M/s Mysore Motors , Mysore V. The Income Tax Officer Ward-2(2), Mysore

ITA 520/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7740 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 13-03-2019
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 520 / BANG/201 9 ASSESSMENT YEAR : 2 0 1 2 - 13 M/S. MYSORE MOTORS, NO. 242, RMS & HPO LAYOUT, SHAKTHI NAGARA, MYSORE 570 010. PAN: AATFM2943B VS. THE INCOME TAX OFFICER, WARD 2(2), MYSORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI RENUKA PRASAD C.M., ADVOCATE R EVENUE BY : SMT. PADMA MEENAKSHI, ADDL. CIT(DR) DATE OF HEARING : 0 8 .0 4 .2019 DATE OF PRONOUNCEMENT : 16. 0 4 .2019 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), MYSORE DATED 30.11.2017 FOR ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED CIT APPEALS (FAA) IN SO FAR AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, ALL PROBABILITY OF JUSTICE AND ORDER TO BE BAD AND LIABLE TO BE CANCELLED. 2. THE RESPONDENT HAS NOT GOT AN OPPORTUNITY TO EXPLAIN HIS DEFENCE FOR THE REASONS TO MAKE ADDITION WITH RELATING TO BOGUS CREDITORS BY AO BECAUSE THE HEARING NOTICE HAS NOT AT ALL SERVED TO APPELLANT. THE APPELLANT IS BONAFIDE AND INNOCENT WITHOUT KNOWING THE PROCEDURE OF HEARING CONDUCTED AT LEARNED CIT APPEALS. IF HE GOT THE PROPER OPPORTUNITY TO EXPLAIN HIS DEFENCE REGARDING TO CREDITORS, THE APPELLANT WOULD HAVE BEEN SUCCEEDED TO EXPLAIN THE GUANINE OF CREDITORS HAVING RECEIVED THE AMOUNT. 3. THE LEARNED A.O AND CIT APPEALS HAS COMMITTED AN ERROR FOR NOT CONSIDERING THE CONFIRMATION LETTER FILED BY THE ONE MR. K P DEEPAK FOR HAVING PROVIDED INTEREST FREE HAND LOAN WITH STATEMENT OF LOAN PROVIDED IN THE SAME LETTER. THE APPELLANT HAS NOT FAILED TO IDENTIFY THE LOANER MR. K P DEEPAK AS THE APPELLANT HAS FILED THE CONFIRMATION LETTER FROM THE SAID CREDITOR. 4. THE LEARNED AO AND CIT APPEALS FAILED TO VERIFY THE BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT AND RELEVANT BANK STATEMENT FOR THE GENUINEITY OF TRANSACTION PERTAINING TO THE INTEREST FREE LOAN GIVEN BY THE MR. K P DEEPAK. THE APPELLANT HAS EXPRESSED THE FACT THAT I ITA NO.520/BANG/2019 PAGE 2 OF 4 HAVE RECEIVED INTEREST FREE HAND LOAN FROM MR. K P DEEPAK BUT IT WAS CLERICAL ERROR WHILE ACCOUNTING THE TRANSACTION IN THE BOOKS OF ACCOUNTS AND THE SAME HAS BEEN REFLECTED IN THE FINANCIAL STATEMENT. THE ABOVE TRANSACTION IS NOT BOGUS AS IT HAS BEEN DONE THROUGH BANK AND CONFIRMS THE SAME BY CREDITOR THROUGH HIS LETTER. 5. THE ACTION OF THE AO IN MAKING ADDITION OF RS.6,59,000/- AND CONFIRMINGTHE SAME BY CIT APPEALS WITHOUT BEING HEARD TOWARDS BOGUS CREDITORS ISARBITRARY AND IRRATIONAL IN VIEW OF THE FACT THAT THE APPELLANT HASMAINTAINED THE BOOKS OF ACCOUNTS AND THE ENTRIES RELATING TO TRANSACTIONIS APPEARED IN BANK STATEMENT AND ALSO ENTERED IN THE BOOKS OF ACCOUNTS.ALL RELEVANT DOCUMENTS WERE SUBMITTED BEFORE PROCEEDING WITH AO. THEABOVE TRANSACTION IS GENUINE AND IS SUPPORTED BY BANK STATEMENT. THEABOVE ADDITION BEING FICTITIOUS AND ASSUMPTION OF THE LEARNED AO THAT THECREDIT IS NOT SUPPORTED BY MATERIAL EVIDENCE. THE CONFIRMATION LETTER ANDBANK TRANSACTION ENTRIES IN THE BOOKS OF ACCOUNTS ARE MORE THAN THEMATERIAL EVIDENCE BUT THE LEARNED AO AND CIT APPEALS HAS NOTCONSIDERED THE SAME. HENCE THE ABOVE ADDITION BEING FICTITIOUS,PRESUMPTION AND ASSUMPTION OF AO AND CIT APPEALS IS REQUIRED TO BEDELETED IN TOTO. 6. THE LEARNED AO IS NOT CLEAR AND MADE UNNECESSARY NEXUS BETWEEN BOOKSOF ACCOUNTS, TAX AUDIT AND CLERICAL MISTAKE. HE HAS NOT APPRECIATE THEFACT THAT THE TRANSACTIONS ARE MADE THROUGH BANK AND ENTRIES AREAVAILABLE IN BOTH BORROWER AND LENDER BANK ACCOUNTS. THERE WAS NOAFTERTHOUGHT IN THIS ISSUE BEING BANK TRANSACTION IT COULD NOT BE ALTEREDOR DELETED OR ADDED AFTER THE DATE OF BALANCE SHEET. THE PRESUMPTION OFAO AND CIT APPEALS IS NOT ACCEPTABLE. 7. AMONG AND OTHER GROUNDS THAT WOULD BE URGED AT THE TIME OF HEARING THEAPPELLANT CRAVES LEAVE TO AMEND, ALTER, DELETE SUCH GROUNDS AND ADDSUCH ADDITIONAL GROUNDS, ADDUCE AND EXPLAIN SUCH ADDITIONAL EVIDENCESAS FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE CIRCUMSPECTIVELYDEMAND. THE APPELLANT HUMBLY SUBMITS THAT THE APPEAL BE ADMITTED THE MATTER BE ADJUDICATED IN FAIR AND JUDICIOUS MANNER AND OPPORTUNITY OF BEING HEARD BE AFFORDED AND ENDS OF JUSTICE BE MET. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE ORDER OF CIT (A) IS EX-PARTE QUA THE ASSESSEE. IT WAS POINTED OUT THAT TWO DATES OF HEARING WERE FIXED ON 27.11.2017 AND 29.11.2017 AS NOTED BY CIT(A) ON PAGE NO. 1 OF THIS IMPUGNED ORDER. IT WAS ALSO POINTED OUT THAT IN PARA 3 OF HIS ORDER, THIS IS NOTED BY CIT(A) THAT NOTICES OF HEARING SENT BY CIT(A) TO ASSESSEE WERE RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARKS NO SUCH PERSON AT THE ADDRESS. HE SUBMITTED THAT THIS OBSERVATION OF CIT(A) IN PARA 3 OF THE IMPUGNED ORDER MAKES IT CLEAR THAT HEARING NOTICES WERE NOT SERVED ITA NO.520/BANG/2019 PAGE 3 OF 4 ON THE ASSESSEE. HE SUBMITTED THAT AS PER FORM NO. 35 FILED BEFORE CIT(A), THE ADDRESS TO WHICH NOTICE WAS REQUIRED TO BE SENT WAS OF THE ADVOCATE OF THE ASSESSEE SHRI RENUKA PRASAD C M. HE SUBMITTED THAT AS NOTED BY THE CIT(A) IN THE IMPUGNED ORDER, HE HAS NOTED THE SAME ADDRESS BUT IN THE FORM NO. 35 FILED BEFORE CIT(A), THE MOBILE NUMBER OF THE ADVOCATE SHRI RENUKA PRASAD C M WAS ALSO GIVEN AND THEREFORE, IN THE INTEREST OF JUSTICE, IF THE NOTICE WAS NOT SERVED ON THE ASSESSEE, THE ADVOCATE OF LD. AR OF ASSESSEE COULD HAVE BEEN CONTACTED OVER MOBILE. HE SUBMITTED THAT IN ANY CASE, IN THE INTEREST OF JUSTICE, THE MATTER MAY BE RESTORED BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO ASSESSEE. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT THIS IS UNDISPUTED THAT THE NOTICES ISSUED BY CIT(A) TO ASSESSEE WERE NOT SERVED ON ASSESSEE FOR WHATEVER REASONS AND HENCE, I FEEL IT PROPER THAT IN THE INTEREST OF JUSTICE, THE MATTER SHOULD GO BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE AND ACCORDINGLY I SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH DECISION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO ASSESSEE. IN VIEW OF THIS, NO DECISION ON MERIT IS CALLED FOR AT THE PRESENT STAGE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 16 TH APRIL, 2019. /MS/ ITA NO.520/BANG/2019 PAGE 4 OF 4 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.