ITO, Ghaziabad V. Sh. Avneesh Kumar Agarwal, Ghaziabad

ITA 1033/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86653 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 27-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 01-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAI
• Keywords: Opportunity of being heard; Additional evidence; Onus to prove
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1033/DEL/2012 1033/DEL/2012 1033/DEL/2012 1033/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008 - -- - 09 0909 09 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1(1), 1(1), 1(1), 1(1), GHAZIABAD. GHAZIABAD. GHAZIABAD. GHAZIABAD. VS. VS. VS. VS. SHRI SHRI SHRI SHRI AVNEESH KUMAR AGARWAL, AVNEESH KUMAR AGARWAL, AVNEESH KUMAR AGARWAL, AVNEESH KUMAR AGARWAL, R RR R- -- -5/115, RAJ NAGAR, 5/115, RAJ NAGAR, 5/115, RAJ NAGAR, 5/115, RAJ NAGAR, GHAZIABAD. GHAZIABAD. GHAZIABAD. GHAZIABAD. PAN : ABQPG5131E. PAN : ABQPG5131E. PAN : ABQPG5131E. PAN : ABQPG5131E. (APPELLANT) (RESPONDENT) CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION CROSS OBJECTION NO NONO NO .105/DEL/2012 .105/DEL/2012 .105/DEL/2012 .105/DEL/2012 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2008 2008 2008 2008 - -- - 09 0909 09 SHRI AVNEESH KUMAR SHRI AVNEESH KUMAR SHRI AVNEESH KUMAR SHRI AVNEESH KUMAR AGARWAL, AGARWAL, AGARWAL, AGARWAL, R RR R- -- -5/115, RAJ NAGAR, 5/115, RAJ NAGAR, 5/115, RAJ NAGAR, 5/115, RAJ NAGAR, GHAZIABAD. GHAZIABAD. GHAZIABAD. GHAZIABAD. PAN : ABQPG5131E. PAN : ABQPG5131E. PAN : ABQPG5131E. PAN : ABQPG5131E. VS VSVS VS . .. . INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1(1), 1(1), 1(1), 1(1), GHAZIABAD. GHAZIABAD. GHAZIABAD. GHAZIABAD. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI VIKRAM SAHAI, DR. ASSESSEE BY : SHRI SANJAY MALIK, ADVOCATE. ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: : THE APPEAL BY THE REVENUE AND THE CROSS-OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A), GHAZIABAD DATED 27 TH DECEMBER, 2011 FOR THE AY 2008-09. 2. IN THE APPEAL BY THE REVENUE, FOLLOWING GROUNDS HAVE BEEN RAISED:- 1. THAT LD.CIT(A) HAS ERRED IN LAW AND ON FACTS BY DELETING THE ADDITION OF RS.5,98,540/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS REGARDING IDENTITY, CREDITWORTHI NESS ITA-1033/D/2012 & CO-105/D/2012 2 AND EXISTENCE OF CREDITOR, IN SPITE OF THE VARIOUS OPPORTUNITIES PROVIDED TO HIM. 2. THAT LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING RELIEF OF RS.6,10,000/- TO THE ASSESSEE WI THOUT APPRECIATING THE FACTS THAT THE ASSESSEE HAD FAILED TO DISCHARGE HIS ONUS TO PROVE THE CREDITWORTHINESS OF THE LENDERS AND GENUINENESS OF THE TRANSACTIONS. 3. THAT LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLOWING RELIEF OF RS.8,72,500/- TO THE ASSESSEE WI THOUT APPRECIATING THE FACTS THAT THE ASSESSEE HAD FAILED TO SUBMIT SUPPORTIVE EVIDENCE TO PROVE THE SOURCE OF F RESH CAPITAL INTRODUCED. 4. THAT LD.CIT(A) HAS ERRED IN LAW AND ON FACTS BY NOT ALLOWING REASONABLE OPPORTUNITY TO EXAMINE THE EVIDENCE AS PER THE PROVISIONS OF RULE 46A(3) OF TH E I.T. ACT, 1961. 5. THEREFORE, THE ORDER OF THE LD.CIT(A) BE CANCELL ED AND THE ORDER OF THE AO MAY BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO MODIFY/AMEND OR ADD ANY ONE OR MORE GROUNDS OF APPEAL. 3. IN THE CROSS-OBJECTION, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE LOAN OF RS.80,000/- FROM SH. DEEPAK TY AGI DID NOT INVOLVE ANY ELEMENT OF INCOME CHARGEABLE TO TAX IN THE HAND OF THE APPELLANT. ON FACTS AND IN LAW OF THE CASE, THE ADDITION OF RS.80,000/- AS INCOME FRO M UN- EXPLAINED SOURCES WAS NOT WARRANTED AND THE SAME DESERVE TO BE DELETED. 2. THAT ON FACTS AND IN LAW, THERE WAS NO LEGAL WARRANT TO MAKE ANY DISALLOWANCE BECAUSE OF NON- MAINTENANCE OF STOCK REGISTER AND ALLEGED NOT VERIF IABLE CASH EXPENSES. THE ADDITION OF RS.40,000/-, SUSTAI NED BY THE LD.CIT(A) DESERVE TO BE DELETED BEING NOT BA SED ON ANY EVIDENCE BUT ON SURMISE AND GUESS. 4. AT THE TIME OF HEARING BEFORE US, IT WAS POINTED OUT BY THE LEARNED DR THAT IN RESPECT OF ALL THE THREE GROUNDS RAISED BY THE ITA-1033/D/2012 & CO-105/D/2012 3 REVENUE, LEARNED CIT(A) ALLOWED THE RELIEF TO THE A SSESSEE BY CONSIDERING THE ADDITIONAL EVIDENCES WITHOUT PASSIN G ANY ORDER FOR ADMISSION OF ADDITIONAL EVIDENCE. HE POINTED OUT F ROM THE ORDER OF LEARNED CIT(A) THAT THE ASSESSEE FILED ADDITIONAL E VIDENCE BEFORE THE CIT(A). THE CIT(A) FORWARDED THE SAME TO THE ASSES SING OFFICER AND CALLED THE REMAND REPORT. THE ASSESSING OFFICER OB JECTED TO THE ADMISSION OF ADDITIONAL EVIDENCES. HOWEVER, THE CI T(A) DID NOT CONSIDER THE ASSESSING OFFICERS OBJECTION FOR ADMI SSION OF ADDITIONAL EVIDENCE AND ADJUDICATED THE APPEAL CONSIDERING THE ADDITIONAL EVIDENCE. HE SUBMITTED THAT BEFORE RELYING UPON TH E ADDITIONAL EVIDENCE, THE CIT(A) SHOULD HAVE PASSED SOME ORDER ADMITTING OR REJECTING THE ADDITIONAL EVIDENCE. SINCE THERE IS NO ORDER OF ADMISSION OF ADDITIONAL EVIDENCE BY THE CIT(A), HE WAS WRONG IN RELYING UPON THE ADDITIONAL EVIDENCE. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT(A) SHOULD BE REVERSED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 5. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, POINTED OUT THAT THE ASSESSING OFFICER ISSUED NOTICE UNDER SECT ION 142(1) FOR THE FIRST TIME ON 15 TH DECEMBER, 2010 FIXING THE CASE ON 23 RD DECEMBER, 2010 AND PASSED THE ORDER ON 28 TH DECEMBER, 2010. THUS, THE ASSESSMENT WAS COMPLETED WITHOUT ALLOWING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREFORE, LEARNED CI T(A) WAS FULLY JUSTIFIED IN ADMITTING THE ADDITIONAL EVIDENCES AS PER THE REQUEST OF THE ASSESSEE. HE WAS FAIR ENOUGH TO ADMIT THAT IN THE ORDER OF LEARNED CIT(A), THERE IS NO MENTION OF THE ADMISSION OF ADD ITIONAL EVIDENCE. HE, HOWEVER, STATED THAT THE CIT(A) CALLED FOR THE REMAND REPORT AND ASSESSEES REPLY ON REMAND REPORT AND THEREAFTER CO NSIDERED THE ADDITIONAL EVIDENCE WHICH CLEARLY PROVES THAT THE C IT(A) IMPLIEDLY ADMITTED THE ADDITIONAL EVIDENCE. THE OMISSION OF MENTIONING ONE LINE IN THE ORDER OF LEARNED CIT(A) THAT THE ADDITIONAL EVIDENCE HAS BEEN ADMITTED DOES NOT MEAN THAT THE ADDITIONAL EVIDENC E HAS NOT BEEN ITA-1033/D/2012 & CO-105/D/2012 4 ADMITTED BY HIM. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT(A) SHOULD BE SUSTAINED. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE US. RU LE 46A OF THE INCOME-TAX RULES, 1962 READS AS UNDER:- 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE DEPUTY COMMISSIONER (APPEALS) OR , AS THE CASE MAY BE, THE COMMISSIONER (APPEALS), ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN T HE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE ASSESSING OFFICER, EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY:- (A) WHERE THE ASSESSING OFFICER HAS REFUSED TO ADMI T EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALL ED UPON TO PRODUCE BY THE ASSESSING OFFICER; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE ASSESSING OFFICER A NY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; OR (D) WHERE THE ASSESSING OFFICER HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1 ) UNLESS THE DEPUTY COMMISSIONER (APPEALS) [OR, AS TH E CASE MAY BE, THE COMMISSIONER (APPEALS)] RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3) THE DEPUTY COMMISSIONER (APPEALS) [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB- RULE (1) UNLESS THE ASSESSING OFFICER HAS BEEN ALLO WED A REASONABLE OPPORTUNITY (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS - EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR ITA-1033/D/2012 & CO-105/D/2012 5 (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PROD UCED BY THE APPELLANT. (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE DEPUTY COMMISSIONER (APPEALS) [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMINATION OF A NY WITNESS, TO ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTHER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEME NT OF THE ASSESSMENT OR PENALTY (WHETHER ON HIS OWN MOTION OR ON THE REQUEST OF THE ASSESSING OFFICER) UNDER CLAUSE (A) OF SUB-SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271.]. 7. SUB-RULE (2) OF RULE 46A CLEARLY MENTIONS THAT N O EVIDENCE SHALL BE ADMITTED UNLESS THE CIT(A) RECORDS IN WRITING TH E REASONS FOR ITS ADMISSION. ADMITTEDLY, THERE IS NO RECORDING OF RE ASONS BY THE CIT(A) FOR ADMISSION OF ADDITIONAL EVIDENCE. THEREFORE, T HIS MATTER NEEDS TO BE SET ASIDE TO THE FILE OF THE CIT(A). HOWEVER, A T THE TIME OF HEARING BEFORE US, IT WAS MENTIONED BY THE LEARNED COUNSEL THAT IF THE ORDER OF LEARNED CIT(A) IS NOT SUSTAINED AND MATTER IS REQUI RED TO BE SET ASIDE TO HIS FILE, HE REQUESTED THAT IT WOULD BE APPROPRI ATE TO SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER BECAUSE ADEQUATE OPPORTUNITY OF BEING HEARD WAS NOT ALLOWED TO THE A SSESSEE BY THE ASSESSING OFFICER. LEARNED DR SUBMITTED THAT HIS F IRST REQUEST WOULD BE TO UPHOLD THE ORDER OF THE ASSESSING OFFICER BUT IF THE MATTER IS TO BE SET ASIDE, THEN THE MATTER MAY BE SENT BACK TO T HE FILE OF THE ASSESSING OFFICER BECAUSE THEN THE ADDITIONAL EVIDE NCE CAN BE EXAMINED BY THE ASSESSING OFFICER. 8. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND THE FACTS OF THE CASE, IN OUR OPINION, IT WOULD MEET THE ENDS OF JUSTICE IF THE ORDERS OF AUTHORITIES BELOW ARE SET ASIDE WITH REFE RENCE TO ALL THE GROUNDS RAISED IN THE APPEAL FILED BY THE REVENUE A ND THE CROSS- OBJECTION OF THE ASSESSEE AND THE MATTER IS RESTORE D TO THE FILE OF THE ASSESSING OFFICER. WE ORDER ACCORDINGLY AND DIRECT THE ASSESSING ITA-1033/D/2012 & CO-105/D/2012 6 OFFICER TO ALLOW ADEQUATE OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE ALL THE EV IDENCES/EXPLANATION BEFORE THE ASSESSING OFFICER. THEREAFTER, THE ASSE SSING OFFICER WILL PASS THE ORDER ON ALL THE ISSUES RAISED IN THE REVE NUES APPEAL OR THE ASSESSEES CROSS-OBJECTION AFRESH IN ACCORDANCE WIT H LAW. 9. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE ASSESSEES CROSS-OBJECTION BOTH ARE DEEMED TO BE ALLOWED FOR S TATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2015. SD/- SD/- (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG ) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 30.01.2015 VK. COPY FORWARDED TO: - 1. REVENUE : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -1(1), GHAZIABAD. 1(1), GHAZIABAD. 1(1), GHAZIABAD. 1(1), GHAZIABAD. 2. ASSESSEE : SHRI AVNEESH KUMAR AGARWAL, SHRI AVNEESH KUMAR AGARWAL, SHRI AVNEESH KUMAR AGARWAL, SHRI AVNEESH KUMAR AGARWAL, R RR R- -- -5/115, RAJ NAGAR, 5/115, RAJ NAGAR, 5/115, RAJ NAGAR, 5/115, RAJ NAGAR, GHAZIABAD. GHAZIABAD. GHAZIABAD. GHAZIABAD. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR