Renu Anil Goel, Solapur V. Income-tax Officer,

ITA 557/PUN/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0501 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 27-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . . , BEFORE SHRI R.K. PANDA, AM . / ITA NO.557/PN/2015 / ASSESSMENT YEAR : 2007-08 SMT. RENU ANIL GOEL, AT POST : MORVANCHI, TALUKA : SOLAPUR-413213 PAN :ABIPG6883G . / APPELLANT V/S ITO, WARD-1(1), SANGLI . / RESPONDENT / APPELLANT BY : SHRI KISHOR PHADKE / RESPONDENT BY : SHRI P.L. KUREEL / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER DATED 28-01-2015 OF THE CIT(A)-I & II, KOLHAPUR RELATING TO ASSESSMENT YEAR 2007-08. 2. ALTHOUGH A NUMBER OF GROUNDS HAVE BEEN TAKEN BY TH E ASSESSEE THEY ALL RELATE TO THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITION OF RS.11,61,168/- ON ACCOUNT OF DISALLOWANCE OF EXPENSES AND RS.23,82,081/- ON ACCOUNT OF DISALLOWANCE OF CREDITORS BY TH E ASSESSING OFFICER IN THE ORDER PASSED U/S.144 OF THE I.T. ACT. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS AS A COMMISSION AGENT. SH E FILED HER RETURN OF INCOME ON 18-03-2008 DECLARING TOTAL INCOME OF R S.1,43,412/- / DATE OF HEARING :08.11.2016 / DATE OF PRONOUNCEMENT: 09.11.2016 2 ITA NO.557/PN/2015 AND AGRICULTURAL INCOME OF RS.15,80,230/-. DESPITE OF SERVICE OF NOTICE, THERE WAS NON-COMPLIANCE FROM THE SIDE OF THE ASSESSEE. THE ASSESSING OFFICER, THEREFORE, PROCEEDED TO COMPLETE THE ASSESSMENT U /S.144 OF THE I.T. ACT. AFTER EXAMINATION OF THE PROFIT AND LOSS ACCOUNT FILED ALONG WITH THE RETURN OF INCOME THE ASSESSING OFFICER HELD THAT IN ABS ENCE OF PRODUCTION OF BOOKS OF ACCOUNT, BILLS AND VOUCHERS, THE VA RIOUS EXPENSES CLAIMED BY THE ASSESSEE REMAIN UNVERIFIED. IN VIE W OF THE ABOVE, THE ASSESSING OFFICER DISALLOWED EXPENSES UNDER VARIO US HEADS TOTALING TO RS.11,61,168/-. 4. SIMILARLY, THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS SHOWN CREDITORS OF RS.23,82,081/- DURING THE YEAR UNDER CONSIDER ATION. SINCE THE ASSESSEE FAILED TO DISCHARGE THE ONUS CAST ON HER B Y PROVING THE IDENTITY AND CAPACITY OF THE CREDITORS AND THE GENUINENE SS OF THE TRANSACTION, THE ASSESSING OFFICER MADE ADDITION OF RS.23,82,08 1/- AS UNEXPLAINED CREDITOR U/S.68 OF THE I.T. ACT. SINCE NONE APPEARED ON BEHALF OF THE ASSESSEE THE CIT(A) ALSO DECIDED THE CASE EX PARTE. AFTER ALLOWING 10% OF THE EXPENSES OF RS.11,61,168/- BEING RS.1,16,11 6/- AS REASONABLE HE CONFIRMED THE DISALLOWANCE OF BALANCE EXPENSE S. SIMILARLY, IN ABSENCE OF ANY CLARIFICATION BEFORE HIM REGARDING T HE IDENTIFY AND CAPACITY OF THE SUNDRY CREDITORS AT RS.23,82,0 81/- HE UPHELD THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION U/S.68 OF THE I.T. ACT. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE FOLLOWING MODIFIED GROUNDS OF APPEAL : 1. THE LD.CIT(A) ERRED IN LAW AND ON FACTS IN NOT G RANTING THE EFFECT OF TELESCOPING OF DISALLOWANCE OF FOLLOWING EXPENSES AGAIN ST THE ADDITION OF RS.23,82,081/- U/S.68 OF THE I.T. ACT, 1961 INCURRED FOR UNEXPLAINED CREDITORS : 3 ITA NO.557/PN/2015 A. EXPENSES OF RS.10,45,051/- INCURRED FOR SALE OF BEDANA. B. EXPENSES OF RS.11,07,900/- INCURRED FOR EARNING THE AG RICULTURAL INCOME. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND A ND DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT THE ASSESSEE IS A LADY AND DUE TO HER CHANGE OF PLACE SHE C OULD NOT PROPERLY ATTEND TO THE INCOME-TAX PROCEEDINGS BEFORE THE AO. F URTHER, THERE WAS CHANGE IN COUNSEL FOR WHICH THE CASE WAS NOT ATTENDED PROPERLY BEFORE THE CIT(A). HE SUBMITTED THAT IN THE INTEREST OF JUSTICE O NE LAST OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE BY SETTING ASIDE THE MATTER EITHER TO THE ASSESSING OFFICER OR THE CIT(A) AND THE ASS ESSEE SHOULD BE GIVEN AN OPPORTUNITY TO EXPLAIN HER CASE. 7. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND HEAVILY OPPOSED THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE. HE SUBMITTED THAT DESPITE REPEATED OPPORTUNITIES GIVEN B Y THE ASSESSING OFFICER AS WELL AS THE CIT(A) THE ASSESSEE HAS NOT BOTHERE D TO APPEAR BEFORE EITHER OF THEM. THEREFORE, THE ORDER PASSED BY THE CIT(A) CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER SHOULD BE UPHELD. 8. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH T HE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PA PER BOOK FILED ON BEHALF OF THE ASSESSEE. I FIND THE ASSESSEE IN THE INSTANT CASE IS ACTING AS A COMMISSION AGENT ON ACCOUNT OF SALE OF GRAPES AND POMEGRANATES. SHE HAD FILED HER RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,43,412/- AND AGRICULTURAL INCOME OF RS.15,80,230/-. SINCE THERE WAS NON-COMPLIANCE ON THE PART OF THE ASSESSEE THE ASS ESSING OFFICER DISALLOWED VARIOUS EXPENSES CLAIMED IN THE PROFIT AND LOSS AC COUNT AND MADE ADDITION OF RS.11,61,168/- ON ACCOUNT OF DISALLOWANCE O F 4 ITA NO.557/PN/2015 EXPENSES. SIMILARLY, HE MADE ADDITION OF RS.23,82,081/- U/S.68 OF THE I.T. ACT ON ACCOUNT OF SUNDRY CREDITORS IN THE BALANCE S HEET WHICH COULD NOT BE EXPLAINED BY THE ASSESSEE. I FIND IN APPEAL THE L D.CIT(A) RESTRICTED THE DISALLOWANCE OF EXPENSES TO 90% OF THE EXP ENSES MEANING THEREBY HE ALLOWED ONLY 10% OF THE EXPENSES AS ALLOWABLE. SIMILARLY, HE ALSO SUSTAINED THE ADDITION OF RS.23,82,081/- MADE BY THE A SSESSING OFFICER U/S.68 OF THE I.T. ACT ON ACCOUNT OF UNEXPLAINED SUN DRY CREDITORS. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT DUE TO SHIFTING OF HER PLACE OF RESIDENCE BY THE ASSESSEE AND CHANGE OF ADVOCATE THE MATTER WAS NOT PROPERLY REPRESENTED BE FORE THE ASSESSING OFFICER AS WELL AS THE CIT(A). IT IS ALSO HIS SUBMISSION THAT GIVEN AN OPPORTUNITY THE ASSESSEE IS IN A POSITION TO SUBSTANTIATE HER CASE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN TH E INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE MATTER BACK T O THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE ONE MORE OPPORTU NITY TO THE ASSESSEE TO SUBSTANTIATE HER CASE. THE ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE ASSESSING OFFICER IN COMPLETION OF THE AS SESSMENT PROCEEDINGS FAILING WHICH THE ASSESSING OFFICER IS FREE TO PASS APPROPRIATE ORDER AS PER LAW. I HOLD AND DIRECT ACCORDIN GLY. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPO SES. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09-11-2016. SD/- ( R.K. PANDA ) ACCOUNTANT MEMBER PUNE ; DATED : 09 TH NOVEMBER, 2016. 5 ITA NO.557/PN/2015 '# $# / COPY OF THE ORDER FORWARDED TO : / BY ORDER , $ % / TRUE COPY // // TRUE COPY // &' % * / SR. PRIVATE SECRETARY *, / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) - 1 & 2, KOLHAPUR 4. THE CIT, 1 & 2, KOLHAPUR 5. $ %%* , * , SMC BENCH / DR, ITAT, SMC BENCH PUNE; 6. 2 / GUARD FILE.