Shri Ravi Saxena, Haryana V. ITO, New Delhi

ITA 2108/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3018 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 10-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NISHCHAY KANTOOR; SSH ASHISH GOEL
• Keywords: Unexplained investment; Capital asset; Opportunity of being heard
• Section: 80C

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH F, NEW DELHI BEFORE : SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 2108/DEL/2015 ASSESSMENT YEAR: 2010-11 RAVI SAXENA, 12 - A, GROUND FLOOR, SECTOR 30-33, INDRAPRASTHA COLONY, FARIDABAD. PAN- ACNPS4187P. (APPELLANT) VS. INCOME - TAX OFFICER, WARD 38(2), NEW DELHI (RESPONDENT) APPELLANT BY SH. VED JAIN, ADVOCATE AND S/SH. ASHISH GOEL, & NISHCHAY KANTOOR, CA RESPONDENT BY ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CITI(A)-XX, NEW DELHI DATED 01.01.2015 FOR THE ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORD ER PASSED BY THE LEARNED CIT(A) IS BAD BOTH IN THE EYES OF LAW AND ON THE FAC TS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ACTION O F AO IN REJECTING THE BOOKS OF ACCOUNTS OF THE ASSESSEE DESPITE THE SAME HAVE B EEN PROPERLY MAINTAINED BY THE ASSESSEE. DATE OF HEARING 19.02.2019 DATE OF PRONOUNCEMENT 27.02.2019 ITA NO. 2108/DEL/2015 2 3. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN MAKING AN ADDITION OF A N AMOUNT OF RS.43,46,840/-, APPLY THE G.P. RATE OF 5% ON GROSS TURNOVER. (II) THAT THE ADDITION HAS BEEN CONFIRMED DESPITE TH E SAME HAVING BEEN MADE ARBITRARILY WITHOUT THERE BEING ANY BASIS FOR THE SAME. (III) THAT THE ADDITION HAS BEEN MADE REJECTING THE DETAILED EXPLANATION AND EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE. 4. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.38,33,872/- MADE BY AO ON ACCOUNT OF SUNDRY CREDITORS. (II) THAT THE ADDITION HAS BEEN CONFIRMED DESPITE TH E FACT THAT THE SAME HAD BEEN MADE ARBITRARILY @25% OF TOTAL SUNDRY CREDITOR S WITHOUT THERE BEING ANY BASIS FOR THE SAME. (III) THAT THE ADDITION HAS BEEN MADE REJECTING THE DETAILED EXPLANATION & EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE. 5. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.10,16,000/- MADE B Y THE AO ON ACCOUNT OF FIXED ASSETS. (II) THAT THE ADDITION HAS BEEN MADE REJECTING THE D ETAILED EXPLANATION & EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE. 6. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE DISALL OWANCE OF DEDUCTION AMOUNTING TO RS.1,00,000/- MADE BY AO, CLAIMED UNDE R SECTION 80C OF THE ACT. (II) THAT THE ADDITION HAS BEEN MADE REJECTING THE D ETAILED EXPLANATION & EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE. ITA NO. 2108/DEL/2015 3 2. THE BRIEF FACTS LEADING TO THE PRESENT APPEAL AR E THAT THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING INCOME OF RS.10,18,720/- ON 20.11.2010. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSEE W AS ASKED TO PRODUCE THE BOOKS OF ACCOUNTS. AS PER THE ASSESSMENT ORDER, THE ASSESSEE FAILED TO PRODUCE THE SAME ON 08.03.2013, THE FINAL DATE OF HEARING. THE AO INVOKED THE PROVISION OF SECTION 145(3) AND ESTIMATED THE PROFIT OF THE A SSESSEE AT THE RATE OF 5% OF THE TOTAL GROSS RECEIPT AND MADE TRADING ADDITION OF RS .43,46,840/-. THE AO FURTHER MADE AN ADDITION OF RS.38,53,872/- BEING 25% OF THE TOTAL CREDITORS OF RS.1,54,15,487/- ON LUMP SUM BASIS TO COVER UP ANY LEAKAGE OF REVENUE. THE AO FURTHER MADE ADDITION OF RS.14,71,025/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE CAPITAL ASSETS SHOWN IN THE BALANCE SHEET OF THE ASSESSEE. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ORDER OF ASSESS ING OFFICER, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE GIVING PARTIAL RELIEF IN THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE FIXED ASSET BUT CONFI RMED OTHER TWO ADDITIONS, AS NOTED ABOVE. AGGRIEVED BY THE IMPUGNED ORDER, THE A SSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE LD. AR OF THE ASSESSEE SUBMITTED THAT BOTH A O AND CIT(A) HAVE GONE WRONG IN REJECTING THE BOOK VERSION OF THE ASSESSEE AND MAKING ADDITION ON THAT ACCOUNT. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS IN FACT PRODUCED THE BOOKS OF ACCOUNTS. THIS ISSUE WAS ALSO RAISED BEFORE THE CIT(A). IN THIS REGARD, THE LD. AR INVITED OUR ATTENTION TO PARA 5.1 OF THE CIT(A) S ORDER WHERE THE CIT(A) HAS TAKEN COGNIZANCE OF THE CONTENTION OF THE ASSESSEE AS UNDER:- ITA NO. 2108/DEL/2015 4 IN APPEAL, IT WAS CLAIMED THAT THE ASSESSEE HAD SUB MITTED ALL THE ACCOUNTS BOOKS, BALANCE SHEET , PROFIT AND LOSS ACCOUNT, SCH EDULE OF FIXED ASSETS, LIST OF SUNDRY CREDITORS, DEBTORS, LOANS AND ADVANCES AND T HE RELEVANT BILLS, VOUCHERS ETC. BUT THE LD. AO FAILED TO TAKE COGNIZA NCE THE SAME AND PROCEEDED TO ASSESSED AND INCREASE THE INCOME BY RS .43,46,840/- WITHOUT GIVING ANY LOGICAL NORMS OR TRENDS OF SUCH BUSINESS . 4. IT WAS FURTHER SUBMITTED BY THE LD. AR THAT AFTE R RECORDING THE ABOVE SUBMISSIONS THE LD. CIT(A) HAS POINTED OUT THAT APP ELLANT WAS THEREFORE, ASKED TO GIVE COMPARATIVE GP AND NP FOR THE LAST THREE YE ARS. THEREAFTER, THE CIT(A) WITHOUT DECIDING THIS ISSUE WHETHER ASSESSEE HAS PR ODUCED THE BOOKS OF ACCOUNTS HAS ENDORSED THE DECISION OF THE ASSESSING OFFICER FOR REJECTING THE BOOKS OF ACCOUNTS AND MAKING ARBITRARILY ADDITION. THE LD. AR ALSO INVITED ATTENTION TO PARA 6.1 OF THE CIT(A) ORDER WHERE THE CIT(A) HAS UPHELD THE DECISION OF AO IN MAKING ADHOC ADDITION OF 25% OF T HE CREDITORS JUST BY POINTING OUT THAT IN FEW CASES CONFIRMATION WAS NOT AVAILABL E. IT WAS SUBMITTED THAT THE DECISION OF CIT(A) IS ARBITRARY AND SHOWS ADHOC ADD ITION WITHOUT EXAMINATION OF THE FACTS. IT WAS ALSO SUBMITTED THAT ADDITION ON A CCOUNT OF UNEXPLAINED INVESTMENT IN FIXED ASSETS HAS BEEN CONFIRMED WITHO UT APPRECIATING THAT WHEN THESE FIXED ASSETS ARE APPEARING IN THE BALANCE SHE ET, THERE CANT BE AN ALLEGATION OF UNEXPLAINED INVESTMENT. THE DEBIT SIDE SHOWS APP LICATION OF THE CREDIT SIDE. THUS THIS ADDITION IS ALSO NOT TENABLE. 5. THE LD. DR, ON THE OTHER HAND, RELYING ON THE OR DERS OF THE AUTHORITIES BELOW, SUBMITTED THAT CONSIDERING THE ARGUMENTS OF THE LD. AR ITSELF, THE LD. CIT(A) WAS NOT JUSTIFIED IN DECIDING THE ISSUE WHET HER THE ASSESSEE HAD PRODUCED ITS BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFICER OR NOT. HE, THEREFORE, SUBMITTED THAT THE MATTER MAY BE REMITTED BACK TO T HE FILE OF ASSESSING OFFICER ITA NO. 2108/DEL/2015 5 FOR VERIFICATION OF ASSESSEES CONTENTIONS IN THE L IGHT OF BOOKS OF ACCOUNTS, WHICH WERE NOT SUBMITTED BEFORE THE ASSESSING OFFICER. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH MATERIAL AVAILABLE ON RECORD, WE FIND CONSIDERABLE FORCE IN THE CONTENTION OF THE LD. DR THAT ONCE THE ASSESSEE PLEADED BEFORE THE LD. CIT(A ) ABOUT PRODUCTION OF BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER, IT WAS INC UMBENT UPON HIM TO DECIDE THIS ISSUE FIRST. THEREFORE, BEFORE DECIDING THE C ORE ISSUE, THE DECISION ON ADDITIONS MADE CANNOT BE SUSTAINED AT ALL. IN SUCH CIRCUMSTANCES, THE REQUEST OF THE LD. DR THAT THE MATTER SHOULD GO BACK TO THE FI LE OF ASSESSING OFFICER FOR PASSING THE ASSESSMENT ORDER DE NOVO, CANNOT BE SAI D TO BE UNJUSTIFIED. THE LD. AR OF THE ASSESSEE HAS ALSO NOT VEHEMENTLY OBJECTED TO THE RESTORATION OF APPEAL TO THE FILE OF ASSESSING OFFICER. WE, THEREFORE, SE T ASIDE THE IMPUGNED ORDER AND REMIT THE CASE BACK TO THE FILE OF ASSESSING OFFICE R FOR MAKING THE ASSESSMENT AFRESH AFTER DUE VERIFICATION OF ASSESSEES CLAIM F ROM THE BOOKS OF ACCOUNTS. THE ASSESSEE IS DIRECTED TO PRODUCE ALL THE BOOKS OF AC COUNT AND EVIDENCE IN ITS SUPPORT. NEEDLESS TO SAY, THE ASSESSEE SHALL BE GIV EN REASONABLE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27.02.2019. SD/- SD/- (AMIT SHUKLA) (L.P. S AHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27.02.2019 *AKS*