Sh. Rakesh Walia (Since Deceased) through his legal heir & son Sh. Saurabh Walia, Yamunanagar V. JCIT, Range, Yamunanagar

ITA 240/CHANDI/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4905 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 23-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: B M MONGA
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHES B, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND DR.B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NO. 240/CHD/2018 ASSESSMENT YEAR: 2008-09 SHRI RAKESH WALIA(DECEASED), VS THE JCIT, THROUGH L/H SHRI SAURABH WALIA, YAMUNA NAGAR, PROP. M/S STEEL AUTO INDUSTRIES, HARYANA. YAMUNA NAGAR. PAN : AANPW6546Q (A PPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.M.MONGA & SHRI ROHIT KAURA RESPONDENT BY : SHRI MANJIT SINGH, SR.DR DATE OF HEARING : 21.05.2018 DATE OF PRONOUNCEMENT : 12.06. 2018 ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FIELD BY THE ASSESSEE ASS AILING THE CORRECTNESS OF THE ORDER DATED 01.12.2017 OF CIT(A)-I KA RNAL PERTAINING TO 2008-09 ASSESSMENT YEAR ON VARIOUS GROUNDS. 2. HOWEVER, AT THE TIME OF HEARING, PARTIES WERE HEARD ON LY IN RESPECT OF GROUND NO. 2 WHICH READS AS UNDER : 1. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING ALL THE ADDITIONS MADE BY THE AO WITHOUT PASSING A SPEAKING ORDER AND WITHOUT DEALING WITH THE WRITTEN SUBMISSIONS, JUDGMENTS, LAW AND FACTS O F THE CASE, AS ENUMERATED BY THE APPELLANT IN DETAILED WRITTEN SUBMISSIONS DULY SUBM ITTED IN APPELLATE PROCEEDINGS. 3. THE LD. AR INVITING ATTENTION TO THE IMPUGNED ORDER SUB MITTED THAT A PERUSAL OF THE IMPUGNED ORDER WOULD SHOW THAT IN PAGES 1 AND 2 THEREOF , THE CIT(A) HAS EXTRACTED THE ASSESSEES SUBMISSIONS AND THE GROUNDS FROM PAGE 3 TO 12 OF HER ORDER. CARRYING US THROUGH THE SAME, IT WAS SUBM ITTED THAT ON EACH OF THE ISSUES THE ASSESSEE HAS ASSAILED THE ADDITION S MADE BY THE AO WHICH THOUGH HAVE BEEN EXTRACTED, HAVE BEEN DIS MISSED BY THE CIT(A) IN A CRYPTIC MANNER BY ONE PAGED ORDER WITHOUT AD DRESSING THE DETAILED SUBMISSIONS. THE FINDING ASSAILED READS AS UNDER : 3.2 FINDINQS:- I HAVE EXAMINED THE FACTS OF THE CASE AND THE SUBMI SSIONS MADE BY THE APPELLANT. WHILE EXAMINING THE CASE, THE AO HAS CLE ARLY GIVEN REASONS FOR THE REJECTION OF THE BOOKS OF ACCOUNTS. HE HAS BROUGHT ON RECORD THAT NO STOCK ITA 240/CHD/2016 PAGE 2 OF 3 REGISTER HAS BEEN MAINTAINED OR PRODUCED. CONSIDERI NG THE FACT THAT THE NATURE OF BUSINESS INVOLVES FITTING OF BEARINGS ETC IN BRIDGE BUILDING AND THE FACT THAT THERE VOUCHERS OF EXPENSES INCLUDING THOSE OF WAGES WERE NOT FULLY VERIFIABLE BEING INTERNAL IN NATURE, THE AO WAS JUSTIFIED IN R EJECTING THE BOOKS OF ACCOUNTS. THE APPELLANT HAS BROUGHT NOTHING ON RECO RD TO SHOW HOW THE ACCOUNTS AS PREPARED AND SUBMITTED BY THEM WOULD ST AND THE TEST OF VERIFICATION. MOREOVER, THE AO HAS CLEARLY BROUGHT OUT THE FACT THAT THE G.P. RATE AFTER INCLUDING JOB WORK RECEIPTS HAVE BEEN SH OWN TO BE 17.89% AS COMPARED TO THE PREVIOUS YEAR FIGURES FOR G.P. @ 22 .19%. IT IS A FACT THAT JOB WORK ENTAILS LESSER EXPENDITURE AS IT DOES NOT INCL UDE OVERHEADS. I, AM, THEREFORE, IN AGREEMENT WITH THE AO'S APPLICATION O F THE RATE OF 22.19% ON GROSS SALES AND THE RATE OF 30% ON JOB WORK RECEIPT S. THE APPLICATION OF G.P. RATE FOR THE VALUATION OF CLOSING STOCK FOLLOWS SET PROC EDURE AND I DECLINE TO INTERFERE WITH THE SAME. THE AO HAS ALSO DISALLOWED LABOUR EXPENSES AND I CO NCUR WITH HIM ON- THE ISSUE THAT NO RECORDS ARE MAINTAINED. MOREOVER, THE VALUATION OF SEMI FURNISHED GOODS AS APPLICABLE UNDER THE CALCULATION OF THE G.P. RATE APPLIED BY THE AO IS F AIR AND I CONFIRM THE SAID ADDITION. THE ADDITION OF PERSONAL EXPENSES ON VEHICLE RUNNI NG AND CAR IS JUSTIFIED AS NO LOG BOOK HAS BEEN MAINTAINED FOR VEHICLES AND NO RECORD OF TELEPHONE CALLS MAINTAINED. I SUSTAINED THE DISALLOWANCE OF RS. 78 ,595/- WHICH IS A REASONABLE 20% OF THE EXPENSES CLAIMED. 4. ON A READING FROM THE ORDER, IT WAS HIS SUBMISSION THAT THE CIT(A) HAS FAILED TO ADDRESS ANY OF THE DETAILED POINTS AGITATED B Y THE ASSESSEE IN THE WRITTEN SUBMISSIONS EXTRACTED AND HAS MERELY CERTIFIE D THAT THE AO WAS JUSTIFIED IN THE CONCLUSIONS DRAWN ON EACH OF THE ISSU ES WITHOUT POINTING OUT HOW THE ARGUMENTS ON FACTS AND LAW ADVANC ED BY THE ASSESSEE REPRODUCED IN THE ORDER WERE NOT ACCEPTABLE. IT WAS ALSO HIS SUBMISSION THAT INFACT EVEN THE FACTS HAVE NOT BEEN CORR ECTLY APPRECIATED. A REFERENCE HAS BEEN MADE TO THE GP RATE STATED TO H AVE BEEN BROUGHT OUT BY THE AO AFTER INCLUDING JOB WORK RECEIPTS SHOWN TO BE 17.89% IN THE YEAR UNDER CONSIDERATION. INVITING ATTENTION TO THE ASSE SSMENT ORDER PARA 2 THEREOF, IT WAS HIS SUBMISSION THAT GP RATE, INFACT, IN THE YEAR UNDER CONSIDERATION WAS 23.40%. THE RELEVANT EXTRACT FROM THE ASSESSMENT ORDER WAS HIGHLIGHTED FOR THE BENEFIT OF THE COURT; IT IS SEEN THAT DURING THE YEAR THE ASSESSEE HAS ALSO RECEIPTS OF RS . 34,05,000/- WHICH WERE NIL DURING THE PREVIOUS ASSESSMENT YEAR. THE GP RATE ON A CURSORY LOOK APPERS TO BE ON THE HIGHER SIDE WHEN COMPARED T O THE PREVIOUS YEARS RATE OF 22.19%. BUT IT IS TO BE NOTICED THAT IN THE P REVIOUS YEAR THERE WERE NO JOB WORK RECEIPTS. ACCORDINGLY, IT WAS HIS LIMITED PRAYER THAT THE IMPUGNED ORDER MAY BE SET ASIDE TO THE FILE OF THE CIT(A) D IRECTING THE SAID AUTHORITY TO PASS A SPEAKING ORDER CONSIDERING SPECIFIC SU BMISSIONS ADVANCED. 5. THE LD. SR.DR ON GOING THROUGH THE RECORD HAD NO OBJ ECTION TO THE SAID REQUEST. ITA 240/CHD/2016 PAGE 3 OF 3 6. IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES BEFORE TH E BENCH, WE ARE OF THE VIEW THAT IN THE PECULIAR FACTS AND CIRCUMSTAN CES OF THE PRESENT CASE WHERE ADMITTEDLY DETAILED SUBMISSIONS EXTRACTED IN T HE IMPUGNED ORDER, HAVE NOT BEEN ADDRESSED BY THE CIT(A). ACCORDING LY, IN THE ABSENCE OF ANY RELEVANT DISCUSSION, THE CORRECTNESS OF THE CONCLUS IONS DRAWN CANNOT BE UPHELD AS THE ORDER IS OPEN TO THE CHALLENGE OF BEING PERVERSE. ACCORDINGLY, IN TERMS OF THE PRAYER OF THE PARTIES TO SET RIGHT THIS SHORTCOMING, THE IMPUGNED ORDER IS SET ASIDE BACK TO THE FILE OF THE CIT(A) WITH THE DIRECTION TO PASS SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12.06. 2018. SD/- SD/- ( DR.B.R.KUMAR) ( DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.