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Income Tax Appellate Tribunal, BENCH “A”, KOLKATA
Before: Shri Mahavir Singh, JM & Shri M.Balaganesh, AM]
Per Shri M.Balaganesh, AM
This appeal of the assessee arises out of the order of the Learned CIT(A)-XII,, Kolkata in Appeal No.514/XII/41(2)/2011-12 dated 15.03.2013 passed against the order of assessment framed for the Asst Year 2009-10 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’).
The first issue to be decided in this appeal is as to whether, the transactions with M/s. L.G.Balakrishna and Bros. Pvt. Ltd. amounting to Rs.12,77,000/- with corresponding TCS of Rs.14,469/- can be considered for the purpose of addition in the assessment year under appeal , in the facts and circumstances of the case. 3. The brief facts of this issue are that the assessee is an individual dealing in iron scrap under the name and style of M/s.A.K.Steel, a proprietorship concern. During the course of assessment proceedings the ld. AO issued notice u/s 133(6) of the Act for checking the genuineness of the sundry creditors reflected by the assessee. He observed that in some cases notices were returned with the remark “left “ or “company abolished “. The assessee however furnished PAN as well as VAT registration details of the sundry creditors to establish their existence and genuineness. The ld. AO accepted the same. However, from the statement in 26AS , the AO observed that the transactions made worth of Rs.12,77,000/- from M/s. L.G.Balakrishnan and Bros. Pvt.
Ashok Kumar Shaw A.Y.2009-10 Ltd was not disclosed by the assessee. The assessee explained that the assessee has disclosed each and every transactions with M/s. L.G.Balakrishnan and Bros. Pvt. Ltd and the account was squared up during the financial year 2008-09 relevant to A.Y.2009-10 and TCS of Rs.14,469/- was also disclosed by the assessee in the books of account and for want of obtaining the TDS certificate before filing of return of income, the TCS of Rs.14,479/- was not claimed by the assessee in the return for A.Y.2009-10. The ld. AO observed that these transactions are taken into account although the assessee has not claimed the TCS. He further observed once the assessee has obtained the clarification from the said deductor by making the deductor revise its TDS returns so that 26AS statement does not show this income, necessary modification to the assessment shall be made in the assessment. Till such time, in the interest of the revenue , this amount was added back by the ld. AO. All these facts are clearly spelt out in the assessment order.
On first appeal the assessee filed certain papers for verification which were taken as additional evidences and the ld. CIT(A) called for a remand report in this regard. The ld. AO in the remand proceedings stated that the assessee has failed to substantiate his claim by producing necessary documents. The ld. CIT(A) based on the remand report upheld the action of the ld. AO. Aggrieved, the assessee is in appeal on the following grounds :- “1) The learned CIT XII, Kolkata erred in law as well as in facts in not considering the detailed submission of the appellant regarding transactions of purchase of Rs.1490345/- with M/S L.G. Balakrishna and Bros. Pvt. Ltd. forming parts of total purchase of Rs. 7,43,66,267.65 of Audited Books of accounts and all the payments made by bank transactions and dismissing grounds of appeal entirely on the basis of remand report made by AO with malafide intention. 2) The learned CIT (A) XII, Kolkata erred in law as well as in facts in relying fully on the remand report prepared by the AO, with malafide intention instead of looking into the true state of affairs of the purchases made from L.G. Balakrishna and Bros. Pvt. Ltd. duly shown in statement filed by the appellant forming part of total purchase shown in audited Profit and Loss account. 3) The learned CIT (A) did not bother to look into the facts that no opportunity of hearing was allowed to the appellant as the notice of hearing of remand report dated 26.11.2012 and hearing on 30.11.2012 was served as 29.11.2012 4) That the learned CIT (A) did not appreciate the fact that without hearing done how could he justify that transaction with L.G. Balakrishna and Bros. Pvt. Ltd. was ingenueine contrary to the view of his predecessor even through TCS of Rs. 14469/- was duly shown in Audited Books of accounts. The learned CIT(A) also did not appreciate the fact that how the AO without hearing concluded and crossed beyond his Ashok Kumar Shaw A.Y.2009-10 predecessor, who made the original assessment order, subject matter of appeal, that transaction with L.G. Balakrishna and Bros. P t. Ltd. were not genuine while the remarks of his predecessor were :- "But the L.G. Balakrishna and Bros. Pvt. Ltd. TAN:CMBL03003A shown against ITS details is not found mention in the accounts. It accounts for Rs.12, 77,000/- payment accrued to the assessee and a TCS of Rs. 14,469/- But these are taken into account although the assessee has not claimed/disclosed this. Once the assessee obtain a clarification from the said deductor and gets its TCS return revised and so that the 26AS statement does not shown this income, we would make necessary correction. Till that time, it is added back. "
5. We find that none appeared on behalf of the assessee. We have heard the ld. DR and perused the materials available on record. We find from the assessment order that the ld. AO was not sure of framing this addition. From the language of the assessment order itself, it could be seen that this addition was made only as a stop gap arrangement till such time the deductor revises the TDS return in order to make necessary modifications in order to ascertain the true nature of the transactions. Hence we deem it fit in the facts and circumstances, in the interest of justice and fair play, to set aside this issue to the file of the ld. AO to decide this issue afresh in accordance with law. Needless to mention that the assessee be given reasonable opportunity of being heard. Accordingly ground no.s 1 to 4 are allowed for statistical purposes.
6. The next ground to be decided in this appeal is as to whether a sum of Rs.1,64,155/- which were representing expenses that were reflected in the personal profit and loss account of the assessee and not part of the Tax Audit Report obtained for the business balance sheet of the assessee could be disallowed in the facts and circumstances of the case.
During the course of assessment proceedings the ld. AO observed that some expenses claimed in the personal profit and loss account which were not part of the Tax Audit Report which in the opinion of the AO were not incidental to the business of the assessee. Accordingly the ld. AO sought to disallow the same in the sum of Rs.1,64,155/-. On first appeal the assessee filed some details which were sent to the ld. AO for verification and remand report obtained thereon. The ld. CIT(A) observed that the ld. AO has not changed its stand in the remand proceedings and based on the same he upheld the action of the ld. AO. Aggrieved, the assessee is in appeal on the following grounds :-
Ashok Kumar Shaw A.Y.2009-10 “5) That the learned CIT (A) XII erred in not considering the genuineness of the claim of Rs.l ,64,959.00 which were incurred for the purpose of business on the basis of rely fully the remand report prepared with ulterior motive and malafide intentions by the AO.”
We find that none appeared on behalf of the assessee. We have heard the ld. DR and perused the materials available on record. We find that since no representation was made on behalf of the assessee we are not able to conclude as to what details were filed by the assessee before the ld. AO during the remand proceedings and what observations were made by the ld. AO in his remand order. Hence in view of the facts and circumstances we deem it fit and proper, in the interest of justice and fair play, to set aside this issue to the file of the ld. AO, to decide the same afresh, in accordance with law. Needless to mention that the assessee be given reasonable opportunity of being heard. Accordingly ground no.5 is allowed for statistical purposes.
In the result the appeal of the assessee is allowed for statistical purposes. Order pronounced in the court on 06.05.2016.