THE DY. CIT-1(1), RAIPUR (CG) vs. M/S. RAJESH ENGINEERING & CASTING, RAIPUR (CG)

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ITA 2/BIL/2014Status: DisposedITAT Raipur19 January 2018AY 2009-105 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee did not comply with the AO's notices, leading to an ex-parte assessment. The CIT(A) deleted additions without proper verification. Therefore, the matter was remitted back to the AO for fresh verification.

What were the facts?

During a survey, the assessee surrendered a sum for excess stock, cash, and unrecorded investment. The Assessing Officer (AO) made additions based on these differences and rejected the books of account. The CIT(A) deleted these additions, granting relief to the assessee.

What were the issues?

Whether the CIT(A) erred in deleting additions made by the AO on account of inventory differences, cash and investment, and partner's remuneration without proper verification.

Which sections of the Income-tax Act were involved?

Section 133A,Section 143(3),Section 144,Section 145(3),Section 40b

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR

Before: S/SHRI N.S SAINI & PAVAN KUMAR GADALE

For Respondent: DR Assessee by : None
Hearing: 18/01

Per Pavan Kumar Gadale, JM

This is an appeal filed by the revenue against the order of the CIT(A)-

Raipur, dated 28.10.2013 for the assessment year 2009-2010.

2.

The revenue has raised the following grounds of appeal:-

“1. Whether in law and on facts & circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 40,48,616/- made by the A.O. on account of difference in inventory of closing stock found at the time of Survey u/s. 133A."

2 ITA No.02/Rpr/2014 Assessment Year : 2009-2010

2.

"Whether in law and on facts & circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 4,55,752/- made by the A.O. on account of difference in cash and investment in office building disclosed at the time of Survey u/s. 133A."

3.

"Whether in law and on facts & circumstances of the case, die CIT(A) has erred in deleting the addition of Rs. 14,74,848/- made by the AO on account of remuneration to partners as the surrendered income is to be considered as Income from other sources."

3.

Brief facts of the case are that the assessee is a partnership firm

deriving income from manufacturing of heavy earth moving machinery parts.

A survey u/s.133A of the I.T.Act, 1961 was conducted at the business

premises of the assessee on 30.06.2008 and 01.07.2008. During the survey,

the assesseed surrendered Rs.1,16,06,292/- on account of excess stock,

excess cash and unrecorded investment in office building and offered

Rs.13,00.000/- after making reconciliation in the incomplete books of

account and explaining the differences. The Assessing Officer also made

observation in respect of statement of comparison of the assessee, financial

statement of sale and net profit for the year 2007-08 and 2008-09.

Considering these findings, the Assessing Officer concluded the percentage

disallowance to be made in respect of stock disclosure and also difference in

the cash and disallowance of partner’s remuneration made u/s 40b and also

books of account are rejected u/s.145(3) of the Act and completed the

3 ITA No.02/Rpr/2014 Assessment Year : 2009-2010

assessment 143(3) r.w s 144 of the Act assessing the total income at

Rs.90,76,386/-

4.

Being aggrieved by the order of the Assessing officer, the assessee

carried the matter in appeal.

5.

In the appellate proceedings, the ld A.R. argued the grounds,

reiterated the submissions made before the Assessing Officer on various

additions. The CI(A) relying on the judicial decisions and findings made by

the assessing Officer, has granted relief and allowed the appeal of the

assessee.

6.

Aggrieved by the order of the CIT(A), the revenue has filed appeal

before us.

7.

At the time of hearing, ld D.R submitted that the CIT(A) erred in

allowing relief to the assessee irrespective of the fact that there is difference

in valuation of closing stock and excess cash, which was disclosed at the

time of survey and subsequent to the assessment. The CIT(A) dealt on the

various aspect and none of the query of the Assessing Officer was complied.

8.

We have heard ld D.R., perused the orders of lower authorities and

materials available on record. Prima facie, we found from the record

produced before the Tribunal and also as enumerated in the assessment

order that the assessee has not complied any notices of the Assessing

4 ITA No.02/Rpr/2014 Assessment Year : 2009-2010

Officer, therefore, the assessment was completed u/s.144 of the Act. We

find that the CIT(A) erred in deleting the addition without considering

various facts and overlooking the Assessing Officer’s findings and also

relying on the statement of the assessee. The Assessing Officer was

deprived of verifying these facts, which were produced before the CIT(A).

The CIT(A) did not call for remand report. Therefore, in the interest of

justice, we remit the matter to the file of the Assessing Officer to verify the

claim of the assessee. The assessee is directed to furnish the details which

were furnished before the CIT(A) and the AO is directed to examine the

documents and pass fresh order as per law after giving opportunity of being

heard to the assessee.

9.

In the result, appeal filed by the revenue is allowed for statistical

purposes.

Order pronounced on 19 /01/2018.

Sd/- sd/-

(N.S Saini) (Pavan Kumar Gadale) ACCOUNTANT MEMBER JUDICIALMEMBER Raipur; Dated 19 /01/2018

B.K.Parida, SPS

5 ITA No.02/Rpr/2014 Assessment Year : 2009-2010

Copy of the Order forwarded to : 1. The Appellant : DCIT-1(1) , Raipur 2. The Respondent. M/s Rajesh Engineering & Casting, Plot No.389-390, Urla Industrial Estate Sector-A, Raipur (C.G.) 3. The CIT(A)-Raipur 4. Pr.CIT-Raipur 5. DR, ITAT, Raipur 6. Guard file. //True Copy//

BY ORDER,

SR.PRIVATE SECRETARY ITAT, Raipur

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