ITO, Ghaziabad V. Shri Prashant Agarwal, Ghaziabad

ITA 1502/DEL/2012

• Counselvise Citation: 150220114 RSA 2012
• Duration Of Justice: 2 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 13-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 30-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI I.C. SUDHIR, JUDICIAL MEMBER ITA NO. 1502 /DEL / 2012 ASSESSMENT YEAR: 2008 - 09 INCOME TAX OFFICER, VS. PRASHANT AGARWAL, WARD - 2(1), GHAZIABAD KM - 147, KAVI NAGAR, GHAZIABAD (PAN: AFRPA4411R ) (APPELLANT) (RESPONDENT) APPELLANT BY : SH.VIKRAM SAHAY, SR. DR RESPONDEN T BY: NONE ORDER PER SHRI I.C. SUDHIR, JM : 1. THE REVENUE HAS QUESTIONED THE FIRST APPELLATE ORDER ON THE GROUND THAT THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 23,87,374/ - BY HOLDING THAT ONCE THE REASONABLE G.P. OF 4% IS ADOPTED, ANY SUITABLE ADDITION ON ACCOUNT OF SUNDRY CREDITORS WOULD NOT BE DESIRABLE AND JUSTIFIED IGNORING THE FACT THAT ADOPTING G.P. OF 4% CAN ONLY COVER UP LEAKAGES OF UNVERIFIED EXPENSES SHO WN IN PROF IT AND LOSS IN THIS CASE. 2. HEARD AND CONSIDERED THE ARGUMENT ADVANCED BY THE LEARNED SR. DR IN VIEW OF THE ORDERS OF THE AUTHORITIES BELOW. 3. IN SUPPORT OF THE GROUND, THE LEARNED SR. DR HAS PLACED RELIANCE ON THE ASSESSMENT ORDER. HE REITERATED THE CON TENTS OF THE GROUND. HE SUBMITTED THAT 2 ITA NO. 1502/DEL /2012 ASSESSMENT YEAR: 2008 - 09 THE LEARNED CIT(A) IN HIS ORDER HAS QUOTED A CASE IN SIMILAR BUSINESS WITH G.P. OF 4.5% BUT WITHOUT MENTIONING WHETHER IT WAS ALSO A CASE HAVING SUCH A HUGE UNVERIFIED SUNDRY CREDITORS. 4. HAVING GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW, WE FIND THE RELEVANT FACTS REMAINED THAT IN ITS BALANCE - SHEET THE ASSESSEE HAD CLAIMED LIABILITY OF RS. 1,19,36,870/ - UNDER THE HEAD SUNDRY CREDITORS . SINCE DESPITE SUFFICIENT OPPORTUNITY, THE ASSESSEE DID NOT PRODUCE THE BOOK S OF ACCOUNT AND OTHER RELEVANT DOCUMENTS, ETC. T HE A.O. HELD THAT THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE CLAIMED LIABILITY AND EVEN FAILED TO FURNISH THE POSTAL ADDRESS OF SUCH SUNDRY CREDITORS. HE ACCORDINGLY DISALLOWED 20% OF THE CLAIMED SU NDRY CREDITORS RESULTING IN ADDITION OF RS. 23,87,374/ - ON ACCOUNT OF BOGUS LIABILITY . LEARNED CIT(A) HAS DELETED THIS ADDITION ON THE BASIS THAT ONCE A REASONABLE G.P. OF 4% IS ADOPTED, ANY SUITABLE ADDITION ON ACCOUNT OF SUNDRY CREDITORS WOULD NOT BE DES IRABLE AND JUSTIFIED. HE NOTED FURTHER THAT THE IDEA OF A.O. FOR MAKING ADDITION OF 20% OF CREDIT BALANCE IS ALSO NOT PROPER. 5. WE DO NOT AGREE WITH THE AFORESAID VIEW EXPRESSED BY THE LEARNED CIT(A) TO JUSTIFY HIS ACTION IN DELETING THE ADDITION AS CASH C REDIT IS AN ITEM OF BALANCE - SHEET WHICH IS NOT TO BE COVERED IN G.P. ASSUMPTION . WE THUS, IN THE INTEREST OF JUSTICE, SET ASIDE THE MATTER TO THE FILE OF THE LEARNED CIT(A) TO DECIDE THE ISSUE AFRESH REGARDING THE GENUINENESS OF THE SUNDRY CREDITORS, AFTER 3 ITA NO. 1502/DEL /2012 ASSESSMENT YEAR: 2008 - 09 AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE PARTIES. GROUND IS THUS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 29TH JANUARY, 2015. SD/ - SD/ - (G.D. AGRAWAL) (I.C. SUDHIR) VICE PRESIDENT JUDICIAL MEMBER DATED: 29 TH JANUARY, 2015. RK/ - COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI