M/s Dynamic Engineers, New Delhi V. ACIT, New Delhi

ITA 6001/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8742 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 24-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Assessment record
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.6001/DEL/2016 ASSESSMENT YEAR: 2010-11 M/S. DYNAMIC ENGINEERS 62-C, SAHIPUR VILLAGE,, SHALIMAR BAGH, NEW DELHI-110088 VS ACIT CIRCLE 19 (1) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. VINAY BAHL, CA RESPONDENT BY MS. ASHIMA NEB, SR. DR DATE OF HEARING: 28/08/2019 DATE OF PRONOUNCEMENT: 13/09/2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 22.09.2016 OF THE CIT(A)-2, NEW DELHI R ELATING TO A. Y. 2010-11. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF MANUFAC TURING AND TRADING OF ELECTRICAL, ELECTRONICS, REFRIGERATION A ND AIR CONDITIONING PARTS. IT FILED ITS RETURN OF INCOME ON 13.10.2010 DECLARING TOTAL INCOME OF RS.1,69,97,990/-. THE ASS ESSING PAGE | 2 OFFICER COMPLETED THE ASSESSMENT U/S 143 (3) DETERM INING THE TOTAL INCOME AT RS.2,25,48,120/- WHEREIN HE MADE AD DITION OF RS.46,77,200/- ON ACCOUNT OF SUPPRESSION OF PROFIT, RS.1,16,223/- U/S.14 A READ WITH RULE 8 D AND RS.7, 56,704/- ON ACCOUNT OF REBATES AND DISCOUNTS. 3. DURING THE COURSE OF APPEAL PROCEEDINGS THE LD. CIT(A) ASKED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT IN ORDER TO EXAMINE THE CLAIM OF ASSESSEE. IT WAS SUBMITTED TO THE LD. CIT(A) THAT BOOKS WERE STOLEN AND THEREFORE, COULD NOT BE PRODUCE. 4. THE LD. CIT(A) NOTED FROM THE ASSESSMENT RECORD THAT THE ASSESSEE HAD PRODUCED COPY OF LEDGER ACCOUNT ETC IN ITS SUBMISSION DATED 24.01.2013 AND, THEREFORE, IT IS A PPARENT THAT THE ASSESSEE WAS MAINTAINING BOOKS OF ACCOUNT. ON B EING QUESTIONED BY THE CIT(A) AS TO WHETHER THE ACCOUNTS WERE BEING MAINTAINED IN COMPUTER SOFTWARE IT WAS SUBMITTED TH AT THE ASSESSEE WAS MAINTAINING THE ACCOUNTS IN THE COMPUT ER SOFTWARE. HOWEVER, THEY DO NOT HAVE ANY RECORD AND PRINTED COPY OF THE SAME HAS BEEN STOLEN. THE LD. CIT(A) O BSERVED THAT WHEN THE ASSESSEE IS MAINTAINING THE ACCOUNTS ON CO MPUTER, THEREFORE, IT IS IMPOSSIBLE THAT THEY ARE NOT HAVIN G ANY COPY OF THE SAME. HE, THEREFORE, HELD THAT THE SUBMISSION O F THE ASSESSEE CANNOT BE EXAMINED IN ABSENCE OF BOOKS OF ACCOUNT. HE ALSO REJECTED THE CLAIM OF THE ASSESSEE THAT THE RE WAS NO NEED OF HAVING BACKUP OF THE RECORDS ESPECIALLY WHE N THE INCOME TAX PROCEEDINGS WERE STILL PENDING IN THE CA SE OF THE ASSESSEE. HE, THEREFORE, UPHELD THE ADDITION MADE B Y THE PAGE | 3 ASSESSING OFFICER ON ACCOUNT OF ESTIMATION OF NET P ROFIT. SO FAR AS THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U /S.14A READ WITH RULE 8 D IS CONCERNED THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO RESTRICT THE DISALLOWANCE TO 67,139/- AS AGAINST RS.1,16,223/- DISALLOWED BY THE ASSESSING OFFICER. HE, HOWEVER, UPHELD THE ADDITION OF RS.7,56,704/- MADE BY THE AS SESSING OFFICER OUT OF REBATE AND DISCOUNT. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS:- 1. THAT THE ORDER PASSED U/S. 143 (3) OF THE ACT DA TED 08.03.2013 BY THE ACIT, CIRCLE 19 (1), NEW DELHI AND THE ORDERS PASSED BY THE CIT(A)-XII, NEW DELHI DATED 22.09.201 6 ARE BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 2. THAT THE ASSESSING OFFICER WAS INCORRECT TO MAK E THE FOLLOWING DISALLOWANCES, WITHOUT PROPER APPRECIATIO N OF THE FACTS OF THE CASE AND EVIDENCES ON RECORD FURNISHED BY THE A PPELLANT :- ON ACCOUNT OF AMOUNT (RS.) A. PARA 1 OF ASSTT. ORDER NET PROFIT 46,77,200 B. PARA 2 OF ASSTT. ORDER DISALLOWANCE U/S. 14A 1,16,223 C. PARA 3 OF ASSTT. ORDER REBATE & DISCOUNT 7,56, 704 TOTAL 55,50,127 3. THAT A DETAILED STATEMENT OF FACTS AND SUBMISSIO NS SHALL BE FILED BEFORE THE DATE OF HEARING. 4. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, WITHDRAW ANY GROUND OF APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET F ILED A COPY OF THE FIR FILED ON 21.04.2015 FOR LOST BAG CONTAIN ING ACCOUNT PAGE | 4 RECORDS OF THE ASSESSEE. HE SUBMITTED THAT ASSESSEE IN THE MEAN TIME HAS RECONSTRUCTED ITS BOOKS OF ACCOUNT AND GIV EN AN OPPORTUNITY THE ASSESSEE IS IN A POSITION TO PRODUC E THE SAME EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE C IT(A). HE ACCORDINGLY SUBMITTED THAT THE MATTER MAY BE SET AS IDE TO THE FILE OF THE ASSESSING OFFICER OR CIT(A) AS THE CAS E MAY BE SINCE THE ADDITION WAS SUSTAINED BY THE CIT(A) MAINLY ON ACCOUNT OF NON PRODUCTION OF BOOKS OF ACCOUNT. 7. THE LD. DR ON THE OTHER HAND STRONGLY SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE APPEAL FILED B Y THE ASSESSEE SHOULD BE DISMISSED SINCE THE BOOKS OF ACCOUNT SO RECONSTRUCTED NOW CANNOT BE RELIED UPON. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BEL OW. WE FIND AS AGAINST THE RETURNED INCOME OF RS.1,69,97,990/-, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON A TOT AL INCOME OF RS.2,25,48,120/- BY MAKING THREE ADDITIONS TOTALING TO RS.55,50,127/-, THE DETAILS OF WHICH HAVE ALREADY B EEN GIVEN AT PARAGRAPH 2 OF THIS ORDER. WE FIND THE LD. CIT(A) A SKED THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT, HOWEVER, THE ASSESSEE FAILED TO PRODUCE THE SAME ON THE GROUND T HAT THE BOOKS OF ACCOUNT WERE STOLEN. WE FIND THE LD. CIT(A ) SUSTAINED THE ADDITION OF RS.46,77.200/- MADE BY THE ASSESSIN G OFFICER ON ACCOUNT OF ESTIMATING THE NET PROFIT AND RS.7,56,70 4/-OUT OF REBATE AND DISCOUNT. HE, HOWEVER, RESTRICTED THE D ISALLOWANCE MADE BY THE ASSESSING OFFICER U/S.14A READ WITH RUL E 8 D TO RS.67,139/-AS AGAINST RS.1,16,223/- DISALLOWED BY T HE PAGE | 5 ASSESSING OFFICER. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE BOOKS OF ACCOUNT WERE STOLEN FOR WHICH THE FIR HAS BEEN LODGED. IT IS ALSO HIS SUBMISSION THA T THE ASSESSEE IN THE MEAN TIME HAS RECONSTRUCTED ITS BOOKS OF ACC OUNT ON THE BASIS OF VARIOUS DETAILS AVAILABLE WITH IT AND THER EFORE GIVEN AN OPPORTUNITY, THE ASSESSEE IS IN A POSITION TO SUBST ANTIATE ITS CASE BEFORE ANY OF THE LOWER AUTHORITIES. CONSIDERI NG THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUS TICE WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO GRANT ONE MORE OPPORTUNITY TO THE ASSE SSEE TO SUBSTANTIATE ITS CASE AND DECIDE THE ISSUE AS PER F ACT AND LAW. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 13.09.2019. SD/- SD/- (SUCHITRA KAMBLE) (R.K PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER *NEHA* DATE:-13 .09.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI PAGE | 6 DATE OF DICTATION 28.08.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29.08.2019 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER