TMI Blog2013 (6) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... this issue is also restored to the file of the AO for readjudication. If the payments have been offered to tax in the hands of the partners no disallowance to this extent shall be made in the hands of the firm. Appeal of the assessee partly allowed for statistical purposes. - ITA No. 286/CTK/2012 - - - Dated:- 10-6-2013 - Shri K. K. Gupta, AM And Shri George Mathan, JM,JJ. For the Appellant : Shri Sunil Mishra, AR For the Respondent : Shri N. K. Neb, Sr. DR ORDER Per Bench: This is an appeal filed by the assessee against the order of CIT(A), Cuttack passed under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act) in appeal No. 0517/2010-11 dated 27.03.2012 for AY 2008-09. 2. Shri Sunil Mishra appeared on behalf of the assessee and Shri N. K. Neb appeared on behalf of revenue. 3. In assessee's appeal the assessee has raised following grounds: "1. For that the orders of the forum below are illegal, arbitrary and based on incorrect appreciation of facts as well as law and as such is liable to be quashed in entirety in the interest of justice and equity. 2. For that, the Assessment order having been communicated on 01.02.2001 aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained by the appellant, as nowhere in the body of the Assessment order he has observed that the books of account as submitted by the appellant being unreliable is rejected, excepting his comment that the appellant could not be able to furnish the bills and vouchers (without specifying as to which bills or vouchers that could not be produced for his verification). ii) The scrutiny assessment for the assessment year 2006-07 and 2007-08, during which the appellant had gross receipt from the very same contractee under the very same contract were completed accepting books of accounts with specific disallowances to some of the heads of expenditures, thereby effectively determining profit rate @ 20 to 25% as against profit rate of 58% if Rs.52,88,614/- is added with the admitted rate of profit of the appellant. 6. For that, addition of Rs.99,70,327/- is per se illegal, arbitrary, erroneous, excessive further reasons that - i) The Ld. AO having neither rejected the Books of accounts including that of cash book based on which the book result was arrived at nor having given any adequate opportunity to the appellant to correlate the matching accounting treatment of the entrees in the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., cited supra, the order should have been passed and served on the assessee on 31.12.2010 but the order having been undoubtedly served on 01.02.2011 makes the order barred by limitation and consequently liable to be quashed. 5. In reply, the Ld. DR specifically requested that time may be granted to produce the record to show the date of dispatch of the order/service of the order. It was the submission by the Ld. DR that the office of the Department is under shifting and consequently, they were unable to produce the said record at the direction of the Tribunal. As the revenue has not been able to produce any record as called for by this Tribunal, this matter is being disposed off. 6. We have considered the rival submissions. At the out set, a perusal of the provisions of section 153 of the Act shows that the word used in the said section 'make'. Similarly, a perusal of the proviso to section 147 of the Act shows that the word used as 'no action shall be taken'. Similarly, in the provisions of section 148 of the Act, the words used are 'shall serve on the assessee'. Similarly, in the provisions of section 149 of the Act, the words used are 'issue to the assessee. Thus, each w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough the key employees and the partners were recorded in the rough cash book and ledger which has been impounded. It was the submission that when the partners or key employees provided the voucher for the same being the expenditure incurred the same are reflected in the regular books maintained by the assessee. It was the submission that though the AO has mentioned in his order that the bills and vouchers had not been produced to substantiate the claim of expenses, the AO had not demanded the said bills and vouchers. It was the submission that no discrepancy in the regular books maintained by the assessee had been found or pointed out by the AO or the revenue. Ld. AR further submitted that the AO further proceeded to invoke the provision of section 40A(3) of the Act in respect of the entries in the rough cash book maintained by the assessee which had been impounded by the revenue during the course of survey. It was the submission that the entries in the rough cash book were the payments to the partners and the key employees for disbursing the payments towards the expenditure that was incurred through them. It was the submission that the provisions of section 40A(3) of the Act was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k and ledger where payments made to the partners or the key employees. Once the assessee is able to substantiate its claim that the payments were made to the partners or the key employees for incurring the expenditure, the AO shall verify whether the same expenditure is recorded in the books of account and if it is found that the payments are recorded in the books of account and the original payments are recorded in the rough cash book as payment to the partners or the key employees, the provisions of section 40A(3) shall not be made applicable to the entries in the rough cash book and ledger. 11. In regard to the difference between the payments made to the partners as per the statement recorded in the course of survey and as recorded in the regular books of account, this issue is also restored to the file of the AO for readjudication. The assessee shall produce evidence before the AO to show that the payments as recorded in the regular books of the assessee to the partners have been offered to tax in the hands of the partners. If the payments have been offered to tax in the hands of the partners no disallowance to this extent shall be made in the hands of the firm. 12. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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