M/s Shantharaj Associates, V. ACIT , Bangalore

ITA 331/BANG/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9457 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 14-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: V CHANDRASHEKAR
• Keywords: Business expenditure; Principle of natural justice; Question of law
• Section: 143(3); 234B; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A, BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SMT ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.331(BANG) 2013 (ASSESSMENT YEAR : 2008-09) M/S SHANTH RAAJ ASSOCIATES, NO.260, II MAIN ROAD, 7 TH BLOCK, JAYANAGAR, BANGALORE -560 082 PAN NO.ABEFS 5109B APPELLANT VS THE ASST. COMMISSIONER OF INCOME TAX CIRCLE-4(1), BANGALORE APPELLANT ASSESSEE BY : SHRI V. CHANDRASHEKAR, ADVOCATE REVENUE BY : DR. P.K.SRIHARI, ADDL.CIT DATE OF HEARING : 14-07-2016 DATE OF PRONOUNCEMENT : 12-08-2016 O R D E R PER SHRI A. K. GARODIA, AM: THIS APPEAL IS FILED BY THE ASSESSEE DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A)-II, BANGALORE DATED 11-01-2013 FOR THE ASSES SMENT YEAR 2008-09. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS; 1. THE ORDER PASSED BY THE LD AO AND TO THE EXTEN T AS CONFIRMED BY THE LD. CIT(A() IN SO FAR PREJUDICIAL TO THE INTEREST OF THE APPELLANT, IS OPPOSED TO LAW WEIGHT OF EVIDE NCE, NATURAL JUSTICE, PROBABILITIES, FACTS AND CIRCUMSTA NCES OF THE CASE. 2. THE ORDER OF THE ASSESSMENT IS BAD IN LAW AS THE MANDATORY CONDITION TO ASSUME JURISDICTION IS NOT E XISTING AND NOT COMPLIED WITH AND HENCE THE ASSESSMENT IS B AD IN LAW AND REQUIRES TO BE CANCELED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LD.CIT(A) ERRED IN LAW IN NOT HOLDING THAT T HE REASONS RECORDED ARE MERE REASONS TO SUSPECT BUT NOT REA SONS TO BELIEVE AS CONTEMPLATED UNDER THE PROVISIONS OF SE CTION 48 OF THE ACT. ITA NO.331(B)/13 2 4. WITHOUT PREJUDICE THE LD. CIT(AS) ERRED IN LAW I N NOT APPRECIATING THAT THE ISSUANCE OF NOTICE UNDER SECT ION 148 OF THE ACT IS WITHOUT PROPER SANCTION UNDER LAW 5. WITHOUT PREJUDICE THE LD. CIT(A) ERRED IN LAW IN NOT APPRECIATING THAT THE ISSUANCE OF NOTICE UNDER THE PROVISIONS OF SEC.148 OF THE ACT IS WITHOUT PROPER APPLICATION OF MIND. 6. WITHOUT PREJUDICE THE LD. CIT(A) ERRED IN LAW AN D FACTS IN CONFIRMING THE DISALLOWANCE OF COMMISSION AND BROKE RAGE EXPENSES OF RS.14,40,000/- ON FACTS AND CIRCUMSTANC ES OF THE CASE. 7. WITHOUT PREJUDICE THE LD. CIT(A) ERRED IN LAW AN D FACTS IN CONFIRMING THE DISALLOWANCE OF BANK CHARGES OF RS.5 ,630/- ON FACTS AND CIRCUMSTANCES OF THE CASE. 8. WITHOUT PREJUDICE THE LD. CIT(A) ERRED IN LAW AN D FACTS IN CONFIRMING THE DISALLOWANCE OF A SUM OF RS.1,63,50 0/- TOWARDS BUSINESS PROMOTION EXPENSES ON FACTS AND CIRCUMSTANCES OF THE CASE. 9. WITHOUT PREJUDICE THE LD. CIT(A) ERRED IN LAW AN D FACTS IN HOLDING THAT 20% OF BUSINESS EXPENSES ARE AMOUNTING TO RS.1,21,584/- ATTRIBUTABLE TO PERSONAL EXPENSES OF THE PARTNERS OF THE APPELLANT FIRM ON FACTS AND CIRCUMS TANCES OF THE CASE. 10. THE APPELLANT WITHOUT PREJUDICE SUBMITS THAT EH AMOUNT DISALLOWED UNDER VARIOUS HEADS AS SUBMITTED ABOVE A RE VERY HIGH AND REQUIRES TO BE SUBSTANTIALLY REDUCED ON TH E FACTS AND CIRCUMSTANCES OF THE CASE. 11. WITHOUT PREJUDICE THE LD. CIT(A) IS NOT JUSTIFI ED IN CONFIRMING THE LEVY OF INTEREST UNDER THE PROVISION S OF SEC.234A, 234B AND 234C OF THE ACT ON FACTS AND CIRCUMSTANCES OF THE CASE. 12. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELET E OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. ITA NO.331(B)/13 3 13. IN VIEW OF THE ABOVE AND OTHER GROUNDS AS MAY B E URGED AT THE TIME OF HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTIC E AND EQUITY. 3. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUNDS WHICH ARE AS UNDER; 1.WITHOUT PREJUDICE THE ASSESSMENT CONCLUDED UNDE R THE PROVISIONS OF SECTION 143(3) OF THE ACT, IN THE INS TANT CASE ON REJECTION OF THE BOOKS OF ACCOUNTS IS BAD IN LAW AN D WITHOUT JURISDICTION ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 2.WITHOUT FURTHER PREJUDICE ON REJECTION OF THE BOO KS OF ACCOUNTS OF THE APPELLANT, THE ASSESSMENT OUGHT TO HAVE BEEN CONCLUDED UNDER THE PROVISIONS OF SEC.144 OF THE AC T IN ACCORDANCE WITH SAID PROVISIONS ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE APPELLANT CRAVE LEAVE TO ADD, ALTER, AMEND S UBSTITUTE, CHANGE AND DELETE ANY OF THE GROUNDS OF APPEAL. 4. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OFF HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED. 4. IT IS SUBMITTED BY THE LD. AR OF THE ASSESSEE B EFORE US THAT THE ISSUES RAISED IN ADDITIONAL GROUNDS WERE NOT RAISED BEFORE THE LD.CIT(A) BUT, THESE GROUNDS OF APPEAL DO NOT INVOLVE ANY INV ESTIGATION OF NEW FACTS AND THESE ARE ONLY A QUESTION OF LAW AND THEREFORE, THE SAME SHOULD BE ADMITTED IN VIEW OF THE JUDGMENT OF THE HONBLE APE X COURT RENDERED IN THE CASE OF NTPC VS DCIT AS REPORTED IN 229 ITR 283. 5. THE LD. DR OF THE REVENUE DID NOT HAVE ANY SERI OUS OBJECTION ITA NO.331(B)/13 4 REGARDING ADMISSION OF ADDITIONAL GROUNDS AND THERE FORE, WE ADMITTED THE ADDITIONAL GROUNDS. AFTER ADMISSION OF ADDITIONAL GROUNDS, BOTH SIDES AGREED THAT THE ENTIRE MATTER SHOULD BE RESTORED BA CK TO THE FILE OF THE LD. CIT(A) FOR A FRESH DECISION BECAUSE ALL THE LEGAL A ND TECHNICAL OBJECTION OF THE ASSESSEE ARE AS PER THESE ADDITIONAL GROUNDS. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FEEL TH AT WHEN THE ASSESSEE IS OBJECTING THE JURISDICTION OF THE AO TO COMPLETE THE ASSESSMENT U/S 143 (3) INSTEAD OF INVOKING PROVISIONS OF SEC.1 44 BECAUSE THE BOOKS OF ACCOUNTS WERE REJECTED, THE ENTIRE MATTER SHOULD GO BACK TO THE FILE OF THE LD. CIT(A) FOR A FRESH DECISION. ACCORDINGLY, WE SET AS IDE THE ORDER OF THE LD.CIT(A) AND RESTORE THE ENTIRE MATTER BACK TO HIS FILE FOR A FRESH DECISION. HE SHOULD DECIDE THIS ASPECT WHETHER THE ASSESSMENT SHOULD BE COMPLETED U/S 143 (3) OR U/S 144 OF THE IT ACT AND THEREAFTER , HE SHOULD DECIDE THE OBJECTION REGARDING QUANTUM OF ASSESSED INCOME. UN DER THESE FACTS, WE MAKE NO COMMENT ON THE MERIT OF VARIOUS ADDITIONS M ADE BY THE AO. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTIONED PAGE. SD/- SD/- (ASHA VIJAYARAGHAVAN) (A.K.GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: BANGALORE: D A T E D : 12.08.2016 AM* ITA NO.331(B)/13 5 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE 1. DATE OF DICTATION .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P. S. .. 4 DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE ORDER COMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER DOES FOR XEROX & ENDORSEMENT . 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. 11 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATU RE ON THE ORDER. 12 THE DATE ON WHICH THE FILE GOES TO THE DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER 13 DATE OF DISPATCH OF ORDER