M/s. Cascade Conseltech (P) Ltd., New Delhi V. ACIT, New Delhi

ITA 1195/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4055 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 04-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 07-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: RAM AVTAR
• Keywords: Depreciation; Opportunity of being heard; Additional evidence; Reasonable cause; Set aside
• Section: 143(3)

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.1195/DEL/2011 1195/DEL/2011 1195/DEL/2011 1195/DEL/2011 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2006 2006 2006 2006- -- -07 0707 07 M/S CASCADE COUNSELTECH M/S CASCADE COUNSELTECH M/S CASCADE COUNSELTECH M/S CASCADE COUNSELTECH (P) LTD., (P) LTD., (P) LTD., (P) LTD., 63, RAMA ROAD, 63, RAMA ROAD, 63, RAMA ROAD, 63, RAMA ROAD, INDUSTRIAL AREA, INDUSTRIAL AREA, INDUSTRIAL AREA, INDUSTRIAL AREA, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 015. 110 015. 110 015. 110 015. PAN NO.AABCC6222E. PAN NO.AABCC6222E. PAN NO.AABCC6222E. PAN NO.AABCC6222E. VS. VS. VS. VS. ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF ASSTT.COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -3(2), 3(2), 3(2), 3(2), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAM AVTAR, CA. RESPONDENT BY : MS.Y.KAKKAR, SR.DR 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 : THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 4.2.2011 PASSED BY LEARNED CIT(A) IN THE MATTER OF AN ASSESS MENT MADE U/S 143(3) OF THE INCOME-TAX ACT, 1961 FOR THE AY 2006- 07. 2. IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE FOLLOWING ADDITIONS MADE BY THE AO:- (I) `4,26,764/- ON ACCOUNT OF INVESTMENT IN MOTOR CAR. (II) `10,01,586/- ON ACCOUNT OF INCREASE IN THE INVENTOR Y AS COMPARED TO THE LAST YEAR. (III) `11,60,000/- ON ACCOUNT OF FRESH LOAN RECEIVED DURI NG THE YEAR. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE AUTHORITIES BELOW. ITA-1195/DEL/2011 2 4. THE AFORESAID ADDITIONS WERE MADE BY THE AO IN A BSENCE OF THE DETAILS REQUIRED TO BE FURNISHED BY THE ASSESSEE VI DE VARIOUS NOTICES ISSUED BY THE AO FROM TIME TO TIME. WITH REGARD TO THE ADDITION OF `4,26,764/- ON ACCOUNT OF INVESTMENT IN MOTOR CAR, IT WAS NOTED BY THE AO THAT THE ASSESSEE MADE THIS INVESTMENT. THE AO REQUIRED THE ASSESSEE TO PRODUCE COPY OF BILL ALONGWITH SOURCE O F SUCH INVESTMENT. IN THE DETAILS OF FIXED ASSETS AND DEPRECIATION, TH E ASSESSEE HAD SHOWN THE ADDITION OF `4,26,764/- TOWARDS MOTOR CAR WHICH GOES TO SHOW THAT ASSESSEE HAS SHOWN THIS INVESTMENT IN ITS BOOKS OF ACCOUNT AND THE AO HAS TAKEN THIS FIGURE FROM THE STATEMENT OF ACCOUNT S ENCLOSED WITH THE RETURN OF INCOME. HOWEVER, ASSESSEE HAS FAILED TO PRODUCE THE COPY OF VOUCHER AND SOURCE OF INVESTMENT RECORDED IN THE BO OKS. 5. WITH REGARD TO INCREASE IN INVENTORY AMOUNTING T O `10,01,586/-, IT IS SEEN THAT INVENTORY HAS BEEN SHOWN BY THE ASS ESSEE IN THE BALANCE SHEET AS PER TRADING AND PROFIT & LOSS ACCO UNT. THE AO HAS MADE THIS ADDITION MERELY FOR THE REASON THAT THERE WAS INCREASE IN THE INVENTORY AS COMPARED TO THE PREVIOUS YEAR WITHOUT CONSIDERING THE TRADING AND PROFIT & LOSS ACCOUNT WHERE PURCHASES A ND SALES MADE DURING THE YEAR ARE REFLECTED. THE AO HAS MADE THE ADDITION OF `11,60,000/- ON ACCOUNT OF LOAN OF `9,50,000/- TAKE N FROM M/S MAHAN IMPORT & EXPORT AND `2,10,000/- FROM MS.RACHNA SANG WAN IN THE ABSENCE OF ANY CONFIRMATION LETTER BEING FILED BY T HE ASSESSEE. 6. ALL THESE THREE ADDITIONS HAVE BEEN CONFIRMED BY THE LEARNED CIT(A) AFTER REJECTING THE ASSESSEES APPLICATION F OR ADMISSION OF ADDITIONAL EVIDENCE AND THEN MERELY STATING THAT ON CE IT IS DECIDED THAT FRESH EVIDENCE CANNOT BE ADMITTED, THE ASSESSE E HAS NO CASE AT ALL. THE LEARNED CIT(A) FURTHER OBSERVED THAT IN A NY CASE, IN THE ABSENCE OF BILLS AND VOUCHERS, THE ASSESSEES CASE IS NON-EXISTENT. ITA-1195/DEL/2011 3 7. IT IS NOT IN DISPUTE THAT THE AO HAD ISSUED NOTI CE OF HEARING FROM TIME TO TIME AND REQUIRED THE ASSESSEE TO PRODUCE T HE DETAILS. INITIALLY, ONE SHRI V.B.SARAF, CA ATTENDED BEFORE THE AO AND S UBMITTED PARTIAL DETAILS. THEREAFTER, SHRI SARAF STOPPED ATTENDING THE AO. THE LEARNED COUNSEL FOR THE ASSESSEE HAS EXPLAINED THAT THERE W AS SOME MISUNDERSTANDING BETWEEN THE ASSESSEE AND SHRI SARA F AND DUE TO THAT REASON, SHRI SARAF STOPPED ATTENDING BEFORE THE AO WITHOUT ANY INTIMATION TO THE ASSESSEE. THE LEARNED COUNSEL FU RTHER EXPLAINED THAT ASSESSEE THEN ENGAGED ITS ACCOUNTANT SHRI INDER SAI N WADHWA TO APPEAR BEFORE THE AO. THE ACCOUNTANT ACCORDINGLY A PPEARED BEFORE THE AO ON 25.11.2008 AND SOUGHT ADJOURNMENT. THE A O ALLOWED THE ADJOURNMENT FIXING THE DATE ON 28.11.2008. ON THIS DATE, SHRI INDER SAIN WADHWA FAILED TO APPEAR BEFORE THE AO AND FILE NECESSARY DETAILS. IT HAS BEEN EXPLAINED BY THE LEARNED COUNSEL FOR TH E ASSESSEE THAT SISTER OF SHRI INDER SAIN WADHWA WAS LYING ILL AT T HAT TIME AND ULTIMATELY EXPIRED IN THE MONTH OF DECEMBER, 2008 A ND THEREFORE, SHRI INDER SAIN WADHWA COULD NOT ATTEND THE AO. IT WAS FURTHER EXPLAINED BY THE ASSESSEE THAT THE LAST NOTICE ISSUED BY THE AO FIXING THE DATE ON 22.11.2008 WAS ACTUALLY NOT RECEIVED BY THE ASSESSE E. HE FURTHER SUBMITTED THAT THE AO COMPLETED THE ASSESSMENT ON 2 2.12.2008. IN THE LIGHT OF THIS EXPLANATION GIVEN BY THE ASSESSEE BEFORE US, WE ARE OF THE CONSIDERED VIEW THAT ASSESSEE WAS PREVENTED BY SUFFICIENT AND REASONABLE CAUSE FROM APPEARING BEFORE THE AO AND F ILING REQUIRED DETAILS. IT IS ALSO NOT IN DISPUTE THAT SOME PARTI AL DETAILS WERE SUBMITTED BY THE ASSESSEE BEFORE THE AO. THE AO HA S ALSO MADE THE ADDITION MERELY ON THE BASIS OF ENTRY SHOWN IN THE BALANCE SHEET WITHOUT ENQUIRING THE MATTER ANY FURTHER. IN THE L IGHT OF THESE CIRCUMSTANCES, WE, THEREFORE, FIND IT FIT AND PROPE R THAT LET THE ASSESSMENT GO BACK TO THE FILE OF THE AO FOR MAKING FRESH ASSESSMENT AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. IN THE COURSE OF HEARING OF THIS APPEAL, THE LEARNE D COUNSEL FOR THE ITA-1195/DEL/2011 4 ASSESSEE HAS UNDERTAKEN THAT THE ASSESSEE SHALL FIL E EACH AND EVERY DETAILS REQUIRED BY THE AO ALONGWITH BOOKS OF ACCOU NT, VOUCHERS AND OTHER DETAILS. WE, THEREFORE, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND REMIT THE WHOLE ASSESSMENT BACK TO THE FILE OF THE AO FOR HIS FRESH ASSESSMENT AS PER LAW. THE AO SHALL PROVIDE REASON ABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS HE REBY DIRECTED TO PRODUCE AND FURNISH ALL DETAILS REQUIRED BY THE AO ALONGWITH BOOKS OF ACCOUNT, VOUCHERS AND OTHER DETAILS WITHOUT TAKING ANY EXCUSE. THE ASSESSEE SHALL COOPERATE WITH THE AO IN FINALIZING THE FRESH ASSESSMENT WITHOUT TAKING ANY UNDUE AND UNNECESSARY ADJOURNMEN TS ON FLIMSY GROUNDS. IN CASE THE ASSESSEE FAILS TO APPEAR BEFO RE THE AO AND FURNISH NECESSARY DETAILS, BOOKS OF ACCOUNT AND OTH ER EVIDENCES, THE AO SHALL BE AT LIBERTY TO DECIDE THE MATTER AS PER LAW. WE ORDER ACCORDINGLY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED TO BE ALLOWED FOR STATISTICAL PURPOSES. 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) )) ) ACCOUNTAN ACCOUNTAN ACCOUNTAN ACCOUNTANT MEMBER T MEMBER T MEMBER T 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