Vikram Kohli, Kanpur V. Income Tax Officer-1(1), Kanpur

ITA 856/LKW/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9098 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 24-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P SRIVASTAV
• Keywords: Opportunity of being heard; Principle of natural justice; Condonation of delay
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.856/LKW/2014 ASSESSMENT YEAR:2005-06 VIKRAM KOHLI L/H OF LATE GURCHARAN LAL KOHLI C-73, SHYAM NAGAR, KANPUR V. INCOME TAX OFFICER 1(1) KANPUR TAN/PAN:AJEPK8628D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI. Y. P. SRIVASTAV, D.R. DATE OF HEARING: 24 02 2015 DATE OF PRONOUNCEMENT: 27 02 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOUS GROUNDS, WHICH ARE AS UNDER:- 1. THAT THE LD CIT (APPEALS)-II, KANPUR HAS ERRED IN LAW AND ON FACTS IN ARBITRARILY ENHANCING THE INCOME OF THE APPELLANT, BY MAKING AN ADDITION OF RS. 25,59,386/- ON ACCOUNT OF FREIGHT EXPENSES. 2. THAT THE LD CIT (APPEALS)-II, KANPUR HAS ERRED IN LAW AND ON FACTS IN ARBITRARILY ENHANCING THE INCOME OF THE APPELLANT, BY MAKING AN ADDITION OF RS.25,59,386/- ON ACCOUNT OF FREIGHT EXPENSES BY INVOKING SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961, WITHOUT APPRECIATING THE FACT THAT IN A.Y. 2005-06, AN INDIVIDUAL WAS NOT LIABLE TO DEDUCT TDS U/S 194C OF THE INCOME TAX ACT,1961. 3. THAT THE LD CIT (APPEALS)-II, KANPUR HAS ERRED IN LAW AND ON :- 2 -: FACTS IN ARBITRARILY ENHANCING THE INCOME OF THE APPELLANT, BY MAKING AN ADDITION OF RS.25,59,386/- ON ACCOUNT OF FREIGHT EXPENSES BY INVOKING SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961, SINCE THE GROSS RECEIPTS FROM THE BUSINESS OR PROFESSION OF THE APPELLANT FOR THE A.Y. 2004-05 WAS BELOW RS.40,00,000/- AND THUS WAS NOT LIABLE FOR TAX AUDIT U/S 44AB OF THE INCOME TAX ACT,1961 DURING A.Y. 2004-05 AND THEREFORE THE APPELLANT WAS NOT LIABLE TO DEDUCT TDS AS PER THE PROVISIONS OF THE INCOME TAX ACT, 1961. 4. THAT THE LD. CIT(A)-II, KANPUR HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS. 39,598/- MADE BY AO ON ACCOUNT OF ONE DEBTOR M/S GLOBAL EXPORTS IN AN ADHOC AND ARBITRARY MANNER AND WITHOUT POINTING OUT ANY SPECIFIC DEFECT. 5. THAT THE LD. CIT(A)-II, KANPUR HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS. 30,000/- ON ACCOUNT OF SALARY PAID TO VIKRAM KOHLI IN AN ADHOC AND ARBITRARY MANNER AND ON SURMISES AND CONJECTURES AND WITHOUT POINTING OUT ANY SPECIFIC DEFECT. 6. THAT THE LD. CIT(A)-II, KANPUR HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS. 5,000/- MADE BY AO ON ACCOUNT OF STAFF WELFARE IN ADHOC AND ARBITRARY MANNER AND ON SURMISES AND CONJECTURES AND WITHOUT POINTING OUT ANY SPECIFIC DEFECT. 7. THAT THE LD. CIT(A)-II, KANPUR HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS. 10,000/- MADE BY AO ON ACCOUNT OF BUSINESS PROMOTION EXPENSE IN AN ADHOC AND ARBITRARY MANNER AND ON SURMISES AND CONJECTURES AND WITHOUT POINTING OUT ANY SPECIFIC DEFECT. 8. THAT THE LD. CIT(A)-II, KANPUR HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS. 5,000/- MADE BY AO ON ACCOUNT OF HOLI AND DEEWALI EXPENSES IN AN ADHOC AND ARBITRARY MANNER AND ON SURMISES AND CONJECTURES AND WITHOUT POINTING OUT ANY SPECIFIC DEFECT. :- 3 -: 9. THAT THE ADDITIONS MADE BY THE LD. A.O. AND FURTHER SUSTAINED BY THE LD. CIT(A)-II, KANPUR ARE ARBITRARY, UNJUSTIFIED AND IN ANY CASE MUCH TOO HIGH AND EXCESSIVE AND DESERVES TO BE DELETED. 10. THAT THE RELEVANT ORDER IS BAD IN LAW AND ON FACTS AND IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND EQUITY. 11. THAT ANY OTHER RELIEF OR RELIEFS AS YOUR HONOUR MAY DEEM FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE BE GRANTED. 2. DURING THE COURSE OF HEARING, IT IS NOTICED THAT THE APPEAL IS FILED LATE BY SIX DAYS, FOR WHICH APPLICATION FOR CONDONATION OF DELAY IS FILED. 3. WE HAVE CAREFULLY EXAMINED THE APPLICATION FOR CONDONATION OF DELAY AND ARE CONVINCED WITH THE EXPLANATIONS GIVEN THEREIN. WE ACCORDINGLY CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 4. SO FAR AS MERIT IS CONCERNED, WE FIND THAT THE LD. CIT(A) HAS DISPOSED OF THE APPEAL EX-PARTE. IN THIS REGARD, THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THOUGH THE LD. CIT(A) HAS MENTIONED DIFFERENT DATES FOR ISSUANCE OF NOTICE, BUT NOTHING HAS BEEN MENTIONED IN THE ORDER WITH REGARD TO THE SERVICE OF NOTICE OF HEARING. THEREFORE, THE LD. CIT(A) HAS DISPOSED OF THE APPEAL WITHOUT AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE LIGHT OF THESE FACTS, THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THE MATTER BE RESTORED TO HIS FILE FOR ADJUDICATION OF APPEAL ON MERIT AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 6. HAVING CAREFULLY EXAMINED THE ORDER OF THE LD. CIT(A), WE FIND THAT THOUGH THE LD. CIT(A) HAS MENTIONED THAT VARIOUS NOTICES WERE ISSUED ON DIFFERENT DATES, BUT NOTHING HAS BEEN MENTIONED IN THE ORDER OF THE LD. :- 4 -: CIT(A) AS TO WHETHER ANY NOTICE OF HEARING WAS EVER SERVED UPON THE ASSESSEE. SINCE THERE IS NO CONCLUSIVE FINDING OF THE LD. CIT(A) WITH REGARD TO THE SERVICE OF NOTICE OF HEARING, WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS DISPOSED OF THE APPEAL WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO DISPOSE OF THE APPEAL ON MERIT AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO EXTEND ALL SORTS OF CO-OPERATION TO THE LD. CIT(A) IN DISPOSAL OF THE APPEAL. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:27 TH FEBRUARY, 2015 JJ:2402 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR