Siddhomal Paper Conversion Co. Pvt. Ltd., New Delhi V. Addl. CIT, New Delhi

ITA 1689/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53256 (ITAT-DELHI)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 25-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 07-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VK MONGA
• Assessee Lawyers: V K GARG
• Keywords: Additional evidence; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI A.N. PAHUJA ITA NO. 1689/DEL/2011 ASSESSMENT YEAR: 2007-08 M/S. SIDDHOMAL PAPER CONVERSION VS. ADDITIONAL CIT , CO. PVT. LTD., 611 KAILASH BLDG. RANGE-8, 26- KG MARGH, NEW DELHI-21 NEW DELHI. (PAN: AAJCS1600A) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI VK GARG, CA RESPONDENT BY: SHRI VK MONGA, DR DATE OF HEARING : 07.12.2011 DATE OF PRONOUNCEMENT : 07.12.2011 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(APPEALS) DATED 24.01.2011 PASSED FOR ASSESSMENT YEAR 2007-08. THE GROUNDS OF APPEALS TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH RULE 8 OF THE ITAT'S RULES, THEY ARE DESCRIPTIVE AND ARGUM ENTATIVE IN NATURE. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.2,80,027 OUT OF T HE SUMS PAID FOR THE REPAIR AND MAINTENANCE OF OFFICE BUILDING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ON 05.10.2007 DECLARING TOTAL INCOME AT RS.4 ,76,40,629. THE CASE OF 2 THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT A ND A NOTICE UNDER SEC. 143(2) OF THE INCOME-TAX ACT, 1961 DATED 18.9.2008 WAS ISSUED AND SERVED UPON THE ASSESSEE. LEARNED ASSESSING OFFICER HAS MA DE A DISALLOWANCE OF RS.2,88,227 OUT OF THE REPAIR AND MAINTENANCE EXPEN SES DEBITED BY THE ASSESSEE. THE BRIEF FINDING RECORDED BY THE ASSESSI NG OFFICER READS AS UNDER: 1. BUILDING REPAIR AND MAINTENANCE: THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.2701678 ON ACCOUNT OF REPAIR AND MAINTENANCE BUILDING UNDER THE HEAD ADMINISTRATION AND OTHER EXPENSES VIDE SCHEDULE 4, OF THE PROFI T & LOSS ACCOUNT. THE EXPENSES HAVE BEEN INCURRED FOR RENEWAL/REPLACE MENT OF VARIOUS DEFECTIVE/DAMAGED PARTS OF THE BUILDING. THE ASSESSEE WAS ASKED TO EXPLAIN AND SUBMIT THE DO CUMENTARY EVIDENCE IN SUPPORT OF THE EXPENDITURE CLAIM. ON VE IFICATION OF THE DETAILS I.E. BILLS/VOUCHERS, IT IS FOUND THAT THE A SSESSEE HAS NOT PRODUCED REPAIR AND MAINTENANCE BILLS TO THE EXTE NT OF RS.288227. WHEN THE ASSESSEE WAS CONFRONTED ON THIS POINT, THE ASSESSEE NEITHER COULD OFFER ANY PLAUSIBLE EXPLANATION NOR SUBMIT AN Y SUPPORTING EVIDENCE TO JUSTIFY ITS CLAIM. IN VIEW OF THE ABOVE , RS.288227 IS DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSE SSEE. PENALTY PROCEEDINGS U/S. 271(1)(C) ARE INITIATED ON THIS PO INT FOR FURNISHING INACCURATE PARTICULAR OF INCOME AS PER PROVISIONS O F I.T. ACT, 1961. 3 3. DISSATISFIED WITH THE DISALLOWANCE, IT WAS CONTE NDED BY THE ASSESSEE, BEFORE THE LEARNED CIT(APPEALS) THAT LEARNED ASSESS ING OFFICER HAS COMMITTED AN ERROR IN WORKING OUT THE DISALLOWANCES AT RS.2,88,227. THE DIFFERENCE IS RS.2,80,027. LEARNED CIT(APPEALS) VER IFIED THIS ASPECT AND ARRIVED AT A CONCLUSION THAT IT IS A CLERICAL MISTA KE ON THE PART OF THE ASSESSING OFFICER AND ALLOWED THE BENEFIT OF RS.820 0. THE ASSESSEE HAS SUBMITTED THAT THE LEARNED ASSESSING OFFICER DID NO T GRANT ANY OPPORTUNITY OF HEARING AT THE TIME OF THE ASSESSMENT PROCEEDINGS O N THIS ISSUE AND DID NOT CALL FOR ANY DETAILS. THE ASSESSEE SOUGHT TO PRODUC E ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME-TAX RULES, 1962. LEARN ED FIRST APPELLATE AUTHORITY HAS REJECTED THIS APPLICATION OF THE ASSE SSEE ON THE GROUND THAT SUB-RULE (1) OF RULE 46A CONTEMPLATES FOUR CONDITIO NS, ON WHOSE FULFILLMENT AN ASSESSEE CAN BE PERMITTED TO ADDUCE ADDITIONAL E VIDENCE. IN THE OPINION OF LEARNED CIT(APPEALS), NONE OF THE CONDITIONS ARE AV AILABLE IN THE CASE OF THE ASSESSEE AND, THEREFORE, IT CANNOT BE PERMITTED TO ADDUCE ADDITIONAL EVIDENCE. ON MERIT, LEARNED FIRST APPELLATE AUTHORITY CONFIRM ED THE DISALLOWANCE ON THE GROUND THAT ASSESSEE FAILED TO PRODUCE VOUCHERS RELATING TO REPAIR AND MAINTENANCE WHICH WERE CALLED FOR BY THE ASSESSING OFFICER. 4 4. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT NEITHER THE ASSESSING OFFICER HAS PROVIDED DUE OPPORTUNITY OF H EARING TO THE ASSESSEE FOR PRODUCING THE EVIDENCE NOR LEARNED CIT(APPEALS) HAS APPRECIATED THESE FACTS. HE PRAYED THAT THE ORDERS OF THE REVENUE AUT HORITIES BELOW BE SET ASIDE AND THE ISSUE BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR READJUDICATION. ON THE OTHER HAND, LEARNED DR RELIE D UPON THE ORDER OF THE REVENUE AUTHORITIES BELOW. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS FILED THE RETURN ON 5 TH OCTOBER, 2007. THE NOTICE UNDER SEC. 143(2) OF THE ACT WAS ISSUED ON 1 8 TH SEPTEMBER, 2008. THEREAFTER, THE ASSESSMENT ORDER IS SILENT ABOUT TH E FURTHER PROCEEDINGS. IT APPEARS THAT JURISDICTION HAS BEEN CHANGED AND ASSE SSMENT PROCEEDINGS WERE TAKEN UP ON 6 TH AUGUST 2009. LEARNED ASSESSING OFFICER IN THE ASSE SSMENT ORDER NOWHERE MENTIONED THE DATE ON WHICH HE CALLED FOR THE INFORMATION IN RESPECT OF REPAIR AND MAINTENANCE. THE ASSESSEE HAS FILED RETURN DISCLOSING AN INCOME OF MORE THAN RS.4.76 CRORES. WE DO NOT SE E ANY REASON FOR THE ASSESSEE TO AGITATE FOR SUCH A SMALL AMOUNT IN THE PRESENT PROCEEDINGS. HAD THE ASSESSING OFFICER PROVIDED SUFFICIENT OPPORTUNI TY TO THE ASSESSEE, IT COULD HAVE PRODUCED THE DETAILS ? FROM THE FINDINGS EXTRACTED SUPRA, IT IS 5 NOWHERE DISCERNIBLE WHAT DETAILS WERE CALLED FOR WH EN THESE WERE CALLED FOR. THE ASSESSEE HAD SOUGHT THE PERMISSION OF LEARNED C IT(APPEALS) FOR FILING SUCH DETAILS. IT SUGGESTS THAT DETAILS WERE WITH TH E ASSESSEE. LEARNED FIRST APPELLATE AUTHORITY IS NOT JUSTIFIED IN REJECTING T HE PRAYER OF ASSESSEE WITHOUT SPECIFYING THE EXACT NATURE OF NOTICE ISSUE D BY THE ASSESSING OFFICER IN CONNECTION WITH THESE DETAILS WHICH MAY ELIMINAT E THE AVAILABILITY CONDITIONS ENUMERATED IN SUB-RULE(1) OF RULE 46A OF THE RULES. LEARNED FIRST APPELLATE AUTHORITY SIMPLY NARRATED THE CONDI TIONS OF SUB-RULE(1) OF RULE 46A AND THEN OBSERVED THAT THE EXCEPTION PROVI DED IN THE SUB-RULE ARE NOT APPLICABLE IN THE CASE OF ASSESSEE. HOWEVER, LE ARNED FIRST APPELLATE AUTHORITY HAS NOT SUBSTANTIATED THIS REASONING WITH THE MATERIAL ON THE RECORD I.E. IN THE SHAPE OF ORDER SHEET ENTRY RECORDED BY THE ASSESSING OFFICER EXHIBITING THE PROVIDING OF OPPORTUNITY TO THE ASSE SSEE. IN SUCH SITUATION, IN OUR OPINION, LEARNED FIRST APPELLATE AUTHORITY OUGH T TO HAVE GRANTED AN OPPORTUNITY TO THE ASSESSEE FOR LEADING ADDITIONAL EVIDENCE INSTEAD OF CONFIRMING THE DISALLOWANCE ON TECHNICAL GROUND. WE ALLOW THE APPEAL OF THE ASSESSEE SET ASIDE THE IMPUGNED ORDER AND RESTORE T HIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR READJUDICATION. THE ASSESSEE WILL BE AT LIBERTY TO SUBMIT ANY EVIDENCE IN SUPPORT OF ITS EXPLANATION. IT IS NEEDLESS TO SAY THAT 6 THE OBSERVATIONS MADE BY US WILL NOT IMPAIR OR INJU RE THE CASE OF A.O. OR WOULD NOT CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLAN ATION OF THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( A.N. PAHUJA ) ( RA JPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/12/2011 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR