ITO, New Delhi V. Sh. Ved Prakash Sharma,

ITA 493/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9961 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 03-08-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 09-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Salary income; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : I : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 493/DEL/2009 ASSESSMENT YEAR : 2005-06 INCOME TAX OFFICER, WARD 1(3), FARIDABAD. VS. SHRI VED PRAKASH SHARMA, PROP. M/S S.N. ENTERPRISES, 2271, SEC.8, FARIDABAD. PAN: ABFPS2201M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHWANI TANEJA, ADVOCATE REVENUE BY : SMT. ANUSHA KHURANA, SR. DR O R D E R PER I.P. BANSAL, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF THE CIT (A) DATED 15 TH DECEMBER, 2008 FOR ASSESSMENT YEAR 2005-06. GROUND S OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN ENTERTAINI NG THE ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TA X RULE, 1962 EVEN THOUGH THE ASSESSEE WAS PROVIDED SUFFICIE NT AND REASONABLE OPPORTUNITIES AND GIVEN AT LEAST TEN OPP ORTUNITIES (AS PER ORDER SHEET ENTRY), BUT THE ASSESSEE DID NO T PRODUCE COMPLETE BOOKS OF ACCOUNTS AND OTHER RELEVANT DOCUM ENTS IN SUPPORT OF THIS CLAIM. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DELETING T HE ADDITION OF RS.8,62,570/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF DISALLOWANCE OF THE OVER TIME EXPENSES EVEN THOUGH THE ASSESSEE HAS FAILED TO PRODUCE ANY DOCUMENTARY EVID ENCE IN SUPPORT OF HIS CLAIM DURING THE ENTIRE PERIOD OF AS SESSMENT ITA NO.493/DEL/2009 2 PROCEEDINGS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DELETING T HE ADDITION OF RS.1,69,778/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF EXPENSES DEBITED IN INCOME & EXPENDITURE STATEMENT BY SIMPLY RELYING ON THE SUBMISSIONS OF THE ASSESSEE A ND WITHOUT DISCUSSING THE ASSESSMENT ORDER. 4. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIM E OF HEARING OF APPEAL. 2. BEFORE THE ASSESSING OFFICER BOOKS OF ACCOUNT WE RE PRODUCED. HOWEVER, RELEVANT BILLS, ETC. IN RESPECT OF OVERTIME PAID TO THE EMPLOYEES AND OTHER EXPENSES WERE DISALLOWED BY THE ASSESSING OFFICER. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE RELEVANT BILLS AND VOUCH ERS ARE LYING IN THE PREMISES OF COMPANY SHIVAM WHICH IS SEALED BY THE PUNJAB & SI ND BANK SINCE MARCH, 2007. THEREFORE, DISALLOWANCE OF RS.8,62,570/- ON ACCOUNT OF OVERTIME EXPENSES AND DISALLOWANCE OF OTHER EXPENSES OF RS.1 ,69,778/- WAS MADE. 3. BEFORE THE LD. CIT (A) ALONG WITH WRITTEN SUBMIS SIONS AN APPLICATION UNDER RULE 46A (1) (B&C) DATED 8 TH SEPTEMBER, 2008 WAS FILED FOR ADMISSION OF ADDITIONAL EVIDENCES IN RESPECT OF OVER TIME REGIST ER AND THE VOUCHERS FOR EXPENSES CLAIMED BY THE ASSESSEE IN THE PROFIT & LO SS ACCOUNT. THE REMAND REPORT WAS SUBMITTED BY THE ASSESSING OFFICER VIDE LETTER DATED 10 TH OCTOBER, 2008 IN RESPONSE TO WHICH COUNTER SUBMISSIONS WERE MADE BY THE ASSESSEE ON 29 TH OCTOBER, 2008. 4. BEFORE THE LD. CIT (A) IT WAS SUBMITTED THAT THE ASSESSEE WAS HAVING THE INCOME FROM SALARY AND ALSO FROM BUSINESS IN THE SH APE OF JOB WORK OF FABRICATION OF GARMENTS ON LABOUR BASIS. ALL THE REQUISITE INF RASTRUCTURE WAS BEING PROVIDED BY THE PRINCIPAL COMPANY FOR WHOM THE ASSESSEE WAS DOING THE JOB WORK. ALL THE EXPENSES RELATED TO WORKERS WAGES, ESI, PF AND OVE RTIME CHARGES WERE BEING REIMBURSED ON ACTUAL PAYMENT AND THE ASSESSEE WAS G ETTING ONLY 4% AS HIS ITA NO.493/DEL/2009 3 SERVICE CHARGES. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS REQUISITE INFORMATION AND RECORDS, COPY OF BILLS, AGREEMENT W ITH THE PRINCIPAL COMPANY, BOOKS OF ACCOUNT AND WAGE REGISTER, ESI, PF PAYMENT PROOF, ETC. WERE SUBMITTED WHICH WAS DULY CHECKED AND VERIFIED BY THE ASSESSIN G OFFICER. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAS ACCEPTED THE CLAIM OF THE ASSESSEE WITH REGARD TO ESI AND PF, ETC. EXCEPT ON E OVERTIME REGISTER AND SOME VOUCHERS OF EXPENSES WERE NOT SUBMITTED TO THE ASSESSING OFFICER AS THE SAME WERE UNDER THE LOCK AND KEY CUSTODY OF THE BUI LDING OF THE PRINCIPAL COMPANY BY THE PUNJAB & SIND BANK FROM WHERE THE AS SESSEE WAS OPERATING HIS JOB WORK AND IT WAS SO SUBMITTED BEFORE THE ASSESSI NG OFFICER. DESPITE THE BEST EFFORTS THE ASSESSEE COULD NOT GET THOSE RECORDS. AS THE CASE WAS GOING TO BE TIME BARRED, THE ASSESSING OFFICER ALSO DID NOT ACC EPT THE SUBMISSIONS OF THE ASSESSEE REGARDING HIS HELPLESSNESS IN PRODUCING TH E REQUISITE RECORD AND ASSESSEE NOW HAS RECEIVED BACK THE RECORDS WHICH AR E AVAILABLE TO BE PRODUCED. THE REPORT OF THE ASSESSING OFFICER HAS BEEN REPROD UCED BY THE LD. CIT (A) IN PARA 4 OF THE IMPUGNED ORDER. THE ASSESSING OFFICE R SUBMITTED THAT THE ASSESSEE COULD NOT PRODUCE POSITIVE PROOF TO SHOW T HAT THE RELEVANT RECORD WAS NOT IN POSSESSION OF THE ASSESSEE, THEREFORE, THE C LAIM OF THE ASSESSEE CANNOT BE ADMITTED. IT WAS SUBMITTED THAT VOUCHERS OF THE EXPENSES PRODUCED BY THE ASSESSEE BEFORE THE LD. CIT (A) ARE SELF-PREPARED V OUCHERS WHICH APPEARS TO HAVE BEEN PREPARED IN ONE GO. THE AUTHENTICITY OF THE SAID RECORD IS DOUBTFUL, THEREFORE, THE SAID RECORD SHOULD NOT BE ADMITTED. IT WAS SUBMITTED THAT THE APPLICATION OF THE ASSESSEE FOR ADMISSION OF ADDITI ONAL EVIDENCE IS NOT COVERED BY THE PROVISIONS OF SECTION 46A(1) (B&C). AFTER OBTAINING CROSS REPLY FROM THE ASSESSEE IT HAS BEEN DETERMINED BY THE LD. CIT (A) THAT SO FAR AS IT RELATES TO APPLICABILITY OF RULE 46A(1), THE ASSESSING OFFICER HIMSELF IN THE ASSESSMENT ORDER HAS RECORDED THAT THE REGISTER CONTAINING THE PARTICULARS OF OVERTIME WAS NOT IN THE POSSESSION OF THE ASSESSEE AND AT THE SA ME TIME IT HAS BEEN ADMITTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD PRO DUCED ALL OTHER RECORDS AND INFORMATION EXCEPT THE OVERTIME WAGES REGISTER AND VOUCHER OF SOME EXPENSES. THE LD. CIT (A) OBSERVED THAT ASSESSEE HAS BEEN COO PERATING WITH THE ITA NO.493/DEL/2009 4 DEPARTMENT AND HAD SUBMITTED ALL THE INFORMATION AN D RECORDS. SINCE THE CASE WAS GETTING TIME BARRED AND ASSESSEE WAS NOT ABLE T O PRODUCE THE RECORDS BEFORE THE ASSESSING OFFICER DUE TO THE NON-AVAILAB ILITY OF THE SAID RECORD, ASSESSEE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE. THEREFORE, THE CLAIM OF THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE IS REQUIRED TO BE ADMITTED. IN THESE CIRC UMSTANCES, AFTER ADMITTING THE CLAIM OF THE ASSESSEE LD. CIT (A) HAS DELETED BOTH THE ADDITIONS ON MERITS AND HE HAS RECORDED A FINDING THAT HE HAS EXAMINED ALL THE DOCUMENTS SUBMITTED AND THEY ARE FOUND IN ORDER. THE DEPARTMENT IS AGGRIEV ED, HENCE, IN APPEAL. 5. LD. DR RELIED ON THE GROUNDS OF APPEAL RAISED BE FORE US AND THE COMMENTS OF ASSESSING OFFICER THAT PROPER OPPORTUNI TY WAS GIVEN TO THE ASSESSEE. SHE SUBMITTED THAT THE ASSESSEE AT FIRST INSTANCE DID NOT PRODUCE THE REQUISITE EVIDENCE FOR WHICH THE DISALLOWANCES WERE MADE. THE ASSESSEE HAD NO POSITIVE PROOF TO SHOW THAT HE WAS PREVENTED BY SUFFICIENT CAUSE FROM NOT PRODUCING THOSE DOCUMENTS AND ALSO THAT THE RELEVAN T RECORDS WERE EARLIER NOT IN THE POSSESSION OF THE ASSESSEE. THUS, LD. DR PLEAD ED THAT THE LD. CIT (A) WAS WRONG IN ADMITTING ADDITIONAL EVIDENCES AND ALSO DE LETING THE ADDITIONS ON MERITS. 6. ON THE OTHER HAND, IT WAS VEHEMENTLY CONTENDED BY LD. AR THAT THE ASSESSEE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE FROM NOT SUBMITTING THE REQUIRED EVIDENCE TO PROVE THE EXPENSES OF OVER TIME WAGES PAID TO THE WORKERS AND THE VOUCHERS OF EXPENSES WHICH HAVE BEE N DISALLOWED BY THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE RELEV ANT RECORDS WERE UNDER LOCK AND KEY WITH THE PUNJAB & SIND BANK AND THIS FACT H AS ALSO BEEN STATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. IT WAS SUBMITTED THAT WHEN A PARTICULAR RECORD CANNOT BE PRODUCED BEFORE AN AUTH ORITY DUE TO THE REASON THAT THEY WERE LYING WITH SOME AUTHORITY AND THE ASSESSE E WAS NOT ABLE TO GET THE SAME, THEN, ACCORDING TO WELL ESTABLISHED PRINCIPLE S OF LAW, THE ASSESSEE CAN BE CONSIDERED TO BE PREVENTED BY REASONABLE AND SUFFIC IENT CAUSE AND THE SAID EVIDENCE, IF LATER ON PRODUCED BEFORE THE APPELLATE AUTHORITY, CAN BE ADMITTED BY ITA NO.493/DEL/2009 5 HIM AS PER PROVISIONS OF RULE 46A AND LD. CIT (A) H AS RIGHTLY ADMITTED THE CLAIM OF THE ASSESSEE. ON MERITS, IT WAS SUBMITTED BY LD . AR THAT THE LD. CIT (A) HAS RECORDED A FINDING THAT HE HAS GONE THROUGH THE ENT IRE EVIDENCE AND HAS FOUND THAT THE CLAIM OF THE ASSESSEE ON MERITS IS CORRECT AND IS LIABLE TO BE ACCEPTED. THUS, RELYING ON THE ORDER OF THE LD. CIT (A) IT WA S PLEADED BY LD. AR THAT HIS ORDER SHOULD BE UPHELD AND DEPARTMENT APPEAL SHOULD BE DISMISSED. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. SO FAR AS IT RELATES TO ADMISSION OF ADDITIONAL EVIDENCE, WE FIND THAT LD. CIT (A) WAS JUSTIFIED IN ADMITTING THE CLAIM OF THE ASSESSEE. THE FACT THAT THE RELEVANT RECORDS WERE SEALED BY THE P UNJAB & SIND BANK HAS BEEN RECORDED IN THE ASSESSMENT ORDER ITSELF BY THE ASSE SSING OFFICER. IF THE ASSESSING OFFICER WAS HAVING SOME DOUBT ABOUT THE S AID FACT, THEN HE COULD HAVE VERIFIED THE SAID FACT. THERE APPEARS TO BE C ORRECTNESS IN THE CLAIM OF THE ASSESSEE THAT THE CASE WAS GOING TO BE TIME BARRED, THEREFORE, THE ASSESSING OFFICER DID NOT GIVE MUCH TIME. LATER ON THE ASSES SEE WAS ABLE TO GET THE RECORD WHICH WAS PRODUCED IN THE SHAPE OF ADDITIONAL EVIDE NCE BEFORE LD. CIT (A). THE CLAIM OF THE ASSESSEE WAS MADE IN THE RETURN OF INC OME ITSELF AND THE SAME WAS REJECTED ONLY FOR WANT OF REQUISITE EVIDENCE WHICH WAS STATED TO HAVE BEEN IN THE POSSESSION OF A THIRD PARTY. THIS CONSTITUTED A RE ASONABLE AND SUFFICIENT CAUSE FOR NON-PRODUCTION OF THE SAID RECORD. THEREFORE , WE SEE NO REASON THAT WHY THE PRODUCTION OF ADDITIONAL EVIDENCE SHOULD NOT BE ADM ITTED BY THE LD. CIT (A). HE HAS CORRECTLY ADMITTED THE SAID EVIDENCE AND, THERE FORE, WE FIND NO INFIRMITY IN SUCH ADMISSION OF ADDITIONAL EVIDENCE. GROUND NO.1 OF THE DEPARTMENT IS REJECTED. 8. SO FAR AS IT RELATES TO MERITS OF BOTH THE ADDIT IONS WHICH HAVE BEEN AGITATED BY THE REVENUE IN GROUND NO.2 AND 3, A FIN DING HAS BEEN RECORDED BY THE LD. CIT (A) THAT HE HAS GONE THROUGH THE ENTIRE ADDITIONAL EVIDENCE AND HE HAS FOUND THAT THE CLAIM OF THE ASSESSEE IS ACCEPTA BLE. NOTHING HAS BEEN PRODUCED BEFORE US TO SHOW THAT SUCH FINDING OF THE LD. CIT (A) IS AGAINST THE ITA NO.493/DEL/2009 6 FACTS OR ARE INCORRECT. OVERTIME CHARGES RELATES T O SOME WORKERS FOR WHICH THE SALARY HAS BEEN ALLOWED BY THE ASSESSING OFFICER. T HOUGH THE ENTIRE EVIDENCE WAS GIVEN TO THE ASSESSING OFFICER BY THE LD. CIT ( A), THE ASSESSING OFFICER HAS NOT COMMENTED ON THE MERITS OF THOSE EVIDENCES AND SIMPLY STATED THAT THOSE ARE SELF-PREPARED VOUCHERS WHICH HAVE BEEN PREPARED AT ONE GO. BUT IT HAS NOT BEEN STATED THAT HOW ON MERITS THE SAID CLAIM OF TH E ASSESSEE WAS NOT ACCEPTABLE. THE LD. CIT (A) HAS STATED THAT THE OV ERTIME WAGES PAYMENT OTHERWISE ARE ACCEPTABLE AS THE ASSESSING OFFICER H AS ACCEPTED THE ESIC AND EPF PAYMENT WITH REGARD TO THOSE WAGES. HE HAS ALS O RECORDED A FINDING THAT HE HAS EXAMINED ALL THE VOUCHERS AND DOCUMENTS PROD UCED IN SUPPORT OF EXPENSES OF RS.1,69,778/-. KEEPING IN VIEW THESE F INDINGS OF LD. CIT (A) AND ALSO KEEPING IN VIEW THE FACTS THAT NOTHING HAS BEE N PRODUCED BEFORE US TO SHOW THAT THESE FINDINGS OF LD. CIT (A) ARE INCORRECT, W E FIND NO JUSTIFICATION IN INTERFERING WITH THESE FINDINGS OF THE LD. CIT (A). THEREFORE, GROUND NO.2 AND 3 RAISED BY THE DEPARTMENT ARE ALSO DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. . 10. THE ORDER PRONOUNCED IN THE OPEN COURT ON 07.08 .2009. [A.K. GARODIA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 07.08.2009. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES