Dr. Varsha Bhasin, New Delhi V. ITO, New Delhi

ITA 1354/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74198 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 20-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: R S BHATIA
• Keywords: Principle of natural justice

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H : NEW DELHI BEFORE SHRI SAMIM YAHYA , ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 1354 /DEL/ 2013 (ASSESSMENT YEAR: 2009 - 10 ) VARSHA BHASIN, 7/36, DOUBLE STOREY, NEW DELHI - 9 AAGPB3212M VS. ITO WARD 37(2) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : R.S.BHATIA, ADV. RESPONDENT BY: SAMEER S H ARMA, SR. DR O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THIS IS AN APPEAL PREFERRED BY TH E ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - XXX VI I I , NEW DELHI DATED 18 . 12.2012 FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS: - 1. THAT THE INCOME TAX OFFICER HAD PASSED ORDER AGAINST THE LAW FACTS AND NATURAL JUSTICE WITH M ALA - FIDE INTENTION. 2. THAT THE INCOME TAX OFFICER PASSED THIS ORDER IN WHICH HE IGNORED ALL GENUINE EXPENSES AND ADDED IN INCOME OF ASSESSEE AND ALSO ERRED AS NATURE OF ASSESSEES INCOME BUSINESS. 3. THAT THE ASSESSING OFFICER HAD ADDITION AS DISCUSSED IN PARA 5 IN INCOME TAX ORDER THEN HE HAS COMPARED G.P. RATE WITH LAST YEAR WRONGLY CALCULATION AND ASSESSEE WAS FILED SALES, PURCHASES MONTH WISE FIGURE AND ALSO OPENING AND CLOSING STOCK AS PER AUDITED BALANCE SHEET SHOWN. THAT THE ADDITION OF RS. 2,43,5 69/ - IS IN INCOME OF ASSESSEE UNJUST, AGAINST THE LAW OF ACCOUNTING SYSTEM. 4. THAT THE ASSESSING OFFICER IN PARA 6 IN INCOME TAX ORDER RS. 315/ - AS SHOWN HEAD IN PROFIT & LOSS A/C RS. 37,144/ - BANK CHARGES AND RS. 2,96,851/ - BANK INTEREST, THESE EXPENSES WAS PAID BY THE FIRM TO BANK OF INDIA AS PER BANK STATEMENT ARE SHOWN. THAT THE ADDITION OF RS. 3,33,995/ - IS AGAINST THE LAW AND JUSTICE. 5. THAT THE ASSESSING OFFICER IN PARA 7 DISALLOWED TOTAL EXPENSES RS. 4,93,718/ - THESE EXPENSES ARE NECESSITY FOR A NY BUSINESS FIRM, BUT THE ASSESSING OFFICER HAS ADDED ALL EXPENSES. THAT THE ASSESSEES FIRM ALL EXPENSES HEAD WAS GIVEN TO THE ASSESSING OFFICER AND ALSO THESE EXPENSES WAS NOT APPLICABLE FOR TDS. THAT THE ADDITION OF RS. 4,93,718/ - IS AGAINST THE LAW OF NATURAL JUSTICE. PAGE NO. 2 6. THAT THE AO HAD ADDED IN PARA 8 RS. 38,815/ - AS DISALLOWED ON PERSONAL EXPENSES BUT THE ALL EXPENSES WAS SHOWN IN FIRMS PROFIT & LOSS A/C AND ALSO AUDITED BY C.A FOR EXPENSE BUSINESS PURPOSE. THAT THE ADDITION OF PARA 8 RS. 38,815/ - A GAINST THE LAW OF JUSTICE. 3. BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A DOCTOR AND PROPRIETOR OF M/S. VEE CARE INCORPORATION, A PROPRIETARY CONCERN DOING BUSINESS IN MEDICAL EQUIPMENT AND SURGICAL EQUIPMENT ; AND SHE ALSO HAVE INCOME FROM PROFESS ION. THE ASSESSEE HAS FILED HER RETURN OF INCOME FOR ASSESSMENT YEAR 2009 - 10 DECLARING INCOME OF RS. 3 ,08,910/ - AND ALSO CLAIMED DEDUCTION UNDER CHAPTER VIA OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT) AMOUNTING TO RS. 1,00,000 AND THUS THE TOTAL TAXABLE INCOME RETURN ED BY HER WAS RS. 2,08,910/ - . THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT, AND THE MATTER WAS FIXED FOR 29.11.2011 AND ON 05.12.2012, HOWEVER NO ONE APPEARED ON BEHALF OF THE ASSESSEE, THEREFORE THE MATTER WAS FIXED FOR 12.12.2011, W HEREIN THE LD AR OF THE ASSESSEE ATTENDED THE PROCEEDING AND FILED DETAILS ASKED VIDE THE QUESTIONNAIRE. ACCORDING TO THE ASSESSING OFFICER FOR THE RELEVANT ASSESSMENT YEAR , THE ASSESSEE HAS SHOWN A NET PROFIT 1.56% AS AGAINST THE NET PROFIT WHICH S HE YIEL DED LAST YEAR I.E. 2.76%; THE ASSESSEE WAS ASKED VIDE ORDER SHEET ENTRY DATED 16.12.2011 TO FURNISH THE DETAILS / CONFIRMATION, BANK ACCOUNTS, BOOKS OF ACCOUNTS, BILLS AND VOUCHERS IN SUPPORT OF THE SECURED LOANS, UNSECURED LOANS, SUNDRY CREDITORS AND ADVAN CES , INVESTMENT MADE, PURCHASES, SALES AND EXPENSES CLAIMED IN THE INCOME AND EXPENDITURE A/C AND THE MATTER WAS FIXED FOR 21.12.2011. SINCE NO ONE APPEARED BEFORE THE ASSESSING OFFICER ON THAT DATE THE MATTER WAS AGAIN ADJOURNED TO 26.12.2011. THE ASSESS ING OFFICER HAS NOTED THAT ON 26.12.2011 THE AR OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND DID NOT FILE DETAILS/ CONFIRMATION SOUGHT FOR BY THE ASSESSING OFFICER . F OR FURNISHING THE DETAILS/ CONFIRMATION, BOOKS OF ACCOUNT, BANK STATEMENTS, BILLS AND VOUC HERS, THE CASE WAS FIXED FOR NEXT DAY. ACCORDING TO THE ASSESSING OFFICER ON 27.12.2011 THE AR OF THE ASSESSEE FILED CONFIRMATION BUT COULD NOT PRODUCE BOOKS OF ACCOUNTS, BILLS AND VOUCHERS TO VERIFY THE PURCHASE, SALE AND EXPENSES DEBITED IN THE INCOME & EXPENDITURE ACCOUNT. SO, ACCORDING TO THE ASSESSING OFFICER DESPITE GIVING SEVERAL OPPORTUNITIES THE ASSESSEE FAILED TO PRODUCE THE BOOKS OF ACCOUNT, BILLS AND VOUCHERS. THEREFORE HE WENT AHEAD WITH THE ASSESSMENT PROCEEDINGS AND MADE TOTAL ADDITION AS BE LOW: - PAGE NO. 3 (RS.) 2,08,910/ - RETURNED INCOME AS DECLARED ADD: - 1. ADDITION AS DISCUSSED IN PARA 5 ABOVE 2,43,569/ - 2. ADDITION AS DISCUSSED IN PARA 6 ABOVE 3,33,995/ - 3. ADDITION AS DISCUSSED IN PARA 7 ABOVE 4,93,718/ - 4. ADDITION AS DISCUSSED IN P ARA 8 ABOVE 38,815/ - TOTAL INCOME 13,19,007/ - ROUNDED OFF 13,19,010/ - 4. AGGRIEVED BY THE SAID ORDER OF THE LD ASSESSING OFFICER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT(A) , WHO WAS PLEASED TO DISMISS THE SAID APPEAL PREFER RED BY THE ASSESSEE AND CONFIRM THE ORDER OF THE ASSESSING OFFICER. AGGRIEVED BY THE SAID ORDER OF THE LD CIT(A) THE ASSESSEE IS BEFORE US. 5. THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT SHE DID NOT GET SUFFICIENT TIME TO COLLECT AND PRODUCE THE NECESSARY DOCUMENTS BEFORE THE ASSESSING OFFICER IN ORDER TO SATISFY HIM IN RESPECT TO THE QUER IES RAISED BY HIM IN RESPECT TO THE EXPENSES INCURRED BY HER IN THE COURSE OF BUSINESS. THEREFORE, ACCORDING TO THE LD AR , ADEQUATE OPPORTUNITY AND TIME WAS NOT GRANTED TO THE ASSESSEE BY THE ASSESSING OFFICER TO CLARIF Y HER STAND AND 30 DAYS WAS TOO SHORT A PERIOD TO COLLECT ALL DOCUMENTS DEMANDED BY AO AND THEREFORE COULD NOT SUBSTANTIATE HER CLAIMS . THEREFORE THE LD AR PLEADS THAT SINCE THERE WAS VIOLATION OF PRINCIPLE S OF NATURAL JUSTICE, THE ORDER OF THE LD CIT(A) HAS TO BE STRUCK DOWN . ON THE OTHER HAND THE LD DR RELIED ON THE ORDER OF THE ASSESSING OFFICER AND LD CIT(A) AND TOOK PAIN TO SHOW THAT SEVERAL OPPORTUNITIES WERE GIVEN TO THE ASSESSEE TO PRODUCE THE RECORDS . THEREFORE THE LD DR CONTENDED THAT THE ORDER OF THE LD CIT(A) IS LEGALLY TENABLE AND THEREFORE SHOULD NOT BE INTERFERED WITH. 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY GONE THROUGH THE RECORDS. WE FIND THAT AT THE FAG END BEFORE THE ASSE SSMENT ORDER WAS PASSED FEW OPPORTUNITIES WERE GRANTED TO THE ASSESSEE, HOWEVER WE FEEL THAT THE TIME GRANTED TO THE ASSESSEE COULD NOT BE SUFFICIENT FOR HER TO COLLECT ALL THE DOCUMENTS NECESSARY TO CORROBORATE AND SUBSTANTIATE HER CLAIM AND SATISFY THE A SSESSING OFFICER , THEREFORE IN OUR VIEW THIS MATTER NEED TO BE ADJUDICATED AFRESH. THEREFORE WE DIRECT THE ASSESSING OFFICER, TO ADJUDICATE AFRESH THIS MATTER AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE. IN THE SAID CIRCUMSTANCES WE SET ASIDE THE ORD ER OF THE LD CIT(A) AND REMAND THE CASE PAGE NO. 4 BACK TO THE FILE OF THE ASSESSING OFFICER TO ADJUDICATE THE SAME, AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE . 7 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN COURT ON 25 . 02 .2014. - SD/ - - SD/ - ( SAMIM YAHYA ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 25 / 02 / 2014 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI