Sudarshan Petroleum, Ahmedabad vs Assessee

M/s.Sudarshan Petroleum ITO, Ward-2(5) N.H. No.8, Alamgir Vs Baroda. Baroda.

PAN : AAWFS 6836 J

अपीलाथ!/ (Appellant) "#यथ!/ (Respondent)

Assessee by : Shri Anil. R. Shah Revenue by : Shri Nimesh Yadav, Sr.DR

सन ु वाई क तार ख/ Dateof Hearing : 05/03/2015 घोषणा क तार ख / Date of Pronouncement: 13/03/2015

आदे श/O R D E R

PER N.S. SAINI, ACCOUNTANT MEMBER: This an appeal filed by

the assessee against order of the CIT(A)-II, Ahmedabad dated 8.0.2010 for Asstt.Year 2005-06 by raising the following grounds of appeal:

I. Ex-party Assessment Order.

1. The CIT(A) has erred both in Law and in fact in confirming the order passed by the Assessing Officer Ex-Party u/s.44 of the Act.

On facts of the case it is submitted that your Appellant had appeared and complied with all the notices supported with full details and information in compliance of the notice u/s. 142(1) of the Act as well as other notices of Assessing Officer.

2. The Assessing Officer has not adhered to the requirement of Law in passing Ex-Party order u/s. 144 including Service of Notice by affixture and that he has acted high handed by in passing order on 20-12-07.

IT)A No149/Ahd/2011 2

3. It is also submitted that while passing Ex Party order u/s. 144 the Assessing Officer was duty bound to complete Total Income judiciously and based on record and not arbitrary. The A.O making above order is on presumption and guess work which is strongly objected by your Appellant and it is submitted that various addition made by him be deleted.

II. On Addition u/s.68 Rs.39,96,198

1. The CIT(A) has erred both in Law and in fact in confirming addition of Rs.39,96.198 out of addition u/s.68 of Rs.51,96,198 made by the Assessing Officer and thereby giving only partial and halfhearted relief of Rs. 12,00,000.

2. It is submitted by your Appellant that all the depositors are known acknowledged and assessable units who have given confirmation, proved that creditworthiness and proved genuineous of transaction and it is therefore submitted Sec.68 does not apply to the facts of the case and no addition is not called for in the following accounts,

(a) Sanjaybhai V. Shah Rs. 8,00,000

(b)Khushbu (Shroff A/c.) Rs.25,96,198

(c) Pranavbhai B. Shah Rs. 6,00,000 Total Rs. 39,96,198

3. Without prejudice to above it is submitted that each of the above referred account there is an Opening Balance which cannot be called cash credit of the year and is not liable to be added to the total income. It is therefore submitted that the Addition of Rs.39,96,198 confirmed by the CIT(A) be deleted.

4. It is also submitted that the Assessing Officer and CIT(A) has erred in not working out addition on the principle of 'Peak Credit' as accepted under accountancy principle and various judgement of Appellate Authorities.

II. Sundry Creditors Rs. 13.13,940

1. The CIT(A) also erred both in Law and facts of the Law in confirming addition of Rs.13,13,940 being "outstanding creditors"

at the end of the Assessment Year appearing in the balance sheet of the Appellant.

2. It is submitted by your Appellant that the Sundry Creditors are goods account and accounts of business and the amount IT)A No149/Ahd/2011 3

which remain outstanding at the end of the year in Appeal has been subsequently paid off settled by account payee cheque and therefore it cannot be said to be non verifiable creditors.

IV. Inflated Expenses Rs.94,550

1. The CIT(A) is also erred in confirming disallowance of Rs.94,550 made by the Assessing Officer on 'adhoc and estimate' basis alleged as "Inflation of Expenses."

2. Your Appellant submits that the entire amount of expense of Rs.4,72,747 is in direct expenses duly vouched and supported by evidence of payment and as per the books of accounts of the Appellant which are wholly verifiable. The disallowance at 20% on adhoc and estimate basis is unwarranted on facts of the case and not supported by provisions of Law.

3. Your Appellant submits that in view of facts of the case and as per provisions of Law and since the Appellant is maintaining regular and proper books of accounts and Assessing Officer having accepted the books of Accounts and not specifically pointed out any lacuna in books or expenses not supported by vouchers & proof payment of the disallowance is not called for.

V. Telescoping of various addition.

1. It is submitted by your Appellant that various additions referred above confirmed in Appeal by CIT(A) results into double and multiple addition which against Law, equity and justice.

2. It is submitted that the principle of Telescoping of various addition be suitably done as per provision of Law and various Authorities of and judgements of Appellate Authorities."

2. At the time of hearing, AR of the assessee admitted that the assessment of income was made by the AO vide its order dated 20.12.2007 passed under section 144 of the Act, as the assessee failed to appear before him and file the details required for making the assessment. He submitted that before the CIT(A) assessee had filed a paper book of 27 pages together with the written submissions for addition of cash credit under section 68 of the Act and addition of sundry creditors. The CIT(A) did not accept the paper book filed by the assessee on the ground that before the AO the assessee failed to file IT)A No149/Ahd/2011 4

any paper in support of his return of income and the AO has allowed sufficient opportunity to the assessee. He submitted that the assessee's business was closed and there was dispute among the partners, and therefore, the required papers could not be submitted to the AO during the course of hearing. He submitted that in the interest of justice the matter should be restored back to the file of the CIT(A) for re- adjudicating the appeal of the assessee afresh, after considering the papers filed by way of paper book before him.

3. The DR vehemently opposed the submissions of the assessee and submitted that no leniency should be shown to the assessee, who failed to avail opportunity of hearing provided by the AO and has not given any sufficient reason to explain its conduct before the CIT(A).

4. After considering the rival submissions and perusing the material on record, we are of the considered view that the assessee has failed to appear before the AO and file required details in support of its return of income and the AO has allowed sufficient opportunity to the assessee. The assessee filed the paper book only before the CIT(A) for the first time, who has not admitted the same, on the ground that the assessee has not filed the same before the AO. In the above circumstances, in our considered view, to serve in the interest of substantial justice, the matter should be remanded back to the file of the CIT(A) to decide the appeal of the assessee afresh after taking into consideration the papers filed in the paper book by the assessee. However, keeping in view the conduct of the assessee before the AO, we impose a penalty of Rs.5,000/- on the assessee, who is directed to deposit the same before the end of this month i.e. March, 2015. The CIT(A) is directed to dispose of the appeal of the assessee expeditiously after considering the papers filed by the assessee before him by way of paper book. The assessee is also directed to cooperate with the CIT(A) in disposing of IT)A No149/Ahd/2011 5

the appeal. With these directions, the appeal of the assessee is allowed for statistical purpose.

5. In the result, the appeal of the assessee is allowed for statistical purpose.

Order pronounced in the Court on Friday, the 13th March, 2015 at Ahmedabad.

Sd/- Sd/- (SHAILENDRA KUMAR YADAV) ( N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER