Sh. Ashok Kumar Gupta, New Delhi V. ITO, New Delhi

ITA 3703/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91426 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 07-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 23-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN RAWAL
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 10

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC - 2 : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3 703 /DEL/201 4 A.Y. : 200 8 - 0 9 MR. ASHOK KUMAR GUPTA, VS. INCOME TAX OFFICER, C - 38, ASHOK VIHAR, PHASE - I, WARD 19 ( 2 ), DELHI 11 0 052 NEW DELHI (PAN: AAFPG5190A ) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. VED JAIN, ADVOCATE . DEPARTMENT BY : SH. ROBIN RAWAL, SR. DR DATE OF HEARING : 0 7 - 7 - 2015 DATE OF ORDER : 20 - 7 - 2015 PER H.S. SIDHU: JM O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - XXII, NEW DELHI DATED 1 1 . 2 .201 4 PERTAINING TO ASSESSMENT YEAR 200 8 - 0 9 . 2. T HE GROUNDS OF APPEAL READ AS UNDER: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY' THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)[CIT(A)] IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND C IRCUMSTANCES OF THE CASE, THE LEARNE D CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN PASSING THE ORDER WITHOUT GIVING ASSE SS EE A PROPER AND ADEQUATE 2 OPPORTUNITY OF BEING HEARD IN CLEAR VIOLATION OF THE PRINCIPAL OF NATURAL JUSTICE. 3(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED C IT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.4,50,354/ - MADE BY THE AO ON ACCOUNT OF SUNDRY CREDITORS. (II) THAT THE SAID ADDITION HAS BEEN CONFIRMED IGNORING THE DETAILED EXPLANATION AND EVIDENCES BROUGHT ON RECORD BY THE AS SESSEE DURING THE ASSESSMENT PROCEEDINGS. 4. WITHOUT PREJUDICE TO THE ABOVE AN AMOUNT OF RS . 1, 58 , 500/ - OUT OF RS.4,50,354/ - CANNOT BE ADDED IN THE RELEVANT ASSESSMENT YEAR AS THE SAME PERTAINS TO EARLIER YEARS BEING THE OPENING BALANCES OF SUNDRY CRED ITORS 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF AN AMOUNT OF RS. 60,000/ - MADE BY THE AO OUT OF VARIOUS EXPENSES. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 3. THE FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES, THEREFORE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF CONVENIENCE. 4. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE SUB MITTED THAT WITH REGARD TO GROUND NO.3 AND 4 RELATES TO ADDITION OF RS . 4 , 5 O,3 54 / - ARE CONCERNED, THE AO MADE ADDITION ON ACCOUNT OF SUNDRY 3 CREDITORS. THE ADDITION HAS BEEN MADE ON ACCOUNT OF FOLLOWING SUNDRY CREDITORS: I. RAJINDER ,METAL INDUSTRY RS.92, 000 / - II. CMC METAL INDUSTRY RS . 4 9,440/ - III. R.A. ENTERPRISES RS.21,368/ - IV. JAY KAY INDUSTRIES RS.21,046/ - V. NATIONAL INDUSTRIES RS. 1 , 00 , 000 / - VI. RELIANCE INC. RS.86, 500 / - VII. OM NEW METAL INDUSTRIES RS.80, 000 / - TOTAL RS.4,5O,354/ - 4.1 HE FURTHER SUBMITTED THAT THE ASSESSEE HAD FURNISHED CONFIRMATION FROM ALL THESE CREDITORS BEFORE THE AO, ATTACHED AT PAPER BOOK PAGE NO. 24 ONWARDS. THE CONTENTION OF THE AO WAS THAT THESE WERE PRODUCED AT THE F A G END OF THE ASSESSMENT. AS THE AO DID NOT RAISE ANY OTHER ISSUE, NO FURTHER EVIDENCES WERE FILED BEFORE HIM. FURTHER, THE AO HAD MADE THE ADDITIONS WITHOUT APPLICATION OF MIND AS HE MADE ADDITION APPEARING AS OPENING BALANCES OF SUNDRY CREDITORS ALSO. DETAILS OF THEM HAVE BEEN PLACED AT PAPER BOOK PAGE NO. 34, WHEREBY IT CAN BE SEEN AN AMOUNT OF RS. 1 , 58 , 500 / - OUT OF THIS IS ARISING OUT OF OPENING BALANCES. IN ANY CASE NO ADDITION UNDER SECTION 68, OF THE BALANCES APPEARING FOR EARLIER YEARS CAN BE MADE. THESE ARE RUNNI NG ACCOUNTS AND THERE IS NO DENYING THAT THESE WERE TRADE CREDITORS . 4 4.2 FURT H ER, THE TRADE CREDITORS ARE ENTIRELY ON A DIFFERENT FOOTING, ADDITION ON ACCOUNT OF UNCONFIRMED CREDITORS CANNOT BE MADE ON SUCH ALLEGATION. 4. 3 RELIANCE IS PLACED ON THE FOLLO WING JUDGMENTS: (I) DCIT VS . DIVINE INTERNATIONAL, ITA NO.1995 (DEL) 2011, DATED 30.09.2011 (II) YFC PROJECTS PVT LTD VS DCIT, (2010) 46 DTR 496 (DEL) (III) CIT VS PANCHAN DASS JAIN, (2008) 205 CTR (A LL /444 ) (ALL) (IV)JCIT VS MATHURA DASS ASHOK KUMAR, (2006) 101 TTJ (ALL) 810 (V) ACIT VS HAR SINGA GUTKHA (P) LTD., (2008) 9 DTR (LUCK)(4B) 604 4.4 HE FURTHER SUBMITTED THAT AS REGARDS GROUND NO. 5 IS CONCERNED, T HE AO MADE AD - HOC DISALLOWANCE OF RS.60,000/ - OUT OF VARIOUS EXPENSES. THE DETAILS OF ALL TH E EXPENSES CLAIMED BY THE ASSESSEE MAY BE PERU S ED FROM PAGE 8 OF THE CIT{A) ORDER. IT CAN BE SEEN THAT ALL EXPENSES ARE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF BUSINESS ONLY. ONLY THE FOLLOWING EXPENSES, AN ELEMENT OF PERSONAL EXPENSES CAN BE A LLEGED : I) TELEPHONE EXPENSES RS. 22,025/ - II) VEHICLE EXPENSES RS. 16,200/ - RS38,225/ - THE TOTAL EXPENSES BEING RS.38,225/ - , DISALLOWANCE OF OTHERWISE NOT JUSTIFIED. 4.5 FINALLY, HE REQUESTED THAT KEEPING IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, THE ADDITIONS IN DISPUTE MAY BE DELETED. 5 5. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDE RS PASSED BY THE REVENUE AUTHORITIES ALONGWITH RELEVANT RECORDS AVAILABLE WITH THE APPEAL FIL E D AND THE SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE, AS AFORESAID AS WELL AS THE PAPER BOOK CONTAINING PAGES 1 TO 39 IN WHICH LD. COUNSEL OF THE ASSE SSEE HAS ATTACHED THE COPY OF THE COMPUTATION OF INCOME; COPY OF AUDITED FINANCIALS OF M/S RAJASTHAN TRADERS; LIST OF SUNDRY CREDITORS; COPY OF TAX AUDIT REPORT; COPY OF REPLY FILED BEFORE AO DATED 14.9.2010; COPY OF REPLY FILED BEFORE THE AO DATED 10.12.2 010; COPY OF REPLY FILED BEFORE THE AO DATED 20.2.2010; COPY OF REPLY FILED BEFORE THE AO DATED 27.12.2010 AND COPY OF SUBMISSION FILED BEFORE THE CIT(A) DATED 23.1.2012. I AM OF THE VIEW THAT ASSESSEE HAS FILED THE WRITTEN SUBMISSION BEFORE THE LD. CI T(A) AS WELL AS BEFORE THE AO AND REMAINED NON - COOPERATIVE BEFORE THE AUTHORITIES BELOW. FOR SUBSTANTIATING THIS VERSION, I AM REPRODUCING THE OBSERVATIONS OF THE AO AND THE DECISION OF THE LD. CIT(A) MENTIONED IN THE IMPUGNED ORDER AT PARA NO. 6 PAGE N O. 3 TO 4 AND PARA NO. 8 PAGE 9 TO 1 3 RESPECTIVELY. 6. OBSERVATIONS OF THE ASSESSING OFFICER THE ASSESSING OFFICER HAS OBSERVED AS UNDER IN THE ASSESSMENT ORDER U/S 143(3) DATED 27.12.2010: - 'RETURN DECLARING INCOME OF RS. 1,73,450/ - WAS FILED ON 30.09.2008. THIS WAS PROCESSED U/S 143(1) ON 04.08.2009 AT THE RETURNED AMOUNT. THIS CASE WAS SELECTED FOR SCRUTINY AS PER GUIDELINES OF THE CBDT. STATUTORY NOTICE U/S 143(2) WAS ISSUED AND SERVED. IN RESPONSE, SHRI MUKESH MITTAL, CA/AR OF THE 6 ASSESSEE ATTENDED FROM TIME TO TIME, DETAILS CALLED FOR HAVE BEEN FILED, BOOKS OF A/CS PRODUCED, WHICH WERE EXAMINED ON TEST CHECK BASIS AND THE CASE WAS DISCUSSED. 2. THE ASSESSEE IS ENGAGED IN THE WHOLESALE T RADING OF METAL/NON - FERROUS METAL AND HAS SHOWN INCOME UNDER THE HEAD BUSINESS. 3. IN THIS CASE, THE ASSESSEE HAD SHOWN SUNDRY CREDITORS AT RS. 58,54,949/ - . IN SPITE OF REPEATED OPPORTUNITIES GIVEN TO THE ASSESSEE (EVEN THE BASIC DETAILS, NAMES AND ADDR ESS WITH AMOUNTS WERE NOT FILED FOR ALL THE SUNDRY CREDITORS. IN RESPONSE TO SHOW CAUSE GIVEN TO THE ASSESSEE, VIDE LETTER DATED 27.12.2010 CONFIRMATIONS OF THE SUNDRY CREDITORS WERE FILED. THESE DETAILS HAVE BEEN FILED AT THE FAG END OF TIME BARRING TIME . A PERUSAL OF THESE DETAILS REVEALED THAT PAN IN RESPECT OF THE FOLLOWING SUNDRY CREDITORS PARTIES ARE NOT REFLECTED IN THEM TO JUSTIFY THEIR GENUINENESS: - (I) RAJINDER METAL INDUSTRY RS. 92,000/ - (II) CMC METAL INDUSTRY RS. 49,440/ - (III) R.A. ENTERPRISES RS. 21,368/ - (IV) JAY KAY INDUSTRIES RS. 21,046/ - (V) NATIONAL INDUSTRIES RS. 1,00,000/ - (VI) RELIANCE INC. RS. 86,500/ - (VII) OM NEW METAL INDUSTRIES RS. 80,OOO/ - TOTAL RS. 4,50,354/ - 7 3.1 IT IS, THEREFORE, HELD TH AT ASSESSEE'S LIABILITY OF SUNDRY CREDITORS TO THE INTENT OF RS. 4,50,354/ - DOES NOT EXIST AND THIS AMOUNT IS ADDED AT THE INCOME OF THE ASSESSEE. 4. FURTHER FOR PERSONAL EXPENSES OF ASSESSEE BOOKED IN BUSINESS ON ESTIMATE RS. 60,000/ - IS DISALLOWED OUT O F EXPENSES CLAIMED BY THE ASSESSEE. T HE COUNSEL OF THE ASSESSEE HAS AGREED FOR TH E DISALLOWANCE AS PER ORDER SHEET ENTRY DT. 27.12.2010. 8. DECISION 8.1 DURING THE APPELLATE PROCEEDINGS, THE APPELLANT SUBMITTED WRITTEN SUBMISSIONS DATED 23.01.12 WHICH ARE REPRODUCED ABOVE IN PARA 7. PERUSAL OF THE WRITTEN SUBMISSIONS AND THE GROUNDS OF APPEAL ETC. LED TO SEVERAL QUERIES WHICH WERE RAISED BY ORDER SHEET ENTRY DATED 04.02.13. ON THIS DATE, .E. 04.02.13, SH. MUKESH MITTAL, CA, ATTENDED AND FILED WRITTEN S UBMISSIONS WHICH WERE BEARING THE DATE 23.01.2012. THE FOLLOWING ORDER SHEET ENTRY WAS MADE ON 04.02.13 : - SHRI MUKESH MITTA, CA ATTENDED AND FILED SUBMISSION DATED 23.1.2012. 1. IT IS SEEN THAT COPIES OF AUDIT REPORTS FOR A.Y. 08 - 09 AND 07 - 08 ARE FILED BUT ALL ACCOMPANYING DOCUMENTS HAVE NOT BEEN FILED. TO FILE COMPLETE SETS AND TO FILE ITR, COMPUTATION OF INCOME ETC. FOR THESE YEARS AND A. Y. 06 - 07 ALSO. 2. TO SUBMIT A NOTE ON T HE MANNER IN WHICH THE BUSINESS IS CARRIED OUT. 8 3. TO GIVE DETAILS OF THE CARS OWNED SPECIFYING HOW & BY WHOM THEY WERE USED. PRODUCE LOG BOOKS FOR CARS. 4. TO GIVE DETAILS FOR PHONES AND TO PRODUCE TELEPHONE CALL REGISTER. 5. GIVE DETAILS OF ALL EXPE NSES ON CARS INCLUDING INSURANCE, INTEREST, DEPRECIATION, CAR RUNNING & MAINTENANCE ETC. 6. EXPLAIN THE NATURE & GIVE DETAILS OF SHOP. EXP. CONVEYANCE, SALARY. ADJ. TO 15.02.13 AT 12.10 PM.' 8.2 COMPLIANCE WAS TO BE MADE ON 15,02.13, BUT ON THIS DATE SH. HIMANSHU GUPTA, SON OF THE ASSESSEE ATTENDED AND FILED LETTER FOR ADJOURNMENT. THE ORDER SHEET ENTRY DATED 15.02.13 IS AS UNDER: - SHRI HIMANSHU GUPTA, WHO HAS STATED TO BE THE SON OF THE ASS ESSEE AND AN EMPLOYEE OF M/S RAJASTHAN TRADERS AS ON DATE, ATTENDED AND FILED LETTER SEEKING ADJOURNMENT. HE HAS STATED THAT M/S RAJASTHAN TRADERS HAS BEEN TRADING IN SCRAP OF NON FERROUS METALS SUCH AS ZINC, BRASS, COPPER, ALUMINIUM FROM LAST SEVERAL YEA RS FROM 2266, BAGICHI. REGHUNATH DAS, SADAR BAZAR, DELHI - 6. HE HAS STATED THAT THE ENTIRE BUSINESS IS CARRIED OUT FROM THIS SHOP ONLY AND THERE IS NO OTHER BRANCH, SHOP, OFFICE, GODOWN ETC. IT WAS POINTED OUT TO SHRI H. GUPTA THAT THE INFORMATION & DOCUME NTS REQUIRED CAN BE SUBMITTED BY HIM OR HIS COUNSEL AND SHRI A.K. GUPTA CAN ATTEND SUBSEQUENTLY IF REQUIRED. 9 ADJ. TO 22.2.13 AT 12.10 PM.' 8.3 HOWEVER, ON 22.02.13 THERE WAS NO COMPLIANCE, NEITHER THE ASSESSEE OR OR HIS SON, NOR ANY OTHER REPRESENTATIVE ATTENDED, NOR ANY WRITTEN SUBMISSIONS WERE FILED AND EVEN ANY ADJOURNMENT WAS NOT SOUGHT. 8.4 SUBSEQUENTLY, NOTICE DATED 10.1 0.13 WAS ISSUED TO THE APPELLANT FOR COMPLIANCE ON 22.10.13 AT 03:50 PM, BUT NO COMPLIANCE AT ALL WAS MADE ON THIS DATE. 8.5 A NOTHER NOTICE DATED 23.10.13 WAS ISSUED TO THE APPELLANT FOR COMPLIANCE ON 12.11.13 AT 12:55 PM, BUT AGAIN NO COMPLIANCE AT ALL WAS MADE ON THIS DATE. 8.6 NOTICE DATED 02.12.13 WAS ISSUED TO THE APPELLANT FOR COMPLIANCE ON 10.12.13 AT 11 :20 AM, BUT AGAIN NO COMPLIANCE AT ALL WAS MADE. 8.7 SUBSEQUENTLY, ANOTHER NOTICE DATED 21.01.14 WAS ISSUED TO THE AT ALL WAS MADE. NEITHER THE ASSESSEE OR HIS SON, NOR ANY OTHER REPRESENTATIVE ATTENDED, NOR ANY WRITTEN SUBMISSIONS WERE FILED AND EVEN ANY ADJOURNMENT WAS NOT SOUGHT. 8.8 FROM THE ABOVE CONDUCT OF THE APPELLANT IT IS CLEAR THAT ONCE SPECIFIC QUERIES WERE RAISED IN THE APPELLATE PROCEEDINGS, THE APPELLANT HAS AVOIDED COMPLIANCE IN THE APPELLATE PROCEEDINGS AND NEITHER FILED ANY WRITTEN SUBMISSIONS NOR ATTEN DED ON THE DATE ADJOURNED I.E. 22.02.13, NOR ATTENDED SUBSEQUENTLY ON VARIOUS DATES FOR WHICH THE HEARING WAS FIXED BY ISSUE OF NOTICES, I.E. 22.10.13, 12.11.13, 10.12.13 AND 30.01.14, AS DISCUSSED ABOVE IN PARA 8.3 TO PARA 8.7. IT IS APPARENT THAT ONCE IN QUIRIES 10 U/S 250(4) WERE MADE BY THE COMMISSIONER (APPEALS), THE APPELLANT BEING APPREHENSIVE THAT THE INQUIRY WILL BRING ON RECORD FURTHER EVIDENCE AND MATERIAL AGAINST HIM AND WOULD FURTHER STRENGTHEN THE ADDITIONS MADE, EVADED THE APPELLATE P ROCEEDINGS A ND NEITHER ATTENDED THE PROCEEDINGS NOR FILED THE REPLIES, D OCUMENTS ETC. REQUIRED BY ORDER SHEET QUERIES. IN VIEW OF THIS SITUATION NO R ELIEF CAN BE GRANTED TO THE APPELLANT. 8. 9 EVEN ON MERITS IT IS SEEN THAT THE ASSESSEE WAS UNABLE TO PROVE THE GENUINENESS OF THE CLAIMED SUNDRY CREDITS FROM THE SEVEN PARTIES MENTIONED IN P A RA 3 OF THE ASSESSMENT ORDER ON PA GE 1. THE APPELLANT HAS CLAIMED THAT THE ASSESSING OFFICER HAS ACCEPTED T HE PURCHASES FROM THESE SEVEN PARTIES. HOWEVER, THE ASSESSING OFFICER HAS NOWHERE STATED THAT THE PURCHASES ARE GENUINE. FURTHER, A PERUSAL OF THE FORM NO. 3CD FOR THE PREVIOUS YEAR ENDED 31.03.08 (RELEVANT TO A.Y. 08 - 09) SHOWS THAT IN PARA 28(A) REGARDING - THE QUANTITATIVE DETAILS OF PRINCIPAL ITEMS OF GOODS TRADED, IT HAS BEEN STATED 'AS PER ANNEXURE'. SIMILARLY IN PARA 28(B) WHICH REQUIRES THE QUANTITATIVE DETAILS OF PRINCIPAL ITEMS OF RAW MATERIALS, FINISHED PRODUCTS AND BY - PRODUCTS FOR A MANUFACTURING C ONCERN, IT HAS BEEN STATED 'AS PER ANNEXURE'. HOWEVER, COPIES OF BOTH THESE ANNEXURES I.E. FOR THE TRADING ACTIVITIES [AS PER PARA 28(A)] AND FOR THE MANUFACTURING ACTIVITIES [AS PER PARA 28(B)], WERE NOT FILED. IN VIEW OF THE ABSENCE OF THESE AND OTHER DO CUMENTS IT WAS MENTIONED IN POINT NO. 1 OF ORDER SHEET ENTRY DATED 04.02.13 THAT IT IS SEEN THAT COPIES OF AUDIT REPORTS FOR A.Y. 08 - 09 AND 07 - 08 ARE FILED BUT ALL ACCOMPANYING DOCUMENTS HAVE NOT BEEN FILED. TO FILE COMPLETE SETS AND TO FILE ITR( COMPUTA TION OF INCOME ETC. FOR THESE YEARS 11 AND A.Y. 06 - 07 ALSO.'. HOWEVER, DESPITE THE SPECIFIC QUERY BEING MADE TO SUBMIT ALL THE ACCOMPANYING DOCUMENTS, THE SAME WERE NOT FILED DESPITE REPEATED OPPORTUNITIES WHICH HAVE BEEN DISCUSSED ABOVE. 8. 1 0 IT IS FURTHER NOTEWORTHY THAT THOUGH IT HAS BEEN CLAIMED BY THE ASSESSEE THAT HE IS ENGAGED IN THE BUSINESS OF 'TRADING OF FERROUS AND NON FERROUS METAL' AS PER PARA 8(A) OF FORM 3CD FOR A.Y. 08 - 09, BUT THE CLAIMED ANNEXURE MENTIONED IN PARA 28(B) CLEARLY SHOWS THAT THE ASSESSEE WAS ENGAGED IN SOME MANUFACTURING ACTIVITIES ALSO. HOWEVER, SUCH MANUFACTURING ACTIVITIES HAVE NOT BEEN DISCLOSED IN THE TRADING AND PROFIT & LOSS ACCOUNT. THE APPELLANT WAS REQUIRED AS PER POINT NO. 2 OF ORDER SHEET ENTRY DATED 04.02.13, 'TO SUB MIT A NOTE ON THE MANNER IN WHICH THE BUSINESS IS CARRIED OUT.' HOWEVER, NO SUCH NOTE WAS SUBMITTED BY THE APPELLANT DESPITE REPEATED OPPORTUNITIES. SH. HIMANSHU GUPTA, WHO STATED TO BE THE SON OF THE ASSESSEE AND ALSO AN EMPLOYEE OF MLS RAJASTHAN TRADERS ATTENDED ON 15.02.13 AND CLAIMED THAT MLS RAJASTHAN TRADERS HAS BEEN TRADING IN SCRAP OF NON FERROUS METALS SUCH AS ZINC, BRASS, COPPER, ALUMINUM, AS PER THE ORDER SHEET ENTRY DATED 15.02.13 REPRODUCED ABOVE IN PARA 8.2. IT IS SEEN THAT THERE ARE SEVERAL D IVERGENT CLAIMS REGARDING THE NATURE OF BUSINESS OF THE ASSESSEE : - A) THAT THE ASSESSEE IS ENGAGED ONLY IN THE DEALING OF SCRAP OF NON FERROUS METALS. B) THAT THE ASSESSEE IS ENGAGED IN THE TRADING OF BOTH FERROUS AND NON FERROUS METALS. 12 C) THAT THE AS SESSEE IS ENGAGED IN MANUFACTURING ACTIVITIES ALSO. 8.11 THE ASSESSEE WAS REQUIRED TO EXPLAIN THE NATURE OF BUSINESS BY SUBMITTING A NOTE ON THE NATURE OF BUSINESS, ALONGWITH OTHER QUERIES, BUT THE ASSESSEE EVADED GIVING REPLIES TO THE ORDER SHEET QUERIES . THE APPELLANT HAS FILED PHOTOCOPIES OF SOME CLAIMED CONFIRMATIONS FROM SEVEN PARTIES, BUT IT IS SEEN THAT NONE OF THESE HAVE THE PAN NO. AS POINTED OUT BY THE ASSESSING OFFICER. FURTHER, THE APPELLANT HAS BEEN UNABLE TO ESTABLISH THE GENUINENESS OF THESE TRANSACTIONS AND THE CLAIMED CREDITS. IT HAS BEEN CLAIMED THAT THE ASSESSING OFFICER HAS ACCEPTED THE PURCHASES, BUT FIRSTLY THE ASSESSING OFFICER HAS NOWHERE IN THE ASSESSMENT ORDER STATED THAT THE PURCHASES IN RESPECT TO THESE PARTIES ARE GENUINE, AND S ECONDLY IN VIEW OF THE QUERIES RAISED IN THE APPELLATE PROCEEDINGS AND THE DELIBERATE NO COMPLIANCE BY THE ASSESSEE, IT IS CLEAR THAT THE CLAIMED PURCHASES FROM THES E PARTIES CANNOT BE HELD TO BE GENUINE AND A DISALLOWANCE HAS TO BE MADE FOR THE PURCHASES FROM THESE PARTIES. ALSO, ADDITION IS REQUIRED TO BE MADE FOR THE THE MANUFACTURING ACTIVITIES CARRIED OUT BY THE ASSESSEE WHICH HAVE NOT BEEN DISCLOSED IN THE TRADING AND PROFIT & LOSS A/C. HOWEVER, IN VIEW OF THE FACTS OF THE CASE, NO FURTHER ADDITION IS BEING MADE AND THE ADDITION OF RS.4,50,354/ - IS DEEMED TO INCLUDE DISALLOWANCE OF PART OF THE PURCHASES FROM THESE PARTIES DURIN G THE YEAR UNDER CONSIDERATION AND FOR UNDISCLOSED AC T IVITIES BY THE ASSESSEE. ACCOR DINGLY , THE ADDITION OF RS . 4 ,50,354/ - IS HEREBY CONFIRMED . 13 7. KEEPING IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES EXPLAINED ABOVE BY THE REVENUE AUTHORITIES, I AM OF THE CONSIDERED VIEW THAT ASSESSEE REMAINED NON - COOPERATIVE BEFORE THE REVENUE AUTHORITIES, THEREFORE, THE ASSESSEE IS NO T DESERVING FOR ANY LENIENT VIEW FROM THIS BENCH. BUT ANY HOW IN THE INTEREST OF JUSTICE, I AM SETTING ASIDE THE ISSUES IN DISPUTE TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH, UNDER THE LAW, AFTER ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSE. IT IS MADE CLEAR THAT IF THE ASSESSEE AGAIN REMAINED NON - COOPERATIVE BEFORE THE AO, THE AO HAS LIBERTY TO DECIDE THE ISSUE IN DISPUTE UNDER THE LAW. ASSESSEE IS ALSO DIRECTED TO FULLY COOPERATE WITH THE AO FOR THE SPEEDY COMPLETION OF THE ASSESSMENT AND FI LED ALL THE NECESSARY EVIDENCE FOR SUBSTANTIATING ITS CLAIM BEFORE HIM AND AO IS LIBERTY TO EXAMINE THE SAME, AS PER LAW, BUT AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 /7/201 5 . SD/ - [ H.S. SIDHU ] JUDICIAL MEMBER DATE: 20 /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 14