Sh. Kamalpreet Singh, Patiala V. ITO, Patiala

ITA 703/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5224 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 25-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 144; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 703/CHD/2017 ASSESSMENT YEAR: 2011-12 SH. KAMALPREET SINGH, VS. THE ITO, WARD-1, PROP M/S SARAN ENTERPRISES, PATIALA 986/3, DHOBI GHAT, PATIALA PAN NO. ACBPS1831N (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAJIV SALDI RESPONDENT BY : SH. MANJIT SINGH, SR DR DATE OF HEARING : 07.12.2017 DATE OF PRONOUNCEMENT : 23.02.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S), [HEREINAFTER REFERRED TO AS CIT(A)], PATIALA DATED 01.03.2017. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL:- 1. THAT THE LD. ASSESSING OFFICER FRAMED THE ASSESSMENT U/S 144 AND REJECTED THE BOOKS AND MADE THE ADDITIONS ON THE BASIS OF SAME BOOKS OF ACCOUNT . 2 2. THAT THE LD. CIT(A) PATIALA WRONGLY CONFIRMED TH E GP AT 6% AS AGAINST DECLARED GP 3.14% WHICH IS AGAINST THE FACTS OF THE CASE AND IS ALSO HIGHLY EXCESSIVE. 3. THAT THE LD. CIT(A) PATIALA ERRED IN IGNORING TH E PROVEN FACT THAT THE BUSINESS OF THE ASSESSEE IN CURRENT YEAR WAS DIFFERENT AS COMPARED TO EARLIER ASSESSMENT YEAR AS THE ITEMS TRADED WERE TOTALLY DIFFERENT IN CURRENT YEAR. THE TRADING ACCOUNT WHEREIN IT WAS SHOWN THAT THERE WAS NO PURCHASE OF CHILKA ONLY RESIDUE WAS SOLD AND ALSO SHOWN THAT MAIN BUSINESS DURING THE YEAR WAS ONLY OF EMPTY BOTTLES. THE COMPLETE RECORD DULY AUDITED WAS ON RECORD. 4. THAT LD. CIT(A) PATIALA ERRED IN CONFIRMING THE ADDITION OF VAT ALTHOUGH NO VAT IS CHARGED AND NO VAT WAS CLAIMED IN THE P&L ACCOUNT. 3. THE BRIEF FACTS OF THE CASE ARE THAT AN EX-PARTE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER U/S 144 OF THE I NCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') DETERMINING THE ASSESSABL E INCOME OF THE ASSESSEE AT 35,16,001/-. THEREAFTER, A RECTIFICATIO N ORDER U/S 154 OF THE ACT WAS PASSED REDUCING THE ADDITION FROM RS. 18,82,944/- TO RS. 9,21,253/-. THE ADDITION SO MADE BY THE ASSESSING O FFICER HAVE BEEN CONFIRMED BY THE CIT(A). 4. BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAS SUBM ITTED THAT IN THIS CASE, THE ASSESSING OFFICER FOUND THAT THE ASS ESSEE HAD NOT FILED ANY RETURN OF INCOME. ON BEING ASKED TO EXPLAIN, TH E ASSESSEE EXPLAINED THAT DUE TO CHANGE IN THE SERVER OF INCOM E TAX DEPARTMENT, SOME PROBLEM WAS BEING FACED FOR ALMOST A MONTH AND , HENCE, THE ASSESSEE CANNOT UPLOAD THE RETURN OF INCOME ELECTRO NICALLY AS THE WEBSITE OF THE DEPARTMENT WAS NOT ACCEPTING DIGITAL SIGNATURES OF THE 3 ASSESSEE. THE ASSESSEE, HOWEVER, ENCLOSED COPY OF T HE RETURN ALONGWITH THE PROOF OF PAYMENT OF SELF-ASSESSED TAX , COPY OF AUDIT REPORT AND COPY OF COMPUTATION OF INCOME. THE ASSES SING OFFICER THEREAFTER ISSUED A QUESTIONNAIRE WHICH WAS DULY RE PLIED. THE ASSESSING OFFICER, HOWEVER, OBSERVED THAT THE ASSES SEE DID NOT ANSWER THE QUESTIONNAIRE. THE ASSESSING OFFICER, THEREFORE , COMPLETED THE ASSESSMENT EX-PARTE U/S 144 OF THE ACT DETERMINING THE INCOME OF THE ASSESSEE BY ESTIMATING THE GP RATE FROM THE BUSINES S. 5. LD. COUNSEL FOR THE ASSESSEE, BEFORE US, HAS SU BMITTED THAT THE ASSESSEE DURING THE YEAR HAD CHANGED ITS BUSINESS A CTIVITY. EARLIER, THE ASSESSEE WAS INVOLVED IN THE BUSINESS OF NAKOO (RICE COMPONENT) BUT THE SAID BUSINESS WAS CLOSED. THE M AIN BUSINESS OF THE ASSESSEE DURING THE YEAR IN QUESTION WAS OF SEL LING OF EMPTY USED BOTTLES TO CHANDIGARH BOTTLING PLANT FOR RECYCLING. LD. COUNSEL FOR THE ASSESSEE HAS FURTHER SUBMITTED THAT THE ASSESSE E HAD PARTICIPATED IN THE PROCEEDINGS AND THAT NO OTHER QUESTIONNAIRE WAS EVER RECEIVED BY THE ASSESSEE AS HAS BEEN MENTIONED BY THE ASSESS ING OFFICER IN THE ASSESSMENT ORDER. THAT ONLY ONE QUESTIONNAIRE WAS I SSUED TO THE ASSESSEE WHICH WAS DULY REPLIED. THE LD. COUNSEL HA S FURTHER SUBMITTED THAT EVEN OTHERWISE, THE ASSESSING OFFIC ER HAS MADE THE DISALLOWANCE BY ESTIMATING THE GP RATE ON THE BASI S OF EARLIER BUSINESS ACTIVITY EARLIER ASSESSMENT YEARS WHEN TH E ASSESSEE WAS NOT IN THE SAME BUSINESS, HENCE, THE GP RATE ON THE BAS IS OF EARLIER BUSINESS ACTIVITY CANNOT BE MADE BASIS FOR ESTIMATI ON OF THE INCOME OF THE ASSESSEE FOR THIS YEAR. THE LD. COUNSEL SUBM ITTED THAT ASSESSEE IS READY TO PARTICIPATE IN THE ASSESSMENT PROCEEDIN G AND TO PRODUCE 4 THE RELEVANT DOCUMENTS FOR PROPER ASSESSMENT OF THE INCOME OF THE ASSESSEE UNDER CONSIDERATION. 6. THE LD. DR, ON THE OTHER HAND, HAS RELIED UPON T HE FINDINGS OF THE LOWER AUTHORITIES. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADMIT TEDLY, THE ASSESSMENT FRAMED IS AN EX-PARTE ASSESSMENT U/S 144 OF THE ACT. THE INCOME HAS BEEN ASSESSED ON THE BASIS OF ESTIMATION OF GP RATE. THE LD. COUNSEL HAS EXPLAINED THAT ASSESSEE HAS CHANGED ITS BUSINESS ACTIVITY FOR THE YEAR UNDER CONSIDERATION AND THE B ASIS OF GP RATE OF EARLIER BUSINESS ACTIVITY CANNOT BE TAKEN FOR ESTIM ATING INCOME FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE IS READ Y TO PARTICIPATE IN THE ASSESSMENT PROCEEDINGS AND FURNISH THE NECESSAR Y DETAILS. CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDER OF THE LOWER AUTHORITIES IS HEREBY S ET ASIDE AND THE MATTER IS REMANDED BACK TO THE FILE OF THE ASSESSIN G OFFICER FOR DE NOVO ASSESSMENT. NEEDLESS TO SAY THAT THE ASSESSEE WILL PARTICIPATE IN THE ASSESSMENT PROCEEDINGS AND WILL NOT CONTRIBUTE IN DELAYING THE DISPOSAL OF THE CASE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23.02.2018 SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23 .02.2018 RKK 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR