Sh. Barun Bhanot, New Delhi V. ACIT, New Delhi

ITA 3075/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2787 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 19-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R C DANDAY
• Assessee Lawyers: K R MANJANI
• Keywords: Unexplained expenditure; Additional evidence
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.3075/DEL/2014 ASSESSMENT YEAR : 2008-09 BARUN BHANOT, A.B. CONSULTANTS, D.II/2542, VASANT KUNJ, NEW DELHI. PAN: AAHPB0314K VS. ACIT, CIRCLE-23(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.R. MANJANI, ADVOCATE DEPARTMENT BY : SHRI R.C. DANDAY, SR. DR DATE OF HEARING : 29.06.2017 DATE OF PRONOUNCEMENT : 30.06.2017 ORDER PER R.S. SYAL, VP: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 24.03.2014 IN RELATION TO THE ASSESSM ENT YEAR 2008-09. ITA NO.3075/DEL/2014 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE SHOWED GROSS RECEIPTS AT RS.1.53 CRORE AND COMMISSION INCO ME OF RS.8.34 CRORE GIVING NET PROFIT OF RS.13,17,294/-. THE ASSESSING OFFICER INITIATED THE ASSESSMENT PROCEEDINGS AND CALLED UPON THE ASSESSEE TO FURNISH NECESSARY DETAILS FOR ENABLING HIM TO COMPLETE THE ASSESSMENT. CA SHRI AMIT K. SARAOGI APPEARED ON BEHALF OF THE ASSESSEE AND FILED A LETTER SEEKING ADJOURNMENT. AN ADJOURNMENT WAS GRANTED AN D THE CASE WAS ADJOURNED TO 06.05.2010 THEN TO 25.05.2010 THEN TO 06.09.2010, THEN TO 07.09.2010, THEN TO 13.09.2010, THEN TO 18.11.2010, THEN TO 19.11.2010, THEN TO 24.11.2010, THEN TO 05.12.2010 AND THEN TO 06.12.2010 AT THE REQUEST OF THE ASSESSEE. THE ASSESSEE KEPT ON SEEK ING ADJOURNMENTS WITHOUT FURNISHING THE BOOKS OF ACCOUNT AND NECESSA RY EVIDENCE. LEFT WITH NO SUPPORT AND CO-OPERATION FROM THE SIDE OF T HE ASSESSEE, THE ASSESSING OFFICER DISALLOWED RS.37.26 LAC, BEING 25 % OF TOTAL EXPENSES; MADE ADDITION OF RS.4,73,047/-, BEING PROFIT RATE O F 8.12% ON THE CONTRACT RECEIPTS AMOUNTING TO RS.58,25,710/- WHICH WERE NOT DECLARED BY THE ASSESSEE, BUT, THE INFORMATION WAS AVAILABLE ABOUT DEDUCTION OF TAX AT SOURCE; AND ADDITION U/S 69C AMOUNTING TO RS .1,90,108/-, BEING ITA NO.3075/DEL/2014 3 THE UNEXPLAINED EXPENDITURE. THIS RESULTED IN COMP LETION OF ASSESSMENT AT RS.57.06 LAC STARTING WITH THE NET TAXABLE INCOM E AS SHOWN BY THE ASSESSEE AMOUNTING TO RS.13,17,294. THE ASSESSEE A RGUED BEFORE THE LD. CIT(A) THAT THE CHARTERED ACCOUNTANT WHO HAD MAINTA INED THE BOOKS OF ACCOUNT OF THE ASSESSEE WAS NOT TRACEABLE AND HAD L EFT FROM HIS KNOWN WHEREABOUTS WITHOUT RETURNING THE BOOKS OF ACCOUNT. THE ASSESSEE COMPILED CERTAIN VOUCHERS AND DETAILS ETC. AND PROD UCED THE SAME BEFORE THE LD. CIT(A) AS ADDITIONAL EVIDENCE. A REMAND REPORT WAS CALLED FOR, WHOSE RELEVANT PARTS HAVE BEEN REPRODUCED IN THE IM PUGNED ORDER. CRUX OF SUCH REMAND REPORT IS THAT THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNT EVEN IN THE REMAND PROCEEDINGS. CONSEQUENTL Y, THE ADDITIONS MADE IN THE ASSESSMENT ORDER WERE REPEATED. THE LD . CIT(A) DISMISSED THE APPEAL, AGAINST WHICH THE ASSESSEE HAS COME UP BEFORE US. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTICED THAT SHRI AMIT K . SARAOGI, THE ASSESSEES CHARTERED ACCOUNTANT, WHO INITIALLY APPE ARED BEFORE THE ASSESSING OFFICER AS WELL, DID NOT PARTICIPATE IN T HE ASSESSMENT ITA NO.3075/DEL/2014 4 PROCEEDINGS AS HE WAS STATED TO BE NOT TRACEABLE LA TER ON. THE ASSESSEES CASE IS THAT THE BOOKS OF ACCOUNT WERE IN COMPUTER OF THE CA AND WERE NOT MADE AVAILABLE TO HIM BEFORE LEAVING. ON A SPE CIFIC QUERY DURING THE COURSE OF PROCEEDINGS BEFORE US, THE LD. AR SUB MITTED THAT THE BOOKS OF ACCOUNT CANNOT BE PREPARED EVEN NOW AND THE ASSE SSMENT BE FINALIZED ON THE BASIS OF THE EVIDENCE AVAILABLE. IN OUR CON SIDERED OPINION, THE SKETCHY DETAILS SOUGHT TO BE RELIED BY THE LD. AR C ANNOT ENABLE THE ASSESSING OFFICER TO FRAME THE ASSESSMENT AS PER LA W. THE LD. AR SUBMITTED THAT IN THE ABSENCE OF COMPLETE DETAILS A VAILABLE WITH THE ASSESSEE, A REASONABLE ESTIMATE OF DISALLOWANCE OF EXPENSES BE MADE AS THE SAME BY THE ASSESSING OFFICER AT 25% OF THE TOT AL EXPENSES WAS ON A HIGHER SIDE. ON QUERY, THE LD. DR ALSO SUPPORTED T HE VIEW POINT OF THE LD. AR THAT A REASONABLE ESTIMATE OF DISALLOWANCE O F EXPENSES COULD BE MADE IN SUCH PECULIAR CIRCUMSTANCES WHEN THE BOOKS OF ACCOUNT ARE NOT AVAILABLE AND THE DETAILS WITH THE ASSESSEE CANNOT HELP IN MAKING THE ASSESSMENT PROPERLY. ON A FURTHER QUERY, THE LD. A R SUBMITTED THAT THIS WAS THE ONLY YEAR IN WHICH THE ASSESSEE CARRIED ON BUSINESS. THIS INDICATES THAT THERE ARE NO COMPARABLE FIGURES FOR THE EARLIER YEARS FROM ITA NO.3075/DEL/2014 5 WHICH SOME ASSISTANCE COULD BE TAKEN TO FINALISE TH E ASSESSMENT. CONSIDERING THE ENTIRETY OF THE FACTS AND CIRCUMSTA NCES OF THE INSTANT CASE, WE ARE OF THE CONSIDERED OPINION THAT IN SUCH PECULIAR CIRCUMSTANCES IT WOULD BE JUST AND FAIR IF THE AD HOC DISALLOWANCE OF EXPENSES MADE BY THE ASSESSING OFFICER AT 25% BE RE DUCED TO 12.5%. WE ORDER ACCORDINGLY. THE OTHER TWO ADDITIONS MADE BY THE ASSESSING OFFICER AT RS.4.73 LAC AND RS.1.90 LAC ARE HELD TO HAVE BEEN RIGHTLY SUSTAINED. 4. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.06.201 7. SD/- SD/- [K. NARASIMHA CHARY] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED, 30 TH JUNE, 2017. DK ITA NO.3075/DEL/2014 6 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.