ACIT, New Delhi V. Sh. Gurdayal Singh, Delhi

ITA 428/DEL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3423 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 15-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 23-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Assessee Lawyers: K P GARG
• Keywords: Additional evidence
• Section: 43B; 143(3); 68; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-428/DEL/2013 ( ASSESSMENT YEAR: 2009-10) ACIT CIRCLE 34(1) NEW DELHI. VS GURDAYAL SINGH E-60, PRATAP NAGAR, DELHI. ANXPS6667B ASSESSEE BY SH. K.P. GARG, ADV. REVENUE BY SH. AMRIT LAL, SR. DR ORDER PER K. NARSIMHA CHARRY, J.M. THIS APPEAL IS FILED BY THE REVENUE CHALLENGING THE ORDER DATED 29.10.2012 IN APPEAL NO. 175/2011-12 BY THE C OMMISSIONER OF INCOME TAX (APPEALS)-XXVII, NEW DELHI, WHERE UND ER HE MODIFIED THE ASSESSMENT ORDER IN SOME RESPECTS. DATE OF HEARING 15.03.2017 DATE OF PRONOUNCEMENT 21.04.2017 2 ITA NO.428/DEL/2013 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING HIS INCOME FROM THE BUSINESS OF DYEING/PRI NTING OF FABRICS/YARN IN THE NAME & STYLE OF BIR HORIZONS, F OR THE AY 2009- 10 THEY HAVE FILED THEIR RETURN OF INCOME ON 30.09. 2009 AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME T AX ACT (FOR SHORT HEREINAFTER CALLED THE ACT) AT RS. 2,37,70, 830/-. IN THE PROCESS OF ASSESSMENT AO ADDED BACK A SUM OF RS. 60 ,87,800/- ON ACCOUNT OF CASH CREDIT U/S 68 OF THE ACT, RS. 3, 78,457/- ON ACCOUNT OF INTEREST, ETC. IN APPEAL ON AN APPRECIA TION OF THE ENTIRE MATERIAL BEFORE HIM, LD. CIT (A) DELETED AN AMOUNT OF RS. 57,87,000/- U/S 68 OF THE ACT AND INTEREST THEREON, AND THE ADDITION MADE U/S 43B OF THE ACT ALSO BY WAY OF IMP UGNED ORDER. 3. CHALLENGING THE IMPUGNED ORDER REVENUE IS IN APP EAL BEFORE US ON THE GROUND THAT THE LD. CIT (A) FAILED TO GIV E AN OPPORTUNITY TO THE AO WHILE RELYING UPON THE NEW MATERIAL PRODU CED FOR THE FIRST TIME BEFORE HIM AS ADDITIONAL EVIDENCE AND TH EREBY HE ERRED IN DELETING THE ADDITIONS MADE BY THE AO U/S 68, 43B, ETC. 4. IT IS THE ARGUMENT OF THE LD. DR THAT BEFORE ACT ING UPON THE NEW MATERIAL THAT WAS PRODUCED BEFORE HIM, THE LD. CIT (A) WAS 3 ITA NO.428/DEL/2013 DUTY BOUND UNDER RULE 46A OF THE RULES TO GIVE A RE ASONABLE OPPORTUNITY TO THE AO TO DEFEND THE ASSESSMENT ORDE R BUT WITHOUT DOING SO AND IGNORING THE FACT THAT THE ADDITIONS W ERE MADE BASING ON THE RECORD AVAILABLE AND IN THAT PROCESS LD. CIT (A) FAILED TO APPRECIATE THE EVIDENCE IN PROPER PROSPECTIVE. PER CONTRA, IT IS THE SUBMISSION OF THE LD. AR THAT FOR THE REASONS RECOR DED IN THE ORDER LD. CIT (A) RIGHTLY ADMITTED THE ADDITIONAL EVIDENC E AND IN VIEW OF THE MATERIAL THAT WAS AVAILABLE ON RECORD THE LD. C IT (A) RIGHTLY REACHED THE CONCLUSION THAT CERTAIN ADDITIONS HAD T O BE DELETED. ACCORDING TO THE LD. AR THE ORDER OF THE LD. CIT (A ) DOES NOT WARRANT ANY INTERFERENCE AND, THEREFORE, HE PRAYED TO DISMISS THE APPEAL. 5. GROUNDS 1 AND 9 ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY ADJUDICATION. INSOFAR AS GROUNDS 2 & 8 ARE CON CERNED, THE CHALLENGE IS BASED ON RULE 46A OF THE RULES. A PER USAL OF THE IMPUGNED ORDER CLEARLY ESTABLISHES THAT VIDE PARAGR APH NO. 18 TO 21 LD. CIT (A) RECORDED THAT ON THE ASSESSEE FILING THE ADDITIONAL EVIDENCE THE SAME WAS FORWARDED IT TO THE AO FOR HI S COMMENTS AND AFTER A CAREFUL CONSIDERATION OF THE REMAND REP ORT AND THE 4 ITA NO.428/DEL/2013 REJOINDER FILED BY THE ASSESSEE THERETO, THE LD. CI T (A) ADMITTED THE ADDITIONAL EVIDENCE HOLDING THAT SUCH MATERIAL MERI T CONSIDERATION FOR DISPOSAL OF THE CASE. ON THE FACE OF THESE REC ORDINGS OF THE LD. CIT (A) IT IS NOT OPEN FOR REVENUE TO CONTEND THAT NO REASONABLE OPPORTUNITY WAS GRANTED TO THE REVENUE BEFORE ADMIT TING THE ADDITIONAL EVIDENCE. THEREFORE, THESE TWO GROUNDS DO NOT HOLD ANY MERIT AND ACCORDINGLY ARE DISMISSED. 6. NOW COMING TO THE GROUNDS NO. 3 & 6, THEY RELATE TO THE ADDITIONS MADE U/S 68 OF THE ACT AND THE INTEREST T HEREON. AS A MATTER OF FACT LD. CIT (A) VIDE PARAGRAPH NOS. 21 T O 23 DEALT WITH THIS MATTER AT LENGTH. LD. CIT (A) FOUND THAT THE ASSESSEE BY PRODUCING THE CONFIRMATION LETTERS, BANK ACCOUNT AN D COPY OF THE ACKNOWLEDGMENT OF THE ITR IN RESPECT OF CHARAN PREE T SINGH, SH. K.K. GANDHI, SMT. MOHINDER GANDHI, AND OTHERS. AND THE CONFIRMATION LETTER, PAN DETAILS AND BANK ACCOUNT O F SMT. HARJEET KAUR PRODUCED COGENT EVIDENCE IN DISCHARGE OF HIS O NUS OF ESTABLISHING THE IDENTITY AND CREDITWORTHINESS OF T HE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. VIDE PARAGRAPH NO . 23 LD. CIT (A) CONCLUDED THAT EXCEPT IN CASE OF ONE ATTAR SING H, WHERE THE 5 ITA NO.428/DEL/2013 AMOUNT INVOLVED WAS RS. 3 LAKHS, THE EVIDENCE PRODU CED BY THE ASSESSEE WAS SATISFACTORY AND COULD BE ACTED UPON. FURTHER, VIDE PARAGRAPH NO. 24 THE LD. CIT (A) HELD THAT IN VIEW OF HIS FINDINGS IN RESPECT OF THE ADDITION U/S 68 OF THE ACT, THE ASPE CT OF INTEREST IS ONLY CONSEQUENTIAL IN NATURE AS SUCH BARRING THE IN TEREST PAYABLE ON THE AMOUNT ATTRIBUTABLE TO ONE ATTAR SINGH, THE LD. CIT (A) DELETED THE OTHER AMOUNTS. 7. THE REASONS GIVEN BY THE LD. CIT (A) VIDE PARAGR APH NOS. 21 TO 24 ARE VERY COGENT AND FIRMLY BASED ON THE ACCEPTAB LE EVIDENCE AVAILABLE ON RECORD. THE REVENUE COULD NOT DEMONST RATE BEFORE US HOW THIS APPROACH OF THE LD. CIT (A) IS WRONG. WE HOLD THAT THE FINDINGS OF THE LD. CIT (A) ON GROUND NO. 3 & 6 ARE COGENT AND CONVINCING AND DO NOT WARRANT ANY INTERFERENCE. WE , THEREFORE, DISMISS GROUNDS NOS. 3 & 6. 8. NOW COMING TO GROUND NO. 4 WHICH IS IN RESPECT O F THE DISALLOWANCE OF 20% OF EXPENSES UNDER THE HEAD BUS INESS PROMOTION, FESTIVAL MISCELLANEOUS TOUR AND TRAVEL A ND STAFF TRAVEL EXPENSES, AS A MATTER OF FACT VIDE PARAGRAPH NO. 1 1 TO 14 THE LD. CIT (A) CONFIRMED THE DISALLOWANCE TO A TUNE OF 20% OF THESE 6 ITA NO.428/DEL/2013 EXPENSES MADE BY THE AO, AND THIS FINDING GOES IN F AVOUR OF THE REVENUE, AS SUCH THE REVENUE CANNOT CHALLENGE THE S AME. SINCE THERE IS NO CROSS OBJECTION ON THIS ASPECT, WE DO N OT PROPOSE TO DISTURB THE FINDING OF THE LD. CIT (A) ON THIS ASPE CT. HENCE, GROUND NO. 4 IS DISMISSED. 9. NOW, COMING TO GROUND NO. 5 WHICH IS IN RESPECT OF THE DISALLOWANCES U/S 43B IS CONCERNED THE LD. CIT (A) RECORDED THE FACT THAT THE AO HIMSELF DELETED THIS ADDITION BY H IS ORDER DATED 05.03.2012 PASSED U/S 154 OF THE ACT AS SUCH IT HAD BECOME INFRUCTUOUS. WE ARE AT A LOSS TO UNDERSTAND HOW CO ULD THIS FINDING BE CHALLENGED BY THE REVENUE. THIS GROUND IS DISMI SSED. 10. NOW COMING TO GROUND NO. 7 WHICH IS IN RESPECT OF EXCESS INCOME AMOUNTING TO RS. 34,551/-, IT WAS CONTENDED BEFORE THE LD. CIT (A) THAT THE AO HAD ERRED IN TAKING THE RETURNE D INCOME AT RS. 77,34,571/- BEFORE THE DEDUCTION UNDER CHAPTER VIA, WHEREAS THE RETURNED INCOME OF THE ASSESSEE WAS RS. 77,00,020/- , RESULTING IN THE EXCESS DETERMINATION OF THE INCOME AMOUNTING TO RS. 34,551/-. LD. CIT (A) REMANDED THE MATTER TO AO TO VERIFY THI S CONTENTION. 7 ITA NO.428/DEL/2013 SINCE, THE LD. CIT (A) DID NOT TURN DOWN THE PLEA O F THE REVENUE, WE DIRECT THE AO TO VERIFY THIS FACT. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.04.2017 SD/- SD/- (P.K. BANSAL) (K. NARSIMHA CH ARRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21.04.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 8 ITA NO.428/DEL/2013 DRAFT DICTATED ON 20.04.2017 DRAFT PLACED BEFORE AUTHOR 20.04.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 21.04.2017 KEPT FOR PRONOUNCEMENT ON 21.04.2017 FILE SENT TO THE BENCH CLERK 21.04.2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.