Ramesh Patel, Cuttack V. ITO, Ward-2(1), Cuttack, Cuttack

ITA 292/CTK/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4642 (ITAT-CUTTACK)
• Duration Of Justice: 4 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 27-05-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 09-07-2014
• Court: TRIBUNAL
• Department Lawyers: RABIN CHOUDHURY
• Assessee Lawyers: B K MOHAPATRA
• Keywords: Unexplained cash credit; Rejection of books of accounts; Opportunity of being heard; Set aside
• Section: 10; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH , CUTTACK [ , . . , BEFORE SHRI SUNIL KUMAR YADAV , J M & SHRI B.P.JAIN , A M ./ ITA NO. 292 /CTK/201 4 ( [ [ / ASSESSMENT YEAR S : 20 10 - 20 11 ) RAMESH PATEL, MANGALABAG, KATHGOLA, CUTTACK - 753001 VS. ITO WARD - 2(1), CUTTACK ./ ./ PAN/GIR NO. : A BBPP 33 34 Q ( / APPELLANT ) .. ( / RES PONDENT ) [ /ASSESSEE BY : SHRI B.K.M O HAPATRA /REVENUE BY : SHRI RA B IN CHOUDHURY / DATE OF HEARING : 2 7 TH MAY , 201 5 / DATE OF PRONOUNCEMENT 29 TH MA Y ,2015 / O R D E R PER SUNIL KUMAR YADAV (J.M) : TH IS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A ), BERHAMPUR (CAMP:BHUBANESWAR), DATED 12 - 5 - 2014 FOR THE ASSESSMENT YEAR 20 10 - 20 11 , ON VARIOUS GROUNDS AND DURING THE COURSE OF HEARING ASSESSEE HAS FILED A RE VISED GROUNDS OF APPEAL AND REQUESTED TO TAKE TH ESE GROUNDS ON RECORD IN PLACE OF ORIGINAL GROUNDS. ACCORDINGLY, THE REVISED GROUNDS WERE TAKEN ON RECORD, THROUGH WHICH THE ORDER OF CIT(A) IS ASSAILED . THE REVISED GROUNDS OF APPEAL FILED BY THE ASSESSEE AR E AS UNDER : - 1. FOR THAT THE ORDER AS PASSED BY THE LEARNED C IT (A) IS NOT JUST AND LEGAL ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. FOR THAT THE LEARNED CIT (A) SHOULD NOT HAVE CONFIRM THE OBSERVATION MADE BY THE ASSESSING OFFICER FOR NON - PRODUCTION OF BO OKS OF ACCOUNT, WITHOUT PROPER CONSIDERATION ITA NO.292/14 2 OF THE WRITTEN SUBMISSION FILED BEFORE HIM, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 3. FOR THAT THE LEARNED CIT (A) SHOULD HAVE FULLY ALLOWED THE DISALLOWANCE OF EXPENSES MADE UNDER CEMENT AND TIMBER BUSINESS ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 4. FOR THAT THE LEARNED CIT (A) SHOULD NOT HAVE CONFIRMED THE ADDITION OF RS.15,02,000/ - ON ACCOUNT OF UNEXPLAINED LOAN CREDITORS WITHOUT PROPER CONSIDERATION OF THE WRITTEN SU BMISSION AND SWORN AFFIDAVIT FILED BEFORE HIM ON 21/02/2014, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 5. FOR THAT THE ORDER OF THE LEARNED CIT (A) IS OTHERWISE BAD IN LAW AND LIABLE TO BE SET ASIDE. 2. DURING THE COURSE OF HEARING, LEARNED C OUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER OF THE ASSESSING OFFICER WITH THE SUBMISSION THAT THE ASSESSING OFFICER HAS STARTED THE ASSESSMENT PROCEEDINGS AT THE FAG - END OF THE YEAR, THEREFORE, THE ASSESSEE WAS NOT AFFORDED SUFFICIENT OPPORT UNITY OF BEING HEARD AND TO PLACE THE RELEVANT DOCUMENTS ON RECORD. THE AO HAS REJECTED THE BOOKS OF ACCOUNTS ON ACCOUNT OF ITS NON - PRODUCTION AND MADE THE DISALLOWANCE ON ADHOC BASIS UNDER DIFFERENT HEADS, BESIDES ESTIMATING THE NET PROFIT. SO FAR AS THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED LOAN CREDITORS IS CONCERNED, THE AO ISSUED NOTICE U/S.131 OF THE ACT AT THE FAG END OF THE YEAR AND DUE TO PAUCITY OF TIME, THE CREDITORS COULD NOT APPEAR AND THE AO HAS MADE ADDITION OF RS. 15,02 ,000/ - U/S.68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH CREDIT. ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) BUT DID NOT FIND FAVOUR WITH HIM. NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US WITH THE SUBMISSION THAT SINCE THE ASSESSEE WAS NOT AFFORDED PROPER OPPORTUNITY ITA NO.292/14 3 OF BEI NG HEARD, THE MATTER MAY BE REMANDED BACK TO THE FILE OF THE AO FOR RE - ADJUDICATION OF THE ISSUES AFRESH AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. LD. AR DREW OUR ATTENTION THAT THE ASSESSEE HAS MAINTAINED PROPER BOOKS OF ACCOUNTS OF EACH AND EVERY BUSINESS UNDERTAKEN BY THE ASSESSEE. THOUGH THE BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE AO BUT WITHOUT EXAMINING THE SAME, THE AO HAS REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATED THE NET PROFIT UNDER DIFFERENT HEADS BESIDES MAKING DISALLOWANC E OF EXPENDITURE. 3. LD. DR RELIED UPON THE ORDER OF LOWER AUTHORITIES. 4 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES WE FIND THAT THE AO HAS STARTED PROCEEDINGS IN THE MIDDLE OF THE YEAR BUT NOTICES WERE ISSUED TO THE CREDITORS AT THE F AG END OF THE YEAR I.E. MIDDLE OF DECEMBER, 2012 AND THE CREDITORS COULD NOT APPEAR FOR EXAMINATION, THOUGH THE COPIES OF THE RETURN WERE FILED BEFORE THE AO. SIMILAR IS THE POSITION WITH REGARD TO THE INCOME DECLARED UNDER DIFFERENT HEADS BY THE ASSESSEE. THE AO ESTIMATED THE NET PROFIT UNDER DIFFERENT HEADS BESIDES MAKING DISALLOWANCE O F EXPENDITURE. T HE ASSESSEE HAS SPECIFICALLY ASSAILED THAT HE HAS PRODUCED THE BOOKS OF ACCOUNTS BUT THE SAME WAS NOT EXAMINED BY THE AO. THE ACCOUNTS WERE AUDITED AND ARE ALSO AVAILABLE FOR EXAMINATION. IN THE LIGHT OF THESE FACTS, WE ARE OF THE VIEW THAT LOWER AUTHORITIES HAVE NOT EXAMINED THE IMPUGNED ISSUES PROPERLY. IF THE BOOKS OF ACCOUNT WERE MAINTAINED BY THE ASSESSEE, THE SAME SHOULD HAVE BEEN EXAMINED BY THE AO WH ILE MAKING DISALLOWANCE OF ITA NO.292/14 4 EXPENDITURE. BY SIMPLY SAYING THAT THE ACCOUNTS ARE REJECTED ON ACCOUNT OF NON - PRODUCTION OF BOOKS OF ACCOUNTS , THE AO CANNOT PROCEED TO ESTIMATE THE NET PROFIT UNLESS IT IS BORNE OUT THAT ASSESSEE W AS AFFORDED AN OPPORTUNITY TO PRODUCE THE BOOKS OF ACCOUNTS. KEEPING IN VIEW THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ISSUES REQUIRE S FRESH ADJUDICATION BY THE ASSESSING OFFICER. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT( A) AND RESTORE BACK TO THE FILE OF AO WITH A DIRECTION TO FRAME THE ASSESSMENT DE NOVO AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO MAKE COMPLIANCE OF ALL THE DIRECTIONS TO BE ISSUE D BY THE AO. 5 . IN THE RESU LT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 / 05 / 201 5 . SD/ - SD/ - ( . . ) (B. P. JAIN) ( ) (SUNIL KUMAR YADAV) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 29 /0 5 / 201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT , CUTTACK 6. [ / G UARD FILE. //TRUE COPY//