Ram Shyam Industries, V. ITO,

ITA 2992/DEL/2008

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69249 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 19-08-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 26-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH
• Assessee Lawyers: O P SAPRA
• Keywords: Opportunity of being heard; Proportionate interest; Additional evidence
• Section: 69C; 143(3); 69; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI R. P. YADAV, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 2992/DEL/2008 ASSESSMENT YEAR: 2005-06 M/S RAM SHYAM INDUSTRIES VS. INCOME TAX OFFICER, KHATIMA ROAD, SITARGANJ, KHATIMA DISTT. U.S. NAGAR (UTTRAKHAND) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. O.P. SAPRA, ADV. RESPONDENT BY : SHRI BHIM SINGH, SR. DR ORDER PER SHAMIM YAHYA, A.M : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER OF CITA DATED 27.4.2007 AND PERTAINS TO ASSESSMENT YEAR 2005-06. THE GROUNDS OF APPEAL READS AS UNDER :- 1) THAT THERE WAS NO JUSTIFICATION ON THE PART OF THE AUTHORITIES BELOW TO REJECT THE ACCOUNT BOOKS OF THE APPELLANT BY INVOKING SECTION 145(3) OF THE I.T. ACT. 2) THAT THE LD. CIT(A) OUGHT TO HAVE DELETED THE ADDITION OF RS. 3,85,334/- ON ACCOUNT OF ALLEGED UNDER-VALUATIO N OF STOCK OF SUPERFINE RICE INSTEAD OF RESTORING IT TO THE FILE OF THE A.O. 3) THAT THE ADDITION OF RS. 1,22,952/- MADE BY TH E LD. AO AND CONFIRMED BY THE LD. CIT(A) IN RESPECT OF BROKEN RI CE IS WHOLLY UNJUSTIFIED AND ILLEGAL BECAUSE THE PERCENTAGE OF B ROKEN RICE SHOWN BY THE APPELLANT WAS ONLY 12.79% AS AGAINST T HE NORMAL PERCENTAGE OF BROKEN RICE BEING UPTO 25%. ITA NO. 2992/DEL/2008 2 4) THAT SIMILARLY, THERE WAS NO JUSTIFICATION ON T HE PART OF THE AO TO MAKE AN ADDITION OF RS. 3,18,698/- FOR SELLIN G THE RICE JUSK ALLEGEDLY AT LOWER RATE THEREBY APPLYING SALE RATE OF RS. 110 PER QUINTAL AND THE LD. CIT(A) WAS NOT JUSTIFIE D IN DIRECTING TO ADOPT SELLING RATE AT RS. 100/- PER QUINTAL AS A GAINST THE AVERAGE SALE RATE OF 67.50 PER QUINTAL DISCLOSED BY THE APPELLANT. 5) THAT THE FOLLOWING ADDITIONS/DISALLOWANCES AS MADE TOWARDS THE ASSESSABLE INCOME OF THE APPELLANT ARE ARBITRAR Y, UNJUST AND ILLEGAL. A) RS. 27,900/- ON ACCOUNT OF UNEXPLAINED EXPENDITU RE IN RESPECT OF BARDANA U/S 69 OF I.T.ACT. B) RS. 28,426/- ON ACCOUNT OF BROKERAGE EXPENSES. BOTH THE ABOVE MENTIONED ADDITIONS HAS BEEN DULY CHALLENGED AND ARGUED BY THE LD. COUNSEL FOR THE AP PELLANT IN THE COURSE OF HEARING OF APPEAL. THE FOLLOWING OBSE RVATIONS MADE BY THE LD. CIT(A) IN PARA 8.2 ARE FACTUALLY IN CORRECT. SINCE THIS POINT HAS NOT BEEN AGITATED UPON BY THE COUNSEL OF THE APPELLANT, THE ADDITION MADE BY THE AO IS HEREB Y CONFIRMED. 6) THAT THE ADDITION OF RS. 77,196/- AS UNEXPLA INED EXPENDITURE U/S 69C OF THE I.T.ACT AS MADE BY THE AO AND CONFIR MED BY THE LD. CIT(A) IS ARBITRARY, UNJUST AND ILLEGAL. 7) THAT THE FOLLOWING FURTHER ADDITIONS/DISALLOWANC ES AS MADE BY THE LD. AO ARE ARBITRARY AND UNJUST: A) RS. 14,999/- ADDITION ON ACCOUNT OF RFC A/C VIDE P ARA 8 OF THE ASSESSMENT ORDER. B) RS. 22,000/- ON ACCOUNT OF PROPORTIONATE INTEREST VIDE PARA 10 OF THE ASSESSMENT ORDER. VARIOUS OBSERVATIONS MADE BY THE AUTHORITIES BELOW IN THEIR RESPECTIVE ORDERS WITH REGARD TO THE ABOVE ADDITIONS/DISALLOWANCES ARE EITHER INCORRECT OR UNT ENABLE. THE AUTHORITIES BELOW HAD EITHER NOT APPRECIATED THE FA CTS STATED DULY SUPPORTED BY DOCUMENTARY EVIDENCE OR HAD IGNOR ED THE SAME. 8) THAT WITHOUT PREJUDICE TO GROUND NOS. 1 TO 7 ABO VE, ADDITIONS/DISALLOWANCES AS MADE ARE VERY EXCESSIVE. 9) THAT WITHOUT PREJUDICE, IF ANY ADDITIONS WERE MA INTAINED BY THE HONBLE TRIBUNAL, THE SAME DESERVED TO BE TELES COPED INTO EACH OTHER. ITA NO. 2992/DEL/2008 3 10) THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, AMEND/MODIFY THE GROUNDS OF APPEAL. 2. IN THIS CASE, THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE IT ACT. IN THE ASSESSMENT ORDER, ASSESSING OFFICER INTER ALIA REJE CTED THE BOOKS OF ACCOUNTS BY INVOKING THE PROVISION OF SECTION 145(3 ) OF THE IT ACT. THE ASSESSING OFFICER WAS OF THE OPINION THAT THERE WER E MANY DEFECTS IN THE BOOKS OF ACCOUNTS AND THE QUANTITATIVE DETAILS. ASS ESSING OFFICER MADE AN ADDITION OF RS. 9,97,505/-. AGAINST THE ABOVE ORDER ASSESSEE APPEAL BEFORE THE LD. CIT. LD. CIT(A) GAVE PART RELIEF TO THE ASS ESSEE AND SUSTAINED PART OF THE ASSESSING OFFICERS ORDER. AGAINST THE ABOVE O RDER, ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSE D THE RECORDS. IN THIS REGARD. WE NOTE THAT ASSESSEE HAS FILED AN APPLICAT ION UNDER RULE 10 OF THE ITAT RULES AS FOLLOWS :- IT IS RESPECTFULLY SUBMITTED THAT AT SR. NO. 10 PAGE 11 OF THE SUPPLEMENTARY PAPER BOOK, THE FOLLOW ING DOCUMENTS ARE THE ADDITIONAL EVIDENCES, WHICH MAY KINDLY BE ENTERTAINED UNDER RULE 10 READ WITH RULE 29 OF THE ITAT RULES : 1. CERTIFICATE DATED 14/09/2011 ISSUED BY ASSESSEE S LOCAL COUNSEL SHRI L.R.CHADHA, ADVOCATE CERTIFYING THAT HE HAD ADVANCED HIS ARGUMENTS ORALLY AGAINST THE TH REE ADDITIONS MENTIONED THEREIN BEFORE CIT(A). IT IS ON LY ON RECEIPT OF THE CIT(A) ORDER THAT THE ASSESSEES COU NSEL HAD COME TO KNOW ABOUT THE OBSERVATIONS MADE BY THE CIT(A) SAYING THAT SUCH GROUND WERE NOT PRESSED. 2. AFFIDAVIT OF IRSHAD NABI, S/O DILSHAD NABI OF SITARGANJ DEPOSING THAT THE TRUCK NO. 778 UP21 WAS OWNED BY H IM AND THAT M/S RAM SHYAM INDUSTRIES HAD STOOD GUARANT OR ONLY FOR THE PAYMENT OF DIESEL PURCHASED BY ME FOR THE SAID TRUCK FROM M/S GURU NANAK SERVICE STATION, SITARGANJ. SUCH AFFIDAVIT COULD NOT BE FILED BEFORE THE LD. ITA NO. 2992/DEL/2008 4 CIT(A) BECAUSE THE ASSESSEE REMAINED UNDER THE BONA - FIDE BELIEF THAT IN VIEW OF THE ARGUMENTS ADVANCED BEFORE THE LD. CIT(A), THE ADDITION WILL BE DELETED. IN VIEW OF THE ABOVE FACTS, THE ABOVE ADDITIONAL EV IDENCE MAY KINDLY BE ENTERTAINED BECAUSE IT ALSO GOES TO T HE ROOT OF THE MATTER AND THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FORM FILING THE SAME EARLIER. 3. LD. COUNSEL OF THE ASSESSEE FURTHER CONTAIND ED THAT IN THIS CASE BOOKS OF ACCOUNTS OF THE ASSESSEE WERE REJECTED BY THE AS SESSING OFFICER BY INVOKING SECTION 145 (3) OF THE IT ACT. HE SUBMITTED THAT IN SUCH A SITUATION ADDITION SHOULD HAVE BEEN MADE BY APPLYING ESTIMATED GP RATES. HOWE VER, HE SUBMITTED THAT ASSESSING OFFICER IN THIS CASE HAS MADE VARIOUS ADD ITIONS BASED ON THE ACCOUNTS AND BOOKS WHICH HAVE BEEN REJECTED. HE FURTHER SU BMITTED THAT GROUND NO. 2 IN THE GROUNDS OF APPEAL IS NOT PRESSED. FURTHER MORE HE SUBMITTED THAT IN THIS CASE BEFORE THE AUTHORITIES BELOW THE MATTER WAS NOT PRO PERLY ARGUED. HE CLAIMED THAT AN OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE BEFORE THE LD. ASSESSING OFFICER TO MAKE PROPER SUBMISSIONS. LD. DR ON THE OTHER HAND, RELIED UPON THE ORDERS OF AUTHORITIES BELLOWS. 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. WE NOTE THAT THERE IS CONSIDERABLE COGENCY IN THE SUBMISSION OF THE ASSES SEE THAT WHEN THE BOOKS OF ACCOUNTS HAVE BEEN REJECTED, SPECIFIC ADDITIONS BAS ED ON THE SAME BOOKS ARE NOT APPROPRIATE. WE FURTHER NOTE THAT ASSESSEE HAS SUBM ITTED THAT SOME OF GROUNDS WHICH THE LD. CITA HAS TREATED AS NOT PRESSED, WHER EIN FACT PRESSED. FURTHER WE NOTE THAT LD. COUNSEL OF THE ASSESSEE HAS PLEADED F OR A FRESH OPPORTUNITY BEFORE THE ASSESSING OFFICER TO CANVASS THE CASE. 5. UPON CAREFULLY CONSIDERATION, WE ARE OF TH E OPINION THAT INTEREST OF JUSTICE IN THIS CASE WILL BE SERVED, IF THE MATTER IS REMITTED TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERING OF AFRESH. ACCORD INGLY, WE REMIT THE ISSUES RAISED ITA NO. 2992/DEL/2008 5 IN THIS APPEAL TO THE FILES OF THE ASSESSING OFFICE R. THE ASSESSING OFFICER SHALL CONSIDER THE SAME DE NOVO. NEEDLESS TO ADD, ASSESS EE SHOULD BE GRANTED PROPER OPPORTUNITY OF BEING HEARD. 11. IN THE RESULT, THIS APPEAL FILED BY THE ASS ESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 AUGUST, 2 013. SD/- SD/- ( R. P.YADAV) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 23 .AUGUST, 2013 B.RUKHAIYAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI