M/s. Royal Tech Enterprises, Meerut V. ACIT, Meerut

ITA 1708/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97775 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 29-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANJULA JAIN
• Assessee Lawyers: V K GOEL
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND MS . SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO . 1708/ DEL/201 3 ASSESSMENT YEAR: 2007 - 08 M/S ROYAL TECH ENTERPRISES, VS. ACIT, CIRCLE - 2, MEERUT J - 127, PANDAV NAGAR, MEERUT (PAN: AAJFR1410L ) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. V.K. GOEL, ADV. RESPONDENT BY : SMT. ANJULA JAIN, SR. DR DATE OF HEARING: 29.10.2015 DATE OF PRONOUNCEMENT: 30.10.2015 ORDER PER INTURI RAMA RAO, A.M. : THE PRESENT APPEAL FILED BY THE ASSESSEE COMPANY IS DIRECTED AGAINST THE ORDER OF LD. CIT( A), DATED 15.03.2013 PASSED FOR THE ASSESSMENT YEAR 2007 - 08. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: I. THAT LD. A.O. AS WELL AS LD. CIT(A) IS IN ERROR THAT DIFFERENCE OF CONTRACT RECEIPT CAN BE ADDED IN THE TOTAL INCOME DIRECTLY AND IGNORE WRITT EN REPLY FILED BY THE ASSESSEE, IN WHICH DIFFERENCE IS EXPLAINED BY THE ASSESSEE INSTEAD OF ADDITION AT THE GROSS PROFIT RATE OR NET PROFIT RATE ADDITION OF CONTRACTUAL RECEIPT IS BAD IN LAW. II. THAT LD. A.O. AS WELL AS LD. CIT(A) IS IN ERROR IGNORING THE FA CT THAT THE ASSESSEE HAS SHOWN ADVANCE OF RS. 25,46,599/ - DULY REFLECTED IN BALANCE SHEET OF THAT YEAR CANNOT BE ASSESS TAX IN THE YEAR CONSIDERATION, WHEN ACCOUNT OF THE WAS MADE IN MERCANTILE BASIS. THEREFORE, ADDITION MADE BY THE A.O. AND CONFIRMED BY T HE CIT(A) IS BAD IN LAW. III. THAT THE LD. CIT(A) IGNORE THE FACT THAT BOOKS OF A/C AND OTHER DOCUMENTS WAS DESTROYED BY THE FIRE. HENCE, THE ASSESSEE WAS UNABLE TO PRODUCE BOOKS OF ACCOUNT BEFORE CIT(A), MEERUT. HENCE, NO ADVERSE VIEW CAN BE TAKEN. 2 ITA NO. 1708/DEL/2013 ASSESSMENT YEAR: 2007 - 08 IV. THAT THE A SSESSEE HAS RIGHT TO ADD/DELETE OR MODIFY ANY GROUNDS DURING THE APPEAL PROCEEDING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS A PARTNERSHIP COMPANY. IT IS ENGAGED IN THE BUSINESS OF CONTRACTS. THE RETURN F INCOME FOR THE ASSESSMENT YEAR 2 007 - 08 WAS FILED ON 05.11.2007 DECLARING INCOME OF RS. 3,71,000/ - AND LATER ON THE RETURN OF INCOME WAS REVISED ON 12 TH JUNE, 2008 AT A N INCOME OF RS. 2, 85 ,7 17 / - . SUBSEQUENTLY, THE CASE WAS TAKEN FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS. 25,52,670/ - VIDE ORDER DATED 06.12.2010 PASSED UNDER SECTION 143(3)/148 OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) AFTER MAKING ADDITION OF RS. 22,66,949/ - BEING THE DIFFERENCE BETWEEN THE GROSS RECEIPTS AS PER THE FOR M NO. 26AS OF THE DEPARTMENT AND THE INCOME DECLARED BY THE ASSESSEE. THE ASSESSEE COULD NOT RECONCILE THE DIFFERENCE BEFORE THE LEARNED ASSESSING OFFICER. BEING AGGRIEVED BY THE ASSESSMENT ORDER, AN APPEAL WAS FILED BEFORE THE LD. CIT(A) WHO VIDE IMPUGNED ORDER DATED 15.03.2013 DISMISSED THE APPEAL ON THE GROUND THAT THE ASSESSEE COULD NOT EXPLAIN THE DIFFERENCE WITH THE DOCUMENTARY EVIDENCE BEFORE HIM. AGGRIEVED, THE ASSESSEE IS BEFORE US WITH THE PRESENT APPEAL. 3. WE HEARD THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL ON RECORD. WE FIND FROM THE ASSESSMENT ORDER THAT THE ADDITION WAS MADE SOLELY BASED ON THE INFORMATION CONTAINED IN FORM NO. 26AS OF THE DEPARTMENT. THE COORDINATE BENCH OF THE ITAT, DELHI IN ITA NO. 4679/DEL/2012, FOR AY 2009 - 10, DATE D 31 ST MARCH, 2015, VIDE PARA 6 OF THE ORDER HELD THAT THE INFORMATION CONTAINED IN FORM NO. 26AS CANNOT BE ITSELF THE BASIS FOR MAKING ADDITION TO THE INCOME 3 ITA NO. 1708/DEL/2013 ASSESSMENT YEAR: 2007 - 08 RETURNED. TO THE SAME EFFECT, THE DECISION OF A COORDINATE BENCH OF ITAT, JABALPUR, IN THE CASE OF RAVINDRA PRATAP THAREJA VS. ITO, 154 ITD 633. 6. WE DO NOT FIND ANY REASON TO DIFFER FROM THE REASONING GIVEN BY THE COORDINATE BENCHES IN THE CASES CITED SUPRA. THE ASSESSING OFFICER IS DUTY - BOUND TO MAKE INDEPENDENT INQUIRY AS TO WHETHER INCOME HAS A CCRUED TO THE ASSESSEE COMPANY AS PER THE METHOD OF ACCOUNTING REGULARLY BEING FOLLOWED BY THE ASSESSEE IN RESPECT OF THE TRANSACTIONS REPORTED IN FORM NO. 26AS. THE ASSESSING OFFICER, AFTER DUE VERIFICATION OF THE TRANSACTIONS WITH REFERENCE TO THE DOCUME NTARY EVIDENCE LIKE AGREEMENT ENTERED INTO BETWEEN THE PARTIES, HAS TO RENDER THE FINDING WHETHER THE INCOME HAS REALLY ACCRUED TO THE ASSESSEE COMPANY OR NOT. ONLY AFTER SUCH VERIFICATION, THE ADDITION CAN BE MADE BY THE ASSESSING OFFICER AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE - COMPANY. THEREFORE, IN ORDER TO MEET THE ENDS OF JUSTICE, WE RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO MAKE DE NOVO ASSESSMENT AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE COMPANY. HENCE, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER , 2015. SD/ - SD/ - ( SUCHITRA KAMBLE ) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30 TH OCTOBER , 2015. RK/ - 4 ITA NO. 1708/DEL/2013 ASSESSMENT YEAR: 2007 - 08 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI