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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC-II’ NEW DELHI
Before: SMT DIVA SINGH
The present appeal has been filed by the assessee assailing the correctness of the order dated 28.03.2016 of CIT(A), Meerut pertaining to 2007-08 assessment year on the following grounds:-
1. “The Ld.A.O. as well as Ld.CIT(A) ignored the fact that the shop was allotted on 14.08.1999 as per allotment letter the assessee has made payment. The receipt was destroyed in fire, all the addition of on account of shop is arbitrary, unjust and not according to law.
2. That Rs.1,73,000/- was outstanding balance of Sh.Anil Chawla, the co- owner of the shop and outstanding balance is shown in the balance sheet of earlier years. Hence, Rs.4,00,000/- and Rs.1,73,000/- cannot be added in the income of the assessee as unexplained investment. 3. That that nature of the trade is required job from outside and it cannot be disallowed @ 50% on job work and addition of Rs.26,360/- is unjustified and without any basis. Because after disallowance of expenses of Rs.32,43% which is highly excessive and net profit cannot be exceed 10% of the receipt. 4. That the assessee has claimed that the documents were burn in fire is supported by document and FIR. Hence, the assessee has reasonable cause of r non-production of evidence and covered u/s 44AF of I.T.Act, because the assessee is small trader. 5. That the assessee has right to add, delete or modify any grounds during the appeal proceeding.” 2. Right at the outset, the Ld. AR submitted that he had moved an adjournment application on 01.10.2016 as he was expected to be out of station however since he has managed his affairs he sought permission to withdraw the application. The Ld.Sr.DR had no objection as he said he was prepared to argue. Accordingly, considering the I.T.A .No.-2944/Del/2016 Vinod Kumar vs ITO
Page 2 of 4 submissions of the parties before the Bench, permission to withdraw the request was granted.
The Ld. AR inviting attention to the assessment order and the impugned order submitted that the assessee has returned an income of Rs.1,09,620/- from job work. The assessment was concluded at an income of Rs.9,27,464/- as the relevant documents in support of the said return were destroyed in a fire and the assessee was unable to produce the same. It was his submission that the assessee has all along been claiming in the peculiar facts of the present case that his income may be estimated on the basis of section 44 AF of the Income Tax Act. In support of the prayer, attention was invited to Ground No. 2 raised before the CIT(Appeals). It was submitted that the assessee has argued before the Assessing Officer that at the shop premises of the assessee who was a tailor a fire had occurred on 30.05.2009. However the Assessing Officer considering the fact that the FIR mentioned that the fire occurred on 12.06.2009 and on noting that the address mentioned by the Fire Department as per its certificate was different, refused to look at the fresh certificate issued by the Fire Department correctly mentioning that the fire occurred on 30.05.2009 and conclude that the date and the address are different. Referring to the conclusion drawn by the CIT(A), it was submitted that the issue was decided against the assessee holding “a perusal of the note sheet in this case reveals that assessee has not cooperated with the counsel and ultimately on 21.03.2016 the AR has withdrawn his power of attorney. The note sheet also reveals that time was given liberally to the assessee to furnish a response to the comments of the AO to whom the matter had been remanded.
However, the assessee has remained non-cooperative and no counter comments to the remand report have been furnished by the AR or the assessee himself.”
3.1. In the said background, it was his submission that the counsel representing the assessee before the CIT(A) had sought time to place the evidence of fire at the shop premises of the assessee to support that the evidence was destroyed which request the I.T.A .No.-2944/Del/2016 Vinod Kumar vs ITO
Page 3 of 4 CIT(A) wrongly concluded that the Ld.AR has withdrawn his Power of Attorney. It was his submission that the Ld. Commissioner was insisting upon the evidences and even before the CIT(A) the assessee was represented by him had submitted that some more time was required as the evidence had not been handed over to him. In these circumstances, the CIT(A) questioned why the counsel was seeking time again and again and he should infact withdraw his Power of Attorney. It was his submission that relying upon the photo copy of the paper cutting paper book page 11 and photocopy of the report of fire department at pages 12 and 13 of the paper Book the fact that the fire occurred on the specific premises on 30.05.2009. Accordingly, it was his request that he had no objection if the documents are verified by the Department. However, the issue, in the peculiar facts and circumstances it was his submission that the CIT(A) may be directed to decide the issue on the basis of section 44 AF of the Income Tax Act on which there was judicial precedent in his favour.
The Ld. Sr.DR, Mr. F.R.Meena had no objection if the issues are restored for verification of the fact whether the fire occurred on 30.05.2009 at the business premises of the assessee. He also had no objection to restoring the issue to the file of the CIT(A) as the assessee had raised a specific ground for considering the applicability of section 44 AF before the said authority which remained not decided.
I have heard the rival submissions and perused the material available on record. It is seen that the assessee claimed that fire occurred at the business premises of the assessee on 30.05.2009. In view of some typographical mistakes claimed to have occurred in the original evidence filed, the assessee relied upon fresh certificate of the concerned department and also supporting evidence by way of newspaper reports. In the afore- mentioned peculiar facts and circumstances considering that the assessee had also raised Ground No. 2 before the CIT(A) which remained undecided, in the circumstances, it is deemed appropriate to restore the issue back to the file of the said authority directing him
I.T.A .No.-2944/Del/2016 Vinod Kumar vs ITO
Page 4 of 4 to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. The fresh evidences if any, relied upon in support of the claim that the fire occurred at the business premises of the assessee, may be taken on record and after confronting the same to the AO and making the report of the available to the assessee he may pass a speaking order in accordance with law. The Ld.CIT(A) is also directed to decide Ground No.2 raised before him which remained undecided. The assessee may support its claim relying on judicial precedent available thereon.
In the result, the appeal of the assessee is allowed for statistical purposes.