ACIT, CC-XXIII, Kolkata, Kolkata V. M/s. Northern Cargo Service, Kolkata

ITA 499/KOL/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5626 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 25-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASAD
• Assessee Lawyers: S L KOCHAR; ANIL KOCHA
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA [BEFORE SHRI P.K.BANSAL, A.M. & SHRI GEORGE MATHAN, J.M. ] I.T.A. NO.499/KOL/2011 ASSESSMENT YEAR : 2004-05 ACIT, CC-XXIII, KOLKATA -VS- M/S. NORTH ERN CARGO SERVICE, KOL. ( APPELLANT ) PAN:AAEFN 2059G RESPONDENT ) DATE OF CONCLUDING THE HEARING : 09.01.2014 DATE OF PRONOUNCING THE ORDER : 15.01.2014 APPEARANCES : FOR THE APPELLANT : SH RI RAJENDRA PRASAD, JCIT, SR.DR : FOR THE RESPONDENT : S/SHRI S.L.KOCHAR, ADVOCATE & ANIL KOCHAR, ADVOCATE O R D E R PER SHRI P.K.BANSAL, A.M. : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A), CENTRAL-III, KOLKATA FOR THE ASSESSMENT YEAR 2004-0 5. 2. THE FIRST GROUND TAKEN BY THE REVENUE IS IN RESP ECT OF HOLDING BY THE CIT(A) THAT THE REJECTION OF THE BOOKS OF ACCOUNTS AND CONSEQUENT ESTIMATION OF THE TOTAL INCOME WERE NOT JUSTIFIED. 3. BRIEF FACTS RELATING TO THIS GROUND ARE THAT THE AO, DURING THE COURSE OF THE ASSESSMENT, ASKED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS, BILLS AND VOUCHERS AND OTHER DETAILS BUT EVEN AFTER GIVING A NUMBER OF OPPORTUNITIES, THE ASSESSEE DID NOT PRODUCE THE SAME. UNDER THE CIRCUM STANCES, THE AO INVOKED THE PROVISIONS OF SECTION 145(3) AND ESTIMATED THE INCO ME. WHEN THE MATTER WENT BEFORE THE CIT(A), THE CIT(A) TOOK THE VIEW THAT TH E REJECTION OF THE BOOKS OF ACCOUNTS WAS NOT JUSTIFIED, EVEN OBSERVING THAT THE BOOKS OF ACCOUNTS COULD NOT BE PRODUCED, ALTHOUGH THEY WERE MAINTAINED AND AUDITED . 2 I.T.A. NO.499/ KOL/2011 M/S.NORTHERN CAR GO SERVICE A.Y. 2004-05 4. THE LD. DR VEHEMENTLY CONTENDED THAT THIS IS A C ASE OF CLEAR-CUT VIOLATION OF SECTION 142(2)(II). ONCE THE AO HAS ASKED THE ASSES SEE TO PRODUCE THE BOOKS OF ACCOUNTS, THE ASSESSEE IS BOUND TO PRODUCE THE BOOK S OF ACCOUNTS. IN THE ABSENCE OF NON-PRODUCTION OF THE BOOKS OF ACCOUNTS, THE AO WAS CORRECT IN LAW IN REJECTING THE BOOKS OF ACCOUNTS AND MAKING THE ASSESSMENT IN THE MANNER AS SPECIFIED UNDER SECTION 144. 5. THE LD. AR, ON THE OTHER HAND, PRODUCED THE COPY OF THE ORDER-SHEET AND STATED THAT THE BOOKS OF ACCOUNTS WERE PRODUCED BUT WHEN THE BENCH POINTED OUT THE LD. COUNSEL TO EXPLAIN THE DATE WHEN THE BOOKS OF ACCOUNTS HAD BEEN PRODUCED, AS THE BENCH HAS NOTED FROM THE ORDER-SHEET IN THE OPEN COURT THAT NO BOOKS WERE PRODUCED BY THE ASSESSEE. 6. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CON SIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW. WE HA VE ALSO GONE THROUGH THE COPY OF THE ORDER-SHEET FILED BY THE ASSESSEE. WE NOTED THAT THE AO HAS ASKED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS, BILLS AN D VOUCHERS ON 15.09.2006, AGAIN ON 28.09.2006, AGAIN ON 19.12.2006 AND ULTIMATELY O N 23.12.2006. THE AUTHORISED REPRESENTATIVE, SHRI ANIL KOCHAR APPEARED AND FILED A FEW DETAILS BEFORE THE AO ALONG WITH THE LETTER DATED 21.12.2006 AND STATED B EFORE THE AO THAT THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNTS, BILLS AND VOUCHERS ON THE GROUND THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION A ND SURVEY OF THE COMPUTER HARD DISCS, BILLS AND VOUCHERS OF THE GROUP WERE SEIZED AND IMPOUNDED ON 16.11.2006. THIS CLEARLY PROVES THAT THE ASSESSEE HAS NOT PRODU CED ANY BOOKS OF ACCOUNTS BEFORE THE AO. WE HAVE ALSO GONE THROUGH THE ORDER OF THE CIT(A). WE NOTED THAT THE CIT(A) HAS ALSO ACCEPTED THAT NO BOOKS OF ACCOU NTS HAS BEEN PRODUCED BUT STILL HE TOOK THE VIEW THAT THE REJECTION OF THE BOOKS OF ACCOUNTS WAS NOT JUSTIFIED, AS THE ASSESSEE HAS MAINTAINED THE BOOKS OF ACCOUNTS. IN OUR OPINION, THE AO, UNDER THESE FACTS, WAS CORRECT IN LAW IN REJECTING THE BO OKS OF ACCOUNTS AND UNTIL AND UNLESS THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSE SSEE ARE PRODUCED, THE AO 3 I.T.A. NO.499/ KOL/2011 M/S.NORTHERN CAR GO SERVICE A.Y. 2004-05 CANNOT DECIDE THE CORRECTNESS OR COMPLETENESS OF TH E ACCOUNTS OR THE METHOD OF ACCOUNTING EMPLOYED BY THE ASSESSEE OR WHETHER THE ASSESSEE HAS REGULARLY FOLLOWED THE ACCOUNTING STANDARD AS HAS BEEN NOTIFI ED BY THE CBDT BUT SINCE IT IS A CASE WHERE THE ASSESSEE HAS MAINTAINED THE BOOKS OF ACCOUNTS AND THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNTS BEFORE THE AO, AS THE BOOKS WERE DULY IMPOUNDED BY THE REVENUE, WHICH WAS BEYOND THE DOMA IN OF THE ASSESSEE AND THEREFORE, THE ASSESSEE WAS PREVENTED, IN OUR OPINI ON, BY SUFFICIENT CAUSE TO PRODUCE THE BOOKS OF ACCOUNTS BEFORE THE AO. WE, TH EREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE PARTIES, SET ASID E THE ASSESSMENT AND RESTORE THIS ISSUE TO THE FILE OF THE AO WITH THE DIRECTION THAT THE AO SHALL READJUDICATE THIS ISSUE AND THE ASSESSEE WILL PRODUCE THE BOOKS OF AC COUNTS, WHICH WILL BE DULY VERIFIED BY THE AO. AFTER VERIFYING THE BOOKS OF AC COUNTS, THE AO WILL RE-DECIDE WHETHER THE PROVISIONS OF SECTION 145(3) ARE APPLIC ABLE OR NOT AND ACCORDINGLY RE- DECIDE THE INCOME, AS MAY BE ASSESSED UNDER THE INC OME-TAX ACT. ACCORDINGLY, THE ASSESSMENT IS SET ASIDE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN THE COURT ON 15 TH JANUARY, 2014. SD/- SD/- (GEORGE MATHAN) (P. K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH JANUARY, 2014 COPY OF THE ORDER FORWARDED TO: 1. M/S. NORTHERN CARGO SERVICE, 20, B.T. ROAD, KOLKATA 700 002. 2. ACIT, CC-XXIII, KOLKATA 3. THE CIT(A), KOLKATA 4. CIT, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, ASSTT. REGISTRAR , ITAT, KOLKATA TALUKDAR(SR.P.S.) 4 I.T.A. NO.499/ KOL/2011 M/S.NORTHERN CAR GO SERVICE A.Y. 2004-05