2015 & 27.11.2016. NONETHELESS, CONSIDERING ALL THE INFORMATION ON THE RECORD, THE APPEAL PROCEEDINGS ARE FINALIZED AS UNDER. FROM THE ABOVE, IT IS CLEAR THAT IN SPITE OF REPOSTING THE HEARING ON VARIOUS DATES, NEITHER THE APPELLANT NOR THE AUTHORIZED REPRESENTATIVE ATTENDED. THIS IS A CLEAR CASE OF CALLOUS AND INDIFFERENT ATTITUDE OF THE APPELLANT TOWARDS APPELLATE PROCEEDINGS. HENCE, IT IS OBVIOUS THAT THE APPELLANT IS NOT INTERESTED IN PURSUING THE PRESENT APPEAL. IN SUCH A SITUATION, THE APPEAL IS LIABLE TO BE DISMISSED IN TERMS OF VERDICTS OF THE HON 'BLE APEX COURT AND VARIOUS OTHER COURTS. THE HORR'BLE APEX COURT, IN THE CASE OF CIT V. B. N. BHATTACHARJEE AND ANOTHER (118 ITR 461) HELD THAT AN APPEAL MEANS AN EFFECTIVE APPEAL. IT HELD THAT PURPOSEFULLY INTERPRETED, PREFERRING AN APPEAL MEANS MORE THAN FORMALLY FILING IT BUT EFFECTIVELY PURSUING IT. IF A PARTY RETREATS BEFORE THE CONTEST BEGINS, IT IS AS GOOD AS NOT HAVING ENTERED THE FRAY. THE HORR'BLE MP HIGH COURT IN ESTATE OF LATE TUKOJIRAO HOLKAR V. CIT, 223 ITR 480(MP) HAS HELD THAT IF A PARTY, AT WHOSE INSTANCE THE REFERENCE IS MADE, FAILS TO APPEAR AT THE HEARING, OR FAILS IN TAKING STEPS FOR PREPARATION OF ITA NOS.222 & 223/MDS/2017 :- 4 -: PAPER BOOKS SO AS TO ENABLE HEARING OF THE REFERENCE, THE COURT IS NOT BOUND TO ANSWER THE REFERENCE. SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE HON'BLE ITAT IN THE CASE OF CIT V. MULTIPLAN (INDIA ) PVT. LTD, 38 ITD 320 (DEL). UNDER SIMILAR CIRCUMSTANCES, FOLLOWING THE RATIO OF MULTIPLAN (IN DIA) LTD (SUPRA), THE JURISDICTIONAL CHENNAI TRIBUNAL HA S ALSO DISMISSED APPEAL FOR NON-PROSECUTION IN THE CASE OF M/ S. HELIOS AND MATHESON INFORMATION TECHNOLOGY LTD VS. ITO IN ITA NO.134JMDSJ2011 DATED 5.7.2011 FOR A.Y.2006-07. THERE IS NO REASON WHY THE RATIO OF THE ABOVE DECISIONS WILL NOT BE APPLICABLE TO THE APPELLANT. IN VIEW OF THE ABOVE , THE APPEAL IS HELD AS DISMISSED. NO DOUBT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAD CONSIDERED THE WORKINGS FURNISHED BY THE ASSESSEE WHILE DECIDING THE APPEALS, STATING THAT ASSESSEE HAD ADMITTED EXCESS STOCK OF RS.32,49,240/-. RELEVANT OBSERVATION OF THE LD. CO MMISSIONER OF INCOME TAX (APPEALS) AS IT APPEAR IN PARA 8 OF ITS ORDER IS REPRODUCED HEREUNDER:- WHAT HAS TRANSPIRED DURING THE COURSE OF SURVEY C AN ONLY BE WITNESSED BY MEANS OF STATEMENT RECORDED, INVENTORY OF GOODS AND INVENTORY OF STOCK ON HAND. ALL THE THREE CORROBORATE TO THE FACT THAT THERE WA S EXCESS STOCK. THE ASSESSEE HAS NOW COME FORWARD WITH A VALUE OF EXCESS STOCK AS BELOW : STOCK VALUE AT TAG PRICE AS ADOPTED BY THE LD. ASSESSING OFFICER 89,99,488 LESS: GP AVERAGE AT THE TIME OF 10.86% 9,77,530 COST OF STOCK VALUE AS ON 04.05.2007 80,22,138 CLOSING STOCK ON HAND AS ON 4.5.2007 AS ARRIVED BY THE ASSESSEE 66,73,902 ITA NOS.222 & 223/MDS/2017 :- 5 -: EXCESS STOCK WORKED OUT 13,48,236/- THIS WORKING NOW GIVEN BY THE AR CANNOT BE ACCEPTED AS THE ASSESSEE HAS CLEARLY ADMITTED AN EXCESS STOCK VALUE OF RS.32,49,240 IN THE STATEMENT ON OATH CORROBORATED BY INVENTORY OF STOCK AND VERIFICATION OF STOCK ON HAND AS ON THE DATE OF SEARCH. CONSIDERING THE SAME, THE APPEA L FILED BY THE ASSESSEE CANNOT BE ENTERTAINED AND IS DISMISSED. BE THAT AS IT MAY, WHAT I FIND IS THAT NOBODY HAD A PPEARED ON BEHALF OF THE ASSESSEE ON THE DATES OF HEARING FIXED BY TH E LD. COMMISSIONER OF INCOME TAX (APPEALS). THOUGH LAXITY ON THE PA RT OF ASSESSEE, IN ENTERING APPEARANCE IS PREGNANT, RULES OF FAIRNESS REQUIRE AN ASSESSEE TO BE HEARD BEFORE ADJUDICATION, UNLESS THE NEGLIGE NCE IS SO GRAVE THAT IT CANNOT BE CONDONED. THAT APART, BY VIRTUE OF SU B SECTION 6 TO SEC. 250 OF THE ACT, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS TO STATE THE POINT FOR DETERMINATION AND DECISION THER EON WITH REASONS FOR SUCH DECISION ON HIS ORDER. CONSIDERING THE FACTS A ND CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT MATTERS REQUIRE A FRESH LOOK BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). I REMIT BOTH THE APPEALS BACK TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR CONSIDERATION AFRESH IN ACCORDANCE WITH LAW. NEEDL ESS TO SAY ASSESSEE SHALL BE GIVEN AN OPPORTUNITY TO EXPLAIN HIS CASE A ND SUBMIT EVIDENCE IN SUPPORT. ITA NOS.222 & 223/MDS/2017 :- 6 -: 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 26TH DAY OF A PRIL, 2017, AT CHENNAI SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 26TH APRIL, 2017 KV &' ()*) / COPY TO: 1 . / APPELLANT 3. +,- / CIT(A) 5. )./ 0 / DR 2. / RESPONDENT 4. + / CIT 6. /12 / GF