M/s Acme Builders, Mohali V. DCIT, C-3(1), Chandigarh

ITA 990/CHANDI/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3688 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-06-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 08-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEENAKSHI VOHRA CIT
• Keywords: Opportunity of being heard; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH A, CHANDIGARH (VIRTUAL COURT) .., !' .. , # $% BEFORE: SHRI. N.K.SAINI, VP & SHRI , R.L. NEGI, JM ITA NO.990/CHD/2019 ASSESSMENT YEAR : 2013-14 M/S ACME BUILDERS, GH-10, JLPL, SECTOR-91 MOHALI THE DCIT CIRCLE-3(1),CHANDIGARH PAN NO: AAQFA9330F APPELLANT RESPONDENT !' ASSESSEE BY : SHRI TEJMOHAN SINGH, ADVOCATE #!' REVENUE BY : SMT. MEENAKSHI VOHRA, ADDL. CIT $ %! & DATE OF HEARING : 03/06/2021 '()*! & DATE OF PRONOUNCEMENT : 03/06/2021 $&/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 24/04/2019 OF THE LD. CIT(A)-1, CHANDIGARH. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELA TES TO THE SUSTENANCE OF DISALLOWANCE OF RS. 2,00,000/- MADE BY THE A.O. ON AC COUNT OF DISCOUNT GIVEN AND PAID TO MS. SURINDERJIT KAUR AND MR. PRITAM SINGH. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE SEARCH AND SEI ZURE OPERATION UNDER SECTION 132(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERR ED TO AS ACT) WAS CONDUCTED ON THE ASSESSEE ON 02/05/2012. DURING THE COURSE OF SEARC H CERTAIN AGREEMENT RELATING TO SALE OF PLOT BETWEEN DIFFERENT -2 PERSONS AND THE ASSES SEE WERE FOUND. THE ASSESSEE FURNISHED THE RETURN OF INCOME ON 27/09/2013 DECLARIN G AN INCOME OF RS. 82,98,790/-. THE A.O. MADE DISALLOWANCE OF RS. 2,00,000/- BY OBSER VING IN PARA 3.1 AND 3.2 OF THE ASSESSMENT ORDER AS UNDER: 2 3.1 DURING THE COURSE OF EXAMINATION OF THE PROFIT AND LOSS ACCOUNT, IT WAS NOTICED THAT THE ASSESSEE CLAIMED EXPENDITURE ON ACCOUNT OF DISCOUNT PAID TO THE TUNE OF RS. 200000/-. VIDE ORDER SHEET ENTRY DATED 09.02.2016, THE COUNSEL OF THE ASSESSEE WAS ASKED TO FILE THE DETAILS OF DISCOUNT GIVEN AND THE PROPE RTY FOR WHICH IT WAS GIVEN . IN RESPONSE VIDE REPLY DATED 14.03.2016 IT WAS SUBMITTED THAT T HE DISCOUNT WAS GIVEN ON ACCOUNT OF SALE OF INDUSTRIAL PLOT OF 500 SQ YARD TO MS. SURIN DERJIT KAUR AND MR. PRITAM SINGH. 3.2 ON PERUSAL OF VARIOUS DETAILS FILED BY THE ASSE SSEE IT WAS NOTICED THAT DURING THE YEAR UNDER THE CONSIDERATION THE ASSESSEE DIDN'T HA VE ANY INCOME FROM SALE OF PLOTS AT YELLOW STONE. ACCORDINGLY VIDE NOTING SHEET ENTRY D ATED 15.03.2016 THE ASSESSEE WAS ASKED TO FILE REPLY TO JUSTIFY ITS CLAIM FOR THE DI SCOUNT CLAIMED IN THE PROFIT AND LOSS ACCOUNT. IN RESPONSE THE ASSESSEE DIDN'T FILE ANY REPLY. THE REFORE THE EXPENDITURE OF RS. 200000 ON DISCOUNT GIVEN IS TREATED AS BOGUS EXPENDITURE AND ADDED TO THE RETURNED INCOME. FURTHER PENALTY PROCEEDINGS 271(L)(C) ARE BEING INITIATED F OR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: 'THE LD. ASSESSING OFFICER HAS DISALLOWED A SUM OF RS.2,00,000/- WITH AN OBSERVATION THAT THE DISCOUNT CLAIMED IN THE PROFIT AND LOSS ACCOUNT WAS BOGUS IN NATURE AND HENCE ADDED BACK. IN THIS REGARD, IT IS HUMBLY SUBMITTED THAT THE ASS ESSEE FIRM HAD BOOKED A NUMBER OF INDUSTRIAL PLOTS WITH SUKHM INFRASTRUCTURE PRIVATE- LIMITED. SCO 123-124. SECTOR-17C, CHANDIGARH MORE POPULARLY KNOWS AS YELLOW STONE INF O CITY . THESE PLOTS HAD BEEN BOOKED IN BULK BY THE ASSESSEE FIRM TO BE SOLD FROM TIME T O TIME TO VARIOUS CUSTOMERS. ONE SUCH PLOT WAS SOLD TO MS. SURINDERJIT KAUR WIFE OF MR. PRITAM SINGH BAIWA AND MR. BALJIT SINGH SON OF MR. PRITAM SINGH BAJWA BOTH RESIDENT O F HOUSE NO. 117, PHASE-9, MOHALI. (COPY OF THE ALLOTMENT LETTER ISSUED BY M/S SUKHM INFRAST RUCTURE PRIVATE LIMITED TO MS. SURINDERJIT KAUR AND MR. BALJIT SINGH IS ENCLOSED VIDE ANNEXURE -1). AS PER BUSINESS PRACTICE, THE INITIAL AMOUNT OF RS. 15,80,000/- WAS RECEIVED FROM MS. SURINDERJIT KAUR AND MR. BALJIT SINGH VIDE THREE CH EGUES ON 05.01.2011 . THE LEDGER ACCOUNT IS ENCLOSED VIDE ANNEXURE-2. COPIES OF THREE CHQUES GIVEN BY THE ALLOTTEES MR. S URINDERJIT KAUR AND MR. BALJIT SINGH IN FAVOUR OF ASSESSEE FIRM ARE ENCLOSED VIDE ANNEXURE -3 AND 4. THE SAID CHEQUES WERE CLEARED ON 05.01.2011 AND 12.01.2011. COPY OF THE S TATEMENT OF ACCOUNT OF M/S ACME BUILDERS WITH HDFC BANK, SECTOR-17C, CHANDIGARH, AC COUNT NO. 02132320002274 IS ENCLOSED VIDE ANNEXURE-5, WHERE THE THREE CHEQUES I SSUED BY THE ALLOTTEES ARE CREDITED. HENCE, FROM THE ABOVE, IT IS EVIDENT THAT AN ALLOTM ENT OF AN INDUSTRIAL PLOT WAS MADE BY YELLOW STONE TO THE ABOVE ALLOTTEES AND THE PAYMENT WAS MADE TO THE ASSESSEE FIRM'S BANK ACCOUNT . SUBSEQUENT PAYMENTS WERE TO BE GIVEN DIRECTLY TO M/S SUKHM INFRASTRUCTURE PRIVATE LIMITED BY MS. SURINDERJIT KAUR AND MR. BAL JIT SINGH. AS PER THE TERMS OF ALLOTMENT AND VARIOUS OTHER CON DITIONS, THE COMPANY M/S SUKHAM INFRASTRUCTURE PRIVATE LIMITED COULD NOT DELIVER TH E SAID PLOT TO MS. SURINDERJIT KAUR AND MR. BALJIT SINGH ON TIME AND AS A CONSEOUENCE THE BUYER S INSISTED ON CANCELLING THE SAID PLOT. IT WAS DECIDED THAT THE ASSESSEE FIRM WILL GIVE AN DIS COUNT OF RS. 2,00,000/- FOR THE SAID DELAY. HENCE, TWO CHEGUES BEARING NUMBERS 744331, 333 FOR RS. 1,00,000/- EACH WERE ISSUED TO MS. SURINDERJIT KAUR AND M/S PRITAM SINGH HUF (WHER EIN BOTH THE ALLOTTEES WERE NATURAL 3 MEMBERS AND AN AMOUNT OF RS. 7,00,000/- HAD BEEN RE CEIVED ON 12.01.2011 FROM M/S PRITAM SINGH HUF AS BOOKING AMOUNT). THIS IS FOR RE FERENCE AND INFORMATION. THE DISCOUNT CHEQUES WERE CLEARED FROM THE ASSESSEE 'S FIRM ACCOUNT IN APRIL 2012. COPY OF THE ASSESSEE FIRMS ACCOUNT STATEMENT WITH HDFC BANK , SECTOR 17C, CHANDIGARH, ACCOUNT NO. 02132320002274 WHEREIN, THE PAYMENT OF RS. \ 1,00,000/- EACH TO MS. SURINDERJIT KAUR AND MR. BALJIT SINGH (PRITAM SINGH HUF ACCOUNT) IS REFLECTING IS ENCLOSED VIDE ANNEXURE -6 . THE COPY OF PAN NUMBERS OF MR. SURINDERJIT KAUR AND MR. BALJIT SINGH ARE ENCLOSED VIDE ANNEXURE -7 AND 8 AS PROOF OF IDENTITY OF SAID BUYE RS. IT IS HUMBLY SUBMITTED THAT AN AMOUNT OF RS.15,80,0 00/- WAS RECEIVED FROM MS. SURINDERJIT KAUR AND MR. BALJIT SINGH FOR BOOKING AN INDUSTRIAL PLOT WITH YELLOW STONE WHEREIN THE ASSESSEE FIRM WAS A BROKER/ AGENT AND DUE TO NON FU LFILLMENT OF SALE CONDITION BY YELLOW STONE, THE ASSESSEE FIRM GAVE AN ADDITIONAL DISCOUN T OF RS. 2,00,000/- ON ITS OWN ACCOUNT TO KEEP AND RETAIN THE CUSTOMERS ETC. PRAYER IT IS EVIDENT FROM THE ABOVE THAT THERE WAS A GENUI NE DISCOUNT GIVEN TO MS. SURINDERJIT KAUR AND MR. BALJIT SINGH AND NO BOGUS ENTRIES WERE PASS ED. THE DISCOUNT OF RS.2,00,000/- GIVEN MAY KINDLY BE ALLOWED AS GENUINE BUSINESS EXPENDITU RE.' 4.1 HOWEVER THE LD. CIT(A) DID NOT FIND MERIT IN THE ABO VE SUBMISSIONS OF THE ASSESSEE AND SUSTAINED THE DISALLOWANCE BY OBSERVING T HAT THE ASSESSEE NEITHER BEFORE THE A.O. NOR BEFORE HIM FURNISHED ANY DOCUMENT CONTAINING TO SUCH TERMS & CONDITIONS TO JUSTIFY THE CLAIM OF DISCOUNT EXCEPT THE LEDGER AC COUNT AND ENTRY IN THE BANK ACCOUNT WHICH WERE SELF SERVING DOCUMENT. 5. NOW THE ASSESSEE IS IN APPEAL. 6. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NEITHE R THE A.O. NOR THE LD. CIT(A) ASKED FOR ANY FRESH EVIDENCE AND WHATEVER WAS RELATED T O THE CLAIM OF THE ASSESSEE WAS FURNISHED BEFORE THE AUTHORITIES BELOW. IT WAS STAT ED THAT THE ASSESSEE MAY PRODUCE ALL THE DOCUMENTS IF REQUIRED BY THE A.O. TO J USTIFY ITS CLAIM OF DISCOUNT GIVEN TO THE CUSTOMERS. 7. IN HER RIVAL SUBMISSIONS THE LD. SR. DR SUPPORTED T HE ORDERS OF AUTHORITIES BELOW AND FURTHER SUBMITTED THAT SINCE THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENT TO SUBSTANTIATE ITS CLAIM EITHER BEFORE THE A.O. OR BEFO RE THE LD. CIT(A). THEREFORE, THE DISALLOWANCE WAS RIGHTLY SUSTAINED BY THE LD. CIT(A). 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIE S AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOT CLEAR AS TO WHETHER THE 4 A.O. OR THE LD. CIT(A) ASKED ANY FRESH EVIDENCE FROM T HE ASSESSEE TO JUSTIFY ITS CLAIM OF DISCOUNT AMOUNTING TO RS. 2,00,000/-. WE THEREFORE BY K EEPING IN VIEW THE PECULIAR FACTS OF THIS CASE, DEEM IT APPROPRIATE TO SET ASIDE THIS I SSUE BACK TO THE FILE OF THE A.O. TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING D UE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 03/06/2021 ) SD/- SD/- .. .., (R.L. NEGI ) ( N.K. SAIN I) # $%/ JUDICIAL MEMBER / VICE PRESIDENT AG DATE: 03/06/2021 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE (+ $ BY ORDER, ; # ASSISTANT REGISTRAR