SHRI SHASHAM KOTHARI, Bhopal V. THE ACIT-1(1), Bhopal

ITA 687/IND/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3003 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-08-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 23-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: YASHVANT SHARMA
• Keywords: Opportunity of being heard; Agreed addition
• Section: 143(3); 27

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCHE, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.64/IND/2015 ASSESSMENT YEAR: 2009-10 SHRI SHASHAM KOTHARI E-31, SHANKAR NAGAR, NEAR SHIVAJI NAGAR, BHOPAL / VS. ACIT, 1(1), BHOPAL (APPELLANT) (REVENUE ) P.A. NO. AGKPK6431D ITA NO.687/IND/2016 ASSESSMENT YEAR : 2009-10 SHRI SHASHAM KOTHARI E-31, SHANKAR NAGAR, NEAR SHIVAJI NAGAR, BHOPAL / VS. CIT(A) - 31, NEW DELHI CAMP BHOPAL ( APPELLANT ) (R EVENUE ) P.A. NO. AGKPK6431D APPELLANT BY SHRI YASHVANT SHARMA CA REVENUE BY SHRI K.G. GOYAL DATE OF HEARING: 02.08.2018 DATE OF PRONOUNCEMENT: 17 .08.2018 / O R D E R PER MANISH BORAD, A.M: THESE TWO APPEALS ARE FILED AT THE INSTANCE OF AS SESSEE. ITANO.64/IND/2015 RELATES TO QUANTUM ADDITION AND SHASHAM KOTHARI 2 ITANO.687/IND/2016 RELATES TO PENALTY LEVIED U/S 27 1(1)(C) OF THE ACT AND PERTAINS TO A.Y. 2009-10 AND ARE DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS), BHOPAL, (IN SHORT CIT(A)), VIDE ORDER DATED 20.11.2014 & 04.12.2015 WHICH IS ARISING OUT OF THE ORDER U/S 143(3) & 271(1)(C) OF THE INCO ME TAX ACT 1961(HEREINAFTER REFERRED TO AS THE ACT) FRAMED ON 15.11.2011 & 28.05.2012 BY ACIT, BHOPAL RESPECTIVELY. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN ITANO.64/IND/2015: THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF HON'BLE CIT(A) IS BAD IN LAW UNTENABLE AND IS LIABLE TO BE QUASHED. 2. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) ERRED IN NOT CONDONING THE DELAY AND IT NOT ENTERTAINING APPEAL FOR ADJUDICATION. 3. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT NO APPEAL LIES AGA INST AGREED ADDITION, IGNORING THE CIRCUMSTANCES EXPLAINED BY T HE ASSESWSEE FOR THE SO-CALLED AGREED ADDITION. 4. THAT, ON FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. AO ERRED IN DISALLOWING AND HON'BLE CIT(A) ERRED IN MAINTAINING DISALLOWANCE OF RS.8, 00,000/- ON ACCOUNT OF LABOUR CHARGES. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN ITANO.687/IND/2016: SHASHAM KOTHARI 3 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF HON'BLE CIT(A) IS BAD IN LAW. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. AO ERRED IN LEVYING AND LD. CIT(A) ERRED IN MAINTAI NING PENALTY OF RS.3,00,000/- U/S 271(1)(C). 2 . BRIEFLY STATED FACTS AS CULLED OUT ON THE RECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN CIVIL CONSTRUC TION BUSINESS. INCOME OF RS.19,98,210/- DECLARED IN RETURN OF INCO ME FILED ON 30.09.2009. THE CASE WAS SELECTED FOR SCRUTINY. NEC ESSARY NOTICES U/S 143(2) & 143(1) OF THE ACT WERE SERVED UPON THE ASSESSEE AND DETAILS WERE FILED BY THE ASSESSEE. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE LD. AO WHILE EXAMINING THE DETAILS OF LABOUR EXPENSES CAME TO A CONCLUSION THAT THERE IS A POSSI BILITY OF BOGUS EXPENDITURE AND ACCORDINGLY ESTIMATED A LUMP SUM DI SALLOWANCE OF LABOUR CHARGE OF RS. 8,00,000/-. INCOME ASSESSED AT RS. 27,98,210/-. 3. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFOR E THE LD. CIT(A) WHICH WAS TIME BARRED. THE LD. CIT(A) DID NOT CONDO NE THE DELAY IN FILING THE APPEAL. AS FAR AS THE MERIT IS CONCERNED , THE LD. CIT(A) CONFIRMED THE DISALLOWANCE OBSERVING THAT THE ASSES SEE HIMSELF HAS AGREED FOR THE DISALLOWANCE OF LABOUR EXPENSES OF R S.8,00,000/- AND THEREFORE, NO APPEAL LIES AGAINST THE IMPUGNED DISA LLOWANCE. 4. SUBSEQUENTLY PENALTY PROCEEDINGS WERE ALSO INITI ATED U/S 271(1)(C) OF THE ACT ON THE ALLEGED DISALLOWANCE OF LABOUR EXPENSES SHASHAM KOTHARI 4 AND PENALTY OF RS.3,00,000/- WAS LEVIED BY THE LD. AO VIDE ORDER DATED 28.12.2012 U/S 271(1)(C) OF THE ACT. 5. AGGRIEVED ASSESSEE IS IN APPEAL BEFORE THE TRIBU NAL AGAINST THE IMPUGNED DISALLOWANCE OF RS.8,00,000/- AND THE PENA LTY CONFIRMED BY THE LD. CIT(A). AT THE OUTSET THE LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS NOT OFFERED PROPER OPPORTUNITY TO SUBMIT THE NECESSARY INFORMATION AND TO PLACE RELEV ANT DOCUMENTARY EVIDENCES AS RAISED IN SUPPORT OF GENUI NENESS OF LABOUR EXPENSES AND IF AN OPPORTUNITY IS PROVIDED, THE DOCUMENTS CAN BE VERIFIED BY THE LD. AO. HE, REQUESTED FOR SE TTING ASIDE ALL THE ISSUES ON BOTH THESE APPEALS TO THE FILE OF LD. AO. NO OBJECTION WAS RAISED BY THE LD. DR ON THIS PLEA OF THE LD. COUNSE L FOR THE ASSESSEE. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD BEFORE US. IN THESE TWO APPEALS OF THE ISSUES RELATING TO QUANTUM ADDITION FOR DISALLOWANCE OF LA BOUR EXPENSES OF RS.8,00,000/- AND PENALTY OF RS.3,00,000/- LEVIED U /S 271(1)(C) OF THE ACT CONFIRMED BY THE LD. CIT(A). WE ACCEPT THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE WHICH GOES UN-REBUTTED BY THE LD. DR AND IN THE INTEREST OF JUSTICE SET ASIDE THE ISSUE RELA TING TO QUANTUM ADDITION TO THE FILE OF LD. AO FOR DE NOVO ADJUDICA TION. 7. AS REGARDS THE PENALTY LEVIED U/S 271(1)(C) OF T HE ACT WHICH IS CALCULATED PER SE THE QUANTUM ADDITION, THE SAME AL SO NEEDS TO BE SET ASIDE TO THE FILE OF LD. AO AS FATE OF LEVYING PENALTY WILL DEPEND ON THE ADDITION IF ANY TO BE MADE BY THE LD. AO IN THE SET ASIDE PROCEEDINGS. SHASHAM KOTHARI 5 WE, ACCORDINGLY, SET ASIDE ALL THE ISSUES OF BOTH T HESE APPEALS TO THE FILE OF LD. AO FOR DE NOVO ADJUDICATION. NEEDLESS T O MENTION THAT A PROPER OPPORTUNITY OF BEING HEARD BE GIVEN TO THE A SSESSEE. 8 . IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE AL LOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 17 .08.2018. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 17/ 08/2018 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE