M/s. Amritvarsha Finance & Leasing Ltd., Ghaziabad V. ACIT, Muzaffarnagar

ITA 713/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3136 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business expenditure; Opportunity of being heard
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER I.T.A. NOS.713/DEL/2015 (ASSESSMENT YEARS 2010-11) AMRITVARSHA FINANCE & LEASING LTD. VS. ACIT 29, YAMNOTRI COMPLEX, CIRCLE-1 AMBEDKAR ROAD MUZAFFARNAGAR GHAZIABAD PAN :AAFCA9131N ASSESSEE BY : SH. ANURAG JAIN, CA REVENUE BY :SH. AMIT JAIN, SR. DR DATE OF HEARING: 22.02.2018 DATE OF PRONOUNCEMENT: 28.02.2018 ORDER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, ANURAG JAIN, HEREINAFTER REFERRED TO AS THE ASSESSEE BY FILING PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORD ER DATED 31.3.2014 PASSED BY THE LD. COMMISSIONER OF INCOME TAX(APPEALS), MUZAFF ARNAGAR ON THE GROUNDS INTER ALIA THAT :- 1. THAT APPELLANT IS A LIMITED COMPANY DERIVING INCOM E FROM MANUFACTURING OF STEEL. 2. THAT CIT [APPEALS] WAS WRONG TO DISMISS THE APPEAL AS ORDER OF A. O WAS ILLEGAL AND CONTRARY TO THE FACTS OF THE CASE . 3. A SURVEY U/S 133 A WAS CONDUCTED ON APPELLANT ON 0 3.02.2010 AND DUE TO MENTAL PRESSURE APPELLANT SURRENDERED AN AMO UNT OF RS ONE (1) CRORE IN SUB-CONSCIOUS POSITION AND A. O ADDED RS 1.5 CRORE ON 2 I.T.A.NO.713/DEL/2015 AMRITVARSHA F INANCE & LEASING LTD. THIS ACCOUNT WHICH IS WRONG AND ILLEGAL. WE ARE TO SUBMIT AS UNDER IN THIS CONNECTION A. THE AMOUNT SURRENDERED AT THE TIME OF SURVEY IS NO T BINDING ON ASSESSEE. B. CBDT HAS DIRECTED VIDE CIRCULAR F. NO. 286/2/2003 IT (INV) DATED 11-03-2003:- A.O. SHOULD RELY UPON THE EVIDEN CES/ MATERIALS GATHERED DURING THE COURSE OF SURVEY/ SEA RCH OPERATION OR THEREAFTER WHILE FRAMING THE RELEVANT ASSESSMENT ORDER. C. THE SAID CONFESSIONAL STATEMENTS HAVE NO EVIDENTIA RY VALUE NOT JUST BECAUSE OF THE LEGAL NICETY THAT DURING SURVEY STATEMENTS CANNOT BE RECORDED ON OATH BUT ALSO FOR THE REASON THAT SUCH CONFESSIONAL STATEMENTS ARE NOT SUPPORTED BY THE EV IDENCES GATHERED BY THE DEPARTMENT. THE HONBLE KERALA HIGH COURT DECIDED IN THE CASE OF PAUL MATHEWS & SONS VS CIT ( 2003) 263 ITR 101(KER). D. IN THE CASE OF CIT \/S KAMAL & CO. (2007) 2013CTR (RAJ) 200 IT WAS DECIDED THAT ANY CONFESSION BY THE ASSESSEE HAS NO VALUE UNLESS SUPPORTED BY THE EVIDENCES COLLECTED BY THE DEPARTMENT. E. THE A. 0 CONTENTED IN ORDER THAT THE CIH AT PER CA SH BOOK OF THE COMPANY WAS RS. 891400 WHILE THE SAME WAS RS. 14071 33 AS PER CASH BOOK OF OFFICE AT GHAZIABAD. THE DIFFERENCE WA S BECAUSE COMPANY HAS THREE CASH BOOKS ONE AT DELHI GODOWN AT Y58 NARAYANA LOHA MUNDI DELHI, SECOND AT FACTORY AT VIL LAGE DHOOM MANIKPUR, DADRI. THE TOTAL FIGURE OF BOTH THE OFFICES MAINTAINED AT GHAZIABAD OFFICE. ON THE DATE OF SURV EY COMPANY HAD RS. 891400/- AT FACTORY RS. 515733 AT DELHI OFF ICE AND THE TOTAL OF BOTH RS. 1407133/- DISCOVERED AS PER GHAZI ABAD CASH BOOK, SO THERE IS NO DIFFERENCE IN CASH. F. A. 0 MENTIONED THAT ANNEXURE A2 PAGE 43 AND ANNEXUR E A4 PAGE22 WERE NOT CLARIFIED WHILE EVERY ANNEXURE AND EVERY PAGE WERE PROPERLY CLARIFIED DURING THE ASSESSMENT PROCE EDING AND BOOKS OF ACCOUNTS WERE PRODUCED BEFORE HIM. G. THERE IS NO DOCUMENT/GROUND FOR WHICH A. 0 HAS MAK E 3 I.T.A.NO.713/DEL/2015 AMRITVARSHA F INANCE & LEASING LTD. ADDITION OF RS. 50 LACS. LD CIT [APPEALS] HAS NOT CONSIDERED ABOVE FACTS AND WRONGLY DISMISSES THE TH EAPPEAL OF APPELLANT. 4. A. O HAS WRONGLY ADDED RS. 1 LACS TO THE INCOME OF COMPANY BECAUSE P13 & 14 OF BLACK DIARY COULD NOT BE EXPLAI NED: A. THESE PAGES ARE WORKING OF ACCOUNTANT OF THE COMPA NY AND NO LINK WITH COMPANY WORKING. B. THERE ARE SOME IMMATERIAL FIGURES LIKE 50,55,15,35 LIKE OTHERS WHICH HAVE NO LINK WITH COMPANY. A. RS. 28529 DISALLOWED AS THE EMPLOYEE CONTRIBUTIO N OF PF DEPOSITED IN 22/01/2010 AGAINST THE DUE DATE 20/01/ 2010 36(1) (VA): IN THE CASE OF CIT VS ANZ INFORMATION TECHNOL OGY P LTD. (IT APPEAL NO 29 OF 2009) IT WAS DECIDED BY HONBLE HIGH COURT OF KARNATAKA THAT ESI DEPOSITED BY THE EMPLOYER U/S 36(1) (VA) READ WITH SECTION 2(24)(X) AND 43 B BEYOND STI PULATED PERIOD CANNOT ADDED INTO THE INCOME OF EMPLOYER AND IT WAS DEPOSITED BEFORE THE DUE DATE OF FILING ITR OF APPE LLANT. ORDER OF CIT [A] IS WRONG, AS ABOVE POINTS WERE NOT CONSIDERED IN THE SAME. 5. A. 0 DISALLOWED RS. 150000 OUT OF MISC. EXPENSES OF COMPANY AS THE AMOUNT WAS FORFEITED BY SAIL: A. COMPANY PARTICIPATED IN A TENDER OFFERED BY SAIL, FOR WHICH EARNEST. MONEY OF RS. 1,50,000 WAS DEPOSITED BY COMPANY, LATTER COMPANY SUCCEED IN THE BID, BUT COU LD NOT SUCCEED WITH THE QUALITY CONDITION OF SAIL. B. COMPANY WENT IN BID TO BENEFIT THE BUSINESS AND TO TIE UP WITH SAIL. THE SAME IS BUSINESS EXPENDITURE OF COMP ANY AS PER SECTION 37(1) OF IT ACT 1961. C. THE SAME FACTS DECIDED IN THE CASE OF GOLD CREST CA PITAL MARKETS LIMITED V. ITO 36 ITR 177 (2010) AND VRM SH ARE BROKING (P) LTD. 27 SOT 469. 4 I.T.A.NO.713/DEL/2015 AMRITVARSHA F INANCE & LEASING LTD. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE THE ASSESSEE IS A LIMITED COMPANY DERIVI NG ITS INCOME FROM MANUFACTURING OF STEEL, FILED RETURN OF INCOME BY D ECLARING ITS INCOME AT RS. 98,22,842/-. DURING THE SURVEY CONDUCTED U/S 133(A) ON 03.02.2010, THE ASSESSEE HAD SURRENDERED THE AMOUNT OF RS. 15,00,00 ,00/- ON ACCOUNT OF EXPENSES, BUT ON FILING RETURN OF INCOME HAD ACCOUN TED FOR RS. 10,00,00,00/- ONLY IN THE BOOKS OF ACCOUNTS. REJECTING THE CONTEN TION RAISED BY THE ASSESSEE AO MADE ADDITION OF RS. 5,00,00,00/-. AO ALSO MADE ADDITION OF RS. 1,50,000/- OUT OF AN AMOUNT OF RS. 2,44,979/- DEBITED BY THE A SSESSEE AS MISCELLANEOUS EXPENSES IN P & L ACCOUNT WHICH INCLUDES RS. 1,50,0 00 FORFEITED BY STEEL AUTHORITY OF INDIA AND THEREBY ASSESSED THE TOTAL I NCOME OF THE ASSESSEE AT RS. 15,00,770/-. 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A ) BY WAY OF FILING THE APPEAL WHO HAS CONFIRMED THE ADDITION BY DISMISSING THE APPEAL. FEELING AGGRIEVED THE ASSESSEE HAS COME UP BEFORE THE TRIBU NAL BY WAY OF FILING PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORITIES REPRESENTATIVE OF THE PARTIES TO THE APPEAL, PERUSED THE ORDER PASSED BY THE REVENUE AUT HORITIES BELOW AND DOCUMENT BROUGHT ON RECORD. 5. AT THE VERY OUTSET, IT IS BROUGHT TO OUR NOTICE BY THE LD. AR FOR THE ASSESSEE THAT THE IMPUGNED ORDER HAS BEEN PASSED BY THE LD. CIT(A) IN HASTE WITHOUT PROVIDING OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. NO DOUBT IN PARA 1 OF THE IMPUGNED ORDER, THE LD. CIT(A) HAS CATEGORICALLY TA BULATED THE DATE OF HEARING FIXED IN THE APPEAL BEFORE HIM BUT HAS FAILED TO PO INT OUT IF THE NOTICE ISSUED TO THE ASSESSEE WAS SERVED UPON OR THE NOTICE RECEIVED BACK UN-SERVED FOR WANT OF 5 I.T.A.NO.713/DEL/2015 AMRITVARSHA F INANCE & LEASING LTD. SOME INCORRECT ADDRESS, RATHER IN THE REMARKS COLUM N SIMPLY STATED THAT NO COMPLIANCE OF THE SUMMONS ISSUED. MOREOVER, WHEN ADJOURNMENT APPLICATION WAS FILED BY THE ASSESSEE ON 25.03.2014, THE LD. CI T(A) HAS NOT RECORDED THE OUTCOME OF THE SERVICE OF SUMMONS ISSUED FOR 31.3.2 014. EVEN OPPTHERWISE SUMMONS ISSUED FROM MUZAFFARNAGAR TO THE ASSESSED A T ITS DELHI ADDRESS CANNOT BE EXPECTED TO HAVE SERVED UPON WITHIN A PERIOD OF THREE DAYS BY ANY STRETCH OF IMAGINATION, UNLESS THE SUMMONS HAS BEEN SENT BY HA ND. 6. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THE LD. CIT(A) BEING QUASI JUDICIAL AUTHORITY HAS N OT AFFORDED AN ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE SO IN TH E INTEREST OF JUSTICE, CASE IS REMANDED BACK TO THE LD. CIT(A) TO DECIDE AFRESH AF TER PROVIDING OPPORTUNITY OF BEING HEARD. CONSEQUENTLY PRESENT APPEAL FILED BY T HE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 3. ORDER PRONOUNCED IN THE OPEN COURT ON 28 FEB., 2 018. SD/- SD/- (B.P.JAIN) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 28 TH FEB. 2018 BINITA COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DE LHI. TRUE COPY. BY ORDER 6 I.T.A.NO.713/DEL/2015 AMRITVARSHA F INANCE & LEASING LTD. .NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 28.02.2018 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 28.02.2018 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER