M/s. JMD International, New Delhi v. DCIT, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI D.R.SINGH JM AND SHRI R.C.SHARMA AM ITA NO.4443/DEL/2009 ASSESSMENT YEAR : 2004-05 SHRI JITIN GUPTA 6/26 WEA KAROL BAGH NEW DELHI. PAN NO.AAHPG5671Q. VS. ASSTT.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-5 NEW DELHI. (APPELLANT) (RESPONDENT) ITA NO.4442/DEL/2009 ASSESSMENT YEAR : 2002-03 M/S JMD INTERNATIONAL 6/26 WEA KAROL BAGH NEW DELHI. PAN NO.AAAFJ2381B. VS. ASSTT.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-5 NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI B.L.GUPTA ITP. RESPONDENT BY : SHRI B.K.GUPTA SR.DR. ORDER PER BENCH : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDER OF CIT(A) FOR AY 2002-03 & 2004-05 IN THE MATTER OF ORDER FRAMED U/S 143(3) OF THE IT ACT. 2. WE HAVE HEARD THE LEARNED AR AND LEARNED DR AND FOUND THAT IN THE CASE OF M/S JMD INTERNATIONAL ADDITION WAS MADE BY THE AO ON ACCOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT AMOUNTING TO RS.6 25 000/- AND THE SAME WAS CONFIRMED BY THE CIT(A). CONTENTION OF LEARNED AR WAS THAT THE TRIBUNAL IN ASSESSEES OWN CASE HAS PASSED ORDER DATED 11.1.200 8 WHEREIN SUCH CASH WAS FOUND TO BE DULY RECORDED IN THE REGULAR BOOKS OF A CCOUNT. ON THE BASIS OF THESE OBSERVATIONS CONTENTION OF LEARNED AR WAS THAT SIN CE THE CASH WAS DULY FOUND RECORDED IN THE BOOKS OF ACCOUNT NO ADDITION WAS R EQUIRED TO BE MADE. ITA-4443 & 4442/D/2009 2 3. WE HAVE GONE THROUGH THE ORDER OF THE TRIBUNAL A ND FOUND THAT IT WAS FRAMED IN RESPECT OF APPEAL FILED BY THE REVENUE IN CASE OF BLOCK ASSESSMENT ORDER WHEREIN ADDITION ON ACCOUNT OF CASH DEPOSITE D WAS DELETED IN THE BLOCK ASSESSMENT ON THE PLEA THAT IT WAS FOUND RECORDED IN THE BOOKS OF ACCOUNT. SINCE IT WAS A BLOCK ASSESSMENT ORDER NO ADDITION WAS TO BE MADE IN RESPECT OF ENTRIES FOUND RECORDED IN THE REGULAR BOOKS OF ACCOUNT AND FOR WHICH RETURN HAS ALREADY BEEN FILED BY THE ASSESSEE. THE PROPOSITION ARRIVE D AT BY THE TRIBUNAL IN ASSESSEES OWN CASE ONLY SUGGESTS THAT SUCH ADDITION IS REQUIR ED TO BE CONSIDERED IN THE REGULAR ASSESSMENT AND NOT IN THE BLOCK ASSESSMENT. EVEN IN THE REGULAR ASSESSMENT MERE RECORDING OF ENTRY IN THE BOOKS OF ACCOUNT IS NOT SUFFICIENT AND AT THE VERY SAME TIME ASSESSEE IS ALSO TO EXPLAIN THE SOURCE OF SUCH CASH WHICH WE FOUND HAS NOT BEEN PROPERLY EXPLAINED BEFORE THE LOWER AUTHORITIES. THE CIT(A) HAS GIVEN SO MANY OPPORTUNITIES TO THE ASSES SEE BUT THE ASSESSEE DID NOT PRESENT AND THE CIT(A) HAS CONFIRMED THE ADDITION. 4. IN RESPECT OF JITIN GUPTA ADDITION WAS MADE ON ACCOUNT OF GP RATE AND DIFFERENCE IN BALANCE EXISTED IN THE CREDITORS ACCO UNT. THE AO REJECTED THE BOOKS OF ACCOUNT AND MADE ADDITION ON ACCOUNT OF GP RATE AS WELL AS ON ACCOUNT OF CESSATION OF LIABILITY U/S 41(1) AND ALSO ON ACCOUN T OF DISCOUNT ALLOWED TO THE PARTIES. AS BEFORE THE CIT(A) THE ASSESSEE WAS NOT PRESENT THEREFORE THE CIT(A) PASSED EX-PARTE ORDER AND ADDITIONS WERE CONFIRMED. 5. AFTER GOING THROUGH THE ORDER OF CIT(A) IN CASE OF BOTH THE ASSESSEES WE FOUND THAT BECAUSE OF THE NON-APPEARANCE THE CIT(A) HAS PASSED EX-PARTE ORDER AND ADDITIONS WERE CONFIRMED. IT ALSO APPEARS FROM THE ORDER OF CIT(A) THAT VARIOUS OPPORTUNITIES WERE GIVEN TO THE ASSESSEE FO R APPEARANCE THEREFORE NO FAULT CAN BE FOUND ON THE PART OF CIT(A) FOR DECIDING THE ISSUE EX-PARTE. IN THE CASE OF JMD INTERNATIONAL WE FOUND THAT EVEN BEFORE THE AO THE ASSESSEE DID NOT APPEAR. CONTENTION OF LEARNED AR WAS THAT SINCE THE ADDITIO N HAS ALREADY BEEN MADE IN THE ITA-4443 & 4442/D/2009 3 COURSE OF BLOCK ASSESSMENT NO SEPARATE ADDITION WA S REQUIRED TO BE MADE IN THE REGULAR ASSESSMENT. THIS CONTENTION OF LEARNED AR HAS NO MERIT. EVEN IN VIEW OF THE FINDING GIVEN BY THE TRIBUNAL IN THE BLOCK ASSE SSMENT ORDER PASSED IN ASSESSEES OWN CASE THIS ADDITION IS REQUIRED TO B E CONSIDERED IN THE REGULAR ASSESSMENT. SINCE THERE WAS NON-APPEARANCE OF THE ASSESSEE BOTH BEFORE THE AO AND THE CIT(A) NO FAULT CAN BE FOUND ON THE PART O F THE DEPARTMENT FOR MAKING EX- PARTE ADDITION. HOWEVER AT THE VERY SAME TIME IN THE INTEREST OF NATURAL JUSTICE AND THE ASSESSEES SUBMISSION THAT SINCE ADDITION W AS MADE IN THE BLOCK ASSESSMENT HE DID NOT PURSUE THE SAME IN THE REGULA R ASSESSMENT SINCE IT AMOUNTS TO DOUBLE ADDITION WE DEEM IT FIT TO RESTORE THE M ATTER BACK TO THE FILE OF THE AO FOR DECIDING AFRESH. AS PER OUR CONSIDERED VIEW T HE ADDITION MADE ON ACCOUNT OF CASH FOUND DURING THE COURSE OF SEARCH AND WHICH WA S FOUND TO BE RECORDED IN THE REGULAR BOOKS IS REQUIRED TO BE CONSIDERED IN THE REGULAR ASSESSMENT BUT AT THE VERY SAME TIME ONUS IS ON THE ASSESSEE TO PROVE THE SOURCE OF SUCH CASH DEPOSIT. MERE ENTRY IN THE BOOKS OF ACCOUNT IS NOT SUFFICIEN T TO PROVE THE SOURCE WHICH UNDISPUTEDLY WAS NOT EXPLAINED. IN THE INTEREST OF JUSTICE AND FAIR PLAY WE RESTORE THE APPEAL OF JMD INTERNATIONAL TO THE FILE OF THE AO FOR DECIDING AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. AT THE VER Y SAME TIME FOR NON- APPEARANCE WE LEVY THE COST OF RS.10 000/- (RUPEES TEN THOUSAND) ON THE ASSESSEE WHICH THE LEARNED AR AGREED FOR PAYMENT. 6. IN VIEW OF THE ABOVE THE MATTER IS RESTORED BAC K TO THE FILE OF THE AO AND THE ASSESSEE IS DIRECTED TO PAY THE COST OF RS.10 0 00/-. WE FURTHER DIRECT THE ASSESSEE TO APPEAR BEFORE THE AO WITHIN TWO MONTHS FROM THE DATE OF SERVICE OF ORDER OF THE TRIBUNAL AND TO COOPERATE WITH THE AO IN ALL RESPECTS. THE RECEIPT OF RS.10 000/- TO BE DEPOSITED WITH THE REGISTRAR ITA T NEW DELHI IS TO BE PLACED ON RECORD BEFORE THE AO ALSO BEFORE PROCEEDING FURT HER. WE DIRECT ACCORDINGLY. 7. SIMILARLY IN THE CASE OF JITIN GUPTA THE CIT(A ) HAS PASSED EX-PARTE ORDER FOR THE NON-APPEARANCE AND ADDITION WAS CONFIRMED. SINCE THE CIT(A) HAS GIVEN ITA-4443 & 4442/D/2009 4 DUE OPPORTUNITY NO FAULT CAN BE FOUND ON HIS PART BUT AT THE VERY SAME TIME IN THE INTEREST OF JUSTICE AND LOOKING TO THE NATURE OF AD DITION ONE OF WHICH IS OF ESTIMATION OF GP RATE ADDITION ON ACCOUNT OF SECTI ON 41(1) BY HOLDING THE SAME AS CESSATION OF LIABILITY AND ALSO ON ACCOUNT OF DISAL LOWANCE OF DISCOUNT WHICH REQUIRES RECONSIDERATION WE RESTORE THE MATTER BEF ORE THE AO. THE ASSESSEE AGREED TO DEPOSIT RS.10 000/- (RUPEES TEN THOUSAND) AS COST FOR HIS NON- APPEARANCE BEFORE THE CIT(A). THIS APPEAL IS ALSO RESTORED BACK TO THE FILE OF THE AO WITH THE SIMILAR DIRECTIONS AS CONTAINED IN PARA GRAPH 6 ABOVE. WE DIRECT ACCORDINGLY. 8. IN THE RESULT BOTH THE APPEALS ARE DISPOSED IN TERMS INDICATED HEREINABOVE. DECISION PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF HEARING ON 21 ST JANUARY 2010. SD/- SD/- (D.R.SINGH) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 21.01.2010. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT DEPUTY REGISTRAR ITA-4443 & 4442/D/2009 5