SHANTI ODAYA NATHAN, MUMBAI V. INCOME TAX OFFICER - WARD - 3(4), MUMBAI

ITA 4174/MUM/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1660 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 13-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BEPAIR
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM I.T.A. NO. 4174/MUM/2018 ( ASSESSMENT YEAR: 2013 - 14 ) SHANTI ODAYA NATHAN ROW HOUSE NO. 1, GROUP NO. 1, SECTOR 17, KOPARKHARIANE, NAVI MUMBAI - 400 709 VS. ITO - WARD 3 (4), RANI MANSION, 2 ND FLOOR, MURBAD ROAD, KALYAN, PIN - 421 301 PAN/GIR NO. ADNPN 1897 R ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : NONE RESPONDENT BY : SHRI S. K. BEPAIR DATE OF HEARING : 21.08.2018 DATE OF PRONOUNCEMENT : 06.09 .201 8 O R D E R PER S HAMIM YAHYA, A. M.: T HIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) - 1, THANE (CIT(A) FOR SHORT) DATED 28.02.2018 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y.) 2013 - 14. 2. T H E GROUNDS OF APPEAL READ AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T. (A) ERRED IN DISMISSING THE APPEAL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T. (A) ERRED IN DISMISSING THE APPEAL WITHOUT GIVING FULL AND PROPER OPPORTUNITY OF BEING HEARD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T. (A) ERRED IN DISMISSING THE APPEAL WITHOUT APPRECIATING FULLY AND PROPERLY THE FA CTS OF THE CASE. 2 ITA NO. 4174/MUM/2018 SHANTI ODAYA NATHAN 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T(A) ERRED IN APPROVING THE ACTION OF THE LEARNED A.O. IN ESTIMATING THE INCOME AT RS. 23,79,232 / - AS AGAINST DECLARED INCOME RS.4,75,250/ - . 3. BRIEF F ACTS OF THE CASE THAT I N THE COURSE OF ASSESSMENT THE ASSESSING OFFICER (A.O.) ASKED THE ASSESSEE TO EXPLAIN A REDUCTION IN THE PROFIT AS COMPARED TO THE PREVIOUS YEAR. I N ABSENCE OF EXPLANATION , THE A.O. MADE AN ADHOC ADDITION @ 1% OF THE PROFIT AT RS.4,7 5,250/ - . 4. UPON ASSESSEE'S APPEAL , THE L D . CIT ( A ) NOTED THAT ASSESSEE'S SUBMISSION THAT PROPER EXPLANATION WAS GIVEN TO THE ASSESSING OFFICER FOR THE REDUCTION IN PROFIT. HOWEVER , THE LD. CIT(A) PROCEEDED TO CONFIRM THE ADDITION BY REFERRING TO AND OTHE R FIRM PROFITED YEAR . 5. A GAINST THE ABOVE ORDER , THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 6. I HAVE HEARD THE L D . DEPARTMENTAL REPRESENTATIVE (LD. DR' FOR SHORT). NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOTICE. 7. UPON CAREFUL CONSIDERATION I FIND THAT ASSESSING OFFICER HAS MADE THE ADDITION ON AD HOC BASIS. HE HAS NOTED THAT SINCE THERE IS A REDUCTION IN THE RATE OF PROFIT AS COMPARED TO PREVIOUS YEAR, PROFIT NEEDS TO BE ESTIMATED ON AN AD HOC BASIS. DESPITE THE ASSESSEE FURNISHING SOME EXPL ANATION , THE A.O. HAS CONVENIENTLY OVERLOOKED IT. AS HELD BY HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PANDIT BROS. VS. CIT [1954] 26 ITR 159 (P & H) A REDUCTION IN PROFIT RATE CAN GIVE RISE TO FURTHER INVESTIGATION , I T CANNOT BE THE SOLE REASON F OR ADDITION. IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRECEDENT , I SET ASIDE THE ORDER S OF THE A UTHORITIES BELOW AND DELETE THE ADDITION . 3 ITA NO. 4174/MUM/2018 SHANTI ODAYA NATHAN 8. I N THE RESULT , THIS APPEAL BY THE ASSESSEE STANDS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 06.09.2018 SD/ - (S HAM IM YAHYA) A CCOUNTANT MEMBER MUMBAI ; DATED : 06.09.2018 ROSHANI , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD F ILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI