Tanuja Kar, Cuttack V. ITO, Cuttack

ITA 317/CTK/2013

• Counselvise Citation: 31722114 RSA 2013
• Duration Of Justice: 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 17-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K NEB
• Assessee Lawyers: S K JENA
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 68; 144

Judgement Text

1 , CUTTACK IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK ( )BEFORE . . , , HONBLE SHRI P.K.BANSAL, ACCOUNTANT MEMBER. /AND . . , HONBLE SHRI D.T.GARASIA, JUDICIAL MEMBER / I.T.A.NO.317 /CTC/ /2013 ! ' / ASSESSMENT YEAR: 2009-2010 TANUJA KAR, CUTTACK PA NO.ABNPK 7016 Q - - - VERSUS- ITO, WARD 2(4) CUTTACK ( $% /APPELLANT ) ( &'$% /RESPONDENT) $% ) / FOR THE APPELLANT: /SHRI S.K.JENA &'$% ) /FOR THE RESPONDENT: /SHRI N.K.NEB * + , / DATE OF HEARING: 23.4.2014 -.' , / DATE OF PRONOUNCEMENT: 23.4.2014 / / ORDER PER BENCH THIS APPEAL IS FILED BY THE ASSESSEE AGAINST ORDER DATED 20.2.2013 OF LD CIT(A), CUTTACK FOR THE ASSESSMENT YEAR 2009-2010 ON THE FOLLOWING GROUNDS: THAT, THE ORDER OF THE LEARNED ASSESSING OFFICER IS ARBITRARY, UNJUST, VIOLATING THE PRINCIPLES OF NATURAL JUSTICE, AND CO NTRARY TO THE PROVISIONS OF ACT AND THEREFORE THE ASSESSMENT ORDER WITH TAX LIA BILITY IS LIABLE TO BE QUASHED AND/OR ANNULLED. 2 THAT, THE ORDER PASSED U/SEC.144 IS UNJUST AND WRON G. THAT, THE LEARNED ASSESSING OFFICER HAS ERRED BOTH IN LAW AND IN FACT BY MAKING ADDITION OF RS.14,43,140/- TO THE TOTAL INCO ME AS UNEXPLAINED CASH CREDIT U/SEC.68 WHICH IS CONTRARY TO THE EVIDENCE O F RECORD AND THE SAME IS LIABLE TO BE DELETED. THAT, THE LEARNED CIT (A) HAS ERRED BOTH IN LAW AND IN FACT BY CONFIRMING ADDITION OF RS.14,43,140/- AS UNEXPLAINED CASH CRED IT WHICH IS CONTRARY TO THE EVIDENCE ON RECORD AND THE SAME IS LIABLE TO BE DELETED. THAT, THE LEARNED ASSESSING OFFICER HAS ERRED BOTH IN LAW AND IN FACT BY INITIATING PENALTY PROCEEDING U/S 271(1) OF THE ACT AND FOR WHICH THE PENALTY NOTICE IS LIABLE TO BE QUASHED AND/OR ANNUL LED. 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL, RUNS A FABRICATION UNIT NAMED AND STYLED AS M/S. SAMBIT ENTERPRISES, JAGATP UR, CUTTACK. SHE FOILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 29.9.2009 DISCLOSING TOTAL INCOME OF RS.2,41,620/-. IN REPLY TO ASSESSING OFFICERS REQ UISITION TO FURNISH CERTAIN DOCUMENTS/INFORMATION ON SEVEN POINTS, THE ASSESSE E REQUESTED FOR ADJOURNMENT ON 3.12.2010. HOWEVER, ON 20.12.2010, THE ASSESSEE FU RNISH CERTAIN DOCUMENTS. THEREAFTER, FURTHER NOTICE WAS SERVED ON THE ASSESSEE BUT THERE WAS NO COMPLIANCE. THEREFORE, THE AO COMPLETED THE ASSESSMENT UNDER SECTION 144 OF THE I NCOME TAX ACT, 1961 AND, INTER ALIA, MADE AN ADDITION OF RS.25,59,728/- UNDER SECTION 68 OF THE ACT AS UNEXPLAINED CASH CREDIT AND RS.10,20,788/- BEING THE DIFFERENCE IN GROSS PROFIT . THE MATTER CARRIED TO APPEAL BEFORE THE CIT(A). 3. THE LD CIT(A) IN THE IMPUGNED ORDER REDUCED THE ADDITION OF RS. 14,43,140/- FROM RS.25,59,728/- MADE BY THE ASSESSING OFFICER CONSID ERING THE BALANCE AS ON 31.3.2009 AS PER THE CREDITOR AND BALANCE AS ON 31.3.2009 AS PER THE ASSESSEE. BEING AGGRIEVED, ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL AGAINST THE SUST ENANCE OF ADDITION OF RS.14,43,140/-. 3 4. LD A.R. SUBMITTED THAT THE ASSESSMENT WAS COMPLE TED UNDER SECTION 144 OF THE ACT AND LD CIT(A) HAS CONFIRMED PART DISALLOWANCE, WHICH IS CONTRARY TO THE EVIDENCE ON RECORD AND URGED BEFORE US TO DELETE THE PART DISALLOWANCE MAD E BY THE CIT(A). ON THE OTHER HAND, LD D.R.SUPPORTED THE ORDER OF LD CIT(A). 5. HAVING HEARD BOTH THE SIDES, WE OBSERVE THAT THE AO HAS MADE THE ASSESSMENT UNDER SECTION 144 OF THE ACT, ON THE GROUND THAT AS ASSES SEE COULD NOT REPRESENT THE CASE BEFORE THE AO DESPITE SEVERAL OPPORTUNITIES GIVEN. HOWEVER, W E FIND THAT ASSESSEE HAS NOT COMPLIED WITH THE VARIOUS NOTICES BY THE AO AT THE ASSESSMENT STA GE. WE ALSO FIND THAT OUT OF LIST OF SIX CREDITORS, ONLY THREE CREDITORS RESPONDED TO THE NO TICE OF THE AO AND GIVEN THEIR STATEMENT AND OTHER THREE CREDITORS COULD NOT RESPOND. AS REGARD S TO THREE CREDITORS, THE AO REQUESTED THE ASSESSEE TO RECONCILE THE DISCREPANCIES APPEARING I N RESPECT OF CREDIT BALANCE IN THEIR BOOKS VIS- -VIS THE BOOKS OF ACCOUNT OF THE ASSESSEE. HOWEVE R, THE AO MADE THE ADDITION OF RS.25,59,728/- WITHOUT CONFRONTING TO THE ASSESSEE MAINLY ON THE GROUND THAT THERE WAS NO COMPLIANCE ON THE PART OF THE ASSESSEE ON 24.10.201 1. IT WAS THE CONTENTION OF THE ASSESSEE THAT OUT OF THREE CREDITORS WHO HAVE NOT RESPONDED TO THE NOTICES OF THE AO, M/S BHARTIA TRADERS AND M/S. ORO METAL ENTERPRISES ARE REPUTED FIRMS WHO DEALS WITH STEEL, ANGLE AND BAR IN THEIR LOCALITY. IT IS STRANGE HOW THE NOTICES WERE NOT SERVED ON THEM ON THE REMARKS LEFT AND ABOLISHED. THE AO SHOULD HAVE GIVEN ANOTHER OPPOR TUNITY TO THE ASSESSEE TO PRODUCE THE CREDITORS. THE CIT(A) CONFIRMED THE ASSESSMENT UN DER SECTION 144 OF THE ACT MADE BY THE AO AND ALSO REDUCED THE ADDITION TO RS.14,43,140/-, BE ING THE DIFFERENCE BETWEEN AS PER THE CREDITORS ACCOUNT AND AS PER THE ASSESSEES ACCOUN T WITHOUT CONFRONTING THE ASSESSE AND ALSO THE CREDITORS. LOOKING TO THE TOTALITY OF THE FA CTS AND CIRCUMSTANCES OF THE CASE AND TO IMPART NATURAL JUSTICE, WE SET ASIDE THE ORDER OF LD CIT(A ) RESTORE THE MATTER TO THE FILE OF THE AO TO DECIDE THE ADDITION OF RS.14,43,140/- AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 4 6.. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 23.4.14 ) / &, 1',2 - COPY OF THE ORDER FORWARDED TO: 1 . $% / THE APPELLANT : TANUJA KAR, PROP. SAMBIT ENTERPRISES, MALHA SAHU, MANGALABAG, CUTTACK 2 &'$% / THE RESPONDENT:ITO 2(4), CUTTACK 3 . / /THE CIT, CUTTACK 4 . / ( )/THE CIT(A),CUTTACK 5 . 3 &, /DR, CUTTACK BENCH 6 . GUARD FILE . ' , &, /TRUE COPY, / * / BY ORDER, ASST.REGISTRAR, ITAT, CUTTA CK SD/ - SD/ - ( . . ) , (P.K.BANSAL), ACCOUNTANT MEMBER ( . . ), (D.T.GARASIA(JUDICIAL MEMBER ( , )DATE. 23 .4 .2014 (B.K.PARIDA) SENIOR PRIVATE SECRETARY. 5 1. DATE OF DICTATION 23.4.14. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER 23.4.14OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT.... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S . 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER .............. .. 9. DATE OF DISPATCH OF THE ORDER ..