Satish Sehrawat, New Delhi V. DCIT, New Delhi

ITA 389/DEL/2009

• Counselvise Citation: 38920114 RSA 2009
• Duration Of Justice: 6 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 10-11-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 02-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TO INCOME US A O N FACTS AND
• Assessee Lawyers: MANIS O N FACTS
• Keywords: Depreciation; Opportunity of being heard; Additional evidence; Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , DELHI BENCH S, DELHI G BENCH BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER , AND SHRI A.T. VARKEY , JUDICIAL MEMBER ITA NO. 389 /DEL / 20 09 [ ASSESSMENT YEAR: 20 05 - 06 ] SHRI SATISH SEHR AWAT VS. THE D.C.I.T 1, PRAKASH HOUSE CIRCLE 24(1) OPP STATE BANK OF PATIALA NEW DELHI MAIN ROAD, MAHIPALPUR NEW DELHI 110 037. PAN NO. ABAPS 4331 H ITA NO. 502 /DEL /20 11 [ ASSESSMENT YEAR: 20 05 - 06] THE D.C.I.T VS. SHRI SATISH SEHRAWAT CIRCL E 24(1) 1, PRAKASH HOUSE NEW DELHI OPP STATE BANK OF PATIALA MAIN ROAD, MAHIPALPUR NEW DELHI 110 037. PAN NO. ABAPS 4331 H (APPELLANT) (RESPONDENT) A SSESSEE B Y : SHRI SANJAY GUPTA SHRI JATIN GUPTA , ADV DEPARTMEN T B Y : SMT RICHA RASTOGI , SR. DR DATE OF H EARING : 10 . 1 1 .201 5 DA TE OF PRONOUNCEMENT : 20 . 11 . 201 5 2 ORDER PER N.K.SAINI, A.M. TH E APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 2.12.2008 OF THE LD. CIT(A) - XXIII , NEW DELHI ON QUANTUM ADDITION WHILE THE DEPARTMENT AL APPEAL IS RELATING TO THE DELETION OF PENALTY AND IS DIRECTED AGAINST THE ORDER DATED 8.11.2010 OF THE LD. CIT(A) - XXIII, NEW DELHI . 2. IN ASSESSEE S APPEAL, THE FOLLOWING GROUNDS HAVE BEEN RAISED: 1. O N FACTS AND C IRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN REJECTING THE CLAIM OF THE ASSESSEE REGARDING STARTING OF NEW BUSINESS OF DEALING IN PRECIOUS GEMS AND MANIS. 2. O N FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DISAL LOWING THE CLAIM OF RS. 1,00,00,000/ - CLAIMED ON ACCOUNT OF BAD DEBTS/LOSS ON A/C OF FRAUD. 3. O N FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN MAKING THE DISALLOWANCE OF RS. 1,00, 000/ - ON ACCOUNT OF BAD DEBTS/ FRAUD LOSS, IGNORI NG THE FACT THAT OUT OF THIS AMOUNT RS. 20 LAKHS HAVE BEEN SUO MOTO ADDED BY THE ASSESSEE TO THE INCOME U/S 40A(3). 3 4. O N FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN MAKING THE DISALLOWANCE OF RS. 7,75,751/ - OUT OF VEHICLE RE PAIR EXPENSES ON AD HOC BASIS WITHOUT HAVING ANY MATERIAL ON RECORD. 5. O N FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING THE DISALLOWANCE OF RS. 2,50,000/ - OUT OF CAR PETROL/DEPRECIATION/INSURANCE EXPENSES ON AD HOC BA SIS PURELY BASED ON PRESUMPTION AND WITHOUT HAVING ANY MATERIAL ON RECORD. 6. O N FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN MAKING THE DISALLOWANCE OF RS. 61 , 562/ - OUT OF TELEPHONE EXPENSES ON AD HOC BASIS AND WITHOUT HAVING MATERIAL ON RECORD. 7. O N FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN UPHOLDING THE DISALLOWANCE OF RS. 41000/ - CLAIMED ON ACCOUNT OF DONATIONS . 3. IN THE DEPARTMENTAL APPEAL, THE SOLITARY GROUND RAISED READS AS UNDER: ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE PENALTY OF RS. 37,25,070/ - IMPOSED BY THE AO U/S 271(1)(C) OF THE ACT . 4 4 . FROM THE ABOVE GROUNDS, IT IS GATHERED THAT THE ASSESSEE HAS CHALLE NGED THE VARIOUS ADDITIONS SUSTAINED BY THE LD. CIT(A) WHILE THE DEPARTMENT IS IN APPEAL AGAINST THE DELETION OF PENALTY FOR THE A.Y 2005 - 06 U/S 271(1)(C) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT . 5 . IN THE INSTANT CASE, THE ASSES SEE MOVED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE IN THE FORM OF FIR LODGED WITH THE POLICE [ECONOMICS OFFENCE WING] IN SUPPORT OF HIS ONE GROUND OF APPEAL . ON THE BASIS OF WHICH A CHARGE SHEET WAS FILED IN THE COURT OF ACMM, PATIALA HOUSE COUR T , NEW DELHI IN APRIL 2011. IT WAS ALSO STATED THAT NEW EVIDENCE COULD NOT BE PRODUCED BEFORE THE AUTHORITIES BELOW AS THE SAME WAS NOT AVAILABLE WITH THE ASSESSEE AT THAT TIME. HOWEVER, THIS EVIDENCE IS VERY CRUCIAL TO PROVE THE GROUND OF APPEAL OF THE ASSESSEE AND COULD NOT BE PRODUCED EARLIER FOR THE REASONS BEYOND THE CONTROL OF THE ASSESSEE. A REQUEST HAS BEEN MADE FOR THE ADMISSION OF ADDITIONAL EVIDENCE U/R 29 OF THE INCOME - TAX RULES, 1963. 5 6 . DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR T HE ASSESSEE REITERATED THE CONTENTS OF THE APPLICATION MOVED FOR ADMISSION OF ADDITIONAL EVIDENCE AND REQUESTED TO ADMIT THE SAME. 7 . IN HER RIVAL SUBMISSIONS, THE LD. DR SUBMITTED THAT THE ASSESSEE DID NOT FURNISH THE DOCUMEN T S BEFORE THE AUTHORITIES BEL OW AND NOTHING WAS STATED BEFORE THE AUTHORITIES BELOW RELATING TO THE FIR FILED AGAINST SHRI RAM GURU, RESIDENT OF NAI N TH A R A I, BRINDAVAN AND OTHER PERSONS. SHE ALSO STATED THAT THE NEW EVIDENCE FURNISHED AT THIS STAGE MAY NOT BE ADMITTED. 8 . WE HAVE CON SIDER ED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. I N THE PRESENT CASE, IT IS NOTICED THAT THE ASSESSEE LODGED A N FIR AGAINST THE PERSONS TO WHOM A SUM OF R S . 1 CRORE WAS PAID , WHICH WAS CLAIMED AS BAD DEBT/LOSS, BUT THE CLAIM OF T HE ASSESSEE WAS NOT ACCEPTED AND THE ADDITION WAS MADE. THAT ADDITION WAS SUSTAINED BY THE LD. CIT(A) ALONG W I TH OTHER ADDITIONS. THE AO LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT CONSIDERING 6 THE ADDITIONS SUSTAINED BY THE LD. CIT(A) AS THE CONCEALED INC OME OF THE ASSESSEE. HOWEVER, THE PENALTY LEVIED ON THE SAID ADDITION U/S 271(1)(C) OF THE ACT WAS DELETED BY THE LD. CIT(A) AND THE DEPARTMENT IS IN APPEAL. I N THE INSTANT CASE I T IS AN ADMITTED FACT THAT THE ASSESSEE COULD NOT PRODUCE THE COPY OF CHARGE - SHEET FILED IN THE COURT OF ACM M , PATIALA HOUSE COURT , NEW DELHI BEFORE THE AUTHORITIES BELOW AS THE SAME WAS NOT AVAILABLE WHE N THE ASSESSMENT ORDER ON 28.12.2008 WAS PASSED . HOWEVER, THIS EVIDENCE IS CRUCIAL TO DECIDE THE CONTROVERSY RELATING TO BAD DE BT/BROUGHT FORWARD LOSS AND GOES TO THE ROOT OF THE MATTER. THEREFORE, THIS EVIDENCE DESERVES TO BE ADMITTED U/R 29 OF THE INCOME - TAX RULES , 1963. S INCE THE NEW EVIDENCE WAS NOT AVAILABLE BEFORE THE AUTHORITIES BELOW, THEY HAVE NO OCCASION TO EXAMINE THE SAME AND MAKE THEIR COMMENTS. WE, THEREFORE, CONSIDER IT APPROPRIATE TO SET ASIDE THIS CASE BACK TO THE FILE OF THE AO TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SINCE THE C A SE RELATED TO ADDITION SUSTAINED BY THE LD. CIT(A) IS SET ASIDE TO THE FILE OF THE AO, THE ISSUE RELATING 7 TO THE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT BEING CO - RELATED IS ALSO SET ASIDE TO THE FILE OF THE AO. 9 . IN THE RESULT, THE APPEAL OF THE ASS ESSEE AS WELL AS OF THE DEPARTMENT ARE ALLOWED FOR STATISTICAL PURPOSES. [ ORDER PRON OUNCED IN THE COURT ON . 11 .201 5 ] SD/ - SD/ - ( A.T. VARKEY ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 20 TH NOVEMBER, 2015. VL/ - COPY TO: 1 . THE APPELLANT BY ORDER 2 . THE RESPONDENT 3 . THE CIT 4 . THE CIT(A) ASSISTANT REGISTRAR 5 . THE DR