DCIT, New Delhi V. M/s Style Syntex Pvt. Ltd., New Delhi

ITA 73/DEL/2010

• Counselvise Citation: 7320114 RSA 2010
• Duration Of Justice: 5 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 16-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 07-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: SHANKUL P SHARMA
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SMT. DIVA SINGH, JM AND SH. N. K. SAINI, AM ITA NO. 73/DEL./2010 : AS STT. YEAR : 2006-07 DCIT CENTRAL CIRCLE 11, ROOM NO. 364, ARA CENTRE, E-2, JHANDEWALAN EXTENSION NEW DELHI VS STYLE SYNTEX PVT. LTD. B1/A-20, MOHAN CO-OPERATIVE INDL. ESTATE, MATHURA ROAD, NEW DELHI- 110 001 (APPELLANT) (RESPONDENT) PAN NO. AABCS0645R APPELLANT BY : SH. B. R. R. KUMAR, SR. DR RESPONDENT BY : SH. SHANKUL P SHARMA, ADV. DATE OF HEARING : 16.06.2015 DATE OF PRONOUNCEMENT : 16.06.2015 ORDER PER N.K. SAINI, A.M. THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORD ER DATED 29/10/2009 OF THE LD. CIT(A)- I, NEW DELHI. 2. ONLY EFFECTIVE GROUND RAISED IN THIS APPEAL READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN DELETING THE A DDITION OF RS. 25,00,000/- MADE BY THE AO ON ESTIMATE BASIS BY NOT APPRECIATING THE FACT THAT THE SET-ASIDE ASSESSMENT FOR A.Y. 2002-03 WAS REDONE DETERMINING THE TAXABLE INCOME A T RS. 37,80,284/- AND THEREFORE THE ESTIMATE MADE BY THE AO WAS VERY MUCH REASONABLE. ITA NO.73/DEL/2010 2 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSES SEE FOR THE YEAR UNDER CONSIDERATION DID NOT FILE THE RETURN OF INCOME, THEREFORE, THE AO ISSUED NOTICE U/S 142(1) OF THE I T ACT, 1961(HEREINAFTER REFERRED TO AS THE ACT). SINCE THE RETURN WAS NOT FILED BY THE ASSESSEE, THE AO FRAMED THE AS SESSMENT U/S 144 OF THE ACT AND ASSESSED THE INCOME ON ESTIM ATE BASIS AT RS. 25,00,000/- BY OBSERVING THAT THE INCO ME FOR THE PRECEDING ASSESSMENT YEAR 2002-03 WAS ASSESSED AT R S. 18,43,480/-. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MA TTER TO THE LD. CIT AND SUBMITTED THAT THE AO FRAMED THE ASSESS MENT ARBITRARILY ON THE BASIS OF ASSESSMENT ORDER FOR TH E ASSESSMENT YEAR 2002-03 WHICH WAS SET ASIDE BY THE ITAT IN ITA NO. 326/DEL./2007 VIDE ORDER DATED 25.7.2008 . IT WAS FURTHER, SUBMITTED THAT THE AO TOTALLY IGNORED THE ASSESSMENT COMPLETED FOR ASSESSMENT YEAR 2003-04 TO 2005- 06 WHEREIN THE TOTAL INCOME HAD BEEN ASSESSED AT NI L AND CARRIED FORWARD OF LOSSES WAS DISALLOWED. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS :- 1. SANGRUR VANASPATI MILLS LTD. VS. CIT (2007) 211 CTR (P&H) 439 2. KACHWALA GEMS VS. JT. CIT 288 ITR 10 (SC) ITA NO.73/DEL/2010 3 5. THE LD. CIT AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DELETED THE ADDITION MADE BY THE AO BY OBS ERVING IN PARA 9 OF THE IMPUGNED ORDER AS UNDER :- I HAVE CONSIDERED THE SUBMISSION OF THE AP PELLANT AND THE OBSERVATION OF THE A.O. SINCE THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME THE AO HAD ESTIMATED THE INCOME ON THE BASIS OF ASSESSMENT MADE FOR A.Y. 2002-03. HOWEVER THE APPELLANT STATED THAT THE ORDER FOR A.Y. 2002-03 HAD BEEN SET-ASIDE BY THE HONBLE ITAT ON 25.7.2008 AND HENCE ON THE DATE OF ASSESSMENT MADE ON 29.12.2008 THE ORDER FOR A.Y. 2002-03 WAS NOT EXISTENT. THEREFORE THE BASIS OF ESTIMATE WAS NOT CORRECT. HOWEVER, IN SUBSEQUENT ASSESSMENT YEARS IN 2003-04 TO 2005-06 THE TOTAL INCOME OF THE ASSESSEE HAD BEEN ASSESSED AT NIL. RELYING ON THE JUDGMENT OF THE HONBLE SANGRUR VANASPATI MILLS LTD. VS. CIT(2007) 211 CTR (P&H) 439 AND HONBLE SC IN KACHWALA GEMS VS. JT. CIT 288 ITR 10 (SC) THE APPELLANT ARGUED THAT THE BEST JUDGMENT ASSESSMENT MUST BE ON A REASONABLE BASIS AND SHOULD BE HONEST AND FAIR ESTIMATE AND NOT TOTALLY ARBITRARY. IN THE INSTANT CASE, AO HAD NOT BROUGHT ANY MATERIAL EVIDENCES TO SHOW THAT SOME BUSINESS ACTIVITIES HAS BEEN CARRIED OUT BY THE ASSESSEE AND NO FINDING HAS BEEN RECORDED. IN VIEW OF THE ABOVE DISCUSSION, IN MY CONSIDERED OPINION T HE ESTIMATE MADE BY THE AO IS WITHOUT ANY BASIS AND HENCE DIRECTED TO THE DELETED. THE APPEAL OF THE APPELLANT HAS BEEN ALLOWED. NOW THE DEPARTMENT IS IN APPEAL. 6. THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER ITA NO.73/DEL/2010 4 DATED 29.12.2008. IN HIS RIVAL SUBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BE FORE THE LD. CIT(A) AND STRONGLY SUPPORTED THE IMPUGNED ORDE R PASSED BY THE LD. CIT(A). 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH TH E PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE O N THE RECORD. IN THE PRESENT CASE, IT APPEARS THAT THE AO FRAMED THE ASSESSMENT EX PARTE U/S 144 OF THE ACT BY ESTIM ATING THE INCOME OF THE ASSESSEE AT RS. 25,00,000/- ON THE BA SIS OF THE INCOME ASSESSED FOR THE ASSESSMENT YEAR 2002-03 WHI CH WAS ASSESSED AT RS. 18,43,480 BUT IGNORED THIS VITAL, F ACT THAT THE SAID ASSESSMENT WAS SET ASIDE BY THE ITAT VIDE ORDE R DATED 25.7.2008 I.E. MUCH BEFORE THE ASSESSMENT ORDER PAS SED BY THE AO ON 29.12.2008. IN THE PRESENT CASE, THE AO H IMSELF ADMITTED THE INCOME OF THE ASSESSEE AT NIL FOR THE PRECEDING ASSESSMENT YEARS I.E. A.Y. 2003-04 TO 200 5-06 WHEREIN THE TOTAL INCOME HAD BEEN ASSESSED AT NIL. THEREFORE, THE ESTIMATE OF THE AO IN ASSESSING THE INCOME FOR THE YEAR UNDER CONSIDERATION WAS WITHOUT ANY BA SIS PARTICULARLY WHEN HE HIMSELF ASSESSED THE INCOME OF THE ASSESSEE AT NIL FOR THE PRECEDING ASSESSMENT YEARS 2003-04 TO 2005-06. ITA NO.73/DEL/2010 5 8. WE, THEREFORE, CONSIDERING THE TOTALITY OF T HE FACTS DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FIND INGS OF THE LD. CIT(A). ACCORDINGLY, WE DO NOT SEE MERIT IN TH IS APPEAL OF THE DEPARTMENT. 10. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DIS MISSED. (ORDER PRONOUNCED IN THE COURT ON 16/06/2015). SD/- SD/- (DIVA SINGH) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16/ 06/2015 *B.RUKHAIYAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO.73/DEL/2010 6 DATE INITIAL 1. DRAFT DICTATED ON 16.06.2015 2. DRAFT PLACED BEFORE AUTHOR 16.06.2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.