ACIT, Kollam V. Shri. Hassan Azeez, Kollam

ITA 551/COCH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2582 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-07-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: A S NARAYANAMOORTHY
• Keywords: Business income; Opportunity of being heard
• Section: 144

Judgement Text

ITA NO. 551/ COCH/ 2011 1 IN THE INCOME TAX APELALTER TIBUNAL COCHIN BENCH , COCHIN BEFORE S/SHRI N.R.S. GANESAN, JM & B. R. S BASKARAN, AM ITA NO. 551 /COCH/ 2011 (ASST YEAR 2009 - 10 ) THE ASST COMM ISSIONER OF INCOME TAX CENTRAL CIRCLE KOLLAM VS SHRI HASSAN AZEEZ ALIYA CASHEW EXPORTS CHANDANATHOPE KOLLAM ( APPELLANT) (RESPONDENT) PAN NO. ADCPA4547E ASSESSEE BY SHRI A S NARAYANAMOORTHY REVENUE BY SMT S VIJAYAPRABHA, JR DR DATE OF HEARING 25 TH JULY 2013 DATE OF PRONOUNCEMENT 31 ST JULY 2013 OREER PER B.R. BASKARAN, AM: THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 27 TH JULY 2011 PASSED BY THE LD CIT(A) - II, KOCHI AND IT RELATES TO THE AY 2009 - 10. 2 THE REVENUE IS ASSAILING THE DECISION OF THE LD CIT (A) IN GRANTING PARTIAL RELIEF I N RESPECT OF THE BUSINESS INCOME ESTIMATED BY THE AO. 3 THE FACTS RELATING TO THE SAID ISSUE ARE STATED IN BRIEF: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROCESSING AND EXPORTING OF CASHEW KERNELS. DURING THE COURSE OF SEARCH OPERATION CONDUCTED AT THE PREMISES PODKUNJ MUSALIAR MEMORIAL CHARITABLE & EDUCATIONAL TRUST , KOLLAM, CERTAIN DOCUMENTS RELATING TO THE ASSESSEE WERE FOUND AND SEIZED. CONSEQUENTLY , THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION W AS INITIATED U/S 153C OF THE ITA NO. 551/ COCH/ 2011 2 ACT IN THE HANDS OF THE ASSESS EE . HOWEVER, T HE ASSESSEE DID NOT RESPOND TO ANY OF THE NOTICES ISSUED BY THE AO. ACCORDINGLY, THE AO PROCEEDED TO ESTIMATE THE INCOME OF THE ASSESSEE TO THE BEST OF HER JUDGEMENT U/S 144 OF THE ACT AND FOR THAT PURPOSE, THE AO PLACED RELIANCE ON THE S EIZED DOCUMENT , VIZ., KJJ - II - 45 , WHICH CONTAINED EXPORT BILLS RAISED BY THE ASSESSEE IN THE MONTHS OF MAY AND JULY 2008 . THE AO NOTICED THAT THE AGGREGATE VALUE OF SALES IN THE TWO BILLS RELATING TO THE MONTH OF MAY WAS RS. 71.82 LACS. IN THE IMMEDIATELY PRECEDING YEAR, THE ASSESSEE HAD DECLARED A TURNOVER OF RS. 10.43 CRORES. ACCORDINGLY, THE AO ESTIMATED THE TURNOVER OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AT RS. 11.00 CRORES AND FURTHER ESTIMATED THE INCOME OF THE ASSESSEE AT 2% OF THE ESTIMA TED TURNOVER. ACCORDINGLY, THE AO COMPLETED THE ASSESSMENT. 4 IN THE APPELLATE PROCEEDINGS BEFORE THE LD CIT(A), THE ASSESSEE FURNISHED COPIES OF RETURNS FILED BEFORE THE COMMERCIAL TAX DEPARTMENT (VAT RETURNS) AND CONTENDED THAT THE TURNOVER OF THE ASS ESSEE FOR THE YEAR UNDER CONSIDERATION WAS ONLY RS. 1,00,64,251/ - . BASED ON THE VAT RETURN AND ALSO THE SEIZED MATERIAL, THE LD CIT(A) ESTIMATED THE TURNOVER OF THE ASSESSEE AT RS. 2.07 CRORES AND ACCORDINGLY, ESTIMATED THE BUSINESS INCOME AT 2% OF RS.2 .07 CRORES. THUS, THE LD CIT(A) DETERMINED THE INCOME OF THE ASSESSEE AT RS.4,15,625/ - . AGGRIEVED, THE REVENUE FILED THIS APPEAL BEFORE US. 5 THE LD DR SUBMITTED THAT THE AO WAS CONSTRAINED TO COMPLETE THE ASSESSMENT TO THE BEST OF H ER JUDGMENT U/S 144 OF THE ACT , IN VIEW OF THE FAILURE OF THE ASSESSEE TO RESPOND TO ANY OF THE NOTICES ISSUED BY THE AO. HOWEVER, THE ASSESSEE HAS FILED THE COPIES OF VAT RETURNS AND BY CONSIDERING THOSE FRESH MATERIALS, THE LD CIT(A) HAS GRANTED PARTIAL RELIEF TO THE ASSE SSEE. THE LD DR SUBMITTED THAT THE LD CIT(A) DID NOT AFFORD PROPER OPPORTUNITY TO THE AO ITA NO. 551/ COCH/ 2011 3 TO EXAMINE THE FRESH DOCUMENTS FILED BEFORE HIM FOR THE FIRST TIME AND HENCE IT VIOLAT ES RULE 46 A OF THE I T RULES. ACCORDINGLY, THE LD DR CONTENDED THAT THE AO SH OULD BE AFFORDED NECESSARY OPPORTUNITY TO EXAMINE THE FRESH DOCUMENTS , ON THE BASIS OF WHICH THE LD CIT(A) TOOK HIS DECISION. 6 THE LD AR DID NOT OBJECT TO THE PLEA MADE BY THE LD DR. 7 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. ADMITTE DLY, THE LD CIT(A) GRANTED PARTIAL RELIEF TO THE ASSESS EE ON THE BASIS OF THE VAT RETURN S, WHICH WERE PRODUCED BEFORE HIM FOR THE FIRST TIME BY THE ASSESSEE. ADMITTEDLY, THE LD CIT(A) DID NOT AFFORD AN OPPORTUNITY TO THE AO TO EXAMINE THE NEW DOCUMENTS A ND EXPRESS HIS OPINION. ACCORDINGLY, AS CONTENDED BY THE LD DR, THERE IS A VIOLATION OF RULE 46 A OF I T RULES. HENCE, WE FIND MERIT IN THE PLEA MADE BY THE LD DR. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD CIT(A) ON THIS ISSUE AND RESTORE THE MATTER T O THE AO WITH A DIRECTION TO EXAMINE THE ISSUE AFRESH AFTER CONSIDERING THE DOCUMENTS THAT WERE FILED BEFORE THE LD CIT(A) AND ALSO BY CONSIDERING ANY OTHER DOCUMENTS AND/OR EXPLANATIONS THAT MAY BE FURNISHED BEFORE HIM AND TAKE APPROPRIATE DECISION IN A CCORDANCE WITH LAW , AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8 IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST , DAY OF JULY 2013. SD/ - SD/ - (N.R.S. GANESAN) ( B.R. BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER COCHIN: DATED 31 ST , JULY 2013 RAJ* ITA NO. 551/ COCH/ 2011 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN