ITO, New Delhi V. Smt. Seema Aggarwal, New Delhi

ITA 848/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4115 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 1997-1998
• Appeal Filed On: 02-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G C KAMEI
• Assessee Lawyers: SANJEEV KWATRE
• Keywords: Unexplained cash credit; Opportunity of being heard; Set aside
• Section: 80HHC; 147

Judgement Text

I.T.A. NO. 848, 81 /DEL/2010 1/6 IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH G BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI A KI GARODIA, ACCOUTANT MEMBER ITA NO. 848 /DEL/2010 (ASSESSMENT YEAR 1997-98) ITO, WARD 36(2), VS. SMT. SEEMA AGGARWAL, NEW DELHI C/O HIREN MEHTA, CA, 21, DAYANAND ROAD, DARYA GANJ, NEW DELHI. C.O. NO.81/DEL/2010 (ASSESSMENT YEAR 1997-98) SMT. SEEMA AGGARWAL, VS. ITO, WARD 36(2), C/O, HIREN MEHTA, CA, NEW DELHI. 21, DAYANAND ROAD, DARYAGANJ, NEW DELHI. (APPELLANTS) (RESPONDENTS) PAN / GIR NO. APPELLANT BY: SHRI G. C. KAMEI, SR. DR RESPONDENT BY: SHRI SANJEEV KWATRE, CA ORDER PER A. K. GARODIA, AM: 1. THIS APPEAL IS FILED BY THE REVENUE WHEREAS THE CROSS OBJECTION IS FILED BY THE ASSESSEE AND BOTH ARE DIR ECTED AGAINST THE ORDER OF LD. CIT(A) XXII, NEW DELHI DATED 20.11.2009. FOR THE SAKE OF CONVENIENCE, BOT H I.T.A. NO. 848, 81 /DEL/2010 2/6 THE APPEALS ARE BEING DISPOSED OFF BY THIS COMMON ORDER. 2. FIRST, WE TAKE UP THE APPEAL OF THE REVENUE. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING CLAIM OF DEDUCTION U/S 80HHC OF THE I. T. ACT. 2) THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) O F APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. IN THE PRESENT CASE, IN THE ORIGINAL ASSESSMENT ORDER PASSED BY THE A.O., DEDUCTION WAS ALLOWED TO THE ASSESSEE U/S 80HHC AS PER THE CLAIM MADE IN THE RET URN OF INCOME. THE ASSESSMENT WAS REOPENED U/S 147 ON THE BASIS THAT THERE WAS UNREALIZED EXPORT SALES OF RS.14.43 LACS. IT WAS NOTICED BY THE A.O. IN THE REASSESSMENT ORDER THAT DURING THE COURSE OF REOPEN ING PROCEEDINGS, THE ASSESSEE FAILED TO FILE COMPLETE D ETAILS OR INFORMATION AND FOR THIS REASON THE CLAIM OF THE ASSESSEE REGARDING DEDUCTION U/S 80HHC WAS DISALLOWED APART FROM MAKING ADDITION ON ACCOUNT OF UNEXPLAINED CREDIT OF RS.59 LACS. REGARDING THE DISALLOWANCE OF CLAIM FOR DEDUCTION U/S 80HHC ALSO, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) , WHICH WAS DISMISSED. THE ASSESSEE MADE 2 ND APPEAL BEFORE THE TRIBUNAL AND IN THE 1 ST ROUND, THE TRIBUNAL I.T.A. NO. 848, 81 /DEL/2010 3/6 RESTORED THE MATTER BACK TO THE FILE OF THE A.O. FO R FRESH DECISION. IN THE IMPUGNED ASSESSMENT ORDER DATED 24.11.2008 AS PER THE DIRECTION OF THE TRIBUNAL IN THE 1 ST ROUND, IT IS NOTICED BY THE A.O. AT PAGE 2 OF THE ASSESSMENT ORDER THAT VARIOUS OPPORTUNITIES WERE GI VEN TO THE ASSESSEE BUT THE ASSESSEE FAILED TO FURNISH ANY EXPLANATION OR DOCUMENTARY EVIDENCE AND HENCE THE A.O. HAD AGAIN DISALLOWED THE CLAIM OF THE ASSESSEE REGARDING DEDUCTION U/S 80HHC AND THE ASSESSEE AGAI N FILED THE APPEAL BEFORE THE LD. CIT(A) WHO HAS HELD THAT DEDUCTION HAS TO BE ALLOWED TO THE ASSESSEE TO THE EXTENT OF RS.37,43,255/- U/S 80HHC. THIS WORKING HAS BEEN DONE BY THE LD. CIT(A) AT PAGE 9 OF HIS ORDER. HE HAS DONE THE REVISED WORKING ON THE BASIS THAT THERE WA S UNREALIZED EXPORT SALES OF RS.93.49 LACS AND NOT RS.14.43 LACS. IN THE TABLE OF WORKING AS APPEARIN G AT PAGE 9 OF THE ORDER OF LD. CIT(A), WE FIND THAT PRO FIT FROM EXPORT OF TRADING GOODS WAS SHOWN AT RS.2115.5 2 LACS FROM EXPORT TURNOVER AFTER REDUCING THE UNREAL IZED EXPORT SALES OF RS.93.49 LACS. FOR THIS REDUCED AM OUNT OF TRADING EXPORT SALES, PROFIT HAS BEEN WORKED OUT AT RS.34.75 LACS, WHICH IS MORE THAN THE PROFIT FROM E XPORT BEFORE EXCLUSION OF UNREALIZED EXPORT SALE OF RS.93 .49 LACS. FOR ENTIRE EXPORT SALES OF RS.2202.02 LACS, EXPORT PROFIT IS CONSIDERED IN THE RETURN OF INCOME AT RS. 32.29 I.T.A. NO. 848, 81 /DEL/2010 4/6 LASC. WE FAIL TO UNDERSTAND AS TO HOW THE PROFIT CA N BE MORE AFTER REDUCING RS.93.49 LACS FROM TRADING EXPO RT SALES. UNDER THESE FACTS, WE FEEL THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE LD. CIT(A) FOR FRESH DEC ISION AFTER EXAMINING ALL ASPECTS OF THE MATTER AND AFTE R OBTAINING REMAND REPORT FROM THE A.O. BECAUSE THE DISALLOWANCE WAS MADE BY THE A.O. ON THE BASIS THAT NO EVIDENCE OR DETAILS WERE FURNISHED BEFORE HIM AND HENCE IF SOME NEW DETAILS OR EVIDENCE WERE FURNISHE D BEFORE THE LD. CIT(A), THE SAME SHOULD HAVE BEEN ADMITTED BY THE LD. CIT(A) AFTER COMPLYING WITH THE REQUIREMENT OF RULE 46A OF THE I. T. RULES AND ALSO AFTER OBTAINING THE REMAND REPORT FROM THE A.O. ON THIS ISSUE. SINCE, THIS WAS NOT DONE, WE SET ASIDE THE ORDER OF LD .CIT(A) ON THIS ISSUE AND RESTORE THE MATER B ACK TO HIS FILE FOR FRESH DECISION. THE LD. CIT(A) SHO ULD PASS NECESSARY ORDER AS PER LAW AS PER ABOVE DISCUS SION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. IN THESE CIRCUMSTANCES, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. 4. NOW, WE TAKE UP THE C.O. FILED BY THE ASSESSEE. THE GROUNDS RAISED BY THE ASSESSEE IN THE C.O. READ AS UNDER: 1) THAT THE ORDER PASSED BY THE LD. CIT(A)-XXVII, I S BAD IN LAW AND CONTRARY TO THE FACTS. I.T.A. NO. 848, 81 /DEL/2010 5/6 2) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT CONFRONTING THE CONTENTS OF THE REMAND REPORT TO THE ASSESSEE DURIN G THE COURSE OF APPELLATE PROCEEDINGS AND ON THIS GROUND ALONE THE IMPUGNED ORDER NEEDS TO BE SET ASIDE/QUASHED. 3) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDI NG THE ADDITION OF RS.28.50 LACS ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDITS WITHOUT EVEN DISCUSSING SUFFICIENT REASONS FOR THE SAME. 5. IT WAS SUBMITTED BY THE LD. A.R. THAT AS CAN BE SEEN AT PAGE 14 OF THE ORDER OF LD. CIT(A), REMAND REPORT D ATED 11.05.2009 WAS SUBMITTED BY THE A.O. BUT THE REMAND REPORT WAS NEVER MADE AVAILABLE TO THE ASSESSEE AND HENCE THIS ISSUE REGARDING CONFIRMATION OF THE ADDI TION OF RS.28.50 LACS ON THE BASIS OF SUCH REMAND REPORT SHOULD BE RESTORED TO THE FILE OF THE LD. CIT(A) FO R FRESH DECISION AFTER CONFRONTING THE REMAND REPORT TO THE ASSESSEE. LD. D.R. SUPPORTED THE ORDER OF THE LD. CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE F IND THAT THERE IS NO MENTION IN THE ORDER OF LD. CIT(A) THAT THE REMAND REPORT OF THE A.O. DATED 11.05.2009 WAS CONFRONTED TO THE ASSESSEE AND WHILE CONFIRMING THI S ADDITION OF RS.28.50 LACS, HE HAS REFERRED TO THE R EMAND REPORT ALSO AS CAN BE SEEN AT PAGE 18 OF HIS ORDER AND HENCE WE ARE IN AGREEMENT WITH THE LD. A.R. THAT TH IS I.T.A. NO. 848, 81 /DEL/2010 6/6 MATTER SHOULD GO BACK TO THE FILE OF THE LD. CIT(A) FOR FRESH DECISION AFTER CONFRONTING THE REMAND REPORT TO THE ASSESSEE. HENCE WE SET ASIDE THE ORDER OF LD. CIT( A) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE FI LE OF LD. CIT(A) FOR FRESH DECISION. REMAND REPORT DATED 11.05.2009 SHOULD BE CONFRONTED TO THE ASSESSEE AND AFTER PROVIDING ADEQUATE OPPORTUNITY TO BE HEARD TO BOTH THE SIDES, LD. CIT(A) SHOULD DECIDE THE ISSUE AFRES H. C.O. FILED BY THE ASSESSEE STANDS ALLOWED FOR STATI STICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS OBJECTION OF THE ASSESSEE ARE ALLOWED FOR STA TISTICAL PURPOSES. 8. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 03.05.2010. SD./- SD./- (A. D. JAIN) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:03 RD MAY, 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI