ITO, Ward-47(2), New Delhi V. Parag Bansal, Delhi

ITA 5002/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3871 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 03-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU MUKHERJEE
• Keywords: Additional evidence

Judgement Text

1 ITA NO. 5002/DEL/2017 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC, FRIDAY NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEM BER ITA NO. 5002/DEL/20 17 ( A.Y 2011-12) THE INCOME TAX OFFICER WARD-47(2), ROOM NO. 111, DRUM SHAPE BUILDING, I.P. ESTATE, NEW DELHI (APPELLANT) VS PARAG BANSAL, 1510, SHIV ASHRAM, BEHIND FIRE STATION, NOVELTY CINEMA, DELHI PAN: AALPB5808Q (RESPONDENT) APPELLANT BY MS. RANU MUKHERJEE, SR. DR RESPONDENT BY SH. P. C. YADAV, ADV. ORDER PER R. K. PANDA , AM THIS APPEA FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 5 TH MAY, 2017 OF THE CIT(A)-16, NEW DELHI RELATING TO ASSESSMENT YEAR 2011-12. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 30 TH SEPTEMBER, 2011 DECLARING TOTAL INCOME OF RS.3,47,320/-. THE ASSESSEE DERIVES INCOME FROM TRADING OF GREY CLOTH AND JOB WORK. DURING THE ASSESSMENT PROCEEDINGS IT WAS NOTED BY THE ASSESSING OFFICER THAT M/S SUPER TRADING HAS BEEN S HOWN AS A CREDITOR TO THE TUNE OF RS.16,58,198/-. THE ASSESSING OFFICER, TO VERIFY THE TRANSACTIONS, SENT TWO LETTERS TO M/S SUPER TRADING . HOWEVER, BOTH THE LETTERS WERE RECEIVED BACK UNSERVED. THE ASSESSING OFFICER THEREFORE, DATE OF HEARING 17.01.2018 DATE OF PRONOUNCEMENT 30.01.2018 2 ITA NO. 5002/DEL/2017 TREATED THE CREDITOR M/S SUPER TRADING AS BOGUS AND BROUGHT RS.16,58,198/- TO TAX U/S 41(1) OF THE ACT, TREATIN G IT AS CESSATION OF LIABILITY. 3. BEFORE THE CIT(A) THE ASSESSEE CHALLENGED THE AD DITION MADE BY THE A.O U/S 41(1) OF THE IT ACT ON THE GROUND THAT THE A.O WITHOUT PROVING THE ESSENTIAL CONDITIONS OF REMISSION OR CESSATION OF S UCH LIABILITY MADE THE ADDITION. CERTAIN DOCUMENTS WERE ALSO FIELD BEFORE THE CIT(A) WHO CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER . A FTER CONSIDERING THE REMAND REPORT FILED BY THE A.O AND THE REJOINDER OF THE ASSESSEE TO SUCH REMAND REPORT, THE LD.CIT(A) DELETED THE ADDITION M ADE BY THE A.O BY OBSERVING AS UNDER:- I HAVE CONSIDERED ALL THE FACTS AND CIRCUMSTANCE O F THE CASE, THE ASSESSMENT ORDER, THE SUBMISSION OF THE APPELLANT A S WELL AS THE REMAND REPORT OF THE ASSESSING OFFICER. FROM THE PERUSAL O F THESE DOCUMENTS ONE THING IS ESTABLISHED BEYOND DOUBT THAT THE APPELLAN T HAD TRANSACTION WITH M/S SUPER TRADING IN THE PREVIOUS UNDER CONSIDERATI ON, THE YEAR BEFORE THAT AND ALSO IN SUCCEEDING YEAR. THE TRANSACTIONS OF PA YMENTS ARE REFLECTED IN THE BANK STATEMENT. THE ASSESSING OFFICER IN HIS RE MAND REPORT HAS ALSO MENTIONED THESE FACTS. HIS ONLY OBJECTION IS, THE A BSENCE OF STOCK REGISTER AND ENTERTAINING FRESH EVIDENCE AT THE APPELLATE ST AGE. THE ASSESSING OFFICER HAS NOT FOUND ANY FAULT WITH THE MERIT OF EVIDENCE. THEREFORE, IN THE INTEREST OF JUSTICE AND THE FACT, THAT ASSESSING OFFICER HAS ALSO BEEN GIVEN AN OPPORTUNITY, TO REBUT, I ADMIT THE ADDITIONAL EVIDE NCE. IN THE LIGHT OF EVIDENCE SUBMITTED I AM OF THE OPINION THAT THERE IS NO EASE OF CESSATION OF LIABILITY WITH RESPECT TO CREDIT OUTSTANDING IN THE NAME OF M /S SUPER TRADING. HENCE, THE ADDITION OF RS. 16,58,198/- MADE BY THE ASSESSI NG OFFICER IS DELETED. 3 ITA NO. 5002/DEL/2017 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REV ENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S:- 1. THE LD. CIT(A) HAS ERRED IN REDUCING THE ADDITIO N OF RS. 23,61,498/- TO RS. 6,55,386/- WITHOUT CONSIDERING THE FACTS ON THE ISSUE OF GROSS PROFIT RATIO. 2. THE LD.CIT(A) IS ERRED IN DELETING OF ADDITION O F RS.16,56,108/- MADE ON ACCOUNT OF BOGUS SUNDRY CREDIT WITHOUT CONSIDERI NG THE FACTS THAT DURING THE ASSESSMENT PROCEEDINGS AMPLE OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO PROVE THE GENUINENESS OF TRANSACTIO N. 3. THE LD.CIT(A) HAS ERRED IN ADMITTING THE ADDITIO NAL EVIDENCES AS THE CASE OF THE ASSESSEE DOES NOT FALL IN THE EXCEPTION S PROVIDED IN THE RULE 46A OF THE INCOME TAX RULES, 1962. 5. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND THE LD.CIT(A) BEFORE ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASS ESSEE HAS GIVEN AN OPPORTUNITY TO THE A.O TO GIVE HIS COMMENTS IN THE REMAND REPORT ON THE BASIS OF VARIOUS DOCUMENTS FILED BEFORE HIM. THE L D.CIT (A) HAS GIVEN A CATEGORICAL FINDING THAT THE ASSESSEE HAD TRANSACTI ON WITH M/S SUPER TRADING IN THE PREVIOUS YEAR UNDER CONSIDERATION AS WELL AS IN THE SUBSEQUENT YEARS. HE HAS FURTHER GIVEN A FINDING T HAT THE PAYMENTS ARE REFLECTED IN THE BANK STATEMENT. THE A.O IN HIS RE MAND REPORT HAS ALSO MENTIONED THESE FACTS. THEREFORE, MERELY BECAUSE T HE ASSESSEE WAS NOT MAINTAINING ANY STOCK REGISTER, THE SAME CANNOT BE A GROUND TO REJECT THE CONTENTION OF THE ASSESSEE REGARDING THE OUTSTANDIN G AMOUNT. IN VIEW OF THE DETAILED REASONING GIVEN BY THE LD.CIT(A) AND I N ABSENCE OF ANY MATERIAL BROUGHT TO MY NOTICE TO TAKE A CONTRARY VI EW, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) IN DELETING THE ADDITION MADE BY THE A.O AMOUNTING TO RS.16,56,108/- U/S 41(1) OF THE IT ACT. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 4 ITA NO. 5002/DEL/2017 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30 TH , 2018 SD/- (R . K. PANDA) ACCOUNTANT MEMBER DATED: 30/01/2018 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 5002/DEL/2017 DATE 1. DRAFT DICTATED ON 22/01/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 22/01/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 30.01. 2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 30.01.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 6 ITA NO. 5002/DEL/2017