Sh. Anil Kumar Sharma, Delhi v. ITO, New Delhi

ITA 4642/DEL/2015 | 2010-2011
Pronouncement Date: 29-09-2016 | Result: Allowed

Appeal Details

RSA Number 464220114 RSA 2015
Assessee PAN AATPS8462R
Bench Delhi
Appeal Number ITA 4642/DEL/2015
Duration Of Justice 1 year(s) 2 month(s) 15 day(s)
Appellant Sh. Anil Kumar Sharma, Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 29-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC 2
Tribunal Order Date 29-09-2016
Date Of Final Hearing 02-08-2016
Next Hearing Date 02-08-2016
Assessment Year 2010-2011
Appeal Filed On 14-07-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-II NEW DELHI BEFORE SMT DIVA SINGH JUDICIAL MEMBER I.T.A .NO.-464 2/DEL/2015 (ASSESSMENT YEAR- 2010-11) ANIL KUMAR SHARMA C-207 PRASHANT VIHAR DELHI-110085. PAN-AATPS8462R (APPELLANT) VS ITO WARD-38(3) NEW DELHI. (RESPONDENT) APPELLANT BY SH.MANISH UPPAL CA RESPONDENT BY MS. ANIMA BAR A NWAL SR.DR ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 27.05.2015 OF CIT(A)-13 NEW DELHI PERT AINING TO 2010-11 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. THAT THE IMPUGNED ORDER IS BAD IN LAW ILLEGAL UN JUSTIFIED UNREASONABLE ARBITRARY AND AGAINST THE PRINCIPAL OF NATURAL JUST ICE AND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND IS LIABLE TO BE S ET ASIDE AND QUASHED AND THUS TO PASS AN ORDER JUDICIOUSLY. 2. THAT THE LD. CIT (A) ERRED IN HOLDING THE VALIDITY OF THE ASSESSMENT ORDER WHEREIN THE LD. AO ISSUED ORDER U/S 143(3) WHEREAS MADE THE ASSESSMENT BY TAKING PROVISIONS OF SECTION 144. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) ERRED IN UPHOLDING THE NET ADDITION OF RS. 14 50 440/- TOWAR DS DISALLOWANCE OF EXPENDITURES INCURRED BY THE LD. AO ON THE BASIS OF SURMISES WHIMS AND WITHOUT ANY EXPLANATION AND FINDINGS OF FACTS. 4. THAT THE LD. CIT(A) ERRED IN NOT REDUCING THE NET A DDITIONS OF RS. 14 50 440/- TO RS. 13 43 579/- ON ACCOUNT OF CALCULATION ERROR MADE BYLD.AO. 5. THAT THE LD. CIT(A) ERRED IN THE FACTS AND CIRCUMS TANCES OF THE CASE IN UPHOLDING THE DISALLOWANCE OF DEDUCTIONS OF RS. 1 0 7 151/- U/S 80C. DATE OF HEARING 02.08.2016 DATE OF PRONOUNCEMENT 29 .09.2016 I.T.A .NO.-4642/DEL/2015 PAGE 2 OF 5 THE APPELLANT CRAVES LEAVE TO ADD AMEND ALTER VAR Y AND 7 OR WITHDRAW ANY OR ALL THE ABOVE GROUNDS OF APPEAL AND ALL THE ABOVE GROUN DS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASS ESSEES RETURN WAS SELECTED FOR SCRUTINY THROUGH CASS AND AFTER ISSUANCE OF NOTICE U/S 143(2) ETC. VARIOUS OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE. ON ONE OCCASION SH . SANJAY KALRA APPEARED HOWEVER WITHOUT A POWER OF ATTORNEY. ACCORDINGLY THE AO RE QUIRED HIM TO FURNISH THE SAME ALONGWITH THE STATEMENT OF INCOME AND EXPENDITURE P&L A/C BOOKS OF ACCOUNTS ALONGWITH THE ORIGINAL APPEALS AND VOUCHERS ETC. HOWEVER SI NCE DESPITE OPPORTUNITY NO ONE APPEARED ON THE NEXT DATE AND EVEN FAILED TO APPEAR IN RESPONSE TO NOTICES ISSUED U/S 271(1)(B) THE AO PROCEEDED TO ASSESS THE INCOME U/ S 144. THE AO CONSIDERING THE FACT THAT THE ASSESSEE HAD RECEIVED A COMMISSION OF RS.2 2.64 810/- AND SHOWED THE NET PROFIT OF RS.27 64 563/- IN THE ABSENCE OF PRODUCTION OF B OOKS OF ACCOUNTS ALLOWED 1/3 OF EXPENSES AND FURTHER PROCEEDED TO MAKE A DISALLOWA NCE CLAIMED UNDER CHAPTER VIA. 3. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY WHO CONFIRMED THE ORDER IN REGARD TO DISALLOWANCE OF ON E THIRD EXPENSES HOLDING AS UNDER:- THE APPELLANT CANNOT CLAIM THAT SINCE THE RETURN I NCOME IS ACCEPTED IN THE EARLIER YEAR IT SHOULD NOT BE SUBJECT TO SCRUTINY IN THE S UBSEQUENT YEAR. IT IS ALSO NOTABLE THAT THE CLAIM OF EXPENSES TO THE TUNE OF RS.22 64 810/- AGAINST GROSS RECEIPT OF COMMISSION INCOME RS.27 64 563/- WHICH IS ALMOST 82 % IS UNREASONABLE AND EXCESSIVE. PARTICULARLY IN THE NATURE OF BUSINESS WHERE THE APPELLANT RECEIVES ONLY COMMISSION FOR SELLING INSURANCE POLICIES AS LIC A GENT SUCH HIGH EXPENDITURE IS NOT A NORMAL SITUATION. HENCE THE PRINCIPLE OF RES -JUDICATA AS WELL AS THE PRINCIPLE OF CONSISTENCY IS NOT APPLICABLE APPELLANT'S CASE. IN VIEW OF THIS DISALLOWANCE OF 1/3RD EXPENSES CLAIMED BY THE APPELLANT IS VERY REA SONABLE. MORE IMPORTANTLY THE APPELLANT HAS NOT SPECIFICALLY CONTESTED THE NATURE OF ADDITION MADE BY AO AND IT IS NOT A PART OF THE GROUNDS OF APPEAL. !N VIEW OF THIS THE IMPUGNED ORDER IS FOUND TO BE JUSTIFIABLE AND HENCE THE GROUND OF APP EAL IS DISMISSED. 3.1. THE ARGUMENTS OF THE ASSESSEE ON ADDITION BY W AY OF DISALLOWANCE OF DEDUCTION CLAIMED U/S 80CCCC AND 80U WAS ALSO DISMISSED HOLDI NG AS UNDER:- I.T.A .NO.-4642/DEL/2015 PAGE 3 OF 5 6.3. THE REASON GIVEN BY AO THE SUBMISSION OF THE APPELLANT ARE CONSIDERED. THE APPELLANT SUBMITTED PHOTOCOPY OF CERTIFICATE GI VEN BY LIC FOR PREMIUM PAID DURING F.Y. 2009-10 THAT INCLUDES PREMIUM PAID AGAI NST POLICIES IN THE NAME OF THE APPELLANT AND AARUSHI SHARMA. THE CERTIFICATE I S DATED 19.05.2015 AND NOT THE ORIGINAL RECEIPTS OF PREMIUM PAID. IT IS ALSO NOT C LEAR WHAT ARE THE COMPELLING FACTS AND CIRCUMSTANCES UNDER WHICH THE DOCUMENTS C OULD NOT BE SUBMITTED BEFORE THE AO DURING ASSESSMENT PROCEEDINGS. HENCE SUCH EVIDENCE CANNOT BE ACCEPTED AT APPELLATE STAGE. THE APPELLANT IS AN LI C AGENT HENCE IT SHOULD NOT HAVE BEEN DIFFICULT TO PROVIDE ORIGINAL RECEIPTS FO R PREMIUM PAID. THE LETTER HEAD AND THE SIGNATURE IN THE CERTIFICATE GIVEN FROM LIC IS NOT DEPENDABLE EVIDENCE. MOREOVER THE DEDUCTION CLAIMED FOR RS. 1 07 151/- AND CERTIFICATE GIVEN IS FOR RS.55 1537- ONLY. SINCE NOTHING PREVENTED APPELLANT TO SUBMIT THESE EVIDENCES BEFORE AO THE SAME ARE NOT ACCEPTED AT APPELLATE S TAGE AND ACCORDINGLY THE ADDITION MADE IS CONFIRMED AND THE GROUND OF APPEAL IS DISMISSED. 4. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEF ORE THE ITAT. 5. THE LD.AR ADDRESSING THE ADDITION BY WAY OF DISA LLOWANCE OF 1/3 ON ESTIMATES SUBMITTED THAT NO JUSTIFICATION HAS BEEN GIVEN BY T HE AO EVEN IF THE ASSESSEE DOES NOT APPEAR THE AO HAS BOUND TO MAKE A COMPARISON WITH THE EARLIER YEARS. 6. REFERRING TO THE ARGUMENTS ADVANCED BEFORE THE C IT(A) IN PARA 6.2 IT WAS HIS SUBMISSION THAT THE ASSESSEE HAD HANDED OVER HIS DO CUMENTS TO HIS COUNSEL AND THE ASSESSEE HAS BEEN KEPT IN THE DARK OF THE FACT THAT HE FAILED TO APPEAR BEFORE THE AO RESULTING IN THE ASSESSMENT HAVING BEEN MADE EX-PAR TE. 7. LD.SR.DR SUBMITTED THAT SHE RELIED UPON THE ORDE RS BELOW. 8. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD IT IS SEEN THAT THOUGH THE ASSESSEE RAISED AN ARGUMENT BEFORE THE CIT(A) THAT ALL NECESSARY DOCUMENTS WERE HANDED OVER TO THE LD.AR AND WHO KEP T THE ASSESSEE IN THE DARK IT IS SEEN THAT AS PER THE FACTS RECORDED IN THE ASSESSME NT ORDER THE LD.AR SH. SANJAY KALRA APPEARED WITHOUT ANY POWER OF ATTORNEY. THUS THE A SSESSEE IN THE FACTS OF THE PRESENT CASE IT IS SEEN HAS BEEN VERY LAX IN HIS RESPONSIB ILITY AND DUTIES IN APPEARING BEFORE THE AO. HOWEVER CONSIDERING THE OVERALL FACTUAL MATRI X IT IS SEEN THAT WHILE DISALLOWING PART I.T.A .NO.-4642/DEL/2015 PAGE 4 OF 5 EXPENSES NO RATIONALE BASIS HAS BEEN BROUGHT OUT IN THE ORDERS TO JUSTIFY ONE THIRD DISALLOWANCE. JUDICIALLY THE ISSUE IS WELL-SETTLED THAT WHILE MAKING A DISALLOWANCE THE FACTORS OF COMPARABILITY IN SIMILAR LINE OF BUSINES S WITH SIMILAR SITUATED PARTIES IS THE BASIS WHICH CAN BE CONSIDERED. MOREOVER THE ASSESSEES PAST RECORD ITSELF CAN BE THE BEST ACCEPTABLE RATIONALE. EVEN IN AN ESTIMATE IT IS THE DUTY AND RESPONSIBILITY OF THE AO TO MAKE A COMPARISON IN ASSESSEES OWN CASE. INCASE T HE EARLIER ASSESSMENT HAVE BEEN DONE U/S 143(3) OR WITH COMPARABLE CASE IN SIMILARLY SIT UATED ENTITIES. THERE IS NO JUSTIFICATION TO APPLY AN ARBITRARY THUMB RULE ESTIMATE OF A DISALLO WANCE OF 1/3 OF EXPENSES. ACCORDINGLY THE IMPUGNED ORDER IS SET ASIDE AND THE ISSUE IS RE STORED BACK TO THE FILE OF THE AO. SINCE THE OTHER ADDITION BY WAY OF A DISALLOWANCE OF DEDU CTION CLAIMED ALSO FOR WANT OF SUPPORTING EVIDENCE HAS BEEN MADE AND SUSTAINED WHI CH ISSUE IS CHALLENGED BEFORE THE ITAT. THE ASSESSEE IS PROVIDED AN OPPORTUNITY TO F ILE SUPPORTING EVIDENCE IN REGARD TO ITS CLAIM. 9. THE AO ACCORDINGLY IS DIRECTED TO PASS A SPEAKIN G ORDER AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. WHILE SO DI RECTING IT IS MADE CLEAR THAT THE OPPORTUNITY SO PROVIDED SHOULD NOT BE ABUSED BY THE ASSESSEE AND BE UTILIZED IN GOOD FAITH AS FAILING WHICH THE AO WOULD BE AT LIBERTY TO PASS A SPEAKING ORDER ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE SAID ORDER WAS PR ONOUNCED ON THE DATE OF HEARING ITSELF IN THE PRESENCE OF THE PARTIES IN THE OPEN COURT. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER 2016. SD/- (DIVA SINGH) JUDICIAL MEMBER *AMIT KUMAR* I.T.A .NO.-4642/DEL/2015 PAGE 5 OF 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI