DCIT, New Delhi V. M/s. Pacific Projects Ltd., New Delhi

ITA 6686/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4911 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 03-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 19-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN GOTRU
• Keywords: Gross profit estimation; Additional evidence
• Section: 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 6686/DEL/2013 A.Y. 2006-07 DCIT-14(1), VS. M/S PACIFIC PROJECTS LTD., ROOM NO. 221, 2 ND FLOOR, SAFEWAY HOUSE, D-4, C.R. BUILDING, COMMERCIAL COMPLEX, I.P. ESTATE, PRASHANT VIHAR, NEW DELHI NEW DELHI 110065 (PAN: AADCP5269R) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. SHRAVAN GOTRU, SR. DR ASSESSEE BY : NONE ORDER PER H.S. SIDHU, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XVII, NEW DELH I DATED 04.9.2013 PERTAINING TO ASSESSMENT YEAR 2006-07 ON THE FOLLOW ING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 1,03,00,000/- MADE BY THE AO ON ACCOUNT OF SUNDRY CREDITORS ON THE BASIS OF ADDITIONAL EVIDENC E PRODUCED DURING THE APPELLATE PROCEEDINGS WITHOUT 2 RECORDING IN WRITING THE REASONS FOR THE ADMISSION OF THE ADDITIONAL EVIDENCE. 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDENCE FILED BEFORE HER AS THE ASSESSEE DID NOT SATISFY THE CONDITIONS LAID DOWN IN RULE 46A OF THE INCOME TAX RULES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 1,60,00,000/- MADE BY THE AO ON ACCOUNT OF LOW GROSS PROFIT (GP) RATE IN THE ABSENCE OF PRODUCTION OF BOOK OF ACCOUNT AND BILLS/ VOUCHERS DURING THE ASSESSMENT PROCEEDINGS. 3. THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FRESH GROUNDS OF APPEAL AND / OR DELETE OR AMEND ANY OF THE GROUND OF APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE FILED ITS RETURN OF INCOME ON 25.11.2006 AT A TOTAL INCOME OF RS. 39,46 ,300/-. THE RETURN OF THE ASSESEE WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER IN REFERRED AS THE ACT) ON 11.1.2008. THE CASE WAS PICKED UP FOR SCRUTINY AND A NOTICE U/S. 143(2) OF THE ACT WAS SENT TO THE ASSESSEE ON 11.10.2007. IN RESPONSE TO THE SAME, T HE AR OF THE ASSESSEE APPEARED FOR THE ASSESSEE FROM TIME TO TIM E. ASSESSEE IS ENGAGED IN THE CONSTRUCTION ACTIVITIES AND HAS CAR RIED OUT MAJOR 3 CONSTRUCTION WORK FOR ABHINAV CGHS LTD., ROHINI ED UCATIONAL SOCIETY, HPCL AND INDIA OIL CORPN. THE TOTAL TURNOVER HAS IN CREASED FROM RS. 12.64 CRORE TO RS. 20.03 CRORES. THE AO VIDE QUEST IONNAIRE DATED 27.5.2008 AND FURTHER ORDER SHEET ENTRIES HAS ASKE D THE ASSESSEE TO FILE VARIOUS DETAILS AND ASSESSEE FILED SOME OF THE DETA ILS AND FAILED TO FILE THE REST. AGAIN VIDE ORDER SHEET ENTRY DATED 5.9.200 8 AND LATER ON VIDE SHOW CAUSE NOTICE U/S. 144 DATED 18.11.2008 ASSESSE E WAS GIVEN FINAL OPPORTUNITY TO EXPLAIN AS TO WHY BEST JUDGMENT ASSE SSMENT U/S. 144 NOT BE MADE AND THE HEARING WAS FIXED ON 28.11.2008. NO BODY APPEARED NOR ANY DETAIL WAS FILED. IN THE LIGHT OF THE SAME, AO DECIDED THE CASE ON MERITS ON THE BASIS OF INFORMATION AVAILABLE ON RE CORD AND MADE VARIOUS ADDITIONS BY COMPLETING THE ASSESSMENT AT RS. 387.5 6 LACS VIDE EXPARTE ASSESSMENT ORDER DATED 2.12.2008 PASSED U/S. 144 OF THE ACT. AGAINST THE ASSESSMENT ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 4.9.2013 HAS DELETED PART ADDITIONS BY PARTLY ALLOWING THE APPEAL OF THE ASSESSEE. AGGRIE VED WITH THE IMPUGNED ORDER PASSED BY THE LD. CIT(A), REVENUE IS IN APPEA L BEFORE THE TRIBUNAL. 3. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. HE STA TED THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,03,00,000/- MADE BY THE AO ON ACCOUNT OF SUNDRY CREDITORS ON THE BASIS OF ADDITI ONAL EVIDENCE PRODUCED DURING THE APPELLATE PROCEEDINGS WITHOUT RECORDING IN WRITING THE REASONS FOR THE ADMISSION OF THE ADDITIONAL EVIDENCE. HE FU RTHER STATED THAT LD. CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDEN CE FILED BEFORE HER AS 4 THE ASSESSEE DID NOT SATISFY THE CONDITIONS LAID DO WN IN RULE 46A OF THE INCOME TAX RULES. IT WAS ALSO SUBMITTED BY THE LD. DR THAT LD. CIT(A ) HAS ERRED IN DELETING THE ADDITION OF RS. 1,60,00,0 00/- MADE BY THE AO ON ACCOUNT OF LOW GROSS PROFIT (GP) RATE IN THE ABSENC E OF PRODUCTION OF BOOK OF ACCOUNT AND BILLS/ VOUCHERS DURING THE ASSESSMEN T PROCEEDINGS. 4. IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE WAS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR HIS AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FILED ANY APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE F ACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ISSUE INV OLVED IN THE PRESENT APPEAL, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE W OULD BE SERVED TO ISSUE NOTICE AGAIN AND AGAIN TO THE ASSESSEE, THERE FORE, WE ARE DECIDING THE PRESENT APPEAL EXPARTE QUA ASSESSEE, AFTER HEAR ING THE LD. DR AND PERUSING THE RECORDS. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORD S, ESPECIALLY THE ORDER OF THE LD. CIT(A) AS WELL AS AO. WE FIND THAT AO HAS PASSED THE ASSESSMENT ORDER 2.12.2008 U/S. 144 OF THE INCOME T AX ACT, 1961 I.E. EXPARTE QUA ASSESSEE. THE AO VIDE QUESTIONNAIRE D ATED 27.5.2008 AND FURTHER ORDER SHEET ENTRIES HAS ASKED THE ASSESSEE TO FILE VARIOUS DETAILS AND ASSESSEE FILED SOME OF THE DETAILS AND FAILED T O FILE THE REST. AGAIN VIDE ORDER SHEET ENTRY DATED 5.9.2008 AND LATER ON VIDE SHOW CAUSE NOTICE U/S. 144 DATED 18.11.2008 ASSESSEE WAS GIVEN FINAL OPPORTUNITY TO EXPLAIN AS TO WHY BEST JUDGMENT ASSESSMENT U/S. 144 NOT BE MADE AND 5 THE HEARING WAS FIXED ON 28.11.2008. NOBODY APPEARE D NOR ANY DETAIL WAS FILED. IN THE LIGHT OF THE SAME, AO DECIDED TH E CASE ON MERITS ON THE BASIS OF INFORMATION AVAILABLE ON RECORD AND MADE VARIOUS ADDITIONS BY COMPLETING THE ASSESSMENT AT RS. 387.56 LACS VIDE E XPARTE ASSESSMENT ORDER DATED 2.12.2008 PASSED U/S. 144 OF THE ACT. H OWEVER, WE FIND THAT LD. CIT(A) IN HIS IMPUGNED ORDER HAS DELETED THE AD DITION OF RS. 1,03,00,000/- MADE BY THE AO ON ACCOUNT SUNDRY CRED ITORS ON THE BASIS OF ADDITIONAL EVIDENCE PRODUCED DURING THE APPELLAT E PROCEEDINGS WITHOUT RECORDING IN WRITING THE REASONS FOR THE ADMISSION OF THE ADDITIONAL EVIDENCE. WE FURTHER FIND THAT THE ASSESSEE DID N OT SATISFY THE CONDITIONS AS LAID DOWN IN RULE 46A OF THE INCOME TAX RULES AN D DESPITE THAT LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENCE. WE FURTH ER NOTE THAT ADDITION OF RS. 1,60,00,000/- WAS ALSO DELETED BY THE LD. CI T(A) ON ACCOUNT OF LOW GROSS PROFIT RATE IN THE ABSENCE OF PRODUCTION OF BOOK OF ACCOUNT AND BILLS/ VOUCHERS DURING THE ASSESSMENT PROCEEDINGS. IN VIEW OF AFORESAID DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT THE SE ADDITIONAL EVIDENCES NEEDS TO BE EXAMINED THOROUGHLY AT THE L EVEL OF THE AO AND ALONGWITH BOOKS OF ACCOUNTS AND BILLS/ VOUCHERS ETC . THEREFORE, IN THE INTEREST OF JUSTICE, WE THINK IT PROPER TO SET AS IDE THE ISSUES IN DISPUTE TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH, AFTE R EXAMINING ALL THE DOCUMENTS, INCLUDING THE ADDITIONAL EVIDENCES AS W ELL AS BOOKS OF ACCOUNTS, BILLS AND VOUCHERS ETC. HOWEVER, THE A SSESSEE IS ALSO DIRECTED TO SUBMIT ALL THE NECESSARY DOCUMENTS INCLUDING THE ADDITIONAL EVIDENCE FILED BEFORE THE LD. CIT(A) AND BOOKS OF ACCOUNTS A ND BILLS/ VOUCHERS ETC. 6 TO SUBSTANTIATE ITS CASE BEFORE THE AO AND ASSESSEE IS ALSO DIRECTED TO FULLY COOPERATE WITH THE AO AND DID NOT TAKE ANY UN NECESSARY ADJOURNMENT. ACCORDINGLY, THE ISSUES IN DISPUTE ARE SET ASIDE TO THE FILE OF THE AO WITH THE AFORESAID DIRECTIONS. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 01/09/2017. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:01/09/2017 '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