ITO, Rohtak V. Smt. Chanchal Rani, Rohtak

ITA 3347/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58761 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 07-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 27-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANOOP KUMAR SINHA
• Section: 44AD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.3347/DEL/2011 ASSESSMENT YEAR : 2006-07 ITO, WARD-4, SONEPAT HQ., ROHTAK. VS. CHANCHAL RANI, D/O SH. SATRAM DASS, VPO TENURPUR, ROHTAK. PAN : AGSPC1993L (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI ANOOP KUMAR SINHA, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE DEPARTMENT. IT IS DIR ECTED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 29 TH APRIL, 2011 FOR ASSESSMENT YEAR 2006-07. THE GROUNDS OF APPEAL READ AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS BY DELETING ADDITIONS MADE I N THE HANDS OF THE ASSESSEE ON THE PROTECTIVE BASIS, WHILE SUBSTANTIV E ADDITIONS MADE IN THE HANDS OF M/S PACL INDIA LTD., NE W DELHI IN A.Y. 2006-07 IS STILL PENDING AT THE APPELLATE STAGE. THE APPELLANT CRAVES LEAVE TO ADD, DELETE OR AMEND ANY GROUND OR GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. THE ASSESSEE IN THE PRESENT CASE FILED RETURN OF INCOM E AT RS.2,37,600/- ARISING OUT OF GROSS RECEIPTS OF CONTRACT S OF ` 29,70,000/- FROM PACL INDIA LTD., B1/3, PASCHIM VIHAR, NEW DELHI . THE IMPUGNED ITA NO.3347/DEL/2011 2 ASSESSMENT HAS BEEN FRAMED U/S 143(3)/148 OF THE ACT. IN THE REASON IT WAS MENTIONED THAT THE ASSESSEE DID NOT TAKE UP CONTR ACT ACTIVITY AND THE CONTRACT ACTIVITY ACTUALLY BELONGED TO M/S P ACL INDIA LTD. AND, THEREFORE, THE ASSESSMENT OF THE ASSESSEE WAS REOPENED AND I N THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS CONCLUDED THAT TH E ASSESSEE HAS NOT DONE ANY KIND OF CONTRACT WORK IN THE P ACL INDIA LTD. AND SINCE NO WORK HAS BEEN DONE NO EXPENSES ARE ALLOWAB LE. HE ALSO HELD THAT EVEN THE PROVISIONS OF SECTION 44AD WERE NO T APPLICABLE. ACCORDINGLY HE TREATED THE ENTIRE RECEIPTS AS INCOME OF THE ASSESSEE AND ASSESSMENT HAS BEEN FRAMED AT ` 29,70,000/-. LEARNE D CIT (A) AFTER REFERRING TO THE VARIOUS ORDERS PASSED BY HIS PRE DECESSOR WHICH ARE STATED TO BE UPHELD BY ITAT [THE DETAILS OF WHICH HAVE BEEN GIVEN IN THE IMPUGNED ORDER PASSED BY THE CIT (A)] HAS DECID ED THE ISSUE IN FAVOUR OF THE ASSESSEE. AGAINST THOSE FINDINGS OF LEARNED CIT (A) THE DEPARTMENT HAS FILED THE AFOREMENTIONED GROUNDS OF AP PEAL. 3. NOTICE OF HEARING WAS SENT TO THE ASSESSEE, HOWEVER, N ONE WAS PRESENT ON BEHALF OF THE ASSESSEE. EARLIER ALSO NONE APPE ARED ON BEHALF OF THE ASSESSEE, THEREFORE, WE PROCEEDED TO DECI DE THE PRESENT APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEAR NED DR AND AFTER CONSIDERING THE FACTS AVAILABLE ON OUR RECORD. 4. THE LEARNED DR, AFTER NARRATING THE FACTS AND REL YING UPON THE ORDER PASSED BY THE ASSESSING OFFICER, PLEADED THAT THE A SSESSEE IN FACT DID NOT CARRY OUT ANY CONTRACT ACTIVITY OF PAC L INDIA LTD., THEREFORE, THE ASSESSING OFFICER WAS RIGHT IN TAKING THE ENTIRE CON SIDERATION AS INCOME OF THE ASSESSEE AND LEARNED CIT (A) HAS WRONGLY D ELETED THE SAME. 5. WE HAVE HEARD THE LEARNED DR AND WE HAVE CAREFUL LY CONSIDERED THE ASSESSMENT ORDER AS WELL AS THE ORDER OF THE CIT (A). IT MAY BE ITA NO.3347/DEL/2011 3 MENTIONED THAT THIS ISSUE HAS BEEN COMING UP TIME AND A GAIN BEFORE THE TRIBUNAL IN SEVERAL CASES. IN ONE OF THE CASES I.E. , IN THE CASE ITO VS. SHRI SANJEEV KUMAR IN ITA NO.3465/DEL/2010 VIDE ORDER DATED 9 TH DECEMBER, 2011 (COPY PLACED ON RECORD), THE TRIBUNA L HAS PASSED THE FOLLOWING ORDER:- THE REVENUE HAS TAKEN UP FOLLOWING GROUNDS IN THE APPEAL:- (I) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN ALLOWING RELI EF TO THE ASSESSEES WITHOUT ANY MATERIAL ON RECORD. (II) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, L D. CIT(A) HAS ERRED IN ALLOWING RELIEF TO THE ASSESS EES WHEN THE ASSESSEE COULD NOT EXPLAIN THE ALLEGED EXPENSES CLAIMED. (III) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN ALLOWING RELIEF TO THE ASSESS EES WHEN THE ASSESSEE HAS FAILED TO PROVE THAT ANY ALLEGED CONTRACT WORK WAS DONE BY HIM/HER. (IV) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, L D. CIT(A) HAS ERRED IN LAW AND FACTS, TO COMPU TE THE INCOME OF THE ASSESSEE BY APPLYING NET PROFIT RATE AT 8% ON THE GROSS RECEIPTS. 2. THE FACTS OF THE CASE ARE THAT THE RETUR N WAS FILED ON 31.07.2006 DECLARING TOTAL INCOME OF RS. 2,37,600/-. THE ASSESSEE HAD SHOWN CONTRACT WORK RECEIPT FROM PACL INDIA LTD. THE ASSESSEE COULD NOT FURNISH ANY EVIDE NCE TO SHOW THAT THE CONTRACT WORK WAS ACTUALLY UNDERTAKEN. FURTHE R, IT WAS FOUND THAT 128 ASSESSEES OF ROHTAK HAD SHOWN CONTRACT RECEIPTS FROM THE AFORESAID PACL AMOUNTING TO RS. 3,64,74,150/-. 64 PERSONS WERE IDENTIFIED ON THE BASIS OF RETURNS FILED IN ROHTAK. NONE OF THEM COULD P RODUCE ANY EVIDENCE WHATSOEVER IN RESPECT OF ANY WORK CARR IED OUT ON BEHALF OF PACL INDIA LTD. THE ASSESSEE HAD CREDITED A SUM OF RS. 29,40,000/- IN HIS BANK ACCOUNT. IN ABSENCE OF ANY EVIDENCE OF CARRYING OUT CONTRACT WORK, THIS A MOUNT WAS ASSESSED AS THE INCOME OF THE ASSESSEE ON PROTECTIVE BASIS UNDER THE HEAD INCOME FROM OTHER SOURCES. 3. THE LD. CIT(APPEALS) COMPUTED THE PROFIT OF THE ASSESSEE BY RESORTING TO THE PROVISION CONTAINED IN S ECTION 44AD AND THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOW ED. ITA NO.3347/DEL/2011 4 4. WHILE NONE ATTENDED ON BEHALF OF THE ASSESSEE BEFORE US, THE LD. SENIOR DR EXPLAINED THE F ACTS OF THE CASE. IT IS SUBMITTED THAT THERE IS NO EVIDENCE ON RECORD REGARDING THE ACTUAL CONTRACT WORK CARRIED OUT BY THE ASSESSEE. THEREFORE, THERE IS NO QUESTION OF INCURRING OF ANY EXPENDITURE. ACCORDINGLY, IT IS ARGUED THAT THE AO WAS RIGHT IN COMPUTING THE INCOME ON THE BASIS OF CRED ITS IN THE BANK ACCOUNT OF THE ASSESSEE. HOWEVER, HE FAIRLY SUBMITTED THAT TRIBUNAL HAS DECIDED VARIOUS APPEALS, WHERE IN THE ORDER OF THE LD. CIT(APPEALS) HAS BEEN UPHELD WITH THE REMARKS THAT ASSESSMENT OF ANY INCOME IN THE HA NDS OF THE ASSESSEE WILL HAVE NO EFFECT WHATSOEVER ON TH E ASSESSMENT OF PACL INDIA LTD. IN VIEW THERE OF, IT IS HELD THAT THE LD. CIT(APPEALS) WAS RIGHT IN DETERMINING THE QUANTUM BY RESORTING TO THE PROVISION CONTAINED IN SECTION 44AD, BUT IN ABSENCE OF ANY EVIDENCE OF ACTUAL CARRYING ON CONTRACT WORK, THIS DECISION WILL HAVE NO IMPACT WHATSOEVER IN THE ASSESSMENT OF PACL INDIA LTD. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED AS DIS CUSSED ABOVE. 6. TO RETAIN THE CONSISTENCY, RESPECTFULLY FOLLOWING T HE AFOREMENTIONED DECISION OF THE CO-ORDINATE BENCH WE PASS SIMILAR ORDER IN THE CASE OF THE PRESENT ASSESSEE ALSO. IN VIEW O F THE AFOREMENTIONED DECISION OF THE TRIBUNAL, THE APPEAL FILED BY THE REVENUE IS CONSIDERED AS PARTLY ALLOWED AS MENTIONED AB OVE. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 07.03.2 012. SD/- SD/- [B.C. MEENA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 07.03.2012. DK ITA NO.3347/DEL/2011 5 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES