ITO, New Delhi V. Sh. Sushil Mohan Aggarwal, New Delhi

ITA 688/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7422 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 26-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL SENIOR
• Keywords: Opportunity of being heard
• Section: 142(1); 145; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.688/DEL./2014 (ASSESSMENT YEAR : 2009-10) ITO, WARD 36 (3), VS. SHRI SUSHIL MOHAN AGGARWAL, NEW DELHI. 61, KRIPAL APARTMENT, I.P. EXTENSION, PATPARGANJ, NEW DELHI. (PAN : AAEPA7390M) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SMT. ANIMA BARNWAL, SENIOR DR DATE OF HEARING : 26.05.2016 DATE OF ORDER : 31.05.2016 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, INCOME TAX OFFICER, WARD 36 (3), NEW DE LHI (HEREINAFTER REFERRED TO AS THE REVENUE), BY FILI NG THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 29.11.2013 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- XXVII, NEW DELHI QUA THE ASSESSMENT YEAR 2009-10 ON THE GR OUNDS INTER ALIA THAT :- ITA NO.688/DEL./2014 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE ORDER OF THE LD. CIT (A) IS BAD IN LAW AND NOT IN CONSONANCE WITH FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT (A) HAD ERRED IN REDUCING THE NET PROFI T FROM 2% TO 1% OF THE TURNOVER BY ESTIMATING THE NET PROF IT AT 1% I.E. RS.23,81,671/- INSTEAD OF 2% I.E. RS.47,63, 383/- OF THE TURNOVER OF RS.23,81,67,172/- AS WAS MADE BY THE A.O. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT (A) ERRED IN DELETING THE ADDITION OF RS.1,74,97,833/- MADE BY THE A.O. ON ACCOUNT OF UNSECURED LOANS AND SUNDRY CREDITORS U/S 41 (1) OF THE ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE APPELLANT CRAVES LEAVE TO ADD, ALLOW OR AMEND A NY OR ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COUR SE OF HEARING OF THE APPEAL. 2. BRIEFLY STATED THE FACTS OF THIS CASE ARE : DURI NG THE SCRUTINY PROCEEDINGS, NOTICE U/S 143(2) AND 142(1) OF THE IN COME-TAX ACT, 1961 (HEREINAFTER THE ACT) ALONG WITH QUESTIONNAI RE WERE ISSUED ON 19.07.2011 BUT NONE APPEARED ON BEHALF OF THE AS SESSEE ON 05.08.2011, THE DATE FOR WHICH THE CASE WAS LISTED. ASSESSEE HAS DECLARED TURNOVER OF RS.23,81,67,172/- DURING THE Y EAR UNDER CONSIDERATION. AO FOUND THE CREDITS APPEARING IN T HE BANK ACCOUNTS UNVERIFIABLE IN THE ABSENCE OF ANY DETAILS FURNISHED BY THE ASSESSEE AND THEREBY REJECTED THE TRADING RESULTS D ECLARED BY THE ASSESSEE U/S 145 (3) OF THE ACT AND CONCLUDED THE P ROCEEDINGS U/S 144 OF THE ACT. ASSESSEE DECLARED THE NET PROFIT @ 0.57% FOR ITA NO.688/DEL./2014 3 WHICH HE HAS FAILED TO FURNISH THE DETAILS. AO, HO WEVER, ESTIMATED THE NET PROFIT RATE @ 2% OF THE DECLARED TURNOVER W HICH COMES TO RS.47,63,383/-, WHICH HAS BEEN TAKEN AS INCOME FROM THE BUSINESS FOR THE YEAR UNDER CONSIDERATION. AO ALSO MADE AN ADDITION OF RS.1,74,97,833/- U/S 41(1) OF THE ACT ON ACCOUNT OF UNSECURED LOANS AND SUNDRY CREDITORS ON THE GROUND THAT THE A SSESSEE HAS NOT FURNISHED REQUISITE DETAILS TO PROVE THE CREDITWORT HINESS OF THE LENDERS IN CASE OF UNSECURED LOANS AND ASSESSED THE TOTAL TAXABLE INCOME TO THE TUNE OF RS.2,22,85,216/-. 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) WHO HAS PARTLY ALLOWED THE APPEAL BY REDUCING THE NP FROM 2 % TO 1% OF THE TURNOVER AND BY DELETING THE ADDITION OF RS.1,74,97 ,833/-. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBU NAL BY WAY OF FILING THE PRESENT APPEAL. 4. ASSESSEE HAS NOT PREFERRED TO PUT IN APPEARANCE DESPITE ISSUANCE OF THE NOTICE OF 01.02.2016 AND 26.05.2016 AND CONSEQUENTLY, WE PROCEEDED TO DECIDE THE PRESENT AP PEAL WITH THE ASSISTANCE OF THE LD. DR AS WELL AS ON THE BASIS OF DOCUMENTS AVAILABLE ON THE FILE. ITA NO.688/DEL./2014 4 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. BARE PERUSAL OF THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) AS WELL AS ASSESSMENT ORDER PASSED BY THE AO AP PARENTLY GO TO PROVE THAT THE ASSESSEE HAS NOT BEEN GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD TO PUT FORTH HIS CASE BEFORE THE AO, WH O HAS PROCEEDED ON THE BASIS OF GUESSWORK AND ESTIMATION SO FAR AS ENHANCING THE NP RATE FROM 0.57% CLAIMED BY THE ASSESSEE TO 2% WI THOUT ANY MATERIAL AVAILABLE ON RECORD. AT THE SAME TIME, CI T (A) AGAIN PROCEEDED ON THE BASIS OF GUESSWORK AND ESTIMATION AND REDUCED THE NP FROM 2% AS ASSESSED BY THE AO TO 1%. CIT (A ) HAS ALSO DELETED THE ADDITION OF RS.1,74,97,833/- MERELY ON THE AVERMENTS MADE IN THE GROUNDS NO.9 & 10 THAT SUCH AN ADDITION AFTER REJECTING THE BOOKS OF ACCOUNTS IS NOT CORRECT, WITHOUT GOING INTO THE MERIT. 7. SO, WITHOUT ENTERING INTO THE MERITS OF THE CASE , WE ARE OF THE CONSIDERED VIEW THAT BOTH AO AS WELL AS LD. CIT (A) BEING QUASI- JUDICIAL AUTHORITY ARE UNDER LEGAL OBLIGATION TO PR OVIDE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, WHICH H AS NOT BEEN ITA NO.688/DEL./2014 5 PROVIDED. SO, LET THE FILE BE RESTORED TO THE AO T O DECIDE AFRESH AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 8. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, THE IM PUGNED ORDER PASSED BY THE LD. CIT (A) IS HEREBY SET ASIDE AND CONSEQUENTLY, THE PRESENT APPEAL IS HEREBY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF MAY, 2016. SD/- SD/- (PRASHANT MAHARISHI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 31 ST DAY OF MAY, 2016 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-1, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.