ITO, New Delhi V. M/s Bloom Products Pvt. Ltd., New Delhi

ITA 293/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3666 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 18-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS BANITA DEVI
• Keywords: Opportunity of being heard; Cost of acquisition; Corroborative evidences
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.K. HALDAR, ACCOUNTANT MEMBER I.T.A. NO.293 /DEL/2011 ASSESSMENT YEAR : 2007-08 ITO, M/S BLOOM PRODUCTS PVT. LTD., WARD-3 (1), C-8, IST FLOOR, ANAND VIHAR, NEW DELHI. V. DELHI-92. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAACB AAACB AAACB AAACB- -- -6659 6659 6659 6659- -- -D DD D APPELLANT BY : MRS. BANITA DEVI, SR. DR. RESPONDENT BY : SHRI KAPIL GOEL, C.A. ORDER PER B.K. HALDAR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORD ER OF LD CIT(A)- VI, NEW DELHI DATED 10.11.2010 FOR 2007-08. REVENU E HAS TAKEN FOLLOWING GROUNDS OF APPEALS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF `.23,01,500/- ON ACCOUNT OF PURCHASE OF PROPERTY AT C-62, RAMPRASTH A COLONY, GHAZIABAD IGNORING THAT MERELY SHOWING THE PROPERTY IN THE OPENING STOCK DOES NOT ABSOLVE THE ASSESSEE OF ITS RESPONSI BILITY TO PRODUCE EVIDENCE FOR THE EXPENSE CLAIMED BY IT. T HE ASSESSEE WAS SPECIFICALLY ASKED TO PRODUCE EVIDENCE FOR INCURRI NG THIS EXPENSE, WHICH IT FAILED TO DISCHARGE. PAGE 2 OF 8 ITA NO../DEL/ 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED ON FACTS IN LAW IN DELETING ADDITION OF `.2 0,96,555/- ON ACCOUNT OF PURCHASE OF PROPERTY D-73, SECTOR-52, NO IDA IGNORING THAT THE ASSESSEE FAILED TO PRODUCE COPY OF DEED/AGREEM ENT FOR PURCHASE OF THIS PROPERTY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF `.8,00,000/- ON ACCOUNT OF CONSTRUCTION EXPENSES WITH RESPECT TO PR OPERTY NO.D-73, SECTOR-52, NOIDA IGNORING THAT THE ASSESSEE CO MPANY FAILED TO DISCHARGE THE ONUS ON IT TO SUBSTANTIATE IT S CLAIMED WITH SUPPORTING DOCUMENTARY EVIDENCE. 4. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT T O AMEND, MODIFY ALTER AND/OR FORGO ANY GROUND OF APPEAL AT A NY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. THE ASSESSEE IS A COMPANY. IT FILED RETURN OF INCOME DECLARING TOTAL INCOME OF `.6730/- ON 19.10.2007. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED TO HAVE PURCHASED AND SO LD TWO PROPERTIES AS UNDER:- SL. PARTICULARS OPENING PURCHASE COST OF SALE PROFIT CLOSING NO. STOCK. IMPROVE. S TOCK. 1. C-62, 4603000 4701000 98000 RAMPRSTHA, GHAZIABAD. UP. 2. D-73, 4193111 1600000 6000000 206889 SECTOR-52 NOIDA,UP. TOTAL 4193111 4603000 160000 10701000 304889 3. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FILE COPI ES OF DEEDS OF PURCHASE AND SALE OF ABOVE PROPERTIES AND TO PRODUCE BOOKS PAGE 3 OF 8 ITA NO../DEL/ OF ACCOUNTS AND VOUCHERS. THE ASSESSEE, HOWEVER, FAILED TO PRODUCE ANY EVIDENCE FOR PURCHASE AND SALE OF THE ABOVE TWO PROPERTIES. THE ASSESSEE ALSO CLAIMED EXPENDITURE OF `.16,00,000/- AS CON STRUCTION EXPENSES FOR PROPERTY AT D-73, SECTOR-52, NOIDA. ONL Y A CONFIRMATION FROM M/S RK CHOPRA (HUF) WAS FURNISHED BY THE ASSESSEE IN SUPPORT OF THE ABOVE EXPENDITURE. NO BILLS AND VOUCHERS ETC. CO ULD BE PRODUCED. THE ASSESSING OFFICER, THEREFORE, CONCLUDED THAT THE AS SESSEE HAS FAILED TO FILE/PRODUCE ANY DETAILS IN RESPONSE TO NOT ICE U/S 143(2) AND 142(1) OF THE ACT AND SUBSEQUENTLY FAILED TO PRODUCE DOCUMENTS IN SUPPORT OF ITS CLAIM OF MAJOR EXPENDITURE. HE, THER EFORE, DISALLOWED 50% OF THE TOTAL EXPENDITURE CLAIMED BY THE ASSESSEE AM OUNTING TO `.51,98,055/-. 4. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD C IT(A). BEFORE THE LD CIT(A), IT WAS SUBMITTED BY THE ASSESSEE THAT ONE OF THE PROPERTIES NAMELY PROPERTY NO.D-73, SECTOR-52, NOIDA WAS PURCHASED/CONSTRUCTED IN THE LAST YEAR AND THEREFORE N O DISALLOWANCE WITH REFERENCE TO SUCH EXPENDITURE COULD BE MADE IN ASSESSMENT YEAR UNDER CONSIDERATION. AS THE ASSESSING OFFICER HAS NOT DISA LLOWED THE WHOLE OF SUCH EXPENSES THE ASSESSEE IS ENTITLED TO COMPLETE ALLOWANCE OF SUCH EXPENDITURE. IT IS ALSO SUBMITTED THAT DURING T HE ASSESSMENT PROCEEDINGS RELEVANT SALE AND PURCHASE DOCUMENT E.G., TRIPARTITE AGREEMENT, AGREEMENT TO SELL ETC. WERE SUBMITTED. AS REGARDS CONSTRUCTION EXPENSES OF `.16,00,000/-, THE ASSESSEE HAS FU RNISHED SUPPORTING EVIDENCE IN THE FORM OF (A) CONFIRMATION (B) ITR ACKNOWLEDGEMENT (C ) STATEMENT OF AFFAIRS FOR CONSTRUC TION CONTRACTORS ALONG WITH RELEVANT LEDGER ACCOUNT. IT WAS, THEREFO RE, SUBMITTED THAT IN VIEW OF HON'BLE DELHI ITATS ORDERS IN THE CASES OF ELA ND INTERNATIONAL (P) LTD. IN 124 TTJ 554 AND ITO V. RITA VIKAS NANDA IN I.T.A. NO.3219/DEL/2001), THE ASSESSEE WAS ENTITLED TO FULL REL IEF. PAGE 4 OF 8 ITA NO../DEL/ 5. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, LD CIT(A) OPINED AS UNDER:- 1) AS FAR AS PROPERTY NO.D-73, SECTOR-52, NOIDA, IS CONCE RNED, THE ASSESSING OFFICER HAD ACCEPTED THAT THE PROPERTY CAME A S OPENING STOCK. AS THE PURCHASE DID NOT PERTAIN TO THE YEAR UNDER CONSIDERATION, NO EXPENDITURE RELATING TO THE SAME CO ULD BE DISALLOWED DURING THE YEAR UNDER CONSIDERATION. 2) AS REGARDS DISALLOWANCE OF 50% OF PURCHASE PRICE OF PRO PERTY C- 62, RAMPRASTHA COLONY, GHAZIABAD, THE ASSESSEE FURNISHED REQUISITE DOCUMENTS NAMELY AGREEMENT TO SELL. THE ASSESSIN G OFFICER HAS NOT DOUBTED THE PURCHASE/SALE TRANSACTION A ND PROFITS ARISING THERE FROM. THE ASSESSING OFFICER HAS MERELY DISA LLOWED 50% OF PURCHASE CONSIDERATION ON AD HOC BASIS WITHOUT BRINGING ANY MATERIAL ON RECORD. THE DISALLOWANCE OF 50% OF `.46,03,000/- WAS THEREFORE UNJUSTIFIED. 3) AS REGARDS DISALLOWANCE OF 50% OF CONSTRUCTION EXPENSES O F `.16,00,000/- DETAILS AS CLAIMED BY THE ASSESSEE WAS FURNI SHED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER DID NOT ACCEPT THE SAME AS THE ASSESSEE FAILED TO FILE ANY FURTHE R EVIDENCE. THE ASSESSING OFFICER HAS NOT CLARIFIED IN THE ASSESSMENT ORDER AS TO WHAT WERE THE OTHER SPECIFIC QUERI ES RAISED BY HIM. IN VIEW OF THE ABOVE, THE ASSESSING OFFI CER WAS NOT JUSTIFIED FOR DISALLOWING 50% OF THE IMPUGNED EX PENSES. 6. LD CIT(A), THEREFORE, DELETED THE IMPUGNED ADDIT IONS MADE BY THE ASSESSING OFFICER. 7. AGGRIEVED, THE REVENUE HAS FILED APPEAL BEFORE TH E TRIBUNAL, BEFORE US, LD DR RELIED ON THE ORDER OF THE ASSESSING OF FICER. IT WAS PAGE 5 OF 8 ITA NO../DEL/ EMPHASIZED BY HER THAT NO DOCUMENTARY EVIDENCE WAS FU RNISHED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM. AS REGARDS THE CONSTRU CTION EXPENSES, NO BILLS, VOUCHERS ETC. COULD BE PRODUCED. TH US, IT WAS CONTENDED BY HER THAT THESE DISALLOWANCES WERE CORRECT LY MADE BY THE ASSESSING OFFICER. IT WAS FURTHER POINTED OUT BY HER TH AT LD CIT(A) HAD DELETED THE IMPUGNED DISALLOWANCES AS PER PARA 2.3. OF HIS ORDER BY TAKING INTO ACCOUNT CERTAIN EVIDENCES WHICH WERE NO T SUFFICIENT TO PROVE THAT THE EXPENSES WERE REALLY INCURRED BY THE A SSESSEE. IT WAS, THEREFORE, SUBMITTED BY HER THAT THE ORDER OF LD CIT (A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 8. LD AR FOR THE ASSESSEE, ON THE OTHER HAND, RELIED O N THE ORDER OF LD CIT(A). HE TOOK THE BENCH THROUGH SOME OF THE PA GES OF THE PAPER BOOK FILED BY THE ASSESSEE TO PROVE HIS POINT. HOWEVER, THERE WERE CERTAIN INCONGRUITY IN THE COPIES OF DOCUMENTS REFERR ED TO BY THE LD AR FOR THE ASSESSEE. WHEN THE SAME WERE POINTED OUT TO THE LD AR, HE WAS NOT ABLE TO EXPLAIN THE SAME. THE LD AR, HOWEVER, WANTED TO RELY ON CERTAIN CASE LAWS AND SUBMITTED THAT WHATEVER WAS R EQUIRED TO BE DONE BEFORE THE ASSESSING OFFICER WAS DONE BY THE ASSESSEE . THE ASSESSING OFFICER SHOULD NOT BE GIVEN A FURTHER OPPORTUN ITY TO PLUG THE LOOPHOLES. IT WAS, THEREFORE, SUBMITTED BY HIM THAT TH E ORDER OF THE LD CIT(A) BE CONFIRMED. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIAL ON RECORD. WE FIND THAT THERE ARE MANY FACTUAL INCONGR UITY IN THE DETAILS FURNISHED BY THE ASSESSEE IN ITS PAPER BOOK. ONLY COPY O F TRIPARTITE AGREEMENT AND SOME OF THE SALES AND PURCHASE AGREEMENTS AND CONFIRMATION AND OTHER DETAILS OF M/S RK CHOPRA (HUF) WERE FURNISHED. NO SALE/PURCHASE DEEDS WERE PRODUCED OR FURNISHED IN SUP PORT OF THE CLAIM AND NO DETAILS OF CONSTRUCTION CARRIED ON IN TH E CONCERNED PROPERTY WAS ALSO FURNISHED. THERE WERE CERTAIN INCONG RUITY IN THE RECITAL OF SOME OF THE AGREEMENTS. THUS, WE ARE OF THE CONSIDERED PAGE 6 OF 8 ITA NO../DEL/ OPINION THAT RELEVANT FACTS FOR DETERMINING THE ISSUES AT HAND ARE NOT AVAILABLE AT PRESENT. WE COULD EITHER CONFIRM THE A DDITION MADE BY THE ASSESSING OFFICER BY TAKING AN ADVERSE VIEW OR WE COULD GIVE THE ASSESSEE A FURTHER OPPORTUNITY TO PRODUCE/FURNISHED NECE SSARY DETAILS TO SUBSTANTIATE ITS CLAIM. WE THINK IT FIT THAT THE ASSESSEE SHOULD BE GIVEN A FURTHER OPPORTUNITY TO SUBSTANTIATE ITS CLAIM BEFORE THE ASSESSING OFFICER. IN THIS VIEW OF THE MATTER, WE SET ASID E THE ORDERS OF AUTHORITIES BELOW ON THE IMPUGNED ISSUES AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRAMING A DE NOVO ASSESSMENT AFTER GIVING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD . WE MAKE IT CLEAR THAT IF THE ASSESSEE IS UNABLE TO PRODUCE THE EVI DENCE IN SUPPORT OF ITS CLAIM, THE ASSESSING OFFICER WILL BE AT LIBERTY TO TAKE AN ADVERSE VIEW. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOW ED FOR STATISTICAL PURPOSES. 11. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE OF HEARING I.E. 22 ND JUNE, 2011. SD/- SD/- (I.P. BANSAL) (B.K. HAL DAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 22.6.2011. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). PAGE 7 OF 8 ITA NO../DEL/ DATE OF HEARING 22,6,2011 DATE OF DICTATION 22.6.2011 DATE OF ORDER SIGNED BY THE HON'BLE MEMBER. 23.6.2011 DATE OF ORDER SENT TO THE CONCERNED BENCH 23.6.2011 PAGE 8 OF 8 ITA NO../DEL/