CEC CICI JV, Gurgaon v. ACIT, Circle-62(1), New Delhi

ITA 4397/DEL/2018 | 2013-2014
Pronouncement Date: 02-03-2021 | Result: Dismissed

Appeal Details

RSA Number 439720114 RSA 2018
Assessee PAN AABAC2574M
Bench Delhi
Appeal Number ITA 4397/DEL/2018
Duration Of Justice 2 year(s) 8 month(s) 24 day(s)
Appellant CEC CICI JV, Gurgaon
Respondent ACIT, Circle-62(1), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 02-03-2021
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 02-03-2021
Assessment Year 2013-2014
Appeal Filed On 08-06-2018
Judgment Text
ITA NO.-4397/DEL/2018 CEC ICI C JV PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: B: NEW DELHI) (THROUGH VIDEO CONFERENCING) BEFORE SH. KUL BHARAT JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA ACCOUNTANT MEMBER ITA NO:- 4397/DEL/2018 ( ASSESSMENT YEAR: 2013-14) M/S. CEC CICI - JV UNIT NO. 605/606 6 TH FLOOR EMAAR PALM SPRING SEC-54 GOLF COURSE ROAD GURGAON VS. ACIT CIRCLE 62(1) NEW DELHI APPELLANT RESPONDENT PAN NO: AABAC2574M REVENUE BY : SH. SAGAR MALHOTRA CA ASSESSEE BY : MS. NIDHI SRIVASTAVA CIT-DR PER ANADEE NATH MISSHRA A.M.: THIS APPEAL BY ASSESSEE IS FILED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-20 NEW DELHI [LD. CIT(A) FOR SHORT] DATED 28.03.2018 FOR ASSESSMENT YEAR 2013-14. GROUNDS TAKEN IN THIS APP EAL OF ASSESSEE ARE AS UNDER: 1. THAT THE LD. AO HAS ERRED BOTH IN LAW AND ON FA CTS IN DETERMINING THE ASSESSED LOSS AMOUNTING TO INR (3 134 280) AS AGAINST THE RETURNED LOSS OF INR (3 881 370)/-. THE LD. CIT(A) HAS FURTHER ERRED IN CONFORMING THE ADDITIONS MADE BY THE LD. AO. 2. THAT THE LD. AO HAS ERRED BOTH IN LAW AND ON FAC TS IN MAKING ITA NO.-4397/DEL/2018 CEC ICI C JV PAGE 2 OF 6 A DISALLOWANCE OF INR 300 000 UNDER THE HEAD OF PUR CHASE OF MATERIAL AS AN UNVERIFIABLE MATERIAL CONSUMED OUT O F THE TOTAL EXPENSES OF INR 300 419 588 CLAIMED IN PROFIT AND L OSS ACCOUNT. THE LD. AO HAS ERRED ON THE FACTS IN ALLEGING THAT THE ASSESSEE HAS FAILED TO PRODUCE SOME BILLS/VOUCHERS IN SUPPOR T OF CLAIM OF EXPENSES DURING THE ASSESSMENT PROCEEDINGS AND HENC E CLAIM OF INR 300 000 BEING A PURCHASE OF MATERIAL DISALLO WED IN ABSENCE OF MISSING BILLS/VOUCHERS. 2.1 THAT IN MAKING THE ABOVE DISALLOWANCE OF PURCHASE O F MATERIAL THE LD. AO HAS PROCEEDED WITHOUT VERIFICA TION OF BILL/VOUCHER. THE ASSESSEE HAS EVEN NEVER BEING ASK ED TO PRODUCE THE BILLS/VOUCHERS IN SUPPORT OF THE CLAIM DEBITED IN PROFIT & LOSS ACCOUNT FOR INR 300 419 588. THE APPE LLANT HAS INCURRED ENTIRE EXPENSES WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSE UNDER SECTION THE 37(1) OF THE SAID ACT. TH E FINDING OF THE LEANED LD. AO IS FACTUALLY INCORRECT LEGALLY M ISCONCEIVED AND ABSOLUTELY UNSUSTAINABLE AND THEREFORE WHOLLY UNWARRANTED; AND 2.2 THAT WHILE MAKING THE DISALLOWANCE OF THE CLAIM OF EXPENSES BEING PURCHASE OF MATERIAL THE LD. AO HAS NOT ONLY FAILED TO ASK BILLS/VOUCHERS TO BE PRODUCE BEFORE H IM FOR VERIFICATION FROM THE APPELLANT COMPANY BUT ALSO MI SCONSTRUED THE STATUTORY PROVISIONS OF LAW TO DISALLOW THE CLA IM OF EXPENSES OF INR 300 000/ -WHICH WAS OTHERWISE ALLOWABLE UNDE R THE ACT. THE LD. CIT(A) FURTHER ERRED IN CONFIRMING THE ADDI TIONS MADE BY THE LD. AO WITHOUT GIVING OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. 3. THAT THE LD. AO HAS ERRED BOTH IN LAW AND ON FACTS IN DISALLOWING THE PART OF THE CLAIM OF INR 200 000/- OUT OF TOTAL EXPENSES OF INR 52 855 347/- INCURRED BY THE APPELL ANT TOWARDS SALARY & OTHER ALLOWANCES INCURRED FOR THE PROJECT UNDERTAKEN DURING THE ASSESSMENT YEAR UNDER THE ON-GOING ASSES SMENT PROCEEDINGS BY HOLDING THAT THE APPELLANT HAS NOT P RODUCED MUSTER ROLL FOR VERIFICATION EXPENSES. THE LD. AO H AS ERRED WHILE MAKING THE DISALLOWANCES ALLEGING THAT IN ABSENCE O F MUSTER ROLL IT NOT POSSIBLE TO VOUCH THE AUTHENTICITY OF THE PA YMENT MADE THEREFORE DISALLOWANCES OF INR 200 000/- IS MADE T O PLUG THE LEAKAGE OF REVENUE. HOWEVER THE APPELLANT HAS MAIN TAINED THE MUSTER ROLL FOR SALARY & WAGES INCURRED FOR THE ASS ESSMENT YEAR UNDER ON-GOING ASSESSMENT PROCEEDING. 3.1 THAT THE LD. AO WHILE MAKING THE IMPUGNED DISA LLOWANCE HAS NEVER ASKED TO PRODUCE THE MUSTER ROLL FOR VERIFICATION OF SALARY AND OTHER ALLOWANCES EXPENSES CLAIMED BY THE APPELLANT LD. AO HAS ALSO NOT GIVEN ANY REASON OR FINDINGS TO ITA NO.-4397/DEL/2018 CEC ICI C JV PAGE 3 OF 6 DISALLOW THE SAME AND THE ACCOUNTING TREATMENT FOLL OWED BY APPELLANT CONSISTENTLY. THE LD. AO HAS MADE THE ADD ITION ON THE BASIS OF AD HOC DISALLOWANCE WITHOUT HAVING ACTUAL FINDING THEREFORE THE ADDITION WHOLLY UNWARRANTED. THE LD. CIT(A) FURTHER ERRED IN CONFIRMING THE ADDITIONS MADE BY THE LD. AO WITHOUT GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. THAT THE LD. AO HAS ERRED BOTH IN LAW AND ON FACTS IN DISALLOWING THE CLAIM OF INR 175 532/- OUT OF THE T OTAL EXPENSES OF INR 1 755 329/- MADE TOWARDS THE PAYMENT OF VEHI CLE RUNNING & MAINTENANCE EXPENSES BY HOLDING THAT THE ASSESSEE HAS NOT PLACED THE VEHICLE LOG BOOK TO VERIFY THE G ENIUSES OF THE EXPENSES. THE LD. AO HAS NEVER ASKED TO SUBMIT THE VEHICLE LOG BOOK BEFORE HIM IN SUPPORT OF RUNNING & MAINTENANCE EXPENSES CLAIMED BY THE APPELLANT. THE RECORD WHICH WAS NEVE R BEING ASKED TO PRODUCE HOW IT CAN BE TREATED AS FAILURE O N THE PART OF APPELLANT. THE APPELLANT HAS INCURRED THE ENTIRE EX PENSES WHOLLY AND EXCLUSIVELY FOR BUSINESS PURPOSE UNDER SECTION 37(1). THE FINDING OF THE LD. AO IS FACTUALLY INCORRECT AND WH OLLY UNWARRANTED. THE LD. CIT(A) FURTHER ERRED IN CONFIR MING THE ADDITIONS MADE BY THE LD. AO WITHOUT GIVING OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. 5. THAT THE LD. AO HAS ERRED BOTH IN LAW AND ON FACTS IN DISALLOWING THE PART OF THE CLAIM OF INR 71 556/- O UT OF TOTAL EXPENSES OF INR 715 560/- INCURRED BY THE ASSESSEE TOWARDS TELEPHONE EXPENSES THE LD. AO HAS MADE THE ADDITIO N ON THE GROUND THAT THE ASSESSEE HAS NOT MAINTAINED PERSONA L TELEPHONE CALL REGISTER FOR PARTNER/EMPLOYEE AND HE NCE IT IS NOT POSSIBLE TO PREDICT THAT SAID EXPENSES INCURRED WHO LLY & EXCLUSIVELY FOR BUSINESS PURPOSE. THE LD. AO HAS MA DE AD HOC DISALLOWANCES ON THE BASIS OF PREDICTION BY MAKING GENERAL OBSERVATION WITHOUT HAVING SPECIFIC EVIDENCE ON NAT URE OF CALLS MADE BY THE APPELLANT'S EMPLOYEE/PARTNER THEREFORE THE AD HOC DISALLOWANCES OF INR 71 556/- I.E. 10% OF TOTA L EXPENSES IS UNSUSTAINABLE INACCURATE FINDING AND WHOLLY UNWARR ANTED. THE LD. CIT(A) FURTHER ERRED IN CONFIRMI NG THE ADDITIONS MADE BY THE LD. AO WITHOUT GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. THE LD. CIT(A) GROSSLY ERRED IN PASSING ORDER WITHO UT FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE. THE ASS ESSEE HAS NOT BEEN GIVEN ANY OPPORTUNITY TO PRODUCE DOCUMENTS IN RELATION TO THE APPEAL FILED BEFORE THE LD. CIT(A). THE LD. CIT (A) HAS ERRED IN PASSING ORDER IN HASTE. ITA NO.-4397/DEL/2018 CEC ICI C JV PAGE 4 OF 6 7. THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITIONS MA DE BY THE LD. AO MERELY BASED ON THE FACT THAT THE ASS ESSEE INCURRED LOSSES DURING THE YEAR. THE LD. CIT(A) ERR ED IN UNDERSTANDING THAT ANY ASSESSEE CAN BE IN LOSSES. T HE LD. CIT(A) ERRED IN FORMING OPINION WITHOUT PROVIDING A NY OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE SAM E. 8. THE LD. CIT(A) ERRED IN HOLDING THAT THE EXPENSES INCURRED BY THE ASSESSEE IS EXCESSIVE IN NATURE WIT HOUT PROVIDING ANY REASON FOR SUCH CONTENTIONS. THE LD. CIT(A) FURTHER ERRED IN FORMING THIS OPINION WITHOUT PROVI DING ANY OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE REASONAB ILITY OF THE EXPENSES. 9. THAT THE ASSESSEE REQUESTS FOR LEAVE TO ADD OR AMEN D THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. (B) AT THE TIME OF HEARING AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE INFORMED US THAT THE ASSESSEE HAS OPTED TO SETTLE T HE APPEAL UNDER VIVAD SE VISHWAS SCHEME 2020 (VSVS FOR SHORT) AND THAT T HE ASSESSEE HAS ALREADY FILED THE RELEVANT FORMS. THE LD. COUNSEL FOR ASSESSEE ALSO DREW OUR ATTENTION TO LETTER DATED 17TH FEBRUARY 2021 FILED IN INCOME TAX APPEL LATE TRIBUNAL (ITAT FOR SHORT) GIVING INTIMATION FOR THE SAME AND REQUESTING TO W ITHDRAW THE APPEAL. (B.1) AT THE TIME OF HEARING BEFORE US THE LD. COUNSEL F OR ASSESSEE SUBMITTED BEFORE US THAT THIS APPEAL MAY BE TREATED AS WITHDR AWN AND MAY BE DISMISSED ON ACCOUNT OF THE AFORESAID VSVS. AFTER DUE CONSIDER ATION AND IN VIEW OF THE FOREGOING; WE ARE OF THE VIEW THAT THIS APPEAL HAS BECOME INFRUCTUOUS AND WE TREAT THIS APPEAL AS WITHDRAWN ON ACCOUNT OF THE AFORESAI D VSVS. ACCORDINGLY THIS APPEAL HAVING BECOME INFRUCTUOUS ARE HEREBY DISMISSED AS WITHDRAWN SUBJECT TO SETTLEMENT OF THE DISPUTES IN THE APPEAL UNDER THE AFORESAID VSVS. ITA NO.-4397/DEL/2018 CEC ICI C JV PAGE 5 OF 6 (C) BEFORE WE PART WE HEREBY CLARIFY BY WAY OF ABUN DANT CAUTION THAT IF FOR SOME REASON THE DISPUTES UNDER THIS APP EAL BEFORE US ARE NOT SETTLED UNDER THE AFORESAID VSVS THEN THE ASSESSEE WILL BE AT LIBERTY TO APPROACH ITAT FOR RESTORATION OF THIS APPEAL IN AC CORDANCE WITH LAW. (D) IN THE RESULT THIS APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 02/03/2021 SD/- SD/- (KUL BHARAT) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTA NT MEMBER DATED: 02/03/2021 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5.DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI