ACIT, New Delhi V. Shri Oriental Apprels, New Delhi

ITA 1028/DEL/2009

• Counselvise Citation: 102820114 RSA 2009
• Duration Of Justice: 2 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 11-04-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 19-03-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 143(3); 80HHC; 133A; 69B; 131; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `E: NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER I.T. A. NO.1028/DEL/2009 ASSESSMENT YEAR : 2003-04 ASSTT. COMMISSIONER OF INCOME-TAX, M/S. ORIENTAL A PPARELS, CIRCLE-36(1), NEW DELHI. VS. 420 & 429, PATPARGAN J INDUSTRIAL ESTATES, DELHI. PAN: AAAFO6255F (APPELLANT) (RESPONDEN T) APPELLANT BY: SHRI R.S. NEGI, SR. DR. RESPONDENT BY: NONE. O R D E R PER K.D. RANJAN, ACCOUNTAT MEMBER: THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEAR 2003 -04 ARISES OUT OF THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APP EALS)-XXVII, NEW DELHI. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE REPRODUCED AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.9,8 0,610/- U/S 69B MADE ON ACCOUNT OF UNDISCLOSED STOCK AND VALUE THEREOF WHICH WAS SURRENDERED DURING THE COURSE OF SURVEY U /S 133A OF I.T. ACT. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.19, 989/- MADE 2 ON ACCOUNT OF EXCESS CLOSING STOCK FOUND DURING SUR VEY PROCEEDINGS. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.34, 97,200/- MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PROPER TY WHICH WAS SURRENDERED BY ASSESSEE HIMSELF DURING SURVEY PROCEEDINGS. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS FURTHER ERRED IN DELETING THE ADDITION M ADE ON ACCOUNT OF UNDISCLOSED INVESTMENT IN PROPERTY ON SO LE GROUND THAT NO VALUATION WAS MADE BY THE DEPARTMENTAL. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.10, 29,263/- MADE ON ACCOUNT OF UNCONFIRMED FABRICATION CHARGES PAID TO M/S. A.B.C.D. ENTERPRISES PROP. SHRI AJAY BANSAL. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION MADE O N ACCOUNT OF TELEPHONE EXPENSES AMOUNTING TO RS.34,278/- RESTRIC TED AT AN AMOUNT OF RS.17,139/-, VEHICLE REPAIR & MAINTENANCE AMOUNTING TO RS.68,034/- RESTRICTED TO RS.34,017/- AND DEPRECIATION ON VEHICLE TO RS.1,48,028/- RESTRICTED AT AN AMOUNT OF RS.74,014/-. THE CIT(A) OUGHT TO HAVE AP PRECIATED THE FACTS BROUGHT ON RECORD BY THE AO WHILE MAKING THESE DISALLOWANCES. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION MADE ON ACCOU NT OF ELECTRICITY & WATER CHARGES OF RS.3,09,426/-, BUSIN ESS PROMOTION EXPENSES OF RS.90,539/-, MISC. EXPENSES O F RS.1,520/-, STAFF WELFARE EXPENSE OF RS.19,344/-, T RAVELLING EXPENSES OF RS.59,844/- AND REPAIR & MAINTENANCE OF RS.91,398/-. THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACTS BROUGHT ON RECORD BY THE AO WHILE MAKING THESE DISA LLOWANCES. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW THE D EDUCTION U/S 3 80HHC OF THE I.T. ACT ON THE ADDITION/DISALLOWANCE MADE TO THE TOTAL INCOME INCLUDING THE INCOME SURRENDERED ON AC COUNT OF EXCESS STOCK. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE VARIOUS JURIDIC AL PRONOUNCEMENT REGARDING TREATMENT OF UNDISCLOSED IN COME AS INCOME FROM OTHER SOURCES, IN WHICH CASE, THE DEDUC TION U/S 80HHC OF THE I.T. ACT ON THE ADDITIONS/DISALLOWANCE S MADE TO THE TOTAL INCOME INCLUDING THE INCOME SURRENDERED O N ACCOUNT OF EXCESS STOCK. 2. IN THIS CASE A SURVEY UNDER SEC. 133A OF THE INC OME-TAX ACT, 1961 WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 07.02. 2003. THE ASSESSMENT WAS COMPLETED UNDER SEC. 143(3) OF THE ACT ON 17.03 .2006 MAKING CERTAIN ADDITIONS. SUBSEQUENTLY ORDER UNDER SEC. 263 WAS P ASSED ON 16.08.2007 ON THE GROUND THAT THE AO FAILED TO EXAMINE THE CASE O N CERTAIN POINTS. THE ASSESSMENT MADE U/S 143(3) WAS CANCELLED AND THE AO WAS DIRECTED TO COMPLETE ASSESSMENT IN ACCORDANCE WITH THE DIRECTIO NS GIVEN IN THE ORDER PASSED UNDER SEC. 263 OF THE ACT. 3. THEREAFTER, THE ASSESSING OFFICER COMPLETED ASSE SSMENT BY MAKING CERTAIN DISALLOWANCES. 4. BEFORE THE CIT(A) IT WAS SUBMITTED THAT IN PARA 3 OF THE ASSESSMENT ORDER THE ASSESSING OFFICER HAD PORTRAYED DISTORTED VERSION OF THE SUBMISSIONS MADE BY IT IN REPLY TO NOTICE UNDER SEC . 263 OF THE ACT. THE ASSESSEE IN ITS REPLY HAS SIMPLY OFFERED HIS FULL C OOPERATION BY STATING SO. 4 HOWEVER, NONE OF THE ADDITIONS WERE EITHER AGREED O R CONSENTED TO. THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS ON VARIOUS ISSUES DELETED THE ADDITIONS. 5. ON THE DATE OF HEARING NONE ATTENDED ON BEHALF O F THE ASSESSEE. THE APPEAL IS DECIDED AFTER HEARING THE LEARNED SR. DR. 6. WE HAVE HEARD THE LEARNED SR. DR AND GONE THROUG H THE MATERIAL AVAILABLE ON RECORD. FROM THE ORDER OF THE CIT(A) WE FIND THAT THE ASSESSEE VIDE LETTER DATED 17.05.2007 HAD ADMITTED DEFICIENC Y AND HAD AGREED TO RE- ASSESSMENT IN TOTO BEFORE THE CIT IN PROCEEDINGS UN DER SEC. 263 OF THE ACT. WE ALSO FIND THAT IT WAS ARGUED BY THE ASSESSEE THA T THE RE-ASSESSMENT ORDER HAS BEEN PASSED WITHOUT RELEASING THE BOOKS OF ACCO UNTS I.E. CASH BOOK AND LEDGERS IMPOUNDED VIDE ORDER UNDER SEC. 131 OF THE ACT DATED 15.12.2004. REPEATED REQUESTS WERE MADE TO THE AO EITHER TO REL EASE THE SAID BOOKS OF ACCOUNT OR ALLOW CERTIFIED COPIES THEREOF, WHICH WE RE NOT ACCEDED TO. THEREFORE, IT WAS SUBMITTED BEFORE THE CIT(A) THAT THE ASSESSEE WAS FORCED TO SUBMIT REPLIES ON ALL THE POINTS WITHOUT HAVING ACCESS TO THE BOOKS OF ACCOUNTS IMPOUNDED U/S 131 OF THE ACT. CONSEQUENTL Y IT WAS PLEADED THAT THE ASSESSMENT PROCEEDINGS WERE IN VIOLATION OF PRI NCIPLES OF NATURAL JUSTICE WITHOUT AFFORDING FAIR AND REASONABLE OPPORTUNITY O F BEING HEARD. 5 7. IN VIEW OF ABOVE FACTS WE ARE OF THE CONSIDERED OPINION THAT THE MATTER SHOULD BE SET ASIDE TO THE FILE OF THE ASSESSING OF FICER WITH THE DIRECTIONS TO ALLOW THE ASSESSEE TO TAKE THE PHOTO COPIES OF THE IMPOUNDED DOCUMENTS AND THE ASSESSEE BE ALLOWED OPPORTUNITY TO SUBMIT REPLI ES BASED ON THE IMPOUNDED BOOKS OF ACCOUNTS AND VOUCHERS ETC. THE ASSESSING OFFICER WILL PROVIDE NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. 9. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 29 TH FEBRUARY, 2012. SD/- SD/- (R.P. TOLANI) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH FEBRUARY, 2012. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.