ITO, Rohtak V. Sh. Pankaj Vij, Rohtak

ITA 4157/DEL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69625 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 31-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 15-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEEK KUMAR
• Keywords: Opportunity of being heard; Additional evidence
• Section: 80C; 194C

Judgement Text

I.T.A. NO. 4157/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4157/DEL/2011 A.Y. : 200 8 - 0 9 INCOME TAX OFFICER, WARD-2, ROHTAK VS. SH. PANKAJ VIJ, H.NO. 4, BANK COLONY, ROHTAK. (PAN: ABRPV6987F) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. GAUTAM JAIN, CA DEPARTMENT BY : SH. VIVEEK KUMAR, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ROHTA K DATED 07.7.2011 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS. 67,97,201/- MADE BY AO ON ACCOUNT OF UNDER REPORTING OF GROSS RECEIPTS BY IGNORING THE FACTS DISCUSSED IN DETAIL IN THE ASSESSMENT ORDER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS. 2,71,480/- MADE BY AO I.T.A. NO. 4157/DEL/2011 2 ON ACCOUNT OF DISALLOWANCE UNDER SECTION 40(A)(IA) OF I.T. ACT, BY ADMITTING THE ADDITIONAL EVIDENCE WITHOUT ALLOWING A REASONABLE OPPORTUNITY TO AO. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS. 94,259/- MADE BY AO ON ACCOUNT OF ACCRETION IN CAPITAL FROM UNDISCLOSED SOURCES BY ADMITTING THE ADDITIONAL EVIDENCE WITHOUT ALLOWING A REASONABLE OPPORTUNITY TO AO. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS. 30000/- OUT OF RS. 116193/- MADE BY ON ACCOUNT OF LOW HOUSEHOLD DRAWINGS BY IGNORING THE FACTS DISCUSSED IN DETAIL IN THE ASSESSMENT ORDER. 5. THE APPELLANT CRAVES LEAVE TO ADD, DELETE OR AM END ANY GROUND OR GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. APROPOS DELETION OF ADDITION OF RS. 67 APROPOS DELETION OF ADDITION OF RS. 67 APROPOS DELETION OF ADDITION OF RS. 67 APROPOS DELETION OF ADDITION OF RS. 67, ,, ,97 9797 97, ,, ,201/ 201/ 201/ 201/- -- - THE ASSESSEE, PROPRIETOR OF M/S VISION OUTDOORS, IS ENGAGED IN THE BUSINESS OF ADVERTISEMENT BY PUTTING HOARDINGS ETC. AND RETURNED TOTAL INCOME OF RS. 92,600/-. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED FROM THE INCO ME TAX DEPARTMENT (ITD) DATABASE IN FORM NO. 26AS THAT THE TOTAL RECEIPTS ARE RS. 1,39,38,684/- ON WHICH TDS MADE IS RS. 2,44 ,084/-. HOWEVER, IN THE RETURN FILED ALONGWITH THE AUDIT RE PORT, THE TOTAL RECEIPTS HAVE BEEN SHOWN AT RS. 71,41,483/- ON WHIC H THE TDS CLAIMED IS RS. 1,29,849/-. THE AO THEREFORE, ISSUE D A SHOW CAUSE I.T.A. NO. 4157/DEL/2011 3 NOTICE AS TO WHY THE DIFFERENCE AMOUNT OF RECEIPT S OF RS. 67,97,201/- SHOUDL NOT BE ADDED TO THE ICNOME RETUR NED. ASSESSING OFFICER WAS NOT SATISFIED WITH THE REPLY OF THE AS SESSEE. HE ADDED THE DIFFERENCE AMOUNTING TO RS. 67,97,201/- TO THE INCOME OF THE ASSESSEE. 4. BEFORE THE LD. CIT(A) ASSESSEE MADE ELABORATE SU BMISSIONS. CONSIDERING THE SUBMISSIONS LD. CIT(A) HELD AS UNDE R:- 6. I HAVE CONSIDERED THE ISSUE AND THE SUBMISSIONS MADE BY THE AR. THE MAIN ISSUE FOR ADJUDICATION IS AS TO I N WHICH HANDS THE RECEIPTS HAVE TO BE BROUGHT TO TAX AND CREDIT F OR TDS ALLOWED. ADMITTEDLY, THE APPELLANT HAS BEEN DOING ADVERTISEMENT BUSINESS IN THE NAME OF M/ S VISION O UTDOORS. IT IS NOT IN DISPUTE THAT HE HAS ALSO BEEN DOING THE S AME BUSINESS IN HUF CAPACITY IN THE NAME OF M/S OUTDOOR SOLUTION S WHICH IS EVIDENT FROM SEPARATE CONTRACTS ENTERED WITH MUNICI PAL AUTHORITIES, SEPARATE BOOKS OF ACCOUNTS, SEPARATE B ANK ACCOUNTS ETC. ADMITTEDLY, THE APPELLANT GIVE THE PA N OF THE INDIVIDUAL TO THAT OF THE HUF SINCE THE HUF WAS NOT HAVING PAN AT THAT TIME FOR THE CONTRACTS AWARDED WITHOUT REAL IZING THE IMPLICATIONS OF THE SAME. THE APPELLANT EXPLAINED T HE DIFFERENCE IN TURNOVER ADMITTED IN THE RETURN W.R.T . THAT OF FORM 26AS DURING THE ASSESSMENT PROCEEDINGS. IT WAS ALSO EXPLAINED IN CLEAR TERMS IN THE APPEAL PROCEEDINGS AS NOTED A BOVE IN THE PRECEEDING PARAS. RECONCILIATION OF THE DIFFERENCE, IF ANY, HAS ALSO BEEN MADE BEFORE THE AO. 6.1 RELIANCE OF THE AO ON THE RETURN OF HUF PURPORT EDLY FILED BY THE APPELLANT IN HUF CAPACITY ON 5.12.2008 WHEN THE APPELLANT SUBMITTED THAT IT WAS NOT FILED BY HIM AS IT DOES NOT HAVE THE SIGNATURE IS MISPLACED. WHEN THE RETURN OF INCOME I.T.A. NO. 4157/DEL/2011 4 ADMITTING THEIR TURNOVER AND TDS CREDIT DATED 30.9. 2008 BASED ON THE AUDITED BOOKS AND AUDIT REPORT IS AVAILABLE, THERE IS NO JUSTIFICATION FOR THE AO TO IGNORE THIS AND COME TO THE CONCLUSION THAT RECEIPTS HAVE BEEN SUPPRESSED BY TH E APPELLANT. IF BOTH THE RETURNS ARE TAKEN INTO ACCOU NT, IT WOULD BE EVIDENT THAT THERE IS NO SUPPRESSION OF TURNOVER AND THEREBY INTENTION TO EVADE TAX. 6.2 AS POINTED BY THE AR, MISMATCH WITH THE FIGURES IN FORM 26AS OF ITD DATABASE ITSELF CAN NOT BE A GROUND TO HOLD THAT THERE IS UNDERSTATEMENT OF RECEIPTS. IT IS TRITE IN LAW THAT CORRECT INCOME HAS TO BE TAXED IN CORRECT HANDS AND IN THE CORRECT YEAR. IT IS NOT THE CASE OF THE AO THAT THE RECEIPTS OF'<': 58.65 LACS DO NOT PERTAIN TO THE HUF. IT IS EVIDENT FROM THE NOTICES ISSUED BY THE AO TO THE DEDUCTORS AND THE R EPLY RECEIVED FROM THEM THAT THE RECEIPTS SHOWN IN THE R ETURN OF HUF IN FACT PERTAIN TO THE WORK EXECUTED BY THE APP ELLANT IN HUF CAPACITY. THUS, THERE IS NO JUSTIFICATION TO OV ERLOOK THE RETURN FILED BY THE APPELLANT IN HUF CAPACITY ON 30 ,9.2008 AND HOLD THAT THERE IS UNDERSTATEMENT OF RECEIPTS BY TH E APPELLANT. 6.3 EVEN IF THE AO CAME TO THE CONCLUSION THAT TH E RECEIPTS OF THE PROPRIETARY CONCERN OF HUF WERE THE RECEIPTS OF THE APPELLANT, HE COULD NOT HAVE MADE THE ADDITION ON G ROSS RECEIPT BASIS DISCARDING THE EXPENDITURE INCURRED. HE COULD AT BEST HAVE MADE AN ADDITION OF RS. 1,05,352/ -, AS D ECLARED IN THE RETURN OF HUF. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE ASSESSEES CLAIM IS THAT ASSESSEE IS DOING ADVERTISEMENT BUSINESS IN HIS INDIVIDUAL CAPACITY AS WELL AS IN HUF I.T.A. NO. 4157/DEL/2011 5 CAPACITY. ASSESSEE HAS GIVEN THE PAN, OBTAINED IN AN INDIVIDUAL CAPACITY TO WORK DONE IN HUF CAPACITY. THIS HAS BE EN SAID TO BE THE REASON FOR THE DIFFERENCE IN RECEIPT AS SHOWN BY TH E ASSESSEE AND THAT AS REFLECTED IN THE FORM NO. 26AS. IN THIS RE GARD, WE NOTE THAT LD. CIT(A) HAS NOTED THAT IN THE APPEAL PROCEEDINGS , ASSESSEE HAS DULY ESTABLISHED THAT THE DIFFERENCE WAS PROPERLY E XPLAINED. IN THIS REGARD, HE HAS HELD THAT NECESSARY RECONCILIATION WAS ALSO GIVEN. LD. CIT(A) HAS ALSO ACCEPTED THE ASSESSEESS SUBMIS SIONS THAT RETURN OF HUF PURPORTEDLY FILED BY THE ASSESSEE IN HUF CAP ACITY ON 5.12.2008 WHEN THE APPELLANT SUBMITTED THAT AS IT W AS NOT FILED BY HIM AS IT DOES NOT HAVE HIS SIGNATURES. 6.1 WE FIND THAT THE LD. CIT(A) HAS DECIDED THE ISS UE IN FAVOUR OF THE ASSESSEE BY REFERRING TO THE DETAILS SUBMITTED BY THE ASSESSEE IN THIS REGARD. LD. CIT(A) HAS ALSO REFERRED TO THE RECONCILIATION MADE WHICH HE HAS FOUND TO BE SATISFACTORY. IN OUR OPIN ION, INTEREST OF JUSTICE WILL BE SERVED IN THIS CASE, IF THE MATTER IS REMITTED TO THE FILE OF THE ASSESSING OFFICER, TO ENABLE HIM TO EXA MINE THE VERACITY OF THESE SUBMISSIONS AND RECONCILIATIONS. ACCORDIN GLY, THE ASSESSING OFFICER DIRECTED TO CONSIDER THE ISSUE AFRESH, IN L IGHT OF THE DETAILED SUBMISSIONS AND RECONCILIATION SUBMITTED BEFORE THE LD. CIT(A). ACCORDINGLY, WE REMIT THIS ISSUE TO THE FILE OF THE LD. AO. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 7. APROPOS DELETION OF ADDI APROPOS DELETION OF ADDI APROPOS DELETION OF ADDI APROPOS DELETION OF ADDITION OF RS. 2 TION OF RS. 2 TION OF RS. 2 TION OF RS. 2, ,, ,71 7171 71, ,, ,480 480 480 480 ON THIS ISSUE ASSESSING OFFICER NOTED THAT TDS IN RESPECT OF THE FOLLOWING PAYMENTS U/S. 194C WAS DEPOSITED BEYO ND THE PRESCRIBED TIME PERIOD. THEREFORE, HE DISALLOWED THE SAME U/S. 40(A)(IA) OF THE ACT. AMOUNT PAID /CREDITED AMOUNT PAID /CREDITED AMOUNT PAID /CREDITED AMOUNT PAID /CREDITED DATE OF PAYMENT/ DATE OF PAYMENT/ DATE OF PAYMENT/ DATE OF PAYMENT/ DATE ON WHICH TAX DATE ON WHICH TAX DATE ON WHICH TAX DATE ON WHICH TAX I.T.A. NO. 4157/DEL/2011 6 (RS.) (RS.) (RS.) (RS.) CREDIT CREDIT CREDIT CREDIT DEPOSITED DEPOSITED DEPOSITED DEPOSITED 40000 31.10.2007 29.5.2008 200000 31.10.2007 29.5.2008 16480 31.01.2008 29.5.2008 15000 28.02.2008 29.5.2008 271480 (TOTAL) 271480 (TOTAL) 271480 (TOTAL) 271480 (TOTAL) 8. BEFORE THE LD. CIT(A) ASSESSEE SUBMITTED THAT TH E TDS HAS BEEN DEPOSITED BEFORE THE DUE DATE OF FILING OF THE RETURN AND THEREFORE, DISALLOWANCE IS NOT SUSTAINABLE. FURTHER MORE, IT WAS SUBMITTED THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE NOT APPLICABLE IN THIS CASE OF THE ASSESSEE AS HE WAS N OT REQUIRED TO DEDUCT THE TAX, SINCE THE TURNOVER WAS LESS THAN RS. 40 LACS IN THE EARLIER YEAR. CONSIDERING THE ABOVE SUBMISSIONS, LD. CIT(A) ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE. 9. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 10. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED TH E RECORDS. WE FIND THAT THE LD. CIT(A) HAS GRANTED THE RELIEF TO THE ASSESSEE BY CONSIDERING THE FACTUAL SUBMISSIONS MADE BY THE AS SESSEE BEFORE HIM. PRINCIPALLY WE AGREE WITH THE POSITION THAT I F THE TDS HAS BEEN DEPOSITED BEFORE THE DATE OF FILING OF THE RETURN, THE DISALLOWANCE IS NOT SUSTAINABLE. FURTHERMORE, AS PER THE PROVISION S OF SECTION 40(IA) FOR THE RELEVANT PERIOD TDS WAS NOT DEDUCTIBLE IF T HE TURNOVER OF THE PREVIOUS YEAR WAS LESS THAN RS. 40 LACS. WE FIND THAT THESE ASPECTS NEED FACTUAL EXAMINATION AT THE LEVEL OF THE ASSESS ING OFFICER. ACCORDINGLY, WE REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. 11. APROPOS DELETION APROPOS DELETION APROPOS DELETION APROPOS DELETION OF ADDITION OF RS. 94 OF ADDITION OF RS. 94 OF ADDITION OF RS. 94 OF ADDITION OF RS. 94, ,, ,259/ 259/ 259/ 259/- -- - ON THIS ISSUE ASSESSING OFFICER NOTED THAT THERE W AS INTRODUCTION OF RS. 94,259/- IN CASH IN CAPITAL ACC OUNT. IN THE ABSENCE OF DOCUMENTARY EVIDENCE / CLARIFICATION IN THIS REGARD, I.T.A. NO. 4157/DEL/2011 7 ASSESSING OFFICER TREATED THE SAME AS UNDISCLOSED I NCOME FROM UNDISCLOSED SOURCES OF THE ASSESSEE. 12. BEFORE THE LD. CIT(A) ASSESSEE SUBMITTED THE SA ME AMOUNT OF RS. 94,259/- WAS OUTSTANDING BALANCE OF THE HDFC B ANK IN THE NAME OF THE ASSESSEE AND THE SAID ACCOUNT WAS TRANSFERRE D TO THE CAPITAL ACCOUNT OF THE ASSESSEE BY DEBITING THE SAME TO T HE HDFC BANK. ASSESSEE ALSO FURNISHED THE COPY OF THE TRANSFER V OUCHERS IN THIS REGARD. IN THE VIEW OF THE AFORESAID EXPLANATION, LD. CIT(A) HELD THAT THE ADDITION MADE BY THE LD. AO WAS NOT VALID. 13. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEA L BEFORE US. 14. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT LD. CIT(A) HAS GRANTED THE RELIEF TO THE ASSESSEE BY CONSIDERING CERTAIN FACTS AND FIGURES WHICH WERE NOT BEFORE THE LD. AO. IN OUR CONSIDERED OPINION, INTEREST OF JUSTICE WILL BE SERVED IF THE MATTER IS REMITTED TO THE FILE OF THE AO TO EXAMIN E THE ISSUE AFRESH. WE HOLD AND DIRECT ACCORDINGLY. 15. APROPOS DELETION OF ADDITION OF RS. 30,000/ APROPOS DELETION OF ADDITION OF RS. 30,000/ APROPOS DELETION OF ADDITION OF RS. 30,000/ APROPOS DELETION OF ADDITION OF RS. 30,000/- -- - ON THIS ISSUE LD. AO NOTED THAT ASSESSEE HAS SHOWN HOUSEHOLD WITHDRAWALS OF RS. 72000/- WHEREAS INVESTMENTS U/S 80C ALONE CAME TO RS. 67114/-. IN RESPONSE TO THE QUERY IN T HIS REGARD, ASSESSEE SUBMITTED THAT HE RESIDES IN HIS OWN HOUSE AND HAS WITHDRAWN RS. 1,30,921/- FROM HIS CAPITAL OUT OF W HICH INVESTMENT U/S. 80C OF RS. 67114/- WAS MADE AND THE BALANCE AM OUNT OF RS. 63807/- WAS USED FOR HOUSEHOLD EXPENSES. LD. AO ESTIMATED THE ASSESSEES HOUSEHOLD EXPENSE AT RS. 15,000/- PER MO NTH AND MADE THE ADDITION OF RS. 116193/-. 16. BEFORE THE LD. CIT(A) ASSESSEE SUBMITTED THAT THE LD. AO HAS IGNORED THE WITHDRAWALS MADE BY THE HUF OF RS. 30,0 00/-. LD. CIT(A) I.T.A. NO. 4157/DEL/2011 8 GRANTED THE RELIEF OF THIS AMOUNT AND RESTRICTED TH E ADDITION IN THIS REGARD TO RS. 86,193/-. 17. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEA L BEFORE US. 18. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE LD. CIT(A) HAS GRANTED THE RELIEF TO THE ASSESSEE ON ACCOUNT OF LOW HOUSE HOLD DRAWINGS BY REFERENCE TO THE DRAWINGS MADE IN THE STATUS OF HUF AMOUNTING TO RS. 30,000/ -. LD. CIT(A) HAS SUSTAINED THE REST OF THE ADDITION. IN OUR CON SIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A ). ACCORDINGLY, WE AFFIRM THE SAME. 19. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22/11/2013. SD/- SD/- [ [[ [R.P. TOLANI R.P. TOLANI R.P. TOLANI R.P. TOLANI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 22/11/2013 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY COPY COPY COPY FORWARDED TO: FORWARDED TO: FORWARDED TO: FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES I.T.A. NO. 4157/DEL/2011 9