Sh. Sandeep Aggarwal, Delhi V. DCIT, New Delhi

ITA 3875/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65990 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 24-07-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 16-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S MOHANTY
• Assessee Lawyers: VK SABHARWAL
• Keywords: Additional evidence; Reasonable cause
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `G : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO.3875/DEL /2010 (ASSESSMENT YEAR : 2007-08) SHRI SANDEEP AGGARWAL, VS. DCIT, CIRCLE 39(1), PROP. M/S MADHAV ENTERPRISES, NEW DELHI. 74/5932, BASTI HARPHOOL SINGH, SADAR THANA ROAD, SADAR BAZAR, DELHI-110006. (PAN/GIR NO.AAIPA6472E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.K. SABHARWAL, ADV., REVENUE BY : SMT. S. MOHANTY, SR.DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)- XXVIII, NEW DELHI, DATED 25.06.2010, RELEVANT TO AS SESSMENT YEAR 2007-08, WHEREBY CONFIRMATION OF ADDITION OF COMMISSION IN THE AMOU NT OF RS.21,67,060/- HAS BEEN CHALLENGED. 2. FACTS INDICATE THAT THE ASSESSEE FILED RETURN OF INCOME FOR THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2007-08 DECLARING NET I NCOME OF RS.7,27,194/- AND ASSESSMENT U/S 143(3) WAS MADE AT RS.30,62,143/- AF TER MAKING AN ADDITION OF RS.21,67,060 ON ACCOUNT OF EXPENDITURE CLAIMED AS C OMMISSION PAID AND RS.1,67,889/- ON ACCOUNT OF CONTRACT CHARGES RECEIVED FROM M/S SM ART INFOMATICS PVT. LTD. NOT TAKEN IN THE COMPUTATION OF ASSESSABLE INCOME. I.T.A. NO.3875/DEL./2010 (A.Y. : 2007-08) 2 3. ASSESSEE TOOK UP THE MATTER IN APPEAL AND CHALLE NGED SUCH ADDITION OF RS.21,67,060/- BEING THE AMOUNT OF COMMISSION DISAL LOWED. THE ASSESSEE HAS FILED AN APPLICATION UNDER RULE 46A OF THE I.T. RULES, 1962 FOR ADMISSION OF ADDITIONAL EVIDENCE IN THE SHAPE OF PHOTO COPIES OF AFFIDAVITS IN RESPE CT OF SIX PERSONS TO WHOM COMMISSION IS PURPORTED TO HAVE BEEN PAID WITH THE REQUEST TO AD MIT THE SAME AS ASSESSING OFFICER DID NOT GIVE PROPER OPPORTUNITY TO THE ASSESSEE. 4. AGGRIEVED BY THIS ORDER OF CIT(A), ASSESSEE HAS COME UP IN FURTHER APPEAL AND WHILE REITERATING THE SUBMISSIONS AS MADE BEFORE CI T(A), LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE TIME GIVEN WAS SHORT, SO NECES SARY EVIDENCE COULD NOT BE COLLECTED AND FILED BEFORE THE ASSESSING OFFICER DURING THE A SSESSMENT PROCEEDINGS AND IN FIRST APPEAL PROCEEDINGS, ASSESSEE FILED SOME OF THE EVID ENCE WITH AN APPLICATION UNDER RULE 46A OF THE I.T. RULES FOR ADMITTING THE SAME AND DE CIDING THE ISSUE IN FAVOUR OF THE ASSESSEE, THE CIT(A) HAS JUST DISMISSED THE APPLICA TION OF THE ASSESSEE WITHOUT GIVING COGENT REASONS AND ALSO CONFIRMED THE ADDITIONS MAD E BY THE ASSESSING OFFICER, THEREFORE, HIS ORDER IS NOT ONLY VIOLATIVE OF RULE 46A OF THE RULES, BUT ALSO IS NOT JUSTIFIED ON MERITS, INASMUCH AS DUE TO SHORT TIME ALLOWED, A LL THE MATERIAL COULD NOT BE GATHERED AS WHATEVER MATERIAL GATHERED THEREAFTER WAS ATTEMP TED TO BE FILED BEFORE CIT(A), ARBITRARILY REJECTED THE CLAIM OF THE ASSESSEE. SO , HIS ORDER NEEDS TO BE REVERSED. IT WAS THUS STRONGLY PLEADED THAT EVIDENCE FURNISHED BEFOR E THE CIT(A) MAY BE DIRECTED TO BE ADMITTED AND MATTER BE RESTORED BACK TO ASSESSING O FFICER FOR RE-CONSIDERATION OF THE ISSUE AFRESH. 5. LD.DR STRONGLY OPPOSED THE PLEA AS RAISED BY THE LD.COUNSEL FOR THE ASSESSEE FOR ADMISSION OF PETITION AS WELL AS FOR SETTING ASIDE THE ORDERS OF AUTHORITIES BELOW TO RESTORE I.T.A. NO.3875/DEL./2010 (A.Y. : 2007-08) 3 THE MATTER BACK ON THE FILE BEFORE CIT(A). IT WAS ALSO SUBMITTED THAT FIRSTLY ASSESSEE HAS NOT BEEN ABLE TO SATISFY THE CONDITIONS AS LAID DOW N UNDER RULE 46A OF THE RULES AND MOREOVER SOME OF THE COPIES OF AFFIDAVITS IN RESPEC T OF ONLY SIX PARTIES WERE FILED BEFORE CIT(A) WITHOUT ORIGINALLY HAVING BEEN FILED AND SIM ILAR TYPE OF COPIES OF AFFIDAVITS WITH RESPECT TO OTHER THREE PARTIES (OUT OF TOTAL OF NIN E) WERE JUST ENCLOSED IN THE PAPER BOOK IN ORDER TO SUBSTANTIATE ITS CLAIM OF HAVING PAID THE COMMISSION WITHOUT COMPLYING WITH THE RULE 29 OF ITAT RULES, 1963. THEREFORE, THE EVIDEN CE IN THE SHAPE OF PHOTOCOPIES OF AFFIDAVITS EITHER FILED BEFORE CIT(A) OR BEFORE THI S BENCH IS NOT LIABLE TO BE ADMITTED AND REQUEST NEEDS TO BE REJECTED IN THIS REGARD. THERE FORE, SAME MAY BE REJECTED. 6. AS REGARDS ISSUE ON MERITS IS CONCERNED, ASSESSE E HAS MISERABLY FAILED TO SUBSTANTIATE ITS CLAIM OF HAVING PAID THE COMMISSIO N BY ADDUCING EVIDENCE AND ASSESSING OFFICER HAS RIGHTLY MADE ADDITION WHOSE A CTION IS JUSTIFIABLY BEEN CONFIRMED BY THE CIT(A), WHICH MAY FURTHER BE CONFIRMED. 7. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AND FIND THAT ASSESSEE IN THIS CASE HAS ATTEMPTED TO FILE PHOTOCO PIES OF AFFIDAVITS (AND NOT ORIGINAL AFFIDAVITS) IN RESPECT OF SIX PARTIES TO WHOM SOME PART OF COMMISSION IS STATED TO HAVE BEEN PAID AND ON THAT BASIS ASSESSEE HAS SOUGHT TO GET AND DELETED THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). THE CIT(A) HAS DEALT WITH THIS ISSUE IN HIS ORDER AS PER PARAS 8,9 & 10 AND C ONCLUDED TO CONFIRM THE IMPUGNED ADDITION GIVING ELABORATE REASONS AS UNDER: 8. THE SUBMISSIONS OF THE APPELLANT AND THE FACTS HAVE BEEN CAREFULLY CONSIDERED. THE APPELLANT HAS ARGUED THAT HE WAS G IVEN A VERY SHORT TIME TO FILE REPLY AND IT WAS NOT POSSIBLE FOR HIM TO COLLECT TH E DETAILS AND DOCUMENTS REQUIRED. THIS ARGUMENT IS INCORRECT BECAUSE AS TH E ASSESSING OFFICER HAS POINTED OUT IN THE ASSESSMENT ORDER, THE NOTICE U/S 143(2) WAS ISSUED ON 18.09.2009 AND A DETAILED QUESTIONNAIRE WAS ISSUED ON 10.07.2009 ASK ING THE APPELLANT TO FURNISH I.T.A. NO.3875/DEL./2010 (A.Y. : 2007-08) 4 VARIOUS DETAILS AND TO PRODUCE HIS BOOKS OF ACCOUNT . THE APPELLANT FAILED TO COMPLY AND PENALTY PROCEEDINGS UNDER SECTION 271(1) (B) WERE INITIATED. SUBSEQUENTLY, A DETAILED SHOW2 CAUSE NOTICE WAS ISS UED ON 14.12.2009. THE ASSESSMENT ORDER HAS BEEN PASSED ON 18.12.2009 NEAR LY 5 MONTHS AFTER ISSUE OF THE DETAILED QUESTIONNAIRE. IN VIEW OF THESE FACTS , THE APPELLANTS ARGUMENT THAT HE DID NOT HAVE SUFFICIENT OPPORTUNITY IS NOT ACCEPTAB LE. IN VIEW OF THESE FACTS, THE ADDITIONAL EVIDENCE SOUGHT TO BE FILED BY THE APPEL LANT IS NOT ADMITTED AS NONE OF THE CONDITIONS LAID DOWN IN RULE 46A ARE SATISFIED. 9. IT MAY ALSO BE MENTIONED THAT IN HIS ABOVE APPLI CATION UNDER RULE 46A, THE APPELLANT HAS STATED THAT THE APPELLANT HAVE ENCLO SED FOLLOWING AFFIDAVITS HEREWITH FOR OUR KIND PERUSAL. HOWEVER, NO ORIGI NAL AFFIDAVITS HAVE BEEN FILED BY THE APPELLANT. ALONG WITH HIS LETTER, ONLY A PH OTOCOPY OF CERTAIN AFFIDAVITS HAS BEEN FILED. AS DISCUSSED ABOVE, THIS ADDITIONAL EV IDENCE HAS NOT BEEN ADMITTED UNDER RULE 46A AS THE APPELLANT HAS FAILED TO EXPLA IN THAT HE WAS PREVENTED BY ANY REASONABLE CAUSE FROM FURNISHING THESE DOCUMENT S EARLIER DURING ASSESSMENT PROCEEDINGS. 10. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS STATED THAT THE ASSESSEE FAILED TO EVEN GIVE THE COMPLETE NAME AND ADDRESSES OF PERSONS TO WHOM COMMISSION RS.21,67,060/- WAS PAID. THE COMMISSION PAID COULD NOT BE CO RELATED WITH ANY SPECIFIC TRANSACTIONS OF SALE/PURC HASE TO ANY SPECIFIC PERSON. HE COULD NOT ALSO CO-RELATE THE ENTRIES IN THE BANK AC COUNT WITH THE COMMISSION PAID TO THE PARTIES. A PERUSAL OF THE BANK ACCOUNT OF T HE ASSESSEE IN BANK OF BARODA REVEALS THAT THOUGH THE COMMISSION WAS RECEIVED BY THE ASSESSEE BY CHEQUE BUT IN ALL CASES THERE IS A CORRESPONDING IMMEDIATE CASH W ITHDRAWAL. NO DETAILS REGARDING THE NAME AND ADDRESS OF PERSONS TO WHOM T HESE CASH PAYMENT WAS MADE HAS BEEN FURNISHED. NO TDS WAS DEDUCTED FOR A NY PAYMENT OF COMMISSION. EVEN IF THE BOOKS OF ACCOUNT WERE LOST, THERE WAS N O REASONS WHY THE APPELLANT COULD NOT GIVE EVEN THE NAMES AND ADDRESS OF THE PERSONS TO WHOM COMMISSION HAD BEEN PAID. THE APPELLANT HAS ALSO F AILED TO EXPLAIN WHY NO TDD HAS BEEN DEDUCTED IN RESPECT OF THESE PAYMENTS. IN VIEW OF THESE FACTS, THE APPELLANT HAS CLEARLY FAILED TO FURNISH TO ESTABLIS H HIS CLAIM OF COMMISSION EXPENSES AMOUNTING TO RS.21,67,060/-. THE ADDITION MADE BY THE ASSESSING OFFICER IS, THEREFORE, JUSTIFIED AND IS UPHELD. TH E GROUND IS DISMISSED. 8. AFTER GOING THROUGH THE BASIS AND CONCLUSION AS DRAWN BY THE CIT(A), AS REPRODUCED IN EARLIER PARA., WE FIND THAT CIT(A) HA S TAKEN A JUST AND APPROPRIATE VIEW IN THE LIGHT OF FACTS, CIRCUMSTANCES AND MATERIAL ON R ECORD. NEITHER ANY FRESH MATERIAL HAS BEEN ADDUCED NOR ANY CONVINCING ARGUMENTS IS ADVANC ED WHICH WOULD JUSTIFY THE CLAIM I.T.A. NO.3875/DEL./2010 (A.Y. : 2007-08) 5 OF COMMISSION PAID BY THE ASSESSEE. SINCE THERE WA S LACK OF MATERIAL AND EVIDENCE TO JUSTIFY CLAIM OF ASSESSEE WITH REGARD TO HAVING PAI D THE COMMISSION AND ASSESSEE HAS NOT BEEN ABLE TO MAKE OUT A CASE EITHER FOR ADMISSION OF ADDITIONAL EVIDENCE, THEREFORE, WHILE CONCURRING WITH THE FINDING AND CONCLUSION AS DRAWN BY THE CIT(A), WE UPHOLD HIS ACTION ON THE FIRST ISSUE, ON BOTH THE ASPECT RAISED AND D ISMISS THE APPEAL OF THE ASSESSEE IN THIS REGARD. 9. AS REGARDS SECOND ISSUE, WE FIND THAT AS PER COM PUTATION OF INCOME FILED BY THE ASSESSEE BEFORE ASSESSING OFFICER, HE HAS SHOWN BUS INESS INCOME FORM HIS PROPRIETORSHIP CONCERN M/S MADHAV ENTERPRISES PVT. LTD. AT RS.5,17 ,915/- AND CONTACT CHARGES FROM M/S BSA INFOMEDIA PVT. LTD. OF RS.1,93,497/- AND HE HAS ALSO DERIVED INCOME FROM OTHER SOURCES. 10. ASSESSING OFFICER IN THE ASSESSMENT ORDER NOTED THAT ASSESSEE FILED A TDS CERTIFICATE FROM M/S SMART INFORMATICS (P) LTD. WIT H REGARD TO PAYMENT OF RS.1,67,889/- HOWEVER, THE SAME WAS NOT SHOWN IN THE COMPUTATION OF INCOME. THE AMOUNT OF RS.1,67,889/- WAS ADDED BACK TO THE INCOME OF THE A SSESSEE. IN HIS STATEMENT OF FACTS, THE ASSESSEE HAS STATED THAT WHILE COMPUTING THE A SSESSABLE INCOME OF THE ASSESSEE SMART INFOMATICS (P) LTD. WAS TYPED MISTAKENLY AS M/S BSA INFOMEDIA PVT. LTD. HOWEVER, NO DETAILS AND EVIDENCE SUCH AS COPY OF ACCOUNT OF M/S SMART INFOMATICS PVT. LTD. HAS BEEN FILED. IN VIEW OF THESE FACTS, THE ASSESSEES CLAI M HAS REMAINED UNSUBSTANTIATED. 11. IN FIRST APPEAL ALSO, ASSESSEE COULD NOT SUBSTA NTIATE ITS CLAIM BY FURNISHING ANY MATERIAL OR EVIDENCE. SO, CIT(A) OBSERVED THAT ADD ITION MADE BY THE ASSESSING OFFICER DOES NOT CALL FOR ANY INTERFERENCE. AGAINST SUCH A CTION OF THE CIT(A), IN FURTHER APPEAL ASSESSEE WHILE REITERATING THE SUBMISSION AS MADE B EFORE LOWER AUTHORITIES, IT WAS PLEADED I.T.A. NO.3875/DEL./2010 (A.Y. : 2007-08) 6 FOR DELETION OF THE ADDITION AS MADE BY THE ASSESS ING OFFICER AND CONFIRMED BY THE CIT(A) BY PLEADING THAT ASSESSING OFFICER HAS ERRE D IN MAKING ADDITION OF RS.1,67,889/- ON ACCOUNT OF CONTACT CHARGES RECEIVED, BUT NOT TAK EN IN THE COMPUTATION OF ASSESSABLE INCOME WHEN THERE WAS A TYPOGRAPHICAL MISTAKE IN TY PING BSA INFOMEDIA PVT. LTD. IN PLACE OF SMART INFOMATICS PVT. LTD. THEREFORE, IT WAS PLEADED FOR SETTING ASIDE OF THIS ISSUE ALSO ON THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AND RE-CONSIDERATION. WHEREAS LD.DR HAS STRONGLY RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW AND PLEADED THAT EVEN IF FIGURES OF CHARGES FROM THE STATED TWO CONCERNS ARE CONSIDERED, THE AMOUNT SHOWN ARE NOT THE SAME AND ARE DIFFERENT AND NOTHIN G STANDS SUBSTANTIAL. SO, PLEA OF THE ASSESSEE IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE HAS RIGHTLY BEEN REJECTED BY THE LOWER AUTHORITIES. THEREFORE, THERE BEING NO SUPPO RTING DOCUMENTS HAVING BEEN FILED, PLEA OF THE ASSESSEE IN THIS REGARD NEEDS TO BE DIS MISSED. 12. WE HAVE HEARD BOTH THE RIVALS SUBMISSIONS AND M ATERIAL ON RECORD AND FIND THAT RS.1,67,889/- ON ACCOUNT OF CONTACT CHARGES PAID TO THE ASSESSEE SHOWN IN THE TDS CERTIFICATE ARE FROM M/S SMART INFOMATICS PVT. LTD. , BUT SAME WAS NOT SHOWN IN THE COMPUTATION OF INCOME AND EXCEPT TAKING THE PLEA OF TYPOGRAPHICAL MISTAKE, NO MATERIAL OR EVIDENCE HAS BEEN FURNISHED TO SUPPORT THE PLEA. THEREFORE, WE DO NOT FIND ANY REASONABLE BASIS TO INTERFERE IN THE ORDER PASSED B Y THE ASSESSING OFFICER IN MAKING ADDITION OF RS.1,67,889/-, WHICH IS FOUND TO HAVE C ORRECTLY BEEN MADE BY THE ASSESSING OFFICER AND UPHELD BY THE CIT(A) WHOSE ACTION IS FU RTHER CONFIRMED AND THIS GROUND OF APPEAL OF THE ASSESSEE IS ALSO DISMISSED. I.T.A. NO.3875/DEL./2010 (A.Y. : 2007-08) 7 13 AS A RESULT, THE APPEAL OF THE ASSESSEE GETS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON 30.11.2012. SD/- SD/- (S.V. MEHROTRA) (U.B.S. BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : NOV. 30, 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXVIII, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT