Sh. Dharmendra Kumar Jain, New Delhi V. ITO, Ghaziabad

ITA 3451/DEL/2014

• Counselvise Citation: 345120114 RSA 2014
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 06-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 06-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Gift; Depreciation; Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 143(3); 234B

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC - 2 : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3 451 /DEL/201 4 A.Y. : 200 8 - 0 9 SHRI DHARMENDRA K UMAR JAIN, VS. ITO, WARD - 1 ( 9 ), C/O RRA TAXINDIA , GHAZIABAD D - 28, SOUTH EXTENSION, PART - I, UTTAR PRADESH NEW DELHI 110 049 (PAN : AAOPJ2566L) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RA KESH GUPTA, ADV. & SH. SOMIL AGGARWAL, ADV. DEPARTMENT BY : SH. ROBIN RAWAL, SR. DR DATE OF HEARING : 06 - 07 - 2015 DATE OF ORDER : 08 - 07 - 2015 PER H.S. SIDHU, JM: - O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) , MEERUT DATED 2 . 1 .201 4 PERTAINING TO ASSESSMENT YEAR 200 8 - 0 9 . 2. T HE GROUNDS OF APPEAL READ AS UNDER: - 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. A O IN MAKING AN ADDITION OF RS.2 ,50,OOOI - 2 ON ACCOUNT OF ADVANCE RECEIVED FROM M/S AADINATH ENTERPRISES ULS 68 THAT TOO WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY DISREGARDING THE SUBMISSIONS AND EVIDENCES FILED BY THE ASSESSEE AND IMPUGNED ADDITION HAS BEEN MADE BY RECORDING INCORRECT FACTS AND FINDING, WITHOUT GIVING ADEQUATE OPPORTUNITY OF HEARING. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. A O IN MAKING AN ADDITION OF RS.2,50,OOOI - ON ACCOUNT OF ADVAN CE RECEIVED IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. A O IN MAKING AGGREGATE ADDITION OF RS .68,OOOI - ON ACCOUNT OF LOAN RAISED FROM SHRI BHUSHAN AND SMT. MEENAKSHI V / S 68 BY TREATING THE SAME AS ALLEGED UNEXPLAINED LOANS AND THAT TOO WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY DISREGARDING THE SUBMISSIONS AND EVIDENCES FI LED BY THE ASSESSEE. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. A O IN MAKING ADDITION OF RS.75,OOOI - ON ACCOUNT OF GIFT RECEIVED FROM GRANDFATHER ULS 68 OF THE ACT THAT TOO WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY DISREGARDING THE SUBMISSIONS AND EVIDENCES FILED BY THE ASSESSEE. 3 5. THAT HAV ING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. A O IN MAKING DISALLOWANCE OF RS.9,60 5 / - BY TREATING IT AS PERSONAL IN NATURE. 6. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTAN CES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN MAKING DISALLOWANCE OF RS. 5 O,OOO/ - ON ACCOUNT OF VARIOUS EXPENSES DEBITED TO THE PROFIT & LOSS. 7. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CAS E, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN REJECTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE UNDER RULE 46A OF INCOME TAX RULES AND THAT TOO WITHOUT ANY BASIS. 8. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ER RED IN LAW AND ON FACTS IN NOT REVERSING THE ACTION OF LD. A O IN CHARGING THE INTEREST U/S 234B AND 234D OF THE INCOME TAX ACT, 1961. 9. THAT THE APPELLANT CRAVES TO LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM BUSINESS OF TRADING. RETURN DECL ARI NG INCOME AT RS.1,31,772/ - WAS FILED ON 29 - 09 - 2008. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS FROM THE PERUSAL OF RETURN OF INCOME IT WAS GATHERED BY THE AO THAT THE ASSESSEE HAD SHOWN ADVANCE FROM CUSTO MER NAMELY, M/S ADINATH ENTERPRISES AT RS.1,00,000 / - . THE AO 4 REQUIRED THE ASSESSEE TO FURNISH CONFIRMATION OF THE PARTY. IN RESPONSE THE ASSESSEE FURNISHED COPY OF ACCOUNT OF MZS ADINATH ENTERPRISES WHICH SHOWED THAT THE AFORESAID PARTY HAD PAID RS.2,50,000 / - TO M / S HINDUSTAN PETROLEUM CORPORATION LTD. AND OUT OF WHICH RS.1,50,000 / - HAD BEEN REPAID DURING THE YEAR. SI NCE THE AFORESAID AMOUNT WAS IN THE NATURE OF LOAN, THEREFORE, THE AO REQUIRED THE ASSESSEE TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE DEPOSITORS AND GENUINENESS OF TRANSACTION. HOWEVER, THE ASSESSEE COULD NOT DISCHARGE ONUS U/S 68 OF THE ACT BY FURNISHING REQUISITE DETAILS AND EVIDENCES. THUS IN THE ABSENCE OF THE SAME, THE AO ADDED THE AMOUNT OF RS.2,50,000 / - TO THE INCOME OF THE ASSESSEE. 3 .1 FROM THE PERUSAL OF THE RETURN OF INCOME IT WAS GATHERED BY THE AO THAT THE ASSESSEE HAD SHOWN UNSECURED LOAN OF RS.50,000 / - FROM SH. BHUSHAN ANAND AND CASH LOAN OF RS.18,000 / - FROM SMT. MEENAKSHI ANAND. THE AO REQUIRED THE ASSESSEE TO PROVE SUCH UNSECURED LOANS RAISED DURING THE YEAR. HOWEVER, THE ASSESSEE MERELY FURNISHED CONFIRMATIONS FROM SUCH P ERSONS WITHOUT GIVING ANY DETAILS TO PROVE THE IDENTI T Y, CREDITWORTHINESS OF THE DEPOSITORS AND GENUINENESS OF TRANSACTIONS. THUS IN THE ABSENCE OF THE SAME THE AO MADE ADDITION TOTALING TO RS.68,000 - (RS.50,000 + RS.18,000) TO THE INCOME OF THE ASSESSEE. 3 .2 FROM THE PERUSAL OF BALANCE SHEET IT WAS FURTHER GATHERED BY THE AO THAT THE ASSESSEE HAD SHOWN CAPITA L ADDITION AT RS.75,400 / - . FROM THE COPY OF LEDGER ACCOUNT IT WAS GATHERED BY THE AO THAT CAPITAL AT RS.75,000 / - WAS INTRODUCED IN CASH. THE AO REQUI RED THE ASSESSEE TO FURNISH THE LEDGER COPY OF CAPITAL ACCOUNT AND ALSO TO PROVE THE SOURCE OF CAPITAL INTRODUCED. LN RESPONSE THE ASSESSEE MERELY STATED THAT THE 5 ADDITION IN THE CAPITAL ACCOUNT AT RS.75,400 / - ON DIFFERENT DATES HAD BEEN RECEIVED BY THE ASSESSEE FROM SH. MEMI CHAND JAIN,GRANDFATHER OF THE ASSESSEE AS GIFTS. HOWEVER, THE ASSESSEE FAILED TO DISCHARGE ONUS U/S 68 OF THE ACT. IN ABSENCE OF THE SAME THE AO MADE ADDITION OF RS.75,400 / - TO THE INCOME OF THE ASSESSEE. 3 .3 IN THE PROFIT & LOSS AC COUNT THE ASSESSEE HAD DEBITED FOLLOWING EXPENSES UNDER DIFFERENT HEADS: - (I) TELEPHONE RS.14,076 / - (II] REPAIRING & MAINTENANCE OF CAR RS.16,870 / - (III) INSURANCE ON CAR RS.11,963/ - (IV) DEPRECIATION ON CAR RS.5,114/ - SINCE PERSONAL ELEMENT OF USE COULD NOT BE RULED OUT, THEREFORE, THE AO DISALLOWED 20% OF SUCH EXPENSES AMOUNTING TO RS.9,605/ - WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE. 3 .4 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO ISSUED VARIOUS NOTICES REQUIRING THE ASS ESSEE TO PRODUCE BOOKS OF ACCOUNT BUT SUPPORTING BILLS AND VOUCHERS WERE NOT PRODUCED. IN THE ABSENCE OF THE SAME, THE AO MADE ADHOC ADDITION OF RS. 50,000/ - TO THE INCOME OF THE ASSESSEE BEING UNVERIFIABLE EXPENSES. THE AFORESAID ADDITIONS HAVE BEEN MADE VIDE ASSESSMENT ORDER DATED 21.12.2010 PASSED U/S. 143(3) OF THE I.T. ACT, 1961. 4. AGGRIEVED WITH THE AFORESAID ADDITIONS MADE BY THE AO VIDE HIS ORDER DATED 21.12.2010 PASSED U/S. 143(3) OF THE I.T. ACT, 1961, 6 ASSESSSEE APPEALED BEFORE THE LD. CIT(A), W HO VIDE IMPUGNED ORDER 2.1.2014 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGAINST THE AFORESAID ORDER DATED 2.1.2014 ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. AT THE OUTSET, LD. COUNSEL OF THE ASSESSEE DRAW OUR ATTENTION TOWARDS THE GROUND NO. 7 IN WHICH THE ASSESSEE HAS PLEADED THAT LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN REJECTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE UNDER RULE 46A OF THE INCOME TAX RULES AND THAT TOO WITHOUT ANY BASIS. HE REQUESTED THAT KEEPING IN VIEW O F THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND IN VIEW OF THE PROVISIONS OF RULE 46A, THE ISSUES IN DISPUTE MAY BE REMITTED BACK TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH, KEEPING IN VIEW OF THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. 7 . ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 8. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES. I FIND FROM THE RECORDS THAT DURING THE APPELLATE PROCEEDINGS THE LD . CIT(A) HAS NOT ADMITTED THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE UNDER RULE 46A OF THE I.T. RULES, 1961, WHICH IS CONTRARY TO THE PRINCIPLE OF NATURAL JUSTICE . IN MY CONSIDERED OPINION, IN THE INTEREST OF NATURAL JUSTICE WOULD BE SERVED, IF THE ISSUES IN DISPUTE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER, AFTER ADMITTING THE ADDITIONAL EVIDENCES, IF ANY, AND THEN PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AND GIVE FULL OPPORTUNITY OF 7 BEING HEARD TO THE ASSESSEE. ACCORDINGLY, I SET AS IDE THE ISSUES IN DISPUTE TO THE FILES OF THE AO TO DECIDE THE SAME AFRESH, UNDER THE LAW, AFTER CONSIDERING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND PASS A SPEAKING ORDER THEREAFTER, IN ACCORDANCE WITH LAW. NEEDLESS TO ADD THAT THE ASSESSEE SH OULD BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE AO AND FURNISH ALL THE DOCUMENTS/ EVIDENCES, IF ANY TO SUBSTANTIATE HIS CASE. 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8 /7/201 5 . SD/ - [ H.S. SIDHU ] JUDICIAL MEMBER DATE: 8 /7/201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES