Magnanimous Infrastructure Pvt. Ltd, Ahmedabad V. ITO, Circle-2(1)(2), Ahmedabad

ITA 53/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5972 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 16-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMB ER MAGNANIMOUS INFRASTRUCTURE PVT. LTD. H-1109, TITANIUM CITY CENTRE, PRAHLAD NAGAR ROAD, SATELLITE, AHMEDABAD PAN: AAGCM5750N (APPELLANT) VS THE ITO, CIRCLE-2(1)(2), AMBAWADI, AHMEDABAD (RESPONDENT) REVENUE BY: SHRI R.R. MAKWANA, SR. D.R. ASSESSEE BY: SHRI S.N. DIVATIA, A.R . DATE OF HEARING : 08-09-2021 DATE OF PRONOUNCEMENT : 15-09-20 21 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2015-16, ARISES FRO M ORDER OF THE CIT(A)-2, AHMEDABAD DATED 22-10-2018, IN PROCEEDIN GS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE SOLITARY GROUND OF APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-2 IN UPHOLDING THE DISALLOWANCE OF EXPENSES AGGREGATING TO RS. 1,51,33,359/-. ITA NO. 53/AHD/2019 ASSESSMENT YEAR 2015-16 I.T.A NO. 53/AHD/2019 A.Y. 2015-16 PAGE NO MAGNANIMOUS INFRASTRUCTURE PVT. LTD. VS. ITO 2 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME DECLA RING NIL INCOME AND CLAIMING LOSS OF RS. 1,33,83,216/- WAS FILED ON 30 TH SEP, 2015. THE CASE WAS SUBJECT TO SCRUTINY ASSESSMENT AND NOTICE U/S. 143( 2) OF THE ACT WAS ISSUED ON 7 TH APRIL, 2016. DURING THE COURSE OF ASSESSMENT, IN SPITE OF ISSUING VARIOUS NOTICES U/S. 142(1) OF THE ACT, THE ASSESSEE HAS FA ILED TO FURNISH THE DETAIL IN RESPONSE TO NOTICES ISSUED. UNDER SUCH CIRCUMSTANC ES ON PERUSAL OF FORM NO. 3CD, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HA S DECLARED LOSS OF RS. 13,19,221/- @ -5.13% AS COMPARED TO GROSS PROFIT DE CLARED AT 28.54% IN THE PREVIOUS YEAR. AFTER OBSERVING ABNORMAL DECREASE IN GROSS PROFITS AS WELL AS NET PROFIT DURING THE YEAR THE ASSESSING OFFICER NO TICED THAT ASSESSEE HAS CLAIMED EXPENSES OF RS. 4,42,69,906/- FOR THE YEAR UNDER CONSIDERATION AS COMPARED TO EXPENSES OF RS. 4,71,31,861/- CLAIMED I N THE PRECEDING ASSESSMENT YEAR. THE ASSESSING OFFICER ALSO NOTICE D THAT THERE WAS ABNORMAL INCREASE IN THE SITE DEVELOPMENT EXPENSES OF RS. 3,14,23,086/- CLAIMED IN THE YEAR UNDER CONSIDERATION. IN VIEW O F NOT PRODUCING ACCOUNTS ALONG WITH BILLS AND VOUCHERS FOR VERIFICATION OF E XPENSES, THE ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCOUNT OF THE A SSESSEE U/S. 145A OF THE ACT AND AFTER TAKING AVERAGE G.P. RATE ON THE BASIS OF LAST THREE YEARS, GROSS PROFIT WAS COMPUTED AT 27.64% AS UNDER:- A.Y. GP RATE DECLARED 2013-14 59.52% 2014-15 28.54% 2015-16 -5.13% AVERAGE GP 27.64% I.T.A NO. 53/AHD/2019 A.Y. 2015-16 PAGE NO MAGNANIMOUS INFRASTRUCTURE PVT. LTD. VS. ITO 3 THE ASSESSING OFFICER ALSO NOTICED THAT ASSESSEE HA S DECLARED REVENUE FROM OPERATION AT RS. 4,47,77,700/- FOR ASSESSMENT YEAR 2014-15 AGAINST WHICH OTHER EXPENSES OF RS. 2,32,14,316/- WAS CLAIMED IN THE P & L ACCOUNT. HOWEVER, DURING THE YEAR UNDER CONSIDERATION, THE A SSESSEE HAS DECLARED REVENUE FROM OPERATION AT RS. 2,57,19,408/- AGAINST OTHER EXPENSES OF RS. 3,14,23,089/- DEBITED IN THE P & L ACCOUNT. THE RE LEVANT SUMMARY OF SUCH EXPENSES AND REVENUE IS AS UNDER:- A.Y. REVENUE EXPENSES % OF EXPENSES AGAINST REVENUE 2014-15 4,47,77,700/- 2,32,14,316/- 51.84 2015-16 2,57,19,408/- 3,14,23,086/- 122.17 AFTER PERUSAL OF THE AFORESAID ANALYSIS, THE ASSESS ING OFFICER OBSERVED THAT ASSESSEE HAS CLAIMED EXPENSES AT THE PERCENTAGE OF 122.17% OF THE TOTAL TURNOVER AS COMPARED TO RATE OF SUCH EXPENSES CLAIM ED IN THE PRECEDING ASSESSMENT YEAR AT 51.84%. CONSEQUENTLY, THE ASSESS ING OFFICER PROPORTIONATELY ALLOWED THE CLAIM OF EXPENSES AT 51 .84% OF THE TURNOVER ON THE BASIS OF LAST YEAR AND REMAINING EXPENSES OF RS . 1,51,33,359/- WAS DISALLOWED. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE TH E LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE SIN CE THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDENCES IN SUPPORT OF THE GENUINEN ESS OF EXPENSES BY PRODUCING BILLS AND VOUCHERS DURING THE COURSE OF A PPELLATE PROCEEDINGS. I.T.A NO. 53/AHD/2019 A.Y. 2015-16 PAGE NO MAGNANIMOUS INFRASTRUCTURE PVT. LTD. VS. ITO 4 5. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WITHOUT REITERATING THE FACTS AS ELABORATED IN THIS ORDER, DURING THE COURSE OF ASSESSMENT YEAR, THE ASSESSEE HAS FAILED TO FURNISH SUPPORTING BILLS AND VOUCHERS TO PROVE THE GENUINENESS OF CLAIM OF VARIO US EXPENSES. UNDER SUCH CIRCUMSTANCES, THE ASSESSING OFFICER HAS MADE ANALY SIS OF GROSS PROFIT ALONG WITH CLAIM OF EXPENDITURE PERTAINING TO THE YEAR UN DER CONSIDERATION WITH THE PRECEDING ASSESSMENT YEAR AS ELABORATED ABOVE IN TH IS ORDER. THE ASSESSEE HAS FAILED TO JUSTIFY THE EXPENDITURE BY SUBMITTING BILLS, VOUCHERS AND BOOKS OF ACCOUNTS, THEREFORE, AFTER REJECTING THE BOOKS O F ACCOUNT U/S. 145(3), THE ASSESSING OFFICER HAS MADE PROPORTIONATE DISALLOWAN CE OF THE CLAIM OF EXPENDITURE ON THE BASIS OF SUCH EXPENDITURE CLAIME D IN THE PRECEDING YEAR AND ALLOWED THE EXPENDITURE @ 51.84% OF THE TURNOVE R AS ALLOWED IN THE PRECEDING YEAR AND MADE ADDITION OF RS. 1,51,33,359 /-. EVEN DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT( A), THE ASSESSEE HAS FAILED TO PRODUCE SUPPORTING RELEVANT EVIDENCES TO PROVE T HE GENUINENESS OF CLAIM OF EXPENDITURE. IT IS ALSO OBSERVED THAT DURING TH E COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE ASSESSEE HAS ALSO NOT FI LED ANY ADDITIONAL EVIDENCES IN SUPPORT OF ITS CLAIM OF EXPENDITURE CL AIMED DURING THE YEAR UNDER CONSIDERATION. LOOKING TO THE ABOVE FACTS AN D CIRCUMSTANCES, IT IS CLEAR THAT ASSESSEE HAS UNREASONABLY WASTED THE TIM E OF THE LOWER AUTHORITIES BY NOT PRODUCING THE RELEVANT DETAIL IN SPITE OF GI VING A NUMBER OF OPPORTUNITIES DURING THE COURSE OF ASSESSMENT AND A PPELLATE PROCEEDINGS. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE U S, THE LD. COUNSEL HAS VEHEMENTLY CONTENDED THAT ADDITION HAS BEEN MADE UN REASONABLY AND REQUESTED THAT THE CASE OF THE ASSESSEE IS REQUIRED TO BE ADJUDICATED ON MERIT. THE LD. COUNSEL AGREED TO DEPOSIT A COST OF 20,000/ - BY PAYING THE CHALLAN I.T.A NO. 53/AHD/2019 A.Y. 2015-16 PAGE NO MAGNANIMOUS INFRASTRUCTURE PVT. LTD. VS. ITO 5 BEFORE THE ASSESSING OFFICER FOR WASTING THE PRECIO US TIME OF THE LOWER AUTHORITIES BECAUSE OF FAILING TO FURNISH THE REQUI SITE DETAILS IN ORDER TO RESTORE THE CASE TO THE FILE OF THE ASSESSING OFFIC ER FOR DECIDING ON MERIT. LOOKING TO THE ABOVE FACTS AND IN THE INTEREST OF J USTICE WE RESTORE THIS CASE TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRES H AFTER EXAMINATION AND VERIFICATION OF THE SUPPORTING DETAILED EVIDENCES A ND AFTER AFFORDING DUE OPPORTUNITY TO THE ASSESSEE SUBJECT TO PAYMENT OF C HALLAN AS DIRECTED ABOVE. THEREFORE, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15-09-2021 SD/- SD/- (MAHAVIR PRASAD) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 15/09/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,