ACIT, New Delhi V. M/s. R.K. Global Shares & Securities Ltd., New Delhi

ITA 933/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52491 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 12-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 05-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence; Corroborative evidences

Judgement Text

ITA NO. 933/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 933/DEL/2010 A.Y. : 2006-07 ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-8, ROOM NO. 356, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. M/S R.K. GLOBAL SHARES AND SECURITIES LTD., 5, 2 ND FLOOR, SAGAR APARTMENT, 6, TILAK MARG, NEW DELHI - 110001 (PAN/GIR NO. : AAACR5786P) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : NONE DEPARTMENT BY : SH. SUDESH GARG, C.I.T.(D.R.) ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 07.12. 2009 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUES RAISED READ AS UNDER:- I(A) THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN ALLOWING RELIEF TO THE ASSESSEE ON ACCOUNT OF ADDIT IONAL EVIDENCE FILED BY THE ASSESSEE DURING THE COURSE O F APPELLATE PROCEEDINGS AND ALLOWING A RELIEF OF ` 1 6,22,909/- OUT OF SALARY PAID. I(B) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE FILED BY THE ASSESS EE ITA NO. 933/DEL/2010 2 DURING THE COURSE OF APPELLATE PROCEEDINGS WITHOUT OBTAINING A REPORT UNDER RULE 46A OF THE IT RULES. I(C) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN ALLOWING THE RELIEF OF ` 1622909/- ON THE GROUND THAT THERE WAS NO DOCUMENTARY EVIDENCE IN THIS REGAR D HAS BEEN FOUND DURING THE COURSE OF SEARCH PROCEEDINGS . 3. IN THIS CASE ASSESSING OFFICER OBSERVED THAT ASSESSEE WAS ASKED TO EXPLAIN WHY THE EXPENDITURE ON SALARY HAS BEEN INCREASED TO ` 22,93,122/- DURING THE YEAR IN COMPARISON TO ` 6,7 0,213/- INCURRED DURING THE IMMEDIATELY PREVIOUS YEAR. ASSESSEE WA S ALSO ASKED TO FILE COMPLETE EMPLOYEE WISE DETAILS IN THIS REGARD, BUT THE SAME WAS NOT FILED. ASSESSING OFFICER TRIED TO CO-RELATE T HE SALARY AMOUNT WITH THE CONTRIBUTIONS MADE BY THE ASSESSEE COMPANY FOR PR OVIDENT FUND ETC. BUT ONLY AN AMOUNT OF ` 5598/- WAS FOUND CHARGE D BY THE ASSESSEE AS PF CONTRIBUTIONS. ASSESSEE WAS ALSO TO SUBMIT THE DETAILS OF TDS DEDUCTED AND DEPOSITED DURING THE YEAR TO EXAMINE T HE ALLOWABILITY OF VARIOUS EXPENDITURES CLAIMED IN THE PROFIT AND LOSS ACCOUNT BUT THE SAME WAS ALSO NOT DONE. ASSESSING OFFICER OBSERVE D THAT THERE WAS NO OTHER OPTION BUT TO DISALLOW THE EXCESS AMOUNT O F SALARY CHARGED TO THE PROFIT AND LOSS ACCOUNT DURING THE YEAR IN COMPA RISON TO LAST YEAR AS NOT INCURRED FOR THE BUSINESS PURPOSES BY THE AS SESSEE IN THE ABSENCE OF SUPPORTING EVIDENCES. HENCE, HE ADDED TH E INCREMENTAL AMOUNT OF ` 16,22,909/-. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT ASSESSING OFFICER HAD DISALLOW ED THE INCREMENTAL SALARY PURELY BASED ON GUESS WORK AND BASED ON SOM E LOOSELY CONNECTED EVIDENCES. HE OBSERVED THAT BY THE COMPA RISON OF THE ITA NO. 933/DEL/2010 3 BALANCE SHEET OF THE ASSESSEE FOR TWO YEARS AS ON 3 1.3.2005 AND 31.3.2006, IT IS VERY CLEAR THAT BUSINESS OF THE A SSESSEE HAS INCREASED MANIFOLD. LD. COMMISSIONER OF INCOME TAX (APPEALS) FUR THER FOUND THAT ASSESSEE HAS GIVEN DETAILS OF SALARY PAYMENT B EFORE THE ASSESSING OFFICER WITH THE NAME OF EMPLOYEES, THEI R DESIGNATION, THE NATURE OF JOB THEY ARE DOING AND THE AMOUNT OF SALAR Y PAID. LD. COMMISSIONER OF INCOME TAX (APPEALS) FURTHER NOTED R EGARDING THE SMALL AMOUNT OF PF PAYMENT DURING THE YEAR, THE ASSESSE E HAS GIVEN A CLARIFICATION WHICH IS FACTUALLY FOUND CORRECT. IN THESE CIRCUMSTANCES, LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT A SSESSING OFFICER WAS NOT CORRECT IN MAKING THE DISALLOWANCE ON ACCOUN T OF SALARY. HE FURTHER HELD THAT NO EVIDENCE HAS BEEN FOUND BROUG HT ON RECORD BY THE ASSESSING OFFICER WHICH IS FOUND DURING THE COURS E OF SEARCH TO SUGGEST THAT SOME OF THE EMPLOYEES SHOWN BY THE ASS ESSEE ARE NOT GENUINE OR SALARY PAID TO THEM IS BOGUS. IN THESE CIRCUMSTANCES, AND BASED ON THE FACTS AS DISCUSSED ABOVE AS WELL AS SU BMISSION OF THE ASSESSEE, THE DISALLOWANCE MADE BY THE ASSESSING OFF ICER WAS DIRECTED TO BE DELETED. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPE AL BEFORE US. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E. NONE APPEARED ON BEHALF OF THE ASSESSEE. UPON CAREFUL C ONSIDERATION, WE FIND THAT THE MATTER CAN BE DISPOSED OF BY HEARING THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS. IN OUR CONSIDERED OPINION, THIS MATTER SHOULD GO BACK TO TH E FILES OF THE ASSESSING OFFICER TO CONSIDER THE ISSUE AFRESH AS THE ASSESSEE HAS SUBMITTED DETAILS OF SALARY PAID BEFORE THE LD. COMMI SSIONER OF INCOME TAX (APPEALS) WHICH WAS NOT DONE BEFORE THE ASSESSI NG OFFICER. ITA NO. 933/DEL/2010 4 ASSESSING OFFICER IS DIRECTED TO GO THROUGH THESE EVIDENCES. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE O PPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12/8/2011 UPO N CONCLUSION OF HEARING. SD/- SD/- [C.L. SETHI] [C.L. SETHI] [C.L. SETHI] [C.L. SETHI] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 12/8/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES