ITO WARD 2(1), MORADABAD vs. ABHISHEK AGARWAL, MORADABAD

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ITA 7274/DEL/2019Status: DisposedITAT Delhi18 October 2022AY 2013-145 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Commissioner (Appeals) deleted the addition by relying on a previous year's order without independent inquiry, despite stating that each assessment year is a separate unit. Therefore, the Tribunal set aside the order and remanded the issue back to the AO for fresh decision after independent inquiries.

What were the facts?

The Assessing Officer (AO) made an addition of Rs. 1,55,60,374/- on account of purchase of exempt goods in cash out of books of account. The Commissioner (Appeals) deleted this addition, relying on a previous order and stating the AO had not conducted independent inquiries. The Revenue appealed this deletion.

What were the issues?

Whether the Commissioner (Appeals) was justified in deleting an addition based on a previous year's order without independent inquiry, and whether the AO had sufficient material to make the addition.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 69,Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI

Before: SHRI SHAMIM YAHYA & SHRI NARENDER KUMAR CHOUDHRY

For Appellant: DR by:
Hearing: 04.10.2022Pronounced: 18.10.2022

O R D E R PER N.K.CHOUDHRY, JM:

The Revenue/Department has preferred the instant appeal against the order dated 27-06-2019 impugned herein, passed by the Ld. Commissioner of Income tax (Appeals),Moradabad (in short “Ld. Commissioner”) u/s 250(6) of the Income Tax Act, 1961 (in short “the Act”), pertaining to the assessment year 2013-14.

2.

Though notice of hearing on 4.10.2022 was sent to the Assesseeat the address mentioned in Form no. 36, however, the Assessee neither appeared nor filed any adjournment application. Hence, in the constrained circumstances, we are inclined to decide this appeal a ex parte.

3.

By perusing the orders passed by the authorities below and hearing the learned DR, we observe that the AO vide order dated 3.3.2016 passed u/s 143(3) of the Act, made various additions including addition of Rs. 1,55,60,374/- on account of purchase of exempt goods in cash out of books of account. The Assessee being aggrieved against the additions made by the AO including the addition referred to above, preferred first appeal before the ld. Commissioner.

3.1 The Ld. Commissioner on appeal, deleted the said addition, by relying upon the order dated 30.04.2015 passed by its predecessor, wherein the similar addition made by the AO u/s 143(3) of the Act was under challenge and the same was deleted by observing“that no inquiries are carried out by the AO, no material is brought by the AO on record in respect of this addition. Only material available with the AO was report of ITI, which is also in form of opinion of various parties in the market. No cogent material has been collected and placed on record.”

3.2 The Ld. Commissioner further held that no addition can be made u/s 144 of the Act, without bringing necessary evidence on record, further a fair and honest estimate has to be made. Further each assessment year is a separate unit.

Therefore, addition cannot be made by the AO only, by relying on the assessment orders of the previous years.

3.3 We observe that on one side, the Ld. Commissioner held that each assessment year is a separate unit and therefore addition cannot be made by the AO only by relying on the assessment orders of the previous year, on the Ld. Commissioner itself by relying upon the order of its predecessor for the A.Y. 2012-13 and without making any independent inquiries, as the Ld. CIT(A) has also co-terminus power of the AO, deleted the addition under consideration. Hence, we are inclined, not to sustain the action of the Ld. Commissioner and considering the peculiar facts and circumstances, deem it appropriate to set aside the issue under consideration qua addition of Rs. 1,55,60,374/- made u/s 69 of the Act on account of investment in purchase of exempt goods from undisclosed sources, to the file of the Assessing Officer for decision afresh with direction to carry out independent inquiries and to collect cogent material before deciding the issue and without being influenced by assessment orders of the previous years. Consequently the impugned order is set aside.

4.

In the result, Revenue/Department’s stands allowed for statistical purposes.

Order pronounced in open court on 18.10.2022.

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