Smt. Sangeeta Agarwal, Kanpur V. Dy. Commissioner of Income Tax-3, Kanpur

ITA 689/LKW/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7326 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 30-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Cost of acquisition; Set aside
• Section: 131

Judgement Text

I.T.A. NO.689/LKW/2017 ASSESSMENT YEAR:2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.689/LKW/2017 ASSESSMENT YEAR:2013-14 SMT. SANGEETA AGARWAL, 117/H-1/323, PANDU NAGAR, KANPUR. PAN:ABYPA8496M VS. DY.C.I.T.-3, KANPUR. (APPELLANT) (RESPONDENT) O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT(A)-I, KANPUR DATED 18/08/2017 PERTAININ G TO ASSESSMENT YEAR 2013-14. IN THIS APPEAL THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEAL) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT M/S B AJRANG TRADERS IS BOGUS, NON EXISTENT FIRM AND BILLS SHOW CASH PURCHASES BRUSHING ASIDE THE FACTS & EVIDENCES PLAC ED BEFORE THE LD. ASSESSING OFFICER AS WELL BEFORE THE C.I.T (APPEAL). 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EAL) HAS ERRED IN HOLDING THAT THE ASSESSEE ALSO DID NOT PRODUCE TO CONTRADICT ANY EVIDENCE BEFORE THE FIRST APPELLATE AUTHORITY THE FINDING OF THE LD. A.O. OR ESTABLISH EXISTENCE OF B AJRANG TRADERS. APPELLANT BY SHRI PRADEEP MEHROTRA, ADVOCATE RESPONDENT BY S HRI JAI NATH VERMA, D.R. DATE OF HEARING 23/10/2019 DATE OF PRONOUNCEMENT 04/11/2019 I.T.A. NO.689/LKW/2017 ASSESSMENT YEAR:2013-14 2 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EAL) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT ' IT IS EVIDENT THAT BAJRANG TRADERS WHO HAS NO RELIABLE ADDRESS OR REGI STRATION NUMBER AND WHOSE MOBILE NUMBER IS NON-EXISTENT IS N OTHING BUT AN ENTRY PROVIDER AND THESE BILLS ARE BOGUS' TH EREBY SUSTAINING THE ADDITION MADE BY THE A.O. 4. THAT THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEAL) CONFIRMING THE ASSESSMENT ORDER PASSED BY THE LEARNED ASSESSING OFFICER IS ARBITRARY, ILLEGAL AND BAD IN LAW LIABLE TO BE QUASHED. 2. AT THE OUTSET, LEARNED A. R. SUBMITTED THAT THE ASSESSEE HAD DECLARED LONG TERM CAPITAL GAIN ON SALE OF LAND AFTER REDUCI NG THE COST OF ACQUISITION AND COST OF IMPROVEMENT ON THE PROPERTY. IT WAS SU BMITTED THAT ONE OF THE ITEMS OF IMPROVEMENT WAS RS.2,95,000/-, WHICH WAS O N ACCOUNT OF BILLS ISSUED BY BAJRANG TRADERS. IT WAS FURTHER SUBMITTE D THAT THE ASSESSING OFFICER DID NOT ALLOW THE CLAIM OF THE ASSESSEE FOR COST OF IMPROVEMENT OF RS.2,95,000/- BY HOLDING THAT THE SUPPLIER M/S BAJR ANG TRADERS WAS NOT GENUINE. LEARNED A. R. SUBMITTED THAT ON A QUERY B Y THE ASSESSING OFFICER REGARDING NON AVAILABILITY OF BAJRANG TRADERS, THE ASSESSEE HAD FILED AFFIDAVIT OF THE PROPRIETOR OF BAJRANG TRADERS ALONG WITH EXP LANATION THAT HIS SHOP WAS DEMOLISHED IN THE YEAR 2013 IN THE ACQUISITION PROCESS OF LAND. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE C ONTENTIONS AND DISALLOWED THE CLAIM FOR COST OF IMPROVEMENT. IT W AS SUBMITTED THAT LEARNED CIT(A) ALSO DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE COULD NOT PRODUCE THE OWNER OF BAJRANG TRA DERS BEFORE THE ASSESSING OFFICER FOR VERIFICATION AND THEREFORE, H E HAS ALSO HELD THE SAME TO BE A NON EXISTING ENTITY. LEARNED A. R. IN THIS RE SPECT INVITED MY ATTENTION TO THE COPY OF AFFIDAVIT, PLACED AT PAGE 9 OF THE P APER BOOK AND ALSO TOOK US TO PAGE 10 WHERE COPY OF AADHAR CARD OF THE PROPRIE TOR OF THE FIRM WAS PLACED. I WAS ALSO TAKEN TO PAGES 11 TO 17 OF THE PAPER BOOK WHERE THE I.T.A. NO.689/LKW/2017 ASSESSMENT YEAR:2013-14 3 COPIES OF BILLS, ISSUED BY BAJRANG TRADERS, WERE PL ACED. LEARNED A. R. SUBMITTED THAT THE PROPRIETOR OF BAJRANG TRADERS HA D FILED AFFIDAVIT AND HAD ALSO AFFIRMED THAT HIS SHOP WAS DEMOLISHED AND THER EFORE, THE INCOME TAX INSPECTOR COULD NOT LOCATE HIM AT THE ADDRESS OF TH E SHOP AND IT WAS PRAYED THAT THE ASSESSEE CAN PRODUCE THE PROPRIETOR OF THE FIRM BAJRANG TRADERS AND OTHER EVIDENCES OF IMPROVEMENT AND THEREFORE, I T WAS PRAYED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE ASSESSIN G OFFICER FOR READJUDICATION. 3. LEARNED D. R., ON THE OTHER HAND, HEAVILY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 4. I HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. I FIND THAT THE ONLY REASON FOR REJECTING THE CLAIM OF THE ASSESSEE FOR COST OF IMPROVEMENT WAS THE REPORT OF INCOME TAX INSPECTOR WHO, VIDE HIS REPORT, SUBMITTED THAT NO BUSINESS CO NCERN WAS EXISTING AT THE ADDRESS MENTIONED ON THE BILLS. FURTHER REASON FOR NOT ACCEPTING THE CLAIM OF THE ASSESSEE WAS THAT THE NOTICE ISSUED TO THE P ROPRIETOR OF BAJRANG TRADERS U/S 131 OF THE ACT WAS RETURNED BACK WITH T HE REMARKS THAT SUCH BUSINESS CONCERN COULD NOT BE TRACED. IN REPLY TO THE ABOVE THE ASSESSEE HAD SUBMITTED THAT THE PROPRIETOR WAS ENGAGED IN TH E SUPPLY OF BUILDING MATERIAL DURING THE YEAR 2011-12 BUT BECAUSE HIS SH OP WAS DEMOLISHED DURING THE YEAR 2013 IN THE ACQUISITION PROCESS OF LAND THEREFORE, HE HAD CHANGED HIS BUSINESS AND THAT IS WHY HE COULD NOT P RESENT HIMSELF BEFORE THE ASSESSING OFFICER BUT FILED AFFIDAVIT ALONG WIT H THE IDENTITY PROOF AND ALL THE BILLS DULY NOTARIZED. UNDER THESE CIRCUMSTANCE S, IT IS CONSIDERED APPROPRIATE TO REMIT THE ISSUE BACK TO THE ASSESSIN G OFFICER WHO SHOULD ADJUDICATE THE ISSUE AFTER HEARING THE ASSESSEE AND AFTER EXAMINING THE PROPRIETOR OF BAJRANG TRADERS. THE ASSESSEE IS ALS O DIRECTED TO COOPERATE IN I.T.A. NO.689/LKW/2017 ASSESSMENT YEAR:2013-14 4 THE ASSESSMENT PROCEEDINGS. NEEDLESS TO SAY, THE A SSESSEE WILL BE PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 04/11 /2019) SD/. ( T. S. KAPOOR ) ACCOUNTANT MEMBER DATED:04/11/2019 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW