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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH,
Before: Shri Waseem Ahmed & Shri S.S. Viswanethra Ravi
Shri S.S.Viswanethra Ravi, JM: This appeal by the Assessee is against the order dt: 13-12-2013 passed by the Commissioner of Income Tax-(Appeals), XIV, Kolkata for the assessment year 2006-07.
In this appeal the assessee has raised as many as seven grounds of appeal, amongst which the only effective ground in this appeal is to be decided whether the CIT-A justified confirming the addition made by the AO by rejecting the books of account and determining the income of assessee on the basis net profit estimated @ 8% of the gross turnover in the facts and circumstances of the case.
3. The assessee being individual engaged in the business of handling and forwarding of coal and filed his return of income at Rs. 2,49,800/- on 31-10- 2006. Under scrutiny, notices u/s. 143(2)/142(1) of the Act were issued. In response to which according to AO neither any one appeared on behalf of the assessee nor filed any evidence in support of the said return filed. Accordingly, the AO determined the income of assessee at Rs. 19,46,644/- estimating the net profit at Rs.13,84,931/- @ 8% on the gross turnover and making addition of Rs.5,61,713/- being undisclosed income of assessee by passing an order u/s. 144 of the Act dated 30-12-2008.
4. In first appeal, before the CIT-A the ld.AR of assessee contended that the AO did not provide sufficient opportunity to prosecute the case. The AO ought not to have to determined the net profit at 8% in pursuance of section 44AD of the Act. However, the CIT-A confirmed the action of the AO in rejecting the books of account and estimating the net profit at Rs.13,84,931/- i.e 8% of gross turnover of Rs.1,73,11,633/-.
5. Before us the ld.AR submits that the issue in hand has been decided by the ‘SMC ‘Bench, ITAT, Kolkata in assessee’s wife case, Smt. Bani Saha in for the AY 2006-07 vide order dated 16-09-2015, wherein the Tribunal (SMC Bench) remanded the issue to the AO to make the assessment afresh after giving proper and sufficient opportunity of being heard to the assessee. Thus, he prayed us to remand the issue to the file of the AO for the same.
On the other hand, the ld.DR relied on the orders of both the authorities.
Heard rival submissions and perused the material available on record. We find that the assessment in this case was completed u/s. 144 of the Act by best of judgment of the AO. It is also observed that the notices issued u/s. 143(3)/142(1) were issued. In compliance of such notices, neither any one appeared nor filed any evidence before the AO by the assessee during the assessment proceedings. We find that the ld.AR of the assessee has rightly pointed out that the issue in hand is squarely covered by said order dated 16- 09-2015 by the SMC Bench, ITAT, Kolkata as the facts of that case are similar and identical. The ITAT SMC Bench has remanded the issue to the file of the AO, relevant finding of which is reproduced for better understanding:-
“4. I have heard the arguments of both the sides and perused the relevant material on record. As rightly submitted by the ld. Counsel for the assessee, the assessee has not been in the business of civil construction and the turnover of her business in the year under consideration being more than one crore, the provisions of section 44AD are not applicable in her case and the reliance of the authorities below on the said provision to estimate the income of the assessee from the business of handling and forwarding of coal by applying the net profit rate of 8% is clearly misplaced. Moreover, a perusal of the assessment order passed under section 144 by the AO shows that he has not given the relevant details of issue of notices under section 143(2) and 142(1) during the course of assessment proceedings and service of such notices on the assessee. In the absence of such details, I find it difficult to ascertain as to whether proper and sufficient opportunity of hearing was given to the assessee or not during the course of assessment proceedings and this position is not disputed or controverted even by the ld.DR. Having considered all these facts of the case, I consider it fair and proper and in the interest of justice to send the matter back to the AO in order to give one more opportunity of being heard to the assessee. Accordingly, the impugned order of the ld.CIT(A) is set aside and the matter is restored to the file of the AO with a direction to make the assessment afresh after giving proper and sufficient opportunity of being heard to the assessee. The assessee is also directed to extend full cooperation to the AO in order to enable him to complete the assessment afresh expeditiously without any further delay. “ In view of the above, we deem it fit and proper and in the interest of justice to remand the matter back to the file of AO to give opportunity of being
Amar Kumar Saha 3 heard to the assessee. Accordingly, the impugned order of the CIT-A is set aside and the matter is restored to the file of the AO with a direction to make the assessment afresh after giving proper and sufficient opportunity of being heard to the assessee. The assessee is also directed to cooperate the AO to enable him to complete the assessment afresh expeditiously without any further delay. He shall be at liberty to file requisite evidences, if any, to substantiate his claim. Thus, this ground of assessee’s appeal is allowed for statistical purpose.
In the result, the appeal of the Assessee is allowed for statistical purpose.
Order pronounced in the open Court on 20-01-2017.