ITA Nos. 2952/Ahd/2015, 1250/Ahd/2013, 1208/Ahd/2015, 1026/Ahd/2015, 663/Ahd/2016, 665/Ahd/2016, 3075/Ahd/2014, 2953/Ahd/2015, 666/Ahd/2016 and 2849/Ahd/2016. Case: H.L. Equipments and Ors. Vs JCIT, Navsari Range and Ors.. ITAT (Income Tax Appellate Tribunal)

Case NumberITA Nos. 2952/Ahd/2015, 1250/Ahd/2013, 1208/Ahd/2015, 1026/Ahd/2015, 663/Ahd/2016, 665/Ahd/2016, 3075/Ahd/2014, 2953/Ahd/2015, 666/Ahd/2016 and 2849/Ahd/2016
CounselFor Appellant: S.N. Soparkar and Parin Shah, AR and For Respondents: Sanjay Agarwal, CIT-DR
JudgesRajpal Yadav, Member (J) and N.K. Billaiya, Member (A)
IssueConstitution Of India - Articles 136, 227, 32; Income Tax Act, 1961 - Sections 133A, 142(1), 143(2), 145(3), 250, 271(1)(c), 80IB; Mines And Minerals (development And Regulation) Act, 1957 - Section 30
Judgement DateApril 03, 2017
CourtITAT (Income Tax Appellate Tribunal)


Rajpal Yadav, Member (J), (ITAT Ahmedabad 'D' Bench)

  1. This bunch of appeals contains eleven appeals; out of which seven appeals are filed by four different assessees, viz. M/s. H.L. Equipments and M/s. Yashasvi Rasayan Pvt. Ltd. are against orders of the ld. CIT(A) dated 3.8.2015 and 5.1.2016, while M/s. HLE Engineers P. Ltd. is against order of the ld. CIT(A) dated 3.3.2015. M/s. Heerasons Chemicals P. Ltd. is aggrieved with order of the ld. CIT(A) dated 5.1.2016 and 23.9.2014. Revenue is in appeals against orders of the ld. CIT(A) dated 22.2.2013, 3.3.2015 and 23.9.2014. Assessment year involved in these appeals is A.Y. 2009-10. All these appeals are disposed of by this common order for the sake of convenience.

  2. Shri S.N. Soparkar, Senior counsel, at very outset pointed out that facts and circumstances in all these appeals are common. He pointed out that for the facility of reference, facts from the first appeal bearing ITA No. 2952/Ahd/2015 be taken. The ld. DR did not dispute this proposition. Therefore, with the assistance of the ld. representatives, we have gone through the record.

  3. It has been pointed out before us that though the appellants i.e. assessees as well as Revenue have taken number of grounds in their appeals, but main grievance of the assessees revolves around two issues viz. (a) the ld. AO has erred in rejecting book results of the assessee and estimating profit with the help of section 145(3) of the Income Tax Act, 1961, (b) the ld. AO has erred in making addition on account unexplained purchases.

  4. The ld. counsel for the assessee pointed out that in this case assessment order had travelled upto the Tribunal, and the Tribunal vide order dated 24.5.2015 in ITA No. 1303/Ahd/2013 has set aside the issues to the file of the ld. CIT(A) for adjudication. But, the ld. CIT(A) did not adhere to directions given by the Tribunal and did not analysis the details. He has summarily by rejected all the contentions of the assessee without recording any specific finding.

  5. While impugning the orders of the Revenue authorities, the ld. counsel for the assessee submitted that survey under section 133A of the Act was conducted at the premises of the assessee on 29.9.2008. The assessee had filed its return of income on 29.9.2009 electronically declaring total income at Rs. 75,69,646/-. The AO has passed assessment order on 29.12.2011 and determined taxable income of the assessee, M/s. H.L. Equipments in the Asstt. Year 2009-10 at Rs. 6,36,45,140/-. The ld. AO has made two major additions; (a) he rejected books of accounts and estimated GP at Rs. 3,26,12,166/-, (b) he worked out stock difference having value of Rs. 5,40,04,722/-. He treated it as an investment for making unaccounted purchases. In his opinion, estimated GP computed in the case of the assessee must have been used for purchasing unaccounted material, and therefore, he calculated unaccounted purchases at Rs. 2,13,92,556/- i.e. (Rs. 5,40,04,722/- minus Rs. 3,26,12,166/-). The ld. counsel for the assessee took us through para-2 of the assessment order and pointed out that the AO has no time to verify the details submitted by the assessee. He himself admitted this aspect while making addition of unaccounted purchases in para-10.

  6. Dissatisfied with this order, when the assessee filed an application for submission of additional evidence to the ld. CIT(A), the ld. CIT(A) did not admit additional evidence and confirmed the addition. The ld. CIT(A) has not considered a single evidence submitted by the assessee or explanation given by it. He pointed out that the order of the CIT(A) is running into 40 page. In the first 5 pages the ld. CIT(A) has reproduced directions of the ITAT, and in the next 12 pages, reproduced conclusions of the AO. Thereafter, he reproduced written submissions given by the assessee upto page No. 38. His finding is running into one-and-half pages that is without making any reference to any contentions or any details. He simply concurred with the AO. Accordingly, the ld. CIT(A) in spite of specific directions of the Tribunal appraising the ld. CIT(A) as to how sub-section (6) of section 250 of the Act contemplates for passing of the speaking order, the ld. CIT(A) did not consider any aspect. According to the ld. counsel, order of the ld. CIT(A) is not sustainable on this preliminary issue itself.

  7. The ld. CIT-DR, on the other hand, was unable controvert this submission of the assessee. However, without rebutting to the above, he filed a small note and pointed out that the AO has given number of opportunities to the assessee, and thereafter made observations exhibiting non-availability of sufficient time for cross-verification of the details.

  8. We have duly considered rival contentions and gone through the record. Before making upon inquiry of the facts of the present appeal, we would like to appraise ourselves with the judgment of the Hon'ble Punjab & Haryana High Court rendered in the case of Roadmaster Industries of India P. Ltd. Vs. Inspecting ACIT (Assessment), 303 ITR 138 (P & H). The Hon'ble Court has expounded requirement of passing a speaking order which has analysed all details and as to why such orders should be passed by quasi-judicial authorities. The Hon'ble Court has made reference to a large number of decisions of the Hon'ble Supreme Court as well as High Court wherein emphasis has been given as to why quasi-judicial authorities should give reason in support of their conclusions. In order to emphasis our point of view and which had made us handicap to adjudicate this appeal, we deem it appropriate to take note of this judgment which would enlighten the AO as to why he has to investigate the issue analytically and provide due opportunity of hearing to the assessee. The judgment reads as under:

    "4. On a perusal of impugned order, even the counsel for the Revenue could not dispute that the order passed by the CIT cannot be termed to be a speaking order which could stand in...

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