M/s. I.K.M. Industries Pvt. Ltd., , Howrah V. ITO, Ward - 13(2), Kolkata , Kolkata

ITA 789/KOL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5351 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 24-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAPIL MONDAL JCIT LD
• Assessee Lawyers: S M SURANA LD
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

1 I.T.A NO 789/KOL/2018 M/S. I.K.M INDUSTRIES PVT. LTD. . IN THE INCOME TAX APPELLATE TRIBUNAL , C( SMC ) BENCH , KOLKATA BEFORE: SHRI P. M. JAGTAP , ACCOUNTANT MEMBER I.T.A NO. 789 /KOL/201 8 A.Y: 20 12 - 13 M/S. I.K.M INDUSTRIES VS. INCOME TAX OFFICER PRIVATE LIMITED WARD 13(2), KOLKATA PAN: AABCI 7917A [APPELLANT] [RESPONDENT] FOR THE APPELLA NT : SHRI S.M. SURANA, ADVOCATE, LD.AR FOR THE RESPONDENT : SHRI KAPIL MONDAL, JCIT, LD.DR DATE OF HEARING : 20 - 09 - 2018 DATE OF PRONOUNCEMENT : 17 - 10 - 2018 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF LD. CIT (APPEALS) , 15 , KOLKATA DATED 02 - 02 - 2018, WHEREBY HE CONFIRMED THE TRADING ADDITION OF RS.23,12,145/ - MADE BY THE AO . 2. THE ASSESSE IN THE PRESENT CASE IS A COMPANY, WHICH IS ENGAGED IN CONTRACT ING BUSINESS . THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 30 - 09 - 2012 DECLARING TOTAL INCOME OF RS.14,41,760/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT THE ASSESSEE COMPANY HAS SHOWN CONTRACT RECEIPTS OF RS.4,33,71,005/ - IN ITS AUDITED ACCOUNTS WHILE THE CONTRACTUAL RECEIPTS AS PER FROM 26AS WERE SHOWN AT RS.4,29,07,5 1 3/ - . THUS, THERE WAS A DIFFERENCE OF RS.4,6 3 ,492/ - IN THE CONTRACTUAL RECEIPTS, WHICH WAS EXPLAINED BY THE ASSESSE AS INCOME RECEIVED FROM EXTRA ORDINARY S ALES OF RS.5,5 5,12 ,740/ - ON ACCOUNT OF SOME EXCISABLE MATERIAL SUPPLIED TO THE CLIENTS . THE AO FOUND THAT THE EXPLANATION OF THE ASSESSE E WAS NOT SUBSTANTIATED BY ANY DOCUMENTARY EVIDENCE. HE ALSO WAS OF THE OPINION THAT PROFIT OF RS. 4,63,492/ - DECLARED ON EXTRA ORDINARY SALES OF RS.5 ,55,12,740/ - GIV ING PROFIT MARGIN OF 0.833% WAS ABYSMALLY LOW AND ABSURD. HE , THEREFORE, APPLIED THE NET PROFIT RATE OF 5% AND ESTIMATED THE PROFIT OF THE ASSESSE E FROM THE EXTRA ORDINARY SALES AT RS.27,75,637/ - AGAINST PROF IT OF RS.4,63,492/ - SHOWN BY THE ASSESSEE . ACCORDINGLY, THE DIFFERENCE OF RS.23,12,145/ - (RS. 27,75,637 RS. 4,63,492) WAS ADDED BY HIM TO THE TOTAL INCOME OF THE ASSESSE E IN THE ASSESSMENT COMPLETED U/S. 143(3) VIDE AN ORDER DT. 31 - 03 - 2015 . 2 I.T.A NO 789/KOL/2018 M/S. I.K.M INDUSTRIES PVT. LTD. . 3. AGAINS T THE ORDER PASSED BY THE AO UNDER SECTION 14 3 (3) , AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT (A) AND SINCE THERE WAS NO COMPLIANCE ON THE PART OF THE ASSESSE E TO THE NOTICES ISSUED BY HIM FIXING THE SAME FOR HEARING FROM TIME TO TIME , T HE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSE E VIDE HIS APPELLATE ORDER DT. 02 - 02 - 2018 PASSED EX PARTE. AGGRIEVED BY THE ORDER OF THE LD. CIT (A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL . 4 . I HAVE HEARD THE ARGUMENTS OF BOTH THE PAR TIES AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. BESIDES EXPLA INING THE NON - COMPLIANCE ON THE PART OF THE ASSESSE E BEFORE THE CIT(A), THE LD. COUNSEL FOR THE ASSESSE E HAS ALSO CONTENDED THAT THE NET PROFIT RATE OF 5% APPLIED BY THE AO WHILE ESTIMAT ING THE PROFIT OF THE ASSESSE FROM EXTRA ORDINARY SALES IS HIGHLY EXCESSIVE AND UN REASONABLE. IN SUPPORT OF THIS CONTENTION, HE HAS FILED THE DETAILS OF GROSS PROFIT RATE AND NET PROFIT RATE DECLARED BY THE ASSESSE E FOR THE IMMEDIATELY PRECEDING THREE YE ARS AS WELL AS IMMEDIATELY SUCCEEDING TWO YEARS. IT IS , HOWEVER, OBSERVED TH A T THE LD. CIT(A) HAS NOT DECIDED THIS ISSUE ON MERIT VIDE HIS IMPUGNED ORDER PASSED EX PARTE. IT IS ALSO OBSERVED THAT WRITTEN SUBMISSION WAS FILED BY THE ASSESSE DURING THE COUR SE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) AS MENTIONED BY THE LD. CIT(A) HIMSELF IN PARAGRAPHS 2 OF HIS IMPUGNED ORDER. THE LD. CIT(A), HOWEVER, HAS NOT TAKEN THE SAME INTO CONSIDERATION WHILE DISPOSING OF THE APPEAL OF THE ASSES S EE AND THERE IS NO DECISION RENDERED BY HIM ON THE MERIT OF THE ISSUE IN VOLVED IN THIS CASE. I, THEREFORE, CONSIDER IT FAIR & PROPER AND IN THE INTEREST OF JUSTICE TO SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) PASSED EX PARTE AND REMAND THE MATTER BACK TO HIM FOR DI SPOS ING OF THE APPEAL OF THE ASSESSE E AFRESH AFTER GIVING THE ASSESSE E ONE MORE OPPORTUNITY OF BEING HEARD AND AFTER CONSIDERING THE WRITTEN SUBMISSIONS FILED BY THE ASSESS E E ON RECORD. 5 . IN THE RESULT, THE APPEAL OF THE ASSESSE E IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH - OCTOBER, 2017. SD/ - P.M. JAGTAP ACCOUNTANT MEMBER DATED 17 - 10 - 2018 3 I.T.A NO 789/KOL/2018 M/S. I.K.M INDUSTRIES PVT. LTD. . PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ ASSESSEE: M/S. I.K.M INDUSTRIES PRIVATE LIMITED 14/3/1 LOKENATH CHATTERJEE LANE, GROUND FLOOR, KOLKATA - 711 102. 2 RESPONDENT/ REVENUE : INCOME TAX OFFICER, WARD 13(2), PODDA R COURT, 8 TH FLOOR, 18 RABINDRA SARANI, KOLKATA - 700 001. 3. CIT, 4. CIT(A), KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA **PP/SPS TRUE COPY BY BY ORDER ASSISTANT REGISTRAR ITAT KOLKATA