Karan Dyeing Mills, Faridabad V. ITO, Faridabad

ITA 1193/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6825 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 02-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: D: NEW DELHI) BEFORE SHRI N.K BILLAIYA, ACCOUNTANT MEMBER & SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO:- 1193/DEL/2015 (ASSESSMENT YEAR: 2010-11) KARAN DYEING MILLS. VS. ITO, WARD I(3), FARIDABAD. PAN NO: AAEFK5154F APPELLANT RESPONDENT ASSESSEE BY : SH. ALOK KUMAR GUPTA, CA REVENUE BY : SH. AMIT JAIN, SR. DR DATE OF HEARING : 11.07.2018. DATE OF PRONOUNCEMENT : 17/07/2018. ORDER PER: KULDIP SINGH, JM THE APPELLANT, KARAN DYEING MILLS (HEREINAFTER REFE RRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 22.12.2014 PASSED BY LD. CIT(A), FARIDA BAD, QUA ASSESSMENT YEAR 2010-11, ON THE GROUNDS THAT:- 2 ITA NO.-1193/DEL/2015. KARAN DYEING MILLS. 1. THE LD. CIT(A) ERRED IN NOT ADJUDICATING GROUND NO. 2 WHICH READ AS THAT HAVING REGARDS TO THE FACTS AND CIRC UMSTANCES OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS BY F RAMING THE IMPUGNED ASSESSMENT ORDER AS PER THE SCHEME OF PROV ISION U/S 143(3) RAISED BY THE ASSESSEE TERMING IT GENERAL I N NATURE IGNORING THE FACT THAT THE GROUND WAS SPECIFIC AND WENT TO THE ROOT OF THE CASE. 2. LD. CIT(A) ERRED IN NOT ADMITTING ADDITIONAL EVI DENCES U/R 46A OF THE INCOME TAX RULES 1962. 3. LD. CIT(A) ERRED IN REJECTING THE ADDITIONAL GRO UND OF APPEAL REQUESTING HIM TO CONSIDER THE HISTORY OF THE ASSES SEE BEFORE DISPOSING OFF THE APPEAL. 4. HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF THE PURCHASES OF FIRE WOOD AMOUNTING TO RS. 1973579 /- 5. HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF THE PURCHASE OF FREE FLOW SALT AMOUNTING TO RS. 757 070. 6. HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF THE PURCHASE OF CLOTH AND FREIGHT THEREON AMOUNTING TO RS. 1591530/-. 7. HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF THE PURCHASE OF CLOTH AMOUNTING TO RS. 304500/-. 8. HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING T HE ADDITION OF RS. 2802202/- ON ACCOUNT OF UNDECLARED JOB WORK REC EIPTS. 9. HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS. 115000 BEING CLAIMED AS WAGES. 10. HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS. 32133/- ON ACCOUNT OF NON BUSINESS TELEPHONE EX PENSES. 11. HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS. 26118 HOLDING POOJA EXPENSES NOT A BUSINESS EXP ENSE. 3 ITA NO.-1193/DEL/2015. KARAN DYEING MILLS. 12. HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LD. CIT(A) ERRED IN LAW AND ON FACTS CONFIRMING THE ADD ITION OF RS. 24945/- ON ACCOUNT ON UNVERIFIED GENERAL EXPENSES. 13. HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 9182/- ON ACCOUNT OF LATE PAYMENT OF EMPLOYEES CON TRIBUTION TO PF. 14. HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 94534/- ON ACCOUNT OF NON BUSINESS VEHICLE RUNN ING AND MAINTENANCE EXPENSES. 15. THE ASSESSEE CRAVES LEAVE TO ADD, MODIFY, OR DE LETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF/ BEFORE THE HEARIN G AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE:- THE ASSESSEE IS INTO THE BUSINESS OF TEXTILE PROCESSING (JOB WORK). DURING ASSESSMENT PROCEEDING S, ASSESSEE HAS FAILED TO FURNISH NECESSARY DETAILS CALLED FOR BY T HE ASSESSING OFFICER AND ULTIMATELY AO PROCEEDED TO PASS THE ASSESSMENT ORDE R EX PARTE ON THE BASIS OF MATERIAL MADE AVAILABLE ON RECORD, REJECTE D BOOKS OF ACCOUNTS AND MADE BEST JUDGMENT ASSESSMENT BY MAKING THE ADD ITION OF RS. 77,32,813/- AND ASSESSED THE TOTAL INCOME AT RS. 90 ,39,770/-. 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A), BY WAY OF FILING THE APPEAL, WHO HAS CONFIRMED THE ADDITION, AFTER DISMISSING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME U P BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4 ITA NO.-1193/DEL/2015. KARAN DYEING MILLS. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, DURING THE APPELLATE PROCEEDINGS, ASSESSEE MOVED AN APPLICATION UNDER RULE 46A OF THE INCOME TAX RULES, 1962 (FOR SHORT THE RULES) WHICH HAS BEEN REJECTED BY THE LD. CIT(A) ON THE GROUND THAT SINCE AMPLE OPPORTUNITIES HAVE ALREADY BEEN GIVEN B Y THE AO TO THE ASSESSEE, WHO HAS FAILED TO FILE THE REQUISITE DETA ILS NO GROUND IS MADE OUT TO ENTERTAIN THE ADDITIONAL EVIDENCE. IT IS ALSO N OT IN DISPUTE THAT AO DURING THE ASSESSMENT PROCEEDINGS HAVE ISSUED SUMMO N U/S 131 OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) TO M/S A JANTA ENTERPRISES FIRE WOOD MERCHANT LINK ROAD, OLD FARIDABAD AND M/S VIKA S TRADERS FOR PRODUCING CERTAIN DOCUMENTS REGARDING TRANSACTIONS WITH THE ASSESSEE AND HAS RELIED UPON MATERIAL PRODUCED WITHOUT CONFR ONTING THE SAME TO THE ASSESSEE. IT IS ALSO NOT IN DISPUTE THAT THE A O HAS EXAMINED COPIES OF BILLS OF M/S BALAJI TRADERS, X/3466, SHOP NO. 12, A GGARWAL MARKET, GANDHI NAGAR, DELHI-3, AND FOUND DISCREPANCIES THEREIN. 6. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW, THAT THE LD. C IT(A) HAS TREATED THE FINDINGS RETURNED BY AO COLLECTED BY WAY OF ISSUANC E OF SUMMON U/S 131 5 ITA NO.-1193/DEL/2015. KARAN DYEING MILLS. OF THE ACT, FINDING DISCREPANCIES THEREIN AND IN CA SE OF LETTER ISSUED BY M/S VIKAS TRADERS HELD THAT THE SIGNATURES AFFIXED ON T HE LETTER ARE NOT MATCHED AND THAT M/S VIKAS TRADERS IS REPORTED TO B E NOT EXISTED BY THE INSPECTOR, AS A GOSPEL TRUTH. ALL THESE FINDINGS A RE DAMAGING TO THE CASE OF THE ASSESSEE PARTICULARLY WHEN TAKEN AT ITS BACK WITHOUT AFFORDING AN ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . 7. THE ENTIRE CASE OF THE AO AS WELL AS LD. CIT(A) IS BASED UPON THE DISCREPANCIES POINTED OUT BY THE AO AS WELL AS CONF IRMED BY LD. CIT(A), WHICH THE ASSESSEE HAS REQUESTED TO EXPLAIN BY MOVI NG AN APPLICATION UNDER RULE 46A OF THE IT RULES, WHICH WAS REJECTED BY LD. CIT(A) MERELY ON THE GROUND THAT AMPLE OPPORTUNITIES HAVE BEEN GR ANTED TO THE ASSESSEE AND HE HAS FAILED TO EXPLAIN THE DISCREPAN CIES POINTED OUT BY THE AO. 8. HOWEVER, WE ARE OF THE CONSIDERED VIEW THAT WHEN THE ENTIRE EVIDENCE HAS BEEN TAKEN ON RECORD BY THE AO ON THE BACK OF THE ASSESSEE, THERE WAS NO QUESTION OF EXPLAINING THE S AME BY THE ASSESSEE. SO, IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERE D VIEW THAT TO MEET WITH THE ENDS OF JUSTICE, THE ADDITIONAL EVIDENCE S OUGHT TO BE BROUGHT ON RECORD BY THE ASSESSEE BY MOVING AN APPLICATION UND ER RULE 46A OF THE IT RULES, IS REQUIRED TO BE ALLOWED AS THE COMPREHENSI VE MATERIAL OBTAINED DURING ASSESSMENT CANNOT BE MADE BASIS FOR ADDITION S WITHOUT CONFRONTING 6 ITA NO.-1193/DEL/2015. KARAN DYEING MILLS. THE SAME TO THE ASSESSEE. HENCE, WE ALLOW THE ADDIT IONAL EVIDENCE SOUGHT TO BE PRODUCED BY THE ASSESSEE BEFORE THE LD. CIT(A ) AND REMAND THE CASE BACK TO THE AO TO DECIDE AFRESH AFTER PROVIDIN G AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17/7/2018 SD/- SD/- (N.K. BILLAIYA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17.07.2018 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 7 ITA NO.-1193/DEL/2015. KARAN DYEING MILLS. DATE OF DICTATION 12/7/2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13/7/2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 17/7/2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 17/7/2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 18/7/2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 8 ITA NO.-1193/DEL/2015. KARAN DYEING MILLS.