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Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI SHAMIM YAHYA & MS. ASTHA CHANDRA
O R D E R PER ASTHA CHANDRA, JM
The appeal filed by the assessee is directed against the order dated 26.03.2018 of the Ld. Commissioner of Income Tax (Appeals) - IV, Kanpur (“CIT(A)”) pertaining to Assessment Year (“AY”) 2013-14.
The assessee has raised the following grounds of appeal:
“1. That having regard to the facts and circumstances of case, Ld. CIT(A) has erred in law and on facts in mentioning that the appellant has evaded tax on Rs. 16,00,000/- u/s 68 on the basis of some random scribbling made on the personal diary of the director of the appellant company which were found during a survey operation. The Ld. CIT(A) framed his opinion and passed his order without considering the explanation given by the AR of the appellant company and also without providing any show cause notice which is a mandatory step and cannot be skipped. Hence, allegation of the Ld. CIT(A) is incorrect and baseless.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not providing sufficient opportunity of being heard and not providing another opportunity for presenting the case and submitting the necessary documents/evidences which were relevant for the case. Thereby denying the appellant’s Right to Natural Justice.
That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making additions of Rs. 16,00,000/- where the Ld. AO assessed the case on the basis of extraneous and irrelevant facts arising out of some rough papers having projections for expected receipts to be collected from debtors by marketing team which is invalid and against the spirit of section 143(3) of IT Act, 1961 thus erred in making additions by applying provisions of law incorrectly.” 3. The assessee company filed its return for AY 2013-14 on 30.09.2013 declaring income of Rs. 3,25,13,325/-. The case was selected for scrutiny through CASS. During assessment proceedings, the statutory notices were served and complied with. Requisite details were filed before the Ld. Assessing Officer (“AO”) who placed them on record. It is stated that survey under section 133A was conducted in the case of the assessee on 09.10.2013 during which incriminating documents were found and impounded. The scanned copy of document on page 1 of Annexure A-3 is reproduced wherein entries totalling to Rs. 16,00,000/- are found. According to the Ld. AO, these are apparently the cash received by the assessee from various companies. Since no reply on this issue was filed before the Ld. AO, he treated Rs. 16,00,000/- as undisclosed income of the assessee which he added to its income completing the assessment on total income of Rs. 3,41,13,330/- on 23.03.2016 under section 143(3) of the Income Tax Act, 1961.
On appeal by the assessee the Ld. CIT(A) confirmed the impugned addition observing in para 6.3 of his appellate order as under:-
“6.3 The undersigned has carefully gone through the assessment order, written submission filed as well as verbal argument of the Id. A.R. It is seen from the assessment order that the A.O. made addition on basis of entries written on 2 document 'Annexure-3, Page no. 1' found during the course of survey which is unexplained cash received by the assessee for which assessee has no explanation. In this regard, Id. A.R. argued that these are mere simple notings which is just the tentative plan of payment to be collected from the builders. On this basis only, it cannot be ascertained by AO that any unexplained transactions were there. After careful consideration of facts and circumstances of the case, it is observed that the paper belongs to the appellant, therefore, it can easily be understand that paper has certain information relating to assessee's own activities. It is seen from the (Annexure-3, page-1) that it has entries of cash deposited in Vijya Bank along with the entries of cash received from different Builders. From the analysis of same, it is observed that assessee has noted all details of cash handled by it. Either received or deposited. Once, the some of entries of said page stands genuine and valid then other entries cannot be ignored on the submission that it was just a plan for future collection. If so, it was the onus upon the appellant to explain and prove the purpose of cash to be received in future and in future at which date same was collected from builders. Except, ignoring the entries, appellant could not submit anything through which it may prove that really these entries are rough paper. Thus, in absence of cogent explanation, undersigned is of the opinion that addition made by AO is justified. The cases relied upon by the Ld. A.R. are on their own footings and distinguishable on facts and are not applicable to the present cases, AO has elaborately discussed the contents of the incriminating document and correctly added Rs. 16,00,000/- on the basis of incriminating document. It is a settled principal of law u/s 292 of the Act that the content of impounded document found are deemed to be true unless rebutted with cogent evidences. The fining given by Hon’ble High Court Madras in the case of CIT vs. Ambika Appalam Depot (2012) 340 ITR 497 /73 DTR 112 (Mad.)(HC) is squarely applicable in the present case wherein it is held by the Court that addition on the basis of incriminating document is perfectly justified. Therefore addition made by AO is confirmed and grounds of appeal of the appellant are dismissed.”
5. Aggrieved, the assessee is in appeal before the Tribunal and all the grounds relate thereto.
6. On the day of hearing the Ld. AR sought adjournment on the ground that the assessee is in the process of obtaining one impounded document mentioned in the assessment order. After perusing the record we rejected the adjournment application and proceeded to decide the appeal.
7. We heard the Ld. Representative of the parties. The Ld. AR submitted that the Ld. AO made the impugned addition for the reason that no reply was filed by the assessee. According to the Ld. AR, the impounded document relied upon by the Ld. AO, scanned copy of which appears on page 2 of the assessment order is not legible at all and legible copy thereof has not been made available to the assessee as yet to enable the assessee to submit reply / explanation to the alleged entries appearing therein. In such a scenario the parties agreed that the matter may be restored to the file of the Ld. AO for decision afresh.
8. Consequently, we set aside the order of the Ld. CIT(A) and remit the issue back to the file of the Ld. AO with a direction to him to provide legible copy of the impounded document relied upon by him to the assessee and allow reasonable opportunity to the assessee to furnish its explanation and present its case. Thereafter, the Ld. AO shall consider the assessee’s reply / explanation and decide the matter afresh as per law. We order accordingly.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.