Binod Automobiles, Angul V. ITO, Angul Ward, Angul

ITA 98/CTK/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3095 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 02-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RANAJEET SINGH
• Keywords: Loose papers
• Section: 201

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM . / ITA NO. 98 /CTK/201 9 ( / ASSESSMENT YEAR :20 1 5 - 2016 ) M/S BINOD AUTOMOBILES, NH - 55, VIL LA/PO:KANDASAR, ODISHA - 759145 VS. ITO, ANGUL WARD, ANGUL ./ PANNO. : AALFB 0713 C ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI RANAJEET SINGH, AN EMPLOYEE OF THE ASSESSEE. / REVENUE BY : SHRI J.K.LENKA, DR / DATE OF HEARING : 1 8 / 11 /2019 / DATE OF PRONOUNCEMENT : 19 / 1 1 /2019 / O R D E R PER L.P.SAHU , A M : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT(A) - 2 , BHUBANESWAR, DATED 21.01.2019 FOR THE ASSESSMENT YEAR 2015 - 2016 ON THE FOLLOWING GROUNDS OF APPEAL : - 1. DECISION OF CIT (A) UPHOLDING THE ADDITION BY AO RS.2,88,900/ - TO RETURNED INCOME AGAINST PARTNER DRAW ING OF RS.1,25,000 FROM CAPITAL , RS 1,57,400 SALARY ADVANCE BY WORKING PARTNER AND RS 6,500 PAYMENT TO SUPPLIER WITHOUT CONSIDERING THE ASSESSEE/APPELLANT WRITTEN SUBMISSION DT. 21.12.2008 BEFORE LD CIT (A), IS ERRONEOUS, BASED ON ASSUMPTIONS AND BIASED. 2. ADDITION BY A O BASED ON IMPOUNDED LOOSE SHEETS FROM SURVEY CONDUCTED ON 5.2.2015 MUCH BEFORE THE COMPLETION OF ACCOUNTING PERIOD ENDED AS ON 31.03.2015 AND AUDITING THEREOF, IS PREMATURE, ARBITRARY, ERRONEOUS AND NOT BASED ON PRINCIPLE. 3. THE AUDITED PROFIT & LOSS STATEMENT AND BALANCE SHEET HAS SHOWN SUCH EXPENDITURE PROPERLY CATEGORIZING AS PARTNER DRAWING FROM CAPITAL AND PARTNER SALARY. THE APPELLANT AT RELEVANT PARA 16(B) ITA NO . 98 /CTK/201 9 2 OF SUBMISSION DT 21.12.2018 HAS CLEARLY EXPLAINED EACH TRANSACTION WHICH WERE NOT RE LIED BY AO BUT DESERVED A CONSIDERATION BY CIT (APPEALS) FOR GRANTING JUSTICE TO THE ASSESSEE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 30.09.2015 DISCLOSING TOTAL INCOME OF RS.9,50,150/ - WHICH WAS PROCESSED U/S.143(1) OF THE ACT . SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE. A SURVEY WAS CONDUCTED U/S.133A OF THE ACT IN THE CASE OF THE ASSESSEE ON 05.02.2015. DURING THE COURSE OF SURVEY, IT WAS NOTICED THAT CERTAIN LOO SE SHEETS WERE IMPOUNDED MARKED AS BHAA - 4 WHICH WAS OBSERVED BY THE AO AS A PERSONAL EXPENDITURE REFLECTED IN THE ASSESSMENT ORDER. IN THIS REGARD, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE BUT THE ASSESSEE COULD NOT EXPLAIN BEFORE THE AO, THEREFORE, THE AO TREATED IT AS A DIVERSION OF PROFIT AND CLAIMED AS EXPENDITURE AND HE FURTHER NOTED THAT THESE EXPENDITURES WERE NOT INCURRED FOR PROMOTING BUSINESS OF THE PARTNERSHIP FIRM. ACCORDINGLY, HE DISALLOWED TO THE TUNE OF RS. 2,88,900/ - . 3 . FEELING AGGRIEV ED FROM THE ORDER OF AO, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE. 4 . AGGRIEVED FROM THE ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL. ITA NO . 98 /CTK/201 9 3 5 . SHRI RANAJEET SINGH, AN EMPLOYEE WHO APPEARED ON BEHALF OF THE ASSESSEE - COMPANY SUBMITTED THAT DURING THE COURSE OF SURVEY NO SUCH EXPENSES WERE DEBITED TO THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE AND THE BOOKS OF ACCO UNTS OF THE ASSESSEE ARE PROPERLY AUDITED. SHRI SINGH FURTHER SUBMITTED THAT THE AMOUNT AS DISPUTED BY BOTH THE AUTHORITIES BELOW HAS BEEN TAKEN EITHER AS A SALARY OR DRAWINGS OF THE MANAGING PARTNER. HOWEVER, THE CIT(A) OBSERVED THAT THE ASSESSEE HAS NOT FILED ANY EXPLANATION BEFORE THE AO. THEREFORE, HE SUBMITTED THAT ASSESSEE COULD BE ABLE TO SUBSTANTIATE ITS CLAIM IF ONE MORE OPPORTUNITY TO BE GIVEN TO REPRESENT ITS CASE BEFORE THE AO. 6 . ON THE OTHER HAND, LD.DR RELIED ON THE ORDERS OF AUTHORITIES BELO W. 7 . AFTER HEARING BOTH THE SIDES AND PERUSING ENTIRE MATERIAL AVAILABLE ON RECORD, WE NOTICED THAT AS PER THE OBSERVATIONS OF AO, ON THE DATE OF SURVEY CARRIED OUT U/S.133A OF THE ACT SOME LOOSE PAPERS WERE FOUND A ND IMPOUNDED BY THE SURVEY TEAM. IT IS C LEAR FROM THE ORDER OF AUTHORITIES BELOW THAT DURING THE SURVEY PROCEEDINGS U/S.133A OF THE ACT, SOME LOOSE DOCUMENTS WERE FOUND, BUT THE AO HAS MADE ADDITIONS AS THESE EXPENSES HAVE BEEN CHARGED INTO THE PROFIT AND LOSS ACCOUNT. ON PERUSAL OF THE ASSESSME NT ORDER AS WELL AS THE APPELLATE ORDER, IT IS NOT CLEAR AS TO WHETHER THE AMOUNT HAS BEEN DEBITED TO THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE OR NOT AND WE ITA NO . 98 /CTK/201 9 4 NOTED THAT THESE FACTS HAVE NOT BEEN EXAMINED BY THE AUTHORITIES BELOW PROPERLY . THEREFORE, IN THE IN TEREST OF JUSTICE, WE REMIT THE ISSUE BACK TO THE FILE OF AO TO VERIFY AS TO WHETHER THE AMOUNT IN QUESTION HAS BEEN DEBITED TO THE PROFIT AND LOSS ACCOUNT AND CONSIDER THE CLAIM OF THE ASSESSEE ACCORDINGLY AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO COOPERATE THE AO IN EARLY DISPOSAL OF THE CASE. THUS, GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED FOR STATI STICAL PURPOSES. 8 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 / 1 1 / 201 9 . SD/ - ( C.M.GARG ) SD/ - ( L.P.SAHU ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK; DATED 19 / 1 1 /201 9 PRAKASH KUMAR MISHRA, SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , /ITAT, CUTTACK 1. / THE APPELLANT - M/S BINOD AUTOM OBILES, NH - 55, VILLA/PO:KANDASAR, ODISHA - 759145 2. / THE RESPONDENT - ITO, ANGUL WARD, ANGUL 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD F ILE. //TRUE COPY//