M/s. O.P. Gupta Construction Private Ltd., Meerut V. CIT, Meerut

ITA 2369/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74396 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 19-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 22-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GUNJAN P RASAD
• Assessee Lawyers: O P SAPRA
• Keywords: Revision of order; Depreciation; Opportunity of being heard; Additional evidence
• Section: 143(3); 142(1); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2369/DEL./2013 (ASSESSMENT YEAR : 2008-09) M/S. O.P. GUPTA CONSTRUCTIONS PVT. LTD., VS. ACIT, CIRCLE 2, 154, NEW MOHAN PURI, MEERUT. MEERUT. (PAN : AAACO7059A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI O.P. SAPRA, ADVOCATE REVENUE BY : SHRI GUNJAN PRASAD, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF CIT, MEERUT DATED 21.03.2013 FOR THE ASSESSMENT YEAR 200 8-09. 2. THE ASSESSEE IS A CIVIL CONTRACTOR. THE RETURN OF INCOME WAS FILED DECLARING LOSS OF RS.14,55,416/- AND THE GROSS RECE IPTS DECLARED WERE OF RS.4,96,68,636/-. THE ASSESSEE WAS ALSO HAVING OTH ER INCOME OF RS.8,70,244/-. THE ASSESSING OFFICER MADE AN ORDER U/S 143(3) ON 30.11.2010. THE WHOLE ORDER OF THE ASSESSING OFFIC ER IS REPRODUCED AS UNDER:- ITA NO.2369/DEL./2013 2 THE ASSESSEE COMPANY E-FILED ITS RETURN DECLARING LOSS AT RS.14,55,416/- ON 27.09.2008, WHICH WAS PROCESSED U /S 143(1) ON THE SAME LOSS. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS AND ACCORDINGLY, NOTICE U/S 143(2) DATED 18.08.2009 WAS ISSUED AND SERVED UPON THE ASSESSEE. THEREAFTER, VARIOUS NOTICES U/S 143(2} AND 142(1) ALONGWITH QUESTIONNAIRE WERE ISSUED AND SERVED UPON THE ASSESSEE. IN RESPONSE TO THE AFORESAID NOTICES SH. PADAM PRAKASH , C.A., COUNSEL OF THE ASSESSEE COMPANY ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND FILED THE REQUIRED DETAILS & DOCUMENTS. BOOKS OF ACCOUNTS, BI LLS/VOUCHERS PRODUCED WHICH WERE EXAMINED ON TEST CHECK BASIS. THE CASE W AS DISCUSSED WITH HIM. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND THAT THE ASSESSEE IS A PRIVATE COMPANY AND ENGAGED IN CIVIL CONSTRUCTION CONTRACT WORK SPECIFICALLY IN CONSTRUCTION OF OVERHEAD WATER TANK AND SEWERAGE. CONSIDERING ALL THE FACTS, DETAILED SUBMITTED BY TH E ASSESSEE COMPANY AND AFTER EXAMINATION OF ACCOUNT BOOKS AND WRITTEN SUBMISSIONS FILED BY THE ASSESSEE COMPANY THE INCOME/LOSS OF TH E ASSESSEE IS COMPUTED AS UNDER- INCOME FROM BUSINESS- NET LOSS AS PER PROFIT AND LOSS ACCOUNT ATTACHED R S.14,69,933.75 LESS- DEPRECIATION AS PER BOOKS RS. 2,03,001.48 RS.12,66,932.27 ADD- DEPRECIATION AS PER IT RULES RS. 1,88,482. 94 NET ASSESSABLE LOSS TO BE CARRIED FORWARD RS.14,55 ,415.21 OR SAYS RS.14,55,420.00 ASSESSMENT IS COMPLETED ON NET LOSS AT RS.14,55,420 /-. ISSUE NOTICE OF DEMAND. INFORM ACCORDINGLY. 3. THE CIT (A) INITIATED THE PROCEEDINGS U/S 263 AF TER HOLDING THAT ON THE EXAMINATION OF THE RECORDS, THE ASSESSMENT WAS DONE WITHOUT PROPER ENQUIRY. 4. NOW, THE ASSESSEE IS IN APPEAL AGAINST THE ORDER U/S 263 OF THE ACT BY TAKING THE FOLLOWING GROUNDS OF APPEAL :- ITA NO.2369/DEL./2013 3 1. THAT THE IMPUGNED ORDER AS PASSED BY THE LD. CI T U/S 263 OF THE INCOME TAX ACT, 1961 IS ARBITRARY, UNJUST & ILLEGAL ON VARIOUS FACTUAL AND LEGAL GROUNDS INCLUDING THE FOLLOWING:- (A) THE ASSESSMENT ORDER DATED 30.11.2010 AS PASSED BY THE A.O. WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE I NTEREST OF REVENUE. (B) THE LD. CIT HAD NO JURISDICTION TO INVOKE SECTI ON 263 OF THE I.T. ACT, 1961. (C) THE LD. AO. HAS PASSED THE ORDER DT. 30.11.2010 U/S 143(3) AFTER PROPER APPLICATION OF MIND. (D) VARIOUS OBSERVATIONS AND DIRECTIONS MADE BY THE LD. CIT IN HIS SECTION 263 ORDER ARE EITHER FACTUALLY INCORREC T OR ARE UNTENABLE IN LAW AND VARIOUS CASE LAWS RELIED UPON BY THE LD. CIT ARE NOT APPLICABLE TO THE APPELLANT'S CASE BEING DISTINGUIS HABLE ON FACTS. 2. THAT WITHOUT PREJUDICE TO GROUND NO.1 ABOVE, THE ID. CIT HAS GROSSLY ERRED IN LAW BY MAKING TRADING ADDITION OF RS.58,60,909/- AFTER REJECTING BOOKS OF ACCOUNTS U/S 145(3) OF THE INCOM E TAX ACT, 1961, HOLDING THAT THE BOOKS RESULTS COULD NOT BE VERIFIE D AND AS SUCH WERE UNASCERTAINABLE AND NON VERIFIABLE AND THE ACTION O F ID. CIT IS PERVERSE AND HAS CAUSED GROSS & GREAT INJUSTICE TO THE APPELLANT HAVING BEEN TAKEN ONLY ON THE BASIS OF ESTIMATIONS AND ASSUMPTIONS WITHOUT ALLOWING PROPER OPPORTUNITY OF BEING HEARD ON THE ISSUE AND THE ORD ER UNDER APPEAL IS BASED ON INCOMPLETE AND INADEQUATE APPRECIATION OF FACTS OF THE CASE AND THE VARIOUS CASE LAWS RELIED UPON BY THE LD. CIT ARE NO T APPLICABLE TO THE APPELLANT'S CASE BEING DISTINGUISHABLE ON FACTS. 3. THAT THE LD. CIT HAD NO JURISDICTION TO MAKE ADD ITION OF RS.58,60,909/- DURING PROCEEDINGS UNDER SECTION 263 OF INCOME TAX ACT, JUST ON THE BASIS OF WILD ESTIMATIONS AND ASSUMPTIO NS WITHOUT MAKING ANY ENQUIRY IN THE FACTS OF THE CASE AND ALSO WITHOUT P ROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT AND AT ANY RATE THE ACTION OF THE LD. CIT IS TOTALLY UNJUST AND UNTENABLE IN LAW. 4. THAT THE FINDING MADE BY THE LD. CIT THAT THE AD VANCE OF RS.40,39,536/- IS NOT SHOWN IN DECLARED RECEIPTS AN D THERE IS NO QUESTION OF ALLOWANCE OF THE SAME AND THAT THIS WILL MEAN AN AD DITION OF RS.40,39,536/- IS FACTUALLY INCORRECT AND HAS BEEN MADE ON INCOMPL ETE APPRECIATION OF THE FACTS OF THE APPELLANT. 5. THAT THE IMPUGNED ORDER OF THE CIT U/S 263 DESER VES TO BE CANCELLED ANNULLED. 6. THE APPELLANT CRAVES LEAVE TO ADD, DELETE AND OR MODIFY ANY GROUNDS OF APPEAL. ITA NO.2369/DEL./2013 4 5. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. AT THE FACE OF THE ORDER OF T HE ASSESSING OFFICER, IT CAN BE SEEN THAT THIS ORDER WAS NOT AT ALL A SPEAKING O RDER. ON A SPECIFIC ENQUIRY FROM THE BENCH WITH REGARD TO ANY QUESTIONNAIRE OR EXPLANATION ASKED BY THE ASSESSING OFFICER IN RESPECT OF THE SALE RETURNS OF RS.4,96,68,636/- WHICH WAS FOUND TO BE ABNORMAL FEATURE IN RESPECT OF A BUSINE SS OF CONTRACTOR, LD. AR SHOWED HIS INABILITY AND THAT THERE APPEARS TO BE N O ENQUIRY MADE IN THIS REGARD. LD. AR ALSO MADE AN APPLICATION UNDER RULE 29 OF ITAT RULES FOR FILING THE ADDITIONAL EVIDENCES. WE HAVE ALSO HEAR D BOTH THE SIDES ON THE ISSUE OF ADMISSION OF ADDITIONAL EVIDENCES AND AFTE R HEARING, WE FIND THAT IN THE INTEREST OF JUSTICE AND EQUITY, IT WILL BE PROP ER TO ADMIT THE ADDITIONAL EVIDENCES. WE ALSO FIND IT APPROPRIATE TO REMAND T HE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. WE ALSO FIND THAT THE CIT HAS HIMSELF ESTIMATED GROSS PROFIT @ 20% WHICH WE ALSO FIND NOT IN ORDER, THEREFORE, ON THE ISSUE OF ESTIMATING THE GROSS PRO FIT, WE HOLD THAT IT ALSO NEEDS INVESTIGATION AT THE LEVEL OF ASSESSING OFFICER. W E FIND IT APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFI CER FOR ESTIMATING THE GROSS PROFIT. CONSIDERING ALL THE RELEVANT FACTS AND EVI DENCE AVAILABLE ON RECORD AND ALSO CONSIDERING THE ASSESSEES APPLICATION FOR ADM ITTING THE ADDITIONAL EVIDENCES, WE ORDER AS UNDER:- ITA NO.2369/DEL./2013 5 THE CIT WAS JUSTIFIED IN INVOKING THE PROVISIONS O F SECTION 263 OF THE INCOME-TAX ACT, 1961 AS THE ASSESSING OFFICERS ORD ER WAS COMPLETELY NON- SPEAKING AND THERE WAS NO EVIDENCE THAT ENQUIRIES H AVE BEEN MADE ON CERTAIN ISSUES WHICH WERE PRIMA FACIE ABNORMAL IN THE ASSES SEES CASE. THEREFORE, WE SUSTAIN THE ACTION TAKEN BY THE CIT U/S 263 OF THE ACT. WE ALSO HOLD THAT THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE BE ADMIT TED AND THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATI ON OF EVIDENCES. THE ISSUE OF ESTIMATING GROSS PROFIT IS ALSO RESTORED TO THE FIL E OF THE ASSESSING OFFICER FOR MAKING FRESH ASSESSMENT. WE ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 28 TH DAY OF MARCH, 2014. SD/- SD/- (I.C. SUDHIR) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 28 TH DAY OF MARCH, 2014/TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MEERUT. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.