Ram Avtar Sharma, New Delhi V. ACIT, Circle-62(1), New Delhi

ITA 6381/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2342 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 16-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Principle of natural justice
• Section: 244A; 234B

Judgement Text

1 ITA NO. 6381/DEL/2017 IN THE INCOME TAX APPE LLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL ME MBER AND DR. B. R. R. KUMAR, ACC OUNTANT MEMBER I.T.A. NO. 6381/DEL/20 17 (A.Y 2013-14) (THROUGH VIDEO CON FERENCING) RAM AVTAR SHARMA C/O. SABHARWAL & PARTNERS, 4819/24, ANSARI ROAD, DARYAGANJ, NEW DELHI DELHI-110002 AAQPA1281K (APPELLANT) VS ACIT CIRCLE-62(1) NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST ORDER DATED 18/09/2017 PASSED BY CIT(A)- 18, NEW DELHI FOR ASSESSMENT YEA R 2013-14. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE ORDERS PASSED BY THE ASSESSING OFFICER ON 19.02.2016 AND UPHELD BY THE LD. CIT(A) WERE PERVERSE TO THE L AW AND TO THE FACTS OF THE CASE, BECAUSE OF DISALLOWING OF FOLLOW ING EXPENSES ON LUMP SUM BASIS WITHOUT THE SUPPORT OF ANY MATERIAL EITHER COLLECTED OR PLACED UPON RECORDS, HAVING ANY NEXUS THERETO, APPELLANT BY SH. V. K. SABHARWAL, ADV RESPONDENT BY MS. PRAMITA M. BISWAS, CIT DR DATE OF HEARING 16.06.2021 DATE OF PRONOUNCEMENT 29.06.2021 2 ITA NO. 6381/DEL/2017 CONFIRMING EITHER TO THE EXTENT OF ITS DISALLOWANCE THE EXPENDITURE WAS NEVER INCURRED OR WERE NOT HAVING ANY RELATION TO THE INCOME EARNED:- A. PURCHASES - RS.3,00,000/- B. WAGES & SALARY -RS.2,00,000/- C. OTHER EXPENSES -RS.27,103/- 2. THAT THE DISALLOWANCE OF EXPENSES ON LUMP SUM BASI S ARE FURTHER WRONG BECAUSE NO OPPORTUNITY IF ANY WAS EVER AFFORD ED PRIOR PRESUMING TO BE ITS DISALLOWANCE THEREOF ON LUMP SU M BASIS. BESIDES THIS, NO MATERIAL IF ANY WAS EVER CONFRONTE D FORMING ANY BASIS OR NEXUS TO THE EXTENT OF ITS DISALLOWANCE TH EREOF. 3. THAT THE ADDITION OF INTEREST OF RS. 2,36,597/- FU RTHER MADE IN THE INCOME OF THE APPELLANT IS ENTIRELY BASED UPON THE MERE PRESUMPTION AND GUESSWORK OF THE ASSESSING OFFICER, AS THE OFFICER WAS NOT HAVING ANY MATERIAL OR EVER CONFRON TED TO THE APPELLANT, THAT THE APPELLANT HAS FACTUALLY RECEIVE D AN INTEREST OF RS. 3,43,669/- ON THE REFUNDS RECEIVED DURING THE Y EAR, THOUGH THE APPELLANT HAS DECLARED THE INTEREST RECEIVED ON THE REFUND OF RS. 1,07,072/- ON THE BASIS OF DOCUMENTARY EVIDENCE S. 4. THAT THE ORDERS PASSED BY THE ASSESSING OFFICER AN D FURTHER UPHELD BY THE LD. CIT(A) ARE UNCONSTITUTIONAL, AS H AVING NO LOCUS STANDI UNDER THE LAW BECAUSE THE BOOKS OF ACCOUNTS, BILLS / VOUCHERS / MUSTER ROLLS, WAGES SHEETS ETC. HAVE BEE N VERIFIED AND EXAMINED BY THE ASSESSING OFFICER AND NO DISCREPANC Y IF ANY HAS EVER BEEN FOUND OR NOTICED THERE FROM PRIOR TO PROC EED THE ASSESSMENT PROCEEDINGS, WHICH THE CIT(A) HAS FAILED TO APPRECIATE WHILE ADJUDICATING THE APPEAL. 3 ITA NO. 6381/DEL/2017 5. THAT THE ORDERS PASSED ARE FURTHER ILLEGAL BECAUSE NO OPPORTUNITY IF ANY WAS EVER AFFORDED PRIOR TO DISALLOW CERTAIN EXPENSES INCURRED AND CLAIMED ON LUMP SUM BASIS, SUE MOTO, A T THE TIME OF PASSING THE ORDERS ONLY WITHOUT THE SUPPORT OF ANY MATERIAL HAVING NEXUS TO ITS DISALLOWANCE THEREOF. 6. THAT THE ADDITIONS MADE ON LUMP SUM BASIS WERE FUR THER NOT LEGAL UNDER THE LAW AND TO THE FACTS OF THE CASE, B ECAUSE THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE ADDITIONS MADE ON THE IDENTICAL GROUNDS HAVE ALREADY BEEN DELETED BY THE ITAT IN THE APPELLANTS OWN CASE FOR THE ASSESSMENT YEAR 2011-12. 7. THAT CHARGING OF INTEREST U/S 234B OF THE ACT, IS FURTHER AGAINST THE LAW AND TO THE FACTS OF THE CASE, AS BEING CONT RARY TO THE ADDITIONS MADE IN THE DECLARED INCOME. 8. THAT THE APPELLANT ASSAILS HIS RIGHT TO AMEND, ALT ER, CHANGE ANY GROUNDS OF APPEAL AT ANY TIME EVEN DURING THE COURS E OF HEARING OF THE INSTANT APPEAL. PRAYER: IT IS, THEREFORE, PRAYED: 1. THAT ILLEGAL AND IMPUGNED ADDITIONS MADE OF RS. 7, 63,700/- IN THE DECLARED INCOME, MAY PLEASE BE DELETED / QUASHE D. 2. THAT CHARGING OF INTEREST U/S 234B OF THE ACT, MAY PLEASE BE QUASHED / DELETED BEING CONSEQUENTIAL TO THE ADDITI ONS MADE AND RELIEF CLAIMED THERE FROM. 3. THAT ANY OTHER RELIEF WHICH THIS HONBLE COURT MAY PLEASE BE 4 ITA NO. 6381/DEL/2017 DEEMS FIT AND PROPER ON THE FACTS AND IN THE CIRCUM STANCES OF THIS CASE. 3. THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION UNDER THE NAME AND STYLE OF M/S RAMA C ONTRACTORS. RETURN OF INCOME WAS FILED ON 20/09/2013 DECLARING INCOME OF RS. 44,04,700/-. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS SHOWN NET PROFIT OF RS.45,97,828/- ON GROSS RECEIPT OF RS. 14,86,04,990 /- THEREBY DECLARING OF NET PROFIT 3.09%. THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF DIFFERENCE IN GROSS RECEIPT AMOUNTING TO RS. 25,40,955/- DISALLOW ANCE OUT OF MATERIAL PURCHASES EXPENSES AMOUNTING TO RS. 3 LAC, DISALLOW ANCE OUT OF WAGES AND SALARY AMOUNTING TO RS. 2 LAC AND DISALLOWANCE OUT OF OTHER EXPENSES AMOUNTING TO RS.27,103/- AS WELL AS ADDITION ON ACC OUNT OF 244A ON ACCOUNT OF INTEREST ALLOWED AMOUNTING TO RS. 2,36,597/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT GROUND NO.3 IS NOT PRE SSED. AS REGARDS THE PURCHASE, WAGES AND SALARY AND OTHER EXPENSES, THE ISSUES ARE IDENTICAL TO THE ASSESSMENT YEAR 2011-12 AND THE TRIBUNAL IN ITA NO. 889/DEL/2015 VIDE ORDER DATED 28/12/2016 DELETED THE SAID ADDITIONS I N ASSESSEES OWN CASE. THEREFORE, THE LD. AR SUBMITTED THAT THE ADDITIONS BE DELETED. 6. THE LD. DR SUBMITTED THAT PURCHASE, WAGES AND SA LARY AS WELL AS OTHER EXPENSES HAS BEEN PROPERLY DETERMINE BY THE ASSESSI NG OFFICER AND THE ORDER RELIED BY THE LD. AR CANNOT BE APPLIED IN THE PRES ENT ASSESSMENT YEAR AS EACH ASSESSMENT YEAR IS A SEPARATE ASSESSMENT YEAR AND T HE FACTUAL ASPECTS ARE DIFFERENT. 5 ITA NO. 6381/DEL/2017 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. FROM THE PERUSAL OF THE TRIBUNALS DECISION IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011-12, GROUND NO. 2 IS RELATED TO UNVERIFIABLE PURCHASES. IN THE PRESENT CASE, THE ASSESSEE WAS ASKED TO RECO NCILE THE DIFFERENCE IN RESPECT OF RECEIPTS AMOUNTING TO RS. 25,40,955/- BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. MERELY MAINTAIN ING THE BOOKS OF ACCOUNTS AND NOT GIVING A PLAUSIBLE EXPLANATION REGARDING TH E PURCHASES, THE SAME CANNOT BE STATED THAT IT IS IDENTICAL TO THE EARLIE R ASSESSMENT YEAR 2011-12. THIS ISSUES ARE A FACTUAL CENTRIC AND PURCHASES MAY BE DIFFERENT IN EACH YEAR. THE MATTER IS NOT IDENTICAL TO THAT OF ASSESSMENT Y EAR 2011-12 IN CONTEXT OF EACH ASSESSMENT YEAR IS A DIFFERENT ASSESSMENT YEAR AND TO PROVE THAT THESE ARE ESTIMATED ADDITIONS HAS TO BE DETERMINED AFTER THE PROPER PERUSAL OF THE EVIDENCE BEFORE THE ASSESSING OFFICER. BEFORE THE C IT(A), THE ASSESSEE HAS SUBMITTED THAT BOOKS OF ACCOUNT, PURCHASE BILLS, WA GES/SALARY REGISTERS WERE PRODUCED BUT WAS NOT EXAMINED PROPERLY BY THE ASSES SING OFFICER AS PER THE CONTENTION OF THE LD. AR. THE ASSESSEE HAS NOT FIL ED ANY PAPER BOOK BEFORE US AS TO SHOW WHICH DOCUMENTS WERE BEFORE THE ASSESSIN G OFFICER. THEREFORE, IT WILL BE APPROPRIATE TO REMAND BACK THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR TAKING PROPER COGNIZANCE OF ALL THE RECORDS RE LATED TO BOOKS OF ACCOUNTS, PURCHASE BILLS, WAGES/SALARY REGISTERS ETC. NEEDLE SS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLE S OF NATURAL JUSTICE. 8. IN RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF JUNE, 2021. SD/- SD/- (B. R. R. KUMAR) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 29/06/2021 R. NAHEED * 6 ITA NO. 6381/DEL/2017 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI