Kwikform Structurals Private Limited, New Delhi V. DCIT, New Delhi

ITA 3430/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2234 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-12-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 04-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Keywords: Additional evidence; Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D DELHI) BEFORE SHRI A.D. JAIN AND SHRI K.G. BANSAL ITA NO. 3430(DEL)09 ASSESSMENT YEAR: 2005-06 KWIKFORM STRUCTURALS PVT. LTD., DY.COMMISSIONE R OF INCOME TAX, 1505, DEVIKA TOWER, NEHRU PLACE, V. CIRCLE 5(1), NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SALIL KAPOOR, ADVOCATE RESPONDENT BY: SHRI B.K . GUPTA, SR. DR ORDER PER A.D. JAIN, J.M . THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2 005-06, ALLEGING THAT THE LEARNED CIT(A) HAS ERRED IN RESTRICTING T HE EXPENDITURE TO THE EXTENT OF RS. 5,61,600/-, UPHOLDING THE ASSESSMENT ORDER. 2. THE FACTS ARE THAT THE ASSESSEE COMPANY SHOWED I NCOME FROM HOUSE PROPERTY, BUSINESS AND PROFESSION AND CAPITAL GAINS . IT CLAIMED BENEFITS OF DEDUCTION U/S 24 OF THE INCOME TAX ACT TO COMPUTE T HE INCOME FROM HOUSE PROPERTY. IT CLAIMED THE BENEFITS OF LOWER RATE O F TAXATION FOR INCOME FROM ITA 3430(DEL)09 2 CAPITAL GAINS. THE AO OBSERVED THAT THE ENTIRE EX PENDITURE CLAIMED INCURRED UNDER VARIOUS HEADS OF EXPENSES HAD BEEN CLAIMED A GAINST CONTRACT RECEIPTS AND THAT WHILE DOING SO, THE ASSESSEE COMPUTED NET LOSS UNDER THE HEAD INCOME FROM BUSINESS AT RS. 13,48,592/-. THE AO RAISED QUERIES IN THIS REGARD VIDE QUESTIONNAIRE DATED 20.7.2007. VIDE RE PLY DATED 23.8.2007, THE ASSESSEE SUBMITTED THE DETAILS . THE BOOKS OF ACC OUNT AND VOUCHERS WERE PRODUCED. IN THE QUESTIONNAIRE (SUPRA) ISSUED, VI DE ITEM AT SL.NO. 16, THE ASSESSEE WAS ASKED TO FILE DETAILS OF EXPENSES ON S TAFF WELFARE, TELEPHONE, TRAVELLING AND CONVEYANCE, BUSINESS PROMOTION, PRO FESSIONAL MEMBERSHIP, FACTORY BUILDING REPAIRS ETC. VIDE THE AFORESAID R EPLY DATED 23.8.2007, THE ASSESSEE SUBMITTED AS FOLLOWS:- 16. THE REQUISITE DETAILS SHALL BE FURNISHED IN THE NEXT HE ARING. THE ASSESSEE HAVE NOT CLAIMED ANY EXPENDITURE ON AC COUNT OF FACTORY BUILDING REPAIRS WHICH HAVE BEEN ADJUSTED ACCORDING LY IN THE COMPUTATION OF INCOME. 3. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDS TH AT DESPITE THE ABOVE SAID REPLY, THE AO DID NOT ACCEDE TO THE ASSESSEES AFORESTATED REQUEST FOR TIME AND THE ASSESSMENT ORDER WAS PASSED ON 30.8.20 07. IT HAS BEEN CONTENDED THAT THESE VERY DETAILS WERE FILED IN THE APPELLATE PROCEEDINGS BEFORE THE CIT(A). THE LD. CIT(A), HOWEVER, REFUS ED TO TAKE THEM ON THE FILE, OBSERVING THAT THE ASSESSEE HAD NOT ADDUCED A NY REASON FOR THEIR NON- ITA 3430(DEL)09 3 PRODUCTION BEFORE THE AO IN TERMS OF THE PROVISIONS OF RULE 46 A OF THE I.T. RULES, 1962; THAT AS SUCH THIS ADDITIONAL EVIDENCE COULD NOT BE ADDUCED AT THAT STAGE, I.E. BEFORE THE LEARNED CIT(A). IT WAS AS SUCH, THAT THE LD. CIT(A) UPHELD THE ASSESSMENT ORDER WITH REGARD TO THE ISSU E OF THE EXPENSES CLAIMED. 4. THE LEARNED DR, ON THE OTHER HAND, HAS , SUPPORT ING THE IMPUGNED ORDER, STATED THAT THE LEARNED CIT(A) WAS CORRECT I N REJECTING THE ADDITIONAL EVIDENCE FILED BEFORE HIM, SINCE THE ASSESSEE FAILE D TO SHOW CAUSE AS TO WHY THESE DOCUMENTS COULD NOT BE FURNISHED BEFORE THE A O. 5. HAVING HEARD THE PARTIES AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THAT IT IS A MATTER OF RECORD THAT IN THE R EPLY DATED 23.8.2007 (SUPRA), THE ASSESSEE DID SEEK TIME TO FILE THE DETAILS REGA RDING THE ISSUE OF EXPENSES CLAIMED. HOWEVER, THIS REQUEST WAS NOT ACCEPTED B Y THE AO AND THE ASSESSMENT ORDER WAS PASSED ON 30.8.2007. THE LEA RNED CIT(A) DID NOT ACCEPT THE DOCUMENTS FILED BY THE ASSESSEE IN THIS REGARD AND, THEREFORE, HE UPHELD THE ASSESSMENT ORDER ON THE ISSUE. 6. NOW, FROM THE ABOVE, IT IS EVIDENT THAT THE ASSE SSEE HAS NOT BEEN GIVEN ADEQUATE OPPORTUNITY TO PROVE ITS CASE REGARDING TH E CLAIM OF EXPENSES. THE AO REJECTED THE ASSESSEES REQUEST FOR TIME TO PROD UCE THE DETAILS AND WHEN SUCH DETAILS WERE FURNISHED BEFORE THE CIT(A), THE CIT(A) REJECTED THE SAME ITA 3430(DEL)09 4 ON THE BASIS THAT NOTHING PREVENTED THE ASSESSEE FR OM FILING THIS EVIDENCE, WHICH THE ASSESSEE HAD IN ITS POSSESSION AND THAT S O, THE ASSESSEE COMPANY DID NOT SATISFY THE STATUTORY CONDITIONS FOR FILING THE ADDITIONAL EVIDENCE. 7. IN OUR VIEW, SINCE THE ASSESSEE WAS NOT ALLOWED TIME BY THE AO TO FILE THESE DETAILS IN THE ASSESSMENT PROCEEDINGS THESE DOCUMENTS DID NOT CONSTITUTE ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A ). IN FACT, IT WAS THE ACTION OF THE AO IN NOT ACCEPTING THE ASSESSEES RE QUEST FOR TIME IN THIS REGARD, THAT THE ASSESSEE WAS PREVENTED FROM FILING THESE DOCUMENTS BEFORE THE AO. THAT BEING SO, THE LEARNED CIT(A) CANNOT BE SAID TO BE JUSTIFIED IN NOT TAKING THESE DOCUMENTS ON HIS FILE, OBSERVING T HEM TO BE FORMING ADDITIONAL EVIDENCE. 8. IN ACCORDANCE WITH THE ABOVE DISCUSSION, IN THE INTEREST OF JUSTICE, WE REMIT THIS ISSUE TO THE FILE OF THE AO, TO BE DECID ED AFRESH IN ACCORDANCE WITH LAW ALLOWING FULL OPPORTUNITY TO THE ASSESSEE TO PR OVE ITS CLAIM OF EXPENSES BY PRODUCING THE DOCUMENTARY EVIDENCE WHICH HAS BEE N REJECTED AS ADDITIONAL EVIDENCE BY THE LEARNED CIT(A). THE AS SESSEE, NO DOUBT, SHALL CO-OPERATE FULLY WITH THE AO. THE LEARNED COUNSEL FOR THE ASSESSEE AGREES TO THIS COURSE OF ACTION BEING ADOPTED. ITA 3430(DEL)09 5 9. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8.12.2009. SD/- SD/- (K,G. BANSAL) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8.12.2009 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR