M/s Camsoft India Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 1070/DEL/2013

• Counselvise Citation: 107020114 RSA 2013
• Duration Of Justice: 2 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 30-03-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 25-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK WADEKAR
• Assessee Lawyers: V RAJ KUMAR
• Keywords: Opportunity of being heard
• Section: 145; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO S . - 1070 & 1074 /DEL/201 3 (ASSESSMENT YEAR S - 2001 - 02 & 200 6 - 0 7 ) CAMSOFT INDIA PVT. LTD., H - 108, IIND FLOOR, NEW ASIATIC BLDG., CONNAGUHT PLACE, NEW DELHI - 110001 PAN - AACCC0334L (APPELLANT) VS ACIT, CENTRAL CIRCLE - 9, NEW DELHI (RESPONDENT) APPELLANT BY SH. V. RAJ KUMAR, ADV. RESPONDENT BY SH.VIVEK WADEKAR, CIT DR ORDER PER DIVA SINGH, JM THE S E ARE TWO APPEAL S FILED BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER DATED 09 . 11 .201 2 OF CIT(A) - XX II, NEW DELHI PERTAINING TO 2001 - 02 & 200 6 - 0 7 ASSESSMENT YEAR S ON THE FOLLOWING G ROUND : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, ID. CIT (A) - XXXII WAS INCORRECT AND UNJUSTIFIED IN ACCEPTING THE ASSESSMENT OF ASSESSEE AT INCOME OF RS.22,11,040/ - AS AGAINST RETURNED INCOME OF RS. 38,554/ - 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT (A) - XXXII WAS INCORRECT AND UNJUSTIFIED BY CONFIRMING THE ORDER OF LD. AO OF APPLYING THE PROVISION OF SEC TION 145(3) EVEN THOUGH AGREEING AND ADMITTING THAT NO BOOKS OF ACCOUNTS WERE PRODUCED BEFORE HIM DURING ASSESSMENT PROCEEDINGS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT (A) - XXXII WAS INCORRECT AND UNJUSTIFIED BY CONFIR MING THE ORDER OF LD. AO OF ADOPTING THE FIGURES OF RS.10,86,24,006/ - FROM THE BALANCE SHEET EVEN AFTER ADMITTING AND AGREEING THAT THE BOOKS OF ACCOUNTS HAVE NOT BEEN PRODUCED AND EVEN IF PRODUCED, THESE ARE INCORRECT AND INCOMPLETE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT (A) - XXXII WAS INCORRECT AND UNJUSTIFIED BY CONFIRMING THE ORDER OF LD. AO OF APPLYING THE PROVISION OF SECTION 145(3) SINCE THE SAME CANNOT BE APPLIED IN THE ABSENCE OF THE BOOKS OF ACCOUNTS. FOR SUC H PROVISION INCORRECTNESS AND INCOMPLETENESS OF THE BOOKS OF ACCOUNT HAS TO BE ESTABLISHED. DATE OF HEARING 31 .03.2015 DATE OF PRONOUNCEMENT 20 .0 4 .2015 I.T.A .NO S . - 1070 & 1074 /DEL/201 3 2 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT (A) - XXXII WAS INCORRECT AND UNJUSTIFIED BY CONFIRMING THE ORDER OF LD. AO OF NOT COMPL ETING THE ASSESSMENT U/S 144 AFTER APPLYING THE PROVISION OF SECTION 145 (3) WHICH IS NECESSARY AS PER THE PROVISION ITSELF. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT (A) - XXXII WAS INCORRECT AND UNJUSTIFIED IN ESTIMATING THE INCOME @ 2% ON SOME ENTRIES WITHOUT THEIR BEING ANY BASIS EVIDENCE AND MATERIAL. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) - XXXII WAS INCORRECT AND UNJUSTIFIED IN NOT ALLOWING THE VARIOUS EXPENSES CLAIMED IN THE PROFIT & LOSS ACCOUNT. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) - XXXII WAS INCORRECT AND UNJUSTIFIED IN RELYING ON PART OF THE FIGURES OF THE FINANCIAL ACCOUNTS AND IGNORING THE OTHER PART OF THE SAME FINANCIAL ACCOUNT S SUCH AS EXPENSES, NEITHER DISALLOWED NOR FOUND TO BE INCORRECT OR NOT GENUINE. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) - XXXII WAS INCORRECT AND UNJUSTIFIED IN NOT ESTIMATING THE INCOME OF THE ASSESSEE COMPANY ON TH E BASIS OF PAST RECORD WHICH IS NECESSARY FOR ESTIMATING THE INCOME U/S 144. 10. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW EVEN ON ALTERNATIVE BASIS AFTER CONSIDERING THE EXPENSES AT LEAST THE CIT(A) - XXXII SHOULD HAVE ASSESSED THE ASSES SEE AT NIL INCOME. 11. ANY OTHER GROUND WHICH ASSESSEE WILL RAISE AT THE TIME OF FILLING PAPER BOOK WITH THE OFFICE OF CIT (A). 2. AT THE TIME OF HEARING AN ADJOURNMENT PETITION WAS MOVED ON BEHALF OF THE ASSESSEE . LD. AR PRESENT IN SUPPORT OF THE PETI TION S TAT ED THAT THE I SSUE IS FULLY COVERED IN ASSESSEE S FAVOUR VIDE ORDER DATED 28.01.2015 IN ITA NO. - 3046 & OTHERS/DEL/2012 IN THE CASE OF ERA ADVERTISING & MARKETING LTD. VS ACIT AND ORDER DATED 14.02.2014 IN ITA NO.3213 & OTHERS/DEL/2014 IN THE CASE OF M/S KONICHIVA BUILDERS PVT. LTD. HOWEVER AN ADJOURNMENT WAS SOUGHT ON THE GROUND THAT THE ARGUING COUNSEL WAS NOT AVAILABLE. THE HEARING WAS ADJOURNED TO THE NEXT DATE IN ORDER TO AFFORD REVENUE TO GO THROUGH THE COPIES OF THE ORDERS FILED WHICH WERE RELIED UPON BY THE ASSESSEE. 2.1. ON THE NEXT DATE LD. AR RELIED UPON THE ORDERS OF CO - ORDINATE BENCHES ON SIMILAR FACTS AND STATED TH A T THE ISSUE QUA GROUND NO. - 7 IS COVERED IN HIS FAV O UR AND THE OTHER GROUNDS ARE NOT BEING PRESSED . 3. THE LD. CIT DR, MR. VIVEK WADEKAR REFERRING TO PARA 3.1 AND 4 OF THE IMPUGNED ORDER STATED THAT THESE APPEALS ARE RELATABLE TO THE 33 COMPANIES CONTROLLED AND OPERATED BY SH. S. K. GUPTA WH O WAS THE SUBJECTED TO SEARCH & SEIZURE OPERAT ION U/S 132 ON 12.12.2006 AND THE TRIBUNAL HAS CONSIDERED THE ISSUES IN THE DECISIONS CITED. THE ISSUES RELATABLE TO ALL THE OTHER GROUNDS EXCEPT I.T.A .NO S . - 1070 & 1074 /DEL/201 3 3 GROUND NO. - 7 ARE CONCLUDED AGAINST THE ASSESSEE ACCORDINGLY THE ISSUE IS COVERED BY EARLIER DECISIONS. SH. S. K. GUPTA IT WAS SUBMITTED HAD ACCEPTED THAT HE HAS BEEN ENGAGED PROVIDING ACCOMMODATION ENTRY BUSINESS THROUGH THESE COMPANIES. ADDRESSING GROUND NO. - 7, IT WAS HIS SUBMISSION HAT NO DOUBT FOLLOWING THE JUDICIAL PRECEDENT THE ISSUE HAS BEEN RESTORED BY THE CO - ORDINATE BENCHES F OR CONSIDERING THE ALLOWABILITY OF ESTIMATED EXPENSES HOWEVER THE GROUNDS REALITIES MAY BE TAKEN INTO CONSIDERATION AS IN THE NATURE OF ASSESSEE S BUSINESS THE ADMINISTRATIVE EXPENSES AFTER THE INITIAL 3 - 4 COMPANIES WOULD VIRTUALLY WORK OUT TO NIL AND CONS EQUENTLY THE P ROPORTIONATE COST TO THE ASSESSEE SHOULD GO DOWN. 4 . THE LD. AR APPEARING FOR THE ASSESSEE RELIED UPON THE DIRECTIONS GIVEN IN THE EARLIER ORDERS. 5 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE F ACE OF THE ADMITT ED FACTS WHEREIN THE ASSESSEE IS ONE OF THE GROUP COMPANIES FLOATED BY SH. S. K. GUPTA, CA WHEREIN HE HAS ACCEPTED THAT ACCOMMODATION ENTR IES HAS BEEN PROVIDED FOLLOWING THE JUDICIAL PRECEDENT, W E DEEM IT APPROPRIATE TO RESTORE THE ISSUE B ACK TO THE AO WITH THE DIRECTION TO ESTIMATE THE REASONABLE EXPENSES KEEPING THE GROUND REALITIES IN MIND . NEEDLESS TO SAY THAT THE ASSESSEE SHALL BE AFFORDED A REASONABLE OPPORTUNITY OF BEING HEARD. WHILE COMING TO THE SAID CONCLUSION WE HAVE TAKEN THE FACTS AVAILABLE ON RECORD INTO CONSIDERATION AS WELL AS THE ORDERS OF THE CO - ORDINATE BENCH . FOR READY - REFERENCE, WE REPRODUCE FROM THE ORDER DATED 28.01.2015 IN ERA ADVERTISING & MARKETING LTD. IN ITA NO. - 3046 - 3049/DEL/2012 WHERE ADDRESSING THE IDENTICA L GROUND FOLLOWING DIRECTION WAS GIVEN : - 9. IN THE AFORE - MENTIONED PECULIAR FACTS AND CIRCUMSTANCES ADDRESSING THE LIMITED PLEA OF THE ASSESSEE IN THE LIGHT OF THE ARGUMENTS ADVANCED BY THE PARTIES BEFORE US WHEREIN LD. AR HAS PLACED RELIANCE UPON THE O RDER OF THE DIVISION BENCH IN THE CASE OF KONICHIVA BUILDERS LTD. AND THE LD. CIT DR THOUGH NOT OPPOSING IT HAS INVITED OUR ATTENTION TO THE ORDER OF THE SMC BENCH IN THE CASE OF CENTENARY SOFTWARE PVT. LTD. WE FIND ON CONSIDERING THE ORDER IN CENTENARY S OFTWARE PVT. LTD. RELIED UPON BY THE REVENUE THAT THE LD. AR BEFORE THE SMC BENCH HAD NOT RAISED ANY PLEA IN REGARD TO ALLOWANCE OF EXPENDITURE AND HAD INSTEAD CANVASSED BEFORE THE SMC BENCH THAT AS PER JUDICIAL PRECEDENT THE ACCEPTED INCOME SHOULD BE BE TWEEN 0.25% TO 0.50%. THIS ARGUMENT IT IS SEEN WAS NOT ACCEPTED. THE CLAIM FOR ALLOWABILITY OF ESTIMATING THE EXPENSES IT IS SEEN WAS NOT CANVASSED BEFORE THE SMC BENCH. ACCORDINGLY THE SAID ORDER IN THE CIRCUMSTANCES HAD NO OCCASION TO CONSIDER THE PLEA. IN THE FACTS BEFORE US, LD. AR HAS DRAWN SPECIFIC ATTENTION TO QUESTION NO. - 2 WHICH HAS BEEN EXTRACTED IN I.T.A .NO S . - 1070 & 1074 /DEL/201 3 4 THE CASE OF KONICHIVA BUILDERS LTD. ALSO IN PARA 8 OF THEIR ORDER WHICH IS ALSO CONSIDERED AT PAGE 18 OF THE ASSESSMENT ORDER IN THE YEAR UN DER CONSIDERATION. IN VIEW OF THE ABOVE THERE BEING NO CHANGE IN FACTS AND CIRCUMSTANCES OF THESE CASES RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN KONICHIVA BUILDERS LTD. THE ISSUE OF ALLOWABILITY OF EXPENSES IN SIMILAR LINES IS RESTORED TO THE AO HEREIN ALSO REQUIRING THE ASSESSEE TO PROVE ITS CLAIM WITH COGENT MATERIAL THE LIMITED PLEA OF THE ASSESSEE IS ACCEPTED. THE OTHER GROUNDS RAISED WERE NOT ARGUED AS SUCH THE SAME ARE DISMISSED FOLLOWING THE JUDICIAL PRECEDENT IN KONICHIVA BUILDERS LT D. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 5.1 . ACCORDINGLY FOLLOWING THE JUDICIAL PRECEDENT OF THE CO - ORDINATE BENCH IN THE CASE OF M/S KONICHIVA BUILDERS PVT. LTD. AND ERA ADVERTISING & MARKETING LTD. ORDER DATED 21.01.2015 IN ITA NO. - 3046 & OTHERS/DEL/2012 , T HE ISSUE OF ALLOWABILITY OF EXPENSES IS RESTORED BACK TO THE AO REQUIRING THE ASSESSEE TO PROVE ITS CLAIM WITH COGENT MATERIAL. ACCORDINGLY IN VIEW OF THE FACT THAT THE ONLY PLEA ADVANCED BY THE ASSESSEE IN THE COURSE OF THE PRESENT HEARING S, ADDRESSED GROUND NO. - 7 . THE ADDITIONS MADE IN THE IMPUGNED ORDER SUBJECT TO THE ABOVE DIRECTION IS UPHELD ALLOWING THE LIMITED PLEA OF THE ASSESSEE CANVASSED VIDE GROUND NO. - 7 . THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 5. 2. SINCE THE FACTS AND CIRCUMSTANCES IN BOTH THE YEARS ARE STATED TO BE IDENTICAL, THE SAME IS ALSO RESTORED WI TH IDENTICAL DIRECTIONS. 6. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATIS TICAL PURPOSES. THE SAID ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20 TH APRIL , 2015. SD/ - SD/ - (T.S.KAPOOR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 20 TH APRIL , 2015 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI