ITO, New Delhi V. M/s Shabnam Hide Co., Delhi

ITA 3754/DEL/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3988 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 30-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 20-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KOUSHLENDRA TIWARI
• Keywords: Business income; Additional evidence
• Section: 142(1); 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 3754/DEL/2012 A.Y. 2009-10 INCOME TAX OFFICER, VS. M/S SHABNAM HIDE CO. WARD 39(4), 7427, QURESH NAGAR, NEW DELHI SADAR BAZAR, ROOM NO. 237, 2 ND FLOOR, DELHI 110 006 C.R. BLDG., I.P. ESTATE, NEW DELHI (PAN: AABCG5754B) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. KOUSHLENDRA TIWARI, SR. DR ASSESSEE BY : NONE ORDER PER H.S. SIDHU, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXVIII, NEW DE LHI DATED 23.5.2012 PERTAINING TO ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS:- 1. THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 6,40,18,580/- ON ACCOUNT OF UNEXPLAINED SUNDRY CREDITORS MERELY ON THE SUBMISSION OF THE ASSESSEE COMPLETELY IGNORING THE FACT THAT 2 ASSESSEE FAILED TO FURNISH NEITHER THE COMPLETE ADDRESS NOR THE CONFIRMATION OF THE SUNDRY CREDITORS. 2. THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 14,00,000/- ON ACCOUNT OF BOGUS EXPENSES MERELY ON THE SUBMISSION OF THE ASSESSEE COMPLETELY IGNORING THE FACT THAT THE ASSESSEE FAILED TO FURNISH THE DETAILS. 3. THAT THE LD. CIT(A) ADMITTED ADDITIONAL EVIDENCES WITHOUT PROVIDING AO AN OPPORTUNITY OF REBUTTAL UNDER RULE 46A. 4. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 5. THE APPELLANT CRAVES TO ADD, AMEND OR MODIFY THE GROUNDS OF APPEAL AT ANY TIME. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE FILED ITS RETURN OF INCOME DECLARING INCOME OF RS. 2,81,128/- ON 17.9.2 009. THE CASE OF THE ASSESSEE WAS PROCESSED U/S. 143(1) OF THE INCOME TA X ACT, 1961 AND WAS TAKEN UP FOR SCRUTINY. NOTICE U/S. 143(2) OF THE A CT DATED 23.8.2010 AND SUBSEQUENTLY NOTICE U/S. 142(1) ALONGWITH QUESTIONN AIRE WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, ASSESSEE FIRM HAS DERIVED BUSINESS INCOME FROM TRAD ING OF HIDES, SKINS AND FRESH MEAT. THE BUSINESS OF FRESH MEAT WAS THE NEW ITEM ADDED IN THE BUSINESS OF THE ASSESSE FIRM. THE ASSESSEE WAS REPEATEDLY ASKED VIDE 3 VARIOUS NOTICES ISSUED U/S. 142(1) OF THE ACT AND V ARIOUS ORDER SHEET ENTRIES TO PRODUCE ORIGINAL BOOKS OF ACCOUNT ALONGW ITH ORIGINAL BILLS / VOUCHERS. AO OBSERVED THAT ASSESSEE HAS FAILED T O PRODUCE THE BOOKS OF ACCOUNT ALONGWITH THE ORIGINAL BILLS AND VOUCHERS A ND ALSO FAILED TO PRODUCE EITHER THE CONFIRMATIONS OF SUNDRY CREDITOR S OR THEIR COMPLETE ADDRESS SO THAT INDEPENDENT VERIFICATIONS CAN BE M ADE BY THE DEPARTMENT. NO PARTYWISE LIST OF PERSONS ALONGWITH THEIR ADDRESSES FROM WHOM PURCHASES HAVE BEEN MADE HAS BEEN SUBMITTED AN D THE ABSENCE OF ABOVE GENUINENESS OF THE SUNDRY CREDITORS CLAIMED BY THE ASSESSEE REMAINED UNVERIFIED. THEREFORE, HE COMPLETED THE AS SESSMENT U/S. 144 OF THE ACT VIDE ORDER DATED 30.12.2011 AND ASSESSED THE INCOME AT RS. 6,57,99,710/- BY MAKING TWO ADDITIONS I.E. RS. 6,40 ,18,580/- ON ACCOUNT OF UNVERIFIED AND UNJUSTIFIED BOGUS SUNDRY CREDITOR S AND RS. 15,00,000/- ON ACCOUNT OF UNJUSTIFIED BOGUS EXPENSES. AGAINST T HE ASSESSMENT ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VI DE HIS IMPUGNED ORDER DATED 23.5.2012 HAS PARTLY ALLOWED THE APPEA L OF THE ASSESSEE. AGGRIEVED WITH THE IMPUGNED ORDER PASSED BY THE LD. CIT(A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 4. IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE WAS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR ITS AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FILED ANY 4 APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE F ACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ISSUE INV OLVED IN THE PRESENT APPEAL, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE W OULD BE SERVED TO ISSUE NOTICE AGAIN AND AGAIN TO THE ASSESSEE, THERE FORE, WE ARE DECIDING THE PRESENT APPEAL EXPARTE QUA ASSESSEE, AFTER HEAR ING THE LD. DR AND PERUSING THE RECORDS. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORD S, ESPECIALLY THE ORDER OF THE LD. CIT(A). ON GOING THROUGH THE AFORE SAID FINDINGS OF THE LD.CIT(A) MADE IN THE IMPUGNED ORDER AS WELL AS THE FINDING OF THE ASSESSING OFFICER MADE IN THE ASSESSMENT ORDER, WE FIND THAT AO HAS PASSED THE EXPARTE ORDER DATED 30.12.2011 U/S 144 OF THE ACT, BECAUSE THE ASSESSEE FAILED TO PRODUCE ORIGINAL BOOKS OF A CCOUNTS ALONGWITH ORIGINAL BILLS / VOUCHERS AND ALSO FAILED TO PRODU CE EITHER THE CONFIRMATIONS OF SUNDRY CREDITORS OR THEIR COMPLET E ADDRESS SO THAT INDEPENDENT VERIFICATIONS CAN BE MADE BY THE DEPART MENT. AO ALSO OBSERVED THAT NO PARTY-WISE LIST OF PERSONS ALONGWI TH THEIR ADDRESSES FROM WHOM PURCHASES HAVE BEEN MADE HAS BEEN SUBMITTED AN D THE ABSENCE OF ABOVE GENUINENESS OF THE SUNDRY CREDITORS CLAIMED BY THE ASSESSEE REMAINED UNVERIFIED. THEREFORE, HE COMPLETED THE AS SESSMENT U/S. 144 OF THE ACT VIDE ORDER DATED 30.12.2011 AND ASSESSED THE INCOME AT RS. 6,57,99,710/- BY MAKING TWO ADDITIONS I.E. RS. 6,40 ,18,580/- ON ACCOUNT OF UNVERIFIED AND UNJUSTIFIED BOGUS SUNDRY CREDITOR S AND RS. 15,00,000/- ON ACCOUNT OF UNJUSTIFIED BOGUS EXPENSES. AGAINST T HE ASSESSMENT ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VI DE HIS IMPUGNED 5 ORDER DATED 23.5.2012 HAS PARTLY ALLOWED THE APPEA L OF THE ASSESSEE BY OBSERVING THAT AO HAS FAILED TO TAKE NOTE IS THAT FINANCIAL STATEMENT OF ACCOUNTS ALONGWITH AUDIT REPORT FOR THE YEAR UNDER APPEAL AS WELL AS FOR PRECEDING YEAR (AY 2008-09) WERE SUBMITTED ON THE V ERY DATE OF HEARING ON 25.01.2011 BY THE ASSESSEE. LD. CIT(A) WAS FU RTHER OF THE VIEW THAT AO HAS WRONGLY OBSERVED THAT ALL SALES ARE BOGUS, HOWEVER, ALL THE SALES MADE TO MDA EXPORT AMOUNTING TO RS. 3,08,27,505.75 HAVE BEEN DULY CONFIRMED BY THE AO AND AS ALL PURCHASES MADE BY MD A EXPORTS HAVING BEEN VERIFIED BY JOINT COMMISSIONER OF INCOME TAX R ANGE-39 WHILE COMPLETING SCRUTINY ASSESSMENT OF MDA EXPORTS. LD . CIT(A) FURTHER OBSERVED THAT AO HAS WRONGLY HELD THAT MEAT SALES O F RS. 3,08,27,505.75 ARE BOGUS, WITHOUT GIVING ANY SPECIFIC REASON SHOW THE PURCHASES OF HIDES AND SKIN AMOUNTING TO RS. 4,24,49,093/- AND SALES T HEREOF AMOUNTING TO RS. 4,66,15,695/- ARE HELD BOGUS, HOWEVER AS FAR AS HIDE AND SKIN SALES OF RS. 4,66,15,695/- IS CONCERNED, NOT A SINGLE SAL E MADE TO 13 PARTIES IS DISPUTED BY THE AO. ALL REALIZATION AGAINST SALES HAVE BEEN MADE BY THE ASSESSEE FROM THROUGH CHEQUES. NO CASH CREDIT ENTRY NOTED BY THE AO IN THE BOOKS OF THE ASSESSEE. LD. CIT(A) FURTHER OBSER VED THAT AO ALSO DISALLOWED A SUM OF RS. 15 LACS OUT OF THE EXPENSE S FOR SALT, CARRIAGE INWARD, CARRIAGE OUTWARD AND LABOUR CHARGES ON ADHO C BASIS AS NO DETAILS WERE PRODUCED AND THEY WERE UNVERIFIABLE. AS PER LD . CIT(A)S VIEW THE DISALLOWANCE MADE IS UNJUSTIFIED AND WITHOUT ANY BA SIS, HENCE, HE SUSTAIN AND RESTRICT A REASONABLE AMOUNT OF DISALLOWANCE TO THE TUNE OF RS. 1,00,000/- OUT OF TOTAL OF RS. 15,00,000/-. IN VIEW OF THE ABOV, WE ARE OF 6 THE CONSIDERED OPINION, THAT AO HAS COMPLETED THE A SSESSMENT U/S. 144 OF THE ACT IN THE ABSENCE OF THE PROPER EVIDENCE, W HICH THE ASSESSEE HAS NOT PRODUCED BEFORE HIM. THEREFORE, IN THE INTERES T OF JUSTICE, WE THINK IT PROPER TO SET ASIDE THE ISSUES IN DISPUTE TO THE FI LE OF THE AO TO DECIDE THE SAME AFRESH, AFTER MAKING INDEPENDENT INQUIRY AND VERIFICATION, AS DEEM FIT. HOWEVER, THE ASSESSEE IS ALSO DIRECTED T O SUBMIT ALL THE NECESSARY DOCUMENTS, AS ASKED BY THE AO DURING THE ASSESSMENT PROCEEDINGS AND FULLY COOPERATE WITH THE AO AND DID NOT TAKE ANY UNNECESSARY ADJOURNMENT. ACCORDINGLY, THE ISSUES IN DISPUTE ARE SET ASIDE TO THE FILE OF THE AO WITH THE AFORESAID DIRECTIONS . 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 05/10/2017. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:05/10/2017 '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