A.M. Jalgaonwala Agro Products Pvt.Ltd, Dhule V. Income tax Officer, Dhule

ITA 664/PUN/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7600 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 20-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Assessee Lawyers: ASHISH MAHENDRA BHALGAT
• Keywords: Principle of natural justice
• Section: 133A

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.664/PUN/2017 / ASSESSMENT YEAR : 2013-14 A.M. JALGAONWALA AGRO PRODUCTS PVT. LTD., KAPAD BAZAR, SIRPUR, TAL. SHIRPUR, DHULE-425 405. PAN: AABCA5276G. . / APPELLANT. V/S THE INCOME TAX OFFICER, WARD-5, DHULE. . / RESPONDENT ASSESSEE BY : SHRI ASHISH MAHENDRA BHALGAT. REVENUE BY : SHRI PANKAJ GARG. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 1, NASHIK DATED 13.02.2017 FOR THE ASSESSMENT YEAR 2013-14. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUS INESS OF DEALING IN ALL TYPES OF PIPES, AGRICULTURAL IMPLEMENTS ETC. ASSE SSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2013-14 ON 30.09.2013 DECLARING TOTAL INCOME OF RS.53,41,100/-. IN THIS CASE, A SUR VEY OPERATION U/S 133A OF THE ACT WAS CARRIED OUT ON 21.11.2 012 ON THE / DATE OF HEARING : 14.08.2019 / DATE OF PRONOUNCEMENT: 16.10.2019 2 BUSINESS PREMISES OF THE ASSESSEE WHEREIN THE ASSESSEE COMPANY HAD ADMITTED ADDITIONAL INCOME OF 1,30,00,000/- FOR THE DISCREPAN CIES WITH REGARD TO STOCK, CASH AND UNACCOUNTED TRANSACTIONS NO TED IN THE IMPOUNDED MATERIAL FOUND DURING THE SURVEY. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3 ) OF ACT VIDE ORDER DT.21.03.2016 DETERMINING THE TOTAL INCOME AT RS.1,84 ,52,810/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO VIDE ORDER DT.13.02.2017 (IN APPEAL NO.NSK/CI T(A)- 1/25/2016-17) DISMISSED THE APPEAL OF ASSESSEE. AGGRIEVE D BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US AND HAS RAISE D THE FOLLOWING GROUNDS : 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADD ITION OF RS.1,30,00,000/- MADE BY THE A.O. WITHOUT APPRECIAT ING THE SAID ADDITION WAS NOT JUSTIFIED IN LAW. 2. THE LEARNED CIT(A), ERRED IN HOLDING THAT THE AD DITION OF RS.1,30,00,000/- WAS JUSTIFIED ON THE GROUND THAT I N THE COURSE OF SURVEY STATEMENT RECORDED U/S 133A, THE ASSESSEE HA D DECLARED ADDITIONAL INCOME OF RS.1,30,00,000/- IN RESPECT OF STOCK SHORTAGE AND CASH FOUND AND HENCE, IT CANNOT GO BACK ON ITS DECLARATION ONCE THE INCOME WAS DECLARED IN THE SURVEY STATEMENT. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THA T THE SAID ADDITION WAS MADE SOLELY ON THE BASIS OF THE DECLARATION MAD E IN THE STATEMENT U/S 133A AND THE DEPT. HAD NOT POINTED OU T ANY DISCREPANCY IN THE BOOKS OF ACCOUNTS FURNISHED BY T HE ASSESSEE IN THE COURSE OF ASST. PROCEEDINGS TO JUSTIFY THE ADDI TION OF RS.1,30,00,000/- ON MERITS AND HENCE, THE ADDITION WAS NOT WARRANTED. 4. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THA T AT THE TIME OF SURVEY ACTION CONDUCTED ON 21.11.2012, THE BOOKS OF ACCOUNTS WERE INCOMPLETE, HOWEVER, AFTER THE END OF THE YEAR, THE BOOKS OF ACCOUNTS WERE PREPARED AND AS PER THE FINALIZED BOO KS, THE STOCK AND CASH WAS RECONCILED AND THE A.O. HAD ACCEPTED T HE SAID BOOKS WITHOUT POINTING OUT ANY DISCREPANCY IN THE SAME AN D THEREFORE, THERE WAS NO REASON TO MAKE ANY ADDITION SOLELY ON THE BASIS OF THE DECLARATION MADE IN THE SURVEY STATEMENT. 5. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE ASSE SSEE SUBMITS THAT AT THE TIME OF SURVEY ACTION, THE 'INVENTORY OF STO CK VALUING RS.2,01,68,450/- WAS FOUND AS AGAINST THE STOCK OFR S.3,77,36,365/- AS PER THE INCOMPLETE BOOKS OF ACCOUNTS AND HENCE, IF AT ALL, ANY ADDITION IS TO BE MADE, THEN ONLY THE G.P, @ 2.47% ON THE STOCK SHORTAGE SHOULD HAVE BEEN TAXED AND NO FURTHER ADDITION WAS JUSTIFIED ON FACTS OF THE CASE. 3 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHE R. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOT ICED THAT ASSESSEE HAD NOT DISCLOSED THE ADDITIONAL INCOME OF RS.1,30,0 0,000/- THAT WAS ADMITTED DURING THE SURVEY IN THE RETURN OF INCOME FILED ON 30.09.2013 FOR A.Y. 2013-14 AND THAT ASSESSEE HAD RETRAC TED FROM THE SAID STATEMENT IN ITS WRITTEN SUBMISSIONS DATED ON 15.12. 2015. I.E., THREE YEARS AFTER THE SURVEY. THE SUBMISSIONS OF THE AS SESSEE OF NOT INCLUDING THE INCOME DECLARED DURING SURVEY IN THE RETURN OF INCOME WERE NOT FOUND ACCEPTABLE BY THE AO. AO THUS MADE ADD ITION OF RS.1,30,00,000/- AS ADDITIONAL INCOME. AGGRIEVED BY THE ORD ER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE EX -PARTE ORDER DATED 13.02.2017 (IN APPEAL NO.NSK/CIT(A)-1/25/2016-17) DISMISSED THE APPEAL OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APP EAL BEFORE US. 5. BEFORE US, LD.A.R. AT THE OUTSET SUBMITTED THAT LD.CIT(A) HAS PASSED AN EX-PARTE ORDER AND NOT ON MERITS. HE FURTHE R SUBMITTED THAT DUE TO UNAVOIDABLE CIRCUMSTANCES, ASSESSEE COULD NOT APP EAR BEFORE LD.CIT(A). HE SUBMITTED THAT IF GIVEN A CHANCE, ASSESSEE UN DERTAKES TO APPEAR BEFORE LOWER AUTHORITIES AND FURNISH ALL THE REQUIRED DETAILS TO SUBSTANTIATE ITS CASE. WITH RESPECT TO THE ADDITION OF R S.1.30 CRORE MADE BY AO, HE SUBMITTED THAT ASSESSEE HAS NOT RETRAC TED THE DECLARATION MADE DURING THE SURVEY BUT ON THE CONTRARY HAD INCLUDED THE INCOME FROM THE IMPOUNDED MATERIAL FOUND DURING SURVEY WHICH HA S RESULTED IN THE INCREASE IN NET PROFIT TO 1.45% AS COMPAR ED TO THE AVERAGE NET PROFITS FOR LAST 5 YEARS AT 0.37%. HE SUBM ITTED THAT DURING 4 THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAD VERIFIED THE BOOKS OF ACCOUNTS WITH REFERENCE TO THE IMPOUNDED MATERIAL AND THE DISCREPANCIES THAT WERE NOT FOUND VERIFIABLE WERE ADDED T O THE INCOME. HE SUBMITTED THAT ADDITION OF RS.1.30 CRORE MADE BY AO WO ULD THEREFORE AMOUNT TO DOUBLE ADDITION OF THE SAME INCOME. HE THEREFO RE SUBMITTED THAT ASSESSEE BE GRANTED ONE MORE OPPORTUNITY TO EXP LAIN HIS STAND. LD.D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF AO AND LD.CIT(A) AND OBJECTED TO LD.A.R.S PRAYER FOR 2 ND INNINGS. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT T O ADDITION OF RS.1,30,00,000/- ON ACCOUNT OF ADDITIONAL INCOME OFFERED BY T HE ASSESSEE DURING THE SURVEY OPERATION U/S 133A OF THE A CT BUT NOT INCLUDED IN THE RETURN OF INCOME AS PER THE REVENUE AUTH ORITIES. THE PERUSAL OF ORDER OF LD.CIT(A) REVEALS THAT LD.CIT(A) HAS PAS SED AN EX- PARTE ORDER WITHOUT DECIDING THE ISSUE ON MERITS. I N VIEW OF THE WELL SETTLED PRINCIPLE OF NATURAL JUSTICE THAT SUFFICIENT OPPORTUNIT Y OF HEARING SHOULD BE AFFORDED TO THE PARTIES AND NO PARTY SHOULD BE CONDEMNED UNHEARD, WE ARE OF THE VIEW THAT ONE MORE OPPORTUNITY B E GRANTED TO THE ASSESSEE COMPANY TO PRESENT ITS CASE BEFORE THE AUTHO RITIES. WE THEREFORE RESTORE THE MATTER BACK TO THE FILE OF LD.CIT(A) TO DECIDE THE ISSUE ON MERITS IN ACCORDANCE WITH LAW. NEEDLESS TO STATE THAT LD.CIT(A) SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. ASSESSEE IS ALSO DIRECTED TO PROMPTLY FURNISH ALL THE DETA ILS CALLED FOR BY THE AUTHORITIES. IN VIEW OF OUR DECISION TO RESTORE THE ISSUE TO LD.CIT(A), WE ARE NOT ADJUDICATING ON MERITS THE GROUNDS OF THE AP PEAL RAISED BY THE ASSESSEE. THUS, THE GROUNDS OF ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 16 TH DAY OF OCTOBER, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 16 TH OCTOBER, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-1, NASHIK. PR. CIT-1, NASHIK. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.