Smt. Kanta Rani, Kurukshetra V. ACIT, Karnal

ITA 1373/DEL/2013

• Counselvise Citation: 137320114 RSA 2013
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 11-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SAROHA
• Assessee Lawyers: RAJAN MALIK
• Keywords: Principle of natural justice

Judgement Text

1 ITA NO. 13 73/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER & SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A .NO.-1373/DE L/2013 (ASSESSMENT YEAR-2008- 09) KANTA RANI, PROP. M/S DES RAJ MUKAND LAL & CO., SHOP NO. 1 & 2, NEW GRAIN MARKET, KURUKSHETRA. AAJFA4083E VS ACIT, CENTRAL CIRCLE, KARNAL. APPELLANT BY SH. RAJAN MALIK, ADV. RESPONDENT BY SH. A.K. SAROHA, CIT-DR ORDER PER H.S. SIDHU, J.M. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE IMPUGNED ORDER ON THE FOLLOWING GROUNDS: 1. THAT THE ORDER OF LD. CIT(A) IS BAD IN LAW AND ON FACTS. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) I S NOT JUSTIFIED WHILE UPHOLDING THE ORDERS OF THE ASSESSI NG OFFICER WITHOUT APPRECIATING THE FACTS OF THE CASE THAT THE SURRENDER MADE AT THE TIME OF SEARCH, BEING MORE, C OVERS THE ADDITION OF RS. 22,37,513/- ALSO WHICH AMOUNTS TO DOUBLE ADDITION. 3. THAT THE ORDERS OF CIT(A) IS NOT JUSTIFIED WHILE UP HOLDING THE ADDITION OF ONLY ON THE BASIS OF GP RATE BRUSHING A SIDE THE DATE OF HEARING 11.08.2015 DATE OF PRONOUNCEMENT 18.08.2015 2 ITA NO. 13 73/DEL/2013 SUBMISSIONS OF THE ASSESSEE AND MERELY RELYING ON T HE SURRENDER MADE BY THE COUNSEL OF THE ASSESSEE CONTR ARY TO THE EVIDENCES ON RECORD, WHICH BEING UN-CORROBORATI VE, AGAINST NATURAL JUSTICE, AND EQUITY, SHOULD NOT HAV E BEEN ACTED UPON. 4. THE LD. CIT(A) HAS ERRED IN DISALLOWING THE INTERES T ACTUALLY PAID AT THE RATE MORE THAN 12% WITHOUT DOUBTING ITS PAYMENT DURING THIS YEAR AND HAVING BEEN ACCEPTED B Y THE DEPARTMENT SINCE MANY EARLIER YEARS. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEAR D AND DISPOSED OFF. 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES. THEREFORE, NO NEED TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. 3. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSE SSEE STATED THAT LD. FIRST APPELLATE AUTHORITY HAS WRONGLY UPHOLD TH E ADDITION MADE BY THE AO AMOUNTING TO RS. 22,37,513/- WHICH AMOUNT S TO DOUBLE THE ADDITION BECAUSE ASSESSEE HAS MADE SURRENDER AT THE TIME OF SEARCH AMOUNTING TO RS. 40 LAKHS TO COVER UP ALL TH E DISCREPANCIES. THEREFORE, THE ADDITION IN DISPUTE IS NOT SUSTAINAB LE IN THE EYE OF LAW. HE FURTHER STATED THAT THE ADDITION IN DISPUT E IS MERELY ON THE BASIS OF SUSPICIOUS WITHOUT ANY MATERIAL. THE ASSE SSEE HAS PRODUCED ALL THE COMPARABLE BILLS/VOUCHERS FOR SUBS TANTIATING HER CLAIM BEFORE THE REVENUE AUTHORITY INSPITE OF THE S AME. THE REVENUE AUTHORITY HAS MADE THE ADDITION IN DISPUTE WITHOUT PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. AS REGARD TO THE SURRENDER MADE BY THE HUSBAND OF THE ASSESSEE THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE SURRENDER OBTAIN UNDER DUR ESS AND 3 ITA NO. 13 73/DEL/2013 COERCION FROM THE HUSBAND OF THE ASSESSEE, THAT TOO AT THE BACK OF THE ASSESSEE FOR WHICH NEITHER ASSESSEE CON-CENTER ED NOR ANY SUCH IMPRESSION WAS THERE FROM ASSESSEES SIDE. THE ASS ESSEE HAS FILED THE AFFIDAVIT TO SUPPORT HIS CONTENTION BEFORE THE AUTHORITY BELOW BUT THE SAME HAS NOT BEEN APPRECIATED BY THEM. SIM ILARLY AS REGARD TO THE DISALLOWANCE OF INTEREST OF RS. 3,40, 629/- THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSE E HAS FILED HER REPLY DATED 24/11/2009 ESTABLISHING THAT THE ASSESS EE FIRM WAS FORCED TO PAY INTEREST AT THE PREVAILING MARKET RAT ES WHICH RANGES @ 9% TO 18% OTHERWISE IN NORMAL CIRCUMSTANCES NO BUSI NESSMEN WILL AGREE TO BORROW EVEN ON HIGHER AND UNREASONABLE RAT ES OF INTEREST. HE STATED THAT LD. AUTHORITIES BELOW HAS NOT APPREC IATED THE EXPLANATION OF THE ASSESSEE AS WELL AS THE EVIDENCE SUPPORTING HER CLAIM AND DISMISS THE APPEAL FILED BY THE ASSESSEE. 4. LD. COUNSEL FOR THE ASSESSEE REQUESTED THAT ISSU ES IN DISPUTE MAY BE SET ASIDE TO THE AO TO DECIDE THE SAME AFRES H UNDER THE LAW AFTER GIVING OPPORTUNITY TO THE ASSESSEE. 5. LD. DR STRONGLY OBJECT THE REQUEST OF THE ASSESS EE AND RELIED UPON THE ORDER PASSED BY THE REVENUE AUTHORITIES. HE STATED THAT BOTH THE AUTHORITIES HAVE GIVEN SUFFICIENT OPPORTUN ITY TO THE ASSESSEE FOR SUBSTANTIATING HER CLAIM BEFORE THEM B UT THE ASSESSEE HAS NOT AVAILED THE SAME. THEREFORE, THE ISSUE IN DISPUTE MAY NOT BE SET ASIDE TO THE AUTHORITY BELOW AND THE APPEAL FILED BY THE ASSESSEE MAY BE DISMISSED. TO SUPPORT THE ORDER OF LD. CIT(A) HE CITED: 4 ITA NO. 13 73/DEL/2013 1. STERLING MACHINE TOOLS VS. CIT, 123 ITR 181 (ALLAHA BD); 2. RAMESHCHANDRA & CO. VS. CIT, 35 TAXMAN 153 (BOM.); 3. RAMANLAL KAMDAR VS. CIT, 108 ITR 73 (MAD.). 6. WE HAVE HEARD THE BOTH PARTIES AND PERUSED THE R ELEVANT RECORD AVAILABLE WITH US SPECIALLY THE ORDERS PASSE D BY THE REVENUE AUTHORITY ALONG WITH THE CASE LAW SUBMITTED BY THE LD. DR I.E. 4. STERLING MACHINE TOOLS VS. CIT, 123 ITR 181 (ALLAHA BD); 5. RAMESHCHANDRA & CO. VS. CIT, 35 TAXMAN 153 (BOM.); 6. RAMANLAL KAMDAR VS. CIT, 108 ITR 73 (MAD.). 7. WE ARE OF THE CONSIDERED VIEW THAT ASSESSEE IS A COMMISSION AGENT AND ARE SO DEALS IN FERTILIZERS AND PESTICIDE S FILED HER RETURN OF INCOME ON 30/09/2008 RETURNING LOSS OF RS. 33,08,14 9/- WHICH WAS SUBSEQUENTLY REVISED ON 04/03/2009 IN COMPLIANC E TO THE NOTICE U/S 143A OF THE INCOME TAX ACT, 1961 RETURNI NG INCOME OF RS. 5,59,880/- INCLUDING AN AMOUNT OF RS. 40 LAKHS BEING AMOUNT OF SURRENDER AT THE TIME OF SEARCH. THE AO PROCESS ED THE RETURN OF INCOME OF THE ASSESSEE AFTER ADOPTING PRESCRIBED PR OCEDURE UNDER THE LAW AND MADE THE ADDITION IN DISPUTE. NO DOUBT THE ASSESSEE HAS FILED HER REPLY BEFORE THE AUTHORITIES BELOW FO R SUBSTANTIATING THE LOSS CAUSES BY HER BUT IN OUR CONSIDERED VIEW T HE EXPLANATION GIVEN BY THE ASSESSEE AS WELL AS THE EVIDENCES FILE D BY HER HAS NOT BEEN PROPERLY APPRECIATED BY THE AUTHORITIES BELOW. SECONDLY THE SURRENDER MADE BY SHRI MUKUND LAL HUSBAND OF THE AS SESSEE HAS ALSO BEEN PROTESTED BY THE ASSESSEE BY WAY OF FILIN G HER AFFIDAVIT BUT THE SAME HAS ALSO NOT BEEN PROPERLY APPRECIATED BY THE AUTHORITIES BELOW. SIMILARLY THE DISALLOWANCE OF INTEREST ASSE SSEE HAS ALSO SUBMITTED HER REPLY DATED 24/11/2009 EXPLAINING THE REASON FOR 5 ITA NO. 13 73/DEL/2013 PAYMENT OF INTEREST AT THE PREVAILING MARKET RATE B UT THE SAME HAS ALSO NOT BEEN PROPERLY APPRECIATED BY THE REVENUE A UTHORITY. 8. AFTER GOING THROUGH THE ORDERS PASSED BY THE REV ENUE AUTHORITIES AS WELL AS THE CASE LAWS CITED BY THE L D. DR, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ORDER IS AGAI NST THE PRINCIPLE OF NATURAL JUSTICE. IN THE INTEREST OF JUSTICE, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUES IN DISPUTE REQUIRE READJUDICATION/APPRECIATION AT THE LEVEL OF AO WITH DIRECTION TO DECIDE THE SAME AFRESH UNDER THE LAW AFTER GIVING O PPORTUNITY TO THE ASSESSEE. LD. DR HAS ALSO CITED THREE CITATIONS: 1. STERLING MACHINE TOOLS VS. CIT, 123 ITR 181 (ALLAHA BD); 2. RAMESHCHANDRA & CO. VS. CIT, 35 TAXMAN 153 (BOM.); 3. RAMANLAL KAMDAR VS. CIT, 108 ITR 73 (MAD.). THE AO IS ALSO DIRECTED TO GO THROUGH THE SAME AND DECIDE THE ISSUES IN DISPUTE AFRESH AFTER GIVING OPPORTUNITY T O THE ASSESSEE AND AFTER THOROUGHLY EXAMINING THE EVIDENCE FILED BY TH E ASSESSEE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 18/08/2015 SD/- SD/- (N.K. SAINI) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18/08/2015 *KAVITA, P.S. 6 ITA NO. 13 73/DEL/2013 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 7 ITA NO. 13 73/DEL/2013 DATE 1. DRAFT DICTATED ON 17/08/2015 2. DRAFT PLACED BEFORE AUTHOR 17/08/2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 17/08/2015 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 17/08/2015 5. APPROVED DRAFT COMES TO THE SR.PS/PS 17/08/2015 6. KEPT FOR PRONOUNCEMENT ON 18/08/2015 7. FILE SENT TO THE BENCH CLERK 19/08/2015 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.