Lavanya Jewels, CHENNAI V. DCIT, Coimbatore

ITA 742/CHNY/2017

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7269 (ITAT-CHENNAI)
• Duration Of Justice: 4 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 26-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Condonation of delay; TDS
• Section: 2; 44AB

Judgement Text

आयकर अपील य अ धकरण, ‘डी’ यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘D’ BENCH, CHENNAI ी महावीर संह, उपा य एवं ी जी. मंज ु नाथ, लेखा सद&य के सम BEFORE SHRI MAHAVIR SINGH, VICE-PRESIDENT AND SHRI G.MANJUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./I. T. A. N o s. 7 4 2 & 7 4 3/ C hny / 2 0 1 7 ( नधा रणवष / A ss e ss m en t Yea r s : 20 1 1 - 1 2 & 2 0 12 - 1 3) M/s. Lavanya Jewels C/o. S.Sridhar, Advocate New No.14 Old No.82, Flat No.5 1 st Avenue, Indira Nagar, Adyar Chennai-600 020. V s The Deputy Commissioner of Income Tax, Circle-II Coimbatore. P AN: A A CF L 9 8 7 6 D (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओरसे/ Appellant by : Mr. S.Sridhar, Advocate यथ क ओरसे/Respondent by : Ms. R.Anita, Addl.CIT स ु नवाईक तार ख/D a t e o f h e a r i n g : 11.11.2021 घोषणाक तार ख /D a t e o f P r o n o u n c e m e n t : 30.11.2021 आदेश / O R D E R Per G.MANJUNATHA, AM: These two appeals filed by the assessee are directed against separate, but identical orders passed by the learned CIT(A)-2, Coimbatore, both dated 30.11.2016 and pertain to assessment years 2011-12 & 2012-13. Since, facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are being disposed off, by this consolidated order. 2. The assessee has more or less filed common grounds of appeal for both assessment years, therefore, for the sake of 2 ITA Nos. 742 & 743/Chny/2017 brevity, grounds of appeal filed for the assessment year 2011- 12 are reproduced as under:- “1. The order of The Commissioner of Income Tax (Appeals) 2, Coimbatore dated 30.11.2016 in l.T.A.No.38/2014-15 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in sustaining the estimate of the profit at 10% of the turnover for the purpose of taxation without rejecting the books of accounts in the computation of taxable total income without assigning proper reasons and justification. 3. The CIT (Appeals) failed to appreciate that the estimation of profit at 10% for taxation was wrong, erroneous, unjustified, incorrect and not sustainable in law. 4. The CIT (Appeals) failed to appreciate that the non production of books of accounts was due to the circumstances beyond the control of the appellant and ought to have appreciated that the lack of opportunity for establishing the said fact would vitiate the related findings in the impugned order. 5. The CIT (Appeals) went wrong in recording the findings in this regard in para 4.0 of the impugned order without assigning proper reasons and justification. 6. The CIT (Appeals) failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law.” 3. At the outset, the learned AR for the assessee submitted that there is a delay 34 days in filing appeals filed by the assessee for both assessment years for which necessary petition along with affidavit explaining reasons for condonation of delay has been filed. The learned A.R for the assessee 3 ITA Nos. 742 & 743/Chny/2017 referring to petition filed for condonation of delay submitted that delay in filing is due to mistake of counsel, who was appearing before the Assessing Officer and learned CIT(A), but not due to negligence of the assessee. The assessee neither derived any benefit nor made any deliberate attempt to delay in filing appeals. Therefore, small delay in filing appeals may be condoned in the interest of justice. 4. The learned DR, on the other hand, although opposed petition filed for condonation of delay, but fairly agreed that delay in filing appeals may be condoned. 5. Having heard both sides and perused petition filed by the assessee for condonation of delay, we are of the considered view that reasons given by the assessee that counsel who appeared before the learned CIT(A) has not filed appeals in time due to reasons best known to him, but said delay is neither intentional nor to derive any undue benefit definitely comes under reasonable cause for condonation of delay and hence, delay of 34 days in filing appeals for both assessment years is condoned and appeals are admitted. 4 ITA Nos. 742 & 743/Chny/2017 6. Brief facts of the case are that the assessee is a partnership firm which is engaged in business of trading in jewellery filed its return of income for assessment year 2011-12 on 22.09.2011 declaring total income at Rs.23,37,100/- . The assessee had also filed return of income for assessment year 2012-13 on 09.03.2013 declaring total income of Rs. 44,44,680/-. The assessment for impugned assessment years have been completed u/s.143(3) of the Income Tax Act, 1961 and the Assessing Officer has determined total income of the assessee by estimating 10% profit on total turnover declared by the assessee for reason that the assessee could not file necessary details including books of account, sale bills, cash book and purchase bills. The assessee carried the matter in appeal before first appellate authority, but could not succeed. The learned CIT(A) for the reasons stated in his appellate order sustained additions made by the Assessing Officer towards estimation of profit on total turnover by holding that the assessee never produced books of account and the Assessing Officer left with no option, but to determine total income of the assessee at its best judgement and thus estimated profit of 10% on total turnover, which is reasonable when compared to 5 ITA Nos. 742 & 743/Chny/2017 gross profit declared by the assessee for both assessment years which at 8.45% on total turnover. Aggrieved by the learned CIT(A) order, the assessee is in appeal before us. 7. The learned A.R for the assessee submitted that the learned CIT(A) has erred in sustaining additions made by the Assessing Officer towards estimation of profit on total turnover without appreciating fact that the assessee has maintained proper books of account and such books of account are audited by an Accountant as per provisions of section 44AB of the Income Tax Act, 1961. The learned A.R further submitted that although the assessee has filed certain details, but could not file further details asked by the Assessing Officer due to paucity of time, because the Assessing Officer has not given proper opportunity before passing assessment order and thus, appeals may be remitted back to the file of the Assessing Officer to give one more opportunity to justify its case. 8. The learned DR, on the other hand, supporting order of the learned CIT(A) submitted that the assessee could not avail best opportunity of hearing provided by both the authorities, 6 ITA Nos. 742 & 743/Chny/2017 which is evident from fact that the assessee could not file necessary books of account and other details before the Assessing Officer and said lapse is continued even before first appellate authority. Therefore, there is no error in the findings given by the authorities below to estimate profit on total turnover and hence, their orders should be upheld. 9. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. Admittedly, the Assessing Officer has called for various details including books of account, purchase and sale bills to support income declared by the assessee in return of income filed for relevant assessment years. Although, the assessee has filed certain details including bank statement, details of salary, e-TDS return statement and depreciation schedule, but could not furnish books of account along with sale and purchase bills, when the Assessing Officer has called upon the assessee to produce the same. The assessee has given reasons for not producing books of account before the Assessing Officer, as per which the Assessing Officer had not given sufficient time to collect books of account and produce for verification. 7 ITA Nos. 742 & 743/Chny/2017 Therefore, he pleaded that one more opportunity of hearing may be given to substantiate its case before the Assessing Officer by furnishing necessary books of account and other details. 10. Having heard both sides and perused materials available on record, we find merit in the arguments of the learned AR for the assessee for simple reason that the Assessing Officer does not seem to have given sufficient opportunity of hearing to the assessee to produce necessary books of account and other details to justify its case. No proper details are coming out from assessment order for giving sufficient opportunity to the assessee. Further, the learned CIT(A) has sustained additions made by the Assessing Officer without properly recording his reasons as to how books of account maintained by the assessee are not correct and profit declared for year under consideration is not acceptable. Therefore, we are of the considered view that issue needs to go back to the file of the Assessing Officer to give one more opportunity of hearing to the assessee to file necessary books of account and other details before the Assessing Officer. Hence, we set aside impugned 8 ITA Nos. 742 & 743/Chny/2017 orders passed by the learned CIT(A) and remit the issue for assessment years 2011-12 and 2012-13 to the file of the Assessing Officer and direct him to reconsider the issue de novo, in accordance with law, after giving reasonable opportunity of hearing to the assessee. It is needless to say, the assessee shall appear before the Assessing Officer and produce necessary details as and when the Assessing Officer calls for same, failing which assessments already framed by the Assessing Officer stand sustained. 11. In the result, appeals filed by the assessee for both assessment years are treated as allowed for statistical purposes. Order pronounced in the open court on 30 th November, 2021 Sd/- Sd/- (महावीर संह) ( जी. मंज ु नाथ ) (Mahavir Singh) (G. Manjunatha ) उपा य / Vice-President लेखा सद%य / Accountant Member चे'नई/Chennai, (दनांक/Dated 30 th November, 2021 DS आदेश क त*ल+प अ,े+षत/Copy to: 1. Appellant 2. Respondent 3. आयकर आय ु -त (अपील)/CIT(A) 4. आयकर आय ु -त/CIT 5. +वभागीय त न1ध/DR 6. गाड फाईल/GF.