Rolax Auto Pvt. Ltd., New Delhi V. ITO, Ward- 21(4), New Delhi

ITA 1564/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5272 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 06-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KIRTI SANKRATYAYAN SENIOR
• Keywords: Business income; Charitable institution; Opportunity of being heard; Set aside
• Section: 194A; 22; 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCE) ITA NO.1564/DEL./2018 (ASSESSMENT YEAR : 2008-09) M/S. ROLAX AUTO PVT. LTD., VS. ITO, WARD 21 (4), B 77, MAYAPURI PHASE I, NEW DELHI. NEW DELHI 110 064. (PAN : AABCR0545D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJESH MAHNA, ADVOCATE REVENUE BY : MS. KIRTI SAN KRATYAYAN, SENIOR DR DATE OF HEARING : 07.09.2021 DATE OF ORDER : 24.09.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. ROLAX AUTO PVT. LIMITED (HEREINAFT ER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 01.12.2017 PASSE D BY THE COMMISSIONER OF INCOME - TAX (APPEALS)-38, NEW DELH I QUA THE ASSESSMENT YEAR 2008-09 ON THE GROUNDS INTER ALIA T HAT:- 1. THE LD. ASSESSING OFFICER, HAS ERRED IN LAW AND ON FACTS IN PASSING ASSESSMENT ORDER U/S 148 / 144 OF THE INCOM E TAX ACT, 1961 WITHOUT SERVING NOTICE TO THE ASSESSEE COMPANY AS PRESCRIBED IN THE ACT. THE ORDER WHICH DOES NOT COM PLY WITH THE ITA NO.1564/DEL./2018 2 REQUIREMENT OF SECTION 147 /148 OF INCOME TAX ACT, 1961 IS NULLITY AS THE ORDER OF ASSESSMENT WAS PASSED U/S 144 OF TH E INCOME TAX ACT, 1961. 2. THE LD. ASSESSING OFFICER, ERRED IN LAW AND ON F ACTS IN PASSING ASSESSMENT ORDER U/S 148/144 OF THE INCOME TAX ACT, 1961 WITHOUT GIVING OPPORTUNITY OF BEING HEARD TO THE AS SESSEE. THE CIT(A) HAS FURTHER ERRED IN LAW IN PARTLY ALLOWING THE APPEAL BUT BY MAINTAINING SUBSTANTIAL ADDITIONS ON ACCOUNT OF SUNDRY CREDITOR AND OTHER GROUNDS. 3. THAT THE CIT (A) FAILED TO APPRECIATE THE SUBMIS SIONS AND PRODUCTION OF EVIDENCE OF TRANSACTION W.R.T. SUNDRY TRADE CREDITORS AND MAINTAINED THE DIFFERENCE IN OPENING AND CLOSING BALANCE OF SUPPLIERS AS INCOME OF THE ASSESSEE AS R S.86,71,196/-. THE OBSERVATION AND ADDITION ARE ILLEGAL AND DESERV ES TO BE SET ASIDE. 4. THAT, THE CIT (A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE MADE DONATIONS AND PAID THROUGH CHEQUES TO CHARITABLE INSTITUTION AND ALSO SUBMITTED INFORMATION OF THE R ECIPIENT SOCIETY AND CIT(A) HAS UPHELD THE ADDITION. 5. FURTHER THE CIT (A) ERRED IN LAW AND FACT AND UP HOLDING THE ADDITION OF INTEREST INCOME AMOUNTING RS.70,762 /- RECEIVED FROM M/S INTEC SECURITIES AS APPEARING THE INCOME A ND EXPENDITURE A/C AS PART OF BUSINESS INCOME OF THE A SSESSEE COMPANY. 6. FURTHER THE CIT (A) ERRED IN LAW AND FACT AND PA RTLY ALLOWING THE APPEAL OF ASSESSEE IN IGNORING THE EXP LANATION BEFORE HIM AND EVIDENCES PLACED ON RECORDS AT THE TIME OF HEARING BEFORE CIT(A). 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF INFORMATI ON RECEIVED THROUGH NON-FILERS MONITORING SYSTEM OF I-TAXNET, A O NOTICED CASH TRANSACTION EXCEEDING RS.10,00,000/- DURING ASSESSM ENT YEAR 2008-09, FOR WHICH ASSESSEE HAS NOT FILED ANY ITR. PROCEEDINGS UNDER SECTION 147/148 OF THE INCOME-TAX ACT, 1961 ( FOR SHORT THE ACT) WERE INITIATED BY ISSUING A NOTICE U/S 148 O F THE ACT. DUE TO ITA NO.1564/DEL./2018 3 NON-APPEARANCE OF THE ASSESSEE DESPITE SERVICE, AO PROCEEDED TO FRAME ASSESSMENT UNDER SECTION 144 OF THE ACT. 3. ASSESSEE IS INTO MANUFACTURING OF AUTO-PARTS. A O NOTICED FORM THE DOCUMENTS AVAILABLE ON RECORD THAT THERE I S AN INCREASE IN THE SUNDRY CREDITORS DURING THE YEAR UNDER ASSESSME NT TO THE TUNE OF RS.86,71,196/-. AO PROCEEDED TO MAKE ADDITION THERE OF ON THE GROUND THAT SINCE DETAIL OF SUNDRY CREDITORS HAS NO T BEEN FILED BY THE ASSESSEE, INCREASE IN THE SUNDRY CREDITORS HAS BEEN TREATED INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. A O ALSO MADE ADDITION OF RS.70,762/- ON ACCOUNT OF INTEREST RECE IVED FROM M/S. INTEC SECURITIES LTD. ON WHICH TAX AT SOURCE HAS BE EN DEDUCTED UNDER SECTION 194A OF THE ACT. ACCORDINGLY, AO FRA MED THE ASSESSMENT U/S 148/144 AT AN INCOME OF RS.1,63,73,0 63/-. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING APPEAL WHO HAS PARTLY ALLOWED THE SAME. FEE LING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.1564/DEL./2018 4 GROUNDS NO.1, 2 & 4 6. GROUND NO.1, 2 & 4 ARE DISMISSED HAVING NOT BEEN PRESSED DURING THE COURSE OF ARGUMENTS. GROUND NO.3 7. AO MADE ADDITION OF RS.86,71,196/- BEING THE INC OME FROM UNDISCLOSED SOURCES ON THE GROUND THAT DETAILS OF S UNDRY CREDITORS HAVE NOT BEEN FILED BY THE ASSESSEE AS THERE IS AN INCREASE IN THE SUNDRY CREDITORS DURING THE YEAR UNDER ASSESSMENT T O THE TUNE OF RS.86,71,196/-. THIS ADDITION HAS BEEN UPHELD BY T HE LD. CIT (A). 8. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNED ADDITION CONTENDED THAT HE HAS SUPPLIED COMPLETE DETAILS OF THE SUNDRY CREDITORS TO THE AO AS WELL AS LD. CIT (A), WHICH IS AVAILABLE AT PAGES 22 TO 24 OF THE PAPER BOOK, AND HAS ALSO REFE RRED TO WRITTEN SUBMISSION FILED WITH LD. CIT (A), WHICH ARE AVAILA BLE AT PAGES 1 TO 14 OF THE PAPER BOOK. HOWEVER, ON THE OTHER HAND, LD. DR FOR THE REVENUE TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. AR CONTENDED THAT SINCE ASSESSEE HAS BEEN NEGLIGENT THROUGH-OUT IN SUPPLYING THE DETAILS, ADDITION IS LIABLE TO BE CONFIRMED. 9. WHEN WE PERUSE THE ORDER PASSED BY THE AO WHICH CARRIES THE CATEGORIC OBSERVATION MADE BY THE AO THAT, IT IS OBSERVED THAT THE ASSESSEE IS ENGAGED IN THE MANUFACTURING OF AUT O PARTS. COPIES OF THE BANK STATEMENT OF THE ACCOUNTS MAINTAINED BY THE ASSESSEE ITA NO.1564/DEL./2018 5 COMPANY ARE AVAILABLE ON RECORD. COPY OF AUDITED BALANCE SHEET, P&L ACCOUNT WITH FORM NO.3CD WERE ALSO OBTAI NED. BUT THE AUTHENTICITY OF THE AUDIT REPORT COULD NOT BE E STABLISHED DUE TO PAUCITY OF TIME AND MOREOVER, NO ADDRESS OF THE AUD ITOR/CA HAS BEEN MENTIONED ON THE PAPERS SIGNED BY THE AUDITOR/ CA. , THE ADDITION HAS BEEN MADE ON THE BASIS OF SURMISES IN HASTE. 10. EVEN THE FINDINGS RETURNED BY LD. CIT (A) THAT, IN THE COURSE OF APPEAL PROCEEDINGS THE APPELLANT HAS SUBM ITTED THAT .THE PARTIES ARE SUCH WHERE EVEN THE CONFIRMATION ARE NOT READILY AVAILABLE BEING OLD RECORDS. IN THIS SIT UATION THERE IS NO CHOICE BUT TO UPHOLD THE ACTION OF ASSESSING OFFICE R. THE ADDITION OF RS.,87,71,196/- ON ACCOUNT OF SUNDRY CREDITORS I S ACCORDINGLY CONFIRMED. ARE CRYPTIC AND WE ARE UNABLE TO COMPREHEND IF THE ISSUE CANVASSED BEFORE THE LD. CIT (A) WAS DISCUSSE D AND DECIDED IN RIGHT EARNEST. 11. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERE D VIEW THAT WHEN THE ENTIRE DETAIL WAS BROUGHT ON RECORD BY THE ASSESSEE DURING THE FIRST APPELLATE PROCEEDINGS, THOUGH ASSESSEE WA S NEGLIGENT IN APPEARING BEFORE THE AO, ADEQUATE OPPORTUNITY OF BE ING HEARD IS REQUIRED TO BE GIVEN TO THE ASSESSEE TO DECIDE THE ISSUE ONCE FOR ALL. SINCE ENTIRE EVIDENCE BROUGHT ON RECORD BY THE ASSE SSEE REQUIRES INITIAL SCRUTINY, IT WOULD BE IN THE INTEREST OF JU STICE TO REMIT THIS ITA NO.1564/DEL./2018 6 CASE TO THE AO. CONSEQUENTLY, THIS ISSUE IS REMITT ED BACK TO THE AO TO DECIDE AFRESH AFTER PROVIDING ADEQUATE OPPORT UNITY OF BEING HEARD TO THE ASSESSEE. SO, GROUND NO.3 IS DETERMIN ED IN FAVOUR OF THE ASSESSEE FOR STATISTICAL PURPOSES. GROUND NO.5 12. AO MADE ADDITION OF RS.70,762/- AFTER NOTICING FROM 26AS DETAILS OF INDIVIDUAL TRANSACTION STATEMENT OF THE ASSESSEE COMPANY WHICH SHOWS THAT ASSESSEE RECEIVED INTEREST OF RS.23,162/- AND RS.47,600/- TOTALING RS.70,762/- FR OM M/S. INTEC SECURITIES LTD. ON WHICH TAX HAS ALSO BEEN DEDUCTED AT SOURCE U/S 194A OF THE ACT AND TREATED THE SAME AS INTEREST IN COME OF THE ASSESSEE. AT THE SAME TIME, LD. CIT (A) DECIDED TH E ISSUE BY RETURNING FOLLOWING FINDINGS:- 5.2.5.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSION S OF THE APPELLANT AND THE ASSESSMENT ORDER ON THIS ISSUE. IT IS CLEAR THAT APPELLANT HAS RECEIVED INTEREST INCOME FROM M/S. IN TEC SECURITIES WHICH SHOULD HAVE BEEN OFFERED TO TAX. HOWEVER, FO R REASONS WHICH ARE AT VARIANCE WITH THE INCOME TAX ACT, 1961 , THE SAME HAS NOT BEEN OFFERED TO TAX BY APPELLANT. ADDITION OF RS.70,762/- BY AO IS ACCORDINGLY UPHELD. 13. AGAIN, LD. AR FOR THE ASSESSEE CONTENDED THAT H E HAS BROUGHT ON RECORD THE ENTIRE DETAILS VIZ. P&L ACCOUNT WITH FORM 3CD, AUDITED BALANCE SHEET, BANK STATEMENTS, WHICH IS EV IDENT FORM PARA 3 OF THE ASSESSMENT ORDER, AS WELL AS BEFORE THE LD . CIT(A), BUT NO COGNIZANCE HAS BEEN TAKEN OF THE DOCUMENTS. SINCE ALL THESE ITA NO.1564/DEL./2018 7 DOCUMENTS ARE REQUIRED TO BE EXAMINED BY THE AO, TH IS ISSUE IS ALSO REMITTED BACK TO THE AO TO DECIDE AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . SO, GROUND NO.5 IS DETERMINED IN FAVOUR OF THE ASSESSEE FOR ST ATISTICAL PURPOSES. 14. GROUND NO.6 BEING GENERAL IN NATURE DOES NOT RE QUIRE ANY ADJUDICATION. 15. RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE I S PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF SEPTEMBER, 2021. SD/- SD/- (PRASHANT MAHARISHI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 24 TH DAY OF SEPTEMBER, 2021 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-38, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.