DCIT, New Delhi V. M/s V&S Texnits Pvt. Ltd., New Delhi

ITA 101/DEL/2011

• Counselvise Citation: 10120114 RSA 2011
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 12-08-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 07-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI B.K. HALDAR, ACCOUNTANT MEMBER I.T.A. NO.101/DEL/2011 ASSESSMENT YEAR : 2003-04 DY. CIT, VS. M/S V&S TEXNITS PVT. LTD. CIRCLE 17(1), D-22/3, OKHLA INDL. AREA, NEW DELHI PHASE-III, NEW DELHI PAN NO.AABCV 1216 H (APPELLANT) (RESPONDENT) APPELLANT BY : DR. B.R.R. KUMAR, SR. DR RESPONDENT BY : NONE ORDER PER B.K. HALDAR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-XIX, NEW DELHI, DATED 18.10.2010 FOR ASSESSM ENT YEAR 2003- 04. 1.1 THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APP EAL:- THE LEARNED CIT(A) HAS ERRED ON FACTS IN LAW BY SET TING ASIDE THE ISSUE OF DISALLOWANCE OF EXCESS CLAIM OF MANUFACTURING EXPENSES OF `15,31,615/- TO THE FILE OF THE ASSESSING OFFICER, WITH DIRECTION TO VERIFY THE 2 RECONCILIATION FURNISHED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS, IGNORING THAT : I) THE POWERS OF THE LEARNED CIT(A) TO SET ASIDE ISSUE S DECIDED IN SCRUTINY ASSESSMENT HAVE BEEN CURTAILED WITH EFFECT FROM 01.06.2001. II) BY NOT CALLING FOR A REMAND REPORT FROM THE ASSESSI NG OFFICER ON THE ISSUES SET ASIDE FOR VERIFICATION, T HE LEARNED CIT(A) HAS NOT DECIDED THE APPEAL IN ACCORDANCE WITH THE BOARDS CIRCULAR NO.14 DATED 12.12.2001 ON THE ISSUE. III) THE CONDITION LAID DOWN FOR ADMITTING ADDITIONAL EVIDENCE UNDER RULE 46A ARE NOT SATISFIED IN THIS C ASE. 2. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED DETAILS OF MANUFACTURING EXPENSES DEBITED TO PROFIT AND LOSS ACCOUNT AS ON 31.03.2003 VIDE ITS LETTER DATED 26.12.2005. IT ALSO FURNISHED DETAILS OF PURCHASES OF CONSUMABLE STORE ACCESSORIE S DURING THE YEAR UNDER CONSIDERATION. ON PERUSAL OF DETAILS OF PURC HASES OF CONSUMABLE STORES AND ACCESSORIES, ASSESSING OFFICER NOTED THA T THE TOTAL PURCHASES ON THIS ACCOUNT WAS `18,38,319/- AND `44,93,570/- R ESPECTIVELY. THE ASSESSING OFFICER NOTED THAT WHOLE OF THE ABOVE AMO UNTS WERE DEBITED IN THE P&L ACCOUNT WHEREAS THE CLOSING STOCK OF CON SUMABLE STORES AND ACCESSORIES AS ON 31.03.2003 WERE SHOWN AT `5,03,49 1/- AND `10,28,124/- RESPECTIVELY. THE OPENING BALANCE AS ON 01.04.2002 OF CONSUMABLE STORES AND ACCESSORIES WERE NIL. THE AS SESSING OFFICER, THEREFORE, HELD THAT THE ASSESSEE CHARGED `15,31,61 5/- ON THE ABOVE 3 ACCOUNT IN ITS PROFIT AND LOSS ACCOUNT WRONGLY. HE , THEREFORE, ADDED THE IMPUGNED AMOUNT AS INCOME OF THE APPELLANT. 2.1 ON APPEAL BEFORE THE LEARNED CIT(A), IT WAS SU BMITTED BY THE ASSESSEE THAT THOUGH THE ABOVE AMOUNT WAS CHARG ED TO THE PROFIT AND LOSS ACCOUNT, THE ASSESSING OFFICER FAILED TO N OTE THAT AN EQUAL AMOUNT I.E., `15,31,615/- WAS CREDITED TO THE PROFI T AND LOSS ACCOUNT UNDER THE HEAD INCREASE/DECREASE IN STOCK. IT WAS, THEREFORE, CONTENDED THAT THE IMPUGNED ADDITION BE DELETED. 2.2 AFTER PERUSING THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) DIRECTED THE ASSESSING OFFICER TO VE RIFY THE RECONCILIATION STATEMENT FURNISHED BY THE ASSESSEE BEFORE HIM AND IF THE ASSESSING OFFICER WAS SATISFIED WITH THE SAME, HE DIRECTED HI M NOT TO MAKE ANY ADDITION ON THIS ACCOUNT. 2.3 AGGRIEVED THE REVENUE HAS FILED APPEAL BEFORE THE TRIBUNAL. 2.4 BEFORE US, ON THE DATE OF HEARING NONE APPEARE D ON BEHALF OF THE ASSESSEE. WE, THEREFORE, PROCEEDED TO HEAR THE CASE EXPARTE QUA THE RESPONDENT. 4 3. THE LEARNED DR CONTENDED THAT THE LEARNED CIT(A ) DID NOT HAVE ANY POWER TO SET ASIDE AN ASSESSMENT ORDER AND DIRECT THE ASSESSING OFFICER TO REFRAME THE SAME. THUS, IT WA S CONTENDED THAT THE ORDER OF THE LEARNED CIT(A) SHOULD BE SET ASIDE. H OWEVER, ON THE MERIT OF THE CASE, HE DID NOT SERIOUSLY OBJECT TO THE DIR ECTION OF THE LEARNED CIT(A) TO THE EFFECT THAT ASSESSING OFFICER SHOULD CONSIDER THE RECONCILIATION FURNISHED BY THE ASSESSEE BEFORE /TH E LEARNED CIT(A) FOR ADJUDICATING THE ISSUE. 3.1 WE HAVE HEARD THE LEARNED DR AND PERUSED THE R ECORD. THOUGH IN PRINCIPLE THE LEARNED CIT(A) MAY NOT HAVE BEEN CORRECT IN DIRECTING THE ASSESSING OFFICER TO VERIFY THE RECON CILIATION FURNISHED BY THE ASSESSEE BEFORE HIM AND DECIDE THE ISSUE ACCORD INGLY, WE ARE OF THE OPINION THAT THE ASSESSEES CONTENTION BEFORE T HE LEARNED CIT(A) REQUIRES TO BE VERIFIED BY THE ASSESSING OFFICER. WE, THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THE IM PUGNED ISSUE AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSIN G OFFICER WITH THE DIRECTION THAT EXPLANATION HAS FURNISHED BY THE ASS ESSEE BEFORE THE LEARNED CIT(A) SHOULD BE VERIFIED AT HIS END AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. THE DISPUTED ADDITION OF `15,31,615/- SHOULD BE RE ADJUDICATED ACCORDINGLY A ND A FRESH ORDER BE PASSED. 5 4. IN RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 12.08.2011. SD/- SD/- ( DIVA SINGH ) ( B.K. HALDAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 12.08.2011 NS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).