Smt. Durga Devi Goyal, BALOTRA V. ITO, BALOTRA

ITA 542/JODH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74946 (ITAT-JODHPUR)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 04-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Rejection of books of accounts; Depreciation; Opportunity of being heard
• Section: 244A; 133A; 234B

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 542/JODH/2013 (A.Y. 2009-10) SMT. DURGA DEVI GOYAL, VS. ITO, W ARD, PROP. M/S. HINDUSTAN POLYESTER, BALOTRA. KHED ROAD, BALOTRA. PAN NO. ADNPG 9575 E (APPELLANT) (RESPONDENT) ITA NO. 543/JODH/2013 (A.Y. 2009-10) SMT. MRIDUL GOYAL, VS. ITO, WARD, PROP. M/S. MANGLIK COTTON MILLS, BALOTRA. KHED ROAD, BALOTRA. PAN NO. AAUPG 4733 C (APPELLANT) (RESPONDENT) ITA NO. 544/JODH/2013 (A.Y. 2009-10) SHRI SANJEEV KUMAR, VS. ITO, WARD , PROP. M/S. MANU TEXTILES, BALOTRA. KHED ROAD, BALOTRA. PAN NO. AGNPA 9386 J (APPELLANT) (RESPONDENT) 2 ASSESSEES BY : SHRI AMIT KOTHARI. DEPARTMENT BY : SHRI N.A. JOSHI - D.R. DATE OF HEARING : 27/02/2014. DATE OF PRONOUNCEMENT : 28/03/2014. O R D E R PER BENCH THESE THREE APPEALS BY THE ASSESSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS EACH DATED 22/10/2013 OF LD. CIT(A) , JODHPUR. THE MAIN GROUND RAISED IN THESE APPEALS IS COMMON AND THE AP PEALS WERE HEARD TOGETHER, SO, THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 FIRST WE WILL DEAL WITH I.T.A.NO. 542/JODH/2013. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THE LD. CIT(A) HAS ERRED IN MAKING EXPARTE ORDE R AND HAS ERRED IN NOT PROVIDING SUFFICIENT OPPORTUNITY OF HEARING. THE L D. CIT(A) HAS ERRED IN NOT CONSIDERING THE VARIOUS ADDITIONS ON MERITS AND HAS ERRED IN DISMISSING THE APPEAL FOR NON-PROSECUTION. THE ORD ER MADE IS BAD IN LAW AND BAD ON FACTS. 2. THE LD. CIT(A) HAS ERRED IN SUSTAINING REJECTION OF BOOKS OF ACCOUNTS AND HAS ALSO ERRED IN SUSTAINING TRADING ADDITION O F RS. 1,45,105/- MADE BY THE LD. AO. 3. THE LD. CIT(A) HAS ERRED IN SUSTAINING ADDITION OF RS. 6,37,625/- FOR G.P ON ALLEGED SHORT STOCK FOUND DURING SURVEY. TH E ADDITION SO MADE IS BAD IN LAW AND BAD ON FACTS. 4. THE LD. CIT(A) HAS ERRED IN SUSTAINING DISALLOWA NCE OF RS. 37,500/- OUT OF INTEREST EXPENDITURE. 3 5. THE LD. CIT(A) HAS ERRED IN SUSTAINING DISALLOWA NCE OF FOLLOWING AMOUNT OUT OF EXPENSES CLAIMED. A. OFFICE EXPENSES 5,000/- B. TELEPHONE EXPENSES 3,000/- C. VEHICLE EXPENSES AND DEPRECIATION 3,500/- D. TRAVELLING EXPENSES 2,500/- 6. THE INTEREST CHARGED U/S 234B AND 234D IS BAD IN LAW AND BAD ON FACTS. THE WITHDRAWAL OF INTEREST U/S 244A IS BAD IN LAW AND BAD ON FACTS. 7. THE APPELLANT CRAVES LIBERTY TO ADD, AMEND, ALTE R, AND MODIFY ANY OF THE GROUND OF APPEAL ON OR BEFORE ITS HEARING BEFOR E YOUR HONOUR. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSE E WAS ENGAGED IN THE BUSINESS OF TRADING AND MANUFACTURING OF DYED C LOTHES AND FILED RETURN OF INCOME ON 30/09/2009 DECLARING AN INCOME OF RS. 2,66,138/-. LATER ON, CASE WAS SELECTED FOR SCRUTINY. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE GROSS PROFIT RATE DECLARED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDE RATION WAS SLIGHT HIGHER IN COMPARISON TO THE PRECEDING YEAR AND THE SALES HAD GONE DOWN. HE FURTHER OBSERVED THAT THE ASSESSEE HAD NOT MAINT AINED DAY TO DAY STOCK REGISTER FOR ITEMS TRADED, SEMI FINISHED AS W ELL AS FINISHED GOODS AND FAILED TO FURNISH QUANTITATIVE TALLIES. HE, TH EREFORE, ASKED THE ASSESSEE TO EXPLAIN THE REASONS AS TO WHY THE PROVI SIONS OF SECTION 145(3) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) SHOULD NOT BE APPLIED. THE ASSESSING OFFICER FURTHER OBSE RVED THAT NO 4 EXPLANATION WAS FILED BY THE ASSESSEE AND AS PER TH E DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF S.N. NAMASIVAYAM CHETTAIR VS. CIT 38 ITR 579 , NON-MAINTENANCE OF STOCK REGISTER CAN JUSTIFY THE REJECTION OF BOOKS OF ACCOUNTS. HE, ACCORDINGLY, REJECTED THE B OOKS OF ACCOUNTS. THE ASSESSING OFFICER ALSO POINTED OUT THAT A SURVEY UN DER SECTION 133A OF THE ACT WAS CONDUCTED IN THIS CASE ON 05/03/2009 AND SH ORT STOCK WAS FOUND. THE ASSESSING OFFICER REJECTED THE EXPLANATION OF T HE ASSESSEE THAT THERE WAS NO SHORT STOCK. ULTIMATELY, THE INCOME WAS ASS ESSED AT AN INCOME OF RS. 11,00,370/- BY MAKING THE FOLLOWING ADDITIONS:- TOTAL INCOME AS PER RETURN FILED RS. 2,66,138 ADD: PROFIT ON SALE OF STOCK OUT OF BOOKS AS DISCU SSED RS. 6,37,625 ADDITION FOR LOW G.P. RATE IN RE-SUBMITTED TRADIN G A/C RS. 1,45,105 DISALLOWANCE OUT OF INTEREST ON UNSECURED LOANS RS. 37,500 DISALLOWANCE OUT OF OFFICE EXPENSES RS. 5 ,000 DISALLOWANCE OUT OF TELEPHONE EXPENSES RS. 3,000 DISALLOWANCE OUT OF VEHICLE EXP. & DEPRECIATION RS. 3,500 DISALLOWANCE OUT OF TRAVELLING EXPENSES RS. 2,500 ---------------------- TOTAL INCOME RS. 11,00,368 (OR) SAY RS. 11,00,370 ---------------------- 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A), WHO DECIDED THE APPEAL EXPARTE AND CONFIRMED THE AD DITIONS MADE BY THE ASSESSING OFFICER BY OBSERVING IN PARA 3 OF THE IMP UGNED ORDER AS UNDER:- 5 3. IN THE GROUNDS OF APPEAL, THE APPELLANT HAS RAI SED VARIOUS GROUNDS CHALLENGING THE REJECTION OF THE BOOKS OF ACCOUNTS U/S 145(3) AND CONSEQUENT TRADING ADDITION OF RS. 1,45,105/- ADDIT ION OF RS. 637625/- MADE ON ACCOUNT OF SHORT STOCK DURING THE COURSE OF SURVEY, DISALLOWANCE OF RS. 37,500/- OUT OF INTEREST EXPENDITURE, DISALL OWANCE OF RS. 5,000/-, RS. 3,000/-, RS. 3,500/- AND RS. 2,500/- ON ACCOUNT OF OFFICE EXPENSES, TELEPHONE EXPENSES, DEPRECIATION AND TRAVELLING EXP ENSES RESPECTIVELY. AS MENTIONED ABOVE THE APPELLANT FAILED TO FURNISH ANY EXPLANATION OR WRITTEN SUBMISSIONS IN SUPPORT OF THE GROUNDS TAKEN IN APPEAL. THE ASSESSING OFFICER HAS DISCUSSED THE REASONS FOR MAK ING THESE ADDITIONS/DISALLOWANCES BUT NO WRITTEN SUBMISSION O R EXPLANATION HAS BEEN SUBMITTED BY THE APPELLANT TO CONTROVERT THE F INDING OF THE ASSESSING OFFICER. IT SEEMS THAT THE PRESENT APPELLANT IS NO T INTERESTED IN PURSUING THE APPEAL. THE LAW ASSISTS THOSE THAT ARE VIGILAN T WITH THEIR RIGHT AND NOT THOSE THAT SLEEP THERE UPON. IN THE ABSENCE OF ANY EXPLANATION IN SUPPORT OF GROUNDS OF APPEAL, I UPHOLD THE ADDITIONS MADE B Y THE ASSESSING OFFICER AFTER DUE DELIBERATIONS AND DETAILED DISCUSSION AS CONTAINED IN THE ASSESSMENT ORDER. NOW THE ASSESSEE IS IN APPEAL. 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E ASSESSEE FURNISHED THE WRITTEN SUBMISSION TO THE ASSESSING O FFICER, BUT THE SAME WAS NOT APPRECIATED IN RIGHT PERSPECTIVE AND ARBITR ARY ADDITIONS WERE MADE WITHOUT PROVIDING SUFFICIENT OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. HE REFERRED TO PAGE NOS. 1 TO 4 OF THE A SSESSEES PAPER BOOK, WHICH IS COPY OF THE LETTER WRITTEN TO THE ASSESSIN G OFFICER, EXPLAINING THE VARIOUS DISCREPANCIES POINTED OUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS FURTHER STATED THAT THE ASSESS ING OFFICER MADE THE ADDITIONS OUT OF THE VARIOUS EXPENSES WITHOUT GIVIN G COGENT REASONS AND THE LD. CIT(A) ALSO CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER 6 WITHOUT PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. HE, THEREFORE, REQUESTED THAT THE CASE MAY BE SENT BACK TO THE ASSESSING OFFICER FOR RE-ADJUDICATION AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6 . IN HIS RIVAL SUBMISSIONS, LEARNED D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE AS SESSEE IN SPITE OF VARIOUS OPPORTUNITIES OF BEING HEARD GIVEN, FAILED TO FURNISH EXPLANATION FOR THE DEFECTS POINTED OUT BY THE ASSESSING OFFICE R. THEREFORE, THE ADDITION WAS RIGHTLY CONFIRMED BY THE LD. CIT(A). 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. CIT(A) DISMISSED T HE APPEAL OF THE ASSESSEE, SIMPLY BY STATING THAT NO WRITTEN SUBMISS IONS OR EXPLANATION HAD BEEN SUBMITTED BY THE ASSESSEE TO CONTROVERT THE FI NDINGS OF THE ASSESSING OFFICER. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED UNHEARD AS PER THE MAXIM AUDI ALTERAM PARTEM . HOWEVER, IN THIS CASE IT APPEARS THAT LD. CIT(A) HAS NOT GIVEN DUE AND RE ASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS ALSO NOTICED THAT THE ASSESSING OFFICER WHILE MAKING THE VARIOUS ADDITIONS OUT OF T HE VARIOUS EXPENSES CLAIMED BY THE ASSESSEE, HAD NOT ASSIGNED ANY COGEN T REASON. 7 FURTHERMORE, THE TRADING ADDITIONS HAD ALSO BEEN MA DE IN SPITE OF ADMITTING THIS FACT THAT THE GROSS PROFIT RATE DECL ARED BY THE ASSESSEE IN COMPARISON TO THE EARLIER YEAR WAS BETTER. WE, THE REFORE, CONSIDERING THE TOTALITY OF THE FACTS, ARE OF THE VIEW THAT THI S MATTER IS TO BE DECIDED AFRESH DENOVO BY THE ASSESSING OFFICER IN ACCORDANCE WITH LAW AF TER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. ACCORDINGLY, THE CASE IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. 8 . THE FACTS OF THE CASES IN I.T.A.NO. 543 & 544/JOD H/2013 ARE SIMILAR TO THE FACTS INVOLVED IN I.T.A.NO 542/JODH/2013 WHI CH WE HAVE ALREADY ADJUDICATED IN THE FORMER PART OF THIS ORDER. IN T HAT VIEW OF THE MATTER, THESE TWO CASES ARE ALSO REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER TO BE ADJUDICATED AFRESH DENOVO IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. 9 . IN THE RESULT, APPEALS ARE ALLOWED FOR STATISTICA L PURPOSES. (ORDER PRONOUNCED IN THE COURT ON 28 TH MARCH, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH MARCH, 2014. VR/- 8 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.