Shri Balram Dagar, Ballabgarh V. ITO, Faridabad

CO 9/DEL/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7966 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 25-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH SENIOR
• Keywords: Additional evidence; Wrong claim
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) SHRI U.B.S. BEDI, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3053/DEL./2011 (ASSESSMENT YEAR : 2007-08) ITO, WARD 1 (5), VS. SHRI BALRAM DAGAR, FARIDABAD. PROP. M/S. DAGAR BROTHERS, V & PO JHARSETLY, BALLABGARH (HARYANA) (PAN : AGYPD3150E) CO NO.9/DEL/2012 (IN ITA NO.3053/DEL./2011) (ASSESSMENT YEAR : 2007-08) SHRI BALRAM DAGAR, VS. ITO, WARD 1 (5), PROP. M/S. DAGAR BROTHERS, FARIDABAD. V & PO JHARSETLY, BALLABGARH (HARYANA) (PAN : AGYPD3150E) (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. CHARITRA GUPTA, ADVOCATE REVENUE BY : SHRI BHIM SINGH, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THE APPEAL OF THE REVENUE AND CROSS OBJECTION FILE D BY THE ASSESSEE EMANATE FROM THE ORDER OF THE CIT (APPEALS), FARIDABAD DATE D 31.03.2011 FOR THE ITA NO.3053 /DEL./2011 CO NO.9/DEL/2012 2 ASSESSMENT YEAR 2007-08. THE GROUNDS OF APPEAL TAK EN BY THE REVENUE READ AS UNDER :- 1. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN DELETING TH E ADDITION HOLDING THAT IT IS UNJUSTIFIED TO APPLY THE NET PROFIT RATE OF 12% OF THE TOTAL TURNOVER IN THE CIRCUMSTANCES WHEN THE LD. CIT(A) H AS APPROVED THE ACTION OF THE ASSESSING OFFICER FRAMING BEST JU DGMENT ASSESSMENT.' 2. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN DELETING TH E ADDITION IGNORING THE RATIO OF THE JUDGMENT OF HON'BLE JURISDICTIONAL COURT IN THE CASE OF PRABHAT KUMAR, CONTRACTOR, SIRSA (ITA NO. 293 OF 2008).' 3. 'THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING OF APPEAL.' THE GROUNDS TAKEN BY THE ASSESSEE IN THE CROSS OBJE CTION READ AS UNDER :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN MAKING THE AD HOC ADDITION OF RS.50,000/- OUT OF EXPENSES. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN UPHOLD ING THE FRAMING OF ASSESSMENT U/S 144 OF THE ACT INSTEAD OF QUASHIN G THE SAME BEING MADE WITHOUT FOLLOWING THE PRINCIPLES OF NATURAL JU STICE. 3. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, AMEN D, MODIFY, DELETE ANY OF THE GROUNDS OF APPEAL BEFORE OR AT TH E TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. WHILE PLEADING ON BEHALF OF THE REVENUE, THE LD. DR SUBMITTED THAT ASSESSEE IS A CIVIL CONTRACTOR. TOTAL RECEIPTS DECLARED WER E OF RS.2,92,38,139/-. DURING THE YEAR, ASSESSEE HAD DONE WORK FOR ROAD CONSTRUCTION AND ALSO CONSTRUCTION OF PLATFORMS FOR TOWERS. RETURN OF INCOME WAS FILE ON 31.10.2007 DECLARING INCOME AT RS.4,13,700/-. THE ASSESSEE HAS DISCLOSED NET PROF IT RATIO OF 1.5% ONLY. THE ITA NO.3053 /DEL./2011 CO NO.9/DEL/2012 3 ASSESSING OFFICER ESTIMATED THE NET PROFIT @ 12% OF TOTAL RECEIPTS. ASSESSING OFFICER ASKED TO FILE VARIOUS DETAILS AND ALSO TO P RODUCE BOOKS OF ACCOUNT BUT THE ASSESSEE REPEATEDLY FAILED TO DO SO. THE RECORDS S HOW THAT THE ASSESSEE WAS PROVIDED 22 OPPORTUNITIES TO COMPLY WITH. THE OPPO RTUNITY WAS PROVIDED ON FOLLOWING DATES :- 26.09.2008, 06.02.2009, 24.06.2009, 08.07.2009, 21 .07.2009, 04.08.2009, 10.08.2009, 12.08.2009, 28.08.2009, 04. 09.2009, 15.10.2009, 03.11.2009, 10.11.2009, 17.11.2009, 19. 11.2009, 23.11.2009, 26.11.2009, 30.11.2009, 02.12.2009, 08. 12.2009, 10.12.2009, 17.12.2009. ASSESSEE WAS ALSO SHOW CAUSED WHY PROVISIONS OF SEC TION 144 ARE INVOKED AND NOTICE U/S 142(1) WAS ALSO ISSUED ON 02.12.2009. THE ASSESSEE NEVER CAME FORWARD WITH BOOKS OF ACCOUNT AND SUPPORTING BILLS AND VOUC HERS. ASSESSEE OR AR OF THE ASSESSEE NEVER ATTENDED ANY PROCEEDINGS ON 22 OCCAS IONS. ORDER WAS PASSED U/S 144 OF INCOME-TAX ACT, 1961. THE ASSESSEE AND HIS COUNSEL THEREAFTER HAD CLAIMED THAT THEY WENT TO INCOME-TAX OFFICE ON 17.12.2009 A ND PRODUCED BOOKS, WHICH PRIMA FACIE IS A FALSE CLAIM. BEFORE WHICH AUTHORI TY THEY APPEARED AND PRODUCED BOOKS OF ACCOUNTS IS NOT CLEAR. SUCH CLAIM IS COMP LETELY A FALSE CLAIM AND NOT SUPPORTED BY ANY EVIDENCE OR BY ANY CIRCUMSTANTIAL EVIDENCE. IT IS ONLY CLAIMED IN AFFIDAVITS. IN VIEW OF THIS FACTUAL POSITION, THE CIT (A) HAS WRONGLY ACCEPTED THE ASSESSEES PLEA UNDER RULE 46A (2) OF THE INCOME-TA X RULES, 1962. THE ASSESSEE WAS ALSO REQUIRED TO PRODUCE THE PERSONS WHO HAVE S UPPLIED THE SOIL BUT FAILED TO DO SO. THE CIT (A) HAS WRONGLY ACCEPTED THE CONTENTS OF THE AFFIDAVITS WITHOUT VERIFYING THE SAME. LD. DR ALSO SUBMITTED THAT THE CIT (A) HAS WRONGLY DELETED THE ITA NO.3053 /DEL./2011 CO NO.9/DEL/2012 4 ADDITION AND SUSTAINED ONLY A PETTY ADDITION OF RS. 50,000/-. THE ASSESSEE HAS AGREED TO ADDITION OF RS.9.53 LACS IN THE ASSESSMEN T YEAR 2008-09 ON ACCOUNT OF NON-AVAILABILITY OF BILLS PERTAINING TO THE LABOUR CHARGES. IN THIS YEAR ALSO, THE ASSESSING OFFICER IN THE REMAND REPORT HAS FOUND DI SCREPANCIES IN THE BOOKS OF ACCOUNT AS SOME OF THE EXPENSES WERE NOT SUPPORTED BY BILLS AND VOUCHERS. THEREFORE, THE CIT (A) IS NOT JUSTIFIED IN REDUCING THE ADDITION TO SUCH EXTENT. HE FINALLY PLEADED THAT THE ISSUE MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED DE NOVO AFTER PROPER EXAMINAT ION OF ALL THE RECORDS AND ALSO TAKING INTO CONSIDERATION, ALL THE RELEVANT FACTS O F ASSESSEES CASE. AS ASSESSEE IS A CIVIL CONTRACTOR FOR SUPPLYING THE SOIL TO THE ROAD CONSTRUCTION AND ALSO CONSTRUCTING PLATFORMS FOR TOWERS. IN SUCH CASES, THE HON'BLE P UNJAB & HARYANA HIGH COURT IN THE CASE OF PRABHAT KUMAR, CONTRACTOR, SIRSA IN ITA NO.293 OF 2008 IN ITS ORDER DATED 14.11.2008 HAS SUSTAINED THE NET PROFIT @ 12% ON THE CONTRACT RECEIPTS. THE ASSESSEES CASE IS SIMILAR TO THAT ON FACTS. HE A LSO PLEADED THAT ON THE ONE HAND, THE CIT (A) HAS UPHELD THE FRAMING OF THE ASSESSMENT U/ S 144 OF THE INCOME-TAX ACT, 1961, ON THE OTHER HAND, HE ALLOWED THE ADMISSION O F ADDITIONAL EVIDENCES WHEREAS THE ASSESSEE WAS NEVER PREVENTED BY ANY SUFFICIENT CAUSE FROM PRODUCING AND FILING THE DOCUMENTS/EVIDENCES. THE ASSESSING OFFICER HAS NEVER REFUSED TO ADMIT THE EVIDENCES. THE ASSESSEE WAS NEVER PREVENTED BY SUF FICIENT CAUSE BY PRODUCING THE EVIDENCES WHICH WERE ASKED BY THE ASSESSING OFFICER . THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE. ASSESSEE WAS NOT PREVENTED B Y SUFFICIENT CAUSE FROM PRODUCING THESE DOCUMENTS BEFORE THE ASSESSING OFFI CER. THE ASSESSEE WAS PROVIDED SUFFICIENT OPPORTUNITY ON 22 TIMES TO ADDU CE THE EVIDENCE. HE FINALLY ITA NO.3053 /DEL./2011 CO NO.9/DEL/2012 5 PLEADED THAT IN VIEW OF THESE FACTS, THE ORDER OF T HE CIT (A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 3. ON THE OTHER HAND, THE LD. AR RELIED ON THE ORDE R OF THE CIT (A) AND PLEADED THAT THE CIT (A) HAS ASKED FOR THE REMAND REPORT FR OM THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS VERIFIED THE BOOKS OF ACCOUNT . HE SUBMITTED THAT THE CIT (A) HAS ERRED IN MAKING THE ADDITION OF RS.50,000/- OUT OF EXPENSES. THE LD. AR ALSO SUBMITTED THAT THE CIT (A) WAS NOT JUSTIFIED IN UPH OLDING THE FRAMING OF THE ASSESSMENT U/S 144 OF THE INCOME-TAX ACT, 1961 AND HE FINALLY PLEADED TO SUSTAIN THE ORDER OF CIT (A) ON THE ISSUE WHERE RELIEF IS G RANTED TO ASSESSEE AND ALSO PLEADED TO DELETE THE AD HOC ADDITION OF RS.50,000/ -. 4. WE HAVE HEARD BOTH THE SIDES ON THE ISSUES RAISE D IN THE APPEAL OF THE REVENUE AS WELL AS ON THE GROUNDS OF CROSS OBJECTIO N FILED BY THE ASSESSEE. THE ASSESSEE IS A CIVIL CONTRACTOR. THE ASSESSEE IS EN GAGED IN SUPPLYING SOIL FOR CONSTRUCTING THE ROADS AND ALSO CONSTRUCTING PLATFO RMS FOR TOWERS THE RETURN OF INCOME WAS FILED ON 31.10.2007 WHICH WAS PROCESSED U/S 143(1) ON 31.02.2009. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 1 43(2) WAS ISSUED ON 01.09.2008, THE SAME WAS SERVED ON ASSESSEE ON 13.09.2008. . T HE ASSESSING OFFICER TOOK UP THE HEARING OF THE CASE STARING FROM 26.09.2008 ON REGULAR BASIS AND UP TO 17.12.2009, TOTAL 22 OPPORTUNITIES WERE GRANTED/PRO VIDED. THE ASSESSEES COUNSEL EVERY TIME REQUESTED FOR ADJOURNMENT BUT DID NOT AT TEND THE PROCEEDINGS BEFORE ASSESSING OFFICER. AT NO OCCASION, THE ASSESSEE AN D AR APPEARED BEFORE ASSESSING OFFICER. THE SUPPORTING BOOKS OF ACCOUNT AND BILLS AND VOUCHERS WERE NEVER PRODUCED DURING THESE PROCEEDINGS. WE WOULD LIKE T O STATE THAT ASSESSEE AND AR ITA NO.3053 /DEL./2011 CO NO.9/DEL/2012 6 FOR ASSESSEE WERE SUCCESSFUL IN AVOIDING SCRUTINY O F DOCUMENTS FOR ALMOST OVER A YEAR. THE ASSESSING OFFICER FINALIZED THE ASSESSME NT ON 17.12.2009 U/S 144 OF INCOME-TAX ACT, 1961. AFTER FILING APPEAL BEFORE T HE CIT (A), ASSESSEE AND AR OF ASSESSEE HAD COME UP WITH A NEW STORY AND FILED AFF IDAVITS THAT THEY WENT TO INCOME-TAX OFFICE ON 17.12.2009. AFFIDAVITS HAVE B EEN FILED IN THIS REGARD. THESE AFFIDAVITS WERE FILED ON STAMP PAPERS PURCHASED ON 26.03.2009. THE ORDER WAS PASSED BY ASSESSING OFFICER ON 17.12.2009. THE CIT (A) BELIEVED THE AVERMENTS IN THESE AFFIDAVITS OF THE ASSESSEE AND THE COUNSEL OF THE ASSESSEE. THE CIT (A) BEFORE ACCEPTING THE AVERMENTS MADE IN THE AFFIDAVITS MUST HAVE CONSIDERED THE FACTUAL POSITION OF THE CASE THAT PRIOR TO THE DATE OF ORD ER, HEARINGS WERE FIXED FOR 21 TIMES AND ON NO OCCASION, ASSESSEE OR AR APPEARED BEFORE ASSESSING OFFICER. ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNT BUT NO SU CH COMPLIANCE WAS MADE. ALL THE TIME, ASSESSEE AND AR HAD REQUESTED FOR ADJOURN MENT. THE ASSESSMENTS WERE GETTING BARRED BY LIMITATION ON 31.12.2009. THIS W AS THE DATE OF LIMITATION FOR FINALIZATION OF ASSESSMENT. WITHOUT VERIFICATION O F FACTS, BELIEVING THE AVERMENTS MADE IN THE AFFIDAVITS BY THE CIT (A) IS NOT PROPER . CIT (A) SHOULD NOT HAVE ACCEPTED THESE AFFIDAVITS ON THE FACE OF IT. THE ASSESSEE HAS ACCEPTED SUBSTANTIAL ADDITION IN THE SUBSEQUENT YEAR ON ACCOUNT OF DISCR EPANCIES NOTICED IN THE BILLS AND VOUCHERS OF THE ASSESSEE. THE PATTERN OF BEHAVIOUR OF ASSESSEE AND AR BEFORE THE ASSESSING OFFICER SHOWS THAT THEY HAVE ADOPTED A NO N-COOPERATION VIEW AND RESTRICTED THE PROPER INVESTIGATION TO FACTS OF THE CASE. THE CIT (A) HAS UPHELD THE VALIDITY OF ORDER PASSED U/S 144 OF THE ACT FOR FIN ALIZATION OF THE ASSESSMENT TO THE BEST OF JUDGMENT. ON THE OTHER HAND, HE HAD ACCEP TED THE ATTENDANCE OF THE ITA NO.3053 /DEL./2011 CO NO.9/DEL/2012 7 ASSESSEE AND HIS COUNSEL ON 17.12.2009 FOR ADMITTIN G ADDITIONAL EVIDENCE WHICH THEY HAVE CLAIMED IN THEIR AFFIDAVITS. DURING THE HEARING BEFORE US, THE LD. AR OF THE ASSESSEE WAS ASKED TO SHOW ANY EVIDENCE ON RECO RD IN SUPPORT OF THE CONTENTS OF AFFIDAVITS BUT HE HAS SHOWN HIS INABILITY TO DO SO. THE ASSESSING OFFICER COULD HAVE PUT GOOD LIGHT ON THE AVERMENTS MADE ON THE AFFIDAV ITS FILED BEFORE THE CIT (A). CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE AND ALSO THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF PRABHAT KUMAR, CITED SUPRA, WE FIND IT APPROPRIATE TO RESTORE ALL THE IS SUES TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING DE NOVO. ASSESSEE IS DIRECTED TO FILE NECESSARY DOCUMENTS BEFORE ASSESSING OFFICER. 5. IN THE RESULT, THE APPEAL OF THE REVENUE AND CRO SS OBJECTION OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 23 RD DAY OF NOVEMBER, 2012. SD/- SD/- (U.B.S. BEDI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 23 RD NOVEMBER, 2012 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), FARIDABAD. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.