ACIT, New Delhi V. Sh. Dinesh Kumar Mathur, New Delhi

ITA 1995/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3417 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 12-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RAJEESH BEHARI MATHUR
• Keywords: Diversion of income; Additional evidence
• Section: 143(3)

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A : NEW DELHI BEFORE SHRI H.S.SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1995/DEL/2016 (ASSESSMENT YEAR: 2009 - 10 ) ACIT, CIRCLE - 33(1), ROOM NO. 1305, 13 TH FLOOR, E - 2, PRATYKASHYA KAR BHAWAN, SP MUJERJEE CIVIC CENTRE, JAWAHAR LAL NEHRU MARG, MINTO ROAD, NEW DELHI VS. DINESH KUMAR MATHUR, F - 10/4, VASANT VIHAR, NEW DELHI PAN:AAIPM9342D (APPELLANT) (RESPONDENT) REVENUE BY : SHRI RAJEEV KUMAR, SR. DR ASSESSEE BY: SHRI RAJEESH BEHARI MATHUR, CA DATE OF HEARING 21/11 /2017 DATE OF PRONOUNCEMENT 1 5 / 0 2 / 2018 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - 34, NEW DELHI DATED 04.01.2016 FOR THE ASSESSMENT YEAR 2009 - 10. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. 'WHETHER IN LAW AND ON FACTS, THE LD. CIT(A) WAS JUSTIFIED IN ADMITTING EVIDENCE DURING THE APPELLATE PROCEEDINGS WHEN THE REMAND REPORT OF THE ASSESSING OFFICER DATED 03.12.2013 CLEARLY STATED THAT SUFFICIENT OPPORTUNITY HAD BEEN GRANTED TO THE ASSESSEE DURING ASSESSMENT PROCEEDINGS TO FURNISH THE EVIDENCES IN SUPPORT OF HIS CLAIMS BUT HE FAILED TO DO SO? 2. WHETHER IN LAW AND ON FACTS, LD. CIT(A) WAS JUSTIFIED IN ADMITTING ADDITIONAL EVIDENCE DURING APPELLATE PROCEEDINGS WITHOUT RECORDING THE REASONS FOR THE ADMISSION OF SUCH EVIDENCE, IN CLEAR VIOLATION OF RULE 46A(2) OF THE INCOME TAX RULES, 1962? 3. WHETHER ON THE FACTS, AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN NOT EXERCISING HIS POWER U/S 250(4) OF THE I.T. ACT AS IT IS INCUMBENT ON CIT(A) TO INVOKE SECTION 250(4) AS HELD BY HON'BLE DELHI HIGH COURT IN ITAT NO.52 5/2014 DATED 11.03.2015 IN THE CASE OF CIT VS. JAN SAMPARK ADVERTISING AND MARKETING (P) LTD. AND ALSO BOMBAY HIGH COURT (231ITR1). ACIT VS. DINESH KUMAR MATHUR ITA NO. 1995/DEL/2016 (ASSESSMENT YEAR: 2009 - 10) PAGE | 2 4. WITHOUT PREJUDICE TO THE GROUNDS OF APPEAL AT NOS. 1, 2 AND 3, WHETHER ON MERITS TOO, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY GIVING RELIEF OF RS. 8,91,750/ - BEING THE ALLEGED LOSS CLAIMED BY THE ASSESSEE ON SALE OF REJECTED MIXED STYLE GARMENTS TO ITS SISTER CONCERN M/S AKRITI CREATION PVT. LTD, WHICH IN FACT WAS DIVERSION OF INCOME OF THE ASSESSEE TO THE SAID CONCE RN? 5. WITHOUT PREJUDICE TO THE GROUNDS OF APPEAL AT NOS. 1, 2 AND 3, WHETHER ON MERITS TOO, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY GIVING RELIEF OF RS 67,40,141/ - BEING THE ALLEGED LOSS CLAIMED BY THE ASSESSEE ON THE SALE OF FABRIC TO ITS SISTER CONCERN M/S AKRITI CREATION PVT. LTD. WHICH IN FACT WAS UNDERESTIMATION OF THE VALUE OF STOCK/DIVERSION OF INCOME OF THE ASSESSEE TO THE SAID CONCERN? 6. WITHOUT PREJUDICE TO THE GROUNDS OF APPEAL AT NOS. 1, 2 AND 3, WHETHER ON MERITS TOO, THE LD. CIT(A) H AS ERRED IN LAW AND ON FACTS BY GIVING RELIEF OF RS. 36,30,771/ - BEING THE EXCESS PAYMENT MADE TO THE ASSESSEE'S SISTER CONCERN M/S AKRITI CREATION PVT. LTD. ON ACCOUNT OF FABRICATION CHARGES? 7. WITHOUT PREJUDICE TO THE GROUNDS OF APPEAL AT NOS. 1, 2 AND 3, WHETHER ON MERITS TOO, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS BY GIVING RELIEF OF 20% OF MISC. EXPENSES, CLAIMS AND DISCOUNT AND EXCHANGE FLUCTUATION, DESPITE THESE EXPENSES BEING UNVERIFIABLE AND PARTLY OF A PERSONAL NATURE. 8. WITHOUT PREJUDICE TO THE GROUNDS OF APPEAL AT NOS.1, 2 AND 3 WHETHER ON MERITS TOO, THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS BY GIVING OF RS. 9939/ - ON ACCOUNT OF SHORT AND EXCESS CLAIMED BY THE ASSESSEE, DESPITE IT BEING UNVERIFIABLE. 3. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME ON 30.09.2009 OF RS. 1364090/ - . DURING THE YEAR THE ASSESSEE SOLD A RESIDENTIAL HOUSE PROPERTY FOR RS. 1320000/ - ON WHICH CIRCLE RATE WAS OF RS. 3030000/ - THER EFORE, THE LD AO MADE AN ADDITION OF U/S 4710000/ - . FURTHER, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXPORT OF READYMADE GARMENTS AND FABRICS. THE LD AO ON THE BASIS OF THE DETAILS FILED NOTED THAT THERE IS A DIFFERENCE IN ALL PIECES IN EXPORT SALES AND FABRIC SALES WITH THE DETAILS AS PER TAX AUDIT REPORT AND FURNISHED DURING THE ASSESSMENT. THEREFORE, THE ASSESSEE GAVE AN EXPLANATION WITH THE BILLS. HOWEVER, THE LD AO REJECTED THE SAME AND MADE ADDITION ON SALE OF REJECTED GARMENTS, SALE OF FABRICS AND FABRICATION CHARGES. FURTHER DISALLOWANCE WAS MADE AT 20% ON ENTIRE EXPENSES. CONSEQUENTLY, ACIT VS. DINESH KUMAR MATHUR ITA NO. 1995/DEL/2016 (ASSESSMENT YEAR: 2009 - 10) PAGE | 3 ASSESSMENT U/S 143(3) OF THE ACT WAS PASSED ON 28.12.2011 OF RS. 17463320/ - . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT(A) WHO DIRECTED THE AO TO CONSIDER TO TAKE THE VALUATION OF THE PROPERTY AT RS. 4292969/ - AS PER REPORT OF THE AVO. FURTHER, HE DELETED THE ADDITION THE ADDITION OF RS. 891750/ - ON SALE OF REJECTED FABRICS FOR THE REASONS THAT SALE OF THE GOODS WAS NOT SHOWN AT PRICE HIGHER THAN THE DECLARE D. HOWEVER, THE ADDITION OF RS. 6740141/ - WAS ALSO DELETED FOR THE SAME REASON. HE ALSO DELETED THE EXCESS PAYMENT OF RS. 3660771/ - FOR THE REASON THAT THE LD AO HAS NOT COMMENTED ON ADDITIONAL EVIDENCE. THEREFORE, REVENUE IS IN APPEAL BEFORE THE LD AO AS ADMITTED THE ADDITIONAL EVIDENCE WITHOUT RECORDING THE REASONS FOR ADMISSION OF SUCH EVIDENCE. IT WAS FURTHER STATED THAT IT IS NOT CLEAR VIOLATION OF RULE 46A(2) OF THE INCOME TAX RULES, 1962. 4. THE LD AR REFERRED TO THE SUBMISSION DATED 21.11.2017 BEFORE US AND STATED THAT THERE WAS A REQUIREMENT OF ADDITIONAL EVIDENCE FOR THE REASON THAT THE LD AO SCHEDULED THE HEARING ON 28.12.2011 AND ON THE SAME DATE HE FRAMED THE ORDER. THEREFORE, THE ADDITIONAL EVIDENCE WERE SUBMITTED. HE FURTHER STATED THAT AO HAS S UBMITTED THE ASSESSMENT REPORT BUT DID NOT COMMENT ON THE ADDITIONAL EVIDENCE. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDERS OF THE LOWER AUTHORITIES. ADMITTEDLY DURING THE COURSE OF APPEAL BEFORE THE LD CIT(A) THE ASSESSE E SUBSTANTIATED THE EVIDENCE VIDE LETTER DATED 28.12.2011. THE ABOVE APPLICATION IS AVAILABLE AT PAGE NO. 60 TO 62 OF THE PAPER BOOK. ACCORDING TO THE LETTER OF THE ASSESSEE SUBMITTED THE SAME LETTER ON 28.12.2011 TO THE LD AO BUT THE LD AO REFUSED TO ACCE PT THE SAME. THE SAME LETTER IS CONSIDERED BY THE LD CIT(A) WHILE DECIDING THE WHOLE ISSUE. ADMITTEDLY THE LD CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE AS STATED BY HIS FINDING WHILE DECIDING GROUND NO. 2,3, AND 4 OF HIS ORDER. AS PER RULE 46A OF THE RUL ES THE LD ACIT(A) IS EMPOWERED TO ADMIT THE ADDITIONAL EVIDENCE HE CAN OBJECT AND DECIDE THE APPEAL ON MERITS AFTER GIVING PROPER PROPERTY TO THE AO. IN THE PRESENT CASE THE LD ACIT VS. DINESH KUMAR MATHUR ITA NO. 1995/DEL/2016 (ASSESSMENT YEAR: 2009 - 10) PAGE | 4 CIT(A) HAS NOT RECORDED HIS REASONS FOR ADMISSION OF ADDITIONAL EVIDENCE IN WRI TING IN THE ORDER. THEREFORE, THE ORDER OF THE LD CIT(A) SUFFERS FROM INFIRMITY. IT IS ALSO NOTED THAT THE LD AO HAS ALSO NOT COMMENTED THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE BEFORE THE LD CIT(A). IF THE LD AO HAD NO RESERVATION OF ADMISSION OF ADDITIONAL EVIDENCE HE FURTHER OBJECTED TO THE SAME NO DOUBT BUT HE SHOULD HAVE ALSO WITHOUT PREJUDICE WHO HAVE NOTED ON THE MERITS OF THE CASE. THIS EXERCISE OF THE AO HAS FAILED TO DO SO. THEREFORE, THERE IS NO INFIRMITY IN THE ORDER OF THE LD CIT(A) IN ADMITTING THE ADDITIONAL EVIDENCE BUT RECORDING THE REASONS AND ALSO APPRAISE IN COMMENTING ON THE MERITS OF THE ADDITIONAL EVIDENCE. IN VIEW OF THIS WE ALLOW GROUND NO. 2 OF THE APPEAL OF THE REVENUE WITH RESPECT ADDITION AGITATED IN GROUND NO. 3,5 AND 6 OF THE APPEAL OF THE REVENUE. THEREFORE, GROUND NO. 2, 4, 5 AND 6 OF THE APPEAL OF THE REVENUE ARE ALLOWED WITH ABOVE DIRECTION AND GROUND NO. 1, 3, 7 AND 8 ARE DISMISSED. 6. IN THE RESULT APPEAL OF THE REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE O PEN COURT ON 1 5 / 0 2 / 2018 . - S D / - - S D / - ( H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 5 / 02 / 2018 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI