DCIT, New Delhi V. Sh. Ramesh Sharma, New Delhi

ITA 6879/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3656 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 19-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Section: 143(3); 153A; 132

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 6879/DEL/2014 (ASSESSMENT YEAR: 2008 - 09 ) DCIT, CENTRAL CIRCLE - 20, NEW DELHI VS. RAMESH SHARMA, 19, POORVI MARG, 3 RD FLOOR, VASANT VIHAR, NEW DELHI PAN:AKYPS3876J (APPELLANT) (RESPONDENT) REVENUE BY : SMT PARAMITA TRIPATHY, CIT DR ASSESSEE BY: SHRI SALIL AGGARWAL, ADV SHRI SHAILESH GUPTA, CA DATE OF HEARING 02/11/ 2017 DATE OF PRONOUNCEMENT 3 1 / 01/2018 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - XXXII, NEW DELHI DATED 30.09.2014 FOR THE AY 2008 - 09. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 29771232/ - MADE BY AO ON ACCOUNT OF UNCONFIRMED AND MISMATCH OF SUNDRY CREDITOR. 2. THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW A ND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 2850023/ - MADE BY AO ON ACCOUNT OF 50% DISALLOWANCE OF PETTY SUNDRY CREDITORS. 3. THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADDITION OF RS. 200 17016/ - MADE BY AO ON ACCOUNT OF 30% OF DISALLOWANCE OF JOB CHARGES. 4. THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND OF ACTS OF THE CASE IN DELETING THE ADDITION OF RS. 16059897/ - MADE BY AO ON ACCOUNT OF ENHANCEMENT OF INCOME BY 10% OF TH E DECLARED GROSS PROFIT. DCIT VS. RAMESH SHARMA, ITA NO. 6879/DEL/2014 (ASSESSMENT YEAR: 2008 - 09) PAGE | 2 5. THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND OF ACTS OF THE CASE IN DELETING THE ADDITION OF RS. 1669740/ - MADE BY AO ON ACCOUNT OF UNEXPLAINED IMPREST ACCOUNT. 6. THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND OF ACTS OF THE CASE IN DELETING THE ADDITION OF RS. 57477245/ - MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF PURCHASE OF FIXED ASSETS AND CLAIM OF DEPRECATION THEREON. 7. THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND OF ACT S OF THE CASE IN DELETING THE ADDITION OF RS. 600000/ - OUT OF TOTAL ADDITION OF RS. 1200000/ - MADE BY AO ON ACCOUNT OF LOW WITHDRAWALS. 8. THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND OF ACTS OF THE CASE IN DELETING THE ADDITION OF RS. 441 340/ - MADE BY AO ON ACCOUNT OF PF & ESI. 9. THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND OF ACTS OF THE CASE IN DELETING THE ADDITION OF RS. 254826/ - MADE BY AO O ACCOUNT OF EXCESS AND UNDER RECOVERY AMOUNTS. 10. THE LD COMMISSIONER OF INC OME TAX (APPEALS) ERRED IN LAW AND OF ACTS OF THE CASE IN DELETING THE ADDITION OF RS. 27576566/ - MADE BY AO ON ACCOUNT OF UNDER VALUATION OF INVESTMENT IN PROPERTY PURCHASED DURING THE YEAR. 11. THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AN D OF ACTS OF THE CASE IN DELETING THE ADDITION OF RS. 3260000/ - MADE BY AO ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT. 3. THE BRIEF FACTS OF THE CASE IS THAT ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM BUSINESS AND PROFESSION ETC. SEARCH U/S 132 OF THE ACT WAS CONDUCTED ON 15.06.2011 IN RAUS INFRA GROUP OF CASES WHERE ASSESSEE IS ALSO ONE OF THE MEMBERS. THEREFORE, NOTICE U/S 153A WAS ISSUED AND IN RESPONSE TO WHICH RETURN OF INCOME WAS FILED ON 04.12.2012 AT RS. 22990147/ - . CONSEQUENTLY, THE ADDITION WAS MADE OF RS. 109421416/ - TO THE TOTAL INCOME OF THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS 30% OF THE JOB WORK CHARGES TO THE EXTENT OF RS. 20017016/ - WAS DISALLOWED. 30% OF THE BILLS PAID TO M/S. SHARMA CONSTRUCTION WERE FOU ND TO BE OVER INVOICED AND THEREFORE, 10% OF THE GROSS PROFIT OF RS. 16059897/ - WAS ESTIMATED. A FURTHER ADDITION OF RS. 2850023/ - WAS ALSO DISALLOWED. FURTHER RS. 166970/ - WAS DISALLOWED OUT OF IMPREST ACCOUNT. RS. 5777245/ - WAS DISALLOWED DCIT VS. RAMESH SHARMA, ITA NO. 6879/DEL/2014 (ASSESSMENT YEAR: 2008 - 09) PAGE | 3 OUT OF VARIOUS EXPENDITURE. RS. 12 LACS WAS ADDED ON ACCOUNT OF LOW HOUSEHOLD EXPENDITURE. RS. 441340/ - WAS DISALLOWED AS ESI AND PF WERE DEPOSITED BEYOND DUE DATES. RS. 254826/ - WAS DISALLOWED ON ACCOUNT OF EXCESS UNDER RECOVERY. FURTHER ADDITION OF RS. 375531/ - WAS MAD E OUT OF VARIOUS TELEPHONE EXPENSES. RS. 32.60 LACS WERE ADDED ON ACCOUNT OF CASH DEPOSITS AND A FURTHER SUM OF RS. 27576566/ - WAS ADDED ON ACCOUNT OF REPORT OF DVO ON PURCHASE OF HOUSE. CONSEQUENTLY, ASSESSMENT U/S 153A READ WITH SECTION 143(3) OF THE ACT WAS MADE ON 31.03.2014 AT RS. 132411560/ - . ORIGINAL ASSESSMENT U/S 143(3) IN THIS PARTICULAR CASE WAS ALREADY MADE ON 12.11.2008 WHEREIN, CERTAIN ADDITIONS WERE MADE TO THE TOTAL INCOME OF THE ASSESSEE. 4. ASSESSEE FILED APPEAL BEFORE THE LD CIT(A) - XXXII, W HO VIDE ORDER DATED 30.09.2014 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. THEREFORE, REVENUE IS IN APPEAL BEFORE US CONTESTING THE DELETION OF THOSE ADDITIONS. 5. THE LD DR RELIED UPON THE ORDER OF THE LD ASSESSING OFFICER. 6. THE LD AR SUBMITTED THAT ASSESSEE H AS RAISED AN ISSUE BEFORE THE LD CIT(A) VIDE ADDITIONAL GROUNDS NO. 1 AND 2 WHEREIN IT HAS BEEN CONTESTED THAT LD AO HAS ERRED IN MAKING ADDITION IN ASSESSMENT COMPLETED BY HIM U/S 153A WITHOUT MAKING ANY REFERENCE TO THE SEIZED MATERIAL WHICH IS ARBITRARY , ILLEGAL AND AGAINST THE PROVISIONS OF LAW. HE SUBMITTED THAT VIDE PARA NO. 50 THE ABOVE GROUNDS OF APPEAL WERE REJECTED AND DECIDED AGAINST THE ASSESSEE. THEREFORE, HE STATED THAT ACCORDING TO RULE 27 OF THE INCOME TAX APPELLATE TRIBUNAL RULES THE ASSESS EE CAN ADVANCE ARGUMENTS ON ISSUES ALREADY DECIDED AGAINST HIM, EVEN THOUGH NO APPEAL HAS BEEN FILED AGAINST THE FINDING OF THE LD CIT(A). THEREFORE, HE SUBMITTED THAT NONE OF THE ADDITION CONTESTED BY THE REVENUE IN THIS APPEAL ARE BASED ON ANY INCRIMINATING MATERIAL THEREFORE, THE APPEAL OF THE REVENUE DOES NOT DESER VE ANY MERIT. THE LD DR VEHEMENTLY OBJECTED AND SUBMITTED THAT ASSESSEE HAS NOT FILED ANY APPEAL IT CANNOT RAISE SUCH GROUND. DCIT VS. RAMESH SHARMA, ITA NO. 6879/DEL/2014 (ASSESSMENT YEAR: 2008 - 09) PAGE | 4 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDER OF THE LD CIT(A) WHEREIN, VIDE PARA NO. 50 HE HAD REJECTED THE ADDITIONAL GROUND RAISED BY THE ASSESSEE HOLDING THAT THERE IS NO REQUIREMENT OF ANY INCRIMINATING MATERIAL DURING THE COURSE OF SEARCH FOR MAKING AN ASSESSMENT. IT WAS FURTHER HELD BY HIM THAT NATURE OF ASSESSMENT PROCEEDINGS CANNOT BE RESTRICTED TO MAKE ASSESSMENT ONLY OF UNDISCLOSED INCOME. THEREFORE, IT IS APPARENT THAT THIS ISSUE IS DECIDED AGAINST THE ASSESSEE. A DMITTEDLY, ASSESSEE HAS NOT FILED ANY APPEAL AGAINST SUCH FINDING OF THE LD CIT(A). HOWEVER, ACCORDING TO RULE 27 OF THE INCOME TAX APPELLATE TRIBUNAL RULES THE ASSESSEE CAN SUPPORT THE ORDER OF THE LD CIT(A) ON THE ISSUES DECIDED AGAINST HIM EVEN IF SAME IS NOT AGITATED IN APPEAL. RULE 27 PROVIDES THAT THE ASSESSEE THOUGH HE MAY NOT HAVE APPEAL MAY SUPPORT THE ORDER AGAINST ON ANY OF THE GROUNDS DECIDED AGAINST HIM. THIS RULE COINS THE FUNDAMENTAL PRINCIPL E THAT A PERSON MIGHT NOT HAVE BEEN AGGRIEVED BY TH E ORDER OF THE COURT AND THEREFORE, MIGHT NOT HAVE FILE D APPEAL AGAINST SUCH ORDER, HOWEVER, HE IS FREE TO DEFEND THE ORDER BEFORE THE APPELLATE FORUM ON ALL GROUNDS INCLUDING THE GROUND WHICH MAY HAVE DECIDED AGAINST HIM BY THE COURT WHOSE ORDER IS OTHERW ISE IN HIS FAVOUR. IN VIEW OF THIS WE AGREE WITH THE COUNSEL THAT NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE IN ABSENCE OF INCRIMINATING MATERIAL IN A CONCLUDED ASSESSMENT. THE PRESENT ASSESSMENT YEAR BEFORE US IS ASSESSMENT YEAR 2007 - 08 WHEREAS THE SEARCH TOOK PLACE ON 15.06.2011 AND ORIGINALLY THE ORDER U/S 143(3) OF THE INCOME TAX ACT HAS ALREADY BEEN MADE ON 12.11.2008. THEREFORE, IN CONCLUDED ASSESSMENTS IT IS APPARENT THAT U/S 153A PROCEEDINGS IF ANY ADDITION IS REQUIRED TO BE MADE HAS TO BE ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. BEFORE US THE LD DR COULD NOT SHOW THAT ANY OF THE ADDITIONS WHICH ARE CONTESTED BY THE REVENUE IN THIS APPEAL ARE ARISING OUT OF ANY INCRIMINATING MATERIAL OR POST SEARCH ENQUIRY C ONDUCTED BY THE REVENUE. WE HAVE ALSO PERUSED THE CONTENTION OF THE LOWER AUTHORITIES ON ALL THESE ADDITIONS, HOWEVER, WE DCIT VS. RAMESH SHARMA, ITA NO. 6879/DEL/2014 (ASSESSMENT YEAR: 2008 - 09) PAGE | 5 ALSO COULD NOT FIND ANY OF THE ADDITION AGITATED BEFORE US ARE BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE HON'BLE DELHI HIGH COURT IN 380 ITR 573 IN CIT VS. KABUL CHAWLA HAS CONFIRMED THE ABOVE VIEW VIDE PARA NO. 37 OF THE ORDER OF THE HONBLE HIGH COURT. THEREFORE, AS NONE OF THE ADDITION IS BASED ON ANY INCRIMINATING MATERIAL UNEARTH ED DURING THE COURSE OF SEARCH ALL THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 8. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 1 / 01/2018 . - S D / - - S D / - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 3 1 / 01/2018 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI