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Jitendra C. Chollera 162/3, Jawahar Nagar, Road No.2, Goregaon (W), Mumbai-400 062 Vs. ITO Ward 24(3)(4), Mumbai
July, 12th 2014

        .  ,      ,                                  

                    ./I.T.A. No. 1276/Mum/2013
                   (   / Assessment Year: 2008-09)

Jitendra C. Chollera                               ITO ­ Ward 24(3)(4),
162/3, Jawahar Nagar, Road No.2,          /        Mumbai
Goregaon (W), Mumbai-400 062              Vs.

     . /  . /PAN/GIR No. AAAPC 7673 D
        ( /Appellant)                        :            (     / Respondent)

         / Appellant by                     :     Shri Kiran Mehta

          /Respondent by                    :     Shri R. K. Sahu

                         /                  :     08.05.2014
                   Date of Hearing
                                            :     10.07.2014
           Date of Pronouncement

                                     / O R D E R
Per Sanjay Arora, A. M.:

      This is an Appeal by the Assessee directed against the Order by the Commissioner
of Income Tax (Appeals)-34, Mumbai (`CIT(A)' for short) dated 20.12.2012, dismissing
the assessee's appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961
(`the Act' hereinafter) for the assessment year (A.Y.) 2008-09 vide order dated

2.    The assessee is an importer-trader in chemicals. Assessment in the instant case
was completed u/s.144 of the Act on a failure on the part of the assessee to comply with
                                                         ITA No.1276/Mum/2013 (A.Y. 2008-09)
                                                                   Jitendra C. Chollera vs. ITO

the notices u/s.142(1), despite several opportunities being extended, by estimating net
profit at 9% of the turnover of Rs.71.77 lacs. Deduction/s under Chapter VI-A, claimed at
Rs.1,09,748/-, was also disallowed in the absence of the documentary evidence/s,
assessing the income at Rs.6,45,950/-, as against the returned income of Rs.2,10,464/-.
The same stood confirmed in appeal in view of the admitted fact of non-compliance, so
that the provision of section 144 stood rightly invoked, with no improvement in its case
having been made by the assessee. Aggrieved, the assessee is in second appeal.

3.     We have heard the parties, and perused the material on record.
3.1    The assessee, as before the authorities below, submits that while the computation
of income, audited final accounts, were furnished, the other details as called for by the
Assessing Officer (A.O.) could not be so in view of the continuing family dispute
between the assessee and his brother, Shri Sanjay Chollera, who was looking after the
accounts and taxation matters of their businesses, since some time in financial year (fy)
2009-10. Even the accountant, as informed earlier, was not cooperative under the
circumstances and at the instance of his brother. These averments are reiterated through a
deposition by way of an affidavit dated 25.04.2014 (PB pgs.16-19), further stating that
the dispute between the brothers has since been resolved. Likewise, an affidavit from Shri
Sanjay Chollera, of even date, affirming so, is also placed on record (PB pg.20). Further,
in fact, it was on account of exhaustive details furnished in penalty proceedings initiated
at the conclusion of the impugned assessment, that the penalty proceedings were finally
dropped by the A.O. (PB pg.21).

3.2    We observe that income has been estimated at 9% of the turnover by the A.O.,
without stating any basis for the same. Section 144 casts an onus on the A.O. to gather
and consider all the relevant material for the purpose of framing the assessment to the
best of his judgment. As contended by the assessee per his affidavit, the returned net
profit of 4.75% for the current year is, in fact, much higher than that for the preceding
years, supporting the same by tabulating the results thereof. Though that may well be; the
profit margin being not constant, we find a large variation therein from year to year, apart
                                                        ITA No.1276/Mum/2013 (A.Y. 2008-09)
                                                                  Jitendra C. Chollera vs. ITO

from the fact, as afore-stated, that no material whatsoever has been specified by the A.O.
as informing his estimate of the net profit at 9% of the turnover. The Revenue has not
rebutted any of the contentions raised before us.

4.     Under the circumstances, upon considering the entirety of the facts and
circumstances of the case, the impugned assessment in our view merits being set aside
and restored back to the file of the A.O. to frame the same de novo in accordance with
law, allowing reasonable opportunity of hearing to the assessee. We decide accordingly.

5.     In the result, the assessee's allowed for statistical purposes.

                  Order pronounced in the open court on July 10, 2014

             Sd/-                                         Sd/-
        (D. Manmohan)                                 (Sanjay Arora)
         / Vice President                               / Accountant Member
 Mumbai;  Dated : 10.07.2014
. ../Roshani, Sr. PS
         /Copy of the Order forwarded to :
1.  / The Appellant
2.  / The Respondent
3.     () / The CIT(A)
4.      / CIT - concerned
5.                ,     ,  / DR, ITAT, Mumbai
6.     / Guard File
                                                      / BY ORDER,

                                              /  (Dy./Asstt. Registrar)
                                          ,  / ITAT, Mumbai
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