Shri Umesh Chand Jain, Ghaziabad V. DCIT, New Delhi

ITA 1823/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3819 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2007-2008
• Appeal Filed On: 15-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRUJANI MOHANTY
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

ITA NO. 1823/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 1823/DEL/2011 A.Y. : 2007-08 SH. UMESH CHAND JAIN, G-7A, HIG, SECTOR-23, SANJAY NAGAR, GHAZIABAD (UP) (PAN : AHDPJ0854H) VS. DCIT, CIRCLE 39(1), NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. KVS GUPTA, CA DEPARTMENT BY : MS. SRUJANI MOHANTY, D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 28.12. 2010 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED READ AS UNDER:- I) THE ACTION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN ENHANCING THE INCOME OF THE APPELLANT BY A SUM OF ` 6,98,760/- WITHOUT ISSUING A SHOW CAUSE NOTICE U/S 251(2) IS ILLEGAL, ARBITRARY, UNWARRANTED, UNCALLED FOR AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO. 1823/DEL/2011 2 II) THE ACTION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN NOT ADMITTING THE AFFIDAVIT OF THE APPELLANT UNDE R RULE 46A IS ILLEGAL, ARBITRARY, UNWARRANTED, UNCALLED FO R AND AGAINST THE FACTS AND CIRCUMSTANCE OF THE CASE. III) THE ACTION OF THE LD. COMMISSIONER OF INCOME TA X (APPEALS) IN NOT ISSUING SUMMONS TO UPJN, RAIPUR IS ILLEGAL, AR BITRARY, UNWARRANTED, UNCALLED FOR AND AGAINST THE FACTS AND CIRCUMSTANCE OF THE CASE. IV) THE ACTION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN ENHANCING INCOME BY ` 1,78,000/- IS ILLEGAL, ARB ITRARY, UNWARRANTED, UNCALLED FOR AND AGAINST THE FACTS AND CIRCUMSTANCE OF THE CASE. V) THE ACTION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF ` 2,09,272/- TO THE RETURN ED INCOME IS ILLEGAL, ARBITRARY, UNWARRANTED, UNCALLE D FOR AND AGAINST THE FACTS AND CIRCUMSTANCE OF THE CASE. VI) THE ACTION OF THE LD. COMMISSIONER OF INCOME TA X (APPEALS) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF ` 2,09,272/- TO THE RETUR NED INCOME EVEN WHEN BOOKS OF ACCOUNTS ARE STATUTORILY AUDITED U/S 44AB IS ILLEGAL, ARBITRARY, UNWARRANTE D, UNCALLED FOR AND AGAINST THE FACTS AND CIRCUMSTANCE OF THE C ASE. VII) THE ACTION OF THE LD. COMMISSIONER OF INCOME TA X (APPEALS) IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER I N NOT GIVING PROPER OPPORTUNITY AND THEREBY COMPLETING THE ITA NO. 1823/DEL/2011 3 ASSESSMENT IS ILLEGAL, ARBITRARY, UNWARRANTED, UNCA LLED FOR AND AGAINST THE FACTS AND CIRCUMSTANCE OF THE CASE. 3. IN THIS CASE ASSESSING OFFICER NOTED THAT THE A SSESSEE IS A CIVIL CONTRACTOR AND DURING THE ASSESSMENT YEAR, ASSESSEE HAS SHOWN RECEIPT OF ` 78,36,971/- IN PROFIT AND LOSS ACCOUNT . PERUSAL OF THE ASSESSEES BANK ACCOUNT REVEALED THAT TOTAL DEPO SIT DURING THE YEAR IN THE BANK IS ` 84,01,478/-. THE ASSESSEE WAS ASK ED TO EXPLAIN THE DIFFERENCE AND TO PRODUCE THE BOOKS OF ACCOUNTS AN D DETAILS. THE ASSESSEE SUBMITTED THAT THIS IS FIRST YEAR OF BUS INESS AND STATED THAT THE PROFIT SHOWN ON RECEIPTS IS MORE THAN 8% WHICH I S MAXIMUM IN THE CASE OF CONTRACTORS U/S. 44AD. ASSESSING OFFICER W AS NOT SATISFIED AND HELD THAT SINCE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS, THE FINANCIAL RESULTS SHOWN BY THE ASSESSEE CANNOT BE A CCEPTED. HENCE, HE APPLIED THE PROFIT RATE OF 10% ON THE GROSS PROF ITS ARRIVED ABOVE OF ` 8,40,148/- ON THE TOTAL RECEIPT OF ` 84,01,478/-. HE OBSERVED THAT ASSESSEE HAS ALREADY SHOWN INCOME FROM HIS BUSINESS OF ` 6,30,876/-, HENCE, HE MADE AN ADDITION OF ` 2,09,272/-. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT ASSESSEE HAS SUBMITTED THE ADD ITIONAL EVIDENCES WHICH WAS NOT FILED EARLIER. HENCE, LD. COMMISSIO NER OF INCOME TAX (APPEALS) STATED THAT ADDITIONAL EVIDENCES WERE NOT ADMISSIBLE. LD. COMMISSIONER OF INCOME TAX (APPEALS) CONCLUDED AS UN DER:- IN VIEW OF THE ABOVE DISCUSSION, THE APPELLANTS C LAIM IN RESPECT OF THE FOLLOWING SOURCES OF DEPOSIT IN THE BANK AC COUNT, IS NOT ACCEPTABLE: ITA NO. 1823/DEL/2011 4 I) ` 38,869/- BY SALES TAX AS PER PARA 15 ABOVE. II) ` 25,500/- BY MACHINE HIRE AS PER PARA 16 ABOVE. III) ` 6,65,662/- BY CARTAGE AS PER PARAS 18 TO 21 ABOV E. IV) ` 1,78,000/- BY LOANS AS PER PARA 23 ABOVE. THE SOURCE OF ABOVE DEPOSITS OF ` 9,08,031/- IS THE REFORE, UNEXPLAINED AND THIS AMOUNT IS TO BE ADDED TO INCOME . IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS MADE AN ADDITION OF ` 2,09,272/- BEING THE NET PROFIT ON UNEXPLAINED DEPOSITS. AS DISCUSSED IN THE ABOVE PARA, UNEXPLAI NED DEPOSITS OF ` 9,08,031/- HAVE BEEN ADDED TO INCOME. THE ADDI TION MADE BY THE ASSESSING OFFICER OF ` 2,09,271/- IS THEREFORE TO BE SUBSTITUTED BY THE ABOVE ADDITION OF ` 9,08,031/-. INCOME, IS THEREFORE, ENHANCED BY ` 6,98,760/-. AS DISCUSSED I N PARA 4 ABOVE, THE APPELLANT WAS GIVEN AN OPPORTUNITY TO EX PLAIN WHY HIS INCOME BE NOT ENHANCED. AS DISCUSSED IN ABOVE PARAS , HIS REPLY HAS BEEN DULY CONSIDERED. WITH THESE MARKS, THE GR OUNDS ARE DISMISSED. GROUND NO. 3 CLAIMS THE LACK OF ADEQUATE OPPORTUNI TY. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS G IVEN DETAILS OF THE OPPORTUNITIES GIVEN AND THE APPELLANTS FAILURE TO PRODUCE THE BOOKS OF ACCOUNTS, BILLS AND VOUCHERS AND TO EXPLA IN THE EXCESS DEPOSITS IN THE BANK ACCOUNT. MOREOVER, OPPORTUNIT Y HAS BEEN ITA NO. 1823/DEL/2011 5 GIVEN DURING THE APPELLANT PROCEEDINGS AND THE SUB MISSIONS OF THE APPELLANT HAVE BEEN DULY CONSIDERED. CONSIDERI NG THE FATS, THE APPELLANTS CLAIM IS NOT ACCEPTABLE. THE GROUND IS DISMISSED. 5. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPE AL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND AT THE THRESHOLD THAT THE ASSESSEES CONTENTION IS THAT LD. COMMISSIONER OF IN COME TAX (APPEALS) HAS ERRED IN NOT ADMITTING THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE. IT HAS FURTHER BEEN ARGUED THAT NO SHOW CAUSE NOTICE WAS ISSUED IN THIS CASE U/S 251(2 ) WHEN THE INCOME WAS BEING ENHANCED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). HENCE, LD. COUNSEL OF THE ASSESSEE SU BMITTED THAT SINCE THE ASSESSEE HAS NOT BEEN GIVEN ADEQUATE OPPORTUNIT Y, THEREFORE, THE MATTER MAY BE REMITTED TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRESH. 6.1 LD. DEPARTMENTAL REPRESENTATIVE DID NOT HAVE ANY SERIOUS OBJECTION TO THIS PROPOSITION. ITA NO. 1823/DEL/2011 6 7. ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE REMIT THE ISSUES IN THIS CASE TO THE FILES OF THE ASSESSING OFFICER TO CONS IDER THE SAME AFRESH, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14/6/2011 UPO N CONCLUSION OF HEARING. SD/- SD/- [A.D. JAIN] [A.D. JAIN] [A.D. JAIN] [A.D. JAIN] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 14/6/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES