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Income Tax Appellate Tribunal, DIVISION BENCHES ‘B’, CHANDIGARH
Before: MS. DIVA SINGH & Dr.B.R.R.KUMAR
PER DIVA SINGH
The present appeal has been field by the assessee assailing the correctness of the order dated 01.12.2017 of CIT(A)-I Karnal pertaining to 2008-09 assessment year on various grounds. 2. However, at the time of hearing, parties were heard only in respect of ground No. 2 which reads as under : 1. That the Ld. CIT(A) has grossly erred in upholding all the additions made by the AO without passing a speaking order and without dealing with the written submissions, judgments, law and facts of the case, as enumerated by the appellant in detailed written submissions duly submitted in appellate proceedings. 3. The ld. AR inviting attention to the impugned order submitted that a perusal of the impugned order would show that in pages 1 and 2 thereof , the CIT(A) has extracted the assessee’s submissions and the grounds from page 3 to 12 of her order. Carrying us through the same, it was submitted that on each of the issues the assessee has assailed the additions made by the AO which though have been extracted, have been dismissed by the CIT(A) in a cryptic manner by one paged order without addressing the detailed submissions. The finding assailed reads as under : 3.2 Findinqs:- I have examined the facts of the case and the submissions made by the appellant. While examining the case, the AO has clearly given reasons for the rejection of the books of accounts. He has brought on record that no stock
ITA 240/CHD/2016 Page 2 of 3
register has been maintained or produced. Considering the fact that the nature of business involves fitting of bearings etc in bridge building and the fact that there vouchers of expenses including those of wages were not fully verifiable being internal in nature, the AO was justified in rejecting the books of accounts. The appellant has brought nothing on record to show how the accounts as prepared and submitted by them would stand the test of verification. Moreover, the AO has clearly brought out the fact that the G.P. rate after including job work receipts have been shown to be 17.89% as compared to the previous year figures for G.P. @ 22.19%. It is a fact that job work entails lesser expenditure as it does not include overheads. I, am, therefore, in agreement with the AO's application of the rate of 22.19% on gross sales and the rate of 30% on job work receipts. The application of G.P. rate for the valuation of closing stock follows set procedure and I decline to interfere with the same. The AO has also disallowed labour expenses and I concur with him on- the issue that no records are maintained. Moreover, the valuation of semi furnished goods as applicable under the calculation of the G.P. rate applied by the AO is fair and I confirm the said addition. The addition of personal expenses on vehicle running and car is justified as no log book has been maintained for vehicles and no record of telephone calls maintained. I sustained the disallowance of Rs. 78,595/- which is a reasonable 20% of the expenses claimed.” 4. On a reading from the order, it was his submission that the CIT(A) has failed to address any of the detailed points agitated by the assessee in the written submissions extracted and has merely certified that the AO was justified in the conclusions drawn on each of the issues without pointing out how the arguments on facts and law advanced by the assessee reproduced in the order were not acceptable. It was also his submission that infact even the facts have not been correctly appreciated. A reference has been made to the GP rate stated to have been brought out by the AO after including job work receipts shown to be 17.89% in the year under consideration. Inviting attention to the assessment order para 2 thereof, it was his submission that GP rate, infact, in the year under consideration was 23.40%. The relevant extract from the assessment order was highlighted for the benefit of the Court; “It is seen that during the year the assessee has also receipts of Rs. 34,05,000/- which were nil during the previous assessment year. The GP rate on a cursory look appers to be on the higher side when compared to the previous year’s rate of 22.19%. But it is to be noticed that in the previous year there were no job work receipts.” Accordingly, it was his limited prayer that the impugned order may be set aside to the file of the CIT(A) directing the said authority to pass a speaking order considering specific submissions advanced.
The ld. Sr.DR on going through the record had no objection to the said request.
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In the light of the submissions of the parties before the Bench, we are of the view that in the peculiar facts and circumstances of the present case where admittedly detailed submissions extracted in the impugned order, have not been addressed by the CIT(A). Accordingly, in the absence of any relevant discussion, the correctness of the conclusions drawn cannot be upheld as the order is open to the challenge of being perverse. Accordingly, in terms of the prayer of the parties to set right this shortcoming, the impugned order is set aside back to the file of the CIT(A) with the direction to pass speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 12.06. 2018.
Sd/- Sd/-
( Dr.B.R.KUMAR) ( DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER
‘Poonam’ Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR Asstt. Registrar ITAT,Chandigarh.