M/s. Baba's Outlet, Bhubaneswar V. ITO, Ward-2(2), Bhubaneswar, Bhubaneswar

ITA 535/CTK/2013

• Counselvise Citation: 53522114 RSA 2013
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: P K MISHRA
• Keywords: Non compliance
• Section: 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK . . , . . , BEFORE SHRI P.K.BANSAL , AM & SHRI D.T.GARASIA , JM ./ ITA NO. 53 5 / C TK /20 1 3 ( / ASSESSMENT YEAR : 20 0 5 - 06 ) M/S BABAS OUTLET, PLOT NO.440, AT/PO: SAHEED NAGAR, BHUBANESWAR, DISTRICT KHURDA - 751007 VS. ITO WARD - 2(2), BHUBANESWAR ./ ./ PAN/GIR NO. : A AKFM 4024 C ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI P.K.MISHRA /REVENUE BY : SHRI S.C.MOHANTY / DATE OF HEARING : 30 TH APRIL , 201 4 / DATE OF PRONOUNCEMENT : 02/05 /2014 / O R D E R PER BENCH : TH IS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) DATED 5 - 3 - 2013 BY TAKING FOLLOWING EFFECTIVE GROUNDS OF APPEAL : - 1. THAT THE IMPUGNED ORDER PASSED U/S.144 OF THE ACT IS NOT JUST AND PROPER UND ER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND AS SUCH ALL THE ADDITIONS MADE ARE LIABLE TO BE DELETED AND THE RETURNED FILED BY THE ASSESSEE IS LIABLE TO BE ACCEPTED IN THE INTEREST OF JUSTICE. 2. THAT THE LEARNED A.O SHOULD NOT HAVE COMPLETED THE ASSESSMENT EXPARTEE WITHOUT PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE FIRM WHEN IT IS KNOWN TO HIM THAT THERE WAS A DISPUTE GOING ON BETWEEN PARTNERS BY THAT TIME AND THE LEARNED C.I.T(A) SHOULD NOT HAVE CONFIRMED THE SAME, WHEN IT IS CLEARLY APPAR ENT THAT THE ADDITIONS MADE BY THE LEARNED A.O ARE NOT SUSTAINABLE IN THE EYE OF LAW. 3. THAT THE LEARNED A.O SHOULD NOT HAVE ADDED BACK THE CAPITAL INTRODUCTION MADE BY THE PARTNERS IN THE HAND OF THE FIRM WITHOUT EXAMINING THE PARTNERS AND THE LEARNED C.I.T (A) 2 ITA NO. 535 /CTK /201 3 SHOULD NOT HAVE CONFIRMED THE SAME TECHNICALLY WITHOUT APPLYING HIS JUDICIAL BENT OF MIND. 4. THAT THE LEARNED A.O AS WELL AS LEARNED C.I.T(A) HAVE COMMITTED GROSS ERROR OF LAW IN CONFIRMING THE ADDITION OF SUNDRY CREDITOR FOR GOODS WHEN THEY HAVE REJECT ED THE BOOKS AND ESTIMATED THE NET PROFIT. 5. THAT THE LEARNED A.O AS WELL AS LEARNED C.I.T(A) SHOULD NOT HAVE DISALLOWED SALARY AND INTEREST PAID TO PARTNERS WHEN THEY HAVE REJECTED THE BOOKS AND ESTIMATED THE NET PROFIT. 6. THAT THE LEARNED A.O AS WELL AS THE LEARNED C.I.T(A) SHOULD NOT HAVE ESTIMATED THE NET PROFIT ON A HIGHER SIDE BECAUSE OF NON COMPLIANCES BY THE ASSESSEE WITHOUT PROVIDING ANY SUFFICIENT REASON FOR SUCH HIGHER SIDE ESTIMATION. 7. T HAT THE LEARNED A.O AS WELL AS THE LEARNED C.I.T(A ) HAVE COMMITTED GROSS ERROR OF LAW IN GIVING A CONTRARY FINDING TO THE FACTS ON RECORD FOR WHICH THE IMPUGNED ADDITIONS MADE IN THE ORDER OF ASSESSMENT ARE LIABLE TO BE DELETED IN THE INTEREST OF JUSTICE. 2 . AT THE OUTSET, LEARNED AR VEHEMENTLY CONTENDE D BEFORE US THAT THE ASSESSEE WAS NOT PROVIDED SUFFICIENT OPPORTUNITY. THE ASSESSMENT HAS BEEN COMPLETED U/S. 144 OF THE I.T. ACT. THE ASSESSEE IS MAINTAINING THE REGULAR BOOKS OF ACCOUNTS. THE ADDITIONS HAVE BEEN MADE MERELY ON ESTIMATE BASIS , E VEN THOUGH THE AUDIT REPORT IN FORM NO. 3CD WAS DULY FILED BEFORE THE AO. THE CIT(A ) HAS NOT DECIDED THE GROUNDS TAKEN BY THE ASSESSEE ON MERIT MERELY CONFIRMING THE ORDER OF THE AO. 3. ON THE OTHER HAND, LEARNED DR RELIED ON THE ORDER OF THE AUTHORITIES BELOW. 4. WE HEARD RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW AND PERUSED THE MATERIAL PLACED ON RECORD. WE NOTED THAT THE AO HAS MADE THE ASSESSMENT UNDER SECTION 144 BY MAKING CERTAIN DISALLOWANCES ON THE RE TURNED INCOME, THEREBY ACCEPTING THE BOOKS OF ACCOUNTS OF THE 3 ITA NO. 535 /CTK /201 3 ASSESSEE WHILE THE ASSESSMENT U/S. 144 HAS TO BE MADE BY ESTIMATING THE INCOME OF THE ASSESSEE BEFORE MAKING THE ASSESSMENT U/S. 144. WE NOTED THAT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE AS IS R EQUIRED AS PER THE PROVISION OF SECTION 144. WE, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIRPLAY TO BOTH THE PARTIES, SET ASIDE THE ASSESSMENT AND DIRECTED THE AO TO MAKE ASSESSMENT AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE. THE ASSE SSEE IS DIRECTED TO ADDUCE THE EVIDENCE AND COOPERATE THE AO IN MAKING THE ASSESSMENT. 5 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PR ONOUNCED IN THE OPEN COURT ON THIS 02/05 / 201 4 . 02/05 /2014 SD/ - SD/ - ( . . ) ( D.T.GARASIA ) ( . . ) ( P.K.BANSAL ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 02/05 /2014 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. / THE APPELLANT 2. / THE RESPO NDENT. 3. ( ) / THE CIT(A) , BHUBANESWAR 4. / CIT , BHUBANESWAR 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//