Shri Om Prakash, New Delhi V. ITO, New Delhi

CO 18/DEL/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0539 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-04-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 26-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 21-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJHA
• Assessee Lawyers: NITIN MEHROTRA; VINAY MEHROTRA CAS
• Keywords: Business expenditure; Principle of natural justice
• Section: 131; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1133/DEL/2012 1133/DEL/2012 1133/DEL/2012 1133/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2007 2007 2007 2007 - -- - 08 0808 08 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -29(1), 29(1), 29(1), 29(1), ROOM NO.103, ROOM NO.103, ROOM NO.103, ROOM NO.103, DRUM SHAPE B DRUM SHAPE B DRUM SHAPE B DRUM SHAPE BUILDING, UILDING, UILDING, UILDING, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI OM PRAKASH, SHRI OM PRAKASH, SHRI OM PRAKASH, SHRI OM PRAKASH, PROP. M/S LORD KRISHNA DYE CHEM, PROP. M/S LORD KRISHNA DYE CHEM, PROP. M/S LORD KRISHNA DYE CHEM, PROP. M/S LORD KRISHNA DYE CHEM, 2165, GALI NO.16, RAM NAGAR, 2165, GALI NO.16, RAM NAGAR, 2165, GALI NO.16, RAM NAGAR, 2165, GALI NO.16, RAM NAGAR, SHAHDARA, SHAHDARA, SHAHDARA, SHAHDARA, DELHI DELHI DELHI DELHI 110 009. 110 009. 110 009. 110 009. PAN : AAOPP7013N. PAN : AAOPP7013N. PAN : AAOPP7013N. PAN : AAOPP7013N. (APPELLANT) (RESPONDENT) CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION NO NONO NO .18/DEL/2013 .18/DEL/2013 .18/DEL/2013 .18/DEL/2013 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2007 2007 2007 2007 - -- - 08 0808 08 SHR SHR SHR SHR I OM PRAKASH, I OM PRAKASH, I OM PRAKASH, I OM PRAKASH, PROP. M/S LORD KRISHNA PROP. M/S LORD KRISHNA PROP. M/S LORD KRISHNA PROP. M/S LORD KRISHNA DYE CHEM, DYE CHEM, DYE CHEM, DYE CHEM, 2165, GALI NO.16, 2165, GALI NO.16, 2165, GALI NO.16, 2165, GALI NO.16, RAM NAGAR, SHAHDARA, RAM NAGAR, SHAHDARA, RAM NAGAR, SHAHDARA, RAM NAGAR, SHAHDARA, DELHI DELHI DELHI DELHI 110 009. 110 009. 110 009. 110 009. PAN : AAOPP7013N. PAN : AAOPP7013N. PAN : AAOPP7013N. PAN : AAOPP7013N. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -29(1), 29(1), 29(1), 29(1), ROOM NO.103, ROOM NO.103, ROOM NO.103, ROOM NO.103, DRUM SHAPE BUILDING, DRUM SHAPE BUILDING, DRUM SHAPE BUILDING, DRUM SHAPE BUILDING, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P. DAM KANUNJHA, SR.DR. ASSESSEE BY : SHRI NITIN MEHROTRA AND SHRI VINAY MEHROTRA, CAS. DATE OF HEARING : 12.03.2015 12.03.2015 12.03.2015 12.03.2015 DATE OF PRONOUNCEMENT : 01.04.2015 01.04.2015 01.04.2015 01.04.2015 ITA-1133/D/2012 & C.O.18/D/2013 2 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THE APPEAL BY THE REVENUE AND THE CROSS-OBJECTION BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08 ARE DIRECT ED AGAINST THE ORDER OF LEARNED CIT(A)-XXV, NEW DELHI DATED 9 TH DECEMBER, 2011. ITA NO.1133/DEL/2012 ITA NO.1133/DEL/2012 ITA NO.1133/DEL/2012 ITA NO.1133/DEL/2012 REVENUES APPEAL : REVENUES APPEAL : REVENUES APPEAL : REVENUES APPEAL :- -- - 2. THE ONLY GROUND OF APPEAL RAISED BY THE REVENUE IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) XXV, NEW DELHI HAS ERRED IN DELETING ADDI TION OF `10,96,000/- MADE BY AO, SPECIFICALLY ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK ACCOUNT. 3. LEARNED DR SUBMITTED THAT THE ASSESSEE HAS NOT C OOPERATED WITH THE DEPARTMENT IN THE MATTER OF ITS ASSESSMENT AND A NUMBER OF OPPORTUNITIES WERE GIVEN TO THE ASSESSEE AT THE TIM E OF ASSESSMENT BY ISSUING NOTICE UNDER SECTION 143(2)/142(1) OF THE I NCOME-TAX ACT, 1961 AND EVEN SUMMONS UNDER SECTION 131 OF THE ACT WERE ISSUED TO THE ASSESSEE. HE SUBMITTED THAT NONE ATTENDED ON BEHAL F OF THE ASSESSEE. IN THESE FACTS, THE ASSESSMENT WAS FRAMED EX-PARTE UNDER SECTION 144 OF THE ACT. HE SUBMITTED THAT THE LEARNED CIT(A) H AS ALLOWED RELIEF TO THE ASSESSEE WITHOUT EVEN CALLING FOR THE REMAND RE PORT IN THE MATTER. HE SUBMITTED THAT IT IS A CLEAR CASE OF VIOLATION O F PRINCIPLES OF NATURAL JUSTICE AND, ACCORDINGLY, THE ORDER OF LEARNED CIT( A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER SHOULD BE RESTORE D. 4. LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO PAR AGRAPH 3.4 OF THE APPELLATE ORDER PASSED BY THE LEARNED CIT(A) IN SUPPORT OF THE CASE OF THE ASSESSEE. HE SUBMITTED THAT THE ADDITION WA S MADE FOR CASH DEPOSITS IN THE BANK, WHICH WERE, IN FACT, CASH SAL ES AND OUT OF SALE OF ITA-1133/D/2012 & C.O.18/D/2013 3 JEWELLERY AND AD-HOC DISALLOWANCE WAS ALSO MADE OUT OF EXPENSES CLAIMED BY THE ASSESSEE WHICH WERE NORMAL BUSINESS EXPENSES. HE RELIED ON THE ORDER OF LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). WE FIND THAT THE ASSESSING OFFICER HAS ALLOWED A NUMBER OF OPPORTUNI TIES TO THE ASSESSEE BY ISSUE OF NOTICE OF HEARING UNDER SECTIO N 143(2)/142(1) AND ALSO SUMMONS UNDER SECTION 131 ALONG WITH FINAL OPP ORTUNITY LETTERS WERE ISSUED TO THE ASSESSEE AND STILL, NONE ATTENDE D ON BEHALF OF THE ASSESSEE BEFORE THE ASSESSING OFFICER. IN THESE FA CTS, THE ASSESSING OFFICER WAS LEFT WITH NO ALTERNATIVE BUT TO PASS EX PARTE ASSESSMENT ORDER UNDER SECTION 144. WE FIND THAT THE LEARNED CIT(A) ALLOWED THE RELIEF TO THE EXTENT OF `10.96 LAKHS WITHOUT EVEN C ALLING FOR THE REMAND REPORT FROM THE ASSESSEE. IN OUR VIEW, EVEN IF THE CLAIM OF THE ASSESSEE THAT THE CASH DEPOSIT IN THE BANK ACCOUNT REPRESENTS CASH SALES, STILL THE LEARNED CIT(A) SHOULD HAVE ALLOWED THE ASSESSING OFFICER OPPORTUNITY TO FILE ITS COMMENTS IN THE FORM OF REM AND REPORT. IN THESE FACTS, WE ARE OF THE VIEW THAT IT SHALL BE REASONAB LE TO SET ASIDE THE ORDERS OF LEARNED CIT(A) AND THE ASSESSING OFFICER TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO FRAME DE NOVO ASSESSMENT IN ACCORDANCE WITH LAW AFTER ALLOWING REASONABLE OPPOR TUNITY OF HEARING. THE ASSESSEE SHALL BE AT LIBERTY TO FILE ANY EVIDEN CE IN SUPPORT OF ITS CLAIM MADE BEFORE THE ASSESSING OFFICER. THE ASSES SING OFFICER SHALL PASS A SPEAKING ORDER ON THE ISSUE BEFORE HIM. WE DIRECT ACCORDINGLY. ASSESSEES ASSESSEES ASSESSEES ASSESSEES CROSS CROSS CROSS CROSS- -- -OBJECTION NO.18/DEL/2013 : OBJECTION NO.18/DEL/2013 : OBJECTION NO.18/DEL/2013 : OBJECTION NO.18/DEL/2013 :- -- - 6. THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT PRE SSED THE CROSS- OBJECTION OF THE ASSESSEE. WE FIND THAT THE CROSS- OBJECTION IS ALSO ITA-1133/D/2012 & C.O.18/D/2013 4 DELAYED BY AROUND 260 DAYS. HOWEVER, IN VIEW OF TH E WITHDRAWAL OF THE CROSS-OBJECTION BY THE ASSESSEE, WE DISMISS THE SAME. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES AND THE CROSS-OBJECTION OF THE ASSESSEE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 1 ST APRIL, 2015. SD/- SD/- ( (( ( T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR T.S. KAPOOR ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. ASSESSEE : SHRI OM PRAKASH, SHRI OM PRAKASH, SHRI OM PRAKASH, SHRI OM PRAKASH, PROP. M/S LORD KRISHNA DYE CHEM, PROP. M/S LORD KRISHNA DYE CHEM, PROP. M/S LORD KRISHNA DYE CHEM, PROP. M/S LORD KRISHNA DYE CHEM, 2165, GALI NO.16, RAM NAGAR, SHAHDARA, 2165, GALI NO.16, RAM NAGAR, SHAHDARA, 2165, GALI NO.16, RAM NAGAR, SHAHDARA, 2165, GALI NO.16, RAM NAGAR, SHAHDARA, DELHI DELHI DELHI DELHI 110 009. 110 009. 110 009. 110 009. 2. REVENUE : INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD INCOME TAX OFFICER, WARD- -- -29(1), 29(1), 29(1), 29(1), ROOM NO.103, DRUM SHAPE BUILDING, NEW DELHI. ROOM NO.103, DRUM SHAPE BUILDING, NEW DELHI. ROOM NO.103, DRUM SHAPE BUILDING, NEW DELHI. ROOM NO.103, DRUM SHAPE BUILDING, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR