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Income Tax Appellate Tribunal, DELHI BENCH “C”, NEW DELHI
Before: SH. S.V.MEHROTRA & SMT. BEENA A. PILLAI
The present appeal has been filed by revenue against 1. order dated 21.07.2014 passed by Ld. CIT(A)-IX New Delhi for assessment year 2010-11 on following grounds of appeal:
(1) Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of Rs. 8647840/- made for not deducting tax at source on the job work payments made by the assessee by totally ignoring the reasons advance by the assessing officer and totally relying upon the submissions of the assessee company and also allowing the additional submissions made during the appellate proceedings without taking the comments of the AO on the same ? (2) Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of Rs. 548895/- on account of freight outwards for non deduction of TDS on such payments on the basis of additional submissions made during the appellate proceedings without taking the comments of the AO on the same? (3) Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of Rs. 18000000/- on the basis of additional submission made by the assessee during the appellate proceeding without taking the comments of the AO on the same? (4) Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in deleting the addition of Rs. 1568560/- on account of repayment of unsecured loans on the basis of additional submissions made by the assessee without taking the comments of the AO on the same? (5) That the order of the Ld. CIT(A) is erroneous and is not tenable on facts and in law. (6) That the grounds of appeal are without prejudice to each other.”
Brief facts of the case are that assessee is engaged in the business of manufacturing of garments and home furnishing goods which are exported as well as sold in the domestic market. Assessee filed its return of income on 5.10.2010 declaring loss of Rs. 9,37,553/-. Subsequently the case was processed u/s 143(1) of the act and selected for scrutiny. Notices u/s 143(2) of the Act was issued and served upon the assessee.
Ld. AO observed that assessee had claimed job work expenses at Rs. 1,23,89,495/- paid to contractors/ sub- contractors. It was also observed by ld. AO that assessee itself had disallowed a sum of Rs. 37,29,305/- on its own for not deducting TDS u/s 195(C) of the Act. Ld. AO observed that no tax has been deducted by assessee on the remaining payments made, amounting to Rs. 86,60,190/-. Assessee was asked to show cause, as to why the amount should not be disallowed for non-deduction of TDS.
During the assessment proceedings, Ld. AO notice that assessee has paid a sum of Rs. 1,80,00,000/- for purchases as per entry in the bank account held by assessee. On verification of the ledger of the party to whom the payment has been made in the books of assessee, ld. AO was of the opinion that the said amount has not been disclosed.
It was also observed by ld. AO that assessee has taken unsecured loan from the Managing Director to an extent of Rs. 30,47,535/- out of which a sum of Rs. 15,86,516/- has been repaid by Director during the year under consideration. Assessee was asked to provide necessary informations / details regarding repayment of loan, mode of repayments and confirmation for the Managing Director. As no confirmation or other supporting evidence was furnished by assessee, ld. AO was of the opinion that the amount of Rs. 15,68,560/- was taken from undisclosed source and added to the total income of assessee.
He thus completed assessment by making addition and computing the assessed income at Rs. 2,86,65,900/- vis-à-vis the loss declared by assessee.
Aggrieved by the assessment order, assessee preferred appeal before ld. CIT(A).
Ld. Sr. DR submitted before us that the documents / materials relied upon by assessee before ld. CIT(A) was not available before the assessing officer for its due verification. He submitted that assessee had filed various vouchers, TDS challans which has not been verified by assessing officer, as the same was not sent to the assessing officer by way of remand. He submitted that before Ld. CIT(A), assessee agreed for disallowance of Rs. 12,350/- as TDS to that extent could not be proved. Ld. Sr. DR submitted that in the interest of natural justice . It is necessary that the document submitted by the assessee has to be verified by assessing officer as the exercise of verification has not been undertaken by ld. CIT(A) either.
None has appeared on behalf of Assessee.
In respect of ground no. 3, Ld. Sr. DR submitted that assessee had filed copy of bank statements along with relevant documents, which also was not available before ld. AO for purposes of verification and ld. CIT(A) has not under taken the exercising of remanding the same to ld. AO.
In so far as ground no. 4 is concerned ld. Sr. DR submits that CIT(A) has merely relied upon the submissions advanced by assessee in respect of the outstanding loan that it related to assessment year 2008-09. It was submitted by assessee before Ld. CIT(A) that assessment for the assessment year 2008-09 has been completed u/s 143(3) of the Act, after obtaining the requisite confirmation by the Managing Director which has not been established by assessee by way of documentary proofs. Ld. Sr. DR, on this juncture, submitted that had the confirmation from the director to be available on record, assessee should have produced the same during the assessment proceedings before assessing officer.
In all it has been submitted that ld. Sr. DR that as the documents based on which the ld. CIT(A) has granted relief to the assessed, none of which has been subject to proper verification as per law, he pleaded that the issues may be set aside to the assessing officer for denovo verification.
We have heard the rival contention advanced by ld. Sr. DR. It is observed that Ld. CIT(A) has not undertaken any independent inquiry on his own to verify the authencity of the documents submitted and oral arguments advanced by assessed, while deciding the issues. Therefore, in the interest of natural justice, we find it fit and proper to set aside the issues back to the file of ld. AO for denovo verification. The ld. AO is directed to issue notice to assessee and grant proper opportunity of being heard. Assessee is directed to file all necessary and relevant information/ details / evidences in order to establish its claim. The assessing officer may thereafter undertake all necessary inquiries as per law to decide the issue afresh. Accordingly the grounds raised by revenue stands allowed for statistical purposes.
In the result, appeal filed by the revenue stands allowed for statistical purposes. Order pronounced in the open court on 28th June, 2017.