Nirav Shah, New Delhi V. ITO, New Delhi

ITA 720/DEL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6216 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 10-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Keywords: Gross profit estimation; Unexplained cash credit; Opportunity of being heard
• Section: 144

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. 720/DEL/2016 (ASSESSMENT YEAR: 2012 - 13 ) NIRAV SHAH, WZ - 516/2, BASAI DARA PUR, NEW DELHI - 110015 PAN: AOJPS0712C VS. ITO, WARD - 49(2), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PARIMALSINGH B. PARMAR, ADV REVENUE BY: SHRI SURENDER PAL, SR. DR DATE OF HEARING 11/12 / 2018 DATE OF PRONOUNCEMENT 2 3 / 01 / 2019 O R D E R PER PRASHANT MAHARISHI , A. M. 1 . THIS APPEAL IS FILED BY THE ASSESSEE AGAINST ORDER OF THE LD CIT(A) - 17 , NEW DELHI DATED 0 5 /0 1 /2016, WHEREIN THE ORDER PASSED UNDER SECTION 144 OF THE ACT BY THE LD ASSESSING OFFICER ON 0 8 /0 2 / 2015 ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT RS. 19680300 / - WAS CHALLENGED AND CONFIRMED. 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW AS WELL AS ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISMISSING THE APPEAL FILED BY THE APPELLANT WITHOUT ALLOWING A FAIR OPPORTUNITY OF BEING HEARD AND SUSTAINING THE EX - PAR TE ORDER FRAMED BY THE ASSESSING OFFICER UNDER SECTION 144 OF THE INCOME TAX ACT, 1961. 3. THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN PASSING THE EX - PARTE ORDER WITHOUT CALLING FOR ANY MATERIAL FROM THE ASSESSING OFFICER AND WI THOUT GOING INTO THE MERITS OF THE CASE. PAGE | 2 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAINING THE ADDITIONS MADE BY THE ASSESSING OFFICER TOTALING TO RS.1,90,23,754/ - BEING RS.78,50,547/ - ON ACCOUNT OF GROSS PROFIT AND ALLEGED DISCR EPANCY IN OPENING STOCK OF ASSESSMENT YEAR WITH THE CLOSING STOCK OF PRECEDING YEAR AND RS.1,11,73,207/ - ON ACCOUNT OF ADDITIONS TO CAPITAL/ UNEXPLAINED CREDITORS/UNSECURED LOANS ETC. 5. THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 3 . T HE BRIEF FACTS OF THE CASE SHOWS THAT THE ASSESSEE IS AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME ON 25 - 9 - 2012 DECLARING INCOME OF RS. 556546 / - . THE LD AO SELECTED THE CASE OF THE ASSESSEE FOR SCRUTINY AND ISSUED SEVERAL NOTICES , WHICH REMAIN UN - COMP LIED WITH AND THEREFORE FINAL SHOW CAUSE NOTICE WAS ISSUED ON 10 - 02 - 2015 STATING THAT THERE IS LOW GROSS PROFIT EARNED BY THE ASSESSEE AND THERE IS A DISCREPANCY IN OPENING STOCK OF CURRENT YEAR WITH THE CLOSING STOCK OF THE PRECEDING YEAR. NO INFORMATION WAS RECEIVED AND THEREFORE THE LD AO INCREASE D THE GROSS PROFIT OF ASSESSEE OF RS. 7850547 / - ON ACCOUNT OF DIFFERENCE IN STOCK. FURTHER, WITH REGARD TO SEVERAL CREDITORS AND UNSECURED LOAN AND ADVANCES TO THE CAPITAL ACCOUNT OF THE ASSESSEE ADDITION OF RS. 11173207 / - WAS MADE. S EVERAL OTHER MINOR ADJUSTMENTS / ADDITIONS WERE MADE AND ASSESSMENT UNDER SECTION 144 OF THE ACT WAS MADE ON 18 - 02 - 2015 DECLARING TOTAL INCOME OF RS. 19680300 / - . 4 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD CIT ( A) . EVEN DESPITE SEVERAL NOTICES THE ASSESSEE DID NOT R EMAIN PRESENT BEFORE THE LD CIT ( A) AND THEREFORE THE VIDE PARA NO. 5 OF THE APPEAL HE CONFIRMED ALL THE ADDITIONS MADE BY THE LD AO. AGGRIEVED , ASSESSEE IS IN APPEAL BEFORE US. 5 . LD AR SUBMITTED THAT THE ASSESSE E COULD NOT REMAIN PRESENT BEFORE LD CIT ( A) BECAUSE OF SOME PERSONAL DIFFICULTIES AS WELL AS NON RECEIPT OF NOTICE LATER ON . EVEN ON THE MERITS THE LD AR STATED THAT THE ACCOUNTS OF THE ASSESSEE ARE DULY AUDITED AND THERE IS NO DEFECT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AS WELL AS THE STOCK DETAILS . HE FURTHER REFERRED TO THE AUDITED ACCOUNTS OF ASSESSEE AND STATED THAT SOME OF THE UNSECURED LOANS ARE OLD LOANS AND NOT RECEIVED DURING THE YEAR . WITH RESPECT TO THE SUNDRY CREDITORS HE SUBMITTED THAT ALL THE SUNDRY CREDITORS ARE BIG PAGE | 3 COMPANIES WHICH ARE REGULARLY SUPPLYING GOODS TO THE ASSESSE AND NO ADDITION IS MADE ON ACCOUNT OF PURCHASES MADE. HE STATED THAT IF THE ASSESSEE IS ASSESSED TO S UCH A HUGE TAX LIABILITY WITHOUT HEARING IT CAUSES A GREAT INJUSTICE. HE ALSO STATED THAT GIVEN AN OPPORTUNITY ASSESSEE WOULD REPRESENT ITS CASE BEFORE LOWER AUTHORITIES. IN THE END HE SUBMITTED THAT THE LD CIT ( A) HAS DECID ED THE ISSUE EX P ARTE . 6 . TH E LD DR VEHEMENTLY STATED THAT ASSESSEE HAS BEEN GIVEN ENOUGH OPPORTUNITIES BEFORE THE LOWER AUTHORITIES AND ASSESSEE HAS FAILED TO TAKE BENEFIT OF SUCH OPPORTUNITIES AND THEREFORE NO PURPOSE WOULD BE SERVED IN SETTING ASIDE THE ISSUE BACK TO THE FILE OF T HE LOWER AUTHORIT IES . 7 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDERS OF THE LOWER AUTHORIT IES . ADMITTEDLY, THE FACTS SHOWS THAT THE ASSESSEE DID NOT COMPLY WITH VARIOUS NOTICES BEFORE THE LD AO AND THEREFORE IT RESULTED INTO PASSING AN ORDER UNDER SECTION 144 OF THE ACT . SIMILARLY , BEFORE THE LD CIT ( A) THE ASSESSEE DID NOT COMPLY . THE ASSESSEE HAS COME FORWARD WITH THE RELEVANT DETAILS WHICH SHOW THAT THE ADDITIONS MADE IN THE HANDS OF THE ASSESSEE WHICH IS FILING RETURN OF INCOME OF RS. 5 LACS APPROXIMATELY HAS BEEN ASSESSED AT THE ASTRONOMICAL FIGURE AT RS. 1.97 CRORES DESERVES TO BE HEARD. FURTHER IT DOES NOT MEAN THAT IF THE ASSESSEE IS PREVENTED TO REPRESENT ITS CASE BEFORE AUTHORITIES, THE A SSESSMENT COULD BE MADE AT ANY AMOUNT OF INCOME. EVEN OTHERWISE THE ANNUAL ACCOUNTS OF THE ASSESSEE IN THE FORM OF RETURN AND BALANCE SHEET ARE AVAILABLE WITH THE AO. ON PERUSAL OF THE BALANCE SHEET IT IS APPARENT THAT ACCOUNTS ARE DULY AUDITED. AS THE AS SESSEE HAS NOT AVAILED OPPORTUNITY OF HEARING AND THE HUGE ADDITIONS ARE CONFIRMED THEREFORE IN THE INTEREST OF JUSTICE , WE SET ASIDE THE WHOLE ISSUE BACK TO THE FILE OF THE LD CIT ( A) WITH A DIRECTION TO THE ASSESSEE TO SUBMIT NECESSARY DETAILS WITHIN THREE MONTHS FROM THE DATE OF THIS ORDER AND THEN THE LD CIT ( A) AFTER CONSIDERING THE SUBMISSION MADE BY THE ASSESSEE DECID E THE WHOLE ISSUE S AFRESH . NEEDLESS TO SAY THAT ASSESSEE MAY BE GIVEN PROPERLY OPPORTUNITY OF H EARING TO CONTEST THE VARIOUS ADDITIONS MADE BY THE LD AO. PAGE | 4 8 . IN THE RESULT APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 3 / 01 / 2019 . - SD/ - - SD/ - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 3 / 01 / 2019 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI