DCIT, New Delhi V. Sh Pramod Kr. Saxena, New Delhi

ITA 3711/DEL/2013

• Counselvise Citation: 371120114 RSA 2013
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 11-11-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 10-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Depreciation; Opportunity of being heard; Additional evidence; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI I.C. SUDHIR, JUDICIAL MEMBER ITA NO. 3711 /DEL / 2013 ASSESSMENT YEAR: 2003 - 04 DY. COMMISSIONER OF INCOME VS. SH. PRAMOD KR. SAXENA, TAX, CIRCLE - 22(1), NEW DELHI D - 88/4, OKHLA INDUSTRIAL AREA, PH - 1, NEW DELHI (PAN:AAMPS1361G) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. VIKRAM SAHAY, SR. DR RESPONDEN T BY: SH. RAJESH MAHNA, ADVOCATE ORDER PER SHRI I.C. SUDHIR, JM : 1. THE REVENUE HAS IMPUGNED THE FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS: THAT THE LEARNED CIT(A) HAS ERRED IN: 1. D ELETING THE ADDITION OF RS. 10,45,430/ - MADE BY THE A.O. ON ACCOUNT OF SALARY AND WAGES; 2. O N ACCEPTING THE ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF THE ITAT RULES, 1962 . 2. THE RELEVANT FACTS ARE THAT THE ADDITION OF RS. 10,45 , 430/ - WAS MADE ON ACCOUNT OF UNAVAILABILITY OF STOCK IN RESPECT OF SALES MADE DURING AUGUST AND SEPTEMBER, 2002. THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD MADE PURCHASES OUTSIDE THE BOOKS OF ACCOUNT OF THIS AMOUNT. THE ASSESSING OFFICER ALSO MADE ADDITION OF RS. 5,00,000/ - TO THE TRADING RESULTS AFTER REJECTING THE 2 ITA NO. 3711/DEL /2013 ASSESSMENT YEAR: 2003 - 04 BOOKS OF ACCOUNT OF DISCREPANCIES IN QUANTITATIV E DETAILS OF OPENING STOCK, PURCHASES AND SALES. FURTHER ADDITION OF RS. 50,000/ - WAS MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON THE VALUE OF LAND INCLUDED IN THE CLAIM OF DEPRECIATION ON BUILDING. THE ABOVE ACTION WAS QUESTIONED BY THE ASSESSEE BE FORE THE LEARNED CIT(A). THE LEARNED CIT(A) VIDE ITS ORDER DATED 14.01.2009, DELETED THE ADDITION AMOUNTING TO RS. 10,45,430/ - ON ACCOUNT OF UNDISCLOSED PURCHASES, AND THE ADDITION OF RS. 5,00,000/ - TO THE TRADING RESULTS. THE DISALLOWANCE OF DEPRECIATION OF RS. 50,000/ - WAS CONFIRMED. THE REVENUE PREFERRED AN APPEAL BEFORE THE TRIBUNAL AGAINST THE RELIEF ALLOWED BY THE CIT(A). THE TRIBUNAL VIDE ORDER DATED 11.09.2009, UPHELD THE DELETION OF ADDITION OF RS. 5,00,000/ - AND SET ASIDE THE ADDITION OF RS. 10,45 ,430/ - ON ACCOUNT OF UNRECORDED PURCHASES ON THE GROUNDS THAT THE RECONCILIATION OF QUANTITATIVE DETAILS HAD NOT BEEN SUBMITTED BEFORE THE ASSESSING OFFICER. 3. IN THE SET ASIDE ASSESSMENT PROCEEDINGS, THE ASSESSEE FAILED TO RESPOND, THE N OTICES ISSUED BY THE ASSESSING OFFICER REQUIRING THE ASSESSEE TO PRODUCE THE DAILY STOCK REGISTER FOR THE YEAR, COPIES OF DOCUMENTS FILED BEFORE THE CIT(A), AND RECONCILIATION OF THE QUANTITATIVE DETAIL S, HENCE THE A.O. ADDED BACK THE AMOUNT OF R S. 10,45,430/ - AS PER THE O RIGINAL ASSESSMENT. 4. DURING THE FIRST APPELLATE PROCEEDINGS, THE COUNSEL EXPLAINED THE REASONS FOR NON - COMPLIANCE BEFORE THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE ADDITION OF RS. 10,45,430/ - ON ACCOUNT OF UN - ENTERED PURCHASES IS NOTHING BUT THE ES TIMATED FIGURES ON THE BASIS OF THE BEST JUDGMENTS. DISCUSSING 3 ITA NO. 3711/DEL /2013 ASSESSMENT YEAR: 2003 - 04 RESPECTIVE CASES OF THE PARTIES IN DETAIL, THE LEA R NED CIT(A) HAS GIVEN THE FOLLOWING FINDINGS: 4. THE ABOVE WRITTEN SUBMISSION HAVE BEEN CAREFULLY CONSIDERED. I HAVE ALSO CALLED FOR AND EXA MINED THE ASSESSMENT RECORDS IN THIS CASE. THE ORDER OF THE CIT(A) - XXV, NEW DELHI HAS ALSO BEEN CAREFULLY PERUSED. THE FIRST GROUND OF APPEAL PERTAINS TO THE ADDITION OF UN - ENTERED PURCHASES OF RS. 10,45,430/ - . THE ASSESSING OFFICER FOUND THAT THE APPELLAN T HAD NEGATIVE STOCK OF RS. 10,45,430/ - DURING THE MONTHS OF AUGUST AND SEPTEMBER, 2002, AS THERE WERE NO PURCHASES TO ACCOUNT FOR THE SALES MADE DURING THOSE MONTHS. BEFORE THE CIT(A) - XXV, THE APPELLANT SUBMITTED A QUANTITATIVE RECONCILIATION OF GOODS PUR CHASED AND SOLD, AS PER THE DATE OF SHIPMENT. IT WAS CONTENDED THAT THE WORKING BY THE ASSESSING OFFICER WAS DONE BY ADOPTING THE DATE OF PURCHASE INVOICE AS THE DATE OF ACTUAL PURCHASE, AND THE DATE OF SALE BILL AS THE DATE OF ACTUAL SALE, WHEREAS THE QUA NTITATIVE TALLY HAD BEEN WORKED OUT ON THE BASIS OF CHALLANS THAT INDICATED THE DATE OF DELIVERY OF GOODS PURCHASED, AND THE SHIPMENT DATE THAT REFLECTED THE DESPATCH OF GOODS FOR SALE. IT WAS SUBMITTED THAT THE PURCHASE INVOICES WERE DATED AFTER THE DATE OF DELIVERY OF THE GOODS, AND THE SALES INVOICES WERE ALSO PREPARED IN ADVANCE SO THAT THE NECESSARY PAPERWORK FOR SHIPMENT COULD BE INITIATED. COPIES OF SHIPMENT BILLS, DELIVERY CHALLANS, PURCHASE BILLS AND SALE INVOICES ALONGWITH A RECONCILIATION STATEME NT GIVING ITEM - WISE QUANTITATIVE TALLY WERE FURNISHED. THE CIT(A), AFTER EXAMINING THE STATEMENT FILED, HELD THAT THE DIFFERENCES WERE RECONCILED, AND DELETED THE ADDITION OF RS. 10,45,430/ - . THE ITAT, DELHI, HAS SET ASIDE THE ISSUE OF UNACCOUNTED PURCHASE S OF RS. 10,45,430/ - TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF QUANTITATIVE RECONCILIATION, AS SUCH DETAILS HAD NOT BEEN FILED BEFORE HIM. 4.1 IN THE SET ASIDE ASSESSMENT PROCEEDINGS, THE APPELLANT FAILED TO ATTEND BEFORE THE ASSESSI NG OFFICER. IT IS CONTENDED THAT THE ALLEGED NOTICE DATED 06.12.2010 WAS NOT RECEIVED BY THE APPELLANT, HENCE NO REASONABLE OPPORTUNITY OF BEING HEARD WAS ALLOWED, AS HAD BEEN DIRECTED BY THE ITAT, DELHI. EXAMINATION OF THE ASSESSMENT RECORD SHOWS THAT THE FIRST NOTICE DATED 20.04.2010 HAD BEEN SENT BY SPEED POST AS PER RECEIPT DATED 23.04.2010. THE APPELLANT HAS STATED THAT THE NOTICE WAS RECEIVED AFTER THE DATE OF HEARING, AS LATE AS 15.05.2010, BUT NO PLAUSIBLE REASON FOR THE DELAYED SERVICE CAN BE DISCE RNED FROM THE FILE. IT IS ALSO CONTENDED THAT A SET OF THE SUBMISSIONS AND DOCUMENTS FILED BEFORE THE CIT(A) WERE HANDED OVER TO THE ASSESSING OFFICER, HOWEVER NO FURTHER NOTICE FOR HEARING WAS RECEIVED. 4 ITA NO. 3711/DEL /2013 ASSESSMENT YEAR: 2003 - 04 4.2 FURTHER, THE APPELLANT HAS SUBMITTED THAT T HE SECOND NOTICE DATED 06.12.2010 WAS NOT RECEIVED BY HIM. THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT WITHOUT MAKING ANY FURTHER ATTEMPT TO OBTAIN OR VERIFY THE QUANTITATIVE DETAILS FILED BY THE APPELLANT BEFORE THE CIT(A) AND THE ITAT. THE APPELLA NT HAS FILED A DETAILED RECONCILIATION STATEMENT INCORPORATING QUANTITATIVE DETAILS OF EACH ITEM OF OPENING STOCK AND PURCHASE, INVOICE WISE, AND TALLIED THE SAME WITH THE QUANTITATIVE DETAILS OF EXPORT SALES AS PER INVOICES AND SHIPPING BILLS. ALL THE SUP PORTING DOCUMENTS HAVE BEEN FILED, AND EXAMINED. IT IS ALSO TAKEN NOTE OF THAT A SIMILAR ADDITION, BASED ON DISCREPANCIES IN THE QUANTITATIVE DETAILS OF PURCHASE AND SALE, HAD BEEN MADE IN THE ASSESSMENT YEAR 2002 - 03, WHICH WAS DELETED BY THE CIT(A) - XXIII, NEW DELHI, VIDE ORDER DATED 15.06.2007, SINCE A RECONCILIATION OF THE QUANTITATIVE DETAILS OF PURCHASES AND SALES, AS PER THE DATE OF SHIPMENT. THE SAID ORDER OF THE CIT(A) HAS BEEN ACCEPTED BY THE DEPARTMENT. AFTER VERIFYING THE QUANTITATIVE DETAILS FILE D BY THE APPELLANT IN THE PRESENT APPELLATE PROCEEDINGS, IT IS FOUND THAT NO DISCREPANCY REMAINS BETWEEN THE QUANTITIES OF GOODS PURCHASED AND SOLD, AND THE DISCREPANCIES BETWEEN THE DATES OF PURCHASE AND SALE HAVE BEEN EXPLAINED WITH REFERENCE TO THE DATE S OF THE DELIVERY CHALLANS FOR THE GOODS RECEIVED, AND THE DATES OF SHIPMENT OF GOODS SOLD. ACCORDINGLY, THE ADDITION MADE OF RS. 10,45,430/ - STANDS DELETED. 5. IT IS EVIDENT FROM THE ABOVE FINDING OF THE LEARNED CIT(A) THAT THE ASSESSEE HAD FILED A DETAIL ED RECONCILIATION STATEMENT INCORPORATING QUANTITATIVE DETAILS OF EACH ITEM OF OPENING STOCK AND PURCHASE, INVOICE - WISE AND TALLIED THE SAME WITH THE QUANTITATIVE DE TAILS OF EXPORT SALES AS PER INVOICES AND SHIPPING BILLS. THE LEARNED CIT( A) HELD THAT THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT WITHOUT MAKING ANY FURTHER ATTEMPT TO OBTAIN OR VERIFY THE QUANTITATIVE DETAILS FILED BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITIES AND THE TRIBUNAL. LEARNED CIT(A) EXAMINED ALL THE S UPPORTING DOCUMENTS AND NOTED THAT SIMILAR ADDITION, BASED O N DISCREPANCIES IN THE QUANTITATIVE DETAILS OF PURCHASE AND SALE , WAS MADE IN THE A.Y. 2002 - 03, WHICH WAS DELETED BY THE FIRST 5 ITA NO. 3711/DEL /2013 ASSESSMENT YEAR: 2003 - 04 APPELLATE AUTHORITY , V IDE ORDER DATED 15.06.2007, SINCE A RECONCILIA TION OF THE QUANTITATIVE DETAILS OF PURCHASES AND SALE S, AS PER THE DATE OF SHIPMENT WAS MADE AVAILABLE. THE REVENUE HAD ACCEPTED THE SAID FIRST APPELLATE ORDER. THE LEARNED CIT(A) HAS ALSO NOTED AFTER VERIFICATION OF THE QUANTITATIVE DETAILS THAT THERE W AS NO DISCREPANCY BETWEEN THE QUANTITIES OF GOODS PURCHASED AND SOLD, AND THE DISCREPANCIES BETWEEN THE DATES OF PURCHASE AND SALE HAVE BEEN EXPLAINED WITH REFERENCE TO THE DATES OF THE DELIVERY OF CHALLANS FOR THE GOODS RECEIVED, AND THE DATES OF SHIPMENT OF GOODS SOLD. IN ABSENCE OF REBUTTAL OF THESE MATERIAL FACTS NOTED BY THE LEARNED CIT(A) AFTER VERIFICATION, WE ARE NOT INCLINED TO INTERFERE WITH THE FIRST APPELLATE ORDER IN THIS REGARD. T HE SAME IS UPHELD. THE GROUNDS ARE ACCORDINGLY REJECTED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 29TH JANUARY, 2015. SD/ - SD/ - (G.D. AGRAWAL) (I.C. SUDHIR) VICE PRESIDENT JUDICIAL MEMBER DATED: 29TH JANUARY, 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI