M/S SHREE VINAYAK TRAVELS, Nagpur V. INCOME TAX OFFICER,WARD-1(4), Nagpur

ITA 263/NAG/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 4245 (ITAT-NAGPUR)
• Duration Of Justice: 5 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 16-07-2017
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Assessee Lawyers: JAYANT M. RANADE
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, NAGPUR (AT e-Court, PUNE) BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. /ITA No.263/NAG/2017 नधा रण वष / Assessment Year : 2009-10 M/s.Shree Vinayak Travels, Ist Floor, Rohera Complex, Wardha Road, Ajni Chowk, Nagpur PAN : ABMFS3553P Vs. ITO, Ward-1(4), Nagpur Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP: This appeal by the assessee arises out of the order passed by the Commissioner of Income-tax (Appeals)-1, Nagpur on 07-04- 2017 in relation to the assessment year 2009-10. 2. The assessee is aggrieved by rejection of books of account and confirmation of certain additions made by the Assessing Officer (AO) thereafter. Assessee by Shri Jayant M. Ranade Revenue by Shri G.J. Ninawe Date of hearing 21-09-2022 Date of pronouncement 22-09-2022 ITA No. 263/NAG/2017 M/s.Shree Vinayak Travels 2 3. Briefly stated, the facts of the case are that the assessee filed its return declaring total income at Nil. The case was picked up for scrutiny. The AO required the assessee to produce books of account. The Authorised Representative (AR) of the assessee attended along with the Accountant of the firm on 10-08-2011 and produced the books of account, audited Balance sheet and Profit and loss account etc. On examination of the books of account, it was, inter alia, found that huge payments were made in cash for various expenses and also the assessee had accepted and returned huge amounts of loan in cash. The AR and the Accountant were requested to put the signatures on the books of account produced by them. They refused to do so. The AO impounded the books of account u/s.131(3) of the Act for further verification. Thereafter, he issued a letter requiring the assessee to explain the position in respect of refusal of the AR and the Accountant to sign the books of account as directed and certain other discrepancies in the books of account. The assessee produced another set of books of account. The AO did not accept such books of account produced later on. The earlier books were rejected and thereafter the AO proceeded to make certain additions u/s.40A(3), 69C, unexplained ITA No. 263/NAG/2017 M/s.Shree Vinayak Travels 3 expenditure and disallowance u/s.40(a)(ia) of the Act for non deduction of tax at source u/s.194C and 194I. The assessee remained unsuccessful before the ld. CIT(A). Aggrieved thereby, the Tribunal has been approached. 4. I have heard the rival submissions and gone through the relevant material on record. The ld. AR harped on the wrongful rejection of the books of account by the AO. In this regard, it is observed that when the assessee produced the books of account before the AO on 10-08-2011, the AO found certain severe discrepancies inasmuch the books were incomplete; certain amounts were paid in cash for various expenses in violation of the relevant provisions; and huge amounts were accepted as loan and returned in cash again in violation of the relevant provisions. The ld. AR contended that the assessee produced another set of books of account before the AO and also reconciliation in the two sets of books of account. This shows that the assessee did not maintain proper books of account. Original set of books of account was produced before the AO which was not only incomplete but also contained certain violations of the provisions under the Act. When the AO found out the discrepancies, the assessee came out with ITA No. 263/NAG/2017 M/s.Shree Vinayak Travels 4 another set of books of account, which was not regularly maintained. In such circumstances, when the assessee itself is accepting that the first set of books of account was incomplete, it is beyond my comprehension as to how it can be urged that the books of accounts be accepted as properly maintained. The very fact that the ld. AR has emphasised on the maintenance of two sets of books of account and further, the reconciliation between two sets of books of account; and the admission that the first set of books was inadvertently produced before the AO, goes to show that the assessee was not maintaining the books of account in a regular manner. In such circumstances no exception can be taken to the view canvassed by the authorities below in rejecting the books of account. 5. Coming to the additions made by the AO on merits, it is seen that some of the additions are based on the books of account which were rejected by the AO. Once the books are rejected, the AO cannot go back to such books of account for making separate additions therefrom. In such circumstances, he is required to frame the assessment in a rational manner. The ld. AR requested for granting another opportunity to the assessee for putting forth his ITA No. 263/NAG/2017 M/s.Shree Vinayak Travels 5 case before the AO so as to render assistance in the proper framing of the assessment. No serious objection was taken by the ld. DR to this suggestion. Under these circumstances, I am of the considered opinion that the ends of justice would meet adequately if the impugned order is set aside and the matter is restored to the file of AO. I order accordingly and direct him to frame the assessment afresh as per law after allowing reasonable opportunity of hearing to the assessee. 6. In the result, the appeal is allowed for statistical purposes. Order pronounced in the Open Court on 22 nd day of September, 2022 - Sd/- (R.S.SYAL) VICE PRESIDENT प ु णे Pune; दनांक Dated : 22 nd September, 2022 Satish ITA No. 263/NAG/2017 M/s.Shree Vinayak Travels 6 आदेश क त ल प अ े षत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. यथ / The Respondent; 3. The CIT(A)-1, Nagpur 4. 5. The Pr.CIT-1, Nagpur िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, Nagpur / DR, Nagpur 6. गाड फाईल / Guard file आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune Date 1. Draft dictated on 21-09-2022 Sr.PS 2. Draft placed before author 22-09-2022 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *