ITO, Lucknow V. Rajesh Kumar Jaiswal, Lucknow

ITA 427/LKW/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9211 (ITAT-LUCKNOW)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-01-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 10-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANADI VERMASR
• Keywords: Opportunity of being heard
• Section: 40A(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A - BENCH, LUCKNOW. BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT AND SHRI N.K.SAINI, ACCOUNTANT MEMBER I.T.A.NO.427(LKW.)/2010 A.Y. : 2006-07 THE ITO II(3), VS. SHRI RAJESH KUMAR JAISWAL, LUCKNOW. 215/85, SUBHASH MARG, LUCKNOW. PAN AEMPJ 6937R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANADI VERMA,SR.DR RESPONDENT BY : NONE O R D E R PER N.K.SAINI, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-I,LUCKNOW DATED 30.3.2010 RELATING TO ASSESS MENT YEAR 2006-07. 2. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE FILED THE RETURN OF INCOME ON 26.10.2006 DECLARING AN INCOME OF RS.1,8 9,954, WHICH WAS PROCESSED UNDER SECTION 143(1) ON 28.3.2007. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. THE AO ISSUED THE NOTICES UN DER SECTIONS 143(2) AND 142(1) OF THE I.T.ACT. SINCE THE ASSESSEE DID NOT A PPEAR ON 22.10.2008, I.E. THE DATE FIXED FOR HEARING, THE AO PROCEEDED UNDER SECTION 144 OF THE I.T.ACT TO COMPLETE THE ASSESSMENT. THE AO NOTICED THAT THE AUDITORS IN THEIR REPORT COMMENTED THAT THE CASH PAYMENT FOR T HE PURCHASES AMOUNTING TO RS.73,23,439 REMAINED UNVERIFIABLE, WHETHER PAID IN CASH OR THROUGH 2 ACCOUNT PAYEE CHEQUE OR BANK DRAFT. THE AO CONSIDE RED THE PURCHASES IN CASH ONLY IN CONTRAVENTION OF PROVISIONS OF SECTIO N 40A(3) AND DISALLOWED 20% OF THE PURCHASES, WHICH WORKED OUT TO RS.14,64 ,688. 3. THE ASSESSEE CARRIED THE MATTER TO THE LD.CIT(A) , WHO DELETED THE ADDITION BY STATING THAT IN VIEW OF THE DECISION RELIED UPON BY THE ASSESSEE IN THE CASE OF R.A.CONSTRUCTION VS. ITO, 2007 (9) M TC 430, ITAT, ALLAHABAD BENCH, THE DISALLOWANCE WAS NOT CALLED F OR. ACCORDINGLY, HE DELETED THE DISALLOWANCE MADE BY THE AO. 4. NOW, THE DEPARTMENT IS IN APPEAL. 5. DURING THE COURSE OF HEARING, NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE, NEITHER ANY ADJOURNMENT WAS SOUGHT IN SPI TE OF THE SERVICE OF NOTICE THROUGH DEPARTMENT ON THE WIFE OF THE ASSESS EE. WE,THEREFORE, PROCEEDED EX PARTE QUA THE ASSESSEE AND DECIDE THE APPEAL ON MERIT AFTER HEARING THE LD.D.R. 6. THE LD.D.R. SUBMITTED THAT THE LD.CIT(A) PASSED A NON-SPEAKING ORDER AND EVEN HE DID NOT MENTION HOW AND IN WHAT MANNER THE FACTS OF THE CASE RELIED UPON BY THE ASSESSEE WERE APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. IT WAS FURTHER STATED THAT IN THE SAID CASE, BOOKS OF ACCOUNTS WERE REJECTED AND NET PROFIT RATE WAS APPLIED, WHILE IN THE ASSESSEES CASE THE AO HAS NOT REJECTED THE BOOKS OF ACCOUNT, THEREFORE, T HE FACTS ARE DISTINGUISHABLE. 3 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.D.R . AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CA SE, IT IS NOTICED THAT THE AO INVOKED THE PROVISIONS OF SECTION 40A(3) OF THE I.T .ACT, BUT DID NOT EVEN RECORD HOW MUCH PURCHASES WERE MADE IN CASH. HE SIM PLY RELIED ON THE COMMENTS OF THE AUDITORS, WHO MENTIONED THAT THE P URCHASES REMAINED UNVERIFIABLE I.E. WHETHER PAID IN CASH OR THROUGH A CCOUNT PAYEE CHEQUE OR BANK DRAFT. IN THE SAID COMMENTS, IT WAS NOT STATED THAT ALL THE PURCHASES WERE IN CASH ONLY. THE AO ALSO DID NOT POINT OUT H OW MUCH PURCHASES WERE IN CASH AND HOW MUCH WERE THROUGH ACCOUNT PAYEE CH EQUE/BANK DRAFT. IT IS ALSO NOTICED THAT THE LD.CIT(A) WHILE DELETING THE DISALLOWANCE ON THE BASIS OF THE DECISION OF R.A.CONSTRUCTION VS. ITO (SUPRA) DID NOT BRING ON RECORD HOW THE FACTS OF THE SAID CASE WERE APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. WE, THEREFORE, CONSIDERING THE TOTALITY OF TH E FACTS, DEEM IT PROPER TO SET ASIDE THE ISSUE BACK TO THE FILE OF THE LD.CIT(A) T O BE DECIDED AFRESH IN ACCORDANCE WITH LAW, AFTER PROVIDING DUE AND REASON ABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 10.1.11 . SD. SD. (H.L.KARWA) (N.K.SAINI) VICE PRESIDENT ACCOUNTANT MEMBER JANUARY 10TH ,2011. COPY TO THE : 1. APPELLANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R.,ITAT, LUCKNOW. SRIVASTAVA.