HEMA VIRENDRA BHAGAT, MUMBAI V. DCIT 16(2), MUMBAI

ITA 2252/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8495 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 15-02-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 22-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN KUMAR
• Assessee Lawyers: R S CHOKSHI
• Keywords: Business income

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI RAJENDRA SINGH(AM) AND SHRI V.D.RAO, (JM) ITA NO.2252/M/2010 ASSESSMENT YEAR 2004-05 HEMA VIRENDRA BHAGAT THE DCIT 16(2), MUMBAI 1103, VASTU SHILP, GAMADIA COLONY TARDEO, MUMBAI 400 007. PAN : AAAPB 9918 Q APPELLANT RESPONDENT ASSESSEE BY : SHRI R.S.CHOKSHI REVENUE BY : SHRI SHRAVAN KUMAR O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 2.2.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2004-05. THE ONLY DISPUTE RAISED IS REGARDING ESTIMATION OF BUSINESS INCOME BY THE AO A T RS.45 LACS. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE WHO WAS ENGAGED IN THE BUSINESS OF INTERIOR DECORATION AND DESIGNS HAD DECLARED GP RATE OF 14.92% ON SALES OF RS.3,40,06,979/- AND NET PROFIT HAD BEEN SHOWN AT 10.10%. THE AO HAD ASKED THE ASSESSEE TO PRODUCE BO OKS OF ACCOUNT WITH BILLS AND VOUCHERS AND OTHER DETAILS. HOWEVER, DESPITE SE VERAL OPPORTUNITIES THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNT WIT H BILLS AND VOUCHERS. THE 2 AO THEREFORE ESTIMATED THE BUSINESS INCOME AT RS.45 LACS. IN APPEAL IT APPEARS THE ASSESSEE SUBMITTED DETAILS AND EVIDENCES AND CI T(A) HAD REMANDED THE MATTER TO THE AO. AS PER CIT(A) REMAND REPORT HAD B EEN RECEIVED FROM THE AO AND A COPY OF WHICH HAD ALSO BEEN GIVEN TO THE ASSE SSEE. CIT(A) FOUND THE REMAND REPORT TO BE VAGUE AND DID NOT ACT ON THE SA ME. IT WAS OBSERVED BY HIM THAT THE GP RATE DECLARED BY THE ASSESSEE WAS V ERY LOW AND HE THEREFORE CONFIRMED THE ADDITION AGGRIEVED BY WHICH THE ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. BEFORE US THE LEARNED AR FOR THE ASSESSEE AT THE VERY OUTSET POINTED OUT THAT THE ASSESSEE HAD NOT BEEN GIVEN A COPY OF THE REMAND REPORT BY THE AO AND THEREFORE THE ASSESSEE WAS NOT AWARE ABOUT THE FINDINGS GIVEN IN THE REMAND REPORT THOUGH IT HAD PRODUCED DETAILS AND EV IDENCES BEFORE THE AO. IT WAS ALSO POINTED OUT THAT ORDER OF CIT(A) ITSELF SH OWED THAT NO ADVERSE MATERIAL HAD BEEN FOUND AGAINST THE ASSESSEE IN THE REMAND REPORT. THEREFORE EVEN ON THIS GROUND ADDITION WAS NOT JUSTIFIED. HE HOWEVER REQUESTED THAT THE ASSESSEE SHOULD BE PROVIDED OPPORTUNITY TO SEE THE REMAND REPORT. THE LEARNED DR PLACED RELIANCE ON THE ORDER OF CIT(A). 4. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE R IVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING ADDITION ON ACC OUNT OF GP RATE. THE ASSESSEE HAD NOT PRODUCED THE BOOKS OF ACCOUNT NOR FILED DET AILS BEFORE THE AO AND AO HAD ESTIMATED THE INCOME OF THE ASSESSEE. IT APPEAR S THAT IN APPEAL THE ASSESSEE FILED DETAILS AND EVIDENCES AND MATTER WAS REMANDED TO THE AO. CIT(A) HAS MENTIONED IN THE APPELLATE ORDER THAT A COPY OF THE REMAND REPORT HAD BEEN GIVEN TO THE ASSESSEE. HOWEVER THE ASSESSE E HAS SUBMITTED THAT NO REMAND REPORT HAD BEEN RECEIVED. THIS CLAIM IS NOT CONTROVERTED BY THE 3 REVENUE BY PRODUCING ANY MATERIAL. EVEN THE CIT(A) HAD NOT MENTIONED THE REFERENCE NO. OF LETTER VIDE WHICH THE REMAND REPOR T HAD BEEN SENT TO THE ASSESSEE. UNDER THESE CIRCUMSTANCES CLAIM OF THE AS SESSEE THAT REMAND REPORT HAD NOT BEEN RECEIVED HAS TO BE ACCEPTED. THE ASSES SEE IS ENTITLED TO SEE THE REMAND REPORT. THE AO IN THE REMAND REPORT WAS REQU IRED TO GIVE FINDING ABOUT BOOKS OF ACCOUNTS BILLS AND VOUCHERS ETC. AND IN CA SE ANY ADVERSE FINDING IS THERE THE ASSESSEE IS REQUIRED TO SEE THE REPORT AN D GIVE EXPLANATION. IT IS REQUIRED TO BE SEEN WHETHER BOOKS OF ACCOUNTS WERE FOUND TO BE DEFECTIVE OR NOT AND EVEN IF THE BOOKS OF ACCOUNTS WERE FOUND TO BE DEFECTIVE THE ESTIMATION HAS TO BE MADE ON SOME REASONABLE BASIS BASED ON SO ME MATERIAL. IN THIS CASE POSITION IS NOT CLEAR AS THE COPY OF THE REMAND REP ORT HAS NOT BEEN GIVEN TO THE ASSESSEE NOR THE DEPARTMENT HAS PRODUCED THE SAME B EFORE US. THEREFORE IN OUR VIEW THE MATTER REQUIRE FRESH EXAMINATION AFTER MAKING AVAILABLE A COPY OF REMAND REPORT TO THE ASSESSEE. WE THEREFORE SET ASI DE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO HIM FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION IN THE LIGHT OF OBSERVATIONS MADE ABOVE AND AFTER ALLOWING OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. THE DECISION WAS PRONOUNCED IN THE OPEN COURT TO DAY (I.E. 15.02.2011). SD/- SD/- ( V.D. RAO ) (RAJENDRA SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 15.02.2011 AT :MUMBAI COPY TO : 4 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR H BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ALK