Bina Ramani, V. ITO, Ward-23(3),

ITA 3002/DEL/2004

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3425 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 16-06-2010
• Assessment Year: 1998-1999
• Appeal Filed On: 22-06-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SAHOTA
• Section: 133A; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E : NEW DELHI BEFORE SHRI C.L.SETHI, JM AND SHRI R.C.SHARMA, AM ITA NO.983/DEL/2005 & 3002/DEL/2004 ASSESSMENT YEARS : 2001-02 & 1998-99 MS.BINA RAMANI, H-5/6, MEHRAULI ROAD, NEW DELHI. VS. DY.COMMISSIONER OF INCOME TAX, CIRCLE-22(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAHUL KHARE, CA. RESPONDENT BY : SHRI G.S.SAHOTA, SR.DR. ORDER PER R.C.SHARMA, AM : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDER OF CIT(A) FOR THE AY 1998-99 AND 2001-02. 2. IN THE AY 1998-99, AO PASSED ORDER U/S 144, WHER EIN RETURNED INCOME OF RS.39,890/- WAS ASSESSED AT RS.11,48,231/-. FACTS IN BRIEF ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN CASE OF M/S INT EGRATION 2020 FOR THE AY 1998-99, WHEREIN ASSESSEE WAS A PARTNER, IT CAME TO THE NOTICE OF THE AO THAT ASSESSEE HAD ACQUIRED SOME PROPERTY AT MEHRAULI AND INVESTED HUGE AMOUNT IN THE FIRM AND SHOWED HER INCOME IN LOW SIDE. HENCE, NOT ICE WAS ISSUED U/S 148 AND PROCEEDINGS WERE STARTED TO REASSESS THE INCOME. F ROM THE RECORD, IT ALSO APPEARS THAT ASSESSEE OWNS A BOUTIQUE UNDER THE NAME AND ST YLE OF M/S ONCE UPON A TIME AND IS ALSO HAVING 50% SHARE IN PARTNERSHIP FIRM M/ S INTEGRATION 2020. A SURVEY U/S 133A WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 13.12.2000 AND SUBSEQUENTLY, SOME DOCUMENTS ETC. WERE IMPOUNDE D. THE AO HAS MENTIONED THAT THE ASSESSEE WAS GIVEN REPEATED OPPORTUNITY TO PRODUCE THE BOOKS OF ACCOUNT AND OTHER DETAILS AS IN RESPONSE TO WHICH, INCOMPLE TE AND CONTRADICTORY INFORMATION WERE FURNISHED. DURING THE SURVEY OPER ATION, DESIGNER DRESSES WORTH RS.11,91,838/- LAKHS WERE FOUND IN THE BUSINESS PRE MISES OF THE ASSESSEE. APART ITA-983/D/2005 & 3002/D/2004 2 FROM THIS, FINISHED GOODS AND RAW MATERIAL WORTH RS .36,320/- AND RS.56,870/- WERE ALSO FOUND AT THE ASSESSEES WORKSHOP. THE AS SESSEE HAD FURNISHED TRADING ACCOUNT FOR THE PERIOD 1.4.2000 TO 12.12.2000 AFTER INCORPORATING ALL BILLS AVAILABLE WITH HER AND THOSE IN POSSESSION OF THE DEPARTMENT DISCLOSING CLOSING STOCK ON THE EVEN DATE AT RS.6,20,996/-. THE AO HAS POINTED OUT THAT DURING SURVEY OPERATION STOCK AMOUNTING TO RS.12,85,028/- (I.E. 11,91,838/- OF DESIGNER DRESSES, RS.36,320/- OF FINISHED GOODS AND RAW MATERIAL WORT H RS.56,870/-) WERE FOUND. THE AO REQUIRED THE ASSESSEE TO JUSTIFY AS TO WHY T HE DIFFERENCE AMOUNT TO RS.6,64,032/- MAY NOT BE TREATED AS UNEXPLAINED INV ESTMENT. IN HER REPLY WHICH IS REPRODUCED IN THE ASSESSMENT ORDER, THE ASSESSEE ST ATED THAT AT THE TIME OF SURVEY OPERATION, THE BOOKS OF ACCOUNT WERE INCOMPLETE AND THE BILLS OF PURCHASES WERE RECEIVED LATE AND THE SALES WERE ENTERED LATER. TH E ASSESSEE FURTHER CONTENDED THAT THE PAYMENTS WERE MADE THROUGH CHEQUE AND HENCE IT CANNOT BE TAKEN AS THE BASIS OF MAKING ADDITION. HOWEVER, THE AO WAS NOT CONVIN CED WITH THE REPLY AS THE BOOKS OF ACCOUNT WERE NOT FOUND TO BE RELIABLE AND THE STOCK HAD BEEN PARTIALLY ACCOUNTED FOR. ACCORDINGLY, THE AO MADE ADDITION O F RS.6,64,032/- U/S 69 BEING THE DIFFERENCE IN THE VALUE OF CLOSING STOCK FOUND DURING SURVEY. 3. IN THE ASSESSMENT FRAMED U/S 144 FOR AY 1998-99, VARIOUS ADDITIONS WERE MADE ON ACCOUNT OF CAPITAL INTRODUCED BY THE ASSESS EE IN ITS FIRM M/S INTEGRATION 2020, ASSETS PURCHASED WORTH RS.2,15,131/- AND CASH IN HAND AND CASH AT BANK FOUND AT RS.2,05,370/- WHICH WERE TREATED AS UNEXPL AINED INCOME ETC. 4. BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTI ON OF THE AO FOR PASSING ORDER U/S 144. CONTENTION OF THE ASSESSEE WAS THAT NO PROPER OPPORTUNITY WAS GIVEN EITHER BY THE AO OR BY THE CIT(A). AS PER LE ARNED AR, THE HEARING BEFORE THE CIT(A) WAS FIXED ON 29.3.2004 AND WITHOUT CONSI DERING THE DOCUMENTS FILED BEFORE HIM, HE PASSED ORDER ON 31.3.2004. IN THE A PPELLATE ORDER, CIT(A) OBSERVED THAT ASSESSMENT PROCEEDINGS WERE TAKEN UP THROUGH H EARINGS FIXED AT SHORT INTERVALS. HE OBSERVED THAT THE FIRST DATE FIXED W AS 5.3.2002 AND THE ASSESSMENT ITA-983/D/2005 & 3002/D/2004 3 WAS COMPLETED ON 26.3.2002, AFTER HEARINGS FIXED AT SHORT NOTICES. IT IS ALSO SEEN FROM THE LETTERS WRITTEN BY THE ASSESSEE TO THE AO, DURING THE ASSESSMENT PROCEEDINGS, THAT IT HAD CONSISTENTLY STATED THAT I TS BOOKS OF ACCOUNT WERE IMPOUNDED, AND ALSO THAT ITS ACCOUNTS WERE IN THE F LOPPY WHICH DID NOT OPERATE. THERE SHOULD NOT HAVE BEEN ANY DISPUTE OVER THE IMP OUNDED MATERIAL AS THE SAME COULD HAVE BEEN CHECKED FROM THE ORDERS DATED 14.12 .2000 AND 15.12.2000, U/S 131(3). FURTHER, WITH THE SUBMISSIONS OF THE ASSES SEE DATED 7.10.2002 REFERRED TO THE AO FOR COMMENTS, COPIES OF ITS VARIOUS LETTERS TO THE AO AND TO THE CIT, COPIES OF THE ORDERS U/S 131(3) DATED 14.12.2000 AND 15.12 .2000, VARIOUS COPIES OF ACCOUNTS ETC. AND AFFIDAVIT FROM SHRI RAHUL KHARE, ADVOCATE, HAD BEEN ENCLOSED WHICH INCLUDED THE LETTER DATED 28.3.2002 WHICH WAS A REPLY TO THE VARIOUS QUERIES RAISED BY THE AO BUT WHICH COULD NOT BE FILED AS TH E ASSESSMENT HAD ALREADY BEEN COMPLETED. THESE DOCUMENTS HAVE BEEN FILED TO SHOW THAT THE ASSESSEE WAS APPEARING OFF AND ON AND HAD BEEN REQUESTING THE AO TO PROVIDE A COPY OF THE IMPOUNDED ACCOUNTS CONTAINED IN THE FLOPPY BUT WHIC H WERE NOT PROVIDED SINCE THE FLOPPY DID NOT OPERATE. SINCE THESE WERE NOT P ROVIDED THE ASSESSEE WAS TRYING TO PREPARE ITS ACCOUNTS ON THE BASIS OF THE BANK ST ATEMENTS AND CHEQUE BOOKS, BUT WHEN THE ASSESSEE APPEARED ON 28.3.2002, HE WAS INF ORMED THAT THE ASSESSMENT HAD ALREADY BEEN COMPLETED. THE AO HAS NOT OBJECTE D TO THE ADMISSION OF EVIDENCE AS ENCLOSED WITH THE PURPORTED LETTER OF 2 8.3.2002 FILED IN APPEAL. HOWEVER, THE CIT(A) CONFIRMED THE ACTION OF THE AO FOR PASSING EX-PARTE ORDER U/S 144. SIMILARLY, ADDITIONS WERE CONFIRMED BY TH E CIT(A) AND ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT REASSESSMEN T PROCEEDINGS FOR THE AY 1998- 99 WERE BASICALLY INITIATED ON THE BASIS OF SOME IN FORMATION FOUND DURING THE COURSE OF ASSESSMENT OF M/S INTEGRATION 2020, WHERE IN ASSESSEE WAS A PARTNER. LEARNED AR PLACED ON RECORD THE ORDER OF THE TRIBUN AL IN CASE OF M/S INTEGRATION 2020 FOR THE AY 1997-98, ORDER DATED 27.11.2006, WH EREIN SIMILAR ORDER FRAMED ITA-983/D/2005 & 3002/D/2004 4 U/S 144 AND WHICH WAS CONFIRMED BY THE CIT(A) WAS S ET ASIDE AND MATTER WAS RESTORED TO THE FILE OF THE AO WITH A DIRECTION TO COMPLETE THE ASSESSMENT DE-NOVO AFTER AFFORDING SUFFICIENT OPPORTUNITY TO THE ASSES SEE OF BEING HEARD. IT WAS ALSO CATEGORICALLY STATED BY THE TRIBUNAL THAT ASSESSEE SHALL COMPLY WITH THE NOTICES ISSUED BY THE AO AND SHALL ALSO RENDER ALL THE NECE SSARY COOPERATION TO THE AO FOR COMPLETING THE FRESH ASSESSMENTS IN ACCORDANCE WITH LAW. WE ALSO FOUND THAT IN BOTH THE YEARS UNDER CONSIDERATION, DETAILED PAPER BOOK WAS FILED BY THE ASSESSEE BEFORE THE CIT(A) WHICH HAS NOT BEEN CONSIDERED NOR ANY REMAND REPORT WAS CALLED ON THOSE DOCUMENTS. ACCORDINGLY, WE FOLLOW THE ORDER OF THE TRIBUNAL IN CASE OF M/S INTEGRATION 2020, WHEREIN ASSESSEE WAS A PARTNER AND RESTORE BOTH THE APPEALS TO THE FILE OF THE AO FOR MAKING ASSESSMENT AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. BOTH THE LEARNED AR A ND LEARNED DR AGREED FOR SUCH RESTORATION. ACCORDINGLY, IN BOTH THE YEARS, MATTE R IS RESTORED BACK TO THE FILE OF THE AO FOR DECIDING AFRESH. 6. IN THE RESULT, THE APPEALS FOR BOTH THE YEARS AR E ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH JULY, 2010. SD/- SD/- (C.L.SETHI) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30.07.2010. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR ITA-983/D/2005 & 3002/D/2004 5