ADIT (E), New Delhi V. The Gurukul Trust, New Delhi

ITA 2416/DEL/2011

• Counselvise Citation: 241620114 RSA 2011
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 01-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Keywords: Depreciation; Opportunity of being heard; Revenue expenditure; Capital expenditure
• Section: 12A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `H: NEW DELHI BEFORE SHRI C.L.SETHI, JUDICIAL MEMBER AND SHRI B.K. HALDER, ACCOUNTANT MEMBER I.T. A. NO.2416/DEL/2011 ASSESSMENT YEAR : 2006-07 ASSTT. DIRECTOR OF INCOME-TAX (E), THE GURUKUL TR UST, TRUST CIRCLE-IV, NEW DELHI. VS. D-251, COUNTRY CLUB ROAD, NAIB SARAI, NEW DELHI. PAN: AAATT3993R (APPELLANT) (RESPONDENT ) APPELLANT BY : DR. B.R.R. KUMAR, SR. DR. RESPONDENT BY : NONE. O R D E R PER C.L. SETHI, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL AGAINST THE ORDER DATED 28 .02.2011 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) IN THE MATTER OF AN ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SEC. 144 OF THE INCOME-TAX ACT, 1961 (THE ACT), FOR THE ASSESSMENT YEAR 2006-0 7. 2 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER:- 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN SETTING ASIDE THE ORDER AND DIR ECTING THE AO TO REFRAME THE ASSTT. ORDER AFTER VERIFICATION O F EXPENSES, AS THE LD. CIT(A) HAS NO AUTHORITY TO REFER THE MATTER BACK TO THE AO. 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN ALLOWING DEPRECIATION TO THE ASSESS EE AS THE ASSESSEE HAS ALREADY CLAIMED THE DEDUCTION ON A/C O F APPLICATION OF MONEY AND IT WILL LEAD TO DOUBLE DED UCTION. 3. IN THIS CASE, THE ASSESSMENT WAS COMPLETED BY TH E ASSESSING OFFICER UNDER SEC. 144 OF THE ACT FOR THE REASON THAT ON TH E DATE OF HEARING FIXED ON 12.12.2008, WHEN THE ASSESSEE WAS REQUIRED TO PRODU CE ALL BILLS WITH REGARD TO ADDITION TO THE FIXED ASSETS, NO ONE FOR THE ASS ESSEE APPEARED BEFORE HIM AND ALSO FOR THE REASON THAT THE ASSESSEE HAS REPEA TEDLY FAILED TO PRODUCE THE BOOKS OF ACCOUNT OR BILL/VOUCHERS ON ONE PRETEXT OR ANOTHER. IN THE ASSESSMENT, THE ASSESSEES CLAIM OF APPLICATION OF INCOME TOWARDS FIXED ASSETS WAS DISALLOWED. THE ASSESSING OFFICER ALSO DISALLOWED 20% OF THE TOTAL EXPENSES CLAIMED BY THE ASSESSEE AFTER DISALL OWING THE PRELIMINARY EXPENSES AND DEPRECIATION FROM THE TOTAL EXPENSES S HOWN IN THE INCOME AND EXPENDITURE ACCOUNT. 3 4. BEING AGGRIEVED, THE ASSESSEE PREFERRED AN APPEA L BEFORE THE LEARNED CIT(A). 5. IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE TH E LEARNED CIT(A), A REMAND REPORT WAS CALLED FOR FROM THE ASSESSING OFF ICER. AFTER CONSIDERING THE ASSESSEES SUBMISSIONS AND REMAND REPORT GIVEN BY THE AO, THE LEARNED CIT(A) DECIDED THE ISSUE BY HOLDING AND CONCLUDING AS UNDER:- 2.4 SO, RELIANCE ON THE ABOVE MENTIONED TWO CASE L AWS BY THE AO IS TOTALLY MISCONCEIVED. AFTER ANALYZING THE IS SUE IN DETAIL AND CONSIDERING THE REQUEST OF THE LD AR THAT 20% C LAIM OF THE REVENUE EXPENDITURE WHICH AHS BEEN DISALLOWED REQUI RES VERIFICATION ON THE PART OF THE AO AS WELL AS AOS FINDING ON APPLICATION OF CAPITAL EXPENDITURE. SO, MATTER IS REMANDED TO AO FOR LIMITED PURPOSE TO VERIFY THE CLAIM OF THE A PPELLANT AND TO ALLOW THEM AFTER PROPER VERIFICATION GIVING PROP ER OPPORTUNITY. 6. FROM THE ORDER OF THE LEARNED CIT(A), IT IS CLEA R THAT THE CIT(A) HAS REMANDED THE MATTER TO THE AO TO VERIFY THE CLAIM O F THE ASSESSEE REGARDING DISALLOWANCE OF 20% OF REVENUE EXPENSES AS WELL AS AOS FINDING ON APPLICATION OF CAPITAL EXPENDITURE. THE LEARNED CI T(A) HAS NOT GIVEN ANY FINDING WHILE DECIDING THESE ISSUES EXCEPT BY SAYIN G THAT THE TWO CASE LAWS RELIED UPON BY THE AO ARE TOTALLY MISCONCEIVED. IN THE LIGHT OF THE PROVISIONS CONTAINED IN SEC. 251 OF THE ACT REGARDI NG POWERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IN DISPOSING O F THE APPEAL, WE FIND THAT THE POWER TO SET ASIDE THE ISSUE TO THE FILE O F THE ASSESSING OFFICER ARE 4 NO MORE AVAILABLE TO THE LEARNED CIT(A) AFTER OMITT ING THE PORTION BEGINNING WITH THE WORDS OR HE MAY SET ASIDE AND ENDING WIT H THE WORDS ON THE BASIS OF SUCH FRESH ASSESSMENT FROM SEC. 251 OF TH E ACT BY THE FINANCE ACT, 2001 W.E.F. 1.06.2001. WE THEREFORE, SET ASIDE THE LEARNED CIT(A)S ORDER AND PROCEED TO DECIDE THE ISSUES INVOLVED ON THEIR OWN MERITS ON THE BASIS OF MATERIAL ON RECORD. 7. IN THE PRESENT CASE, THE ASSESSING OFFICER HAS D ISALLOWED THE ASSESSEES CLAIM OF APPLICATION OF INCOME TOWARDS C APITAL EXPENDITURE FOR THE REASON THAT THE ASSESSEE FAILED TO PRODUCE BILLS/VO UCHERS AND BOOKS OF ACCOUNT. THE ASSESSEE ALSO CONTENDED BEFORE THE LE ARNED CIT(A) THAT THE ASSESSMENT WAS MADE IN HASTE AND THE ASSESSEE WANTE D THAT THE CASE MAY BE REMANDED BACK. HOWEVER, THE ASSESSEE FAILED TO PRO DUCE RELEVANT VOUCHERS/BILLS AND BOOKS OF ACCOUNT BEFORE THE LEAR NED CIT(A) BY FILING AN APPLICATION UNDER RULE 46A OF THE INCOME-TAX RULES. UNDER GROUND NO.4 TAKEN BEFORE THE LEARNED CIT(A), THE ASSESSEE HAD P RAYED THAT IN THE INTEREST OF JUSTICE, THE CASE MAY BE REMANDED BACK TO THE AO SO THAT THE BOOKS OF ACCOUNT COULD BE VERIFIED AND THE EXPENSES CLAIMED BY THE ASSESSEE COULD BE ALLOWED. IT IS NOT IN DISPUTE THAT THE ASSESSEE HA S FAILED TO PRODUCE BOOKS OF ACCOUNT AND BILLS BEFORE THE AO AS WELL AS BEFORE T HE LEARNED CIT(A) FOR VERIFICATION. HOWEVER, WE HAVE GONE THROUGH THE AS SESSMENT ORDER AND FIND 5 THAT ONE SHRI RAKESH AGGARWAL, FCA BEING THE AUTHOR IZED REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE AO FROM TIME TO TIME AND FURNISHED CERTAIN DETAILS. THE ASSESSEE IS A CHARITABLE TRUS T REGISTERED UNDER SEC. 12A OF THE ACT. THE RETURN OF INCOME WAS FILED ALONG WITH AUDIT REPORT IN FORM NO.10B. SINCE THE ASSESSEE GOT THE ACCOUNTS AUDITE D AND SUBMITTED AUDIT REPORT IN FORM NO.10B, IT IS CLEAR THAT THE ASSESSE E WAS MAINTAINING BOOKS OF ACCOUNT. IN ORDER TO DECIDE AS TO WHETHER THE ASSE SSEES CLAIM OF APPLICATION OF INCOME TOWARDS INVESTMENT IN FIXED ASSETS AND TH AT THE EXPENSES INCLUDING PRELIMINARY EXPENSES AND DEPRECIATION CLAIMED IN TH E INCOME AND EXPENDITURE, ARE GENUINE AND ALLOWABLE AS PER LAW, IT IS NECESSARY TO EXAMINE THE BOOKS OF ACCOUNT AND OTHER DETAILS INCLUDING BI LLS AND VOUCHERS. WE, THEREFORE, HOLD THAT IF ONE MORE OPPORTUNITY IS GIV EN TO THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNT, BILLS AND VOUCHERS AND OT HER DETAILS AS REQUIRED BY THE AO, FOR AOS VERIFICATION, IT WOULD MEET THE EN DS OF JUSTICE. THIS UNDERSTANDING WAS GIVEN TO THE LEARNED DEPARTMENTAL REPRESENTATIVE IN THE COURSE OF HEARING OF THIS APPEAL. WE, THEREFORE, S ET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND REMANDED THE WHOLE ASSESSMENT TO THE FILE OF THE AO FOR MAKING FRESH ASSESSMENT AS PER LAW AFTER PROVID ING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DO HEREBY DIRECT THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNT, ALL VOUCHERS AND BILLS AND OTHER DETAILS BEFORE 6 THE ASSESSING OFFICER FOR HIS VERIFICATION SO THAT A PROPER AND JUST ASSESSMENT CAN BE MADE BY THE AO AFTER EXAMINING THE ASSESSEE S BOOKS OF ACCOUNT AND OTHER DETAILS AS PER LAW. WE ORDER ACCORDINGLY. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S TREATED TO BE ALLOWED FOR A STATISTICAL PURPOSE. 9. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT I MMEDIATELY AFTER THE HEARING WAS OVER ON 1 ST DECEMBER, 2011. SD/- SD/- (B.K. HALDER) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 ST DECEMBER, 2011. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.