Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI
Before: SHRI P.K. BANSAL & SHRI K.N. CHARY
This appeal is filed by the Revenue challenging the order dated 29.10.2012 in appeal no. 175/2011-12 by the Commissioner of Income Tax (Appeals)-XXVII, New Delhi, where under he modified the assessment order in some respects.
Briefly stated facts are that the assessee is an individual deriving his income from the business of dyeing/printing of fabrics/yarn in the name & style of Bir Horizons, for the AY 2009- 10 they have filed their return of income on 30.09.2009 and the assessment was completed u/s 143(3) of the Income Tax Act (for short hereinafter called ‘the Act’) at Rs. 2,37,70,830/-. In the process of assessment AO added back a sum of Rs. 60,87,800/- on account of cash credit u/s 68 of the Act, Rs. 3,78,457/- on account of interest, etc. In appeal on an appreciation of the entire material before him, Ld. CIT (A) deleted an amount of Rs. 57,87,000/- u/s 68 of the Act and interest thereon, and the addition made u/s 43B of the Act also by way of impugned order.
Challenging the impugned order Revenue is in appeal before us on the ground that the Ld. CIT (A) failed to give an opportunity to the AO while relying upon the new material produced for the first time before him as additional evidence and thereby he erred in deleting the additions made by the AO u/s 68, 43B, etc.
It is the argument of the ld. DR that before acting upon the new material that was produced before him, the Ld. CIT (A) was duty bound under Rule 46A of the Rules to give a reasonable opportunity to the AO to defend the assessment order but without doing so and ignoring the fact that the additions were made basing on the record available and in that process Ld. CIT (A) failed to appreciate the evidence in proper prospective. Per contra, it is the submission of the Ld. AR that for the reasons recorded in the order Ld. CIT (A) rightly admitted the additional evidence and in view of the material that was available on record the Ld. CIT (A) rightly reached the conclusion that certain additions had to be deleted.
According to the Ld. AR the order of the Ld. CIT (A) does not warrant any interference and, therefore, he prayed to dismiss the appeal.
Grounds 1 and 9 are general in nature and do not require any adjudication. Insofar as grounds 2 & 8 are concerned, the challenge is based on Rule 46A of the Rules. A perusal of the impugned order clearly establishes that vide paragraph no. 18 to 21 Ld. CIT (A) recorded that on the assessee filing the additional evidence the same was forwarded it to the AO for his comments and after a careful consideration of the remand report and the rejoinder filed by the assessee thereto, the Ld. CIT (A) admitted the additional evidence holding that such material merit consideration for disposal of the case. On the face of these recordings of the Ld. CIT (A) it is not open for Revenue to contend that no reasonable opportunity was granted to the Revenue before admitting the additional evidence. Therefore, these two grounds do not hold any merit and accordingly are dismissed.
Now coming to the grounds no. 3 & 6, they relate to the additions made u/s 68 of the Act and the interest thereon. As a matter of fact Ld. CIT (A) vide paragraph nos. 21 to 23 dealt with this matter at length. Ld. CIT (A) found that the assessee by producing the confirmation letters, bank account and copy of the acknowledgment of the ITR in respect of Charan Preet Singh, Sh.
K.K. Gandhi, Smt. Mohinder Gandhi, and others. and the confirmation letter, PAN details and bank account of Smt. Harjeet Kaur produced cogent evidence in discharge of his onus of establishing the identity and creditworthiness of the creditors and genuineness of the transactions. Vide paragraph no. 23 Ld. CIT (A) concluded that except in case of one Attar Singh, where the amount involved was Rs. 3 lakhs, the evidence produced by the assessee was satisfactory and could be acted upon. Further, vide paragraph no. 24 the Ld. CIT (A) held that in view of his findings in respect of the addition u/s 68 of the Act, the aspect of interest is only consequential in nature as such barring the interest payable on the amount attributable to one Attar Singh, the Ld. CIT (A) deleted the other amounts.
The reasons given by the Ld. CIT (A) vide paragraph nos. 21 to 24 are very cogent and firmly based on the acceptable evidence available on record. The Revenue could not demonstrate before us how this approach of the Ld. CIT (A) is wrong. We hold that the findings of the Ld. CIT (A) on ground no. 3 & 6 are cogent and convincing and do not warrant any interference. We, therefore, dismiss grounds nos. 3 & 6.
8. Now coming to ground no. 4 which is in respect of the disallowance of 20% of expenses under the head “business promotion, festival miscellaneous tour and travel and staff travel expenses”, as a matter of fact vide paragraph no. 11 to 14 the Ld. CIT (A) confirmed the disallowance to a tune of 20% of these expenses made by the AO, and this finding goes in favour of the Revenue, as such the Revenue cannot challenge the same. Since there is no cross objection on this aspect, we do not propose to disturb the finding of the Ld. CIT (A) on this aspect. Hence, ground no. 4 is dismissed.
Now, coming to ground no. 5 which is in respect of the disallowances u/s 43B is concerned the Ld. CIT (A) recorded the fact that the AO himself deleted this addition by his order dated 05.03.2012 passed u/s 154 of the Act as such it had become infructuous. We are at a loss to understand how could this finding be challenged by the Revenue. This ground is dismissed.
Now coming to ground no. 7 which is in respect of excess income amounting to Rs. 34,551/-, it was contended before the Ld. CIT (A) that the AO had erred in taking the returned income at Rs. 77,34,571/- before the deduction under Chapter VIA, whereas the returned income of the assessee was Rs. 77,00,020/-, resulting in the excess determination of the income amounting to Rs. 34,551/-.
Ld. CIT (A) remanded the matter to AO to verify this contention.
Since, the Ld. CIT (A) did not turn down the plea of the Revenue, we direct the AO to verify this fact.
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 21.04.2017