Hamdaan Exports, New Delhi V. DCIT, New Delhi

ITA 3546/DEL/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7500 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-01-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 14-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: D P SACHDEVA
• Keywords: Depreciation; Income from undisclosed sources

Judgement Text

ITA NO. 3546/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 3546/DEL/2011 A.Y. : 2005-06 M/S HAMDAAN EXPORTS, C/O SHRI ANDLEEB SEHGAL, C-28, SUJAN SINGH PARK, NEW DELHI 110 003 (PAN: AAAFH4100L) .. VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-5, NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. D.P. SACHDEVA, CA DEPARTMENT BY : SH. SALIL MISHRA, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 14.10. 2010 PERTAINING TO ASSESSMENT YEAR 2005-06. 2. THE GROUNDS RAISED IN THE APPEAL READ AS UNDE R:- I) THAT ON THE FACTS AND IN THE CIRCUMSTANCE OF TH E PETITIONER FIRMS CASE, THE LD. COMMISSIONER OF INCOME TAX (APPE ALS)- 1, NEW DELHI HAS ERRED IN LAW IN UPHOLDING THE ACTIO N OF THE ASSESSING OFFICER IN TREATING THE COMMISSION OF ` 15,72,500/- RECEIVED FROM KOYALA INTERNATIONAL PRIVA TE LIMITED AS INCOME FROM UNDISCLOSED SOURCES. ITA NO. 3546/DEL/2011 2 II) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE PETITIONER FIRMS CASE, CONFIRMATION BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, NEW DELHI OF DISALLOWANCE O F TOTAL EXPENSES OF ` 10,99,890/- (WRONGLY MENTIONED AS ` 99 2.414 IN THE APPEAL PETITION BEFORE LD. COMMISSIONER OF INC OME TAX (APPEALS)-I, NEW DELHI) FOR THE YEAR ENDED 31.3 .2005 MADE BY THE ASSESSING OFFICER IS ARBITRARY, WRONG A ND ILLEGAL. III) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE PETITIONER FIRMS CASE, THE LD. COMMISSIONER OF INCOME TAX (APPE ALS)- I, NEW DELHI IS WRONG IN CONFIRMING THE ACTION OF T HE ASSESSING OFFICER IS NOT CONSIDERING ITS CLAIM FOR DEPRECIATION OF ` 1,52,474/-. IV) THAT THE ASSESSMENT MADE IS BAD IN LAW. 3. IN THIS CASE THE ASSESSING OFFICER OBSERVED THA T ASSESSEE HAS RECEIVED A CHEQUE FOR ` 15 LACS DATED 13.1.22004 A ND ANOTHER CHEQUE OF ` 72500/- AS COMMISSION. ASSESSEE WAS REQUIRED T O EXPLAIN THE NATURE OF DUTIES PERFORMED TO EARN ITS COMMISSION. A SSESSEE STATED THAT THE COMMISSION IS FOR THE SALE/PURCHASE OF IRON ORE FROM KOYALA INTERNATIONAL PVT. LTD. ASSESSING OFFICER FURTHER OBSERVED THAT ASSESSEE HAS SHOWN RECEIPT OF COMMISSION AMOUNTING TO ` 1572500/- AND FURTHER DIFFERENCE IN EXCHANGE FOR ` 938028/-. THE DIFFERENCE OF EXCHANGE PERTAINED TO EARLIER YEARS AND ASSESSEE HA S NOT WORKED FOR THIS DURING THE YEAR. HE OBSERVED THAT NO EXPEN SE ON DIFFERENCE IN EXCHANGE ARE ALLOWABLE. REGARDING COMMISSION ASSES SING OFFICER FOUND THAT ASSESSEE HAS NOT FURNISHED THE DETAILS O F WORK DONE OR SERVICES RENDERED TO EARN THIS COMMISSION. THE DED UCTOR OF ITA NO. 3546/DEL/2011 3 COMMISSION M/S KOYALA INTERNATIONAL PVT. LTD. HAS NOT DEDUCTED EVEN TDS. ASSESSING OFFICER OPINED IT SEEM TO BE JUST AN ADJUSTMENT ENTRY. THE INSPECTOR OF THIS CIRCLE WAS DEPUTED T O MAKE ENQUIRIES FROM KOYALA INTERNATIONAL PVT. LTD. THE INSPECTOR V ISITED THE GIVEN ADDRESS. THE INSPECTOR REPORTED IN HIS REPORT THAT THIS IS A RESIDENTIAL COMPLEX OF A FARM HOUSE WHICH IS GUARDED BY SECURITY . THE SECURITY GUARD PRESENT AT THE PREMISES DID NOT ALLOW THE INSP ECTOR TO VISIT INSIDE. THEY TOLD THE INSPECTOR THAT THE OCCUPANTS HAVE GONE TO GOA. FROM THIS THE ASSESSING OFFICER INFERRED THAT IT COU LD NOT BE OFFICE OF A PRIVATE LIMITED COMPANY. ASSESSING OFFICER HELD THA T AS THE RECEIPT REMAINED UNEXPLAINED, IT WILL BE TREATED AS INCOME F ROM UNDISCLOSED SOURCES. ASSESSEE ALSO FAILED TO PRODUCE EVEN TH E BOOKS OF ACCOUNTS TO FURNISH THE DETAILS REGARDING EXPENSES CLAIMED IN P&L ACCOUNT, SO ASSESSING OFFICER HELD THAT NO EXPENSES CAN BE ALL OWED. 4. AGAINST THE ABOVE ORDER THE ASSESSEE APPEALED BE FORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). LD. COMMISSION ER OF INCOME TAX (APPEALS) OBSERVED THAT DESPITE GIVING THE PRO PER OPPORTUNITIES THE ASSESSEE HAS NOT SUBMITTED THE DETAILS OF WORK D ONE OR SERVICES RENDERED TO EARN THE COMMISSION AND EVEN THE TDS HAS NOT BEEN DEDUCTED BY THE DEDUCTOR OF THE COMMISSION. AND AL SO EVEN THE INSPECTOR DEPUTED HAS GIVEN THE ADVERSE REPORT. LD . COMMISSIONER OF INCOME TAX (APPEALS) NOTED THAT EVEN DURING APPELLA TE PROCEEDINGS, THE ASSESSEE DID NOT SUBMIT THE DETAILS REGARDING N ATURE OF SERVICES RENDERED OR THE WORK DONE FOR THE EARNING THE COMMISS ION OF ` 15,72,500/-. UNDER THE CIRCUMSTANCES, LD. COMMISSIO NER OF INCOME TAX (APPEALS) HELD THAT ASSESSING OFFICER HAS CORR ECTLY DISALLOWED THE COMMISSION AS INCOME FROM UNDISCLOSED SOURCES. ITA NO. 3546/DEL/2011 4 4.1 AS REGARDS THE DISALLOWANCE AND EXPENSES THE L D. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT ASSESSEE HAS NOT PRODUCED BOOKS OF ACCOUNTS AND OTHER DETAILS OF EXPENSES OF ` 9,92,414/- DURING THE COURSE OF ASSESSMENT PROCEEDINGS EVEN AT THE TI ME OF APPELLATE PROCEEDINGS NO DETAILS HAVE BEEN FURNISHED. THERE FORE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE ASSE SSING OFFICERS ACTION IN DISALLOWANCE OF EXPENDITURE. 4.2 BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) ASSESSEE SUBMITTED THAT ASSESSEE HAS CLAIMED DEPRECIATION OF ` 1,52,474/- ON FIXED ASSETS USED FOR BUSINESS PURPOSES DURING THE YEAR ENDED 31.3.2005. ASSESSING OFFICER HAS NOT CONSIDERED THIS CLAIM. LD. COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT A SSESSEE HAS NOT SUBMITTED ANY DETAILS REGARDING THE FIXED ASSETS F OR WHICH DEPRECIATION IS ALLOWABLE, EITHER AT THE TIME OF ASS ESSMENT PROCEEDINGS OR AT THE TIME OF APPELLATE PROCEEDINGS. THEREFORE, LD. COMMISSIONER OF INCOME TAX (APPEALS) DECIDED THE ISSUE AGAINST THE ASSESSEE. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPE AL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. AS REGARDS TH E DETAIL OF WORK DONE AND SERVICES RENDERED TO EARN THIS COMMISSION, NO DETAIL HAS BEEN SUBMITTED. EVEN BEFORE US THE LD. COUNSEL OF T HE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO BUTTRESS THE ASSESSEE S CLAIM. EVEN THE TDS WAS NOT DEDUCTED BY THE DEDUCTOR ON COMMISSION A ND EVEN THE INSPECTOR DEPUTED HAS GIVEN ADVERSE REPORT. UNDER THE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDER OF THE AUTHORITIES BELOW IN TREATING THE COMMIS SION EARNED AS INCOME FROM UNDISCLOSED SOURCES. ITA NO. 3546/DEL/2011 5 6.1 AS REGARDS THE CLAIM OF EXPENSES IS CONCERNED, N O DETAIL WAS SUBMITTED BEFORE THE AUTHORITIES BELOW. BEFORE US ALSO NO DETAIL WAS SUBMITTED. REPORTEDLY THE BOOKS ARE STILL IMPOUNDE D. UNDER THE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THERE IS N O INFIRMITY IN THE ORDER OF THE AUTHORITIES BELOW REGARDING THE DISALL OWANCE OF THE CLAIM OF THE EXPENDITURE. 6.2 AS REGARDS THE CLAIM OF DEPRECIATION, WE FIND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS DISALLOWED THE SAME ALSO ON THE GROUND THAT RELEVANT DETAILS WERE NOT SUBMITT ED. IN THE ABSENCE OF THE NECESSARY DETAIL, THIS CLAIM OF DEPRECIATIO N IS ALSO NOT ALLOWABLE. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/1/2012. SD/- SD/- [ [[ [I.P. BANSAL I.P. BANSAL I.P. BANSAL I.P. BANSAL] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 20/1/2012 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES