IN INCOME TAX APPELLATE TRIBUNAL, BENCH KOLKATA [Before Hon ble Shri S.S.Viswanethra Ravi, JM & Dr.Arjun Lal Saini, AM ] ITA No.1484/Kol/2013 Assessment Year : 2009-10 I.T.O., Ward-2(2) -versus- M/s. Chinnamasta Traders Asansol Kulti [PAN: AANFM 8539 K] (Appellant) (Respondent) For Appellant : Shri Anand Kumar Singh, JCIT For Respondent : Shri S.K.Tulsiyan, Advocate and Shri R.N.Ram, A.R. Date of Hearing : 07.09.2016 Date of Pronouncement : 23.09.2016. ORDER Per Dr.Arjun Lal Saini, AM captioned appeal filed by revenue pertaining to A.Y.2009-10, is directed against order passed by Commissioner of Income Tax (Appeals) Asansol, in Appeal No.397/C.I.T.(A)/Asl/W-2(2)/Asl/11-12 dated 07.03.2013, which in turn arises out of order passed by Ld. Assessing Officer u/s 144/143(3) of Income Tax Act, 1961 (in short, Act), dated 19.12.2012. 2. facts of case are stated in brief. Assessee firm has filed its return of income for A.Y.2009-10 on 30.09.2009. case was selected for scrutiny u/s 143(2) of Act and statutory notices were sent by AO to assessee but there was no compliance to these notices. However, Shri Salil Baran Majumder appeared as Authorised Representative of assessee on 14.10.2011 before AO without submitting any vakalatnama and stated in letter that one of partners of firm, Sri Joy Banerjee, with whom all books of accounts were kept, had absconded. Because of this reason books are not available. assessee could not produce any books of account before AO. Before completion of assessment several letters were issued to assessee for obtaining explanation regarding additions on 2 ITA No.1484/Kol/2013 M/s. Chinnamasta Traders A..Y.2009-10 different heads. There was no compliance on part of assessee. assessee firm has not cooperated with department. One of partners of firm Shri Rakesh Verma has stated that Shri Joy Banerjee, partner who is absconding for last few months but they could not produce any FIR and same could not be shown before AO. All partners are literate even then they did not file any FIR to search him. ld. AO completed assessment u/s 144 of Act as per best judgment and computed total income at Rs.1,74,14,110/-. Aggrieved by order of ld. AO, assessee filed appeal before C.I.T.(A), Asansol. 3. ld. C.I.T.(A) observed that option before AO was to disallow expenses in full or part or to reject books of accounts u/s 145(3) of Act. latter is also justified as books of accounts were not produced due to reasons that Shri Joy Banerjee, partner who is in possession of books is absconding. ld. CIT(A) relied on determination of fixed percentage of gross receipts by AO. However, he considered that percentage cannot lead to figure equaling what has been fixed by AO, has no precedent. On other hand, considering level of absence of vouchers and defects considered high in this case and 8% is not justified. One with low level of interest or depreciation liability will have higher income. Fixing income at 8% as pleaded by assesee will be grave injustice to all assesses who has maintained correct and complete accounts. This is case where even existence of books of accounts have not been made. Even eligibility of deduction is not established. Accordingly he directed AO to assessee income from contract work at 12.5% obtained by reducing value of materials supplied from gross receipts. Not being satisfied with order of ld. CIT(A), revenue is in further appeal before us. 4. Although in this appeal revenue has raised multiple grounds of appeal but at time of hearing grievance of Revenue had been confined to ground nos. 1 ,2 3, 5, 6 and 7 and ground no.4 has not been pressed. 3 ITA No.1484/Kol/2013 M/s. Chinnamasta Traders A..Y.2009-10 ld. DR pointed out that main grievance of revenue is that assessment should be done based on books of accounts and not on estimated basis.The Ld DR for Revenue has pointed out that partners of firm has joint responsibility and severally responsibility. partners of firm reported to AO that one of partners Mr. Joy Banerjee has absconded, does not mean that other partners are not responsible for getting assessment done. Besides, there is no any evidence that Mr. Joy Banerjee has absconded, because partners neither lodged F.I.R nor they published in newspaper that their partner has absconded, moreover after two years when proceedings of CIT (A) started then also he remains absconded therefore this is false statement made by partners and nobody can rely. Before ld. CIT(A) assessee could not file any documentary evidence that Mr. Joy Banerjee had absconded with books of accounts and books could not be recovered from him yet. He has not been caught by police authorities tll date. 5. On other hand, ld. AR for assesee has submitted that assessee could not produce books of account before AO, reason being one of partners has absconded with books of accounts. assessee firm is trying to search absconded partner with help of relatives and friends circles. ld. AR also prayed that in this case 8% of profit on gross receipts is reasonable and he cited before us two case laws decided by ITAT, New Delhi in case of M/s. Balwan Singh & Co. vide ITA No.4040/Del/2011 order dated 04.11.2011 and ITAT Amritsar Bench in case of Shri Janak Raj Vs.DCIT , vide ITA No.161(Asr)/2011 order dated 08.06.2012. 6. Having heard rival submission, we are of view that there is merit in submissions of ld. DR for revenue, as proposition canvassed by him are supported by facts cited above. As he has explained that one of partners of firm has absconded with books of accounts but assessee had not filed any FIR with police department therefore their statements can not be relied. There is no point to reveal that partner has absconded. CIT(A) did not ask assessee firm to produce before him FIR and other documents which can show that one of 4 ITA No.1484/Kol/2013 M/s. Chinnamasta Traders A..Y.2009-10 partners has been absconded with books of accounts and till date partner is not traceable. assessee under consideration comes under tax audit ambit and Tax audit report u/s 44AB has been certified by Chartered Accountant therefore assessment can not be done based on estimate. If books of accounts are absconded by one of partners but then copy of tax audit report must be available with Chartered Accountant of assessee. said partner can not steal tax audit report form CA office and assessee must produce tax audit report before AO along with other documents. Besides, ld. AR for assessee has submitted before us two case laws which are not applicable to facts under consideration because other partners have failed to prove fact that one of partners has absconded with books of accounts and they had not filed FIR with police authorities. Therefore it is not acceptable. Therefore these two case laws cited before us are not applicable to facts under consideration. Accordingly we are of view that this issue requires fresh examination at end of AO. We also direct assessee to produce books of accounts, tax audit report etc, before AO and get assessment done. Therefore we set aside order of CIT(A) and restore issue to file of AO with direction to ascertain net income of assessee as per discussion supra. 7. In result, all grounds of appeal of revenue are allowed for statistical purposes. Order pronounced in court on 23.0-9.2016. Sd/- Sd/- [S.S.Viswanethra Ravi] [Dr.Arjun Lal Saini] Judicial Member Accountant Member Date: 23.09.2016. R.G.(.P.S.) \ 5 ITA No.1484/Kol/2013 M/s. Chinnamasta Traders A..Y.2009-10 Copy of order forwarded to: 1. M/s. Chinnamasta Traders, Village & P.O. Aldhi, Tintalla, P.O.Kulti- 713343, C/o Md. Kamruddin. 2 I.T.O., Ward-2(2), Asansol. 3. C.I.T.(A)- Asansol. 4. C.I.T., Asansol. 5. CIT(DR), Kolkata Benches, Kolkata. True Copy, By order, Deputy /Asst. Registrar, ITAT, Kolkata Benches I.T.O., Ward-2(2), Asanso v. M/s. Chinnamasta Trader