ITO, New Delhi V. Shri Aravindakshan Pillai, Delhi

ITA 1642/DEL/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7359 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 21-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: S M MATHEN
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH A NEW DELHI BEFORE : SHRI H.S. SIDHU , JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1642/DEL./2013 ASSTT. YEAR : 2009 - 10 INCOME - TAX OFFICER, VS. SHRI ARAVINDAKSHAN PILLAI, WARD 36(4), NEW DELHI. FLAT NO.7A, MIG FLATS, POCKET - V, MAYUR VIHAR, PHASE - III, DELHI. ITA NO. 2170/DEL./2013 ASSTT. YEAR : 2009 - 10 SHRI ARAVINDAKSHAN PILLAI, VS. INCOME - TAX OFFICER, PROP. M/S. A.R. SILKS, WARD 36(4), NEW DELHI FLAT NO.7A, MIG FLATS, POCKET - V, MAYUR VIHAR, PHASE - III, DELHI. [PAN: AJOPP0293R] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI K.K. JAISWAL, D.R. ASSESSEE BY : SHRI S.M. MATHEN, C. A. DATE OF HEARING : 13.01.2016 DATE OF PRONOUNCEMENT : 15 .01.2016 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THESE ARE CROSS APPEALS FILED BY THE REVENUE AND THE ASSESSEE AGAINST THE ORDER DATED 24.12.2012 OF LD. CIT(A) - XXVII, NEW DELHI FOR THE ASSESSMENT YEAR 2009 - 10. ITA NO. 1642 AND 2170/DEL./2013 2 2. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL READ AS UNDER : (I). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAD ERRED IN DELETING THE ADDITION OF RS.54,55,050/ - MADE BYTHE AO ON ACCOUNT OF ADDITION IN FIXED ASSETS. (II). ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND MATTER MAY BE RESTORED BACK TO THE FILE OF THE AO TO TAKE HOLISTIC VIEW OF THE MATTER. 3. THE CONC ISE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL ARE AS FOLLOWS : 1. THAT THE HON BLE COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AS MUCH AS ON THE FACTS OF THE CASE BY SUSTAINING THE UNWARRANTED ADHOC ADDITION OF RS.27,40,562/ - MADE BY THE LEARNED ASSESS ING OFFICER IN RESPECT OF ALLEGED UNVERIFIED SUNDRY CREDITORS TO THE EXTENT 10%. 2. THAT THE HON BLE COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AS MUCH AS ON THE FACTS OF THE CASE BY SUSTAINING THE ADDITIONS OF RS.1.00 LAC U/SEC. 68 OF THE ACT ALLEGING T HAT THE ASSESSEE DID NOT FILE CONFIRMATION TO THIS LOAN. 3. THAT THE HON BLE COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AS MUCH AS ON THE FACTS OF THE CASE BY SUSTAINING THE UNWARRANTED ADDITION MADE BY THE LEARNED ASSESSING OFFICER IN RESPECT OF THE ADD ITIONAL CAPITAL OF RS.3,98,570/ - INTRODUCED BY THE APPELLANT DURING THE FINANCIAL YEAR 2008 - 09 WITHOUT APPRECIATING THAT THE APPELLANT HAD ALREADY FURNISHED THE RELEVANT DOCUMENTARY EVIDENCE VIS - - VIS COPY OF BANK ACCOUNT TO SUPPORT THE SAID ADDITION IN TH E SHARE CAPITAL. 4. THAT THE HON BLE COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AS MUCH AS ON THE FACTS OF THE CASE BY SUSTAINING THE ADDITIONS IN THE HANDS OF ASSESSEE COMPANY, WITHOUT GIVING FAIR AND PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT COMPANY THEREBY VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. ITA NO. 1642 AND 2170/DEL./2013 3 4. WHILE DEALING WITH THE APPEAL OF THE REVENUE, WE FIND THAT THE ONLY DISPUTE IN THIS APPEAL IS WITH RESPECT TO DELETION OF ADDITION OF RS.54,55,050/ - MADE BY THE AO ON ACCOUNT OF ADDITION TO FIXED ASSETS, I.E., PLANT & MACHINERY AND LAND AT BANGALORE. THE BRIEF FACTS ARE THAT THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION MADE ADDITION IN FIXED ASSETS ON ACCOUNT OF PLANT & MACHINERY AND LAND AT BANGALORE AMOUNTING TO RS.15,00,000/ - , RS.35,0 0,000/ - AND RS.4,55,050/ - . SINCE NO DETAILS WERE FILED BEFORE THE AO WITH RESPECT TO ADDITION TO FIXED ASSETS, THEREFORE, THE AO MADE ADDITION OF RS.54,55,050/ - . IN APPEAL, THE LD. CIT(A) DELETED THIS ADDITION OBSERVING THAT SOURCE OF INVESTMENT STOOD EXPLAINED FROM THE LOAN ACCOUNT OF FEDERAL BANK. IT WAS ALSO OBSERVED THAT THE ASSESSEE HAD MADE INV ESTMENT IN LAND BEFORE 31.03.2008 BUT THE SAME WAS NOT ADDED TO THE VALUE OF THE LAND AS ON 31.03.2008 INADVERTENTLY BY THE ASSESSEE, BUT THE SAME WAS ADDED TO THE VALUE OF FIXED ASSETS IN THE YEAR UNDER CONSIDERATION. AGGRIEVED BY THIS ORDER OF LD. CIT(A) , THE REVENUE IS IN APPEAL BEFORE US. 5. THE LD. DR RELYING ON THE ORDER OF THE AO SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY DELETED THE ADDITION AFTER CONSIDERING THE DETAILS AND SUBMISSIONS OF THE ASSESSEE, WHICH WERE NEVER SUBMITTED OR PLACED BEFORE THE ASSESSING OFFICER. IN THE REMAND REPORT, THE AO HAD CATEGORICALLY REPORTED THAT ITA NO. 1642 AND 2170/DEL./2013 4 THE PAYMENTS WERE MADE BY THE FEDERAL BANK DIRECTLY TO THE SELLER ON 17.03.2008 AND 24.03.2008 WHICH DID NOT FALL IN THE YEAR UNDER CONSIDERATION. HE, THEREFORE, SUBMITTED THAT THE MATTER MAY BE RESTORED BACK TO AO T O TAKE A HOLISTIC VIEW ON THE ISSUE. 6. THE LD. AR OF THE RESPONDENT, ON THE OTHER HAND, RELIED ON THE ORDER OF LD. CIT(A) ON THIS ISSUE. 7. HAVING CONSIDERED THE RIVAL SUBMISSIONS, WE FIND THAT THE ASSESSING OFFICER SHOULD BE GIVEN REASONABLE OPPORTUNI TY TO EXAMINE THE DETAILS AND EVIDENCES FURNISHED BY ASSESSEE BEFORE THE LD. CIT(A) FOR THE FIRST TIME BEFORE THE LD. CIT(A) . BEFORE ACCEPTING THE EXPLANATION OF ASSESSEE REGARDING INADVERTENT MISTAKE IN NOT SHOWING THE VALUE ADDITION TO THE FIXED IN THE Y EAR WHEN THEY WERE ACQUIRED OR INVESTMENT MADE , THE DETAILS OF TRANSACTIONS NEED TO BE EXAMINED BY THE AO, WHICH IS LACKING IN THE PRESENT CASE. ACCORDINGLY, THE MATTER IS RESTORED TO THE FILE OF AO TO EXAMINE THE SAME AND TO TAKE A HOLISTIC VIEW IN THE MA TTER AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1642 AND 2170/DEL./2013 5 8. ADVERTING TO THE APPEAL OF THE ASSESSEE, GROUND NO. 3 HAS NOT BEEN PRESSED AND THE SAME IS LIABLE TO DI SMISSED AS SUCH. REGARDING THE ISSUES RAISED IN REMAINING GROUNDS OF APPEAL, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITION OF RS.27,40,562/ - MADE BY AO AND SUSTAINED BY CIT(A) . THE ADDITION SO MADE REPRESENT S TO 10% OF THE TOTAL SUNDRY CREDITOR S SHOWN BY THE ASSESSEE AT RS.2,74,05,626/ - . THE ADDITION HAS BEEN MADE ON THE GROUND THAT NO DETAILS OF SUNDRY CREDITORS WERE FURNISHED BEFORE THE AUTHORITIES BELOW. IT WAS SUBMITTED THAT THE ASSESSEE HAS NOT BEEN AFFORDED REASONABLE OPPORTUNITY TO SUBMIT THE DETAILS, WHICH SHALL BE FURNISHED IF HE IS GIVEN ONE MORE OPPORTUNITY TO JUSTIFY THE SUNDRY CREDITORS. HE ALSO SUBMITTED THAT THE ASSESSEE SHALL ALSO BE ABLE TO OFFER COMPLETE DETAILS/EVIDENCES WITH RESPECT TO UNSECURED LOAN, ON ACCOUNT OF WHICH AO HA D MADE ADDITION OF RS.3,89,691/ - WHICH WAS RESTRICTED TO RS.1 LAC BY THE CIT(A) ON THE REASON THAT A SUM OF RS.2,89,691/ - WAS IN RESPECT OF LOAN FROM BARCLAYS BANK AND HAD BEEN BROUGHT FORWARD FROM THE PRECEDING YEAR. HE THEREFORE, URGED THAT MATTER BE RES TORED TO THE FILE OF AO FOR DECIDING THESE ISSUES AFRESH AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF HEARING. THE LD. DR, ON THE OTHER HAND RELIED ON THE ORDER OF THE CIT(A) ON THESE ISSUES. HE, HOWEVER, DID NOT VEHEMENTLY OBJECT TO THE PRAYER OF ASSESSEE REGARDING RESTORATION OF THE MATTER TO AO. ITA NO. 1642 AND 2170/DEL./2013 6 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT IT IS FIT CASE WHERE THE ASSESSEE SHOULD BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD BEFORE THE ASSESSING OFFICER FOR SUBMISSION OF DETAILS AND EVIDENCES PERTAINING TO SUNDRY CREDITORS AND UNSECURED LOANS AS NARRATED ABOVE. WE, THEREFORE, AS PRAYED FOR, RESTORE THE ISSUES TO THE FILE OF ASSESSING OFFICER TO DECIDE THESE MATTERS AFRESH AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. T HE ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE AO AND HE MAY FURNISH ALL THE DETAILS PERTAINING TO THE ISSUES AS REQUIRED BY THE AO . ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALSO ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AND ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15.01.2016. SD/ - SD/ - ( H.S. SIDHU ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15.01.2016 *AKS/ - COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI