DEBOCK BUILDERS PVT. LTD., Jaipur V. ITO, Jaipur

ITA 305/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1999 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 04-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Additional evidence; Non compliance; Assessment record
• Section: 142(1); 131; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 297/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2011-12 INCOME TAX OFFICER, WARD- 3(5), JAIPUR. CUKE VS. DEBOCK BUILDERS PVT. LTD. 51, LOHIYA COLONY, 200 FT. BYEPASS VAISHALI NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCD 5275 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 305/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2011-12 DEBOCK BUILDERS PVT. LTD. 51, LOHIYA COLONY, 200 FT. BYEPASS VAISHALI NAGAR, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD- 3(5), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCD 5275 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI VIKASH RAJVANSHI (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI P.R. MEENA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 06/02/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 19/03/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER DATED 25.01.2016 OF CIT (A), JAIPUR FOR THE ASSESSMENT YE AR 2011-12. ITA NO. 297& 305/JP/2016 ITO VS. DEBOCK BUILDERS PVT. LTD. 2 2. THE ASSESSEE IS A COMPANY AND ENGAGED IN THE BUS INESS OF LAND PURCHASE, LAND DEVELOPMENT AND SALE OF PLOTS. THE A SSESSEE FILED HIS RETURN OF INCOME ON 31.03.2012 DECLARING LOSS OF RS . 7,39,003/-. THE AO ISSUED NOTICE U/S 143(2) OF THE ACT FOR SCRUTINY ASSESSMENT AS WELL AS NOTICE U/S 142(1) ASKING THE ASSESSEE TO FURNISH VARIOUS RECORDS AND DOCUMENTS. THE ASSESSEE FAILED TO COMPLY WITH THE N OTICES ISSUED U/S 142(1). SUBSEQUENTLY THE AO ISSUED SHOW CAUSE NOTIC E DATED 06.05.2013 ASKING THE ASSESSEE TO EXPLAIN WHY THE P ENALTY SHOULD NOT BE LEVIED U/S 271(1)(B) OF THE ACT. SINCE, THERE WA S NO COMPLIANCE DESPITE PENALTY U/S 271(1)(B) WAS LEVIED THE AO FIN ALLY ISSUED A SHOW CAUSE NOTICE U/S 144 ON 16.12.2013. THE AO FRAMED A SSESSMENT U/S 144 OF THE ACT WHEREBY THE INCOME OF THE ASSESSEE W AS ASSESSED AT RS. 3,31,24,884/- AS AGAINST LOSS OF RS. 7.39 LACS. THU S, THE AO MADE CERTAIN DISALLOWANCES AS WELL AS ADDITIONS INCLUDIN G THE ADDITION ON ACCOUNT OF UNRECORDED SALE TO THE TUNE OF RS. 1,50, 49,690/-, ADDITION ON ACCOUNT OF CASH DEPOSIT OF RS. 46,17,180/-, ADDITIO N ON ACCOUNT OF UNSECURED LOAN OF RS. 1,28,48,704/-. THE ASSESSEE C HALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A) WHO HAD GRAN TED PART RELIEF TO THE ASSESSEE IN RESPECT OF UNRECORDED SALES OF RS. 1,02,04,233/ OUT OF THE TOTAL ADDITION OF RS. 1,50,49,690/- MADE BY THE AO. THE OTHER ITA NO. 297& 305/JP/2016 ITO VS. DEBOCK BUILDERS PVT. LTD. 3 ADDITION/DISALLOWANCE MADE BY THE AO WERE CONFIRMED BY THE LD. CIT(A) EXCEPT SOME PARTIAL RELIEF. THUS BOTH ASSESSEE AS W ELL AS REVENUE ARE AGGRIEVED BY THE IMPUGNED ORDER OF THE LD. CIT(A) A ND FILED THESE CROSS APPEALS. 3. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF OF RS. 1,02,04,233/- OUT OF ADDITION OF RS. 1,50,49,690/- MADE BY THE AO ON ACCOUNT OF UNRECORDED SALES ON THE BASIS OF THE EVIDENCES WHIC H WERE NOT PRODUCED BEFORE THE AO DURING THE COURSE OF ASSESSM ENT PROCEEDINGS DESPITE PROVIDING VARIOUS OPPORTUNITIES BY THE A.O. 2. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EV IDENCES IGNORING THE FACT THAT NONE OF THE MANDATORY CIRCUMSTANCES M ENTIONED IN RULE 46A OF I.T. RULES 1962 WAS FULFILLED IN HIS CA SE. 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- GROUND NO. 1. THE LD. A.O. HAS ERRED IN LAW AS WELL AS IN FACT IN WRONGLY MAKING ASSESSMENT U/S 144 INSPITE OF THAT ALL INFORMATION WERE DULY REFLECTED IN THE AUDITED FINANCIAL STATEMENTS OF TH E ASSESSEE COMPANY AND LD. CIT(A) ALSO WRONGLY HELD THAT AO WA S JUSTIFIED IN MAKING ASSESSMENT U/S 144 OF THE ACT. GROUND NO. 2 THE LD. A.O. HAS ERRED IN LAW AS WELL AS IN FACT IN DISALLOWING RS. 1,50,49,690/-ON ACCOUNT OF WRONGLY CONSIDERING SALES OF RS. 2 CRORES OVER AND ABOVE DISCLOSED SALE OF RS. 4 9,05,310/- .THE AMOUNT RS. 2 CRORES IS DULY DISCLOSED AS SECUR ITY DEPOSIT ITA NO. 297& 305/JP/2016 ITO VS. DEBOCK BUILDERS PVT. LTD. 4 RECEIVED FROM THE PARTY AND NOT FOR SALE IN THE CUR RENT LIABILITIES. HENCE, LD. A.O. WRONGLY DISALLOWED THE ALREADY DISCLOSED SECURITY DEPOSIT RECEIVED AND CIT (A) DEL ETED THE ADDITION OF RS. 1,02,04,233/-BUT WRONGLY SUSTAINED THE ADDITION OF RS. 48,45,457/- GROUND NO. 3. THE LD. A.O. HAS ERRED IN LAW AS WELL AS IN FACT IN WRONGLY DISALLOWING THE UNSECURED LOANS OF RS. 1,28,48,704/ - WHICH IS DULY DISCLOSED IN THE BALANCE SHEET AND DULY CONFIR MED BY THE UNSECURED CREDITORS. THE UNSECURED LOAN WAS GIVEN B Y THE DIRECTOR OF THE COMPANY MR. MUKESH KUMAR MAHAWAR AN D WAS DULY CONFIRMED BY HIM. LD. CIT(A) GAVE MARGINAL REL IEF OF RS. 4,00,000/- ONLY AND SUSTAINED ADDITION OF RS. 1,24, 80,704/-. GROUND NO. 4. THE LD. A.O. HAS ERRED IN LAW AS WELL AS IN FACT IN WRONGLY DISALLOWING THE DEPRECIATION OF RS. 4,32,490/- ON T HE ADDITION TO THE VEHICLE WHICH IS DULY DISCLOSED IN THE AUDIT ED BALANCE SHEET OF THE COMPANY. LD. CIT(A) HAS NOT CONSIDERED THE REMAND REPORT WHILE MAKING THE ERRONEOUS ADDITIONS. GROUND NO, 5. THE LD. A.O. HAS ERRED IN LAW AS WELL AS IN FACT IN WRONGLY MAKING ADDITION OF RS. 46,17,180/- ON ACCOUNT OF CASH DEPO SITS IN THE CURRENT ACCOUNT, WHICH IS THE GENUINE CASH-IN-HAND IN CONFIRMATION WITH THE CASH BOOK OF THE ASSESSEE COM PANY. COPY OF CASH BOOK, BANK STATEMENTS WAS ALSO DULY SUBMITT ED BY THE ASSESSE COMPANY. LD. CIT(A) DID NOT CONSIDER THE SA ME AND SUSTAINED THE ADDITION OF RS. 46,17,180/-MADE BY AO . GROUND NO. 6. THE LD. A.O. HAS ERRED IN LAW AS WELL AS IN FACT IN WRONGLY DISALLOWING RS.2,09,347/- ON ACCOUNT OF PAYMENT MAD E FOR ITA NO. 297& 305/JP/2016 ITO VS. DEBOCK BUILDERS PVT. LTD. 5 ADVERTISEMENT AND BROKERAGE U/S 40(A)(IA) FOR NON-D EPOSIT OF TDS, INSPITE OF THAT THE ABOVE AMOUNT WAS DULY DISC LOSED BY THE RECIPIENT IN THEIR INCOME TAX RETURN FOR RELEVA NT ASSESSMENT YEAR. CIT (A) DID NOT CONSIDER THE SUBMI TTED AND REJECTED THIS GROUND OF APPEAL GROUND NO. 7. THE LD. A.O. HAS ERRED IN LAW AS WELL AS IN FACT IN WRONGLY MAKING ADDITION OF 10 0 /0 OF RS. 70,64,773/- OF DEVELOPMENT EXPENSES AMOUNTING RS. 7,06,477/-, WHEREAS ALL EXPE NSES WERE CAPITALIZED AND INCLUDED IN CLOSING STOCK AND NOT CHARGED AS EXPENDITURE IN P&L ACCOUNT. LD. AO DID N OT MENTION ANYTHING IN THE REMAND REPORT AND DID NOT P AY ANY ATTENTION TO THE FACTS LD. CIT(A) ALSO DID NOT CONS IDER THE SUBMISSION. GROUND NO. 8 THE APPELLANT PRAYS YOU HONOR TO ADD, AMEND OR ALTE R ALL OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFORE THE D ATE OF HEARING. 5. GROUND NO. 1 OF THE ASSESSEES APPEAL IS REGARDI NG EX-PARTE ASSESSMENT MADE BY THE AO U/S 144 OF THE ACT. THE L D. AR OF THE ASSESSEE HAS SUBMITTED THAT THE MAIN DIRECTOR OF TH E ASSESSEE COMPANY SHRI MUKESH KUMAR MAHAWAR WAS SUFFERING FROM SEVERE CHEST PAIN AND CONTINUOUS PAIN IN HIS ABDOMEN SINCE LAST ONE YEAR. FURTHER, HE WAS ALSO FACING POLICE ENQUIRY AND CRIMINAL PROCEEDING AND ONLY WHEN THE COURT HAS FINALLY GIVEN RELIEF IN FAVOUR OF SHRI MU KESH KUMAR MAHAWAR TILL THEN THE ASSESSEE COMPANY COULD NOT CONDUCT IT S DAY TO DAY ITA NO. 297& 305/JP/2016 ITO VS. DEBOCK BUILDERS PVT. LTD. 6 BUSINESS AFFAIRS AND ALSO SUFFERED SUCH TRANSACTION LOSS DUE TO INCONVENIENCE AND MENTAL TRAUMA FACE BY THE DIRECTO R OF THE COMPANY. THUS, DUE TO THE ILL HEALTH AS WELL AS OTHER INCONV ENIENCE AND SUFFERING OF THE DIRECTOR THE ASSESSEE WAS NOT ABLE TO REPRES ENT BEFORE THE AO. THUS, THE LD. AR HAS SUBMITTED THAT WHEN THE ASSESS EE HAS EXPLAINED THE SUFFICIENT CAUSE FOR NOT APPEARING BEFORE THE A O THEN, THE LD. CIT(A) WOULD HAVE SET ASIDE THE EX-PARTE ORDER. 6. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT THE ASSESSING OFFICER HAS GIVEN MORE SUFFICIENT OPPORTUNITIES AND DESPITE VARIOUS SHOW CAUSE NOTICES AND LEVY OF PENALTY U/S 271(1)(B ) OF THE ACT THE ASSESSEE DID NOT APPEAR AND COMPLY WITH THE VARIOUS NOTICES ISSUED BY THE AO. HENCE, THE AO WAS LEFT WITH NO OPTION BUT T O COMPLETE THE ASSESSMENT EX-PARTE U/S 144 OF THE ACT. HE HAS FURT HER CONTENDED THAT THE LD. CIT(A) HAS ENTERTAINED ADDITIONAL EVIDENCE AND THEREFORE, THE GRIEVANCE OF THE ASSESSEE WAS REDRESSED BY THE LD. CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD WE NOTE THAT THE ASSESSEE FILED ADDITIONAL EVIDENCES BEFORE THE LD. CIT(A) WHICH WAS FORWARDED TO THE AO ON 16.12.2015 FOR OBTAINING ITS COMMENTS ON THE SUBMISSIONS AND ADDIT IONAL EVIDENCES FILED BY THE ASSESSEE. THE AO FILED ITS REMAND REPO RT ON 13.12.2015 ITA NO. 297& 305/JP/2016 ITO VS. DEBOCK BUILDERS PVT. LTD. 7 WHICH HAS BEEN REPRODUCED BY THE LD. CIT(A) IN THE IMPUGNED ORDER. THE AO HAS STATED IN THE REMAND REPORT THAT THE ASS ESSEE DID NOT COMPLY WITH THE REQUISITION AND SHOW CAUSE NOTICE I SSUED BY THE AO DESPITE SUFFICIENT OPPORTUNITIES WERE GIVEN AND SUM MONS ISSUED TO THE DIRECTOR OF THE ASSESSEE U/S 131. THE RELEVANT PART OF THE REMAND REPORT OF THE AO AS UNDER:- STILL NOT COMPLIANCED. THEREAFTER SOME MORE OPPORTUNITIES WERE GIVEN TO TH E ASSESSEE VIDE NO.1849 DATED 31.12.2013, ON 28.01.20 14 AND SUMMON WAS ALSO ISSUED TO SHRI MUKESH KUMAR MAHAWAR U/S 131 AND LAST FINAL OPPORTUNITY WAS GIVE VIDE LETTER NO.2174 DATED 11.02.2014 BUT NOT COMPLIANCED AT ANY TIME. IT MEANS THE SEVERAL OPPORTUNITIES WERE AVAILABLE B EFORE THE ASSESSEE BEFORE A LONG TIME AGO OF THE TREATMENT/IL LNESS. IN THE LAST THE ORDER U/S 14 4 / 1 43(2) WAS PASSED ON 10.03.2014 BY THE A.O IN CHAIR ITO WARD 2(2)JAIPUR. IT ALSO MEANS THAT THERE SHOULD BE ON OFFICER FOR O NE CASE TO PASS AN ORDER. NO WAIT CAN BE POSSIBLE FOR THE LAST DAY OF THE CONCERNED YEAR IN THE LIMITATION MATTER. ALSO NO CO NFLICT IS REVEALED BETWEEN THE A/R OF THE ASSESSEE AND THE A/ R AS STATED WRONGLY. IN SUCH CIRCUMSTANCES THE ANOTHER DIRECTOR MAY ATTEND THE CASE WITH ANOTHER A/R. LOOKING THE FACTS AND THE EVIDENCES AS ARE PLACED BEFORE YOUR GOODSELF AS AN ADDITIONAL EVIDENCES ARE NOT COVERED UNDER THE PROVISIONS OF RULE 46A OF THE I.T. ACT 19 61 AS ARE NOT PERTAINED TO THE YEAR UNDER CONSIDERATION WELL AS T HOSE ARE ITA NO. 297& 305/JP/2016 ITO VS. DEBOCK BUILDERS PVT. LTD. 8 RELATED TO THE A.Y 2008-09 FOR THE ASSESSEE. REST O F THE DETAILS/INFORMATION WERE ALREADY BY THE A.O IN CHAI R BEFORE PASSING THE ORDER U/S 144 WELL BY COMPARING THE DETAILS/INFORMATION OF THE AUDIT REPORT AND THE ITR OF THE ASSESSEE. THUS AFTER GOING THROUGH ASSESSMENT RECORD AS WELL AS MATERIAL FACTS AND THE SUBMISSIONS PRODUCED BY THE ASSESSEE AT THIS STAGE, NO REASONS OBSERVED FOR CONSIDERATION /INVESTIGATION FURTHER IN THE MATTER AS WERE CONSIDERED ALREADY AT THE TIME OF ASSESSMENT PROCEE DINGS NOT BEYOND OF AUDIT REPORT AND THE /TR FILED B THE ASSESSEE , HENCE I RELY UPON THE FINDINGS OF THE A.O IN CHAI R AS MENTIONED IN HIS ORDER. THEREFORE, I HAVE ALSO THE SAME OPINION ON THE ADDITIONS MADE BY THE A.0 IN CHAIR ITO WARD 2(2) JAIPUR BY PASSING THE ORDER U/S 144 ON 10.03.2 014. NO FURTHER INQUIRY IS REMAINED BALANCE TO BE CONDUCTE D NOW AS ALL THE ISSUES AND MATTER OF FACTS HAVE ALREADY BEE N DISCUSSED AND WELL DETERMINED IN THE SAID ORDER EAR LIER. THUS, IT IS CLEAR THAT THE ASSESSING OFFICER RAISED THE OBJECTIONS AGAINST THE ADDITIONAL EVIDENCE PROPOSE TO BE FILED BY THE ASSESSEE AND SUBMITTED THAT THE ASSESSEE HAS AGAIN FAILED TO COM PLY WITH THE VARIOUS NOTICES AND SUMMONS ISSUED BY THE AO. THE LD. CIT(A ) AFTER CONSIDERATION THE REMAND REPORT HAS HELD THAT THE S UFFICIENT OPPORTUNITIES WERE PROVIDED BY THE AO DURING THE AS SESSMENT PROCEEDINGS THEREFORE, THE AO WAS JUSTIFIED IN MAKI NG THE ASSESSMENT U/S 144 OF THE ACT. WE DO CONCUR WITH THE FINDING O F THE LD. CIT(A) ON THE ISSUE THAT THE ASSESSING OFFICER PROVIDED MORE SUFFICIENT ITA NO. 297& 305/JP/2016 ITO VS. DEBOCK BUILDERS PVT. LTD. 9 OPPORTUNITIES TO THE ASSESSEE AND WAS LEFT WITH NO OPTION BUT TO MAKE ASSESSMENT U/S 144 OF THE ACT. HENCE, WE DO NOT FIN D ANY ERROR OR ILLEGALITY IN THE FINDING OF THE LD. CIT(A) QUASH T HIS ISSUE. 8. HOWEVER, WE FIND THAT THE LD. CIT(A) WHILE DECID ING THE ISSUE REGARDING THE ADDITION/DISALLOWANCE MADE BY THE AO HAS CONSIDERED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE THOUGH TH E SAID EVIDENCE WERE NOT EXAMINED BY THE AO DUE TO NON COMPLIANCE OF THE ASSESSEE TO THE NOTICES ISSUED BY THE AO EVEN IN THE REMAND PROCEED INGS. THUS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN BOTH THE R EVENUE AS WELL AS THE ASSESSEE ARE AGGRIEVED BY THE IMPUGNED ORDER OF THE LD. CIT(A) AND THE REVENUE HAS RAISED A SPECIFIC GROUND THAT LD. C IT(A) HAS CONSIDERED THE ADDITIONAL EVIDENCE WITHOUT GIVING AN OPPORTUNI TY TO THE AO AND THEREFORE, THERE IS A VIOLATION OF RULE 46A OF THE I.T. RULES 1962 THEN WITHOUT EXPRESSING ANY VIEW ON THE MERIT OF THE OTH ER ISSUES WE SET ASIDE THE MATTER TO THE RECORD OF THE ASSESSING OFF ICER FOR DECIDING THE SAME AFTER ALLOWING AN OPPORTUNITY TO ASSESSEE TO P RODUCE THE RELEVANT EVIDENCE AND DETAILS AND ALSO TO COMPLY WITH THE NO TICES TO BE ISSUED BY THE AO FOR FURTHER ENQUIRY AND INVESTIGATION OF THE MATTER. HENCE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND R EMIT THE MATTER TO THE ITA NO. 297& 305/JP/2016 ITO VS. DEBOCK BUILDERS PVT. LTD. 10 RECORD OF THE ASSESSING OFFICER FOR ADJUDICATION OF THE SAME AFTER CONSIDERING THE EVIDENCE AND OTHER DETAILS TO BE FI LED BY THE ASSESSEE. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19/03/2018 SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19/03/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ITO, WARD-3(5),JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- DEBOCK BUILDERS PVT. LTD., JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 297 & 305/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR