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Hotel Sai Siddhi Pvt. Ltd. Versus Assistant Commissioner of Income Tax, Central Circle-1, Nashik

Reopening of assessment - assessee’s failure to file the return of income u/s 139 - Held that:- As the validity of the notice issued u/s 148 and reassessment order made u/s 143(3) r.w.s 147 are concerned, we find, notice issued and reassessment made should be upheld considering assessee’s failure to file the return of income in time as provided u/s 139(1) of the Act. Regarding grant of adequate opportunity of the Commissioner of Income (Appeals), we are of the view that the said ground is not su .....

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sessing Officer is under obligation to allow the business expenditure as per the provisions of the Act. However, the Assessing Officer is allowed to make additions for want of evidences and the same should be fair and reasonable. Assessing Officer should avoid multiple additions on any account. We find the reassessments under consideration are prima facie unreasonable and unsustainable in the present forum. For example, the Assessing Officer cannot estimate profits of the hotel business on one s .....

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meet the requirement of the law and if they are any way to be rejected; (2) Once estimation of GP/NP is done, Assessing Officer shall not add the expenditure claimed in the profit and loss account; (3) Assessing Officer shall allow the statutory deductions if any, as per the law out of the said estimated profits of business. Assessing Officer shall note that the best judgment assessment involves fair judgment assessment. Further, it goes without saying that the Assessing Officer shall grant reas .....

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ty of the re-assessment made u/s 143(3) r.w.s 147 of the Act along with the issue relating to additions on merits. 2. For the sake of completeness of the order, grounds relating to assessment year 2009-10 are extracted as under:- 1. On the facts and in the circumstances of the case, the assessment order passed by the Assessing Officer u/s 143 r.w.s is bad in law in as much as the Assessing Officer has neither mentions the reasons for issue of notice in the assessment order nor intimated to the a .....

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the case and without prejudice to above grounds, the CIT(A) has erred in sustaining the estimation of income by the Assessing Officer at ₹ 10,00,000/- without there being any basis. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in sustaining the disallowance of ₹ 4,82,05,599/- relying on the computation of total income filed by the appellant overlooking the fact that once overall estimation of net profit is made by rejecting the books of accounts and .....

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e Assessing Officer issued notice u/s 148 of the Act. In response, there is no compliance by the assessee for the said notice. Letters dated 25.08.2011, 30.12.2011, 21.02.2012 and 31.05.2012 were issued one after the other. However, the response from the assessee was not appreciable one. Eventually, the assessee responded only to ask for some more time to file the Return of Income, documents, details etc. Subsequently, the Assessing Officer issued series of letters dated 18.06.2012, 30.11.2012 e .....

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was completed after rejecting books of accounts and after making ad-hoc additions. In the reassessment, the net profit of the assessee from hotel business is estimated at ₹ 10,00,000/- in addition to the addition of disallowable sum of ₹ 4,82,05,599/-. This amount was claimed as disallowable one in the said financial statement. Thus, the same was disallowed by the Assessing Officer in the reassessment. The total income determined by the Assessing Officer (after depreciation is allowe .....

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t order dated 26th March, 2013. 5. During first appellate proceedings, the assessee raised issues relating rejection of books of accounts, estimation of profit and other additions as described above. The Commissioner of Income Tax (Appeals) had to issue various opportunities to the assessee to appear before him on 08.11.2013, 18.11.2013, 04.04.2014, 21.04.2014, 07.11.2014, 12.11.2014 and 05.03.2015 etc. The Commissioner of Income Tax (Appeals) observed at para 2.1.2 of the impugned order that th .....

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ppeal memo and dismissed the appeal of the assessee. Relevant findings of the Commissioner of Income Tax (Appeals) common for both the appeals is discussed at Para 2.1.12 to 2.1.18. The same is reproduced as under:- 2.1.12 During the appellate proceedings, the Appellant has furnished copy of the balance sheet and profit and loss accounts filed by the Directors and Chartered Accountant along with the letter dated 12.11.2013. However, in addition to these documents, the Appellant has not furnished .....

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so far. As stated above, the Appellant has been granted number of opportunities to prosecute its own appeal. However, the Appellant has chosen not to avail the opportunities provided by my predecessor and me. 2.1.14 The Appellant has merely furnished the profit and loss account, balance sheet and statement of computation of total income. However, these documents are only a starting point for verification of the income declared by the Appellant in the return of income. In absence of verification .....

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t has argued without substantiating its argument with evidence that it had submitted assets bifurcation between Goa and Nashik Hotels before the learned AO. Similarly, it has stated without establishing that the waiver of VAT pertained to FY 2010-11. 2.1.16 I have considered the Appellant's arguments. I find that the Appellant's arguments are more of academic in nature. I have no dispute with the legal discourse rendered by the Appellant. However, the Appellant needs to prove the facts b .....

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ibility of the Appellant to support its Grounds of Appeal with necessary evidence. If the Appellant is challenging the learned AO's action of rejection of its books of accounts it ought to produce the same for getting it verified from the AO under Rule 46A: The Appellant's legal arguments are not relevant unless the facts are established. During appellate proceedings also, the Appellant has not shown any keenness to get its affairs verified from either the learned AO or by the office of .....

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ellate proceedings. It is settled that law favours vigilant and not indolent. Therefore, the Appellant's case cannot be considered on sympathetic grounds. 2.1.18 In absence of any material to decide any Ground of Appeal in favour of the Appellant and in view of the above discussion, I confirm the total income assessed by the learned AO for all three assessment years. Accordingly, additions made of ₹ 4,92,05,599 for AY 2009-10, ₹ 6,18,23,291 for AY 2010-11 and of ₹ 19,46,91, .....

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ress i.e Hotel Sai Siddhi Pvt. Ltd, Plot No. 3/4, Poush Sector-A, Agra Road, Lekhanagar, Nashik-422 009. The said letter was returned on un-served by Postal Authority with the remark Left . During hearing proceeding, ld. DR for the Revenue explained the consistent non-cooperation of the assessee in the matters of the attendance to the proceedings before the Assessing Officer/Commissioner of Income Tax(Appeals) and now before the Tribunal. To substantiate above, the ld. DR for the Revenue read ou .....

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sessee was not reacting to the proceedings of the Commissioner of Income Tax (Appeals) in a responsible manner. After giving background of the above facts relating to the assessee s noncooperation in the matter relating assessment, reassessment and adjudication, ld. DR also requested for confirming the order of the Commissioner of Income Tax (Appeals) it its entirety. As discussed above, the notice was not received by the assessee at the given address for correspondence. We have examined Form-36 .....

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mation available on record. 8. So far as the validity of the notice issued u/s 148 and reassessment order made u/s 143(3) r.w.s 147 are concerned, we find, notice issued and reassessment made should be upheld considering assessee s failure to file the return of income in time as provided u/s 139(1) of the Act. Regarding grant of adequate opportunity of the Commissioner of Income (Appeals), we are of the view that the said ground is not supported by any evidence. We find that the Commissioner of .....

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fficer/Commissioner of Income Tax (Appeals) are extremely unfair in making the aforesaid additions. They are in the nature of making double taxation of same income. Normally, when the GP or income is estimation, no separate disallowance out of expenses is warranted. Further, the reassessment made by the Assessing Officer after rejecting the book, results should be fair and reasonable, more so, when the exparte or ad-hoc additions are involved. There is no dispute on the fact that the assessee co .....

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