ACIT CIR 25(3), MUMBAI V. YUSUF CHAUDHARY, MUMBAI

ITA 6204/MUM/2011

• Counselvise Citation: 620419914 RSA 2011
• Duration Of Justice: 3 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 13-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 08-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R N DISOUZA
• Assessee Lawyers: TARUN OBIA
• Keywords: Opportunity of being heard
• Section: 133(6)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND SANJAY GARG, (JM) . . , , ./I.T.A. NO.6204/MUM/2011 ( / ASSESSMENT YEAR : 2008-09) ASSTT. COMMISSIONER OF INCOME TAX , 25(3), 308, C-11, BANDRA-KURLA COMPLEX, BANDRA (E), MUMBAI-400051 / VS. SHRI MOHD YUSUF CHAUDHARY, SHOP NO.5, NAVJEEVAN NIVAS CHS, NEW MILL ROAD, KURLA (W), MUMBAI-400070 ( / APPELLANT) .. ( / RESPONDENT) ./ ./PAN/GIR NO. : ACWPC3221B ! / REVENUE BY SHRI R N DISOUZA ' ! /ASSESSEE BY SHRI TARUN OBIA # $ ' %& / DATE OF HEARING : 22.10.2014 '( ' %& /DATE OF PRONOUNCEMENT : 14.11.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 16.6.2011 PASSED BY THE LD. CIT(A)-35, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2008-09. 2. THE REVENUE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.1,43,95,871/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SUPPRESSION OF SALES. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. WE NOTICE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF UNDERTAKING CIVIL CONTRACT WORK AND INTERIOR DECORATION WORKS AND POP JOBS. DU RING THE COURSE OF SCRUTINY I.T.A. NO6204/MUM/2011 2 PROCEEDINGS, THE AO ISSUES NOTICE U/S 133(6) OF THE INCOME TAX ACT, 1961 (THE ACT) TO THE CUSTOMERS OF THE ASSESSEE IN ORDER TO V ERIFY THE AMOUNT OF GROSS CONTRACT RECEIPTS DECLARED BY THE ASSESSEE. THE AO NOTICED THAT THE ASSESSEE HAS CARRIED OUT MAJOR WORK FOR M/S TALWALKARS BETTE R VALUE PVT.LTD.. THE AMOUNT OF GROSS CONTRACT RECEIPTS ACCOUNTED FOR BY THE ASS ESSEE DIFFERED FROM THE AGGREGATE AMOUNT DECLARED BY THE CUSTOMERS OF THE A SSESSEE. THE ASSESSEE SUBMITTED THAT HE DID NOT INCLUDE THE REIMBURSEMENT OF COST OF MATERIALS IN CONTRACT RECEIPTS AND THE AMOUNT SHOWN BY THE CUS TOMERS INCLUDED THE VALUE OF MATERIALS ALSO. HOWEVER, THE AO COMPUTED THE DIFFE RENCE BETWEEN THE RECEIPTS DECLARED BY THE ASSESSEE AND THAT REPORTED BY THE C USTOMERS AT RS.1,43,95,871/- ACCORDINGLY, THE AO ASSESSED THE SAME AS INCOME OF THE ASSESSEE. 4. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) ACCEPTED THE SUBMISSIONS OF THE ASSESSEE THAT IT DID NOT ACCOUNT FOR THE RECEIPT PE RTAINING TO REIMBURSEMENT OF COST OF MATERIALS AND THE SAME HAS RESULTED IN THE DIFFERENCE. THE ASSESSEE HAS ALSO SUBMITTED THAT IT HAD ACCOUNTED CERTAIN RECEIP TS IN THE SUBSEQUENT YEARS. IT WAS FURTHER SUBMITTED THAT ALL THE PAYMENTS RECEIVE D FROM THE CUSTOMERS HAVE DULY BEEN DEPOSITED IN THE BANK ACCOUNT OF THE ASSE SSEE. HENCE THE LD. CIT(A) TOOK THE VIEW THAT THE AO HAS NOT MADE OUT A CASE FOR MAKING ADDITION OF SUPPRESSION OF SALES. FURTHER THE LD CIT(A) HAS OB SERVED THAT THE AO HAS NOT POINTED OUT ANY MISTAKE IN THE ACCOUNTING SYSTEM F OLLOWED BY THE ASSESSEE. ACCORDINGLY, HE HELD THAT THE IMPUGNED ADDITION MAD E BY THE AO IS NOT JUSTIFIED AND ACCORDINGLY DELETED THE ADDITION. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A). 5. AT THE TIME OF HEARING, THE LD. DR SUBMITTED THA T THE LD. CIT(A) HAS CONSIDERED NEW MATERIAL FILED BY THE ASSESSEE WITH OUT CONFRONTING THE SAME TO THE AO. HE FURTHER SUBMITTED THAT THE LD. CIT(A) HAS ARRIVED AT THE DECISION WITHOUT EXAMINING THE BOOKS OF ACCOUNT IN ORDER TO CORROBORATE THE SUBMISSIONS MADE BY THE ASSESSEE. HE FURTHER SUBMITTED THAT T HE ASSESSEE DID NOT FURNISH CORRECT DETAILS OF COST OF MATERIAL USED IN THE CON TRACT WORK. INSTEAD HE HAS STATED THE RATIO OF EXPENDITURE OF COST OF MATERIAL WOULD BE AROUND 60% OF THE CONTRACT RECEIPTS. THE LD. DR SUBMITTED THAT THERE IS MISS-MATCH BETWEEN THE AMOUNT RECEIVED BY THE ASSESSEE AND THE OF VALUE O F WORK UNDERTAKEN BY THE I.T.A. NO6204/MUM/2011 3 ASSESSEE AND THESE FACTS HAVE NOT BEEN EXAMINED BY THE LD CIT(A). ACCORDINGLY, THE LD. DR SUGGESTED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE AO IN ORDER TO EXAMINE THE SAME AFRESH IN THE L IGHT OF THE NEW MATERIAL FURNISHED AND THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LD. CIT(A). 6. ON THE CONTRARY, THE LD. AR SUBMITTED THAT THE L D. CIT(A) HAS EXAMINED ALL THE DETAILS AND THEREAFTER ARRIVED AT THE DECISION THAT THE IMPUGNED ADDITIONS IS NOT WARRANTED IN THE FACTS AND CIRCUMSTANCES OF TH E CASE. WHEN IT WAS POINTED OUT TO THE LD. AR THAT THE ISSUE APPEARS TO BE A M ATTER OF REQUIRING RECONCILIATION OF FIGURES FURNISHED BY THE CUSTOMERS AND THAT ACCO UNTED FOR BY THE ASSESSEE AND HENCE SUCH EXERCISE CAN BE CARRIED OUT BEFORE T HE AO IN ORDER THE SATISFY HIM THAT THERE WAS NO SUPPRESSION OF SALES, THE LD. AR AGREED TO THE SAME. 7. ACCORDINGLY, WE ARE OF THE VIEW THAT THIS M ATTER REQUIRES FRESH EXAMINATION AT THE END OF THE AO. ACCORDINGLY, WE SET ASIDE TH E ORDER OF LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO FOR FRESH EXAMINATION. THE ASSESSEE IS ALSO DIRECTED TO RECONCILE DIFFERENCE BETWEEN THE A CCOUNTED RECEIPTS AND THAT DECLARED BY THE CUSTOMERS. AFTER OFFERING NECESSAR Y OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, THE AO MAY TAKE APPROPRIATE DECIS ION IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE APPEALS FILED BY THE REVE NUE IS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 14TH NOV , 2014. '( # )* +, 14TH NOV, 2014 ( ' $ - SD SD ( /SANJAY GARG) ( . . / B.R. BASKARAN) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ) # $ MUMBAI: 14TH NOV,2014. . . ./ SRL , SR. PS I.T.A. NO6204/MUM/2011 4 !'#$ %$&' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. # .% ( ) / THE CIT(A)- CONCERNED 4. # .% / CIT CONCERNED 5. /0 %1 , & 1 , ) # $ / DR, ITAT, MUMBAI CONCERNED 6. 2 3$ / GUARD FILE. 4 # / BY ORDER, TRUE COPY 5 (ASSTT. REGISTRAR) & 1 , ) # $ /ITAT, MUMBAI