M/s Motia Constructions Ltd., Zirakpur V. DCIT, Patiala

ITA 612/CHANDI/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8729 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-01-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 31-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMARVEER SINGH
• Keywords: Additional evidence; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 612/CHD/2012 ASSESSMENT YEAR: 2004-05 M/S MOTIA CONSTRUCTIONS LTD., V THE DCIT, CHANDIGARH-DELHI HIGHWAY, CENTRAL CIRCLE, ROYALE ESTATE, NAC, PATIALA. ZIRAKPUR. PAN: AADCM6578B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGA L RESPONDENT BY : SHRI AMARVEER SINGH DATE OF HEARING : 13.01.2015 DATE OF PRONOUNCEMENT : 21 .01.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-I LUDHIANA DATED 20.03.2012 FOR AS SESSMENT YEAR 2004-05 CHALLENGING THE DISALLOWANCE OF RS. 21 ,82,240/- ON ACCOUNT OF DEVELOPMENT EXPENSES. 2. THE ASSESSING OFFICER MADE THE DISALLOWANCE ON T HE FACTS THAT THE ASSESSEE COMPANY DID NOT PRODUCE ANY DOCUM ENTS TO PROVE THAT THE CLAIMED AMOUNT OF RS. 21,82,240/- HA D BEEN ACTUALLY SPENT. THE ASSESSEE EXPRESSED ITS INABILI TY TO FURNISH ANY DOCUMENTARY EVIDENCE OR PRIMARY VOUCHERS IN RES PECT OF ITS EXPENSES. THE INABILITY TO PRODUCE ANY DOCUMENT WAS SPECIFICALLY NOTED BY ASSESSING OFFICER IN THE ORDE R-SHEET DATED 2 27.10.2010. EVEN AT THE LATER STAGE ALSO, BEFORE A SSESSING OFFICER NO DOCUMENTS WERE PRODUCED. THEREFORE, ASS ESSING OFFICER DISALLOWED THE ABOVE DEVELOPMENT EXPENSES. EVEN BEFORE LD. CIT(APPEALS), ASSESSEE COULD NOT PRODUCE ANY DO CUMENTS OR VOUCHERS IN SUPPORT OF CLAIM OF GENUINENESS OF THE EXPENDITURE. THE LD. CIT(APPEALS) ALSO CONFIRMED THE ADDITION AN D DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE. 3. THE LD. COUNSEL FOR THE ASSESSEE FILED APPLICATI ON REQUESTING FOR ADMISSION OF ADDITIONAL EVIDENCE. THE ADDITION AL EVIDENCES ARE FILED IN THE SEPARATE PAPER BOOK FROM PAGES 1 T O 268 CONTAINING THE COPIES OF THE LEDGER ACCOUNT AND SEV ERAL VOUCHERS AND THE HAND WRITTEN SLIPS. THE LD. COUNSEL FOR THE ASSESSEE, BY REFERRING TO THE APPLICATION FOR ADMISSION OF THESE ADDITIONAL EVIDENCES SUBMITTED THAT THE GENUINENESS OF THE EXP ENDITURE ARE NOT IN DISPUTE. IT IS SUBMITTED THAT IN-FACT IN TH E ASSESSEE COMPANY, ONE SHRI PAWAN BANSAL WAS THE DIRECTOR AND HE HAS RESIGNED FROM THE COMPANY ON 02.01.2009 DUE TO DISP UTE AND ALL THE AFFAIRS WERE LOOKED AFTER BY HIM AND ALL OTHER EVIDENCES WERE LYING WITH HIM. HOWEVER, ALONGWITH HIM, THE OTHER TWO DIRECTORS OF HIS FAMILY SHRI KEWAL BANSAL AND SMT. PINKI BANS AL ALSO RESIGNED FROM THE COMPANY. THEREFORE, RECORD RELAT ING TO THESE EXPENSES/VOUCHERS HAD BEEN IN HIS CONTROL AND MOST OF THE RECORDS WERE WITH THEM WHEN THE ASSESSMENT HAD BEEN FRAMED. THE ASSESSEE COULD NOT PRODUCE THE VOUCHERS OF DEVE LOPMENT EXPENSES BEFORE THE AUTHORITIES BELOW DUE TO THE AB OVE REASON AND NOW THE MATTER IS AMICABLY SETTLED BETWEEN THE DIRECTORS. THEREFORE, DUE TO ABOVE EXCEPTIONAL CIRCUMSTANCES, THE ASSESSEE WAS PREVENTED BY SUFFICIENT/REASONABLE CAUSE FOR NO T PRESENTING 3 THESE EVIDENCES BEFORE THE AUTHORITIES BELOW. THE L D. COUNSEL FOR THE ASSESSEE, THEREFORE SUBMITTED THAT THESE ADDITI ONAL EVIDENCES IN THE SHAPE OF VOUCHERS MAY BE ADMITTED FOR HEARING AND THE MATTER MAY BE REMANDED BACK TO THE ASSESSIN G OFFICER FOR PROPER VERIFICATION AND NECESSARY ACTION IN THE MATTER. HE HAS RELIED UPON THE JUDGEMENT OF HON'BLE PUNJAB & H ARYANA HIGH COURT IN THE CASE OF CIT VS MUKTA METAL WORKS 336 ITR 555 AND OF THE HON'BLE SUPREME COURT IN THE CASE OF TEK RAM VS CIT 357 ITR 133. 4. ON THE OTHER HAND, LD. DR STRONGLY OBJECTED TO T HE ADMISSION OF THE ADDITIONAL EVIDENCE AND SUBMITTED THAT WHATEVER CAUSE IS EXPLAINED NOW WAS NEVER EXPLAINED BEFORE AUTHORITIES BELOW FOR NOT PRESENTING THE ADDITIONAL EVIDENCES BEFORE THEM. HE HAS SUBMITTED THAT ASSESSEE HAS EX PRESSED INABILITY TO PRODUCE ANY DOCUMENTARY EVIDENCES BEFO RE THE ASSESSING OFFICER. THEREFORE, GENUINENESS OF THE V OUCHERS NOW PRODUCED IN THE SHAPE OF ADDITIONAL EVIDENCES IS IN DOUBT. THEREFORE, THE APPLICATION OF THE ASSESSEE FOR ADMI SSION OF ADDITIONAL EVIDENCE MAY BE REJECTED AND APPEAL OF T HE ASSESSEE MAY BE DISMISSED. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS. IT IS A F ACT THAT ASSESSEE HAS EXPRESSED INABILITY TO FURNISH ANY DOC UMENTARY EVIDENCES AND PRIMARY VOUCHERS FOR CLAIMING DEDUCTI ON ON ACCOUNT OF DEVELOPMENT EXPENSES BEFORE ASSESSING OF FICER. THE ASSESSING OFFICER ALSO RECORDED THIS FACT IN THE OR DER-SHEET AND ULTIMATELY ASSESSEE DID NOT PRODUCE ANY EVIDENCE OF INCURRING DEVELOPMENT EXPENSES FOR THE PURPOSE OF BUSINESS BE FORE THE ASSESSING OFFICER. THE SAME IS THE POSITION BEFORE LD. 4 CIT(APPEALS) AND ASSESSEE HAS NOT PRODUCED ANY EVID ENCE BEFORE LD. CIT(APPEALS) ALSO. NOW THE ASSESSEE HAS COME U P WITH THE EXPLANATION OF RESIGNATION OF THREE OF ITS DIRECTOR S BEFORE PASSING OF THE ASSESSMENT ORDER AND IT IS CLAIMED T HAT THE VOUCHERS OF DEVELOPMENT EXPENSES WERE IN POSSESSION OF THE DIRECTORS WHO HAVE RESIGNED FROM THE ASSESSEE COMPA NY. HOWEVER, SUCH FACT WAS NEVER PLEADED BEFORE THE AUT HORITIES BELOW. THEREFORE, IT APPEARS TO BE THE AFTER THOUG HT STORY MADE UP BY THE ASSESSEE. IF THE DOCUMENTARY EVIDENCES I N THE SHAPE OF VOUCHERS OF DEVELOPMENT EXPENSES WERE IN POWER A ND POSSESSION OF OTHER DIRECTORS WHO HAVE RESIGNED, NO THING HAD PREVENTED ASSESSEE FROM EXPLAINING THESE FACTS BEFO RE AUTHORITIES BELOW. FURTHER, ON GOING THROUGH THE VOLUMINOUS PA PER BOOKS WHICH CONTAIN THE LEDGER ACCOUNT AND COPIES OF THE VOUCHERS, WE NOTICE THAT NONE OF THE VOUCHERS THROUGH WHICH DEVE LOPMENT EXPENSES ARE STATED TO HAVE BEEN PAID BY ASSESSEE, HAVE BEEN SIGNED ON BEHALF OF THE ASSESSEE. THE VOUCHERS ARE NOT APPROVED BY THE ASSESSEE COMPANY AND NO DETAILS HAVE BEEN ME NTIONED AS TO HOW THESE PAYMENTS WERE MADE FOR BUSINESS PURPOS E OF THE ASSESSEE AND WHETHER THE SAME HAVE BEEN APPROVED BY AND ON BEHALF OF THE ASSESSEE COMPANY. IN THE ABSENCE OF ANY SIGNATURE ON THE VOUCHERS ON BEHALF OF THE ASSESSEE COMPANY, THE GENUINENESS OF THE VOUCHERS ITSELF IS IN DOUBT. TH EREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES ABOVE AND D ISCUSSION, WE ARE OF THE VIEW THAT THE ADDITIONAL EVIDENCES IN THE SHAPE OF VOUCHERS SHOULD NOT BE ADMITTED. THE REQUEST OF AS SESSEE FOR ADMISSION OF ADDITIONAL EVIDENCE IS ACCORDINGLY REJ ECTED. 5 6. CONSIDERING THE ABOVE DISCUSSION, IT IS CLEAR TH AT ASSESSEE FAILED TO PRODUCE ANY EVIDENCE IN SUPPORT OF THE CL AIM OF DEVELOPMENT EXPENSES BEFORE THE AUTHORITIES BELOW. THEREFORE, ASSESSEE FAILED TO PROVE THAT DEVELOPMENT EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. THEREFORE, IN THE ABSENCE OF ANY EVI DENCE OR MATERIAL ON RECORD, WE DO NOT FIND ANY JUSTIFICATIO N TO INTERFERE WITH THE ORDERS OF AUTHORITIES BELOW. THE APPEAL O F THE ASSESSEE STANDS DISMISSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JANUARY,2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: JANUARY,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH