ALIASGAR INAYATHUSEIN BOHARI,DHULE vs. INCOME TAX OFFICER, DHULE

आदेश / ORDER

PER D. KARUNAKARA RAO, AM :

This appeal filed by assessee is directed against the order of

Commissioner of Income Tax (Appeal)-1, Nashik dated 13.02.2017 for

assessment year 2013-14.

“1.The learned CIT(A) erred in confirming the addition of Rs.70,00,000/- made by the A.O. without appreciating the said addition was not justified in law. 2. The learned CIT(A) erred in holding that the addition of Rs.70,00,000/- was justified on the ground that in the course of survey statement recorded u/s. 133A, the assessee had declared additional income of Rs.70,00,000/- in respect of stock shortage, cash found, unaccounted investments and cash payments u/s.40A(3) and hence, he cannot go back on his declaration once the income was declared in the survey statement. 3. 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.70,00,000/- on merits and hence, the addition was not warranted. 4. 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.

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individual and is engaged in the business of all types of pipes, agricultural

implements, machinery etc. The assessee filed return of income of

Rs.26,46,907/-. In the assessment proceedings u/s.143(3) of the I.T Act,

the Assessing Officer assessed income at Rs. 98,67,776/-. This is a case

where there was survey action u/s.133A of the Act on 21.11.2012. During

the proceedings, statement was recorded u/s.134 of the Act from assessee.

The survey action resulted in discovery of certain incriminating documents

and loose papers, and which led to disclose the income of Rs.70,00,000/-.

Subsequently, the assessee retracted the same and therefore, did not

disclose the same in the return of income. It is the case of assessee that no

such disclosure is required as contents of the said impounded loose papers

and other documents, books of accounts were incorporated while

completing the books of accounts and adopted the book profit in filing

return of income. However, as per the discussion given in Para-11 of the

assessment order, the Assessing Officer proceeded to make addition of Rs.

70,00,000/- in the assessment made u/s. 143(3) of the Act.

improve his case. Eventually, the Commissioner of Income Tax (Appeal)

dismissed the appeal of assessee. The contents of Para-3 and 4 and their

sub-paragraphs are relevant.

(Appeal), the assessee filed present appeal before us with the grounds

extracted above.

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Commissioner of Income Tax (Appeal) dismissed the appeal of assessee in

his ex-parte order after giving nominal hearings on 22.11.2016,

16.12.2016, 09.01.2017 and 23.01.2017. As per discussion given in Para

3.5 of impugned order, the appeal of assessee was adjudicated eventually

without ensuring the presence of the assessee or his Authorized

Representative. On this issue, the Ld. Counsel for the assessee submitted

that by making addition of Rs.70,00,000/-, the assessment made

constitutes case of double addition to the extent of said Rs. 70,00,000/-.

The assessee filed written submission on this issue explaining the manner

how it becomes a case of double addition. Contents of Paras in the written

submissions are relevant. In the said written submissions, the assessee

explained with the said addition of Rs.70,00,000/-, an unusual GP of the

assessee is subjected to taxation. The Ld. AR submitted for grant of one

opportunity to the assessee before the Assessing Officer to explain the facts

of the case.

Assessing Officer and Commissioner of Income Tax (Appeal). He also

brought our attention to the incriminating materials impounded by

Revenue during survey action.

Commissioner of Income Tax (Appeal) is the product of ex-parte

proceedings. During First Appellate proceedings, the case was decided

without the presence of assessee or his Authorized Representative.

Therefore, in principle, the request for grant an opportunity of being heard

to the assessee, has merit. Accordingly, we are of the opinion that hearing

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dates mentioned in the impugned order does not indicate that notices were

actually served upon the assessee and assessee is well aware about the

said dates of hearing. Notices were sent to assessee through speed post.

There is no conclusive finding regarding service of notices to assessee in

the order of Commissioner of Income Tax (Appeal). The contents of Para-2

of the order of Commissioner of Income Tax (Appeal) are self explanatory in

this regard. Therefore, we are of the opinion that it is a fit case for

remanding all the issues raised in the appeal to the file of Commissioner of

Income Tax (Appeal). This time, Commissioner of Income Tax (Appeal)

should grant reasonable opportunity of being heard to the assessee by not

only sending the notices through speed post but also ensuring the service

of notices upon assessee as per the rules on services of notices. The

assessee is directed to comply with the notices without fail. Accordingly,

grounds raised by assessee are allowed for statistical purposes.

S.A. No. 20/PUN/2018 ( A.Y. 2013-14)

assessment made by Assessing Officer and assessed income of

Rs.98,67,776/- after making addition of Rs.70,00,000/-. The Assessing

Officer issued the demand notice u/s.156 of the Act asking to pay demand

of Rs.30,18,266/-. The assessee filed Stay Application before us requesting

to stay the demand. In this regard, considering the above discrepancies

with regard to issue of proper notice to the assessee, both the parties

submitted that Stay Application could be heard along with main appeal i.e.

ITA No. 660/PUN/2017.

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Order pronounced on 27th day of March, 2018.

Sd/- Sd/- (सुषमा चावला / Sushma Chowla ) (डी.क�णाकरा राव/D. Karunakara Rao) �या�यक सद�य /JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER

पुणे / Pune; �दनांक / Dated : 27th March, 2018. SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeal)-1, Nashik 4. The CIT-1, Nashik. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “ए” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6.

// True Copy // आदेशानुसार / BY ORDER,

�नजी स�चव /Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.