D.S. Chauhan, Gurgaon V. ITO, Gurgaon

ITA 271/DEL/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3535 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-08-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 23-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: REENA NE HRU
• Keywords: Additional evidence
• Section: 234B; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI B.C. MEENA ITA NO. 271/DEL/2009 ASSESSMENT YEAR: 2005-06 SHRI D.S. CHAUHAN, PROP. VS. INCOME-TAX OFFICER, M/S. ANURAG AUTO INDUSTRIES, WARD-1, C/O. YP SINGH RANA (ADV.), GURGAON. 205-208, DEEP PLAZA, OPP. DIST. COURT, GURGAON. (PAN: ACAPC3043R) (APPELLANT) (RESPONDENT) APPELLANT BY: MS. REENA NE HRU, ADV. RESPONDENT BY: MS. Y. KAKKAR, S R.DR ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(APPEALS) DATED 27.10.2008 PASSED FOR ASSESSMENT YEAR 2005-06. THE ASSESSEE HAS TAKEN NINE GROUNDS OF APPEAL, OUT OF T HEM GROUND NOS. 8 & 9 ARE GENERAL GROUNDS OF APPEAL ON WHICH NO SPECIFIC FINDING IS REQUIRED, THEREFORE, THEY ARE REJECTED. IN GROUND NOS. 1 TO 3 , ASSESSEE HAS PLEADED THAT LEARNED REVENUE AUTHORITIES HAVE ERRED IN PASSING E X PARTE ORDERS. IN GROUND NOS. 4 & 7, ASSESSEE HAS PLEADED THAT ASSESSING OFF ICER HAS ERRED IN REJECTING THE AUDITED BOOKS OF ACCOUNT UNDER SEC. 1 45(3) AND ESTIMATING G.P. AT 35% IN PLACE OF 26.77% DISCLOSED BY THE ASSESSEE . IN GROUND NOS. 5 & 6, 2 ASSESSEE IS IMPUGNING THE ADDITIONS MADE ON ACCOUNT OF UNSECURED LOANS APPEARING IN THE BALANCE SHEET OF THE ASSESSEE, AS WELL AS OF THE PROPRIETARYSHIP. 2. FIRST WE TAKE GROUND NOS. 1 TO 3. THE BRIEF FACT S OF THE CASE ARE THAT ASSESSEE IS RUNNING A PROPRIETARY SHIP CONCERN IN T HE NAME AND STYLE OF M/S. ANURAG AUTO INDUSTRIES, WHERE HE IS MANUFACTURING A UTO PARTS. HE HAS FILED HIS ITR FOR ASSESSMENT YEAR 2005-06 ON 28.10.2005. HE DECLARED AN INCOME OF RS.1,50,442 PLUS AGRICULTURAL INCOME OF RS.1,25, 645. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE UNDER SEC. 143(2) WAS ISSUED ON 14 TH JULY 2006. IT EMERGES OUT FROM THE ASSESSMENT ORDE R THAT ASSESSING OFFICER HAS ISSUED A NUMBER OF NOTICES BU T THEY REMAINED UNCOMPLIED. ASSESSING OFFICER HAS PASSED AN ASSESSM ENT ORDER ACCORDING TO HIS BEST JUDGMENT UNDER SECTION 144 OF THE ACT ON 7 .12.2007. HE DETERMINED THE TAXABLE INCOME OF THE ASSESSEE AT RS.32,86,632. ASSESSING OFFICER HAS MADE BASICALLY THREE ADDITIONS. THE FIRST ADDITION WAS MADE IN RESPECT OF RS.14,67,802, ON THE GROUND THAT UNSECURED LOANS WE RE SHOWN IN THE BALANCE SHEET OF ASSESSEES PROPRIETARY CONCERN. ASSESSEE F AILED TO GIVE CONFIRMATION. THE SECOND ADDITION IS OF RS.10,40,000. THIS ADDITI ON WAS ALSO MADE ON THE GROUND THAT UNSECURED LOANS IN HIS PERSONAL BALANCE SHEET WERE SHOWN BY THE 3 ASSESSEE AGAINST THE NAMES OF SMT. MAGAL, SHRI NARA IN SINGH, SHRI HUKAM SINGH AND SUNITA CHAUHAN. THE ASSESSEE FAILED TO GI VE CONFIRMATION FROM THESE CREDITORS. THE NEXT ITEM ADDED BY THE ASSESSI NG OFFICER IS OF RS.6,28,388. THIS HAS BEEN ADDED BY THE ASSESSING O FFICER BY REJECTING THE BOOK RESULTS AND ESTIMATING THE G.P. AT 35% AS AGAI NST 26.77% DISCLOSED BY THE ASSESSEE. 3. DISSATISFIED WITH THESE ADDITIONS, ASSESSEE CARR IED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(APPEALS). LEARNED FIRST APPE LLATE AUTHORITY HAS FIXED THE HEARING ON 22 ND MAY 2008. SHRI BMS RANA, AR OF THE ASSESSEE SOUGHT AN ADJOURNMENT AND HEARING WAS ADJOURNED. UL TIMATELY, THE APPEAL WAS LISTED FOR HEARING ON 24.10.2008. ACCORDING TO THE ASSESSEE, HE HAS SUBMITTED WRITTEN SUBMISSIONS ON THIS DATE BUT LEAR NED FIRST APPELLATE AUTHORITY HAS DECIDED HIS APPEAL WITHOUT CONSIDERIN G THE WRITTEN SUBMISSIONS. THE LEARNED COUNSEL FOR THE ASSESSEE W HILE IMPUGNING THE ORDERS OF THE LEARNED REVENUE AUTHORITIES, SUBMITTE D THAT ASSESSEE WAS FACING CRIMINAL PROCEEDINGS LAUNCHED AT THE INSTANCE OF HI S COUSIN SHRI JITENDER CHAUHAN, VIDE FIR NO.904 DATED 2 ND DECEMBER 2005. HE HAS SETTLED THE DISPUTE AMICABLY AND FILED A CRIMINAL MISCELLANEOUS BEARING NO.46374M OF 2007 IN THE HON'BLE PUNJAB AND HARYANA HIGH COURT, VIDE WHICH THE FIR HAS 4 BEEN QUASHED. THE ASSESSEE WAS BUSY IN SORTING OUT THIS DISPUTE WITH HIS COUSIN IN THE MONTH OF SEPTEMBER & OCTOBER 2007 AND COULD NOT ATTEND THE ASSESSMENT PROCEEDINGS. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO STATED THAT ASSESSING OFFICER HAS ESTIMATED THE G.P. WITHOUT LO OKING INTO PAST RECORD AND OTHER DETAILS AVAILABLE WITH THE ASSESSING OFFICER. SHE FURTHER CONTENDED THAT BEFORE THE LEARNED CIT(APPEALS) ASSESSEE HAS SUBMIT TED THE WRITTEN SUBMISSIONS AND THE CONFIRMATIONS FROM ALL THE CRED ITORS BUT LEARNED FIRST APPELLATE AUTHORITY DID NOT TAKE INTO CONSIDERATION THE CONFIRMATIONS FILED BY THE ASSESSEE. LEARNED CIT(APPEALS) SIMPLY REPROD UCED THE ASSESSMENT ORDER AND THEN CONCUR WITH THE FINDINGS OF THE ASSE SSING OFFICER. THE LEARNED COUNSEL FOR THE ASSESSEE SOUGHT TO PLACE ON RECORD ALL THESE DETAILS BEFORE US. 4. LEARNED DR ON THE OTHER HAND OPPOSED THE PRAYER MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE. SHE POINTED OUT T HAT PAPERS SOUGHT TO BE PRODUCED BEFORE THE ITAT WERE NEVER PRODUCED BEFORE ANY AUTHORITY, THEREFORE, THEY CANNOT BE TAKEN ON RECORD. SHE FURT HER POINTED OUT THAT THE ASSESSEE HAS ALLEGED FILING OF WRITTEN SUBMISSIONS BEFORE THE LEARNED FIRST APPELLATE AUTHORITY, BUT PHOTO COPIES OF SUCH SUBMI SSION DOES NOT CONTAIN ANY RECEIPT FROM THE OFFICE OF THE LEARNED CIT(APPE ALS). THE ASSESSEE 5 FAILED TO BRING ANY EVIDENCE ON RECORD IN SUPPORT O F ALL HIS SUBMISSIONS THAT ALLEGED WRITTEN SUBMISSIONS WERE SUBMITTED BEFORE T HE LEARNED FIRST APPELLATE AUTHORITY. SHE FURTHER CONTENDED THAT ASS ESSING OFFICER HAS GIVEN SUFFICIENT OPPORTUNITIES TO THE ASSESSEE BUT HE FAI LED TO SUBMIT THE REQUISITE DETAILS. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE ASSESSEE HAS NOT FILED ANY FO RMAL APPLICATION BEFORE US FOR LEADING ADDITIONAL EVIDENCE. HE HAS FILED A PAP ER BOOK BUT IN THE ABSENCE OF ANY APPLICATION FOR LEADING ADDITIONAL EVIDENCE, COGNIZANCE OF THESE PAPERS CONTAINING CONFIRMATION ETC. CANNOT BE TAKEN . THE CASE OF THE ASSESSEE IS THAT WHEN ASSESSMENT PROCEEDINGS WERE GOING ON H E WAS FACING CRIMINAL PROCEEDINGS AND WAS IN THE PROCESS OF SETTLING THOS E PROCEEDINGS BY WAY OF A COMPROMISE. ULTIMATELY, THE COMPROMISE WAS ARRIVED AT AND FIR AT THE INSTANCE OF HIS COUSIN WAS QUASHED BY THE HON'BLE H IGH COURT. DUE TO THIS FAMILY PROBLEM, HE COULD NOT ATTEND THE PROCEEDINGS BEFORE THE ASSESSING OFFICER. ALONG WITH THE APPEAL PAPERS, ASSESSEE HAS FILED COPIES OF ITNS 150 DEMONSTRATING THE TAX CALCULATED BY THE ASSESSING O FFICER. WE FIND THAT A TOTAL DEMAND OF RS.14,31,023 HAS BEEN RAISED BY THE ASSESSEE WHICH INCLUDES INTEREST OF RS.3,41,240 UNDER SEC. 234B OF THE ACT. THE ADDITIONS MADE BY 6 THE ASSESSING OFFICER ARE IN RESPECT OF UNEXPLAINED LOANS APPEARING IN THE BALANCE SHEET OF THE PROPRIETARYSHIP CONCERN AS WEL L AS PERSONAL BALANCE SHEET. THE THIRD ADDITION IS IN RESPECT OF ESTIMATI ON OF G.P. ON DUE CONSIDERATION OF ALL THE FACTS AND CIRCUMSTANCES, WE ARE OF THE OPINION THAT PUNISHMENT IN THE SHAPE OF TAX LIABILITY IS DISPROP ORTIONATE TO THE ALLEGED NEGLIGENCE OF THE ASSESSEE IN CONDUCTING HIS PROCEE DINGS BEFORE THE INCOME- TAX AUTHORITIES. WE DO NOT ABSOLVE THE ASSESSEE FRO M HIS CONDUCT FOR NOT TAKING INCOME PROCEEDINGS SERIOUSLY. HE FAILED TO S UBMIT THE DETAILS ON MERIT. BUT CONSIDERING OVER ALL FACTS AND CIRCUMSTA NCES AND IN THE INTEREST OF JUSTICE, WE DEEM IT APPROPRIATE TO GRANT ONE MORE O PPORTUNITY TO THE ASSESSEE FOR EXPLAINING HIS CASE. WE SET ASIDE THE IMPUGNED ORDERS AND RESTORE ALL THESE ISSUES TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSEE WILL BE AT LIBERTY TO SUBMIT ANY EVIDENCE IN SUPPORT OF HIS EX PLANATION. THE ASSESSING OFFICER SHALL GRANT DUE OPPORTUNITY OF HEARING TO T HE ASSESSEE AND READJUDICATE ALL THESE THREE ISSUES AFTER PERMITTIN G THE ASSESSEE TO SUBMIT EVIDENCE. WE FURTHER DIRECT THE ASSESSEE TO COOPERA TE WITH THE ASSESSING OFFICER AND DO NOT ASK UNNECESSARY ADJOURNMENT. THE ASSESSEE IS DIRECTED TO FILE AN APPLICATION BEFORE THE ASSESSING OFFICER FO R TAKING UP THE PROCEEDINGS WITHIN TWO MONTHS FROM THE RECEIPT OF THIS ORDER BE CAUSE THAT WOULD ELIMINATE ANY POSSIBLE PLEA THAT ASSESSING OFFICER HAD NOT ISSUED NOTICE OR IT 7 WAS NOT SERVED UPON THE ASSESSEE. IT IS NEEDLESS TO SAY THAT THE OBSERVATIONS MADE BY US WHILE DISPOSING OF THIS APPEAL WILL NOT IMPAIR OR INJURE THE CASE OF A.O. OR WILL NOT CAUSE ANY PREJUDICE TO THE DEFE NCE/EXPLANATION OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 08.07.201 1 SD/- SD/- ( B.C. MEENA ) ( RAJ PAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 08/07/2011 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR