M/s Vasoo Builders Private Limited , Bangalore V. Deputy Commissioner of Income Tax Circle-7(1)(2), Bangalore

ITA 1741/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7969 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-08-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 23-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI J C IT BENGALURU
• Keywords: Unexplained cash credit; Income from undisclosed sources; Principle of natural justice; Additional evidence; Reasonable cause; Condonation of delay; TDS
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO S . 1741 AN D 1742 /BANG/20 1 8 ASSESSMENT YEARS : 2010-11 AND 2011-12 M/S. VASOO BUILDERS PVT. LTD., 4D, THOMAS MANOR, RICHMOND TOWN, BENGALURU 560 025. PAN : AAACV 5939 Q VS. DCIT, EARLIER CIRCLE 12[5], PRESENTLY CIRCLE 7 [1][2], BMTC BUILDING, 80 FEET ROAD, 6 TH BLOCK, KORAMANGALA, BENGALURU 560 095 . APPELLANT RESPONDENT ASSESSEE BY : SHRI. PRANAV KRISHNA, SHRI. S. RAVISHANKAR, ADVOCATES REVENUE BY : SMT. R. PREMI, JCIT (DR)(ITAT), BENGALURU DATE OF HEARING : 2 1.08.2020 DATE OF PRONOUNCEMENT : 25 .08.2020 O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND THESE ARE DIRECTED AGAINST A COMBINED ORDER OF LEARNED CIT(A)-7, BENGALURU, DATED 06.09.2017 FOR ASSESSMENT YEAR 2010-11 AND 2011-12. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS. 1741 AND 1742 /BANG/2018 PAGE 2 OF 7 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: ITA NO.1741/BANG/2018 1. THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS]-7, BENGALURU DATED 06/09/2017 AND THE ORDER OF ASSESSMENT PASSED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 143 [3] OF THE ACT DATED 25/03/2013, IN SO FAR AS IT IS AGAINST THE APPELLANT, IS OPPOSED TO THE LAW, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES IN THE APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSED TO TAX ON A TOTAL INCOME DETERMINED BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] OF RS. 1,15,80,925/- AS AGAINST THE INCOME REPORTED BY THE APPELLANT OF RS. 42,72,715/-, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN NOT ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 4. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] FAILED TO APPRECIATE THAT THE ADDITIONAL EVIDENCES COULD NOT BE FILED BY THE APPELLANT BEFORE THE LEARNED ASSESSING OFFICER DUE TO REASONABLE CAUSE SINCE THE APPELLANT COULD NOT COMPILE THE DETAILS AND DOCUMENTS AS THE EMPLOYEES OF THE APPELLANT HAD LEFT THE SERVICES AND THE SAME CONSTITUTED TRUE, GENUINE AND SUFFICIENT CAUSE WHICH PREVENTED THE APPELLANT FROM PRODUCING THE EVIDENCES BEFORE THE LEARNED ASSESSING OFFICER AND THE SAME WAS UNINTENTIONAL, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF INCREASE IN SHARE CAPITAL AMOUNTING TO RS. 60,00,000/- AS UNEXPLAINED CREDITS BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE CONDITIONS AS ENVISAGED UNDER SECTION 68 OF THE ACT HAVING BEEN COMPLIED WITH I.E. THE IDENTITY OF THE PARTY, GENUINENESS OF THE ITA NOS. 1741 AND 1742 /BANG/2018 PAGE 3 OF 7 TRANSACTIONS AND CREDIT WORTHINESS OF THE PARTY, CONSEQUENTLY NO ADDITION COULD HAVE BEEN MADE BY THE LEARNED ASSESSING OFFICER AMOUNTING TO RS. 60,00,000/- BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT AND THE SAID ADDITION OUGHT NOT TO HAVE BEEN CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS], ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF ENTERTAINMENT EXPENDITURE INCURRED BY THE APPELLANT AMOUNTING TO RS. 6,29,224/- BY ERRONEOUSLY HOLDING THAT THE SAID EXPENDITURE IS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS OF THE APPELLANT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN TDS CREDIT AMOUNTING TO RS.6,15,985/- AS UNACCOUNTED INCOME, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER AS PER THE PARITY OF REASONING OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF KARANVIR SINGH 349 ITR 692, THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST UNDER SECTION 234 B OF THE INCOME TAX ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. FURTHER THE LEVY OF INTEREST UNDER SECTION 234 B OF THE ACT IS ALSO BAD IN LAW AS THE PERIOD, RATE, QUANTUM AND METHOD OF CALCULATION ADOPTED ON WHICH INTEREST IS LEVIED ARE ALL NOT DISCERNIBLE AND ARE WRONG ON THE FACTS OF THE CASE. 10. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBSTITUTE AND DELETE ANY OR ALL THE GROUNDS OF APPEAL URGED ABOVE. 11. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DURING THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF EQUITY AND JUSTICE. ITA NO.1742/BANG/2018 1. THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS]-7, BENGALURU DATED 06/09/2017 AND THE ORDER OF ASSESSMENT PASSED BY THE LEARNED ASSESSING OFFICER UNDER ITA NOS. 1741 AND 1742 /BANG/2018 PAGE 4 OF 7 SECTION 143 [3] OF THE ACT DATED 13/03/2014, IN SO FAR AS IT IS AGAINST THE APPELLANT, IS OPPOSED TO THE LAW, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES IN THE APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSED TO TAX ON A TOTAL INCOME DETERMINED BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] OF RS. 3,73,32,583/- AS AGAINST THE BUSINESS LOSS REPORTED BY THE APPELLANT OF RS. 16,87,337/-, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN NOT ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 4. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] FAILED TO APPRECIATE THAT THE ADDITIONAL EVIDENCES COULD NOT BE FILED BY THE APPELLANT BEFORE THE LEARNED ASSESSING OFFICER DUE TO REASONABLE CAUSE SINCE THE APPELLANT COULD NOT COMPILE THE DETAILS AND DOCUMENTS AS THE EMPLOYEES OF THE APPELLANT HAD LEFT THE SERVICES AND THE SAME CONSTITUTED TRUE, GENUINE AND SUFFICIENT CAUSE WHICH PREVENTED THE APPELLANT FROM PRODUCING THE EVIDENCES BEFORE THE LEARNED ASSESSING OFFICER AND THE SAME WAS UNINTENTIONAL, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF ENTERTAINMENT EXPENDITURE INCURRED BY THE APPELLANT AMOUNTING TO RS. 6,41,853/- BY ERRONEOUSLY HOLDING THAT THE SAID EXPENDITURE IS NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS OF THE APPELLANT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE IN INCOME OFFERED AND INCOME AS PER 26AS STATEMENT AMOUNTING TO RS.3,83,37,147/- AS SUPPRESSED INCOME WITHOUT APPRECIATING THAT THE APPELLANT 'ES RECOGNISED INCOME AS PER LAW AND THERE IS NO SUPPRESSION OF INCOME AS ALLEGED BY THE LEARNED AUTHORITIES BELOW, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS. 1741 AND 1742 /BANG/2018 PAGE 5 OF 7 7. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER AS PER THE PARITY OF REASONING OF RE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF KARANVIR SINGH 349 ITR 692, THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST UNDER SECTION 234 B OF THE INCOME TAX ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. FURTHER THE LEVY OF INTEREST UNDER SECTION 234 B OF THE ACT IS ALSO BAD IN LAW AS THE PERIOD, RATE, QUANTUM AND METHOD OF CALCULATION ADOPTED ON WHICH INTEREST IS LEVIED ARE ALL NOT DISCERNIBLE AND ARE WRONG ON THE FACTS OF THE CASE. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBSTITUTE AND DELETE ANY OR ALL THE BRANDS OF APPEAL URGED ABOVE. 9. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DURING THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF EQUITY AND JUSTICE. 3. IN THE VERY BEGINNING, IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT THERE IS A DELAY OF 37 DAYS IN FILING OF THESE APPEALS BEFORE THE TRIBUNAL. HE ALSO SUBMITTED THAT THE ASSESSEE HAS MOVED AN APPLICATION BEFORE THE TRIBUNAL REQUESTING FOR CONDONATION OF DELAY ALONG WITH AN AFFIDAVIT. IN THIS APPLICATION FOR CONDONATION OF DELAY, IT IS SUBMITTED BY THE ASSESSEE THAT AFTER RECEIVING THIS COMBINED ORDER OF LEARNED CIT(A) FOR THESE TWO YEARS, THE ASSESSEE MET THE CA WHO APPEARED BEFORE CIT(A) FOR FURTHER ADVICE AND HE ADVISED THE ASSESSEE TO FILE THE APPEAL BEFORE THE TRIBUNAL AND HE ALSO ADVISED THE ASSESSEE TO MEET A DIFFERENT COUNSEL I.E., THE PRESENT COUNSEL WHO HAS APPEARED BEFORE THE TRIBUNAL SHRI. PRANAV KRISHNA BECAUSE THE EARLIER CA WHO APPEARED BEFORE LEARNED CIT(A) WAS NOT CONVERSANT WITH THE PROCESS OF FILING AND ARGUING APPEAL BEFORE THE TRIBUNAL BUT THE ASSESSEE WAS FACING A LOT OF FINANCIAL ISSUES FOR WHICH THE BUSINESS OF THE ASSESSEE HAD COME TO A STANDSTILL AND THERE WAS A LOT OF PRESSURE FROM VARIOUS CREDITORS AND THEREFORE, THE ASSESSEE COULD NOT MEET THE SAID COUNSEL IN TIME AND HE COULD MEET THE SAID COUNSEL ONLY AFTER SOMETIME AND THE DELAY HAS BEEN CAUSED BECAUSE OF THIS REASON. RELIANCE HAS BEEN PLACED ON THE JUDGMENT OF HONBLE APEX COURT ITA NOS. 1741 AND 1742 /BANG/2018 PAGE 6 OF 7 RENDERED IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST KATIJI AND ORS 167 ITR 471 AND IT WAS SUBMITTED THAT SUCH DELAY SHOULD BE CONDONED IN THE INTEREST OF JUSTICE. LEARNED DR OF THE REVENUE SUBMITTED THAT THE DELAY SHOULD NOT BE CONDONED BUT CONSIDERING THE FACTS OF THE PRESENT CASE AS NOTED ABOVE AND RESPECTFULLY FOLLOWING THIS JUDGMENT OF HONBLE APEX COURT CITED BY LEARNED AR OF THE ASSESSEE AS NOTED ABOVE AND IN THE INTEREST OF JUSTICE, WE CONDONE THE DELAY OF 37 DAYS IN FILING THESE APPEALS BEFORE THE TRIBUNAL AND ADMIT THE SAME. 4. IN THE COURSE OF HEARING OF THESE APPEALS, IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT AS PER GROUND NO.3 RAISED BY THE ASSESSEE IN BOTH THE YEARS, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT LEARNED CIT(A) WAS NOT JUSTIFIED IN NOT ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE BEFORE HIM AND THEREFORE, THIS IS THE REQUEST OF THE ASSESSEE THAT SUCH ADDITIONAL EVIDENCE SHOULD BE ADMITTED BY THE TRIBUNAL AND THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF CIT(A) FOR A FRESH DECISION AFTER CONSIDERING THESE ADDITIONAL EVIDENCES. AS AGAINST THIS, LEARNED DR OF THE REVENUE SUBMITTED THAT IN PARA NO.4.6 OF HIS ORDER, THIS IS THE FINDING OF LEARNED CIT(A) THAT IT IS THE DUTY OF THE ASSESSEE TO EXPLAIN THE CIRCUMSTANCES WHICH PREVENTED IT FROM SUBMITTING SUCH DOCUMENTS BEFORE THE LOWER AUTHORITIES AND SINCE THE ASSESSEE FAILED TO PROVIDE SUFFICIENT CAUSE REGARDING FAILURE OF THE ASSESSEE TO SUBMIT THESE DOCUMENTS BEFORE THE AO, THE SAME CANNOT BE ADMITTED. HE SUBMITTED THAT BEFORE THE TRIBUNAL ALSO, THE ASSESSEE HAS NOT MADE OUT A CASE FOR ADMISSION OF ADDITIONAL EVIDENCES AND THEREFORE, THIS REQUEST OF THE ASSESSEE SHOULD BE REJECTED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND IN THE INTEREST OF JUSTICE AND IN THE FACTS OF THE PRESENT CASE, AS PER WHICH IT IS NOTED BY LEARNED CIT(A) IN PARA 4.5 OF HIS ORDER THAT THIS WAS THE EXPLANATION OF THE ASSESSEE BEFORE ITA NOS. 1741 AND 1742 /BANG/2018 PAGE 7 OF 7 HIM THAT BECAUSE OF THIS REASON THAT THE ACCOUNTING STAFF HAS LEFT THEIR JOB, THE ASSESSEE COULD NOT SUBMIT THE DETAILED STATEMENT TO THE AO AND FOR THIS REASON, THIS WAS THE REQUEST OF THE ASSESSEE BEFORE CIT(A) TO ACCEPT THE ADDITIONAL EVIDENCES. CONSIDERING THESE FACTS AND IN THE INTEREST OF JUSTICE, WE FEEL IT PROPER TO ADMIT THE ADDITIONAL EVIDENCES. HENCE, WE ADMIT THE ADDITIONAL EVIDENCES AND RESTORE THE ENTIRE MATTER IN BOTH THE YEARS TO THE FILE OF CIT(A) FOR A FRESH DECISION AFTER CONSIDERING THE ADDITIONAL EVIDENCES. IN VIEW OF THIS DECISION, WE DO NOT MAKE ANY COMMENT ON THE MERIT OF THE CASE AND HOLD THAT NO DECISION IS CALLED FOR ON MERIT OF THE CASE AT THE PRESENT STAGE. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (BEENA PILLAI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 25 TH AUGUST, 2020. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.