ITO, New Delhi V. Sh. Syed Kazim Raza, New Delhi

ITA 1292/DEL/2013

• Counselvise Citation: 129220114 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 20-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 06-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V K BAJAJ; RAVINDER BAJAJ
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3); 133(6)

Judgement Text

ITA NO.1292/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 1292/DEL/2013 A.Y. : 2008-09 ITO, WARD 22(4), ROOM NO. 1003, 10 TH FLOOR, E-2 BLOCK, DR. SP MUKERJEE CIVIC CENTRE, JLN MARG, MINTO ROAD, NEW DELHI 110 002 VS. SH. SYED KAZIM RAJA PROP. M/S KAY AAR CONSTRUCTION, 716, DDA JANTA FLATS, PUL PEHLADPUR, NEW DELHI 110 044 (PAN: ADFPR0895Q) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. RAKESH KUMAR, SR. DR ASSESSEE BY : SH. V.K. BAJAJ AND SH. RAVINDER BAJAJ, ADV. DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 20 2020 20- -- -8 88 8- -- -2014 2014 2014 2014 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 22 2222 22- -- -8 88 8- -- -2014 2014 2014 2014 ORDER ORDER ORDER ORDER PER PER PER PER H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU : : : : J JJ JM MM M THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXIII, NE W DELHI DATED 28.12.2012 PERTAINING TO ASSESSMENT YEAR 2008-09. T HE GROUNDS RAISED READ AS UNDER :- ITA NO.1292/DEL/2013 2 1. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 15,15,851/- MADE BY THE AO ON THE GROUND THAT LIAB ILITIES OF RS. 31,33,424/- AS BOGUS / AS CEASED LIABILITIES UNDER SECTION 41(1)(A) OUT OF TOTAL SUNDRY CREDITORS OF R S. 46,98,427/-. 2. ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN RELYING ON A CERTIFICATE ISSUED BY THE BANKER OF ASSESSEE, BY ADMITTING ADDITIONAL EVIDENC E WITHOUT ALLOWING AO TO EXAMINE THE SAME, THUS VIOLA TING RULE 46A(3) OF THE IT RULE, 1962. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F HEARING OF THE APPEAL. 2. BRIEFLY FACTS STATED IN THIS CASE ARE THAT THE A SSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF CIVIL CONSTRU CTION AND HAD FILED ITS RETURN OF INCOME FOR THE ASSTT. YEAR 2008-09 ON 30.9.2008 DECLARING INCOME OF RS. 2,350/-. THE ASSESSMENT P ROCEEDINGS UNDER SECTION 143(3) WERE COMPLETED BY THE AO ON 30.12.2 010 AT AN INCOME OF RS. 31,35,770/- AFTER MAKING THE ADDITION S OF RS. 31,33,434/- U/S. 41(1)(A) OUT OF OUTSTANDING BALANC ES OF SUNDRY CREDITORS. THE AO ISSUED NOTICES TO VARIOUS SUN DRY CREDITORS TO CONFIRM THE BALANCES REPORTED BY THE ASSESSEE, HOWE VER, MOST OF ITA NO.1292/DEL/2013 3 THE NOTICES RETURNED UNSERVED. ON VERIFYING THE PA YMENTS CLAIMED IN RESPECT OF ONE OF THE PARTIES, HE FOUND SOME MI SMATCH IN THE DETAILS PROVIDED BY THE ASSESSEE, HENCE, HE TREATED THE LIABILITIES OF RS. 31,33,424/- AS BOGUS/AS CEASED LIABILITIES UND ER SECTION 41(1)(A), OUT OF TOTAL SUNDRY CREDITORS OF RS. 46,9 8,427.. 3. AGAINST THE ABOVE ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO AFTER ELABORATE DISCUSSIONS ON THE ISSU E HAD CONSIDERED THE RELEVANT DOCUMENTS AND EVIDENCES AND ACCORDI NGLY DELETED THE ADDITION OF RS. 15.16 LACS AND BALANCE AMOUNT C ONFIRMED THE ADDITION TO THE EXTENT OF RS. 16,37,373/- WHICH WAS SURRENDERED BY THE ASSESSEE BEFORE THE CIT(A). 4. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 5. LD. DR RELIED UPON THE ORDER OF THE AO AND REQUE STED THE SAME MAY BE UPHELD. LD. DRS FURTHER CONTENTION IS THAT LD. CIT(A) HAS ERRED IN RELYING ON A CERTIFICATE ISSUED BY THE BANKER OF ASSESSEE, BY ADMITTING ADDITIONAL EVIDENCE WITHOUT ALLOWING AO TO EXAMINE THE SAME, THUS VIOLATING RULE 46A(3) OF THE I.T. RULE, 1962. 5.1 ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSE E HAS FILED THE SYNOPSIS IN SUPPORT OF HIS ARGUMENTS, THE SAME IS R EPRODUCED HERE FOR THE SAKE OF CONVENIENCE. ITA NO.1292/DEL/2013 4 1. ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION AND THE CONTRACT RECEIPTS OF THE ASSES SEE AMOUNTED TO RS.91.77 LACS DURING THE ASSESSMENT YEA R UNDER REFERENCE. 2. THE LD. ASSESSING OFFICER HAS MADE THE ADDITION OF RS. 31.35 LACS VIDE ORDERS DATED 30.12.2010 IN RESPECT OF 33 PARTIES. 3. THE LD. CIT (A) HAS DELETED ADDITION OF RS.15.16 LACS VIDE ORDER DATED 28.12.2012 AND BALANCE AMOUNT OF R S 16.37 LACS WAS CONFIRMED WHICH WAS SURRENDERED BY T HE ASSESSEE BEFORE LD. CIT(A).THE ASSESSEE RELIES UPON THE ORDERS PASSED BY THE LD. CIT(A). 4. INCOME TAX DEPARTMENT HAS FILED AN APPEAL BEFORE THE HON'BLE ITAT ON THE FOLLOWING GROUNDS:- (I) THAT THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS.15.16 LACS OUT OF LIABILITIES OF RS. 31.33 LACS ON THE GROUND THAT THESE WERE BOGUS/ CEASED LIABILI TIES U/S 41 (1 )(A) OUT OF TOTAL SUNDRY CREDITORS OF RS. 46.98 LACS. (II) THAT THE LD. CIT(A) HAS ERRED IN RELYING ON THE CERTIFICATE ISSUED BY THE BANK OF THE ASSESSEE BY ITA NO.1292/DEL/2013 5 ADMITTING AS AN ADDITIONAL EVIDENCE WITHOUT ALLOWIN G ASSESSING OFFICER TO EXAMINE THE SAME. THUS VIOLATI NG RULE 46A(3). 5. ADDITION OF RS.15.16 LACS DELETED BY LD. CIT(A) ADDITION OF RS.15.16 LACS DELETED BY LD. CIT(A) ADDITION OF RS.15.16 LACS DELETED BY LD. CIT(A) ADDITION OF RS.15.16 LACS DELETED BY LD. CIT(A) THE GROUNDS TAKEN BY THE REVENUE ARE AGAINST THE FA CTS OF THE CASE AS THE PARTIES TO WHOM PAYMENTS OF RS.1 5.16 LACS WERE MADE BY ACCOUNT PAYEE CHEQUES AND THESE PAYMENTS HAVE BEEN CONFIRMED BY THE ASSESSEE BANKER BANK OF MAHARASHTRA AND THEREFORE THESE PARTIES ARE NEITHER BOGUS NOT LIABILITIES OF THESE AMOUNTS HAD CEASED. REGARDING THE BALANCE PAYMENT OF RS.16.37 LACS, THE ASSESSEE SURRENDERED THE AMOUNT BEFORE THE LD. CIT( A) AS HE COULD NOT OBTAIN THE CONFIRMATIONS FROM THE P ARTIES DUE TO HIS ILL HEALTH AND HEART PROBLEMS AS CONFIRM ED BY THE MEDICAL CERTIFICATES AND MEDICAL REPORTS FILED AT PAGE 20. 6. ADDITIONAL EVIDENCE UNDER RULE 46A ADDITIONAL EVIDENCE UNDER RULE 46A ADDITIONAL EVIDENCE UNDER RULE 46A ADDITIONAL EVIDENCE UNDER RULE 46A THE ASSESSEE HAD FILED AN APPLICATION UNDER RULE 46 A BEFORE THE LD. CIT(A) ON 14.05.2012 ON THE VALID GR OUNDS THAT THE SUFFICIENT OPPORTUNITY WAS NOT GRANTED TO THE ITA NO.1292/DEL/2013 6 ASSESSEE AND A COPY OF NOTICES ISSUED U/S 133(6) BY THE LD. AO, WHICH WERE RETURNED UNDELIVERED OR THE DIFFERENCES WERE FOUND IN THE OUTSTANDING BALANCES WERE NOT EVEN GIVEN TO THE ASSESSEE. THE ASSESSEE ALSO DID NOT RECEIVE NOTICE DATED 06.072012 AND 20.07.2012 ISSUED BY THE LD. AA. TO T HE ASSESSEE DURING REMAND PROCEEDINGS. HENCE THE ASSESSEE WAS DENIED A REASONABLE AND PROPER OPPORTUNITY OF BEING HEARD WHICH IS AGAINST THE NAT URAL COURSE OF JUSTICE. THE LD. CIT(A) IN FACT GAVE SUFFICIENT OPPORTUNITY TO THE LD. AO. BEFORE ADMITTING THE ADDITIONAL EVIDENCE UN DER RULE 46A AND THE LD. AO. HAD FILED REMAND REPORT DA TED 06.08.2012 BEFORE THE LD. CIT(A). THE LD. AO. IN HI S REMAND REPORT HAS NOT DENIED THE FACT THAT THE COPY OF NOTICES SENT TO THE PARTIES WHICH WERE RETURNED UNDELIVERED WERE NOT GIVEN TO THE ASSESSEE. THUS SUFFICIENT OPPORTUNITY WAS THEREFORE DENIED TO THE ASSESSEE. THE ASSESSEE HAD THEREFORE FILED THE FOLLOWING DOCUMENTARY EVIDENCE BEFORE THE LD. CIT(A): ITA NO.1292/DEL/2013 7 I. BANK CERTIFICATE ISSUED BY BANK OF MAHARASHTRA F ILED BY ASSESSEE. II. COPY OF LEDGER ACCOUNT AND THE BILLS OF THE PARTIES. 7. AS PER THE BANK CERTIFICATE ISSUED BY BANK OF MAHARASHTRA FROM FARIDABAD BRANCH AND DEHRADUN BRANCH, THE ASSESSEE HAS PROVED TO THE SATISFACTION OF THE LD. CIT(A) THAT PAYMENTS OF RS.15,15,851/- WERE MAD E BY ACCOUNT PAYEE CHEQUES. THE ASSESSEE HAD ALSO FILED THE COPY OF LEDGER ACCOUNT AND THE BILLS OF THE PARTIES BEFORE LD. CIT(A) AS PER DETAILS GIVEN IN THE EXCEL SHEET WHICH WAS FILED BEFORE HON'BLE CIT(A), A COPY OF WHICH IS ATTACHED HEREWITH AT PAGE 3-9 . 8. THE ASSESSEE WAS ALSO HAVING VERY POOR HEALTH D UE TO HEART PROBLEM AND WAS ADMITTED AT KAILASH HOSPITAL, NOIDA AS PER DISCHARGE SUMMARY AND MEDICAL REPORTS OF THE HOSPITAL FILED BEFORE THE LD. CIT(A). THE ASSES SEE WAS NOT ABLE TO ATTEND THE WORK PROPERLY FOR ALMOST 18 MONTHS TILL DECEMBER 2010. AFTER THAT IT TOOK FURTH ER TWO YEARS FOR HIM TO RECOVER FULLY AND ATTEND TO HIS WO RK ON A REGULAR BASIS, A COPY OF THE DISCHARGE SUMMARY AND MEDICAL REPORTS ARE ATTACHED HEREWITH AT PAGE 20. ITA NO.1292/DEL/2013 8 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WITH REGARD TO ADDITION OF RS. 15.16 LACS DELETED B Y THE CIT(A), WE FIND THAT THE PARTIES TO WHOM THE PAYMENT OF RS. 15 .16 LACS WERE MADE BY ACCOUNT PAYEE CHEQUES AND THESE PAYMENTS HA VE BEEN CONFIRMED BY THE ASSESSEE BANKER BANK OF MAHARASTA RA AND THEREFORE, THESES PARTIES ARE NEITHER BOGUS NOR LI ABILITIES OF THESE AMOUNTS HAD CEASED. WE ALSO FIND CONSIDERABLE C OGENCY IN THE SUBMISSIONS OF THE ASSESSEE THAT REGARDING THE BAL ANCE AMOUNT OF RS. 16.37 LACS, THE ASSESSEE SURRENDERED THE AMOUNT BEFORE THE LD. CIT(A) AS HE COULD NOT OBTAIN THE CONFIRMATIONS FR OM THE PARTIES DUE TO HIS ILL HEALTH AND HEART PROBLEMS AS CONFIRMED B Y THE MEDICAL CERTIFICATES AND MEDICAL REPORTS FILED. IN VIEW OF THE ABOVE, WE FIND THAT LD. CIT(A)S HAS RIGHTLY DELETED THE ADDITION OF RS. 15.16 AND BALANCE PAYMENT OF RS. 16.37 LACS WAS RIGHTLY CON FIRMED BY THE LD. CIT(A), WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, THE SAME IS DECIDED AGAINST THE REVENUE. 6.1 WITH REGARD TO ISSUE REGARDING ADMISSION OF A DDITIONAL EVIDENCES BY THE LD. CIT(A) UNDER RULE 46A, WE FIND THAT AS PER THE ASSESSEES SUBMISSION THE ASSESSEE HAD FILED AN APPLICATION UNDER RULE 46A BEFORE THE LD. CIT(A) ON 14.05.2012 ON THE VALID GROUNDS THAT THE SUFFICIENT OPPORTUNITY WAS NOT GRANTED TO THE ASSESSEE AND A COPY OF NOTICES ISSUED U/S 133(6) BY THE LD. AO, WHICH WERE RETURNED UNDELIVERED OR THE DIFFERENCES WERE FOUND IN THE OUTSTANDING BALANCES WERE NOT EVEN GIVEN TO THE ASS ESSEE. THE ASSESSEE ALSO DID NOT RECEIVE NOTICE DATED 06.07201 2 AND 20.07.2012 ISSUED BY THE LD. AO TO THE ASSESSEE DUR ING REMAND PROCEEDINGS. HENCE THE ASSESSEE WAS DENIED A REASON ABLE AND PROPER OPPORTUNITY OF BEING HEARD WHICH IS AGAINST THE NATURAL COURSE OF JUSTICE. THE LD. CIT(A) IN FACT GAVE SUFF ICIENT OPPORTUNITY TO THE LD. AO. BEFORE ADMITTING THE ADDITIONAL EVIDENC E UNDER RULE 46A ITA NO.1292/DEL/2013 9 AND THE LD. AO. HAD FILED REMAND REPORT DATED 06.08 .2012 BEFORE THE LD. CIT(A). THE LD. AO. IN HIS REMAND REPORT HA S NOT DENIED THE FACT THAT THE COPY OF NOTICES SENT TO THE PARTIES W HICH WERE RETURNED UNDELIVERED WERE NOT GIVEN TO THE ASSESSEE. THUS SU FFICIENT OPPORTUNITY WAS THEREFORE DENIED TO THE ASSESSEE. T HE ASSESSEE HAD THEREFORE FILED THE FOLLOWING DOCUMENTARY EVIDENCE BEFORE THE LD. CIT(A): I. BANK CERTIFICATE ISSUED BY BANK OF MAHARASHTRA F ILED BY ASSESSEE. II. COPY OF LEDGER ACCOUNT AND THE BILLS OF THE PAR TIES. 6.2 WE ALSO FIND THAT AS PER THE ASSESSEES SUBMISS ION THE BANK CERTIFICATE ISSUED BY BANK OF MAHARASHTRA FROM FARI DABAD BRANCH AND DEHRADUN BRANCH, THE ASSESSEE HAS PROVED TO THE SATISFACTION OF THE LD. CIT(A) THAT PAYMENTS OF RS.15,15,851/- WERE MADE BY ACCOUNT PAYEE CHEQUES. THE ASSESSEE HAD ALSO FILED THE COPY OF LEDGER ACCOUNT AND THE BILLS OF THE PARTIES BEFORE LD. CIT(A) AS PER DETAILS GIVEN IN THE EXCEL SHEET WHICH WAS FILED BE FORE HON'BLE CIT(A), A COPY OF WHICH IS ATTACHED HEREWITH AT PAG E 3-9. THE ASSESSEE WAS ALSO HAVING VERY POOR HEALTH DUE TO HE ART PROBLEM AND WAS ADMITTED AT KAILASH HOSPITAL, NOIDA AS PER DISC HARGE SUMMARY AND MEDICAL REPORTS OF THE HOSPITAL FILED BEFORE TH E LD. CIT(A). THE ASSESSEE WAS NOT ABLE TO ATTEND THE WORK PROPERLY F OR ALMOST 18 MONTHS TILL DECEMBER 2010. AFTER THAT IT TOOK FURTH ER TWO YEARS FOR HIM TO RECOVER FULLY AND ATTEND TO HIS WORK ON A RE GULAR BASIS, A COPY ITA NO.1292/DEL/2013 10 OF THE DISCHARGE SUMMARY AND MEDICAL REPORTS AVAILA BLE ON RECORD. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS NOT VIOLATED THE RULE 46-A IN ADMITTING THE AD DITIONAL EVIDENCE FROM THE ASSESSEE, AS AO HAS FILED THE REMAND REPOR T ON THIS ACCOUNT. IN OUR CONSIDERED OPINION, WE REJECT THE CONTENTION OF THE REVENUE ON THIS ISSUE AND DECIDE THE SAME AGAINST T HE REVENUE. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/8/2014. SD/- SD/- [ [[ [S.V. MEHROTRA S.V. MEHROTRA S.V. MEHROTRA S.V. MEHROTRA] ]] ] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 22/8/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: 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.1292/DEL/2013 11