Creative Instruments & Controls, New Delhi V. ITO WARD - 53(3), New Delhi

ITA 1631/DEL/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4308 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 29-09-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAGDISH SINGH
• Keywords: Unexplained cash credit; Principle of natural justice; Additional evidence
• Section: 43B; 201; 68

Judgement Text

1 ITA NO.1631/DEL/2020 IN THE INCOME TAX APPELLAT E TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBE R AND MS SUCHITRA KAMBLE, JUDIC IAL MEMBER ITA NO. 1631/DEL/2020 ( A.Y 2012-13) (THROUGH VIDEO CONFEREN CING) CREATIVE INSTRUMENTS & CONTROLS 35, ARD COMPLEX, R. K. PURAM, NEW DELHI-110061 AAFFC5941B (APPELLANT) VS ITO WARD-53(3) NEW DELHI (RESPONDENT) APPELLANT BY SH. GAUTAM JAIN, ADV RESPONDENT BY SH. JAGDISH SINGH, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 31/03/2015 PASSED BY CIT(A)- DELHI-36 FOR ASSESSMENT YEAR 201 2-13 . 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING AN ADDITION MADE OF R S. 1,09,46,3757/- ON ACCOUNT OF UNSECURED LOANS AND HELD TO BE ALLEGED U NEXPLAINED CREDIT U/S 68 OF THE ACT. 1.1 THAT WHILE UPHOLDING THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THERE WAS NO FRESH LO ANS RAISED BY THE APPELLANT DATE OF HEARING 08.02.2021 DATE OF PRONOUNCEMENT 08.02.2021 2 ITA NO.1631/DEL/2020 IN THE INSTANT YEAR AND THEREFORE THE SUM OUTSTANDI NG AT THE CLOSE OF THE YEAR ON ACCOUNT OF PURCHASES MADE BY THE APPELLANT COULD NEITHER IN LAW AND NOR ON FACT BE REGARDED AS UNEXPLAINED CREDIT U/S 68 OF THE ACT. 1.2 THAT IN ANY CASE ONCE THE PURCHASES HAVE BEE N ACCEPTED AS GENUINE PURCHASES CORRESPONDING CREDIT CANNOT B VALIDLY ADD ED AS UNEXPLAINED CREDIT U/S 68 OF THE ACT. 1.3. THAT FURTHER MORE SUM OF RS. 16,37,000/- REPR ESENTED OPENING BALANCES THEREFORE THE SAME CANNOT EVEN OTHERWISE B E TAXED U/S 68 OF THE ACT. 1.4 THAT THE FINDING THAT THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS HAD NOTH ING TO DO WITH RETURN OF INCOME FILED BY THE APPELLANT AND, THE REMAND REPOR T OF THE AO IS VEHEMENTLY CLEAR THAT LAST MINUTE LEDGER ENTRIES HAVE BEEN MAD E TO JUSTIFY CLAIMS IS FACTUALLY L INCORRECT, LEGALLY MISCONCEIVED AND WHO LLY UNTENABLE. 1.5 THAT EVEN THE CONCLUSION THAT ARGUMENT TAKEN U P BY THE APPELLANT FOR NON SUBMISSION OF DETAILS IN FRONT OF THE AO AR E VEY ROUTINE, GENERAL AND DEVOID OF MERIT; AND THE APPELLANT HAS NOT FURNISHE D ANY EVIDENCE IN SUPPORT OF ITS ARGUMENT IS CONTRARY TO MATERIAL ON RECORD AND THUS UNSUSTAINABLE. 2. THAT FURTHERMORE THE LEARNED COMMISSIONER O F INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN NOT ADMIT TING THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT UNDER RULE 46A READ WITH SEC TION 250(4) OF THE ACT. 2.1 THAT THE FINDING THAT NONE OF THE CONDITIONS M ENTIONED IN RULE 46A(L)(A) TO (L)(D) ARE SATISFIED IN THE CASE OF TH E APPELLANT ARE BASED ON SURMISES, CONJECTURE AND SUSPICION AND THUS UNTENAB LE. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) HAS ALSO ERRED 3 ITA NO.1631/DEL/2020 BOTH IN LAW AND ON FACTS IN UPHOLDING A DISALLOWANC E OF SUM OF RS. 7,38,112/- UNDER THE HEAD 'OTHER CURRENT LIABILITIE S BY INVOKING SECTION 43B OF THE ACT. 3.1 THAT THE CONDITION THAT SINCE ALL THE PA YMENTS HAVE BEEN MADE BY THE ASSESSEE AFTER FILING DATE OF LTR FOR THE AY 2012-13 I.E. 30.9.2012 AND LIABLE TO BE DISALLOWED AS PER SECTION 43B OF THE A CT IS FACTUALLY INCORRECT, LEGALLY MISCONCEIVED AND WHOLLY UNTENABLE. 4. THAT BOTH THE AUTHORITIES BELOW HAVE FRAMED THE IMPUGNED ORDER WITHOUT GRANTING SUFFICIENT PROPER OPPORTUNITY TO THE APPEL LANT AND THEREFORE THE SAME ARE CONTRARY TO PRINCIPLES OF NATURAL JUSTICE AND H ENCE VITIATED. IT IS THEREFORE, PRAYED THAT, IT BE HELD THAT ADDI TION AND DISALLOWANCE MADE AND SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BE DELETED AND APPEAL OF THE APPELLANT BE ALLOWED. 3. THE ASSESSMENT IN THIS CASE WAS MADE U/S. 143 (3) OF THE I.T ACT, 1961 VIDE ORDER DATED 21/03/2015 AND THE INCOME WAS ASSE SSED AT RS. 1,26,78,300/- AGAINST THE RETURNED INCOME 6,73,063/ - MAKING THE FOLLOWING ADDITIONS:- I. ADDITION OF RS. 6,360/- ON ACCOUNT OF TELEPHONE EXP ENSES. II. ADDITION OF RS. 73,812/- ON ACCOUNT OF VEHICLE REP AIR & MAINTENANCE. III. ADDITION OF RS. 22,423/- ON ACCOUNT OF DIFFERENT E XPENSES. IV. ADDITION OF RS. 61,353/- ON ACCOUNT OF EXPENSES OF DISALLOWABLE NATURE. V. ADDITION OF RS. 1,09,46,375/- ON ACCOUNT OF UNSECU RED LOANS. VI. ADDITION OF RS. 7,38,112/- ON ACCOUNT OF LIABILITI ES PAYABLE. VII. ADDITION OF RS. 30,000/- ON ACCOUNT OF COMMISSION INCOME. VIII. ADDITION OF RS. 1,26,800/- ON ACCOUNT OF UNDECLARE D 4 ITA NO.1631/DEL/2020 3. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF TH E ASSESSEE. 4. THE LD. AR SUBMITTED THAT THE CIT(A) ERRED IN NO T ADMITTING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE UNDER RUL E 46 A READ WITH SECTION 250(4) OF THE INCOME TAX ACT, 1961. HENCE, THE MAT TER MAY BE REMANDED BACK TO THE FILE OF THE CIT (A) FOR ADMITTING THE ADDITI ONAL EVIDENCE TO DECIDE THE APPEAL ON MERIT. 5. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE CIT (A) WITHOUT ASSIGNING ANY PARTICULAR REASONS HAS REJECTED THE ADDITIONAL EVIDENCE WHICH GOES TO THE ROOT OF THE MATTER. WE THEREFORE, DIRECT THE CIT(A) TO ADMIT THE ADDITIONAL EVIDENCE AND TO DECIDE THE ISSUE AFRESH AFTER TAKIN G COGNIZANCE OF THE EVIDENCES FILED BY THE ASSESSEE. NEEDLESS TO SAY, THE ASSESS EE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 7. IN RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08TH DAY OF FEBRUARY, 2021 IN PRESENCE OF BOTH THE PARTIES. SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED: 08/02/2021 R. NAHEED 5 ITA NO.1631/DEL/2020 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI