M/s Imperial Associates, Gaya V. I.T.O., Gaya

ITA 41/PAT/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9628 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 04-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV KR SNHA FCA SH
• Assessee Lawyers: T VARKEY JUDIC IA L M EMBER
• Keywords: Principle of natural justice
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PA T N A BENCH , PATNA BEFORE SHRI ABY. T. VARKEY , JUDICIAL MEMBER AND SHRI WASEEM AHMED , ACCOUNTANT MEMBER ITA NO. 41 / PAT / 2014 ASSESSMENT YEAR: 2010 - 11 M/S IMPERIAL ASSOCIATES, SATYENDRA NARAYAN SISNGH, VILL. RASALPUR, P.O. MANPUR, P.S. MUFFASIL, GAYA - 823003 [ PAN NO. AABFI 9998 J ] / V/S . INCOME TAX OFFICER, WARD - 3(1) R.J. PALACE, RAI KASHI NATH MORE, GAYA /APPELLANT .. /RESPONDENT / BY APPELLANT SHRI SANJEEV KR. SNHA, FCA / BY RESPONDENT SHRI S.K. PAUL, DR / DATE OF HEARING 1 2 - 04 - 2017 / DATE OF PRONOUNCEMENT 12 - 04 - 2017 /O R D E R PER BENCH : - THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - DHANBAD CAMP OFFICE , PATNA DATED 31 .0 1 .201 4 . ASSESSMENT WAS FRAMED BY ITO WARD - 3 (1), GAYA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 3 0 . 03 .20 13 FOR ASSESSMENT YEAR 20 1 0 - 11 . SHRI SANJEEV KR. SINHA LD. AUTHORIZED REPRESENTATIVE APPEARED ON BEHALF OF ASSESSEE AND SHRI S.K. PAUL, LD. DEPARTM ENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF REVENUE. 2. SOLITARY ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY SUSTAINING THE DISALLOWANCE OF 2.74 CRORES ON ACCOUNT OF ADVANCE RECEIVED FROM THE CUSTOMERS. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSHIP FIRM AND IS ENGAGED IN BUSINESS OF MINING OF SAND. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS SHOWN ADVANCE OF 2.70 CRORES IN ITS BALANCE - SHEET. ON QUESTION ITA NO. 41/PAT/2014 A.Y. 2010 - 11 M/S IMPERIAL ASSOCIATES VS. ITO WD - 3(1) GAYA PAGE 2 ABOUT THE GENUINENESS OF THE ADVANCE BY THE AO THE ASSESSEE FAILED TO PROVIDE NECESSARY DETAILS. THEREFORE, THE AO DISALLOWED THE SUM AND ADDED TO THE TOTAL INCOME OF ASSESSEE U/S 68 OF THE ACT. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT THE AMOUNT WAS RECEIVED FROM VARIOUS CUSTOMERS WHICH WAS SUBSEQUENTLY DEPOSITED WITH THE MINING DEPARTMENT. THE ASSESSEE IN SUPPORT OF ITS CLAIM HAS ALSO SUBMITTED AFFIDAVITS OF THE SAID CUSTOMERS. HOWEVER, LD. CIT(A) REJECTED THE PLEA OF ASSESSEE AND CONFIRMED THE ORDER OF AO BY OBSERVING THAT IN THE MINING OF SAND A LOT OF UNAUTHORIZED REMOVAL SAND TAKES PLACE AND HUGE AMOUNT OF CASH IS GENERATED IN THAT PROCESS . THEREFORE, THE ABOVE ADVANCES SHO WN BY ASSESSEE IS NOTHING BUT OWN INCOME OF ASSESSEE. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSEE CAME IN SECOND APPEAL BEFORE US ON THE FOLLOWING GROUNDS: - 1. FOR THAT THE ORDER IS BAD IN LAW AND FACTS. 2. FOR THAT THE LEARNED CIT APPEALS WAS N OT JUSTIFIED TO CONFIRM THE ADDITION OF RS.2,74,00,000/ - 3. FOR THAT DURING THE COURSE OF ASSESSMENT PROCEEDING THE LEARNED ASSESSING OFFICER ASKED THE APPELLANT THE SOURCES OF THE CUSTOMER ADVANCE VIDE ORDER SHEET ENTRY DATED 05/02/2013. 4. FOR THAT INCOM PLIANCE OF QUARRY THE APPELLANT FILED LIST OF CUSTOMERS WITH NAME AND ADDRESS AND AMOUNT OF ADVANCE. 5. FOR THAT THE LEARNED ASSESSING OFFICER DID NOT TOOK THE PAIN TO INQUIRE ABOUT THE CUSTOMER ADVANCE. 6. FOR THAT THE DETAILS OF CUSTOMER ADVANCE WAS FILE ON 08/03/2013 AND ASSESSMENT HAS BEEN COMPLETED U/S.143(3). 7. FOR THAT THE LEARNED ASSESSING OFFICER DID NOT INQUIRE TO ISSUE SUMMON TO THOSE PERSON WHO HAS ADVANCE THE MONEY. 8. FOR THAT A PROPER INQUIRY SHOULD HAVE BEEN MADE AND AFTER PROPER VERIFICATI ON THE AMOUNT OF CUSTOMER ADVANCE SHOULD HAD BEEN ADDED. 5. LD. AR FOR THE ASSESSEE BEFORE US SUBMITTED THAT ALL THE ADVANCES RECEIVED FROM THE PARTIES ARE GENUINE AND NONE OF THEM CAN BE REGARDED AS BOGUS ADVANCE. LD. AR REQUESTED THE BENCH TO RESTORE T HE MATTER BACK TO THE FILE OF AO TO GIVE ONE MORE OPPORTUNITY TO ASSESSEE TO JUSTIFY THE SUNDRY ADVANCES ON THE BASIS OF DOCUMENTARY EVIDENCE. ON THE OTHER HAND, LD. DR AGREED WITH THE SUBMISSION OF LD. AR IF THE MATTER BE RESTORED TO THE FILE OF AO FOR DE NOVO ASSESSMENT. ITA NO. 41/PAT/2014 A.Y. 2010 - 11 M/S IMPERIAL ASSOCIATES VS. ITO WD - 3(1) GAYA PAGE 3 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE FACTS OF THE CASE HAVE ALREADY BEEN EXPLAINED IN PRECEDING PARAGRAPH OF THIS ORDE R AND NO NEED TO REPEAT HERE FOR THE SAKE OF BREVITY. AT THE OUTSET, WE FIND THAT ASSESSEE FAILED TO FURNISH THE NECESSARY DETAILS AT THE TIME OF ASSESSMENT PROCEEDINGS. HOWEVER, CERTAIN AFFIDAVITS WERE SUBMITTED AT THE APPELLATE STAGE IN THE FORM OF AFFID AVIT FROM THE CUSTOMERS WHO HAS GIVEN ADVANCE TO THE ASSESSEE. HOWEVER, LD. CIT(A) REJECTED THE SAME AND CONFIRMED THE ORDER OF AO. ON PERUSAL OF RECORD, WE FIND THAT NO REMAND REPORT WAS CALLED UP BY LD. CIT(A) AND THE CLAIM OF ASSESSEE WAS OUTRIGHTLY REJ ECTED. HOWEVER, IN THE INTEREST OF NATURAL JUSTICE AND FAIR PLAY WE ARE INCLINED TO RESTORE THE MATTER BACK TO THE FILE OF AO TO GIVE ONE MORE OPPORTUNITY TO ASSESSEE. IT IS ALSO IMPORTANT TO NOTE THAT THE ASSESSEE IS DIRECTED TO COOPERATE IN THE DE NOVO ASSESSMENT PROCEEDINGS AND PRODUCED NECESSARY DOCUMENTS TO SUBSTANTIATE ITS CLAIM. HENCE, THIS GROUND OF ASSESSEES APPEAL IS RESTORED TO THE FILE OF AO IN TERMS OF ABOVE DIRECTION FOR FRESH ADJUDICATION AS PER LAW. 7. IN THE RESULT, ASSESSEES APPEAL STA NDS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING I.E. ON WEDNESDAY ON 12 / 04 /201 7 SD/ - SD/ - ( ABY. T. VARKEY ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP , SR.P.S - 12 / 04 /201 7 PATNA COPY OF ORDER FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CONCERNED CIT 4 . CIT (A) 5 . DR, ITAT, PATNA 6 . GUARD FILE. BY ORDER/ , /TRUE COPY/ SR.PS/PS, ITAT, PATNA