Nasir Ali, New Delhi V. Addl. CIT, Range- 23, New Delhi

ITA 1285/DEL/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5960 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 23-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B R MISHRA SENIOR
• Assessee Lawyers: RAJ KUMAR FCA SHRI SUMIT GOEL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE HONBLE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1285/DEL./2018 (ASSESSMENT YEAR : 2011-12) SHRI NASIR ALI, VS. ADDL.CIT, RANGE 23, C/O RAJ KUMAR & ASSOCIATES, NEW DELHI. CHARTERED ACCOUNTANTS, L 7A (LGF), SOUTH EXTN.PART 2, NEW DELHI 110 049. (PAN : AEXPA4947B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJ KUMAR, FCA SHRI SUMIT GOEL, FCA REVENUE BY : SHRI B.R. MISHRA, SENIOR DR DATE OF HEARING : 21.05.2018 DATE OF ORDER : 25.05.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, SHRI NASIR ALI (HEREINAFTER REFERRE D TO AS THE ASSESSEE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 30.01.2018 PASSED BY LD. CIT ( APPEALS)-31, NEW DELHI QUA THE ASSESSMENT YEAR 2011-12 ON THE GR OUNDS INTER ALIA THAT :- ITA NO.1285/DEL./2018 2 1. THAT THE ADDL. CIT RANGE-23 NEW DELHI, SINCE DID NOT ASSUME THE JURISDICTION LEGALLY VALIDLY, HE NCE THE IMPUGNED ASSTT. FRAMED BY ADDL. CIT RANGE-23, NEW DELHI IS ILLEGAL AND WITHOUT JURISDICTION. 2. THAT UNDER THE FACTS AND CIRCUMSTANCES THERE IS ABSOLUTELY NO LEGALITY AND JUSTIFICATION IN DISALLO WING THE COMMISSION EXPENSES OF RS.3,49,49,555/-. 3. THAT UNDER THE FACTS AND CIRCUMSTANCES THE DISALLOWANCE OF RS.2,69,900/- OUT OF SALARY EXPENSE S IS ILLEGAL, UNWARRANTED AND UNSUSTAINABLE IN LAW AS WE LL AS ON MERITS. 4. THAT THE LD. CIT (A) ERRED IN LAW AS WELL AS ON MERITS IN SETTING ASIDE THE ISSUE OF ADDITION OF RS.69,7211- BEING THE DIFFERENCE IN INCOME AS PER FORM-26AS BY DIRECTING THE A.O. TO VERIFY/RECONCILE THE FIGURES OF INCOME FOR THE DIFFERENCE OF RS.69,721/- AS PER FORM-26AS AGAINST DIRECTING TO DELETE THE ADDIT ION OF RS.69,721/-. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : ASSESSING OFFICER MADE DI SALLOWANCE OF RS.3,49,49,555/- CLAIMED BY THE ASSESSEE AS COMMISS ION EXPENSES ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PROVE NOT ONLY THE GENUINENESS OF THE TRANSACTION BUT ALSO FAILED TO P ROVE NEXUS OF ITA NO.1285/DEL./2018 3 PAYMENT MADE UNDER THE HEAD COMMISSION VIS--VIS SALES MADE. AO FURTHER MADE DISALLOWANCE OF RS.2,69,900/- OUT O F THE SALARY EXPENSES CLAIMED BY THE ASSESSEE TO THE TUNE OF RS. 93,42,830/- ON THE GROUND THAT THE SALARY PAYMENT SHOWN TO HAVE BE EN PAID TO NAZIR HUSAIN, ZAFAR HUSAIN AND MEHRAJ JAHAN HAS ACT UALLY NOT BEEN PAID BY THE ASSESSEE AS THEY HAVE NOT SHOWN THE SAL ARY AMOUNT IN THEIR ITR AND COMPUTATION OF INCOME. AO MADE ADDIT ION OF RS.69,271/- ON ACCOUNT OF DIFFERENCE IN THE TOTAL B USINESS RECEIPT SHOWN IN 26AS FORM AS WELL AS IN ITS PROFIT & LOSS ACCOUNT. 3. ASSESSEE CARRIED THE MATTER BY WAY OF APPEAL BEF ORE THE LD. CIT (A) WHO HAS CONFIRMED THE ADDITION OF RS.3,49,4 9,555/- AND RS.2,69,900/- AND SET ASIDE THE ISSUE OF ADDITION O F RS.69,271/- TO THE AO TO VERIFY / RECONCILE THE FIGURES AND GRANT APPROPRIATE RELIEF BY PARTLY ALLOWING THE APPEAL. FEELING AGGRIEVED, T HE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PR ESENT APPEAL. 4. ASSESSEE BY MOVING A SEPARATE APPLICATION SOUGHT TO RAISE ADDITIONAL GROUNDS AS UNDER :- ADDL. G.NO.L (TAKEN AS G.NO.L IN FORM-36) THAT THE ADDL. CIT RANGE-23 NEW DELHI, SINCE DID NO T ASSUME THE JURISDICTION LEGALLY VALIDLY, HENCE THE IMPUGNED ASSTT. FRAMED BY ADDL. CIT RANGE-23, NEW DELHI IS ILLEGAL AND WITHOUT JURISDICTION. ADDL. G. NO.2 ITA NO.1285/DEL./2018 4 THAT UNDER THE FACTS AND CIRCUMSTANCES THE LD. CIT (A) ERRED IN LAW AS WELL AS ON MERITS IN NOT ADMITTING THE ADDITIONAL EVIDENCES FILED UNDER RULE-46A . ON THE GROUND THAT BOTH THE ADDITIONAL GROUNDS SOUG HT TO BE RAISED ARE LEGAL ONES AND GO TO THE ROOT OF THE CASE. KEE PING IN VIEW THE SETTLED PRINCIPLE OF LAW THAT THE LEGAL GROUNDS CAN BE ENTERTAINED AT ANY STAGE OF THE PROCEEDINGS, THE ASSESSEE IS ALLOW ED TO RAISE THE ADDITIONAL GROUNDS WHICH ARE NECESSARY FOR COMPLETE ADJUDICATION OF THE CONTROVERSY AT HAND. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. UNDISPUTEDLY, THE ASSESSEE IS A LIC AGENT WHO HA S CLAIMED SELLING AGENCY COMMISSION EXPENSES PAID TO SIX PART IES, NAMELY, M/S. PIONEER SECURITIES PVT. LTD., MRS. MANJULA AHL UWALIA, M/S. KAMAL SPONGE & STEEL POWER LTD., MS. MEHRAJ JAHAN, SHRI NAZIR HUSSAIN AND M/S. ALI TRADING CO., WHICH HAS BEEN DI SALLOWED ON THE FAILURE OF THE ASSESSEE TO PRODUCE EVIDENCE REG ARDING THE NATURE AND EXTENT OF SERVICES RENDERED BY SELLING AGENTS. 7. IT IS THE CASE OF THE ASSESSEE THAT HE HAS NOT B EEN GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD BY CONFRONTING WITH THE ITA NO.1285/DEL./2018 5 MATERIAL RELIED UPON BY THE AO/CIT (A) NOR SUFFICIE NT TIME HAS BEEN GIVEN TO THE ASSESSEE TO PRODUCE THE CONFIRMAT ION AND DOCUMENTS AS TO MAKE PAYMENT OF SELLING AGENCY COMM ISSION. AO IN PARA 3.4 HAS CATEGORICALLY MENTIONED THAT SINCE INFORMATION CALLED FOR WAS NOT COMING FORTH EVEN AFTER ISSUANCE OF NOTICE U/S 133 (6) AND SUMMON U/S 131 OF THE ACT FOR PERSONAL APPEARANCE OF MANJULA AHLUWALIA, KAMAL SPONGE & STEEL POWER LTD., MS. MEHRAJ JAHAN, SHRI NAZIR HUSSAIN AND PIONEER SECURI TIES PVT. LTD. HE HAS PROCEEDED TO MAKE THE ADDITION. 8. ASSESSEE ALSO CHALLENGED THE JURISDICTIONAL ISSU E BY RAISING SPECIFIC GROUNDS WHICH HAVE NOT BEEN ADJUDICATED UP ON BY THE AO AS WELL AS LD. CIT (A). 9. SO FAR AS QUESTION OF MAKING ADDITION OF RS.2,69 ,900/- ON ACCOUNT OF SALARY PAYMENT IS CONCERNED, THE SAME HA S ALSO BEEN MADE BY THE AO WITHOUT CONFRONTING THE ASSESSEE WIT H THE MATERIAL/ EVIDENCE RELIED UPON BY THE AO VIZ. ITR A ND COMPUTATION OF INCOME OF NAZIR HUSAIN, ZAFAR HUSAIN AND MEHRAJ JAHAN. SO, BEING QUASI-JUDICIAL AUTHORITY, AO IS UNDER OBLIGAT ION TO PROVIDE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . 10. SO FAR AS QUESTION OF MAKING ADDITION OF RS.69, 721/- RESTORED BY LD. CIT (A) TO AO IS CONCERNED, SINCE THE ADDITI ON IS ON ACCOUNT ITA NO.1285/DEL./2018 6 OF DIFFERENCE IN FORM NO.26AS AND P&L ACCOUNT, THE SAME IS REQUIRED TO BE SETTLED BY VERIFICATION AND RECONCIL IATION BY THE AO. 11. IN THE GIVEN CIRCUMSTANCES, WE ARE OF THE CONSI DERED VIEW THAT TO MEET WITH THE ENDS OF JUSTICE, IT WOULD BE APPROPRIATE TO RESTORE THE FILE BACK TO THE AO TO DECIDE AFRESH AF TER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . HENCE IMPUGNED ORDER PASSED BY LD. CIT (A) IS SET ASIDE A ND FILE IS RESTORED TO THE AO TO DECIDE AFRESH AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. CONSEQUENTLY, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 25 TH DAY OF MAY, 2018. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH ) PRESIDENT JUDICIAL MEMBER DATED THE 25 TH DAY OF MAY, 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-31, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.