Sh. Rajinder Singh, New Delhi V. ACIT, New Delhi

ITA 2293/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1159 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 17-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Keywords: Depreciation; Assessment record
• Section: 143(3); 142(1); 133(6); 43; 13

Judgement Text

ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 1 OF 28 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: F: NEW DELHI) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 2293/DEL/2017 ( ASSESSMENT YEAR: 2013-14) SHRI RAJINDER SINGH, C-60, BASEMENT, MALVIYA NAGAR, NEW DELHI-110017. VS. ACIT, CIRCLE 63(1), NEW DELHI. PAN NO: AWWPS0999N APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI SURENDER PAL, SR. DR ORDER PER ANADEE NATH MISSHRA, AM [A] THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED APPELLATE ORDER DATED 31.01.2017 PASSED BY LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-20, NEW DELHI, [IN SHORT, LD.CIT(A)] PERTAINING TO ASSESS MENT YEAR 2013-14. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. DISALLOWANCE ON ACCOUNT OF PURCHASE OF MATERIAL :- {1.1} CONTENTION OF THE ASSESSING OFFICER:- ON PERUSAL OF PROFIT & LOSS ACCOUNT, IT IS OBSERVED THAT THE ASSESSEE HAS DEBITED A SUM OF RS. 1,04,40,429/- ON ACCOUNT OF PURCHASE O F MATERIAL. THE ASSESSEE WAS ASKED TO FURNISH THE DETAIL TOW WH OM THE SAME PAID. FOR THE ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 2 OF 28 VERIFICATION OF CLAIM OF ASSESSEE NOTICES U/S 133(6 ) WERE SENT. FROM THE FOLLOWING PARTIES NOTICE WERE RETURNED BAC K/ NO REPLY RECEIVED S.NO . NAME OF THE PARTY AMOUNT REMARKS 1 M/S BALAJI MARBLE & GRANITE, PLOT NO. E - 410, PARYAVARAN ROAD, INDL. AREA, MADANGANJ- KISHANGARH (AJMER) RAJASTHAN -305801 255000 RETURNED BACK M/S VANDANA TIMBERS, 5 - A, RAJDHANI PARK, MAIN ROHTAK ROAD, NAGLOI, NEW DELHI 916998 RETURNED BACK 3 M/S PAL ENTERPRISES, SAVITRI NAGAR, MALVIYA NAGAR, NEW DELHI - 110017 2400000 RETURNED BACK 4 M/S R.K. ELECTRONICS, E - 2/9, MALVIYA NAGAR, DELHI - 110017 403000 NO REPLY RECEIVED 7 M/S GARG TIMBER TRADERS, 550, CHIRAG DELHI, NEW DEL HI - 110017 210250 NO REPLY RECEIVED M/S GURU NANAK BUILDING MATERIAL STORE, 33, CORNER MARKET MALVIYA NAGAR, NEW DELHI-110017 911811 NO REPLY RECEIVED TOTAL 50,97,059 FOR 133(6) RETURNED BACK/NO REPLY RECEIVED, THE AR OF THE ASSESSEE WAS ASKED TO GIVE THE JUSTIFICATION THAT WHY IT SHOULD NOT BE AD DED TO THE INCOME OF THE ASSESSEE. THE AR OF THE ASSESSEE REPLIED VIDE NOTE SHEET ENTRY DATED 10.02.2016 STATING THAT THE ADDRESSES ARE CORRECT. THIS REPLY HAS BEEN CONSIDERED BUT NOT TENABLE AS N O REPLY/CONFIRMATION HAS BEEN RECEIVED FROM CONCERNED PARTIES. THE ABOVE 133(6) I SSUED WERE RETURNED BACK OR NO REPLY RECEIVED. HENCE, THE SAID PARTIES, PAYMENT OF RS.50,97,059/- IS DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF B OGUS PURCHASES. THE AR SUBMITTED INVOICES. AS EVIDENT FROM THIS INVOICE, THERE IS NOT TIN / PA N WHICH ALSO RAISES DOUBTS ABOUT ITS AUTHENTICITY. FURTHER, THERE IS NO NAME MENTIO NED. (REFER PAGE-9 PARA NO 5& 5.1 OF THE APPELLATE ORDER ) {1.2} APPELLANTS SUBMISSION:- THE ASSESSEE WENT OUT OF THE WAY TO ATTAIN AND FILE DETAILED CONFIRMATION, WITH NARRATED BANK STATEMENT, ACKNOWLEDGEMENT OF RETURN OF INCOM E, AND PAN OF THE CREDITORS, ON THEIR BEHALF RESPECTIVELY, WHICH ARE FILED VIDEPAG E NO. 90 TO 95 OF THE PAPER BOOK FOR YOUR REFERENCE. ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 3 OF 28 6. THAT DETAILED LEDGER ACCOUNT ALONG WITH ALL COP IES OF BILLS/ INVOICE OF PURCHASE OF BUILDING MATERIAL DURING THE YEAR UNDER CONSIDER ATION, ARE ENCLOSED AGAIN (VIDE PAGE NO.35 TO 88) OF THE PAPER BOOK, YOUR READY PERUSAL. 7. THAT THE AO IN HIS ORDER(PAGE 13 OF THE PAPER B OOK) HAS STATED THAT THERE IS NO TIN/PAN ON THE INVOICE OF M/S PAL ENTERPRISES. THE AO NEITHER DIRECTED THE ASSESSEE TO SUBMIT THE SAME NOR NOTED ON THE ORDER SHEET TO MAK E SUBMISSIONS. THE AO HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE TO EXPLAIN TH E ABOVE. ALSO THERE ARE 13. INVOICES RAISED BY M/S PAL ENTERPRISES DURING THE YEAR, AGAI NST THE ASSESSEE'S NAME. THE AO HAS ONLY POINTED OUT THE BILL, WHICH DID NOT HAVE PURCH ASING DEALER'S NAME [ASSESSEE] ON IT. ALL THE BILLS, WITH THE CREDITOR'S ADDRESSES AND PA N ARE ENCLOSED VIDE PAGE NO. 35 TO 41 OF THE PAPER BOOK. 8. THAT 'MERELY BECAUSE THE NOTICES U/S 133(6) COUL D NOT BE SERVED UPON/ RETURNED BACK/ OR NO REPLY RECEIVED FROM/ TO THE CREDITORS, DOES NOT MEAN THE TRANSACTION WERE BOGUS'. ALL THE TRANSACTIONS WITH CREDITORS WERE MA DE THROUGH BANKING CHANNELS (BANK STATEMENT DULY NARRATED IS ANNEXED VIDE PAGE NO. 33 TO 34 OF THE PAPER BOOK) AND ALL DOCUMENTARY EVIDENCES PROVE THAT THE ASSESSE HAS TR ANSACTED WITH THE PURCHASING DEALERS GENUINELY. 9. THAT THE AO ISSUED NOTICE U/S 133(6) TO THE BUSI NESS CREDITORS ON 20/01/2016 ONLY AND NEVER AGAIN. MEANING THEREBY, THAT THE AO DID NOT INTEND TO GIVE ANOTHER OPPORTUNITY TO THE SAID CREDITORS. AS EXPLAINED EAR LIER, ALL DETAIL VIDE LETTER MENTIONED ABOVE WERE FILED AND PLACED ON RECORD. THUS, THE O NUS TO PROVE THE TRANSACTION AND ITS GENUINENESS NO MORE LIE UPON THE ASSESSEE. 10. THE AO IN HIS ORDER SAID THAT 'THE COUNSEL STA TED THAT THE ADDRESSES ARE CORRECT . IT IS VEHEMENTLY DENIED. NEITHER THE ASSESSEE NOR T HE COUNSEL ISSUED ANY SUCH STATEMENT IN REGARD TO THE ADDRESSES OF THE CREDITORS. THE LD.AO HAS MADE FALSE ALLEGATION IN HIS ORDER VIDE PAGE NO. 35 TO 43 OF T HE PAPER BOOK. 11. THAT THE REMARKS IN THE ORDER THAT, THE ASSESSE E HAS FURNISHED INACCURATE PARTICULARS AND CONCEALED THE INCOME, BECAUSE THERE IS NO TIN/PN ON ONE CREDITOR'S INVOICE, IS BASELESS. AS SAID IN PARA 7, ALL THE TR ANSACTIONS ARE THROUGH BANKING CHANNELS AND ARE GENUINE. ALSO ALL THE BILLS HAVE THE TIN AN D PAN INCORPORATED AND ENCLOSED VIDE PAGE 35-43 OF THE PAPER BOOK. ADDITION OF RS. 50,97 ,059/- MAY VERY KINDLY BE DELETED. (REFER PAGE-10 PARA-5.2 OF THE APPELLATE ORDER) {1.3} DECISION OF THE LD. CIT(A)- XX:- THE AO HAS MADE AN ADDITION OF RS.50,97,059/- ON AC COUNT OF PURCHASE OF MATERIAL ON THE GROUND THAT NOTICE UNDER SECTION 133(6) CAME BA CK UN SERVED/NO REPLY RECEIVED AND THE INVOICES WERE NOT HAVING TIN/PAN. THE ASSESSING OFFICER HAS MADE THIS ADDITION BY SIMPLY WRITING THAT THE AR OF THE APPELLANT WAS ASK ED TO JUSTIFY THIS AND HE STATED THAT ADDRESSES ARE CORRECT. DURING THE COURSE OF APPELLA TE PROCEEDINGS, THE APPELLANT HAS FILED PAPER BOOK ALONG WITH THE DOCUMENTS, WHICH WE RE FILED BEFORE THE ASSESSING ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 4 OF 28 OFFICER AND CLAIMED THAT CONFIRMATION OF THE PURCHA SERS, BANK STATEMENT, THE COPY OF RETURN OF INCOME, PAN ETC. WERE FILED BEFORE THE AS SESSING OFFICER VIDE LETTER DATED 21.10.2015,09.02.2016 AND 17.02.16 WHICH WERE IGNOR ED BY THE ASSESSING OFFICER. THE APPELLANT HAS ALSO CLAIMED THAT ALL THESE PURCHASES ARE MADE THROUGH CHEQUES. THAT TO VERIFY THE CLAIM OF THE APPELLANT, THE ASSESSMENT R ECORD WAS CALLED FROM THE ASSESSING OFFICER & VERIFIED AND IT IS GATHERED THAT DURING T HE ASSESSMENT PROCEEDINGS, THE APPELLANT FILED THE CONFIRMATION OF THE PURCHASERS, LEDGER ACCOUNT, BANK STATEMENT SHOWING CHEQUE PAYMENT TO THESE PARTIES, COPIES OF BILL HAVING TIN /PIN BUT THE ASSESSING OFFICER HAS NOT DISCUSSED AT ALL ABOUT TH ESE DOCUMENTS. IT APPEARS THAT THE AO WAS ONLY GUIDED BY THE NOTICES ISSUED UNDER SECT ION 133(6) WHICH CAME BACK UNSERVED OR WHERE NO REPLY WAS RECEIVED. FROM THE A SSESSMENT RECORD IT IS ALSO GATHERED THAT IN THE FOLLOWING CASES NOTICES U/S 13 3(6) CAME BACK UNSERVED WITH THE FOLLOWING REMARKS:- FURTHER, THE FOLLOWING CREDITORS HAVE NOT RESPONDED TO THE NOTICES U/S 133(6) OF THE ASSESSING OFFICER:- M/S R.K. ELECTRONICALS, E - 2/9, MALVIYA NAGAR, DELHI - 110017 M/S GARG TIMBER TRADERS, 550, CHIRAG DELHI, NEW DEL HI-110017 M/S G URU NANAK BUILDING MATERIAL STORE, 33, CORNER MARKE T, MALVIYA NAGAR, NEW DELHI-110017 IN THIS LIGHT, THE CLAIM OF THE APPELLANT HAS BEEN CONSIDERED AND FOUND THAT THE ASSESSING OFFICER VIDE NOTICE U/S 142(1) DATED 29.0 7.2015 HAS ASKED FOR THE NAME SR. NO. NAME OF THE PARTY REMARKS 1 . M/S. VANDANA TIMBERS & GRANITE PLOT NO.E- 410, PARYAVARANA ROAD, INDL. AREA MADANGANJ KISHANGRAH(AJMER) RAJASTHAN-305801 UNFOUND 2. M/S. PAL ENTERPRISES, SAVITRI NATAR, MALVIYA NAGAR, NEW DELHI INSUFFICIENT ADDRESS 3. BALAJI MARBLE SIGRANTIE PLOT NO.E- 410, PARYAVARANA ROAD, INDL. AREA MADANGANJ KISHANGRAH (AJMER) RAJASTHAN-305801 NOT KNOWN ADDRESS RETURNED BACK ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 5 OF 28 AND ADDRESS FOR THE PARTY FROM WHOM PURCHASES WAS M ADE OF MORE THAN RS. 5 LACS. IN COMPLIANCES TO THIS ON 21.10.2015 THE APPELLANT HAS FILED THESE DETAILS WHERE THE NAME AND ADDRESS OF THE APPELLANT HAS FILED THESE D ETAILS WHERE THE NAME AND ADDRESS OF GURUNANAK BUILDING MATERIAL, PAL ENTERPR ISES, NAV DURGA STEEL AND SANITARY, AHLUWALIA MARBLES AND VANDANA TIMBERS WAS GIVEN. IN THESE ACCOUNTS ONLY PAL ENTERPRISES AND VANDANA TIMBERS CREDIT BALANCE OF RS. 19,12,000/- AND RS.7,67,234/- WAS SHOWN RESPECTIVELY. ON 26.10.2015 VIDE ORDER SHEET ENTRY THE ASSESSING OFFICER HAS ASKED THE APPELLANT TO FILE T HE CONFIRMATION TO THE CREDITORS. SUBSEQUENTLY VIDE LETTER DATED 07.12.2015 THE APPEL LANT HAS FILED THE CONFIRMED COPY OF PAL ENTERPRISES AND VANDANA TIMBERS. ON 20.01.20 16 THE ASSESSING OFFICER VIDE ORDER SHEET ENTRY HAS ASKED FOR PURCHASE VOUCHER & BILLS AND CREDITORS ADDRESS AND CONFIRMATION. VIDE LETTER DATED 28.01.2016 AGAIN CO NFIRMED COPIES OF VANDANA TIMBERS, PAL ENTERPRISES, GURUNANAK BUILDING MATERI AL STORE, BILLS & VOUCHERS OF PAL ENTERPRISES, VANDANA TIMBERS, GURUNANAK BUILIDING M ATERIAL, AHLUWALIA MARBELS, R.K. ELECTRICALS AND GARG TIMBER TRADERS AS WELL AS LEDG ER COPIES OF THESE PARTIES IN THE BOOKS OF THE APPELLANT WAS PRODUCED. AGAIN THE APPE LLANT VIDE LETTER DATED 10.02.2016 HAS MENTIONED THE FOLLOWING:- 'THAT CONFIRMATIONS FROM SUNDRY CREDITORS NAMELY M/ S BALAJI MARBLES, M/S VANDANA TIMBER (PAN- AAEFV9228P)-, M/S R.K. ELECTRICALS (PA N- AAFFR8583G), M/S NAV DURGA STEEL, M/S GARG TIMBER, M/S GURUNANAK BUILDING MATE RIAL (PAN- AAKPM9550H)-, M/S PAL ENTERPRISES (AKHPB4641B)-. ALL THE ABOVE CONFIRMATI ON ARE FILED BY THE ASSESSEE VIDE LETTER DATED 18-11-2015 PARA 5.' ON 10.02.2016 VIDE ORDER SHEET ENTRY THE ASSESSING OFFICER HAS MADE THE FOLLOWING ENTRY IN RELATION TO THE NOTICES WHICH CAME BACK UN SERVED:- 'HE WAS INFORMED RETURNED 133(6) FROM VENDORS. AR S TATED THAT ADDRESS ARE CORRECT. ON AR REQUEST, FINAL DATE 17 FEB 2016' ON 17 FEB THE APPELLANT HAS FILED LETTER ALONG WITH DOCUMENTS. THE RELEVANT PORTION OF THE LETTER DATED 17.02.2016 OF THE APPELLANT IS REP RODUCED AS UNDER:- 'THAT CONFIRMATIONS FROM SUNDRY CREDITORS, WITH THE IR ACKNOWLEDGEMENT OF RETURN OF INCOME & PAN, NAMELY: M/S. GURNANAK BUILDING MATERI AL (PAN AAKPM9550H), M/S. PAL ENTERPRISES (AKHPB4641B)- ARE ENCLOSED FOR YOUR REA DY REFERENCE.' ON 17 TH FEB THE FOLLOWING ORDER SHEET ENTRY HAS BEEN MADE: - SHRI SAMEER MALHOTRA AR ATTENDED AND FILED FINAL R ESPONSE FROM SIDE OF ASSESSEE. CASE WAS DISCUSSED. ON THIS DATE NO ADVERSE OBSERVATION WAS MADE IN THE ORDER SHEET NOR ANY FURTHER QUERY WAS MADE BY THE ASSESSING OFFICER IN THE ORDER SHEET. ALL THE CONFIRMATIONS OF THE ABOVE MENTIONED SIX PA RTIES ARE ALSO PRODUCED BEFORE ME DURING THE COURSE OF APPELLATE PROCEEDINGS. BESIDES THIS, THE COPY OF LEDGER ACCOUNT, BANK STATEMENT SHOWING CHEQUE PAYMENT TO THESE PART IES, PAN ETC. ARE ALSO FILED BEFORE ME WHICH WERE ALREADY FILED BEFORE ASSESSING OFFICE R. ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 6 OF 28 IN THIS LIGHT, THE APPELLANT WAS ASKED TO SUBMIT TH E DETAIL OF THE GROSS PROFIT AND NET PROFIT OF THE LAST 3 YEARS WHICH IS SUBMITTED BY THE APPELLANT AND REPRODUCED AS UNDER:- FROM THIS IT IS APPARENT THAT THE GROSS PROFIT HAS INCREASED FROM 13.60 TO 18.79 AND NET PROFIT HAS INCREASED FROM 5.92% TO 15.33% FROM THE ASSESSMENT YEAR 2013-14 WHICH IS QUITE REASONABLE IN THIS LINE OF BUSINESS. THE AO H AS NOT MADE ANY EFFORT TO MAKE ENQUIRIES FROM BANK WHEN THE PAYMENTS WERE MADE THR OUGH CHEQUES AND IGNORED THE RELEVANT DETAILS AND DOCUMENTS FILED BY THE APPELLA NT DURING THE COURSE OF THE ASSESSMENT PROCEEDING IN THE FORM OF CONFIRMATIONS, RETURN OF INCOME, PAN, BILLS AND CHEQUE PAYMENT THROUGH BANK STATEMENTS. IN THE LIGH T OF THESE EVIDENCES PRODUCED BY THE APPELLANT AND THE INCREASED NET PROFIT SHOWN BY THE APPELLANT, I DO NOT FIND ANY JUSTIFICATION OF THE ADDITION MADE BY THE ASSESSING OFFICER REGARDING PURCHASE. EVEN WHEN THE APPELLANT HAS FILED CONFIRMATIONS OF THESE PARTIES, THE AO HAS NOT MADE ANY ADVERSE OBSERVATION IN THE ORDER SHEET OR ANY QUERY TO THE APPELLANT. FROM THE ASSESSMENT RECORD AND ORDER SHEET ENTRIES, IT IS AL SO APPARENT THAT ASSESSING OFFICER HAS MADE ANY QUERY TO THE APPELLANT REGARDING THE NON C OMPLIANCE BY THE THREE PARTIES I.E. GURUNANAK BUILDING MATERIAL, R.K. ELECTRICALS AND G ARG TIMBER TRADERS AND ONLY ASKED ABOUT THE RETURN OF NOTICES IN THE CASE OF ANOTHER THREE PARTIES I.E. PAL ENTERPRISES, VANDANA TIMBERS AND BALAJI MARBLE & GRANITE. FINALLY, THE ORDER U/S 143(3) HAS BEEN PASSED ON 07 .03.2016 BY THE ASSESSING OFFICER WITHOUT GIVING ANY SHOW CAUSE LETTER OR OPPORTUNITY TO THE APPELLANT AND ADDITION OF RS.50,97,059/- IN RESPECT OF THE PURCHASE MADE FROM ABOVE SIX PARTIES WAS MADE BY THE ASSESSING OFFICER. BUT THE OBSERVATION OF ASSESSING OFFICER REGARDING THE MISSING NAME OF THE APPELLANT AS WELL AS PAN/TIN ON THE INVOICES OF PAL ENTERPRISES ARE CORRECT AND IN THE FOLLOWING INVOICES NAME THE APPELLANT HAS NOT BEEN GIVEN:- ASSESSMENT YEAR 2011-12 2012-13 2013-14 GROSS PROFIT 13.60 14.36 18.79 NET PROFIT 5.92 7.32 15.33 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 7 OF 28 S.NO. DATE BILL NO. AMOUNT 1 . 02/11/2012 604 187000.00 2. 09/11/2012 610 236000.00 3. 16/11/2012 618 114400.00 4. 19/11/2013 621 84300.00 5. 23/11/2012 626 99200.00 6. 30/11/2012 630 117400.00 7. 05/12/2012 633 184000.00 8. 17/12/2012 642 96000.00 9. 28/12/2012 648 56000.00 10. 04/01/2013 653 14300.00 11. 14/01/2013 661 98000.00 12. 06/02/2013 672 88400.00 13. 26/02/2013 685 73500.00 14. 01/03/2013 689 23900.00 15. 17/03/2013 693 87000.00 16. 29/03/2013 699 55900.00 1615300.00 IT IS ALSO STRANGE THAT THE APPELLANT IS MARKING CH EQUE PAYMENTS ON REGULAR BASIS TO ALL THE PARTIES INCLUDING PAL ENTERPRISES, BUT NO PAYME NTS HAS BEEN MADE AFTER 22.10.2012RELATING TO THESE BILLS WHICH ARE OUTSTAN DING EVEN ON 31.03.2013. THE FREQUENCY OF TRANSACTION AND SERIES NO.OF BILLS STA RING FROM 604 TO 699 IS ALSO DOUBTFUL AS BEFORE THIS THE TRANSACTION FROM PAL ENTERPRISES WAS MADE THROUGH BILL NO.2188, ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 8 OF 28 2254, 2316 AND 2361 FROM 20.06.2012 TO 20.102012. A S NO INDEPENDENT CONFIRMATION WAS RECEIVED FROM PAL ENTERPRISES, THE TRANSACTION OF ABOVE-MENTIONED BILLS WHERE THE NAME OF THE APPELLANT IS MISSING COULD NOT BE SUBST ANTIATED. FURTHER, DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPELLANT COULD NOT PR ODUCE ANY EVIDENCE OF SUBSEQUENT PAYMENTS MADE RELATING TO THESE BILLS. HENCE, THE A DDITION OF THE AMOUNT OF RS.16,15,300/- RELATING TO THESE BILLS OF PAL ENTER PRISES MADE BY THE ASSESSING OFFICER IS CONFIRMED AND THE ADDITION OF AMOUNT OF RS.34,81,75 9/- (5097059 -1615300) MADE BY THE ASSESSING OFFICER IS DELETED. THE APPELLANT WIL L GET RELIEF ACCORDINGLY. (REFER PAGE -11 TO 14 PARA- 5.3 OF THE APPELLATE OR DER {1.4} CONTENTION OF THE ASSESSEE TO THE HON'BLE BEN CH: - A. THAT THE LD. CIT(A)- 20 HAS ERRED IN PASSING THE 'APPELLATE ORDER', WITHOUT AFFORDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. B. THAT IT IS BROUGHT TO YOUR HONOR'S KIND NOTICE THAT NEITHER AT THE TIME OF ASSESSMENT, NOR AT THE TIME OF HEARING OF APPEAL, T HE ASSESSEE WAS DIRECTED TO PRODUCE EVIDENCE OF PAYMENTS MADE TO M/S PAL ENTERP RISES, POST 31/03/2014. C. THAT M/S PAL ENTERPRISES IS ONE OF THE BUSINESS CREDITORS OF THE ASSESSEE AND HAS AN AMOUNT RECEIVABLE TO THE TUNE OF RS, 19,20,0 00/- FROM THE ASSESSEE CONCERN, AS ON 31/03/2014 (COPY OF LEDGER ENCLOSED) . THE CIT(A)- 20 HAS ONLY CONFIRMED THE ADDITION OF THE LD. AO AN AMOUNT TO T HE TUNE OF RS. 16,15,300/- BECAUSE THE BILLS/ INVOICES (16 NOS.) DID NOT HAVE NAME OF THE ASSESSEE ON THE SAME. D. ALTHOUGH, THE EVIDENCE OF PAYMENTS MADE TO M/S P AL ENTERPRISES POST 31/03/2014 ARE MADE AVAILABLE TO THE HONBLE BENCH, ALONG POST 31/03/2014 ARE MADE AVAILABLE TO THE HON'BLE BENCH, ALONG WITH COP IES OF ALL THE BILLS/ INVOICES, LEDGER ACCOUNT & CONFIRMATION ISSUED BY M/S PAL ENT ERPRISE, TO THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AND IN THE SUBS EQUENT YEARS. E. THAT COPY OF LEDGER ACCOUNTS, CONFIRMATIONS, PAN , DULY NARRATED BANK STATEMENT IN REGARD TO THE TRANSACTIONS BETWEEN THE ASSESSEE AND THE SELLER/ SUNDRY CREDITOR, WHO SOLD BUILDING MATERIAL TO THE ASSESSEE DURING THE YEAR, NAMELY, M/S PAL ENTERPRISES (AKHPB4641B) ARE ENCLOS ED FOR YOUR HONOR'S READY PERUSAL. THE SAME WERE FILED DURING ASSESSMENT AND APPELLATE PROCEEDINGS VIDE LETTER DATED 17/02/2016, 18/11/2015 AND 21/10/2015. COPIES OF LETTERS ARE ALSO ENCLOSED FOR YOUR REFERENCE. F. THAT NO OPPORTUNITY WAS AFFORDED TO THE ASSESSE E TO ESTABLISH IF THE PAYMENTS WERE MADE TO M/S PAL ENTERPRISES IN THE SUBSEQUENT YEARS. G. THAT KEEPING THE FACTS AND CIRCUMSTANCES IN VIEW , THE ADDITION OF RS. 16,15,300/- ON THE ABOVE ACCOUNT MAY VERY KINDLY BE DELETED. (2}DISALLOWANCE ON ACCOUNT OF PERSONAL EXPENSES:- {2.1) CONTENTION OF THE ASSESSING OFFICER;- THE ASSESSEE IN HIS BOOKS OF A/C'S CLAIMED THE FOLL OWING EXPENSES WHICH ARE REPRODUCED AS UNDER: ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 9 OF 28 (A) CAR INSURANCE (B) INTEREST ON CAR LOAN (C) CAR DEPRECIATION TOTAL AMOUNT AS POSSIBILITY OF THESE EXPENSES FOR NON BUSINESS/P ERSONAL PURPOSE COULD NOT BE RULED OUT, DUE TO THE FACTS THAT NO LOG BOOK IS MAINTAINE D BY THE ASSESSEE NOR IS PRODUCED FROM WHICH IT CAN BE VERIFIED THAT THESE EXPENSES W ERE USED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS USE ONLY. THEREFORE, AN AD-HOC EDITION OF 20% OF THE TOTAL AM OUNT SPENT ON THESE EXPENSES RS. 2,59,800/- I.E. RS. 51,960/- IS MADE AND ADDED BACK TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF PERSONAL USE OF THESE EXPENSES. {2.2} APPELLANT'S SUBMISSION:- 19. THAT DISALLOWANCE MADE ON FOR. 20% DISALLOWANCE OF RS.22,932/- FROM CARD INSURANCE, RS. 50,361/- AS INTEREST ON CAR LOON HAS ALREADY BEEN MADE BY THE AO IN HIS ORDER VIDE PARA IV (PAGE 12 OF THE PAPER BOOK). MEA NING THEREBY THE AO HAS MADE THE SAME ADDITION TWICE I.E. VIDE PARA IV & V BOTH, IN HIS ORDER (REFER PAGE 12 OF THE PAPER BOOK). COPY OF LEDGER ACCOUNT IS FILED VIDE PAGE NO . 96 TO 99 OF THE PAPER BOOK. IT ALSO SHOWS THE KIND OF INTEREST TAKEN AND THE INTENTION OF THE AO WHILE PASSING THE ORDER. 20. THAT 20% OF RS.1,86,507/- CLAIMED AS CAR DEPRE CIATION IS DISALLOWED. THE DEPRECATION IS CLAIMED AT 15% OF THE TOTAL VALUE, I .E. RS. 1,86,507. THE SAME IS ALLOWABLE UNDER THE PROVISIONS OF THE ACT. IN ADDIT ION TO THIS, THE AO HAS NOT GIVEN ANY REASON BEFORE MAKING THE ADDITION/DISALLOWANCE OF D EPRECIATION CLAIMED. THE ADDITION/ DISALLOWANCE MAY KINDLY BE DELETED. 21. THAT IT MAY ALSO BE CONSIDERED THAT ASSESSEE LI VES CLOSE BY TO HIS OFFICE. HE DOES NOT USE THE VEHICLE FOR HIS PERSONAL USE. HE THE VE HICLE TO VISIT CONSTRUCTION SITES AND MAKES PURCHASE FOR BUILDING MATERIAL WITHIN DELHI/NCR. THE USE OF THE SAID VEHICLE IS COMPLETELY OFFICIAL. ADDITION OF RS. 51,96.0/- IS T OTALLY UNJUSTIFIED. (REFER PAGE-18 & PARA -9.1 OR 9.2 OF THE APPELLATE ORDER) {2.3} DECISION OF THE CIT(A)- XX:- THE AO HAS MADE ADHOC ADDITION @ 20% OF THE TOTAL A MOUNT SPENT ON ACCOUNT OF CAR INSURANCE OF RS.22,932, INTEREST ON CAR LOAN OF RS. 50,361/- AND CAR DEPRECIATION OF RS.186507/-. THE EXPENDITURE ON CAR INSURANCE AND I NTEREST ON CAR LOAN ARE FIXED EXPENDITURE AND HAS TO BE INCURRED BY THE APPELLANT EVEN IF THERE IS NO PERSONAL ELEMENT ON SUCH EXPENSES. HOWEVER, THE CAR DEPRECI ATION HAS TO BE DISALLOWED U/S 38(2) OF THE ACT ON PERSONA ELEMENT SPECIALLY ON TH E GROUND THAT DURING THE COURSE OF HEARING VIDE ORDER SHEET ENTRY DATED 06.12.2016 THE APPELLANT HAD ACCEPTED THIS FACT THAT THE PROPRIETOR IS HAVING ONLY ONE VEHICLE IN H IS NAME WHICH IS USED IN THE BUSINESS AND THERE IS NO VEHICLE IN THE NAME OF HIS WIFE ALS O FOR PERSONAL USE WHICH WAS CLAIMED EARLIER. IN THIS LIGHT, THE PERSONAL USE OF THE VEH ICLE CANNOT BE RULED OUT. HOWEVER, THE DISALLOWANCE @20% MADE BY ASSESSING OFFICER IS EXCE SSIVE AND IT IS REASONABLE TO RS.22,932/ - RS.50,361/- RS.1,86,507/- RS.2,59,800/- ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 10 OF 28 RESTRICT THE DISALLOWANCE @ 10% WHICH COMES TO RS.1 8, 650/- AND APPELLANT WILL GET RELIEF ACCORDINGLY. (REFER PAGE -19 & PARA -9.3 OF THE APPELLATE ORDER) ( 2.4} CONTENTION OF THE ASSESSEE TO THE HON'BLE BENC H: - A. THAT IT IS APPARENT THAT THE GROSS PROFIT HAS INCRE ASED FROM 13.60 TO 18.79 AND NET PROFIT HAS INCREASED FROM 5.92% TO 15.33% FROM THE ASSESSMENT YEAR 2013-14 WHICH IS QUITE REASONABLE IN THIS LINE OF BUSINESS. CONSIDERING THE FACTS & CIRCUMSTANCES OF THE CASE, AD HOC ADDIT ION @10% MAY VERY KINDLY BE DELETED ON THE ABOVE GROUND. [B] VIDE ASSESSMENT ORDER DATED 07.03.2016 PASSED UNDE R SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE I.T. ACT). THE RELEVANT PORTION OF THE ASSESSMENT ORDER DATED 07.03.2016 IS REPRODUCED AS UNDER:- ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 11 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 12 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 13 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 14 OF 28 [C] THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). V IDE IMPUGNED APPELLATE ORDER DATED 31.01.2017, WHEREIN THE LD. CIT(A) PARTLY ALL OWED THE ASSESSEES APPEAL. THE RELEVANT PORTION OF THE ORDER DATED 31.01.2017 OF T HE LD. CIT(A) IS REPRODUCED AS UNDER: ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 15 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 16 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 17 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 18 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 19 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 20 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 21 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 22 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 23 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 24 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 25 OF 28 ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 26 OF 28 [D] THIS PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE AFORESAID IMPUGNED APPELLATE ORDER DATED 31.01.2017 OF THE LD . CIT(A). AT THE TIME OF HEARING, REVENUE WAS REPRESENTED BY SHRI SURENDER PAL, THE L EARNED SENIOR DEPARTMENTAL REPRESENTATIVE (LD. SR. DR, FOR SHORT). HOWEVER, NONE WAS PRESENT FROM THE ASSESSEES SIDE. IN THE ABSENCE OF ANY REPRESENTA TION FROM ASSESSEES SIDE, AT THE TIME OF HEARING BEFORE US, WE HEARD THE LD. SR. DR; WHO RELIED UPON THE ORDER DATED 07.03.2016 OF THE ASSESSING OFFICER AND THE AFORESA ID IMPUGNED APPELLATE ORDER DATED 31.01.2017 OF THE LD. CIT(A). AFTER PERUSAL OF THE MATERIALS ON RECORD, INCLUDING THE ORDER OF THE AO AND THE AFORESAID IMPUGNED ORDER DA TED 31.01.2017 OF THE LD. CIT(A), WE FIND THAT THE LD. CIT(A) HAS PASSED SPEAKING ORD ER ON MERITS. RELEVANT PORTION OF THE IMPUGNED ORDER OF THE LD. CIT(A) HAS ALREADY BE EN REPRODUCED IN FOREGOING PARAGRAPH [C] OF THIS ORDER. WE FIND THAT THE LD. CIT(A) HAS GIV EN DETAILED REASONS FOR ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 27 OF 28 HIS DECISION ON MERITS IN THE AFORESAID IMPUGNED AP PELLATE ORDER DATED 31.01.2017 OF LD. CIT(A). DURING APPELLATE PROCEEDINGS IN INCOME TAX APPELLATE TRIBUNAL (ITAT, FOR SHORT) NO MATERIAL HAS BEEN BROUGHT FOR OUR CONSIDE RATION TO PERSUADE US TO TAKE A VIEW DIFFERENT FROM THE VIEW TAKEN BY THE LD. CIT(A) IN THE IMPUGNED ORDER ON MERIT. AFTER HEARING THE LD. SR. DR AND AFTER PERUSAL OF MATERIA LS ON RECORD, AND FURTHER, IN VIEW OF THE FOREGOING DISCUSSION, WE DECLINE TO INTERFERE W ITH THE AFORESAID IMPUGNED APPELLATE ORDER DATED 31.01.2017 OF LD. CIT(A), AND ACCORDING LY, THIS APPEAL IS DISMISSED. [E] BEFORE WE PART; WE EXPLICITLY CLARIFY THAT THE ASSESSEE WILL BE AT LIBERTY TO APPROACH ITAT FOR RESTORATION OF THE APPEAL IN ACCO RDANCE WITH PROVISO TO RULE 24 OF INCOME TAX (APPELLATE TRIBUNAL), RULES, 1963. IF THE ASSESSEE DOES APPROACH ITAT FOR RESTORATION OF THE APPEALS I N ITAT, THE MATTER WILL BE CONSIDERED IN ACCORDANCE WITH LAW HAVING REGARD TO THE FACTS AND CIRCUMSTANCES. [F] IN THE RESULT, APPEAL FILED BY ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/12/2019. SD/- SD/- (AMIT SHUKLA) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUN TANT MEMBER DATED: 18/12/2019 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) ITA- 2293/DEL/2017. SHRI RAJINDER SINGH. PAGE 28 OF 28 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER