ITO, New Delhi V. M/s. Maryan Apparel Pvt. Ltd., New Delhi

ITA 5395/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2802 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 27-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 01-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SH. S.V.MEHROTRA , ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NO. 5395/DEL/2014 (ASSESSMENT YEAR: 2010-11) ITO WARD-6(2) NEW DELHI VS. MARYAN APPAREL PVT. LTD. A-201, VARDHMAN APARTMENTS, MAYUR VIHAR, PHASE-1 NEW DELHI PAN: AAECM5087C (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SH. ARUN KUMAR YADAV, SR. DR DATE OF HEARING : 27.06.2017 DATE OF PRONOUNCEMENT : _28.06.2017 O R D E R PER BEENA A. PILLAI, J.M : 1. T HE PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINS T ORDER DATED 21.07.2014 PASSED BY LD. CIT(A)-IX NEW DELHI FOR ASSESSMENT YEAR 2010-11 ON FOLLOWING GROUNDS OF APP EAL: (1) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 8647840/- MADE FOR NOT DEDUCTING TAX AT SOUR CE ON THE JOB WORK PAYMENTS MADE BY THE ASSESSEE BY TOTAL LY IGNORING THE REASONS ADVANCE BY THE ASSESSING OFFIC ER AND TOTALLY RELYING UPON THE SUBMISSIONS OF THE ASSESSE E COMPANY AND ALSO ALLOWING THE ADDITIONAL SUBMISSION S MADE DURING THE APPELLATE PROCEEDINGS WITHOUT TAKIN G THE COMMENTS OF THE AO ON THE SAME ? (2) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 548895/- ON ACCOUNT OF FREIGHT OUTWARDS FOR N ON 2 ITA NO. 5395 /DEL/2014 (AY 2010-11) DEDUCTION OF TDS ON SUCH PAYMENTS ON THE BASIS OF ADDITIONAL SUBMISSIONS MADE DURING THE APPELLATE PROCEEDINGS WITHOUT TAKING THE COMMENTS OF THE AO O N THE SAME? (3) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 18000000/- ON THE BASIS OF ADDITIONAL SUBMIS SION MADE BY THE ASSESSEE DURING THE APPELLATE PROCEEDIN G WITHOUT TAKING THE COMMENTS OF THE AO ON THE SAME? (4) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1568560/- ON ACCOUNT OF REPAYMENT OF UNSECUR ED LOANS ON THE BASIS OF ADDITIONAL SUBMISSIONS MADE B Y THE ASSESSEE WITHOUT TAKING THE COMMENTS OF THE AO ON T HE SAME? (5) THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. (6) THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUD ICE TO EACH OTHER. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENG AGED IN THE BUSINESS OF MANUFACTURING OF GARMENTS AND HOME FURN ISHING GOODS WHICH ARE EXPORTED AS WELL AS SOLD IN THE DOM ESTIC MARKET. ASSESSEE FILED ITS RETURN OF INCOME ON 5.10 .2010 DECLARING LOSS OF RS. 9,37,553/-. SUBSEQUENTLY THE CASE WAS PROCESSED U/S 143(1) OF THE ACT AND SELECTED FOR S CRUTINY. NOTICES U/S 143(2) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. 3. LD. AO OBSERVED THAT ASSESSEE HAD CLAIMED JOB WO RK EXPENSES AT RS. 1,23,89,495/- PAID TO CONTRACTORS/ SUB- CONTRACTORS. IT WAS ALSO OBSERVED BY LD. AO THAT AS SESSEE ITSELF 3 ITA NO. 5395 /DEL/2014 (AY 2010-11) HAD DISALLOWED A SUM OF RS. 37,29,305/- ON ITS OWN FOR NOT DEDUCTING TDS U/S 195(C) OF THE ACT. LD. AO OBSERV ED THAT NO TAX HAS BEEN DEDUCTED BY ASSESSEE ON THE REMAINING PAYMENTS MADE, AMOUNTING TO RS. 86,60,190/-. ASSESSEE WAS AS KED TO SHOW CAUSE, AS TO WHY THE AMOUNT SHOULD NOT BE DISA LLOWED FOR NON-DEDUCTION OF TDS. 4. DURING THE ASSESSMENT PROCEEDINGS, LD. AO NOTIC E THAT ASSESSEE HAS PAID A SUM OF RS. 1,80,00,000/- FOR PU RCHASES AS PER ENTRY IN THE BANK ACCOUNT HELD BY ASSESSEE. ON VERIFICATION OF THE LEDGER OF THE PARTY TO WHOM THE PAYMENT HAS BEEN MADE IN THE BOOKS OF ASSESSEE, LD. AO WAS OF T HE OPINION THAT THE SAID AMOUNT HAS NOT BEEN DISCLOSED. 5. IT WAS ALSO OBSERVED BY LD. AO THAT ASSESSEE HAS TAKEN UNSECURED LOAN FROM THE MANAGING DIRECTOR TO AN EXT ENT OF RS. 30,47,535/- OUT OF WHICH A SUM OF RS. 15,86,516/- H AS BEEN REPAID BY DIRECTOR DURING THE YEAR UNDER CONSIDERAT ION. ASSESSEE WAS ASKED TO PROVIDE NECESSARY INFORMATION S / DETAILS REGARDING REPAYMENT OF LOAN, MODE OF REPAYM ENTS AND CONFIRMATION FOR THE MANAGING DIRECTOR. AS NO CONFI RMATION OR OTHER SUPPORTING EVIDENCE WAS FURNISHED BY ASSESSEE , LD. AO WAS OF THE OPINION THAT THE AMOUNT OF RS. 15,68,560 /- WAS TAKEN FROM UNDISCLOSED SOURCE AND ADDED TO THE TOTA L INCOME OF ASSESSEE. 4 ITA NO. 5395 /DEL/2014 (AY 2010-11) 6. HE THUS COMPLETED ASSESSMENT BY MAKING ADDITION AND COMPUTING THE ASSESSED INCOME AT RS. 2,86,65,900/- VIS--VIS THE LOSS DECLARED BY ASSESSEE. 7. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE PREF ERRED APPEAL BEFORE LD. CIT(A). 8. LD. SR. DR SUBMITTED BEFORE US THAT THE DOCUMEN TS / MATERIALS RELIED UPON BY ASSESSEE BEFORE LD. CIT(A) WAS NOT AVAILABLE BEFORE THE ASSESSING OFFICER FOR ITS DUE VERIFICATION. HE SUBMITTED THAT ASSESSEE HAD FILED VARIOUS VOUCHERS, TDS CHALLANS WHICH HAS NOT BEEN VERIFIED BY ASSESSING OFFICER, AS THE SAME WAS NOT SENT TO THE ASSESSING OFFICER BY W AY OF REMAND. HE SUBMITTED THAT BEFORE LD. CIT(A), ASS ESSEE AGREED FOR DISALLOWANCE OF RS. 12,350/- AS TDS TO T HAT EXTENT COULD NOT BE PROVED. LD. SR. DR SUBMITTED THAT IN T HE INTEREST OF NATURAL JUSTICE . IT IS NECESSARY THAT THE DOCUM ENT SUBMITTED BY THE ASSESSEE HAS TO BE VERIFIED BY ASS ESSING OFFICER AS THE EXERCISE OF VERIFICATION HAS NOT BEE N UNDERTAKEN BY LD. CIT(A) EITHER. 9. NONE HAS APPEARED ON BEHALF OF ASSESSEE. 10. IN RESPECT OF GROUND NO. 3, LD. SR. DR SUBMITTE D THAT ASSESSEE HAD FILED COPY OF BANK STATEMENTS ALONG WI TH RELEVANT DOCUMENTS, WHICH ALSO WAS NOT AVAILABLE BEFORE LD. AO FOR 5 ITA NO. 5395 /DEL/2014 (AY 2010-11) PURPOSES OF VERIFICATION AND LD. CIT(A) HAS NOT UND ER TAKEN THE EXERCISING OF REMANDING THE SAME TO LD. AO. 11. IN SO FAR AS GROUND NO. 4 IS CONCERNED LD. SR. DR SUBMITS THAT CIT(A) HAS MERELY RELIED UPON THE SUBMISSIONS ADVANCED BY ASSESSEE IN RESPECT OF THE OUTSTANDING LOAN THAT IT RELATED TO ASSESSMENT YEAR 2008-09. IT WAS SUBMITTED BY ASSES SEE BEFORE LD. CIT(A) THAT ASSESSMENT FOR THE ASSESSMEN T YEAR 2008-09 HAS BEEN COMPLETED U/S 143(3) OF THE ACT, A FTER OBTAINING THE REQUISITE CONFIRMATION BY THE MANAGIN G DIRECTOR WHICH HAS NOT BEEN ESTABLISHED BY ASSESSEE BY WAY O F DOCUMENTARY PROOFS. LD. SR. DR, ON THIS JUNCTURE, S UBMITTED THAT HAD THE CONFIRMATION FROM THE DIRECTOR TO BE A VAILABLE ON RECORD, ASSESSEE SHOULD HAVE PRODUCED THE SAME DURI NG THE ASSESSMENT PROCEEDINGS BEFORE ASSESSING OFFICER. 12. IN ALL IT HAS BEEN SUBMITTED THAT LD. SR. DR TH AT AS THE DOCUMENTS BASED ON WHICH THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSED, NONE OF WHICH HAS BEEN SUBJECT TO PRO PER VERIFICATION AS PER LAW, HE PLEADED THAT THE ISSUES MAY BE SET ASIDE TO THE ASSESSING OFFICER FOR DENOVO VERIFICATION. 13. WE HAVE HEARD THE RIVAL CONTENTION ADVANCED BY LD. SR. DR. IT IS OBSERVED THAT LD. CIT(A) HAS NOT UNDERTAK EN ANY INDEPENDENT INQUIRY ON HIS OWN TO VERIFY THE AUTHEN CITY OF THE DOCUMENTS SUBMITTED AND ORAL ARGUMENTS ADVANCED BY ASSESSED, WHILE DECIDING THE ISSUES. THEREFORE, I N THE INTEREST 6 ITA NO. 5395 /DEL/2014 (AY 2010-11) OF NATURAL JUSTICE, WE FIND IT FIT AND PROPER TO SE T ASIDE THE ISSUES BACK TO THE FILE OF LD. AO FOR DENOVO VERIFICATION. THE LD. AO IS DIRECTED TO ISSUE NOTICE TO ASSESSEE AND GRAN T PROPER OPPORTUNITY OF BEING HEARD. ASSESSEE IS DIRECTED TO FILE ALL NECESSARY AND RELEVANT INFORMATION/ DETAILS / EVIDE NCES IN ORDER TO ESTABLISH ITS CLAIM. THE ASSESSING OFFICER MAY THEREAFTER UNDERTAKE ALL NECESSARY INQUIRIES AS PER LAW TO DECIDE THE ISSUE AFRESH. ACCORDINGLY THE GROUNDS RA ISED BY REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE RESULT, APPEAL FILED BY THE REVENUE STA NDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JUNE, 2017. SD/- SD/- (S.V.MEHROTRA) (BEENA A. PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 28.06.2017 BINITA COPY OF ORDER TO: - 1) THE APPELLANT; 2) THE RESPONDENT; 3) THE CIT; 4) THE CIT(A)-, NEW DELHI; 5) THE DR, I.T.A.T., NEW DELHI; TRUE COPY BY ORDER ITAT, NEW DELHI 7 ITA NO. 5395 /DEL/2014 (AY 2010-11) S.NO. DETAILS DATE 1 DRAFT DICTATED ON 27.06.2017 2 DRAFT PLACED BEFORE AUTHOR 27.06.2017 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO THE SR. PS/PS 6 KEPT FOR PRONOUNCEMENT ON 7 FILE SENT TO BENCH CLERK 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE A.R. 10 DATE OF DISPATCH OF ORDER