ITO, Rohtak V. M/s. Arihant Teleservices, New Delhi

ITA 3734/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7326 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 3
• Next Hearing Date: 14-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 25-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: NAVEEN GUPTA
• Keywords: Unexplained cash credit; Assessment record
• Section: 142(1); 68; 144

Judgement Text

IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC-3: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3734/DEL/2014 A.Y. : 2010-11 INCOME TAX OFFICER, VS. M/S ARIHANT TELESERVICE S, WARD-2, ROHTAK 510/19, GREEN ROAD, SHAKTI NAGAR, ROHTAK NEW ADDRESS:- B-586, WEAVERS COLONY, ASHOK VIHAR, PHASE-4, NEW DELHI 52 (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. KK JAISWAL, SR. DR ASSESSEE BY : SH. NAVEEN GUPTA, ADV. DATE OF HEARING : 14-06-2016 DATE OF ORDER : 14-06-2016 O R D E R PER H.S. SIDHU, JM THIS APPEAL IS FILED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DATED 22.4.2014 OF THE LD. CIT(A)-ROHTAK RELEVANT T O ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN CANCELLING THE ASSESSMENT BY OBSERVING THAT THE TIME LIMIT FOR SERVICE OF NOTICE U/S. 143(2) HAS EXPIRED WHEREAS THE SAID NOTICE DATED 7.9.2011 WAS DULY SENT BY THE DEPARTMENT BY SPEED POST 2 AT THE ADDRESS MENTIONED IN THE RETURN FILED BY THE ASSESSEE FOR AY 2010-11. HENCE, THE SERVICE OF THE NOTICE U/S. 143(2) ON THE ASSESSEE WAS PROPER AND IN TIME. 2. THE APPELLANT CRAVES LEAVE TO ADD, DELETE OR AMEND ANY GROUND OR GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN DECLARING AN INCOME OF RS. 30,180/- ON 30.09.2010. THE CASE WAS LATER SELECTED FOR SCRUTINY UNDER 'CASS' AND STATUTORY NO TICE U/S 143(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE A CT) WAS ISSUED ON 07.09.2011 BY THE WARD 19(2), NEW DELHI. THE CASE W AS LATER ON TRANSFERRED TO WARD-2, ROHTAK AND NOTICE U/S 143(2) WAS AGAIN ISSUED ON 26.12.2012 FIXING THE CASE FOR 28.12.2012. ON THE S AID DATE NONE ATTENDED NOR ANY WRITTEN REPLY FILED. NOTICE U/S 14 2(1) ALONGWITH DETAILED QUESTIONNAIRE DATED 22.01.2013 WAS ISSUED FIXING TH E CASE FOR 31.01.2013. ON THE SAID DATE REPLY WAS RECEIVED FRO M THE ASSESSEE REQUESTING TO PROVIDE THE COPY OF THE NOTICE U/S 14 3(2) ISSUED BY ITO, WARD 19(2), NEW DELHI. THE ASSESSEE VIDE THIS OFFIC E LETTER DATED 14.02.2013 WAS REQUESTED TO INSPECT THE FILE FOR TH E ASSESSMENT YEAR 2010-11 ON ANY WORKING DAY. NOTICE U/S. 142(1) WAS ALSO ENCLOSED WITH THE SAID LETTER. ON 22.02.2013 APPLICATION WAS RECE IVED FROM THE ASSESSEE REQUESTING TO ADJOURN THE CASE IN THE MONTH OF MARC H, 2013. THE CASE OF THE ASSESSEE WAS AGAIN FIXED FOR 05.03.2013 BY ISSU E OF LETTER DATED 28.02.2013. ON THE SAID DATE NONE ATTENDED NOR ANY WRITTEN REPLY FILED. REMINDER/NOTICE U/S 142(1) WAS AGAIN ISSUED ON 06.0 3.2013 FIXING THE 3 CASE FOR 07.03.2013. BUT THIS NOTICE REMAIN UNCOMPL IED WITH. YET AGAIN NOTICE U/S 142(1)/REMINDER WAS AGAIN ISSUED VIDE L ETTER NO. 8223 FIXING THE CASE FOR 12.03.2013. BUT AGAIN NO COMPLIANCE WA S MADE. AO OBSERVED THAT IT IS QUITE CLEAR THAT THE ASSESSEE I S DELIBERATELY AVOIDING TO FURNISH THE DETAILS/INFORMATION AS CALLED FOR. HENC E, HE LEFT WITH NO OTHER ALTERNATIVE THAN TO COMPLETE THE ASSESSMENT ON THE BASIS OF INFORMATION AVAILABLE ON RECORD. ACCORDINGLY, AO OBSERVED THAT ON PERUSAL OF THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE IT SHOWS TH AT AGAINST THE SALE/RECEIPTS OF RS.61,35,060/- THE OPENING STOCK I S NIL, CLOSING STOCK IS RS.8,32,281/- AND THE PURCHASE IS RS.78,82,722/- ME ANING THEREBY THAT THE ASSESSEE HAS INCURRED A GROSS LOSS OF RS. 9,09, 381/-. AO OBSERVED THAT IN SPITE OF AMPLE OPPORTUNITIES PROVIDED TO TH E ASSESSEE, THE ASSESSEE DELIBERATELY AVOIDED TO PRODUCE THE BOOKS OF ACCOUNTS AND SUPPORTING DOCUMENTS FOR VERIFICATION. KEEPING IN V IEW THE ABOVE NARRATED FACTS THE BOOK VERSION OF THE ASSESSEE WAS REJECTED AND INCOME OF THE ASSESSEE WAS COMPUTED AT THE RATE OF 8% OF TURNOVER OF RS.61,35,060/- WHICH COMES TO RS. 4,90,805/-. A FURTHER ADDITION O F RS.20,25,713/- IS MADE TO THIS INCOME AS THE ASSESSEE HAS ALSO SHOWN COMMISSION INCOME OF RS.20,08,293/- AND OTHER INCOME OF RS.17,420/- T OTALLING RS. 20,25,713/-. AFTER TAKING INTO ACCOUNT NET PROFIT O F RS.30,177/- DECLARED BY ASSESSEE FROM ITS BUSINESS AND ADDITION OF RS.24 ,86,341/- (490805+2025713-30177) WAS MADE TO THE RETURNED INC OME OF ASSESSEE. 4 2.1 AO FURTHER OBSERVED THAT ON PERUSAL OF THE B ALANCE SHEET IT SHOWS THAT THE ASSESSEE FIRM REFLECTED THE CLOSING CAPITA L OF RS.9,05,994/- AS ON 31.03.2010 AFTER TAKING INTO ACCOUNT THE NET PROFIT OF RS.30,177/- DECLARED BY THE ASSESSEE THE AMOUNT OF RS.8,75,817/ - COMES AS THE CAPITAL INTRODUCED DURING THE YEAR UNDER CONSIDERAT ION. FURTHER, SCRUTINY OF THE BALANCE SHEET SHOWS THAT THE UNSECURED LOANS TO THE TUNE OF RS.12,06,742/- ARE OUTSTANDING AS ON 31.03.2010. AO NOTED THAT SINCE THE ASSESSEE HAS OFFERED NO EXPLANATION REGARDING T HE SOURCE OF THESE UNSECURED LOANS AND CAPITAL INTRODUCED, AS SUCH, AN ADDITION OF RS.20,82,559/- (RS.8,75,817/- + RS.12,06,742/-) WAS MADE TO THE RETURNED INCOME OF THE ASSESSEE U/S 68 OF THE I.T. ACT,1961 AS UNEXPLAINED CASH CREDITS. ACCORDINGLY, THE ASSESSME NT WAS COMPLETED U/S. 144 OF THE I.T. ACT, 1961 AT AN INCOME OF RS. 45,99,080/- VIDE ORDER DATED 15.3.2013 BY THE ASSESSING OFFICER. 3. AGGRIEVED BY THE AFORESAID ADDITION, ASSESSEE AP PEALED BEFORE THE LD. CIT(A) WHO VIDE IMPUGNED ORDER DATED 22.4.2014 HAS ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDING AS UNDER:- I HAVE EXAMINED THE FACTS OF THE CASE AND THE SUBM ISSIONS MADE BY THE ASSESSEE. THE ASSESSMENT RECORDS REVEAL THAT THE NOTICE U/S 143 (2) DATED 07.9.2011 SENT BY THE DEPARTMENT ON 8.9.2011 WAS RETURNED UN-SERVED ON 15.9.2011 WITH THE REMARKS OF THE POSTAL DEPARTMENT THAT AFTER ENQUIRIES AT THAT ADDRESS NO BODY OF THAT NAM E WAS AVAILABLE, HENCE IT WAS TO BE RETURNED. THE ADDRESS OF THE 5 NOTICE WAS 510/19 GREEN ROAD, SHAKTI NAGAR (PAGE 26 AND OF ASSESSMENT RECORD, ANNEXURE-I). HOWEVER, SUBSEQUENT NOTICE AT THE SAME ADDRESS DATED 20.10.2011, 10.7.2012., 18.7.2012 WERE RECEIVED BY THE APPELLANT FOR WHICH EVIDENCES OF RECEIPT HAVE BEEN FILED (ANNEXURE-2). THE NOTICE S SHOULD HAVE BEEN SERVED ON OR BEFORE 30.9.2011.HOWEVER, TH ERE HAS BEEN NO SERVICE BY AFFIXTURE, AS IS APPARENT FROM T HE CASE RECORDS. THE NEXT NOTICE WAS ISSUED ONLY ON 20.10.2 011. HENCE, THE TIME LIMIT FOR SERVICE OF NOTICE HAS EXP IRED. THEREFORE, I CANCEL THE ASSESSMENT. THE OTHER GROUN DS DO NOT REQUIRE ANY ADJUDICATION. 4. AGAINST THE AFORESAID ORDER OF THE LD. CIT(A), R EVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. DURING THE HEARING, LD. DR RELIED UPON THE ORD ER PASSED BY THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GRO UNDS OF APPEAL BY THE DEPARTMENT. 6. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE R ELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT HE HAS PASS ED A WELL REASONED ORDER WHICH NEEDS TO BE AFFIRMED. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY. AF TER PERUSING THE IMPUGNED ORDER OF THE LD. CIT(A), I FIND THAT LD. C IT(A) HAS PASSED A WELL REASONED AND SPEAKING ORDER BECAUSE THE NOTICE U/S. 143(2) DATED 7.9.2011 HAVE NOT BEEN SERVED WITHIN THE STIPULATED TIME, AS A RESULT THE 6 TIME LIMIT FOR SERVICE OF NOTICE WAS EXPIRED AND AL SO THERE IS NO SERVICE OF AFFIXTURE. THEREFORE, LD. CIT(A) HAS RIGHTLY CANCE LLED THE ASSESSMENT, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, H ENCE, WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL FILE D BY THE REVENUE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14-06-2016. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 14/6/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES