ROLAX AUTO PVT. LTD.,NEW DELHI vs. ITO, WARD- 21(4), NEW DELHI

PER KULDIP SINGH, JUDICIAL MEMBER :

Appellant, M/s. Rolax Auto Pvt. Limited (hereinafter

referred to as ‘the assessee’) by filing the present appeal sought to

set aside the impugned order dated 01.12.2017 passed by the

Commissioner of Income - tax (Appeals)-38, New Delhi qua the

assessment year 2008-09 on the grounds inter alia that:-

“1. The Ld. Assessing Officer, has erred in law and on facts in passing assessment order u/s 148 / 144 of the Income Tax Act, 1961 without serving notice to the Assessee Company as prescribed in the act. The order which does not comply with the

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requirement of Section 147 /148 of Income Tax Act, 1961 is nullity as the order of Assessment was passed U/s 144 of the Income Tax Act, 1961. 2. The Ld. Assessing Officer, erred in law and on facts in passing assessment order u/s 148/144 of the Income Tax Act, 1961 without giving opportunity of being heard to the Assessee. The CIT(A) has further erred in law in partly allowing the appeal but by maintaining substantial additions on account of Sundry Creditor and other grounds. 3. That the CIT (A) failed to appreciate the submissions and production of evidence of transaction w.r.t. Sundry Trade Creditors and maintained the difference in Opening and Closing Balance of suppliers as income of the assessee as Rs.86,71,196/-. The observation and addition are illegal and deserves to be set aside. 4. That, the CIT (A) failed to appreciate the fact that the assessee made donations and paid through cheques to charitable institution and also submitted information of the recipient society and CIT(A) has upheld the addition. 5. Further the CIT (A) erred in law and fact and upholding the addition of Interest Income amounting Rs.70,762/- received from M/s Intec Securities as appearing the Income and Expenditure A/c as part of business income of the Assessee Company. 6. Further the CIT (A) erred in law and fact and partly allowing the appeal of assessee in ignoring the explanation before him and evidences placed on records at the time of hearing before CIT(A).”

controversy at hand are : On the basis of information received

through Non-filers Monitoring System of i-taxnet, AO noticed cash

transaction exceeding Rs.10,00,000/- during Assessment Year

2008-09, for which assessee has not filed any ITR. Proceedings

under section 147/148 of the Income-tax Act, 1961 (for short ‘the

Act’) were initiated by issuing a notice u/s 148 of the Act. Due to

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non-appearance of the assessee despite service, AO proceeded to

frame assessment under section 144 of the Act.

the sundry creditors during the year under assessment to the tune of

Rs.86,71,196/-. AO proceeded to make addition thereof on the

ground that since detail of sundry creditors has not been filed by

the assessee, increase in the sundry creditors has been treated

income of the assessee from undisclosed sources. AO also made

addition of Rs.70,762/- on account of interest received from M/s.

Intec Securities Ltd. on which tax at source has been deducted

under section 194A of the Act. Accordingly, AO framed the

assessment u/s 148/144 at an income of Rs.1,63,73,063/-. 4. Assessee carried the matter before the ld. CIT (A) by way of

filing appeal who has partly allowed the same. Feeling aggrieved,

the assessee has come up before the Tribunal by way of filing the

present appeal.

parties to the appeal, gone through the documents relied upon and

orders passed by the revenue authorities below in the light of the

facts and circumstances of the case.

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GROUNDS NO.1, 2 & 4 6. Ground No.1, 2 & 4 are dismissed having not been pressed

during the course of arguments.

GROUND NO.3 7. AO made addition of Rs.86,71,196/- being the income from

undisclosed sources on the ground that details of sundry creditors

have not been filed by the assessee as there is an increase in the

sundry creditors during the year under assessment to the tune of

Rs.86,71,196/-. This addition has been upheld by the ld. CIT (A).

contended that he has supplied complete details of the sundry

creditors to the AO as well as ld. CIT (A), which is available at

pages 22 to 24 of the paper book, and has also referred to written submission filed with ld. CIT (A), which are available at pages 1 to

14 of the paper book. However, on the other hand, ld. DR for the

Revenue to repel the arguments addressed by the ld. AR contended

that since assessee has been negligent through-out in supplying the

details, addition is liable to be confirmed.

of the bank statement of the accounts maintained by the assessee

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company are available on record. Copy of ‘audited’ Balance

Sheet, P&L account with Form No.3CD were also obtained. But

the authenticity of the audit report could not be established due to paucity of time and moreover, no address of the auditor/CA has

been mentioned on the papers signed by the auditor/CA.”, the

addition has been made on the basis of surmises in haste.

“….the parties are such where even the confirmation are not

readily available being old records….” In this situation there is no

choice but to uphold the action of assessing officer. The addition

of Rs.,87,71,196/- on account of Sundry Creditors is accordingly

confirmed.” are cryptic and we are unable to comprehend if the issue canvassed before the ld. CIT (A) was discussed and decided

in right earnest.

when the entire detail was brought on record by the assessee during

the first appellate proceedings, though assessee was negligent in

appearing before the AO, adequate opportunity of being heard is

required to be given to the assessee to decide the issue once for all.

Since entire evidence brought on record by the assessee requires

initial scrutiny, it would be in the interest of justice to remit this

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case to the AO. Consequently, this issue is remitted back to the

AO to decide afresh after providing adequate opportunity of being

heard to the assessee. So, ground no.3 is determined in favour of

the assessee for statistical purposes.

GROUND NO.5

details of Individual Transaction statement of the assessee

company which shows that assessee received interest of

Rs.23,162/- and Rs.47,600/- totaling Rs.70,762/- from M/s. Intec

Securities Ltd. on which tax has also been deducted at source u/s

194A of the Act and treated the same as interest income of the

assessee. At the same time, ld. CIT (A) decided the issue by

returning following findings:-

“5.2.5.1 I have carefully considered the submissions of the appellant and the assessment order on this issue. It is clear that appellant has received interest income from M/s. Intec Securities which should have been offered to tax. However, for reasons which are at variance with the Income Tax Act, 1961, the same has not been offered to tax by appellant. Addition of Rs.70,762/- by AO is accordingly upheld.”

on record the entire details viz. P&L account with Form 3CD,

audited balance sheet, bank statements, which is evident form para

3 of the assessment order, as well as before the ld. CIT(A), but no

cognizance has been taken of the documents. Since all these

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documents are required to be examined by the AO, this issue is also remitted back to the AO to decide afresh after providing

adequate opportunity of being heard to the assessee. So, Ground No.5 is determined in favour of the assessee for statistical purposes.

Sd/- sd/- (PRASHANT MAHARISHI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated the 24th day of September, 2021 TS