M/s Shri Shyam Pipes Pvt. Ltd., New Delhi V. JCIT, New Delhi

ITA 4735/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65571 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 13-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 29-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHAILESH GUPTA CAS
• Keywords: Gross profit estimation; Opportunity of being heard; Additional evidence; Corroborative evidences
• Section: 80G; 145

Judgement Text

ITA NO. 4735/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI I.C. SUHDIR, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 4735/DEL/2010 A.Y. : 2007-08 M/S SHRI SHYAM PIPES PVT. LTD., 37, NETAJI SUBASH MARG, DARYAGANJ, NEW DELHI 110002 (PAN: AAACS0885L) VS. JOINT COMMISSIONER OF INCOME TAX, RANGE-8, NEW DELHI (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. SALIL AGGARWAL, ADV., SH. GAUTAM JAIN & SH. SHAILESH GUPTA, CAS DEPARTMENT BY : SH. SANJAY KUMAR, JAIN, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XI, NEW DEL HI DATED 22.9.2010 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED READ AS UNDER:- I) THE FIRST ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN UPHOLDING THE ADDITION OF ` 91,64,692/- BY REJECTING BOOKS OF ACCOUNTS UNDER SECTION 145 OF THE ACT. ITA NO. 4735/DEL/2010 2 II) ANOTHER ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (A) ERRED IN UPHOLDING THE DISALLOWANCE OF CLAIM OF DEDUCTION UNDER SECTION 80G OF THE ACT OF ` 34,864/-. III) THE THIRD ISSUE RAISED IS THAT LD. COMMISSIONER OF INCOME TAX (A) ERRED IN SUSTAINING THE DISALLOWANCE OF CLAIM OF FOLLOWING EXPENSES -ON ACCOUNT OF BUSINESS PROMOTION - ` 30,045/- -OUT OF DIWALI EXPENSES - ` 2,68,854/- -OUT OF ADVERTISEMENT EXPENSES - ` 32,062/- 3. THE ASSESSEE COMPANY IS ENGAGED IN THE MANUFACTUR ING OF COPPER PIPES. RETURN OF INCOME WAS FILED ON 31.10 .2007 DECLARING TOTAL INCOME AT ` 47,04,776/-. THE CASE WAS SELECTE D FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE ACT DATED 18.9.2008 WAS I SSUED TO THE ASSESSEE. DURING THE COURSE OF ASSESSMENT, THE A SSESSING OFFICER INTER-ALIA NOTED THAT ASSESSEE HAS PROVIDED SOME IN FORMATION AND FAILED TO PROVIDE SOME OF THE INFORMATION AND DOCUME NTS. 4. APROPOS ISSUE OF ADDITION FOR LOW GP RATIO ON THIS ISSUE ASSESSING OFFICER FOUND THAT FOLLOW ING IS COMPARATIVE RESULTS OF THE GP OF THE ASSESSEE ARE : PARTICULARS YEAR ENDING - 31.3.2007 YEAR ENDING 3 1.3.2006 SALES ` 6109.79 LACS ` 4105.76 LACS GROSS PROFIT ` 266.28 LACS ` 240.58 LACS ITA NO. 4735/DEL/2010 3 GP RATE ` 4.36% ` 5.86% 4.1 ASSESSEE WAS ASKED TO JUSTIFY THE FALL IN TH E GP RATE. THE ASSESSEE SUBMITTED THAT ASSESSEES UNIT WAS EXCISAB LE UNIT AND MAINTAINING THE FULL QUANTITATIVE DETAILS ON ACCOUNT S OF SALES/ PURCHASE MADE DURING THE YEAR. THERE ARE NO SALES BILLS / PURCHASE BILLS WHICH WERE UNACCOUNTED FOR IN THE STOCK REGISTER. IT WA S FURTHER SUBMITTED THAT THE SALES OF THE ASSESSEE COMPANY HAS INCREASED 50% IN COMPARISON TO LAST YEAR. THE MAIN REASON FOR THE IN CREASE IN THE SALES WAS REDUCTION IN THE MARGIN BY THE ASSESSEE COMPANY. IT WAS FURTHER SUBMITTED THAT THE MAIN SALES OF THE ASSESSEE WAS T O THE MULTINATIONAL COMPANIES WHO WERE BENT UPON REDUCING THEIR INPUT CO STS AND IT WAS FURTHER SUBMITTED THAT THE GP RATE HAS DECREASED B UT THE VOLUME HAS INCREASED. IT WAS FURTHER SUBMITTED THAT STOCK R EGISTER WAS MAINTAINED BY THE ASSESSEE, THERE IS 50% INCREASE IN THE SALES AND REDUCTION IN THE GP RATE IS ONLY BY 1.50%. THE OVER ALL IMPACT OF THE DECREASE IN THE GP RATE HAVE RESULTED IN INCREASE IN THE GROSS PROFITS BY 25.70 LACS. FURTHER, THE ASSESSEE SUBMITTED THE COPY OF BANK STATEMENT FOR THE FULL YEAR ALONGWITH THE BANK RE CONCILIATION STATEMENT. ASSESSING OFFICER WAS NOT CONVINCED B Y THE REPLIES. THE ASSESSING OFFICER NOTED THAT ASSESSEE COMPANY HAS N OT PRODUCED THE BOOKS OF ACCOUNTS IN PHYSICAL FORM FOR VERIFICATIO N. ASSESSING OFFICER ITA NO. 4735/DEL/2010 4 FURTHER OBSERVED THAT ASSESSEE DID NOT PRODUCE ANY DOCUMENTARY EVIDENCE FOR THE EXPENDITURE INCURRED. ASSESSING O FFICER NOTED THAT THE ASSESSEE WAS SUPPLYING MATERIALS TO SAME PARTIE S IN THE PAST ALSO AND HAS ALSO GIVEN HIGHER GP RATIO. ASSESSING OFF ICER NOTED THAT THE ASSESSEE COMPANY HAS NOT PRODUCED ANY DOCUMENTARY EV IDENCE TO DEMONSTRATE THAT THERE IS ANY CHANGE IN TERMS OF RE FERENCE WITH REFERENCE TO THE PURCHASE AND SALES. THEREAFTER, A SSESSING OFFICER CITED CERTAIN CASE LAWS AND CONCLUDED AS UNDER:- THUS, IN THE LIGHT OF ABOVE DISCUSSIONS AND RESPECTFULLY FOLLOWING THE RATIO OF JUDGEMENTS AS DISCUSSED ABOVE, SEC. 145 OF I.T. ACT, 1961 IS INVO KED AND TRADING RESULTS AND THE NET TAXABLE INCOME IS INCREASED BY MAKING AN ADDITION OF ` 91,64,692/- AF TER ADDING THIS FIGURE THE GROSS PROFIT COMES TO ` 357.9 2 LACS (` 91,64,692/- + 266.28 LACS). HENCE, THE AMOU NT OF ` 91,64,692/- IS DISALLOWED AND ADDED BACK TO TH E INCOME OF THE ASSESSEE. 5. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) OBSERVED THAT ASSESSEES COUNSEL HAS BEEN SERVED WI TH THE COPY OF REMAND REPORT AND THE SUBMISSIONS OF THE ASSESSEE ARE AS UNDER:- THAT IN THE ASSTT. ORDER THE TRADING RESULT OF THE APPELLANT WAS REJECTED ON THE GROUND THAT BOOKS OF ACCOUNTS WERE NOT PRODUCED AND ON OUR REQUEST YOU ITA NO. 4735/DEL/2010 5 REMANDED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH EXAMINATION. THE LD. ASSESSING OFFICER HAS GIVEN US OPPORTUNITY TO APPEAR ON 21.7.2010 AND 23.7.2010. ON BOTH THE DAYS THE APPELLANT APPEARED THROUGH ITS LD. AUTHORISED REPRESENTATIVE AND THE MATTER HAS BEEN RECORDED IN THE REMAND REPORT OF THE ASSESSING OFFICER DATED 5.8.2010. A CLOSE LOOK IN THE REMAND REPORT W OULD REVEAL THAT ALL THE DOCUMENTS AS ASKED FOR WERE DUL Y PRODUCED BARRING THE ORIGINAL CASH VOUCHERS WHICH COULD NOT BE PRODUCED ON THE SCHEDULED DATE AS THOS E WERE INADVERTENTLY LEFT IN THE OFFICE ON THE FIRST DAY. ON THE SECOND DAY I.E. ON 23.7.2010 ONLY PURCHASE AND SALES BILLS WERE CALLED FOR, BY THE ASSESSING O FFICER AND THE SAME WAS RELIGIOUSLY PRODUCED BEFORE HER AN D THE REPORT OF THE ASSESSING OFFICER WOULD SPEAK FO R ITSELF. ON 3.8.2010, SH. ANUJ JAIN, CA APPEARED ALONGWITH THE DIRECTOR SH. AJAY GUPTA BEFORE THE ASSESSING OFFICER AND SHE WAS ASKED TO STATE WHETH ER ANY OTHER DOCUMENTS WERE SPECIFICALLY REQUIRED BY H ER AND SHE HAS ANSWERED IN NEGATIVE. BOTH THE PERSONS IN AFFIDAVIT BEFORE YOU HAVE GIVEN THE MATTER. THE MOOT QUESTION IS REGARDING VERIFICATION OF TRADING RESULT AND IT IS STATED THAT NO CASH SALE OR PURCHASE WAS MADE AND IT WILL BE DEMONSTRATED TO YOU THROUGH EVIDENCE AND THIS WILL MAKE THE ITA NO. 4735/DEL/2010 6 OBSERVATION OF THE ASSESSING OFFICER THAT CASH VOUCHERS WERE NOT PRODUCED AS REDUNDANT. THE P&L ACCOUNT FOR THE RELEVANT PERIOD HAS BEEN BIFURCATED IN CASH AND OTHER THAN CASH AND THE SAME HAS BEEN SUBMITTED ALONGWITH REJOINDER DATED 9.9.2010. THE REPORT WOULD REVEAL THAT ENTIRE TRANSACTION BARRING MANUFACTURING EXPENSES OF ` 22,80,873/- (SCHEDULED 12) P-54/APB-I AND ADMINISTRATIVE EXPENSES OF ` 8,54,007/- (SCHEDULED 13) P-54/APB-I, ALL OTHER EXPENSES WERE INCURRED OTHER THAN CASH. THE APPELLANT IS READY TO PRODUCE THE CASH VOUCHERS ONC E AGAIN BEFORE THE ASSESSING OFFICER IF SO DIRECTED BY YOURSELF. REGARDING PARA 2.2 OF REPORT DATED 5.8.2010 NON PRODUCTION OF ORIGINAL DOCUMENTS, IT IS SUBMITTED THA T THE SAME WAS NEVER CALLED FOR DURING THE COURSE OF HEARING AND NATURALLY THERE WAS NO OCCASION FOR THE APPELLANT TO PRODUCE THE SAME BEFORE HER. THE DOCUMENTS ARE RELATED TO SALES TAX AND EXCISE RETURN S FILED BEFORE STATUTORY AUTHORITIES. ALTHOUGH THE ASSESSING OFFICER HAS ARGUED THAT THE EVIDENCE SHO ULD NOT BE ADMITTED U/S. 46A ON THE GROUND THAT SUFFICIE NT OPPORTUNITIES WERE GIVEN DURING THE ORIGINAL ASSTT . PROCEEDINGS BUT THE APPELLANT HAS SUFFICIENT CAUSE FOR NON PRODUCTION OF SUCH DOCUMENTS AND THAT IS WHY TH E APPEAL HAS BEEN MADE U/R. 46A BEFORE YOU. ITA NO. 4735/DEL/2010 7 RELIANCE IS PLACED ON 13 SOT 661 (MUM) SHAHRUKH KHAN VS. DCIT (P-447). IT IS ALSO PLACED ON RECORD THAT ONCE THE MATTER WAS REMANDED U/R. 46A AS PER THE REQUEST OF THE APPELLANT FOR ADMISSION OF FRESH EVIDENCE AND THE REPORT HAS BEEN RECEIVED FROM THE ASSESSING OFFICER STATING THAT SOME EVIDENCE WERE PRODUCED OTHER THAN THE CASH VOUCHERS. IT IS RESPECTFULLY STATED THAT NOW IT WILL BE THE DUTY OF THE LD. COMMISSIONER OF INCOME TA X (A) TO EXAMINE THE EVIDENCE U/S. 250(4) READ WITH RU LE 46A(4). RELIANCE IS PLACED ON SMT. PRABHAVATI S. SH AH VS. C.I.T. 231 ITR 1 (BOM) & ANMOL COLOURS (I) PVT. LT D. VS. ITO 121 TTJ 269 (JAIPUR) AND ALSO C.I.T. VS. DLV UNIVERSAL LTD. 197 TAXATION 250 (DEL.) REGARDING TRADING ADDITION, RELIANCE IS ALSO PLACED ON C.I.T. VS. RICE EXPORTS P LTD. I.T.A. NO. 999/2010 (DEL.) DATED 3.8.2010 AND C.I.T. VS. SMT. POONAM RANI I.T.A. NO. 406/2009 (DEL.) DATED 7.5.2010. 6. LD. COMMISSIONER OF INCOME TAX (A) FURTHER NOTED TH AT ON THE REQUEST OF THE ASSESSEE THE MATTER WAS REMANDED TO THE ASSESSING OFFICER. ASSESSING OFFICER FILED HIS REPORT WHICH WAS FORWARDED TO THE ASSESSEE FOR ITS COMMENTS. LD. COMMISSIONER OF INCOME TAX(A) OBSERVED THAT FOLLOWING IS THE GIST OF THE AOS SU BMISSIONS IN THIS REGARD:- ASSESSING OFFICER NOTED THAT CASH BOOK WAS ASKED TO BE VERIFIED FIRST BY THE ASSESSING OFFICER. HOWEVER, THE ITA NO. 4735/DEL/2010 8 ASSESSEES COUNSEL SUBMITTED THAT THE SAME MAY NOT B E VERIFIED, SINCE THE ORIGINAL VOUCHERS HAVE NOT BEEN PRODUCED. ASSESSING OFFICER THEREAFTER, VERIFIED THE PURCHASE BILLS ON TEST CHECK BASIS AND NO DISCREP ANCY WAS NOTICED IN THIS REGARD. ASSESSING OFFICER FURT HER SUBMITTED THAT ASSESSEE WAS REQUESTED TO PRODUCE AL L THE ORIGINAL DOCUMENTS MENTIONED IN THE PAPER BOOK FILE D ON WHICH THE ASSESSEE WISHED TO RELY DURING THE REMAND PROCEEDINGS. HOWEVER, THE ASSESSEE SIMPLY PRODUCE D THE BOOKS OF ACCOUNTS AND DID NOT PRODUCE IN ORIGINAL T HE PAGES 336 TO 404 OF APB-II. THEREAFTER, ASSESSING OFFICER OBSERVED THAT IN THE PRESENT CASE THAT IT IS SEEN THAT NONE OF THE CIRCUMSTANCES OF RULE 46A WOULD APPLY TO THE ASSESSEE SINCE THE ASSESSING OFFICER HAD NEITHER R EFUSED EVIDENCE NOT PREVENTED THE ASSESSEE TO PRODUCE THE EVIDENCE. THEREFORE, ASSESSING OFFICER SUBMITTED THAT IN VIEW OF THE ABOVE, ADDITIONAL EVIDENCE BEING SUBMITT ED BY THE ASSESSEE MAY NOT BE ADMITTED. 6.1 LD. COMMISSIONER OF INCOME TAX (A) NOTED THAT ASS ESSEE HAS TRIED TO BANK ON CERTAIN PORTION OF THE REMAND REPOR T AND WANTED TO REJECT CERTAIN OTHER PORTION. HE HELD THAT ASSESSEE CANNOT DO SO. EITHER THE ASSESSEE HAS TO ACCEPT THE REMAND REPORT IN FULL OR REJECT COMPLETELY. LD. COMMISSIONER OF INCOME TAX (A) FURTH ER OBSERVED THAT FACT REMAINS THAT THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFICER, AT THE TIME OF ASSESSMENT. LD. COMMISSIONER OF INCOME TAX (A) FURTHER NOTED THAT IT IS ALSO A FACT THAT ITA NO. 4735/DEL/2010 9 ASSESSEE HAS NOT PRODUCED ANY BOOKS OF ACCOUNTS INC LUDING VOUCHERS BEFORE THE ASSESSING OFFICER. LD. COMMISSIONER OF INCOME TAX (A) FURTHER NOTED THAT ASSESSEES COUNSEL WANTED THE AP PELLATE AUTHORITY TO EXAMINE THE SAME WHEREAS REPEATED OPPORTUNITIES BY THE DIFFERENT AOS AT DIFFERENT STAGES WERE NOT COMPLIED. LD. COM MISSIONER OF INCOME TAX (A) FURTHER OBSERVED THAT ASSESSING OFFI CER HAD MADE DETAILED DISCUSSION REGARDING LOW GP, HE HAS ASKED T HE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNTS, SALE AND PURCHASE VO UCHERS. LD. COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED THAT BOOKS WERE NEVER PRODUCED IN SPITE OF REPEATED OPPORTUNITIES. LD. COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED THAT THE RECORD R EVEALS THAT REPEATED OPPORTUNITIES WERE ALLOWED TO THE ASSESSEE TO ESTABLISH THE REASON FOR LOW GP AND IN RESPONSE THE ASSESSEE COUL D NOT PRODUCE A SINGLE DOCUMENT BEFORE THE ASSESSING OFFICER TO ES TABLISH THE FACT OF THE LOW GP FOR THE RELEVANT PERIOD. LD. COMMISSIO NER OF INCOME TAX (A) NOTED THAT THE REMAND STAGE, THE ASSESSEE HAS FA ILED TO PRODUCE THE DOCUMENTS ASKED BY THE ASSESSING OFFICER. LD. COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED THAT ALL THE AFORE SAID FACTS ESTABLISHED THAT BOOKS OF ACCOUNTS WERE NOT PROPER LY MAINTAINED BY THE ASSESSEE. THE ASSESSEE COULD NOT EXPLAIN HOW THE PROFIT MARGIN GOES DOWN TO SUCH AN EXTENT. HENCE, LD. COMMISSION ER OF INCOME TAX ITA NO. 4735/DEL/2010 10 (A) OBSERVED THAT THE ACTION OF THE ASSESSING OFFIC ER IN ESTIMATING THE GP CANNOT FAULTED. LD. COMMISSIONER OF INCOME TAX (A ) CONCLUDED THAT ON CONSIDERATION OF THE SUBMISSIONS MADE BY THE ASSE SSEE AND CONSIDERING THE CASE IN TOTALITY, HE WAS OF THE OPI NION THAT ACTION OF THE ASSESSING OFFICER IN INVOKING THE SECTION 145 IS JUSTIFIED AND FURTHER ADDITION OF ` 91,64,692/- WAS CORRECT AND IT DOES N OT REQUIRE ANY INTERFERENCE. 7. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPE AL BEFORE US. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PRODUCE D THE RECORDS. WE FIND THAT THE MAIN GRIEVANCE OF THE ASSESSING OFF ICER IN THIS REGARD IS THAT THE ASSESSEE HAS NOT SUBMITTED THE REQUISITE BOOKS OF ACCOUNTS AND VOUCHERS. LD. COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED THAT AT THE REMAND STAGE THIS WAS NOT COMPLIED WITH A ND IN THIS VIEW OF THE MATTER LOWER AUTHORITIES HAVE INVOKED THE SECTI ON 145 AND MADE THE ESTIMATED ADDITION OF ` 91,64,692/-. IN THIS R EGARD, IT IS THE SUBMISSION OF THE ASSESSEE THAT THE ASSESSEE HAS PR ODUCED ALL THE NECESSARY DOCUMENTS AND VOUCHERS. SOME DOCUMENTS IN THIS REGARD WHICH COULD NOT BE PRODUCED BEFORE THE ASSESSING OF FICER ORIGINALLY WERE SUBSEQUENTLY PRODUCED BEFORE THE ASSESSING OFF ICER IN THE REMAND PROCEEDINGS. HOWEVER, THE ASSESSING OFFICE R HAS NOT CONSIDERED THE SAME. IT HAS FURTHER BEEN SUBMITTED T HAT DETAIL IN THIS ITA NO. 4735/DEL/2010 11 REGARD WAS ALSO SUBMITTED BEFORE THE LD. COMMISSIONER OF INCOME TAX (A) WHO ALSO FAILED TO EXAMINE THE VERACITY OF THE S AME. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVES SUBMISSIONS IN THIS REGARD IS THAT ASSESSEE HAS FAILED TO PRODUCE THE NECESSARY B OOKS OF ACCOUNTS AND VOUCHERS. HENCE, THE REJECTION OF ACCOUNTS AND ESTIMATION OF GP WAS JUSTIFIED. 8.1 WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT IN THIS CASE ADDITION FO R LOW GP HAS MADE PRIMARILY ON THE GROUND THAT THE PROPER BOOKS OF A CCOUNTS & HAVE NOT BEEN PRODUCED BY THE ASSESSEE BEFORE THE LOWER AUTH ORITIES. ON THE OTHER HAND IT IS ASSESSEES PLEA THAT THE REQUIRED BOOKS AND DOCUMENTS WERE PRODUCED. IN OUR CONSIDERED OPINIO N, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, INTEREST OF JUSTICE WILL BE SERVED, IF THE MATTER IS REMITTED TO THE FILE OF THE ASSESSING OFFI CER TO CONSIDER THE CASE AFRESH. HENCE, WE REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO CONS IDER THIS ISSUE DE NOVO, IN LIGHT OF THE SUBMISSION OF THE ASSESSEE. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 9. APROPOS THE CLAIM OF DEDUCTION U/S. 80G IN THIS REGARD, ASSESSING OFFICER NOTED THAT ASSE SSEE HAS DEBITED AN AMOUNT OF ` 80,558/- ON ACCOUNT OF DONATION AND CHARITY. ASSESSEE ITA NO. 4735/DEL/2010 12 WAS ASKED TO EXPLAIN AND FILE THE SUPPORTING EVIDEN CE FOR PAYMENT OF DONATION. HOWEVER, NO REPLY IN THIS REGARD WAS GIV EN. ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE HAS NOT FI LED ANY EXEMPTION CERTIFICATE WHICH SHOWS THAT THE PAYMENT IS EXEMPT U/ S. 80G OF THE I.T. ACT. HENCE, THE ASSESSING OFFICER DISALLOWED TH E AMOUNT OF DONATION OF ` 80,558/-. 10. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) NOTED THAT ASSESSEE CLAIMS THAT PROPER DOCUMENTARY EVIDENCE WAS SUBMITTED, BUT THE SAME WAS NEITHER PRODUCED BEFO RE THE LD. COMMISSIONER OF INCOME TAX (A) NOR PRODUCED DURING THE COURSE OF ASSESSMENT. HENCE, LD. COMMISSIONER OF INCOME TAX (A) SUSTAINED THE ADDITION. 11. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APP EAL BEFORE US. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORDS. WE FIND THAT IN THIS CASE ALSO DISALLOWANCE HAS BEE N MADE IN THE ABSENCE OF THE PROPER EVIDENCE SUBMITTED BY THE ASSE SSEE. WE DEEM IT PROPER AND FIT TO REMIT THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRESH. 13. APROPOS OTHER DISALLOWANCES : ON ACCOUNT OF A DVERTISEMENT; BUSINESS PROMOTION; DIWALI EXPENSES. IN THIS REGARD, ASSESSING OFFICER DISALLOWED THE FOLLOWING EXPENSES :- ADVERTISEMENT EXPENSES ` 32,062/- ; BUSINESS PROMO TION EXPENSES ` 30,045/- AND DIWALI EXPENSES ` 2,68,854/- . ITA NO. 4735/DEL/2010 13 WHILE DISALLOWING THE CLAIMS OF EXPENDITURE, ASSES SING OFFICER NOTED THAT ASSESSEE HAS NOT GIVEN SUFFICIENT EXPLAN ATION REGARDING THE BUSINESS NEEDS OF THE EXPENDITURE. HE ALSO NOTED THAT ASSESSEE WAS ASKED TO EXPLAIN THE NATURE OF EXPENSES. AS REGARDS, ADVERTISEMENT EXPENSES, ASSESSING OFFICE R NOTED THAT ASSESSEE WAS ASKED TO EXPLAIN THE EXPENSES AN D HOW THIS EXPENDITURE WAS INCURRED FOR THE PURPOSE OF BUSINE SS, BUT THE ASSESSEE COULD NOT OFFER ANY EXPLANATION IN THIS RE GARD. HENCE, ASSESSING OFFICER DISALLOWED THE EXPENDITURE. AS REGARDS, BUSINESS PROMOTION ASSESSEE WAS ASKED TO EXPLAIN THE NATURE OF EXPENDITURE. HOWEVER, ASSESSEE DID NOT SUBMIT ANY REPLY AND HENCE, ASSESSING OFFICER OPINED THAT EXP ENDITURE DOES NOT FULFILL THE NEED OF THE ASSESSEE. HENCE, HE DISALL OWED THE SAME. AS REGARDS, DIWALI EXPENDITURE, ASSESSING OFFICER N OTED ASSESSEE WAS ASKED TO EXPLAIN THE SUPPORTING EVIDENCE FOR IN CURRING EXPENSE UNDER THIS HEAD. NO PROPER SUPPORTING EVIDENCE W AS FILED BY THE ASSESSEE, NOR THE BUSINESS NEEDS WERE ESTABLISHED. HENCE, ASSESSING OFFICER MADE THE DISALLOWANCE. 14. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) THAT THESE ARE DISALLOWANCES OVER AND ABOVE THE GP ADDITI ON. IN ALL THE CASES THE ASSESSING OFFICER HAS GIVEN OPPORTUNIT Y TO THE ASSESSEE TO EXPLAIN THE EXPENDITURE WITH CORROBORATIVE EVIDENCE AND THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS. ACCORDINGLY, HE UPHELD THE ORDER OF THE ASSESSING OFFICER. 15. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPE AL BEFORE US. ITA NO. 4735/DEL/2010 14 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORDS. WE FIND THAT EXPENDITURE HAS BEEN DISALLOWED IN TH IS CASE BY THE ASSESSING OFFICER, AS THE ASSESSEE HAS FAILED TO EX PLAIN THE NEED OF THE EXPENDITURE AND SUPPORTING DOCUMENTS IN THIS REGARD . WE FIND THAT WE HAVE ALREADY REMITTED THE ISSUE DISCUSSED ON ACCO UNT OF LOW GP TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO CONS IDERATION. HENCE, WE DEEM IT FIT TO APPROPRIATE TO REMIT THE ISSUES ON TH ESE DISALLOWANCES TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING O FFICER SHOULD CONSIDER THE ISSUES IN THIS CASE WITH REFERENCE TO THE SUBMIS SIONS MADE BY THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. NEEDLES S TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY OF BE ING HEARD. 17. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05/10/2012. SD/- SD/- [ [[ [I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 05/10/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES