Shri Dheer Chand Sharma, Ghaziabad V. ITO, Ghaziabad

CO 161/DEL/2012

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0381 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 1 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 04-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHWANI TANEJA; AMIT KUMAR AG R AWAL
• Assessee Lawyers: VIKRAM SAHAY
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO. - 1499 /DEL/20 12 (ASSESSMENT YEAR - 2 008 - 09 ) ITO, WARD - 1(2), CGO COMPLEX - 1, HAPUR ROAD, GHAZIABAD (APPELLANT) VS DHEER CHAND SHARMA, SC - 25, SHASTRI NAGAR, GHAZIABAD. PAN - BDLPS0506G (RESPONDENT) CO. NO. - 161/DEL/2012 (IN I .T.A .NO. - 1499 /DEL/20 12) (ASSESSMENT YEAR - 2 008 - 09 ) DHEER CHAND SHARMA, SC - 25, SHASTRI NAGAR, GHAZIABAD. (APPELLANT) VS ITO, WARD - 1(2), CGO COMPLEX - 1, HAPUR ROAD, GHAZIABAD (RESPONDENT) APPELLANT BY SH. VIKRAM SAHAY, SR. DR RESPONDENT BY SH. ASHWANI TANEJA, CA & AMIT KUMAR AG R AWAL, CA ORDER PER BENCH THE PRESENT APPEAL AND THE CO HAS BEEN FILED BY THE REVENUE AND THE ASSESSEE. THE REVENUE ASSAILS THE CORRECTNESS OF THE ORDER DATED 31.101.2012 OF CIT(A), GHAZIABAD PERTAINING TO 2008 - 09 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: - 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.2,32,13,740/ - BY APPLYING N.P. RATE OF 1.80% WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE FAILED TO PRODUCE BOOKS OF DATE OF HEARING 04 . 0 3 .2015 DATE OF PRONOUNCEMENT 05 . 0 3 .2015 2 I.T.A .NO. - 1499/DEL/2012 & CO. NO. - 161/DEL/2012 ACCOUNTS AND REQU ISITE DOCUMENTS IN SPITE OF THE NUMEROUS OPPORTUNITIES PROVIDED TO HIM. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING RELIEF RS.2,32,13,740/ - TO THE ASSESSEE BY RELYING THE CASE FOR THE A.Y.2009 - 10 WHEN THE FACTS OF THE CASE FOR THE A.Y.2009 - 10 ARE QUITE DIFFERENT AND PRINCIPAL OF RES JUDICATA IS NOT APPLICABLE IN INCOME TAX PROCEEDINGS. 3. THEREFORE, THE ORDER OF THE LD. CIT(A) BE CANCELLED AND THE ORDER OF THE AO MAY BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO MODIFY/AMEND OR ADD ONE OR MORE GROUNDS OF APPEAL. 2. AND THE CO FILED BY THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ESTIMATING THE NET INCOME AT 1.80% WHICH IS HIGH LY EXCESSIVE AND UNJUSTIFIED. 2. THAT THE CROSS OBJECTOR CRAVES THE LEAVE TO ADD, AMEND, MODIFY, DELETE ANY OF THE GROUND(S) OF CROSS OBJECTION BEFORE OR AT THE TIME OF HEARING. 2.1. AT THE TIME OF HEARING IT WAS SUBMITTED BY THE LD. AR THAT THE CO - ORDIN ATE BENCH VIDE THEIR ORDER DATED 26.03.2013 IN ITA NO. - 1498/DEL/2012 ALONGWITH CO NO. - 160/DEL/2012 PERTAINING TO 2008 - 09 ASSESSMENT YEAR IN THE CASE ITO VS SH. GURU PRASAD SHARMA ON IDENTICAL FACTS HAS RESTORED THE ISSUE BACK TO THE FILE O F THE AO . THE SAID VIEW IT WAS SUBMITTED HAS BEEN FOLLOWED BY THE CO - ORDINATE BENCH IN ITA NO. - 1501/DEL/2012 ALONGWITH CO NO. - 162/DEL/2012 IN THE CASE OF ITO VS SMT. GEETA SHARMA IN THE CONSOLIDATED ORDER. IN THESE CIRCUMSTANCES IT WAS HIS PRAYER THAT WHERE THE FACTS WERE ALSO IDENTICAL THE ISSUE FOLLOWING THE VIEW TAKEN BY THE CO - ORDINATE BENCH MAY BE RESTORED TO THE FILE O F THE AO. ATTENTION WAS INVITED TO THE SIMILAR ITY IN THE GROUNDS RAISED BY THE DEPARTMENT AND THE CO IN THE PRESENT CASE WITH THE ORDER OF THE CO - ORDINATE BENCH. LD. SR. DR PLACED RELIANCE ON THE ASSESSMENT ORDER. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION OF THE CONSOLIDATED ORDER DATED 26.03.2013 IN THE CASE OF GURU PRASAD SHARMA AND GEETA SHARMA OF SC - 25, SHASTRI NAGAR, GHAZIABAD WE FIND THAT THE FACTS ARE SIMILAR. I N THE PRESENT APPEAL THE ASSESSEE HAD RETURNED AN 3 I.T.A .NO. - 1499/DEL/2012 & CO. NO. - 161/DEL/2012 INCOME OF RS.3,17,530/ - FROM SUPPLY OF EARTH SOIL. A PERUSAL OF THE ORDER OF THE CO - ORDINATE B ENCH RELIED UPON SHOWS THAT IN THE FACTS OF THAT CASE ALSO THE RETURN ED INCOME WAS RS.3,17,530/ - FROM THE SUPPLY OF EARTH SOIL. I T IS SEEN THAT SIMILARITY OF FACTS IS FURTHER ESTABLISHING AS IN THE FACTS OF THAT CASE ALSO THE ASSESSEE DID NOT PRODUCE BOOK S OF ACCOUNTS WITH BILLS AND VOUCHERS OF EXPENSES DESPITE REPEATED OPPORTUNITIES ACCORDINGLY THE TRADING RESULTS WERE CONSIDERED TO BE UNVERIFIABLE. IT IS FURTHER SEEN THAT AS IN THE PRESENT CASE THE AO THEREIN ALSO APPLIED THE NP RATE OF 8% AND THE CIT( A) THERE IN ALSO CONSIDER I N G THE FACT THAT THE AO IN THE SUBSEQUENT ASSESSMENT YEAR HAD ACCEPTED A NET PROFIT OF 1.9% HAD ESTIMATED THE NET PROFIT RATE AT 1.8%. THUS BEING OF THE VIEW THAT THERE IS SIMILARITY OF FACTS AND CIRCUMSTANCES OF THE PRESENT CASE W ITH THAT GURU PRASAD SHARMA CONSIDERED BY THE CO - ORDINATE BENCH , WE FIND THAT IN VIEW THEREOF THE ISSUE HAS OT BE RESTORED TO THE AO WITH SIMILAR DIRECTION. FOR READY - REFERENCE WE REPRODUCE THE RELEVANT EXTRACT FROM THE SAID ORDER: - 5. HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECORD. THE AUTHORITIES BELOW HAVE FOUND THAT THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNTS AND VOUCHERS TO JUSTIFY THAT THE PROFITS CAN CORRECTLY BE DEDUCED THEREFROM. THE LD. CIT(A) HAS UPHELD THE REJECTION OF ACCOUNTS AS THE S AME WERE UNRELIABLE. THE ASSESSEE IS NOT IN APPEAL AGAINST REJECTION OF ACCOUNTS. IT IS ALSO NOT THE CASE OF THE ASSESSEE THAT EVEN AFTER REJECTION OF ACCOUNTS, CORRECT PROFITS CAN BE DEDUCED THEREFROM. THE LD. CIT(A) HAS RETURNED A FINDING THAT BOOKS OF A CCOUNT WERE NOT PRODUCED EVEN BEFORE HIM. IN THIS VIEW OF THE MATTER WHEN THE ACCOUNTS ARE REJECTED AS THE CORRECT AND COMPLETE PROFITS CANNOT BE DEDUCED THEREFROM, THE INCOME OF THE ASSESSEE HAS TO BE ASSESSED TO THE BEST JUDGMENT OF THE ASSESSING AUTHORI TY. THE ASSESSEE S COUNSEL, BEFORE US, HAS PLEADED THAT THE ASSESSING AUTHORITY DID NOT TAKE RELEVANT BASIS INTO CONSIDERATION FOR MAKING THE ESTIMATES. IT, HOWEVER, IS WELL SETTLED THAT IN MAKING BEST JUDGMENT ASSESSMENT THERE IS ALWAYS CERTAIN DEGREE OF GUESS WORK. THE AUTHORITIES CONCERNED SHOULD TRY TO MAKE AN HONEST AND FAIR ESTIMATE OF THE INCOME EVEN IN A BEST JUDGMENT ASSESSMENT. THEY SHOULD ALSO NOT ACT TOTALLY ARBITRARILY WHILE THE ASSESSEE HIMSELF IS UNDER A DUTY TO SUBMIT PROPER ACCOUNTS. IN THE PRESENT APPEAL, THE APPELLANT BEFORE US CONTENDS THAT IN CASE AN OPPORTUNITY IS AFFORDED HE WOULD BE ABLE TO PROVE HIS CASE BEFORE THE ASSESSING AUTHORITY ON ESTIMATION AND ALSO SHOW THAT THE SHARE DEALINGS RESULTED INTO A LOSS WITH REFERENCE TO THE BOOKS OF ACCOUNTS AND VOUCHERS AVAILABLE WITH HIM. THAT BEING SO AND IN 4 I.T.A .NO. - 1499/DEL/2012 & CO. NO. - 161/DEL/2012 ORDER TO RENDER SUBSTANTIAL JUSTICE TO THE PARTIES, WE CONSIDER IT PROPER TO SET ASIDE THE ADDITION AND REMIT THE MATER BACK TO THE ASSESSING AUTHORITY SO THAT REASONABLE ESTIMATE OF INCOME IS MADE AFRESH ON RATIONAL BASIS AND WITHOUT ANY BIAS. NEEDLESS TO ADD REASONABLE AND EFFECTIVE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE SHALL BE AFFORDED. THE ASSESSEE SHALL COOPERATE IN THE ASS ESSMENT PROCEEDINGS. 4 . IT IS SEEN THAT T HIS VIEW WAS FOLLOWED BY THE CO - ORDINATE BENCH IN THE CASE OF SMT. GEETA SHARMA AS WOULD BE EVIDENT FROM THE FOLLOWING EXTRACT FROM THE SAID ORDER: - 6. IN APPEAL NO. 1501/DEL/2012 (GEETA SHARMA), PARTIES ADMITTED THAT THE FACTS ARE PARA - MATERIA THE SAME TO THE FA CTS IN APPEAL NO. 1498/DEL/2012. THIS ASSESSEE HAD ACHIEVED A TURN OVER OF RS. 33,02,51,578/ - BY MAKING PURCHASES OF RS. 32,91,03,942/ - LARGELY ON CASH BASIS AND HAD DECLARED A NET PROFIT OF RS. 3,17,534/ - ONLY. THE INCOME STOOD ASSESSED AT RS. 2,64,20,12 6/ - BY APPLYING NET PROFIT RATE OF 8% AFTER REJECTING THE BOOKS OF ACCOUNTS AS THE SAME WERE NEITHER PRODUCED NOR AVAILABLE FOR VERIFICATION BEFORE EITHER OF THE AUTHORITIES BELOW. THE LD. CIT(A), HOWEVER, REDUCED THE ESTIMATION TO 1.8% IN THE SAME MANNER AS HAS BEEN DONE IN THE CASE OF GURU PRASAD SHARMA IN ITA NO. 1498/DEL/2012. FACTS BEING IDENTICAL AND FOR THE PARITY OF REASONS AS ARE TAKEN IN THE AFORESAID APPEAL, WE SET ASIDE THE ADDITION IN THIS CASE AS WELL AND REMIT THE MATTER BACK TO THE ASSESSI NG AUTHORITY SO THAT REASONABLE ESTIMATE OF INCOME IS MADE AFRESH WITHOUT ANY BIAS AND ON RATIONAL BASIS AFTER AFFORDING REASONABLE AND EFFECTIVE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE SHALL COOPERATE IN THE ASSESSMENT PROCEEDINGS. 5 . ACCORDINGLY AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES AND ISSUES UNDER CHALLENGE, WE FIND THAT THE PRAYER OF THE LD. AR THAT THE MATTER HAS TO BE RESTORED TO THE AO WITH SIMILAR DIRECTION HAS TO BE ACCEPTED. WE NOTE THAT ON BEHALF OF THE REVENUE NO FA CT, ARGUMENT OR POS ITION OF LAW IN ORDER TO TAKE A CONTRARY VIEW WAS BROUGHT TO OUR NOTICE BY THE LD. SR. DR . RE SPECT FULLY FOLLOWING THE ORDER OF THE CO - ORDINATE BENCH , T HE ISSUES RAISED IN THE APPEAL AND THE CROSS - OBJECTION ARE RESTORED WITH SIMILAR DIRE CTION BACK TO THE FILE TO THE AO WHO SHALL DECIDE THE SAME BY WAY OF A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 5 I.T.A .NO. - 1499/DEL/2012 & CO. NO. - 161/DEL/2012 6 . IN THE RESULT THE APPEAL OF THE REVENUE AND THE CO OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 0 5 T H OF MARCH 2015 . S D / - S D / - ( T.S.KAPOOR ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 0 5 / 03 /201 5 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI