BINOD AUTOMOBILES,ANGUL vs. ITO, ANGUL WARD, ANGUL

आयकर अपीऱीय अधिकरण, कटक न्यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM आयकर अपीऱ सं./ITA No.98/CTK/2019 (नििाारण वषा / Assessment Year :2015-2016) M/s Binod Automobiles, Vs. ITO, Angul Ward, Angul NH-55, Villa/PO:Kandasar, Odisha-759145 स्थायी लेखा सं./PANNo. : AALFB 0713 C (अऩीलाथी /Appellant) (प्रत्यथी / Respondent) .. ननधाारिती की ओर से /Assessee by : Shri Ranajeet Singh, an employee of the assessee. िाजस्व की ओर से /Revenue by : Shri J.K.Lenka, DR

सुनवाई की तािीख / Date of Hearing : 18/11/2019 घोषणा की तािीख/Date of Pronouncement : 19/11/2019 आदेश / O R D E R Per L.P.Sahu, AM: This 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 drawing 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 AO 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)

2 ITA No.98/CTK/2019 of submission dt 21.12.2018 has clearly explained each transaction which were not relied by AO but deserved a consideration by CIT (appeals) for granting justice to the assessee.

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

loose 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/-.

before the CIT(A) and the CIT(A) dismissed the appeal of the assessee

after considering the submissions of the assessee.

appeal before the Income Tax Appellate Tribunal.

3 ITA No.98/CTK/2019 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 accounts 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.

below.

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 and impounded by the survey team. It is clear 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 assessment 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

4 ITA No.98/CTK/2019 noted that these facts have not been examined by the authorities below

properly. Therefore, in the interest 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

heard 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 statistical purposes.