Patel Pan Products Ltd., Lucknow V. Asstt. Commissioner of Income Tax, Lucknow

ITA 476/LKW/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100389 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 28-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 43B; 133(6); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.476 & 477/LKW/2014 ASSESSMENT YEARS 2008-09 & 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, LUCKNOW VS PATEL PAN PRODUCTS LTD., 37-38, GAURA BAGH, KURSI ROAD, LUCKNOW-226026 PAN AAECP 0472 C ITA NOS.576 & 577/LKW/2014 ASSESSMENT YEARS 2008-09 & 2009-10 PATEL PAN PRODUCTS LTD., 37-38, GAURA BAGH, KURSI ROAD, LUCKNOW-226026 PAN AAECP 0472 C VS ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, LUCKNOW (RESPONDENT) (APPELLANT) S HRI PRADEEP KAPOOR, CA APPELLANT BY SHRI A. K. SINGH, CIT, DR RESPONDENT BY 15/09/2015 DATE OF HEARING 18 /0 9 /2015 DATE OF PRONOUNCEMENT O R D E R PER SUNIL KUMAR YADAV, JM. THESE CROSS APPEALS ARE PREFERRED BY THE ASSESSEE A S WELL AS REVENUE AGAINST THE RESPECTIVE ORDERS OF THE CIT(A) PERTAIN ING TO THE AYS. 2008-09 & 2009-10. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEALS, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF THROUGH THIS CON SOLIDATED ORDER. THE ORDERS OF THE CIT(A) IS CHALLENGED ON VARIOUS GROUNDS BY T HE REVENUE AS WELL AS THE 2 ASSESSEE AND FOR THE SAKE OF REFERENCE WE EXTRACT T HE GROUNDS OF APPEAL RAISED BY THEM. ITA NO. 476/LKW/2014 FOR AY 2008-09 (ASSESSEES APP EAL) IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOW ING GROUNDS: 1. BECAUSE ON A DUE CONSIDERATION OF THE FACTS AN D CIRCUMSTANCES OF THE CASE PARTICULARLY THAT NO INCRIMINATING MATERIA L WAS FOUND DURING THE COURSE OF SEARCH WHICH \' COULD BE SAID TO BE P ERTAINING TO THE ASSESSMENT YEAR 2005-06, THE 'CIT(A)' SHOULD HAVE Q UASHED THE ASSESSMENT ORDER DATED 30.12.2011. WITHOUT PREJUDICE TO THE AFORESAID 2. BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN REJECTING/UPHOLDING THE REJECTION OF BOOKS OF ACCOU NT OF THE 'APPELLANT', PRECISELY ON THE GROUNDS THAT - (A) NOTICES SENT UNDER SECTION 133(6) TO VA RIOUS SUPPLIERS, REMAINED UNRESPONDED TO; AND (B) THERE WAS A SURVEY CONDUCTED BY THE COMMERCI AL TAX AUTHORITIES DURING THE RELEVANT PREVIOUS YEAR AND T HE ASSESSMENT MADE BY COMMERCIAL TAX AUTHORITY (WHICH IS PENDING FOR ADJUDICATION BEFORE THE APPELLATE AUTHO RITIES) AND IN MAKING/SUSTAINING AN ADDITION OF RS.87,30,40 3/- AS EXTRA PROFIT. 3. BECAUSE TRADING RESULTS OF THE 'APPELLANT' STOO D FULLY SUPPORTED BY THE BOOKS OF ACCOUNT AS ALSO BY THE RECORDS MAINTAI NED AS PER EXCISE LAWS AND NO DEFECT/ DISCREPANCY HAVING BEEN FOUND T HEREUNDER, THE SAME COULD NOT HAVE BEEN REJECTED SO AS TO MAKE AN ESTIMATE OF TURNOVER AS AND INCOME THEREFROM. 4. BECAUSE THE ORDER PASSED BY THE COMMERCIAL TAX AUTHORITIES, BY ITSELF COULD NOT HAVE BEEN MADE THE BASIS FOR REJEC TION OF BOOKS OF ACCOUNT AND FOR MAKING IMPUGNED ADDITION/ WITHOUT T HERE BEING ANY INDEPENDENT APPLICATION OF MIND BY THE AUTHORITIES BELOW BEFORE WHOM COMPREHENSIVE SUBMISSIONS HAD BEEN MADE. 5. BECAUSE IN ANY CASE THE ADDITION SO MADE/SU STAINED BY THE AUTHORITIES BELOW IS WHOLLY ARBITRARY, MUCH TOO HI GH AND EXCESSIVE. 6. BECAUSE THE ORDER APPEALED AGAINST IS CONT RARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 3 ITA NO. 477/LKW/2014 FOR AY 2009-10 (ASSESSEES APP EAL) IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOW ING GROUNDS: 1. BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LA W AND ON FACTS IN MAKING/UPHOLDING THE ADDITION FOR A SUM OF RS.1,10, 25,291/- AS HAD BEEN COLLECTED BY THE APPELLANT UNDER THE HEAD ENTRY TAX ON THE GROUNDS THAT - (A) THE SUM HAD NOT BEEN PAID EVEN BY THE TIM E THE RETURN WAS DUE TO BE FILED UNDER SECTION 139(1); AND (B) PROVISIONS OF SECTION 43B ARE APPLICABLE 2. BECAUSE THE SAID COLLECTION STOOD FULLY PAID, I N THE MANNER LAID- DOWN/DIRECTIONS GIVEN BY THE HON'BLE HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH, LUCKNOW VIDE THEIR JUDGME NT AND ORDER DATED 19.02.2009 PASSED IN WRIT PETITION NO.7995 (MB) OF 2007 AND VIEW TO THE CONTRARY AS HAS BEEN TAKEN BY THE AUTHORITIES BELOW IS WHOLLY ERRONEOUS. 3. BECAUSE OTHERWISE ALSO, THE PREMISE ON WHICH TH E ADDITION HAS BEEN SUSTAINED BY THE 'CIT(A)' IS WHOLLY ERRONEOUS AS BE ING INCONSISTENT WITH THE FACTS OF THE CASE AND LAW APPLICABLE THERETO. 4. BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN MAKING/ SUSTAINING AN ADDITION OF RS.93,25,458/- ON ACCOUNT OF EXTRA PROFIT BY - (A) ENHANCING THE TURNOVER TO RS.45 CRORES; A ND (B) BY APPLYING GROSS PROFIT RATE OF 6% TO SUCH ENHANCED TURNOVER; AFTER REJECTING THE BOOKS OF ACCOUNT BY I NVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT. 5. BECAUSE THE APPELLANT HAD MAINTAINED BOOKS O F ACCOUNT AND OTHER RECORDS IN REGULAR COURSE OF BUSINESS AND WERE FOUN D TO BE SO MAINTAINED EVEN AT THE TIME OF SEARCH & SEIZURE ACTION WHICH H AD COMMENCED ON 19.11.1998 AND THERE EXISTED NO VALID BASIS FOR (A) REJECTION OF BOOKS OF ACCOUNT BY INVO KING THE PROVISION OF SECTION 145(3);AND (B) ENHANCEMENT OF TURNOVER AND FOR APPLICATION OF HIGHER RATE OF GROSS PROFIT. 6. BECAUSE IRRESPECTIVE OF OBSERVATIONS BY THE AUT HORITIES BELOW THE TURNOVER AS WELL AS G.P. RATE AS DISCLOSED BY THE A PPELLANT STOOD FULLY SUPPORTED AND NO ENHANCEMENT, EITHER IN THE TURNOVE R OR IN THE G.P. RATE WAS CALLED FOR AND THE SAME ARE MUCH TOO HIGH AND E XCESSIVE. 4 7. BECAUSE IN ANY CASE NO BASIS WHATEVER HAS BEEN GIVEN FOR QUANTIFYING THE ENHANCEMENT AND FOR APPLICATION OF A G.P. RATE OF 6% TO THE ENHANCED TURNOVER. 8. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. ITA NO. 576/LKW/2014 FOR AY 2008-09 (REVENUES APPE AL) IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWI NG GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 21,00,000/- WIT HOUT APPRECIATING THE FACTS THAT THE ASSESSEE COMPANY HAS NOT DISCHARGED ITS ON US AS PROVIDED IN SECTION 68 OF THE I.T. ACT, 1961. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 3,33,959/- WITH OUT APPRECIATING THE FACTS THAT IT WAS A SEARCH CASE AND THE ADDITION WAS MADE BY THE ASSESSING OFFICER AFTER GIVING COGENT REASONS IN THE ADDITION ON ACCO UNT UNPAID ENTRY TAX TO GOVERNMENT OF U.P.. 3. THAT THE ORDER OF THE LD. CIT [A] BEING ERRONEOU S IN LAW AND ON FACTS WHICH NEEDS TO BE VACATED AND THE ORDER OF THE A.O. BE RE STORED. 4. THAT THE APPELLANT CRAVES LEAVE TO AMEND OR ADD ANY ONE OR MORE OF THE GROUNDS OF THE APPEAL AS STATED ABOVE AS AND WHEN N EED FOR DOING SO MAY ARISE. ITA NO. 577/LKW/2014 FOR AY 2009-10 (REVENUES APPE AL) IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWI NG GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CITFAJ HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 28,00,000/- WIT HOUT APPRECIATING THE FACTS THAT THE ASSESSEE COMPANY HAS NOT DISCHARGED ITS ON US AS PROVIDED IN SECTION 68 OF THE I.T. ACT, 1961. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CITFA) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 60,00,000/- WIT HOUT APPRECIATING THE FACTS THAT IT WAS A SEARCH CASE AND THE ADDITION WAS MADE ON THE DIFFERENCE OF STOCK FOUND AT THE TIME OF SEARCH. 3. THAT THE ORDER OF THE LD. CIT (A) BEING ERRONEOUS I N LAW AND ON FACTS WHICH NEEDS TO BE VACATED AND THE ORDER OF THE A.O. BE RE STORED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY ONE OR MORE OF THE GROUNDS OF THE APPEAL AS STATED ABOVE AS AND WHEN N EED FOR DOING SO MAY ARISE. 5 2. DURING THE COURSE OF HEARING, IT IS NOTICED THAT THE CIT(A) HAS NOT ADJUDICATED THE GROUNDS RAISED BEFORE HIM ON MERIT BY PASSING A REASONED ORDER. IN HER ENTIRE ORDER, SHE HAS REITERATED THE FINDINGS OF THE ASSESSING OFFICER ON A PARTICULAR ISSUE AND THE SUBMISSION OF THE ASSESSEE. THEREAFTER, SHE IN FEW LINES, HAS CONCLUDED HER DECISION. SHE H AS NOT ASSIGNED THE REASON AS TO WHY SHE HAS ACCEPTED THE CONTENTIONS OF THE A SSESSEE OVERRULING THE FINDING OF THE ASSESSING OFFICER. ON ALL ISSUES INV OLVES IN THESE APPEALS, WE DO NOT FIND ANY REASONED ORDER OF THE CIT(A). WE, THER EFORE, OF THE VIEW THAT THE CIT(A) HAS NOT ADJUDICATED THE GROUNDS RAISED BEFOR E HIM AND INVOLVED BEFORE THE TRIBUNAL JUDICIOUSLY BY PASSING A REASONED ORDE R, WE THEREFORE, SET ASIDE HER ORDER AND RESTORE THE MATTER TO HER FILE WITH A DIRECTION TO ADJUDICATE THE ISSUE RAISED BEFORE THE TRIBUNAL BY THE RESPECTIVE PARTIES AFRESH BY PASSING REASONED ORDER AFTER AFFORDING PROPER OPPORTUNITY O F BEING HEARD TO THE ASSESSEE AS THE JUDICIAL AUTHORITIES ARE REQUIRED T O ADJUDICATE AN ISSUE RAISED BEFORE HIM BY PASSING A REASONED ORDER SO THAT APPE LLATE AUTHORITY CAN FORM A VIEW AS TO WHY THE SAID JUDICIAL AUTHORITY AGREES T O THE SUBMISSION OF THE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE A S WELL AS REVENUE STAND ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (A.K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18/09/2015 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 ASS TT. REGISTRAR