Shri Rajeev Kumar Gupta, Meerut V. ITO, Meerut

ITA 3609/DEL/2014

• Counselvise Citation: 360920114 RSA 2014
• Duration Of Justice: 1 year(s) 21 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: 2009-2010
• Appeal Filed On: 17-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Assessee Lawyers: RAVINDRA AGGARWAL
• Keywords: Opportunity of being heard
• Section: 143(3); 133(6)

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC - 2 : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3609 /DEL/201 4 A.Y. : 200 9 - 10 SHRI RAJEEV KUMAR GUPTA, VS. ITO, WARD - 2(2), 517, SHIV SHAKTI NAGAR, MEERUT MEERUT INCOME TAX OFFICE, (PAN : ALBPG0014A) BHAISALI GROUND, MEERUT (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAVINDRA AGGARWAL, CA 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 1 8 . 2 .201 4 PERTAINING TO ASSESSMENT YEAR 200 9 - 10 . 2. T HE GROUNDS OF APPEAL READ AS UNDER: - I) THAT THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE BY CONFIRMING AND UPHOLDING THE ADDITION OF RS. 10,14,000/ - AS MADE BY THE AO, TOWARDS AGGREGATE UNCONFIRMED CASH PAY MENTS TO ONE OF THE SUPPLIERS, 2 BY TREATING THE SAME AS INCOME OF THE APPELLANT AND THE VARIOUS FINDINGS AND OBSERVATIONS MADE BY THE AUTHORITIES BELOW IN THEIR RESPECTIVE ORDER WHILE MAKING ABOVE ADDITION ARE EITHER INCORRECT OR UNTENABLE IN LAW AND THE SUBMISSIONS O FTHE APPELLANT HAVE NOT BEEN CONSIDERED IN RIGHT PERSPECTIVE THEREOF. 2. THAT WITHOUT PREJUDICE TO ABOVE, THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON THE FACTS BY MAKING PERVERSE OBSERVATION THAT NO CASH FLOW STATEMENT HAS BEEN FURNISHED TO ESTABLISH THE AVAILABILITY OF FUNDS FOR MAKING THE PAYMENTS , AS AVAILABILITY OF CASH WAS NEITHER DOUBTED BY THE AO NOR THE LD. CIT(A) REQUIRED THE APPELLANT TO FURNISH CASH FLOW STATEMENT DURING APPELLANT PROCEEDING AND THEREFORE THE ADDITION UNDER AP PEAL HAVING BEEN CONFIRMED ON THE BASIS OF SUCH OBSERVATION DESERVES TO BE DELETED. 3. THE APPELLANT CRAVES LEAVE TO ADD, MODIFY AND / OR DELETE ANY GROUNDS OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOM E FROM WHOLE SALE AND RETAIL TR ADING OF ALL KINDS PAPERS. RETURN DECLARING INCOME OF RS.2,24,210/ - WAS FILED ON 06 - 11 - 2011. DURING THE COURSE OF ASSESSMENT PRO CEED INGS FROM THE PERUSAL OF COPY OF ACCOUNT FURNISHED BY THE ASSESSEE IN RESPECT OF THE CREDITO R, M / S PARAS PAPER CENTRE, MEERUT IT WAS GATHERED BY THE A O THAT IT WAS A CREDITOR FOR RS.81,81,317/ - . THUS THE AO IN ORDER TO CONFIRM THE SAME SOUGHT INFORMATION ULS 133(6) OF THE ACT FROM MLS PA RAS PAPER CENTRE 3 WHO INFORMED THAT THE ASSESSEE WAS A DEBTOR AT RS.91,95,137/ - DURING THE RELEVANT ACCOUNTING PERIOD. FROM THE PERUSAL OF BOTH THE COPIES OF ACCOUNT AS PER THE ASSESSEE A AND AS PER M/S PARAS - PAPER CENTRE IT WAS GATHERED BY THE AO THAT THE ASSESSEE HAD SHOWN 52 NUMBERS OF CASH PAYMENTS OF RS.19,500 / - EACH AGGREGATING TO RS.I0,14,000/ - BUT M / S PARAS PAPER CENTRE HAD NOT SHOWN SUCH PAYMENTS. THE AO VIDE ORDER SHEET ENTRY DATED 18 - 11 - 2011 REQUIRED THE ASSESSEE TO EXPLAIN WHY THE DIFFERENCE OF RS. 1 0,14,000 / - BE NOT TREATED AS CASH INTRODUCED OUT OF BOOKS OF ACCOUNT AND BE NOT ADDED TO THE INCOME OF THE ASSESSEE. IN RESPONSE IT WAS SUBMITTED BY THE ASSESSEE THAT AS FAR AS NON - CONFIRMATION OF 52 CASH RECEIPT OF RS.10.14 LACS BY M/S PARAS PAPER CENTRE, MEERUT, A CREDITOR, IT WAS SUBMITTED THAT THE SAME HAS DULY ACKNOWLEDGE BY THE STAFF OF SH. PUNIT JAIN, PROP. MLS PARAS PAPER CENTRE, MEERUT. 3.1 HOWEVER, THE AO REJECTED THE SUBMISSIONS MADE BY THE ASSESSEE. THE ASSESSEE FILED AN APPLICATION ULS 144A OF THE ACT BEFORE THE ADDL. CLT, RANGE - 2, MEERUT REQUESTING TO ISSUE NECESSARY DIRECTIONS TO THE AO ON BEHALF OF HIS SUBMISSIONS. THE ADDL.CIT, RANGE - 2, MEERUT DIRECTED THE ASSESSEE TO FURNISH THE DETAILS AS REQUIRED VIDE ORDER SHEET ENTRY DATED 28 - 12 - 2011 AND ALSO TO PRODUCE THE PERSON WHO RECEIVED THE CASH PAYMENTS ON BEHALF OF MLS PARAS PAPER CENTRE AND ALSO TO JUSTIFY THE PAYMENTS MADE IN CASH. IN RESPONSE THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS REITERATING THE SAME FACTS AS NARRATED BEFORE THE AO WHICH WERE R EJECTED BY THE AO. SINCE, THE, ASSESSEE, FAILED TO PRODUCE THE PERSON WHO RECEIVED CASH ON BEHALF OF MLS PARAS PAPER CENTRE, MEERUT AND AS SUCH THE ADDL.CIT, RANGE - 2 , MEE RUT DIRECTED THE AO TO ADD THE AMOUNT OF RS. 1 O,14,000 / - TO THE INCOME OF THE ASSESSEE. BASED ON SUCH INFERENCE THE AO ADDED THE AMOUNT OF 4 RS. 1 O,14,000 / - TO THE INCOME OF THE ASSESSEE AND COMPLETED THE ASSESSMENT U/S. 143(3) OF THE I.T. ACT, 1961 VIDE HIS ORDER DATED 29.11.2011. 4. AGGRIEV E D WITH THE AFORESAID ORDER DATED 29.11.2011, ASSE SSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 18.2.2014 HAS DISMISSED THE APPEAL OF THE ASSESSEE BY CONFIRMING THE ACTION OF THE AO. 5. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. AT THE OUTSET, LD. C OUNSEL OF THE ASSESSEE STATED THAT LD. CIT(A) WAS WRONG IN OBSERVING THAT NO CASH FLOW STATEMENT HAS BEEN FURNISHED TO ESTABLISH THE AVAILABILITY OF FUNDS FOR MAKING THE PAYMENTS , AS AVAILABILITY OF CASH WAS NEITHER DOUBTED BY THE AO NOR THE LD. CIT(A) REQUIRED THE ASSESSEE TO FURNISH CASH FLOW STATEMENT DURING APPELLATE PROCEEDINGS AND THEREFORE, HE STATED THAT THE CONFIRMATION OF THE ADDITION MERELY ON THIS BASIS IS WRONG AND DESERVE TO BE DELETED. 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 IN THE APPELLATE ORDER, LD. CIT(A) HAS NOTED THAT AS PER THE ASSESSEE THE AO HAS ERRED IN LAW AND FACTS BY COMPLETING THE ASSESSMENT AT RS. 12,32,210/ - AS AGAINST THE DECLARED INCOME OF RS. 2,24,210/ - AND THE VARIOUS CONCLUSIONS DRAWN BY THE AO FO R DOING SO WERE DEVOID OF SUPPORTING MATERIAL AND 5 BEING BASED ON ASSUMPTIONS WERE NOT TENABLE IN LAW. WE FIND THAT THE AO HAD MADE ADDITION OF RS. 10,14,000/ - MERELY ON THE GROUND THAT AS PER THE COPY OF ACCOUNT M/S PARAS PAPER CENTRE, MEERUT 52, CASH P AYMENTS AT RS. 19,500/ - WERE SHOWN MADE HOWEVER, M/S PARAS PAPER CENTRE, MEERUT DENIED TO HAVE RECEIVED SUCH PAYMENTS. FURTHER, THE ASSESSEE COULD NOT PRODUCE SH. BIJENDRA KUMAR THE RECIPIENT OF SUCH PAYMENTS ON BEHALF OF M/S PARAS PAPER CENTRE, MEERU T. ON THE OTHER HAND ASSESSEE HAS CONTENDED THAT SUCH PAYMENTS WERE MADE TO ONE SH. BIJENDRA KUMAR, EMPLOYEE OF THE AFORESAID CONCERN WHO COLLECTED PAYMENTS ON BEHALF OF M/S PARAS PAPER CENTRE, MEERUT, WHO LEFT THE SERVICE WITH THE AFORESAID CONCERN ANS A S SUCH COULD NOT BE PRODUCED FOR EXAMINATION BEFORE THE AO. 8.1 I FURTHER FIND CONSIDERABLE COGENCY IN THE ASSESSEE S SUBMISSIONS THAT THE LD. CIT(A) HAS OBSERVED THAT NO CASH FLOW STATEMENT HAS BEEN FURNISHED TO ESTABLISH THE AVAILABILITY OF FUNDS FOR MAKING THE PAYMENTS , AS AVAILABILITY OF CASH WAS NEITHER DOUBTED BY THE AO NOR THE LD. CIT(A) REQUIRED THE ASSESSEE TO FURNISH CASH FLOW STATEMENT. THEREFORE, I N THE INTEREST OF JUSTICE, IN MY CONSIDERED OPINION, THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE AO TO CONSIDER THE ISSUE IN DISPUTE AFTER CONSIDERING THE CASH FLOW STATEMENT AND OTHER RELEVANT DOCUMENTS, IF ANY, AND GIVE AN OPPORTUNITY OF BEING HEARD TO 6 THE ASSESSEE. ACCORDINGLY, THE ISSUE IN DISPUTE IS SET ASIDE DENOVO TO THE FIL E OF THE AO TO CONSIDER THE SAME. ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE AO AND SUBMIT THE DOCUMENTS LIKE CASH FLOW STATEMENT ETC. TO THE AO IN ORDER TO SUBSTANTIATE HIS CLAIM BEFORE THE AO. 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE S TANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08 /7/201 5 . SD/ - [ H.S. SIDHU ] JUDICIAL MEMBER DATE: 08 /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 7