ITO, Bangalore V. Shri K.L. Suresh, Ramanagar

ITA 816/BANG/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8552 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 02-03-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 17-08-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gross profit estimation; Unexplained cash credit; Search and seizure; Set aside
• Section: 144

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE DR. O.K NARAYANAN, VICE PRESIDENT AND SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER ITA NO.815 /B ANG/2009 (AS ST. YEAR - 2006-07) SHRI K.L SURESH, NO.14, HAROHALLI, GABBADI KAVAL VILLAGE, KAGGALAHALLI POST, KANAKAPURA TALUK, RAMANAGAR DIST. . APPELLANT VS. THE INCOME-TAX OFFICER, WARD-9(3), BANGALORE. . RESPONDENT ITA NO.816 /BANG/2009 (ASST. YEAR -2006-07) THE INCOME-TAX OFFICER, WARD-9(3), BANGALORE. . APPELLANT VS. SHRI K.L SURESH, NO.14, HAROHALLI, GABBADI KAVAL VILLAGE, KAGGALAHALLI POST, KANAKAPURA TALUK, RAMANAGAR DIST. . RESPONDENT ITA NOS.815 & 816/B/09 & CO NO.16/B/10 2 CO NO.16 /BANG/2010 (A SST. YEAR - 2006-07) SHRI K.L SURESH, NO.14, HAROHALLI, GABBADI KAVAL VILLAGE, KAGGALAHALLI POST, KANAKAPURA TALUK, RAMANAGAR DIST. . APPELLANT VS. THE INCOME-TAX OFFICER, WARD-9(3), BANGALORE. . RESPONDENT REVENUE BY : SMT. JACINTA ZIMIK VASHAI, ADDL. CO MMISSIONER OF INCOME-T AX ASSESSEE BY : SHRI T.V SUBRAMANYA BHAT, CHARTERED ACCOUNTANT O R D E R PER DR. O.K NARAYANAN, VICE PRESIDENT THESE TWO CROSS-APPEALS ARE FILED BY THE ASSESSEE AND THE REVENUE RESPECTIVELY. THE RELEVANT ASSESSMENT YEAR IS 2006-07. THE CROSS-OBJECTION IS AGAIN FILED BY THE ASSESSEE IN R ESPONSE TO THE APPEAL FILED BY THE REVENUE. THE CROSS-APPEALS ARE DIR ECTED AGAINST THE ORDER OF THE CIT(A)-V AT BANGALORE DATED 15.6.2009 AND ARISE OUT OF THE ASSESSMENT COMPLETED U/S 144 OF THE INCOME-TAX ACT 1961. ITA NOS.815 & 816/B/09 & CO NO.16/B/10 3 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURE AND SALE OF DRINKING WATER AND HAD FILED A LOSS RETURN. BUT THE ASSESSING OFFICER HAS MADE SERIES OF ADDITIONS TOWARDS UNEXPL AINED SUNDRY CREDITORS, UNEXPLAINED LOAN CREDITORS AND LOW GROSS PROFIT. ULTIMATELY, THE LOSS RETURN OF RS.4,86,020/- WAS CONVERTED INTO A POSITIVE TOTAL INCOME OF RS.49,35,887/-. 3. IN FIRST APPEAL, THE CIT(A) CONFIRMED VARIOUS AD DITIONS EXCEPT THE GROSS PROFIT ADDITION. THE APPEAL WAS THUS, PA RTLY ALLOWED. THE REVENUE AS WELL AS THE ASSESSEE ARE AGGRIEVED AND, THEREFORE, THESE CROSS-APPEAL BEFORE THE TRIBUNAL. 4. WE HEARD SHRI T.V SUBRAMANYA BHAT, THE CHARTERE D ACCOUNTANT APPEARING FOR THE ASSESSEE AND SMT. JACI NTA ZIMIK VASHAI, THE LEARNED ADDL. COMMISSIONER OF INCOME-TAX APPEA RING FOR THE REVENUE. 5. IT IS TRUE THAT ASSESSEE HAS NOT PRODUCED NECESS ARY PARTICULARS AND DETAILS BEFORE THE ASSESSING AUTHORITY AND THE ASSESSING OFFICER WAS NOT IN A POSITION TO ASCERTAIN THE EXACT POSITI ON REGARDING THE INCOME. IT WAS IN SUCH A CIRCUMSTANCE, THE ASSESSIN G OFFICER HAS ITA NOS.815 & 816/B/09 & CO NO.16/B/10 4 MADE MULTIPLE ADDITIONS TOWARDS UNEXPLAINED CAPITAL , UNEXPLAINED CREDITORS AS WELL AS ADDITION TOWARDS LOW GROSS PRO FIT. 6. BUT WHILE DOING SO, WE ARE AFRAID THAT THE ASSES SING OFFICER HAS OVERLOOKED AN IMPORTANT FACT THAT THE ASSESSEE WAS SUFFERING FROM ILLNESS AT THAT RELEVANT POINT OF TIME. FOR WHICH, FINALLY, HE HAS TO UNDERGO BYPASS SURGERY. WHEN A PERSON IS CONFRONTE D WITH SUCH A LIFE AND DEATH SITUATION, IT IS QUITE NATURAL THAT THE M OST IMPORTANT MATTER FOR THE PERSON WOULD BE THE MEDICAL ATTENTION AND N OT THE MATTERS RELATING TO INCOME-TAX AND ASSESSMENT. THEREFORE, WE HAVE TO HAVE A LENIENT VIEW TO UNDERSTAND THE CASE OF THE ASSESSEE THAT HE WAS NOT IN A POSITION TO SUBMIT THE NECESSARY DETAILS AND PARTIC ULARS BEFORE THE ASSESSING AUTHORITY IN THE COURSE OF ASSESSMENT PRO CEEDINGS. 7. BUT AGAIN, IT IS TO BE SEEN THAT THE ASSESSEE WA S NOT STILL SUCCESSFUL IN PRODUCING THE EVIDENCES BEFORE THE CI T(A) AS WELL. THAT IS WHY, CIT(A) HAD TO CONFIRM CERTAIN ADDITIONS, EV EN THOUGH, HE HAS DELETED THE ADDITION ON THE GROUND OF GROSS PROFIT. 8. BUT, WHEN WE TAKE AN OVER-ALL VIEW OF THE CASE, WE FIND THAT THE ASSESSEE DID NOT HAVE AN EFFECTIVE OPPORTUNITY TO P RESENT HIS CASE ITA NOS.815 & 816/B/09 & CO NO.16/B/10 5 BEFORE THE APPROPRIATE AUTHORITIES. THERE IS A JUST IFIED APPREHENSION THAT THE INCOME HAS BEEN OVER-ASSESSED. BUT, WE AL SO UNDERSTAND THAT THIS IS NOT A PRIMA FACIE CASE, WHERE THE RESULTS D ECLARED BY THE ASSESSEE AS SUCH COULD BE ACCEPTED FOR THE PURPOSE OF ASSESSMENT. THEREFORE, WE FEEL THAT IT HAS BECOME NECESSARY TO REDO THE ASSESSMENT AFRESH AFTER RE-EXAMINING ALL THE MATERIALS THAT MA Y BE PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING AUTHORITY. IN TH ESE CIRCUMSTANCES, WE SET ASIDE THE MATTER TO THE FILE OF THE ASSESSI NG OFFICER FOR PASSING A FRESH ASSESSMENT ORDER AFTER GIVING THE ASSESSEE AN OPPORTUNITY TO EXPLAIN HIS CASE. 9. AS THE ORDERS OF THE LOWER AUTHORITIES HAVE BEEN SET ASIDE, THE CROSS-OBJECTION FILED BY THE ASSESSEE HAS BECOME IN FRUCTUOUS. ITA NOS.815 & 816/B/09 & CO NO.16/B/10 6 10. IN RESULT, THE APPEAL FILED BY THE ASSESSEE AS WELL AS THE REVENUE ARE TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPO SES AND THE CROSS- OBJECTION FILED BY THE ASSESSEE IS DISMISSED AS INF RUCTUOUS. ORDER PRONOUNCED ON THURSDAY, THE 11 TH DAY OF M ARCH, 2010, AT BANGALORE. SD/- SD/- (SHAILENDRA KUMAR YADAV) (DR. O.K NARAYA NAN) JUDICIAL MEMBER VICE PR ESIDENT VMS. COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF 7..GF, ITAT, NEW DELHI. BY ORD ER ASST. REGISTRAR, ITAT, BANGALOR E.