ACIT, New Delhi V. Sh Amritpal Singh, New Delhi

ITA 1527/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3810 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-06-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 07-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRAKAR
• Assessee Lawyers: R K KAPOOR
• Keywords: Set aside
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `A: NEW DELHI BEFORE SHRI I.P. BANSAL, JM & SHRI SHAMIM YAHYA, AM ITA NO. 1527/DEL OF 2010) ASSESSMENT YEAR: 2001-02 ACIT, CENTRAL CIRCLE 21, AMRITPAL SINGH, NEW DELHI . VS PROP. M/S ADWEL ADVERTISING SERVICES, G-24/2 MARINA ARCADE, CONNAUGHT CIRCUS, NEW DELHI. PAN: AARPS5236M APPELLANT RESPONDENT APPELLANT BY: SHRI J.P. CHANDRAKAR, SR. DR RESPONDENT BY: SHRI R.K. KAPOOR, CA ORDER PER I.P. BANSAL, JM: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRE CTED AGAINST THE ORDER OF CIT(A) DATED 25 TH JANUARY, 2010 FOR ASSTT. YEAR 2001-02. GROUNDS OF APPEAL READ AS UNDER: 1(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.37,80,384/- MADE BY THE AO U/S 154 OF THE I.T. ACT, 1961 IN RESPECT OF BENAMI CONCERN AS THE SAME HAS BEEN LEFT OUT TO BE ADDED IN THE TOTAL INCOME OF THE ASSESSEE. 2. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 2 2. VIDE ORDER DATED 17 TH MARCH, 2009 PASSED U/S 154, THE AO ADDED A SUM OF RS.37,80,384/- TO THE ORIGINALLY ASSESSED IN COME IN ORDER PASSED U/S 153A/250. ACCORDING TO THE SAID ORDER, THE ADDITIO N, WHICH WAS TO BE MADE OF A SUM OF RS.37,80,384/-, AS DISCUSSED IN THE BOD Y OF THE ASSESSMENT ORDER AT S.NO.54, WAS LEFT TO BE MADE WHILE COMPUTING TOT AL INCOME OF THE ASSESSEE. THEREFORE, ACCORDING TO AO, SUCH LEFT OU T AMOUNT OF INCOME CONSTITUTES A MISTAKE, WHICH IS APPARENT FROM RECOR D. ACCORDINGLY, NOTICE U/S 154/155 WAS ISSUED. THE ASSESSEE DID NOT APPEA R AND NO WRITTEN SUBMISSIONS WHATSOEVER WERE FILED. THEREFORE, AO P RESUMED THAT ASSESSEE HAS NOTHING TO SAY. HE PASSED THE RECTIFICATION OR DER VIDE WHICH THE IMPUGNED ADDITION WAS MADE. 3. THE ADDITION MADE IN THE SAID ORDER WAS CHALLENG ED BEFORE CIT(A). THE CIT(A) HAS UPHELD THE APPLICABILITY OF SECTION 154. HOWEVER, HE HAS ALSO CONSIDERED THE MERITS OF THE ADDITION. IT WAS PLEADED BEFORE LEARNED CIT(A) THAT SIMILAR ADDITION WAS MADE FOR A SUM OF RS.3,48,14,953/-, WHICH WAS ALSO ARISING OUT OF A NOTICE OF MCD IN RELATION TO OUTSTANDING DEMAND AND TRIBUNAL HAS UPHELD THE ORDER OF CIT(A) VIDE WH ICH SUCH ADDITION WAS DELETED. IT WAS SUBMITTED THAT FACTS RELATING TO T HAT ADDITION AND THE PRESENT ADDITION ARE SAME. CONSIDERING THOSE FACTS, IT WAS FOUND THAT AS ASSESSEE WAS MAINTAINING THE ACCOUNT ON CASH BASIS AND NO PAYMEN T WAS MADE DURING THE 3 YEAR UNDER CONSIDERATION, THEREFORE, NO ADDITION CO ULD BE MADE. IT WAS ALSO FOUND THAT ASSESSEE DID NOT INCUR ANY EXPENDITURE R ELATING TO THAT WORK, THEREFORE, ALSO NO SUCH ADDITION COULD BE MADE. TH US, KEEPING IN VIEW ORDER OF ITAT IN RESPECT OF ADDITION OF RS.3,48,14,953/-, LEARNED CIT(A) HAS DELETED THE ADDITION ON MERIT. THE REVENUE IS AGGRI EVED AND, HENCE IN APPEAL. 4. LEARNED DR, AFTER NARRATING THE FACTS, SUBMITTED THAT THE ASSESSEE HAS NOT CHALLENGED THE APPLICABILITY OF SECTION 154, TH EREFORE, ONE FACT IS CLEAR THAT THE AMOUNT WAS LEFT OUT TO BE ADDED TO THE INC OME OF THE ASSESSEE, WHICH WAS LATER ON ADDED BY THE AO VIDE IMPUGNED ORDER. HE CONTENDED THAT SO FAR AS MERITS ARE CONCERNED, SUCH ADDITION COULD NO T BE DELETED BY CIT(A) AT HIS OWN AS NO DISCUSSION WHATSOEVER IS MADE IN THE IMPUGNED ORDER PASSED U/S 154/155 OF THE ACT. HE CONTENDED THAT WHILE DE LETING THE ADDITION, THE MERITS HAVE TO BE DISCUSSED ON THE BASIS OF FACTS, WHICH MAY BE IN THE SHAPE OF EITHER MAINTENANCE OF THE ACCOUNTS ON THE BASIS OF MERCANTILE SYSTEM OR CASH BASIS AND THE OTHER FACT THAT WHETHER ANY SUCH PAYMENT WAS MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AN D ALSO THE FACT THAT WHETHER ANY EXPENDITURE WAS INCURRED BY THE ASSESSE E FOR THE SAID WORK. HE SUBMITTED THAT ALL THE FACTS RELATING TO SUCH ASPEC TS HAVE TO BE DETERMINED AND WITHOUT DETERMINING THOSE FACTS, SIMPLY RELYING ON THE ORDER OF THE ITAT IN RESPECT OF OTHER ADDITIONS, SUCH ADDITION COULD NOT BE DELETED. HE, 4 THEREFORE, SUBMITTED THAT CIT(A) WAS WRONG IN DELET ING THE ADDITION BY RELYING ON THE ORDER OF ITAT, WHICH IS IN RESPECT O F ANOTHER AMOUNT. HE CONTENDED THAT SUCH DELETION REQUIRES ASCERTAINMENT OF FACTS AND EVEN FOR DETERMINATION OF SUCH FACTS, THE CIT(A) WAS REQUIRE D TO GIVE AN OPPORTUNITY TO THE AO SO THAT AO COULD HAVE LOOKED INTO THOSE F ACTS. THUS, HE SUBMITTED THAT ADDITION HAS BEEN WRONGLY DELETED BY CIT(A) AN D HIS ORDER ON THIS ISSUE SHOULD BE SET ASIDE AND THAT OF AO BE RESTORED. 5. ON THE OTHER HAND, IT WAS SUBMITTED BY LEARNED A R THAT SIMILAR ADDITION OF RS.3,48,14,953/- WAS DELETED BY THE CIT (A) AND TRIBUNAL VIDE ITS ORDER DATED 30 TH APRIL, 2009 HAS UPHELD THE ORDER OF CIT(A) IN ITA NO.2284/DEL/2007. HE CONTENDED THAT APPLYING THE S AME LOGIC, THE LEARNED CIT(A) HAS GIVEN THE RELIEF TO THE ASSESSEE, THEREF ORE, HIS ORDER SHOULD BE UPHELD. SO FAR AS IT RELATES TO ARGUMENT OF LEARNE D DR THAT FOR DECIDING ON MERITS THE FACTS ARE REQUIRED TO BE ESTABLISHED, IT WAS SUBMITTED BY LEARNED AR THAT HE HAS NO OBJECTION IF THE MATTER IS RESTOR ED BACK TO THE FILE OF AO. HE SUBMITTED THAT TO THE EXTENT OF APPLICABILITY OF SECTION 154, THE ASSESSEE HAS NO OBJECTION. 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. WE HAVE GONE THROUGH THE AFORE-ME NTIONED ORDER OF ITAT VIDE WHICH THE DELETION OF RS.3,48,14,953/- WAS UPH ELD. THE DELETION HAS 5 BEEN UPHELD ON THE GROUND THAT ASSESSEE WAS MAINTAI NING CASH SYSTEM OF ACCOUNTING. THE ADDITION WAS DELETED ALSO ON THE G ROUND THAT THE PAYMENT WITH REGARD TO THE SAID DEMAND NOTICE ISSUED BY MCD WAS NOT MADE AND IS NOT REFLECTED IN THE BOOKS OF ACCOUNT. IT IS ALSO MENTIONED THAT IT WAS NOT THE CASE OF AO THAT ASSESSEE HAD CLAIMED THE EXPENSES B UT NOT MADE THE PAYMENT AND, THUS, IT WAS HELD THAT CIT(A) WAS RIGH T IN DELETING THE ADDITION. IN OUR CONSIDERED OPINION, UNLESS ALL THESE FACTS A RE DETERMINED, ADDITION COULD NOT BE DELETED KEEPING IN VIEW THE PECULIAR F ACT THAT ASSESSEE HAS NO GRIEVANCE REGARDING APPLICABILITY OF SECTION 154 OF THE ACT. THE ONLY CASE OF THE ASSESSEE IS THAT ADDITION COULD NOT BE MADE ON MERITS. FOR HOLDING THAT THE IMPUGNED ADDITION COULD NOT BE MADE, THE FOLLOW ING FACTS HAVE TO BE DETERMINED: (I) WHETHER THE ASSESSEE IS ACTUALLY MAINTAINING THE AC COUNT ON CASH BASIS. (II) WHETHER THE PAYMENT RAISED THROUGH RELEVANT DEMAND NOTICE WAS MADE BY THE ASSESSEE DURING THE YEAR UNDER CONS IDERATION. IF SUCH PAYMENT WAS NOT MADE DURING THE YEAR UNDER CONSIDERATION, WHAT WAS THE FATE OF THE NOTICE ISSU ED BY MCD AND IN WHICH YEAR SUCH PAYMENT WAS MADE. 6 (III) WHETHER ASSESSEE HAS INCURRED ANY EXPENDITURE DURIN G THE YEAR UNDER CONSIDERATION IN RELATION TO THE RELEVANT DEM AND NOTICE OF MCD FOR CARRYING OUT THE WORK STATED THEREIN. THEREFORE, WE ARE OF THE OPINION, THAT THESE FACTS ARE REQUIRED TO BE DETERMINED AND TO BE BROUGHT ON RECORD BEFORE THE A DDITION IS DELETED ON MERITS. THE ADDITION CANNOT BE DELETED SIMPLY FOR THE REASON THAT FOR ANY SIMILAR REASONS, THE TRIBUNAL HAS UPHELD THE ORDER OF CIT(A) VIDE WHICH SOME OTHER ADDITION WAS DELETED. IT IS APPARENT FRO M THE ORDER OF CIT(A) THAT TO ARRIVE AT A CONCLUSION THAT SIMILAR FACTS EXISTE D FOR THE IMPUGNED ADDITION ALSO, HE HAS NOT CONFRONTED THE AO WITH THESE FACTS . KEEPING IN VIEW ENTIRETY OF THESE FACTS, WE ARE OF THE OPINION THAT IT IS A FIT CASE WHERE THE ISSUE RESTORE BACK TO THE FILE OF AO WITH A DIRECTI ON TO DETERMINE AFORE- MENTIONED FACTS AND TO DECIDE THE IMPUGNED ADDITION AS PER PROVISIONS OF LAW AFTER ASCERTAINING THESE FACTS. WE DIRECT ACCO RDINGLY. 7. FOR STATISTICAL PURPOSES, THE APPEAL IS TREATED AS ALLOWED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JUNE 2010. (SHAMIM YAHYA) (I.P. BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 TH JUNE, 2010 VIJAY 7 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-II, NEW DELHI. 5. DR ASSISTANT REGISTRAR