Income Tax Officer-I, Faizabad V. M/s Ajay Construction Company, Faizabad

ITA 885/LKW/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2069 (ITAT-LUCKNOW)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-09-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 12-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M P MISHRA; SHAILENDRA MISHRA S
• Keywords: Assessment record
• Section: 40A(3); 142(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.885/LKW/2014 ASSESSMENT YEAR 2011-12 M/S AJAY CONSTRUCTION COMPANY, BANBEERPUR, GOPALPUR, FAIZABAD PAN AA OFA 1842 J VS INCOME TAX OFFICER-I, FAIZABAD (RESPONDENT) (APPELLANT) S HRI AMIT NIGAM , DR APPELLANT BY SHRI M.P. MISHRA & SHRI SHAILENDRA MISHRA, ADVOCATES RESPONDENT BY 16 /0 9 /2015 DATE OF HEARING 09/10/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT (A)-I, LUCKNOW DATED 15.09.2014 FOR THE AY 2011-12. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE CIT(A)-I, LUCKNOW HAS ERRED ON FACT A ND IN LAW IN DELETING THE ADDITION OF RS. 5,07,805/- MADE ON ACCOUNT OF D ISALLOWANCE OF INTEREST AND REMUNERATION PAID TO THE PARTNERS A MOUNTING TO RS.1,93,098/- AND RS.3,14,707/- RESPECTIVELY IGNORI NG THE FACT THAT 'THE A.O. HAD ASKED THE ASSESSEE TO FURNISH TH E PARTNERSHIP DEED VIDE SHOW CAUSE NOTICE U/S 142(1) DATED 27.08. 2013 PROVIDING REASONABLE OPPORTUNITY TO THE ASSESSEE BU T THE SAME WAS NOT FURNISHED/PRODUCED BEFORE THE A.O. DURING A SSESSMENT PROCEEDINGS. 2 2. THE CIT(A)-I, LUCKNOW HAS ERRED ON FACT AND IN LAW IN ADMITTING THE FRESH EVIDENCE BEING THE REVISED PARTNERSHIP DE ED FILED UNDER RULE 46A OF THE I.T. RULES WHICH WAS NOT PROD UCED BEFORE THE A.O. DURING ASSESSMENT PROCEEDINGS. BEFORE CONS IDERING THE FRESH EVIDENCE FURNISHED BY THE ASSESSEE IN APPEAL THE CIT(A) DID NOT ALLOW ANY OPPORTUNITY TO THE A.O. TO CONSID ER THE SAME AS REQUIRED UNDER RULE 46A(3) OF THE I.T. RULES. 3. THE CIT(A)-I, LUCKNOW HAS ERRED ON FACT AN D IN LAW IN DELETING THE ADDITION OF RS. 19,68,5707- MADE ON ACCOUNT OF DISALLOWANCE U/S 40A(3) OF THE I.T. ACT WITHOUT APPRECIATING THA T THE ASSESSEE HAD FAILED TO PRODUCE ANY OF THE BILLS/VOUCHERS OF THE EXPENSES CALLED FOR BY THE A.O. VIDE ORDER SHEET ENTRIES AND SHOW CAUSE NOTICE U/S 142(1) DATED 27.08.2013. 4. WHILE DELETING THE ADDITION OF RS. 19,68,570/- U/S 40A(3) OF THE I.T. ACT, THE CIT(A) HAS OVERLOOKED THE FACT THAT S HRI. AJAY KUMAR SINGH, PARTNER OF THE ASSESSEE FIRM VIDE ORDE R SHEET ENTRY DATED 10.09.2013 IN ASSESSMENT RECORD, HAD ADMITTED THAT MATERIALS WERE PURCHASED BY CASH. 5. THE CIT(A)-I, LUCKNOW ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 7,50,000/- ADMITTING THE FRESH EVID ENCE UNDER RULE 46A IN RESPECT OF THE PAYMENTS MADE BY M/S U.P . AWAS AVAM VIKAS PARISHAD, PRATAPGARH WITHOUT ALLOWING TH E A.O. AN OPPORTUNITY TO EXAMINE THE SAME AS REQUIRED UNDER R ULE 46A(3) OF THE I.T. RULES. THESE EVIDENCES WERE NOT 'PRODUC ED BEFORE THE A.O. DURING ASSESSMENT PROCEEDINGS AS WAS CALLED FO R VIDE SHOW CAUSE NOTICE U/S 142(1) DATED 27.08.2013 PROVIDING OPPORTUNITY TO THE 'ASSESSEE. 6. THAT THE APPELLANT ALSO CRAVES TO MODIFY, AME ND, CHANGE AND REVISE THE ABOVE GROUNDS OF THE APPEAL AND ADD FURT HER GROUNDS OF APPEAL, IF NECESSARY. 3. LD. DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. HE ALSO SUBMITTED THAT THERE IS VIOLATION OF RULE 46A OF THE I.T. RUL ES IN THE PRESENT CASE. IN REPLY, IT WAS SUBMITTED BY LD. AR OF THE ASSESSEE THAT AO DID NOT PROVIDE SUFFICIENT OPPORTUNITIES TO THE ASSESSEE AND THEREFORE, THE MA TTER MAY BE RESTORED BACK TO THE FILE OF THE AO FOR FRESH DECISION. 3 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT IT IS NOTED BY THE AO IN THE ASSESSMENT ORDER THAT NOTICE U/S 143(2) WAS ISSUED AND SERVED ON THE ASSESSEE ON 28.09.2012 BUT THEREAFTER, NOTICE U/S 1 42(1) WAS ISSUED ON 26.06.2013 AND 10.07.2013 I.E. MUCH AFTER THE ISSUE OF NOTICE U/S 143(2) OF THE ACT. THE ASSESSMENT ORDER HAS BEEN PASSED BY THE AO ON 11.09 .2013. HENCE, WE FIND FORCE IN THE SUBMISSION OF LD. AR OF THE ASSESSEE THAT AD EQUATE OPPORTUNITIES OF HEARING WAS NOT PROVIDED BY THE AO TO THE ASSESSEE AND UNDE R THESE FACTS AND IN VIEW OF THIS THAT THERE IS VIOLATION OF RULE 46A OF I.T. RU LE BY LD. CIT(A), WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF THE A.O. FOR FRESH DECISION AFTER PROVIDING ADEQUATE OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE. IN VIEW OF THIS DECISION, NO SEPARATE ADJUDICATION IS CALLED FOR REGARDING ADDITION DELETED BY THE CIT(A). 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (SUNIL KUMAR YADAV) (A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED:09 /10/2015 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR