ITO, Ranchi V. M/s. Baba Construction, Ranchi

ITA 57/RAN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 85438 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2014
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 26-04-2013
• Court: TRIBUNAL
• Department Lawyers: CHOUDHARY ORAM JCITLD
• Assessee Lawyers: R K KAUSHALLD
• Keywords: Loose papers; Opportunity of being heard

Judgement Text

1 ITA NO.57/RAN/13 M/S. BABA CONSTRUCTION INCOME TAX APPELLATE TRIBUNAL, CIRCUIT BENCH, RANCHI BEFORE HON'BLE SHRI H.L. KARWA, PRESIDENT , AND HON'BLE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO. 57 /RAN/2013 A.Y 200 6 - 07 I.T.O WARD 1(2), RANCHI VS. M/S. BABA CONSTRUCTION,RANCHI PAN: A AEFB0370N ( APPELLANT ) ( RESPONDENT ) FOR THE APPELLANT : CHOUDHARY ORAM, JCIT/LD.DR FOR THE RESPONDENT : SHRI R.K. KAUSHAL,LD.AR DATE OF HEARING : 2 5 - 11 - 2014 DATE OF PRONOUNCEMENT: 2 5 - 11 - 2014 ORDER SHRI B.R. BASKARAN, ACCOUNTANT MEMBER : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 30.1.2013 PASSED BY LD CIT(A), RANCHI AND IT RELATES TO THE ASSESSMENT YEAR 2006 - 07. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN RESPECT OF THE FOLLOWING ISSUES: - ( A ) ADDITION OF RS.36,90,041/ - ON THE BASIS OF KACHCHA RECEIPT. ( B ) CANCELLING THE REJECTION OF BOOKS AND CONSEQUENT ESTIMATION OF PROFIT. ( C ) DELETION OF ADDITION OF RS.20.00 LAKHS RELATING TO THE VOL UNTARY DISCLOSURE MADE DURING THE COURSE OF SURVEY OPERATION. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE, A PARTNERSHIP FIRM, WAS SUBJECTED TO SURVEY OPERATION. IT IS ENGAGED IN CONSTRUCTION BUSINESS. DURING THE COURSE OF SURVEY, THE D EPARTMENT UNEARTHED CERTAIN LOOSE PAPERS, WHICH REVEALED THAT THE ASSESSEE WAS NOT ACCOUNTING 2 ITA NO.57/RAN/13 M/S. BABA CONSTRUCTION 35.81% OF RECEIPTS SHOWN IN THE KACHCHA PAPERS. THE AGGREGATE AMOUNT OF RECEIPT S SHOWN IN THE KACHCHA PAPERS WAS RS.1,03,04,500/ - AND THE AO CONSIDERED 35.81% OF THE SAME, VIZ., RS.36,90,041/ - AS INCOME OF THE ASSESSEE. THE AO FURTHER REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE INCOME OF THE ASSESSEE AT 10% OF THE GROSS RECEIPTS REFERRED ABOVE. THUS, THE AO ESTIMATED THE INCOME OF THE ASSESSEE AT RS.10,30,45 0/ - . DURING THE COURSE OF SURVEY, THE ASSESSEE HAD ADMITTED TO OFFER RS.34.00 LAKHS IN AY 2005 - 06 AND RS.20.00 LAKHS IN AY 2006 - 07. SINCE THE ASSESSEE DID NOT OFFER RS.20.00 LAKHS IN THIS YEAR, THE AO ASSESSED THE SAME IN THE HANDS OF THE ASSESSEE. 3. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) DELETED THE ADDITION OF RS.36,90,041/ - ON THE GROUND THAT THE ASSESSING OFFICER HAS ADDED THE SAME WITHOUT MAKING PROPER ENQUIRIES. HE ALSO CANCELLED THE REJECTION OF BOOKS ON THE REASONING THAT THE AO DID N OT POINT OUT ANY DEFECT IN THE BOOKS OF ACCOUNT. ACCORDINGLY, THE LD CIT(A) ALSO SET ASIDE THE INCOME ESTIMATED BY THE AO. WITH REGARD TO THE ADDITION OF RS.20.00 LAKHS, THE LD CIT(A) NOTICED THAT THE SAME WAS OFFERED IN THE HANDS OF THE PARTNERS OF THE ASSESSEE FIRM. ACCORDINGLY, HE DELETED THE SAID ADDITION ALSO. 4. DURING THE COURSE OF HEARING, THE LD D.R SUBMITTED THAT THE LD CIT(A) HAS DELETED ALL THE ADDITIONS WITHOUT AFFORDING AN OPPORTUNITY TO THE ASSESSING OFFICER. ACCORDING TO LD D.R, THE ASSESSING OFFICER HAS GIVEN SUFFICIENT REASONS FOR MAKING THESE ADDITIONS AND HENCE THE LD CIT(A) WAS NOT JUSTIFIED IN DELETING ALL THE ADDITIONS. ON THE CONTRARY, THE LD A.R STRONGLY SUPPORTED THE ORDER PASSED BY LD CIT(A). 5. WE NOTICE THAT THE LD CIT (A) HAS CANCELLED THE FIRST TWO ADDITIONS MAINLY ON THE REASONING THAT THE AO HAS REJECTED THE BOOK RESULTS WITHOUT POINTING OUT ANY DEFECT AND ALSO WITHOUT CONDUCTING PROPER EXAMINATION. FROM THE READING OF THE ASSESSMENT ORDER, IT IS NOT CLEAR AS TO WHE THER THE ASSESSING OFFICER DID CALL 3 ITA NO.57/RAN/13 M/S. BABA CONSTRUCTION FOR ANY EXPLANATIONS FROM THE ASSESSEE WITH REGARD TO THE KACHCHA RECEIPTS. AS POINTED OUT BY LD CIT(A), THE ASSESSING OFFICER COULD HAVE CONDUCTED NECESSARY ENQUIRIES FROM THE CUSTOMERS OF THE ASSESEE ALSO. IT IS ALSO NOT KNOWN AS TO WHETHER THE ASSESSEE WAS GIVEN OPPORTUNITY OF BEING HEARD BEFORE REJECTING THE BOOKS OF ACCOUNTS. HENCE, IN OUR VIEW THE FIRST TWO ISSUES REQUIRE FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) IN RESPECT OF THE FIRST TWO ISSUES STATED ABOVE AND RESTORE THEM TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THEM AFRESH AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. WITH REGARD TO THE L AST ADDITION OF RS.20.00 LAKHS, THE LD CIT(A) DELETED THE SAME ON THE REASONING THAT THE SAID AMOUNT WAS OFFERED BY THE PARTNERS OF THE ASSESSEE FIRM. HOWEVER, BOTH THE PARTIES FAILED TO FURNISH ANY EVIDENCE TO SHOW THAT THE SAID INCOME OF RS.20.00 LAKHS WAS INDEED OFFERED BY THE PARTNERS. HENCE, IN OUR VIEW, THIS ISSUE ALSO REQUIRES VERIFICATION AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD CIT(A) ON THIS ISSUE ALSO AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFI CER WITH THE DIRECTION TO EXAMINE AS TO WHE THER THE SAME HAS BEEN ASSESS ED IN THE HANDS OF THE PARTNERS AND TO DELETE THE ADDITION ONLY IF IT HAS BEEN ASSESSED IN THE HANDS OF THE PARTNERS OF THE ASSESSEE FIRM. WE ORDER ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 5 - 11 - 2014 SD/ - SD/ - [ H.L. KARWA ] [ B.R. BASKARAN ] PRESIDENT ACCOUNTANT MEMBER DT. 2 5 - 11 - 2014 4 ITA NO.57/RAN/13 M/S. BABA CONSTRUCTION PLACE : RANCHI PP, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT : I.T.O W 1(2), RANCHI 2 THE RESPONDENT: M/S. BABA CONSTURCTION , VATIKA APARTMENT, LINE TANK ROAD RANCHI 3..THE CIT, 4.THE CIT(A), 5.DR, ITAT CIRCUIT BENCH, RANCHI 6. GUARD FIL E. TRUE COPY, BY ORDER, ASSTT. REGISTRAR 5 ITA NO.57/RAN/13 M/S. BABA CONSTRUCTION 1. DATE OF DICTATION .............2 5 - 11 - 2014 /26 - 11 - 14 DI CTATED ON MEMBER S LAPTOP ....................... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DI CTATING MEMBER ........................OTHER MEMBER .......27 - 11 - 2014........................ 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. ..................... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRO NOUNCEMENT..................................2 5 - 11 - 2014................................................... 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S ................ 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .................... ................... 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ......................................... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER ........................................................ ......................................... 9. DATE OF DESPATCH OF THE ORDER ..............................................................