Jwala Strips & Tubes Pvt Ltd, Faridabad V. ITO WARD 13(3), New Delhi

ITA 1681/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9085 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 28-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reason to believe
• Section: 148; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-I, NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER AND SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO.1681/DEL/2019 ASSESSMENT YEAR: 2010-11 JWALA STRIPS & TUBES PVT. LTD., PLOT NO.124, SEC-24, FARIDABAD, HARYANA 121 004. PAN NO. AABCJ 0607 N VS. ITO WARD-13(3), NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SHRI ROHIT TIWARI , ADV. SHRI MANAN KALRA, ADV. RESPONDENT BY SHRI R. K. GUPTA, SR. DR DATE OF HEARING: 30 /0 7 /2020 DATE OF PRONOUNCEMENT: 07 /0 8 /2020 ORDER PER ANIL CHATURVEDI, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 05.05.2017 OF THE COMMISSIONER OF INCOME TAX (A)-5, [CIT(A)] DELHI RELATING TO ASSESSMENT YEAR 2010-11. ITA NO.1681/DEL/2019 JWALA STRIPS AND TUBES PVT. LTD. A.Y. 2010-11 PAGE | 2 2. THE RELEVANT FACTS AS CULLED FROM THE MATERIAL ON RECORDS ARE AS UNDER: 3. ASSESSEE IS A COMPANY. AO HAS NOTED THAT ASSESSEE DID NOT FILE ITS RETURN OF INCOME FOR AY 2010-11. AO RECEIVED INFORMATION THAT ASSESSEE IS A NON FILER OF RETURN OF INCOME AND THERE ARE HUGE CASH DEPOSITS IN THE BANK ACCOUNT OPERATED BY IT AND THE CREDITS IN THE BANK ACCOUNT ARE NOT DISCLOSED BY THE ASSESSEE. ACCORDINGLY TO VERIFY THE CASH DEPOSITS IN THE BANK ACCOUNT NOTICE U/S 148 DATED 06.02.2014 WAS ISSUED TO THE ASSESSEE. THEREAFTER THE CASE WAS TAKEN UP FOR SCRUTINY AND SUBSEQUENTLY THE ASSESSMENT WAS FRAMED U/S 147/143(3) VIDE ORDER DTD 30.03.2015 AND THE TOTAL INCOME WAS DETERMINED AT RS.12,30,750/- BY MAKING ADDITION OF RS. 28,51,021/- U/S 68 OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO VIDE ORDER DTD 05.05.2017 IN APPEAL NO.DEL/CIT(A)-5/0132/2015-16 DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS: 1. THAT, BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AS WELL AS ON FACTS IN REOPENING THE ASSESSMENT/CONFIRMING THE ACTION OF REOPENING THE ASSESSMENT U/S 147/148 BECAUSE: (A) NEITHER THEY HAVE REASON TO BELIEVE NOR WAS THE AO SATISFIED BEFORE REOPENING THE ASSESSMENT. (B) THE AO HAS MERELY REOPEN THE ASSESSMENT TO FURTHER ENQUIRY WHICH IS CONTRARY TO THE PROVISION OF STATUTORY PROVISIONS OF THE ACT. ITA NO.1681/DEL/2019 JWALA STRIPS AND TUBES PVT. LTD. A.Y. 2010-11 PAGE | 3 2. THAT THE ORDER OF THE LD CIT(A) IS LIABLE TO BE QUASHED BEFORE BAD IN LAW AS REASONABLE AND SUFFICIENT OPPORTUNITY WAS NOT PROVIDED TO THE ASSESSEE/APPELLANT. 3. THAT THE LD CIT(A) HAS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE ASSESSMENT ORDER AND FAILED TO APPRECIATE THAT ASSESSMENT MADE U/S 147/143(3) BY LD AO IS BAD IN LAW BECAUSE: (A) HE HAS IGNORED ALL THE DOCUMENTS SUBMITTED AT THE TIME OF ASSESSMENT PROCEEDINGS. (B) THE COMPANY WAS ALREADY CLOSED DOWN IN THE FINANCIAL YEAR 2009-10 AND WAS NOT GOOD IN FINANCIAL POSITION HENCE NOT HAVING ANY TAXABLE INCOME DURING THE YEAR. 4. THAT THE LD CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN PASSING EX-PARTE ORDER U/S 147/143(3) AND MADE THE ADDITION OF RS.28,51,021/- U/S 68 ON ACCOUNT OF NON-EXPLANATION ON SOURCE OF DEPOSITS IN BANK. THE ABOVE GROUNDS OF APPEALS ARE INDEPENDENT OF, AND WITHOUT PREJUDICE TO EACH OTHER. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ALL OR ANY GROUNDS HEREIN OR ADD ANY FURTHER GROUNDS AS MAY BE CONSIDERED NECESSARY EITHER BEFORE OR DURING THE HEARING OF THESE GROUNDS. 4. THE CASE FILE REVEALS THAT TWICE CASE WAS ADJOURNED AT THE REQUEST OF THE LD AR. THEREAFTER, VIDE LETTER DATED 03.06.2020 ASSESSEE GAVE ITS CONSENT FOR THE HEARING OF THE APPEAL THROUGH VIDEO CONFERENCING AND ACCORDINGLY THE CASE WAS FIXED FOR HEARING ON 17.06.2020. ON THAT DATE, THE LD AR AGAIN SOUGHT ADJOURNMENT OF THE HEARING. WHILE ADJOURNING THE HEARING TO 30.07.2020, IT WAS INFORMED BY THE BENCH IN THE OPEN COURT THAT IT IS THE LAST OPPORTUNITY TO THE ASSESSEE. ON THE DATE ON HEARING (30.07.2020), THE LD AR AGAIN SOUGHT ADJOURNMENT BUT THE SAME WAS REJECTED AND THE MATTER WAS TAKEN FOR HEARING AFTER HEARING THE DR. ITA NO.1681/DEL/2019 JWALA STRIPS AND TUBES PVT. LTD. A.Y. 2010-11 PAGE | 4 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT CASH DEPOSITS AGGREGATING TO RS.28,51,021/- WAS MADE ON VARIOUS DAYS IN THE BANK ACCOUNT OF THE ASSESSEE (THE TABULAR DETAILS OF WHICH IS NOTED BY THE AO ON PAGE 2 OF HIS ORDER). THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THE CASH DEPOSITS. AO HAS NOTED THAT THE SOURCE WAS EXPLAINED TO BE OUT OF CASH AVAILABLE IN THE BOOKS OF ACCOUNTS AND IT WAS ON ACCOUNT OF SALES MADE BY IT. THE ASSESSEE WAS ASKED TO FURNISH THE LEDGER ACCOUNTS, BILLS/VOUCHERS OF THE PARTIES BUT ACCORDING TO THE AO THE SAME WERE NOT FURNISHED BY THE ASSESSEE. AO ON THE BASIS OF DETAILS FURNISHED NOTED THAT THE SALE WAS ONLY MADE TO JAWALA STEEL CORPORATION OF RS 21,25,844/-. AO NOTING THE FACT THAT IN THE ABSENCE TO REQUIRED DETAILS, THE SUBMISSION OF THE ASSESSEE CANNOT BE ACCEPTED. HE CONCLUDED THAT ASSESSEE WAS INVOLVED IN BOGUS SALE/PURCHASE AND ACCORDINGLY MADE ADDITION OF RS 28,51,021/- OF THE CASH DEPOSITS IN BANK U/S 68 OF THE ACT. 6. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) IN THE ORDER HAS NOTED THAT NONE APPEARED FOR HEARING DESPITE THE SERVICE OF NOTICE THROUGH SPEED POST. SHE ALSO NOTED THAT THE ADJOURNMENT WAS ALSO GRANTED AT THE REQUEST OF THE AR OF THE ASSESSEE BUT ON THE ADJOURNED DATE NONE APPEARED. SHE THEREFORE, PROCEEDED TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL ON RECORD. ITA NO.1681/DEL/2019 JWALA STRIPS AND TUBES PVT. LTD. A.Y. 2010-11 PAGE | 5 7. CIT(A) HAS NOTED THAT NO STATEMENT OF FACTS WAS FILED BY THE ASSESSEE ALONGWITH THE APPEAL MEMO. SHE HAS NOTED THAT ASSESSEE DID NOT FILE THE LEDGER ACCOUNTS OF THE PARTIES FROM WHOM THE CASH WAS RECEIVED NOR DID IT FURNISH THE COPY OF THE BILLS/VOUCHERS TO PROVE THE SALE/PURCHASE OF GOODS. CIT(A) ALSO NOTED THAT ON VERIFICATION FROM THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS, IT WAS SEEN THAT ASSESSEE HAD NOT FILED ITS ANNUAL RETURNS WITH REGISTRAR OF COMPANIES (ROC) AFTER A.Y. 2008-09 (BALANCE SHEET AS ON 31.03.2008) AND THAT NO INCOME TAX RETURNS WERE FILED BY THE ASSESSEE FROM THAT PERIOD ONWARDS. SHE THEREFORE CONCLUDED THAT THE CONTENTION OF THE ASSESSEE ABOUT THE SOURCE OF CASH DEPOSITS TO BE OUT OF AVAILABLE CASH BALANCE AS REFLECTED IN CASH BOOK CANNOT BE ACCEPTED AND SHE THUS UPHELD THE ORDER OF AO. AGGRIEVED BY THE ORDER OF AO, ASSESSEE IS NOW BEFORE US. 8. BEFORE US, LD AR SOUGHT ADJOURNMENT BUT THE SAME WAS REFUSED FOR THE REASONS NOTED HEREINABOVE. LEARNED AR SUBMITTED THAT MATTER MAY BE RESTORED TO LEARNED CIT(A) AS HE WAS NOT GIVEN DUE OPPORTUNITY OF HEARING AND CIT(A) PASSED EX-PARTE ORDER. LD DR ON THE OTHER HAND POINTED TO THE FINDINGS OF AO AND CIT(A) AND SUBMITTED THAT ASSESSEE DID NOT FILE THE REQUIRED DETAILS BEFORE THE LOWER AUTHORITIES AND HAS ALSO NOT FILED ANY DETAILS BEFORE THE HONBLE ITAT. HE FURTHER SUBMITTED THAT ITA NO.1681/DEL/2019 JWALA STRIPS AND TUBES PVT. LTD. A.Y. 2010-11 PAGE | 6 ASSESSEE HAD ALSO NOT FILED THE AUDITED BALANCE SHEETS WITH THE ROC AFTER 31.03.2008 AND THEREFORE, THE CONTENTION OF THE DEPOSITS TO BE OUT OF AVAILABLE CASH BALANCES AS SHOWN IN THE CASH BOOK ALSO CANNOT BE ACCEPTED. HE THUS SUPPORTED THE ORDER OF LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT APPEAL IS WITH RESPECT TO ADDITION OF CASH DEPOSITS IN THE BANK ACCOUNT. ON THE SUBMISSION OF THE AR OF RESTORING THE MATTER TO CIT(A) ON ACCOUNT OF NOT GRANTING DUE OPPORTUNITY OF HEARING, WE FIND NO MERIT ON THE SUBMISSION OF THE LEARNED AR IN VIEW OF THE FACT THAT CIT(A) HAS NOTED THAT NOTICE FOR HEARING ON 03.02.2017 WAS SENT TO THE ASSESSEE THROUGH SPEED POST BUT THERE WAS NO COMPLIANCE TO THE NOTICE. SHE HAS ALSO NOTED THAT ON THE DATE OF HEARING ON 07.03.2017 THE ADJOURNMENT WAS SOUGHT BY THE ADVOCATE OF THE ASSESSEE AND THE SAME WAS ADJOURNED TO 21.04.2017. ON 21.04.2017 AGAIN ADJOURNMENT WAS SOUGHT AND THE MATTER WAS ADJOURNED TO 04.05.2017. THE CIT(A) THUS CONCLUDED THAT DESPITE VARIOUS OPPORTUNITIES NON APPEARED ON BEHALF OF ASSESSEE. SHE HAS ALSO NOTED THAT THE APPEAL MEMO WAS NOT ACCOMPANIED BY ANY POWER OF ATTORNEY NOR ANY POWER OF ATTORNEY WAS FILED BY ANY PERSON WHO SOUGHT ADJOURNMENT. THE PERUSAL OF THE ORDER OF THE LOWER AUTHORITIES REVEAL THAT THE ASSESSEE HAD NOT PRODUCED THE DETAILS TO DEMONSTRATE THE SOURCE OF CASH DEPOSITS EITHER BEFORE THE AO OR BEFORE CIT(A). BEFORE US ALSO NO MATERIAL HAS BEEN ITA NO.1681/DEL/2019 JWALA STRIPS AND TUBES PVT. LTD. A.Y. 2010-11 PAGE | 7 PLACED BY THE ASSESSEE TO PROVE THE MERITS OF THE CASE. HE COULD ALSO NOT POINT TO ANY FALLACY IN THE FINDINGS OF LOWER AUTHORITIES. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A). THUS THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 10. IN THE RESULT THE APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.08.2020 SD/- SD/- (BHAVNESH SAINI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER PRITI YADAV SR. PS* DATE:- .08.2020 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI