Ashish Goel, v. ITO, Bhiwani

ITA 2798/DEL/2010 | 2003-2004
Pronouncement Date: 31-01-2011 | Result: Allowed

Appeal Details

RSA Number 279820114 RSA 2010
Assessee PAN AHAPG5849A
Bench Delhi
Appeal Number ITA 2798/DEL/2010
Duration Of Justice 7 month(s) 26 day(s)
Appellant Ashish Goel,
Respondent ITO, Bhiwani
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-01-2011
Date Of Final Hearing 20-01-2011
Next Hearing Date 20-01-2011
Assessment Year 2003-2004
Appeal Filed On 04-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI SHAMIM YAHYA ITA NO. 2798/DEL/10 A.Y: 2003-04 ASHISH GOYAL VS. INCOME-TAX OFFICER C/O DUNGAR MAL & SONS BHIWANI. ANAJ MANDI CHARKHI DADRI HARYANA. PAN NO. AHAPG5849A ITA NO. 2536/DEL/10 A.Y: 2003-04 INCOME-TAX OFFICER VS. ASHISH GOYAL BHIWANI. C/O DUNGAR MAL & SONS ANAJ MANDI CHARKHI DADRI C.O. NO. 261/DEL/10 ( IN ITA NO. 2536/DEL/10 ) A.Y: 2003-04 ASHISH GOYAL VS. INCOME-TAX OFFICER C/O DUNGAR MAL & SONS BHIWANI. ANAJ MANDI CHARKHI DADRI ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : S/SHRI K.SAMPATH ADV. K.C.JAIN AD V. & RAJAT JAIN CA REVENUE BY : MRS. ANUSHA KHURANA SR. DR O R D E R PER R.P. TOLANI J.M : THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AS WE LL AS THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 16-3-2010 RELATIN G TO A.Y. 2003-04. THE ITA 2798 2536 & CO 261/D/10 ASHISH GOEL 2 ASSESSEE HAS ALSO FILED CROSS-OBJECTION. ALL THESE MATTERS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO. 2798/DEL/10 THE ASSESSEE HAS RAISED F OLLOWING EFFECTIVE GROUNDS: THAT ON FACTS AND IN CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO U/S 14 7 OF THE INCOME-TAX ACT 1961. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING ADDITIO N OF RS. 54 69 713/- IN RESPECT OF CREDITS FOUND IN THE BANK ACCOUNT ON THE GROUNDS THAT THE SAME COULD NOT BE VERIFIED FRO M THREE PARTIES WHOM SUMMONS U/S 131 WERE ISSUED THOUGHT TH E PARTIES ARE UNDER NO CONTROL OF THE APPELLANT. 2.1. IN REVENUES APPEAL FOLLOWING GROUNDS ARE RAIS ED: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN REDUCING THE ADDITION OF RS. 1 69 67 175/- BY RS. 1 14 97 462/- REPRESENTING UNEXPLAINED CREDI TS IN BANK ACCOUNT WITH STANDARD CHARTERED BANK WITHOUT APPREC IATING THAT THE ASSESSEE COULD NOT TELL THE NAMES OF THE PARTIE S FROM WHOM PURCHASE OF EDIBLE OIL WAS MADE AND ALSO THE ADMISS ION OF THE ASSESSEE IN THE STATEMENT DATED 18.09.2009 RECORDED BY THE AO DURING APPELLATE PROCEEDINGS THAT T HE SALES PROCE EDS OF WHICH WERE CLAIMED TO HAVE BEEN DEPOSITED INTO THE ABOVE BANK ACCOUNT WERE BENAMI I.E. OUT OF BOOKS AND NOT RECOR DED IN THE BOOKS OF ACCOUNTS. 3. BRIEF FACTS ARE: THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EDIBLE OILS AS COMMISSION AGENT AND AS A TRADER. DURING THE COU RSE OF BUSINESS THE ASSESSEE HAD TO TRANSACT WITH VARIOUS CLIENTS AND CUSTOMERS PERTAINING TO THE TRANSACTIONS RELATING TO THESE ACTIVITIES OF COMMIS SION AGENT AND TRADER. AO RECEIVED SOME INFORMATION FROM KOLKATA INCOME-TAX OFFICE IN RESPECT OF ONE M/S MANTORA OIL PRODUCTS LTD. TO VERIFY THEIR TRAN SACTIONS WITH ASSESSEE. IN CONNECTION WITH THIS VERIFICATION ASSESSEE WAS SUM MONED U/S 131 TO ITA 2798 2536 & CO 261/D/10 ASHISH GOEL 3 PRODUCE BOOKS OF ACCOUNTS BANK STATEMENTS ETC. ASS ESSEE ATTENDED BUT COULD NOT PRODUCE THE REQUISITE INFORMATION. ON THIS BASI S AO REOPENED THE ASSESSMENT BY RECORDING REASONS ON 25-4-2007 AND IS SUED NOTICE U/S 148. FROM THE ASSESSMENT ORDER IT APPEARS THAT HEARING I N THE REASSESSMENT PROCEEDINGS STARTED SOMEWHERE FROM 15-11-2006. IT S HALL BE PERTINENT HERE TO MENTION THAT AO RECORDED A STATEMENT OF THE ASSE SSEE ON 15-1-2007 PART OF WHICH IS REFERRED IN HIS ORDER TO THE EFFECT THA T HIS PAN NO. WAS AHAPG5849A AND HAD FILED RETURN OF INCOME FOR AY 20 06-07 ON 31-10- 2006 AND PRIOR TO THAT HE HAD FILED RETURN FOR A.Y. 2005-06. THE STATEMENT REFERS TO HIS MARRIAGE AND OTHER FACTS. REGARING BO OKS OF ACCOUNT THE ASSESSEE PLEADED THAT THEY WERE WITH SALES-TAX DEPA RTMENT LATER ON HE ACCEPTED THAT THE BOOKS OF ACCOUNT WERE NOT AVAILAB LE. BE THAT AS IT MAY THE ABOVE ADDITIONS WERE MADE. ACCORDING TO AO ASSESSE E WENT ON SEEKING THE ADJOURNMENT AS HIS MARRIAGE WAS FIXED ON 20-1-2007 SUBSEQUENTLY SINCE ASSESSEE FAILED TO COMPLY. AO HOWEVER FRAMED THE EX PARTE ASSESSMENT HOLDING THAT CREDIT ENTRIES IN THE BANK ACCOUNT O F THE ASSESSEE WERE UNEXPLAINED CREDITS AND MADE AN ADDITION OF RS. 1 6 9 67 175/- AS INCOME. 3.1. ASSESSEE PREFERRED FIRST APPEAL. THE CIT(A) UP HELD THE REOPENING OF ASSESSMENT ON THE GROUND THAT PROPER REASONS WERE R ECORDED. ON MERITS ASSESSEE FILED ADDITIONAL EVIDENCE AND EXPLANATION WHICH WAS FORWARDED TO AO AND A REMAND REPORT WAS CALLED FOR. AO FURNISHED A REMAND REPORT DATED 1-10-2005. CIT(A) ON CONSIDERATION OF RECORD GAVE S UBSTANTIAL PART RELIEF BY FOLLOWING OBSERVATIONS: THE SUBMISSIONS OF THE ASSESSING OFFICER AND OF TH E APPELLANT HAVE BEEN CONSIDERED. THE ENQUIRY WAS CONDUCTED THR OUGH THE ASSESSING OFFICER U/S 250(4) OF THE IT ACT. THE ASS ESSING ITA 2798 2536 & CO 261/D/10 ASHISH GOEL 4 OFFICER HAS HERSELF SUBMITTED THAT THE PARTICULARS OF PAYMENTS TALLY WITH THE DEPOSITS MADE IN THE STANDARD CHARTE RED BANK IN RESPECT OF 3 PARTIES WHO WERE SUMMONED TO HER OFFIC E FOR VERIFYING THE SALES MADE BY THE APPELLANT TO THEM. AS REGARDS THE REMAINING 3 PARTIES NOTHING HAS BEEN HEARD FROM THEM. DURING APPEAL PROCEEDINGS THE AR OF THE APPELLANT W AS SPECIFICALLY ASKED TO PRODUCE THE REMAINING 3 PARTI ES IN RESPECT OF WHICH THE ENQUIRY COULD NOT REACH LOGICAL AND BE FORE THE ASSESSING OFFICER. THE AR OF THE APPELLANT EXPRESSE D ITS HELPLESSNESS IN PRODUCING THE PARTIES. THE ONUS OF PROVING ITS AVERMENTS LIES ON THE ASSESSEE. SINCE THE SALES TO THE FOLLOWING 3 PARTIES:- 1. MANOTRA OIL PRODUCTS 8 39 467 2. SHREE OM VANASPATI 27 05 246 3. KURELA PAPERS MILLS (P) LTD. 19 25 000 COULD NOT BE PROVED AS GENUINE BY THE APPELLANT TH E CREDITS SHOWN IN THE BANK ACCOUNTS CLAIMED TO BE PERTAINING TO THEM ARE HELD AS UNEXPLAINED INCOME OF THE APPELLANT. IN SHORT TOTAL SALES OF RS. 54 69 713/- ARE HELD AS INCOME FROM UN DISCLOSED INCOME OF THE APPELLANT OUT OF TOTAL RS. 1 69 67 17 5/- ADDED BY THE ASSESSING OFFICER. THEREFORE THE ADDITION OF RS . 54 69 713/- IS CONFIRMED. IT MAY BE MENTIONED THAT THE APPELLAN T THE GROUNDS OF APPEAL NO. 6 & 8 PERTAINING TO THIS ITEM ARE PARTLY ALLOWED. 3.1. AGGRIEVED BOTH THE PARTIES ARE IN APPEAL. ASS ESSEE HAS FURTHER FILED CROSS-OBJECTION RAISING FOLLOWING GROUNDS: ON THE FACT S AND CIRCUMSTANCES OF THE CASE IT IS WRONG ON THE PART OF THE APPELLANT AO TO SUGGEST THAT THE RESPON DENT AHS NOT PROVIDED DETAILS OF CREDITS FOUND IN THE BANK ACCOU NT WHICH REPRESENTED SALES WHICH WERE ALL RECEIVED THROUGH B ANKING CHANNEL FOR WHICH ADDITION WAS MADE AS UNEXPLAINED CREDITS U/S 68 OF THE INCOME-TAX ACT 1961. ON THE FACT S AND CIRCUMSTANCES OF THE CASE THE RES PONDENT OBJECTS TO THE GROUND NO. 1 TAKEN BY THE AO IN GROU ND OF APPEAL FOR THE REASONS THAT THE APPELLANT AO HIMSELF WAS S ATISFIED WITH ITA 2798 2536 & CO 261/D/10 ASHISH GOEL 5 COPIES OF ACCOUNTS OBTAINED FROM THE PARTIES WITH R EGARD TO CREDITS FOUND VERIFIED AS GENUINE FOR WHICH NO DIS CREPANCY WAS FOUND IN THE REMAND REPORT SUBMITTED BEFORE THE CIT (A). 4. LEARNED COUNSEL FOR THE ASSESSEE AT THE OUT SET CONTENDS THAT AS A MATTER OF FACT THERE WAS NO INFORMATION IN AOS PO SSESSION THAT ASSESSEE HAD ESCAPED ANY INCOME. THE BASIS FOR ISSUING NOTIC E U/S 48 EMANATED FROM KOLKATA ABOUT A TRADING TRANSACTION WITH M/S MANTO RA OIL PRODUCTS LTD. WHICH WAS SOUGHT TO BE CROSS CHECKED BY THE ASSESSE ES AO IN THE REASONS RECORDED ALSO. ASSESSEE ATTENDED THE PROCEEDINGS. I N THE REASONS RECORDED THERE IS NO MENTION ABOUT ANY ESCAPEMENT OF INCOME. ONLY BECAUSE OF NON- PRODUCTION OF BOOKS OF ACCOUNT REASSESSMENT PROCEE DINGS HAVE BEEN INITIATED. 4.1. LEARNED COUNSEL CONTENDS THAT THERE IS NEITHER APPLICATION OF MIND NOR CONSIDERATION OF RELEVANT FACTS THEREFORE THE REA SONS RECORDED ARE MECHANICAL AND DO NOT INDICATE ANY ESCAPEMENT OF AN Y INCOME. 4.2. ON MERITS IT IS CONTENDED THAT AO HIMSELF REC ORDED ASSESSEES STATEMENT IN HIS ORDER AND THE FACT THAT HE WAS TO GET MARRIED AFTER SOMETIME AND BOOKS WERE LYING WITH SALES-TAX AUTHORITIES AS ASSESSEE IS REGISTERED UNDER SALES-TAX ACT AO HAS HELD THAT AT THE RELEVA NT TIME BOOKS WERE NOT LYING WITH SALES-TAX AUTHORITIES AND ON THIS BASIS HELD HUGE BANKING TRANSACTIONS AS ASSESSEES UNDISCLOSED INCOME AND M ADE THE ADDITION ACCORDINGLY. BEFORE CIT(A) ALSO THOUGH REMAND REPOR T WAS OBTAINED SOME OF THE PARTIES DID NOT COMPLY WITH SUMMONS OF THE D EPARTMENT. ON THIS BASIS ALONE PART ADDITIONS HAVE BEEN RETAINED. ACCORDING TO LEARNED COUNSEL THE TRANSACTIONS WERE FAIRLY OLD AND OUTSIDE PARTIES D ID NOT COMPLY WITH AOS ITA 2798 2536 & CO 261/D/10 ASHISH GOEL 6 SUMMONS. REGARDING THEIR PARTICULAR TRANSACTIONS A N ENQUIRY FROM THE AOS OF THESE PARTIES SHOULD HAVE BEEN MADE BEFORE RETAI NING THE ADDITIONS. INSTEAD CIT(A) THOUGH HAS GIVEN RELIEF OF RS. 1 14 97 462/- HAS NOT CONSIDERED ASSESSEES REPEATED PLEAS THAT THE AO MA Y BE DIRECTED TO VERIFY THE FACTS IN RESPECT OF TRANSACTIONS OF THE PARTIES WHO DID NOT APPEAR. SINCE THE PART ADDITIONS REMAIN CONFIRMED ON THE BASIS O F INCOMPLETE INQUIRIES AND WITHOUT CONSIDERING THE ASSESSEES EXPLANATION A DDITIONS MAY BE DELETED. ALTERNATIVELY IT IS PLEADED THAT SINCE THE INQUIR IES IN RESPECT OF ABOVE THREE PARTIES I.E. MANTORA OIL PRODUCTS; SHREE OM VANSASP ATI; AND KURELA PAPERS MILLS (P) LTD. ARE NOT COMPLETE AO MAY BE DIRECTED TO VERIFY THEIR RESPECTIVE INCOME-TAX RECORDS. 5. LEARNED DR IN THAT CONTEXT CONTENDS THAT SINCE R EVENUE IS ALSO IN APPEAL THE ENTIRE ADDITIONS MAY BE SET ASIDE REST ORED BACK TO THE FILE OF AO TO DECIDE THEM AFRESH IN ACCORDANCE WITH LAW. 6. BOTH THE PARTIES HAVE AGREED TO SET ASIDE THE M ATER BACK TO THE FILE OF AO. THE LEARNED COUNSEL FOR THE ASSESSEE HAS FURTH ER PLEADED NOT TO PRESS HIS GROUND ABOUT REOPENING AND THE GROUND IN CROSS- OBJECTION AND HAS UNDERTAKEN TO PROVIDE FULL COOPERATION IN THE FRESH PROCEEDINGS. 6.1 WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE GONE T HROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE FOREGO ING ASSESSEES GROUNDS ABOUT REOPENING OF ASSESSMENT ARE DISMISSED. ASSESS EES GROUNDS TAKEN IN CO ARE ALSO DISMISSED AS NOT PRESSED. ITA 2798 2536 & CO 261/D/10 ASHISH GOEL 7 6.2. ABOUT MERITS IN VIEW OF ABOVE FACTS WE SET AS IDE THE ISSUES RAISED IN REVENUES AS WELL AS IN ASSESSEES APPEAL BACK TO T HE FILE OF AO TO DECIDE THE SAME AFRESH AFTER GIVING THE ASSESSEE ADEQUATE OPP ORTUNITY OF BEING HEARD. IN CASE OF PARTIES WHO HAVE NOT RESPONDED TO AOS S UMMONS U/S 131 APPROPRIATE PROCEEDINGS MAY BE TAKEN AGAINST SUCH P ARTIES AS OBSERVED BY HONBLE SUPREME COURT IN THE CASE OF ORISSA CORPORA TION 159 ITR 78 AND INQUIRIES IN THAT CASE MAY BE CONDUCTED FROM AOS OF SUCH RELEVANT PARTIES ABOUT THEIR TRANSACTION WITH ASSESSEE. AO SHALL AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE ADEQU ATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES; REVENUES APPEAL IS ALLOWED FOR STATISTI CAL PURPOSES AND THE CROSS- OBJECTION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31-01-2011. SD/- SD/- (SHAMIM YAHYA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31-01- 2011. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR