ACIT, New Delhi V. The Office Liquidator of M/s Triveni Infrastructure, New Delhi

ITA 6525/DEL/2016

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 9571 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 20-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.As. No. 6522, 6523, 6524, 6525 & 6526/DEL/2016 Assessment Years 2007-08, 2008-09, 2009-10, 2010-11 & 2011-12 Asst. Commissioner of Income Tax, Central Circle-28, New Delhi. v. The Official Liquidator of M/s. Triveni Infrastructure Development Company Ltd., 8 th Floor, Lok Nayak Bhawan, New Delhi. TAN/PAN: AACCT3870A (Appellant) (Respondent) Appellant by: None Respondent by: Ms. Rakhi Vimal, CIT-DR Date of hearing: 27 09 2022 Date of pronouncement: 30 09 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M. The c ap ti one d ap p eal s ha ve be en f ile d a t the i ns ta nc e o f the Re ven ue a ga in st t he or de rs of th e Co mmi s si on er of Inco me Ta x (Ap pe al s) -X XI X, Ne w D el hi [ ‘ CIT ( A)’ in s hor t] , of eve n dat e 22. 09 .2 01 6 ar isi ng f ro m th e as ses s men t o rd er s pas sed un d er Se ct io n 14 3(1 ) of t he In co me Ta x Ac t, 1 96 1 ( the A ct ) co nce rn in g A Ys 2 00 7- 08 to 2 01 1- 12 . 2. W hen the ma tte r w as ca ll ed f or h ea ri n g, n on e appea re d f or the ass es se e. I t w as tra ns pir ed in the co ur se of t he h ea ri ng t hat no ti ce s of he ar in g hav e b een d ul y s e rve d o n t he of f ici al l iq uid at or b y rev en ue w ho h as s t epp ed i nt o th e sh oe s of the ma na ge me n t co mpa n y. The ref o re, i n v ie w of the co nti nu ed def ia nc e of notice s of heari ng wit ho ut s h ow in g an y e xt ra or di nar y s itu ati on a nd witho ut a n y re qu es t ITA No.6522 to 6526/Del/2016 2 f or adj ou rn me nt , we a re c on st rai nt to pr oc ee d ex -p art e i n th e cap ti on ed R ev en ue’ s A p pea ls . 3. At t he t i me of hea ri ng, the ld . CI T- DR f or the Re ve nue po i nte d out t ha t al l ap pea ls ar e in te rco nn ec ted a nd i ss ue s in vol ve d ar e co mmo n . C on se que ntl y, al l th e mat te r s we re he ard toge t her f o r t he sak e of c on ven ie nc e a nd a re ad ju di cat ed he re un der . 4. To b eg in w it h f or the sak e of co nv en ien ce w e s hal l ta k e up IT A N o. 6 52 2/ De l/ 20 16 f o r ad ju dic at i on pu rp os es . 5. The g ro un ds of a pp eal r ais ed b y t h e Re ven ue r ea d a s un de r : “ 1 ) O n t h e f a c t s a n d i n t h e c i r c u m s t a n c e s o f t h e ca s e , t h e I d . C I T ( A ) h a s e r r e d i n l a w a n d o n f a c t s i n d e l e t i ng t h e d i s a l l o w a n c e o f R s . 2 2 , 3 9 , 3 6 , 8 8 2 / - m a d e b y t h e A s s es s i n g O f f i c e r o n a c c o u n t o f u n v e r i f i a b l e e x p e n s e s c l a i m e d b y t h e a s s e s s e e . 2 ) O n t h e f a c t s a n d i n t h e c i r c u m s t a n c e s o f t h e c as e , t h e l d . C I T ( A ) h a s e r r e d i n l a w a n d o n f a c t s i n d e l e t i n g t h e d i s a ll o w a n c e o f R s . 2 2 , 3 9 , 3 6 , 8 8 2 / - m a d e b y t h e A s s e s s i n g O f f i c e r o n a c c o u n t o f u n v e r i f i a b l e e x p e n s e s c l a i m e d b y t h e a s s e s s e e b y h ol d i n g t h a t t h e A O h a s m a d e t h e a d d i t i o n o n a d h o c b a s i s w i t h o u t a n y c o g e n t r e a s o n i n g o r w o r k i n g , a n d n o t a p p r e c i a t i n g t h e f a c t t h a t n e i t h e r t h e a s s e s s e e n o r t h e D e l h i H i g h C o u r t a p p o i n t e d O f f i c i al L i q u i d a t o r o f t h e c o m p a n y p r o v i d e d r e p l y t o t h e n o t i c e s i n s p i t e of p r o v i d i n g s u f f i c i e n t o p p o r t u n i t y . 3 ) T h a t t h e o r d e r o f t h e C I T ( A ) i s p e r v e r s e , e r r o ne o u s a n d i s n o t t e n a b l e o n f a c t s a n d i n l a w . 6. As p er t he g ro un ds of appea l, t he Rev enu e ha s chal le ng e d the act io n of t he CI T( A) wh er eb y t h e d is al lo wa nce o f exp en se s a mou nti ng t o Rs .2 2 ,39 ,3 6, 88 2/ - wa s r e ver se d b y t he CI T( A). ITA No.6522 to 6526/Del/2016 3 7. The re as on s g iv en b y the C IT( A) f or adj ud ic at in g t he i ss ue i n f avou r of as se ss ee r ead s as u nd er: “I T A N o . 6 5 2 2 / D e l . / 2 0 1 6 ( A s s e s s m e n t Y e a r 2 0 0 7 - 0 8 ) 1 7 . I n 1 3 t h g r o u n d o f a p p e a l , t h e a p p e l l a n t h a s d is p u t e d t h e a d h o c d i s a l l o w a n c e @ 1 5 % o f t o t a l e x p e n s e s c l a i m e d w h i c h c o m e s t o R s . 2 2 , 3 9 , 3 6 , 8 8 2 / - . T h e a d d i t i o n h a s b e e n m a d e a s t h e a p p e l l a n t c o u l d n o t p r o d u c e t h e b i l l s a n d v o u c h e r s f o r v e r i f ic a t i o n d u r i n g a s s e s s m e n t p r o c e e d i n g s a n d A O d i s a l l o w e d t h e s a m e as g e n u i n e n e s s o f t h e e x p e n s e s r e m a i n e d u n v e r i f i e d . N o s u b m i s s i o n s h a v e b e e n m a d e b y t h e a p p e l l a n t i n t h i s r e g a r d . 1 7 . 1 I t h a s b e e n o b s e r v e d t h a t t h e A O h a s n o t r e j e ct e d b o o k s o f a c c o u n t s , w h e r e a s t h e b o o k s o f a c c o u n t s w e r e a u d i t ed a n d a l s o r e l i e d b y t h e A O f o r m a k i n g o t h e r a d d i t i o n s . T h e d is a l l o w a n c e h a s b e e n m a d e @ 1 5 % o n a d h o c b a s i s w i t h o u t a n y c o g e n t r ea s o n i n g o r w o r k i n g . I t i s a l s o s e e n t h a t t h e s a i d a d d i t i o n h a s n o b e a r i n g o n t h e s e i z e d m a t e r i a l f o u n d d u r i n g t h e c o u r s e o f s e a rc h . I n v i e w o f t h e d e c i s i o n o f H o n ' b l e D e l h i H i g h C o u r t i n t h e c a se o f K a b u l C h a w l a ( s u p r a ) n o a d d i t i o n s c a n b e m a d e i n a c o m p l et e d c a s e , w i t h o u t t h e b a s i s o f a n y i n c r i m i n a t i n g m a t e r i a l f o un d d u r i n g s e a r c h . T h o u g h t h e r e a r e c o n t r a r y j u d g m e n t s i n c l u d in g b y H o n ' b l e A l l a h a b a d H i g h C o u r t i n t h i s r e g a r d , h o w e v e r t h e d ec i s i o n o f H o n ' b l e D e l h i H i g h C o u r t i s b i n d i n g i n n a t u r e a n d he n c e r e s p e c t f u l l y f o l l o w i n g t h e s a m e , i t i s h e l d t h a t t hi s a d h o c a d d i t i o n c a n n o t b e m a d e i n a b s e n c e o f a n y i n c r i m i n a t i n g d o c um e n t f o u n d d u r i n g s e a r c h . T h e r e f o r e , t h e a d d i t i o n a m o u n t i n g t o R s . 2 2 , 3 9 , 3 6 , 8 8 2 / - i s d i r e c t e d t o b e d e l e t e d . T h i s gr o u n d o f a p p e a l i s a l l o w e d . ” 8. W e h av e ca ref u ll y con si de re d th e s ub mi ssi on s made o n beh alf of th e R ev en ue to di sl od ge th e f in d ing s of th e CIT (A ). W e f i nd su bst an ti al me ri t t h ere in . A d mit te dl y, t he as se sse e co ul d n ot pr od uc e ITA No.6522 to 6526/Del/2016 4 the bi lls an d v ou c her s t ow ar ds h ug e exp en se s cl ai med bef or e th e As ses si ng Of f ice r. Th us, t he al leg at io n of t he As sess in g Of f icer th at the ge nui ne ne ss o f such e xp en se s r e ma in s u nv erif i ed can no t be f ault ed . I t is f urt he r a n ad mi tt ed p osi t ion t ha t no s ub mi s sio ns w er e ma de on beh alf of the a ss es se e bef or e the As se ss in g Of f icer i n th is reg ar d. I n t he c irc u ms tan ce s, t he As se ssi ng Of f icer wa s l ef t wit h n o alt er nat iv e bu t to ta ke a ho li sti c vi ew i n t he mat ter t o th e bes t of h is jud g men t. T he As ses si ng Of f icer i n the f act s an d cir cu mst an ce s, dee me d i t f it t o es t i ma te di sal lo wa nc e @ 1 5% of the to ta l ex pe ns es cla i med w hi ch w or ked o ut t he di sp ut e d a mo un t of R s.22 , 39, 36 ,8 82 /- . 9. The C IT (A ) ha s re ver se d th e e st i mat ed di sa ll ow ance f o r t he rea so ns r ep ro duc ed he re in ab ov e. Th e CI T( A) ha s f o und f ault w it h the ac ti on of th e A ss es sin g Of f icer wi th ou t c onf r ont in g t he As ses si ng Of f icer f or suc h s ub st an tia l ac ti on . T he CI T( A) h as app ar en tl y ac te d i n a v er y cu rs or y ma nne r. In our vi ew, it wa s inc u mbe nt up on th e CI T( A) to d ea l wit h t he is sue on mer it s af te r conf r on ti ng t he As s ess in g Of f ice r f or s uch a d ras tic ac ti on . Ne ed le ss to sa y, the C IT (A ) pl a ys t he ro le of bot h adj ud ic atin g a uth or it y a s wel l as ap pe lla te aut ho ri t y. T he C IT (A) a pp ear s to ha v e a cce pt ed eve r y sta te me nt p lac ed o n b eh alf o f the as se ss ee b ef ore it as sac ro sa nc t di sc ard i ng th e ob je ct ive a n al ys i s of f acts ca rr ied o ut b y the A ss es si ng Of f ic er. N ot ic eab l y, th e CI T( A) ha s no t co n f ront ed t he su b mis sio ns a nd mate ri al pl ac ed bef o re it to t he A ss es si ng Of f ice r. No r e man d re po rt on f act ua l as pe ct s sh ow in g wi de v ar i anc e in th e f acts in vo lv ed h as bee n cal le d f o r. Th e C IT (A ) has r ea di l y ac cep te d the nar ra ti ve p ro po un ded b y t he a ss es s ee o n th e f actu al a s pec ts . Th e CI T( A) h as n ot d eal t wi th i mpo rta n t f indi ng th at h ug e ex pe nse s inc ur re d re ma in s u ns ub sta nt ia te d b y t he a ss es se e a nd t h us t he on us wh ich l a ys up on t h e ass es se e re mai ne d un dis ch ar ge d. I t is al so n ot dis ce rn ib le f r o m t h e c r yp t ic or de r of t he CI T( A) a bo ut t h e n at ur e of ITA No.6522 to 6526/Del/2016 5 the se ize d mat er ia l f oun d d ur in g th e sea rc h. N o r efere nce to the con te nt s of s eiz ed mat er ia l o r p an ch n am a h as bee n ma d e. I t i s n ot un der st oo d a s to h ow t he c la i m of th e as se sse e h as b ee n ac ce pte d mer el y o n th e g ro un d t ha t b oo ks of acc ou nt w ere a u dit ed . T he Re ven ue is en ti tle d to ver if y t he ex pe nse s whe re the c irc u msta nc es so wa rr an te d n ot wi t hst an di ng t he ac co u nts a re au di te d. 10. In s ho rt , t he ord er pas se d b y t he CI T( A) i s n on de sc ri pt on t he f actu al a s w ell as leg al a sp ec ts . Th e CIT (A ), i n o ur o pin io n, ha s su mma ri l y a cce pt ed th e ver si on of t he ass es se e wit ho ut g i vin g a f ai r op por tu ni t y to th e Re ven ue in th is re g ard . T he ref ore, we are no t i n a po sit io n t o e ith er a cce pt or oth er wi se rej ec t th e con cl us io n dr aw n b y the CI T( A) . I n o u r vi ew , t he cir cu ms tan ce s e xi st in g in t he ca se war ra nt s se tt in g as i de of th e i mp ug ne d ord er of t he C IT ( A) g ra nt in g wh ole so me re lief to t he a ss es se e on t he af o re sa i d is su e of dis al lo wa nc es of e x pen se s. 11. The af ore sa id i ss u e is t he ref or e se t a sid e an d r est or ed t o th e f ile of th e C IT (A ) f or de no vo ex a mi nat io n of f act ua l an d le ga l asp ec ts cl ai me d b y the as se ss ee . N ee dle ss to sa y, th e C IT( A) sh al l pas s a sp eak in g o rd er af te r g iv in g du e op por tu ni t y to b ot h the si des . The p oi nt a s to wh eth er t he a dd it ion s/ di sa ll ow an ces have a n y con ne ct io n to th e sei ze d mate ri al i s ent ir el y f a ct ua l in nat ur e a nd the ref o re w e d o n ot c on si der it n ec e ssa r y to g iv e co m me nts wi th ref er enc e t o t he ju d ici al pre ce de nt s a p pli ca bl e i n th e a bs e nce of an y mea ni ngf u l dis cu ss ion o n t he re le va n t f act s. C on se que n tl y, we se t asi de th e a ct io n of the C IT( A) a nd re s tor e t he is sue b ac k to th e f ile of th e CI T( A) f o r f r esh a dj ud ica ti on i n acc or da nce w it h la w. 12. In th e r es ult , t he ap pea l of t he Re ve nu e i n IT A No. 6 52 2/ Del /2 01 6 f or As se ss me nt Yea r 2 00 7- 08 is allow ed f o r sta ti st ica l pu rp os es . ITA No.6522 to 6526/Del/2016 6 13. Fo r pa ri t y of rea s on s in IT A N o. 65 22/ De l/ 20 16 , t he i ssu e reg ar di ng d is al l ow anc e of ex pen se s ra is ed in IT As No. 6 52 3/ Del /2 01 6 to 6 52 6/ De l/ 20 16 f or A ss es s men t Yea rs 2 00 8- 09 to 2 01 1- 12 ar e al so set a sid e an d re st ore d to t he fil e of the CI T( A) f or d en ov o d et er mi nat io n in ac co r dan ce w it h l aw a f ter giv in g rea so na bl e op po rtu nit y of bei ng h ea rd to the a ss es se e as wel l as t he As ses si ng Of f ic er. 14. In th e re su lt, t he cap ti on ed a pp eal s of th e Re ve nu e in IT As No. 6 52 3/ Del /2 01 6 to 6 52 6/ De l/ 20 16 f or A ss es s men t Yea rs 2 00 8- 09 to 20 11 -1 2 are a ls o al lo we d f or s ta ti sti cal p ur po ses. 15. In th e co mb in ed res ul t, al l th e ca pti on ed a pp eal s o f the Re ven ue a re al lo we d f or s tat is ti ca l p ur po ses e x- pa rte. Order was pronounced in the open Court on 30/09/2022. Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /09/2022 Prabhat