ITO, New Delhi V. Sh Ramesh Chand Lihla, Delhi

ITA 595/DEL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6989 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 09-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RASMITA JHA
• Keywords: Additional evidence
• Section: 80C; 144

Judgement Text

1 ITA NO. 59 5/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT ME MBER & SMT. BEENA PILLAI, JUDICIAL MEMBER I.T.A .NO.-595/DEL /2012 (ASSESSMENT YEAR-2007- 08) ITO, WARD 29(3), NEW DELHI. VS RAMESH CHAND LIHLA, PROP. M/S LIHLA FASHIONS, M/S RAMESH SONS & M/S EXCELLENT IMPEX, 1717, 1 ST FLOOR, GALI PIAO WALI, DARIBA KALAN, CHANDNI CHOWK, DELHI. AABPC9696D APPELLANT BY SMT. RASMITA JHA, SR. DR RESPONDENT BY SH. VED JAIN, CA ORDER PER BEENA PILLAI, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER OF THE LD. CIT(A)S-XXV, NEW DELHI, VIDE HIS ORDER DATED 30/11/2011 FOR A.Y. 2007-08 ON THE FOLLOWING GROUND S: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) XXV, NEW DELHI HAS ERRED IN DELETING THE ADD ITION OF RS. 30,56,110/- MADE BY THE ASSESSING OFFICER IN TH E ABSENCE OF CONFIRMATIONS OF SUNDRY CREDITORS. DATE OF HEARING 09.12.2015 DATE OF PRONOUNCEMENT 11.02.2016 2 ITA NO. 59 5/DEL/2012 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE I N THE ABSENCE OF BANK CERTIFICATE THE LD. CIT(A) XXV, NEW DELHI HAS ERRED IN DELETING THE ADDITION OF RS. 1,50,310/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE I N RETURN INCOME AND NET PROFIT AS PER PROFIT AND LOSS ACCOUN T. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE I N THE ABSENCE OF BANK CERTIFICATE THE LD. CIT(A) XXV, NEW DELHI HAS ERRED IN ALLOWING DEDUCTION U/S 80C OF I.T. ACT . 2. BRIEF FACTS OF THE CASE ARE AS UNDER: 2.1 THE ASSESSEE FILED ITS RETURN OF INCOME ON 31/1 0/07 DECLARING TOTAL INCOME AT RS. 1,48,395/-. THE CASE WAS PROCE SSED U/S 143(1). SUBSEQUENTLY IT WAS SELECTED FOR SCRUTINY AND NOTIC ES WERE ISSUED TO THE ASSESSEE. 3. THE LD. AO COMPLETED THE ASSESSMENT EX-PARTE U/S 144 ON 23/12/09 BY MAKING THE FOLLOWING ADDITIONS: I) ADDITION ON ACCOUNT OF UNVERIFIED SUNDRY CREDITORS AMOUNTING TO RS. 21,52,440/- II) ADDITION ON ACCOUNT OF UNVERIFIED UNSECURED LOANS AMOUNTING TO RS. 75,000/-. 3. AGGRIEVED BY THE ORDER OF THE LD. AO THE ASSESSE E PREFERRED AN APPEAL BEFORE THE LD. CIT(A). 3.1. BEFORE THE LD. CIT(A) THE ASSESSEE ARGUED THAT THE LD.AO WAS NOT JUSTIFIED IN MAKING ADHOC ADDITIONS MERELY BECA USE THE ASSESSEE WAS NOT ABLE TO REPRESENT THE CASE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, AS THE ASSESSEE WAS OUT OF THE COUNTRY. ACCORDINGLY, THE ASSESSEE SUBMITTED ALL THE DETAILS IN RESPECT OF THE SUNDRY CREDITORS AND UNSECURED LOANS BEFORE THE LD. CIT(A). THE LD. CIT(A) CALLED FOR THE REMAND REPORT IN LIEU OF THE ADDITIONAL EVIDENCE 3 ITA NO. 59 5/DEL/2012 FILED BY THE ASSESSEE. AFTER CONSIDERING THE REMAN D REPORT, THE LD. CIT(A) DELETED THE ADDITION MADE BY THE ASSESSEE IN RESPECT OF THE SUNDRY CREDITORS AND UNSECURED LOANS. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. GROUND NO. 1 : 4.1 IT WAS CONTENDED BY THE LD. AR THAT THE ASSESSE E IS A PROPRIETOR OF M/S SULOCHNA EXPORTS AND THE LIST OF SUNDRY CRED ITORS AS ON 31/03/07 WAS SUBMITTED BEFORE THE LD. CIT(A) ON WHI CH THE REMAND REPORT WAS CALLED FOR. IN THE REMAND REPORT THE LD . AO HAS RECORDED THAT THE ASSESSEE HAS FURNISHED THE CONFIRMATION FR OM THE UNSECURED LENDERS. HE HAS FURTHER RECORDED THAT THE SE CREDITORS ARE CONTINUING FROM THE PREVIOUS YEAR AND ARE OLD CREDI TORS WHICH IS PROVED FROM THE OPENING AND THE CLOSING BALANCES. THE LD.AR SUBMITTED THAT EXCEPT FOR THE CREDITOR BEING MALIKA TEXTILES, ALL OTHER PARTIES ARE OLD CREDITORS AND ARE BEING CARRI ED FORWARDED BY THE ASSESSEE. FURTHER THE LD. AR SUBMITTED THAT THE SE SUNDRY CREDITORS AS ARE VERY MUCH EXISTING AND THAT THE AS SESSEE HAS ALSO MADE SOME PAYMENTS TO CERTAIN SUNDRY CREDITORS DURI NG THE YEAR WHICH PROVES THAT THE LIABILITY OF THE SUNDRY CREDI TORS HAS NOT SEIZED, AND THEY CONTINUE TO BE A LIABILITY FOR THE ASSESSEE, WHICH HAS TO BE PAID BACK BY THE ASSESSEE, AND AS SUCH, T HE LD. AO WAS NOT JUSTIFIED TO MAKE THE ADDITIONS. 4.2. ON THE CONTRARY, THE LD. DR SUBMITS THAT THE A SSESSEE DID NOT FILE THE PROPER BOOKS OF ACCOUNTS BEFORE THE LD. AO . SHE RELIES UPON THE ORDER OF THE LD. AO. 4 ITA NO. 59 5/DEL/2012 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE PAPER BOOK FILED BEFORE US. THE RE MAND REPORT DATED 4.3.11 IS PLACED AT PAGES 79 TO 81 OF THE PAP ER BOOK. IT IS OBSERVED THAT THE LD. AO HAS RECORDED A FINDING THA T THE UNSECURED CREDITORS HAVE BEEN EXISTING WITH THE ASSESSEE EVEN IN THE PREVIOUS YEAR AND THAT THE ASSESSEE HAS FILED THE CONFIRMATI ONS FROM THESE PARTIES BEFORE THE FIRST APPELLATE PROCEEDINGS. IT IS ALSO OBSERVED THAT THE LD. AO COULD NOT PRODUCE ANY MATERIAL ON R ECORD TO PROVE THAT THESE DETAILS FILED BY THE ASSESSEE ARE NOT GE NUINE. TLE LD.AR BROUGHT OUR NOTICE TO THE SUBMISSION MADE BEFORE TH E LD.CIT(A), WHICH IS PLACED AT PAGES 115 TO 121 OF THE PAPER BO OK. AT PAGE 120 OF THE SUBMISSION, IT HAS BEEN CATEGORICALLY MENTIO NED THAT EXCEPT FOR THE CREDITOR BEING MALIKA TEXTILES, ALL OTHER C REDITORS ARE OLD. 5.1. THE LD. AO HAS THEREFORE, FAILED TO JUSTIFY TH E ADDITIONS MADE IN RESPECT OF THE UNSECURED CREDITORS. IT IS ALSO OBS ERVED THAT THESE CREDITORS WERE OLD AND, THEREFORE, DID NOT PERTAIN TO THE YEAR UNDER CONSIDERATION AND HAS BEEN BROUGHT FORWARD FROM THE EARLIER YEARS WHICH HAS NOT BEEN DISPUTED BY THE REVENUE. 5.3. THE AMOUNT PAYABLE TO THESE CREDITORS CAN BE A DDED TO THE ASSESSEES TOTAL INCOME IN THE YEAR IN WHICH THE AS SESSEES LIABILITY TO PAY THE AMOUNT SEIZED OR IS EXTINGUISHED AND NOT IN THE YEAR UNDER CONSIDERATION, WHERE THE ASSESSEE HAS ADMITTE DLY SHOWN THE LIABILITY IN THE BALANCE SHEET. WE, THEREFORE, DO NOT FIND ANY INFIRMITY WITH THE ORDER OF THE LD. CIT(A). THE GROUND NO. 1 OF THE REVENUE IS, THEREFORE, DISM ISSED. 5 ITA NO. 59 5/DEL/2012 GROUND NO. 2: 6. THE LD. AR SUBMITTED THAT THE ADHOC ADDITION AMO UNTING TO RS.1,50,310/-, MADE BY THE AO UNDER THE HEAD UNEXP LAINED DIFFERENCE OF INTEREST, ON THE GROUND THAT THE DETA ILS WERE NOT AVAILABLE DURING THE COURSE OF THE ASSESSMENT PROCE EDINGS. THE LD. AR SUBMITTED THAT NECESSARY DETAILS ALONG WITH THE BANK CERTIFICATE WERE SUBMITTED BEFORE THE LD. CIT(A) AS ADDITIONAL EVIDENCE, ON WHICH A REMAND REPORT WAS CALLED FOR. 6.1. IN THE REMAND REPORT THE LD. AO HAS ACCEPTED T HAT THE DIFFERENCE OF INTEREST PAID ON HOUSING IS UNDER THE HEAD INCOME FROM HOUSE PROPERTY WHICH HAS BEEN FURTHER SET OFF FROM INCOME FROM BUSINESS. ON THE BASIS OF THE FINDINGS OF THE LD. AO IN THE REMAND REPORT THE LD. CIT(A) DELETED THE ADDITIONS. 6.1. ON THE CONTRARY, THE LD. DR VEHEMENTLY SUPPORT ED THE FINDINGS OF THE LD. AO. THE LD.DR SUBMITTED THAT THE DISALLO WANCE HAS BEEN MADE AS THE CERTIFICATE ISSUED BY THE BANK WERE NOT AUTHENTICATED BY THE BANK. 7. WE OBSERVE THAT THERE IS A CONSIDERABLE MERIT IN THE SUBMISSIONS OF THE LD. AR. IT IS ACCEPTED BY THE LD.AO IN THE REMAND REPORT, PLACED AT PAGE 81 OF THE PAPER BOOK, THAT THE ASSES SEE HAD CLAIMED DEDUCTION U/S.24(B) FOR THE INTEREST PAYMENT ON THE HOME LOANS FOR WHICH THE NECESSARY DETAILS WERE SUBMITTED, WHICH H AS NOT BEEN CONSIDERED BY THE LD.AO. IT IS NOTICED THAT THE ASS ESSEE HAS PAID INTEREST ON THE HOUSING LOAN FOR ACQUISITION OF SEL F OCCUPIED HOUSE PROPERTY AMOUNTING TO RS.1,50,000/- WHICH IS ADMISS IBLE U/S.24(B) OF THE ACT, UNDER THE HEAD INCOME FROM HOUSE PROPER TY. THE 6 ITA NO. 59 5/DEL/2012 BALANCE RS.310/-IS THE DIFFERENCE APPEARING IN THE BOOKS OF ACCOUNT, WHICH IS ALLOWALE U/S.32 OF THE ACT. ON TH E ABOVE FACTS, WE DO NOT FIND ANY INFIRMITY IN THE DELETION OF THE ADDITION BY THE LD.CIT(A) . IN VIEW OF THE ABOVE FACTS AND CIRCUMST ANCES, THE FINDINGS OF THE LD. CIT(A) DOES NOT CALL FOR ANY IN TERFERENCE. THIS GROUND OF APPEAL FILED BY THE REVENUE IS DISMI SSED. GROUND NO. 3 : 8. THE LD. AR SUBMITTED THAT THE AO MADE THE DISALL OWANCE OF RS.1,00,000/- U/S.80C, ON THE GROUND THAT THE DETAI LS REGARDING THE HOUSING LOAN WHICH WAS TAKEN BY THE ASSESSEE AN D THE CERTIFICATE FROM THE BANK IN RESPECT OF THE SAME WE RE NOT SUBMITTED. THE LD. AR FURTHER SUBMITTED THAT THESE DETAILS WER E SUBMITTED BEFORE THE LD. CIT(A) ON WHICH A REMAND REPORT WAS CALLED FOR. THE LD. AR SUBMITTED THAT ON THE BASIS OF THE FINDINGS IN THE REMAND REPORT THE LD. CIT(A) DELETED THE DISALLOWANCE MADE BY THE AO. 15. ON THE CONTRARY, THE LD. DR HAS SUPPORTED THE A SSESSMENT ORDER. 16. WE HAVE PERUSED THE REMAND REPORT WHICH IS AT P AGE 109 TO 114 OF THE PB. IT IS OBSERVED THAT THE LD. AO HAS ADMITTED THE CERTIFICATE AND THE DOCUMENTS SUBMITTED BY THE ASSE SSEE BEFORE THE LD. CIT(A). HE HAS NOT MADE OUT ANY CONTRARY OBSER VATION IN RESPECT OF THE HOUSING LOAN REPAYMENT MADE BY THE ASSESSEE. THEREFORE, IN OUR VIEW THE AMOUNT STANDS VERIFIED. WE ARE, THERE FORE, OF THE CONSIDERED OPINION THAT THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION MADE BY THE AO. THE LD. CIT(A) WAS RIGHT IN GRANTING THE 7 ITA NO. 59 5/DEL/2012 DEDUCTION TO THE ASSESSEE U/S 80C OF THE ACT. THIS GROUND OF APPEAL IS DISMISSED. 17. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11.2.2016 SD/- SD/- (N.K. SAINI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11.2.2016 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 8 ITA NO. 59 5/DEL/2012 DATE 1. DRAFT DICTATED ON 09.12.15 2. DRAFT PLACED BEFORE AUTHOR 14.12.15 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 11.2.16 6. KEPT FOR PRONOUNCEMENT ON 11.2.16 7. FILE SENT TO THE BENCH CLERK 11.2.16 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.