TaxTMI 
TaxTMI 
2025 (3) TMI 1167
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....rder of AO merged with IT AT & therefore lost its existence & CIT(A) confirmed 15% on Adhoc can not be to relied on for A.Y. 2008-09. 3. It is also submitted that proceedings initiated of Reopening u/s 148 was for making fishing inquiries and the AO had not satisfied himself about any escapement of Income. AO did not find any new material to reopen the case. On Merits of the Case; 1. The CIT(A) has erred in confirming disallowance of Rs. 22,75,000/- being payment made by the Appellant to Shri Kapil Bhimsibhai Pithia for contractual payment made for transportation of material from the mines to the crushing plant which is during course of business of your Appellant. (a) Your Appellant submits that at the time of finalizing the assessment for A.Y.08- 09 all information and details regarding Carting payment was available and was on record and was verified by the AO and (b) It is therefore submitted the expenditure of Rs. 22,75,000/- being incurred for business and during course of business and not being personal or of capital nature the entire disallowance be deleted. 2. The CIT(A) also erred in confirming disallowance of Rs. 4,799/....
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....by them respectively and therefore also sec.40a(ia) does not apply." 3. The assessee has also raised the following additional grounds of appeal: "1. The CIT(A) has erred both in Law and in Fact in confirming the order passed u/s. 143(3) r.w.s.148 and that no income has escaped assessment or under assessed. 2. Since no income has escaped assessment or under assess the reopening is the case of change of opinion and/or facts and details regarding Total Income were duly before AO in assessment proceedings and after verification the order was passed. It is therefore submitted that Reopening is bad in Law and Void. 3. CIT(A) has erred both in Law and in Fact the upholding the Reopening of the Assessment u/s. 148 of the Act though the Assessing Officer while issuing notice u/s. 148 and Reasons Recorded for Reopening has not taken mandatory permission of Pr. CIT / CIT u/s. 151 of the Act and he has also not supplied to the Appellant copy of such permission. The CIT(A) ought to have held that the proceeding u/s. 148 are bad in Law and Void. 4. Your Appellant submits that CIT(A) has erred in confirming the Order of the AO since there is a vast ....
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....at income of the assessee had escaped assessment under Section 147 of the Act. During the course of 147 proceedings, the Assessing Officer observed that assessee had debited a sum of Rs. 23,63,436/- towards mining expenses. On verification of tax audit report, Assessing Officer observed that payment of Rs. 22,75,000/- was paid to Shri Kapil Bhimsinhbhai Pithiya towards contract charges and the said person happened to be the younger brother of one of the partners of the assessee firm. The Assessing Officer observed that for A.Y. 2011-12, on the same issue the Assessing Officer had recorded the statement of Shri Kapil Bhimsinhbhai Pithiya, wherein it was found that the claim of contract expenses relating to Shri Kapil Bhimsinhbhai Pithiya is a false claim since he had not rendered any services to the assessee firm. Further, for A.Y. 2011-12, the assessee refused to cross-examine Shri Kapil Bhimsinhbhai Pithiya, despite having been given an opportunity of doing so. Accordingly, the Assessing Officer held that since the facts of the case for A.Y. 2008-09 are identical to the facts of the assessee's own case for A.Y. 2011-12, he held that assessee firm had wrongfully claimed expenses as....
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....apil Bhimsibhai Pithiyal, during the course of assessment proceedings for the Asstt. Year 2011-12, I hold that the entire expenses claimed as contractual payment to the said party amounting to Rs. 22,75,000/- for the assessment year under consideration is considered as a wrong claim as contractual payment and accordingly the sum of Rs. 22,75,000/- is hereby disallowed and added back to the total income of the assessee. Penalty proceedings u/s. 271(1)(c) of the I.T. Act has also been separately on this point for filing inaccurate particulars of income." 5. In appeal, Ld. CIT(A) confirmed the additions made by the Assessing Officer with the following observations: "4.1.2 The AO recorded statement on oath u/s 131 of the act dated 12.03.2014 from Shri Kapil Bhimshibhai Pithiyal, during the course of assessment proceedings for the AY 2011-12 on the same issue. After recording the statement, the AO had categorically stated that the claim of the assessee firm of carting expenses in relating to Shri: Kapil Bhimshibhai Pithiyal is a false and wrong claim. For the AY 2011-12 the AO had given an opportunity to the assessee to cross examine the witness Shri. Kapil Bhimshibhai Pithi....
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....r years from the end of the relevant assessment year, unless the [Joint] Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice.]" 9. We observe that the case of assessee falls under Section 151(2) of the Act which provides that in case a regular assessment under Section 143(3) has not taken place, then notice can be issued with the authority of JCIT, after expiry of four years from the end of the relevant assessment years. In the instant case, admittedly the return of the assessee was processed under Section 143(1) of the Act and no regular assessment of the assessee was carried out under Section 143(3) of the Act, prior to the present proceedings. Accordingly, we find no infirmity in the notice issued under Section 148 of the Act and the legal challenge to the issuance of 148 notice raised by the Counsel for the assessee is hereby rejected. 10. On merits, the Counsel for the assessee pointed out that even for A.Y. 2011-12, Ld. CIT(A) in assessee's own case after having considered the entire facts of the case, restricted the disallowance to 15% of the cartage expenses. Accordingly, it was requested tha....
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....irm had to depend on external services for the purpose of movement of rubble from the mines to the crushing unit. The appellant firm had excavated rubble of 1,34,450 MT during the year under reference which has not questioned by the Assessing Officer as no addition on this account is made. The said quantity had to be moved from the mines to the crushing unit for which the appellant firm had availed the services of Shri Kapil Bhimsibhai Pithia who had transported the material through the machines of various other parties located in an around the mines. A chart showing dale wise details of excavation and production which is nothing but the production carried out by the crushing unit on daily basis is submitted by the appellant which is placed in the paper book. A perusal of the same reveals that on an average production of the appellant firm is around 400 MT which could not have been carried out without movement of material. I agree with the Authorised Representative that the mere fact that Shri Kapil Bhimsibhsi Pithia is relative of one of the partner of the appellant firm and had given a statement which was not acceptable to the Assessing Officer, cannot made a basis for rejection ....
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....to the Question No. 15, Shri Kapil Bhimsibhai Pithiya submitted that as per his knowledge he started the business of carting somewhere in December 2009 or January 2010. * In answer to the Question No. 17, on being asked how he tarried his carting business without having any vehicles, Shri Kapit Bhimsibhai Pithiya submitted that he hired others' vehicles tor his carting business. * On being asked to tell the name of the parties for whom he did carting work, in answer to the Question No. 20, Shri Kapil Bhimsibhai Pithiya submitted that he did carting work only for one time for Pramukh Metal Quarry. * On being asked what he meant by "only for one time for Pramukh Metal Quarry" in answer to the Question No. 21, Shri Kapil Bhimsibhai Pithiya submitted that he did carting work somewhere in 2010-2011. He further submitted that he did not remember the months during which. he did carting work. * On being asked how long he did carting work during 201Q-2011, in answer to the Question No. 23 it was submitted by Shri Kapil Bhimsibhai Pithiya that he did carting work approximately for six to seven months. * In answer to the Question No.25, he repl....