K POONGAVANAM, CHENNAI V. ACIT, CIRCLE-1, CHENNAI

ITA 3172/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6413 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 22-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: T N SEETHARAMAN
• Keywords: Income from undisclosed sources; Opportunity of being heard; Corroborative evidences; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.3172/CHNY/2018 ( [ [ / ASSESSMENT YEAR: 2011-12) SHRI K. POONGAVANAM, NO.5, ARASAMARA ST, SOMAVARAKULA, CHENGAM ROAD, 5 TH STREET, TIRUVANNAMALAI 606 601. VS THE ACIT, CIRCLE 1, VELLORE. PAN: AKGPP0094H ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI T.N. SEETHARAMAN, ADVOCATE / RESPONDENT BY : SHRI CLEMENT RAMESH KUMAR, JCIT /DATE OF HEARING : 10.07.2019 /DATE OF PRONOUNCEMENT : 31.07.2019 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-13, CHENNAI IN ITA NO.54/CIT(A)-13/2011-12 DATED 6.08.2018 FOR THE ASSESSMENT YEAR 2011-12. 2. THE ASSESSEES APPEAL IS DELAYED BY 5 DAYS. THE ASSESSEE FILED CONDONATION PETITION PLEADING THAT THE SHORT DELAY IN FILING THE APPEAL WAS OCCURRED DUE TO DELAY IN GETTING THE COPY OF E-CHALLAN FOR TRIBUNAL 2 ITA NO.3172/CHNY/2018 APPEAL FEES. THEREFORE THE SHORT DELAY IN FILING THE APPEAL BEING BONAFIDE, IT WAS PLEADED TO CONDONE THE DELAY. WE HEARD THE RIVAL SUBMISSIONS AND CONDONED THE DELAY. 3. SHRI POONGAVANAM, THE ASSESSEE IS A CIVIL CONTRACTOR. AGAINST THE ORIGINAL ASSESSMENT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), BUT THE CIT(A) DISMISSED THE APPEAL IN ITA NO.995/13-14 DATED 29.04.2014. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THIS TRIBUNAL. THE TRIBUNAL BY ITS ORDER IN ITA NO.1770/MDS/2016 DATED 30.12.2016, SET ASIDE THE ORDER OF THE CIT(A) AND REMITTED THE DISPUTED MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER AFRESH AND DIRECTED THE ASSESSING OFFICER TO PROVIDE ADEQUATE OPPORTUNITY OF BEING HEARD BEFORE PASSING THE ASSESSMENT ORDER. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED A NOTICE U/S.142(1) CALLING FOR VARIOUS PARTICULARS AND TO APPEAR ON 10.11.2017. THOUGH, THE NOTICE WAS SERVED ON THE ASSESSEE ON 27.10.2017, THE ASSESSEE DID NOT APPEAR. A FINAL OPPORTUNITY WAS GIVEN TO THE ASSESSEE ON 23.11.2017 FIXING THE HEARING ON 29.11.2017. NEITHER THE ASSESSEE APPEARED NOR DID HE FILE ANY REPLY TO THE SAID NOTICE. THEREFORE, THE ASSESSING OFFICER ISSUED A DRAFT ASSESSMENT ORDER TO WHICH ALSO, THE ASSESSEE HAS NOT FILED ANY REPLY. THEREFORE, ON THE BASIS OF AVAILABLE MATERIAL ON THE RECORD, THE ASSESSING OFFICER DISALLOWED RS.19,78,220/- DEBITED TO THE P&L ACCOUNT AS WITHHELD FINE, BEING IN THE NATURE OF PENALTY / FINE FOR 3 ITA NO.3172/CHNY/2018 VIOLATION / OFFENCE. HE ADDED RS.31,08,146/- DEPOSITED WITH PROJECT CO- ORDINATOR TSUNAMI IMPLEMENTATION AND RS.19,09,252/- DEPOSITED WITH TN POLICE HOUSING CORPORATION AS UNACCOUNTED INCOME FOR THE REASON THAT THESE DEPOSITS DID NOT REFLECT IN THE BALANCE SHEET AND THEREFORE CONSIDERED THEM AS ASSESSEES CONCEALED INCOME. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE CLAIMED MATERIAL CONSUMPTION AT THE RATE OF 47% ON THE CONTRACT RECEIPTS. HE HELD THAT IT IS BEING ON HIGHER SIDE IN COMPARISON TO THE LINE OF BUSINESS. IN THE ABSENCE OF PRODUCTION OF SUBSTANTIAL EVIDENCE, THE ASSESSING OFFICER DISALLOWED 14% OF SUCH EXPENSES AS AN EXCESS CLAIM. SIMILARLY, THE ASSESSING OFFICER FOUND THAT THE LABOUR CHARGES CLAIMED BY THE ASSESSEE WAS AT THE RATE OF 44% ON THE GROSS CONTRACT RECEIPTS. HE HELD THAT IT IS HIGHER THAN NORMAL FIGURE IN THE LINE OF BUSINESS. IN THE ABSENCE OF PRODUCTION OF PRIMARY SUPPORTING MATERIAL, THE ASSESSING OFFICER HELD THAT ABOUT 30% OF THE GROSS RECEIPTS COULD BE THE NORMAL EXPENDITURE IN THE LINE OF BUSINESS AND THEREFORE HE RESTRICTED THE LABOUR CHARGES CLAIM TO 30% OF THE CONTRACT RECEIPTS. THUS, HE MADE A TOTAL ADDITION OF RS.1,61,26,722/- TO THE RETURNED INCOME. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE LD.CIT(A) HELD THAT SINCE THE ASSESSEE HAS NOT PRODUCED ANY SUPPORTING EVIDENCE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE APPELLATE PROCEEDINGS, HE DISMISSED THE APPEAL. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL. 4 ITA NO.3172/CHNY/2018 4. THE LD.AR PLEADED THAT SINCE THE ISSUES ARE TO BE DECIDED ON THE BASIS OF PRIMARY MATERIALS, THIS APPEAL MAY BE REMITTED BACK TO THE ASSESSING OFFICER FOR A FRESH EXAMINATION, TO WHICH THE LD.DR OPPOSED STATING THAT THE APPEAL BEFORE THE ITAT IS ON THE SECOND TIME ON THE SAME SET OF ISSUES. THE ASSESSEE NEITHER PRODUCED ANY EVIDENCE BEFORE THE ASSESSING OFFICER NOR BEFORE THE CIT(A) AND NOT EVEN BEFORE THE ITAT AT THIS STAGE. SO THE LD.DR PLEADED THAT NO USEFUL PURPOSE WOULD BE SERVED AND SUBMITTED THAT ITAT SHOULD NOT REMIT THIS ISSUE BACK. THEREAFTER THE LD.AR PLEADED THAT THE CASE MAY BE REMITTED BACK AND RELIED ON CERTAIN CASE LAWS VIZ., (I) CIT VS. P&C CONSTRUCTIONS (P) LTD (2009) 318 ITR 113 (MAD) (II) CIT V. EAST COAST CONSTRUCTIONS AND IND. LTD (2006) 283 ITR 297 (MAD) (III) CIT VS. IGNIFLUID BOILERS (I) LTD (2006) 283 ITR 295 (MAD) 5. WE HEARD THE RIVAL SUBMISSIONS. FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE HAS NOT MADE ANY ATTEMPT TO PRODUCE ANY DOCUMENT / VOUCHER / PRIMARY MATERIAL EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE LD.CIT(A) OR BEFORE THIS TRIBUNAL IN SUPPORT OF ITS CONTENTION. WHEN THERE ARE NO DOCUMENTS PLACED BEFORE US TO CREATE EVEN A DOUBT ON THE IMPUGNED ISSUES, THE ASSESSEES CLAIM THAT THE IMPUGNED ISSUES SHOULD BE REMITTED BACK TO THE ASSESSING OFFICER IS NOT JUSTIFIED AND HENCE IT IS NOT PERMITTED. SINCE THE ASSESSEE HAS NOT PLACED ANY PRIMARY MATERIAL, 5 ITA NO.3172/CHNY/2018 IT IS NOT POSSIBLE FOR US TO APPRECIATE AS TO WHETHER THE FACTS AND CIRCUMSTANCE DEALT IN THE CASE LAWS ARE APPLICABLE TO THE ASSESSEES CASE AND HENCE THE ASSESSEES APPEAL IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON THE 31 ST JULY, 2019 AT CHENNAI. SD/- SD/- /CHENNAI, /DATED 31 ST JULY, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. [ /GF ( ) (DUVVURU R.L REDDY) /JUDICIAL MEMBER ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER