The Assistant Commissioner of Income Tax, Circle-1 (1), Panaji., Panaji V. M/s D. M. minerals and Resources., Panaji

ITA 353/PAN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2072 (ITAT-PANAJI)
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2016
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 01-10-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK RATKAL LD
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI NARENDRA S. SAINI, HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO.3 53 /PAN/201 5 : (ASST. YEAR : 201 1 - 1 2 ) ASST. COMMISSIONER OF INCOME TAX , VS. M/S D M MINERALS AND RESOURCES , CIRCLE - 1(1), PANAJI GOA. R. NO. 502, 5 TH FLOOR, SHIV TOWERS, PATTO, PANAJI GOA. PAN :AAGFD1842D . ( APPELLAN T) (RESPONDENT) A PPELLANT BY : SHRI ABHISHEK RATKAL, LD. D.R. RESPONDENT BY : SHRI SANDIP BHANDARE, C.A. DATE OF HEARING : 0 9 /06 /2016 DATE OF ORDER : 0 9 / 06 /2016 O R D E R PER GEORGE MATHAN , J.M : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT (A) , PANAJI - 1 , IN ITA NO.80 /PNJ/ 14 - 1 5 , DATED 1 0.06 .2015 FOR THE ASSESSMENT YEAR 201 1 - 1 2 . 2. SHRI ABHISHEK RATKAL, LD. D.R REPRESENTED ON BEHALF OF THE REVENUE AND SHRI SANDIP BHANDARE, C.A REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LD. D.R THAT IN GROUND NO.1 THE REVENUE HAS CHALLENGED THE ACTION OF THE LD.CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER U/S 41(1) AFTER TAKING INTO CONSIDERATION THE CONFIRMATION LETTERS OF CREDITORS SUBMITTED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS 2 ITA NO . 3 53 /PAN/20 1 5 (ASST. YR: 201 1 - 1 2 ) WITHOUT A FFORDING AN OP PORTUNITY TO THE ASSESSING OFFICER OF BEING HEARD, THEREBY VIOLATING THE PROVISION OF RULE 46A OF THE ACT. 4 . IN REPLY, THE LD. A .R SUBMITTED THA T THE DETAILS HAD BEEN SUBMITTED TO THE ASSESSING OFFICER VIDE ITS LETTER DATED 6.3.2014 ON 27.3.2014 THOUGH THE ASSESSMENT ORDER WAS PASSED ON 25.3.2014. IT WAS A PRAYER THAT THE DETAILS HAVE BEEN PRODUCED B EFORE THE ASSESSING OFFICER THOUGH ADMITTEDLY AFTER THE COMPL ETION OF THE ASSESSMENT ORDER. T HE ORDER OF THE LD.CIT(A) WAS LIABLE TO BE S USTAINED. 5. WE HAVE CONS I DERED THE RIVAL SUBMISSIONS. I T IS NOTICED THAT THE EVIDENCES PRODUCED BEFORE THE ASSESSING OFFICER IS AFTER THE COMPLETION OF THE ASSESSMENT PROCEEDINGS AND THE PASSING OF THE ASSESSMENT ORDER. ADMITTEDLY, THE ASSESSING OFFICER COULD NOT HAVE LOOKED INTO THE SAID EVIDENCES. T HE LD.CIT(A) HAS DELETED THE ADDITION BY LOOKING INTO THE EVIDENCES WHICH WERE NOT BEFORE THE ASSESSING OFFICER IN THE COURSE O F ASSESSMENT PROCEEDINGS. THESE EVIDENCES ARE I N THE NATURE OF FRESH EVIDENCES B EFORE THE LD.CIT(A). IT WAS THE N INCUMBENT ON THE LD.CIT(A) TO CALL FOR A REMAND REPORT FROM TH E ASSESSING OFFICER IN RESPECT OF THESE EVIDENCES. THIS HAVING NOT BEEN DONE THE ORDER OF THE LD.CIT(A) BECOMES ERRONEOUS. IN THESE CIRCUMSTANCES THE OR DER OF THE LD.CIT(A) ON THIS ISSUE STANDS SET ASIDE AND THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE - ADJUDICATION AFTER GRANTING THE ASSESSEE AN ADEQUATE OPPORTUNITY OF BEING HEARD. 6. IN RESPECT OF THE SECOND GROUND IT WAS SUBMITTE D BY THE LD. D.R THAT THE ISSUE WAS AGAINST THE ACTION OF THE LD.CIT(A) IN RESTRICTING THE DISALLOWANCE OF THE EXPENSES TO 1% INSTEAD OF 10% AS MADE BY THE ASSESSING OFFICER. IT WAS A SUBMISSION THAT NO VOUCHERS OR BILLS IN RESPECT OF THE EXPENDITURE W AS PRODUCED BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFICER HAD DISALLOWED 10% OF THE EXPENSES. IT WAS A SUBMISSION THAT ON APPEAL THE LD. CIT(A) HAD RESTRICTED THE 3 ITA NO . 3 53 /PAN/20 1 5 (ASST. YR: 201 1 - 1 2 ) DISALLOWANCE TO 1%. IT WAS A SUBMISSION THAT THE ORDER OF THE LD.CIT(A) WAS LIABLE TO BE REVERSED. 7. IN REPLY THE LD. A.R VEHEMENTLY SUPPORTED THE ORDER OF THE LD.CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMITTEDLY, IN THE ABSENCE OF THE VOUCHERS AND BILLS THE ASSESSING OFFICER MADE AN ESTIMATION BY DISALLOWING 10%. THE REASON FOR SUCH DISALLOWANCE , WHETHER IT IS BECAUSE THE EXPENSES WERE OVER STATED OR UNJUSTIFIED ARE NOT DISCUSSED BY THE ASSESSING OFFICER . IT IS JUST AN ESTIMATED DISALLOWANCE . THIS ESTIMATED DISALLOWANCE HAS BEEN REDUCED BY THE LD.CIT(A) . IF THE ASSESSEE HAS NOT PRODUCED THE VOUCHERS AND BILL S IN RESPECT OF THE EXPENSES CLAIM ED, IT WAS OPEN TO THE ASSESSING OFFICER TO DISALLOW ALL SUCH EXPENSES. THIS WAS NOT DONE. THE ASSESSING OF FICER HOWEVER ENTERED INTO THE R E A LM OF ESTIMATING THE DISALLOWANCE. NO BASIS FOR THE ESTIMATION HAS ALSO BEEN SPECIFIED. THE LD.CIT(A) HAS AFTER CONSIDERING THE FACTS REDUCED THE ESTIMATED DISALLOWANCE TO 1%. THE REVENUE HAS NOT BEEN ABLE TO DISLODGE THE ESTIMAT ION DONE BY THE LD.CIT(A) NOR IS ABLE TO S UPPORT THE ESTIMATE OF 10%. THIS BEING SO , WE FIND NO ERROR IN THE FINDINGS OF THE LD.CIT(A) AND CONSEQUENTLY THE SAME STANDS CONFIRMS. 9 . IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PR ONOU NCED IN THE OPEN COURT ON 0 9 .06 .2016. SD/ - (NARENDRA S. SAINI) ACCOUNTANT MEMBER SD/ - (GEORGE MATHAN) JUDICIAL MEMBER PLACE : PANAJI - GOA DATED : 0 9 /06 /2016 *A* 4 ITA NO . 3 53 /PAN/20 1 5 (ASST. YR: 201 1 - 1 2 ) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY O RDER ASSISTANT REGISTRAR ITAT, PANAJI BENCH, PANAJI