Shri Mukesh Kumar Tyagi, New Delhi V. ITO, New Delhi

CO 478/DEL/2012

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0388 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 03-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 24-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: NIRAJ AGGARWAL
• Keywords: Additional evidence
• Section: 68; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI SH. N.K.SAINI, ACCOUNTANT MEMBER & SHRI A.T.VARKEY, JUDICIAL MEMBER ITA NO. 5594/DEL/2012 ASSESSMENT YEAR: 2009-10 ITO WARD-25(4), 304-D, 3 RD FLOOR, VIKAS BHAWAN NEW DELHI (APPELLANT) VS. MUKESH KUMAR TYAGI C/O, DR. NARESH KUMAR TYAGI, S/O, SHRI BEGH RAJ TYAGI, VILLAGE-SHIKARPUR, P.O. DAULATPUR, NAJAFGARH NEW DELHI ABGPT3151N (RESPONDENT) C.O. NO. 478/DEL/2012 (IN ITA NO. 5594/DEL/2012) MUKESH KUMAR TYAGI C/O, DR. NARESH KUMAR TYAGI, S/O, SHRI BEGH RAJ TYAGI, VILLAGE-SHIKARPUR, P.O. DAULATPUR, NAJAFGARH NEW DELHI ABGPT3151N (APPELLANT) VS. ITO WARD-25(4), 304-D, 3 RD FLOOR, VIKAS BHAWAN NEW DELHI (RESPONDENT) . ITA NO. 5594/DEL/2 012 C.O. NO. 478/DEL/ 2012 2 ASSESSEE BY : SH. NIRAJ AGGARWAL, C.A. REVENUE BY : SH . P.DAM KANUNJNA, SR. DR DATE OF HEARING : 03.02.2014 DATE OF P RONOUNCEMENT : 06.02.2015 ORDER PER N.K.SAINI, A.M. : THE APPEAL OF THE DEPARTMENT AND CROSS OBJECTION B Y THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 22 /08/2012 OF THE C.I.T.(A) XXIV, NEW DELHI. 2. FIRST, WE WILL DEAL WITH THE DEPARTMENTAL APP EAL IN ITA NO. 5594/DEL/2012 FOLLOWING GROUNDS OF APPEAL IN THIS A PPEAL : 1. DELETING THE ADDITION OF RS. 25,46,685/- M ADE BY THE AO U/S 68 OF THE I.T.ACT. 2. ACCEPTING THE CONFIRMATION OF THE ASSESSEE FOR UNSECURED LOANS WITHOUT DIRECTING THE AO TO MAKE FU RTHER ENQUIRY TO ASCERTAIN THE GENUINENESS OF THE TRANSAC TION AND IDENTITY AND CREDITWORTHINESS OF THE LOAN CREDITORS . 3. DELETING THE DISALLOWANCE OF RS. 2,17,621/- MADE BY THE AO FOR NON-FURNISHING THE BOOKS OF ACCOUNTS AND BILLS/VOUCHERS. 4. CIT(A) HELD THAT THE AO DID NOT FIND ANY DI SCREPANCY IN THE BOOKS OF ACCOUNTS OR BILL AND VOUCHERS WHERE AS THE SAME WERE NOT PRODUCED BEFORE THE AO. 3. VIDE GROUND NOS. 1 & 2 THE GRIEVANCE OF TH E DEPARTMENT RELATES TO THE DELETION OF ADDITION OF RS. 5, 46,685 MADE B Y THE AO U/S 68 OF THE IT ACT, 1961 (HEREINAFTER REFERRED TO THE ACT IN SHO RT). . ITA NO. 5594/DEL/2 012 C.O. NO. 478/DEL/ 2012 3 4. FACTS OF THE CASE RELATED TO THIS ISSUE IN B RIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 26.9.2009 DE CLARING A NET INCOME OF RS. 3,58,980/- . LATER ON, THE CASE WAS SELECTED F OR SCRUTINY. SINCE THE LAST NOTICE ISSUED ON 8.11.2011 FIXING CASE FOR 17. 11.2011 BY THE AO REMAINED UNATTENDED, THEREFORE, THE AO PROCEEDED T O FINALISE ASSESSMENT ON THE BASIS OF MATERIAL AVAILABLE ON THE RECORD AN D DISALLOWED UNSECURED LOAN OF RS. 31,87,902/-. THEREAFTER THE AO RECTIFI ED THE ASSESSMENT ORDER U/S 154 OF THE ACT AND STATED THAT THE AMOUNT OF UN SECURED LOAN WAS MISTAKEN AT RS. 31,87,902/- WHICH WAS THE AMOUNT PE RTAINING THE ASSESSMENT YEAR 2008-09 WHEREAS THE AMOUNT FOR THE YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2009-10 STOOD AT RS. 25,46,685/- ACCORDINGLY DISALLOWANCE U/S 68 OF THE ACT WAS REST RICTED TO RS.25,46,685/-. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER OF THE LD. CIT(A) AND SUBMITTED AN APPLICATION UNDER RULE 46A FOR ADMISSION OF ADDITIONAL EVIDENCE VIDE LETTER DATED 21.6.2012 AND AVERRED THAT HE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE RE LEVANT EVIDENCES BEFORE THE AO SINCE INITIAL NOTICES WERE NOT AT ALL SERVED UPON ASSESSEE AND WERE SERVED ON SOME OTHER ASSESSEE OF THE SAME NAME. AS REGARDS TO THE LAST TWO NOTICES, THE ASSESSEE SUBMITTED THAT HE WAS NOT KEEPING WELL AND THEREFORE COULD NOT ATTEND THE PROCEEDINGS BEFORE T HE AO. THE ASSESSEE ALSO FURNISHED THE MEDICAL CERTIFICATE WHEREIN IT W AS MENTIONED THAT HE WAS SUFFERING FROM HEPATITIS & JAUNDICE AND WAS BED -RIDDEN FOR ABOUT TWO MONTHS. 6. THE LD. CIT(A) CALLED A REMAND REPORT FRO M THE AO WHO VIDE LETTER DATED 5.7.2012 OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCES . ITA NO. 5594/DEL/2 012 C.O. NO. 478/DEL/ 2012 4 AND AS REGARDS TO THE UNSECURED LOANS, HE STATED T HAT CONFIRMATIONS OF THE LOAN FROM THE CREDITORS WERE NOT FILED BEFORE H IM DURING THE ASSESSMENT PROCEEDINGS, THEREFORE, IN THE ABSENCE OF PROPER VE RIFICATION THE GENUINENESS , IDENTITY AND CREDITWORTHINESS OF THE LOANS COULD NOT BE ESTABLISHED. THE LD. CIT(A) FORWARDED THE REMAND R EPORT TO THE ASSESSEE FOR A REJOINDER. IN RESPONSE THE ASSESSEE STATED T HAT THE ADDITIONS MADE BY THE AO WERE PURELY BASED ON SUSPICION, SURMISES AND WRONG FACTS. IT WAS STATED THAT THE TOTAL UNSECURED LOANS (OTHER THAN B ANKS) AMOUNTED TO RS. 17,78,400/- OUT OF WHICH FRESH LOANS ADDED DURING T HE YEAR WERE ONLY OF RS. 1,32,000/-. THE ASSESSEE FURTHER SUBMITTED THAT HE HAD GIVEN ALL SATISFACTORY DOCUMENTS INCLUDING LOAN CONFIRMATION LETTERS, PAN CARDS, ITR COPIES AND BANK STATEMENTS ETC. TO PROVE THE GENUI NENESS OF UNSECURED LOANS. THE ASSESSEE ALSO FURNISHED COPIES OF AUDITE D BALANCE SHEET, TRADING AND P&L A/C. ALONG WITH PART A OF ITR-IV. 7. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE AND THE REMAND REPORT OF THE AO OBSERVED T HAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRESENTING E VIDENCES BEFORE THE AO BECAUSE OF HIS ILLNESS. THE LD. CIT FURTHER OBSE RVED THAT THE ASSESSEE RECEIVED RS. 86,000/- FROM SMT. SUSHILA, RS. 20,000 /- FROM SH. AMIT KUMAR SHARMA AND RS. 26,000/- FROM SH. NITIN TYAGI, TOTAL ING TO RS. 1,32,000/-, DURING THE YEAR UNDER CONSIDERATION. HE ALSO OBSERV ED THAT THE CONFIRMATIONS ALONG WITH PROPER IDENTIFICATION AND COPIES OF ACKNOWLEDGEMENT OF RETURN FILED, HAD BEEN PLACED ON RECORD OF THE ASSESSEE. AS REGARDS THE OLD LOANS, CONFIRMATION O F SHRI MUKESH KUMAR GOEL WAS PLACED ON RECORD FROM WHOM OPENING BALANCE OF LOAN WAS AT RS. 10,44,000/- AND SIMILAR CONFIRMATIONS FROM SH. RAME SHWAR TYAGI (RS. . ITA NO. 5594/DEL/2 012 C.O. NO. 478/DEL/ 2012 5 21,800/-) SH. MANOJ TYAGI ( RS. 63,600/-), SH. MOH AN AGGARWAL (75,000/-), SH. RAJESH MISHRA (RS. 25,000/-) AND SH. SUNIL TYAG I (50,000/-) HAD BEEN PLACED ON RECORD. THE LD. CIT(A) WAS OF THE VIEW T HAT THE ARGUMENT OF THE AO REGARDING NON-AVAILABILITY OF ANY PAPER REGARDIN G UNSECURED LOAN WAS FACTUALLY INCORRECT. HE ALSO OBSERVED THAT THE BALANCE LOANS TAKEN BY THE ASSESSEE WERE FROM FINANCIAL INSTITUTIONS AND B ANKS, THEREFORE, THE ADDITION OF RS. 25,46,685/- ON ACCOUNT OF NON-VERIF ICATION OF UNSECURED LOANS DID NOT HOLD GOOD PARTICULARLY IN THE LIGHT OF THE EVIDENCES THAT ONLY RS. 1,32,000/- WERE RECEIVED BY THE ASSESSEE AS UNS ECURED LOAN DURING THE YEAR AND THE BALANCE AMOUNT WAS CARRIED FORWARD FROM THE LAST YEAR. ACCORDINGLY ADDITION OF RS. 25,46,685/- WAS DELETED . NOW THE DEPARTMENT IS IN APPEAL. 8. THE LD. DR REITERATED OF THE OBSERVATI ONS MADE BY THE AO AND STRONGLY SUPPORTED THE ASSESSMENT ORDER DATED 9 .12.2011. IN HIS RIVAL SUBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPP ORTED THE IMPUGNED ORDER. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF THE BOT H PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE AO WRONGLY CONSIDERED THE WHOLE OF THE LOANS PERTAINING TO THE EARLIER AS WELL AS THE YEAR UNDER CONSIDERATION AMOUNTING TO RS. 31,87,902/- AS NOT VERIFIABLE. LATER ON, HE RECTIFIED THE MISTAKE AND CONSIDERED THE CREDITORS OF RS. 25,46,685/- AS UNVE RIFIABLE AND MADE THE ADDITION U/S 68 OF THE ACT. THE ASSESSEE DUE TO IL LNESS COULD NOT PRODUCE THE EVIDENCES BEFORE THE AO HOWEVER THE SAME WERE F URNISHED IN THE FORM . ITA NO. 5594/DEL/2 012 C.O. NO. 478/DEL/ 2012 6 OF CONFIRMATION ALONG WITH PROPER IDENTIFICATION AN D THE COPIES OF ACKNOWLEDGEMENT OF THE RETURNS FILED BY THE CREDITO RS BEFORE THE LD. CIT(A), WHO AFTER PROPER VERIFICATION FOUND THAT ONLY THE L OANS AMOUNTING TO RS. 1,32,000/- WERE RECEIVED IN THIS YEAR AND THE ASSE SSEE FURNISHED THE RELEVANT DOCUMENTS FOR IDENTIFICATION AND CONFIRMAT ION. THE LD. CIT(A) FORWARDED THE NEW EVIDENCES TO THE AO WHO SIMPLY ST ATED THAT THOSE SHOULD NOT BE ADMITTED, HOWEVER, HE HAD NOT GIVEN THE REASON AS TO WHY THOSE WERE NOT ADMISSIBLE. IT, THEREFORE, APPEARS T HAT THE ADDITION MADE BY THE AO WAS BASED ONLY ON SURMISES AND CONJECTURES W HICH IS NOT ENABLE PARTICULARLY WHEN DURING THE YEAR UNDER CONSIDERAT ION THE AMOUNT RECEIVED FROM THE NEW CREDITORS WAS ONLY OF RS. 1,32,000/-. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS DO NOT SEE AN Y INFIRMITY IN THE ORDER OF LD. CIT(A) ON THIS ISSUE. ACCORDINGLY WE DO NOT SEE ANY MERIT IN THE APPEAL OF THE DEPARTMENT ON THIS ISSUE. 10. THE NEXT ISSUE VIDE GROUND NO. 3 RELATES TO T HE DELETION OF DISALLOWANCE OF RS. 2,17,621/- MADE BY THE AO. FACT S RELATED TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE CLAIMED VARIOUS EXPE NSES UNDER DIFFERENT HEADS AT RS. 6,17,621. THE AO RESTRICTED THOSE EXPE NSES TO RS. 4,00,000/- AND BALANCE CLAIM OF RS. 2,17,621/- WAS DISALLOWED. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO D ELETED THE DISALLOWANCE BY OBSERVING THAT THE AO HAD NOT POINTED OUT ANY DI SCREPANCY OR MISTAKE IN THE BALANCE SHEET, PROFIT & LOSS ACCOUNT, BOOKS OF ACCOUNTS OR BILLS AND VOUCHERS OF THE ASSESSEE. HE, FURTHER, OBSERVED THA T THE ACCOUNTS OF THE ASSESSEE WERE DULLY AUDITED BY A CHARTERED ACCOUNTA NT, THEREFORE, AD HOC ADDITION OF SUCH NATURE WAS NOT TENABLE. ACCORDINGL Y THE ADDITION MADE BY THE AO WAS DELETED. . ITA NO. 5594/DEL/2 012 C.O. NO. 478/DEL/ 2012 7 11. NOW THE DEPARTMENT IS IN APPEAL. LD. DR SUP PORTED THE ORDER OF THE AO AND FURTHER SUBMITTED THAT THE ASSESSEE D ID NOT PRODUCE BOOKS OF ACCOUNTS AND THE VOUCHERS FOR VERIFICATION THEREFO RE, THE DISALLOWANCE WAS RIGHTLY MADE BY THE AO AND THE LD. CIT(A) WAS NOT J USTIFIED IN DELETING THE SAME. IN HIS RIVAL SUBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE EXPENSES WERE INCURRED DURING THE REGULAR COURSE OF BUSINESS AND FOR THE BUSINESS PURPOSES. IT WAS FURTHER STATED TH AT THE EXPENSES WERE FULLY SUPPORTED BY THE VOUCHERS AND THE BOOKS OF AC COUNTS WERE DULY AUDITED WHICH WERE ACCEPTED BY THE AO, THEREFORE, DISALLOWANCE MADE BY THE AO WAS NOT JUSTIFIED AND THE LD. CIT(A) RIGHTLY DELETED THE SAME. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE RECO RD. IN THE PRESENT CASE, IT APPEARS THAT THE BOOKS OF ACCOUNTS OF THE ASSESS EE WERE DULY AUDITED AND THE AO WHILE MAKING THE AD HOC DISALLOWANCE DID NOT POINT OUT ANY SPECIFIC ITEM OF THE EXPENSES WHICH WAS NOT INCURRE D FOR THE BUSINESS PURPOSES. THEREFORE, THE LD. CIT(A) WAS FULLY JUSTI FIED IN DELETING THE IMPUGNED ADDITION MADE BY THE AO. WE DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) ON TH IS ISSUE. 13. AS REGARDS TO THE CROSS OBJECTION FILED BY THE ASSESSEE IS CONCERNED, IT IS NOTICED THAT NO SPECIFIC RELIEF HA S BEEN SOUGHT AND THE ASSESSEE MAINLY SUPPORTED THE ORDER PASSED BY THE L D. CIT(A). AND IN THE FORMER PART ON THIS ORDER, WE HAVE DISMISSED THE AP PEAL OF THE DEPARTMENT. . ITA NO. 5594/DEL/2 012 C.O. NO. 478/DEL/ 2012 8 THEREFORE THIS CROSS OBJECTION IN SUPPORT OF THE OR DER OF THE LD. CIT(A) BECOMES INFRUCTUOUS. ACCORDINGLY THE SAME IS DISMIS SED AS INFRUCTUOUS. 14. IN THE RESULT APPEAL OF THE DEPARTMENT AND C. O. OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/ 02/2015 . SD/- SD/- (A.T.VARKEY) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 06 FEB. 2015 B.RUKHAIYAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. CIT (ITAT), NEW DELHI