Abdulmajeed H Memon, Pune v. ITO Wd 4[5] Pune, Pune

ITA 740/PUN/2012 | 2006-2007
Pronouncement Date: 29-04-2014 | Result: Allowed

Appeal Details

RSA Number 74024514 RSA 2012
Bench Pune
Appeal Number ITA 740/PUN/2012
Duration Of Justice 2 year(s) 16 day(s)
Appellant Abdulmajeed H Memon, Pune
Respondent ITO Wd 4[5] Pune, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 29-04-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 29-04-2014
Date Of Final Hearing 15-01-2014
Next Hearing Date 15-01-2014
Assessment Year 2006-2007
Appeal Filed On 12-04-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NO.740/PN/2012 (A.Y: 2006-07) ABDULMAJEED H. MEMON GALLANT TRADERS 186 SOLAPUR BAZAR PUNE 411001 PAN: ABBPM04554E APPELLANT VS. ITO WARD 4(5) PUNE RESPONDENT APPELLANT BY : SHRI NIKHIL PATHAK AND SHRI SUHAS P BORA RESPONDENT BY : SHRI P.L . PATHADE DATE OF HEARING: 29.04.2014 DATE OF ORDER : 29.04.2014 ORDER PER SHAILENDRA KUMAR YADAV J.M: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-II [IN SHOR T CIT(A)] PUNE DATED 19.01.2012 FOR A.Y. 2006-07 ON THE FOLLOWING GROUNDS. 1. THE LEARNED CIT (APPEALS) ERRED IN NOT APPRECIATING THE CONTENTION OF THE APPELLANT THAT THE ADDITION I S MADE BY THE AO IN VIOLATION OF NATURAL JUSTICE AND HOLDING THAT THE ADEQUATE OPPORTUNITY AND TIME FOR BEING HEARD WAS GIVEN TO THE APPELLANT. 2. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE BOOKS OF ACCOUNT AUDITED U/S 44AB OF THE INCOME TAX ACT 1961 WERE CORRECTLY REJECTED BY INVOKING THE PROVISIONS OF SECTION 145. 3. THE LEARNED CIT (APPEALS) FURTHER ERRED IN CONFIRMING THE ADDITION OF RS. 62 98 565/-ON ACCOUN T OF INFLATED PURCHASES FOR THE YEAR UNDER CONSIDERAT ION BY NOT CONSIDERING THE FOLLOWING FACTS: 2 A) THAT THE AO HAS ADOPTED THE AVERAGE RATE OF RS. 8/- PER KG FOR SALES AND RS. 6.96 PER KG FOR PURCHASES ON THE BASIS OF TWO OTHER CONCERNS WHERE THERE CANNOT BE ANY STANDARD FOR THE TYPE OF BUSINESS CARRIED ON BY THE APPELLANT. B) THAT THE APPELLANT IS TRADING IN 26 TYPES OF PAPER AND ONE RATE CANNOT BE APPLIED TO THE TOTAL QUANTITY OF PURCHASES WITHOUT CONSIDERING THE OPENING STOCK AT THE BEGINNING OF THE YEAR. C) THAT THE EXERCISE MADE BY THE LEARNED AO IS BASED ON ARITHMETIC CALCULATIONS AND THEORETICAL. D) THERE IS NO FINDING THAT PURCHASES ARE EXAGGERATED OR THE SALES ARE SUPPRESSED. E) COMPARISON OF RATES ON THE BASIS OF TWO OTHER CONCERNS MADE BY THE AO WITHOUT GIVING ANY OPPORTUNITY TO THE APPELLANT TO COMMENT ON THE SAME. 4. THE APPELLANT DENIES HIS LIABILITY TO PAY INTEREST U/SEC.234A 234B & 234C OF THE INCOME TAX ACT 1961 AND THEREFORE IT BE DELETED. 5. THE APPELLANT MAY KINDLY BE PERMITTED TO ADD TO OR ALTER ANY OF GROUNDS OF APPEAL IF DEEMED NECESSARY . 2. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUS INESS OF DEALING WASTE PAPER AS A DEALER WHICH IS IN THE NA ME AND STYLE OF M/S. GALLANT TRADERS. THE ASSESSEE FILED RETURN OF INCOME DECLARING INCOME OF 5 09 128/- AND THE SAME HAS BEEN ASSED U/S.143(3) DETERMINING THE TOTAL INCOME AT 68 07 690/-. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OF FICER EXAMINED THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS AND OBSERVED THAT THE VOUCHERS PERTAINING TO PURCHASES AS WELL AS CARRIAGE OUTWARD WERE NOT VERIFIABLE AND ALSO THE P ROFITS DISCLOSED BY THE ASSESSEE WERE LOW AS PER THE INDUSTRY STANDA RD AND THUS INVOKED THE PROVISIONS OF SECTION 145 OF THE ACT AN D REJECTED THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER THEREAFTER COMPARED THE RATE OF PURCHASES FOR MONTHS OF JULY AND NOVEMBER 2005 AND THE RATE OF PURCHASES IN THE COMPARABLE CASES I.E. M/S. MAYUR 3 TRADING CO. AND M/S. ODHAVJI DHARAMSHI THAKKAR. TH E ASSESSING OFFICER ON THE COMPARISON FOUND THAT THER E WAS INFLATION OF 1 PER KG IN PURCHASE OF PAPER AND THUS ADOPTED 0.75 PER KG AS INFLATION IN RESPECT OF TOTAL QUANTI TY OF PAPER SOLD DURING THE YEAR THEREBY MAKING ADDITION OF 62 98 565/- TO THE TOTAL INCOME RETURNED BY THE ASSESSEE. 2.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF ASSESSEE AND HAVING CONSIDERED THE SAME THE CIT(A) CONFIRME D THE ORDER OF THE ASSESSING OFFICER. THE SAME HAS BEEN OPPOSE D BEFORE US ON BEHALF OF ASSESSEE INTER ALIA SUBMITTED THAT T HE ADDITION WAS MADE BY THE ASSESSING OFFICER IN VIOLATION OF NATUR AL JUSTICE AND HOLDING AS NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE . THE CIT(A) ERRED IN HOLDING THAT THE BOOKS OF ACCOUNT AUDITED U/S 44AB OF THE I.T ACT 1961 WERE CORRECTLY REJECTED BY INVOKI NG THE PROVISIONS OF SECTION 145 AND ON MERIT IT WAS SUBM ITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF 62 98 565/- ON ACCOUNT OF INFLATED PURCHASES FOR YE AR UNDER CONSIDERATION BY NOT CONSIDERING THE FACTS PUT FORW ARD BEFORE HIM. THE ASSESSING OFFICER WAS NOT JUSTIFIED IN AD OPTING RATE OF PER KG FOR SALES AND 6.96 PER KG FOR PURCHASES ON THE BASIS OF TWO OTHER CONCERNS WHERE THERE COULD NOT BE ANY STA NDARD TYPE OF BUSINESS CARRIED ON BY THE ASSESSEE. THE ASSESSEE IS TRADING IN 26 TYPES OF PAPER AND ONE RATE CANNOT BE APPLIED TO THE TOTAL QUANTITY OF PURCHASES WITHOUT CONSIDERING THE OPENI NG STOCK AT THE BEGINNING OF THE YEAR. THE COMPARISON OF THE R ATES ON THE BASIS OF TWO OTHER CONCERNS MADE BY THE ASSESSING O FFICER WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE TO COMME NT ON THE SAME. 2.2 THE LEARNED AUTHORIZED REPRESENTATIVE ALSO DREW OUR ATTENTION WITH REGARD TO THE COMPARISON MADE BY THE ASSESSING OFFICER. THE MAIN EMPHASIS OF THE LEARNED AUTHORIZ ED 4 REPRESENTATIVE HAS BEEN THAT THE COMPARISON OF THE RATE ON THE BASIS OF TWO OTHER CONCERNS MADE BY THE ASSESSING O FFICER WAS WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE. EV EN BEFORE THE CIT(A) THE ASSESSEE RAISED THE ISSUE AND IN REMAND PROCEEDINGS THE ASSESSING OFFICER DID NOT GIVE OPPORTUNITY TO T HE ASSESSEE. IN THIS SITUATION WE ARE OF THE VIEW THAT THE ASSESSE E HAS BEEN DENIED OPPORTUNITY OF HEARING WHICH IS NOT JUSTIFI ED. IN THE INTEREST OF JUSTICE WE SET ASIDE THE ORDER OF CIT( A) AND RESTORE THE ISSUE TO THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AT HAND AFTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. SINCE WE ARE RESTORING THE ISSUE ON PREL IMINARY ISSUE WE ARE REFRAINING FROM COMMENTING ON THE MERIT OF T HE ISSUE AT HAND. 3. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 29 TH OF APRIL 2014. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 29 TH APRIL 2014 GCVSR COPY TO:- 1) ASSESSEE 2) DEPARTMENT 3) THE CIT(A)-II PUNE 4) THE CIT-II PUNE 5) THE DR A BENCH I.T.A.T. PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY I.T.A.T. PUNE