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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’: NEW DELHI
Before: SHRI CHANDRA MOHAN GARG, & SHRI L.P. SAHU,
PER CHANDRA MOHAN GARG, JUDICIAL MEMBER
These three appeals have been filed by the assessee and directed against the order of the CIT(A)-XXVIII, New Delhi, dated 30/11/2012 for AYs 2007-08 to 2009-10. Since the appeals pertain to same assessee and were heard together, we are disposing them off by this common order for the sake of convenience and brevity. three appeals. However, at the very outset of the hearing of the arguments, the ld. AR submitted that the issues involved in all these three appeals stand covered vide order of this Tribunal in the case of assessee’s sons Shri Anish Kumar Gupta and Shri Ashish Kumar Gupta in & 121/Del/2013 for A.Ys 2007-08 and 2008-09, a copy of which has been furnished on record. The ld. AR further submitted that neither the ld. CIT(A) nor the AO was justified in coming to a haste and arbitrary conclusion without appreciating the facts and circumstances of the case and without verifying the confirmations of the assessee of the assessee placed on record. The ld. AR contended that he has no objection if the matter is restored to the file of the AO for fresh adjudication and prayed that the AO may be directed to verify the confirmations before passing order.
On careful consideration of above submissions, at the outset, from the copy of the order of the Tribunal dated 9.1.2014, passed in the cases of Shri Anish Kumar Gupta and Shri Ashish Kumar Gupta in to 121/Del/2013 and 112 to 114/Del/2013 for ay 2007-08 to 2009-10 [supra] as relied upon by the ld. AR of the present assessee, we observe that in the appeal AO with the following observations:
“13. We have duly considered the rival contentions and gone through the record carefully. The stand of the assessee is that he has entered into an agreement with M/s. Reliance Industries for providing certain services on a monthly payment of Rs.10,000 plus reimbursement of the actual expenditure. Now, the assessee has pointed out that he has received a sum of Rs.378,93,279 in assessment year 2007-08 and sum of Rs.340,66,623 in assessment year 2008-09. These are the gross receipts. The payer has given a confirmation disclosing the fact that assessee has incurred a sum of Rs.371,52,574 under various heads in assessment year 2007-08 and Rs.333,41,778 in assessment year 2008-09. The payer has observed that it is reimbursing the expenses incurred by the assessee on its behalf. In this situation, the amount to this extent is neither a loan to the assessee nor a gift. He has not kept this amount in his pocket. If the Assessing Officer has any doubt that these expenses are not genuine expenditure then they are to be examined in the hands of the payer. It is to be seen in the case of Reliance Industries as to for what purpose these expenses have been incurred and if they are not for business purposes then they can be disallowed in the hands of Reliance Industries. The other angle could be that if Reliance Industries denies that these expenditures do not pertain to it then its genuineness could be examined in the hands of the assessee. In that case, if it is proved that these are not business expenditure, assessee has received this money and kept in his pocket, only then, it can be 4 to 119/Del/2013 assessed in the hands of the assessee. We also find that in assessment year 2008-09, learned Assessing Officer has observed that these amounts are to be added in the income of the assessee on protective basis. Therefore, learned Assessing Officer has misguided himself in examining this issue in the hands of the assessee. Learned Assessing Officer can examine veracity of assessee’s claims with regard to the balance amount i.e. the difference between Rs.378,93,277 minus Rs.3,71,525 and Rs.340,66,623 minus Rs.333,41,778. How the total amount can be added in the hands of the assessee is not ascertainable in the assessment order. The confirmation of Reliance Industries is available on pages 53 and 63 of the paper book. We have gone through these documents. This issue is also set aside to the file of the Assessing Officer for readjudication. Learned Assessing Officer shall keep in mind that similar additions are deleted by Learned CIT(Appeals) in assessment year 2006-07 and ITAT has affirmed the order of Learned CIT(Appeals). He shall also keep in mind that in the case of Anish Gupta, he himself made addition on protective basis.
Now, we take the remaining grounds of appeal in the case of Ashish Kumar Gupta. The ground No.5 in assessment year 2007-08 is connected with Ground No.2. In this ground, assessee has pleaded that Learned CIT(Appeals) has erred in confirming the addition of Rs.1,53488. The brief facts of the case are that according to the Assessing Officer, assessee had shown advance of Rs.114,76,588 while he has furnished the details by way of cash received from the agriculturalist at Rs.113,23,100. The Assessing Officer has made the 4
5 to 119/Del/2013 addition of this amount under sec. 68 of the Act. He treated the balance amount i.e. difference between these two at Rs.1,53,488 as unexplained on the ground that assessee has neither given the details nor confirmation. Since, we have already set aside the main issue whereby unexplained cash credits have been added, we deem it appropriate to set aside this issue also to the file of the Assessing Officer. Learned Assessing Officer shall readjudicate this issue also.”
From the order of the Tribunal dated 09.1.2014 [supra, we also observe that the similar issue has been restored to the file of the AO in the appeals of Shri Anish Kumar Gupta with the following observations:
“16. The brief facts with regard to these grounds are that Shri Ashish Gupta was running a proprietorship concern, namely, “Arnav Lisioning Services”. He entered into an agreement with Reliance Industries Ltd. on 5th day of April 2006 for providing consultancy services. The Reliance Industries supposed to pay consultancy fee of Rs.15,000 per month. According to the assessee, he has received a sum of Rs.283,83,450 from Reliance Industries Ltd. towards expenditure in assessment year 2007-08. The assessee had incurred a sum of Rs.276,98,340. In its confirmation, Reliance Industries has confirmed that this much amount was towards reimbursement of expenditure. Learned Assessing Officer has made analysis of these expenses under various heads and thereafter he made an addition of 6 to 119/Del/2013 Rs.274,76,043 which represents reimbursement of expenditure. Learned Assessing Officer is of the opinion that these expenses are for non-business purposes. Apart from this amount, learned Assessing Officer has made addition of Rs.2,02,476. This is an expense which was payable by the assessee. Similarly, in assessment year 2008-09, Reliance Industries has paid Rs.255,77,109 and the reimbursement of expenses out of this amount is of Rs.249,03,984. Learned Assessing Officer has observed that the expenditure were for non-business purposes. He also assessed the income on protective basis with regard to the receipts from M/s. Reliance Industries. Learned Assessing Officer further made an addition of Rs.7,99,012 which is challenged by the assessee in ground No.3. This amount represents TDS credit claimed by the assessee at Rs.6,19,012 plus Rs.1,80,000 i.e. consultancy fee of 12 months. Learned Assessing Officer has made an addition of Rs.247,78,097 on protective basis which is an amount worked out by debiting the total receipts paid by the Reliance Industries at Rs.255,77,109 minus Rs.7,99,012.
In assessment year 2009-10, Assessing Officer has again made an addition of Rs.46,08,774. The assessee had received a sum of Rs.49,00,004 from Reliance Industries and out of this amount, a sum of Rs.45,03,104 was towards the reimbursement of expenditure. The Assessing Officer has made an assessment of Rs.46,08,774 on protective basis. He worked out this amount by debiting a sum of Rs.1,80,000 claimed by the assessee as consultancy charges from the total amount paid by the Reliance Industries Ltd. in this year. 6
The facts are similar to that of Shri Anish Kumar Gupta as discussed in the foregoing paragraphs of this order. Learned Assessing Officer in two assessment years i.e. 2008-09 and 2009-10 himself has observed that the alleged receipts from the Reliance Industries is to be assessed on protective basis in the hands of the assessee, then how he can made addition on substantive basis in assessment year 2007-08. We have set aside this also to the file of the Assessing Officer for readjudication in the case of his brother. Following our observations in para 13, we allow these grounds also and set aside all these issues to the file of the Assessing Officer for readjudication
The ld DR has fairly accepted that the facts and circumstances of the present case pertaining to father of Shri Anish Kumar Gupta and Shri Ashish Kumar Gupta are quite similar and issue involved in these three appeals is also same to the earlier appeals decided by the Tribunal order dated 9.1.2014 [supra]. The ld. DR supported the order of the ld. CIT(A) and submitted that the ld. CIT(A) was quite justified in upholding the order of the AO. However, he raised no serious objection to the assessee’s submission that he has no objection if the appeal is restored to the file of the AO for and verification of the confirmations filed by the assessee. perused the relevant material placed on record before us. We find from the order of the ld. CIT(A) that the issues under consideration have not been decided by the AO in a proper manner and facts have not been appreciated in a judicious manner. We find that the confirmations have not been verified by the lower authorities. We further find that the ld. CIT(A) has passed the order without providing the assessee due opportunity of being heard. On the basis of foregoing discussion and careful perusal of the operative part of the ld. CIT(A)’s conclusion, it is amply clear that the ld. CIT(A) has decided the issue in haste by passing a cryptic order which is not sustainable. We further note that the ld. CIT(A) has also not properly considered the submissions and facts of the case and simply followed the AO’s conclusion and dismissed the appeals of the assessee. We further note that the ld. CIT(A) too has not given due opportunity of being heard to the assessee. The ld. DR has supported the order of the ld. CIT(A). However, he raised no serious objection if the appeal is restored to the file of AO for fresh adjudication of first appeal. Therefore, in the interest of justice, we deem it fit to restore the grounds of appeal raised by the assessee in all the Needless to mention that the AO shall provide due and proper opportunity of being heard to the assessee, without being prejudiced with the earlier impugned order. Grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, all the three appeals of the assessee stand allowed for statistical purposes.
The order is pronounced in the open court on .07.2016.