ITO, Mohali V. Shri Bhupinder Singh, Kharar

ITA 1104/CHANDI/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51434 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 23-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Unexplained investment; Principle of natural justice; Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 1104/CHD/2010 ASSESSMENT YEAR: 2006-07 THE ITO, VS. SHRI BHUPINDER SINGH, WARD 6(2), M/S SHIVALIK ENGINEERS & CONTRACTORS, MOHALI KHARAR (PUNJAB) PAN NO. AKRKPS1633E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K.SAINI RESPONDENT BY : NONE DATE OF HEARING : 24.8.2011 DATE OF PRONOUNCEMENT : 26.08.2011 ORDER PER SUSHMA CHOWLA, JM THE APPEAL BY THE REVENUE IS AGAINST THE ORDER OF C IT(A) CHANDIGARH DATED 31.5.2010 RELATING TO ASSESSMENT Y EAR 2006-07 AGAINST THE ORDER PASSED UNDER SECTION 144 OF THE I.T. ACT, 1961. 2. DESPITE SERVICE OF NOTICE NONE APPEARED ON BEHAL F OF THE ASSESSEE. THE APPEAL WAS FIXED FOR HEARING ON 27.10.2010 ON W HICH DATE IT WAS ADJOURNED TO 16.12.2010 AT THE REQUEST OF THE ASSES SEE. THE BENCH DID NOT FUNCTION ON 16.12.2010 AND THE APPEAL THEREAFTER WA S FIXED FOR HEARING ON 27.8.2011. NONE WAS PRESENT ON BEHALF OF THE ASSES SEE AND THEREAFTER ANOTHER NOTICE WAS ISSUED TO THE ASSESSEE BY RPAD F OR APPEARANCE ON 24.8.2011. ON THE APPOINTED DATE OF HEARING NEITHE R THE ASSESSEE PUT IN AN 2 APPEARANCE NOR ANY APPLICATION FOR ADJOURNMENT WAS MOVED. WE PROCEED TO DECIDE THE PRESENT APPEAL AFTER HEARING THE LD. DR FOR THE REVENUE. 3. THE GROUND NO.1 RAISED BY THE REVENUE IS GENERAL AND HENCE THE SAME IS DISMISSED. 4. THE REVENUE HAS RAISED GROUND NO.2 OF THE APPEAL AGAINST THE DELETION OF ADDITION OF RS. 7,75,000/- MADE ON ACCO UNT OF UNEXPLAINED INVESTMENT MADE IN THE PURCHASE OF LAND. THE GROUND NOS. 3 & 4 RAISED BY THE REVENUE ARE AS UNDER:- 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) DID NOT ALLOW SUFFICIENT AND PROPER OPPORTUNITY TO THE ASSESSING OFFICER, REMAND REPORT WAS CALLED FOR VIDE CIT(A) LETTER RECEIVED ON 24.5.2010 AND ORDER WAS PASSED ON 31.5.2010. AFTER CALLING FOR REMAND REPORT OF ASSESSING OFFICER, THE LD. CIT(A) DID NOT CONSIDER THE REMAND REPORT WHILE DECIDING THE APPEAL. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDENCE WHICH WAS FURNISHED BY THE ASSESSEE UNDER RULE 46A OF THE INCOME TAX RULES WHEREAS THE ASSESSING OFFICER HAD REPORTED THAT THE EVIDENCE WAS INADMISSIBLE . 5. FROM THE PERUSAL OF RECORD WE FIND THAT THE ASSE SSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNT BEFORE THE ASSESSING O FFICER AND THEREAFTER ALSO FAILED TO APPEAR ON VARIOUS DATES OF HEARING. THE ASSESSMENT IN THE CASE WAS COMPLETED U/S 144 OF THE INCOME TAX ACT. THE CIT(A) HAS UPHELD THE PASSING OF ORDER U/S 144 OF THE ACT. THE CIT(A) HAS ALSO NOTED THAT DESPITE SEVERAL OPPORTUNITIES AFFORDED TO THE ASSESSEE, THE ASSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNT DURING T HE ASSESSMENT PROCEEDINGS. EVEN BEFORE CIT(A), ONLY CASH BOOK WA S PRODUCED AND NO SEPARATE DOCUMENTS IN THE FORM OF VOUCHERS / BILLS WERE PRODUCED. THE 3 FINDINGS OF THE CIT(A) ARE AS PER PARA 10(I) AT P AGE 5 OF THE APPELLATE ORDER. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT HAD APPLIED GP RATE OF 10% ON CONTRACT RECEIPTS AND THE CIT(A) UPHELD THE ABOVE SAID ADDITION MADE BY THE ASSESSING OFFICER T HAT IN THE ABSENCE OF THE BOOKS OF ACCOUNT BEING PRODUCED, THE ASSESSING OFFICER COULD NOT EXAMINE THE EXPENSES AND HAD NO OPTION BUT TO DISAL LOW PART OF THE EXPENSES. THE SECOND ADDITION MADE BY THE ASSESSIN G OFFICER WAS IN CONNECTION WITH THE INVESTMENT SHOWN IN THE BOOKS O F ACCOUNT FOR PURCHASE OF LAND AT KHARAR & VILLAGE KANSAL. THE AS SESSING OFFICER NOTED VIDE PARA 6 OF THE ASSESSMENT ORDER THAT IN THE BAL ANCE SHEET THE ASSESSEE HAD SHOWN ADDITION OF RS. 6,10,500/- AND RS. 1,65,0 00/- ON ACCOUNT OF PURCHASE OF LAND AT KHARAR AND VILLAGE KANSAL. THE SAID INVESTMENT WAS STATED TO BE MADE OUT OF BOOKS OF ACCOUNT AND SINC E NO BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE ASSESSING OFFICER NOR ANY OTHER DOCUMENT WAS FILED TO PROVE THE SOURCE OF INVESTMENT IN THE SAID PROPERTIES, AND IN THE ABSENCE OF NON VERIFICATION OF THE WITHDRAWALS OF P AYMENTS FROM THE CASH BOOK, THE SAID INVESTMENT WAS ASSESSED AS INCOME FR OM UNDISCLOSED SOURCES AND ADDITION OF RS. 7,75,000/- WAS MADE. B EFORE THE CIT(A) THE ASSESSEE CLAIMED THAT THE SAID INVESTMENT WAS MADE OUT OF ITS BOOKS OF ACCOUNT AND COPY OF THE ACCOUNT OF THE SAME ALONG W ITH SOURCES WAS DULY SUBMITTED DURING THE ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER. THE ASSESSEE FURTHER PRODUCED THE CASH BO OK IN ORIGINAL BEFORE THE CIT(A) FOR THE ABOVE SAID TRANSACTIONS. THE CIT(A) OBSERVED AS UNDER:- VIDE THIS OFFICE LETTER NO. 124 DATED 19.4.2010, T HE DOCUMENTS LIKE LEDGER CASH BOOK, FOR EXPLAINING INVESTMENTS, WERE SENT TO THE ASSESSING OFFICER FOR EXAMINATION AND REPORT UNDER RULE 46A. SINCE NOT EVEN AN INTERIM REPORT HAS BEEN RECEIVED TILL DATE, THE DECISION IS BEING TAKEN IN THE ABSENCE OF THAT. 4 6. THE CIT(A) DELETED THE ADDITION VIDE PARA 14 BY HOLDING THAT BOTH THE INVESTMENTS WERE MADE OUT OF BOOKS OF ACCOUNT A ND OUT OF AVAILABLE CASH IN HAND. THE REVENUE IS IN APPEAL AGAINST THE AFORESAID ADMISSION OF THE ADDITIONAL EVIDENCE IN VIOLATION OF THE PROVISI ONS OF RULE 46A OF THE I.T. RULES. 7. UNDER THE PROVISIONS OF RULE 46A OF THE I.T. RUL ES, THE ASSESSEE IS ENTITLED TO PRODUCE ALL SUCH ADDITIONAL EVIDENCES, WHICH WAS NOT PRODUCED BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CIRCUMSTANCES ENSHRINED IN SUB CLAUSE (A) TO (D) UNDER RULE 46A ( 1) OF THE I.T. RULES. THE ADDITIONAL EVIDENCE CAN BE FURNISHED BEFORE THE CIT(A) WHERE (A) THE ASSESSING OFFICER HAD REFUSED TO ADMIT THE EVIDENCE , OR (B) WHERE THE ASSESSEE WAS PREVENTED BY A SUFFICIENT CASE FROM PR ODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSIN G OFFICER; OR C) WHERE THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUS E FROM PRODUCING ANY EVIDENCE BEFORE THE ASSESSING OFFICER, WHICH WAS RE LEVANT TO ANY GROUND OF APPEAL; OR D) WHERE THE ASSESSING OFFICER HAS M ADE THE ORDER WITHOUT GIVING A SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE REPRESENTING TO ANY GROUND OF APPEAL. UNDER RULE 46A(2) OF THE I.T. RULES, IT IS PROVIDED THAT NO EVIDENCE SHALL BE ADM ITTED UNDER SUB RULE (1) UNLESS THE CIT(A) RECORDS IN WRITING THE REASONS FO R ITS ADMISSION AND UNDER SUB RULE (3), THE CIT(A) SHALL NOT TAKE INTO RECORD ANY EVIDENCE ADDUCED UNDER SUB RULE (1) UNLESS THE ASSESSING OFF ICER HAS BEEN ALLOWED A REASONABLE OPPORTUNITY TO EXAMINE THE SAID EVIDEN CE OR DOCUMENT OR CROSS EXAMINE THE WITNESS PRODUCED BY THE ASSESSEE OR PRODUCE ANY EVIDENCE/DOCUMENT/WITNESS IN REBUTTAL OF THE ADDITI ONAL EVIDENCE PRODUCED BY THE ASSESSEE. UNDER SUB RULE (4), IT I S PROVIDED THAT THE 5 CIT(A) IS NOT EMPOWERED TO DIRECT THE ASSESSEE FOR PRODUCTION OF ANY DOCUMENT OR OF ANY WITNESS TO ENABLE HIM TO DISPOSE OF THE APPEAL. 8. THE PROCEDURE FOR THE ADMISSION OF ADDITIONAL EV IDENCE IS PRESCRIBED IN THE ACT AND THE ASSESSEE IN CASE WANT S TO RELY ON ANY EVIDENCE WHICH IS NOT FURNISHED BEFORE THE ASSESSIN G OFFICER, AND IS BEING FURNISHED BEFORE THE CIT(A) FOR ADJUDICATION OF THE ISSUE RAISED, AN APPLICATION FOR THE SAME IS TO BE MOVED FOR ITS ADM ISSION AND UNDER RULE 46A OF INCOME-TAX RULES, THE CIT(A) AFTER CONFRONTI NG THE SAME TO THE ASSESSING OFFICER HAS TO DECIDE WHETHER THE SAME ME RITS TO BE ADMITTED AND THEREAFTER DECIDE THE ISSUE ON ITS MERITS. 9. THE CIT(A) ITSELF IN PARA 10.1 NOTES THE ASSESSE E TO HAVE ONLY PRODUCED CASH BOOK BEFORE IT WITHOUT ANY SUPPORTING DOCUMENTS IN THE FORM OF VOUCHERS AND BILLS WHILE DECIDING THE ESTIM ATION OF INCOME AND ON THE OTHER HAND HAS ACCEPTED THE PLEA OF THE ASSESS EE IN RESPECT OF THE ADDITION MADE IN THE PURCHASE OF PLOTS DURING THE YEAR UNDER CONSIDERATION WITHOUT EVEN WAITING FOR THE REMAND R EPORT OF THE ASSESSING OFFICER. THE OFFICE LETTER WAS ISSUED BY THE CIT( A) ON 19.5.2010 AND THE APPELLATE ORDER HAS BEEN PASSED ON 31.5.2010. WE A RE OF THE VIEW THAT THE CIT(A) HAS CONTRAVENED THE PROVISIONS OF ACT FOR TH E ADMISSION OF THE ADDITIONAL EVIDENCE AND IN THE INTEREST OF NATURAL JUSTICE, WE DEEM IT FIT TO RESTORE THE ISSUE BACK TO THE FILE OF CIT(A) TO CON FRONT ADDITIONAL EVIDENCE TO THE ASSESSING OFFICER AND AFTER SEEKING REMAND REPORT IN THIS CONNECTION DECIDE THE ISSUE OF BOTH THE ADMISSION O F ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND ALSO MERIT OF THE ADDITIO N. A REASONABLE OPPORTUNITY OF HEARING SHALL BE AFFORDED TO THE ASS ESSEE IN THIS REGARD. THE 6 GROUND NOS. 3 & 4 RAISED BY THE REVENUE ARE THUS AL LOWED FOR STATISTICAL PURPOSES. 10. IN VIEW OF OUR REMITTING THE ISSUE BACK TO THE FILE OF CIT(A), WE ARE NOT ADDRESSING THE ISSUE ON THE MERITS OF THE ADDIT ION. 11. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF AUGUST, 2011. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26 TH AUGUST, 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH