Sudhir Kumar Khemka, Panipat V. ITO, Ward- 3 , Panipat

ITA 435/DEL/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5700 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 16-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R MISHRA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC, NEW DELHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER & SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.- 435/DEL/2018, (ASSESSMENT YEAR: 2007-08) SMT. SUDHIR KUMAR KHEMKA, 979, SECTOR-12, PHASE-II, HUDA, PANIPAT. VS. INCOME TAX OFFICER, WARD-3, PANIPAT. PAN NO: ADSPK5838P APPELLANT RESPONDENT ASSESSEE BY : SH. GOPAL SHARMA (ADV .) REVENUE BY : SH. B.R. MISHRA (SR. DR) DATE OF HEARING : 14.06.2018. DATE OF PRONOUNCEMENT : 22/06/2018. ORDER PER: O.P. KANT, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORD ER DATED 17/08/2017 PASSED BY THE LD. COMMISSIONER OF INCOME-TAX (APPEALS), KA RNAL [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2007-08 RAISING FOLLOWING GROUNDS: 2 ITA NO.-435/DEL/2018. SMT. SUDHIR KUMAR KHEMKA. [1.0] THAT HAVING REGARD TO THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT QUASHING T HE IMPUGNED ORDER U/S 143(3) OF THE INCOME-TAX ACT, 1961 THAT TOO WIT HOUT GIVING ADEQUATE OPPORTUNITY OF BEING HEARD AND WITHOUT CON SIDERING THE RECONCILIATION STATEMENT OF THE TWO TRADE-CREDITORS OF THE ASSESSEE/ APPELLANT AND THE DOCUMENTARY EVIDENCES FILED BY TH E ASSESSEE DURING THE ASSESSMENT & APPELLATE PROCEEDINGS. [1.1] LD. AO AND THE LD.CIT(A) HAS ERRED IN LAW IN NOT PROVIDING THE OPPORTUNITY TO THE ASSESSEE/APPELLANT TO CONFRONT T HE SUPPLIERS/[TRADE-CREDITORS] FOR CROSS-EXAMINATION A ND ERRED IN RECORDING THE STATEMENT OF THE SUPPLIER/TRADE-CREDI TORS AT THE BACK OF ASSESSEE INSPITE OF ASSESSEES REQUEST FOR CROSS - EXAMINATION THE CAPTIONED TWO SUPPLIERS. [2.0] LD. CIT(A) HAS ERRED IN LAW ON FACT IN CONFIR MING THE ACTION OF THE LD. AO IN THE ABSENCE OF AOS REMAND REPORT DT. 20.04.2 012 AND ASSESSEES CORSS-COMMENTS AS WELL AS RECORD OF THE APPEAL. [3.0] THAT LD.CIT(A) ERRED IN LAW FACTS AND CIRCUMS TANCES OF THE CASE IN DISPOSING OFF THE APPELLANTS APPLICATION FOR RECTI FICATION U/S 154 WITHOUT ANY MODIFICATION AND WITHOUT GIVING ANY REA SON FOR REJECTING IT. [3.1] THAT LD.CIT(A) WITHOUT AFFORDING AN OPPORTUNI TY OF BEING HEARD PRIOR TO DISPOSE-OFF THE APPLICATION U/S 154 ERRED IN LAW DISPOSING-OFF THE APPELLANTS APPLICATION U/S 154 WHICH IS ALSO BEYON D TIME LIMITATION. [4.0] THE APPELLANT CRAVES TO LEAVE/ADD/AMEND/MODIF Y/DELETE/FOREGO AND TO SUBSTITUTE ANY GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE DERIVES INCOME FROM TRADING OF YARN FROM A PROPRIETARY CONCERN NAMELY M/S SHIVA M ENTERPRISES. FOR THE YEAR INTO CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME ON 21/11/2007 DECLARING TOTAL INCOME OF RS. 2,51,490/-. THE CASE WAS SELECTED FOR SCRUTI NY AND NOTICE UNDER SECTION 143(2) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) WAS I SSUED AND COMPLIED WITH. THE SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT , WAS COMPLETED ON 30/12/2009 3 ITA NO.-435/DEL/2018. SMT. SUDHIR KUMAR KHEMKA. AFTER MAKING ADDITION OF RS. 4,56,941/- AS BOGUS LI ABILITY IN RESPECT OF TWO TRADE CREDITORS AND RS. 16,069/-, DISALLOWANCE OUT OF TEL EPHONE AND TRAVELLING EXPENSES. 3. AGGRIEVED ASSESSEE FILED AN APPEAL BEFORE THE LD . CIT(A), WHO UPHELD THE ADDITION OF BOGUS LIABILITY IN RESPECT OF THE TRADE CREDITORS. 4. AGGRIEVED WITH THE SAID ADDITION SUSTAINED BY TH E LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE GROUNDS RAISED BY THE ASSESSEE ARE RELATED T O OF THE ADDITION OF RS. 2,33,979/-IN RESPECT OF M/S JAI DURGA HANDTEX AND R S. 2,22,962/- IN RESPECT OF M/S GROVER HANDLOOM. 6. BEFORE US, THE LD. COUNSEL SUBMITTED THAT IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE CREDIT BALANCES OF RS. 2,66,477/- AND RS. 3,11,551/- WAS APPEARING IN THE NAME OF M/S JAI DURGA HANDTEX AND M/S GROVER HANDLO OM RESPECTIVELY. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER MADE INDEPENDE NT ENQUIRIES WITH THOSE PARTIES AND FOUND THAT THERE WAS DEBIT BALANCE OF RUPEES 32,498 /- IN THE ACCOUNT OF M/S JAI DURGA HANDTEX AND DEBIT BALANCE OF RUPEES 88,589/- WAS IN THE ACCOUNT OF M/S GROVER HANDLOOM. THE LD. COUNSEL SUBMITTED THAT THE ASSESS EE EXPLAINED THE DIFFERENCE BEFORE THE ASSESSING OFFICER. ACCORDING TO THE ASSESSEE, T HE DIFFERENCE WAS ON ACCOUNT OF THE DEBIT NOTES RAISED, WHICH HAS BEEN ACCOUNTED FOR BY THE ASSESSEE IN SUBSEQUENT ASSESSMENT YEAR. 4 ITA NO.-435/DEL/2018. SMT. SUDHIR KUMAR KHEMKA. 7. THE LD. COUNSEL ALSO SUBMITTED THAT THE ASSESSIN G OFFICER HAS RELIED ON THE STATEMENT OF THE PARTIES AND BEFORE MAKING ADDITION S, NO CROSS-EXAMINATION HAS BEEN PROVIDED TO THE ASSESSEE, WHICH IS IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE AND THUS NO ADDITION COULD HAVE BEEN MADE IN THE CASE O F THE ASSESSEE. 8. THE LD. DR ON THE OTHER HAND, RELIED ON THE ORDE R OF THE LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED T HE RELEVANT MATERIAL ON RECORD. WE FIND THAT BEFORE THE ASSESSING OFFICER, THE ASSE SSEE EXPLAINED THE DIFFERENCE IN LEDGER ACCOUNTS OF THOSE TWO PARTIES AS DUE TO THE DEBIT NOTES, WHICH WERE ACCOUNTED FOR BY THOSE PARTIES AT THE TIME OF REJECTION OF GO ODS BUT THE ASSESSEE ACCOUNTED FOR THE SAME LATER ON. WE NOTE THAT THE LD. ASSESSING OFFIC ER HAS REJECTED THIS CONTENTION WITHOUT VERIFYING THAT, IN THE SUBSEQUENT YEAR ASSE SSEE HAS ACCOUNTED FOR THOSE DEBIT NOTES. WE FIND THAT, THE ONLY DISPUTE IS IN RESPECT OF THE ENTRIES MADE BY THE ASSESSEE IN SUBSEQUENT YEARS. THE ASSESSEE HAS FURNISHED COP Y OF THE ACCOUNT OF BOTH THE PARTIES FOR THE NEXT FINANCIAL YEAR SHOWING THE DEB IT ENTRIES OF THE PURCHASE RETURNS AS ON 01/04/2007. IN OUR OPINION, IN SUBSTANCE THE ASS ESSEE HAS DISCHARGED HIS ONUS BY WAY OF TAKING INTO ACCOUNT THE DEBIT NOTES AND THUS THE CORRESPONDING LIABILITY HAS ALREADY BEEN REVERSED BY THE ASSESSEE IN SUBSEQUENT YEAR. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, THE ADDITION SUSTAINED BY THE LD . CIT(A) IS NOT JUSTIFIED AND ACCORDINGLY WE DELETE THE SAME. THUS THE GROUND NOS . 1 TO 2 RAISED BY THE ASSESSEE ARE ALLOWED. IN VIEW OF THE GROUND NO. 1 ALLOWED TO THE ASSESSEE, THE GROUND NO. 3 IS 5 ITA NO.-435/DEL/2018. SMT. SUDHIR KUMAR KHEMKA. RENDERED INFRUCTUOUS. THE GROUND NO. 4 BEING GENER AL IN NATURE, WE ARE NOT REQUIRED TO ADJUDICATE UPON AND DISMISS THE SAME AS INFRUCTU OUS. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 22/6/2018. SD/- SD/- KULDIP SINGH O.P.KANT (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 22.06.2018 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO.-435/DEL/2018. SMT. SUDHIR KUMAR KHEMKA. DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 7 ITA NO.-435/DEL/2018. SMT. SUDHIR KUMAR KHEMKA.