ITO, New Delhi V. M/s Esteem Projects Pvt. Ltd., New Delhi

ITA 1148/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4057 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 03-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Additional evidence

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 B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI BEFORE SHRI C.L.SETHI, JM AND SHRI K. K.K. K.G.BANSAL G.BANSAL G.BANSAL G.BANSAL, AM , AM , AM , AM ITA NO. ITA NO. ITA NO. ITA NO.1148/DEL/2011 1148/DEL/2011 1148/DEL/2011 1148/DEL/2011 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2006 2006 2006 2006- -- -07 0707 07 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -11(2), 11(2), 11(2), 11(2), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S ESTEEM PROJECTS PVT.LTD., M/S ESTEEM PROJECTS PVT.LTD., M/S ESTEEM PROJECTS PVT.LTD., M/S ESTEEM PROJECTS PVT.LTD., 202, 203, P 202, 203, P 202, 203, P 202, 203, PRAKASH TRADE CENTRE, RAKASH TRADE CENTRE, RAKASH TRADE CENTRE, RAKASH TRADE CENTRE, B BB B- -- -30, SUBHASH CHOWK, 30, SUBHASH CHOWK, 30, SUBHASH CHOWK, 30, SUBHASH CHOWK, LAXMI NAGAR, LAXMI NAGAR, LAXMI NAGAR, LAXMI NAGAR, DELHI DELHI DELHI DELHI 110 092. 110 092. 110 092. 110 092. PAN NO.AAACE2251Q. PAN NO.AAACE2251Q. PAN NO.AAACE2251Q. PAN NO.AAACE2251Q. (APPELLANT) (RESPONDENT) APPELLANT BY : MS.Y.KAKKAR, SR.DR RESPONDENT BY : SHRI K.SAMPATH, ADVOCATE. ORDER ORDER ORDER ORDER PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI PER C.L.SETHI, J , J, J , JM : M : M : M : IN THIS APPEAL FILED BY THE REVENUE AGAINST THE ORDE R DATED 28.11.2010 FOR THE AY 2006-07, THE REVENUE HAS DISPUT ED THE CIT(A)S ORDER IN DELETING THE FOLLOWING TWO ADDITIONS:- (I) ADDITION OF `5 LAKHS ON ACCOUNT OF TRADING RESULTS. (II) ADDITION OF `3,18,965/- U/S 68 ON ACCOUNT OF UNSECURE D LOANS FROM DIRECTORS. 2. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. 3. IN THE ASSESSMENT, THE AO MADE A LUMP SUM ADDITION OF `5 LAKHS TO THE TRADING RESULTS BY OBSERVING THAT THE ASSESSEE FAIL ED TO FURNISH THE DETAILS REQUIRED TO VERIFY THE TRADING RESULTS AND HENCE, TRADING ITA-1148/DEL/2011 2 RESULTS CANNOT BE ACCEPTED. THE AO ALSO MADE AN ADDIT ION OF `3,18,965/- BEING UNSECURED LOANS RAISED DURING THE Y EAR. 4. BEING AGGRIEVED WITH THE AOS ORDER, THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE LEARNED CIT(A). BEFORE THE LEARN ED CIT(A), THE ASSESSEE FURNISHED VARIOUS DETAILS AND EVIDENCES INCLUDING THE LIST OF SUNDRY CREDITORS ALONGWITH ADDRESSES, AND PURCHASE AND SAL ES ACCOUNT. THE LEARNED CIT(A) CALLED A REMAND REPORT FROM THE AO. IN THE REMAND REPORT, THE AO STATED THAT ADDITIONAL EVIDENCE MAY N OT BE ADMITTED AS THE CASE IS NOT COVERED BY ANY EXCEPTIONS MENTIONED IN RULE 46A OF THE IT RULES. THE ASSESSEE SUBMITTED A COUNTER REPLY TO THE REMAND REPORT VIDE REPLY DATED 25.10.2010 AND 16.11.2010. AFTER CONSIDERING THE ASSESSEES SUBMISSION, AOS REMAND REPORT AND ASSESSEES COU NTER REPLY, THE LEARNED CIT(A) DELETED THE ADDITION. IN RESPECT OF THE ADDITION IN THE TRADING RESULTS, THE LEARNED CIT(A) H AS OBSERVED THAT THE GROSS PROFIT RATE SHOWN BY THE ASSESSEE AT 37.49% IS IN THE SAME RANGE AS THAT OF AY 2004-05 AND 2005-06 AND THERE IS NO SIGN IFICANT FALL IN THE GP RATE. WITH REGARD TO ADDITION OF `3,18,965/-, T HE LEARNED CIT(A) HAS OBSERVED THAT INCREASE IN THE UNSECURED LOANS IN THE Y EAR IS DUE TO CREDIT OF DIRECTORS SALARY AND THE RENT PROVIDED TO THEM. THE LEARNED CIT(A) HAS PERUSED THE COPY OF ACCOUNT OF THE DIRECTO RS AND FOUND THAT THE INCREASE IN THE UNSECURED LOAN HAS BEEN EXPLAINED BY THE ASSESSEE. IN THE COURSE OF HEARING OF THIS APPEAL, THE L EARNED COUNSEL FOR THE ASSESSEE HAS REITERATED THE VARIOUS OBSERVATIONS AN D FINDINGS GIVEN BY THE CIT(A) IN HIS ORDER WHILE DELETING THE ADDITION. 5. ON THE OTHER HAND, LEARNED DR MERELY SUPPORTED TH E AOS ORDER. 6. IN THE COURSE OF HEARING OF THIS APPEAL, NO MATERI AL WAS BROUGHT ON RECORD TO REBUT THE FINDINGS OF LEARNED CIT(A) WH ILE DELETING THE ITA-1148/DEL/2011 3 ADDITION. WE, THEREFORE, UPHOLD THE ORDER OF LEARN ED CIT(A) AND REJECT THE GROUND TAKEN BY THE REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2011. SD/- SD/- (K.G.BANSAL (K.G.BANSAL (K.G.BANSAL (K.G.BANSAL) )) ) (C.L.SETHI (C.L.SETHI (C.L.SETHI (C.L.SETHI) )) ) ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 06.05.2011. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR