Ram Chand Baboo Mal & Co, New Delhi V. ITO, Ward-49(2), New Delhi

ITA 4608/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3386 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 14-07-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence; Non compliance
• Section: 251; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: F NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.4608/DEL/2017 ASSESSMENT YEAR: 2012-13 M/S. RAM CHAND BABOO MAL & CO., B-92, WHS, KIRTI NAGAR, NEW DELHI VS. ITO, WARD-49(2), NEW DELHI PAN :AAEFR7713D (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORD ER DATED 24/03/2017 PASSED BY THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS)-17, NEW DELHI [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2012-13 RAISING FOLLOWING GROUNDS: 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-17 AND LD. ASSESSING OFFICER IS ERRONEOUS ON THE FACTS AND IN THE LAW. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE HE OUGHT TO HAVE ACCEPTED THE RETURNED INCOME. APPELLANT BY NONE RESPONDENT BY SH. ROHIT ANAND, SR.DR DATE OF HEARING 04.10.2021 DATE OF PRONOUNCEMENT 14.10.2021 2 ITA NO. 4608/DEL/2017 2. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOM E TAX (APPEALS)- 17 AND LD. ASSESSING OFFICER IS REPLETE WITH PREJUD ICIAL OBSERVATIONS AND SAME ARE NOT SUSCEPTIBLE TO ANY AD VERSE CONCLUSIONS. 3. THAT NO OPPORTUNITY WAS AFFORDED TO THE APPELLA NT TO LEAD ADDITIONAL / FURTHER EVIDENCE ON THE ISSUES INVOLVE D IN RESPECT OF RULE 46 OF THE INCOME TAX RULE. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE APPELLANT FIRM THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-17 AND LD. ASSESSING OFFICER ERRED IN COMPUTING THE IN TAXABLE INCOME OF THE APPELLANT UNDER SECTION 144 OF THE INCOME TAX ACT. NO WEIGHTAGE WAS GIVEN TO THE PREVIOUS TAXABLE INCOMES /PROFITS & CONDUCT OF THE APPELLANT. THE GENERAL TREND OF PROFITS IN SIMI LAR SEGMENT OF TRADE WERE ALSO NOT GIVEN DUE WEIGHTAGE WHILE COMPU TING THE TAXABLE INCOME OF THE APPELLANT FIRM. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E APPELLANT FIRM THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-17 AND LD. ASSESSING OFFICER IS NOT JUSTIFIED IN TREATING THE UNSECURED LOANS BORROWED BY THE APPELLANT AS HIS INCOME, INVOKING T HE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT ON THE PLEA THA T A CONFIRMATIONS WERE NOT RECEIVED BEFORE THE APPOINTE D DATE. THE FACT THAT THE BALANCES AT THE END OF THE YEAR ALSO INCLUDE THE OPENING BALANCES WHICH WERE NOT RECEIVED DURING THE PREVIOUS YEAR WAS NOT GIVEN DUE WEIGHTAGE. THE APPELLANT PRA YS THAT ADDITION OF RS. 5291910/-ON ACCOUNT OF UNSECURED LO ANSIS NOT JUSTIFIED AND ON THE MERITS TO BE DELETED. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT FIRM THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-17 AND LD. ASSESSING OFFICER ERRED IN MAKING ADDITION OF RS. 6 8,39,139/- ON ACCOUNT OF SUNDRY CREDITORS ON THE PLEA THAT A CONF IRMATIONS WERE NOT RECEIVED BEFORE THE APPOINTED DATE. THE FACT THAT THE BALANCES AT THE END OF THE YEAR ALSO INCLUDE THE OPENING BALANCES WHICH WERE NOT RECEIVED DURING THE PREVIOUS YEAR WAS NOT GIVEN DUE WEIGHTAGE. THE APPELLANT PRA YS THAT ADDITION OF RS. 68,39,139/- ON ACCOUNT OF SUNDRY CR EDITORS IS NOT JUSTIFIED AND ON THE MERITS TO BE DELETED. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE APPELLANT FIRM THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-17 AND LD. ASSESSING OFFICER ERRED IN MAKING ADDITION OF RS. 2 ,65,000/- ON ACCOUNT OF ADVANCES FROM CUSTOMERS ON THE PLEA THAT A CONFIRMATIONS WERE NOT RECEIVED BEFORE THE APPOINTE D DATE. 3 ITA NO. 4608/DEL/2017 THE APPELLANT PRAYS THAT ADDITION OF RS. 2,65,000/- ON ACCOUNT OF ADVANCES FROM CUSTOMERS IS NOT JUSTIFIED AND ON THE MERITS TO BE DELETED. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE IS ENGAGED IN TRADING BUSINESS OF TIMBER AND ALLIED PR ODUCTS. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RE TURN OF INCOME ON 28/09/2012, DECLARING TOTAL INCOME OF 2,20,510/-. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND STATUTORY NOTICES UNDER INCOME-TAX A CT, 1961 (IN SHORT THE ACT) WERE ISSUED AND PARTLY COMPLIED. T HE ASSESSEE ONLY FILED ANNUAL FINANCIAL STATEMENT AND VAT RETURN S. NON- COMPLIANCE OF NOTICES HAS BEEN RECORDED BY THE LEAR NED ASSESSING OFFICER ON PAGE-2 OF THE IMPUGNED ASSESSM ENT ORDER. IN VIEW OF NON-COMPLIANCE, THE ASSESSING OFFICER IN IM PUGNED ASSESSMENT ORDER PASSED ON 26/03/2015, MADE ADDITIO N UNDER SECTION 68 OF THE ACT FOR UNEXPLAINED SUNDRY CREDIT ORS (RS. 68,39,139/-); UNEXPLAINED UNSECURED LOANS (RS. 52,9 1,910/-) AND UNEXPLAINED ADVANCES (RS. 2,65,000/-). THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A), HOWEVER, BEFORE H IM ALSO ONLY PART COMPLIANCE WAS MADE. NON-COMPLIANCE BY THE ASS ESSEE OF VARIOUS NOTICES ISSUED BY THE LEARNED CIT(A) IS REC ORDED IN PARA 4.2 OF THE ORDER OF THE LD. CIT(A). BEFORE THE LD. CIT(A), THE ASSESSEE FILED ADDITIONAL EVIDENCE FOR ADMITTING UN DER RULE 46 OF THE INCOME-TAX RULES, 1962 (IN SHORT THE RULES). BEFORE THE LEARNED CIT(A), THE ASSESSEE SUBMITTED THAT AFTER R ECEIPT OF FIRST NOTICE FOR SCRUTINY IN AUGUST, 2013, THE CASE WAS N OT TAKEN UP TILL JANUARY, 2015. THE ASSESSMENT PROCEEDINGS WERE TAKE N UP AFTER TAKING CHARGE BY THE INCUMBENT ASSESSING OFFICER IN JANUARY, 4 ITA NO. 4608/DEL/2017 2015 AND COMPLETED ON 09/03/2015 AND NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO LEAD EVIDENCE ON THE ISSUE INVOLVED. THE ASSESSEE FURTHER SUBMITTED THAT MOST OF THE CREDITO RS WERE BASED AT OUT STATIONS AND ASSESSEE WAS MAKING DILIGENT EN DEAVOUR TO GET THE CONFIRMATION FROM THOSE PARTIES. THE LD. CIT(A) , HOWEVER, REJECTED THE REQUEST OF THE ASSESSEE FOR ADMITTING ADDITIONAL EVIDENCES AND DISMISSED THE APPEAL OBSERVING AS UND ER: I FIND THAT THE APPELLANT WAS GIVEN SUFFICIENT OPP ORTUNITY OF BEING HEARD ON VARIOUS DATES BY THE AO AS MENTIONED IN PA RA 4.1 (SUPRA) BUT THE APPELLANT DID NOT COMPLY ON MOST OF THE DAT ES. THE APPELLANT'S NON COMPLIANCE BEHAVIOR EVEN REMAINED T HE SAME BEFORE ME ALSO AS THERE WAS NON-COMPLIANCE ON MOST OF THE OCCASIONS ON THE PART OF THE APPELLANT. UNDER THESE CIRCUMSTANCE S, THE APPELLANT COULD NOT DEMONSTRATE THE CIRCUMSTANCES UNDER WHICH THEY WERE PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EV IDENCES BEFORE THE AO WHICH ARE NOW BEING FURNISHED BEFORE ME. SIN CE, THE APPELLANT'S CASE DOES NOT FALL UNDER ANY OF THE CIR CUMSTANCES AS MENTIONED UNDER RULE 46A(L)(A), (B), (C) AND (D), T HEREFORE, THE CASE LAWS RELIED UPON BY THE APPLICANT ARE NOT APPLICABL E ON THE FACTS OF THE PRESENT CASE. HENCE, I AM OF THE CONSIDERED VIE W THAT THE ADDITIONAL EVIDENCES FILED BY THE APPELLANT ARE NOT FOUND TO BE ADMITTABLE UNDER RULE 46A. THEREFORE, THE SAME ARE NOT ADMITTED. 4.5 SINCE, THE APPELLANT FAILED TO PROVE THE GENUIN ENESS OF THE SUNDRY CREDITORS AS WELL AS THE LOAN CREDITORS BY F ILING THE RELEVANT DETAILS/DOCUMENTS BEFORE THE AO, THEREFORE, THE AO WAS JUSTIFIED TO MAKE ADDITION ON ACCOUNT OF THE SAME. 2.1 AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE TR IBUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. AT THE OUTSET, WE MAY LIKE TO MENTION THAT BEFORE THE TRIBUNAL A POWER OF ATTORNEY DATED 10/07/2017 ISSUE D IN THE NAME OF CHARTERED ACCOUNTANT, SH. RUPAL JAIN, AND O THERS WAS FILED ALONG WITH THE APPEAL SET. FIRST NOTICE WAS I SSUED BY THE 5 ITA NO. 4608/DEL/2017 REGISTRY OF TRIBUNAL ON 17/02/2020 FOR HEARING DATE D 01/04/2020, BUT NO COMPLIANCE WAS MADE. MEANWHILE, THE MATTER WAS ADJOURNED FROM TIME TO TIME DUE TO NON-F UNCTIONING OF THE BENCH. THE HEARING WAS FIXED ON 02/02/ 2021, HO WEVER, NONE ATTENDED. AGAIN A FRESH NOTICE WAS ISSUED ON 03/02/ 2021 FOR HEARING ON 23/03/2021. ON SAID DATE, NONE PRESENT O N BEHALF OF THE ASSESSEE AND MATTER WAS ADJOURNED TO 31/05/2021 ON THE REQUEST OF LEARNED DEPARTMENTAL REPRESENTATIVE. AGA IN, A FRESH NOTICE WAS ISSUED ON 21/07/2021, FIXING THE HEARING ON 05/08/2021. ON SAID DATE ALSO NO COMPLIANCE WAS MAD E. IN VIEW OF THE NON-COMPLIANCE BY THE ASSESSEE, A FRESH NOTI CE WAS ISSUED ON 05/08/2021, FIXING THE HEARING ON 04/10/2021 AND THE DEPARTMENTAL REPRESENTATIVE WAS DIRECTED TO SERVE S AID NOTICE UPON THE ASSESSEE. THE LEARNED DEPARTMENTAL REPRESE NTATIVE HAS FILED A REPORT ON 22/09/2021, WHEREIN HE SUBMITTED THAT THE ASSESSING OFFICER HAD SENT AN INSPECTOR FOR SERVICE OF THE NOTICE AT THE ADDRESS OF THE ASSESSEE PROVIDED IN FORM NO. 36 , I.E, PRESCRIBED FOR FILING APPEAL BEFORE THE TRIBUNAL, H OWEVER, COULD NOT FIND ANYONE AT THE ADDRESS AND, THEREFORE, HE S ERVED NOTICE THROUGH AFFIXTURE IN PRESENCE OF TWO WITNESSES. DES PITE SERVICE OF NOTICE BY THE DEPARTMENT, NONE APPEARED ON THE DATE OF THE HEARING, NOR ANY REQUEST FOR ADJOURNMENT WAS RECEIV ED. IN THE CIRCUMSTANCES, WE WERE OF THE OPINION THAT NO USEFU L PURPOSE WILL BE SERVED FURTHER ADJOURNING THE MATTER AND THEREFO RE IT WAS HEARD EX PARTE QUA THE ASSESSEE AFTER HEARING ARGUMENTS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT LD. CIT(A) IS JUSTIFIED IN DECLINING TO ADMIT THE ADDIT IONAL EVIDENCES AS 6 ITA NO. 4608/DEL/2017 THE ASSESSEE IS NOT FULFILLING THE CONDITIONS REQUI RED UNDER RULE 46A FOR ADMITTING OF THE ADDITIONAL EVIDENCES. 5. WE HAVE HEARD SUBMISSION OF THE LEARNED DEPARTMENT AL REPRESENTATIVE ON THE ISSUE IN DISPUTE. BEFORE THE ASSESSING OFFICER, THE ASSESSMENT WAS COMPLETED IN EX PARTE MANNER AND ADDITION FOR UNSECURED CREDITOR, UNSECURED LOAN AND ADVANCES WAS MADE BY THE ASSESSING OFFICER. BEFORE THE LD. C IT(A), THE ASSESSEE FILED ADDITIONAL EVIDENCE IN SUPPORT OF IT S CLAIM THAT CREDITORS AND UNSECURED LOANS ARE GENUINE. THE LD. CIT(A) DECLINED THE REQUEST OF THE ASSESSEE FOR ADMITTING ADDITIONAL EVIDENCE IN TERMS OF RULE 46A OF THE RULES. THE REL EVANT PROVISIONS OF THE RULE 46A ARE REPRODUCED AS UNDER: [ PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE [ DEPUTY COMMISSIONER (APPEALS) ] [ AND COMMISSIONER (APPEALS) ] . 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, TH E COMMISSIONER (APPEALS)], ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN T HE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE [ASSESS ING 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 TH E EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE [ASSESSING OFFICER] ; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAU SE FROM PRODUCING BEFORE THE [ASSESSING OFFICER] ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL ; OR (D) WHERE THE [ASSESSING OFFICER] HAS MADE THE ORDER AP PEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO A DDUCE 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, TH E COMMISSIONER (APPEALS)] RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3) THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE [ASSESSING OFFICER] HAS BEEN ALLOWED A R EASONABLE OPPORTUNITY (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS- EXAMINE THE WITNESS PRODUCED 7 ITA NO. 4608/DEL/2017 BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONE R (APPEALS)] TO DIRECT THE PRODUCTION OF ANY DOCUMENT, OR THE EXAMINATION OF A NY WITNESS, TO ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTHER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETHER ON HIS OWN MO TION OR ON THE REQUEST OF THE [ASSESSING OFFICER]) UNDER CLAUSE (A) OF SUB-SECTIO N (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271.] 5.1 BEFORE THE LEARNED CIT(A), THE ASSESSEE SUBMITTED THAT REGULAR ASSESSMENT PROCEEDINGS WERE STARTED IN JANU ARY, 2015 AND WERE CLOSED ON 09/03/2015 AND, THEREFORE, NO FU RTHER OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO LEAD EVIDE NCES ON THE ISSUE INVOLVED. WE HAVE NOTICED THE ASSESSEE HAS NO T COMPLIED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE L EARNED CIT(A) ON MANY OCCASIONS. BUT THE ISSUE-IN-DISPUTE IS OF VERI FICATION OF SUNDRY CREDITORS, UNSECURED LOANS AND ADVANCES ETC. BEFORE THE TRIBUNAL ALSO, THE ASSESSEE HAS NOT PREFERRED ANY A PPLICATION FOR ADMITTING ADDITIONAL EVIDENCE AND AFTER FILING THE APPEAL, THE ASSESSEE IS NOT PURSUING ITS APPEAL ALSO. WE FIND T HAT ASSESSING OFFICER HAS NOT REFUSED TO ADMIT EVIDENCE BEFORE HI M AND SO RULE 46A(A) IS NOT APPLICABLE IN THE CASE OF THE ASSESSE E. IN SUPPORT OF RULE 46A(B), THE ASSESSEE DID NOT FILE ANY EVIDENCE IN SUPPORT OF SUFFICIENT CAUSE FOR NOT PRODUCING THE EVIDENCES BE FORE THE ASSESSING OFFICER, EXCEPT MERELY MENTIONING THAT AS SESSMENT WAS COMPLETED WITHIN A SHORT PERIOD FROM JANUARY, 2015 TO MARCH, 2015. THE ALLEGATIONS OF NOT PROVIDING SUFFICIENT O PPORTUNITY [RULE 46A(D)] ARE ALSO BASELESS IN VIEW OF THE LIST OF NO TICES NOT COMPLIED BY THE ASSESSEE AS REFERRED ON PAGE 2 OF THE ASSESS MENT ORDER. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. C IT(A) IN NOT 8 ITA NO. 4608/DEL/2017 ADMITTING ADDITIONAL EVIDENCE. ACCORDINGLY, THE GRO UNDS OF APPEAL FILED BY THE ASSESSEE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH OCTOBER, 2021 SD/- SD/- (KUL BHARAT) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14 TH OCTOBER, 2021. RK/- (DTDC) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI ]