D.P. JAIN & CO. INFRASTRUCTURE P. LTD., Nagpur V. THE JT. C.I.T., RANGE- 8, Nagpur

ITA 519/NAG/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3589 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 15-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Depreciation; Opportunity of being heard; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH:NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO.519/NAG/2014 ASSESSMENT YEAR: 2010 - 11 D.P.JAIN & CO. INFRASTRUCTURE P. LTD., C/O. M/S. LOYA BAGR I & CO., CA, GANDHIBAGH, NAGPUR - 06 PAN : - AACCD1376K VS JT. COMMISSIONER OF INCOME TAX RANGE - 8, NAGPUR - 06 (APPELLANT) (RESPONDENT) APPELLANT BY SHRI RAJESH LOYA, A.R. RESPONDENT BY SHRI. A.R.NINAWE, D.R. DATE OF HEARING: 08 - 06 - 2016 DATE OF PRONOU NCEMENT: - 15/06 / 2016 ORDER PER SHAMIM YAHYA , A .M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD.CIT(A) DATED 12.09.2014 AND PERTAINS TO ASSESSMENT YEAR 2010 - 11. THE GROUNDS OF APPEAL READ AS UNDER: - (1) THAT THE ORDER OF THE AO IS BAD IN LAW AND WRONG ON FACTS AND THE LEARNED CIT(A) ERRED IN CONFIRMING THE SAME. ON THE FACTS OF THE CASE THE PROCEEDINGS ARE ILLEGAL AND THE ACTION OF THE AUTHORITIES IS HIGHLY UNJUSTIFIED. (2) THAT THE AO ERRED IN LAW AND ON FACTS IN DISALLOWING PUR CHASES AMOUNTING TO RS. 1,23,03,320 / - HOLDING THAT THE PURCHASES MADE FROM MR S.GOPIKRISHNA TRADING CO. MUMBAI ARE NON GENUINE AND BOGUS AND THE LEARNED CIT(A) ERRED IN FURTHER CONFIRMING THE ACTION OF THE AO. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION IS MADE ON THE BASIS OF CONJECTURES AND SURMISES WITHOUT BRINGING ON RECORD ANY CONCRETE EVIDENCE AND HENCE THE SAME IS LIABLE TO BE SET ASIDE. (3) (A) THAT THE AO ERRED IN LAW AND ON FACTS IN DISALLOWING DEPRECIATION CLAIMED ON D.G. SET AMOUNTING TO RS.9,41,214/ - HOLDING THAT THE PURCHASES MADE FROM FAMILIAR TRADING PRIVATE LTD. ARE NON GENUINE AND BOGUS AND THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO. 2 I TA NO. 5 1 9 /NAG/20 1 4 (B) THAT THE AO FURTHER ERRED IN LAW AND ON FACTS IN DISALLOWING VAT INPUT CREDIT CLAIMED BY THE ASSESSEE OF RS. 7,81,774 / - ON THE ABOVE - MENTIONED D.G. SET BY HOLDING THAT THE PURCHASES MADE FROM FAMILIAR TRADING PRIVATE LTD. ARE NON GENUINE & BOGUS AND FURTHER ON THE PREMISE THAT THAT NO VAT HAS BEEN PAID BY THE SE LLER, WITHOUT APPRECIATING THE FACT THAT NO SUCH V A T HAS BEEN DEBITED BY ASSESSEE TO PROFIT & LOSS ACCOUNT AND THE LEARNED CIT(A) GROSSLY ERRED IN CONFIRMING THE ACTION OF THE AO WITHOUT SUBSTANTIATING HIS STAND. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION IS MADE ON THE BASIS OF CONJECTURES AND SURMISES WITHOUT BRINGING ON RECORD ANY EVIDENCE AND THUS, THE ACTION OF THE AUTHORITIES IS HIGHLY UNJUSTIFIED. (4) (A) THAT THE AO ERRED IN LAW AND ON FACTS IN DISALLOWING DEPRECIATION CLAIME D ON FOUR DECK SCREEN AMOUNTING TO RS. 4,26,130/ - HOLDING THAT THE PURCHASES MADE FROM STRONG TRADING PRIVATE LTD. ARE NON GENUINE AND BOGUS AND THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO. (B) THAT THE AO ERRED IN LAW AND ON FACTS IN DIS ALLOWING VAT INPUT CREDIT CLAIMED BY THE ASSESSEE OF RS. 3,53,945 / - ON FOUR DECK SCREEN HOLDING THAT THE PURCHASES MADE FROM STRONG TRADING PRIVATE LTD. ARE NON GENUINE & BOGUS AND FURTHER ON THE PREMISE THAT NO VAT HAS BEEN PAID BY SELLER, WITHOUT APPR ECIATING THE FACT THAT NO SUCH VAT HAS BEEN DEBITED BY ASSESSEE TO PROFIT & LOSS ACCOUNT AND THE L EARNED CIT(A) GROSSLY ERRED IN CONFIRMING THE ACTION OF THE AO WITHOUT SUBSTANTIATING HIS STAND. ON THE FACTS AND CIRCUMSTANCES OF TH E CASE THE ADDITION IS M ADE ON THE BASIS OF CONJ ECTURES AND SURMISES WITHOUT BRINGING ON RECORD ANY EVIDENCE AND THUS, THE ACTION OF THE AUTHORITIES IS HIGHLY UNJUSTIFIED. (5) THAT THE AO ERRED IN LAW AND ON FACTS IN MAKING ADHOC DISALLOWANCE OF EXPENDITURE OF RS. 9,00,000/ - HOLDING THAT THE SAME ARE NON GENUINE AND BOGUS BEING CASH PAYMENTS IN LAST FORTNIGHT OF THE F.Y. AND THE LEARNED CIT(A) FURTHER ERRED IN CONFIRMING THE ADHOC ADDITION MADE BY THE AO. (A) OUT OF TOTAL CASH PAYMENTS TO PETTY CONTRACTORS OF RS.48,52,65 1 / - (BELOW RS.20,000) ASSESSING OFFICER DISALLOWED RS.5, 00, 000/ - HOLDING THAT THE SAME ARE MADE IN THE LAST FORTNIGHT OF THE F.Y. AND THUS ARE NON GENUINE & BOGUS. (B) OUT OF TOTAL CASH PURCHASES ASSESSING OFFICER DISALLOWED RS4, 00, 000/ - HOLDING THAT THE SAME ARE MADE IN THE LAST FORTN IGHT OF THE F.Y. AND THUS ARE NON GENUINE & BOGUS. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION IS MADE ON THE BASIS OF CONJECTURES AND SURMISES. THE ACTION OF THE LEARNED AUTHORITIES IS HIGHLY UNJUSTIFIED A ND WITHOUT ANY SOUND BASIS & HENCE LIABLE TO BE SET ASIDE. 3 I TA NO. 5 1 9 /NAG/20 1 4 ( 6) THAT THE AO ERRED IN LAW AND ON FACTS IN CHARGING INTEREST U/S. 234D AND THE CIT(A) ERRED IN NOT ADJUDICATING THE GROUND RAISED BEFORE HIM. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE INTEREST CHARGED IS IMPROPER. 2. AT THE OUTSET, IN THIS CASE THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) IN THIS CASE HAS PASSED AN EX - PARTY ORDER. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT ASSESSEE WAS NOT PRESENTED BEFORE THE LD. CIT(A) AS ON ONE OF THE DATES THE LD. COUNSEL OF THE ASSESSEE HAS SOUGHT ADJOURNMENT AND SUBSEQUENTLY DATE OF THE HEARING WAS NOT NOTED BY THE LD. COUNSEL OF THE ASSESSEE, HENCE THE ASSESSEE REMAINED UNREPRESENTED. THE LD. COUNSEL OF THE ASSESSEE FURTHER TOOK US TO PARA 7.2 OF THE ORDER OF LD. CIT(A) WHEREIN THE LD. CIT(A) HAS OBSERVED THE FOLLOWING : - '7.2 IT IS FOR THIS REASON ALSO THAT IT WAS NECESSARY THE APPELLANT SHOULD HAVE APPEARED DURING THE COURSE OF APPELLATE PROCEEDINGS SO THAT IT COULD BE REQUESTED TO OBTAIN THE CONFIRMATIONS FROM THE SAID PARTIES, THEIR PAN ETC. AND THE APPELLANT COULD HAVE BEEN REQUESTED TO PRODUCE THE SAID PARTIES ALONG WITH THEIR BALANCE SHEETS SO THAT A REASONABLE CONCLUSION COULD HAVE BEEN DRAWN W ITH REGARD TO THE CLAIM MADE BY THE APPELLANT. HOWEVER IT IS SEEN THAT IN SPITE OF VARIOUS NOTICES SENT BY THIS OFFICE TO THE APPELLANT, THERE HAS BEEN PERSISTENT NON - COMPLIANCE DURING THE COURSE OF APPELLATE PROCEEDINGS. THE APPELLANT HAS CLAIMED TO HA VE MADE SAID PURCHASES AND THE ABSENCE OF IMPORTANT EVIDENCES WHICH PUTS A QUESTION - MARK REGARDING THE GENUINENESS OF THE SAME. THE ONUS WAS ALWAYS ON THE APPELLANT TO ESTABLISH THEIR GENUINENESS. THIS COULD HAVE BEEN DONE BY FILING VARIOUS EVIDENCES L IKE AUDIT REPORT OF THE SAID PARTIES, THEIR CONFIRMATIONS, THEIR BALANCE SHEETS ETC. IN VIEW OF THE ABOVE FACTS, THE ADDITION MADE BY THE LD. AO AMOUNTING TO RS.1 2303319/ - ON ACCOUNT OF TMT STEEL PURCHASE AND THE CLAIM OF DEPRECIATION OF RS.1722988/ - AN D RS.780075/ - ARE HEREBY CONFIRMED. THESE GROUNDS ARE THEREFORE DISMISSED.' 3. REFERRING TO THE ABOVE, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE MAY BE PROVIDED AN OPPORTUNITY OF HEARING BEFORE THE LD. CIT(A) SO THAT ASSESSEE WILL BE IN A POSITION TO MAKE THE NECESSARY SUBMISSION BEFORE THE LD.CIT(A). 4 I TA NO. 5 1 9 /NAG/20 1 4 4. PER CONTRA THE LD. DR DID NOT HAVE ANY SERIOUS OBJECTION IN GIVING ASSESSEE ANOTHER OPPORTUNITY BEFORE THE LD. CIT(A). 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION. WE NOTE THA T ASSESSEE HAS REMAINED UNREPRESENTED BEFORE THE LD. CIT(A). ORDER OF THE LD. CIT(A) MAKES IT CLEAR THAT ABSENCE OF ASSESSEE AND NON - SUBMISSION OF FURTHER DETAILS HAVE ALSO LED TO THE LD.CIT(A) DRAWING ADVERSE INFERENCE. WE FURTHER NOTE THAT THE ASSESSE E HAS NOW SUBMITTED PAPER BOOK, BEFORE US CONSISTING OF VARIOUS DOCUMENTS AND DETAILS. THE LD. COUNSEL OF THE ASSESSEE STATED THAT THESE DOCUMENTS ARE PART OF THE ASSESSMENT RECORD. HOWEVER WE NOTE THAT THIS ASPECT WILL HAVE TO BE EXAMINED. FURTHERMORE IT IS NOT CLEAR WHETHER THE LD. CIT(A) HAD THE BENEFIT OF REFERENCE/EXAMINATION OF THE AFORESAID DOCUMENTS SUBMITTED BY THE LD. COUNSEL OF THE ASSESSEE. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION INTEREST OF JUSTICE WILL BE SERVED IF THE ISSUE R EMITTED TO THE LD. CIT (A). ACCORDINGLY WE REMIT THE ISSUE TO THE LD. CIT(A). LD. CIT (A) IS DIRECTED TO CONSIDER THE ISSUE AFRESH AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND TAKING INTO ACCOUNT THE DOCUMENTS AND SUBMISSIONS BEING MADE B Y THE LD. COUNSEL OF THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO PRESENT HIMSELF BEFORE THE LD. CIT(A) SUO MOTO WITHIN 30 DAYS OF THIS ORDER TO PURSUE THE APPEAL BEFORE THE LD. CIT(A). 8. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOW ED FOR STATISTICAL P URPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF JUNE , 2016 SD/ - SD/ - (MUKUL K. SHRAWAT) (SHAMIM YAHYA) J UDICIAL MEMBER ACCOUNTANT MEMBER PLACE: - NAGPUR DATED: - 15 / 0 6 /2016 5 I TA NO. 5 1 9 /NAG/20 1 4 COPY FORWARDED TO : 1. D.P.JAIN & CO.INFRASTRUCTURE P. LTD., C/O. M/S. LOYA BAGRI & CO., CA,GANDHIBAGH, NAGPUR - 06 2. JT. COMMISSIONER OF INCOME TAX RANGE - 8, NAGPUR 3. C.I.T. - I V , NAGPUR. 4. CIT (APPEALS) - I I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR M.B.BODKHE /SR. P.S.