The Rohtak Coop Milk Producer Union Ltd., Rohtak V. ACIT, Rohtak

ITA 1181/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58968 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 13-03-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 16-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS REENA S PURI; C B SINGH
• Assessee Lawyers: SUDHIR K SEHGAL
• Keywords: Depreciation; Search and seizure; Additional evidence; Question of law; Bad and doubtful debts; Difference of opinion; Condonation of delay; Reason to believe; Change of opinion
• Section: 143(3); 80G; 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H DELHI BEFORE SHRI U.B.S. BEDI AND SHRI K.G. BANSAL ITA NO. 1181(DEL)/2010 ASSESSMENT YEAR: 2004-05 THE ROHTAK COOP. MILK PRODUCER ASSISTANT COMMISSIONER UNION LTD., C/O THE CHIEF EXECUTIVE VS. OF INCOME-TAX, ROHTAK OFFICER, THE ROHTAK COOP. MILK PRODUCER CIRCLE, ROHTAK. UNION LTD., MILK PLANT, ROHTAK. PAN: AABAT1503H (APPELLANT) (RESPOND ENT) APPELLANT BY : SHRI SUDHIR K. SEHGA L, C.A. RESPONDENT BY: MRS. REENA S. PURI, CIT, DR & SHRI C.B. SINGH, SR. D.R. DATE OF HEARIN G : 13.03.2012 DATE OF PRONOUN CEMENT: 23.03.2012 ORDER PER K.G. BANSAL : AM THE ASSESSEE HAS TAKEN FIVE SUBSTANTIVE GROUND S IN THIS APPEAL, WHICH READ AS UNDER:- 1. THAT THE LD. CIT(APPEALS) HAS ERRED IN LAW & FACTS IN CONFIRMING THE ISSUANCE OF NOTICE U/S 148 BY THE LD. AO. 2. THAT THE LD. CIT(APPEALS) HAS ERRED IN LAW & FACTS IN CONFIRMING THE ADDITION OF RS. 18,08,312.00 MADE BY THE LD. A O ON WRONG AND UNTENABLE GROUNDS BEING PROVISION FOR MILK CAN REP AIR. THE AMOUNT HAS ALREADY BEEN SHOWN INCOME IN THE BOOKS IN FI NANCIAL YEAR 2004-05 RELEVANT TO ASSESSMENT YEAR 2005-06. ITA NO. 1181(DEL)/2010 2 3. THAT THE LD. CIT(APPEALS) HAS ERRED IN LAW & FACTS IN CONFIRMING THE ADDITION OF RS. 62,614/- BEING PROVISION FOR B AD & DOUBTFUL DEBTS MADE BY THE LD. AO. IT IS AN OLD OUTSTANDING BA LANCE FOR THE LAST MORE THAN 10 YEARS. 4. THAT THE LD. CIT(APPEALS) HAS ERRED IN LAW & FACTS IN CONFIRMING THE ACTION OF THE LD. AO IN NOT ALLOWING THE SET OFF OF CARRIED FORWARD LOSS OF RS. 11,97,120/-. 5. THAT THE LD. CIT(APPEALS) HAS ERRED IN LAW & FACTS IN CONFIRMING THE ADDITION OF RS.5.00 LAKHS MADE BY THE LD. A O ON ACCOUNT OF GRANT-IN-AID RECEIVED BY BHIWANI BRANCH OF THE ASSESSEE. THE AMOUNT HAS ALREADY BEEN SHOWN INCOME IN THE BOO KS IN FINANCIAL YEAR 2005-06 RELEVANT TO ASSESSMENT YEAR 2006-07 . THE SIXTH GROUND IS RESIDUARY IN NATURE AND NO ADDITIONAL GROUND WAS TAKEN IN PURSUANCE OF THIS GROUND. 2. THE APPEAL IS ADMITTEDLY BARRED BY LIMITATION A ND THE DELAY IS OF 178 DAYS. AN APPLICATION DATED 09.03.2010 PRAYING FOR CONDONATION OF DELAYHAS BEEN FILED. IT IS MENTIONED THEREIN THAT THE ORDER OF THE LD. CIT(APPEALS) WAS RECEIVED ON 17.07.2009. THIS O RDER WAS HANDED OVER TO SHRI SHYAM LAL GUPTA, ADVOCATE, FOR PREPARING AND FILING APPEAL BEFORE THE TRIBUNAL. THIS ORDER WAS MISPLACED BY THE COUN SEL BECAUSE OF HIS CONTINUOUS ILL-HEALTH, THUS, THE APPEAL WAS NOT FILED BY HIM. THE ASSESSEE CAME TO KNOW ABOUT THIS OMISSION BECAUSE OF COMM UNICATION RECEIVED ITA NO. 1181(DEL)/2010 3 FROM THE A.O ABOUT CONCEALMENT PROCEEDINGS. THEREA FTER, THE ASSESSEE CONTACTED THE COUNSEL AND FOUND THAT THE APPEAL HA D NOT BEEN FILED. CONSEQUENTLY, THE ASSESSEE APPLIED FOR A COPY OF THE ORDER OF THE LD. CIT(APPEALS), WHICH WAS RECEIVED BY IT ON 19.02. 2010. THE APPEAL WAS FILED ON 16.03.2010. THUS, THE DELAY WAS ON AC COUNT OF MISPLACEMENT OF THE IMPUGNED ORDER AND IT OCCURRED ON ACCOUNT OF CONTINUOUS ILLNESS OF THE COUNSEL. THE APPLICATION IS ACCOMPANIED BY THE AF FIDAVIT OF THE COUNSEL. IT IS DEPOSED THAT HE HAS BEEN HANDLING THE TAX MATT ERS OF THE ASSESSEE FOR MANY YEARS. HE RECEIVED THE ORDER OF THE LD. CI T(APPEALS) FOR FILING FURTHER APPEAL BEFORE THE TRIBUNAL. THE ORDER WAS PLACED BY THE OFFICE STAFF IN THE WRONG FILE AND IT HAS ESCAPED HIS ATTENTION INADVERTENTLY BECAUSE OF CONTINUOUS ILLNESS. THEREFORE, THE APP EAL COULD NOT BE FILED IN TIME. THE ASSESSEE HAS ALSO FILED A CERTIFICATE FROM DR. A.K. SOOD OF DR. SOOD CLINIC, ROHTAK. IT IS MENTIONED THEREIN THA T SHRI SHYAM LAL GUPTA IS SUFFERING WITH PARKINSON DISEASE, HYPERTENSION AN D HEART DISORDER. HE HAS BEEN BED RIDDEN SINCE MAY, 2009 AND IS UNABLE TO PERFORM HIS DAILY WORK. SHRI SHYAM LAL GUPTA IS UNDER HIS TREATMENT. THE COPY OF THE PRESCRIPTION IS ALSO ENCLOSED ALONG WITH VARIOUS RECEIPTS OF P ROFESSIONAL FEES FROM HIM. THE CASE OF THE LD. COUNSEL IS THAT THE ASSESSEE SHOULD NOT SUFFER ON ACCOUNT OF OMISSION ON THE PART OF ITS COUNSEL. IN THIS CONNECTION, RELIANCE ITA NO. 1181(DEL)/2010 4 IS PLACED ON THE DECISION OF B BENCH OF CHANDI GARH TRIBUNAL IN THE CASE OF HIMACHAL PRADESH CRICKET ASSOCIATION, UNA, IN ITA NOS. 110 AND 111/CH./2004 DATED 08.09.2004, A COPY OF WHICH H AS BEEN PLACED BEFORE US. THIS CASE INVOLVES CONDONATION OF DELAY OF 524 DAYS IN FILING THE APPEAL. THE GIST OF THE DECISION IS THAT THE T ERM SUFFICIENT CAUSE IS QUITE ELASTIC SO AS TO ENABLE THE COURTS TO APPLY THE L AW IN A MEANINGFUL MANNER WHICH SUB-SERVES THE ENDS OF JUSTICE. FURTHER, A LITIGANT SHOULD NOT ORDINARILY SUFFER FOR THE MISTAKE OF THE COUNSEL . THE RELEVANT PARAGRAPH NOS. 12 AND 13 OF THIS DECISION ARE REPRODUCED BELOW:- 12. IN ADDITION TO THE AFFIDAVIT FILED BY TH E ADVOCATE, WE HAVE ALSO REFERRED TO THE VARIOUS COMMUNICATIONS FILED BY THE ASSESSEE WITH THE REVENUE AUTHORITIES. IN REGAR D TO THE REGISTRATION CERTIFICATE; THE PLEA OF THE ASSESSEE WAS THAT THE REGISTRATION OUGHT TO HAVE BEEN MADE EFFECTIVE FROM THE DATE OF CREATION OF THE TRUST. INITIALLY, THE COMMUNICATI ONS WERE ADDRESSED TO THE ASSISTANT THE COMMISSIONER OF INCO ME-TAX. IT WAS STATED BEFORE US THAT THE ENQUIRY IN REGARD TO THE REGISTRATION OF THE TRUST WAS ENTRUSTED TO THE ACIT BY THE COMMISSIONER OF INCOME-TAX AND ACCORDINGLY. THE REQ UEST WAS MADE TO THE CONCERNED OFFICER FOR CONDONATION OF TH E DELAY IN FILING OF APPLICATION U/S 12A. SUBSEQUENTLY APPLICA TION WAS ALSO FILED WITH THE COMMISSIONER OF INCOME-TAX. ALL THIS WAS DONE AT THE INSTANCE AND ADVICE OF THE ADVOCATE OF THE A SSESSEE. IN THIS CASE. THE ADVOCATE OF THE ASSESSEE SHRI V.K SA CHDEVA HAS AFFIRMED TO HAVE WRONGLY ADVISED THE ASSESSEE ABOUT THE COURSE OF ACTION TO BE TAKEN IN REGARD TO THE REGISTRATION CERTIFICATE ISSUED BY THE COMMISSIONER OF INCOME-TAX. THE BONA FIDES OF THE ASSESSEE ARE ESTABLISHED BY THE FACT THAT RIGHT FROM 30.10.2001, THE ASSESSEE HAS BEEN COMMUNICATING WIT H THE ITA NO. 1181(DEL)/2010 5 REVENUE AUTHORITIES TO GRANT REGISTRATION FROM THE DATE OF CREATION OF THE TRUST. IT IS UNDISPUTED FACT THAT T HE ASSESSEE DID NOT RECEIVE PROPER ADVICE FOR TAKING APPROPRIATE AC TION IN REGARD TO THE CONDONATION OF DELAY IN FILING OF THE APPLIC ATION FOR REGISTRATION U/S 12A. SO HOWEVER, AS POINTED EARLI ER, BONA FIDES OF THE ASSESSEE ARE ESTABLISHED FROM THE VERY FACT THAT SEVERAL COMMUNICATIONS REFERRED TO ELSEWHERE IN THIS ORDER WERE ADDRESSED TO THE REVENUE AUTHORITIES IN THIS REGARD , APPLICATION U/S 154 HAD ALSO BEEN FILED WITH THE REVENUE AUTHOR ITIES. WHETHER THERE IS ANY MERIT IN THE APPLICATION OF TH E ASSESSEE U/S 154 OR NOT, MAY NOT BE AS RELEVANT AS THE CONDUCT O F THE ASSESSEE IN PURSUING THE MATTER SERIOUSLY WITHOUT ANY LATCHES ON ITS PART. THE ASSESSEE HAD TAKEN THE ADVICE OF THE ADVOCATE. THE ADVOCATE HAD NOT GIVEN PROPER ADVICE TO THE ASS ESSEE. ONCE IT IS ESTABLISHED THAT THE ASSESSEE HAD TAKEN REASO NABLE STEPS IN PURSUING THE MATTER WITH THE AUTHORITIES AND THE AD VOCATE HAS BY WAY OF AN AFFIDAVIT ADMITTED HIS MISTAKE, THE ASSESSEE, IN OUR VIEW, SHOULD NOT SUFFER FOR THE FAULT OF HIS L EGAL ADVISOR. THIS VIEW IS SUPPORTED BY THE DECISION OF THE PUNJA B & HARYANA HIGH COURT. IN THE CASE OF MANOJ AHUJA & ANOTHER VS . INSPECTING ACIT (SUPRA) WHEREIN THEIR LORDSHIPS HEL D THAT NO LITIGANT SHOULD ORDINARILY SUFFER FOR THE MISTAKE O F THE COUNSEL. IN THE CASE OF C.G.PAUL & CO. VS. ITO (SUPRA), THE COCHIN BENCH OF THE TRIBUNAL HELD THAT THE COMMISSIONER OF INCOME- TAX SHOULD HAVE ADOPTED A LIBERAL VIEW IN THE MATTE R OF CONDONATION OF DELAY IN VIEW OF THE AFFIDAVIT OF TH E ASSESSEES CHARTERED ACCOUNTANT AS THE SAID AFFIDAVIT WAS CATE GORICAL ABOUT THE ENTRUSTMENT OF THE WORK TO HIM BY THE ASS ESSEE WITH THE PRESCRIBED TIME FOR FILING THE APPEAL AND THE CHARTERED ACCOUNTANT HAS STATED THAT THE DELAY HAD OCCURRED I N HIS OFFICE DUE TO CERTAIN PROBLEMS. SIMILAR VIEW HAS TAKEN BY THE DELHI BENCH IN THE CASE OF SUDERSHAN AUTO & GENERAL FINAN CE VS. CIT (SUPRA), WHEREIN IT WAS HELD THAT THE TAX CONS ULTANT OF ASSESSEE HAVING CONFIRMED BYWAY OF AFFIDAVIT THAT H E WAS NOT AWARE OF THE PROVISIONS OF LAW AND DID NOT ADVISE T HE ASSESSEE PROPERLY COULD NOT BE BRUSHED ASIDE. IN THE CASE O F COLLECTOR. LAND ACQUISITION VS. MST KATIJI & OTHERS (SUPRA), T HE HON'BLE SUPREME COURT HAS ALSO HELD THAT SUFFICIENT CAUSE I S ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE. ITA NO. 1181(DEL)/2010 6 13. IN THIS CASE, THE APPELLANT IS A NON-PROFIT MAKING ASSOCIATION ESTABLISHED WITH THE SOLE PURPOSE OF PR OMOTING THE GAME OF CRICKET IN HIMACHAL PRADESH. THE FUNDS ARE BEING RECEIVED FROM VARIOUS SOURCES AND SAME ARE UTILIZED FOR THE PURPOSE OF PROMOTING THE GAME OF CRICKET. IT HAS BE EN PLACED ON RECORD THAT FULL-FLEDGED MODEM CRICKET STADIUM I S ALMOST READY IN DHARAMSHALA. OUR ATTENTION WAS DRAWN TO TH E CBDT CIRCULAR. NO.395 DATED 24.9.1984 WHICH EXEMPTS THE INCOME OF THE ASSOCIATION ENGAGED IN PROMOTION OF SPORTS . TH E ASSESSEE ASSOCIATION IS ALSO REGISTERED WITH BCCI, WHICH IS THE PARENT BODY OF THE ASSOCIATION AND ALL THE CONTRIBUTIONS P ARTICULARLY BEING OF THE ASSOCIATION ARE RECEIVED FROM THE BCCI THE ASSOCIATION HAS ALSO BEEN GRANTED EXEMPTION U/S 80G OF THE INCOME-TAX ACT, 1961. THE EVIDENCE IN THIS REGARD I S PLACED ON THE PAPER BOOK. THE APPELLANT IS ALSO A SOCIETY REG ISTERED WITH THE REGISTRAR OF SOCIETIES, KANGRA. TAKING ALL THIS FACTS INTO CONSIDERATION AND IN THE LIGHT OF THE DECIDED CASES ELSEWHERE IN THIS ORDER AND IN PARTICULAR THE AFFIDAVIT OF SHRI V.K.SACHDEVA, ADVOCATE, WE ARE OF THE VIEW THAT THE ENDS OF JUSTI CE WILL BE SERVED BY CONDONING THE DELAY IN FILING OF HE APPEA L BY THE ASSESSEE. WE ACCORDINGLY, CONDONE THE DELAY OF 524 DAYS AND ENTERTAIN THE APPEAL OF THE ASSESSEE. 2.1 IN REPLY, THE LD. CIT, DR SUBMITTED THAT SH RI SHYAM LAL GUPTA NEVER APPEARED BEFORE ANY OF THE LOWER AUTHORITIE S. SHRI RAGHAV GUPTA, ADVOCATE, HAD APPEARED BEFORE THE AO. SHRI RAGHA V GUPTA ALONG WITH SHRI R.K. BHATIA ATTENDED BEFORE THE LD. CIT(APP EALS). THUS, ILLNESS OF SHRI SHYAM LAL GUPTA DOES NOT ADVANCE THE CASE O F THE ASSESSEE. THE IMPUGNED ORDER WAS ADMITTEDLY RECEIVED BY THE AS SESSEE, WHILE THE AFFIDAVIT STATES THAT SHRI SHYAM LAL GUPTA RECEI VED THE ORDER. THUS, THE ITA NO. 1181(DEL)/2010 7 ASSESSEE HAS NOT EXPLAINED THE CAUSE OF LONG DELA Y OF 178 DAYS SATISFACTORILY. IN ORDER TO SUPPORT HER CASE, RE LIANCE HAS BEEN PLACED ON THE DECISION IN THE CASE OF OFFICE OF CHIEF POST MA STER GENERAL & OTHERS VS. LIVING MEDIA INDIA LTD. & ANOTHER, 197 TAXMAN 435 (DEL) IN CIVIL APPEAL NOS. 2474 & 2475 OF 2002 DATED 24.02.2012, A CO PY OF WHICH HAS BEEN PLACED BEFORE US. 2.2 IN THE REJOINDER REPLY, THE LD. COUNSEL SU BMITTED THAT SHRI RAGHAV GUPTA IS THE SON OF SHRI SHYAM LAL GUPTA. HE IS AN JUNIOR ADVOCATE, WHO HAD BEEN LOOKING AFTER THE WORK OF HIS FATHER. HOWEVER, THE WORK OF THE ASSESSEE WAS MAINLY LOOKED AFTER BY SHRI SHYAM LA L GUPTA. 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. THE REASON ADDUCED BY THE ASSESSEE F OR DELAY IN FILING THE APPEAL IS THAT SHRI SHYAM LAL GUPTA, WHO WAS LOOKIN G AFTER THE TAX MATTERS, HAD BEEN AILING FOR SOME TIME. THIS REASON IS SUPPORTED BY THE AFFIDAVIT OF SHRI SHYAM LAL GUPTA AND OTHER DOCUMENTS FILED I N RESPECT OF HIS TREATMENT. WE HAVE ALREADY DISCUSSED THE RATIO OF THE CASE OF HIMACHAL PRADESH CRICKET ASSOCIATION (SUPRA). IN THE CAS E OF THE OFFICE OF CHIEF POST MASTER GENERAL & OTHERS (SUPRA), THERE WAS A DELAY OF 427 DAYS IN ITA NO. 1181(DEL)/2010 8 FILING APPEAL. THE LD. COUNSEL FOR THE RESPONDE NT CONTENDED THAT THERE WAS AN INORDINATE DELAY AND LOOKING TO THE CONDUCT O F THE PETITIONER, THE DELAY SHOULD NOT BE CONDONED. THE HONBLE COURT CONSID ERED THE CASE OF COLLECTOR, LAND ACQUISITION & ANOTHER VS. MST. KAT IJI & OTHERS, (1987) 2 SCC 107, G. RAMEDOWDA, MAJOR & OTHERS VS. SPECIAL LAND ACQUISITION OFFICER, (1988) 2 SCC 142, STATE OF HARYANA VS. CH ANDRA MANI & OTHERS (1996) 3 SCC 132, STATE OF UTTAR PRADESH & OTHERS VS. HARISH CHANDRA & OTHERS (1996) 9 SCC 309, NATIONAL INSURANCE CO. L TD. VS. GIGA RAM AND OTHERS (2002) 10 SCC 176 AND STATE OF NAGALAND V S. LIPOK AO AND OTHERS, (2005) 3 SCC 752. THEREAFTER, THE COU RT CONSIDERED THE AFFIDAVIT WHICH EXPLAINED THE REASONS FOR DELAY . IT IS MENTIONED THAT EVEN ACCORDING TO THE DEPONENT, THEIR COUNSEL HA D APPLIED FOR CERTIFIED COPY OF THE JUDGMENT ON 08.01.2010 AND IT WAS REC EIVED BY THE DEPARTMENT ON THE SAME DAY. THERE IS NO EXPLANAT ION FOR NOT APPLYING FOR THE CERTIFIED COPY OF THE IMPUGNED JUDGMENT ON 11.09.2009 OR AT LEAST WITHIN A REASONABLE TIME. THERE IS NO EXPLANAT ION FOR THIS OMISSION. THE OTHER DATES MENTIONED IN THE AFFIDAVIT ALSO SHOW THAT THERE WAS DELAY AT EVERY STAGE AND THE ONLY MENTION MADE IS REG ARDING THE DATES OF THE RECEIPT OF FILE AND THE DECISION TAKEN. THERE IS N O EXPLANATION AS TO WHY SUCH DELAY HAD OCCURRED. THE PERSONS CONCERNED A RE WELL AWARE OF THE ITA NO. 1181(DEL)/2010 9 ISSUES AND EXISTENCE OF THE LIMITATION. IN THE ABSENCE OF PLAUSIBLE AND ACCEPTABLE EXPLANATION, THE DELAY CANNOT BE CONDON ED MECHANICALLY JUST BECAUSE THE GOVERNMENT OR A WING OF THE GOVERNME NT IS A PARTY. ALTHOUGH WHEN THERE IS NO GROSS NEGLIGENCE OR DELIBERATE INACTION OR LACK OF BONA FIDE, A LIBERAL APPROACH HAS TO BE A DOPTED BUT THE DEPARTMENT CANNOT TAKE ADVANTAGE OF VARIOUS EARLIER DECISIO NS. THUS, THE DELAY WAS NOT CONDONED. WE ARE OF THE VIEW THAT THE FACTS OF THIS CASE ARE DISTINGUISHABLE. THE MAIN POINT OF DISTINCTION IS THAT THE OFFICE OF CHIEF POST MASTER GENERAL DID NOT FURNISH SUFFICIENT RE ASONS FOR CONDONATION OF DELAY. AS AGAINST THE AFORESAID, THE DELAY IN TH IS CASE HAS BEEN EXPLAINED BY WAY OF THE AFFIDAVIT OF SHYAM LAL GUPTA, AN A DVOCATE. SINCE THERE ARE PLAUSIBLE REASONS FOR DELAY AS IT OCCURRED DUE TO OMISSION ON THE PART OF SHRI SHYAM LAL GUPTA, WE ARE OF THE VIEW THAT THE DELAY SHOULD BE CONDONED. THUS, WE PROCEED TO DECIDE THE ISSUE ON MERITS. 4. GROUND NO. 1 IS THAT THE LD. CIT(APPEALS) H AS ERRED IN CONFIRMING THE VALIDITY OF NOTICE ISSUED U/S 148 BY THE AS SESSING OFFICER. IN PARAGRAPH NO. 4 OF THE IMPUGNED ORDER, IT HAS BEEN MENTIONED THAT THE ASSESSEE HAS NOT MADE ANY SUBMISSION ON THIS GROU ND. THEREFORE, THE GROUND WAS DISMISSED AS NOT PRESSED. THE GROUND WAS DISMISSED ON MERITS ITA NO. 1181(DEL)/2010 10 ALSO BECAUSE THE AO HAD FOLLOWED DUE PROCEDURE AS PER LAW AND HAD ISSUED STATUTORY NOTICES AS LAID DOWN UNDER TH E ACT. THE AO HAD ISSUED NOTICE ON 24.10.2007 AFTER RECORDING THE FOLLOWI NG REASONS:- (A) PERUSAL OF SCHEDULE E OF CURRENT LIABILITIES AND PROVISIONS REVEALED PROVISION FOR MILK CAN REPAIRS AT RS. 18,08,312/-. SINCE, CREDIT ENTRY IN BOOKS IS AVAILABLE, DEBIT ENTRY WAS BOOKED IN PROFIT & LOSS ACCOUNT. THUS, AMOUNT OF RS. 18,08,312/- BEING P ROVISION FOR UNASCERTAINED LIABILITY WAS TO BE ADDED IN TOTA L INCOME. (B) PERUSAL OF SCHEDULE P OF THE ADMINISTRATIVE EXPENS ES REVEALED THAT THE ASSESSEE HAD DEBITED RS. 62,614/- AS PROVISIO N FOR BAD AND DOUBTFUL DEBTS WHICH WAS TO BE ADDED IN THE TAXA BLE INCOME. (C) IN THE STATEMENT OF INCOME, THE ASSESSEE HAD SET OFF RS. 11,97,120/- AGAINST BROUGHT FORWARD LOSSES. PERUSAL OF ASSE SSMENT RECORDS FOR THE ASSESSMENT YEAR 2003-04 REVEALS THAT INCOME W AS ASSESSED AT RS. 51,05,080/- UNDER SECTION 143(1) ON 24.12.2003 A ND NO LOSS WAS BROUGHT FORWARD. THUS, SET OFF OF LOSS TO THE E XTENT OF RS. 11,97,120/- WAS IRREGULAR AND NOT ADMISSIBLE. (D) THE ASSESSEE RECEIVED GRANT IN AID OF RS. 5,00,000 /- AT BHIWANI BRANCH BUT CREDITED THE SAME DIRECT IN THE BALAN CE SHEET. GRANT RECEIVED BY THE ASSESSEE FOR MEETING REVENUE EXPEN SES WILL BE TREATED AS REVENUE INCOME. THUS, RS. 5,00,000/- WAS REQUIRED TO BE CREDITED IN THE P & L ACCOUNT. 4.1 THE CASE OF THE LD. COUNSEL IS THAT EVEN IF NO SUBMISSION WAS MADE BEFORE THE LD. CIT(APPEALS), YET HE WAS OBLIGED TO PASS A SPEAKING ORDER ON MERITS. FURTHER, THE DETAILS IN RESPECT OF ALL THE POINTS MENTIONED IN THE REASONS IS AVAILABLE ON RECORD. ITA NO. 1181(DEL)/2010 11 4.2 IN REGARD TO PROVISION FOR MILK CAN REPAIR, AMOUNTING TO RS. 18,08,312/-, OUR ATTENTION IS DRAWN TO THE CORR ESPONDING LEDGER ACCOUNT, WHICH SHOWS OPENING CREDIT BALANCE OF RS. 14,85,4 00/-. SOME MILK CANS HAVE BEEN PURCHASED AND SOME FURTHER CREDITS HAV E BEEN MADE IN THIS ACCOUNT, LEADING TO CREDIT BALANCE OF RS. 18,08,3 12/- AS ON 31.03.2004. HOWEVER, THIS EVIDENCE HAS BEEN FILED BEFORE US A S ADDITIONAL EVIDENCE. IN RESPECT TO ADMINISTRATIVE EXPENSES, OUR ATTE NTION IS DRAWN TO THE LEDGER ACCOUNT WHICH SHOWS THAT THERE IS NO TRAN SACTION AND THE AMOUNT REPRESENTS OPENING BALANCE. THIS IS ALSO AN ADD ITIONAL EVIDENCE BEFORE US. IN REGARD TO SET OFF OF BROUGHT FORWARD LOSS, IT I S SUBMITTED THAT THE SAME COULD HAVE BEEN RECTIFIED U/S 154 AS IT IS AXI OMATIC THAT ONLY THAT MUCH OF LOSS BROUGHT FORWARD FROM EARLIER YEARS CAN BE ALLOWED WHICH IS DETERMINED IN THE ASSESSMENT OF THAT YEAR. IN RESPECT OF GRANT-IN-AID OF RS. 5.00 LAKH, IT IS SUBMITTED THAT THE AMOUNT WAS RECEIVED IN THIS YEAR AND DULY SHOWN IN SCHEDULE-C TO THE ACCOUNTS. IN OTH ER WORDS, THE CASE OF THE LD. COUNSEL IS THAT ALL THE DETAILS WERE AVAILAB LE ON THE RECORD OF THE AO, THE ASSESSEE HAD EARLIER BEEN COMPLETED U/S 143( 3) ON 05.12.2006, AND NOTHING NEW CAME TO THE NOTICE OF THE AO. THER EFORE, IT IS ONLY A CASE OF CHANGE OF OPINION. ITA NO. 1181(DEL)/2010 12 4.3 IN ORDER TO SUPPORT THE CASE, RELIANCE IS PL ACED ON THE DECISION IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. & AN OTHER (2010) 320 ITR 561 (SC), IN WHICH IT HAS BEEN HELD THAT ALTHOUGH THE AO HAS POWER TO RE- ASSESS THE INCOME, HE HAS NO POWER TO REVIEW T HE ORDER. THE RE- ASSESSMENT HAS TO BE MADE ON FULFILLMENT OF CERTAI N PRE-CONDITIONS. THE CONCEPT OF CHANGE OF OPINION IS IN-BUILT IN SEC TION 147 AND IF THIS CONCEPT IS REMOVED, THEN REVIEW MAY TAKE PLACE IN THE GARB OF RE- ASSESSMENT. FOR THE SAKE OF READY REFERENCE, TH E RELEVANT PORTION OF THE JUDGMENT AT PLACITUM 6 ON PAGE NOS. 564 AND 565 IS REPRODUCED BELOW:- ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MADE T O SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO DIRECT TAX L AWS (AMENDMENT) ACT, 1987, RE-OPENING COULD BE DONE UND ER ABOVE TWO CONDITIONS AND FULFILLMENT OF THE SAID CONDITIO NS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BUT IN SECTION 147 OF THE ACT [WITH EFF ECT FROM 1ST APRIL, 1989], THEY ARE GIVEN A GO-BY AND ONLY ONE C ONDITION HAS REMAINED, VIZ., THAT WHERE THE ASSESSING OFFICER H AS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDICTION TO RE- OPEN THE ASSESSMENT. THEREFORE, POST-1ST APRIL, 1989, POWER TO RE-OPEN IS MUCH WIDER. HOWEVE R, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETATION TO THE WOR DS REASON TO BELIEVE FAILING WHICH, WE ARE AFRAID, SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO RE-OPE N ASSESSMENTS ON THE BASIS OF MERE CHANGE OF OPINION , WHICH CANNOT BE PER SE REASON TO RE-OPEN. WE MUST ALSO KE EP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW A ND POWER ITA NO. 1181(DEL)/2010 13 TO RE-ASSESS. THE ASSESSING OFFICER HAS NO POWER TO REVIEW; HE HAS THE POWER TO RE-ASSESS. BUT RE-ASSESSMENT HAS T O BE BASED ON FULFILLMENT OF CERTAIN PRE-CONDITION AND IF THE CONCEPT OF CHANGE OF OPINION IS REMOVED, AS CONTENDED ON BEH ALF OF THE DEPARTMENT, THEN, IN THE GARB OF RE-OPENING THE ASS ESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF CHANGE OF OPINION AS AN IN-BUILT TEST TO CHECK ABUSE OF P OWER BY THE ASSESSING OFFICER. HENCE, AFTER 1ST APRIL, 1989, AS SESSING OFFICER HAS POWER TO RE-OPEN, PROVIDED THERE IS TA NGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE IS E SCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LI NK WITH THE FORMATION OF THE BELIEF. OUR VIEW GETS SUPPORT FROM THE CHANGES MADE TO SECTION 147 OF THE ACT, AS QUOTED H EREINABOVE. UNDER THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, PARLIAMENT NOT ONLY DELETED THE WORDS REASON TO BE LIEVE BUT ALSO INSERTED THE WORD OPINION IN SECTION 147 OF THE ACT. HOWEVER, ON RECEIPT OF REPRESENTATIONS FROM THE COM PANIES AGAINST OMISSION OF THE WORDS REASON TO BELIEVE, PARLIAMENT RE-INTRODUCED THE SAID EXPRESSION AND DELETED THE W ORD OPINION ON THE GROUND THAT IT WOULD VEST ARBITRAR Y POWERS IN THE ASSESSING OFFICER. WE QUOTE HEREINBELOW THE REL EVANT PORTION OF CIRCULAR NO.549 DATED 31ST OCTOBER, 1989 , ([1990] 182 ITR (ST.) 1, 29) WHICH READS AS FOLLOWS: 7.2 AMENDMENT MADE BY THE AMENDING ACT, 1989, TO REINTRODUCE THE EXPRESSION `REASON TO BELIEVE' IN S ECTION 147.--A NUMBER OF REPRESENTATIONS WERE RECEIVED AGA INST THE OMISSION OF THE WORDS `REASON TO BELIEVE' FROM SECTION 147 AND THEIR SUBSTITUTION BY THE `OPINION' OF THE ASSESSING OFFICER. IT WAS POINTED OUT THAT THE MEAN ING OF THE EXPRESSION, `REASON TO BELIEVE' HAD BEEN EXPLAI NED IN A NUMBER OF COURT RULINGS IN THE PAST AND WAS WELL SETTLED AND ITS OMISSION FROM SECTION 147 WOULD GIVE ARBITR ARY POWERS TO THE ASSESSING OFFICER TO REOPEN PAST ASSESSMENTS ON MERE CHANGE OF OPINION. TO ALLAY THE SE FEARS, THE AMENDING ACT, 1989, HAS AGAIN AMENDED SECTION 147 TO REINTRODUCE THE EXPRESSION `HAS REAS ON TO BELIEVE' IN PLACE OF THE WORDS `FOR REASONS TO BE R ECORDED BY HIM IN WRITING, IS OF THE OPINION'. OTHER PROVIS IONS OF THE NEW SECTION 147, HOWEVER, REMAIN THE SAME. ITA NO. 1181(DEL)/2010 14 4.4 RELIANCE IS ALSO PLACED ON THE DECISION IN TH E CASE OF TRACTEBEL INDUSTRY ENGINEERING VS. ASSISTANT DIRECTOR OF IN COME-TAX (INTERNATIONAL TAXATION) (2011) 64 DTR 344 (DEL), THE HONBLE C OURT MENTIONED THAT ALTHOUGH THE AO HAS USED THE PHRASE REASON TO BEL IEVE, ADMITTEDLY, BETWEEN THE DATE OF ORDER OF ASSESSMENT SOUGHT TO BE REOPENED AND THE DATE OF FORMING THE OPINION NOTHING NEW HAPPEN ED. NO NEW MATERIAL HAS COME ON RECORD. THERE IS NO CHANGE OF LAW. WHILE PASSING THE ORIGINAL ORDER, THE ORDER OF THE LD. CIT(APPEALS) WAS THERE BEFORE THE AO. THUS, IT IS A CASE OF MERE CHANGE OF OPINION WHICH DOES NOT PROVIDE JURISDICTION TO INITIATE PROCEEDINGS US/ 147 OF TH E ACT. 4.5 IN REPLY, THE LD. CIT, DR SUBMITTED THAT MER E AVAILABILITY OF THE INFORMATION ON THE RECORD DOES NOT PRECLUDE THE JURISDICTION OF THE AO TO REOPEN THE ASSESSMENT PROVIDED THE CONDITIONS MENTIONED IN SECTION 147 ARE SATISFIED. IN THIS CONNECTION, SHE RELI ED ON THE DECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. VS. DY.CIT (2011) 197 TAXMAN 415 (DEL). OUR ATTENTION HAS BEEN DRAWN TO THE FACT THAT THE HONBLE COURT TOOK INTO ACCOUNT THE PROVISION CONTAINED IN TH E EXPLANATION TO SECTION 147 TO THE EFFECT THAT MERE PRODUCTION OF BOOKS OF ACCOUNT OR OTHER ITA NO. 1181(DEL)/2010 15 EVIDENCE IS NOT SUFFICIENT. THEREFORE, JUST BECAU SE MATERIAL LIES EMBEDDED IN THE EVIDENCE, WHICH THE AO COULD HAVE UNCOVERE D BUT DID NOT UNCOVER, IS NOT A GOOD GROUND TO DENY OR STRIKE DOWN A N OTICE U/S 148. IT IS MENTIONED THAT THIS DECISION HAS BEEN APPROVED BY HONBLE SUPREME COURT IN SLP NO. 19085/2011, REPORTED IN 2011-TIO L-72-SC-IT. FURTHER, RELIANCE IS PLACED ON THE DECISION OF E BENCH OF DELHI TRIBUNAL IN ITA NO. 3190(DEL)/2007 FOR ASSESSMENT YEAR 2004-05 IN THE CASE OF ORIENTAL INSURANCE CO. LTD. VS. ACIT DATED 22.07.2011, A COPY OF WHICH HAS BEEN PLACED BEFORE US. IN THIS CASE, THE DECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD., HAS BEEN FOLLOWED AND REO PENING OF THE ASSESSMENT HAS BEEN UPHELD. 5. WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. THE FACTS ARE THAT THE ORIGINAL ASSESSMENT U/S 143(3) WAS COMPLETED ON 05.12.2006. THEREAFTER, THE AO NO TED FOUR REASONS WHICH ACCORDING TO HIM LED TO UNDER-ASSESSMENT OF INCO ME BY AN AMOUNT OF RS. 35,68,046/-. BASED UPON THESE FOUR REASONS, IT WAS RECORDED THAT THE AFORESAID INCOME HAS ESCAPED ASSESSMENT. ACCOR DINGLY, NOTICE U/S 148 WAS ISSUED ON 24.10.2007. THIS NOTICE HAS BEE N ISSUED AND SERVED WITHIN A PERIOD OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR. ITA NO. 1181(DEL)/2010 16 THEREFORE, PROVISO TO SECTION 147 IS NOT APPLIC ABLE. IT IS ALSO A MATTER OF FACT THAT DETAILS IN RESPECT OF ALL THESE POINTS WERE NOT ON THE RECORD OF THE AO. NO INFORMATION FLOWED TO HIM FROM ANY OTHER QUARTER NOR THERE WAS ANY CHANGE IN LAW IN RESPECT OF ANY OF THE MATTER. THE QUESTION IS-WHETHER, THE AO IS JUSTIFIED IN REOPENING THE ASSESSMENT. 5.1 THE LD. CIT(APPEALS) DISMISSED THE CORRESPOND ING GROUND BY MENTIONING THAT NO SUBMISSION WAS MADE ON THESE G ROUNDS AND, THUS, THE GROUNDS ARE TREATED AS NOT PRESSED. ADMITTEDLY, NO SUBMISSION WAS MADE IN RESPECT OF REOPENING THE ASSESSMENT BEFORE H IM. HOWEVER, THE CASE OF THE LD. COUNSEL IS THAT EVEN IN ABSENCE OF ANY SU BMISSION, THE GROUND SHOULD HAVE BEEN DECIDED ON MERITS DEPENDING UPON THE FACTS AVAILABLE ON RECORD. THE REASONS WERE AVAILABLE BEFORE HIM, WHI CH SHOULD HAVE BEEN EXAMINED FOR ARRIVING AT A PROPER DECISION. WE AGREE WITH THIS SUBMISSION OF THE LD. COUNSEL. HOWEVER, WE ALSO FIND THAT THE LD. CIT(APPEALS) DISPOSED THE GROUNDS EVEN ON MERITS ALBEIT IN A SUMMARY MANNER. IT IS MENTIONED THAT THE GROUNDS DO NOT STAND THE TEST OF LAW AS THE AO HAS FOLLOWED DUE PROCEDURE AS PRESCRIBED UNDER THE ACT. NO FAULT CAN BE FOUND WITH THE LATTER PART OF THE D ECISION, BUT THE ORDER DOES NOT SHOW AS TO HOW THE GROUNDS DO NOT STAND TEST OF LAW. IN THE CASE OF ITA NO. 1181(DEL)/2010 17 KELVINATOR OF INDIA LTD. (SUPRA), THE HONBLE SUP REME COURT HELD THAT THE CONCEPT OF CHANGE OF OPINION IS IN-BUILT IN SECT ION 147, AS OTHERWISE UNRESTRICTED POWERS WILL BE AVAILABLE TO THE AO T O EXERCISE THIS POWER INCLUDING USING THE POWER OF REVIEW IN THE NAME OF REASSESSMENT. HOWEVER, WE ALSO FIND THAT THERE IS ANOTHER LINE OF JUDGME NTS WHICH HAVE TAKEN THE VIEW THAT PASSIVE DISCLOSURE IN THE RETURN DOES NOT AMOUNT TO THE DISCLOSURE OF MATERIAL FACTS AND IN SUCH A SITUATION THE AO WILL BE ABLE TO REOPEN THE ASSESSMENT U/S 147. THIS COMES OUT CLEARLY FROM THE DECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. (SUPRA), WHICH HAS BEEN CONFIRMED BY THE HONBLE SUPREME COURT. THEREFORE, IT HAS TO BE SEEN IN THIS CASE WHETHER THE DISCLOSURE WAS MADE PROPERLY IN THE CO URSE OF ASSESSMENT SO THAT AO COULD COMPUTE THE INCOME CORRECTLY. THI S WILL NECESSITATE THE EXAMINATION OF VARIOUS GROUNDS FOR REOPENING. 5.2 THE FIRST ISSUE IS REGARDING PROVISION FOR MIL K CAN REPAIRS AMOUNTING TO RS. 18,08,312/-. THE ASSESSEE HAS PLACED A C OPY OF THIS ACCOUNT BEFORE US, BUT ADMITTEDLY THIS EVIDENCE WAS NOT THE RE BEFORE THE AO. IT IS NOW BEING PRODUCED AS AN ADDITIONAL EVIDENCE BEFORE US. THE POSITION IN REGARD TO ADMINISTRATIVE EXPENSES OF RS. 62,614/- IS THE SAME. THE CASE OF THE LD. COUNSEL IN REGARD TO BROUGHT FORWARD LOS S IS THAT THE ASSESSMENT ITA NO. 1181(DEL)/2010 18 COULD HAVE BEEN RECTIFIED U/S 154. HOWEVER, WE FIND THAT UNDER CLAUSE (C)(IV) TO EXPLANATION 2, ALLOWANCE OF EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE AMOUNTS TO A C ASE IN WHICH INCOME CHARGEABLE TO TAX IS ESCAPED ASSESSMENT. THEREFOR E, EXCESS ALLOWANCE OF BROUGHT FORWARD LOSS OF RS. 11,97,120/- SHOWS THA T INCOME HAS ESCAPED ASSESSMENT. THIS POINT WAS ALSO NOT BROUGHT TO T HE NOTICE OF THE AO BY THE ASSESSEE AT THE TIME OF ORIGINAL ASSESSMENT. THE GRANT-IN-AID OF RS. 5.00 LAKH WAS RECEIVED IN THIS YEAR, BUT WAS CARRIED OVER TO THE BALANCE-SHEET. IN OTHER WORDS, THIS AMOUNT WAS NOT OFFERED FOR TAXATION. NO REASON WAS ADDUCED BEFORE THE AO IN SUPPORT THEREOF. LOOKI NG TO THE AFORESAID, WE ARE OF THE VIEW THAT THE FACTS IN REGARD TO TH E FIRST TWO ITEMS WERE NOT AVAILABLE ON RECORD AND FACTS IN RESPECT OF OTHER TWO ITEMS WERE NOT BROUGHT TO THE NOTICE OF THE AO AT THE TIME OF ASS ESSMENT. IN SUCH A SITUATION, WE ARE OF THE VIEW THAT THE DECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. (SUPRA) IS APPLICABLE. THUS, T HE AO WAS JUSTIFIED IN REOPENING THE ASSESSMENT. 6. WE NOW PROCEED WITH THE APPLICATION OF THE ASSESSEE DATED 11.03.2012 FOR ENTERTAINING ADDITIONAL EVIDENCE. THROUGH THIS ITA NO. 1181(DEL)/2010 19 APPLICATION, THE ASSESSEE SEEKS TO BRING FOLLOW ING ADDITIONAL EVIDENCE ON RECORD:- (I) COPY OF THE ACCOUNT DESIGNATED AS PROVISION FOR MILK CAN REPAIR FROM 01.04.1998 TO 31.03.2005; (II) COPY OF ACCOUNT DESIGNATED OLD ADVANCE TO STAFF; (III) COPY OF ACCOUNT OF REVOLVING FUND FROM 01.06.2002 AND 31.03.2005; AND (IV) COPY OF ACCOUNT OF REVOLVING FUND FOR BHIWA NI FOR ASSESSMENT YEAR 2005-06 ALONG WITH COPY OF ACCOUNT OF MCC E XPENSES, BHIWANI FOR ASSESSMENT YEAR 2006-07. 6.1 IT IS MENTIONED THAT THE ASSESSEE WAS HEAVILY DEPENDENT ON SHRI SHYAM LAL GUPTA, COUNSEL, WHO COULD NOT PERSONALLY APPEAR BEFORE THE LD. CIT(APPEALS) BECAUSE OF HIS CONTINUOUS ILLNESS. E VEN DURING THE COURSE OF HEARING, PROPER SUBMISSIONS COULD NOT BE MADE. DUE TO AFORESAID REASON, CERTAIN EVIDENCES WHICH SHOULD HAVE BEEN FILED, C OULD NOT BE FILED. THESE EVIDENCES ARE MATERIAL FOR DECIDING THE GROUNDS TAKEN BEFORE US. ITA NO. 1181(DEL)/2010 20 ACCORDINGLY, IT IS URGED THAT THE EVIDENCE MAY BE ENTERTAINED. THE APPLICATION IS ACCOMPANIED BY AFFIDAVIT OF SHRI D .S. AHLAWAT, CEO OF THE ASSESSEE-COMPANY TO THE EFFECT THAT A SUM OF RS. 5 .00 LAKH WAS RECEIVED FROM HARYANA GOVERNMENT FOR EXPENDITURE IN RESPE CT OF MILK CHILLING CENTRE, BHIWANI, DURING FINANCIAL YEAR 2003-04 . THIS AMOUNT HAS BEEN EXPENDED BY THE ASSESSEE. IN FACT, A SUM OF RS. 33,53,769/- HAS BEEN SPENT IN THE YEAR 2005-06. THE GRANT OF RS. 5.0 0 LAKH RECEIVED IN THE YER 2003-04 HAS BEEN UTILIZED IN THE YEAR 2005-06. 6.2 THE SUBMISSIONS MADE IN THE APPLICATION HAVE BE EN REPEATED BEFORE US BY THE LD. COUNSEL FOR THE ASSESSEE. IN ORDER TO SUPPORT THE CASE FOR ADMISSION, RELIANCE IS PLACED ON THE DECISION IN T HE CASE OF CIT VS. GANI BHAI WAHAB BHAI (1998) 232 ITR 900. IT HAS BEEN MENTIONED ON PAGE NO. 903 OF THE REPORT THAT THE ORDER OF THE TRIBUNAL DO ES NOT SPEAK ABOUT ANY ADDITIONAL EVIDENCE. THEREFORE, IT IS STRANGE AS TO HOW THE TWO QUESTIONS HAVE BEEN FRAMED WHICH SPEAK OF THE FRESH EVIDENC E HAVING BEEN TAKEN INTO CONSIDERATION. OBVIOUSLY, THIS CASE IS NOT REGARD ING ENTERTAINMENT OF ADDITIONAL EVIDENCE AND, THEREFORE, DOES NOT ADVA NCE THE CASE OF THE ASSESSEE. FURTHER, IN THE CASE OF CIT VS. SURETE CH HOSPITAL AND RESEARCH CENTRE LTD. (2007) 293 ITR 53 (BOM.), ONE OF TH E QUESTIONS BEFORE THE ITA NO. 1181(DEL)/2010 21 COURT WAS IN REGARD TO ADMISSION OF ADDITIONAL EV IDENCE BY THE TRIBUNAL UNDER RULE 29. THE CONTENTION OF THE REVENUE WAS THAT THE TRIBUNAL WAS NOT JUSTIFIED IN INVOKING RULE 46A(4) OF THE IN COME-TAX RULES AND ALLOWING ADDITIONAL EVIDENCE TO BE PRODUCED BEFORE THE CIT(APPEALS) FOR THE FIRST TIME. THE MERE FACT THAT THE EVIDENCE SOUGHT TO BE PRODUCED IS VITAL AND IMPORTANT, DOES NOT PROVIDE SUBSTANTI AL CAUSE TO ALLOW ITS ADMISSION AT THE APPELLATE STAGE WHEN THE EVID ENCE WAS AVAILABLE WITH THE ASSESSEE AT THE INITIAL STAGE AND WAS NOT P RODUCED BY HIM. THESE ARGUMENTS DID NOT FIND FAVOUR WITH THE COURT. IT IS MENTIONED THAT THE APPELLATE AUTHORITY CAN PERMIT PRODUCTION OF DOCU MENT WHICH ENABLE HIM TO DISPOSE OF THE APPEAL. THE TRIBUNAL HAS RECORDE D A FINDING THAT THE DOCUMENTS WERE NECESSARY FOR DISPOSAL OF THE APP EAL ON MERITS. NO QUESTION OF LAW ARISES FROM SUCH AN ORDER. IN TH E CASE OF CIT VS. MUKESH METAL WORKS (2011) 336 ITR 555 (P & H), O NE OF THE QUESTIONS WAS-WHETHER, THE TRIBUNAL IS RIGHT IN LAW IN NOT TAKING INTO ACCOUNT ADDITIONAL EVIDENCE? THE HONBLE COURT MENTIONED T HAT THE REPORT OF FORENSIC SCIENCE LABORATORY WAS A RELEVANT MAT ERIAL AND SO WAS THE AFFIDAVIT DATED 27.12.2004 OF THE SEARCHED PERSO N. THE ADDITIONAL EVIDENCE WAS NECESSARY FOR JUST DECISION OF TH E MATTER. AT BEST, THE DEPONENT COULD BE PRODUCED FOR CROSS-EXAMINATION. THE ADDITIONAL ITA NO. 1181(DEL)/2010 22 EVIDENCE CAN BE ALLOWED IN THE INTEREST OF JUSTI CE IF THE SAME IS AUTHENTIC AND IS NECESSARY FOR DECISION OF THE ISSUE RAI SED IN THE APPEAL. THEFORE, IT HAS BEEN HELD THAT THE TRIBUNAL WAS NOT JUSTI FIED IN DECLINING TO CONSIDER THE ADDITIONAL EVIDENCE. THE LD. CIT, DR OPPOSE D THE ADMISSION OF ADDITIONAL EVIDENCE ON THE GROUND THAT THE ASSESS EE HAS BEEN A HABITUAL DEFAULTER IN THE MATTER. THE EVIDENCE WAS NOT PR ODUCED BEFORE THE AO OR THE LD. CIT(APPEALS). THEREFORE, IT IS ARGUED THA T THE EVIDENCE MAY NOT BE ENTERTAINED. 7. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. WE FIND THAT THE EVIDENCE PERTAINS TO PROVISION IN RESPECT OF MILK CAN REPAIR, ADVANCE TO STAFF AND THE SUBS IDY OF RS. 5.00 LAKH RECEIVED BY THE ASSESSEE. THE EVIDENCE WAS IN P OSSESSION OF THE ASSESSEE EVEN AT THE TIME OF ASSESSMENT. HOWEVER, THE EV IDENCE WAS NOT FILED BEFORE THE AO OR THE LD. CIT(APPEALS). NONETHEL ESS, THE EVIDENCE IS MATERIAL IN DECIDING GROUND NOS. 2, 3 AND 5 TAKE N BEFORE US. IN THE LIGHT OF THE DECISION IN THE CASE OF MUKTA METAL WORKS ( SUPRA), WHICH IS A JURISDICTIONAL HIGH COURT, WE ADMIT THE ADDITIONA L EVIDENCE. ITA NO. 1181(DEL)/2010 23 8. GROUND NOS. 2, 3 AND 5 ARE RESTORED TO THE F ILE OF THE AO AS THESE REQUIRE EXAMINATION OF ADDITIONAL EVIDENCE. THE AO SHALL DECIDE THESE GROUNDS AFRESH AFTER GRANTING ADEQUATE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. THUS, THESE GROUNDS ARE TREATED AS ALLOWED. 9. IN REGARD TO GROUND NO. 4 REGARDING SET OFF OF CARRY FORWARD LOSS, NO ARGUMENT HAS BEEN MADE. IN FACT, WHILE DEALING WITH REOPENING THE ASSESSMENT, THE CASE OF THE LD. COUNSEL WAS THAT S UCH A MISTAKE CAN BE RECTIFIED U/S 154. WE HEREBY DIRECT THE AO LOOK INTO THE MATTER AND ALLOW THE SET OFF OF THE CARRY FORWARD LOSS AS DETERM INED IN THE ASSESSMENTS OF EARLIER YEARS AND AS PER LAW. THUS, THIS GROUN D IS TREATED AS DISMISSED. 10. IN THE RESULT, THE APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (U.B.S. BEDI) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA ITA NO. 1181(DEL)/2010 24 COPY OF THE ORDER FORWARDED TO:- THE CHIEF EXECUTIVE, ROHTAK COOP. MILK PRODUCTS UNI ON LTD., ROHTAK. ACIT, ROHTAK CIRCLE, ROHTAK. CIT(A) CIT, THE D.R., ITAT, NEW DELHI. ASSISTANT REGISTRAR.