ITO, New Delhi V. M/s. L.D. Gera (HUF), Ghaziabad

ITA 6049/DEL/2012

• Counselvise Citation: 604920114 RSA 2012
• Duration Of Justice: 2 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-08-2015
• Assessment Year: 1999-2000
• Appeal Filed On: 05-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESANG Y SHERPR
• Assessee Lawyers: V K AGARWAL
• Keywords: Unexplained investment; Additional evidence; Non compliance
• Section: 143(3); 80HHC; 69; 144

Judgement Text

ITA NO. 6049/ DEL/ 2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D , NEW DELHI BEFORE SHRI N.K. SAINI, AC COUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. N O. 6049 /DEL/20 1 2 A.Y. : 1999 - 20 00 INCOME TAX OFFICER, WARD 27 (3), ROOM NO. D - 1, VIKAS BHAWAN, I.P. ESTATE, NEW DELHI 110 002 VS. M/S L.D. GERA (HUF) PROP. M/S BNG IMPEX, C/O SH. V.K. AGGARWAL, D - 59, CHANDER NAGAR, GHAZIABAD 201011 (PAN: AATPG6013E) (APPELLANT) (RESPONDENT) DEPARTMENT BY : MS. KESANG Y. SHERPR, SR. DR ASSESSEE BY : SH. V.K. AGARWAL, A.R. DATE OF HEARING : 1 3 - 0 8 - 201 5 DATE OF ORDER : 04 - 0 9 - 201 5 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - X X IX, NEW DELHI DATED 27 . 9 .201 2 P ERTAINING TO ASSESSMENT YEAR 1999 - 2000 . 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN - ITA NO. 6049/ DEL/ 2012 2 1. DELETING THE ADDI TION OF RS. 75,00,000/ - AS UNEXPLAINED INVESTMENT IN STOCK. 2. DELETING THE ADDITION OF RS. 15,00,000/ - AS GROSS PROFIT ON SALE OF THE UNEXPLAINED INVESTMENT IN THE DOMESTIC MARKET. 3. DIRECTING THE AO RECALCULATE THE DEDUCTION U/S. 80HHC AFTER GIVING EFFECT T O THE APPELLATE ORDER. 4. IGNORING THE SUBMISSION OF THE AO NOT TO ACCEPT THE ADDITION EVIDENCE OF THE ASSESSEE UNDER RULE 46A OF THE I.T. RULES. 5. THE APPELLANT CRAVES THE RIGHT TO ADD ANY OTHER GROUND OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE DEPARTME N T HAS FILED AN APPEAL BEFORE ITAT AGAINST THE ORDER OF LD. CIT(A). THE I TAT VIDE ITS ORDER ITAT NO. 1209/DEL/2004 DATED 26.09.2008 HAS ACCEPTED THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF AO FOR FRESH DECISION AFTER PROVIDING ADEQUATE OPPORTU NITY TO THE INCOME OF THE ASSESSEE. AFTER THAT NOTICE U/S 143( 2) DATED 17.01.2009 FIXING THE P RO C EEDINGS FOR 27.07.2009 WAS ISSUED ON THE ASSESSEE'S ADDRESS I.E. 8/3, 1ST F LOOR , SABHARAWA MARG, KAROL BAGH, NEW DELHI BUT THE SAME WAS RETURNED UN - SER VED. AFTER THAT I T IS NOTICED THAT SHRI L.D.GERA, THE K ARTA OF THE HUF HAS EXPIRED AND HIS LEGAL HEIRS SHN NAVEEN GARG, SON RESIDING IN DUBAI. AFTER TAKING PROPER APPROVAL FROM CIT, DELHI - IX, NEW DELHI A NOTICE U/S 143(2) ALON G W I TH A LETTER DATED 11.09.200 9 FIXING THE PROCEEDINGS FOR 24 . 09.2009 WAS ISSUED ON THE ADDRESS OF ASSESSEE'S SON AT DUBAI(UAE). BUT AGAIN NE I THER ANYBODY ATTENDED SHE PROCEEDINGS NOR ANY ADJOURNMENT WAS TAKEN. 3.1 IN THIS CASE, THE RETURN OF INCOME WAS FILED ON 31.12.1999 AT NIL INCOME . AFTER THAT THE ASSESSMENT U/S 143(3) OF THE I.T. ACT, 1961 WAS COMPLE TED ON 27.03.2002 AT AN INCOME OF RS. ITA NO. 6049/ DEL/ 2012 3 1.75,25,024/ - . AGAINST THE ORDER OF AO, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) - I HAS PAR TLY ALLOWED THE APPEAL AND PA SSED THE ORDER DATED 24.12.200 3. AGAINST THE ORDER OF CIT(A), THE DEPARTMENT HAS FILED AN APPEAL BEFORE THE ITAT, THE ITAT HAS RESTORED THE MATTER ON THE FILE OF AO ON THE FOL L OWIN G THREE ISSUES ON WHICH DEPARTMENT HAS FILED AN APPEAL I N IT AT BY GIVING FRESH OPPORTUNITY TO THE ASSESSEE. SINCE THE ASSESSEE HAS EXPIRED AND HIS SON WERE NOT ATTENDED THE CASE PROCEEDINGS, I HAVE NO OPTION BUT TO FINALIZE THE ASSESSMENT PROCEEDINGS ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD U/S. 144 OF TH E I.T. ACT, 1961. THE AO OBSERVED THAT AS THE ASSESSEE / LEGAL HEIR OF THE ASSESSEE HAS FAILED TO COMPLY WITH THE NOTICES U/S. 143(2) AND NOT REPRESENT THE CASE BEFORE THE UNDERSIGNED AND HAS NOT OBJECTED TO HIS PROPOSAL TO DECIDE THE MATTER ON MERITS U/S . 144 OF THE I.T. ACT, 1961 BY MAKING FOLLOWING ADDITIONS ON THE ISSUES ON WHICH DEPARTMENT HAS FILED APPEAL IN ITAT IN ABSENCE OF NON COMPLIANCE OF NOTICES AND EVIDENCES. I) ADDITION OF RS. 75 LACS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF G OODS FROM M/S LIBERTY HOISERY. II) ADDITION OF RS. 15 LACS ON ACCOUNT OF BOOK PROFIT 20% ON SALES RELATABLE TO STOCK OF RS. 75 LACS SOLD IN DOMESTIC MARKET. III) DIRECTING TO RECOMPUTED THE DEDUCTION U/S. 80HHC. 3.2 AO OBSERVED THAT SINCE THE ASSESSEE HAS DIED AND HIS LEGAL HEIRS IS ABROAD AND HAS NOT COOPERATE WITH THE DEPARTMENT, THE INCOME OF RS. 1,75,25,024/ - AS PER ORDER U/S. 143(3) DATED 27.3.2002 WAS ACCEPTED VIDE ASSESSMENT ORDER DATED 30.12.2009 PASSED U/S. 254/144 OF THE I.T. ACT, 1961. ITA NO. 6049/ DEL/ 2012 4 4. AGAINST THE ABOVE ASSESSMENT ORDER THE ASSESSEE APPEALED BEFORE THE LD. CIT(A) WHO DELETED THE ADDITION MADE BY THE AO AND ALLOWED THE APPEAL OF THE ASSESSEE VIDE HIS IMPUGNED ORDER DATED 27.9.2012. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTIONS RAISED BY THE REVENUE IN ITS GROUNDS OF APPEAL. 7. ON THE CONTRARY, LD. COUNSEL OF THE ASSESSEE RELIED UPO N THE ORDER OF THE LD. CIT(A) AND FILED THE SYNOPSIS. 8 . WE HAVE HEARD BO TH THE PARTIES AND PERUSED THE RELEVANT RECORDS , O RDERS OF THE REVENUE AUTHORITIES AND THE SYNOPSIS FILED BY THE LD. COUNSEL OF THE ASSESSEE. 8.1 WITH REGARD TO GROUND NO. 1 REGARDING DELETION OF ADDITION OF RS. 75 LACS ON ACCOUNT OF UNEXPLAINED INVESTME NT IN STOCK IS CONCERNED, WE FIND THAT THE ADDITIONAL EVIDENCE ADMITTED BY THE LD. CIT(A) IN THE FORM OF DELIVERY CHALLANS ISSUED BY THE SUPPLIER M/S LIBERTY HOSIERY MILLS PVT. LTD. THESE EVIDENCES AND THE DISCREPANCIES POINTED OUT BY THE A.R. IN THE EVID ENCES COLLECTED BY THE AO FORM THE SUPPLIER, LEAD HIM TO ARRIVE AT A CONSIDERED VIEW THAT THE GOODS WERE SUPPLIED BY M/S LIBERTY HOSIERY MILLS PVT. LTD. TO THE ASSESSEE IN THE MONTH OF AUGUST, 1998 AND NOT IN THE MONTH OF NOVEMBER, 1998 AS CLAIMED BY THE AO. THEREFORE, LD. CIT(A) HAS RIGHTLY HELD THAT THERE REMAINS NO GROUND FOR AN ADDITION OF RS. 75 LACS TO THE INCOME OF THE ASSESSEE U/S. 69 OF THE ACT AND HENCE, DELETED THE SAID ADDITION. IN OUR CONSIDERED OPINION, THE LD. CIT(A) HAS PASSED A WELL R EASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE WE UPHOLD THE SAME AND ACCORDINGLY THE GROUND NO. 1 RAISED BY THE REVENUE STANDS DISMISSED. ITA NO. 6049/ DEL/ 2012 5 8.2 WITH REGARD TO GROUND NO. 2 REGARDING DELETION OF ADDITION OF RS. 15 LACS ON ACCOUNT OF ALLEGED PROFIT 220% ON SALE OF STOCK OF RS. 75 LACS IN DOMESTIC MARKET. WE FIND THAT THIS ISSUE IS RELATED TO THE EARLIER ISSUE OF PURCHASE OF GOODS WORTH RS. 75 LACS FROM M /S LIBERTY HOSIERY MILLS PVT. LTD. SINCE, IT HAS ALREADY BEEN HELD THA T THE GOODS PURCHASED FROM M/S. LIBERTY HOSIERY MILLS PVT. LTD. IN THE MONTH OF AUGUST, 1998 WERE EXPORTED BY THE APPELLANT IN THE SAME MONTH, THERE WAS NO STOCK LEFT WITH THE APPELLANT FOR FURTHER SALE AFTER AUGUST, 1998. MOREOVER, THE ADDITION HAS BEEN M ADE ON THE BASIS OF SUSPICION, CONJECTURES AND SURMISES, AS NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE AO OF ANY DOMESTIC SALE BY THE APPELLANT. WE FIND THAT T HE AO HAS ONLY ASSUMED THAT SINCE THE GOODS WORTH RS.75 LACS WERE SUPPLIED BY M / S. LIBERTY HOS IERY MILLS PVT. LTD. IN THE MONTH OF NOVEMBER, 1998 AND NOT IN THE MONTH OF AUGUST, 1998, THEREFORE, THE A SSSESSEE HAS NOT ONLY INVESTED UNACCOUNTED MONEY I N PURCHASE OF GOODS WORTH RS.75 LACS IN AUGUST, 1998, WHICH WERE EXPORTED AND THE GOODS RECEIVE BY T HEM FROM THE SUPPLIER IN THE MONTH OF NOVEMBER, 1998, MUST HAVE BEEN SOLD IN THE LOCAL MARKET, EARNING A PROFIT @ 20%THEREON. THIS THEORY OF THE AO HAS ALREADY BEEN DISCARDED, ONCE IT IS HELD THAT THE GOODS WORTH RS.75 LACS WERE RECEIVED BY THE A SSESSEE FR OM THE SUPPLIER IN THE MONTH OF AUGUST, 1998 ONLY A ND THESE VERY GOODS WERE EXPORTED ON 13.08.1998. THEREFORE, THE QUESTION OF EARNING ANY PROFIT ON ANY DOMESTIC SALE DOES NOT ARISE AT ALL. HENCE, LD. CIT(A) HAS RIGHTLY DELETED THE SAID ADDITION. IN OUR CONSIDERED OPINION, THE LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE WE UPHOLD THE SAME AND ACCORDINGLY THE GROUND NO. 2 RAISED BY THE REVENUE STANDS DISMISSED. 8.3 WITH REGARD TO GROUND NO. 3 REGA RDING DIRECTING THE AO TO RECALCULATE THE DEDUCTION U/S. 80HHC AFTER GIVING EFFECT TO THE ITA NO. 6049/ DEL/ 2012 6 APPELLATE ORDER, WE FIND THAT THE ASSESSEE HAS CHALLENGED THE INCORRECT COMPUTATION OF THE DEDUCTION ADMISSIBLE U/SW. 80HHC OF THE ACT, WHICH WAS RESTRICTED TO RS. 1 .75 CRORES AS AGAINST THE ORIGINAL CLAIM OF THE ASSESSEE AT RS. 2.48 CRORES. THEREFORE, THE LD. CIT(A) HAS RIGHTLY DIRECTED THE AO TO RECOMPUTED THE DEDUCTION ADMISSIBLE U/S. 80HHC OF THE ACT TO THE ASSESSEE AFTER PROPER EFFECT TO THIS APPELLATE ORDER. IN OUR CONSIDERED OPINION, THE LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE WE UPHOLD THE SAME AND ACCORDINGLY THE GROUND NO. 3 RAISED BY THE REVENUE STANDS DISMISSED. 8.4 WITH REGARD TO GROUND NO. 4 RELATING TO IGNORING THE SUBMISSION OF THE AO NOT TO ACCEPT THE ADDITIONAL EVIDENCE OF THE ASSESSEE UNDER RULE 46A OF THE I.T. RULES IS CONCERNED, WE FIND THAT THE AO HAS MADE ALL POSSIBLE EFFORTS TO LOCATE THE LATEST ADDRESS OF THE ASSESSEE AND ALSO T O THE EXTENT OF LOCATING THE DUBAI ADDRESS OF THE LEGAL HEIR OF SH. L.D. GERA AND SENDING THE NOTICE U/S. 143(2) AT THAT ADDRESS, THE FACT REMAINS THAT THE NOTICE SENT TO THE DUBAI ADDRESS WAS NOT SERVED ON SH. NAVEEN GERA AND WAS RETURNED BACK UNSERVED WITH THE REMARKS INCOMPLETE ADDRESS . UNDER THESE CIRCUMSTANCES, THERE IS MERIT IN THE ARGUMENT OF THE LD. COUNSEL OF THE ASSESSEE THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRESENTING THE ADDITIONAL EVIDENCES BEFORE THE AO. IN VIEW OF THE ABOVE, THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE WERE RIGHTLY ALLOWED TO BE ADMITTED BY THE LD. CIT(A). IN THIS REGARD, A REMAND REPORT WAS CALLED FRO FROM THE AO VIDE LETTER DATED 22.2.2011. THE REMAND REPORT OF THE AO WAS RECEIVED ON 23.3.2011, WHEREIN HE HAS OBJECTED TO THE INTRODUCTION OF ADDITIONAL EVIDENCES AS THESE DOCUMENTS ARE TERMED BY THE ASSESSEE AS BEING NOT ADDITIONAL EVIDENCES BUT ONLY CLARIFICATORY IN NATURE . WE FIND THAT THE AO STATED IN THE REMAND REPORT THAT THES E DOCUMENTS HAD ITA NO. 6049/ DEL/ 2012 7 ALREADY BEEN CONSIDERED AT THE TIME OF ORIGINAL ASSESSMENT. IN THE REJOINDER, THE AR OF THE ASSESSEE SUBMITTED THAT SINCE ALL THE DOCUMENTS FILED ALONG WITH THE APPLICATION UNDER RULE 46A HAD BEEN CONSIDERED AT THE TIME OF ORIGINAL ASSESSM ENT, THE SAME WAS ALSO CONSIDERED BY THE LD. CIT(A) AFTER CONSIDERING THE REMAND REPORT AND THE REJOINDER OF THE LD. COUNSEL OF THE ASSESSEE AND RIGHTLY ALLOWED THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. IN OUR CONSIDERED OPINION, THE LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE WE UPHOLD THE SAME AND ACCORDINGLY THE GROUND NO. 4 RAISED BY THE REVENUE STANDS DISMISSED. 9 IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 04 / 0 9 /20 1 5 . SD/ - SD/ - [ N.K. SAINI] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 04 / 0 9 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES