SHARDA SUGAR COMPANY,MUZAFFARNAGAR vs. ITO, WARD- 2(3), MUZAFFARNAGAR

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ITA 6891/DEL/2017Status: DisposedITAT Delhi05 July 2018AY 2013-144 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the evidence filed by the assessee before the CIT(A) under Rule 46A was essential for adjudicating the issues. Therefore, the matter was remitted back to the Assessing Officer for re-examination of the evidence and a fresh decision.

What were the facts?

The assessee appealed an order by the CIT(A) which upheld the AO's addition and enhanced it by applying a 6% net profit on freight and incidental charges. The assessee argued that the CIT(A) erred by not considering the nature of business and rejecting evidence filed under Rule 46A.

What were the issues?

Whether the CIT(A) erred in enhancing the addition without proper consideration of evidence and the nature of business. Whether the rejection of additional evidence filed under Rule 46A was justified.

Which sections of the Income-tax Act were involved?

Section 145(3),Section 251(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC.”, NEW DELHI

Before: SHRI H.S. SIDHU

For Appellant: Smt. Prem Lata Bansal, Sr. Adv. &

ORDER This appeal by the Assessee are directed against the Order of the Ld. Commissioner of Income Tax (Appeals), Muzaffarnagar dated 31.08.2017 pertaining to assessment year 2013-14 on the following grounds:-

1. That the learned CIT(A) has grossly erred both in law and on facts in upholding the assessment order and enhancing the additions so made by the Ld. Assessing Officer by making adhoc addition of 6% of gross amount of reimbursement of freight and incidental charges amounting Rs4.86 Crores. The addition / enhancement made therein has been made with preconceived notions and such impugned order is without jurisdiction, liable to be quashed, as such.

2. That the impugned order so passed by the learned CIT(A) is bad in law as it is devoid of the acknowledgment of the fact that the appellant has received the reimbursement of freight paid by him to transporter with some charges, while the learned CIT(A) 1 the total amount of freight and incidental charges re company for providing service to them and without considering the facts and nature of business / service provided by the appellant to its customer without conducting any enquiry, therefore the enhancement in addition as made in the impugned Order is liable to be quashed.

3. That without prejudice to the above, the learned CIT(A) has further erred both in law and on facts in not considering that the appellant has maintained books of accounts and receipts and expenses are properly accounted in the books. Mere non production of some of voucher, the application of section 145(3) is illegal.

4. That the learned CIT (A) has applied net profit 6% without allowing the deduction of salary and interest paid to partners, which against law.

5.

That the learned CIT (A) has arbitrarily and illegally enhanced the income Rs.29,16,789/- u/s 251(2) by applying net profit against the application of 3% by the assessing officer.

6. That the appellant reserves the right to add, alter, amend, delete, any/all grounds of appeal either before or at the time of hearing of appeal.

RELIEF CLAIMED:

It is therefore, prayed that the order of learned CIT(A) be held to be un-tenable and further, additions made along with interest levied may kindly be deleted and appeal of the appellant be allowed.

2.

Facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of convenience. 2

3.

At the time of hearing, Ld. Counsel for the assessee stated that AO as well Ld. CIT(A) has not given proper opportunity to the assessee to substantiate its claim inspite of the fact that the Assessee is having all the necessary evidences in its possession. She further stated that assessee has moved an Application under Rule 46A and filed necessary evidences before the Ld. CIT(A) which has been wrongly rejected by the ld. CIT(A) by holding that assessee is not covered under the scope of Rule 46A, and decided the issue against the assessee on merits. Ld. Counsel for the assessee finally stated that evidences produced by the Assessee are very much essential for the adjudication of the issue in dispute and establishing the claim of the assessee which has been not been accepted by the ld. First Appellate Authority. She further submitted that the additional evidences filed by the assessee before the Ld. CIT(A) be admitted and the issues in dispute should be set aside to the AO for thorough examination and appreciation and decide the issues in dispute as per law, after giving adequate opportunity of being heard to the assessee.

4.

Ld. DR relied upon the orders passed by the Revenue Authorities and did not seriously oppose the request of the Ld. Counsel for the assessee.

5. I have heard both the parties and perused the records especially the impugned order as well as the contention raised by the assessee in the Application under Rule 46A of the I.T. Rules, 1962 and the evidences filed by the Assessee before the Ld. CIT(A). I am of the considered view that in the interest of justice the evidences filed by the Assessee before the Ld. CIT(A) under Rule 46A of the I.T. Rules, 1962, are very much essential to adjudicate the issues in dispute for substantiating the claim of the assessee. Therefore, in the interest of justice, I remit back the issues in dispute to the file of the Assessing Officer with the directions to accept all the evidences filed by the assessee on the issues in dispute and thoroughly examine / enquire the same and then decide the issue in dispute, as per law after giving adequate opportunity of being heard to the assessee.

6.

In the result, the Appeal filed by the Assessee stands allowed for statistical purposes.

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