The ITO, Ward-5(2), RAJKOT-GUJARAT V. Shree Shakti Industries, RAJKOT-GUJARAT

ITA 724/RJT/2010

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0165 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 23-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR GARG
• Section: 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . .. . , , , , . .. . . .. . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAV A, AM ITA NO.724/RJT/2010. / ASSESSMENT YEAR 2006-07 INCOME TAX OFFICER, WARD-5(2), AAYKAR BHAVAN, RACE COURSE RING ROAD, RAJKOT ( * / APPELLANT) VS. SHAKTI INDUSTRIES, C/O KESHAV RAI, SHRI RAMESHBHAI TANTIC (PATEL) JAMNA PARK SOC. STREET NO,.2,BLOCK NO.22 NEAR MAYANI CHOWK, MAVDI PLOT AREA, RAJKOT. PAN: AAXFS9046D +,* / RESPONDENT - / REVENUE BY SHRI ANKUR GARG /- / ASSESSEE BY NONE - / DATE OF HEARING 19.9.2012 - / DATE OF PRONOUNCEMENT 21.09.2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 10.12.2009 OF C IT(A) FOR THE ASSESSMENT YEAR 2006-07. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A FIRM E NGAGED IN THE BUSINESS OF MANUFACTURING OF FOOD PUMPS. FOR THE ASSESSME NT YEAR ITA NO.724/RJT/2010. 2 UNDER APPEAL IT FILED RETURN OF INCOME DECLARING TOTA L INCOME OF RS.1,400/- ON 29.12.2006. THOUGH THE RETURN OF INCOME ACCOMPANIED , INTER-ALIA, BY TRADING ACCOUNT, CAPITAL ACCOUNT, BALANCE SHEET AND AUD IT REPORT. THE AO FRAMED THE ASSESSMENT U/S 144 OF THE INCOME-TAX ACT 19 61 ON 29.12.2008 AT A TOTAL INCOME OF RS. 88,86,312/-. IN THIS ASSESSMENT ORDER, THE AO MADE ADDITION OF RS.62,20,098/- FOR THE DETA ILED REASONS GIVEN IN PARAGRAPH 4 OF THE ASSESSMENT ORDER. 3. ON APPEAL, BEFORE THE LD. CIT(A), IT WAS EXPLAINE D THAT THE AO MADE ADDITION OF ALL THE THINGS LIKE OPENING STOCK, TO TAL PURCHASE, TOTAL TRADING AND P AND L EXPENSES, SECURED AND UNSECURED LOAN S WITHOUT GIVING ANY ESTIMATION OR GIVING ANY REASON. ON THIS BASI S, THE LD. CIT(A) VIDE ORDER DTD.23.6.2009, U/S.250(4) OF THE ACT REM ANDED THE MATTER TO THE ASSESSING OFFICER AND DIRECTED HIM AS UNDER : '3. UPON CONSIDERATION OF ALL THE FACTS, I FIND THA T SUFFICIENT OPPORTUNITY HAS NOT BEEN PROVIDED TO THE APPELLANT BEFORE FINALIZING THE ASSESSMENT. I, THEREFORE, FIND THE R EASONS FIT FOR REMANDING THE CASE TO THE ASSESSING OFFICER. I, ACC ORDINGLY, REMAND THE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO CARRY OUT ALL THE INQUIRIES AND INVE STIGATION NECESSARY IN REGARD TO THE ACCOUNTS AND EXPENSES DI SCUSSED BY HIM IN PARA-4 & 5 OF THE ASSESSMENT ORDER. THE A SSESSING OFFICER SHALL COMPLETE. THE REMAND PROCEEDINGS AND SUBMIT THE REMAND REPORT WITHIN 30 DAYS OF RECEIPT OF THIS ORD ER. IN THIS REGARD, THE ASSESSING OFFICER IS FREE TO CALL ANY INFORMATION/EVIDENCES FROM THE APPELLANT AND TO ISS UE OF SUMMONS OR CALL FOR THE DETAILS AS HE MAY DEEM FIT AS PER LAW UNDER THE PROVISIONS OF ACT. THE APPELLANT SHALL FU LLY CO-OPERATE WITH THE ASSESSING OFFICER FOR COMPLETING THE REMAN D PROCEEDINGS ON TIME ALLOTTED FOR THIS PURPOSE.' 4. IN REPLY TO THE ABOVE, BEFORE THE LD. CIT(A) VID E HIS LETTER DATED 12.11.2009, THE AO HAS SUBMITTED REMAND REPORT WHICH IS REPRODUCED BY THE LD. CIT(A) IN PARAGRAPH 3.3. OF THE IMPUGNED OR DER. ITA NO.724/RJT/2010. 3 5. ON THE RECEIPT OF THE REMAND REPORT FROM THE A O, THE LD. CIT(A) FORWARDED THE SAME TO THE ASSESSEE FOR HIS COMMENTS AND AFTER CONSIDERING THE SAME, THE LD. CIT(A) CONFIRMED THE ADDI TION OF RS.5,15,115/- AND DELETED THE REST OF THE ADDITION OF RS.57,04,983/-. FURTHER THE LD. CIT(A) DIRECTED THE AO TO DELETE T HE ADDITION TO THE TUNE OF RS.23,30,814/- OUT OF TOTAL ADDITION OF RS.26,64,814 /- MADE ON ACCOUNT OF LOAN FROM JIVAN COMMERCIAL CO-OPERATIVE BANK LTD AND KOTAK MAHINDRA BANK. FINALLY FOR THE DETAILED REASONS GIVEN IN PARA GRAPH 5 OF THE IMPUGNED ORDER THE LD. CIT(A) MADE ADDITION OF RS.1, 50,000/- TO THE RETURNED INCOME OF RS.1400/- WHICH IS OVER AND ABOVE TH E ADDITION CONFIRMED IN THE PRECEDING PARAGRAPHS OF HIS ORDER. A GGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL B EFORE US ON THE FOLLOWING GROUNDS : 1. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS IN DIRECTING TO DELETE THE ADDITION TO THE TURN OF RS.5704983/- O UT OF TOTAL ADDITION OF RS.62,22,098/- MADE ON ACCOUNT OF OPENING STOCK, PURC HASES AND TRADING EXPENSES. 2. THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS IN DIRECTING THE TO DELETE THE ADDITION TO THE TUNE OF RS.23 ,30,814/- OUT OF TOTAL ADDITION OF RS.2664814 MADE ON ACCOUNT OF LOA N FROM JIVAN BANK AND KOTAK BANK. 3. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE CI T(A) MAY KINDLY BE SET ASIDE AND THAT OF THE AO BE RESTORED 6. DESPITE THE SERVICE OF NOTICE THROUGH DEPARTMENTAL REPRESENTATIVE, ON THE DATE OF HEARING NONE WAS PRESENT ON THE SIDE OF THE ASSESSEE. EVIDENCE OF SERVICE OF NOTICE TO THE ASSESSEE IS PLACED ON RE CORD. UNDER THESE CIRCUMSTANCES, WE PROCEEDS TO DECIDE THE APPEAL ON THE BASIS OF THE STATEMENT MADE BY THE LD. DR AND MATERIAL AVAILA BLE ON RECORD. ITA NO.724/RJT/2010. 4 7. SHRI ANKUR GARG, THE LD. DR APPEARED BEFORE US AND POINTED OUT DESPITE ADEQUATE OPPORTUNITY ALLOWED, BEFORE THE AO THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNT, THEREFORE, THE A O WAS HAVING NO OPTION BUT TO ESTIMATE INCOME. HE FURTHER SUBMITTED THAT THE AO ISSUED SIX NOTICES OF HEARING BUT NO COMPLIANCE WAS MADE BEFORE THE AO. HE ACCORDINGLY, SUGGESTED THAT IN THE INTEREST OF JUSTICE, THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THE MATTER BE REMANDED TO THE FILE OF THE AO WITH A DIRECTION THAT THE ASSESSEE SHOULD PRODUCE ALL THE BOO KS OF ACCOUNTS, THE AO WILL EXAMINE THE SAME AND FRAME THE ASSESSMENT. . 8. HAVING HEARD THE LD. DR, WE HAVE CAREFULLY GONE T HROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE T HAT THE AO IN THE ASSESSMENT ORDER ADDED ALL THE THINGS LIKE OPENING STOCK, T OTAL PURCHASE, TOTAL TRADING AND P AND L ACCOUNT, EXPENSES, SECURED AN D UNSECURED LOANS WITHOUT GIVING ANY ESTIMATION OR GIVING ANY REA SON. THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE AUDITED. WITH THE RETURN OF INCOME, THE ASSESSEE HAS FILED AUDITED P AND L ACCOUNT, BALANCE SHEET AND AUDIT REPORT. THE LD. CIT(A) CALLED THE REMAND REPORT FRO M THE AO, THIS REMAND REPORT WAS FORWARDED TO THE ASSESSEE FOR HIS COMMENTS AND A FTER CONSIDERING THE COMMENTS OF THE ASSESSEE, IN OUR OPINION , THE LD. CIT(A) IS LEGALLY AND FACTUALLY CORRECT IN DELETING THE ADDITI ONS TO THE TUNE OF RS.57,04,983/- AND RS.23,30,814/- OUT OF TOTAL ADD ITION OF RS.62,20,098/- AND RS. 26,64,814/- MADE BY THE AO IN THE ASSESSMENT O RDER. WE, ARE, THEREFORE, INCLINED TO UPHOLD THE ORDER OF THE LD. C IT(A) ITA NO.724/RJT/2010. 5 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED HEREINABOVE. SD SD ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 3/ ORDER DATE 21-09-2012. /RAJKOT SRL - -- - +4 +4 +4 [phone] / COPY OF ORDER FORWARDED TO:- 1. * / APPELLANT-, 2. +,* / RESPONDENT- 3. : / CONCERNED CIT. 4. :- / CIT (A). 5. 4 +, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY , INCOME TAX APPELLATE TRIBUNAL, RAJKOT. .