M/S. JAMMULA VENKATARAMANA & SONS,GANJAM vs. ITO, WARD-1, BERHAMPUR

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ITA 164/CTK/2017Status: DisposedITAT Cuttack04 October 2017AY 2011-124 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal set aside the orders of the lower authorities and restored the matter to the Assessing Officer for fresh assessment. The assessee was directed to appear before the Assessing Officer and provide all necessary details.

What were the facts?

The assessee failed to provide necessary details and documents to the Assessing Officer, leading to a best judgment assessment under Section 144. The Assessing Officer treated the assessee as an Association of Persons and made additions for undisclosed opening stock and other expenses.

What were the issues?

Whether the best judgment assessment was arbitrary and whether the assessee's status was correctly determined. The issue also involved the validity of additions made due to non-compliance and alleged undisclosed opening stock.

Which sections of the Income-tax Act were involved?

Section 144,Section 142(1),Section 44AD,Section 185(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: S/SHRI N.S SAINI

For Appellant: Shri Kaniska Rath, AR
For Respondent: Shri D.K.Pradhan, DR
Hearing: 04/10Pronounced: 04/10

This is an appeal filed by the assessee against the order of the

CIT(A)-1, Bhubaneswar dated 12.1.2017 for the assessment year 2011-

12.

2.

The assessee has raised the following grounds of appeal:

“1. For that it is arbitrary and unlawful to make a BEST JUDGMENT ASSESSMENT U/s.144 of I.T. Act; and further it is baseless to treat the Appellant's STATUS as Association of Persons U/s. 185(5) of I.T. Act.

2.

For that the Appellant made all possible and effective compliance to Notice dt.06.11.2013 issued U/s.142(1) of I.T. Act even when Regular Books of Account was not maintained by the Appellant . Therefore the finding of Appellant's Non Compliance to Notice U/s.142(1) is without any basis.

2 ITA No .164 /CT K/ 2017 Asse ssment Year : 20 11- 201 2 3. For chat without indicating/ observing any such specific failure the finding of Appellant's Non Compliance to any such provision of Sec-144 of IT Act is without any basis.

Accordingly the adoption of provision of Sec-185(5) of Act as well as determination of Appellant's Status, Disallowance Salary and Interest of Rs.1,20,000.00 and Rs.2,36,856.00 respectively is arbitrary and the same should have been allowed U/s.44AD(2) of I.T. Act.

4.

For that the Appellant never indicated the opening stock value at SI No.6 of his I.T. Return (A.Y.2011 = 12) to be at NIL. The Appellant in absence of Regular Books of Account filed his return on presumptive basis U/S.44AD of I.T. Act leaving no scope to indicate the opening stock in the I.T. Return,

Accordingly it is arbitrary to enhance the Appellant's Gross Sales, and it is arbitrary to add the Opening Stock (with profit thereon @ 8.1%) with the Appellant's Sales Torn Over. Therefore the determination of Appellant's Gross Sale at Rs.60,52,199.00 is arbitrary & the same should have been at Rs.45,32,226.00 as considered by the Sales Tax Authority.”

3.

At the outset, ld A.R. of the assessee submitted that the Assessing

Officer has made assessment u/s.144 of the Act as the assessee failed to

file necessary details and documents called for. Therefore, he made

assessment u/s.144 of the Act disregarding the status of the assessee as

partnership firm and making the assessment on the assessee as an AOP.

While doing so, he has made addition of Rs.4,84,176/- to the returned

income of Rs.3,6,578/- by the assessee as extra profit relating to

undisclosed opening stock and made a high pitch addition of

Rs.8,46,754/-, which has been confirmed in appeal by the CIT(A). He

submitted that one more opportunity should be granted to the assessee

to represent its case before the Assessing Officer and he undertakes to

3 ITA No .164 /CT K/ 2017 Asse ssment Year : 20 11- 201 2 appear before the Assessing Officer suo-moto and file all necessary details

and documents for completing the assessment.

4.

Ld D.R. had no objection to the above submission of ld A.R. of the

assessee.

5.

In view of above, I set aside the orders of lower authorities and

restore the matter back to the file of the Assessing Officer for doing

assessment denovo after allowing reasonable and proper opportunity to

the assessee.

6.

The assessee is directed to appear before the Assessing Officer

within 30 days from the date of this order for fixing the date of hearing

and render full co-operation to the Assessing Officer by filing all the

details as and when called upon to do so. The Assessing Officer is

directed to complete the assessment expeditiously. With these directions,

the appeal of the assessee is allowed for statistical purposes.

7.

In the result, appeal is allowed for statistical purposes.

.

Order pronounced on 4 /10/2017.

Sd/- (N.S Saini) ACCOUNTANT MEMBER Cuttack; Dated 4 /10/2017 B.K.Parida, SPS

4 ITA No .164 /CT K/ 2017 Asse ssment Year : 20 11- 201 2 Copy of the Order forwarded to : 1. The appellant: M/S. Jammula Ventaraman & Sons, At: Big Bazar, Berhampur, Ganjam 2. The Respondent. ITO, Ward-1, Berhampur 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT-1, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// BY ORDER,

SR.PRIVATE SECRETARY ITAT, Cuttack

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