M/s Samant Singh, Lucknow V. Income Tax Officer-1(3), Lucknow

ITA 434/LKW/2015

• Counselvise Citation: 43423714 RSA 2015
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1994-1995
• Appeal Filed On: 30-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI, A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.434/LKW/2015 ASSESSMENT YEAR 1994-95 THE INCOME TAX OFFICER-I(3), INCOME TAX OFFICE, ASHOK MARG, LUCKNOW VS M/S SAMANT SINGH, 2/282, VIRAT KHAND, GOMTI NAGAR, LUCKNOW PAN AAXFS 5589 B (RESPONDENT) (APPELLANT) SHRI A.P. SINHA, ADVOCATE APPELLANT BY SMT. ALKA SINGH , DR RESPONDENT BY 11 /0 8 /2015 DATE OF HEARING 30/09/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF LD. CIT (A), LUCKNOW-I DATED 02.03.2015 FOR THE AY 1994-95. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1- THE HON'BLE C.I.T. (APPEALS)-I, LUCKNOW ERRED W HILE SUSTAINING THE ADDITIONS OF RS.4,72,084.00 AND RS.89,115.00. 1- (A)THE HON'BLE C.I.T.,(APPEALS)-I, LUCKNOW ERRED WHILE SUSTAINING THE ABOVE ADDITION WITHOUT ALLOWING ADEQ UATE OPPORTUNITY. 1- (B)THE SUSTENANCE OF ADDITIONS IS WRONG BY HOLDI NG THAT THE CERTIFIED COPY OF AUDIT REPORT ALONG WITH FORM NO. 3 CB AND 3 CD WAS NOT FILED. 2 2- THE HON'BLE C.I.T. (APPEALS)-I, LUCKNOW ERRED WHILE SUSTAINING THE ADDITION OF RS.9,50,000.00 AGAIN BY HOLDING THE CER TIFIED COPY OF AUDIT REPORT COULD NOT BE FILED. 2 (A)HE FURTHER ERRED WHILE SUSTAINING THE ABOVE ADDI TION BY HOLDING THAT NO CONFIRMATION FROM THE CREDITORS WAS FOUND. 2(B)HE ERRED WHILE NOT APPRECIATING THAT THE ORIGIN AL AUDIT REPORT AND THE MAIN CREDITOR WERE PRODUCED BEFORE THE LD. INCO ME TAX OFFICER IN PROCEEDING U/S 143 (3)/254 OF THE INCOME TAX ACT, 1 961. IT IS RESPECTFULLY PRAYED THAT BOTH THE ADDITIONS M AY EITHER BE DELETED OR THE ORDER OF THE HON'BLE C.I.T. (APPEALS) - 1, LUCK NOW BE SET ASIDE TO BE LOOKED A FRESH. IT IS PERTINENT TO MENTION THAT THE HEARING BEFORE THE HON'BLE C.I.T. (APPEALS)-I, LUCKNOW HAD CONCLUDED I N SEPTEMBER, 2014 AND THE ORDER HAS BEEN PASSED IN MARCH, 2015. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT THIS IS SECOND ROUND OF APPEAL. HE SUBMITTED THAT IN THE FI RST ROUND, THE TRIBUNAL, RESTORED THE MATTER BACK TO THE FILE OF THE AO FOR FRESH DEC ISION AS PER ITS ORDER DATED 17.07.2006 IN ITA NO. 232/ALLD/2002. HE FURTHER SUB MITTED THAT AGAINST THIS TRIBUNALS ORDER, THE ASSESSEE HAS FILED MISCELLANE OUS APPLICATION, WHICH WAS DISMISSED BY THE TRIBUNAL AND AGAINST SUCH DISMISSA L OF THE M. A. BY THE TRIBUNAL, THE ASSESSEE FILED AN APPEAL BEFORE THE HONBLE ALL AHABAD HIGH COURT. HE ALSO SUBMITTED THAT ON PAGES 34 TO 37 OF THE PAPER BOOK IS THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT IN INCOME TAX APPEAL NO. 9 OF 2012 DATED 10.09.2013. IN PARTICULAR, OUR ATTENTION WAS DRAWN TO PAGES 36 TO 37 OF THE PAPER BOOK, WHERE IT IS HELD BY THE HONBLE ALLAHABAD HIGH COURT THAT THE T RIBUNAL ORDER IS MODIFIED AND THE AO IS DIRECTED TO MAKE THE ASSESSMENT DENOVO BY IGN ORING THE DIRECTION ISSUED BY THE TRIBUNAL. HE ALSO POINTED OUT THAT IT IS ALSO H ELD BY THE HONBLE ALLAHABAD HIGH COURT THAT IF THE AO HAS ALREADY GIVEN EFFECT TO TH E ORDER PASSED BY THE TRIBUNAL, THEN LIBERTY IS GRANTED TO THE ASSESSEE TO FILE AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY AND HE WILL ADJUDICATE THE SAME STRICTLY ON MERIT WITHIN A PERIOD OF THREE MONTHS BY IGNORING THE DELAY, IF ANY. HE FURTHER SU BMITTED THAT AS PER THIS JUDGMENT 3 OF THE HONBLE ALLAHABAD HIGH COURT, WHEN THE BOOKS ARE ADMITTEDLY DESTROYED IN THE FLOOD, THE SAME CANNOT BE PRODUCED BEFORE THE A O AND THEREFORE, THE ISSUE IN DISPUTE SHOULD BE DECIDED WITHOUT ASKING FOR PRODUC TION OF THE BOOKS. HE SUBMITTED THAT SINCE THE ORDER OF THE AO IS ON THE BASIS OF E ARLIER TRIBUNALS DIRECTION, THE SAME IS NOT VALID. HE SUBMITTED THAT UNDER THESE FACTS, THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE CIT(A) FOR FRESH DECISION ON MER IT IN THE LIGHT OF THIS JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION. WE FIND THAT IN THE IMPUGNED ORDER, LD. CIT(A) HAS NOTED DOWN ENTIRE HISTORY OF THE CAS E. HE HAD NOTED ON PAGE 3 OF HIS ORDER THAT THE HONBLE HIGH COURT HAS UPHELD THE OR DER OF THE TRIBUNAL ABOUT RESTORING THE MATTER BACK TO THE AO BUT MODIFIED TH E ORDER OF THE TRIBUNAL BY DIRECTING THE AO TO MAKE THE ASSESSMENT DENOVO IGNO RING THE DIRECTIONS ISSUED BY THE TRIBUNAL. THEREAFTER IN PARA 4 OF HIS ORDER, HE HAD DECIDED THE ISSUE ON THIS BASIS THAT THE DIRECTION OF THE TRIBUNAL RELATING T O ADDITION ON ACCOUNT OF MATERIAL CONSUMED AND LABOUR CHARGES WAS NEITHER AGITATED BE FORE THE HONBLE HIGH COURT NOR ANY DIRECTION WAS ISSUED BY THE HONBLE HIGH CO URT IN THAT REGARD AND THEREAFTER, HE HAS UPHELD THESE TWO ADDITIONS ON TH IS BASIS THAT THESE TWO ADDITIONS WERE MADE BY THE AO AS PER DIRECTION OF THE TRIBUNA L. HE HAS ALSO OBSERVED THAT THE ASSESSEE HAS NOT FILED ANY DETAILS RELATING TO THE MATERIAL PURCHASES AND LABOUR CHARGES. IN OUR CONSIDERED OPINION, WHEN THE BOOKS ARE DESTROYED IN FLOOD AND THE SAME CANNOT BE PRODUCED AND STILL IT IS THE DIRECTI ON OF THE HONBLE ALLAHABAD HIGH COURT THAT THE ISSUE IN DISPUTE REGARDING ALLOWABIL ITY OF EXPENDITURE IS TO BE DECIDED ON MERIT, THE ADDITION MADE BY THE AO AND UPHELD BY THE LD. CIT(A) ON THE BASIS OF EARLIER TRIBUNAL ORDER IS NOT JUSTIFIED. IN OUR CON SIDERED OPINION, THE ALLOWABILITY OF THE EXPENSES UNDER THE HEAD MATERIAL CONSUMED AND L ABOUR CHARGES SHOULD BE DECIDED ON THE BASIS OF PAST HISTORY OF THE ASSESSE E AND THE POSITION IN THE SUBSEQUENT YEARS AND IF IT IS FOUND THAT THE EXPENS ES IN THE PRESENT YEAR UNDER 4 THESE TWO HEADS ARE AT PAR AS COMPARED TO THE EARLI ER AND/OR SUBSEQUENT YEARS, THEN NO DISALLOWANCE IS CALLED FOR. THIS IS ONE EXA MPLE WE HAVE GIVEN AS TO HOW TO EXAMINE AND DECIDE THE CLAIM OF THE ASSESSEE. IF TH E EXPENSES IN THE PRESENT YEAR ARE MORE THAN THE EARLIER OR SUBSEQUENT YEARS THEN ALSO, THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO EXPLAIN THE REASONS FOR SUC H EXTRA EXPENDITURE IN THE PRESENT YEAR AND IF THE REASONS, IF ANY, EXPLAINED BY THE ASSESSEE ARE FOUND TO BE REASONABLE, THE MATTER SHOULD BE DECIDED IN THE LIG HT OF THOSE EXPLANATIONS. HENCE, WE FEEL THAT IN THE INTEREST OF JUSTICE, THE MATTER SHOULD GO BACK TO THE FILE OF THE CIT(A) FOR FRESH DECISION AS PER THE DIRECTION OF T HE HONBLE ALLAHABAD HIGH COURT AND IN VIEW OF ABOVE DISCUSSION AFTER PROVIDING REA SONABLE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. WE ORDERED ACCORDINGLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (SUDHANSHU SRIVASTAVA) (A.K. G ARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 30/09/2015 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGI STRAR