FARMERS FORTUNE (INDIA) PRIVATE LIMITED,MUMBAI vs. DCIT, CIRCLE 1(3)(1), MUMBAI, MUMBAI

The assessee has raised grounds challenging the confirmation of additions of Rs.1,41,28,502/- on account of prior period interest expenditure and Rs.6,26,67,808/- made by estimating net profit at 1% of turnover.

Aggrieved, the assessee preferred appeal before the Ld. CIT(A). The Ld. CIT(A) issued notices on various dates. However, there was no effective compliance from the side of the assessee. The Ld. CIT(A), therefore, proceeded to decide the appeal on the basis of material available on record and confirmed the additions made by the Assessing Officer. Accordingly, the appeal of the assessee was dismissed.

Before us, the Ld. Authorised Representative submitted that the assessee could not properly represent the matter before the lower authorities. It was submitted that the Assessing Officer has proceeded on the basis that the assessee had not produced books of account and supporting evidences. The Ld. AR submitted that the books of account and supporting documents are available with the assessee and the assessee is now ready to produce the same before the Assessing Officer for verification. It was further submitted that the interest expenditure was paid to scheduled bank and the same is allowable as per law. The Ld. AR, therefore, prayed that the matter may be restored to the file of the Assessing Officer for fresh adjudication.

We have heard the rival submissions and perused the material available on record. We find that the additions have been made primarily on account of non-production of books of account, bills, vouchers and other supporting evidences before the Assessing Officer. The Ld. CIT(A) has also confirmed the additions mainly for want of compliance and supporting material from the assessee. Thus, the controversy involved in the present appeal requires verification of books of account and supporting evidences at the end of the Assessing Officer.

It is settled principle that assessment proceedings should be decided on the basis of relevant material and evidences. At the same time, the assessee is under obligation to furnish books of account, bills, vouchers and such other details as may be called for by the Assessing Officer. In the present case, the assessee has now submitted that it is ready to produce books of account and supporting evidences for verification. Therefore, in the interest of substantial justice, we deem it appropriate to grant one more opportunity to the assessee.

However, the conduct of the assessee in not properly complying before the lower authorities cannot be approved. The matter has travelled up to the Tribunal only because of non-production of necessary details and evidences at the appropriate stage. Therefore, to balance the equities, we restore the entire matter to the file of the 3

The assessee shall pay the aforesaid cost within 15 days from the date of receipt of this order and furnish proof of such payment before the Assessing Officer. Thereafter, the Assessing Officer shall provide reasonable opportunity of being heard to the assessee and decide the issues afresh in accordance with law after examining the books of account, bills, vouchers and other evidences that may be furnished by the assessee. The assessee is directed to fully cooperate in the proceedings and furnish all details called for by the Assessing Officer, failing which the Assessing Officer shall be at liberty to decide the matter on the basis of material available on record in accordance with law.

In view of the above, the impugned order of the Ld. CIT(A) is set aside and the matter is restored to the file of the Assessing Officer for fresh adjudication.

In the result, appeal of the assessee is allowed for statistical purposes.