Shri Shamim Ahmed, Muzaffarnagar V. ACIT, Muzaffarnagar

ITA 1372/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3981 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-06-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 07-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 234B; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO. 1372 /DEL/201 7 [A.Y. 20 13 - 14 ] SHAMIM AHMED VS. ACIT 667/1, SOUTH KHALAPAR CIRCLE - 2 MUZAFFARNAGAR MUZAFFARNAGAR PAN : AGOPA0369 E [ ASSESSEE ] [RESPONDENT] DATE OF HEARING : 2 8 . 1 2 .2017 D ATE OF PRONOUNCEMENT : 11 .01 .201 8 ASSESSEE BY : SHRI ANKIT GUPTA , ADV. REVENUE BY : MS. ASHIMA NEB, SR. DR ORDER THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE LD. CIT(A) , MUZ AFFARNAGAR VIDE ORDER DATED 2 0 . 1 2 .201 6 FOR A.Y. 20 13 - 14 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S OF APPEAL: 1. THAT ASSESSMENT ORDER PASSED 143(3) AND THE ADDITION MADE ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. THE CIT(A) ERRED IN UP HOLDING THE SAME. 2 . THE ADDITION/ DISALLOWANCES MADE BY THE ASSESSING OFFICER ARE ILLEGAL, UNJUST, HIGHLY EXCESSIVE AND ARE NOT BASED ON ANY MATERIAL ON RECORD BY THE ASSESSING OFFICER. THE TOTAL INCOME OF THE APPELLANT HAS BEEN WRONGLY AND ILLEGALLY COMPUT ED BY THE 2 ITA NO. 1372 /DEL/201 7 ASSESSING OFFICER AT RS.43,79,684.00 AS AGAINST DECLARED INCOME OF RS, 15,48,588.00. THE CIT(A) ERRED IN SUSTAINING THE MAJOR ADDITIONS. 3. THAT, IN VIEW OF THE FACTS AND CIRCUMSTANCES, THE ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN MAKIN G THE ADDITION OF RS.L9,92,985.00 ON A CCOUNT OF LIABILITY SHOWN UNDER THE HEAD OF SUNDRY CRED I TORS , W ITHOUT APPRECIATING THAT THE ALLEGED CREDITORS H AS APPEARED AND ACCEPTED/ CONFIRM THE CLAIM MADE , WHICH IS HI GHLY ARBITRARY, UNJUST AND AGAINST THE FACTS A ND CIRCUMSTANCES OF THE CASE. 4. THAT T HE ASSESSING OFFICER HAS FAILED TO APPRECIATE AND MADE THE ADDITION/ DISALLOWANCE U/S 40(A)(IA) OF RS.28,000.00 ON BASIS OF NON DEDUCTION OF TDS ON THE INTEREST PAID TO MAHINDRA FINANCE COMPANY. THE CIT (A) UPHELD T HE SAME WITHOUT APPRECIATING THE FACT THAT THE INTEREST PAID TO NBFC HENCE THERE IS NO LIABILITY OF TDS ON SUCH PAYMENTS U/S 194A OF THE INCOME TAX ACT, 1961. 5. THAT, THE CIT (A) FAILED TO APPRECIATE, THAT, THE SAID INTEREST HAS PAID IN SHAPE OF EMI AND N O INTEREST HAS BEEN SHOWN AS PAYABLE, HENCE, THE PROVISION OF SECTION 40(A)(IA) IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THAT THE ASSESSING OFFICER/CIT(A), IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE ERRED ON FACTS AND IN LAW IN MAKING THE ADDITION/ DISALLOWANCE ON ESTIMATED BASIS OF RS.77,789/ - ON THE BASIS THAT THE BILLS/VOUCHER ARE SELF MADE CANNOT BE 3 ITA NO. 1372 /DEL/201 7 VERIFIED, WHICH IS UNJUST, ARBITRARY, UNLAWFUL, HIGHLY EXCESSIVE, BASED ON SURMISES AND CONJECTURES AND CANNOT BE JUSTIFIED BY ANY MATERIAL ON RECORD. 7. THAT THE ASSESSING OFFICER/CIT(A), IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE ERRED ON FACTS AND IN LAW IN MAKING THE ADDITION/ DISALLOWANCE ON AD - HOC BASIS OF RS.1,15,968/ - ON ACCOUNT OF LOW HOUSE WITHDRAWALS WITH OUT ANY BASIS WHICH IS UNJUST, ARBITRARY, UNLAWFUL, HIGHLY EXCESSIVE, BASED ON PRESUMPTION. 8. THE ADDITIONS CONFIRMED AND THE OBSERVATIONS MADE BY CIT (A) ARE UNJUST, UNLAWFUL AND BASED ON MERE SURMISES AND CONJUNCTURES. THE ADDITIONS MADE CANNOT BE JUST IFIED BY ANY MATERIAL ON RECORD. 9. THAT THE EXPLANATION GIVEN EVIDENCE PRODUCED, MATERIAL PLACED AND AVAILABLE ON RECORD HAS NOT BEEN PROPERLY CONSIDERED AND JUDICIALLY INTERPRETED AND THE SAME DO NOT JUSTIFY THE ADDITIONS/ ALLOWANCES MADE. 10. THAT THE I MPUGNED ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER AND ORDER PASSED BY CIT(A) ARE AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND THE SAME HAS BEEN PASSED WITHOUT AFFORDING REASONABLE AND ADEQUATE OPPORTUNITY OF BEING HEARD. 11.THAT THE INTEREST U/S 23 4A & 234B HAS BEEN WRONGLY AND ILLEGALLY CHARGED AS THE APPELLANT COULD NOT HAVE FORESEEN THE DISALLOWANCES/ADDITIONS MADE AND COULD NOT HAVE INCLUDED THE 4 ITA NO. 1372 /DEL/201 7 SAME IN CURRENT INCOME FOR PAYMENT OF ADVANCE TAX. THE INTEREST CHARGED UNDER VARIOUS SECTIONS IS ALS O WRONGLY WORKED OUT. 3. GROUND NOS.1, 2,8,9,10,12 ARE GENERAL IN NATURE AND THEREFORE, REQUIRE NO ADJUDICATION. 4. GROUND NOS. 4 AND 5 ARE NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE. ACCORDINGLY, THEY ARE DISMISSED AS NOT PRESSED. 5. AS REGARDS GRO UND NO. 3, THE BRIEF FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE TRADING OF LIVE STOCK AND HAS SHOWN BUSINESS TURNOVER OF RS. 86,95,39,419/ - AND NET PROFIT OF RS. 1 6,48,5 88/ - . THE ASSESSEE HAS SHOWN SUNDRY CREDITORS OF RS.3,01,39,082/ - . THE A.O. DURING THE ASSESSMENT PROCEEDINGS HAS ISSUED NOTICE U/S 133(6) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] TO VERIFY THE SUNDRY CREDITORS. HOWEVER IN SIX CASES WITH DETAILS GIVEN IN PARA 2 OF THE ASSESSMENT ORDER, THE NOTICES SEN T U/S 133(6) OF THE ACT WERE RECEIVED BACK. THIS FINDING WAS CONFRONT ED TO THE ASSESSEE BY THE A.O. SUBSEQUENTLY THE APPELLANT PRODUCED FOUR SUNDRY CREDITORS OUT OF THE SAME BEFORE THE A.O. THE A.O. AFTER MAKING EXAMINATION WAS NOT SATISFIED WITH THEIR GEN UINENESS AND , ACCORDINGLY , MADE ADDITION OF RS. 1 9,92,985/ - ON THIS ACCOUNT OF SIX BOGUS SUNDRY CREDIT ORS. AGGRIEVED, 5 ITA NO. 1372 /DEL/201 7 THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 6 . I HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O AND THE LD. CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. IT IS A MATTER OF RECORD THAT THE PAYMENTS TO THE SAID SUNDRY CREDITORS HAVE BEEN MADE IN THE NEXT FINANCIAL YEAR AND FOUR SUNDRY CREDITORS OUT OF SIX HAVE BEEN PRODUCED BEFORE THE ASSESSING OFFICER WHOSE STATEMENTS HAVE BEEN RECORDED AND IS A MATTER OF RECORD. THE FOLLOWING SAID CRED ITORS, AS PER DETAILS BELOW, CONFIRMED THE SAID CREDIT IN THE ASSESSEES BOOKS OF ACCOUNTS IN THE S TATEMENT SO RECORDED: A. SHRI GULZAR RS. 3,87,200/ - B. SHRI BILAL RS. 2,43,751/ - C. SHRI GULFAM RS. 2,37,120/ - D. SHRI MANNAR RS. 4,23,500/ - RS. 12,91,571/ - 7. AS REGARDS THE OTHER TWO SUNDRY CREDITORS, THEIR DETAILS ARE AS UNDER: A. S HRI GAYYUR RS. 4,57,663/ - B. SHRI MANSAF AZAM RS. 2,43,751/ - 6 ITA NO. 1372 /DEL/201 7 8. THE ASSESSEE HAS SUBMITTED THE CONFIRMATIONS AND OTHER PARTICULARS, WHICH HAVE NOT BEEN DISPUTED.. UNDER SUCH FACTS AND CIRCUMSTANCES OF THE CASE, THE IDENTITY OF THE CREDITORS, THEIR CR EDIT WORTHINESS AND GENUINENESS OF THE TRANSACTION CANNOT BE DISPUTED. ACCORDINGLY, THE ADDITION SO MADE IS DIRECTED TO BE DELETED AND THE ORDER OF THE LD. CIT(A) IS REVERSED. THUS, GROUND NO. 3 IS ALLOWED. 9. AS REGARDS GROUND NO. 6, THE ASSESSING OFFI CER MADE DISALLOWANCE OF RS. 77,785/ - ON ACCOUNT OF NON VERIFIABILITY OF BILLS AND VOUCHERS WHICH WAS CONFIRMED BY THE LD. CIT(A). 10. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS A MATTER OF RECORD THAT AS PER T HE PAPER BOOKS, THE SAID VOUCHERS AND DETAILS HAVE BEEN PRODUCED IN WHICH NO DEFECT HAS BEEN POINTED OUT. NEITHER THE ASSESSING OFFICER NOR THE LD. CIT(A) HAVE BROUGHT ON RECORD THE CLAIM OF EXPENSES IN THE PRECEDING ASSESSMENT YEARS AND THERE IS NO BASIS TO DISALLOW THE SAID CLAIM. ACCORDINGLY, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS DIRECTED TO BE DELETED. GROUND NO. 6 IS ALLOWED. 7 ITA NO. 1372 /DEL/201 7 11. AS REGARDS GROUND NO. 7, THE ASSESSING OFFICER MADE AN ADDITION OF RS. 1,15,968/ - ON ACCOUNT OF LOW HOUSE HO LD WITHDRAWALS WHICH WAS CONFIRMED BY THE LD. CIT(A). 12. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS A MATTER OF RECORD THAT THE ASSESSEE HAS DECLARED HOUSE HOLD WITHDRAWALS OF RS. 1,24 ,032/ - FOR A FAMILY CONSISTING OF SIX MEMBERS. HOWEVER, THE ASSESSING OFFICER ESTIMATED THE SAME AT RS. 20,000/ - P.M. WITHOUT BRINGING ON RECORD THE BASIS FOR ESTIMATING THE SAME. ACCORDINGLY, SUCH ESTIMATIONS ARE NOT PERMITTED AND ADDITION SO MADE IS DI RECTED TO BE DELETED. THUS, GROUND NO. 7 IS ALLOWED. 13. GROUND NO. 11 IS WITH REGARD TO CHARGING OF INTEREST WHICH IS CONSEQUENTIAL IN NATURE. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER IS PRO NOUNCED IN THE OPEN COURT ON 11 . 0 1 .201 8 . SD/ - [B.P. JAIN] ACCOUNTANT MEMBER DATED: 11 TH JANUARY, 2018 8 ITA NO. 1372 /DEL/201 7 VL/ COPY FORWARDED TO: 1 . ASSESSEE 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELH I