, Û ""B""
IN THE INCOME TAX APPELLATE TRIBUNAL, "B" BENCH: KOLKATA
(¢) ^ , Û ^ ,
Before Hon'ble Sri Mahavir Singh, , JM & Hon'ble Sri Shamim Yahya, AM
É / ITA No. 1581/Kol/2011 A.Y 2005-06
M/s. Beardsell Eastern (P) Ltd. -- I.T.O Ward 5(3), Kolkata
PAN: AACCB1980F
-Versus-
(/APPELLANT ) . (×/RESPONDENT)
For the Appellant: ^/Shri Subash Agarwal, Advocate
For the Respondent :
^/Shri Ravi Jain, ld. CIT/Sr.DR
/Date of Hearing: 04-09-2014
/Date of Pronouncement: 8/9/-2014
/ORDER
^ ,
Shri Shamim Yahya, AM
This appeal filed by the assessee is directed against the order of the Ld. CIT(A)
dated 05-09-2011 pertaining to assessment year 2005-06.
2. The grounds of appeal raised by the assessee read as under:-
1. For that the order passed by the ld. CIT(A) as also the ld.AO U/s
144 is arbitrary, unlawful, vindictive, excessive and bad in law.
2. For that the ld.CIT(A) as also the ld.AO were wrong in rejecting the
books of accounts on the grounds of petty difference in some accounts and
estimation of WIP which were duly explained and supported by
documentary evidences at the time of Appellate and Remand proceedings.
3. For that the ld.CIT(A) was wrong in upholding the application of
provision of Sec 44AD & 44AF of the I.T Act by the ld.AO as the gross
receipts of the assessee was 152.75 lakhs. The above provisions are
applicable only to assessee whose gross receipts are below 4 lakhs.
4. For that the ld.CIT(A) as well as the ld.AO has erred by not
allowing depreciation as per provisions of Income Tax act after calculating
ITA No.1581/Kol/11-B-AM M/s. Beardsell Eastern P.Ltd Vs. ITO, W 5(3), Kol.
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profits of the assessee as per gross profit rates as specified in Sec. 44AD &
44AF of Income Tax Act.
5. For that the ld.CIT(A) as well as the ld.AO were wrong in
disallowing the expenditure for non-deduction of TDS when he has
determined the income applying the provisions of section 44AD & 44AF of
Income Tax Act.
6. For that the ld.AO was wrong in initiating the proceedings U/s.
271(1)( c) as the assessment made by the ld.AO were an estimated basis
created out of his assumptions and for which no penal action can be
initiated.
3. In this case assessment was framed u/s. 144 of the I.T Act 1961. AO noted that
there were various discrepancies found in the assessee's books of account. These
differences are related to the followings:-
a. Contractual receipt from M/s. Volatas Ltd.
b. Contractual receipts from M/s. Gangarampur Cold Storage, and
c. Contractual receipts from Burdwan Lamps.
3.1 The difference is also in income as shown in the account and income as per TDS
certificate. Furthermore, the assessee company did not file any valuation of stock, stock
register and valuation of W.I.P [Work in Progress] etc. The AO further noted that the
assessee has also failed to substantiate with proper accounts about stores consumed. In
this regard a show cause notice was issued to the assessee mentioning why the books of
account should not be rejected. However, the assessee did not file any explanation despite
several reminders sent by the AO. In these circumstances the AO proceeded to make
assessment u/s. 144 of the I.T Act. The AO made the assessment at Rs.19,57,270/- u/s.
144 of the I.T Act 1961 .
4. Against the above, the assessee appealed file before the ld.CIT(A)
5. Against the action of the AO the ld.CIT(A) inter-alia has held as under:-
ITA No.1581/Kol/11-B-AM M/s. Beardsell Eastern P.Ltd Vs. ITO, W 5(3), Kol.
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Page 6 para 8.
I have carefully considered the submissions of the assessee as well as
gone through the assessment order and remand report of the assessing officer.
The counsel could not rebut the findings of the Assessing Officer, even though
the assessee submitted that the assessee is ready to reconcile the differences,
yet the assessee failed to do the same even during inquiry before assessing
Officer being conducted as per sec 250(4) after an opportunity was provided
by the CIT(A)-VI, Kolkata to assessee to explain it before the Assessing
Officer. Effectively complete books of accounts were not produced. In the
absence of complete books of accounts, the AO was not able to examine/verify
the books of accounts and the differences pointed by him on the order sheet
had later on communicated in the letter also. The Assessing Officer was
justified in rejecting the books of accounts and estimating the profit in absence
of compliance. The assessee did not give any genuine reasons to explain the
non-compliance before the then Assessing Officer during assessment
proceedings u/s. 143(3). Many discrepancies were noticed by the Assessing
Officer and after that there was deliberate non-compliance on the part of the
assessee. The assessee did not want to produce the books of accounts again
and avoided deliberately to explain the discrepancies to the then Assessing
Officer. The assessee wanted now another opportunity before another
Assessing Officer knowing that the issue will be limited. The assessee cannot
take the benefit of its own deficiencies and non-compliance. However, even
now the Assessee has not complied fully before the Assessing Officer as
submitted by him in the remand report. There is a legal ..... i.eVigilantibus,
non-dermientibus, jurasubvenient," meaning thereby that "the law assist
those who are gvigilant and not those who sleep over their rights.
6. Against the above order, the assessee is in appeal before us.
7. We have heard both the ld. Counsel and perused the record. The ld. Counsel of the
assessee submitted that there was a mistake on the part of the assessee in not furnishing
necessary details before the authorities below. Hence, he prayed before us that the assessee
may be granted an opportunity to substantiate its case. He further submitted that now the
assessee is ready to submit necessary books of accounts. The assessee is also ready to
reconcile all the differences as pointed out by the AO. The ld.CIT/DR, on the other hand,
has relied on the orders of the authorities below. He submitted that despite repeated
opportunities the assessee has not co-operated with the authorities below and giving the
assessee further opportunity would not serve any purpose.
ITA No.1581/Kol/11-B-AM M/s. Beardsell Eastern P.Ltd Vs. ITO, W 5(3), Kol.
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7.1 Upon careful consideration and perusing the record, in our considered opinion in
the interest of justice, the matter needs to be remitted to the file of the AO. Accordingly,
the AO is directed to consider the issue afresh after giving the assessee adequate
opportunity of being heard.
8. In the result, the appeal of the assessee is allowed for statistical purpose.
Û
Order pronounced in the open court on 8 /09/2014
Sd/- Sd/-
[ , Û ] [ , ]
[ Mahavir Singh, Judicial Member ] [ Shamim Yahya, Accountant Member
() Dated :8/9 /2014
** PRADIP SPS
/ Copy of the order forwarded to:
1.. / The Appellant : M/s. Beardsell Eastern (P) Ltd A/3/1, Gillandar House, 8 N.S Road, Kol-1.
2 × / The Respondent- I.T.O W 5(3), Aaykar Bhavan, P-7 Chowinghee Sq, Kol-69.
3.
/The CIT, 4. ()/The CIT(A)
5. / DR, Kolkata Bench 6.Guard file.
× /True Copy, / By order, /
Asstt Registrar
ITA No.1581/Kol/11-B-AM M/s. Beardsell Eastern P.Ltd Vs. ITO, W 5(3), Kol.
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