Shri S.Ramasubramony, CHENNAI V. ITO, CHENNAI

ITA 890/CHNY/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4530 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-08-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 13-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: D ANAND
• Section: 80HHC; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 890/MDS/2011 ASSESSMENT YEAR 2001-02 SHRI S. RAMASUBRAMONY, W-746, D-SECTOR, 4 TH AVENUE, ANNA NAGAR WEST EXTENSION, CHENNAI 600 101 [PAN: AAIPM 6468 L] VS INCOME TAX OFFICER, BUSINESS WARD XIV(1), CHENNAI 600 034. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D. ANAND, ADVOCATE RESPONDENT BY : SHRI N. MADHAVAN, JCIT DATE OF HEARING : 01-08-2013 DATE OF PRONOUNCEMENT : 12-08-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-XI I, CHENNAI DATED 09-03-2011 RELEVANT TO THE ASSESSMENT YEAR (A Y) 2001-02. I.T.A. NO. 890/MDS/2011 :- 2 -: 2. THE FACTS IN BRIEF ARE, THE ASSESSEE IS CARRYING BUSINESS OF EXPORT OF GARMENTS UNDER AND NAME AND STYLE OF PROP RIETORSHIP FIRM KARAVEERA ENTERPRISES. THE ASSESSEE FILED H IS RETURN OF INCOME FOR THE AY. 2001-02 ON 31-10-2001 ADMITTING TOTAL INCOME OF ` 1,01,720/- AND AGRICULTURAL INCOME OF ` 1,42,870/-. THE INCOME RETURNED BY THE ASSESSEE INCLUDED INCOME FRO M HIS PROPERTY, INCOME FROM BUSINESS AND INCOME FROM OTHE R SOURCES. ASSESSEE BEING EXPORTER OF GARMENTS CLAIMED DEDUCTI ON OF ` 18,92,193/- U/S. 80HHC OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). THE ASSESSING OFF ICER NOTICED THAT WHILE WORKING OUT THE PROFITS OF THE BUSINESS UND ER EXPLANATION (BAA) TO SECTION 80HHC FOR CALCULATING ELIGIBLE DED UCTION, THE ASSESSEE HAS TAKEN ONLY PROFIT FROM THE EXPORT UNIT AND NOT THE ENTIRE INCOME COMPUTED UNDER THE HEAD BUSINESS. T HE ASSESSING OFFICER WAS OF THE OPINION THAT INCOME CH ARGED TO TAX HAS ESCAPED ASSESSMENT AND ISSUED NOTICE U/S. 148 OF THE ACT TO THE ASSESSEE ON 16-08-2005. THE ASSESSING OFFICER RE- CALCULATED THE DEDUCTION ALLOWABLE TO THE ASSESSEE U/S. 80HHC AND HELD THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTI ON TO THE TUNE OF ` 4,41,052/- ONLY. THE ASSESSEE OBJECTED TO THE RE-W ORKING OF I.T.A. NO. 890/MDS/2011 :- 3 -: THE DEDUCTION AND SUBMITTED THAT THE ASSESSEE IS MA INTAINING SEPARATE BOOKS FOR KARAVEERA ENTERPRISES AND FOR THE OTHER INCOMES DERIVED BY HIM DURING THE RELEVANT FINANCIA L YEAR (FY) 2000-01. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNTS MAINTAINED DURING THE FY RELEVANT TO THE AY 2001-02. DESPITE REPEATED OPPORTUNITIES, THE ASSES SEE OR HIS AR COULD NOT PRODUCE BOOK OF ACCOUNTS TO SUBSTANTIATE THEIR CONTENTIONS THAT SEPARATE BOOKS OF ACCOUNTS WERE MA INTAINED BY THE ASSESSEE FOR EXPORT BUSINESS AND OTHER INCOME G ENERATING ACTIVITIES. THE ASSESSING OFFICER VIDE ASSESSMENT ORDER DATED 28-12-2006 PASSED U/S. 147 OF THE ACT MADE ADDITION IN THE INCOME RETURNED BY THE ASSESSEE. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESSE E PREFERRED AN APPEAL BEFORE THE CIT(APPEALS) ON THE GROUND THAT SUFFICIENT OPPORTUNITY WAS NOT AFFORDED TO THE ASSE SSEE TO PRESENT THE CASE AND PRODUCE THE DOCUMENTS. THE CIT(APPEALS ) WAS NOT CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE AND DISMISSED THE APPEAL OF THE ASSESSEE. NOW, THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE US ASSAILING THE ORDER OF THE CIT(APPEALS). I.T.A. NO. 890/MDS/2011 :- 4 -: 3. SHRI D. ANAND, ADVOCATE APPEARING ON BEHALF OF T HE ASSESSEE SUBMITTED THAT APART FROM THE EXPORT BUSIN ESS, THE ASSESSEE IS HAVING INCOME FROM HARVESTING MACHINES. THE ASSESSEE IS MAINTAINING SEPARATE BOOK OF ACCOUNTS F OR 100% EXPORT ORIENTED UNIT - M/S. KARAVEERA ENTERPRISES A ND OTHER BUSINESSES. THE LD. COUNSEL FOR THE ASSESSEE CONTE NDED THAT THE BOOKS OF ACCOUNTS COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER AS THE YOUNGER BROTHER OF THE AR OF THE ASS ESSEE WAS CRITICALLY ILL AND WAS ADMITTED IN THE HOSPITAL SIN CE 26-11-2006. LATER ON, THE BROTHER OF THE AR LEFT FOR HIS HEAVEN LY ABODE ON 10-12-2006. THE ASSESSING OFFICER WITHOUT AFFORD ING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS MADE ADDITION VIDE ORDER DATED 28-12-2006 PASSED U/ S. 147 OF THE ACT. IN THE FIRST APPELLATE PROCEEDINGS, THE CIT(APPEALS) HAS NOT APPRECIATED THE FACT THAT THE AR OF THE ASSESSE E WAS IN PERSONAL DIFFICULTY THEREFORE COULD NOT PRODUCE THE BOOKS SEPARATELY MAINTAINED BY THE ASSESSEE FOR EXPORT BU SINESS AND OTHER BUSINESS ACTIVITIES. THE CIT(APPEALS) HAS DI S-BELIEVED THE SUBMISSIONS OF THE ASSESSEE AND HAS DISMISSED THE A PPEAL OF THE ASSESSEE. I.T.A. NO. 890/MDS/2011 :- 5 -: 4. ON THE OTHER HAND SHRI N. MADHAVAN, JCIT APPEARI NG ON BEHALF OF THE REVENUE SUBMITTED THAT A PERUSAL OF T HE ORDERS OF THE AUTHORITIES BELOW WOULD CLEARLY SHOW THAT THE A SSESSEE HAS BEEN NON-CO-OPERATIVE RIGHT FROM THE BEGINNING. THR EE OPPORTUNITIES WERE AFFORDED TO THE ASSESSEE BY ASSE SSING OFFICER ON 29-11-2006, 18-12-2006 & 26-12-2006 TO PRODUCE T HE BOOKS OF ACCOUNTS. BUT THE ASSESSEE FILED TO PRODUCE THE ALLEGED SEPARATE BOOKS OF ACCOUNTS. THE LD. DR FURTHER SUB MITTED THAT THE ASSESSEE HAS BEEN TAKING CONTRADICTORY STAND FO R NON- PRODUCTION OF THE BOOKS. ON ONE OCCASION, THE ASSE SSEE HAS STATED THAT THE PERSON WHO WAS MAINTAINING THE ACCO UNTS FOR THE ASSESSEE HAD DISAPPEARED WITH THE SEPARATE SET OF B OOKS AND THE ASSESSEE HAS NEITHER BEEN ABLE TO LOCATE HIS OLD AC COUNTANT OR THE BOOKS TAKEN AWAY BY HIM. ON THE OTHER HAND, TH E ASSESSEE HAS STATED THAT THE BROTHER OF THE AR OF THE ASSESS EE WAS CRITICALLY ILL THEREFORE, THE AR COULD NOT PRODUCE BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFICER. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE RIVAL PARTIES AND HAVE ALSO PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE I.T.A. NO. 890/MDS/2011 :- 6 -: LD. COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS BEEN MAINTAINING SEPARATE BOOKS FOR HIS EXPORT BUSI NESS AND OTHER BUSINESS ACTIVITIES. A PERUSAL OF THE ASSESS MENT ORDER SHOWS THAT THE ASSESSING OFFICER HAS GRANTED THREE OPPORTUNITIES TO THE ASSESSEE I.E., ON 29-11-2006, 18-12-2006 & 2 6-12-2006 TO PRODUCE THE BOOKS OF ACCOUNTS. BUT ON ALL THE THRE E OCCASIONS NEITHER THE ASSESSEE NOR HIS AR COULD PRODUCE THE A LLEGED SEPARATE BOOKS OF ACCOUNTS. THE COUNSEL FOR THE AS SESSEE HAS MADE A STATEMENT THAT THE YOUNGER BROTHER OF THE AU DITOR WAS SERIOUSLY ILL AND WAS ADMITTED IN THE HOSPITAL SINC E 26-11-2006 AND LATER DIED ON 10-12-2006. WE FIND THAT THE PER IOD OF PRE- OCCUPATION OF THE AR OF THE ASSESSEE IN TAKING CARE OF HIS YOUNGER BROTHER WHO WAS CRITICALLY ILL IS ALMOST SA ME WHEN THE ASSESSING OFFICER HAD POSTED THE CASE FOR HEARINGS. THEREFORE, IT IS QUITE POSSIBLE THAT AR OF THE ASSESSEE COULD NOT HAVE PLACED ON RECORD THE BOOKS OF ACCOUNTS BEFORE THE ASSESSIN G OFFICER. IN THE INTEREST OF JUSTICE, WE GRANT AN OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE ALLEGED SEPARATE BOOKS OF ACCOUNTS BEFO RE THE ASSESSING OFFICER. I.T.A. NO. 890/MDS/2011 :- 7 -: 6. THE IMPUGNED ORDER IS SET ASIDE AND THE FILE IS REMITTED BACK TO THE ASSESSING OFFICER FOR DECIDING THE MATT ER AFRESH AFTER TAKING INTO CONSIDERATION THE DOCUMENTS PRODUCED BY THE ASSESSEE IN ACCORDANCE WITH LAW. APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON MONDAY, THE 12 TH AUGUST, 2013 AT CHENNAI. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (VIKAS AWASTHY) JUDICIAL MEMBER DATED: 12 TH AUGUST, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR