ACIT, New Delhi V. Sh. Bhopal Singh Tomar, Delhi

ITA 3071/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0353 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-02-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 18-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Keywords: Rejection of books of accounts; Unexplained investment; Set aside

Judgement Text

I.T.A. NO.3071 /DEL/10 1/6 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A NEW DELHI) BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.3071 /DEL/2010 ASSESSMENT YEAR : 2006-07 ACIT, SHRI BHOPAL SINGH TOMAR, CIRCLE-34 (1), C-12/460, YAMUNA VIHAR, NEW DELHI. V. DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.ABWPT ABWPT ABWPT ABWPT- -- -4479 4479 4479 4479- -- -K KK K APPELLANT BY : MS.ANUSHA KHURANA, SR. DR. RESPONDENT BY : SHRI RAKESH KUMAR, C.A. ORDER PER A.K. GARODIA, AM: THIS IS REVENUE'S APPEAL FILED AGAINST THE ORDER OF LD CIT(A)- XXVII, NEW DELHI DATED 10.3.2010 FOR ASSESSMENT YEAR 2 006-07. 2. GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, L D CIT(A) HAS ERRED IN RESTRICTING THE QUANTUM OF ADDITION TO `,3,75,000/- MADE BY THE ASSESSING OFFICER AT `.14,82,300/- ON ACCOU NT OF UNEXPLAINED INVESTMENT PROPERTY NO.B.372, BLOCK-B, G ALI NO.16, DELHI. . I.T.A. NO.3071/DEL/10 2/6 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE LD CIT(A) HAS ERRED IN REDUCING THE ADDITION TO `.8,77, 975/- AND `.50,014/- RESPECTIVELY MADE BY THE ASSESSING OFFICER ON THE ACCOUNT OF GROSS PROFIT EARNED BY THE ASSESSEE ON UNACCO UNTED TURNOVER OF TWO CONCERNS AT `.42,45,574/- AND `.15,1 8,015/- RESPECTIVELY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE LD CIT(A) HAS ERRED IN REDUCING THE QUANTUM OF ADDITION TO `.5,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT O F UNDISCLOSED INVESTMENT IN CAPITAL ACCOUNT AT `.35,50,0 00/-. 4.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, TH E LD CIT(A) HAS ERRED IN REDUCING THE QUANTUM OF ADDITION TO `.8,37,200/- MADE BY THE ASSESSING OFFICER ON ACCOUNT O F UNEXPLAINED INVESTMENT IN FIXED ASSETS AT `.14,48,900/ -. 3. AT THE VERY OUT SET, IT WAS SUBMITTED BY LD DR OF THE REVENUE THAT NO PROPER COMPLIANCE WAS MADE BY THE ASSESSEE BEFOR E THE ASSESSING OFFICER AND IT IS ALSO SUBMITTED THAT THE ASSESSIN G OFFICER HAS MADE VARIOUS ADDITIONS ON THE BASIS OF TWO SETS OF AUDITE D BALANCE SHEET OUT OF WHICH ONE WAS FILED WITH THE DEPARTMENT ALONG WITH RETURN OF INCOME AND THE OTHER WAS SUBMITTED TO THE BANK. I T IS SUBMITTED THAT THE ASSESSING OFFICER HAS REJECTED THE BOOKS OF ACCO UNTS OF THE ASSESSEE FOR THIS REASON AND MADE ADDITIONS ON THE BASIS OF THESE BALANCE SHEETS BUT LD CIT(A) HAS ALLOWED VARIOUS RELIEF TO THE ASSESSEE AND ALLOWED DEDUCTION ON ACCOUNT OF EXPENSES WHICH WE RE DEBITED BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS AS PER THAT AUDITED BALANCE SHEET WHICH WAS SUBMITTED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME. IT IS SUBMITTED BY HIM THAT SUCH EXPENSES CANNOT BE ALLOWED UNLESS THE ASSESSEE PRODUCES EVIDENCES BEFORE THE ASSESSING OF FICER . I.T.A. NO.3071/DEL/10 3/6 REGARDING INCURRING OF EXPENSES FOR THE PURPOSE OF BUSI NESS OF THE ASSESSEE. IT IS ALSO SUBMITTED THAT CONSIDERING ALL THESE F ACTS, THE ORDER OF LD CIT(A) CANNOT BE SUSTAINED AND EITHER THE ORDER OF THE ASSESSING OFFICER SHOULD BE APPROVED OR THE MATTER MAY BE RESTO RED BACK TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH DECISION. LD AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD CIT(A). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GONE TH ROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE IS HAVING TWO PROPRIETORSHIP CONCERNS I.E. M/S RAJSHREE PRAKASHAN AN D M/S RAJ PRINTERS. AS PER AUDITED ACCOUNTS SUBMITTED WITH THE I NCOME TAX RETURN, THE TURNOVER OF M/S RAJSHREE PRAKASHAN WAS AT ` .106.37 LAKHS WHEREAS THE TURNOVER OF THE SAME CONCERN AS PER THE BA LANCE SHEET SUBMITTED TO BANK WAS `.620.09 LAKHS. THE GROSS PROFIT AS PER FIRST SET OF AUDITED ACCOUNTS SUBMITTED WITH I.T. RETURN WAS `. 33.67 LAKHS WHEREAS THE SAME AS PER SECOND SET OFF OF AUDITED ACCOUN TS SUBMITTED WITH THE BANK WAS `.42.45 LAKHS ALTHOUGH THE NET PROF IT REPORTED BY THE ASSESSEE IN BOTH THE AUDITED ACCOUNTS WAS SAME I.E. FOR ` .2,47,456/-. SIMILARLY, IN THE CASE OF OTHER CONCERN M/S RAJ PRIN TERS, THE TURNOVER AS PER THE AUDITED ACCOUNTS SUBMITTED WITH THE INCOME TA X DEPARTMENT WAS `.19.70 LAKHS AND THE SAME AS PER THE BALANCE SHEET SUBMITTED WITH THE BANK WAS `.97.73 LAKHS. THE GROSS PROFIT AS PER THE FIRST SET OFF OF AUDITED BALANCE SHEET SUBMITTED WITH THE I.T DEPAR TMENT WAS `.16.68 LAKHS WHEREAS THE SAME AS PER THE SECOND SET OF A UDITED BALANCE SUBMITTED WITH THE BANK WAS `.15.18 LAKHS. HO WEVER, THE NET PROFIT AS PER BOTH BALANCE SHEET WAS SAME I.E. `.208,0 21/-. THE ASSESSING OFFICER MADE ADDITIONS BY ADOPTING THE GROSS PR OFIT AS PER THESE TWO BALANCE SHEETS OF THESE TWO CONCERNS SUBMITTED WITH THE BANK I.E. `.42,45,574/- FOR M/S RAJSHREE PRAKASHAN AND `.15,18,015/- FOR M/S RAJ PRINTERS WHICH MEANS THAT THE ASSESSING OFFIC ER DID NOT ALLOW ANY DEDUCTION FROM THE GROSS PROFIT ALTHOUGH VA RIOUS EXPENSES . I.T.A. NO.3071/DEL/10 4/6 ARE DEBITED IN THE P&L A/C AS PER BOTH SET OF BALANCE SHEETS WHICH WERE FURNISHED BEFORE THE DEPARTMENT AND WITH THE BA NK FOR BOTH THE CONCERNS. THIS ACTION OF THE ASSESSING OFFICER IS NOT JUST IFIED BECAUSE IT CANNOT BE ACCEPTED THAT NO EXPENSES WAS INCURRED BY T HE ASSESSEE AFTER THE STAGE OF GROSS PROFIT BUT AT THE SAME TIME, L D CIT(A) HAS ACCEPTED AND ALLOWED ALL THE EXPENSES WHICH ARE DEBIT ED BY THE ASSESSEE IN THE P&L A/C OF THESE TWO CONCERNS AS PER THE B ALANCE SHEET SUBMITTED WITH THE I.T. DEPARTMENT ALONG WITH THE RE TURN OF INCOME BECAUSE HE HAS SUSTAINED ADDITIONS ONLY TO THE EXTENT O F DIFFERENCE IN GROSS PROFIT AS PER THE BALANCE SHEET SUBMITTED WITH THE DEPARTMENT AND AS PER THE BALANCE SHEET WITH THE BANK. THIS HAS B EEN DONE BY LD CIT(A) WITHOUT MAKING ANY VERIFICATION REGARDING AL LOWABILITY OF THE EXPENSES DEBITED BY THE ASSESSEE IN THE P&L A/C SUBMITTED WITH THE I.T. RETURN. CONSIDERING THESE FACTS, WE ARE IN AGREEM ENT WITH LD DR OF THE REVENUE THAT SUCH AN ORDER OF LD CIT(A) CANNOT B E SUSTAINED BUT AT THE SAME TIME, WE ARE NOT IN AGREEMENT WITH HIM THAT THE ORDER OF THE ASSESSING OFFICER SHOULD BE APPROVED. WE ARE IN AGREEME NT WITH HIM ON THE SECOND PROPOSITION PUT FORWARD BY HIM THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH DECISION. UNDER THIS FACTUAL POSITION, WE SET ASIDE THE ORDER OF THE LD CIT(A) AND RESTORE THE ENTIRE MATTER BACK TO THE FILE OF THE ASSE SSING OFFICER FOR A FRESH DECISION BECAUSE WE HAVE NOTED THAT RELIEF ALLOW ED BY LD CIT(A) ON OTHER ISSUES ARE ALSO WITHOUT PROPER BASIS AND HENCE W E FEEL THAT IN THE INTEREST OF JUSTICE, THIS WILL BE FIT AND PROPER T O RESTORE THE ENTIRE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH DECISION. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD CIT(A) AND RESTORE THE ENTIRE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR A FRESH DECISION. THE ASSESSING OFFICER IS DIRECTED THAT ALTHOUGH HE HAS REJECTED THE BOOKS OF ACCOUNTS BUT HE COULD NOT REJEC T IN TOTO THE CLAIM OF THE ASSESSEE REGARDING VARIOUS EXPENSES. TO THE EXTENT, THE ASSESSEE CAN PRODUCE EVIDENCES REGARDING INCURRING OF EX PENSES FOR . I.T.A. NO.3071/DEL/10 5/6 BUSINESS PURPOSES, DEDUCTION SHOULD BE ALLOWED. FOR THIS PURPOSE, THE ASSESSEE MAY BE ASKED TO FILE COMPLETE DETAILS OF PURCHA SES AND SALES WITH THE NAME OF PARTIES AND THEIR ADDRESSES ETC. IF R EQUIRED, THE ASSESSEE MAY BE ASKED TO PRODUCE BOTH SETS OF BOOKS OF ACCO UNTS TO FIND OUT THE EXACT DISCREPANCY FOR DECIDING THE ISSUE S IN A PROPER MANNER. THIS CLAIM OF THE ASSESSEE THAT ONLY ONE SET OF B OOKS OF ACCOUNTS WERE MAINTAINED AND THE OTHER BALANCE SHEET WAS WITHOUT ANY SUPPORTING BOOKS IS NOT ACCEPTABLE BECAUSE AS PER TH E COPY OF BOTH BALANCE SHEETS AVAILABLE IN THE PAPER BOOK FOR T HESE TWO CONCERNS, IT IS SEEN THAT BOTH THESE BALANCE SHEETS ARE D ULY AUDITED BY CHARTERED ACCOUNTANT AND IN THE AUDIT REPORT IT IS R EPORTED BY C.A. IN BOTH THE BALANCE SHEETS THAT BOOKS OF ACCOUNTS HAVE BEE N KEPT AT THE OFFICE OF THE ASSESSEE AND WERE EXAMINED BY HIM. ONE AU DIT REPORT SUBMITTED WITH THE DEPARTMENT IS BY M/S PK SINGHAL & CO C.A. WHICH IS DATED 25.10.2006 FOR BOTH THE CONCERNS I.E. M/S RAJSHR EE PRAKASHAN AND M/S RAJ PRINTERS WHEREAS THE SECOND SET OF AUDITED ACCOUNT IS AUDITED BY SHRI SC SHARMA, C.A. AS PER AUDIT REPORT DATED 29.10.2006 FOR RAJSHREE PRAKASHAN AND DATED 25.7.2006 FOR RAJ PRINTERS. WHEN THE AUDITORS HAVE STATED IN THE AUDIT REPORT THAT BOOKS OF ACCOUNTS WERE EXAMINED BY THEM, IT CANNOT BE ACCEPTED THAT THE ASSE SSEE WAS NOT MAINTAINING TWO SETS OF BOOKS OF ACCOUNTS. HENCE, IF RE QUIRED, THE ASSESSING OFFICER CAN ASK THE ASSESSEE TO PRODUCE BOTH SET O F BOOKS OF ACCOUNTS FOR BOTH THE CONCERNS. IF REQUIRED, THE ASSESSI NG OFFICER MAY SUMMON THESE TWO AUDITORS ALSO TO FIND OUT THE REAL POSI TION. THE ASSESSING OFFICER SHOULD PASS NECESSARY ORDER AS PER LAW AS P ER ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STA NDS ALLOWED FOR STATISTICAL PURPOSES. . I.T.A. NO.3071/DEL/10 6/6 6. ORDER PRONOUNCED IN THE OPEN COURT ON THE DAY 11 TH FEBRUARY, 2011. SD/- SD/- (I.P. BANSAL) (A.K. GAROD IA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 11 .2.2011. 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).