Sh. Ram Parkash Rustogi, Rewari V. ITO, Rewari

ITA 1059/DEL/2014

• Counselvise Citation: 105920114 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 01-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 24-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAGAN SOOD
• Keywords: Diversion of income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 1059 /DEL/201 4 (ASSESSMENT YEAR - 200 9 - 10 ) RAM PARKASH RUSTOGI, PROP. M/S PRABHU DAYAL PREM PRAKASH, SHO P NO. - 150, NAI ANAJ MANDI, REWARI. PAN - AAUPR0694M (APPELLANT) VS ITO, WARD - 2, REWARI. (RESPONDENT ) APPELLANT BY NONE RESPONDENT BY SH.GAGAN SOOD, SR.DR ORDER BY THE PRESENT APPEAL, THE ASSESSEE ASSAILS THE CORRECTNESS OF THE ORDER DATED 13 .12.2013 OF CIT(A), ROHTAK PERTAINING TO 200 9 - 1 0 ASSESSMENT YEAR . NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING . THE APPEAL WAS PASSED OVER. D ESPITE THIS THE ASSESSEE REMAINED UNREPRESENTED. HOWEVER, AFTER CONSIDERING THE MATERIAL AVAILABLE ON RECORD AND THE SUBMISSIONS OF THE LD. SR. DR IT WAS CONSIDERED APPROPRIATE TO PROCEED WITH THE PRESENT APPEAL EX - PARTE QUA THE ASSESSEE APPELLANT ON MERIT. 2. A PERUSAL O F THE RECORD SHOWS THAT THE ASSESSEE DECLARED AN INCOME OF RS.3,16,230/ - . THE SAID RETURN AFTER BEING PROCESSED U/S 143(1) WAS SELECTED FOR SCRUTINY AFTER ISSUANCE OF NOTICE U/S 143(2) AND SUBSEQUENTLY NOTICE U/S 143(1) ALONGWITH QUESTIONNAIRE ETC. WAS ISSUED. A PERUSAL O F THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE FAILED TO PRODUCE COMPLETE BOOKS OF ACCOUNTS AND ONLY PART OF THE BOOKS WERE PRODUCED. IN VIEW THEREOF ON ACCOUNT OF DIFFERENCE S IN THE PARTIES ACCOUNTS AND THE ASS ESSEE S ACCOUNTS ADDITION OF RS.24,494/ - WAS MADE FOR THE REASONS DISCUSSED IN PARA 2 OF THE ASSESSMENT ORDER. APART FROM THIS AN ADDITION OF RS.3,52,834/ - WAS MADE ON ACCOUNT OF THE AO S CONCLUSION THAT THERE WAS DIVERSION OF INCOME OF THE SAID AMOUNT IN REGARD TO SMT. SHOBHA DATE OF HEARING 01 .0 7 .2015 DATE OF PRONOUNCEMENT 14 . 0 8 .2015 I.T.A .NO. - 1059/ DEL/2014 PAGE 2 OF 4 RUST A GI, ( WIFE OF SH.RAJKUMAR RUSTAGI ) , SMT. SHASHI RUSTAGI AND SMT. KAMLESI RUSTAGI. THE AO ALSO MADE AN ADDITION OF RS.58.480/ - ON ACCOUNT OF DIFFERENCE IN CLOSING STOCK WHEREIN THE ASSESSEE IS FOUND TO HAVE NOT FILED ON QUERY ANY DOCUMENT SO AS TO EXPLAIN WHY CLOSING STOCK OF BAJRA WAS SHOWN AT A LOWER RATE. SIMILARLY EXPENSES TO THE T UNE OF RS.1,87,725/ - WAS DISALLOWED FOR NON - PRODUCTION OF COMPLETE BILLS AND VOUCHERS . D ISALLOWANCE OF 20% OF EXPENSES WAS MADE. THE ASSESSEE S G.P. RATE WAS ALSO TINKERED WITH AND AGAINST RATE OF 1.09% IT WAS TAKEN @ 1.66% APPLYING LAST YEAR S G.P.RATE FOR THE REASONS SET OUT IN PARA 6 OF THE ASSESSMENT ORDER ADDITION OF RS.2,06,220/ - . OV ER AND ABOVE THESE THE AO MADE FURTHER ADDITION S OF RS.28,560/ - ; 710/ - ; 6415/ - ON ACCOUNT OF INTEREST FREE ADVANCES GIVEN TO FAMILY MEMBERS NAMELY SH.PARDEEP RUSTOGI AND SH.NEERU RUST O GI WHERE COPY OF THE ACCOUNTS OF THE PERSONS WERE NOT FURNISHED; AND ON ACCOUNT OF THE DIFFERENCE IN THE ACCOUNTS OF OPENING BALANCE AND DEDUCTION UNDER CHAPTER VIA RESPECTIVELY . 3. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT OPPORTUNITY WAS GIVEN TO THE ASSESSEE HOWEVER , D OCUMEN T A RY EVIDENCE IN SUPPORT OF THE CLAIMS MADE WERE NOT FIL E D. THESE ADDITIONS WERE ASSAILED IN APPEAL BEFORE THE CIT(A). A PERUSAL O F THE SAME SHOWS THAT THE LD.CIT(A) IN THE SEVEN PAGED ORDER AFTER REPRODUCING THE SUBMISSIONS OF THE ASSESSEE ON EACH OF THE ISSUES H E LD THAT THE ASSESSEE HAS NOT FI LED ANY D OCUMENTARY EVIDENCE IN SUPPORT OF ITS CLAIM AND THE ARGUMENTS ADVANCED ON FACTS NAMELY HOW THE THREE PERSONS MENTIONED IN THE ASSESSMENT ORDER WERE ACTING AS COMMISSION AGENT O F THE ASSESSE E AND THE ADDITION MADE AS A RESULT OF VARIATION IN THE GP RATE ADVANCED WERE DISMISSED HOLDING TO BE GENERAL IN NATURE. IN THE ABOVE - MENTIONED PECULIAR FACTS AND CIRCUMSTANCES WHERE ADMITTEDLY THE ADDITIONS SUSTAINED HAVE BEEN ASSAILED ON THE GROUNDS THAT DOCUMENTARY EVIDENCE ON RECORD WAS IGNORED AND ON THE GROUND THAT THE COMMISSION INCOME INFACT HAS BEEN EARNED BY THE ASSESSEE AND SOME OF THE EXPENSES PERTAINED TO RE - IMBURSEMENT OF EXPENSES INCURRED LIKE GODOWN RENT, MARKET FEES, WAGE AND THE ADHOC DISALLOWANCE OF 20% DID NOT REFER TO PAST HISTORY ETC. FURTHER SHOWS THAT APPARENTLY THE EVIDENCE WHICH THE ASSESSEE WOULD WANT TO REFER NECESSARILY WOULD BE IN ITS POSSESSION NAMELY THE DETAILS OF THE NAMES AND PARTICULARS OF PAYMENTS MADE TO THE PARTIES AFTER DEDUCTING TDS AND RE - CONCILIATION WITH M/S GUP TA TRADING COMPANY DUE TO THE DIFFERENCE IN VAT ACCOUNT AND CASH DISCOUNT. SIMILARLY FOR SMT. SHOBHA I.T.A .NO. - 1059/ DEL/2014 PAGE 3 OF 4 RUSTOGI, SHASHI RUSTOGI AND KAMLESHI RUSTOGI STATED TO BE COMMISSION AGENT AND WHILE ESTIMATING THE INCOME OF THE ASSESSEE IN THE PECULIAR FACTS, DISCUSS ION WHY THE IMPACT OF INCREASE IN SALES BY 2.35 CRORE FOR FALL IN G.P RATE IS NOT CONSIDERED APPROPRIATE AND LEGITIMATE ARE ALL FACTS IN REGARD TO WHICH EVIDENCE COULD HAVE BEEN FILED AND THE IMPUGNED ORDER ON FACTS HAS NOT TAKEN CERTAIN ARGUMENTS THOUGH BROUGHT OUT IN THE ORDER BUT NOT TAKEN INTO CONSIDERATION IN THE FINDING. ON CERTAIN ISSUES, RELIEF TO SOME EXTENT COULD HAVE BEEN GRANTED TO THE ASSESSEE NAMELY REDUCTION OF DISALLOWANCE OF EXPENSES @ 20 % AND G.P RATE COULD HAVE WARRANTED AN INTERFERE NCE ON FACTS. IT IS ALSO SEEN THAT THE ASSESSEE HAS ALSO NOT HELPED ITS CASE BY PLACING THE RELEVANT FACTS AND SUBMISSIONS ON RECORD. SINCE ON A READING OF THE ISSUES UNDER CHALLENGE AND HOW THEY HAVE BEEN CANVASSED BEFORE THE LD.CIT(A AND CONSIDERING T HE SAME HAVE BEEN MORE OR LESS UPHELD EVEN WHERE A PARTIAL RELIEF ON FACTS ON RECORD COULD HAVE BEEN GRANTED IT LEADS TO THE CONCLUSION THAT THE ORDER PASSED HAS BEEN PASSED WITH THE MINDSET THAT THE CLAIMS NECESSARILY HAD TO BE REJECTED. THE FACT THAT T HE REPRESENTATION ON THE PART OF THE ASSESSEE WAS ALSO NOT COMPLETE AND PROPER HAS ALREADY BEEN TAKEN NOTE OF AS THE EVIDENCES UP ON WHICH RELIANCE COULD HAVE BEEN PLACED AND WERE EVIDENCES WHICH THE ASSESSEE OUGHT TO HAVE IN ITS POSSESSION H A S N E V E R B E E N B R O U G H T O N R E C O R D IS ALSO COMING O UT FROM THE ORDERS. IN VIEW OF THE SE PECULIAR FACTS AND CIRCUMSTANCES CONSIDERING THE OVERALL FACTUAL BACKGROUND IN THE INTERESTS OF SUBSTANTIAL JUSTICE THE IMPUGNED ORDER IS SET ASIDE. THE ISSUE IS RESTORED BACK TO THE FILE OF THE LD. CIT(A GRANTING LIBERTY TO THE ASSESSEE TO FILE FRESH EV IDENCES, IF ANY, IN SUPPORT OF ITS CLAIM. THE LD.CIT(A), THEREAFTER SHALL PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT IT IS HOPED THAT THE OPPORTUNITY SO PROVIDED IS NOT ABUSED BY THE ASSESSEE AND A PROPER COMPLIANCE IS MADE BEFORE THE CIT(A). 4 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 4 T H OF AUGUST, 2015. S D / - (DIVA SINGH) JUDICIAL MEMBER DATED: 1 4 /08 /2015 * AMIT KUMAR * I.T.A .NO. - 1059/ DEL/2014 PAGE 4 OF 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI