Gurdeepak Chawla, New Delhi V. ITO, New Delhi

ITA 2505/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6860 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 23-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Keywords: Opportunity of being heard
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER, AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 2505/DEL /2014 ASSESSMENT YEAR: 2008-09 GURDEEPAK CHAWLA VS. THE ITO HEMKUNT HOUSE, 6, RAJENDRA PLACE NEW DELHI NEW DELHI PAN : AAEPC 9244 N [APPELLANT] [RESPONDENT] DATE OF HEARING : 18.07.2016 DATE OF PRONOUNCEMENT : 27.07.2016 APPELLANT BY : SHRI GAUTAM JAIN, ADV SHRI PIYU SH KUMAR KAMAL, ADV RESPONDENT BY : SHRI AMRIT LAL, CIT -DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A), NEW DELHI, DATED 24/06/2011 FO R A.Y 2008-09 PASSED IN FIRST APPEAL NO. 36/2011-12 FOR AY. 2008- 09. 2. ALTHOUGH THE ASSESSEE HAS RAISED AS MANY AS FOUR GROUNDS IN THIS APPEAL, BUT EXCEPT THE MAIN EFFECTIVE GROUND NO. 1, ALL THE REST ARE SUPPORTIVE TO THE MAIN GROUND WHICH READS AS FOLLOW S: 2 ITA NO. 2505/ DEL/2014 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT(A) HAS ERRED IN TREATING THE CANCELLED AMOUNT O F BILL AS COMMISSION AND DISALLOWING THE CLAIM OF DEDUCTION. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON R ECORD ON THE TRIBUNAL INTER ALIA ASSESSMENT ORDER AND ORDER OF T HE CIT(A). THE LD. AR SUBMITTED THAT THE CIT(A) HAS ERRED IN TREATING THE CANCELLED AMOUNT OF BILL AS COMMISSION AND DISALLOWING THE CL AIM OF DEDUCTION. THE LD. AR ALSO POINTED OUT THAT THE CIT(A) HAS ERR ED IN UPHOLDING THE AMOUNT OF RS. 13,36,639/- AS COMMISSION WHEREAS THI S AMOUNT REPRESENTED DEDUCTION OF AMOUNT FROM RECEIPTS AS PE R BOOKS OF CANCELLED BILL AND STATEMENT OF PARTY WAS ALSO SHOW N. THE LD. AR VEHEMENTLY POINTED OUT THAT NEITHER THE ASSESSEE RE CEIVED ANY AMOUNT NOR HE DISBURSED OR PAID TO ANYONE BUT THE C IT(A) PROCEEDED TO DISALLOW THE SAME U/S 40(A)(IA) OF THE ACT WHICH WAS ALSO NOT THE CASE OF THE AO. THE LD. AR POINTED OUT THAT THE AO ONLY NOTICED DIFFERENCE IN RECEIPT BETWEEN THE P & L ACCOUNT AND THE RETURN BUT IGNORED THE DIFFERENCE OF THE SAME AMOUNT BETWEEN T HE EXPENSES SHOWN IN THE P & L ACCOUNT IN THE RETURN WHICH SUPP ORT THE FACTS WHICH WAS ALSO EXPLAINED BEFORE THE CIT(A) THAT THE IMPUGNED SUM IS NOTHING BUT REVERSAL OF THE CANCELLED BILL WHICH WA S FIRST CREDITED TO GROSS RECEIPTS AT THE TIME OF RAISING BY THE BILL A ND LATER DEBITED ON CANCELLATION OF CORRESPONDING ADVERTISEMENT JOB WOR K. 3 ITA NO. 2505/ DEL/2014 3 3. PER CONTRA, THE LD. DR SUPPORTED THE ORDER OF TH E LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE FILED LEDGER ACCOUNT OF M/S HINDUSTAN BUILDWELL PVT. LTD WHEREIN NO SUCH ENTRY WAS REFLEC TED. THE LD. DR VEHEMENTLY POINTED OUT THAT THE ASSESSEE FAILED TO DEMONSTRATE THAT HE HAS RAISED THE BILL WHICH LATER ON WAS CANCELLED WITH THE HELP OF CONCERNED PARTYS CONFIRMATION AND THE REASONS FOR SUCH CANCELLATION ALONGWITH PRIMARY DOCUMENTS. HENCE, THE IMPUGNED O RDER MAY BE UPHELD. 4. IN REJOINDER, THE LD. AR SUBMITTED THAT THE AUTH ORITIES BELOW DID NOT ASK FOR CONFIRMATION OR ANY OTHER DOCUMENTARY E VIDENCE AND THUS THE ASSESSEE WAS PREVENTED TO FILE THE SAME IN SUPP ORT OF HIS CASE AND EXPLANATION. 4. WE HAVE CONSIDERED THE ARGUMENTS OF BOTH THE SID ES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON R ECORD BEFORE US. WE FIND FROM THE ORDERS OF THE AUTHORITIES BELOW TH AT THE DIFFERENCE IN EXPENSES OF SAME AMOUNT IS SHOWN IN THE P & L AC COUNT AND RETURN. HOWEVER, THE LD. CIT(A) UPHELD THE ADDITION ON THE ALLEGATIONS AS SUBMITTED AND ARGUED BY THE LD. COUNSEL OF THE REVE NUE THAT THE ASSESSEE COULD NOT DEMONSTRATE CANCELLATION OF AGRE EMENT AND REASONS OF CANCELLATION BY SUPPORTING DOCUMENTS. T HE LD COUNSEL FOR THE ASSESSEE, DURING THE ARGUMENTS, AGREED TO THE S UBMISSION OF THE LD. COUNSEL OF THE REVENUE THAT THE ISSUE MAY BE RE STORED TO THE FILE 4 ITA NO. 2505/ DEL/2014 4 OF THE A.O FOR A FRESH ADJUDICATION. WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE WAS NOT PROVIDE DUE OPPORTUNITY O F BEING HEARD TO EXPLAIN HIS STAND AND, THEREFORE, IN THAT VIEW OF T HE MATTER, IN THE INTEREST OF JUSTICE, WE DEEM IT FIT TO RESTORE THE SOLE GROUND OF APPEAL RAISED BY THE ASSESSEE TO THE FILE OF THE AO FOR FR ESH ADJUDICATION. NEEDLESS TO MENTION, THAT THE AO SHALL PROVIDE DUE AND PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, WITHOUT BEING PREJUDICED WITH THE EARLIER ORDER. GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 27.07 .2016. SD/- SD/- (S.V. MEHROTRA) (C.M. GAR G) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27 TH JULY, 2016 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI