ITO, New Delhi V. Sh. Kamal Gupta, New Delhi

ITA 3733/DEL/2016

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6302 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 23-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VED PRAKASH MISHRA
• Assessee Lawyers: ASHISH GOEL
• Keywords: Additional evidence
• Section: 80C; 133(6); 145(3); 6; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER IT A NO. 3733 /DEL/20 16 ASSESSMENT YEAR 2009-10 ITO, WARD-59(2), NEW DELHI. VS. SHRI KAMAL GUPTA, D-3, ARYA NAGAR APARTMENT, PLOT NO.91, I.P. EXTENSION, DELHI. TAN/PAN: AEBPG4819C (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI VED PRAKASH MISHRA, SR.D.R. RESPONDENT BY: SHRI VED JAIN, ADV. AND SHRI ASHISH GOEL, CA DATE OF HEARING: 11 01 2021 DATE OF PRONOUNCEMENT: 11 01 2021 O R D E R PER AMIT SHUKLA, JUDICIAL MEMBER: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE IMPUGNED ORDER DATED 31.03.2016 PASSED BY CIT (A)-XXXIV, NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED U/S.144 FOR THE ASSESSMENT YEAR 2009-10. IN THE GRO UNDS OF APPEAL, THE REVENUE HAS RAISED FOLLOWING GROUNDS;- 1. THE ORDER OF THE LD. CIT(A) IS BAD IN LAW. 2. THE LD. CIT(A) ERRED IN ACCEPTING THE ADDITIONA L EVIDENCES, THOUGH THE ASSESSING OFFICER IN THE REMA ND REPORTS STRONGLY OBJECTED FOR ADMISSION OF ADDITIONAL EVIDE NCES BECAUSE THE ASSESSEE DID NOT EXPLAIN AS TO HOW HIS CASE WAS COVERED BY THE EXCEPTIONS PROVIDED IN RULE 46A (1) OF THE I. T. ITAS NO.3733/DEL/2016 2 RULES, 1962. 3. THE LD. CIT(A) ERRED IN ALLOWING RELIEF ON THE BASIS OF ADDITIONAL EVIDENCES FOR WHICH, THE LD.CIT(A) HAD N OT GIVEN ANY REASONS IN THE APPELLATE ORDER AS TO WHY THE ADDITI ONAL EVIDENCES WERE ACCEPTED BY HIM. 4. THE LD. CIT(A) ERRED IN DELETING THE ADDITION O F RS. 17,87,372/- MADE ON ACCOUNT OF GP RATE BY ACCEPTING ADDITIONAL EVIDENCES AND IGNORING THE OBJECTIONS RA ISED BY THE ASSESSING OFFICER FOR ADMISSION OF ADDITIONAL EVIDE NCES. 5. THE LD. CIT(A) ERRED IN DELETING THE ADDITION O F RS.2,96,91,716/- MADE ON ACCOUNT OF SUNDRY CREDITOR S BY ACCEPTING ADDITIONAL EVIDENCES AND IGNORING THE OBJ ECTIONS RAISED BY THE ASSESSING OFFICER FOR ADMISSION OF AD DITIONAL EVIDENCES. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALLOW OR AMEN D ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 2. THE FACTS IN BRIEF QUA THE AFORESAID ISSUE ARE T HAT, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF B OOKS AND STATIONERY. AS PER THE ALLEGATION OF THE ASSESSING OFFICER, THE ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNT ALONG WITH THE BILLS AND VOUCHERS. HOWEVER, NO SUCH BOOKS OF ACCOUNT AND BILLS/VOUCHERS WERE PRODUCED BEFORE HIM . IN ABSENCE OF SUCH BOOKS OF ACCOUNT AND ON THE BASIS O F MATERIAL AVAILABLE ON RECORD, HE FOUND THERE IS INC ONSISTENCY IN THE BUSINESS AFFAIRS OF THE ASSESSEE, WHICH HAS BEEN HIGHLIGHTED IN THE ASSESSMENT ORDER IN DETAIL AND A CCORDINGLY, ASSESSING OFFICER PROCEEDED TO MAKE VARIOUS ADDITIO NS; VIZ., ITAS NO.3733/DEL/2016 3 FIRSTLY , ADDITION ON ACCOUNT OF GROSS PROFIT AFTER REJECTI NG THE BOOKS OF ACCOUNT AND INVOKING SECTION 145(3) AT RS.17,87,372/-; SECONDLY , DISALLOWANCE OF RS.3,89,549/- EXPENDITURE ON ACCOUNT OF ROYALTY AND OTHER EXPENSE S LIKE FINANCE CHARGES, ADMIN EXPENSES, ETC. AT RS. 6,01,2 54/-; THIRDLY, ADDITION ON ACCOUNT OF SUNDRY CREDITORS OF RS.2,96,91,716/-; FOURTHLY , UNSECURED LOAN OF RS.8,94,520/-; FIFTHLY , ADDITION ON ACCOUNT OF CHEQUES ISSUED BUT WERE NO T PRESENTED OF RS.18 LACS; SIXTHLY , DEDUCTION U/S.80C; AND LASTLY , ESTIMATED INCOME FROM OTHER SOURCES AT RS.24,000/ - . IN THE FIRST APPEAL, MOST OF THE ADDITIONS HAVE BEE N DELETED. HOWEVER, THE REVENUE BEFORE US HAS ONLY CHALLENGED TWO ADDITIONS, I.E., ADDITION OF RS.17,87,372/- ON ACCO UNT OF ESTIMATION OF GROSS PROFIT AND ADDITION OF RS.2,96, 91,716/- ON ACCOUNT OF SUNDRY CREDITORS ONLY ON THE GROUND THAT LD. CIT (A) HAS ERRED IN ACCEPTING ADDITIONAL EVIDENCES. NO THING HAS BEEN CHALLENGED ON MERITS OF THE ADDITION AND FINDI NG OF THE LD. CIT (A). 3. ON THE PERUSAL OF THE RECORD AND APPELLATE OR DER, WE FIND THAT ASSESSEE HAD FILED A PETITION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A. THE COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGES 194 AND 195, WHEREIN ASS ESSEE HAD STATED AS UNDER: 1. THE APPLICANT HAS FILED AN APPEAL BEFORE YOUR H ONOUR AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER U NDER SECTION 144 OF THE ACT DATED 30TH DECEMBER, 2011 FOR ASSESS MENT YEAR 2009-10. ITAS NO.3733/DEL/2016 4 2. WHILE FRAMING THE ASSESSMENT THE ASSESSING OFFIC ER HAS ALLEGED THAT THE ASSESSEE HAS NOT APPEARED ON THE L AST DATE OF THE HEARING FIXED FOR 30TH NOVEMBER, 2011 AND HAS N OT PRODUCED THE BOOKS OF ACCOUNT. 3. IT HAS ALSO BEEN ALLEGED BY THE ASSESSING OFFICE R THAT THE ASSESSEE HAS NOT FILED PROPER CONFIRMATIONS FROM TH E TRADE CREDITORS AND HAS ALSO FAILED TO FURNISH EVIDENCES IN SUPPORT OF THE CLAIM UNDER SECTION 80C AND SECTION 80D. 4. IN THIS REGARD IT IS SUBMITTED THAT THE ASSESSEE HAS BEEN ATTENDING THE PROCEEDINGS FROM TIME TO TIME BEFORE THE ASSESSING OFFICER AS IS EVIDENT FROM THE VARIOUS LETTERS FILE D BEFORE THE ASSESSING OFFICER. 5. THAT THE ASSESSING OFFICER AT NO STAGE OF TIME D URING THE ASSESSMENT RAISED ANY OBJECTION REGARDING THE CONFI RMATIONS FILED BY THE ASSESSEE. FURTHER THE ASSESSEE HAS PRO DUCED THE BOOKS OF ACCOUNT ON 25TH NOVEMBER, 2011. IT HAS GONE WITH THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER ON 30 TH NOVEMBER, 2011 AND ON THAT DAY THE ASSESSING OFFICER DID NOT EXAMINE THE SAME ON THE GROUND THAT HE IS BUSY IN OTHER MATTERS AND HE WILL COMPLETE THE ASSESSMENT IN THE MONTH OF DECEMBER, 2 011. 6. THAT DURING THE MONTH OF DECEMBER, 2011 THE ASSE SSEE VISITED THE ASSESSING OFFICER NUMBER OF TIMES BUT THE ASSES SING OFFICER DID NOT EXAMINE THE BOOKS OF ACCOUNT. 7. AFTER ONE MONTH I.E. ON 30TH DECEMBER, 2011 THE ASSESSING OFF.CER PASSED THE ASSESSMENT ORDER MAKING VARIOUS ALLEGATIONS AND INCLUDING NON-PRODUCTION OF BOOKS OF ACCOUNT AN D OTHER DOCUMENTS/EVIDENCES. 8. IN THIS REGARD IT IS SUBMITTED THAT THE ASSESSEE HAS SUBMITTED ITAS NO.3733/DEL/2016 5 ALL DOCUMENTS/EVIDENCES WHICH WERE AVAILABLE IN THE RECORD. FURTHER AS REGARDS OTHER DOCUMENTARY EVIDENCES IN R ESPECT OF 80C AND 80D THERE WAS NEVER AN OCCASION TO FILE THE SAME NOR THESE WERE CALLED FOR. 9. THE ASSESSEE HAS GOT ALL THESE EVIDENCES AND DOC UMENTS INCLUDING THE BOOKS OF ACCOUNT AND THE SAME ARE BEI NG PRODUCED BEFORE YOUR HONOUR. IT IS PRAYED THAT THESE MAY BE ADMITTED AS ADDITION AL EVIDENCES UNDER RULE 46A IN VIEW OF THE FACTS STATED HEREINAB OVE. 4. LD. CIT (A) HAS FORWARDED SUBMISSIONS AND COPIES OF ADDITIONAL EVIDENCES FILED BY THE ASSESSEE TO THE A SSESSING OFFICER FOR HIS COMMENTS. THE ASSESSING OFFICER HOW EVER VIDE HIS SUBMISSION DATED 18.06.2015 OBJECTED FOR THE AD MISSION OF ADDITIONAL EVIDENCES BUT ALSO PROCEEDED TO GIVE HIS COMMENT AND SUBMISSIONS ON THE ISSUES RAISED ON THE MERIT OF THE ADDITIONS ALSO. THE RELEVANT REMAND REPORT O N MERITS HAS BEEN DULY INCORPORATED IN THE IMPUGNED APPELLAT E ORDER FROM PAGES 6 TO 11. IN SO FAR AS PRODUCTION OF BOOK S OF ACCOUNT AND ADDITION ON ACCOUNT OF GROSS PROFIT, TH E ASSESSEE IN RESPONSE TO THE NOTICE BY THE ASSESSING OFFICER WHEREBY ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNT ALONG WITH BILLS AND VOUCHERS. IN RESPONSE ASSESSEE PRODU CED ALL THE DETAILS AND RELEVANT BOOKS OF ACCOUNTS WHICH WE RE DULY VERIFIED AND EXAMINED BY THE ASSESSING OFFICER AND NO ADVERSE INFERENCE HAS BEEN RECORDED BY THE ASSESSIN G OFFICER AS REPORTED AND ADMITTED BY HIM IN HIS REMAND REPOR T. APART FROM THAT, THE ASSESSEE HAS ALSO FILED DETAILS OF S UNDRY ITAS NO.3733/DEL/2016 6 CREDITORS, UNSECURED LOAN, ETC. WITH CONFIRMATION A ND EVIDENCES. THE LD. ASSESSING OFFICER HAD ALSO ISSUE D NOTICE U/S. 133(6) TO VARIOUS SUNDRY CREDITORS, IN RESPONS E TO WHICH CONFIRMATIONS WERE RECEIVED DIRECTLY FROM THE SAID PARTIES ALONG WITH BALANCES SHOWN BY THE PARTIES WHICH HAS BEEN TABULATED BY THE ASSESSING OFFICER IN HIS REMAND RE PORT. IN RESPONSE OF SUCH REMAND REPORT, THE ASSESSEE HAS FI LED DETAILED SUBMISSION WHICH HAS BEEN DULY CONSIDERED BY THE LD. CIT (A). 5. IN SO FAR AS ESTIMATION OF PROFIT IS CONCERNED, THE LD. CIT (A) HAS RECORDED A CATEGORICAL FINDING THAT DURING THE REMAND PROCEEDINGS, ASSESSING OFFICER HAS SPECIFICALLY ADM ITTED THAT THE APPELLANT HAD PRODUCED BOOKS OF ACCOUNT ALONG W ITH BILLS AND VOUCHERS WHICH WERE EXAMINED AND VERIFIED BY TH E ASSESSING OFFICER AND NO ADVERSE INFERENCE WAS DRAW N. BASED ON ASSESSING OFFICERS FINDING, LD. CIT(A) REJECTED THE ESTIMATION OF THE PROFIT MADE BY THE ASSESSING OFFI CER MADE IN THE ASSESSMENT ORDER AND DELETED THE ADDITION OF RS.17,57,372/-. SECONDLY, ON THE ISSUE OF DISALLOWA NCE OF SUNDRY CREDITORS, THE OBSERVATION AND THE FINDING O F THE LD. CIT (A) IS AS UNDER: 7.1 GROUND NO-7 RELATES TO THE ADDITIONS OF RS. 3,2 3,86,236/- MADE BY AO WHICH INCLUDE DISALLOWANCES ON ACCOUNT O F SUNDRY CREDITORS, UNSECURED LOANS AND CHEQUES ISSUED BUT N OT CLEARED. DURING THE ASSESSMENT PROCEEDINGS, AO MADE ADDITION S UNDER THESE HEADS ON ACCOUNT OF NON PRODUCTION OF BOOKS O F ACCOUNT AND OTHER DOCUMENTARY EVIDENCE. HOWEVER, DURING THE REMAND ITAS NO.3733/DEL/2016 7 PROCEEDINGS, AO ISSUED NOTICES U/S 133(6) OF THE AC T IN ORDER TO VERIFY THE GENUINENESS OF SUNDRY CREDITORS AND IN R EPLY TO THESE NOTICES, CONFIRMATIONS FROM THESE CREDITORS WERE RE CEIVED BY HIM. HOWEVER, SOME DISCREPANCIES WERE NOTICED BY AO IN T HE DETAILS OF CONFIRMATIONS OF SUNDRY CREDITORS AND THE DIFFER ENCE WAS NOTICED BY AO AS UNDER:- SL. NO. NAME OF THE ASSESSEE DIFFERENCE 1. CORPORATE STAT. P. LTD. 7650 2. INSPIRATION PUBLICATION 3421 3. JIWAN BOOKS -1760 4. KALIKA ENTERPRISES -123 5. MAGGO ENTERPRISES 38400 6. SARASWATI HOUSE P. LTD. 100 7. SHANT PAPER MART 19250 8. SHREE PARASNATH ENTERPRISE -1439 6. ONCE, THE ASSESSEE HAS GIVEN THE REASONS IN ITS PETITION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A , WHICH HAVE BEEN DULY FORWARDED TO THE ASSESSING OFFICER A ND THEREAFTER, ASSESSING OFFICER HAS CARRIED OUT HIS I NQUIRY ON THESE ADDITIONAL EVIDENCES AND HAS VERIFIED THE BOO KS OF ACCOUNT FROM THE BILLS AND VOUCHERS, CONFIRMATIONS, ETC, THEN IT CANNOT BE HELD THAT THERE IS A VIOLATION OF RULE 46A. LD. CIT (A) WAS WELL WITHIN HIS POWER NOT ONLY TO ADMIT THE ADDITIONAL EVIDENCE IN THESE CIRCUMSTANCES AS MENTIONED IN THE PETITION BUT ALSO CALLED FOR THE REMAND REPORT BY THE ASSESS ING OFFICER GIVING HIM FULL OPPORTUNITY WHICH HAS BEEN AVAILED BY THE ASSESSING OFFICER. IT IS FURTHER SEEN THAT THE REVE NUE HAS NOT CHALLENGED THE MERITS OF THE ADDITION EXCEPT FOR TH E FACT THAT LD. CIT (A) HAS ERRED IN ADMITTING THE ADDITIONAL E VIDENCES. WE DO NOT FIND ANY INFIRMITY IN THE ACTION OF THE LD. CIT (A) IN ITAS NO.3733/DEL/2016 8 ADMITTING THE ADDITIONAL EVIDENCE BUT ALSO HIS FIND INGS ON MERITS AS HIS FINDING ARE BASED ON THE REMAND REPOR T AND THE INQUIRY CONDUCTED BY THE ASSESSING OFFICER AFTER HE HAS DULY VERIFIED THE ENTIRE FACTS ON RECORD. THUS REVENUES GROUNDS CANNOT BE SUSTAINED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY, 2021 SD/- SD/- [B.R.R. KUMAR] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 TH JANUARY, 2021 PKK