M/s. Verve Carbon Pvt. Ltd., Bhubaneswar V. Income Tax Officer, Ward-1(3), Bhubaneswar

ITA 419/CTK/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5302 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 27-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH CUTTACK BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER ./ ITA NO. 419 / CTK /20 1 7 ( / ASSESSMENT YEAR : 20 09 - 20 1 0 ) M/S VERVE CARBON PVT. LTD. HIG - 3 2, JAYADEV VIHAR, BHUBANESWAR VS. ITO, WARD - 1(3), BHUBANESWAR ./ ./ PAN/GIR NO. : A ACCV 6315 L ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI BIBEKANANDA MOHANTY , AR /RE VENUE BY : SHRI D.K.PRADHAN , DR / DATE OF HEARING : 2 7 / 1 2 /201 7 / DATE OF PRONOUNCEMENT 28 / 12 /201 7 / O R D E R TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 1 , BHUBANESWAR , DATED 3 1.7.2017 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - 1. THAT, THE ASSESSMENT ORDER U/S.143(3)/147 OF THE INCOME TAX ACT.1961 IS AGAINST LAW, WEIGHT OF EVIDENCES AND PROBABILITIES OF THE CASE. 2. THE LEARNED ASSESSING OFFICER FROM THE 26 AS NOTE D THAT THERE IS A CREDIT OF RS.38,44,834/ - AGAINST PROFESSIONAL SERVICE FROM WHICH TDS WAS MADE. BUT THE APPELLANT HAS DISCLOSED PROFESSIONAL FEE OF RS.36,96,007/ - , IN THE PROFIT AND LOSS ACCOUNT. THE LEARNED ASSESSING OFFICER WITHOUT GIVING ANY OPPORTUNIT Y TO EXPLAIN, ADDED BACK RS.1,48,827/ - , TO TOTAL INCOME. IN FACT, THE DIFFERENCE IN BETWEEN 26 AS AND PROFIT AND LOSS ACCOUNT AROSE DUE TO DEDUCTION OF TAX ON SERVICE TAX, WHICH IS RECOGNIZED SEPARATELY, ADVANCE NOT RECOGNIZED AS INCOME AND DISCLOSED UNDER THE HEAD SUNDRY CREDITOR FOR NOT RENDERING SERVICE AND ALSO CERTAIN CREDIT MADE IN PROFIT AND LOSS ACCOUNT ON WHICH TAX HAS NOT BEEN DEDUCTED. THE HONOURABLE 1ST APPELLATE AUTHORITY IN A SIMILAR MANNER CONFIRMED THE ADDITION WHICH IS LIABLE TO BE DELETED. 3. THE LEARNED ASSESSING OFFICER HAS ADDED BACK RS.2,10,000/ - , UNDER THE HEAD SUNDRY CREDITOR WITHOUT ASKING TO EXPLAIN WHY THERE IS A DISCREPANCY BETWEEN THE BALANCE SHEET FIGURES AND LIST OF CREDITORS FURNISHED. IN FACT, THE DIFFERENCE IS ONLY ON ACCO UNT OF OPENING SUNDRY CREDITOR OF RS.2,10,000/ - , WHICH HAS NOT BEEN TAKEN IN TO ACCOUNT. THE HONOURABLE APPELLATE ITA NO. 419 /CTK/201 7 2 AUTHORITY ALSO IN LINE WITH THE LEARNED ASSESSING OFFICER CONFIRMED SUCH ADDITION ARBITRARY WHICH IS LIABLE TO BE DELETED. 4. THE LEARNED AS SESSING OFFICER HAS ADDED BACK RS.28,000/ - , ON ACCOUNT OF CREDIT APPEARING IN THE NAME OF M/S SUJAN ENERGY PVT. LTD. IN FACT SUJAN ENERGY PVT. LTD MIGHT HAVE TREATED THE SAME AS PAYMENT AGAINST SERVICE, WHERE AS, THE APPELLANT HAS SHOWN THE SAME AS ADVANCE . THE 1ST APPELLATE AUTHORITY WITHOUT GOING INTO THE DETAILS SUBMITTED CONFIRMED THE ADDITION WHICH BEING AGAINST LAW NEEDS TO BE DELETED. 5. THE LEARNED ASSESSING OFFICER HAD ADDED BACK RS.10,00,000/ - , TO TOTAL INCOME ON ACCOUNT OF RETURN OF SHARE APPLIC ATION TO MANAV COMMODITIES PVT. LTD., RECEIVED DURING THE YEAR. THE SAID RS.10,00,000/ - INSTEAD OF DEBITING TO SHARE APPLICATION, THE SAME IS APPEARING UNDER THE HEAD OTHER ADVANCES. MERELY, BY CHANGING THE NOMENCLATURE OF THE ACCOUNT, THE ADDITION SHOULD NOT BE SUSTAINED, SINCE REAL NATURE OF TRANSACTION HAS BEEN REFLECTED IN THE BOOKS OF ACCOUNT. THE HONOURABLE 1ST APPELLATE AUTHORITY ALSO WITHOUT GOING IN TO THE DETAILS CONFIRMED THE ADDITION WHICH IS NOT SUSTAINABLE AND LIABLE TO BE DELETED. 6. THE LEA RNED ASSESSING OFFICER ON SURMISE ADDED BACK RS.10,00,000/ - , AS UNACCOUNTED LIABILITY TO THE TOTAL INCOME, WHEN RS.10,00,000/ - , WAS CONTRIBUTED AS SHARE APPLICATION MONEY BY ARANYA EXPLORATION PVT. LTD. BY WAY OF ADJUSTMENT OF RETURN OF SHARE APPLICATION R ECEIVED FROM MANAV COMMODITIES PVT. LTD. THIS IS DULY REFLECTED IN THE ACCOUNT OF THE APPELLANT AS WELL AS IN THE ACCOUNT OF ARANYA EXPLORATION PVT. LTD.. THE HONOURABLE 1ST APPELLATE AUTHORITY ALSO IN LINE WITH THE LEARNED ASSESSING OFFICER AGREED TO THE ADDITIONS WHICH IS AGAINST THE FACTS AND AS SUCH, THE ADDITIONS IS NEEDED TO BE DELETED. 7. FOR THESE AND OTHER REASONS TO BE ARGUED AT THE TIME OF HEARING, THE ORDER OF ASSESSMENT SHALL BE SQUASHED TO MEET THE END OF JUSTICE. 3. THE AR OF THE ASSESSEE SUBMITTED THAT THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE CIT(A) WITHOUT CONSIDERING THE EVIDENCES AND SUBMISSIONS OF THE ASSESSEE FILED BEFORE HIM AND, THEREFORE, IT WAS HIS PRAYER THAT THE MATTER SHOULD BE REMANDED BACK TO THE FILE OF CIT(A) FOR ADJ UDICATION OF THE ISSUES INVOLVED IN THE APPEAL OF THE ASSESSEE AFRESH. 4. WHEN THE BENCH POINTED OUT THAT THE CIT(A) IN HIS ORDER AT PAGE 2 PARA 2&3 HAS HELD AS UNDER : - ITA NO. 419 /CTK/201 7 3 2. AS PER RECORDS, THIS APPEAL WAS POSTED FOR HEARING FOR THE FIRST TIME ON 25.3.20 13. ON THE SAID, THE ID. AR APPEARED AND THE HEARING WAS ADJOURNED.' THEN, THE CASE WAS POSTED FOR HEARING ON 13.11.2013 ON WHICH DATE THE AR APPEARED AND REQUESTED FOR TIME. ACCORDINGLY, THE HEARING OF THE CASE STOOD ADJOURNED TO 9.12.2013. THE AR APPEARE D ON 9.12.2013 AND FILED PAPER BOOK. THEREAFTER, THE CASE WAS POSTED FOR HEARING ON 22.6.2017 BUT THE AR APPEARED ON 4.7.2017 AND REQUESTED FOR TIME. THE CASE WAS, THEREFORE, ADJOURNED TO 18.7.2017. THERE WAS NO COMPLIANCE ON 18.7.2017. AS A RESULT, FINAL OPPORTUNITY OF HEARING WAS GIVEN TO THE ASSESSEE BY ISSUING A LETTER ON 19.7.2017 POSTING THE CASE FOR HEARING ON 27.7.2017. IT WAS CLEARLY MENTIONED IN THE LETTER THAT FAILURE TO COMPLY WITH THE TERMS OF THE SAME WOULD LEAD TO DISPOSAL OF THE APPEAL EX PA RTE ON MERITS WITHOUT AFFORDING ANY FURTHER OPPORTUNITY OF HEARING. EVEN THEN, THERE WAS NO COMPLIANCE ON 27.7.2017 OR AT ANY TIME THEREAFTER TILL DATE. IN THE CIRCUMSTANCES, THEREFORE, I AM FORCED TO DISPOSE OF THE APPEAL ON THE BASIS OF FACTS AND MATERIA LS AVAILABLE ON RECORD WITHOUT AFFORDING ANY FURTHER OPPORTUNITY OF HEARING TO THE ASSESSEE. 3. IN THE COURSE OF APPEAL HEARING DURING FY 2013 - 14, THE ASSESSEE HAD FILED BEFORE MY PREDECESSOR CERTAIN ACCOUNT COPIES WHICH WERE SENT TO THE AO FOR VERIFICAT ION ON REMAND. DESPITE SEVERAL OPPORTUNITIES GIVEN BY THE AO, THE ASSESSEE DID NOT COOPERATE WITH THE AO. THE AO THEREFORE, FAILED TO EXAMINE THE COPIES OF THE ACCOUNTS SENT TO HIM ON REMAND. THE AR OF THE ASSESSEE COULD NOT CONTROVERT THE OBSERVATIONS A ND FINDINGS OF THE CIT(A) QUOTED ABOVE. 5. IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT IN ORDER TO RENDER SUBSTANTIAL JUSTICE TO THE ASSESSEE, ONE MORE OPPORTUNITY SHOULD BE GRANTED TO THE ASSESSEE TO PRESENT ITS APPE AL BEFORE THE CIT(A). HOWEVER, KEEPING IN VIEW THE CONDUCT OF THE ASSESSEE BEFORE THE CIT(A), I AM OF THE CONSIDERED OPINION THAT A COST SHOULD BE IMPOSED ON THE ASSESSEE. I, THEREFORE, DIRECT THE ASSESSEE TO DEPOSIT A SUM OF RS.11,000/ - (RUPEES ELEVEN THOU SAND ONLY) BY WAY OF COST TO THE DEPARTMENT WITHIN A PERIOD OF 15 DAYS FROM THE DATE OF THIS ORDER. WITH THIS DIRECTION, I SET ASIDE THE ORDER OF CIT(A) AND REMAND THE MATTER BACK TO HIS FILE TO DISPOSE OF F THE APPEAL OF THE ASSESSEE ON MERITS ITA NO. 419 /CTK/201 7 4 AFTER ALLOWI NG REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. IT IS MADE CLEAR THAT IF THE ASSESSEE DOES NOT COOPERATE WITH THE CIT(A) IN THE SET ASIDE PROCEEDINGS BEFORE HIM, THE CIT(A) SHALL BE AT LIBERTY TO PASS ANY ORDER AS HE MAY DEEM FIT IN THE MA TTER. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 / 12 /201 7 . SD/ - (N. S. SAINI) / ACCOUNTANT MEMBER CUTTACK ; DATED 28 / 12 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//