Vishal Gupta, V. ITO, Ward-2,

ITA 4236/DEL/2005

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3076 (ITAT-DELHI)
• Duration Of Justice: 11 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-05-2017
• Assessment Year: 1995-1996
• Appeal Filed On: 02-11-2005
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UMESH CHAND DUBEY
• Keywords: Question of law
• Section: 40A(3); 143(3); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO S . 4236 & 4237 / DEL/20 05 A.Y RS . : 1995 - 96 & 1996 - 97 VISHAL GUPTA 821/13, URBAN ESTATE, KARNAL, HARYANA VS. ITO, WARD - 2 KARNAL (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SH. UMESH CHAND DUBEY, SR. DR ORDER PER H.S. SIDHU, JM THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE AG AINST THE RESPECTIVE ORDERS OF THE LD. CIT(A) RELATING TO ASSESS MENT YEARS 1995-96 & 1996-97 RESPECTIVELY. SINCE THE ISSUES I NVOLVED IN THESE APPEALS ARE COMMON AND IDENTICAL, HENCE, THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDE R FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED IN ITA NO. 4236/DEL/2005 (AY 1995-1996) READ AS UNDER:- 2 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS GROSSLY ERRED IN HOL DING THE PROCEEDING INITIATED U/S. 148 BY THE LD. ASSESSIN G AUTHORITY HAS RIGHTLY DONE. 2. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE NOTICE ISSUED BY THE LD. ASSESSING AUTHO RITY IS BAD IN LAW AND DESERVES TO BE SET ASIDE / DELETED. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS GROSSLY ERRED IN CON FIRMING THE ADDITION OF RS. 2783200/- ON ACCOUNT OF SUNDRY DEBTORS MADE BY THE ASSESSING AUTHORITY. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS GROSSLY ERRED LEGALLY AND FACTUALL Y IN CONFIRMING THE DECISION OF ASSESSING AUTHORITY IN ASSESSING RS. 184701/- AS INCOME FOR WITHDRAWALS IN RESPECT OF NEW CAR. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, ASSESSMENT ORDER IS BAD IN LAW AND DESERVES TO BE DELETED / SET ASIDE. THAT THE PETITIONER CRAVES TO ADD, ALTER, AMEND OR DELE TE ANY GROUND OR GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 3. THE GROUNDS RAISED IN ITA NO. 4237/DEL/2005 (AY 1996-97) READ AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDITION OF RS. 131131/- BY APPLYING GP RATE OF 3.5% ON SUPPRESS SALES OF RS. 3746603/- WHIC H IS 3 WITHOUT ANY BASE OR ESTIMATE AND ALSO NO BASIS OF THE ESTIMATE OF SALE HAS BEEN GIVEN. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS GROSSLY ERRED IN CON FIRMING THE ADDITION OF RS. 1287712/- ON ACCOUNT OF CREDIT BALANCES OF RS. 20000/- OR MORE OF VARIOUS PARTIES MADE BY THE LD. ASSESSING AUTHORITY. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS GROSSLY ERRED IN CON FIRMING THE ADDITION OF RS. 276455/- ON ACCOUNT OF DISALLOWAN CE MADE OF 20% OF CASH PAYMENT IN EXCESS OF RS. 20000/- U/S. 40A(3) MADE BY THE LD. ASSESSING AUTHORITY. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, ASSESSMENT ORDER IS BAD IN LAW AND DESERVES TO BE DELETED/ SET ASIDE. THAT THE PETITIONER CRAVES TO ADD, ALTER, AMEND OR DEL ETE ANY GROUND OR GROUNDS OF APPEAL ON OR BEFORE THE DAT E OF HEARING. ITA NO. 4236/DEL/2005 (AY 1995-96) 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ADIT(INV .) AMBALA HAD CONDUCTED SURVEY ULS.133A ON 17.10.1996 ON THE BUSI NESS PREMISES OF M/S. HINDUSTAN AGRO TECH, HSIDC, 106, SECTOR-3, KA RNAL. DURING THE COURSE OF SURVEY BOOKS OF ACCOUNT PERTAINING TO M /S GUPTA & GUPTA AGRO TECH PROP. SH. VISHAL GUPTA WERE ALSO FOU ND THERE. THE ADIT IMPOUNDED THE SAID BOOKS, OF ACCOUNT AND PASSED ON TO THE ITO, WARD-2, KARNAL FOR TAKING NECESSARY ACTION TO AS SESSEE THE INCOME OF THE ASSESSEE FOR THE SAID ASST. THE THEN IT O, WARD-2, 4 KARNAL ON THE BASIS OF SURVEY REPORT AND STATEMENT OF SH. VISHAL GUPTA RECORDED BY ADIT(INV.), AMBALA ON 19.11.1996 A ND 26.11.1996 AND 26.11.1996 ISSUED NOTICE U/S. 148 AND DULY SERVED UPON THE ASSESSEE ON 21.01.1997 ON THE ADDRESS GUPTA & GUPTA AGRO TECH THROUGH SH. VISHAL GUTPA, HSIDC 106, SECT OR-S, KARNAL. IN RESPONSE TO THE NOTICE, SHRI VISHAL GUPTA HAD FILE D HIS RETURN OF INCOME ON 30.06.1997 DECLARING AN INCOME OF RS.4250 0/- ON 30.06.1997 IN THE OFFICE OF DCIT, SPECIAL RANGE, KA RNAL, SH. V.K. BATRA THEN JCIT, SPECIAL RANGE, KARNAL HAD COMPLETED THE ASSESSMENT U/S. 144 OF INCOME-TAX ACT, 1961 ON 29.01 .1999. NOT SATISFIED WITH THE ORDER OF A.O. THEREAFTER THE ASSESSE E FILED 2ND APPEAL BEFORE THE WORTHY ITAT, NEW DELHI. THE HON'B LE ITAT (BENCH 'C') NEW DELHI VIDE THEIR ORDER DATED 23.10.2001 IN APPEAL ITA NO.3252 TO 3260/DE1/2000 CANCELLED THE ASSESSMENT O N THE GROUND THAT STATUTORY NOTICE U/S.143(2) WHICH IS REQUIRED TO BE SERVED WITHIN 12 MONTHS IN WHICH RETURN WAS FILED, WAS NOT CO MPLIED WITH HENCE THE PROCEEDINGS COMPLETED BY THE A.O. CANNOT BE HELD AS VALID. THEREAFTER THE DEPARTMENT HAS FILED MISCELLAN EOUS APPLICATION 261/DEL/03 FOR RECALL OF THE ITAT'S ORDER DATED 23.1 0.2001, BUT THIS MISCELLANEOUS APPLICATION HAS ALSO BEEN DISMISSED ON 1 ST OCTOBER, 2004. IN THE MEANWHILE, AO HAD ISSUED A NOTICE UNDER SEC. 148 UPON THE ASSESSEE ON 23.2.2002. IN RESPONSE TO THIS NOTICE, 5 ASSESSEE HAS FILED RETURN OF INCOME ON 20.5.2002. T HE ASSESSING OFFICER HAS FRAMED THE ASSESSMENT UNDER SEC. 143(3) READ WITH SEC. 147 ON 20.3.2003 AND ASSESSED THE INCOME OF THE ASSES SEE AT RS. 30,10,100/-. AGAINST THE ASSESSMENT ORDER, THE ASSES SEE APPEALED BEFORE THE LD. CIT(A) WHO VIDE HIS IMPUGNED ORDER DA TED 18.8.2005 HAS DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED W ITH THE AFORESAID ORDER DATED 18.8.2005, ASSESSEE APPEALED B EFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 11.12 .2009 IN ITA NO. 4236 TO 4238/DEL/2005 (AYRS. 1995-96 TO 1997-98) HAS ALLOWED THE APPEAL NO. 4236/DEL/2005 (AY 1995-96) ON THE REOPENI NG OF ASSESSMENT. AGAINST THE ORDER OF THE TRIBUNAL DATED 11.12.2009, THE DEPARTMENT FILED APPEALS BEFORE THE HONBLE HIGH COURT OF DELHI IN ITA NOS. 1782/2010 & 1784/2010 AND THE HONBLE HI GH COURT OF DELHI VIDE ITS ORDER DATED 30.4.2012 HAS ANSWERED THE QUESTION OF LAW IN NEGATIVE I.E. IN FAVOR OF THE APPELLANT-DEPAR TMENT AND AGAINST THE RESPONDENT-ASSESSEE AND DIRECTED THE TRIBUNAL TO DECIDE THE APPEAL ON MERITS. THE HONBLE HIGH COURT OF DELHI HA S ALSO DIRECTED THE PARTIES TO APPEAR BEFORE THE ASSISTANT REGISTRAR OF THE TRIBUNAL ON 28.5.2012, WHEN THE DATE OF HEARING WILL BE FIXED . BUT ON 28.5.2012 NOBODY APPEARED BEFORE THE ASSISTANT REGI STRAR OF THE TRIBUNAL. THEREAFTER, PURSUANT TO THE DIRECTIONS OF THE HONBLE HIGH COURT OF DELHI, AS AFORESAID, THE TRIBUNAL VIDE ORDE R DATED 6 24.7.2012 HAS FIXED THE CASE FOR HEARING ON 18.10.2 012 AND DUE TO LEAVE OF THE LD. DR ON 18.10.2012 THE CASE WAS ADJOU RNED FOR 15.1.2013. ON 15.1.2013 ON THE WRITTEN REQUEST OF THE ASSESSEE/LD. COUNSEL OF THE ASSESSEE, THE CASE WAS A DJOURNED FOR 9.10.2013, 11.2.2014, 5.5.2015, 5.8.2015, 9.10.201 5 AND FURTHER ADJOURNED FOR 29.6.2016 AND ON THIS DATE ALSO THE NOB ODY WAS PRESENT AND THE CASE WAS ADJOURNED FOR 26.9.2016 AND ISSUE NOTICE THROUGH REGD. POST AND THROUGH DR. ON 26.9.20116 THE CASE WAS ADJOURNED FOR 25.1.2017 DUE TO NON-FUNCTIONING OF BE NCH AND ON 25.1.2017 AGAIN NOBODY PRESENT AT THE TIME OF HEARI NG AND ACCORDINGLY ISSUED THE NOTICE BY REGD. POST. ON 25.1. 2017 THE CASE WAS AGAIN ADJOURNED FOR 16.5.2017 FOR HEARING. BUT AGAIN ON 16.5.2017 NOBODY WAS PRESENT ON BEHALF OF THE ASSESS EE, HOWEVER, LD. DR WAS PRESENT. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ISSUE INVOLVED IN THE PRE SENT APPEAL, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SERVE D TO ISSUE NOTICE AGAIN AND AGAIN TO THE ASSESSEE, THEREFORE, WE ARE DECIDING THE PRESENT APPEAL EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS ON MERITS. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORDS. AS REGARDS THE GROUND NO. 3 & 4 RELATING TO CONFIRMATION OF ADDITION OF RS. 27,83,200/- ON ACCOUNT OF SUNDRY DEBTORS MADE BY THE AO AND 7 ISSUE RELATING TO ASSESSING RS. 1,84,701/- AS INCOME FOR WITHDRAWALS IN RESPECT OF NEW CAR ARE CONCERNED, WE FIND THAT AO MADE THE ADDITION BECAUSE NO SUPPORTIVE EVIDENCE I.E. TRADING ACCOUNT, PROFIT AND LOSS ACCOUNT, CAPITAL ACCOUNT, BALANCE SHEET, DET AILS OF CREDITORS AND DETAILS OF ASSETS AND LIABILITIES ETC. HAVE BEEN FILED BY THE ASSESSEE. ACCORDINGLY HE MADE THE ADDITION OF RS. 29,67,901/- (RS. 27,83,200 ON ACCOUNT OF SUNDRY DEBTORS AND RS. 1,84, 701/-) ON ACCOUNT OF PURCHASE OF NEW CAR. WE NOTE THAT AS PER THE IMPOUNDED LEDGER FOR THE PERIOD ENDING 31.3.1995, THE ASSESSEE HAD SUNDRY DEBTORS AMOUNTING TO RS. 27,83,200/- AS ON 31.3.199 5. THERE WAS NO CORRESPONDING CREDITORS ON THAT DATE. THE AS SESSEE HOWEVER WAS FAILED TO FILE ANY DETAILS OF THESE DEBTORS. IT WAS ALSO NOT PROVED THAT THESE DEBTORS DID NOTE RELATE TO THE YEAR UN DER APPEAL AND ASSESSEE EVEN DID NOT FILE HIS BALANCE SHEET, PROFIT AND LOSS ACCOUNT ETC. SIMILARLY, THE SOURCE OF THE PURCHASE OF NEW CAR COULD ALSO NOT BE PROVED BY HIM IN SPITE OF THE FA CT THAT THE AO HAD GIVEN MORE THAN REASONABLE OPPORTUNITIES TO EXP LAIN IT. THEREFORE, THE LD. CIT(A) HAS RIGHTLY UPHELD THE ADD ITION OF RS. 29,67,901/- BY DISMISSING THE APPEAL OF THE ASSE SSEE, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THE ISSUES IN DISPUTE AND GROUNDS RAISED 8 BY THE ASSESSEE STAND REJECTED. IN THE RESULT, THE APPE AL NO. 4236/DEL/2005 (AY 1995-96) STANDS DISMISSED. ITA NO. 4237/DEL/2005 (AY 1996-97) 6. THE FACTS RELATED TO THIS APPEAL ARE COMMON AND IDE NTICAL TO ITA NO. 4236/DEL/2005 (AY 1995-96) AS MENTIONED IN P ARA NO. 4, AS AFORESAID, HENCE, THE SAME ARE NOT REPEATED HERE FO R THE SAKE OF BREVITY. 7. WITH REGARD TO GROUND NO. 1 TO 3 ARE CONCERNED, RELATING TO CONFIRMING THE ADDITION OF RS. 1,31,131/- BY APPLYI NG GP RATE OF 3.5% ON SUPPRESS SALES OF RS. 37,46,603/-; ADDITIO N OF RS. 12,87,712/- ON ACCOUNT OF CREDIT BALANCES OF RS. 20 ,000/- AND ADDITION OF RS. 2,76,455/- ON ACCOUNT OF DISALLOWANC E MADE OF 20% OF CASH PAYMENT IN EXCESS OF RS. 20000/- U/S. 40A(3) MADE BY THE AO ARE CONCERNED, WE FIND THAT THE BOOKS OF ACCOUNTS ON THE BASIS OF WHICH ADDITIONS HAVE BEEN MADE BY THE AO RELATED TO THE ASSESSEE EVEN THOUGH THE SAME WERE IMPOUNDED AT THE BU SINESS PREMISES OF M/S HINDUSTAN AGRO TECH. WE FURTHER NO TE THAT THE ASSESSEE IN HIS STATEMENT RECORDED BY THE ADIT(INV.) AMBALA ON 26.11.1996 HAS HIMSELF IDENTIFIED THE DOCUMENT NO. 1 1 AS LEDGER CONTAINING THE DETAILS OF EXPENSES ETC. OF M/S GUPTA & GUPTA AGRO TECH. WE NOTE THAT ASSESSEE DID NOT RAISE THIS ISSUE BEFORE THE AO. WE FURTHER NOTE THAT DURING THE APPELLATE PROCEEDINGS , IT WAS 9 CLAIMED THAT THE ASSESSEE HAS NO CONCERN WITH THESE BO OKS OF ACCOUNTS. THUS, THE CONTENTION OF THE AR OF THE ASSE SSEE THAT ONUS OF PROVING ENTRIES IN THESE BOOKS OF ACCOUNTS LIED UP ON THE PARTNERS OF M/S HINDUSTAN AGRO TECH. CANNOT BE ACCEPTED. THES E BOOKS ADMITTEDLY BELONGED TO THE ASSESSEE AND IT WAS HIS DU TY TO EXPLAIN THE ENTRIES IN THESE BOOKS OF ACCOUNTS. REGARDING TH E ADDITION OF RS. 1,31,131/-, THE ASSESSEE HAS FAILED TO EXPLAIN AS TO HOW THE NET PROFIT RATE OF 3.5% AS APPLIED BY THE AO WAS ON THE HIGHER SIDE. SIMILARLY, THE ASSESSE HAS FILED NO EXPLANATION WH ATSOEVER BEFORE THE AO REGARDING THE CASH CREDITS APPEARING IN HIS B OOKS OF ACCOUNTS AMOUNTING TO RS. 12,87,712/-. THESE AMOUNTS REPRESENT TRADING RECEIPTS FOR SALE AND PURCHASE AND NOT CASH CREDITS HAS NOT BEEN SUBSTANTIATED. NO DOCUMENTARY EVIDENCE IN SUPPO RT OF THIS CONTENTION HAS BEEN FILED BY THE AR OF THE ASSESSEE. HENCE, THIS ADDITION WAS RIGHTLY UPHELD. WE FIND THAT ADDITION WA S MADE ON THE BASIS OF GP RATE, WAS NOT ACCEPTED BECAUSE VIOLATION OF THE PROVISIONS OF SECTION 40A STANDS PROVED FROM THE BOO KS OF ACCOUNTS OF THE ASSESSEE HIMSELF. ACCORDINGLY, THE ADDITION OF RS. 2,76,455/- WAS RIGHTLY CONFIRMED. HENCE, ALL THE ADDITIONS OF RS. 1,31,131/-, RS. 12,87,712/- AND RS. 2,76,455/- WERE UPHELD, WHI CH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THE ISSUES IN DISPUTE AND GROUNDS R AISED BY THE 10 ASSESSEE STAND REJECTED. IN THE RESULT, THE APPEAL NO. 4237/DEL/2005 (AY 1996-97) STANDS DISMISSED. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/05/2017. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 19/05/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES