ACIT, New Delhi v. M/s. Urban Improvement Co. Pvt. Ltd., New Delhi

ITA 4455/DEL/2011 | 2007-2008
Pronouncement Date: 30-03-2012 | Result: Partly Allowed

Appeal Details

RSA Number 445520114 RSA 2011
Assessee PAN AAACU1004F
Bench Delhi
Appeal Number ITA 4455/DEL/2011
Duration Of Justice 5 month(s) 25 day(s)
Appellant ACIT, New Delhi
Respondent M/s. Urban Improvement Co. Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 30-03-2012
Date Of Final Hearing 19-03-2012
Next Hearing Date 19-03-2012
Assessment Year 2007-2008
Appeal Filed On 05-10-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.D. RANJAN ITA NO. 4455/DEL/2011 ASSESSMENT YEAR: 2007-08 ASSISTANT CIT VS. M/S. URBAN IMPROVEMENT CO. CIRCLE 18(1) PVT. LTD. F-32 CON. PLACE NEW DELHI. NEW DELHI-1100 01 (PAN: AAACU1004F) (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI BRR KUMAR SR.DR ASSESSEE BY: S/SH. NEERAJ JAIN & PK MISHRA ARS DATE OF HEARING : 19.03.2012 DATE OF PRONOUNCEMENT : 30.03.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 11.07.2011 PASSED FOR ASSESSMENT YEAR 2007-08. GROUND NOS. 1 AND 2 ARE INTER-CONNECTED TO EACH OTHER. IN THESE GROUNDS GRIEVANCE OF THE REVENUE IS THAT THE LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.3 72 592. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A COLONIZER. IT HAS FILED ITS RETURN OF INCOME ON 18.10.2007 DECLARING A LOSS OF RS.77 54 639. ON SCRUTINY OF THE ACCOUNTS IT REVEALED TO THE ASSESS ING OFFICER THAT ASSESSEE HAS SHOWN UNCLAIMED BALANCE OF RS.18 62 962. THE AS SESSEE RECEIVES THE 2 AMOUNTS FROM ITS CUSTOMERS TOWARDS THE SALE OF PLOT S AND IN SOME CASES DUE TO CERTAIN DISPUTES NAMELY DEFAULT IN PAYMENT AN D/OR NON-COMPLIANCE OF THE TERMS AND CONDITIONS OF THE AGREEMENT THE PLOT S HAVE BEEN CANCELLED. THE ASSESSEE RETAINED 10% TO 33% OF THE AMOUNTS FR OM SUCH CUSTOMERS. THIS AMOUNT HAS ACCUMULATED TO RS.18 62 962. IT REL ATES TO 83 PURCHASERS. ACCORDING TO THE ASSESSING OFFICER THE LIABILITY T O REPAY THIS AMOUNT HAS CEASED AND THEREFORE HE TREATED 20% OF THIS AMOUN T AS AN INCOME OF THE ASSESSEE. ACCORDINGLY AN ADDITION OF RS.3 72 592 H AS BEEN MADE. 3. ON APPEAL IT WAS CONTENDED BY THE ASSESSEE THAT ALL THESE PLOT-HOLDERS WENT TO COURT AND LITIGATION IS PENDING. EITHER THE ASSESSEE HAS TO PROVIDE THEM ALTERNATIVE PLOT OR TO RETURN THIS MONEY HENC E THE LIABILITY HAS NOT BEEN CEASED. LEARNED CIT(APPEALS) VERIFIED THIS ASPECT A ND DELETED THE DISALLOWANCE. 4. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE DO NOT FIND ANY ERROR IN THE ORDER OF THE LEARNED CIT(APPEALS) BECAUSE THE ASSESSING OFFICER HAS NOT ASSIGNED REASONS EXHIBITING AS TO HOW THIS LIABILITY HAS BEEN CEASED . IF THE LIABILITY HAS BEEN CEASED THEN IT SHOULD BE TOTAL LIABILITY. HOW CAN B E 20%. THE DETAILS OF 83 3 PERSONS WHO HAVE PURCHASED THE PLOTS ALONG WITH PLO T NUMBERS HAVE BEEN PLACED ON PAGES 53 & 54 OF THE PAPER BOOK. WE FAIL UNDERSTAND HOW THE ASSESSING OFFICER HAS WORKED OUT 20%. THEREFORE WE DO NOT FIND ANY MERIT IN GROUND NOS. 1 AND 2 OF THE REVENUES APPEAL. THE Y ARE REJECTED. 5. GROUND NO. 5 IS GENERAL IN NATURE. IT DOES NOT R EQUIRE ANY SPECIFIC FINDING TO BE RECORDED. HENCE IT IS REJECTED. 6. GROUND NOS. 3 AND 4 ARE INTER-CONNECTED. IN THES E GROUNDS OF APPEAL GRIEVANCE OF THE REVENUE IS THAT LEARNED CIT(APPEAL S) HAS ERRED IN DELETING THE ADDITION OF RS.13 19 790 WHICH WAS ADDED BY THE ASSESSING OFFICER BY MAKING A DISALLOWANCE OUT OF MAINTENANCE EXPENSES. IN GROUND NO. 4 REVENUE HAS PLEADED THAT THIS ADDITION HAS BEEN DEL ETED BY ENTERTAINING ADDITIONAL EVIDENCE IN VIOLATION TO RULE 46A OF THE INCOME-TAX RULES 1962. 7. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT ASSESSEE HAS DE BITED RS.131 97 907 TOWARDS MAINTENANCE EXPENDITURE OF THE COLONY. ASSE SSING OFFICER HAS DISALLOWED 10% OF THE EXPENSES ON THE GROUND THAT A SSESSEE COMPANY FAILED TO PRODUCE DETAILS NAMELY BILLS VOUCHERS AND NAT URE OF EXPENSES ETC. 4 8. ON APPEAL LEARNED CIT(APPEALS) DELETED THE DISA LLOWANCE BY OBSERVING AS UNDER: 5.1 DURING THE COURSE OF APPELLATE PROCEEDINGS FUL L DETAILS OF THE MAINTENANCE EXPENSES IN THE FORM OF LEDGER ACCOUNT HAVE BEEN FURNISHED AND CONTENTION OF THE LEARNED AR WAS THAT BOOKS OF ACCOUNT AND VOUCHERS OF THE COMPANY HAD BEEN AUDITED AND AU DITOR HAS NOT OFFERED ANY ADVERSE COMMENT AND FULL DETAILS OF TH E EXPENDITURE HAVE BEEN ACCEPTED AS ADDITIONAL EVIDENCE SO IN MY CON SIDERED OPINION ACTION OF THE A.O. WAS FOUND TO BE TOTALLY MISCONCE IVED. GROUND NO.4 IS ALLOWED IN FAVOUR OF THE APPELLANT. 9. WE FIND THAT LEARNED FIRST APPELLATE AUTHORITY H AS DELETED THE DISALLOWANCE BY ENTERTAINING ADDITIONAL EVIDENCE. H E HAS OBSERVED THAT IN VIEW OF BOOKS OF ACCOUNT AND VOUCHERS THE ACTION O F THE ASSESSING OFFICER IS MISCONCEIVED. 10. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES WE HAVE GONE THROUGH THE RECORD CAREFULLY. RULE 46A HAS A DIRECT BEARIN G ON THE CONTROVERSY THEREFORE IT IS SALUTARY UPON US TO TAKE NOTE OF T HIS RULE. IT READS AS UNDER: 46A (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRO DUCE BEFORE THE DC(APPEALS) OR AS THE CASE MAY BE THE COMMISSIONE R (APPEALS) ANY EVIDENCE WHETHER ORAL OR DOCUMENTARY OTHER TH AN THE EVIDENCE 5 PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BE FORE THE ASSESSING OFFICER EXCEPT IN THE FOLLOWING CIRCUMST ANCES NAMELY:- A) WHERE THE ASSESSING OFFICER HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAU SE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPO N TO PRODUCE BY THE ASSESSING OFFICER; OR C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAU SE FROM PRODUCING BEFORE THE ASSESSING OFFICER ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; OR D) WHERE THE ASSESSING OFFICER HAS MADE THE ORDER APPE ALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO TH E APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE( 1) UNLESS THE DEPUTY COMMISSIONER (APPEALS) OR AS THE CASE MAY B E THE COMMISSIONER (APPEALS) RECORDS IN WRITING THE REASO NS FOR ITS ADMISSION. (3) THE DEPUTY COMMISSIONER (APPEALS) OR AS TH E CASE MAY BE THE COMMISSIONER(APPEALS) SHALL NOT TAKE INTO ACCOUNT A NY EVIDENCE PRODUCED UNDER SUB-RULE (1) UNLESS THE ASSESSING OF FICER HAS BEEN ALLOWED A REASONABLE OPPORTUNITY- A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS-EXA MINE THE WITNESS PRODUCED BY THE APPELLANT; OR 6 B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE DEPUTY COMMISSIONER( APPEALS) OR AS THE CASE MAY B E THE COMMISSIONER(APPEALS) TO DIRECT THE PRODUCTION OF A NY DOCUMENT OR THE EXAMINATION OF ANY WITNESS TO ENABLE HIM TO DI SPOSE OF THE APPEAL OR FOR ANY OTHER SUBSTANTIAL CAUSE INCLUDIN G THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETHER ON HIS OWN MO TION OR ON THE REQUEST OF THE [ASSESSING OFFICER] UNDER CLAUSE (A) OF SUB-SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER S ECTION 271. 11. A BARE PERUSAL OF THIS RULE WOULD REVEAL THAT APPELLANT I.E. ASSESSEE SHALL NOT BE ENTITLED TO PRODUCE ANY EVIDENCE WHETH ER ORAL OR DOCUMENTARY OTHER THEN THE EVIDENCE PRODUCED BY HIM DURING THE ASSESSMENT PROCEEDINGS UNLESS CONDITIONS ENUMERATED IN CLAUSE A TO D OF SU B-RULE (1) ARE AVAILABLE. ACCORDING TO THESE CLAUSES ADDITIONAL EVIDENCE WOU LD BE PERMITTED IT IS PROVED THAT ASSESSING OFFICER HAS REFUSED TO ADMIT THE ADDITIONAL EVIDENCE OR ASSESSEE WAS CALLED UPON TO PRODUCE A SPECIFIC EVID ENCE BY THE ASSESSING OFFICER BUT BY VIRTUE OF SUFFICIENT REASONS HE COUL D NOT PRODUCE SUCH EVIDENCE OR ASSESSEE WAS TO PRODUCED ANY EVIDENCE R ELEVANT TO THE GROUNDS OF APPEAL BUT HE COULD NOT PRODUCE IT BEFORE THE AS SESSING OFFICER OR ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER W ITHOUT GIVING SUFFICIENT 7 OPPORTUNITY TO THE ASSESSEE. IF ANY ONE CONDITIONS IS AVAILABLE THEN ASSESSEE WOULD BE PERMITTED TO ADDUCE ADDITIONAL EVIDENCE. T HE NEXT STEP SUGGESTED IN THE RULE IS THAT LEARNED CIT(APPEALS) HAS TO REC ORD REASONS FOR PERMITTING AN ASSESSEE TO ADDUCE THE ADDITIONAL EVIDENCE. AFTE R THIS EXERCISE IT HAS BEEN PROVIDED IN SUB-RULE (3) THAT LEARNED FIRST APPELLA TE AUTHORITY SHALL NOT TAKE INTO ACCOUNT SUCH EVIDENCE UNLESS AN OPPORTUNITY TO BE REBUTTED THE EVIDENCE WAS GIVEN TO THE ASSESSING OFFICER. ASSESSING OFFIC ER SHALL BE PROVIDED AN OPPORTUNITY TO EXAMINE THE DOCUMENT SUBMITTED BY TH E ASSESSEE AND HE WILL BE PROVIDED AN OPPORTUNITY TO ADDUCE EVIDENCE FOR R EBUTTING THE EVIDENCE PRODUCED BY THE ASSESSEE. SUB-CLAUSE (4) OF RULE 46 A IS AN EXCEPTION TO THESE CONDITIONS. IT EMPOWERS THE FIRST APPELLATE A UTHORITY TO DIRECT THE PRODUCTION OF ANY DOCUMENT OR EXAMINATION OF ANY WI TNESS WHICH CAN HELP THE LEARNED FIRST APPELLATE AUTHORITY TO DISPOSE OF THE APPEAL IN ACCORDANCE WITH LAW AND FOR ANY OTHER SUBSTANTIAL CAUSE. 12. IN THE PRESENT CASE LEARNED FIRST APPELLATE AU THORITY HAS FOLLOWED THE STEPS REQUIRED BY RULES 1 & 2. HE DID NOT CONTR OVERT THE ASSESSING OFFICER WITH THE EVIDENCE SUBMITTED BY THE ASSESSEE AS REQUIRED BY SUB-RULE (3). WITHOUT PROVIDING AN OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER HOW LEARNED FIRST APPELLATE AUTHORITY CAN SAY THAT ACTION TAKEN BY THE 8 ASSESSING OFFICER IS MISCONCEIVED. THE OPPORTUNITY WHICH WAS PROVIDED BY THE LEARNED CIT(APPEALS) IS IN RESPECT OF THE CONDI TIONS REQUIRED BY SUB- RULE (2). LEARNED CIT(APPEALS) CALLED FOR A REMAND REPORT BUT IT WAS CALLED FOR AS TO WHY ADDITIONAL EVIDENCE BE NOT TAKEN ON R ECORD. ASSESSING OFFICER RAISED THE OBJECTION. LEARNED CIT(APPEALS) PASSED A N ORDER TAKING THE EVIDENCE ON RECORD. THEREAFTER HE DID NOT CONFRONT THE ASSESSING OFFICER TO GIVE HIS COMMENTS ON THE MERIT OF THE EVIDENCE OR A NY EVIDENCE LEARNED ASSESSING OFFICER WISH TO PRODUCE IN REBUTTAL. THER EFORE WE SET ASIDE THE ORDER OF THE LEARNED FIRST APPELLATE AUTHORITY AND RESTORE THE ISSUE BEFORE HIM FOR READJUDICATION. HE SHALL PROVIDE AN OPPORTU NITY OF HEARING TO THE ASSESSING OFFICER. 13. IN THE RESULT THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 30.03.201 2 SD/- SD/- ( K.D. RANJAN ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/03/2012 MOHAN LAL 9 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR