Kasyap Motors (P) Ltd., New Delhi V. ACIT, New Delhi

ITA 4312/DEL/2010

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2888 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-06-2017
• Assessment Year: 2001-2002
• Appeal Filed On: 21-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K JIWANI
• Assessee Lawyers: V M CHAURASIA
• Keywords: Opportunity of being heard; Additional evidence; Reassessment proceedings
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.4312/DEL./2010 ASSESSMENT YEAR 2001-2002 KASYAP MOTORS PRIVATE LIMITED, 20, OKHALA INDUSTRIAL AREA, NEW DELHI 110 020. PAN AAACK8368B VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-5(1), C.R. BUILDING, I.P. ESTATE, NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI RAN O JAIN AND SHRI V.M. CHAURASIA, ADVOCATES. FOR REVENUE : SHRI V.K. JIWANI, SR. D.R. DATE OF HEARING : 0 8 .03.2018 DATE OF PRONOUNCEMENT : 21 .03.2018 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-VIII, NEW DELHI, DATED 21 ST JULY, 2010, FOR THE A.Y. 2001-2002, CHALLENGING THE DISAL LOWANCE OF RS.13,68,500/- OUT OF JOB-WORK AND COST OF REPAIRS INCURRED BY ASSESSEE. EARLIER, THE APPEAL OF ASSESSEE WERE DISM ISSED FOR 2 ITA.NO.4312/DEL./2010 KASHYAP MOTORS (P) LTD., NEW DELHI. DEFAULT WHICH IS RESTORED BY ALLOWING THE M.A. FILE D BY THE ASSESSEE. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT IN THIS CASE SCRUTINY ASSESSMENT UNDER SECTION 143(3) WAS MADE O N 31 ST MARCH, 2004 AT AN INCOME OF RS.99,53,380/-. THE ASS ESSEE FILED APPEAL BEFORE LD. CIT(A) WHO VIDE HIS ORDER DATED 2 4 TH MARCH, 2006, DELETED THE ADDITION OF RS.67,79,873/- AND CO NSEQUENT TO THE APPEAL EFFECT, THE INCOME WAS ASSESSED AT RS.31 ,73,507/-. THE ASSESSEE FILED APPEAL AGAINST THE ORDER OF THE LD. CIT(A) FOR UPHOLDING THE DISALLOWANCE OF RS.13,68,500/- MADE B Y A.O. ON ACCOUNT OF JOB WORK AND COST OF REPAIRS BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 31 ST OCTOBER, 2008 RESTORED THE ISSUE OF DISALLOWANCE OF EXPENSES OF RS.13,68,500/- TO THE FILE OF A.O. THE A.O, THEREFORE, TAKEN-UP THE MATTER AGA IN. THE A.O. REPRODUCED THE ORDER OF THE TRIBUNAL IN THE ASSESSM ENT ORDER WHILE REMANDING THE MATTER BACK TO THE FILE OF THE A.O. THE TRIBUNAL NOTED THAT THE ASSESSEE EXPLAINED THAT DAY -TO-DAY EXPENSES WERE RECORDED SEPARATELY IN A PETTY CASH B OOK AND THE 3 ITA.NO.4312/DEL./2010 KASHYAP MOTORS (P) LTD., NEW DELHI. AGGREGATE AMOUNTS WAS THEN POSTED IN LEDGER ON A SI NGLE DATE. THE EXTRACT OF PETTY CASH BOOK HAS BEEN PRODUCED BE FORE THE TRIBUNAL WHEREIN THE ASSESSEE HAS MADE, AMONGST OTH ERS A LUMP SUM ENTRY OF LABOUR CHARGES IN EACH AND EVERY MONTH. T HE DETAILS OF LABOUR CHARGES HAS NOT BEEN SEPARATELY F ILED. THE PETTY CASH BOOK WAS NEITHER EXAMINED OR VERIFIED BY THE A .O. OR BY LD. CIT(A) THOUGH IT IS CASE OF ASSESSEE THAT DETAI LS AND PETTY CASH BOOK PRODUCED BEFORE AUTHORITIES BELOW. IT IS ALSO NOTED IN THE ORDER THAT DETAILS OF EXPENSES RECORDED IN THE PETTY CASH BOOK REVEAL THAT PAYMENTS WERE MADE TO DIFFERENT PA RTIES, WHICH HAS TO BE EXAMINED AND VERIFIED WITH REFERENCE TO B ILLS AND VOUCHERS AND THE MODE OF PAYMENT. THE TRIBUNAL, ACC ORDINGLY, RESTORED THE MATTER BACK TO THE FILE OF A.O. THE AS SESSEE WAS DIRECTED TO PRODUCE AND FURNISH BEFORE A.O. ALL SUC H NECESSARY DETAILS, BOOKS, VOUCHERS AND OTHER EVIDENCE IN SUPP ORT OF THE CLAIM. 3. THE A.O. GAVE AN OPPORTUNITY TO THE ASSESSEE TO PROVE GENUINENESS OF THE MAKING EXPENSES OF RS.7,98,500/- AND 4 ITA.NO.4312/DEL./2010 KASHYAP MOTORS (P) LTD., NEW DELHI. RS.5,70,000/- ON ACCOUNT OF JOB WORK AND COST OF SE RVICE AND REPAIRS. THE A.O. NOTED THAT ASSESSEE HOWEVER, FAIL ED TO PRODUCE ITS BOOKS OF ACCOUNT AND PETTY CASH BOOK. THE ASSES SEE HOWEVER, FILED COPIES OF THE BILLS IN RESPECT OF TH E ABOVE EXPENSES FOR WHICH THE A.O. FOUND CERTAIN DISCREPANCIES. THE A.O. ACCORDINGLY MADE THE ADDITION OF RS.13,68,500. 4. THE ASSESSEE EXPLAINED BEFORE THE LD. CIT(A) TH AT ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF REPA IR AND SERVICING OF VEHICLES AND HAS RECORDED THE TOTAL SA LES OF RS.3,37,52,611/- IN ASSESSMENT YEAR UNDER APPEAL AN D IT HAD INCURRED TOTAL EXPENSES OF RS.1,70,66,035/- ON ACCO UNT OF COST OF SERVICES AND REPAIRS WHICH INTER ALIA INCLUDED R S.9,75,174/- BEING JOB WORK AND RS.5,29,445/- BEING COST OF THE SERVICE AND REPAIRS. ALL ENTRIES ARE RECORDED IN THE BOOKS OF A CCOUNT AND ARE SUPPORTED BY INDEPENDENT AND THIRD PARTY VOUCHERS. FOR SMALL EXPENSES IT WAS NOT POSSIBLE TO OBTAIN INDEPENDENT BILLS/ VOUCHERS FOR JOB WORK ETC., HOWEVER, THE SAME ARE R ECORDED IN THE PETTY CASH BOOK SEPARATELY MAINTAINED BY ASSESS EE WHICH 5 ITA.NO.4312/DEL./2010 KASHYAP MOTORS (P) LTD., NEW DELHI. WERE INCURRED FOR THE PURPOSE OF BUSINESS. IT WAS A LSO EXPLAINED THAT CONSIDERING VOLUME OF BUSINESS OF ASSESSEE THE AMOUNTS IS VERY SMALL INCURRED FOR THE PURPOSE OF BUSINESS OF ASSESSEE I.E., THE ASSESSEE HAD TO PURCHASE THE SPARES, LUBRICATIO N ETC., FOR REPAIRS ETC., THE LD. CIT(A) REPRODUCED THE EARLIER FINDINGS OF THE LD. CIT(A) IN THE ORDER AND NOTED THAT ASSESSEE PROMISED BEFORE ITAT TO PRODUCE THE PETTY CASH BOOK FOR EXAM INATION WHICH IS NOT PRODUCED. THEREFORE, THE APPEAL OF ASS ESSEE WERE DISMISSED. 5. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. SHE HAS REFERRED TO ORDER OF ITAT, COPY 0F WHICH IS FILED A T PAGE-1 OF THE PAPER BOOK TO HIGHLIGHT THAT ASSESSEE HAS NOT PROMI SED TO PRODUCE PETTY CASH BOOK BEFORE THE TRIBUNAL. THE AU THORITIES BELOW HAVE RECORDED WRONG FACTS IN THE IMPUGNED ORD ERS. THE TRIBUNAL HAS RESTORED THE MATTER TO THE FILE OF A.O . FOR FRESH ADJUDICATION AFTER VERIFYING THE DETAILS AND EXAMIN ING THE NECESSARY DETAILS, BOOKS AND VOUCHERS. SHE HAS REFE RRED TO PB- 6 ITA.NO.4312/DEL./2010 KASHYAP MOTORS (P) LTD., NEW DELHI. 6 WHICH IS REPLY FILED BEFORE A.O. ALONG WITH WHICH ASSESSEE ENCLOSED COPY OF THE LEDGER ACCOUNT OF JOB WORK AND SERVICE AND REPAIR EXPENSES, COPIES OF VOUCHERS, WHICH WERE FIL ED BEFORE ITAT FOR VERIFICATION. PB-7 IS ANOTHER REPLY BEFORE A.O. WITH WHICH ASSESSEE ENCLOSED STATEMENT OF JOB WORK CHARG ES AND COST OF SERVICE AND REPAIRS IN EXCESS OF RS.1001/- AND R S.2500/- INCLUDING COPIES OF VOUCHERS WHICH IS SUPPORTED BY THE DETAILS FILED AT PAGES 8 TO 29 OF THE PAPER BOOK. A.O. HAS WRONGLY MENTIONED IN THE ASSESSMENT ORDER THAT NO PETTY CAS H BOOK HAS BEEN PRODUCED AS PER ITAT ORDER BECAUSE THERE IS NO DIRECTION. PB-21 IS REPLY FILED BEFORE LD. CIT(A) IN WHICH ASS ESSEE HAS MENTIONED THAT ASSESSEE IS PRODUCING CASH BOOK ALON G WITH PETTY CASH BOOK ALONG WITH VOUCHERS FOR THE PETTY C ASH BOOK FOR VERIFICATION ALONG WITH APPLICATION UNDER RULE 46A OF I.T. RULES. COPY OF THE APPLICATION UNDER RULE 46A OF I.T. RULE S IS ALSO PLACED ON RECORD IN WHICH ASSESSEE EXPLAINED THAT D URING REASSESSMENT PROCEEDINGS, ASSESSEE PRODUCED BOOKS O F ACCOUNT INCLUDING PETTY CASH BOOK BUT THE SAME SEEMS TO HAV E BEEN OVERLOOKED BY THE A.O. WHILE MAKING REASSESSMENT TH E A.O. 7 ITA.NO.4312/DEL./2010 KASHYAP MOTORS (P) LTD., NEW DELHI. NEVER ASKED THE ASSESSEE TO SUBMIT THE EXTRACT OF P ETTY CASH BOOK. THE PETTY CASH BOOK IS STILL IN POSSESSION OF THE ASSESSEE AND COPIES THEREOF ARE FILED BEFORE LD. CIT(A). IT WAS, THEREFORE, REQUESTED THAT ADDITIONAL EVIDENCE MAY BE ADMITTED. PB-22 IS LETTER BEFORE LD. CIT(A) IN WHICH ALSO IT WAS HIGHL IGHTED THAT ASSESSEE PRODUCED CASH BOOK LEDGER AND PETTY CASH B OOK (COMPUTERIZED AS ORIGINAL IS NOT TRACEABLE) ALONG W ITH VOUCHERS. LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMIT TED THAT ASSESSEE PRODUCED ADDITIONAL EVIDENCE BEFORE LD. CI T(A) WHICH ARE EVEN NOT MENTIONED IN THE APPELLATE ORDER. LEAR NED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT THE AUT HORITIES BELOW WITHOUT ANY JUSTIFICATION, WITHOUT CONSIDERING THE EXPLANATION AND MATERIAL PRODUCED ON RECORD, SUSTAINED THE ADDI TION. 6. ON THE OTHER HAND, THE LD. D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REPAIR AND SERVICES OF THE VEHICLES AND HAS DECL ARED 8 ITA.NO.4312/DEL./2010 KASHYAP MOTORS (P) LTD., NEW DELHI. SUBSTANTIAL SALES. THE ASSESSEE ALSO RECORDED SUBST ANTIAL EXPENSES FOR EARNING THE INCOME OUT OF THE SAME. TH E ASSESSEE HAS ALSO PAID THE AMOUNT FOR COST OF SERVICE AND RE PAIRS WHICH INCLUDES AMOUNT IN QUESTION BEING JOB WORK AND COST AND SERVICE ON REPAIRS. THE NATURE OF BUSINESS OF ASSES SEE CLEARLY REVEAL THAT THE ABOVE AMOUNT SHALL HAVE TO BE INCUR RED BY ASSESSEE FOR THE PURPOSE OF BUSINESS OF THE ASSESSE E. IN THE FIRST ROUND OF THE PROCEEDINGS, THE TRIBUNAL RESTORED THE MATTER TO THE FILE OF A.O. FOR EXAMINING THE DETAILS AND EVID ENCE BY GIVING REASONABLE, SUFFICIENT OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. THE TRIBUNAL IN THE FIRST ORDER NOTED SUB MISSION OF ASSESSEE THAT DAY-TO-DAY EXPENSES WERE RECORDED SEP ARATELY IN THE PETTY CASH BOOK AND THE AGGREGATE AMOUNT WAS TH EN POSTED IN A LEDGER ON A SINGLE DATE. THE EXTRACT OF THE PE TTY CASH BOOK WERE FILED BEFORE THE TRIBUNAL. THE TRIBUNAL CONSID ERING THE COPIES OF THE PETTY CASH BOOK NOTED THAT THIS HAS N OT BEEN EXAMINED BY THE A.O. AND THE LD. CIT(A). THE ASSESS EE CLAIMED BEFORE THE TRIBUNAL THAT COPIES OF THE PETTY CASH B OOK AND OTHER DETAILS WERE FILED BEFORE A.O. BUT THE TRIBUNAL RES TORED THE 9 ITA.NO.4312/DEL./2010 KASHYAP MOTORS (P) LTD., NEW DELHI. MATTER TO THE FILE OF THE A.O. TO EXAMINE THE SAME DETAILS. LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT TO VAR IOUS REPLIES FILED BEFORE A.O. AND LD. CIT(A) WHICH CLEARLY HIGH LIGHTED THAT ASSESSEE PRODUCED LEDGER ACCOUNT ALONG WITH VOUCHER S IN SUPPORT OF JOB WORK CHARGES AND COST AND SERVICE AN D REPAIRS AND FURTHER DETAILS AS DESIRED BY A.O. OF EXCEEDING PARTICULAR AMOUNTS. ASSESSEE ALSO FILED REPLY BEFORE LD. CIT(A ) ALONG WITH APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UN DER RULE 46A BY PRODUCING THE CASH BOOK, PETTY CASH BOOK AND OTH ER VOUCHERS FOR EXAMINATION. HOWEVER, THE LD. CIT(A) DID NOT MENTION ANYTHING IN THE IMPUGNED ORDER AND ALSO DID NOT DECIDE THE ADMISSION OF THE ADDITIONAL EVIDENCE. THE LD. C IT(A), MERELY FOLLOWED THE ORDER OF HIS PREDECESSOR IN WHICH LD. CIT(A) EARLIER CONFIRMED THE ADDITION. HOWEVER, THE LD. CIT(A) FAI LED TO NOTE THAT THE EARLIER ORDER OF THE LD. CIT(A) DOES NOT E XIST IN THE EYE OF LAW BECAUSE IT WAS ALREADY SET ASIDE BY THE TRIB UNAL. 8. CONSIDERING THE EXPLANATION OF ASSESSEE BEFORE THE AUTHORITIES BELOW AND REPLIES FILED, COPIES OF WHIC H ARE FILED IN 10 ITA.NO.4312/DEL./2010 KASHYAP MOTORS (P) LTD., NEW DELHI. THE PAPER BOOK. I FIND THAT EXPLANATION OF ASSESSEE HAS NOT BEEN CONSIDERED IN PROPER PERSPECTIVE AND MATTER COULD B E RE- ADJUDICATED, HOWEVER, HOW LONG ? IT IS SECOND ROUND OF APPELLATE PROCEEDINGS. THEREFORE, I AM OF THE VIEW THAT IT BE ING OLD CASE OF A.Y. 2001-2002 AND ONLY SMALL DISALLOWANCE IS UNDER CONSIDERATION, THEREFORE, THERE IS NO NEED TO DISBE LIEVE THE EXPLANATION OF ASSESSEE AND MATERIAL PRODUCED ON RE CORD TO SHOW THAT PROPER DOCUMENTS WERE PRODUCED BEFORE LD. CIT(A) FOR ADMISSION AS ADDITIONAL EVIDENCES WHICH WERE NO T CONSIDERED. SAME ARE ALSO NOT REBUTTED BEFORE ME. C ONSIDERING THE NATURE OF BUSINESS OF THE ASSESSEE AND TOTAL VO LUME OF BUSINESS CONDUCTED BY ASSESSEE AND INCOME SO DECLAR ED, FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF IT BE ING A OLD CASE, I AM OF THE VIEW THAT THE ADDITION SHOULD BE DELETE D IN THIS CASE. IN VIEW OF THE ABOVE DISCUSSION, I SET ASIDE THE OR DERS OF THE AUTHORITIES BELOW AND DELETE ADDITION OF RS.13,68,5 00/-. APPEAL OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 11 ITA.NO.4312/DEL./2010 KASHYAP MOTORS (P) LTD., NEW DELHI. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 21 ST MARCH, 2018 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.