M/s. R.L. Allied Industries, New Delhi V. ITO, New Delhi

ITA 3184/DEL/2010

• Counselvise Citation: 318420114 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 13-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 28-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Assessee Lawyers: K R MANJANI
• Keywords: Depreciation; Opportunity of being heard; Additional evidence
• Section: 144; 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `F: NEW DELHI BEFORE SHRI C.L.SETHI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER I.T. A. NO.3184/DEL/2010 ASSESSMENT YEAR : 2007-08 M/S. R.L. ALLIED INDUSTRIES, INCOME-TAX OFFICER, 50-F, KOHLAPUR ROAD, VS. WARD 20(1), NEW DELHI. KAMLA NAGAR, NEW DELHI. PAN: AAAFR5507P (APPELLANT) (RESPONDENT ) APPELLANT BY : SHRI K.R. MANJANI, ADVOCATE. RESPONDENT BY : SMT. PRATIMA KAUSHIK, SR. DR. O R D E R PER C.L. SETHI, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 0 9.06.2010 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) PE RTAINING TO THE ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL, THE ASSESSEE HAS DISPUTED THE FOLLO WING ADDITIONS CONFIRMED BY THE LEARNED CIT(A):- A) TRADING ADDITION OF RS.2,03,938/- B) CREDITORS RS.32,38,736/- (EVEN THOUGH IT WAS SHOWN THAT PROPER OPPORTUNITY WAS NOT GIVEN, CONFIRMATIONS ARE AVAILA BLE AND ADDITION CAN NOT BE MADE FOR BALANCES WHICH WERE OUTSTANDING FOR MORE THAN LAST TWO YEARS). 2 C) RS.23,513/- IN RESPECT OF DEPRECIATION ON ADDITIONA L MACHINERY, EVEN THOUGH IT IS HELD BY CIT(A) THAT MACHINERY IS PURCH ASED. D) RS.1,62,513/- IN RESPECT OF BROKERAGE. E) 50% OF RS.17,851/- IN RESPECT OF ELECTRICITY EXPENS E. F) 50% OF RS.1,00,000/- IN RESPECT OF MACHINERY REPAIR S. 3. THE ASSESSEE HAS ALSO CONTESTED THAT THE AO WAS UNJUSTIFIED IN COMPLETING THE ASSESSMENT UNDER SEC. 144 OF THE ACT . 4. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GON E THROUGH THE ORDERS OF THE AUTHORITIES BELOW. ON PERUSAL OF ASSESSMENT ORDER, WE FIND THAT THE ASSESSMENT HAS BEEN COMPLETED UNDER SEC. 143(3) OF THE ACT. NOTICES UNDER SEC. 143(2) AND/OR UNDER SEC. 142(1) WERE ISSUED AN D SERVED UPON THE ASSESSEE FROM TIME TO TIME. THE AO MADE CERTAIN AD DITIONS FOR WANT OF DETAILS AND EVIDENCES REQUIRED TO BE FILED BY THE A SSESSEE. THE AO AFFORDED SEVERAL OPPORTUNITIES TO THE ASSESSEE DURING THE AS SESSMENT PROCEEDINGS. THE AO EVEN ASKED THE MANAGING PARTNER TO APPEAR BEFORE HIM FOR HIS STATEMENT. HOWEVER, THE PARTNER DID NOT APPEAR ON THE GROUND O F ILLNESS. THESE FACTS WERE HIGHLIGHTED BY THE LEARNED CIT(A) IN HIS ORDER . IN THE LIGHT OF THE CATEGORICAL OBSERVATIONS MADE BY THE AO AS WELL AS BY THE LEARNED CIT(A), WE ARE OF THE CONSIDERED VIEW THAT THE AO HAS NOT C OMMITTED ANY ILLEGALITY 3 IN COMPLETING THE ASSESSMENT UNDER SEC. 143(3) OF T HE ACT, IN THE COURSE OF WHICH, HE MADE CERTAIN ADDITIONS IN THE ABSENCE OF EVIDENCE AND IN THE LIGHT OF THE MATERIAL AVAILABLE ON RECORD. THEREFORE, TH IS GROUND RAISED BY THE ASSESSEE IS TOTALLY WITHOUT ANY BASIS AND MERIT. I T IS THUS REJECTED. 5. IN THE COURSE OF HEARING OF THIS APPEAL, THE LEA RNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT VARIOUS DOCUMENTS AND PAP ERS AVAILABLE WITH THE ASSESSEE COULD NOT BE PRODUCED BEFORE THE AO FOR TH E REASON BEYOND THE CONTROL OF THE ASSESSEE INASMUCH AS THE VARIOUS CON FIRMATIONS FROM THE VARIOUS PARTIES COULD NOT BE OBTAINED BY THE TIME T HE ASSESSMENT WAS COMPLETED. HE FURTHER SUBMITTED THAT OUT OF 17 TRA DE CREDITORS FOR RS.45,51,754/-, CONFIRMATIONS FOR RS.24,30,268/- WE RE AVAILABLE AND FILED BEFORE THE CIT(A). HE FURTHER POINTED OUT THAT IT WAS STATED BEFORE THE LEARNED CIT(A) THAT CONFIRMATIONS OF RS.3,37,064/- WERE IN PROCESS TO BE RECEIVED WITHIN TWO DAYS, AND THE REMAINING PARTIES WERE OUTSIDE DELHI AND THEIR BALANCES WERE BEING BROUGHT DOWN FROM EARLIER YEARS. HE FURTHER STATED THAT A DUPLICATE PURCHASE VOUCHER WITH REGARD TO TH E PURCHASE OF MACHINERY WAS ALSO FILED BEFORE THE LEARNED CIT(A). HE FURTH ER SUBMITTED THAT THE GROSS PROFIT RATE COULD BE APPLIED HAVING REGARD TO THE PAST RECORD OF THE ASSESSEE. IN THE COURSE OF HEARING OF THIS APPEAL, THE ASSESSEE HAS SUBMITTED FURTHER PAPERS BEFORE US IN THE FORM OF CONFIRMATIO NS FROM M/S. O.S. TIMBER 4 TRADERS AND SURENDRA ENTERPRISES, WHICH HAVE IN THE MEAN TIME COLLECTED BY THE ASSESSEE. THE ASSESSEE HAS ALSO FILED BEFORE U S PAPER BOOK CONTAINING VARIOUS DETAILS. IN THE ORDER OF THE LEARNED CIT(A) THE SUBMISSION OF THE ASSESSEE HAS BEEN REPRODUCED. FROM THE SUBMISSION FILED BEFORE THE CIT(A), IT IS CLEAR THAT CONFIRMATIONS FOR RS.24,30,268/- W ERE FILED AND A DUPLICATE PURCHASE VOUCHER OF MACHINERY FROM RAJENDRA PLYWOOD INDUSTRIES (P) LTD. WAS ALSO FILED. BUT THE LEARNED CIT(A) HAS NOWHERE STATED AS TO WHY THESE ADDITIONAL EVIDENCES FILED BEFORE HIM, WERE NOT CON SIDERED. THE LEARNED CIT(A) HAS CONFIRMED THE AFORESAID ADDITIONS MADE B Y THE ASSESSING OFFICER FOR THE REASON THAT NO CONFIRMATION AND OTHER DETAI LS WERE FILED BY THE ASSESSEE. HOWEVER, WITH REGARD TO THE ADDITION OF RS.71,851/- ON ACCOUNT OF NON-VERIFICATION OF ELECTRICITY AND POWER EXPENSES, AND ADDITION OF RS.1,00,000/- ON ACCOUNT OF NON-FURNISHING OF MACHI NERY REPAIR EXPENSES, THE LEARNED CIT(A) REDUCED THE DISALLOWANCE TO 50% BY OBSERVING THAT DISALLOWANCE ON ESTIMATED BASIS WAS ON HIGHER SIDE. HE FURTHER STATED THAT THE ADDITION ON ACCOUNT OF MACHINERY WAS NOT CALLED FOR AS THE SAME WAS NOT DEBITED TO THE PROFIT & LOSS ACCOUNT. HOWEVER, HE DISALLOWED THE DEPRECIATION THEREUPON AMOUNTING TO RS.23,513/- . NOW, SINCE THE ASSESSEE HAS PRODUCED CERTAIN EVIDENCES BEFORE US AND SAME W ERE ALSO PRODUCED BEFORE THE LEARNED CIT(A) AND SINCE THESE DOCUMENTS COULD NOT BE PRODUCED 5 BEFORE THE AO BECAUSE THEY WERE NOT AVAILABLE WITH THE ASSESSEE AT THAT POINT OF TIME, WE ARE OF THE CONSIDERED OPINION THAT THE MATTER INVOLVING IN THIS APPEAL BE RESTORED BACK TO THE FILE OF THE AO FOR H IS FRESH ADJUDICATION AFTER EXAMINING ALL THE DETAILS AND EVIDENCES THAT MAY BE FILED BY THE ASSESSEE BEFORE HIM. WE DO HEREBY DIRECT THE AO TO PRODUCE AND FURNISH ALL THE DOCUMENTS AND PAPERS THAT HAVE BEEN FILED BEFORE US , BEFORE THE AO FOR HIS EXAMINATION AND VERIFICATION. THE ASSESSEE SHALL A LSO PRODUCE FURTHER EVIDENCES BEFORE THE AO TO SUPPORT ITS STAND. THE AO SHALL EXAMINE AND VERIFY THOSE DETAILS THAT MAY BE FILED BY THE ASSES SEE BEFORE HIM AND THEN DECIDE THE ISSUES AS PER LAW AFTER PROVIDING REASON ABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS HEREBY DIRE CTED TO COOPERATE WITH THE AO IN FINALIZING THE ASSESSMENT AS PER LAW, IN THE ABSENCE OF WHICH, THE AO SHALL BE AT LIBERTY TO DECIDE THE MATTER AS PER MAT ERIALS AVAILABLE ON RECORD AND AS PER LAW. WE ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED TO BE PARTLY ALLOWED FOR A STATISTICAL PURPOSE. 7. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 23 RD SEPTEMBER, 2011. SD/- SD/- (B.C. MEENA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD SEPTEMBER, 2011. 6 ITA NO.3184/DEL/2010 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.