A.B. Excavators & Earthmovers Pvt. Ltd, Faridabad V. ITO, New Delhi

ITA 1399/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3908 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-06-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 31-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRISH BEDI
• Assessee Lawyers: S K AHUJA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 1399/DEL/2010 ASSESSMENT YEAR: 2006-07 A.B. EXCAVATORS & EARTHMOVERS PVT. LTD., 1315, SECTOR-15, FARIDABAD. AADCA9382M VS. ITO, WARD 1(1), C.R. BLDG., I.P. MARG, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K. AHUJA, CA RESPONDENT BY: AMRISH BEDI, SR. DR O R D E R PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF CIT(A) DATED 01.01.2010 FOR A.Y. 2006-07 AGAINST AS SESSMENT MADE BY AO U/S 115WE(3)/115WF. GROUNDS OF APPEAL READ AS U NDER: - 1. THE ORDER OF LD. CIT(A)-IV, CONFIRMING THE AD-H OC ADDITIONS TO THE VALUE OF FRINGE BENEFIT, MADE BY THE INCOME TAX OFF ICER, IS CONTRARY TO THE LAW AND THE FACTS OF THE CASE. 2. THE STATUTORY NOTICES U/S 115WE(2) WERE NOT SERV ED ON THE ASSESSEE COMPANY, AS THESE WERE SENT TO WRONG ADDRE SS. 3. THE ASSESSEE WAS NOT GIVEN A COPY OF THE REMAND REPORT OF THE AO, EITHER BY THE AO OR THE LD. CIT(A). THE REMAND REPORT OF THE AO WAS USED AGAINST THE ASSESSEE BY THE LD. CIT(A), WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSEE TO DEFEND IT. 4. THE LD. CIT(A), HAS NOT CONSIDERED THE SUBMISSIO NS OF THE ASSESSEE THAT THE ADDITION TO THE VALUE OF FRINGE B ENEFITS HAS BEEN MADE ON AD-HOC BASIS BY THE AO, ON THE PLEA O N THE 2 ITA NO. 1399/DEL/2010 ESTIMATION BASIS FOR WANT OF VERIFICATION, WITHOUT BRINGING ON RECORD, UNDER WHICH HEAD OF EXPENSES THE ADDITION I S BEING MADE. 2. RETURN OF FRINGE BENEFITS WAS FILED BY THE ASSES SEE AT A TOTAL VALUE OF FRINGE BENEFIT OF RS. 1,76,578/-. ACCORDI NG TO AO THE ASSESSEE DID NOT AVAIL THE OPPORTUNITY OF HEARING DESPITE VA RIOUS OPPORTUNITIES GIVEN WHICH INCLUDED SERVICE BY AFFIXTURE. IN THE CIRCUMSTANCES AO IN ABSENCE OF BOOKS OF ACCOUNT, BILLS AND VOUCHERS TO VERIFY THE EXPENSES RELATED TO VALUATION OF FRINGE BENEFITS, ESTIMATED A SUM OF RS. 1 LAKH OVER AND ABOVE THE VALUE DECLARED AND THUS, ADDITIO N OF RS. 1 LAKH WAS MADE WHICH WAS AGITATED IN AN APPEAL FILED BEFORE C IT(A). ONE OF THE GROUNDS TAKEN BEFORE CIT(A) WAS REGARDING NON-SERVI CE OF NOTICE UNDER SECTION 115 WHICH ACCORDING TO ASSESSEE WAS SENT AT WRONG ADDRESS AND THUS, IT WAS CONTENDED BY THE ASSESSEE THAT OPPORTU NITY OF HEARING WAS NOT PROVIDED. THIS GROUND OF APPEAL IS STATED TO H AVE BEEN NOT PRESSED BY THE ASSESSEE AND THUS, LD. CIT(A) HAS DISMISSED SUCH GROUND AND ON MERITS LD. CIT(A) HAS CALLED FOR REMAND REPORT OF A O WHICH HAS ALSO BEEN REPRODUCED IN THE ORDER OF CIT(A). HOWEVER, LD. CI T(A) HAS CONFIRMED THE ADDITION ON THE GROUND THAT FROM READING OF THE REMAND REPORT IT APPEARS THAT VALUATION OF FBT HAS NOT BEEN DONE IN A MANNER WHICH IS FULLY TRANSPARENT AND OBJECTIVE. UNDER VARIOUS HEA DS OF EXPENSES THERE ARE ELIMENTS OF FRINGE BENEFITS WHICH HAVE NOT BEEN SPECIFICALLY POINTED OUT AND IN SUCH CIRCUMSTANCES THE AO HAD NO OPTION BUT TO MAKE ESTIMATION AND THUS, HE HAS UPHELD THE ADDITION. I N THE REMAND REPORT AO HAD MENTIONED CERTAIN SPECIFIC AMOUNTS FOR WHICH THE PROOF WAS NOT 3 ITA NO. 1399/DEL/2010 SUBMITTED AND AO HAS MENTIONED THAT THE ASSESSEE HA S FILED BILLS ALSO IN RESPECT OF ITEMS OF FOODS AND BEVERAGES PROVIDED TO THE EMPLOYEES IN THE FACTORY PREMISES WHICH WERE CLAIMED TO BE GIVEN SET OF IN VIEW OF SEC. 115WB(2) OF THE INCOME TAX ACT. IT IS AGAINST SUCH FINDINGS OF LD. CIT(A) THE ASSESSEE HAS RAISED THE ABOVE MENTIONED GROUNDS. 3. AFTER REFERRING TO THE FACTS, IT WAS PLEADED BY LD. AR THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF ESTIMATE AS AGAINST THE FACT THAT ALL THE DETAILS WERE PROVIDED TO THE AO DURING THE COURSE OF REMAND PROCEEDINGS. IT WAS SUBMITTED THAT ASSESSMENT WAS MADE BY THE AO WITHOUT SERVICE OF NOTICE ON ASSESSEE AND EVEN AFTE R OBTAINING REMAND REPORT, THE FACT OF SUBMISSION OF ALL THE DETAILS H AS BEEN IGNORED BY LD. CIT(A). IT WAS SUBMITTED THAT WHEN DETAILS WERE FI LED BEFORE AO, LD. CIT(A) SHOULD HAVE ADJUDICATED THE EXACT QUANTUM WH ICH COULD BE ADDED AND THUS, LD. CIT(A) HAS CONFIRMED THE ADDITI ON WITHOUT APPLICATION OF MIND ON TO THE FACTS OF THE CASE. IT WAS SUBMIT TED THAT IT WILL BE IN THE INTEREST OF JUSTICE, IF THE MATTER IS RESTORED BACK TO THE FILE OF AO FOR RE- ADJUDICATION OF THE ISSUE AS PER PROVISIONS OF LAW AND THUS, HE SUBMITTED THAT ASSESSEES SUBMISSION SHOULD BE ACCEPTED. 4. ON THE OTHER HAND, RELYING ON THE ORDER OF CIT(A ), IT WAS PLEADED BY LD. AR THAT ADDITION HAS RIGHTLY BEEN CONFIRMED BY CIT(A). 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE ASSESSMENT IS MADE U/S 115WF WHICH 4 ITA NO. 1399/DEL/2010 PROVIDES BEST JUDGMENT ASSESSMENT. THE ASSESSMENT IS FRAMED IN ABSENCE OF REPRESENTATION OF THE ASSESSEE RESULTED EITHER OF NON-SERVICE OF NOTICE OR ON ACCOUNT OF FAILURE OF THE ASSESSEE TO REPRESENT BEFORE AO. BUT IN ANY CASE DURING THE COURSE OF REMAND PROCEED INGS, ALL THE DETAILS WERE MADE AVAILABLE BY THE ASSESSEE TO THE AO. THE AO HAS SPECIFICALLY MENTIONED THOSE AMOUNTS. THEREFORE, M ERE CONFIRMING THE ASSESSMENT ORDER WHICH WAS AN EX-PARTE ORDER, IS NO T JUSTIFIED AND IS NOT IN ACCORDANCE WITH LAW. THEREFORE, ACCEPTING THE R EQUEST OF LD. AR WE RESTORE THIS ISSUE TO THE FILE OF AO WITH A DIRECTI ON TO PROVIDE THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING AND TH EN TO RE-FRAME THE ASSESSMENT AS PER PROVISIONS OF LAW. WE DIRECT ACC ORDINGLY. THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN THE MANNER AFOR ESAID. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 01.06.201 0 (SHAMIM YAHYA) ACCOUNTANT MEMBER (I.P. BANSAL) JUDICIAL MEMBER DATED: 01.06.2010 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR