ITO, New Delhi V. Shri Ishwar Chand Bansal, New Delhi

ITA 4132/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2820 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 08-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 26-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBANI
• Assessee Lawyers: DR RAKESH GUPTA; YASHU GOEL
• Keywords: Additional evidence; Corroborative evidences
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER ITA NO. 4132/DEL/2016 (ASSESSMENT YEAR: 2012 -13) ITO, WARD-41(1), ROOM NO.1709, 17 TH FLOOR, PRATYAKSH KAR BHAWAN, CIVIC CENTRE, MINTO ROAD, NEW DELHI-110002. VS ISHWAR CHAND BANSAL, 24A/73, WEST PUNJABI BAGH, NEW DELHI-110026. PAN-ADTP9145R (APPELLANT) (RESPONDENT) APPELLANT BY MS. BEDOBANI, SR.DR RESPONDENT BY DR. RAKESH GUPTA & SH. YASHU GOEL, CA DATE OF HEARING 08.05.2017 DATE OF PRONOUNCEMENT 13.06.2017 ORDER PER R.K.PANDA, ACCOUNTANT MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 06.05.2016 OF THE CIT(A)-14, NEW DELHI RELATI NG TO ASSESSMENT YEAR 2012-13. 2. FACTS IN BRIEF OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 25.08.2012 DECLAR ING TOTAL INCOME OF RS.2,80,631/-. THE ASSESSEE IS ENGAGED IN THE BUSI NESS OF BUILDING ACTIVITIES AND RUNNING HIS BUSINESS FROM 17A/35, WE ST PUNJABI BAGH, NEW DELHI. DURING THE COURSE OF ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS CL AIMED CONSTRUCTION PAGE 2 OF 10 ITA NO. 4132/DEL/2016 ITO VS ISHWAR CHAND BANSAL EXPENSES OF RS.40 LACS IN THREE PROPERTIES FOR WHIC H HE HAS NOT FURNISHED ANY SUPPORTING EVIDENCE FOR THE GENUINENE SS OF THE CONSTRUCTION EXPENSES. FURTHER, NO SOURCE OF SUCH EXPENDITURE WAS FURNISHED DESPITE OPPORTUNITIES GRANTED. HE, THEREF ORE, TREATED THE EXPENSES MADE ON SUCH CONSTRUCTION AS UNEXPLAINED E XPENDITURE MADE DURING THE YEAR OUT OF UNDISCLOSED SOURCE. HE ACCORDINGLY MADE ADDITION OF RS.40 LACS TO THE TOTAL INCOME OF THE A SSESSEE U/S 69C OF THE ACT. SIMILARLY, THE ASSESSING OFFICER ALSO MAD E AN ADDITION OF RS.4,80,000/- WHICH WAS CLAIMED BY THE ASSESSEE AS SALARY FOR WANT OF ANY SUPPORTING EVIDENCE. 3. BEFORE LD.CIT(A), THE ASSESSEE FILED CERTAIN ADD ITIONAL EVIDENCES BASED ON WHICH LD.CIT(A CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSESSEE HAD ALSO EXPLAINED THE REASONS FOR WHICH HE WAS PREVENTED FROM SUBMITTING THESE ADDITI ONAL EVIDENCES. IT WAS EXPLAINED THAT THE ASSESSEE WAS FILING THE REQU ISITE DETAILS AS CALLED FOR BY THE ASSESSING OFFICER FROM TIME TO TI ME. WHEN THE CASE WAS LAST FIXED FOR HEARING ON 07.03.2015, THE ASSES SEE APPEARED BEFORE THE ASSESSING OFFICER WITH THOSE DETAILS. HOWEVER, THE ASSESSING OFFICER ISSUED ANOTHER NOTICE ON 05.03.2015 U/S 142 (1) FIXING THE CASE FOR HEARING ON 10.02.2015. IT WAS SUBMITTED THAT W HEN THE ASSESSEE HAD APPEARED BEFORE THE ASSESSING OFFICER ON 07.03. 2015 HE WAS PAGE 3 OF 10 ITA NO. 4132/DEL/2016 ITO VS ISHWAR CHAND BANSAL INFORMED THAT THE CASE HAS BEEN FIXED FOR HEARING O N 10.03.2015. HOWEVER, SINCE THE ASSESSEE WAS GOING ABROAD ON THE SAME DAY, HE WAS NOT IN A POSITION TO APPEAR BEFORE THE ASSESSING OF FICER. 4. BASED ON THE SUBMISSIONS FILED BY THE ASSESSEE, LD.CIT(A) ACCEPTED THE ADDITIONAL EVIDENCES. SO FAR AS THE D ELETION OF RS.40 LACS IS CONCERNED, HE HELD THAT THE ASSESSEE FILED BEFO RE HIM THE REQUISITE DETAILS WITH EVIDENCES WHICH REVEAL THAT EXPENSES H AVE BEEN INCURRED FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE. H E FURTHER NOTICED THAT IN THE SUBSEQUENT YEAR I.E. A.Y. 2013-14, SUCH EXPENSES HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER WHILE COMPLE TING THE ASSESSMENT U/S 143(3). HE ACCORDINGLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INVESTMENT MADE IN THE THREE PROPERTIES AMOUNTING TO RS.40 LACS AND THE SALARY O F RS.4,80,000/-. 5. AGGRIEVED WITH SUCH ORDER OF THE LD.CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL WITH THE FOLLOWING GROUN DS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION MA DE BY THE ASSESSING OFFICER (AO) ON ACCOUNT' OF UNEXPLAINED S OURCE OF EXPENDITURE U/S 69C OF THE ACT AMOUNTING TO RS.40,0 0,000/- WITHOUT PROPER VERIFYING THE SOURCE OF EXPENDITURE DURING THE APPELLATE PROCEEDINGS EVEN THOUGH THE ASSESSEE COUL D NOT PROVE THE NEXUS OF SOURCE OF EXPENDITURE AS WELL AS BILLS FURNISHED IN RESPECT OF EXPENDITURE WERE UNSIGNED. PAGE 4 OF 10 ITA NO. 4132/DEL/2016 ITO VS ISHWAR CHAND BANSAL 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION MA DE BY THE ASSESSING OFFICER (AO) ON ACCOUNT OF UNEXPLAINED SO URCE OF EXPENDITURE U/S 69C OF THE ACT AMOUNTING TO RS.40,0 0,000/- BY ACCEPTING THE ADDITIONAL EVIDENCE AND IGNORING THE REPORT OF THE AO WHICH IS IN CONTRAVENTION OF RULE 46A OF INCOME TAX RULES, 1962. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION MA DE BY THE ASSESSING OFFICER (AO) ON ACCOUNT OF SALARY EXPENSE S AMOUNTING TO RS.4,80,000/- BEING UNVERIFIABLE BY ACCEPTING THE A DDITIONAL EVIDENCES WITHOUT VERIFYING THE CASH FLOW STATEMENT AS WELL AS IGNORING THE REPORT OF THE AO WHICH IS IN CONTRAVEN TION OF RULE 46A OF INCOME TAX RULES, 1962. 4. THE APPELLANT CRAVES THE RIGHT TO ADD, ALTER OR AMEND ANY GROUND OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 6. LD.DR STRONGLY CHALLENGED THE ORDER OF THE LD.CI T(A). REFERRING TO THE ORDER OF THE LD.CIT(A), HE SUBMITTED THAT THERE IS NO BASIS ON WHICH LD.CIT(A) ACCEPTED THE ADDITIONAL EVIDENCES. REFER RING TO THE VARIOUS PAGES OF THE PAPER BOOK, HE SUBMITTED THAT ALL THES E ARE SELF MADE VOUCHERS AND LD.CIT(A) HAS NOT GONE INTO DETAILS AL L THOSE VOUCHERS. REFERRING TO THE BANK ACCOUNT OF THE ASSESSEE FILED IN PAPER BOOK, HE SUBMITTED THAT THERE ARE HUGE DEPOSITS AND WITHDRAW ALS IN THE BANK ACCOUNT. UNDER THESE CIRCUMSTANCES, LD.CIT(A) SHOU LD NOT HAVE PAGE 5 OF 10 ITA NO. 4132/DEL/2016 ITO VS ISHWAR CHAND BANSAL DELETED THE ADDITION. HE ACCORDINGLY SUBMITTED THA T THE ORDER OF LD.CIT(A) BE REVERSED AND THAT OF THE ASSESSING OF FICER TO BE RESTORED. 7. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND STRONGLY SUPPORTED THE ORDER OF LD.CIT(A). REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS VIRGIN SECURITIES AND CREDITS PVT.LTD. REPORTED IN 322 ITR 396, HE SUBMITTED THAT HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT WHERE LD.C IT(A) BEFORE ADMITTING THE ADDITIONAL EVIDENCES HAD OBTAINED A R EMAND REPORT FROM THE ASSESSING OFFICER AND THE ASSESSING OFFICER IN THE REMAND REPORT HAD NOT OBJECTED TO THE ADDITIONAL EVIDENCE AND WHE N SUCH ADDITIONAL EVIDENCE WAS CRUCIAL TO THE DISPOSAL OF THE APPEAL AND HAD A DIRECT BEARING ON THE QUANTUM OF THE CLAIM MADE BY THE ASS ESSEE THE LD.CIT(A) CAN ADMIT SUCH ADDITIONAL EVIDENCE UNDER RULE 46A IF HE FINDS THAT THE SAME IS CRUCIAL FOR DISPOSAL OF THE APPEAL. HE SUBMITTED THAT IN THE INSTANT CASE, ADMISSION OF ADDITIONAL E VIDENCE WAS CRUCIAL FOR DISPOSAL OF THE APPEAL SINCE THE ASSESSEE WAS P REVENTED BY SUFFICIENT CAUSES FOR NON-FURNISHING OF THOSE DETAI LS BEFORE THE AO. HE ACCORDINGLY SUBMITTED THAT LD.CIT(A) WAS FULLY JUST IFIED IN ADMITTING THE ADDITIONAL EVIDENCES. 8. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, HE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PURCHASE OF OLD PROPERTIES, PAGE 6 OF 10 ITA NO. 4132/DEL/2016 ITO VS ISHWAR CHAND BANSAL RENOVATE THEM AND SALE THEM IN THE MARKET. HE SUBM ITTED THAT PROVISIONS OF SECTION 69C ARE APPLICABLE IF THE ASS ESSEE IS UNABLE TO EXPLAIN THE SOURCE OF SUCH EXPENSE. HOWEVER, IF TH E SAME IS EXPLAINED IN THE P&L A/C AND THE BOOKS OF THE ASSESSEE SHOW S UFFICIENT FUNDS THEN NO ADDITION U/S 69C IS CALLED FOR. REFERRING TO VARIOUS PAGES OF THE PAPER BOOK, LD. COUNSEL FOR THE ASSESSEE DREW T HE ATTENTION OF THE BENCH TO THE AUDITED ACCOUNTS AND VARIOUS BILLS AND VOUCHERS FOR THE EXPENSES THAT HAVE BEEN INCURRED. FURTHER IN THE S UBSEQUENT YEAR, THE ASSESSING OFFICER HAS ACCEPTED SIMILAR EXPENDITURE AND HAS NOT MADE ANY ADDITION. SO FAR AS SALARY EXPENDITURE IS CONC ERNED, HE SUBMITTED THAT THE SAME HAS BEEN PAID BY CASH AND IS DULY SUP PORTED BY PROPER VOUCHERS. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF LD.CIT(A) BEING IN ACCORDANCE WITH LAW SHOULD BE UPHELD AND THE GRO UNDS RAISED BY THE REVENUE SHOULD BE DISMISSED. 9. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND LD. CIT(A) AND THE PAPER BOOK FILED BY THE ASSESSEE. I HAVE ALSO CONS IDERED THE VARIOUS DECISIONS CITED BEFORE ME. I FIND THE ASSESSEE IN THE INSTANT CASE IS ENGAGED IN THE BUSINESS OF PURCHASE OF OLD PROPER TIES, RENOVATE THEM AND SALE THEM IN THE MARKET. DURING THE IMPUGNED A SSESSMENT YEAR, THE ASSESSEE HAS CLAIMED TO HAVE SPENT AN AMOUNT OF RS.40 LACS ON PAGE 7 OF 10 ITA NO. 4132/DEL/2016 ITO VS ISHWAR CHAND BANSAL RENOVATION OF THREE PROPERTIES WHICH WAS CLAIMED IN THE P&L ACCOUNT. SINCE THE ASSESSEE DID NOT FURNISH THE REQUISITE DE TAILS, THE ASSESSING OFFICER INVOKING THE PROVISIONS OF SECTION 69C MADE ADDITION OF THE SAME. SIMILARLY THE ASSESSING OFFICER ALSO MADE AD DITION OF RS.4,80,000/- ON ACCOUNT OF SALARY FOR WANT OF EVID ENCE. I FIND BEFORE LD.CIT(A) THE ASSESSEE FURNISHED CERTAIN ADDITIONAL EVIDENCES BASED ON WHICH LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. ALTHOUGH, THE ASSESSING OFFICER OBJECTED TO THE ADM ISSION OF THE ADDITIONAL EVIDENCE, HE HAS NOT GIVEN ANY COMMENTS REGARDING THE MERIT OF THE DOCUMENTS. I FIND THE LD.CIT(A) BASED ON THE EVIDENCES FILED BEFORE HIM, ADMITTED THE ADDITIONAL EVIDENCES AND DELETED BOTH THE ADDITIONS. IT IS THE SUBMISSION OF THE LD. DR THAT ADMISSION OF SUCH ADDITIONAL EVIDENCE BY THE LD.CIT(A) IS IN VIO LATION OF RULE 46A. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESS EE THAT THE ASSESSEE WAS PREVENTED FROM SUFFICIENT CAUSES FOR NON-SUBMIS SION OF SUCH ADDITIONAL EVIDENCE. ACCORDING TO HIM WHEN THE ASS ESSEE APPEARED BEFORE THE ASSESSING OFFICER ON 07.03.2015, THE ASS ESSING OFFICER INSTEAD OF HEARING THE MATTER, HAD ADJOURNED THE MA TTER TO 10.03.,2015. THE ABOVE SUBMISSION OF THE ASSESSEE BEFORE THE LD.CIT(A) REMAINS UN-CONTROVERTED BY THE LD.DR. UN DER THESE PAGE 8 OF 10 ITA NO. 4132/DEL/2016 ITO VS ISHWAR CHAND BANSAL CIRCUMSTANCES, IT IS TO BE SEEN AS TO WHETHER THE L D. CIT(A) WAS JUSTIFIED IN ADMITTING THE ADDITIONAL EVIDENCES. 10. AS PER THE PROVISIONS OF RULE 46A, THE ASSESSE E IS ENTITLED TO PRODUCE ADDITIONAL EVIDENCE BEFORE THE LD.CIT(A) WH ERE THE ASSESSING OFFICER HAD REFUSED TO ACCEPT SUCH EVIDENCE WHICH O UGHT TO HAVE BEEN ADMITTED OR WHERE THE ASSESSEE WAS PREVENTED BY SUF FICIENT CAUSE FROM PRODUCING SUCH EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER. AS MENTIONED EARLIER, THE ASSES SEE IN THE INSTANT CASE HAD APPEARED BEFORE THE ASSESSING OFFICER ON 0 7.03.2015 BUT THE CASE WAS ADJOURNED TO 10.03.2015 WITHOUT THE CONSEN T OF THE ASSESSEE AS MENTIONED BEFORE THE LD.CIT(A) AND NOT CONTROVER TED BY THE REVENUE. FURTHER, LD.CIT(A) HAD CALLED FOR A REMAN D REPORT FROM THE ASSESSING OFFICER GIVING HIM FULL OPPORTUNITY TO GO THROUGH THE DOCUMENTS AND SUBMIT THE REPORT. ALTHOUGH THE AO HA D SUBMITTED HIS REPORT OBJECTING TO THE ADDITIONAL EVIDENCE, HOWEVE R, HE HAS NOT COMMENTED UPON THE MERIT OF THE DOCUMENTS. 11. I FIND SOMEWHAT SIMILAR CASE HAD COME UP BEFOR E THE HONBLE DELHI HIGH COURT IN THE CASE OF VIRGIN SECURITIES & CREDIT PVT.LTD. (SUPRA) WHERE THE HONBLE HIGH COURT HAD OBSERVED A S UNDER:- DISMISSING THE APPEAL, (I) THAT BEFORE ADMITTING T HE ADDITIONAL EVIDENCE THE COMMISSIONER (APPEALS) HAD OBTAINED A REMAND REPORT FROM THE ASSESSING OFFICER. IN THE REMAND R EPORT THE PAGE 9 OF 10 ITA NO. 4132/DEL/2016 ITO VS ISHWAR CHAND BANSAL ASSESSING OFFICER HAD NOT OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCE. THE ADDITIONAL EVIDENCE WAS C RUCIAL TO THE DISPOSAL OF THE APPEAL AND HAD A DIRECT BEARING ON THE QUANTUM OF THE CLAIM MADE BY THE ASSESSEE. RULE 46A OF THE IN COME TAX RULES, 1962, PERMITS THE COMMISSIONER (APPEALS) TO ADMIT ADDITIONAL EVIDENCE IF HE FINDS THAT THE SAME IS CR UCIAL FOR DISPOSAL OF THE APPEAL. 12. SINCE THE ADDITIONAL EVIDENCES FILED BY THE ASS ESSEE BEFORE THE LD.CIT(A) GO TO THE ROOT OF THE MATTER FOR DECIDING THE ISSUE ON MERIT AND SINCE THE LD.CIT(A) HAD ACCEPTED THOSE ADDITION AL EVIDENCES AFTER GIVING DUE OPPORTUNITY TO THE ASSESSING OFFICER THR OUGH HIS REMAND REPORT, THEREFORE, I FIND NO MERIT IN THE ARGUMENT S OF THE LD.DR THAT THERE IS VIOLATION OF THE PROVISIONS OF RULE 46A. 13. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, I FIND THE ASSESSEE HAD FIELD THE DETAILS OF EXPENSE SUPPORTED BY BILLS AND VOUCHERS. THE EXPENDITURE IS DULY RECORDED IN THE BOOKS OF ACCOUN TS OF THE ASSESSEE WHICH ARE DULY AUDITED. THERE IS ALSO SUFFICIENT S OURCE TO EXPLAIN THE EXPENSES INCURRED BY THE ASSESSEE AS PER THE AUDITE D ACCOUNTS. FURTHER, IN THE SUBSEQUENT YEAR, THE ASSESSING OFFI CER, IN THE ORDER PASSED U/S 143(3), HAS ACCEPTED SIMILAR EXPENSES. I, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) IN DELETING THE ADDITION OF RS.40 LACS ON ACCOUNT OF INVESTMENT MADE ON THE THREE PROPERTIES. PAGE 10 OF 10 ITA NO. 4132/DEL/2016 ITO VS ISHWAR CHAND BANSAL 14. SO FAR AS THE DELETION OF RS.4,80,000/- ON ACCO UNT OF SALARY IS CONCERNED, I FIND THE ASSESSEE HAD PRODUCED THE REQ UISITE BILLS AND VOUCHERS BEFORE THE LD.CIT(A) BASED ON WHICH HE HA D DELETED THE ADDITION. I, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) DELETING THE DISALLOWANCE OF SALARY OF RS .4,80,000/- IN THIS VIEW OF THE MATTER, THE ORDER OF THE LD.CIT(A) IS U PHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 13.06.2017. SD/- (R.K.PANDA) ACCOUNTANT MEMB ER DATE:-13 TH JUNE, 2017 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTR AR ITAT NEW DELHI