ITO, New Delhi v. Sh. Surjeet Singh, New Delhi

ITA 4104/DEL/2011 | 2003-2004
Pronouncement Date: 30-11-2011 | Result: Dismissed

Appeal Details

RSA Number 410420114 RSA 2011
Assessee PAN AIVPS8007L
Bench Delhi
Appeal Number ITA 4104/DEL/2011
Duration Of Justice 2 month(s) 20 day(s)
Appellant ITO, New Delhi
Respondent Sh. Surjeet Singh, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 30-11-2011
Date Of Final Hearing 14-11-2011
Next Hearing Date 14-11-2011
Assessment Year 2003-2004
Appeal Filed On 09-09-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMEBR AND SHRI K.G. BANSAL ACCOUNTANT MEMBER I.T.A NO. 4104/DEL/2011 ASSTT. YEAR 2003-04 ITO WARD-23 (2) ROOM NO. 304-D 3 RD FLOOR VIKAS BHAWAN NEW DELHI. VS. SURJEET SINGH 4499/11 JAI MATA MARKET TRI NAGAR NEW DELHI. AIVPS8007L (APPELLANT) (RESPONDENT) AND CO. NO. 375/DEL/11 IN I.T.A NO. 4104/DEL/2011 ASSTT. YEAR 2003-04 SURJEET SINGH 4499/11 JAI MATA MARKET TRI NAGAR NEW DELHI. AIVPS8007L VS. ITO WARD-23 (2) ROOM NO. 304-D 3 RD FLOOR VIKAS BHAWAN NEW DELHI. (RESPONDENT) APPELLANT BY: SMT. S. MOHANTHY DR RESPONDENT BY: SHRI AMIT GOEL CA ITA NO. 4104/DEL/2011 & CO NO. 375/DEL/11 ASSTT. YEARS 2003-04 2 ORDER PER RAJPAL YADAV JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD. CIT(A) DATED 30 TH JUNE 2011 PASSED FOR ASSTT. YEAR 2003-04. ON RECEIPT OF NOTICE ASSESSEE HAS FILED CROSS OBJECTI ON BEARING NO. 375/DEL/11 WHEREIN HE HAS CHALLENGED REOPENING OF A SSESSMENT BY ISSUANCE OF NOTICE U/S 148. THE GROUNDS OF APPEA L TAKEN BY THE REVENUE READ AS UNDER :- 1. DELETING THE ADDITION OF `.32 65 218/- MADE ON ACCOUNT OF G.P. RATE UNSECURED LOANS SUNDRY CREDITORS AND DIFFERENCE IN RECEIPTS AND UNVERIFIABLE EXPENSES VIOLATING THE RULE 46A OF THE INCOME TAX ACT AS THE ADDITIONAL EVIDENCE WERE FILED BY THE ASSESSEE BEFO RE THE APPELLATE AUTHORITY THE ADMISSIBILITY OF WHICH WAS OBJECTED TO BY THE AO. 2. IN ACCEPTING THE SWEEPING SUBMISSIONS OF THE ASSESS EE WHICH DO NOT STAND SUPPORTED BY EVIDENCES. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL. HE IS RUNNING TWO PROPRIETARY CONCERNS NAMELY M/S. KRISHNA FURNITURE AND DECORATORS AND M/S. KRISHNA C ONSTRUCTION COMPANY. IN M/S. KRISHNA FURNITURE & DECORATORS H E USED TO EXECUTE CONTRACTS FOR INTERIOR DESIGNING AND FABRIC ATION WHEREAS IN M/S. KRISHNA CONSTRUCTION COMPANY HE EX ECUTE ITA NO. 4104/DEL/2011 & CO NO. 375/DEL/11 ASSTT. YEARS 2003-04 3 CONSTRUCTION CONTRACTS. HE MAINLY WORKED IN THE OFF ICE OF CAG OF INDIA. HE HAS FILED HIS RETURN OF INCOME ON 3 RD OCTOBER 2003 DECLARING AN INCOME OF `4 95 690/-. THE RETURN WAS PROCESSED U/S 143(1). LD. AO ON PERUSAL OF THE RECORDS FOUND THAT ASSESSEE HAS SHOWN RECEIPTS OF `. 66 51 802/- AND ` . 37 00 235/- IN M/S. KRISHNA FURNITURE AND DECORATOR S AND M/S. KRISHNA CONSTRUCTION COMPANY RESPECTIVELY WHEREAS AS PER THE TDS CERTIFICATE SUCH RECEIPTS ARE AT `.70 62 101/- AND `. 37 46 061/- RESPECTIVELY. ON ACCOUNT OF THIS DISCRE PANCY HE RECORDED REASONS FOR REOPENING OF THE ASSESSMENT AN D ISSUED A NOTICE U/S 148. THE NOTICE WAS ISSUED ON 31 ST MARCH 2010. THE ASSESSEE HAD FILED A LETTER CONTENDING THEREIN THAT RETURN FILED ON 3.10.2003 BE TREATED AS FILED IN RESPONSE TO THE NOTICE SERVED U/S 148. THE AO ISSUED NOTICE U/S 143 / 142 ON 25 TH JUNE 2010 AND FIXED THE HEARING FOR 12 TH JULY 2010. HOWEVER IT APPEARS THAT HE DID NOT COMMENCE THE PROCEEDING UP TO 8 TH DECEMBER 2010. IN THE PERIOD BETWEEN 12 TH JULY 2010 UPTO DECEMBER 2010 ASSESSEE SOUGHT COPIES OF THE REASON S ETC. AND AO HAS DISPOSED OFF HIS APPLICATIONS. ACCORDING TO THE AO ASSESSEE DID NOT FILE BOOKS OF ACCOUNTS AND OTHER D ETAILS CALLED ITA NO. 4104/DEL/2011 & CO NO. 375/DEL/11 ASSTT. YEARS 2003-04 4 UPON BY HIM VIDE LETTER DATED 8.12.2010. HE HAS REP RODUCED THE QUESTIONNAIRES ISSUED TO THE ASSESSEE ON PAGE 2 OF THE ASSTT. ORDER. 3. THE AO HAS REJECTED THE BOOK RESULT OF THE ASSES SEE ON ACCOUNT OF ASSESSEES ALLEGED FAILURE OF PRODUCTION OF BOOKS OF ACCOUNT. HE HAS SHOWN GP AT 10.63 % IN M/S. KRISHN A FURNITURE AND DECORATORS. AO ESTIMATED THE GP AT 15%. IN THIS WAY THE ADDITION AT `. 2 96 353/- HAS BEEN MADE. THE ASSESS EE HAS CLAIMED EXPENSES OF `. 2 93 433/-. THE AO DISALLOWE D 30% OF THESE MISCELLANEOUS EXPENSES AND MADE THE ADDITION OF `. 88 029/-. IN THIS WAY AN ADDITION OF `. 3 84 382/- ON ACCOUNT OF LOW GP AND DISALLOWANCE OF EXPENSES HAS BEEN MADE I N THE PROPRIETARY CONCERN M/S. KRISHNA FURNITURE & DECOR ATORS. APART FROM THIS ADDITION HE FURTHER FOUND THAT AN UNSECU RED LOAN OF `. 38 000/- IS STANDING AGAINST THE NAME OF GURPYARA R AM AND SUSHMA DEVI. THE AO HAS OBSERVED THAT ASSESSEE DID NOT FILE CONFIRMATION. THEREFORE HE MADE THE ADDITION OF `. 38 000/-. SIMILARLY HE FOUND SUNDRY CREDITORS OF `. 9 92 839 /- IN THE BALANCE SHEET SINCE ASSESSEE FAILED TO FILE CONFIRM ATION HE ITA NO. 4104/DEL/2011 & CO NO. 375/DEL/11 ASSTT. YEARS 2003-04 5 ADDED ALL THE SUNDRY CREDITORS IN THE INCOME OF PRO PRIETARY CONCERN M/S. KRISHNA FURNITURE & DECORATORS. 4. ON A SIMILAR YARDSTICK GP ADDITION & EXPENSES H AS BEEN MADE AT `. 2 74 610/- IN THE CASE OF KRISHNA CONSTR UCTION COMPANY. HE FURTHER DISALLOWED THE SUNDRY CREDITOR OF `. 11 19 172/-. THE AO FURTHER MADE AN ADDITION IN RES PECT OF DISCREPANCY IN THE TOTAL RECEIPTS AS WELL AS TDS CE RTIFICATE. AN ADDITION OF `. 4 56 225/- HAS BEEN MADE ON THIS COU NT. THE INCOME OF THE ASSESSEE HAS BEEN DETERMINED AT `. 37 60 910/-. 5. DISSATISFIED WITH THE ABOVE ASSESSEE CARRIED TH E MATTER IN APPEAL. HE FILED AN APPLICATION FOR PERMISSION TO ADDUCE ADDITIONAL EVIDENCE. HE POINTED OUT THAT ON 8.12.20 10 AO HAS ISSUED A SHOW CAUSE NOTICE AND ASSESSEE WAS REQUIRE D TO SUBMIT THE REQUISITE DETAILS ON 15.12.2010. HE PASS ED THE IMPUGNED EX PARTE ASSESSMENT ON 23.12.2010. THE RET URN WAS FILED ON 3 RD OCTOBER 2003. ALMOST 7 YEARS HAVE EXPIRED. AO DID NOT GRANT HIM THE TIME OF MORE THAN 15 DAYS FOR SUB MITTING NUMBER OF DETAILS CALLED FOR. LD. COMMISSIONER FOUN D A JUSTIFIABLE REASON FOR PERMITTING THE ASSESSEE TO A DDUCE ADDITIONAL EVIDENCE. HE CALLED FOR THE COMMENTS OF AO AND ITA NO. 4104/DEL/2011 & CO NO. 375/DEL/11 ASSTT. YEARS 2003-04 6 THEREAFTER THE ADDITIONAL EVIDENCE HAS BEEN TAKEN ON RECORD BY RECORDING REASONS. LD. FIRST APPELLATE AUTHORITY HA S TAKEN COGNIZENCE OF THE EVIDENCE SUBMITTED BY THE ASSESSE E. HE DISCUSSED THE EVIDENCE IN DETAIL AND THEREAFTER ALL OWED THE APPEAL OF ASSESSEE. 6. LD. DR SUBMITTED THAT LD. CIT(A) HAS PERMITTED T HE ASSESSEE TO ADDUCE ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A. WITH REGARD TO THE ADDITIONS ON MERIT SHE REL IED UPON THE ORDERS OF AO. ON THE OTHER HAND LD. COUNSEL FOR TH E ASSESSEE RELIED UPON THE ORDER OF LD. CIT(A). 7. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. THE AO ON PAGE 2 OF T HE ASSTT. ORDER HAS REPRODUCED THE QUESTIONNAIRES ACCORDING TO WHICH HE CALLED FOR INFORMATION FROM THE ASSESSEE ON VARIOUS ISSUES. IN M/S. KRISHNA FURNITURE DECORATORS HE CALLED FOR A NOTE EXHIBITING THE NATURE OF BUSINESS COPY OF TRADING PROFIT AND LOSS ACCOUNT BALANCE SHEET WITH AUDIT REPORT ETC. WE FI ND THAT ON ALL THESE POINTS ASSESSEE HAS SUBMITTED THE DETAILS WH ICH HAVE BEEN NOTICED BY LD. FIRST APPELLATE AUTHORITY ON PA GES NO. 12 & 13. ASSESSEE HAS SUBMITTED COPY OF AUDITED ACCOUNTS . HE HAS ITA NO. 4104/DEL/2011 & CO NO. 375/DEL/11 ASSTT. YEARS 2003-04 7 SUBMITTED CONFIRMATION OF GURU PYARA RAM AND SUSHMA DEVI IN RESPECT OF UNSECURED LOANS. HE HAS ALSO PRODUCED CO NFIRMATION FROM BHAGWATI TRADERS DHIMAN BROTHERS IMPERIAL SA LES CORPORATION ETC. SIMILARLY ASSESSEE HAS PRODUCED ALL THE DETAILS CALLED FOR BY THE AO IN RECEIPT OF M/S. KR ISHNA CONSTRUCTION COMPANY. THE SUBMISSIONS MADE BY THE A SSESSEE HAS ALSO BEEN REPRODUCED BY THE LD. CIT(A). WITH RE GARD TO THE DISCREPANCY IN THE TOTAL RECEIPT VIS A VIS TDS CERT IFICATE IT WAS CONTENDED BY THE ASSESSEE THAT THE DIFFERENCES WERE DUE TO VAT / CST / CARTAGE ETC. THE CAG OFFICE HAS RAISED THE AUDIT OBJECTION POINTING OUT THE DIFFERENCE IN TURN OVER AS PER TDS CERTIFICATE AND ASSESSEE HAS SENT THE REPLY TO THE AUDIT OBJECTION TO THE CAG. THUS ASSESSEE HAS RECONCILED THE DIFFERENCE IN THE TDS CERTIFICATE AS WELL AS THE RE CEIPTS SHOWN BY HIM. WE FIND THAT LD. FIRST APPELLATE AUTHORITY HAS GONE THROUGH ALL THESE CONTENTIONS AND EVIDENCES SUBMI TTED BY THE ASSESSEE. LD. AO WITHOUT VERIFYING THESE DETAILS JU ST MADE THE ADDITIONS OF WHATEVER IS APPEARING IN THE BALANCE S HEET. HE EVEN ESTIMATED THE INCOME BY REJECTING THE BOOK RES ULT AND THEREAFTER DISALLOWED THE EXPENSES WHICH IS NOT PER MISSIBLE IN ITA NO. 4104/DEL/2011 & CO NO. 375/DEL/11 ASSTT. YEARS 2003-04 8 LAW. BECAUSE ONCE THE BOOKS ARE REJECTED ALL ASPECT S RELATING TO EXPENSES WILL BE TAKEN CARE WHEN GP IS BEING ESTIMA TED. THE ADDITIONS WERE MADE SIMPLY FOR THE REASON THAT AO F AILED TO INITIATE THE INQUIRY AT AN EARLY DATE AND FAILED TO GIVE REASONABLE TIME FOR EXPLAINING THIS POSITION. HAD T HE EFFICIENT TIME WAS GRANTED TO THE ASSESSEE THERE MAY NOT BE A NY ADDITION EVEN AT THE ASSESSMENT STAGE ? CONSIDERING ALL THESE ASPECTS AND THE DETAILED ORDER OF THE LD. CIT(A) W E DO NOT SEE ANY REASON TO INTERFERE IN IT. CO NO. 375/DEL/11 7. IN THE CROSS OBJECTION ASSESSEE HAS CHALLENGED THE REOPENING OF ASSESSMENT BY ISSUANCE OF NOTICE U/S 1 48. IN THE APPEAL REVENUE HAS FILED COPY OF FORM NO. 35 WHICH WAS FILED BEFORE THE LD. CIT (A) AND WHICH CONTAINS STATEMENT OF FACTS AS WELL AS GROUNDS OF APPEAL RAISED BY THE ASSESSEE. F ROM PERUSAL OF ANNEXURE B WHICH IS GROUNDS OF APPEAL RAISED BEF ORE THE LD. CIT(A) WE FIND THAT ASSESSEE HAS NOT RAISED THE GR OUNDS CHALLENGING REOPENING OF ASSTT. BEFORE LD. CIT(A). WE DO NOT FIND ANY FINDING BY THE LD. FIRST APPELLATE AUTHORI TY ON THIS ISSUE. IT IS TRUE THAT BEING A JURISDICTIONAL ISSUE IT CAN BE RAISED ITA NO. 4104/DEL/2011 & CO NO. 375/DEL/11 ASSTT. YEARS 2003-04 9 FOR THE FIRST TIME BEFORE US BUT WE DO NOT HAVE THE BENEFIT OF FINDING RECORDED BY THE LD. CIT(A) ON THIS ISSUE. T HE ASSESSEE HAS NOT FILED ANY PAPER BOOK AND PLACED THE REASON FOR RE- OPENING ON THE RECORD. IF WE WANT TO ADJUDICATE THI S ISSUE THEN EITHER WE HAVE TO CALL FOR A REMAND REPORT FROM THE CIT(A) OR TO REMIT THIS ISSUE TO THE FILE OF LD. CIT(A). KEEPING IN VIEW OUR FINDING ON THE MERIT VIDE WHICH WE HAVE DISMISSED T HE APPEAL OF REVENUE WE DO NOT WISH TO ENTERTAIN THIS GROUND AT THIS STAGE AND REMIT THE ISSUE TO THE FILE OF LD. CIT(A) FOR ADJUDICATION. IT WILL ONLY INCREASE THE MULTIPLICIT Y OF LITIGATION. THEREFORE THE CROSS OBJECTION FILED BY THE ASSESSE E IS ALSO REJECTED. 8. IN THE RESULT APPEAL AS WELL AS CROSS OBJECTION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER 2011. SD/- SD/- [K.G. BANSAL] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30.11.2011 VEENA ITA NO. 4104/DEL/2011 & CO NO. 375/DEL/11 ASSTT. YEARS 2003-04 10 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT