ACIT 2(3), MUMBAI V. RAJCO METAL INDUSTRIES P.LTD, MUMBAI

ITA 3395/MUM/2013

• Counselvise Citation: 339519914 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 02-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J K GARG
• Assessee Lawyers: SANJAY R PARIKH
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 3395/MUM/2013 ASSESSMENT YEAR: 2009-10 ACIT-2(3), ROOM NO. 552, M.K. ROAD MUMBAI- 400 020 VS. RAJCO METAL INDUSTRIES P. LTD. 19, INDIAN MERCANTILE INS. BUILDING, 31, DR. VB GANDHI MARG, FORT MUMBAI- 400 023 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :- AAACR 5185 N ASSESSEE BY : SHRI SANJAY R. PARIKH REVENUE BY : SHRI J.K. GARG DATE OF HEARING : 07.08.2014 DATE OF PRONOUNCEMENT : 27.08.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE LD.CIT(A)-06, MUMBAI DATED 07.02.2013 FOR THE ASSES SMENT YEAR 2009-10. 2. IN THIS APPEAL, THE REVENUE HAS AGITATED THE DEC ISION OF THE LD.CIT(A) DELETING THE DISALLOWANCE OF EXPENSES DEBITED IN TH E P&L A/C @ 2% MADE BY THE AO. 3. THE RELEVANT FACTS ARE THAT THE AO, IN THE ASSES SMENT ORDER HAS STATED THAT THE ASSESSEE WAS ASKED TO PRODUCE BOOKS OF ACCOUNT VIDE ORDER SHEET NOTING DATED 12.12.2011 AND THE CASE WAS ADJOURNED TO 16.12.2011 . ON THE DATE OF ADJOURNMENT, THE ASSESSEE DID NOT ATTEND AND THE ASSESSEE DID NO T EVEN MADE ANY REQUEST FOR ADJOURNMENT. THE AO OBSERVED THAT THE ONUS WAS ON T HE ASSESSEE TO ESTABLISH THAT CORRECT INCOME WAS DECLARED BY IT AND THE FACT ACCO UNTS WERE AUDITED DID NOT ABSOLVE THE LIABILITY OF ASSESSEE TO PRODUCE SAME B EFORE AO TO ESTABLISH THE CORRECTNESS. THE AO, ACCORDINGLY, MADE AN AD HOC DI SALLOWANCE OF THE EXPENSES DEBITED IN THE P&L A/C@ 2%. ON APPEAL, THE LD.CIT(A ) HELD THAT THE BEST JUDGMENT ITA NO. 3395/MUM/2013 RAJCO METAL INDUSTRIES P. LTD. ASSESSMENT YEAR: 2009-10 2 ASSESSMENT MUST BE BASED ON SOME REASONABLE BASIS A ND IN THE PRESENT CASE AS THE ACCOUNTS WERE AUDITED, THE AD HOC DISALLOWANCE OF 2 % OF EXPENSES WAS NOT TENABLE. AGGRIEVED BY THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL. 4. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD, IT IS PERTINENT TO MENTION THAT THE ASSESSEE, DURING THE FIRST APPELLATE PROCEEDINGS, HAS SUBMITTED THAT THE COPY OF THE NOTICE U/S 142(1) DA TED 25.11.2011 HAS BEEN RESPONDED BY THE ASSESSEES LETTER DATED 24.11.2011 IN WHICH DETAILS WERE FILED CONTAINING 48 PAGES. SUBSEQUENTLY, ANOTHER SUBMISSI ON WAS MADE BEFORE AO VIDE LETTER DATED 30.11.2011 AND 12.11.2011. ON 16.12.20 11, THE ACCOUNTANT OF THE ASSESSEE WAS UNWELL AND THEREFORE THE BOOKS OF ACCO UNT AND OTHER DETAILS COULD NOT BE FURNISHED. ON 23.12.2011, THE ASSESSEE FILED LET TER BEFORE AO SEEKING SHORT ADJOURNMENT FOR 2 OR 3 DAYS BUT ON 23.12.2011 THE A SSESSMENT ORDER WAS PASSED. AFTER CONSIDERING THE ORDER OF THE AO AND SUBMISSIO N OF THE ASSESSEE, THE LD.CIT(A) HAS OBSERVED THAT THE ACCOUNTS OF THE ASSESSEE HAVE BEEN AUDITED AND IT IS OBVIOUS THAT SUFFICIENT OPPORTUNITY IS NOT MADE AVAILABLE T O THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT BEFORE THE AO. THE ASSESSMENT WAS GETTING BARRED BY LIMITATION ON 31.12.2011 AND THE AO MADE AD HOC DISALLOWANCE OF 2 % OF EXPENSE WITHOUT POINTING OUT ANY BASIS FOR MAKING SUCH ADDITION. IN VIEW OF THAT MATTER, WE CONCUR WITH THE VIEWS OF THE LD.CIT(A) THAT IT IS WELL SET TLED THAT THE BEST JUDGMENT ASSESSMENT MUST BE BASED ON SOME REASONABLE BASIS A ND IN THE PRESENT CASE AS THE ACCOUNTS ARE AUDITED THE AD HOC DISALLOWANCE OF 2% OF EXPENSES IS NOT TENABLE. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE DECI SION OF THE LD.CIT(A) AND THE SAME IS UPHELD. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF AUGUST, 2014. SD/- SD/- (RAJENDRA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 27.08.2014. *SRIVASTAVA ITA NO. 3395/MUM/2013 RAJCO METAL INDUSTRIES P. LTD. ASSESSMENT YEAR: 2009-10 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR D BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.