M/s Kartikay Builders, New Delhi V. ITO, New Delhi

ITA 1146/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58496 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 03-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: US AGGARWAL
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.D. RANJAN ITA NO. 1146/DEL/2011 ASSESSMENT YEAR: 2007-08 KARTIKAY BUILDERS, VS. INCOME-TAX OFFICER, 170E, W-5, WARD 38(2), LANE WESTERN AVENUE, SAINIK FARM, NEW DELHI. NEW DELHI. (PAN: AAEFK5701C) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI US AGGAR WAL, ADV. RESPONDENT BY: MS. Y. KAKKAR, SR.DR DATE OF HEARING : 04.01.2012 DATE OF PRONOUNCEMENT : 13 .01.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(APPEALS) DATED 16.11.2010 PASSED FOR ASSESSMENT YEAR 2007-08. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.10,58,439. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FIRM AT THE RELEVANT TIME WAS ENGAGED IN THE CONSTRUCTION OF BU ILDING AND DEVELOPMENT OF REAL ESTATES. IT HAS FILED ITS RETURN OF INCOME ON 27.10.2007 DECLARING AN INCOME OF RS.2,92,283. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY 2 ASSESSMENT AND A NOTICE UNDER SEC. 143(2) DATED 26. 9.2008 WAS ISSUED AND SERVED UPON THE ASSESSEE. ON SCRUTINY OF THE ACCOUN TS, IT REVEALED TO THE ASSESSING OFFICER THAT IT HAS DEBITED A SUM OF RS.7 5,61,114 TOWARDS PURCHASE OF RAW-MATERIAL AND EXPENSES IN THE P & L ACCOUNT. ASSESSING OFFICER HAS DIRECTED THE ASSESSEE TO PRODUCE BILLS AND VOUCHERS FOR VERIFICATION. AT THE FIRST INSTANCE, ASSESSEE SUBMI TTED THAT ITS BILLS AND VOUCHERS HAVE BEEN LOST AND AN FIR HAS BEEN LODGED. HOWEVER, ACCORDING TO THE ASSESSEE, IT HAS PREPARED THE DUPLICATE BILLS F ROM THE PARTIES, FROM WHOM PURCHASES WERE MADE AND PRODUCED BEFORE THE ASSESSI NG OFFICER. ASSESSING OFFICER HAS OBSERVED THAT A DIFFERENCE OF RS.10,58, 439 COULD NOT BE EXPLAINED BY THE ASSESSEE AND HE MADE THE ADDITION. 3. APPEAL TO THE LEARNED CIT(APPEALS) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED B EFORE US THAT IT HAS FILED A LETTER DATED 29.12.2009 BEFORE THE A.O., WH EREIN THE ASSESSEE HAS GIVEN BIFURCATION OF THE PURCHASES AS WELL AS OTHER EXPENSES. THE LEARNED COUNSEL FOR THE ASSESSEE EMPHASIZED THAT THIS LETTE R WAS NOT CONSIDERED BY THE ASSESSING OFFICER, RS.64,79,676 IS THE AMOUNT ATTRIBUTABLE TO PURCHASES AND THE REST RELATES TO THE EXPENSES. ASSESSING OFF ICER HAS ACCEPTED THE 3 PURCHASES BUT FAILED TO GIVE CREDIT OF THE EXPENSES INCURRED BY THE ASSESSEE. ON THE OTHER HAND, LEARNED DR SUBMITTED THAT IT WAS THE DUTY OF THE ASSESSEE TO EXPLAIN THE AMOUNT OF RS.75,61,114 WHICH INCLUDE S PURCHASE OF RAW- MATERIAL OF EXPENSES. ASSESSING OFFICER HAS MADE AN ANALYSIS OF TOTAL AMOUNT AND THEREAFTER CARVED OUT A DIFFERENCE BETWE EN THE TOTAL AMOUNT DEBITED BY THE ASSESSEE AND THE AMOUNT FOR WHICH EV IDENCE WAS PRODUCED BY THE ASSESSEE. SHE POINTED OUT THAT FOR A SUM OF RS. 10,58,439, ASSESSEE COULD NOT FILE SUPPORTING EVIDENCE AND, THEREFORE, ASSESS ING OFFICER HAS MADE THE ADDITION. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. ACCORDING TO THE ASSESSEE, IT HAS GIVEN FOLLOWING BIFURCATION TO THE ASSESSING OFFICER: THE DETAIL OF MATERIAL & EXPENSES ARE AS UNDER: 1. MATERIAL PURCHASED 64,79,676.00 2. WAGES 2,42,500.00 3. ELECTRICITY CHARGES PAID TO OAK 2,65,982. 00 4. HOUSE TAX OF BUILDING SOLD 4,00,456.00 5. ADVERTISEMENT 57,000.00 6. FITTING INSTALLED IN PROPERTY SOLD 1,15,500. 00 TOTAL: 75,61,114.00 4 6. THERE IS NO MENTION OF THESE DETAILS IN THE ASSE SSMENT ORDER. IN OUR OPINION, WHEN ASSESSING OFFICER HAS RECORDED A FIND ING THEN ASSESSEE OUGHT TO HAVE REBUTTED THAT FINDINGS BEFORE THE LEARNED F IRST APPELLATE AUTHORITY EITHER IN THE STATEMENT OF FACTS OR BY SUBMITTING R ELEVANT SUBMISSIONS EXHIBITING THAT EXPLANATION SUBMITTED BY IT WAS NOT CONSIDERED BY THE ASSESSING OFFICER, BUT IT APPEARS THAT ASSESSEE FAI LED TO ADOPT THIS PROCEDURE. IN THE BIFURCATION, ONE OF THE AMOUNT IS ALLEGED T O BE A HOUSE-TAX OF BUILDING SOLD. THIS TYPE OF EXPENDITURE CAN BE VERIFIED BY C ALLING RELEVANT EVIDENCE FROM THE AUTHORITIES. BUT THE ASSESSEE HAD TO POIN T OUT THE DETAILS ABOUT THE NATURE OF SUCH EXPENDITURE. WE FIND TOTAL ABSENCE O F RHYTHMIC COHERENCE BETWEEN THE FACTS AND CONCLUSION IN THE ASSESSMENT ORDER. LEARNED ASSESSING OFFICER HAS STARTED INVESTIGATION ABOUT T HE EXPENSES DEBITED BY THE ASSESSEE BUT FAILED TO NOTE ALL NECESSARY FACTS AND HOW HE WORKED OUT THE DIFFERENCE. TAKING INTO CONSIDERATION ALL THE FACTS AND CIRCUMSTANCES, WE DEEM IT APPROPRIATE THAT ENDS OF JUSTICE WOULD MEET IF WE SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR READJUDICA TION. WE MAKE IT CLEAR THAT ONLY A LIMITED ISSUE ABOUT ALLOWANCE OR DISALLOWANC E OF RS.10,58,439 IS BEING REMITTED TO THE ASSESSING OFFICER AND HE SHAL L LOOK INTO THE BIFURCATION EXTRACTED ABOVE AND IN CASE ASSESSEE PRODUCED THE R ELEVANT EVIDENCE EXPLAINING THE TOTAL EXPENSES TO THE SATISFACTION O F THE ASSESSING OFFICER THEN 5 ASSESSING OFFICER MAY ALLOW SUCH EXPENSES IN ACCORD ANCE WITH LAW. IT IS NEEDLESS TO SAY THAT THE OBSERVATIONS MADE BY US WI LL NOT IMPAIR OR INJURE THE CASE OF A.O. OR WOULD NOT CAUSE ANY PREJUDICE TO TH E DEFENCE/EXPLANATION OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SD/- ( K.D. RANJAN ) SD/- ( RA JPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 /01/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR