Shivohum Industries (UT), New Delhi V. ITO, New Delhi

ITA 1282/DEL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81983 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 30-10-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 23-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Opportunity of being heard; Principle of natural justice; Opportunity of cross examination
• Section: 143(3); 142(1)

Judgement Text

ITA NO. 1282/ DEL/ 2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. N O. 1282/DEL/2010 A.Y. : 2006 - 07 SHIVOHUM INDUSTRIES (UT), J - 290, 2 ND FLOOR, SAKET, NEW DELHI 110 017 (PAN: ABFFS0211B) VS. INCOME TAX OFFICER, WARD - 2, HARIDWAR (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ASHWANI TANEJA, ADV. & SH. RAHUL KHARE, ADV. DEPARTMENT BY : SH. VIKRAM SAHAY, SR. DR DATE OF HEARING : 30 - 10 - 2014 DATE OF ORDER : 31 - 10 - 2014 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS - I ) , DEHRADUN DATED 0 1 . 12 .20 09 P ERTAINING TO ASSESSMENT YEAR 2006 - 07 ON THE FOLLOWING GROUNDS: - 1. THAT UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE WHERE IN ALL THE POSSIBLE EVIDENCES RELATING ITS BUSINESS ACTIVITIES WERE KEPT AND MAINTAINED BY THE APPELLANT THE LD. CIT(A) HAS ERRED IN CO NFIRMING THE GENUINE BUSINESS ACTIVITIES AS NON GENUINE. ITA NO. 1282/ DEL/ 2010 2 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN CONFIRMING THE INCOME FROM GENUINE BUSINESS ACTIVITIES CARRIED ON BY THE APPELLANT AS INCOME FROM UNDISCLOSED SO URCES INSTEAD OF INCOME FROM BUSINESS. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF DEDUCTIONS AVAILABLE TO THE APPELLANT U/S. 80 - IC. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS FALLEN IN ERROR IN CONFIRMING THE ORDER OF THE AO WHILE TREATING ITS SUNDRY CREDITORS AS BOGUS AND ASSESSING THE SAME AS ITS INCOME. 5. THAT THE APPELLANT PRAY FOR LEAVE TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 2. BRIEFLY STATED FACTS ARE THAT THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006 - 07 WAS FILED BY THE ASSESSEE ON 27.10.2006 SHOWING NIL INCOME AFTER CLAIMING DEDUCTION U/S. 80IC OF THE I.T. ACT, 1961. THE RETURN WAS PROCESS ED U/S. 143(2) ON 1.2.2007. THE ASSESSEE IS A PARTNERSHIP FIRM KNOWN AS SHIVOHUM INDUSTRIES (UT) AND THERE ARE TWO PARTNERS NAMELY M/S SHIVOHUM INDUSTRIES (P) LTD. (50% SHARE AND M/S TRANS ASIA CORPORATION LTD. (50% SHARE). AS PER COPY OF PARTNERSHIP DE ED THE ASSESSEE DEALS IN MANUFACTURING AND TRADING IN PLASTIC, PET PRODUCT, STEEL RESIN PETROCHEMICAL, AGRO PRODUCTS ETC. WITH EFFECT FROM 1.3.2006. THE CASE OF THE ASSESSEE WAS PICKED UP UNDER COMPULSORY SCRUTINY AS PER CLAUSE 2(S) OF CBDT ACTION PLAN F OR FINANCIAL YEAR 2006 - 07 FOR NON CORPORATE ASSESSEE. ACCORDINGLY, NOTICE U/S. 143(2) DATED 25.7.2007 WAS SENT THROUGH ITA NO. 1282/ DEL/ 2010 3 REGISTERED POST ON 9.8.2007. AGAIN NOTICE U/S. 143(2) DATED 12.10.2007 WAS SERVED UPON THE ASSESSEE THROUGH AFFIXTURE BY THE INSPECTO R OF THIS OFFICE ON 16.10.2007. THEREAFTER NOTICE U/S. 142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED AND SERVED UPON THE ASSESSEE PROPERLY. ACCORDINGLY, ASSESSEE SUBMITTED THE DETAILS. ON GOING THROUGH THE ASSESSEE RESPONSE, ASSESSMENT WAS COMPLETED U/S . 143(3) OF THE I.T. ACT, 1961 ON THE TOTAL INCOME OF RS. 79,64,720/ - AND MADE THE ADDITIONS. 3. AGAINST THE ORDER OF THE ASSESSING OFFICER DATED 19.12.2008 PASSED UNDER SECTION 143(3) OF THE I.T. ACT, 1961, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 1.12.2009 DISMISSED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED BY THE AFORESAID ORDER O F THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE US. 5. LD. COUNSEL OF THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 238 HAVING RECORDS OF LOWER AUTHORITIES AND ALSO BRIEF SYNOPSIS . AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE HAS SU BMITTED THAT THIS CASE BEEN DECIDED WITHOUT GIVING SUFFICIENT OPPORTUNITY AND IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND ADDITIONS HAVE BEEN MADE AND CONFIRMED ON THE BASIS OF PRESUMPTIONS AND UNSUBSTANTIATED FALSE ALLEGATIONS. HE FURTHER SUBMITT ED THAT THE AO MADE ADDITIONS DISBELIEVING THE GENUINENESS OF BUSINESS OF THE ASSESSEE ON THE BASIS OF SOME INQUIRIES MADE BY HIM AT THE ASSESSEE S BACK. HE FURTHER SUBMITTED THAT THE INQUIRIES CONFRONTED AT THE FAG END OF THE ASSESSMENT PROCEEDIGNGS. SUFFICIENT TIME AND OPPORTUNITY WAS NOT GIVEN BY THE AO. HE FURTHER ITA NO. 1282/ DEL/ 2010 4 SUBMITTED THAT EVEN COPIES OF STATEMENTS RECORDED WERE NOT PROVIDED TO THE ASSESSEE. NOR ANY OPPORTUNITY OF CROSS EXAMINATION WAS PROVIDED. HE FURTHER SUBMITTED THAT BEFORE THE LD. CIT (A), FURTHER CONFIRMATIONS AND AFFIDAVITS ETC. WERE PROVIDED AND THEREFORE LD. CIT(A) CALLED FOR REMAND REPORT OF THE AO. IT WAS ALSO THE CONTENTION OF THE ASSESSEE S COUNSEL THAT DURING THE REMAND PROCEEDINGS EVERYTHING WAS PROVIDED TO THE AO AND IT WA S REQUESTED THAT THE AO MAY PLEASE AGAIN MAKE VERIFICATION AND MAY ALSO PROVIDE OPPORTUNITY OF CROSS EXAMINATION. HE ALSO SUBMITTED THAT EVEN ONE CREDITOR PERSONALLY APPEARED BEFORE THE AO AND CONFIRMED THE TRANSACTION AND ANOTHER CREDITOR WAS ALSO PROD UCED BEFORE THE AO, BUT AO DID NOT RECORD HIS STATEMENT. THE AO REJECTED ALL THE EVIDENCES SUBMITTED BY THE ASSESSEE THAT TOO WITHOUT MAKING ANY VERIFICATION AND WITHOUT BRINGING ANYTHING CONTRARY ON THE RECORD. HE FURTHER SUBMITTED THAT THE LD. CIT(A) ALSO ACCEPTED UNSUBSTANTIATED ADVERSE OBSERVATIONS OF THE AO THAT TOO WITHOUT BRINGING ANYTHING CONTRARY ON THE RECORD AND WITHOUT MAKING ANY FURTHER INQUIRIES. LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, TH IS CASE NEEDS TO BE SENT BACK TO THE AO WITH THE DIRECTIONS TO CONSIDER THE EVIDENCES PLACED BY THE ASSESSEE ON RECORD DURING THE REMAND PROCEEDINGS AND MAKE FRESH INQUIRIES IF NEEDED AND TO PROVIDE COPIES OF STATEMENTS RECORDED AND OTHER ADVERSE MATERIAL COLLECTED ITA NO. 1282/ DEL/ 2010 5 BY THE AO ALONGWITH OPPORTUNITY OF CROSS EXAMINATION, BEFORE TAKING ANY ADVERSE INFERENCE AGAINST THE ASSESSE E . 6. ON THE OTHER HAND, LD. DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED T HE RECORDS , ESPECIALLY THE ORDERS OF THE LOWER AUTHORITIES ALONGWITH THE PAPER BOOK AND BRIEF SYNOPSIS SUBMITTED BY THE ASSESSEE. 7.1 LD. COUNSEL OF THE ASSESSEE DURING THE HEARING BEFORE US HAD STATED THAT ASSESSING OFFICER HAS NOT PROVIDED ADEQUATE OP PORTUNITY TO THE ASSESSEE TO SUBSTANTITATE ITS CLAIM AND SIMILARLY THE LD. FIRST APPELLATE AUTHORITY HAS UPHELD THE ORDER OF THE ASSESSING OFFICER. THEREFORE, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL MAY BE SET A SIDE TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD. WE FIND THAT LD. COUNSEL OF THE ASSESSEE HAS FORCE IN HIS CONTENTION THAT THIS CASE BEEN DECIDED WITHOUT GIVING SUFFICIENT OPPORTUNITY AND IN VIOLATI ON OF PRINCIPLES OF NATURAL JUSTICE AND ADDITIONS HAVE BEEN MADE AND CONFIRMED ON THE BASIS OF PRESUMPTIONS AND UNSUBSTANTIATED FALSE ALLEGATIONS. WE ALSO FIND THAT AO MADE ADDITIONS DISBELIEVING THE GENUINENESS OF BUSINESS OF THE ASSESSEE ON THE BASIS OF SOME INQUIRIES MADE BY HIM AT THE ITA NO. 1282/ DEL/ 2010 6 ASSESSEE S BACK. WE FIND THAT SUFFICIENT TIME AND OPPORTUNITY WAS NOT GIVEN BY THE AO AS WELL AS BY THE LD. CIT(A). 7.2 IN OUR CONSIDERED OPINION, IN THE INTEREST OF NATURAL JUSTICE, THE ISSUE MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE ISSUE INVOLVED IN THE PRESENT APPEAL TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO CONSIDER THE SAME AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE O PEN C OURT ON 31/ 10 /20 14 SD/ - SD/ - [ T.S. KAPOOR ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 31 / 10 /201 4 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 1282/ DEL/ 2010 7