Chhabindra Behera, Angul V. ITO, Angul Ward, Angul

ITA 289/CTK/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5634 (ITAT-CUTTACK)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 28-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: K K BAL
• Keywords: Unexplained investment; Unexplained expenditure; Condonation of delay
• Section: 143(3); 142(1); 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ITA NO . 289 /CTK/201 7 ( / ASSESSMENT YEAR : 20 09 - 20 10 ) CHHABINDRA BEHERA, AT - BADATRIBIDA, GHANTAPADA, KANIHA, TALCHER, DIST - ANGUL, VS. ITO, ANGUL ./ ./ PAN/GIR NO. : A JCPB 4058 L ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI K.K.BAL , AR /REVENUE BY : SHR I D.K.PRADHAN , DR / DATE OF HEARING : 17 / 0 5 /201 8 / DATE OF PRONOUNCEMENT 17 / 05 /201 8 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : TH E ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDER OF CIT(A) - 2 , BHUBANESWAR , DATED 10.02.2017 , PASSED IN I.T.APPEAL NO. 0025 / 201 5 - 16 , U/S. 263/ 143(3)/250 OF THE I.T.ACT FOR THE ASSESSMENT YEAR 20 1 4 - 20 1 5 . 2. AS PER THE OFFICE NOTE, THERE IS A DELAY OF 36 DAYS IN FILING THE PRESENT APPEAL. THE ASSESSEE HAS FILED AN APPLICATION DATED 2 8.07.2017 FOR CONDONATION OF DELAY ALONG WITH AN AFFIDAVIT EXPLAINING THE REASONS FOR DELAY. CONSIDERING THE APPLICATION OF ASSESSEE AND LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND LD. DR HAS NO SERIOUS OBJECTION, WE ALLOW THE APPLICATION AND CO NDONE THE DELAY OF 36 DAYS IN FILING THE PRESENT APPEAL AND THE APPEAL IS HEARD FINALLY. 3 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. FOR THAT THE ORDER OF THE FORUM BELOW IS ARBITRARY, UNJUST IN AND ILLEGAL IN THE FACTS AND CIRCUMSTAN CES OF THE CASE AND LIABLE TO BE QUASHED. ITA NO. 289 /201 7 2 2. FOR THAT THE ASSESSMENT HAS BEEN COMPLETED PREMATURELY PRIOR TO THE ORDER 4JROF THE HON'BLE ITAT. SINCE THE PRESENT ASSESSMENT ORDER HAS BEEN PASSED PRIOR TO THE ORDER OF THE HON'BLE ITAT AND WITHOUT FOLLOWING THE DIRECTION IN IT APPEAL NO - THIS ASSESSMENT MAY BE TREATED AS INFRACTUTIOUS. 3. FOR THAT LD ASSESSING OFFICER ERRED IN ADOPTING DOUBLE STANDARD FOR COMPLETING ASSESSMENT. THEREFORE THE ASSESSMENT IS ILLEGAL AND LIABLE TO BE QUASHED 4. FOR THAT LD. A SSESSING OFFICER ERRED IN MAKING ADDITION U/S 69 AT RS.34,46,432/ - OF THE INCOME TAX ACT, WHICH HAS BEEN RECORDED IN THE BANK BOOK OF ASSESSEE AND ALSO THE ASSESSEE HAS SUFFICIENTLY EXPLAINED ABOUT THE NATURE AND SOURCE THEREOF. THEREFORE THE ADDITION IS A RBITRARY AND LIABLE TO BE DELETED. 5. FOR THAT THE LD ASSESSING OFFICER IS NEITHER DISPUTING THE SALE TURNOVER NOR THE CLOSING STOCK. THE ONLY DISPUTE IS THE SO CALLED PURCHASE SUPPRESSION. IF THE PURCHASE IS A MORE THAN THE FIGURE SHOWN IN THE PROFIT AN D LOSS ACCOUNT ITS EFFECT WOULD HAVE BEEN EITHER ON SALE OR CLOSING STOCK. WHILE ASSESSING LD ASSESSING OFFICER HAS NEITHER INCREASED THE SALE TURNOVER NOR ENHANCED THE STOCK. QUITE APART FROM THE FACTS THE LD. ASSESSING OFFICER HAS NOT IN ANY MANNER LET I N ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAS PAID THE DISPUTED AMOUNT FROM HIS UNDISCLOSED SOURCE OF INCOME, WHICH MEANS HE HAS FAILED TO ESTABLISH THERE IS AN UNEXPLAINED INVESTMENT. THEREFORE THE ALLEGATION OF PURCHASE SUPPRESSION IS FALSE AND THE ADDITI ON MADE ON SUCH ALLEGATIONS IS LIABLE TO BE DELETED. 6. FOR THAT THE CEMENT COMPANY CAN'T SALE DIRECTLY TO THE CUSTOMERS, THEY HAVE TO SALE ON ACCOUNT OF ANY OF THEIR EXISTING VENDERS TO THE CUSTOMERS OF THAT AREA AND INCENTIVE OUT OF THOSE TRANSACTION W ILL BE CREDITED TO THE ACCOUNT OF THE VENDER. EXACTLY THE SAME HAS HAPPENED IN CASE OF THE ASSESSEE. THEREFORE THE SALES ON ACCOUNT OF THE ASSESSEE SHOULD NOT BE TREATED AS HIS PURCHASE TURNOVER. 7. FOR THAT THE ASSESSMENT HAS BEEN COMPLETED IN VERY CONF USED MANNER. LD ASSESSING OFFICER IS STILL IN DOUBT WHETHER THE DIRECT SALE WILL BE UNEXPLAINED INVESTMENT U/S 69 OR IT WILL BE UNEXPLAINED EXPENDITURE U/S 69C. IN PARA 4.4 AT PAGE 5 HE HAS OPINED RS34,46,432/ - SHOULD HAVE BEEN UNEXPLAINED EXPENDITURE AND THE CORRESPONDING INCOME SHOULD HAVE BEEN ADDED TO THE PROFIT. WHERE AS FINALLY HE HAS ASSESSED THE SAME AMOUNT AS UNEXPLAINED INVESTMENT U/S 69 OF THE INCOME TAX ACT, WHICH MEANS THE ASSESSING OFFICER HIMSELF IS CONTRADICTING HIS FINDINGS. THEREFORE THE A SSESSMENT IS NON APPLICATION OF MIND AND LIABLE TO BE QUASHED. 8. FOR THAT THE ADDITION HAS BEEN MADE ON THE GROUND OF SUSPICION AND SURMISE DISBELIEVING THE ASSESSEE'S CONTENTION AND PRESUMING ITA NO. 289 /201 7 3 THAT THE DIRECT SALE MADE BY THE CEMENT COMPANIES ON ACCOUNT OF ASSESSEE ARE THE PURCHASE OF THE ASSESSEE IS NOT SUSTAINABLE. 9. FOR THAT OTHER GROUNDS IF ANY WILL BE URGED AT THE TIME OF HEARING. 4 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF WHOLESALING OF ACC & OCL CEMENT AND F ILED THE RETURN OF INCOME ON 24.03.2010 FOR ASSESSMENT YEAR 2009 - 2010 DECLARING TOTAL INCOME OF RS. 2,59,020/ - . SUBSEQUENTLY, THE RETURN WAS PROCESSED U/S.143(1) OF THE ACT AND THE CASE WAS SELECTED THROUGH CASS FOR SCRUTINY AND NOTICE U/S.143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE. IN COMPLIANCE THE LD. AR OF THE ASSESSEE APPEARED AND SUBMITTED THE RELEVANT DETAILS. THE AO CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND MATERIAL PLACED ON RECORD COMPLETED THE ASSESSMENT AND MADE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT AND ASSESSED THE TOTAL INCOME AT RS. 44.61.260/ - AND PASSED ORDER U/S. 263/ 143(3) OF THE ACT, DATED 18.03.2015 . 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITIONS MADE BY THE AO AND DISMISSED THE APPEAL O F THE ASSESSEE. 5. AGAINST THE ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 6. BEFORE US, LD. AR SUBMITTED THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION U/S.69 OF THE ACT WHICH HAS BEEN RECORDED IN THE BANK BOOK OF ASSESSEE AN D ALSO THE ASSESSEE HAS SUFFICIENTLY EXPLAINED ABOUT THE NATURE AND SOURCE THEREOF. HOWEVER, PRAYED FOR AN OPPORTUNITY TO SUBSTANTIATE ITS CLAIM BEFORE THE LOWER AUTHORITIES. 7. CONTRA, LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIES . ITA NO. 289 /201 7 4 8. WE HAVE HEARD R IVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. PRIMA FACIE, WE FIND THOUGH THE ASSESSEE HAS SUBMITTED BEFORE US THAT HE HAS EXPLAINED ABOUT THE NATURE AND SOURCE THEREOF, HOWEVER, ON PERUSAL OF THE ORDER OF CIT(A), WE FIND THAT THE ASSESSEE WAS NOT ABLE TO FURNISH THE DETAILS. THE CIT(A) OBSERVED THAT WHEN THE ASSESSEE CLAIMS THAT THESE ARE NOT HIS PURCHASES AND HE HAS NOT MADE ANY PAYMENT, HE COULD HAVE EASILY FURNISHED A COPY OF THE CONFIRMATION FROM CEMENT COMPANIES REGARDING DIRECT DISPA TCHES AND INCENTIVE COMMISSION RECEIVED BY THE ASSESSEE FROM THE CEMENT COMPANIES. EVEN THE ASSESSEE HAS NOT BEEN ABLE TO GIVE THE DETAILS AND EVIDENCES REGARDING THE PERSONS TO WHOM DIRECT DISPATCHES WERE MADE COPY OF SALE INVOICES AND THE PAYMENT RECEIPT S. FROM THE ABOVE OBSERVATIONS OF THE CIT(A) WE FIND THAT THE ASSESSEE COULD NOT SUBSTANTIATE ITS CLAIM PRODUCING ANY SUPPORTING DOCUMENTS , THEREFORE, THE CIT(A) HAS NO OPTION BUT TO ACCEPT THE FINDINGS OF AO . HOWEVER, ON THE PRAYER OF THE LD. AR OF THE AS SESSEE AND IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE TO REPRESENT ITS CASE BEFORE THE AO AND REMIT THIS ISSUE TO THE FILE OF AO, WHO SHALL VERIFY AND EXAMINE THE DETAILS AND PASS THE ORDER IN ACCORDANCE WITH LA W AND THE ASSESSEE SHALL BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING AND HE SHALL COOPERATE WITH SUBMITTING THE INFORMATION BEFORE THE AO . ACCORDINGLY, WE ALLOW THE GROUNDS OF APPEAL OF ASSESSEE FOR STATISTICAL PURPOSES. ITA NO. 289 /201 7 5 9 . IN THE RESULT, THE APPEAL O F THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . O RDER PRONOU NCED IN THE OPEN COURT ON 17 / 05 / 201 8 . SD/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 1 7 / 05 /201 8 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE S ECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//