M/s. K.F. Farms (P) Ltd., Jalandhar V. The Joint Commissioner of Income tax, Jalandhar

ITA 236/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5747 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 18-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: J S BHASIN
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, VICE PRESIDENT AND SH. MEHAR SINGH, ACCOUNTANT MEMBER I.T.A. NO.236(ASR)/2010 ASSESSMENT YEAR:2006-07 PAN :AACCK2487J M/S. K.F. FARMS (P) LTD. VS. JT. COMMR. OF INCOME -TAX, JALANDHAR. JALANDHAR-IV, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S. BHASIN, ADV. RESPONDENT BY: SH. AMRIK CHAND, DR ORDER PER MEHAR SINGH, AM, THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIREC TED AGAINST THE ORDER OF THE CIT(A), JALANDHAR, DATED 26.03.2010, PASSED UNDER SECTION 250(6) OF THE INCOME-TAX ACT, 1961 ( HEREINAFTER REFERRED TO IN SHORT THE ACT), FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT THE IMPUGNED ORDER IS PERVERSE ON FACTS AN D LAW, IN ASMUCH THE ADDITION OF RS.28,82,613/- UPHELD BY THE CIT(A) IS A RESULT OF TOTAL NON UNDERSTANDING OF ASSESSEES W ORKING, FOR WANT OF PROPER DISCUSSION SANS ADEQUATE HEARING GRA NTED BY BOTH, THE AO AS ALSO BY THE CIT(A). AS SUCH, THE IM PUGNED ORDER DESERVES TO BE ANNULLED FOR GROSS VIOLATION O F PRINCIPLES OF NATURAL JUSTICE. 2. THAT THE LD. CIT(A) OUGHT TO HAVE ALLOWED THE AS SESSEES APPEAL, WHEN THE DETAILED WRITTEN SUBMISSIONS AS FI LED BEFORE 2 HIM AND SENT TO AO FOR HIS COMMENTS, WERE NOT AT AL L CONTROVERTED, DESPITE GIVING SEVERAL OPPORTUNITIES, AS ENUMERATED ON PAGE 10 PARA 4 OF THE APPELLATE ORDER . 3. THAT THE LD. CIT(A), GROSSLY ERRED IN TAKING AN ADVERSE VIEW, BASED ON DENIAL OF TWO PERSONS, OBTAINED BY THE AO AT ASSESSEES BACK, THE SAME BEING INADMISSIBLE IN EVI DENCE. 4. THAT THE IMPUGNED ADDITION OF RS.28,82,613/-, AL LEGED TO BE PROFIT ON TRADING OF POTATOES PURCHASED FROM THE DI RECTORS OF THE ASSESSEE COMPANY, HAS BEEN WRONGLY UPHELD BY TH E LD. CIT(A), ON HIGHLY ERRONEOUS ASSUMPTIONS OF FACTS OF HIS OWN. 5. THAT THE ORDERS OF THE AUTHORITIES BELOW ARE AGA INST LAW AND FACTS OF THE CASE AND HENCE LIABLE TO BE SET ASIDE IN TOTO. 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, THE LD. COUNSEL FOR HE ASSESSEE, CONTENDED THAT THE ORDER PASSED BY THE CI T(A), IS PERVERSE AND BAD IN LAW, AS THE EVIDENCES GATHERED BY THE AO WERE U SED TO DRAW ADVERSE INFERENCE, AGAINST THE ASSESSEE, WITHOUT CONFRONTIN G THE SAME. HE CARRIED US TO THE IMPUGNED ASSESSMENT ORDER, REFERRED TO, IN P ARA-3 AND SPECIFICALLY POINTED OUT THAT RANDOM ENQUIRIES WERE CONDUCTED BY THE A.O. HE MENTIONED THE NAMES OF SUCH THREE PERSONS, AS INCORPORATED IN PARA-3 OF THE ASSESSMENT ORDER. THEREFORE, STATEMENTS WERE RECORDED AND ADVE RSE INFERENCES WERE DRAWN, WITHOUT CONFRONTING THE RESULT OF ENQUIRIES TO THE ASSESSEE. HE ALSO DREW OUR ATTENTION TO PARA 6.5 OF THE ASSESSMENT OR DER. WE CONSIDER IT ESSENTIAL TO REPRODUCE THE TEXT OF PARA 6.5, WITH A VIEW TO APPRECIATE THE SAME. 6.5. FURTHER, THE ASSESSEES CONTENTION THAT DENIA L OF ONE OR TWO PERSONS OUT OF 173 LESSOR CAN NOT BE RULED OUT IN V IEW OF LITERATE, RURAL MINDSET OF THE LESSORS. THIS IS NOT ACCEPTABLE. RAN DOM ENQUIRIES WERE MADE. ONLY 8 PERSON OUT OF 173 PERSONS WERE SELECTE D FOR ENQUIRY. OUT OF 8 PERSONS, 3 PERSONS HAD DENIED THAT THEY HA D GIVEN LAND ON LEASE. FURTHER, THE ONUS IS ON THE ASSESSEE TO PROV E THAT IT HAD TAKEN LAND ON LEASE. YET, THE ASSESSEE HAD NOT BEEN ABLE TO PRODUCE THE LESSORS WHO DENIED LEASE AND ALSO THE LESSORS CALLE D FOR VIDE THIS OFFICE LETTER DATED 28.11.2008. 3 4. THE LD. DR, ON THE OTHER HAND, THOUGH RELIED UPON THE ORDER OF THE CIT(A), RESPONDED WITH FAIRNESS AND CONCURRED WITH THE REQUEST OF THE ASSESSEE TO RESTORE THE ISSUE TO THE FILE OF THE AO , TO MEET THE ENDS OF NATURAL JUSTICE. 5. HAVING REGARD TO THE LEGAL AND FACTUAL POSITION OF THE CASE, THE CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE COULD NOT BE REBUTTED BY THE LD. DR. CONSEQUENTLY, IT IS EVIDENT THAT THE ASS ESSEE WAS NOT AFFORDED PROPER AND REASONABLE OPPORTUNITY TO PRESENT ITS CA SE, IN RESPECT OF CERTAIN PERSONS, WHOSE STATEMENTS WERE RECORDED, BUT NOT CO NFRONTED TO THE ASSESSEE. THUS, THERE IS VIOLATION OF PRINCIPLE OF NATURAL JU STICE. THEREFORE, IN ORDER TO MEET ENDS OF JUSTICE, WE CONSIDER IT FAIR AND REASO NABLE TO SET ASIDE THE ISSUE TO THE FILE OF THE A.O. WITH THE DIRECTION TO DECID E THE SAME AFRESH, IN ACCORDANCE WITH LAW AND AFTER AFFORDING REASONABLE OPPORTUNITY TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 13T H JUNE, 2011. SD/- SD/- (H.L. KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 13TH JUNE, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE:M/S. K.K. FARMS (P) LTD. JALANDHAR. 2. THE J.C.I.T. JALANDHAR IV, JLR. 3. THE CIT(A), JLR. 4. THE CIT, JLR 5. THE SR DR, AMRITSAR.