SHRI RAMESH CHAND, AJMER V. INCOME TAX OFFICER, WARD-2-3, AJMER

ITA 750/JPR/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4588 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 05-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRAJCIT
• Keywords: Additional evidence
• Section: 40A(3); 244A; 142(1); 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 750/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2014-15 SHRI RAMESH CHAND B-24, MANDI YARD, KEKRI DISTT. AJMER- 305404 CUKE VS. INCOME-TAX OFFICER, WARD-2(3), AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABPPC0200J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJ MEHRA(JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 01/08/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 02/08/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A), AJMER DATED 25.07.2017.10.2017 FOR ASSE SSMENT YEAR 2014- 15. WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUND S OF APPEAL:- 1. THE IMPUGNED ORDER U/S 144 DATED 23.11.2016 IS BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICT ION AND FOR VARIOUS OTHER REASONS AND HENCE, THE SAME MAY KINDL Y BE QUASHED AND IN ANY CASE, THE IMPUGNED ADDITION/S BE DELETED. 2. THE LD. AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN FRAMING THE ASSESSMENT U/S 144 WITHOUT AFFORDING ADEQUATE AND REASONABLE OPPORTUNITY AND EVEN WITHOUT COMPLYI NG WITH THE MANDATORY STATUTORY REQUIREMENT OF LAW. THE IMPUGNE D ORDER ITA NO. 750/JP/2017 SHRI RAMESH CHAND, AJMER VS. ITO, AJMER 2 HAVING BEEN FRAMED IN GROSS BREACH OF NATURAL JUSTI CE, KINDLY BE QUASHED. 3. THE LD. CIT(A) SERIOUSLY ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN NOT ADMITTING THE ADDITIONAL EVIDENC ES FURNISHED BY THE APPELLANT DURING THE COURSE OF THE APPELLATE PR OCEEDINGS. THE DECISION OF THE LD. CIT(A) IS TOTALLY CONTRARY TO T HE PROVISIONS OF LAW AND FACTS ON THE RECORD AND HENCE THE SAME KIND LY BE ADMITTED AND CONSIDERED. 4. RS. 39,83,000/- THE LD. CIT(A) ERRED IN LAW AS W ELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS. 39,83,000/- [20% OF RS. 1,99,15,000/-] ON ACCOUNT OF UNEXPLAINE D CASH DEPOSIT MADE BY THE AO. THE ADDITION SO MADE AND CO NFIRMED BY THE LD. CIT(A) IS TOTALLY CONTRARY TO THE PROVISION S OF LAW AND FACTS ON THE RECORD AND HENCE THE SAME KINDLY BE DELETED IN FULL. 5. RS. 51,600/-: THE LD. CIT(A) ERRED IN LAW AS WEL L AS ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS. 51,600/- ON ACCOUNT OF UNSECURED LOANS MADE BY THE AO. THE ADDI TION SO MADE AND CONFIRMED BY THE LD. CIT(A) IS TOTALLY CON TRARY TO THE PROVISIONS OF LAW AND FACTS ON THE RECORD AND HENCE THE SAME KINDLY BE DELETED IN FULL. 6. RS. 11,02,693/- THE LD. CIT(A) ERRED IN LAW AS W ELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE DISALLOWANC E OF THE FOLLOWING EXPENSES. S. NO. HEAD OF EXPENSES EXP. CLAIMED DISALLOWED BY AO 30% CONFIRMED BY THE LD. CIT(A) 6.1 FREIGHT 22,49,148/ - 6,74,744/ - RS. 6,74,744/- 6.2 SALARIES & WAGES 13,83,508/ - 4,15,052/ - RS. 4,15,052/- 6.3 OTHER EXPENSES 12,74,812/ - 3,82,444/ - RS. 3,82,444/- ITA NO. 750/JP/2017 SHRI RAMESH CHAND, AJMER VS. ITO, AJMER 3 TOTAL RS. 14,72,240/ - RS. 14,72,240/- THE DISALLOWANCE SO MADE AND CONFIRMED BY THE LD. C IT(A), BEING TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS OF THE CASE, KINDLY BE DELETED IN FULL. 7. THE LD. AO FURTHER ERRED IN LAW AS WELL AS ON TH E FACTS OF THE CASE IN CHARGING INTEREST U/S 234A, 234B, 234C & 234D OF THE ACT AND AS ALSO IN WITHDRAWING INTEREST U/S 244A OF THE ACT. THE APPELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING AND WITHDRAWAL OF ANY SUCH INTEREST. THE INTEREST SO CHARGED/WITHDRAW N, BEING CONTRARY TO THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. 2. GROUND NO. 1 IS GENERAL IN NATURE, DOES NOT REQU IRE ANY SEPARATE ADJUDICATION. HENCE THE SAME IS DISMISSED. 3. IN GROUND NO. 2, THE ASSESSEE HAS CHALLENGED TH E FRAMING OF ASSESSMENT U/S 144 WITHOUT AFFORDING ADEQUATE AND R EASONABLE OPPORTUNITY TO THE ASSESSEE. WE HAVE GONE THROUGH T HE RECORDS AND FIND THAT NOTICE U/S 143(2) WAS ISSUED ON 18.09.201 5. THEREAFTER, NOTICE U/S 142(1) WAS ISSUED ON 27.06.2016 ASKING THE ASSE SSEE TO FURNISH REQUIRED INFORMATION AND DOCUMENTATION. THEREAFTER, THERE HAVE BEEN NUMBER OF OCCASIONS WHEREIN THE HEARING HAVE BEEN S CHEDULED BY THE ASSESSING OFFICER, HOWEVER, THERE HAS BEEN NO COMPL IANCE ON THE PART OF THE ASSESSEE AND THE ASSESSING OFFICER HAS PROCE EDED AND PASSED THE ORDER U/S 144 OF THE ACT. IN LIGHT OF THE SAME, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE ASSESSING OFFICER WHI CH HAS BEEN PASSED U/S 144 OF THE ACT. IN THE RESULT, GROUND NO. 2 OF THE ASSESSEES APPEAL IS DISMISSED. ITA NO. 750/JP/2017 SHRI RAMESH CHAND, AJMER VS. ITO, AJMER 4 4. IN GROUND NO. 3, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN NOT ADMITTING THE ADDITIONAL EVIDENCE S FURNISHED BY THE ASSESSEE IN THE FORM OF BOOKS OF ACCOUNTS I.E. CASH BOOK, BANK BOOK, LEDGER, JOURNAL AND BILLS AND VOUCHERS DURING THE C OURSE OF APPELLATE PROCEEDINGS. 5. THE LD. AR HAS SUBMITTED THAT THE LD. CIT(A) HAS NOT CONSIDERED THE REMAND REPORT OF THE AO WHEREIN HE HAS NOT OBJE CTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCE AND HAS IN FAC T VERIFIED THE SAME AND THE FOUND THE TRANSACTIONS DULY VERIFIABLE. 6. IN THIS REGARD, THE LD. AR HAS DRAWN OUR REFEREN CE TO THE REMAND REPORT DATED 12.06.2017 CALLED FOR THE LD. CIT(A) F ROM THE AO WHICH IS AVAILABLE AT ASSESSEES PAPER BOOK PAGE 270-271 AND WHICH READS AS UNDER:- KINDLY REFER TO YOUR OFFICE LETTER NO. CIT(A)/AJM/ 2016-17/5825 DATED 20.03.2017 ON THE ABOVE MENTIONED SUBJECT THROUGH W HICH WRITTEN SUBMISSION FILED BY THE APPELLANT SHRI RAMESH CHAND , KEKRI-AJMER DURING THE COURSE OF APPELLANT PROCEEDINGS WERE FOR WARDED TO THIS OFFICE AND COMMENTS/REMAND REPORT WAS DESIRED BY YOUR HONO UR. SHRI G.M.JAIN, CA AND A/R OF THE ASSESSEE ALONGWIT H SHRI RAMESH CHAND, ACCOUNTANT ATTENDED THE HEARING THE RESPONSE TO THIS OFFICE LETTER DATED 29.06.2017 AND FILED HIS WRITTEN SUBMI SSION. BOOKS OF ACCOUNTS VIZ-A-VIZ LEDGER, CASH BOOK, BANK STATEMEN TS, PURCHASE AND SALES REGISTER, BILLS AND VOUCHERS WERE ALSO PRODUC ED AND EXAMINED ON TEST CHECK BASIS. THE CASE WAS DISCUSSED WITH THEM. ITA NO. 750/JP/2017 SHRI RAMESH CHAND, AJMER VS. ITO, AJMER 5 THE PARA WISE REMAND REPORT IS AS UNDER:- 1. ASSESSMENT COMPLETED U/S 144 OF THE I.T. ACT: ON PERUSAL OF RECORD, IT WAS FOUND THAT ENOUGH OPPO RTUNITY OF BEING HEARD WERE PROVIDED TO THE ASSESSEE, BUT THE ASSESSEE NEITHER APPEARED NOR FURNISHED ANY REPLY DURING THE PERIOD OF 5 MONTHS OF PROCEEDING, WHICH SHOWS THAT THE ASSESSEE WAS NOT I N A POSITION TO HAVE ANYTHING TO PRODUCE OR SAY. ALL NOTICES/LETTERS WERE ISSUED TO THE ASSESSEE THR OUGH SPEED POST AND SERVED MOSTLY ON VERY NEXT DAY OF THE NOTICE. T HEREFORE, AO HAS NOT OPTION THAN TO MAKE THE ASSESSMENT OF INCOME OF THE ASSESSEE TO THE BEST OF HIS JUDGMENT U/S 144 OF THE INCOME-TAX ACT, 1961. 2. ADDITION ON ACCOUNT OF CASH DEPOSITS OF RS. 39,83,0 00/- THE A/R OF THE ASSESSEE PRODUCED THE COPY OF BANK A CCOUNT AND CASH BOOK WHICH WAS EXAMINED. FROM THIS, CASH DEPOS ITS IN ASSESSEES BANK ACCOUNT ARE VERIFIABLE. 3. ADDITION ON ACCOUNT OF UNSECURED LOANS OF RS. 51,60 0/- THE A/R OF THE ASSESSEE PRODUCED THE CONFIRMATIONS ALONGWITH COPY OF THE LEDGER ACCOUNT REGARDING UNSECURED LOAN S, WHICH ARE VERIFIABLE. 4. DISALLOWANCE OF EXPENSES OF RS. 14,72,240/- THE AO HAS DISALLOWED THE EXPENSES AS UNDER:- S. NO. EXPENSES AMOUNT (RS.) 30% OF SUCH EXPENSES (RS.) 1. FREIGHT 22,49,148/- 6,74,744/- 2. SALARIES & WAGES 13,83,508 4,15,052/- 3. OTHER EXPENSES 12,74,812 3,82,444/- ITA NO. 750/JP/2017 SHRI RAMESH CHAND, AJMER VS. ITO, AJMER 6 TOTAL 14,72,240/- ON PERUSAL OF LEDGER OF FREIGHT EXPENSES ACCOUNT, I T WAS GATHERED THAT THE ASSESSEE HAS MADE VARIOUS PAYMENTS OF MORE THAN RS. 20,000/- IN CASH TOTALING TO RS. 15,80,816/-. THE A /R OF THE ASSESSEE HAS NOT ANY EXPLAIN THE CIRCUMSTANCES IN WHICH PAYM ENT WAS MADE IN CASH. THEREFORE EXPENDITURE OF RS. 15,80,816/- SHOU LD NOT BE ALLOWED IN VIEW OF PROVISIONS OF SECTION 40A(3) OF THE I.T. AC T, 1961. IT WAS ALSO GATHERED THAT SOME OF THE EXPENSES ARE NOT FULLY VOUCHED/SELF MADE VOUCHERS. THEREFORE, TAKING A REA SONABLE VIEW, 20% OF EXPENSE MAY BE DISALLOWED OUT OF SALARIES & WAGE S EXPENSES AND OTHER EXPENSES. IT IS PERTINENT TO MENTION HERE THAT IN AY 2013-14 THE AO HAS ALSO DISALLOWED THE GENERAL EXPENSES OF RS. 10,000/- REPORT IS SUBMITTED FOR YOUR KIND PERUSAL. 7. ON PERUSAL OF THE REMAND REPORT, IT IS OBSERVED THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY ADVERSE COMMENTS REGARDIN G ADMISSION OF THE ADDITIONAL EVIDENCES PRODUCED BY THE ASSESSEE. IN F ACT, THE SAME WERE EXAMINED BY THE ASSESSING OFFICER DURING THE COURSE OF REMAND PROCEEDINGS AND THE CASH DEPOSIT IN THE ASSESSEES BACK ACCOUNT WERE HELD VERIFIABLE. SIMILARLY, UNSECURED LOAN WERE HEL D VERIFIABLE. REGARDING DISALLOWANCE OF EXPENSES WHICH WERE ORIGINALLY MADE 30%, THE ASSESSING OFFICER IN THE REMAND REPORT HAS SUGGESTE D DISALLOWANCE OF 20% OF THE SAID EXPENSES. HOWEVER, WE FIND THAT THE RE IS NO FINDING OR DISCUSSION BY THE LD. CIT(A) IN RESPECT OF THE REMA ND REPORT GIVEN BY THE ASSESSING OFFICER DATED 12.06.2017. IT IS THERE FORE A CASE WHERE THE LD. CIT(A) HAS CALLED FOR THE REMAND REPORT SEEKING COMMENTS FROM THE AO WITHOUT THE ADMITTING ADDITIONAL EVIDENCES. AT T HE SAME TIME, THE ITA NO. 750/JP/2017 SHRI RAMESH CHAND, AJMER VS. ITO, AJMER 7 ASSESSING OFFICER HAS NOT OBJECTED TO THE ADMISSION TO THE ADDITIONAL EVIDENCES AND HAS IN FACT GONE AHEAD AND EXAMINED T HOSE ADDITIONAL EVIDENCES AND FOUND THE TRANSACTION UNDERTAKEN BY T HE ASSESSEE VERIFIABLE. IN SUCH CIRCUMSTANCES WHETHER THE REVE NUE HAS NOT OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENC ES, IT WOULD HAVE BEEN BETTER HAD LD. CIT(A) GIVEN HIS FINDING ON MER IT RATHER THAN REJECTING THE ADDITIONAL EVIDENCES ON TECHNICALITY. IN THE RESULT, WE DEEM IT APPROPRIATE TO REMAND THE MATTER TO THE FIL E OF LD. CIT(A) WHO SHALL DECIDE THE SAME AFRESH ON MERITS AFTER TAKING INTO CONSIDERATION THE ADDITIONAL EVIDENCES SO SUBMITTED BY THE ASSESS EE AND REMAND REPORT SO FURNISHED BY THE ASSESSING OFFICER DATED 12.06.2017. IN THE RESULT, GROUND NO. 3 IS ALLOWED FOR STATISTICAL PUR POSES. 8. REGARDING GROUND NO. 4 TO 6 REGARDING MERITS OF THE CASE AND THE GROUND NO. 7 IS ON THE LEVY OF INTEREST U/S 234A, 2 34B, 234C & 234D. SINCE WE HAVE REMANDED THE MATTER TO THE FILE OF TH E ASSESSING OFFICER, WE DEEM IT APPROPRIATE TO SET ASIDE THESE GROUNDS T O THE FILE OF THE LD. CIT(A) AS WELL. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 02/08/2018. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 02/08/2018 ITA NO. 750/JP/2017 SHRI RAMESH CHAND, AJMER VS. ITO, AJMER 8 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAMESH CHAND, AJMER 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-2(3), AJMER 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 750/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR