2018 (8) TMI 2087

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....hat, either way, section 144 gets attracted. The assessee's income was accordingly assessed at 2.75% of the turnover (Rs.3174.80 lacs), i.e., by way of commission. The same stands confirmed in first appeal. Qua expenses, allowed at an adhoc, lump sump of figure of Rs.5 lacs by the AO, i.e., against an aggregate claim for expenditure at Rs.25,34,248/-, the ld. CIT(A), in the interest of justice, extended the allowance of expenditure to Rs.18, 46, 189, detailed as pg. 8 of his order. Aggrieved, the assessee is in second appeal. 3. We have heard the parties, and perused the material on record. The assessee before us seriously assails the framing of the assessment u/s. 144, stating that all the documents, as required, were duly furnished, i.e., after obtaining the copies of the documents from the AO on 19.12.2011. By own admission, some information was supplied on 26.12.2011, vide letter of even date (PB pgs. 54, 59). The same stands perused. Without going into the merits of the information supplied, how, at the threshold, one wonders, the information supplied at that juncture could be processed or verified - the time limit for framing the assessment expiring on 30.12.2011. In fa....

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....5) parties, whose ledger accounts stand furnished by the assessee vide his letter dated 26/12/2011. In any case, balances (or copies of account) of the balance 25 remain to be confirmed. Rather, given that purchases were made only from, as stated, 40 parties, the outstanding of the balances of 155 parties (as on 31/3/2009) itself raises doubts, requiring confirmation of their balances/accounts. What, further, is of utmost concern is the balance of the four parties, stated at para 7.1 of the assessment order, to whom an aggregate of Rs. 61.06 lacs outstands as on 31/3/2009. This is as these are among the eight (including the assessee) found to be engaged in unscrupulous activities, with a view to defraud the Government and, therefore, under investigation by the Customs Department. The ld. counsel, Shri Magow, would during hearing confirm that purchases were made from them. Notices under section 133(6) to them during assessment proceedings, however, remained unresponded (refer para 7.2 of the assessment order). The ld. counsel would add that no sales to any of the seven concerns (the assessee being the eighth), mentioned the show cause notice dated 25/7/2011 issued by the Customs Dep....

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....e part of the assessee in meeting the statutory compliances. Furnishing of information at that late stage, so that it could not be subject to the verification process, is though of not of much consequence for the Revenue. Why, the drafting of the assessment order, finalized on the last date of limitation, i.e., 30/12/2011, itself would consume about 2 to 3 days. In fact, we have ourselves observed some areas for examination on which information has been sought/supplied. The same cannot therefore be said to be proper compliance, so that, strictly speaking, section 144 (1)(b) would get attracted. At the same time, it would be, under the circumstances, wholly inappropriate, in view of the furnishing of information/details and the conscientious efforts being put in by the assessee toward the same, even if belatedly, to arrive at a conclusion that accounts are not correct and complete, and invoke s. 145(3). That would, to our mind, besides being unfair to the assessee, would also be so to the assessment process itself; the verification being underway and incomplete. Appellate proceedings are a continuation of the assessment proceedings. The ld. CIT(A), enjoy as it does coterminous power....

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....ts logical conclusion. The quantitative records in the form of stock tally are yet to be provided, only whereupon could the reasons for the decline in the gross profit - being at 0.92% as against 1.25% for the immediately preceding year, be ascertained. No vouchers were produced at any stage, resulting in the disallowance of almost the entire expenditure, with the ld. CIT(A) allowing some 'in the interest of justice'. And so on. It is precisely because of this state of affairs, not properly addressed by the first appellate authority, that there is no basis for the findings on which the assessment rests. The matter, therefore, setting aside the impugned order, would need to travel back to the file of the AO. We are not, when we say so, in any manner affording a second innings to the Revenue. The assessment order is replete with instances of non-compliance by the assessee, for which reference be made to pages 1 to 11 of the assessment order. The burden to prove its' return, and the claims preferred thereby, is on the assessee. The assessee's insistence, therefore, on the Revenue to provide him with the copies of the documents he required for making compliance, is thus wholly inapprop....