SNG Agro Impex P.Ltd, Delhi V. ITO, Ward-24(1), New Delhi

ITA 4352/DEL/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0685 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 06-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 131; 68; 144; 194A

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No. 4352/Del/2018 Asstt. Year : 2013-14 O R D E R PER ASTHA CHANDRA, JM The appeal by the assessee is directed against the order dated 28.03.2018 of the Ld. Commissioner of Income Tax (Appeals) - 28, New Delhi (“CIT(A)”) pertaining to the Assessment Year (“AY”) 2013-14. 2. The assesee has taken following grounds:- “1. That the learned Commissioner of Income Tax (Appeals)-28, New Delhi has grossly erred both in law and on facts in upholding the order of assessment and dismissing the appeal of the appellant without admitting the additional evidences furnished before him which evidences were/are crucial for adjudicating the grounds of appeal raised before him. 2. That the learned Commissioner of Income Tax (Appeals) has grossly erred in failing to appreciate that since on account of fire, appellant was prevented by the sufficient cause in producing the SNG Agro Impex P. Ltd. 4091, Naya Bazar, North Delhi, Delhi – 110 006 PAN AAOCS1732J Vs. ITO, Ward-24(1) New Delhi. (Appellant) (Respondent) Assessee by: None Department by : Shri Umesh Takyar, Sr. DR Date of Hearing 07.04.2022 Date of pronouncement 31.05.2022 ITA No.4352/Del/2018 2 documentary evidences before the learned AO, as such, documents furnished by the appellant before the learned CIT(A) should have been admitted and appeal of the appellant should have been considered on merits. 3. That the learned Commissioner of Income Tax (Appeals) has grossly erred in failing to appreciate that under the provisions of the Act, the real income of assessee has to be assessed and since the evidences furnished by the assessee were crucial for the determination of the real income of the assessee, as such, in the interest of justice, such documents should have been admitted and appeal of the appellant should have been decided on merit after considering the documentary evidences. 4. That the learned Commissioner of Income Tax (Appeals) has grossly erred in summarily dismissing the appeal of the appellant without disposing off each ground raised before him and also without considering the submissions made by the appellant on the merits of the addition. 5. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the addition of Rs. 1,26,23,980/- made u/s 68/69A of the Act being the deposits made in the bank account failing to appreciate that cash deposited were the business receipts of the appellant and is duly reflected in the cash book of the appellant. 6. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the addition of Rs. 3,78,207/- made as undisclosed interest income under the head “income from other sources” failing to appreciate that same has duly been offered for taxation. 7. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the addition of Rs. 1,63,73,325/- made u/s 68 of the Act being the unsecured loan/advances received ITA No.4352/Del/2018 3 from directors and relatives failing to appreciate that unsecured loan was received through banking channels and interest was also paid, and in respect of the unsecured loan, complete documentary was also famished before the learned CIT(A). 8. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the addition of Rs. 94,79,176/- made by applying the GP rate of the preceding assessment year i.e. AY 2012-13 failing to appreciate that books of account of the appellant are duly audited and same has been found true and correct as such, addition made is wholly untenable. It is therefore, prayed that it be held that the additions made of Rs. 3,88,54,688/- is not in accordance with law and therefore the additions so made along-with interest levied be kindly deleted and appeal of the appellant company be kindly allowed.” 3. Briefly stated the assessee company filed its return of income on 26.09.2013 declaring income of Rs. 15,21,960/-. It was selected for scrutiny through CASS. During the assessment proceedings several notices and show cause letters were issued but no compliance was made. Even summons under section 131 dated 01.03.2016 served upon the Director Shri Nitin Kumar Aggarwal and Shri Mayank Gupta through S.H.O. Police Station, Rani Bagh remained uncomplied with. The Ld. Assessing Officer (“AO”) was therefore, compelled to frame the assessment ex-parte under section 144 of the Income Tax Act, 1961 (the “Act”). 4. The Ld. AO found that there were cash deposits of Rs. 1,26,23,980/- in the bank account of the assessee maintained with HDFC Bank Limited. The source thereof was not explained. The Ld. AO therefore added the said amount to the income of the assessee under section 68/69A of the Act. 4.1 The Ld. AO perused 26AS details and found that the assessee had earned interest income of Rs. 3,88,434/- (shown in Profit & Loss Account as ITA No.4352/Del/2018 4 miscellaneous income) on which tax of Rs. 10,227/- was deducted at source under section 194A of the Act. The Ld. AO added the difference of Rs. 3,78,207/- (Rs. 3,88,434 - 10,227) to the income of the assessee. 4.2 The Ld. AO further observed that there was increase of unsecured loans/advances taken from directors and relatives amounting to Rs. 1,63,73,325/- during the year under consideration. He added the said amount to the income of the assessee under section 68 of the Act. 4.3 Lastly, the Ld. AO made Gross Profit (GP) addition of Rs. 94,79,176/-. 4.4 Accordingly, as against the returned income of Rs. 15,21,960/-, the Ld. AO completed the assessment on total income of Rs. 4,03,76,648/-. 5. On appeal, the assessee pleaded for admittance of additional evidence under Rule 46A of the Income Tax Rules, 1962 (“Rules”); filed a paper book and made submissions on each and every addition made by the Ld. AO. 5.1 The Ld. CIT(A) recorded detailed reasons for not admitting the additional evidence and confirmed the impugned additions. His findings appear in para 4.1 to 4.4 of the appellate order which is reproduced below:- “4.1 I have considered the facts of the case, the sequence of assessment proceedings as narrated by AO in the assessment order and the submissions of appellant. In the detailed submissions given, the appellant has discussed the legal aspects of admitting the additional evidence and case laws of different courts/ITAT related to this. However, the only factual reason given by it for filing the additional evidence was that there was a fire broke on 23.08.2015 at the business premises of appellant at shop no, 4091, Naya Bazar, Delhi and on account of fire, most of the documents had gutted and therefore, the appellant could not reply to the queries raised by the AO. However, before going to the factual aspects of the case, let us now discuss ITA No.4352/Del/2018 5 the legal aspects of this issue. Rule 46A of IT Rules deals with the production of additional evidence before CIT(A) as under:- "46A. (1). The appellant shall not be entitled to produce before the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commission (Appeals)] any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the [Assessing Officer], except in the following circumstances, namely:- a) Where the Assessing Officer has refused to admit evidence which ought to have been admitted; or b) Where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground o f appeal; or c) Where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. (2). No evidence shall be admitted under sub-rule(1) unless the [Deputy Commissioner (Appeals) [or, as the case may be, the Commissioner (Appeals)] records in writing the reasons for its admission." 4.2 In the light of aforesaid legal position, now the facts in the case of the appellant are to be examined. The 'only reason given by appellant for not producing the relevant details/documents/evidence before AO was that a fire broke in his business premises on 23.08.2015 in which most of the documents were gutted. But, much before this date i.e. 17.02.2015, the AO had asked the appellant to furnish the relevant details/documents on 09.03.2015 by issuing the questionnaire but the appellant did not comply with the statutory notices issued by AO. Subsequently also the questionnaire issued by AO on 26.11.2015 asking the appellant to furnish details on 04.12.2015 again remained unanswered on the part of the appellant. The subsequent show cause notice dated 11.02.2016 giving the appellant final opportunity and specifying the basis of proposed additions was also not answered by ITA No.4352/Del/2018 6 appellant. Even the summons issued u/s 131 to its director Shri Nitin Agrawal remained uncomplied as the director did not care to attend or answer the said summon. For the purpose of making compliance, the AO went to the extent of issuing another summons u/s 131 dated 01.03.2016 to the directors Shri Nitin Kumar Agrawal and Shri Mayank Gupta and getting it served through S.H.O, Police Station, Rani Bagh who reported also that the summons were duly served upon both the persons on 04.03.2016 and they have been directed to attend the office on 07.03.2016. Vide theses summons, AO had asked the appellant to explain the source of cash deposits of Rs. 1,26,23,980/-, details about the unsecured loans or cash creditors as per provision of section 68 of IT Act and other details asked as per questionnaire dated 26.11.2015 and 11.02.2016 but again neither any of the directors attended in compliance to the summons nor any details were filed. For the non-compliance of the statutory notices/summons, the AG initiated penalty proceedings u/s 271(l)(b) also. Thus, it is clear that the AO had made all out efforts to enforce the compliance by appellant in respect of various issues raised by him through questionnaire as well as statutory notices but there was complete non- compliance and non-cooperation on the part of appellant or its director or authorized representative throughout the assessment proceedings. Contrary to this, now the appellant is claiming that it was prevented by sufficient cause in producing/submitting relevant details/evidence before AO during the assessment proceedings which is baseless and without any substance. 4.3 Now, I come to the reasons given by the appellant that there was a fire broken in his business premises and most of the documents were gutted in that fire. In support of its claim, the appellant has furnished the copies of report from Delhi Fire Service, a PCR call report dated 23.08,2015 and application from appellant to S.H.O, Lahori Gate, Naya Bazar, dated 24.08,2014. In the report of Delhi Fire Service, it mentions the category of fire ''small' but nowhere it has been mentioned that what the damage has been done due to this fire. -This re [Sort is silent on this part. The PCR call report dated 28.03.2015 on a plain paper also just informs about the fire in shop no. 4091, Naya Bazar, Lahori Gate but nothing more is said in this report. Only m the application dated 24.08.2015 by appellant to S.H.O., Lahori Gate, it has ITA No.4352/Del/2018 7 been informed by appellant that its original data, files and accounts, computer, documents and property documents were got burned and there must be other documents which were also burned. In this application, request was made to lodge the FIR, However, as informed by appellant during the appellate proceedings, no FIR was lodged by the S.H.O, Lahori Gate, Naya Bazar on the request of appellant. Thus, in none of the documents, it has been specifically mentioned that the books of account, bills and vouchers, relevant details pertaining to the year under consideration were got destroyed due to fire in the shop. The S.H.O, Lahori Gate also did not acknowledge the request of applicant and no FIR was lodged by him mentioning the damages done in the fire. Thus, the plea taken by appellant that most of the documents have been burned, therefore, he could not reply the query raised by AO is nothing but an afterthought a concocted story for the purpose of consideration of details created by him during the appellate proceedings. During the whole of the assessment proceedings, the appellant did not utter a single word about the break of fire in the business premises, leave alone the filing of details by making compliance of statutory notices. Even if there was a fire in business premises, he could have attended the assessment proceedings and given the available details to the AO by taking plea that most of the documents have been burned in the fire. But there was utmost non-compliance and utter disregard on his part of statutory notices, questionnaire, show cause letters or summons by the AO. 4.4 In view of the above, the additional evidence filed by appellant are not being admitted and, therefore, being rejected. The conclusion drawn by AO by making additions on the basis of material available on record is substantiated and upheld. Consequently, the additions made by him are confirmed and the grounds taken by the appellant are rejected and hence, dismissed.” 6. This has brought the assesee before the Tribunal. 7. The hearing was fixed on 16.08.2021 but none was present for the assessee on that day though the Ld. DR attended. Hearing was adjourned to 03.11.2021. On that day (03.11.2021) the Ld. AR of the assessee requested for adjournment which was allowed and hearing was fixed for 17.01.2022. ITA No.4352/Del/2018 8 The parties were duly informed. On 17.01.2022 the bench did not function. Hence fresh notice was issued on 22.02.2022 by speed post which has been returned by the postal authorities with the remark “Long time offices closed in this add R.T.S.” It is thus evident that there is no hope of service of notice and compliance/ appearance by the assessee or the AR. We, therefore, proceeded to dispose off the appeal ex-parte after hearing the Ld. DR. 8. We have gone through the assessment order of the Ld. AO and the appellate order of the Ld. CIT(A) and heard the Ld. DR . 9. On perusal of the material available on records, we observe that the Ld. CIT(A) has dealt with all the arguments/ contentions raised by the assessee in respect of admittance of additional evidence under Rule 46A of the Rules and refuted them all by bringing on records contrary facts and the circumstances. Since the finding of facts recorded by the Ld. CIT(A) on the issue of admittance of additional evidence under Rule 46A of the Rules remain uncontroverted by the assessee, we decline to interfere on the issue of admittance of additional evidence. On merits also no fresh facts and material are available before us. We, therefore have no alternative but to uphold the order of the Ld. CIT(A) and reject the appeal of the assessee. 10. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 31 st May, 2022. sd/- sd/- (G. S. PANNU) (ASTHA CHANDRA) PRESIDENT JUDICIAL MEMBER Dated: 31/05/2022 Veena Copy forwarded to - 1. Applicant 2. Respondent 3. CIT 4. CIT (A) ITA No.4352/Del/2018 9 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi 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