Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
आदेश / ORDER PER ANIL CHATURVEDI, AM :
This appeal filed by the assessee is emanating out of the order of 1. Commissioner of Income Tax (A) – 1, Nashik dated 13.02.2017 for the assessment year 2013-14.
The relevant facts as culled out from the material on record are as under :-
Assessee is a Private Limited Company engaged in the business of dealing in all types of pipes, agricultural implements etc. Assessee electronically filed its return of income for A.Y. 2013-14 on 30.09.2013 declaring total income of Rs.53,41,100/-. In this case, a survey operation u/s 133A of the Act was carried out on 21.11.2012 on the
business premises of the assessee wherein the assessee company had
admitted additional income of 1,30,00,000/- for the discrepancies with
regard to stock, cash and unaccounted transactions noted in the
impounded material found during the survey. The case was selected for
scrutiny and thereafter assessment was framed u/s 143(3) of Act vide
order dt.21.03.2016 determining the total income at Rs.1,84,52,810/-.
Aggrieved by the order of AO, assessee carried the matter before
Ld.CIT(A), who vide order dt.13.02.2017 (in appeal No.Nsk/CIT(A)-
1/25/2016-17) dismissed the appeal of assessee. Aggrieved by the
order of Ld.CIT(A), assessee is now before us and has raised the
following grounds :
“1. The learned CIT(A) erred in confirming the addition of Rs.1,30,00,000/- made by the A.O. without appreciating the said addition was not justified in law.
The learned CIT(A), erred in holding that the addition of Rs.1,30,00,000/- was justified on the ground that in the course of survey statement recorded u/s 133A, the assessee had declared additional income of Rs.1,30,00,000/- in respect of stock shortage and cash found and hence, it cannot go back on its declaration once the income was declared in the survey statement.
The learned CIT(A) failed to appreciate that that the said addition was made solely on the basis of the declaration made in the statement u/s 133A and the dept. had not pointed out any discrepancy in the books of accounts furnished by the assessee in the course of asst. proceedings to justify the addition of Rs.1,30,00,000/- on merits and hence, the addition was not warranted.
The learned CIT(A) erred in not appreciating that at the time of survey action conducted on 21.11.2012, the books of accounts were incomplete, however, after the end of the year, the books of accounts were prepared and as per the finalized books, the stock and cash was reconciled and the A.O. had accepted the said books without pointing out any discrepancy in the same and therefore, there was no reason to make any addition solely on the basis of the declaration made in the survey statement.
Without prejudice to the above grounds, the assessee submits that at the time of survey action, the 'inventory of stock valuing Rs.2,01,68,450/- was found as against the stock ofRs.3,77,36,365/- as per the incomplete books of accounts and hence, if at all, any addition is to be made, then only the G.P, @ 2.47% on the stock shortage should have been taxed and no further addition was justified on facts of the case.”
All the grounds being inter-connected are considered together.
During the course of assessment proceedings, AO noticed that
assessee had not disclosed the additional income of Rs.1,30,00,000/-
that was admitted during the survey in the return of income filed on
30.09.2013 for A.Y. 2013-14 and that assessee had retracted from the
said statement in its written submissions dated on 15.12.2015. i.e.,
three years after the survey. The submissions of the assessee of not
including the income declared during survey in the return of income
were not found acceptable by the AO. AO thus made addition of
Rs.1,30,00,000/- as additional income. Aggrieved by the order of AO,
assessee carried the matter before Ld.CIT(A), who vide ex-parte order
dated 13.02.2017 (in appeal No.Nsk/CIT(A)-1/25/2016-17) dismissed
the appeal of assessee.
Aggrieved by the order of Ld.CIT(A), assessee is now in appeal
before us.
Before us, Ld.A.R. at the outset submitted that Ld.CIT(A) has
passed an ex-parte order and not on merits. He further submitted that
due to unavoidable circumstances, assessee could not appear before
Ld.CIT(A). He submitted that if given a chance, assessee undertakes to
appear before lower authorities and furnish all the required details to
substantiate its case. With respect to the addition of Rs.1.30 crore
made by AO, he submitted that assessee has not retracted the
declaration made during the survey but on the contrary had included
the income from the impounded material found during survey which has
resulted in the increase in net profit to 1.45% as compared to the
average net profits for last 5 years at 0.37%. He submitted that during
the course of assessment proceedings, the AO had verified the books of
accounts with reference to the impounded material and the
discrepancies that were not found verifiable were added to the income.
He submitted that addition of Rs.1.30 crore made by AO would therefore
amount to double addition of the same income. He therefore submitted
that assessee be granted one more opportunity to explain his stand.
Ld.D.R. on the other hand supported the order of AO and Ld.CIT(A) and
objected to Ld.A.R.’s prayer for 2nd innings.
We have heard the rival submissions and perused the material on
record. The issue in the present case is with respect to addition of
Rs.1,30,00,000/- on account of additional income offered by the
assessee during the survey operation u/s 133A of the Act but not
included in the return of income as per the Revenue authorities. The
perusal of order of Ld.CIT(A) reveals that Ld.CIT(A) has passed an ex-
parte order without deciding the issue on merits. In view of the well
settled principle of natural justice that sufficient opportunity of hearing
should be afforded to the parties and no party should be condemned
unheard, we are of the view that one more opportunity be granted to the
assessee company to present its case before the authorities. We
therefore restore the matter back to the file of Ld.CIT(A) to decide the
issue on merits in accordance with law. Needless to state that Ld.CIT(A)
shall grant adequate opportunity of hearing to both the parties.
Assessee is also directed to promptly furnish all the details called for by
the authorities. In view of our decision to restore the issue to Ld.CIT(A),
we are not adjudicating on merits the grounds of the appeal raised by
the assessee. Thus, the grounds of assessee are allowed for
statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on 16th day of October, 2019.
Sd/- Sd/- (SUSHMA CHOWLA) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER
पुणे Pune; �दनांक Dated : 16th October, 2019. Yamini
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A)-1, Nashik. Pr. CIT-1, Nashik. 4. 5 �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी” / DR, ITAT, “B” Pune; गाड� फाईल / Guard file. 6.
आदेशानुसार/ BY ORDER
// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.