Man Chand, Kurukshetra V. ITO, Kurukshetra

ITA 892/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6750 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 08-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGHDR
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO. 892/CHD/2016 ASSESSMENT YEAR: 20 11-12 SHRI MAM CHAND, VS. THE ITO, PROP. M/S APARNA INDUSTRIES, WARD-2, VILLAGE- BABAITPUR, KURUKSHETRA. TEHSIL-LADWA, DISTT. KURUKSHETRA. PAN NO. ADNPC2575Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JASPAL SHARMA RESPONDENT BY : SHRI MANJIT SINGH,DR DATE OF HEARING : 02.08.2017 DATE OF PRONOUNCEMENT : 05.10.2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE CORRECTNESS OF THE ORDER DATED 22.05.2016 OF CIT (APPEALS )-2 GURGAON PERTAINING TO 2011-12 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THE IMPUGNED ORDER IS BOTH AGAINST FACTS AND ERRONE OUS IN LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.C IT(APPEALS)-2 HAS ERRED IN HAVING CONFIRMED THE AGGREGATE ADDITION AMOUNTING TO RS.16 ,00,000/- MADE BY THE LD.AO U/S 68 ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN TH E NAMES OF SH.AMIT GUPTA, SMT.ANJALI GUPTA, SMT.REKHA GUPTA AND SMT.SANJU GUP TA. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.C IT(APPEALS)-2 HAS ERRED IN HAVING HELD THAT THERE WAS A SHAM ARRANGEMENT BETWEEN THE APPELLANT AND THE CREDITORS. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.C IT(APPEALS)-2 HAS ERRED IN HAVING CONFIRMED THE ADDITION OF RS.2,52,818/-MAD E BY THE LD.AO TREATING THE SAME AS FICTITIOUS LIABILITY IN THE NAME OF M/S VIK AS GINNING & PRESSING LTD. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D.CIT(APPEALS)-2 HAS ERRED IN HAVING CONFIRMED THE DISALLOWANCE OF RS.2,00 ; 000/-MADE BY THE LD. AO OUT OF EXPENSES MERELY ON ADHOC BASIS. 2. THE LD. AR INVITING ATTENTION TO THE ORDER-SHEET DATED 14.02.2017 SUBMITTED THAT THE ASSESSEE HAD FILED APPLICATION FOR ADMISS ION OF ADDITIONAL EVIDENCE. THE APPLICATION, IT WAS SUBMITTED, WAS S UPPORTED BY AN AFFIDAVIT JUSTIFYING THE REASONS WHY THE EVIDENCE MAY N OW BE TAKEN ON RECORD. THE DEPARTMENT WAS GIVEN TIME TO FILE ITS REPLY ON THE ADMISSION OF THE ADDITIONAL EVIDENCE AND ALTHOUGH THE APPEAL WAS LIST ED FOR HEARING ON TWO DIFFERENT OCCASIONS, I.E. 21.03.2017 AND 06.06.2017 SINCE THE BENCH WAS NOT FUNCTIONAL, NO ACTION COULD BE TAKEN. HOWEV ER, ON ITA 892/CHD/2016 A.Y. 2011-12 PAGE 2 OF 4 06.07.2017, IN ORDER TO OBTAIN THE REMAND REPORT FROM THE AO, TIME WAS SOUGHT BY THE LD. SR.DR WHICH WAS GRANTED. IN THESE CIRC UMSTANCES, IT WAS HIS PRAYER THAT THE EVIDENCE MAY BE TAKEN ON RECO RD AND MAY BE CONSIDERED FOR GRANTING RELIEF AS EVIDENTLY THE DEPARTMENT HAS NOT COME UP AND SAID ANYTHING AGAINST THE ADMISSION DESPITE MORE T HAN SUFFICIENT OPPORTUNITY. 3. THE LD. SR.DR MR. MANJIT SINGH SUBMITTED THAT NO DOUBT, TIME HAS BEEN GIVEN TO THE DEPARTMENT, HOWEVER, THE AO, TILL DATE H AS NOT GIVEN ANY REPLY. ACCORDINGLY, SOME MORE TIME MAY BE GRANTED. 4. THE LD. AR IN REPLY SUBMITTED THAT LET THE LD. SR.DR HAV E A LOOK AT THE EVIDENCES HIMSELF, HOWEVER TIME MAY NOT BE GRANTED. THE SAID REQUEST OF THE LD. AR IN THE PECULIAR FACTS WAS NOT SERIOUSLY OPPOS ED BY THE LD. SR.DR. 5. A PERUSAL OF THE RECORD SHOWS THAT ASSESSEE WHO IS ENGAGED IN MANUFACTURING AND TRADING OF CATTLE-FEED, BENOLA, KHAL, WAS RE QUIRED TO EXPLAIN THE UNSECURED LOANS APPEARING IN THE BALANCE-SHEE T BY WAY OF PROVING IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE CREDITORS. THE AO NOT SATISFIED WITH THE REPLY GIVEN BY THE LD. AR MADE A N ADDITION OF RS. 16 LACS. APART FROM THAT, ADDITION OF RS. 2,52,818/- WAS ALSO MADE TREATING THE LIABILITY AS FICTITIOUS. THE AUTHENTICITY OF THE EX PENSES WAS ALSO DOUBTED , LEADING TO THE ADDITION OF RS. 2 LACS. APART FROM THAT, ADDITION OF RS. 16,792/- ON ACCOUNT OF DIFFERENCE IN THE BALA NCE SHEET OF JAI SANTOSHI MAA TRADERS AND RS. 23,601/- ADDITION MADE IN THE MACHINERY ACCOUNT WAS FOUND TO BE UNEXPLAINED LEADING T O THE ASSESSMENT BEING HAVING COMPLETED AT AN INCOME OF RS. 25,8 6,310/- AS OPPOSED TO THE RETURNED INCOME OF RS. 4,93,100/-. THE AD DITIONS WERE SUSTAINED IN APPEAL BY THE CIT(A). 6. IN THE SAID BACKGROUND, ASSAILING THE ADDITION, THE ASSE SSEE HAS FILED APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE ON 14.02.2017 ON THE FOLLOWING GROUNDS : THE APPLICANT/APPELLANT/ASSESSEE BEGS YOUR HONOUR' S PERMISSION TO RELY ON THE DOCUMENTS AS PER ANNEXURE-L ATTACHED WHILE HEARING THE APPEAL NOTED AS ABOVE. IN THIS BEHALF IT IS RESPECTFULLY SUBMITTED THAT ALL THE DO CUMENTS MENTIONED IN THE ANNEXURE-L EXCEPT COPIES OF ACCOUNTS MENTIONED AT S. NO. 2,7,1 2 &22, WERE AVAILABLE WITH THE COUNSEL WHO WAS HANDLING ASSESSMENT PROCEEDINGS BUT IT APPEARS THAT THESE COULD NOT BE FILED BEFORE THE AO OR CIT(APPEALS) DUE TO LACK OF CO-ORDINATION AMONG THE COUNSEL DUE TO CHANGE OF COUNSEL. FIRSTLY SHRI ROSHAN LAI GUPTA , ADVOCATE, WAS ENGAGED AS COUNSEL. THEN SHRI RAJ KUMAR GUPTA,CA, WAS ENGAGED AS COUNSE L TO CONDUCT THE ASSESSMENT ITA 892/CHD/2016 A.Y. 2011-12 PAGE 3 OF 4 PROCEEDINGS. NOT SATISFYING WITH THE SERVICES OF CO UNSEL, AGAIN SHRI ROSHAN LAI GUPTA,ADVOCATE, WAS ENGAGED TO CONDUCT ASSESSMENT P ROCEEDINGS. TO CONDUCT THE APPEAL BEFORE THE LD.CIT(APPEALS),GURGOAN, THE APPELLANT E NGAGED ANOTHER COUNSEL, SH.RAKESH DHALL, C.A. WHO SUBMITTED ONLY THE WRITTEN SUBMISSI ONS. AS FOR COPIES OF ACCOUNTS MENTIONED AT SR.NO. 2,7,1 2 &22, THESE ARE OF SUBSEQUENT YEARS AND ARE NECESSARY AND RELEVANT TO DECIDE THE ISSUES . THEREFORE ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN THE INTEREST OF SUBST ANTIAL JUSTICE THE APPLICANT/APPELLANT MAY BE ALLOWED TO RELY ON THE DOCUMENTS AS MENTIONE D IN ANNEXURE-L. (EMPHASIS SUPPLIED) 6.1 THE SAID PRAYER IS SUPPORTED BY AN AFFIDAVIT OF THE ASS ESSEE AFFIRMING THE FOLLOWING FACTS : 1. THAT ASSESSMENT FOR THE ASSESSMENT YEAR 2011- 12, WAS FRAMED U/S 143(3) BY THE ITO, WARD 2,KURUKSHETRA, VIDE HER ORDER DATED 28.03.2014 AT AN INCOME OF RS.25,86,310/- AS AGAINST RETURNED INCOME AT RS.4,93,100/-. 2. THAT THE DEPONENT ENGAGED SHRI ROSHAN LAI GUP TA, ADVOCATE AS COUNSEL TO CONDUCT THE ASSESSMENT PROCEEDINGS. LATER ON COUNSE L WAS CHANGED AND SHRI RAJ KUMAR GUPTA, CA, WAS ENGAGED AS COUNSEL. BUT NOT SATISF YING WITH SERVICES OF CHANGED COUNSEL, THE DEPONENT AGAIN ENGAGED SHRI ROSHAN LAI GUPTA, ADVOC ATE, AS HIS COUNSEL TO CONDUCT ASSESSMENT PROCEEDINGS. 3. THAT TO CONDUCT THE APPEAL BEFORE THE LD.CIT( APPEALS), THE DEPONENT ENGAGED ANOTHER COUNSEL, SHRI RAKESH DHALL, C.A. 4. THAT ALL THE DOCUMENTS MENTIONED IN ANNEXURE-L EXCEPT THE COPIES OF ACCOUNTS MENTIONED AT S.NO. 2,7,17 &22, WERE AVAILABLE WITH THE COUNSEL DURING ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS. 5. THAT DUE TO LACK OF COORDINATION AMONG THE CO UNSEL, IT APPEARS THAT THE DOCUMENTS AS PER ANNEXURE-L EXCEPT THE COPIES OF ACCOUNTS MEN TIONED AT S.NO. 2,7,17 & 22, COULD NOT BE FILED BEFORE THE LD. AO AS WELL AS CLT(APPEALS). 6. THAT COPIES OF ACCOUNTS MENTIONED AT S.NO.2,7,17 & 22 ARE OF SUBSEQUENT YEARS AND ARE RELEVANT. 7. THAT ALL THE DOCUMENTS MENTIONED IN ANNEXURE-L ARE RELEVANT AND HAVE DIRECT BEARING ON THE ISSUE. 8. THAT THERE WAS NO MALAFIDE INTENTION IN NOT SUBM ITTING THE DOCUMENTS AS PER ANNEXURE-L, BEFORE THE AO AS WELL AS CIT(APPEALS). 6.2 CONSIDERING THE EXPLANATION OFFERED WHERE IT APPEARS TH AT THE ASSESSEE HAS SUFFERED DESPITE HIS BEST EFFORTS ON ACCOUN T OF COUNSELS WHO WERE NOT AWARE OF THE CONSEQUENCES OF APPEARING FOR A FORMAL HEARING WITH PART EVIDENCES AND TREATED THE SERIOUS MATTER OF HEARIN GS FIXED CASUALLY. ACCORDINGLY, IN THE PECULIAR FACTS AND CIRCUMSTANCES WHERE I FIND OPPORTUNITY HAS ALREADY BEEN GIVEN TO THE AO TO ADDRE SS WHETHER ADDITIONAL EVIDENCES CAN BE ADMITTED OR NOT, IT IS DEEMED A PPROPRIATE IN THE PECULIAR FACTS TO ADMIT THE ADDITIONAL EVIDENCE AS THE EXPLANATION IS FOUND TO BE BONAFIDE. THE EVIDENCE, ADMITTEDLY COULD NOT B E PLACED BEFORE THE TAX AUTHORITIES FOR REASONS BEYOND THE CONTROL OF T HE ASSESSEE AND IS DEEMED RELEVANT AND CRUCIAL FOR DETERMINING THE ISSUE. ACC ORDINGLY, IN THE ITA 892/CHD/2016 A.Y. 2011-12 PAGE 4 OF 4 INTERESTS OF SUBSTANTIAL JUSTICE, THE ADDITIONAL EVIDENCE IS A DMITTED. HOWEVER, IT MAY BE NOTED THAT ITS VALIDITY AND GENUINENESS IS NOT BEING COMMENTED UPON AND THE ISSUES ARE LEFT OPEN TO THE AO TO CONSIDER THE SAME AND GRANT NECESSARY RELIEF, IF ANY MAINTAINABLE UNDER LA W. NEEDLESS TO SAY THAT THE ASSESSEE SHALL BE GRANTED A REASONABLE OPPORTU NITY OF BEING HEARD BY THE AO. IT IS ALSO MADE CLEAR THAT IT IS HOPED THAT THE ASSESSEE SHALL PARTICIPATE FULLY AND FAIRLY BEFORE THE AO AND OPPORTU NITY SO PROVIDED, IT IS HOPED, IS NOT ABUSED AS IN THE EVENTUALITY O F ABUSE OF THE SAME, THE AO WOULD BE AT LIBERTY TO PASS AN ORDER ON TH E BASIS OF MATERIAL AVAILABLE ON RECORD. THE SAID ORDER WAS PRONOUNCED IN TH E OPEN COURT AT THE TIME OF HEARING ITSELF. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05.10.2017. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.