M/s. Shakti Infra, Vadodara V. The ITO, Ward- 1(2)(1), Vadodara

ITA 296/AHD/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9632 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-12-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 26-04-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIASHOKKUMARSUTHAR; FORTHEASSESSEETOPRODUCETHE; FORTHEASSESSEEASTHE
• Assessee Lawyers: MSURVASHISODHAN; WAYOFSPEAKINGORDERWITHREASONING.ONCETHEFACTTHATSUBSTANTIVE

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’C’’BENCH,AHMEDABAD BEFOREMsSUCHITRAKAMBLE,JUDICIALMEMBER And SHRIWASEEMAHMED,ACCOUNTANTMEMBER आयकरअपीलसं./ITANo.296/AHD/2023 धििाधरणवरध / Asstt.Year:2009-2010 M/s.ShaktiInfra, FF/14,Shree,Complex, Opp.Mahindra, GujaratTractors, Visvamitri, Vadodara-390011. PAN:ABMFS3957M Vs. I.T.O, Ward-1(2)(1), Vadodara. (Applicant)(Respondent) Assesseeby:MsUrvashiSodhan,A.R Revenueby:ShriAshokKumarSuthar,Sr.D.R सुिवाईकीतारीख/DateofHearing:05/12/2023 घोरणाकीतारीख/DateofPronouncement:08/12/2023 आदेश/ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: ThecaptionedappealhasbeenfiledattheinstanceoftheAssesseeagainst theorderoftheLearnedCommissionerofIncomeTax(Appeals),Vadodara, arisinginthematterofassessmentorderpassedunders.143r.w.s.147ofthe IncomeTaxAct,1961(here-in-afterreferredtoas"theAct")relevanttothe AssessmentYear2009-2010. ITAno.296/AHD/2023 A.Y.2009-10 2 2.Thefactsinbriefarethattheassesseeinthepresentcase,apartnership firm,isengagedinthebusinessofconstructionanddevelopment.Inthepresent case,theproceedingsundersection147oftheActwereinitiatedbyissuinga causenoticeundersection148oftheActdated30March2016.Theassessment wasfinallyframedundersection143(3)readwithsection147oftheActdated16 December2016aftermakingthefollowingaddition: (i)Additiononaccount unexplainedInvestmentu/s.69A oftheI.TActasdiscussedinpara 5 1,73,00,000 (ii)Additiononaccountof disallowanceofexpensesas discussedinpara6 25,24,954 3.AggrievedassesseepreferredanappealtothelearnedCIT(A)who confirmedtheorderoftheAOonthereasoningthattherewasnosubmissionfiled bytheassesseeinresponsetovariousnoticesissuedtoit(theassessee).Assuch, intheabsenceofanyassistance/replyfromthesideoftheassessee,thelearned CIT(A)waspleasedtoconfirmtheorderoftheAO. 4.BeingaggrievedbytheorderoflearnedCIT(A),theassesseeisinappeal beforeus. 5.ThelearnedARbeforeusfiledapaperbookrunningfrompages1to74 andapplicationfortheadditionalevidencedemonstratingthattheexpensesin disputewereincurredthroughbankingchannel.AssuchthelearnedAR contendedthattheprotectiveadditionmadeinthehandsoftheassesseehas alreadybeensubjectmatterofadditioninthehandsofthe5partnersoutoftotal 8partners.Againsttheadditionmadeinthehandsofthepartners,therewasno ITAno.296/AHD/2023 A.Y.2009-10 3 appealpreferredbythepartners.Therefore,itwassubmittedbythelearnedAR thatoncesubstantiveadditionhasbeenconfirmedinthehandsofthepartners, therecannotbeanyreasontosustaintheadditioninthehandsofthepresent assessee.Assuch,theprotectiveadditionisliabletobedeleted. 6.ThelearnedARfurthersubmittedthattherewerenoproceedingsinitiated inrespectoftheremaining3partnersandthereforenoadditionwasmadeintheir hands.AsperthelearnedAR,whytheproceedingswerenotinitiatedagainstthe 3partnersisbestknowntotherevenue.Itisbecauseallthenecessaryfactswere alreadyavailableonrecordwiththerevenueformakingtheadditionsona substantivebasisinthehandsoftheremaining3partners. 7.Regardingtheotherexpenses,beingcompoundwall,advertisement expensesandsiteexpenses.ThelearnedARsubmittedthatalltheseexpenses wereincurredthroughthebankingchannelandthereforethesamecannotbe disallowedinentirety.AsperthelearnedAR,thebusinessoftheassesseehas beenclosedandthereforeitisnotpossiblefortheassesseetoproducethe recordsexceptthebankstatementdemonstratingthepaymentmadewithrespect totheexpensesdiscussedabove.Assuch,itwasprayedbythelearnedARthat anyreasonablead-hocdisallowanceforwantofdocumentscanbemadeinstead ofmakingthedisallowanceinentirety. 8.OnthecontrarythelearnedDRcontendedthatthereisnoinformation availableonrecordwhethertheadditionmadeinthehandsofthepartnersofthe assesseehasbeenchallengedbythembeforethehigherforum.Therefore,onthis reasoningtheadditionmadeonprotectivebasisinthehandsoftheassessee cannotbedeleted. 9.Regardingtheotherexpenses,thelearnedDRsubmittedthatthebank statementfiledbytheassesseedemonstratingthepaymentincurredforthe ITAno.296/AHD/2023 A.Y.2009-10 4 expensesthroughbankingchannelwasnotavailablebeforetheauthoritiesbelow. Therefore,thesamecannotbetakenintoconsiderationwhileadjudicatingthe issuewithoutconfrontingthesametotheauthoritiesbelow. 10.ThelearnedDRalsoopposedtogivefurtheropportunitytotheassesseeby restoringtheissuetothefileoftheauthoritiesbelowforfreshadjudicationinthe lightoftheargumentsadvancedbythelearnedARfortheassesseeasthe assesseewasalreadygivenopportunitiesbythelearnedCIT(A)whichwerenot availed.ThelearnerDRvehementlysupportedtheorderoftheauthoritiesbelow. 11.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Undeniably,theassesseewasaffordedthe opportunityofbeingheardbythelearnedCIT(A)asevidentfromhisfinding reproducedonpage2ofhisorder.However,fromtheorderofthelearnedCIT(A) wenotethattheassesseehasfurnishedgroundofappealsandstatementoffacts whereinitwassubmittedtothelearnedCIT(A)bytheassesseethatsubstantive additionmadeinthehandsofpartnershavebeenadmittedbythepartnersand thereforetheprotectiveadditioninthehandsoftheassesseeisnotsustainable. However,whatwefindthatthelearnedCIT-Ahasnotconsideredthestatement offactsproducedbytheassesseebeforelearnedCIT(A).Theprovisionsofsection 250(6)oftheActrequirethelearnedCIT(A)todisposeoftheappealfiledbythe assesseebywayofspeakingorderwithreasoning.Oncethefactthatsubstantive additionshavebeenconfirmedinthehandsofthepartners,weareoftheview thatthelearnedCIT(A)shouldhaveconsideredthesameintheinterestofjustice beforedismissingtheappealoftheassesseeinlimine.Bethatasitmaybe,inthe interestofjusticeandfairplayweareinclinedtorestorethisissuetothefileof thelearnedCIT(A)forfreshadjudicationaspertheprovisionsoflaw.Hence,the groundsofappealoftheassesseeareherebyallowedforthestatisticalpurposes. ITAno.296/AHD/2023 A.Y.2009-10 5 12.Intheresult,theappealfiledbytheassesseeisallowedforstatistical purposes. OrderpronouncedintheCourton08/12/2023atAhmedabad. Sd/-Sd/- (SUCHITRAKAMBLE)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated08/12/2023 Manish