ITO, New Delhi V. Sh. Akshay Gupta, New Delhi

ITA 280/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90925 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 15-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: AVADESH BHATNAGAR
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI A.T. VARKEY: JUDICIAL MEMBER ITA NO. 280/DEL/2013 A.Y. 2009-10 INCOME-TAX OFFICER, VS. AKSHAY GUPTA, WARD 31(3), NEW DELHI. M/S MACH TRADE WINGS, 40, 4 TH FLOOR, DCM BUILDING, BARAKHAMBA ROAD, NEW DELHI. PAN: AAKPG 5917 C ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : MS. Y. KAKKAR DR RESPONDENT BY : SHRI AVADESH BHATNAGAR ADV . DATE OF HEARING : 18/03-2015 DATE OF ORDER : 22-04-2015. O R D E R PER S.V. MEHROTRA, A.M:- THIS APPEAL, PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE CIT(A)S ORDER DATED 30-10-2012, RELATING TO A.Y. 2009-10. F OLLOWING GROUNDS ARE RAISED: 1. THE LD. CIT(A)HAS ERRED IN DELETING THE ADDITION OF RS. 1,40,24,000/- ON ACCOUNT OF DIFFERENCE OF GROSS REC EIPTS AS APPEARED IN 26AS AND IN P&L ACCOUNT OF THE ASSES SEE IN THE ABSENCE OF ANY RECONCILIATION SUBMITTED BY T HE ASSESSEE. 2. THE LD. CIT(A)HAS ERRED AND HAS VIOLATED THE RULE 4 6A OF THE IT RULES 1962 BY ADMITTING THE ADDITIONAL EVIDENCES, WHICH WERE NOT SUBMITTED BEFORE THE AO 2 ITA 280/DEL/2013 ITO VS. AKSHAY GUPTA DESPITE 10 HEARING OPPORTUNITIES PROVIDED TO THE ASSESSEE. 2. THE ASSESSEE IS AN INDIVIDUAL AND IS A SERVICE P ROVIDER, CUSTOM HOUSE AGENTS. DURING THE YEAR THE ASSESSEE DECLARED INCOM E FROM BUSINESS AND INCOME FROM OTHER SOURCES. HE FILED ITS RETURN OF I NCOME DECLARING INCOME OF RS. 9,08,019/-. THE AO HAS OBSERVED THAT IT WAS NOT ICED THAT THERE WAS A DIFFERENCE IN GROSS RECEIPTS DECLARED BY THE ASSESS EE AS PER TDS CERTIFICATE RS. 2.02 CRORES AND AS PER P&L A/C RS. 61.78 LACS. HE, THEREFORE, CONCLUDED THAT ASSESSEE HAD DECLARED LESS GROSS RECEIPTS BY R S. 140.24 LACS. HE REQUIRED THE ASSESSEE TO FILE RECONCILIATION OF RECEIPTS AS PER TDS CERTIFICATES AND RECEIPTS AS PER P&L A/C. IN RESPONSE THE ASSESSEE S UBMITTED THAT RECONCILIATION OF TDS WAS ALREADY SUBMITTED TO MR. MUKESH. HOWEVER, INSPITE OF AOS REQUEST, THE ASSESSEE DID NOT FURNI SH COPY OF THE SAME. THE AO, AFTER CONSIDERING THE ASSESSEES PLEA, CONCLUDE D THAT ASSESSEE HAD SHOWN HIS INABILITY TO RECONCILE THE TWO FIGURES AN D ASSESSEE HAD NEVER FILED ANY RECONCILIATION BEFORE MR. MUKESH, AOS PREDECES SOR. THE AO, ACCORDINGLY, MADE AN ADDITION OF RS. 1,40,24,000/-. 2.1. BEFORE LD. CIT(A) THE ASSESSEE HAD FILED ADDIT IONAL EVIDENCE WITH RESPECT TO ADDITION MADE BY AO ON ACCOUNT OF DIFFER ENCE BETWEEN AMOUNT OF RECEIPTS SHOWN IN P&L A/C AND AMOUNT OF RECEIPT SHO WN IN TDS CERTIFICATE. 3 ITA 280/DEL/2013 ITO VS. AKSHAY GUPTA THE CIT(A), AFTER CONSIDERING THE ASSESSEES CONTEN TION FORWARDED THE EVIDENCE FILED BY ASSESSEE FOR AOS COMMENT VIDE LE TTER DATED 17-5-2012. THE AO FORWARDED HIS REMAND REPORT VIDE LETTER DATE D 21-8-2012 AND PLEADED FOR NON ADMISSION OF ADDITIONAL EVIDENCE. T HE LD. CIT(A), HOWEVER, ADMITTED THE ADDITIONAL EVIDENCE AND OBSERVED IN PA RA 8.3 AS UNDER: 8.3. I HAVE GONE THROUGH THE ASSESSMENT ORDER, COP Y OF SUBMISSION MADE BY THE APPELLANT, REMAND REPORT SUB MITTED BY THE ASSESSING OFFICER AND EVIDENCES FILED BY THE AP PELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS AS ADDIT IONAL EVIDENCE. THE APPELLANT HAD ALSO FILED RECONCILIATI ON STATEMENT OF RECEIPTS SHOWN IN THE PROFIT & LOSS ACCOUNT AND AMOUNT OF GROSS RECEIPTS MENTIONED IN TDS CERTIFICATES/ 26AS. THE ASSESSING OFFICER HAD MADE AN ADDITION OF RS. 1,40, 24,000/- BEING THE DIFFERENCE BETWEEN RECEIPTS SHOWN BY THE APPELLANT IN PROFIT & LOSS ACCOUNT AND AMOUNT OF GROSS RECEIPTS AS MENTIONED IN TDS CERTIFICATE/ 26 AS IN THE ABSENCE OF RECONCILIATION STATEMENT BY THE APPELLANT. THE APPE LLANT HAS BEEN CONSISTENT IN FOLLOWING ACCRUAL BASIS OF ACCOU NTING AND HIS INCOME TAX CASES FOR THE ASSESSMENT YEARS 2004-05 A ND 2006-07 HAVE BEEN COMPLETED U/S 143(3) OF THE ACT. THE DIFF ERENCE BETWEEN THE AMOUNT OF RECEIPT STATED IN PROFIT AND LOSS ACCOUNT AND IN TDS CERTIFICATES IS DUE TO AIR FREIGHT AND O THER EXPENDITURE INCURRED BY THE APPELLANT ON BEHALF OF HIS CLIENTS AND THERE IS NO ACCRUAL OF INCOME AS THE SAME WAS O N ACCOUNT OF REIMBURSEMENT OF EXPENDITURE. 2.2. AFTER CONSIDERING THE ASSESSEES SUBMISSIONS, CIT(A) DELETED THE ADDITION. 2.3. AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFORE THE ITAT. 4 ITA 280/DEL/2013 ITO VS. AKSHAY GUPTA 3. WE HAVE HEARD BOTH THE PARTIES. WE FIND THAT LD. CIT(A) HAS CONSIDERED THE ADDITIONAL EVIDENCE FOR DELETING THE DISALLOWANCE. THE AO IN THE REMAND REPORT HAD MERELY PLEADED FOR NON-ADMISS ION OF ADDITIONAL EVIDENCE BUT DID NOT REFER TO THE MERITS OF THE CAS E. THE HONBLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME-TAX VS. MOD ERN CHARITABLE FOUNDATION HAS HELD THAT IF ADDITIONAL EVIDENCE HAS BEEN PRODUCED BEFORE CIT(A), THEN THE MATTER IS TO BE REMANDED TO THE AO TO VERIFY THE CORRECTNESS OF ASSESSEES PLEA. IN PARAS 7 & 8 OF T HEIR DECISION THE HONBLE HIGH COURT HAS OBSERVED AS UNDER: 7. AFTER HEARING THE COUNSEL FOR THE PARTIES, WE AR E OF THE OPINION THAT AT THIS STAGE ADMISSION OF THE ADDITIO NAL EVIDENCE ADMITTED BY THE CIT(A) BE NOT INTERFERED WITH. IT I S MORE SO WHEN THE ASSESSEE IS A CHARITABLE ORGANIZATION. WE MAY ALSO RECORD THE SUBMISSION OF THE LEARNED COUNSEL FOR TH E RESPONDENT THAT INSOFAR AS UNSECURED LOANS ARE CONCERNED, THEY WERE PAID BACK IN SUBSEQUENT YEARS, WHICH SHOWS THAT THESE WE RE THE GENUINE LOANS TAKEN BY THE ASSESSEE. AT THE SAME TI ME, WE FIND THAT THE CIT (A) AFTER ADMITTING THE EVIDENCE RELIE D UPON THE SAME WITHOUT ANY VERIFICATION. NO DOUBT, THE REMAND REPORT OF THE AO WAS CALLED FOR AND IT WAS FOUND THAT THE AO DID NOT GO INTO TO THE VERACITY OF THE SAME AND REPRODUCED SOM E FACTS FROM THE ASSESSMENT ORDER. IT WAS BECAUSE OF THE REASONS THAT THE AO STRONGLY FELT THAT THERE WAS LAPSE ON THE PART OF T HE ASSESSEE IN NOT PRODUCING THE EVIDENCE BEFORE HIM WHEN HE HAD B EEN GIVEN NUMBER OF OPPORTUNITIES AND THEREFORE, HE OBJECTED TO THE ADMISSION OF THE SAID EVIDENCE AND DID NOT DO ANY F URTHER EXERCISE TO VERIFY THE SAME. AT THE SAME TIME, WE A LSO FIND THAT EVEN THE CIT (A) DID NOT GO INTO THESE DOCUMENTS AN D SIMPLY RELIED UPON THESE DOCUMENTS AND GAVE BENEFIT TO THE AO. THEREFORE, IN ORDER TO BALANCE THE EQUITIES, WE ARE OF THE 5 ITA 280/DEL/2013 ITO VS. AKSHAY GUPTA OPINION THAT ON ONE HAND, THE ASSESSEE BE PERMITTED TO RELY UPON THE ADDITIONAL EVIDENCE PRODUCED BEFORE THE CI T (A), AT THE SAME TIME, THE AO ALSO BE GIVEN OPPORTUNITY TO VERIFY THESE DOCUMENTS. 8. ACCORDINGLY, WE REMIT THE CASE BACK TO THE AO WH O SHALL GO INTO THE VERACITY OF THESE DOCUMENTS. THE ASSESSEE SHALL ALSO BE ENTITLED TO SHOW THAT THE UNSECURED LOANS HAD BEEN REPAID. IF THE ASSESSEE IS ABLE TO EXPLAIN THE DONATIONS AS WE LL AS UNSECURED LOANS PROPERLY, THE AO SHALL ACCEPT THE S AME. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE DELH I HIGH COURT, WE SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORE THE MATT ER TO THE FILE OF AO FOR EXAMINING THE ASSESSEES CLAIM DE NOVO IN ACCORDANC E WITH LAW. 5. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 22-04-2015. SD/- SD/- (A.T. VARKEY ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22-04-2015. MP: C OPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR