WALAITI RAM ASHOK KUMAR, NEW DELHI V. ITO, WARD- 47(1), NEW DELHI

ITA 4096/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3920 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 20-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard
• Section: 234B; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.4096/DEL/2017 ASSESSMENT YEAR : 2012-13 WALAITI RAM ASHOK KUMAR NEW DELHI VS. ITO, WARD-47(1), NEW DELHI PAN : ACQPR3314L (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SH. AMIT JAIN, SR. DR DATE OF HEARING : 24-10-2017 DATE OF PRONOUNCEMENT : 24 -10-2017 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 5 TH APRIL, 2017 OF THE CIT(A)-16, NEW DELHI RELATING TO ASSESSMENT YEAR 2012-13. 2. DESPITE SERVICE OF NOTICE NON-APPEARED ON BEHALF OF THE ASSESSEE. THEREFORE, THIS APPEAL IS BEING DECIDED ON THE BASI S OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. 3. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER :- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE THE IMPUGNED ASSESSMENT IS ILLEGAL AND UNSUSTAINABLE IN LAW AS W ELL AS ON MERITS. 2. THE LD. CIT(A) ERRED IN LAW IN DISMISSING THE A PPEAL WITHOUT DISCUSSING THE MERITS OF THE CASE AND GROUNDS OF APPEAL. 3. THAT UNDER THE FACT AND CIRCUMSTANCES OF THE C ASE ADDITION OF RS. 30,66,574/- ON ACCOUNT OF DISALLOWANCE OF COMMISSIO N PAID IS ABSOLUTELY UNSUSTAINABLE IN LAW AS WELL AS ON MERITS. 2 ITA NO.4096/DEL/2017 (WALAITI RAM ASHOK KUMAR) 4. THAT UNDER THE FACT AND CIRCUMSTANCES OF THE C ASE ADDITION OF RS. 18,499 BEING ONE FIFTH OF TOTAL EXPENDITURE OF RS. 92,496 INCURRED ON ACCOUNT OF EXPENSES INCURRED ON TRAVELLING, TELEPHONE AND CAR INSURANCE IS ABSOLUTELY UNSUSTAINABLE IN LAW AS WELL AS ON MERITS. 5. THAT BOTH THE LOWER AUTHORITIES ERRED IN LAW IN NOT PROVIDING REASONABLE & PROPER OPPORTUNITY OF BEING HEARD. 6. THAT THE INTEREST UNDER SECTION 234B & 234C OF THE ACT ARE WRONGLY CHARGED. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF TRADING OF DYES AND CHEM ICALS. IT FILED ITS RETURN OF INCOME ON 12 TH SEPTEMBER, 2012 DECLARING TOTAL INCOME OF RS. 8,43 ,084/-. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS MADE SALES OF RS. 16,43,95,492/- AND HAS MADE GROSS PROFIT OF RS. 90,37,058/-. IN THE PRECEDING YEAR SUCH TURN O VER WAS RS. 12,68,78,823/- AND THE GROSS PROFIT WAS RS. 76,12,739/-. THE AO FU RTHER OBSERVED THAT THE ASSESSEE HAS PAID COMMISSION OF RS. 30,66,574/- TO 11 PARTIES. THE AO ASKED THE ASSESSEE TO FURNISH THE DETAILS AND ALSO ISSUED NOTICE U/S 133(6) TO ALL THE ABOVE PARTIES. ACCORDING TO THE AO, THE NOT ICE ISSUED U/S 133(6) WAS RECEIVED BACK IN THE CASE OF ONE MR. SAHIL AGGARWAL . SIMILARLY, THE REPLY WAS NOT SUFFICIENT FROM ONE MR. ASHOK KUMAR GUPTA A ND M/S. ASIAN DYES AND CHEMICALS. REMAINING 8 PARTIES DID NOT RESPOND AT ALL. HE THEREFORE, CONFRONTED THE ASSESSEE ABOUT THE SAME AND ASKED TH E ASSESSEE TO EXPLAIN AS TO WHY THE COMMISSION SHOULD NOT BE TREATED AS NON- GENUINE AND SHOULD NOT BE DISALLOWED. IN ABSENCE OF ANY PROPER COMPLIANCE FROM THE SIDE OF THE ASSESSEE, THE AO DISALLOWED THE ENTIRE COMMISSION O F RS. 30,66,574/-. SIMILARLY, OUT OF THE VARIOUS EXPENSES CLAIMED BY T HE ASSESSEE SUCH AS TRAVELLING EXPENSES, TELEPHONE EXPENSES, MOTOR CAR INSURANCE AND MOTER CAR DEPRECIATION, THE AO DISALLOWED AN AMOUNT OF R S. 55,225/- BEING 1/5 TH OF SUCH EXPENDITURE ON ESTIMATE BASIS. 3 ITA NO.4096/DEL/2017 (WALAITI RAM ASHOK KUMAR) 4.1 BEFORE THE CIT(A), THE ASSESSEE EXPRESSED HIS WILLINGNESS TO PRODUCE THE PARTIES TO WHOM THE COMMISSION HAS BEEN PAID. A LTHOUGH THE AR WAS ASKED TO PRODUCE 5 PARTIES PER DAY STARTING FROM 3 RD MARCH, 2017, THE LD. CIT(A) OBSERVED THAT THERE WAS NON-APPEARANCE FROM THE SIDE OF THE ASSESSEE FROM 3 RD MARCH, 2017 TILL PASSING OF THE ORDER I.E. ON 5 TH APRIL, 2017. HE, THEREFORE, HELD THAT THE COMMISSION PAID BY THE ASSESSEE TO THE SO-CALLED COMMISSION AGENTS IS NOT GENUINE AND THEREFORE, HE CONFIRMED THE SAME. SO FAR AS DISALLOWANCE OF EXPENSES IS CONCERNED HE HEL D THAT NO DISALLOWANCE OUT OF DEPRECIATION ON MOTOR CAR IS CALLED FOR. HO WEVER, IN ABSENCE OF ANY PROPER COMPLIANCE BEFORE HIM, HE SUSTAINED THE REMA INING DISALLOWANCE MADE BY THE AO. 5. AGGRIEVED WITH SUCH ORDER WITH CIT(A), THE ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. I HAVE HEARD THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SINCE THE ASSESSEE BEFORE THE CIT(A) HAS EXPRESSED HIS WILLINGNESS TO PRODUCE THE COMMISSION AGENTS TO PROVE THE GENUINEN ESS OF SUCH COMMISSION AND SINCE THE ASSESSEE DID NOT APPEAR BE FORE THE CIT(A) THEREAFTER, CONSIDERING THE TOTALITY OF THE FACTS O F THE CASE AND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE T O THE FILE OF THE CIT(A) WITH A DIRECTION TO GRANT ONE MORE OPPORTUNITY TO THE AS SESSEE TO SUBSTANTIATE HIS CASE. THE ASSESSEE IS ALSO HEREBY DIRECTED TO APPEA R BEFORE THE CIT(A) AND PRODUCE THE SO CALLED COMMISSION AGENTS AS AGREED E ARLIER TO PROVE THE IDENTITY OF THOSE PERSONS AND THE GENUINENESS OF TH E PAYMENTS FAILING WHICH THE LD. CIT(A) IS AT LIBERTY TO PASS APPROPRIATE OR DERS AS PER LAW. I HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSES SEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 4 ITA NO.4096/DEL/2017 (WALAITI RAM ASHOK KUMAR) 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE COURT AT THE TIME OF HEARI NG ITSELF I.E. ON 24.10.2017). SD/- SDSD/- S/- SD/- (R. K. PA NDA) ACCOUNTANT MEMBER DATED:24-10-2017 BINITA COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE DRP-IV, NEW DELHI 4) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI 5 ITA NO.4096/DEL/2017 (WALAITI RAM ASHOK KUMAR) S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 24.10.2017 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 24.10.2017 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT ON .2017 SR. PS/PS 7 DATE OF UPLOADING OF ORDER .2017 SR. PS/PS 8 FILE SENT TO BENCH CLERK .2017 SR. PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R. 11 DATE OF DISPATCH OF ORDER