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Income Tax Appellate Tribunal, JAIPUR BENCHES, JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 751/JP/2017
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; ikWy jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 751/JP/2017 fu/kZkj.k o"kZ@Assessment Years : 2014-15 cuke M/s Mahendra Oil Mills, The Income Tax Officer, Vs. G-48-49, RIICO Industrial Area, Ward-2(3), Ajmer Jaipur Road, Kekri, Distt-Ajmer LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABFM3810H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Mahendra Gargieya (Adv.) jktLo dh vksj ls@ Revenue by : Shri A. S. Nehara (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 09/08/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 13/08/2018 vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Ajmer dated 25.07.2017 for Assessment Year 2014-15 wherein the assessee has taken the following grounds of appeal:-
“1. The impugned order u/s 144 dated 23.11.2016 is bad in law and on facts of the case, for want of jurisdiction and for various other reasons and hence, the same may kindly be quashed and in any case, the impugned additions be deleted.
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The ld. AO erred in law as well as on the facts of the case in framing the assessment u/s 144 without affording adequate and reasonable opportunity and even without complying with the mandatory statutory requirement of law. The impugned order having been framed in gross breach of natural justice, kindly be quashed.
The ld. CIT(A) seriously erred in law as well as on the facts of the case in not admitting the additional evidences furnished by the appellant during the course of the appellate proceedings. The decision of the ld. CIT(A) is totally contrary to the provisions of law and facts on the record and hence the same kindly be admitted and considered.
Rs. 23,69,200/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the addition of Rs. 23,69,200/- [20% of Rs. 1,18,46,000/-] on account of unexplained cash deposit made by the AO. The addition so made and confirmed by the ld. CIT(A) is totally contrary to the provisions of law and facts on the record and henc ehte same kindly be deleted in full.
Rs. 45,95,380/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the addition of Rs. 45,95,380/- [30% of Rs. 1,53,17,932/-] on account of unsecured loans made by the AO. The addition so made and confirmed by the ld. CIT(A) is totally contrary to the provisions of law and facts on the record and hence the same kindly be deleted in full.
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Rs. 11,02,693/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the disallowance of the following expenses. S. Head of Expenses Exp. Claimed Disallowed by Confirmed by No. AO (30%) the ld. CIT(A) 6.1 Freight Rs. 9,09,302/- Rs. 2,72,790/- Rs. 2,72,790/- 6.2 Consumption of Rs. 3,56,923/- Rs. 1,07,077/- Rs. 1,07,077/- stores & spare parts 6.3 Repairs to Rs. 2,96,792/- Rs. 89,038/- Rs. 89,038/- machinery 6.4 Salaries & Wages Rs. Rs. 4,01,904/- Rs. 4,01,904/- 13,39,680/- 6.5 Other expenses Rs. 5,05,074/- Rs. 1,51,522/- Rs. 1,51,522/- 6.6 Depreciation Rs. 2,67,873/- Rs. 80,362/- Rs. 80,362/- Total Rs. 11,02,693/- Rs. 11,02,693/-
The disallowance so made and confirmed by the ld. CIT(A), being totally contrary to the provisions of law and facts of the case, kindly be deleted in full. 7. Rs. 1,30,036/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the disallowance of the claim of brought forward losses up to Rs. 1,30,036/- [as against claimed by the AO of Rs. 1,81,760/-]. The disallowance so made and confirmed by the ld. CIT(A) being totally contrary to the provisions of law and facts of the case, kindly be allowed in full. 8. The ld. AO further erred in law as well as on the facts of the case in charging interest u/s 234A, 234B, 234C & 234D of the Act and as also in withdrawing interest u/s 244A of the Act. The appellant totally denies
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its liability of charging and withdrawal of any such interest. The interest so charged/withdrawn, being contrary to the provisions of law and facts, kindly be deleted in full.”
Ground No. 1 is general in nature, does not require any separate adjudication. Hence the same is dismissed.
In Ground No. 2, the assessee has challenged the framing of assessment u/s 144 without affording adequate and reasonable opportunity to the assessee. We have gone through the records and find that notice u/s 143(2) was issued on 31.08.2015. Thereafter, notice u/s 142(1) was issued on 27.06.2016 asking the assessee to furnish required information and documentation. Thereafter, there have been number of occasions wherein the hearing have been scheduled by the Assessing Officer, however, there has been no compliance on the part of the assessee and the Assessing Officer has proceeded and passed the order u/s 144 of the Act. In light of the same, we do not see any infirmity in the order of the Assessing Officer which has been passed u/s 144 of the Act. In the result, Ground No. 2 of the assessee’s appeal is dismissed.
In Ground No. 3, the assessee has challenged the action of the ld. CIT(A) in not admitting the additional evidences furnished by the assessee in the form of books of accounts i.e. Cash Book, Bank Book, Ledger, Journal and Bills and vouchers during the course of appellate proceedings.
5 ITA No. 751/JP/2017 M/s Mahendra Oil Mills, Ajmer vs. ITO, Ajmer
The ld. AR has submitted that the ld. CIT(A) has not considered the remand report of the AO wherein he has not objected to the admission of the additional evidence and has in fact verified the same and the found the transactions duly verifiable.
In this regard, the ld. AR has drawn our reference to the remand report dated 06.06.2017 called for the ld. CIT(A) from the AO which reads as under:-
“Kindly refer to your office letter No. CIT(A)/AJM/2016-17/5820 dated 17.03.2017 on the above mentioned subject through which written submission filed by the appellant M/s Mahendra Oil Mill, Kekri- Ajmer during the course of appellant proceedings were forwarded to this office and comments/remand report was desired by your honour.
Shri G.M.Jain, CA and A/R of the assessee alongwith Shri Ramesh Chand, Accountant attended the hearing in response to this office letter dated 29.06.2017 and filed his written submission. Books of accounts viz-a-viz ledger, cash book, bank statements, purchase and sales register, bills and vouchers were also produced and examined on test check basis. The case was discussed with them.
The para wise remand report is as under:-
Assessment completed u/s 144 of the I.T. Act:
On perusal of record, it was found that enough opportunity of being heard were provided to the assessee, but the assessee neither appeared nor furnished any reply during the period of 5 months of proceeding, which shows that the assessee was not in a position to have anything to produce or say.
6 ITA No. 751/JP/2017 M/s Mahendra Oil Mills, Ajmer vs. ITO, Ajmer
All notices/letters were issued to the assessee through speed post and served mostly on very next day of the notice. Therefore, AO has not option than to make the assessment of income of the assessee to the best of his judgment u/s 144 of the Income-tax Act, 1961.
Addition on account of cash deposits of Rs. 23,69,200/-
The A/R of the assessee produced the copy of bank account and cash books which was examined. From this cash deposits in assessee firm’s bank account are verifiable.
Addition on account of unsecured loans of Rs. 45,95,380/-
The A/R of the assessee firm produced the confirmations alongwith copy of ledger account regarding unsecured loans which are verifiable.
Disallowance of expenses of Rs. 11,02,693/-
The AO has disallowed the expenses as under:-
S. No. Expenses Amount (Rs.) 30% of such expenses (Rs.) 1. Freight 9,09,302/- 2,72,790/- 2. Consumption of 3,56,923/- 1,07,077/- stores & spare parts 3. Repairs to 2,96,792/- 89,038/- machinery 4. Salaries & wages 13,39,680/- 4,01,904/- 5. Other expenses 5,05,074/- 1,51,522/- 6. Depreciation 2,67,873/- 80,362/-
7 ITA No. 751/JP/2017 M/s Mahendra Oil Mills, Ajmer vs. ITO, Ajmer
Total 11,02,693/-
A/R of the assessee firm produced the books of accounts/bills & vouchers of expenses which were examined on test check basis. On going through the details of bills & vouchers of above expenses, it was found that some of the expenses are not fully vouched. Therefore, in a reasonable view 20% of these expenses may be disallowed. It is pertinent to mention here that in AY 2013-14 the AO has also disallowed the shop expenses to the extent of 20% of the expense.
Disallowance of brought forward losses of Rs. 1,81,760/- In assessment for AY 2013-14, losses have been determined at Rs. 51,724/- and allowed to be carried forward. In return of income for AY 2014-15, assessee firm has set off of o/F losses amounting to Rs. 1,81,760/- which is not allowable. It may be allowed to the extent of Rs. 51,724/- only.”
On perusal of the remand report, it is observed that the Assessing Officer has not given any adverse comments regarding admission of the additional evidences produced by the assessee. In fact, the same were examined by the Assessing Officer during the course of remand proceedings and the cash deposit in the assessee’s back account were held verifiable. Similarly, unsecured loan were held verifiable. Regarding disallowance of expenses which were originally made 30%, the Assessing Officer in the remand report has suggested disallowance of 20% of the said expenses. However, we find that there is no finding or discussion by the ld. CIT(A) in respect of the remand report given by the Assessing Officer dated 06.06.2017. It is therefore a case where the
8 ITA No. 751/JP/2017 M/s Mahendra Oil Mills, Ajmer vs. ITO, Ajmer
ld. CIT(A) has called for the remand report seeking comments from the AO without the admitting additional evidences. At the same time, the Assessing Officer has not objected to the admission to the additional evidences and has in fact gone ahead and examined those additional evidences and found the transaction undertaken by the assessee verifiable. In such circumstances whether the Revenue has not objected to the admission of the additional evidences, it would have been better had ld. CIT(A) given his finding on merit rather than rejecting the additional evidences on technicality. In the result, we deem it appropriate to remand the matter to the file of ld. CIT(A) who shall decide the same afresh on merits after taking into consideration the additional evidences so submitted by the assessee and remand report so furnished by the Assessing Officer dated 06.06.2017. In the result, Ground No. 3 is allowed for statistical purposes.
Regarding Ground No. 4 to 7 regarding merits of the case and the Ground No. 8 is on the levy of interest u/s 234A, 234B, 234C & 234D. Since we have remanded the matter to the file of the ld CIT(A), we deem it appropriate to set aside these grounds to the file of the ld. CIT(A) as well.
In the result, the appeal is partly allowed for statistical purposes.
Order pronounced in the open Court on 13/08/2018.
Sd/- Sd/- ¼fot; ikWy jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur
9 ITA No. 751/JP/2017 M/s Mahendra Oil Mills, Ajmer vs. ITO, Ajmer fnukad@Dated:- 13/08/2018 *Ganesh Kr. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- M/s Mahendra Oil Mills, Ajmer 2. izR;FkhZ@ The Respondent- ITO, Ward-2(3), Ajmer 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { ITA No. 751/JP/2018} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत