M/s. Tirupati Resurfacing Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 6478/DEL/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7017 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 05-01-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 05-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UC DUBEY
• Keywords: Opportunity of being heard
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. SUDHANSHU SRIVASTAVA, JM IT A NO. 6478/DEL/2013 : ASSTT. YEAR : 2006 - 07 TIRUPATI RESURFACING PVT. LTD., C - 172, MAHARANA PRATAP ENCLAVE, PITAMPURA, NEW DELHI - 110034 VS INCOME TAX OFFICER, WARD - 16(3 ), NEW DELHI - 110002 (APPELLANT) (RESPONDENT) PAN NO. A AA CT3024G ASSESSEE BY : SH. K. V. S. R. KRISHNA, CA REVENUE BY : SH. U. C. DUBEY , CIT DR DATE OF HEARING : 05 .0 1 .201 7 DATE OF PRONOUNCE MENT : 11 .01 .201 7 ORDER PER N. K. SAINI, AM : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 07.08.2013 OF LD. CIT(A) - X IX , NEW DELHI. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THE ORDER OF THE AO IS BAD IN LAW & AGAINST THE FACTS OF THE CASE. 2. THAT EX - PARTE ORDER IS NO ORDER A NO REASONABLE OPPORTUNITY HAS BEEN GIVEN TO A' AND ASSESSME NT ORDER HAS IGN ORED THE FACTS & DOCUMENTS ON RECORD. 3. THAT C.IT (A) HAS WRONGLY CONFIRMED THE ORDER OF AO. ITA NO . 6478 /DE L/201 3 TIRUPATI RESURFACING PVT. LTD. 2 4. THE AO HAS WRONGLY ESTIMATED NET PROFIT OF 'A' AS 10% OF WORK RECEIPTS AGAIN ST RETURNED LOSS OF RS. 175,600/ - . AS S. NO. 17 OF LETTER DT. 28.02.2008 FILED BE FORE AO IN RESPONSE TO HIS QUESTIONNAIRE DT. 18.02.2008, READS: 'WE MAY ADD THAT ASSESSEE HAS NOT EVEN PROVIDED FOR INTEREST ON SECURED LOANS BECAUSE OF PATHETIC FINANCIAL STATUS. THERE WERE OVERDUE BANK LOAN OUTSTANDING WHICH WERE NOT BEING PAID UP. PROV IDING INTEREST ON SUCH LOAN WILL RESULT IN LOSSES IN ACCOUNTS WHICH WILL WAKE UP THE BANK TO CALL UP THE LOANS IMMEDIATELY AND PURSUE THE RECOVERY'. NOTES TO ACCOUNTS APPENDED ON FOOT PROFIT & LOSS ACCOUNT WHICH READS: 'INTEREST ON BANK LOANS NOT PROVIDE D IN VIEW OF THE FACT ALL LOANS ARE BEING TREATED BY BANK AS NPA. IT WILL BE DEBITED AS AND WHEN BANK DEBITS THE INTEREST. BANK IS STARTING LEGAL ACTION FOR RECOVERY OF LOAN & INTEREST'. 5. AO HAS COMPLETELY IGNORED THE ABOVE FROM WHICH FINANCIAL POSITION OF THE COMPANY IS APPARENT AND WRONGLY ESTIMATED INCOME OF 'A' AS 10% OF GROSS RECEIPTS. 6. IN VIEW OF ABOVE YOU ARE REQUESTED TO DELETE THE ADDITION & ACCEPT DECLARED RESULTS AS GROUND REALTIES HAVE BEEN IGNORED WHILE FRAMING ASSESSMENT. ITA NO . 6478 /DE L/201 3 TIRUPATI RESURFACING PVT. LTD. 3 7. THAT APPELLA NT PRAYS FOR LEAVE TO ADD, AMEND OR VARY ANY OF THE GROUNDS EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 3 . FROM THE ABOVE GROUND S , IT IS GATHERED THAT THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE CONFIRMATION OF ADDITION MADE BY THE AO ON ACCOUNT OF ESTIMATING THE NET PROFIT @ 10% OF GROSS RECEIPTS INSTEAD OF RA.1,75,600/ - DECLARED BY THE ASSESSEE. 4 . THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 11.12.2006 DECLARING A LOSS OF RS.1,75,600/ - . THE ASSESSMENT, HOWEVER, WAS FRAMED BY THE AO EX - PARTE U/S 144 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) BY ASSESSING THE INCOME @ 10% OF THE GROSS RECEIPTS. ACCORDINGLY, INCOME WAS ASSESSED AT RS.14,64,413/ - . 5 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO SUSTAINED THE ADDITION BY OBSERVING THAT MERELY FILING THE PARTIAL DETAILS DID NOT ABSOLVE THE ASSESSEE FROM HIS STATUTORY RESPONSIBILITY OF FURNISHING THE COMPLETE DETAILS REQUIRED BY THE AO AND THAT THE AO WAS LEFT WITH NO ALTERNATIVE BUT TO ESTIMATE THE INCOME U/S 144 OF THE ACT AND THE ASSESSEE FAILED TO SUBSTANTIATE THE INCOME SHOWN IN THE RETURN. 6 . NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO FRAMED THE ASSESSMENT EX - PARTE WITHOUT ITA NO . 6478 /DE L/201 3 TIRUPATI RESURFACING PVT. LTD. 4 ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD AND WITHOUT CONSIDERING THE DETAILS FURNISHED BY THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) ALSO WITHOUT CONSIDERING THE SUBMISSIONS OF THE ASSESSEE SUSTAINED THE ADDITION MADE BY THE AO WITHOUT GIVING ANY COGENT REASON. HE REQUESTED TO RESTORE THE MATTER BACK TO THE FILE OF THE AO. 7 . IN HIS RIVAL SUBMISSIONS THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT IN SPITE OF VARIOUS O PPORTUNITIES GIVE N BY THE AO, T HE ASSESSEE DID NOT COMPLY AND FURNISH THE DETAILS REQUIRED BY THE AO. THEREFORE, THE ASSESSMENT WAS RIGHTLY FRAMED BY ESTIMATING THE INCOME FROM THE GROSS RECEIPTS. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE AO PASSED THE ASSESSMENT ORDER EX - PARTE AND HAD NOT GIVEN ANY BASIS WHILE APPLYING THE NET PROFIT RATE OF 10% ON THE GROSS RECEIPTS. IT IS ALSO NOT ICED THAT THE LD. CIT(A) ALTHOUGH MENTIONED IN PARA 3.2 OF THE IMPUGNED ORDER THAT THE SUBMISSIONS OF THE ASSESSEE AND THE FACTS HAD BEEN CAREFULLY CONSIDERED BUT NOWHERE IT IS STATED THAT WHAT WERE THE SUBMISSIONS OF THE ASSESSEE AND HOW THOSE WERE APPREC IATED. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS, DEEM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER BACK TO THE FILE OF THE AO ITA NO . 6478 /DE L/201 3 TIRUPATI RESURFACING PVT. LTD. 5 TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNIT Y OF BEING HEARD. WE ALSO DIRECT THE ASSESSEE TO COOPERATE AND NOT TO SEEK UNDUE OR UNWARRANTED ADJOURNMENTS. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . (O RDER PRONOUNCED IN THE COURT ON 11 /01/2017 ) SD/ - SD/ - (SUDHANS HU SRIVASTAVA ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 /01/2017 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. 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