RUPESH JAYANTILAL SANGHVI HUF, MUMBAI V. IT O 25(2)(4), MUMBAI

ITA 3624/MUM/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93358 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 12-06-2015
• Court: TRIBUNAL
• Department Lawyers: JAVED AKHTAR
• Assessee Lawyers: PRIYANKA J MARU
• Keywords: Principle of natural justice

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI . . , , BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER . / ITA NO. 3624 / MUM/ 201 5 ( / A SSESSMENT YEAR : 200 9 - 1 0 ) M/S. RUPESH JAYANTILAL SANGHVI HUF, B/402, ROYAL GARDEN KASTURAB, CROSS ROAD NO.2, BORIVALI (E) MUMBAI - 400 166 .. / APPELLANT V/S ITO - 2 5 (2 )( 4 ) MUMBAI - .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AA JHR8609D APPELLANT BY : MS. PRIYANKA J. MARU REVENUE BY : SHRI JAVED AKHTAR, (DR) / DATE OF HEARING 2 8 .0 7 .201 5 / DATE OF ORDER 30 - 07 - 2015 / ORDER . . , / PER R.C. SHARMA , A .M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST ORDER DATED 16.03.2015 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) 44 , MUMBAI, IN THE MATTER OF ORDER PASSED UNDER SECTION 143(3), FOR THE RUPESH JAYANTILAL SANGHVI 2 ASS ESSMENT YEAR 200 9 - 1 0 . THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : - 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) (LD. CIT (A)) HAS ERRED IN NOT CONSIDERING THE REQUEST FOR ADJOURNMENT FILED ON THE DATE OF HEARING & HENCE NOT GIVING PROP ER OPPORTUNITY TO THE APPELLANT. 2. THE ORDER OF THE LD. CIT (A) IS CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND IS AGAINST THE PRINCIPLES OF EQUITY AND NATURAL JUSTICE AND IS PASSED WITHOUT T HE APPLICATION OF MIND AND IS THEREFORE, LIABLE TO BE QUASHED. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN MAKING AN OPINION REGARDING THE CAVALIER ATTITUDE OF THE APPELLANT BEFORE THE AO & DURING THE APPEAL PRO CEEDINGS WITHOUT CONSIDERING THE FACT THAT APPELLANT HAD SUBMITTED THE DOCUMENTS BEFORE AO & DURING ASSESSMENT PROCEEDINGS. 4. WITHOUT PREJUDICE TO THE ABOVE AND ON MERIT THE LD. CIT (A) OUGHT TO HAVE CONSIDERED THE SUBMISSION MAD E DURING THE APPEAL PROCEE DINGS. 5. UNDER THE FACTS AND CIRCUMSTANCES. OF THE CASE AND IN LAW THE LD. CLT(A) HAS ERRED IN UPHOLDING THE LEVY OF INTEREST UNDER SECTION 2348 AND 234C OF THE ACT . 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR MODIFY ANY OF THE ABOVE GROUNDS OF APPEAL. 2. THE BRIEF FACTS AS CULLED OUT FROM ORDERS OF THE AUTHORITIES BELOW ARE THAT THE ASSESSEE IS HUF AND PROPRIETOR OF M/S. PARTH CHEM IMPEX , IN THE BUSINESS OF DEALING IN CHEMICALS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE AO CALLED FOR V A RIOUS DETAILS . THE AO WAS NOT SATISFIED WITH THE RESPONSE TO THE ASSESSEE. T HE AO OBSERVED THAT THE ASSESSEE DID NOT FURNISH/ PRODUCE ANY BOOKS OF ACCOUNTS AND AS CONSEQUEN CE THE BOOKS OF THE ASSESSEE WERE REJECTED BY THE AO AND RUPESH JAYANTILAL SANGHVI 3 THE GROSS PROFIT WAS ESTIMA TED AT RS.17,69,02 5/ - DETERMINING IT @ 0.60% OF THE TURNOVER AS AGAINST GROSS PROFIT OF RS.9,20,207/ - BEING 0.31% OF THE TURNOVER SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT AND ACCORDINGLY, DIFFERENCE AMOUNT OF RS.8,48,818/ - WAS ADDED BY THE AO IN THE A SSESSMENT ORDER. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A) . LD. CIT(A) HAS OBSERVED IN THE APPEAL ORDER THAT ASSESSEE HAS FILED COPY OF ACCOUNT IN THE BOOKS OF M/S JEET CHEM DULY CONFIRMED AND VERIFIED, COPY OF THE ACCOUNT IN TH E BOOKS OF M/S CHEMISOL CORPORATION, SAMPLE COPIES OF SALES AND PURCHASES FROM AND TO M/S CHEMISOL CORPORATION, COPY OF THE STOCK LEDGER QUANTITY. BY OBSERVING THAT NOBODY APPEARED TO EXPLAIN THE DOCUMENTS SO SUBMITTED BEFORE HIM, THE CIT(A) DISMISSED ASSE SSEES APPEAL WITHOUT EXAMINING THE DOCUMENTS FILED BEFORE HIM NOR GIVEN ANY VERDICT ON MERITS OF THE ADDITION. AGAINST THIS ORDER OF CIT(A) ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 3. IT WAS ARGUED BY THE LD. AR THAT BEFORE CIT(A) ASSESSEE HAS S UBMITTED FOLLOWING DOCUMENTS : - A) ENCLOSED HEREWITH COPY OF OUR ACCOUNT IN THE BOOKS OF M/S.JEET CHEM DULY CONFIRMED AND VERIFIED BY THEM. 8) ENCLOSED HEREWITH COPY OF OUR ACCOUNT IN THE BOOKS M/S.CHEMISOL CORPORATION DULY SUBMITTED DURING ASSESSMENT PR OCEEDING. C) ENCLOSED HEREWITH SAMPLE BILL COPIES OF SALES AND PURCHASES SHOWING CLEARLY THAT SALES AND PURCHASE FROM AND TO M/S.J.M .CORPORATION ARE OF DIFFERENT ITEMS AND NOT THE SAME ITEMS. RUPESH JAYANTILAL SANGHVI 4 D) ENCLOSED HEREWITH COPY OF STOCK LEDGER QUANTITY SUMMARY SHOWING CLOSING STOCKS. THE ID.A.O. HAS ERRED IN CONCLUDING THAT THE APPELLANT HAS DONE THE BUSINESS WITHOUT HAVING STOCKS AND HAS DONE TRANSACTIONS OF SALES AND PURCHASES WITH THE SAME PARTIES AND HENCE THE BOOKS OF ACCOUNTS ARE TO BE REJECTED AND GROSS P ROFIT TO BE ESTIMATED TWICE THAN THAT SHOWN BY THE APPELLANT. THE ID.A.O. HAS FAILED TO APPRECIATE THE FACT THAT MY BOOKS OF ACCOUNTS ARE A) AUDITED UNDER THE PROVISIONS OF SECTION 44AB OF THE ACT. B) THE AUDITOR HAS FOUND NO FAULT WITH THE BOOKS OF A CCOUNTS. C) THE OFFICER HAS ALSO NOT FOUND ANY FAULT IN THE BOOKS OF ACCOUNTS AS SUCH AND HIS CONCLUSION FOR GP ADDITION WAS BASED ON FINDINGS OF HIS THIRD PARTY VERIFICATION PROCESS (U/S.133(6)). AS PER THE LD. AR WITHOUT FINDING ANY FAULT WITH THE ABO VE DOCUMENTS THE C IT (A) HAS CONFIRMED THE ACTION OF THE AO. 5. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF LOWER AUTHORITIES. 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT IN THE COURSE OF ASSESSMENT THE AO OBSERVED THAT M/S JEET CHEM TO WHOM ASSESSEE HAD SOLD GOODS FOR RS.17.78 LAKHS WAS NOT SERVED WITH THE NOTICE ISSUED UNDER SECTION 133(6). ACCORDINGLY, THE AO TREATED THE SALES AS UNEXPLAINED SALES. AFTER MAKING FURTHER OBSERVATION WITH REGARD TO THE SALES BILL ETC. THE AO REJECTED BOOKS OF ACCOUNT. BEFORE THE CIT(A) THE ASSESSEE HAS FILED VARIOUS DOCUMENTARY EVIDENCE TO SUBSTANTIATE ITS PURCHASE AND SALES ETC., HOWEVER, WITHOUT EXAMINING THESE DOCUMENTS AND GOING INTO THE MERIT OF THE ADDITION, THE CIT(A) HAS DISMISSED ASSESSEES APPEAL ON THE PLEA THAT NOBODY IN PERSON RUPESH JAYANTILAL SANGHVI 5 APPEARED BEFORE HIM TO EXPLAIN THE DOCUMENTS FILED BEFORE HIM. IT IS NOT IN DISPUTE THAT THE CIT(A) HAS EXAMINED THE DOCUMENTS SO AS TO FIND ANY FAULT THEREIN. ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE ORDER PASSED BY THE CIT(A) VIS - - VIS ORDER OF THE AO. IN THE INTEREST OF JUSTICE AND FAIRPLAY WE RESTORE THIS APPEAL BACK TO THE FILE OF AO FOR DECIDING AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO FILE DOCUMENTARY EVIDENCE WHICH WERE FILED BEFORE THE CIT(A), AGAIN BEFORE THE AO TO ENABLE HIM TO VERIFY THE CORRECT GROSS PROFIT RATE DISCLOSED BY THE ASSESSEE. THE AO IS TO DECIDE AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT O N DAY OF 30 TH JULY , 2015. SD/ - . . , R.C. SHARMA ACCOUNTANT MEMBER MUMBAI, DATED : 30 . 07. 2015 PATEL/ PKM / COPY OF THE ORDER FORWARDED TO : (1) / THE ASSESSEE ; RUPESH JAYANTILAL SANGHVI 6 (2) / THE REVENUE; (3) ( ) / THE CIT(A ) ; (4) / THE CIT, MUMBAI CITY CONCERNED ; (5) , , / THE DR, ITAT, MUMBAI ; (6) / GUARD FILE . / TRUE COPY / BY ORDER / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI