Lohia Enterprises, Mumbai vs Assessee

आयकर अपील य अ धकरण, ए खंडपीठ मंब ु ई INCOME TAX APPELLATE TRIBUNAL,MUMBAI - A -BENCH सव ी आई पी बंसल , या यक सद य एवं राजे , लेखा सद य Before S/Sh. I P Bansal,Judicial Member & Rajendra,Accountant Member आयकर अपील सं/.ITA No.1721/Mum/2013, नधारण वष/Assessment Year-2008-09 Lohia Enterprises Income tax Officer-24(3)-3 113, Tirupati Udyog,I.B. Patel Road C-10, Pratyakshakar Bhawan Goregaon-East,Mumbai-400 063. Vs Bandra Kurla Complex PAN:ASSESSEEAFL 0347 D Bandra- East,Mumbai-400 051.

(अपीलाथ /Appellant) ( यथ / Respondent) नधा रती ओर से/Assessee by :Shri Ryan Saldanha राज व क ओर से/ Revenue by :Ms. C. Tripura Sundari सुनवाई क तार ख/ Date of Hearing : 03- 06 -2015 घोषणा क तार ख / Date of Pronouncement : 03-06-2015 आयकर अ ध नयम,1961 क धारा 254(1)के अ तगत आदे श Order u/s.254(1)of the Inco me-tax Act,1961(Act) लेखा सद य राजे के अनुसार PER RAJENDRA, AM-

Challenging the order dt.11.12.2012 of the CIT(A)-34, Mumbai, the assessee has raised following Grounds of Appeal:

"1.The CIT(A) has erred in confirming the action of Assessing Officer in rejecting the book results and estimating the net profit at 5% of the total turnover of the appellant."

Vide its application dt.2/6/15, the assessee has made an application for admission of additional evidences. In its application the assessee has stated that it had produced the purchase vouchers for verification before Assessing officer (AO), that the AO had mentioned in his order that documents were not furnished before him that it was a factual mistake on part of the AO, that documents produced by it were not considered in the assessment as well as in the appellate proceedings, that the First Appellate Authpority (FAA) had mentioned that the assessee had made cash purchases, that the observations made by FAA were factually incorrect, that the document were never asked for by both the authorities, that evidences produced before the Tribunal would go to the very root of the matter. The Authorised Representative (AR) reiterated the submissions made in the application and contended that the additional evidences should be admitted as per provisions of Rule 29 of the ITAT Rules, 1963. The Departmental Representative (DR) left the issue of the admission of the additional evidence to discretion of the Bench.We have perused the material on record and found the evidence produced by the assessee would have bearing on the final outcome of the appeal. Therefore, same are being admitted u/r.29 of the ITAT, Rules.

2.Assessee-firm, engaged in the business of manufacturing M.S. Wires, filed its return of income on 29.9.2008 declaring total loss of Rs.2.62 lacs, the AO completed the assessment u/s. 143(3) of Act on 12.11.2010 determining income of the assessee at Rs.21.45 lacs.

1721/13 (08-09)Lohia Enterprises

The effective Ground of appeal is about rejecting the book results and estimating profit at 5% of total turnover of the assessee.During the assessment proceedings the AO observed that the assessee had failed to furnish complete purchase bills/payment made for purchases with regard to material purchased, that it had failed to furnish name and complete address of parties to whom payments were made, that purchases were made in cash. He held that the bills produced by the assessee seemed to be bogus. He further held that either the assessee did not maintain any books of account or were not maintained as per the accounting standards. Invoking the provisions of s. 145(3) he estimated the net profit of the assessee at 5% of the total turnover.

3.Aggrieved by the order of the AO the assessee preferred an appeal before the FAA.Before him,it was contended that the AO had passed the order u/s. 144, that the same was defective and bad in law, that the AO had admitted of producing the audited account. and Balance sheet, that on the other hand he held that the assessee was not maintaining books of account, that all the details called for by AO were produced on 20.10.2010, that the details contained completed name address of purchase party and details of sundry creditors, that the AO did not issue a show cause before passing the best assessment. The assessee enclosed the copy of sales tax challan. After considering the submission of assessee the FAA held that the assessee had furnished some of the details called forth by the AO, that on 20.9.2010 it had filed details about the bank account etc., that the assessee had not produced the books of account, that the assessee had taken to a course of non-compliance and non-cooperation from the beginning that the assessee had not produced books of account, that the AO had rightly invoked the provisions of s.143(3) of the Act. Relying on the order of Kanchwalla Gems (288 ITR 10) the FAA, held that the AO had rightly estimated the net profit @5% of the turnover. Finally he dismissed the appeal filed by the assessee.

4.Before us,the AR stated that assessee was in possession of books of account as well as supporting documents as directed by the AO, that the AO/FAA had ignored the documents produced by it.DR supported the order of the FAA.

We have heard the rival submissions and perused the material available on record. We find that the FAA had mentioned that the assessee had produced certain details including bank statements before AO,during the assessment proceedings, that the AO had passed an ex-parte order. If the assessee's books of account were audited and an audit report was filed along with the return of income,then it cannot be said the assessee was not maintaining the books of account. Considering the peculiar facts and circumstances of the case,we have admitted the additional evidence produced before us by the assessee. We are of the opinion that in the interest of justice the matter should be restored back to the file of the AO for fresh adjudication. He is directed to afford reasonable opportunity of hearing to the assessee. The assessee is directed to produce all the documents/books of account before the AO. The effective ground of appeal filed by the assessee is allowed in favour of the assessee in part.

As a result,appeal filed by the assessee stands partly allowed.

फलतः नधा रती वारा दा खल क गई अपील अंशतःमंजरू क जाती है . Order pronounced in the open court on 3rd ,June,2015. आदे श क घोषणा खल ु े यायालय म दनांक 3 जन ू ,2015 को क गई ।

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Sd/- Sd/- (आई पी बंसल/I P Bansal) (राजे / RAJENDRA) या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER मुंबई/Mumbai, दनांक/Date: 03.06.2015 व. न.स. Jv.Sr.PS. आदे श क त ल प अ े षत/Copy of the Order forwarded to : 1.Appellant /अपीलाथ 2. Respondent / यथ

3.The concerned CIT(A)/संब ध अपील य आयकर आयु त, 4.The concerned CIT /संब ध आयकर आयु त

5.DR "A" Bench, ITAT, Mumbai / वभागीय त न ध, ए खंडपीठ,आ.अ. याया.मुंबई

6.Guard File/गाड फाईल स या पत त //True Copy// आदे शानस ु ार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst. Registrar आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai.

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