SARAOGI MANSION ESTATE PVT. LTD., Jaipur V. ADD. CIT, Jaipur

ITA 837/JPR/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5213 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 02-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G R PARIKH JCIT DR DHK
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; Bad and doubtful debts; Assessment record

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF;D LN L; DS LE{K BEFORE:SHRI BHAGCHAND, AM & SHRI LALIET KUMAR, J M VK;DJ VIHY LA-@ ITA NO. 837/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 M/S. SARAOGI MANSION ESTATE (P) LTD. 04, HATHROI MARKET, AJMER ROAD, JAIPUR CUKE VS. THE ADDL. CIT RANGE-2 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAGCS 2700 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SHRAWAN KUMAR GUPTA JKTLO DH VKSJ LS@ REVENUE BY : SHRI G.R. PARIKH, JCIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01/06/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 13 /06/2016 VKNS'K@ ORDER PER LALIET KUMAR, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-1, JAIPUR DATED 09-10-2015 FOR THE ASSESSME NT YEAR 2009-10. 2.1 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE HAS NOT PRESSED THE GROUND NOS. 1,3,4 AND 5. HENCE, THE SAM E ARE DISMISSED BEING NOT PRESSED. 3.1 NOW THE GROUND NO. 21 AND 2.2 RAISED BY THE ASS ESSEE IN ITS GROUND OF APPEAL ARE AS UNDER:- ITA NO. 837/JP/2015 M/S. SARAOGI MANSION ESATE (P) LTD. VS. THE ADDL. C IT, RANGE, 2, JAIPUR . 2 2.1 RS.9,97,777/-. THE LD. CIT(A) HAS ERRED IN LA W AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE DISAL LOWANCE OF CLAIM OF RS. 9,97,777/- ON ACCOUNT OF BAD DEBT MADE BY T HE AO U/S 36(1)(VII). HENCE, THE DISALLOWANCE SO MADE AND CON FIRMED BY THE LD. CIT(A) IS CONTRARY TO THE PROVISIONS OF LAW AND FACE. HENCE, THE SAME MAY KINDLY BE DELETED IN FULL. 2.2 THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON T HE FACTS OF THE CASE IN NOT ADMITTING THE ADDITIONAL EVIDENC E FILED WITH THE APPLICATION U/R 46A ALTHOUGH THE SAME WERE PART OF BOOKS OF ACCOUNT PRODUCED AND WHEN THE SAME GOES TO THE ROOT OF THE MATTER. HENCE, ADMISSION OF ADDITIONAL EVIDENCE SO DENIED BY THE LD. CIT(A) IS CONTRARY TO THE PROVISIONS OF LAW AND FAC TS AND PRINCIPLE OF NATURAL JUSTICE. HENCE, THE SAME MAY KINDLY BE C ONSIDERED AND DISALLOWANCE MAY KINDLY BE DELETED IN FULL. 3.2 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 29-09-200 9 DECLARING TOTAL INCOME OF RS. 2,37,20,710/-. THE CASE OF THE ASSES SEE WAS PICKED UP FOR SCRUTINY. NOTICE U/S 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 21-08-2010 AND WAS SERVED UPON THE ASSESSEE. THE L D. AR OF THE ASSESSEE ATTENDED THE PROCEEDINGS FROM TIME TO TIME. THE AO OBSERVED THAT ASSESSEE HAS WRITTEN OFF BAD DEBTS OF RS. 9,97,777/ - IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE VIDE NOTE SHEET DATED 0 1-12-2011 WAS REQUIRED TO FURNISH DETAILS OF BAD DEBTS ALONGWITH DOCUMENTARY EVIDENCES WHETHER SUCH DEBT WAS TAKEN INTO ACCOUNT IN COMPUTI NG THE INCOME OF THE ASSESSEE IN THE RELEVANT YEAR AND TO FILE DOCUMENTA RY EVIDENCE FOR THE SAME. THE ASSESSEE VIDE LETTER DATED 07-12-2011 SUB MITTED THAT THE COPY ITA NO. 837/JP/2015 M/S. SARAOGI MANSION ESATE (P) LTD. VS. THE ADDL. C IT, RANGE, 2, JAIPUR . 3 OF ACCOUNT OF BAD DEBTS HAS ALREADY BEEN FURNISHED VIDE LETTER DATED 10- 10-2011. HOWEVER, THE AO OBSERVED THAT THE ASSESSEE SUBMITTED THE DETAILS OF BAD DEBTS WITH THE NAMES OF DEBTORS. THE AO NOTICED THAT THE ASSESSEE HAS NEITHER MENTIONED THE YEAR TO WHICH IN COME CORRESPONDING TO THESE DEBTS WERE ACCOUNTED FOR NOR DOCUMENTARY E VIDENCE / PROOF AS TO WHETHER THE INCOME OF SUCH DEBTS WERE ACCOUNTED FOR . THE TABLE IS REPRODUCED AS UNDER REGARDING BAD DEBTS FOR THE PER IOD 01-04-2008 TO 31-03-2009. S.N. PARTICULARS INCOME IN (LAST YEAR) OTHERS 1. M/S. M.S. ENTERPRISES, SHOP NO. 121-A, RENT 1- 09-2000 TO 31-03-2007 -79 MONTHS @ RS. 4600/- 3,63,400 - 2. SMT. DROUPADI DEVI , SHOP NO. B-35, SERVICE CHARGES (AC. DG, COMMON) 1,21,397 - 3. SHRI ISHWARLAL & VIJAY LALWANI SHOP NO. B-42, SERVICE CHARGES (AC. DG, COMMON) 1,78,136 - 4. SHRI MAHESH GUPTA, SHOP NO. B-70, SERVICE CHARGES (AC. DG, COMMON) 12,960 - 5. SHRI HIMANSHU SHARMA SHOP NO B-37,SERVICE CHARGES (AC. DG, COMMON) 51,287 - 6. SERVICE CHARGES (AC. DG, COMMON), SHOP NO. B- 63, B-20-B, B21, G-15, B-41,G36-C 4,981 - 7 ADVANCE PAID TO STAFF BUT NOT RECEIVED - - 8. SERVICE TAX PAID BY THE COMPANY NOT RECEIVED FROM PARTIES - 1,13,921 9. AMOUNT INCURRED BY THE COMPANY FOR A.C. SHIFTING BUT NOT PAID BY THE PARTY - 41,095 TOTAL 7,32,161 2, 65,616 ITA NO. 837/JP/2015 M/S. SARAOGI MANSION ESATE (P) LTD. VS. THE ADDL. C IT, RANGE, 2, JAIPUR . 4 GRAND TOTAL 9,97,777 THE AO OBSERVED IN THE ASSESSMENT ORDER THAT THE ON US AGAIN SHIFTS ON THE ASSESSEE TO PROVE THAT THE BAD DEBT WRITTEN OFF WAS TAKEN AS INCOME IN ANY PREVIOUS YEAR AND THE AO FOUND THAT THE ASSESSEE CO ULD NOT DISCHARGE ITS ONUS CAST UPON TO IT PROVE ITS CLAIM. THE AO OBSERV ED THAT NO CONFIRMATION HAD BEEN FILED BY THE ASSESSEE FROM TH E RELEVANT PARTIES IN SUPPORT OF ITS CLAIM AND NO ADDRESSES WERE MADE AVA ILABLE TO MAKE FURTHER ENQUIRES FROM THOSE PARTIES AND THE PARTIES IN QUES TION WERE NOT PRODUCED BY THE ASSESSEE BEFORE THE AO. THE AO RELIED ON THE ORDER HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. INDIA N CAREPT FACTORY , 178 CTR 420 THAT THE ONUS LIES ON THE ASSESSEE TO PROVE ALL THE EXPENSES TO THE SATISFACTION OF THE AO. THE AO THEREFORE, HAD NO OT HER ALTERNATIVE EXCEPT TO REJECT THE CLAIM OF THE ASSESSEE UNDER THE HEAD BAD DEBTS AND THE AO DISALLOWED AN AMOUNT OF RS. 9,97,777/- TO THE INCOM E. 3.3 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE AO. 3.4 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE FILED THE FULL DETAILS OF BAD DEB TS WITH LEDGER ACCOUNT OF ALL THE YEAR SHOWING SUCH INCOME IN THE RESPECTIVE YEARS WITH THE APPLICATION UNDER RULE 46A OF INCOME TAX RULES, 196 2. THE LD. CIT(A) ITA NO. 837/JP/2015 M/S. SARAOGI MANSION ESATE (P) LTD. VS. THE ADDL. C IT, RANGE, 2, JAIPUR . 5 HAS SENT THE SAME TO THE AO FOR HIS COMMENTS BUT TH E AO WRONGLY ALLEGED THAT NO DOCUMENTARY EVIDENCE HAD BEEN FILED . HOWEVER, THE LD. CIT(A) HAS NOT ADMITTED THE ADDITIONAL EVIDENCES AL THOUGH THE DOCUMENTS AND LEDGER ACCOUNT FILED WERE THE PART OF BOOKS OF ACCOUNT. THUS THE LD. AR PRAYED THAT IN ORDER TO GIVE JUSTICE TO THE PART IES, THE ADDITIONAL EVIDENCES MAY KINDLY BE CONSIDERED AS THESE ARE PAR T AND PARCEL OF THE ASSESSMENT RECORDS AND THE ISSUE MAY KINDLY BE REST ORED BACK TO THE FILE OF THE AO TO DECIDE IT AFRESH. 3.5 THE LD. DR RELIED ON THE ORDER OF THE AUTHORITI ES BELOW AND OPPOSED THE ARGUMENTS OF THE LD. AR AS TO RESTORATION OF T HE ISSUE BACK TO THE FILE OF THE AO. 3.6 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD THA T THE ASSESSEE HAS BEEN DEPRIVED OF PRODUCING THE RELEVANT RECORDS/ DETAILS AS TO THE ADDITION OF RS. 9,97,777/-. WE FEEL THAT THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY OF BEING HEARD AFRESH BY CONSIDERING THE RELEVANT E VIDENCES PRODUCED UNDER 46A OF INCOME-TAX RULES. HENCE, THE GROUND NO . 2 AND 2.1 OF THE ASSESSEE ARE RESTORED BACK TO THE FILE OF THE AO TO DECIDE IT AFRESH BY PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD. TH US THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ITA NO. 837/JP/2015 M/S. SARAOGI MANSION ESATE (P) LTD. VS. THE ADDL. C IT, RANGE, 2, JAIPUR . 6 4.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 /06/20 16. SD/- SD/- HKKXPUN YFYR DQEKJ (BHAGCHAND ) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13 /06/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. SARAOGI MANSION ESTATE (P) LTD ., JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ADDL. CIT, RANGE-2, JAIPUR - 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 837/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR