Sarada Buildcon (P) Ltd, Jajpur v. ACIT, Cuttack

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK ( ) BEFORE . . HONBLE SHRI K.K.GUPTA ACCOUNTANT MEMBER. /AND . . . S HRI K.S.S.PRASAD RAO JUDICIAL MEMBER / I.T.A.NO. 213CTK/20 10 / ASSESSMENT YEAR 2006 - 07 M/S.SARADA BUILDCON (P) LTD. PLOT NO.1425 BANK STREET JAJPUR ROAD JAJPUR AAACS 7142 E - - - VERSUS - ACIT CIRCLE 1(1) CUTTACK. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI KANHAYALAL SHARMA AR / FOR THE RESPONDENT: / SHRI S.K.DASH DR / ORDER . . SHRI K.K.GUPTA ACCOUNTANT M EMBER. THIS APPEAL BY THE ASSESSEE AGITATES THE ACTION OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER U/S.1 44 OF THE INCOME - TAX ACT 1961 THE RETURNED INCOME OF 2 20 460 AT 59 65 240. THE LEARNED CIT (A) HAD CONSIDERED THE ORDER OF THE ASSESSING OFFICER ON APPEAL WHEN NONE APPEARED ON BEHALF OF THE ASSESSEE - APPELLANT IN DISMISSING THE APPEAL AND UPHOLDING THE ADDITIONS. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A CONSTRUCT ION COMPANY ENGAGED IN THE CONSTRUCTION WORKS AND SALE OF CONSTRUCTED FLATS. BY VERIFYING THE RETURNED INCOME WHEN THE CASE CAME UP FOR SCRUTINY GIVING VERY LITTLE TIME TO THE ASSESSEE TO APPEAR ORDER WAS PASSED ON 31.12.2008. AN APPEAL WAS PREFERRED WHEN THE LEARNED CIT(A) REQUIRED THE PRESENCE OF THE ASSESSEE APPELLANT BUT DISMISSED THE I.T.A.NO. 213CTK/2010 2 CONTENTIONS OF THE AR OF THE ASSESSEE BY HOLDING THAT HE WAS NOT AUTHORISED TO DO SO. HE ALSO IN ORDER TO MEET THE TIME LIMIT FOR DISPOSAL CONFIRM ED THE ACTION OF THE ASS ESSING OFFICER WITHOUT DELIBERATING ON THE ISSUES ON MERIT S AT LENGTH. HE PRAYED THAT ALL THE BOOKS OF ACCOUNT ARE MAINTAINED AND THE ASSESSEE BEING A PRIVATE LIMITED COMPANY WAS STATUTORILY AUDITED WHICH FINANCIAL STATEMENT CLEARLY INDICATE THAT THE ASSES SEE DID NOT HAVE THE MEN POWER TO REPLY TO THE QUERIES RAISED BY THE ASSESSING OFFICER WITHIN A SHORT SPAN OF TIME OF ONE MONTH. THIS BEING YEAR WHEN THE ASSESSEE HAD OBTAINED BANK LOANS FOR THE PURPOSE TO UTILIZE THE SAME IN THE CONSTRUCTION HAD ALSO RE CEIVED ADVANCES AGAINST EQUITY SHARES WAS THEREFORE TO BE EXPLAINED IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME - TAX ACT WHICH HAVE BEEN HELD ADVERSELY BY THE ASSESSING OFFICER AS PROCURING UNSECURED LOANS WHICH ARE BOGUS. HE POINTED OUT THAT HOW CAN T HE ASSESSEE COMPANY BEING A BORROWER HAVE SURPLUS FUNDS TO REINVEST AS UNSECURED LOANS IS BOUND TO BE EXPLAINED TO THE AUTHORITIES BELOW FOR WHICH AN APPROPRIATE DIRECTION MAY BE GIVEN TO THE ASSESSING OFFICER. HE PRAYED THAT THE ORDER OF THE LEARNED CIT(A ) BE SET ASIDE AND THE ISSUE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERATION AFRESH. 3. THE LEARNED DR POINTED OUT THAT THE ASSESSEE IS A HABITUAL DEFAULTER TO THE NOTICES ISSUED FOR A VISIT TO THE INCOME - TAX DEPARTMENT SO MUCH SO EVEN BEF ORE THE LEARNED CIT(A) ON ASSESSEES OWN APPEAL IT COULD NOT SEND AN AUTHORISED PERSON TO EXPLAIN HIS CASE. IN CASE THE ASSESSEES PRAYER IS CONSIDERED SPECIFIC TIME MAY BE ALLOTTED FOR DISPOSAL OF THE ASSESSEES CASE BY THE ASSESSING OFFICER. I.T.A.NO. 213CTK/2010 3 4. WE HAV E HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD . WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSMENT HAS BEEN FRAMED WITHOUT CONSIDERING THE BROAD ASPECTS WHICH HA VE BEEN CATEGORICALLY INCORPORATED IN THE FINANCIAL STATEMENT TO B E CONFIRMED BY THE LEARNED CIT(A) ON MERITS. OBVIOUSLY A BORROWER CANNOT BE A LENDER FOR INCOME - TAX PURPOSES. HOWEVER WE FIND FORCE IN THE CONTENTION OF THE LEARNED DR THAT THE ASSESSEE BEING A HABITUAL DEFAULTER FOR APPEAR ING BEFORE THE AUTHORITIES BELOW WE DIRECT THE ASSESSING OFFICER TO CONSIDER THE RETURNED INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME - TAX ACT WITHIN A TIME FRAME OF THREE MONTHS FROM THE DATE HEREOF DURING WHICH PERIOD THE ASSESSEE IS REQUIRED TO FURNISH ALL T HE DETAILS AS REQUISITIONED BY THE ASSESSING OFFICER TO MAKE A REASONABLE AND FAIR ASSESSMENT OF THE INCOME SO RETURNED BY THE ASSESSEE. 5. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS CONSIDERED AS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 25 TH FEBRUARY 2011 SD/ - SD/ - ( . . . ) ( K.S.S.PRASAD RAO) JUDICIAL MEMBER ( . . ) (K.K.GUPTA) ACCOUNTANT MEMBER. ( ) DA TE: 25 TH FEBRUARY 2011 ( ) ( H.K.PADHEE ) SENIOR.PRIVATE SECRETARY. I.T.A.NO. 213CTK/2010 4 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : M/S.SARADA BUILDCON (P) LTD. PLOT NO.1425 BANK STREET JAJPUR ROAD JAJPUR 2 / THE RESPONDENT: ACIT CIRCLE 1(1) CUTTACK. 3 . / THE CIT 4 . ( )/ THE CIT(A) 5 . / DR CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY / BY ORDER [ ] SENIOR PRIVATE SECRETARY