M/s. JHAWAR ICE & COLD STORAGE, Indore V. The ADDL. CIT Range-3, Indore

ITA 448/IND/2014

• Counselvise Citation: 44822714 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 09-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Additional evidence; Speculation loss
• Section: 144

Judgement Text

JAWAHAR ICE & COLD STORAGE ITA NO.448 OF 2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.448/IND/2014 A.Y. 2007-08 M/S. JAWAHAR ICE & COLD STORAGE, INDORE PAN AABFJ 3518 P :: APPELLANT VS ADDL. CIT, RANGE-3, INDORE :: RESPONDENT ASSESSEE BY SHRI PRAKASH JAIN, CA RESPONDENT BY SHRI R.A. VERMA, DR DATE OF HEARING 08.12.2015 DATE OF PRONOUNCEMENT 08.12.2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING T HE ORDER OF LD. CIT(A)- I, INDORE, DATED 31.3.2014. 2. THE SUM AND SUBSTANCE OF THE GROUNDS OF APPEAL IS T HAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ASSESSMENT OR DER PASSED U/S 144 OF THE I.T. ACT CONFIRMING THE DISALLOWANCE TOWARDS LOSS INCURRED ON SALE AND PURCHASE OF GUR WITHOUT CONSID ERING THE FACTS OF THE CASE AND SUBMISSION MADE BEFORE HIM. JAWAHAR ICE & COLD STORAGE ITA NO.448 OF 2014 2 3. FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGE D IN THE BUSINESS OF RUNNING COLD STORAGE. DURING THE YEAR U NDER CONSIDERATION, THE ASSESSEE HAS ALSO TRADED IN GUR ON AADAT, COMMISSION BASIS. THE ASSESSEE FILED ITS RETURN ON 30.10.2007 DECLARING INCOME AT RS.64,67,951/-. THE AO NOTED TH AT IN THE P & L ACCOUNT, THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.34,L64,942/- AS LOSS ON SALE OF GUR. THE AO ASKE D THE ASSESSEE TO SUBMIT DETAILS IN THIS REGARD. IN RESPO NSE, THE ASSESSEE SUBMITTED SALE AND PURCHASE BILLS FROM A S INGLE PARTY M/S. HARI OM TRADERS, MUZZAFARNAGAR. HOWEVER, THE A O WAS OF THE VIEW THAT LOSS FROM SALE & PURCHASE OF GUR APPE ARS TO BE NOT GENUINE AS THE SALE AND PURCHASE HAVE BEEN EFFECTED TO SAME PERSON, THUS, SALE AND PURCHASE APPEAR TO BE SPECUL ATIVE PURCHASE AND SALE. ACCORDINGLY, THE AO DISALLOWED T HE CLAIM OF LOSS OF RS.34,64,942/- AND ASSESSED THE INCOME AT RS.99,32,890/- BY TREATING THE CLAIM OF LOSS ON TRA DING OF GUR INCURRED AT RS.34,64,942/- AS SPECULATION LOSS. LD. CIT(A) CONFIRMED THE ACTION OF THE AO. AGGRIEVED WITH THE SAME, THE ASSESSEE IS BEFORE US. 4. BEFORE US, T HE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT NO PROPER, REASONABLE AND MEANINGFUL OPPORTUNITY WAS G IVEN TO THE ASSESSEE BY THE AO AS WELL AS THE LD. CIT(A). THE AO DID NOT GO THROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE AO NEITHER MADE A NY INDEPENDENT INQUIRY JAWAHAR ICE & COLD STORAGE ITA NO.448 OF 2014 3 NOR ANY SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSE E SHOWING HIS INTENTION TO MAKE ADDITION ON ACCOUNT OF LOSS SUFFERED IN TRA DING OF GUR, THEREFORE, THE AO, WHILE MAKING THE EXPARTE ASSESSMENT U/S 144, DI D NOT COMPLY WITH THE PROVISIONS OF SECTION 144(1). BY NOT TAKING INTO CO NSIDERATION THESE FACTS, THE LD. CIT(A) TOO, HAS NOT MADE ANY REFERENCE OF RELEV ANT GROUND NO.1 & 2 IN HIS DECISION AND CONFIRMED THE ACTION OF THE AO. FURTH ER, LD. CIT(A) DID NOT MAKE ANY INQUIRY FROM THE AO ON ASSESSEES APPLICATION U NDER RULE 46A DATED 12.2.2010 FILED WITH NUMEROUS EVIDENCES AND DECIDED THE APPEAL WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE . THEREFORE, IT IS PRAYED THAT LD. CIT(A) MAY BE DIRECTED IN THIS REGARD. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF LOWER AUTHORITIES. WE FIND THAT IN THE INSTANT APPEAL, TH E ASSESSEE WAS NOT GIVEN PROPER AND EFFECTIVE OPPORTUNITY. BEFORE US, THE AS SESSEE HAS FILED A PAPER BOOK RUNNING INTO 139 PAGES, WHEREIN, THE RELEVANT DOCUMENTS HAVE BEEN ANNEXED, WHICH HAVE NOT BEEN TAKEN INTO CONSIDERATI ON BY THE LD. CIT(A) WHILE DECIDING THE APPEAL AS THE LD. CIT(A) NEITHER COMME NTED UPON THE APPLICATION UNDER RULE 46A NOR REMAND REPORT WAS CALLED FOR FRO M THE AO, WHICH IS NOT JUSTIFIED. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A). THE MATTER IS BACK TO THE FILE OF THE LD. CIT(A) WITH DIRECTION T O CALL FOR REMAND REPORT AND CONSIDER THE ADDITIONAL EVIDENCES. THE LD. CIT(A) S HOULD DECIDE THE APPEAL IN TERMS AS INDICATED ABOVE AFTER GIVING DUE OPPORTUNI TY OF HEARING TO THE JAWAHAR ICE & COLD STORAGE ITA NO.448 OF 2014 4 ASSESSEE AS PER LAW AND THE ASSESSEE IS ALSO AT LI BERTY TO FILE EVIDENCE, IF ANY, IN SUPPORT OF ITS CLAIM.. 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 08.12.201 5. SD/- ( D.T. GARASIA) JUDICIAL MEMBER SD/- (B.C. MEENA) ACCOUNTANT MEMBER DATED : 8.12.2015 !VYS! COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR, INDORE