Sh Kailash Chand Sharma, Delhi V. ITO, New Delhi

ITA 1844/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52789 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 10-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 22-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: DR RAKESH GUPTA; ASWANI TANEJA
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI A.N. PAHUJA ITA NO. 1844/DEL/2010 ASSTT. YR: 2006-07 KAILASH CHAND SHARMA VS. INCOME TAX OFFICER, PROP. M/S NEPAL SAL STORE, WARD 19(2), NEW DELHI. 9A, TIMBER MARKET, AZADPUR, DELHI-110033. PAN/GIR NO. AATPS6984Q (APPELLANT ) ( RESPONDENT ) APPELLANT BY : DR. RAKESH GUPTA, ADVOCATE & SH. ASWANI TANEJA, ADVOCATE RESPONDENT BY : MS. Y. KAKKAR DR O R D E R PER R.P. TOLANI, J.M : THIS IS ASSESSEE APPEAL AGAINST CIT(A)S ORDER DATE D 1-2-2010 RELATING TO A.Y. 2006-07. SOLE EFFECTIVE GROUND RAI SED IS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE AC TION OF LD. AO IN ASSESSING RS. 4,69,411/- (244076+225335) BEIN G THE AMOUNT AGAINST THE PURCHASE MADE DURING THE YEAR. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADI NG OF TIMBER ITEMS. ASSESSEES BALANCE SHEET, INTER ALIA, SHOWED TRADIN G CREDIT OF RS. 2,44,076/- FROM ONE M/S GOPAL TRADERS. IT WAS HELD THAT ASSESS EE OWED NO LIABILITY TO THIS CONCERN. THE SAME WAS ADDED AS INCOME OF THE A SSESSEE. 2.1. SIMILARLY, ASSESSEE HAD AN ACCOUNT OF PURCHASE S WITH ONE M/S SHARMA TRADERS. TOTAL AMOUNT OF PURCHASES FROM THIS CONCER N WERE TO THE TUNE OF RS. 2 6,70,335/- AND THE OUTSTANDING BALANCE SHOWN IN BAL ANCE SHEET WAS RS. 2,25,335/-. ACCORDING TO AO, SHARMA TRADERS, HOWEVE R, CONFIRMED THAT THERE WERE NO OUTSTANDING PAYMENTS DUE FROM ASSESSE E. THIS OUTSTANDING BALANCE WAS ALSO ADDED TO THE INCOME OF ASSESSEE. 2.2. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL TO THE CIT(A), WHERE IT WAS STATED THAT BOTH THE ADDITIONS WERE BY IGNORING THE DOCUMENTARY EVIDENCE FILED BEFORE AO AND WITHOUT AFFORDING AN OPPORTUNIT Y TO CROSS-EXAMINE M/S GOPAL TRADERS AND M/S SHARMA TRADERS. THE CIT(A), H OWEVER, CONFIRMED THE ADDITIONS MADE BY THE AO. AGGRIEVED, ASSESSEE I S IN APPEAL BEFORE US. 3. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT I T HAS BEEN ADMITTED BY CIT(A) THAT ASSESSEE HAD INSISTED FOR CROSS-EXAMINA TION OF THE SAID CONCERNS, WHO HAD STATED THAT NOTHING WAS DUE FROM ASSESSEE. IT IS PLEADED THAT AS A FUNDAMENTAL RULE OF NATURAL JUSTICE, ANY MATERIAL WHICH IS PROPOSED TO BE USED AGAINST ANY ASSESSEE SHOULD BE CONFRONTED TO I T. SINCE THIS PRINCIPLE OF NATURAL JUSTICE HAS BEEN DENIED, THE DECISION IS NO T PROPER. IN THE INTEREST OF JUSTICE THE MATTER MAY BESET ASIDE, RESTORED BACK T O THE FILE OF AO TO SUPPLY THE INCRIMINATING MATERIAL OR STATEMENT AND HEAR TH E ASSESSEE THEREON. 4. LEARNED DR IS HEARD. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT EMERGES FROM RECORD THAT ASSESSEE HAD INSISTED FOR MATERIAL AND CROSS EXAMINATION OF M/S GOPAL TRADERS AND M/S SHAR MA TRADERS WHO DENIED HAVING ANY OUTSTANDING BALANCE DUE FROM THE ASSESSEE. IT IS A BASIC PRINCIPLE OF NATURAL JUSTICE THAT THE MATERIAL, WHI CH IS PROPOSED TO BE USED AGAINST THE ASSESSEE, SHOULD BE CONFRONTED TO IT FO R EXPLANATION AND ON CONSIDERATION OF THE ENTIRE MATERIAL FACTS THE ISSU ES ARE TO BE DECIDED. WE 3 FIND MERIT IN THE ARGUMENT OF THE LEARNED COUNSEL I N THIS BEHALF AND SET ASIDE THE ISSUE BEFORE US BACK TO THE FILE OF AO TO DECID E THE SAME AFRESH, AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 12-10-2011. SD/- SD/- (A.N. PAHUJA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12-10-2011. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR