DCIT, New Delhi V. M/s. Gahoi Buildwell Pvt. Ltd., New Delhi

ITA 2367/DEL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6561 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-02-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 17-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K SAROHA
• Keywords: Search and seizure; Opportunity of being heard; Validity of assessment
• Section: 142(1); 153A; 131; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH C NEW DELHI BEFORE : S MT. DIVA SINGH, JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 2367/DEL./2012 ASSTT. YEAR : 2006 - 07 D.C.I.T., CENTRAL CIRCLE - 23, VS. GAHOI BUILDWELL PVT. LTD., NEW DELHI. 701, MERCANTILE HOUSE, 15, K.G. MARG, CONNAUGHT CIRCUS, NEW DELHI. [AABCG 9474 A] (APPELLANT) (RESPONDENT) APPELLANT BY : SH. A.K. SAROHA, CIT/DR RESPONDENT BY : SH. SANJAY KUMAR, CA DATE OF HEARING : 16.02.2016 DATE OF PRONOUNCEMENT : 01 .03.2016 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THIS APPEAL FILED BY REVENUE ARISES OUT OF THE ORDER OF LD. CIT(A) - XXXIII, NEW DELHI DATED 19.03.2012 FOR THE ASSESSMENT YEAR 2006 - 07 ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.78,78,446/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PAYMENTS MADE TO V ARIOUS SUPPLIERS/CONTRACTORS AS THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THESE EXPENSES. 2. THE ORDER OF CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. ITA NO. 2367/DEL./2012 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FLAGSHIP COMPANY O F VIKAS SURYA GROUP ENGAGED IN THE DEVELOPMENT OF COMMERCIAL COMPLEX AT PLOT NO. 10 LAXMI NAGAR DISTRICT CENTRE, NEW DELHI. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 19.01.2009 ON THE ABOVE NAMED COMPANY WHICH IS A PART OF KURELE GROUP. CONSEQUENT UPON SEARCH, A NOTICE U/S. 153A OF THE IT ACT WAS ISSUED ON 30.11.2009 AND DULY SERVED UPON THE ASSESSEE. IN RESPONSE, THE ASSESSEE COMPANY FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006 - 07 ON 16.02.2010, DECLARING INCOME OF RS.2,45,44,700/ - . SUBSEQUE NTLY, THE CASE WAS TAKEN IN SCRUTINY. NOTICES U/S. 143(2) AND 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE DATED 18.08.2010 AND 27.07.2010 WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE RAISED OBJECTIONS ON THE VALIDITY OF ASSESSMENT PROCEEDINGS U/S. 153A AS WELL AS THE SEARCH PROCEEDING. THESE OBJECTIONS STOOD DISPOSED OFF BY THE ASSESSING OFFICER AGAINST THE ASSESSEE. SUBSEQUENTLY, THE AO GAVE ANOTHER OPPORTUNITY TO COMPLY WITH THE NOTICES U/S. 142(1) AND 143(2) FIXING THE DATE OF HEARING ON 01.10.2 010, BUT NONE TURNED UP ON BEHALF OF THE ASSESSEE. ONCE AGAIN, THE ASSESSEE WAS AFFORDED OPPORTUNITY OF BEING HEARD VIDE LETTER DATED 26.10.2010 ENDORSING ITS COPY TO ARS OF THE ASSESSEE FIXING THE DATE OF COMPLIANCE AS 01.11.2010. HOWEVER, ON THE DATE FIX ED, NEITHER THE ASSESSEE NOR ITS AR ATTENDED. DESPITE THE NON - COOPERATIVE CONDUCT OF THE ASSESSEE, THE AO AGAIN ISSUED A LETTER DATED 08.11.2010 WHEREBY A SHOW ITA NO. 2367/DEL./2012 3 CAUSE NOTICE U/S. 144 OF THE ACT WAS ISSUED TO THE ASSESSEE TO FILE HIS SUBMISSIONS/REPLY, HOWEV ER, THE ASSESSEE AGAIN KEPT SILENT. IT WAS ONLY WHEN THE SUMMONS U/S. 131 WAS ISSUED TO THE DIRECTOR SHRI Y.C. KURELE ON 26.11.2010, THAT THE ASSESSEE TURNED UP ON 30.11.2010 AND SOUGHT FURTHER TIME FOR COMPLIANCE. ON THIS , TIME WAS GIVEN UPTO 06.12.2010. HOWEVER, THE REQUISITE DETAILS WERE FILED THEREAFTER THAT TOO IN PIECEMEAL AND AT THE FAG END OF THE ASSESSMENT PROCEEDINGS. BEING DISSATISFIED BY THE REPLY OF ASSESSEE AND GOING THROUGH THE DETAILS OF EXPENSES AND BILLS/VOUCHERS SUBMITTED BY THE ASSESSEE, THE AO NOTED THAT THE PAYMENTS IN RESPECT OF FOLLOWING PARTIES/CONTRACTORS WERE NOT GENUINE, AS THE BILLS/VOUCHERS DID NOT HAVE REQUISITE INFORMATION LIKE TIN NUMBER, BILL NUMBER ETC. : (I) H.P. SALES CO. PVT. LTD. RS.120758/ - (II). KESHAV SINGH RS .90312/ - (III). S.S. ASSOCIATES RS. 40500/ - (IV). S.S. CONSTRUCTIONS RS.604579/ - (V). G.D. BUILDERS RS.7022297/ - TOTAL RS.7878446/ - SINCE THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF THE ABOVE EXPENSES, THEREFORE, THE AO MADE ADDITION OF RS.78,78,446/ - TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED BY THIS ORDER, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A), WHO DELETED THE ADDITION HOLDING THAT THE AFORESAID PAYMENTS WERE MADE AFTER DEDUCTING TDS AND THE BILLS VOUCHERS SUBMITTED BY THE ASSESSEE ITA NO. 2367/DEL./2012 4 BORE THE NAME AND ADDRESS AND PHONE NUMBER OF THE CONTRACTORS OR SUPPLIERS, DESCRIPTION OF THE GOODS SUPPLIED AND THE NATURE OF SERVICE RENDERED ALONG WITH RATES, MEASUREMENTS ETC. THE LD. CIT(A) ALSO OBSERVED THAT NO SPECIFIC ENQUIRY WAS MADE BY THE AO BEFORE MAKING THE ADDITION ON SUSPICION. RELIANCE WAS PLACED ON THE DECISION OF HON BLE SUPREME COURT IN UMA CHARAN SHAW & ORS. VS. CIT, 37 ITR 271 (SC). 3. DURING THE COURSE OF HEARING, THE LD. DR SUBMITTED THAT THE LD. CIT(A) WAS NOT JUS TIFIE D IN DELETING THE ADDITION. IT WAS SUBMITTED THAT IN VIEW OF THE OBSERVATION OF THE LD. CIT(A) THAT THE AO HAS NOT MADE ANY ENQUIRY, THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION IS NOT TENABLE FOR THE REASON THE LD. CIT(A) ITSELF HAS NEITHER MADE NOR DIRECTED ANY ENQUIRY ON THE IMPUGNED BILLS AND VOUCHERS OR FROM THE CONCERNED PARTIES BEFORE DELETING THE ADDITION. NO REMAND REPORT WAS CALLED FROM THE AO. THE ASSESSEE HAS BEEN NON - COOPERATIVE BEFORE THE AO AND FILED THE REPLY ON 22.12.2010 I.E., AT THE FAG END OF THE ASSESSMENT PROCEEDINGS DEBARRING THE AO TO MAKE DEEP ENQUIRY INTO THE MATTER. THE LD. CIT(A) HAS NOT CONSIDERED ALL THESE BASIC FACTS BEFORE DELETING THE IMPUGNED ADDITION. THEREFORE, THE MATTER REQUIRES INVESTIGATION AT THE STAGE OF AO. RELIANCE IS PLACED ON THE DECISION OF HON BLE JURI SDICTIONAL ITA NO. 2367/DEL./2012 5 HIGH COURT IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING & MARKETING (P) LTD., 56 TAXMANN.COM 286 (DELHI). 4. ON THE OTHER HAND, LD. AR RELIED ON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE IMPUGNED ORDER, BEING WELL REASONED ORDER, DOES NOT CALL FOR ANY INTERFERENCE. ALL THE REQUISITE DETAILS WERE FURNISHED WITH REPLY TO THE AO AND PAYMENTS HAVE BEEN MADE TO THE CONTRACTORS AFTER DEDUCTING TDS WHEREVER APPLICABLE. IT WAS SUBMITTED THAT TIN N UMBER IS NOT MANDATORY. HE, THEREFORE, URGED FOR SUSTENANCE OF THE IMPUGNED ORDER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ENTIRE RECORD BEFORE US AS WELL AS CASE LAWS CITED AND WE FIND THAT IT IS A CASE, WHERE DUE TO NON - CO OPERATION ON THE PART OF ASSESSEE, THE AO COULD NOT BE ABLE TO MAKE PROPER I NQUIRY INTO THE MATTER. AS IS CONSPICUOUS FROM THE ASSESSMENT ORDER, THE ASSESSEE HAD BEEN LINGERING AND DELAYING THE PROCEEDINGS AND IT WAS ONLY IN OF THE MONTH OF DECEMBER WHEN T HE ASSESSMENT WAS GOING TO BE BARRED BY LIMITATION, THE ASSESSEE HAD FILED ITS REPLY AND DETAILS . THE LD. CIT(A) ALSO FOUND THAT NO ENQUIRY HAS BEEN MADE BY THE LD. AO, BUT IN THAT SITUATION, THE CIT(A) HAS ALSO NOT SOUGHT ANY REMAND REPORT OR DIRECTED ANY ENQUIRY INTO THE MATTER BEFORE DELETING THE ADDITION. ITA NO. 2367/DEL./2012 6 HE, HOWEVER, CLOSED THE CHAPTER BY DELETING THE ADDITION AND ACCEPTING THE SUBMISSIONS OF THE ASSESSEE WITHOUT GOING DEEP INTO THE GENUINENESS OF THE VOUCHERS/BILLS, ON WHICH THE AO HAD RAISED OBJECTIO NS. THEREFORE, THE MATTER REQUIRES DETAILED SCRUTINY/ENQUIRY OF THE MATERIAL SUBMITTED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW. FOR THIS, WE STAND FORTIFIED BY THE PRINCIPLE OF LAW LAID DOWN BY HON BLE JURISDICTIONAL HIGH COURT IN CIT VS. JANSAMPARK A DVERTISING & MARKETING (P) LTD. (SUPRA), IN WHICH IT HAS BEEN HELD THAT THE ASSESSING OFFICER HERE MAY HAVE FAILED TO DISCHARGE HIS OBLIGATION TO CONDUCT A PROPER INQUIRY TO TAKE THE MATTER TO LOGICAL CONCLUSION. BUT THE COMMISSIONER (APPEALS), HAVING NOT ICED WANT OF PROPER INQUIRY, CANNOT CLOSE THE CHAPTER SIMPLY BY ALLOWING THE APPEAL AND DELETING THE ADDITIONS MADE. IN PRESENCE OF THESE FACTS, THE DECISION RELIED ON BY THE LD. CIT(A) IN THE CASE OF UMACHARAN SHAW & BROS (SUPRA) DOES NOT RENDER ANY HELP TO THE ASSESSEE, AS THE CASE BEFORE US IS A CASE, WHERE PROPER ENQUIRY NEEDS TO BE MADE BY THE AO BEFORE ARRIVING AT A LOGICAL CONCLUSION. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE AND THE CASE IS RESTORED TO THE FILE OF AO FOR DECIDING THE ISSUE UNDER CONSIDERATION AFRESH AFTER MAKING PROPER ENQUIRY ON THE MATERIAL FURNISHED BY THE ASSESSEE REGARDING THE PAYMENTS MADE TO VARIOUS CONTRACTORS/SUPPLIERS. NEEDLESS TO SAY, THE ASSESSEE SHALL BE AFFORDED REASONABLE OPPORTUNITY OF BEIN G HEARD AND THE ASSESSEE IS DIRECTED TO CO - ITA NO. 2367/DEL./2012 7 OPERATE WITH THE ASSESSING OFFICER IN GETTING THE FRESH ASSESSMENT COMPLETED EXPEDITIOUSLY . 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01.03.2016 . SD/ - SD/ - ( DIVA SINGH ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01.03.2016 *AKS/ - COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI