Narender Singh Surana, Noida V. ITO, New Delhi

ITA 1019/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58608 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 24-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 24-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Keywords: Opportunity of being heard; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI K.D. RANJAN ITA NO. 1019/DEL/2011 ASSTT. YR: 2006-07 NARENDER SINGH SURANA VS. INCOME TAX OFFICER, A-27-C, SECTOR-16, WARD 20(2), NEW DELHI. NOIDA (UP) PAN/GIR NO. AAAHN6425L (APPELLANT) ( RESPONDENT ) APPELLANT BY : SHRI K. SAMPATH ADV. RESPONDENT BY : SHRI R.S. NEGI SR. DR O R D E R PER R.P. TOLANI, J.M : THIS IS ASSESSEES APPEAL AGAINST CIT(A)S ORDER DA TED 24-12-2010 RELATING TO A.Y. 2006-07. FOLLOWING GROUNDS ARE RAI SED: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE AUTHORITIES BELOW ERRED IN MAKING FOLLOWIN G ADDITIONS TO THE RETURNED INCOME- (I) RS. 6,90,926/- REJECTING THE TRADING RESULTS DECLAR ED BY THE ASSESSEE BY THE ESTIMATING GROSS PROFIT; (II) RS. 12,07,900/- BEING THE AMOUNT OF CASH DEPOSITS I N BANK ACCOUNT TREATING THE SAME AS UNEXPLAINED INCOM E U/S 68 OF THE ACT. 2. BRIEF FACTS ARE: THE ASSESSEE IS CLAIMED TO BE E NGAGED IN PURCHASE AND SALE OF SHARES. RETURN WAS FILED DECLARING INCOME O F RS. 1,16,022/- ON THE BASIS OF P&L A/C AND BANK STATEMENTS. DURING THE CO URSE OF HEARING AO POINTED OUT THAT THE ASSESSEES BOOKS OF ACCOUNTS S HOULD HAVE BEEN AUDITED AS THE TURN OVER EXCEEDED RS. 40 LACS. BESIDES, ASS ESSEE DID NOT FILE RELEVANT 2 DETAILS FOR VERIFICATION OF SALES AND PURCHASES. AO IN THE ABSENCE OF RELEVANT BOOKS, MADE ADDITION OF RS. 6,90,926/- BEING 1% OF TOTAL TURN OVER DECLARED BY THE ASSESSEE AT RS. 6,90,92,634/- FROM TRADING O F SHARES. THE AO ALSO MADE AN ADDITION OF RS. 12,07,900/- ON ACCOUNT OF U NEXPLAINED CASH CREDITS U/S 68 OF THE I.T. ACT. 3.1. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL. CI T(A) CONFIRMED THE ORDER OF AO. 2.2. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 3. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT A SSESSMENT PROCEEDINGS WERE TAKEN BY AO AS LATE AS 8-12-2008. PART OF THE COMPLIANCE WAS MADE AND ON THE FAG END OF THE ASSESSMENT PROCE EDINGS, AO ASKED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS AND VARI OUS OTHER DETAILS. ASSESSEE ATTENDED ON 26-12-08 AND PART DETAILS WERE FILED. THE REMAINING DETAILS COULD NOT BE FILED DUE TO PAUCITY OF TIME A ND SOME OF THE DETAILS WERE FILED ON 30-12-08, WHICH WERE REFUSED TO BE ACCEPTE D BY AO, AS, ACCORDING TO HIM, THE ASSESSMENT PROCEEDINGS WERE ALREADY CLO SED AND ORDER PASSED ON 30-12-08. UNDER THESE CIRCUMSTANCES, THE ASSESSEE COULD NOT FILE PROPER DETAILS. 3.1. IN FIRST APPEAL, ASSESSEE MOVED A PROPER APPLI CATION UNDER RULE 46A FOR ADMISSION OF ADDITIONAL EVIDENCE IN ABOVE CIRCU MSTANCES. CIT(A) 3 WITHOUT DECIDING THIS APPLICATION, CONFIRMED THE AD DITION HOLDING THAT ASSESSEE WAS NON-COMPLIANT BEFORE AO. IN THESE CIRC UMSTANCES, LEARNED COUNSEL HAS TWO FOLD ARGUMENTS- (I) ASSESSEE WAS NOT GIVEN ADEQUATE OPPORTUNITY OF BEIN G HEARD AND APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE WA S NOT ADVERTED TO BY THE CIT(A), THEREFORE THE ADDITIONS MAY BE DE LETED. (II) ON MERITS ALSO, THE ASSESSEE HAVING GIVEN DETAILS A BOUT SALE AND PURCHASES OF SHARES, THE RESULTANT PROFIT WAS DISCE RNABLE AND AT THE MOST PART OF THE EXPENSES MAY HAVE BEEN ESTIMATED. IN THIS CASE AO HAS TAKEN AN ARBITRARY ESTIMATE BY ADOPTING 1% O F THE TURN OVER AS THE NET PROFIT. SIMILARLY, THE CASH CREDITS HAVE BEEN WRONGLY ADDED AS THEY WERE THROUGH BANKING CHANNELS. 4. LEARNED DR IS HEARD. 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. ASSESSEES PLEA ABOUT COMMENCEMENT OF ASSESSMENT PROCEEDINGS AT A LATE STAGE EMERGES FROM RECORD. IN OUR VIEW THE ASSESSEE WAS NOT AFFORDED ADEQUATE TIME TO COMPLY W ITH THE REQUIREMENTS OF AO. THE ASSESSEE SOUGHT TO ADDRESS THIS SITUATION B Y FILING AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE BEFORE CIT(A), WHICH HAS NOT BEEN DECIDED AND THE ADDITIONS HAVE BEEN CONFIRMED WITHO UT CONSIDERING THE ADDITIONAL EVIDENCE. 4 5.1. IN THE ENTIRETY OF FACTS AND CIRCUMSTANCES, IN OUR VIEW, ASSESSEE HAS FILED APPLICATION FOR ADMISSION OF ADDITIONAL EVIDE NCE BEFORE CIT(A) IN THE PAPER BOOK FILED BEFORE US WHICH CONTAINS VARIOUS D OCUMENTS IN RESPECT OF THESE TWO ADDITIONS. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT THE ENDS OF JUSTICE WILL MEET IF THE ISSUES RA ISED IN ASSESSEES APPEAL ARE SET ASIDE AND RESTORED BACK TO THE FILE OF AO TO BE DECIDED AFRESH AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. WE ORDE R ACCORDINGLY. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON 31-01-2012. SD/- SD/- ( K.D. RANJAN ) ( R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31-01-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 5