M/s. India Petroleums, New Delhi V. ACIT, New Delhi

ITA 1008/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87050 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 19-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 68; 144

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI J.S.REDDY, ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 1008 /DEL/ 2013 (ASSESSMENT YEAR: 2006 - 07 ) INDIA PETROLEUMS, C - 140, FIRST FLOOR, DEFENCE COLONY, NEW DELHI PAN:AAAFI9089H VS. ACIT, CENTRAL CIRCLE - 12, ROOM NO.330, 3 RD FLOOR, E - 2, ARA CENTRE, JHANDEWALA EXTENSION, NEW DELHI (APPELLANT) (RESPONDENT) DATE OF HEARING 30.12.2014 DATE OF PRONOUNCEMENT 25 .0 3 .2015 O R D E R PER A. T. VARKEY, JUDICIAL MEMBER THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - XXXI, NEW DELHI DATED 31.07.2012 FOR THE ASSESSMENT YEAR 2006 - 07. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS: - 1. THAT ON FACTS AND IN CIRCUMSTANCES OF THE CASE THE LD. CIT (A) XXXI HAS ERRED IN CONFIRMING THE ADDITION BY APPLYING GP RATE OF 4% ON GROSS TURNOVER OF RS.1,61,63,177/ - THEREBY ESTIMATING THE GROSS PROFIT AT RS.6,46,527/ - RESULTING IN AN ADDITION OF RS.4,0 3,913/ - WHICH IS ARBITRARY, UNJUST AND ILLEGAL AND THEREFORE LIABLE TO BE QUASHED. 2. THAT ON FACTS AND IN CIRCUMSTANCES OF THE CASE THE LD. CIT (A) XXXI HAS ERRED IN CONFIRMING THE ADDITION OF RS.4,50,000/ - AS MADE BY THE AO ON ACCOUNT OF UNSECURED LOAN U/S 68 OF THE INCOME TAX ACT, WHICH IS ILLEGAL AND THEREFORE LIABLE TO BE QUASHED. 3. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY. ACCORDING TO THE LD AR, THE LD CIT(A) HAD PASSED AN EX - PARTE ORDER ON 31.07.2012 AND SO THE APPEAL, SHOULD HAVE BEEN FILED BEFORE 29.09.2012. HOWEVER, THE ASSESSEE RECEIVED THE CERTIFIED COPY OF THE IMPUGNED ORDER ONLY ON 28.01.2013 AND IMMEDIATELY THEREAFTER THE ASSESSEE FILED THE APPEAL APPELLANT BY : SH. RAJEEV SAXENA, ADV RESPONDENT BY : SH. SATPAL SINGH, SR. DR PAGE 2 OF 4 ALONG WITH APPLICATION FOR CONDONATION OF DELAY. FOR THE I NTEREST OF JUSTICE, WE DEEM IT FIT TO CONDONE THE DELAY AND ADMIT THE APPEAL. 4. AT THE OUTSET , THE LD AR REMINDED US AGAIN THAT THE IM PUGNED ORDER IS AN EX - PARTE ORDER AND SINCE NO ONE APPEARED BEFORE THE AO, THE AO HAS PASSED AN U/S 144 OF THE INCOME TA X ACT, 1961 (HEREIN AFTER THE ACT) . ACCORDING TO HIM THE PARTNER (SHRI JAGRIT KHAITAN) WHO WAS RUNNING THE ASSESSEE FIRM DIED AFTER A PROLONGED ILLNESS ON 1 7.01.2010 AND HE WAS LOOKING AFTER ALL THE CASES BEFORE THE AUTHORITIES BELOW. AND ACCORDING TO TH E LD AR , THE SLEEPING PARTNER WHO HAS FILED THIS APPEAL ON BEHALF OF THE ASSESSEE, SMT. INDU NARAIN HAD RESIGNED FROM THE FIRM ON 31.10.2008. AND SINCE SHRI JAGRIT KHAITAN IS NO MORE, SMT. INDU NARAIN WAS NOT AWARE OF THE APPEAL GOING ON BEFORE LD CIT(A) A ND SO THE ASSESSEE COULD NOT EFFECTIVELY PURSUE THE MATTER. SO BEFORE THIS TRIBUNAL AN APPLICATION U/RULE 29 OF THE ITAT RULES 1963 HAS BEEN FILED BY THE ASSESSEE TO ADMIT ADDITIONAL EVIDENCES, WHICH ACCORDING TO LD AR IS NECESSARY TO ADJUDICATE THE ISSUES . ON THE OTHER HAND LD DR RELIED ON THE ORDER OF THE LD CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND FIND THAT THE IMPUGNED ORDER IS AN EX - PARTE ORDER AGAINST THE ASSESSEE FIRM. IT HAS BE EN BROUGHT TO OUR NOTICE THAT ASSESSMENTS FOR ASSESSMENT YEAR S 2005 - 06 AND 2006 - 07 WERE COMPLETED ON 20 .12.2007 AND 12 .12.2008 RESPECTIVELY. BOTH THESE ASSESSMENTS WERE MADE E X - - PARTE AND SH. JAGRIT KHAITAN HAD FILED A PPEAL AFTER OBTAINING THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2006 - 07. IT WAS BROUGHT TO OUR KNOWLED GE THAT APPE AL F OR ASSESSMENT YEAR 2006 - 07 WAS FILED ON 23 . 01 . 2009 BY JAGRIT KHAITAN WITHIN TIME BUT NO APPEAL WAS FILED BY JAGRIT KHAITAN AGAINST THE EX - PARTE ASSESSMENT MADE FOR ASSESSMENT YEAR 2005 - 06. 6 . AFTER THE DEMISE OF JAGRIT KHAITAN, THE PRESENT SIGNATORY SMT. INDU NARAIN WAS NOT AWARE OF THE SAID APPEAL WHICH WAS DECIDED BY THE CIT(A) EX - PARTE FOR ASSESSMENT YEAR 2006 - 07 ON 31 . 07 . 2012 ; AND LATER ONCE SHE REALIZED ABOUT THE HUGE DEMAND WHICH WAS CREATED AGAINST THE ASSESSEE FIRM FOR RELEVANT ASSE SSMENT YEAR WHEN SMT INDU NARAIN WAS TECHNICALLY PARTNER OF THE ASSESSEE FIRM, HOWEVER IT WAS CONTENDED THAT SHE WAS ONLY A SLEEPING PARTNER DURING THAT PERIOD RELEVANT FOR THE ASSESSMENT YEAR IN HAND . IT WAS STATED BEFORE US THAT SMT. INDU NARAIN HAD NEITHER TAKEN ANY SHARE NOR PAGE 3 OF 4 LOOKED AFTER THE BUSINESS OF THE ASSESSEE FIRM AND INFACT HAD GOT MARRIED IN THE YEAR 1980 I.E. LONG BACK AND SO SHE HAD NO KNOWLEDGE OF THE BOOKS OF ACCOUNT AND OTHER DETAILS OF THE ASSESSEE FIRM. HOWEVER, NOW SH. DEEPAK NARAIN HUSBAND OF SMT INDU NARAIN HAS INITIATED LEGAL PROCEEDINGS AND IS ASSIST ING HER TO FILE THE INSTANT APPEAL BEFORE US . IT WAS ALSO BROUGHT TO OUR NOTICE THAT APPEAL FOR AY 2005 - 06 WAS ALSO FILED BY SMT. INDU NARAIN BEFORE CIT(A) AFTER OBTAINING CERTIFIED COPY OF THE ASSESSMENT ORDER ON 13 . 0 .2013 WHICH IS STILL PENDING BEFORE THE LD CIT(A) - 31 (NOW CIT(A ) 26 . 7 . SO ACCORDING TO THE LD AR , MRS. INDU NARAIN WAS ONLY A SLEEPING PARTNER OF THE ASSESSEE FIRM AND SHE RESIGNED ON 31.10.2008. HOWEVER, SINCE SHE WAS A PARTNER THOUGH ONLY A SLEEPING PARTNER, DURING THE RELEVANT ASSESSMENT YEAR, AND THERE IS NO OTHER PARTNER, SHE HAD NO OTHER ALTERNATIVE BUT TO FILE APPEAL BECAUSE OF THE HEAVY DEMAND RAISED ON THE ASSESSEE FIRM BY THE IMPUGNED ORDER . WE FIND THAT IN TH E AFORESAID CIRCUMSTANCES, THERE IS SUFFICIENT CAUSE FOR THE ASSESSEE FIRM IN NOT PRODUCING REQUISITE DOCUMENTS BEFORE THE LD CIT(A) BECAUSE HER BROTHER WHO WAS THE ACT IVE PARTNER DIED ON 17.10.2010 AND SHE HAD BEEN A HOUSE WIFE FROM 1980 ONWARDS . AND SINC E SHE WAS NOT AWARE OF THE PROCEEDING GOING BEFORE THE LD CIT(A), THE IMPUGNED ORDER WAS PASSED EX - PARTE. SO WE ARE INCLINED TO ADMIT THE ADDITIONAL EVIDENCE AND REMAND IT BACK TO THE FIL E OF THE AO, SINCE THE ASSESSMENT ORDER ITSELF IS U/S 144 OF THE ACT SINCE N ONE APPEARED BEFORE THE AO. SO WE SET ASIDE THE IMPUGNED ORDER AND REMAND IT BACK TO THE FILE OF AO FOR FRESH ADJUDICATION ALONG WITH ADDITIONAL EVIDENCE SUBMITTED BEFORE US. NEE DLESS TO SAY THAT AO SHALL GIVE SUFFICIENT OPPORTUNITY TO THE ASSESSEE BEFORE PASSING THE ASSESSMENT ORDER. 8 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 5 . 03 . 2015 . - S D / - - S D / - ( J.S.REDDY ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 5 / 03 / 2015 A K KEOT COPY FORWARDED TO PAGE 4 OF 4 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI