ACIT, NEW DELHI vs. SHRI GAUTAM GUPTA, NEW DELHI

The present appeal has been filed by the Revenue against the order dated 22.12.2011 passed by Ld. CIT(A)- XXXI, New Delhi, for the Assessment Year 2004-05, on the following grounds of appeal: “(i) On the facts and circumstances of the case, the CIT(A) erred in deleting the addition of Rs.31,11,790/- made by the A.O. on account of hire charges. (ii) Set aside of the order of the CIOT(A) and restore the matter back to the A.O. to re-examine fresh evidences in a holistic manner.”

2 I.T.A.No.1046/Del/2016 2.1 The assessee filed its return of income declaring total income of Rs.9,48,340/- on 01.11.2004. The case was selected for scrutiny and notices u/s 1433(2) and 142(1) of the Act were served upon the assessee. During the course of assessment proceedings, Ld. A.O. observed that the assessee has claimed an amount of Rs.1,87,89,870/- under the head ‘hire charges’. On calling for the details in respect of the said claim and pursuance of the documents submitted by the assessee, Ld. A.O. observed that the assessee has claimed sundry and miscellaneous expenses to the tune of Rs.31,121,790/-. During the course of assessment proceeding, the assessee submitted that these were petty amounts paid to transporters, however, he had failed to produce any documentary evidence like bills / vouchers in respect of the expenditure incurred under this head. Ld. A.O. accordingly, made an addition for want of proper explanation / bills / vouchers to an extent of Rs.31,11,790/-. 2.2 Aggrieved by the order of the A.O., the assessee preferred an appeal before Ld. CIT(A). Before Ld. CIT(A), the assessee submitted application under Rule 46 with a request to admit certain fresh evidences. Ld. CIT(A) remanded the documents to the Ld. A.O. for verification and comments. Ld. A.O., commented as under: “During the course of assessment proceedings, Assessing Officer noted that appellant has claimed an amount of Rs.1,87,89,870/- under the head 'Hire Charges'. But appellant could not submit any details/bills/vouchers in respect of Hire Charges amounting to Rs. 31,11,790/-. When appellant was asked to justify the claim, appellant replied that these

3 I.T.A.No.1046/Del/2016 were petty amounts paid to transporters However, he failed to furnish any evidence w.r.t the expenditure incurred under this head. Consequently, Assessing Officer added back this amount to the income of the appellant.

During the course of appellate proceedings, appellant has stated that enough opportunities were not granted to the appellant. But after going through the assessment record of the appellant, it was gathered that on the following dates A.R. of the appellant, Mr. Ashok Chawla attended the assessment proceedings:- 25-05-2006, 17-08-2006, 30-05,2006, 15-11-2006, 05-06-2006, 29-01-2006, 17-07-2006. It shows that the appellant was granted several opportunities to furnish details to the Assessing Officer but he intentionally avoided to do so.

Now at the time of appellate proceedings, appellant has only given bifurcation for the amount of Rs. 31,11,790/- in respect of hire charges to different persons. But even now no documentary evidence i.e. bill/ vouchers have been submitted by the appellant with regard to the amount of Rs. 31,11,790/- spent for Hire Charges. Bills and vouchers are sought to be produced, verified and examined for genuineness, only then the claim of the appellant may be considered.

In view of the facts and circumstances stated above and fresh papers submitted by the appellant, it has become crystal clear that appellant willingly ignored to submit any concrete document and any evidence in support of the claim for Hire Charges amount to Rs. 31,11,790/-, therefore, you are requested to please confirm this addition.

Reference to the contents of the rule 46A, show that production of additional evidence is conditioned by certain situations. The appellant has to show that the Assessing Officer has refused to admit the evidence. The appellant also has to show alternatively that he

4 I.T.A.No.1046/Del/2016 was prevented by sufficient cause from proceedings the evidence before the Assessing Officer.

Alternatively further the appellant also has to show its relevance to the grounds of appeal sought to be urged. Lastly, the appellant also has to establish that the AO did not afford him sufficient opportunity in regard thereto.

The material on record is abundantly clear that no attempt was made by the appellant to produce the evidence before the AO. As no reasons have been provided by the appellant for not producing the evidence before the lower authorities, the application for admission of additional evidence deserves to be rejected. If 'admitted, the provisions of Rule 46A have to be followed. As noted above, the facts of this case fail to fulfill the requirements of Rule 46A.

With regard to merits of the additional evidence, the appellant has only filed a statement of facts no supporting evidence has been placed on record. It is prayed that the claims of the appellant case need to be thoroughly investigated. If additional evidence is admitted in the matter, the case may be restored back to the AO for passing assessment afresh.

It is also contended that if the appellant was in possession of all the requisite documents pertaining to his assessment for Asstt. Year '2006-07, then why did not produce the same during assessment proceedings before the AO, despite being given innumerable opportunities. This resulted in ex parte order u/s 144 of the IT Act. In the grounds of appeal submitted before you, he has submitted that he was not provided enough opportunity for completing the assessment proceedings but after going through the above said facts, it is apparent that he intentionally ignored the scrutiny assessment proceedings. In light of the objections raised and observations made in and case law cited above, you are requested to reject the application of the appellant for production of any additional evidence.”

5 I.T.A.No.1046/Del/2016 2.3 On perusal of the remand report, Ld. CIT(A) decided as under: “The appellant had filed justification for the expenses incurred under the head hire charges. The necessary details were produced along with books of accounts during assessment proceedings. The AO has disallowed a sum of Rs.31, 11,790/- on doubts and suspicion. He has not confronted the assessee with any objection with respect to the Justification or the audited books of accounts. In fact, books of accounts that includes cash book, ledger, vouchers, etc., have been accepted by the Assessing Officer. Moreover, when the matter was referred to the AO for remand report, the AO has not verified the details and confirmations by calling the appellant. In the interest of Justice, It was incumbent upon AO to have verified the details of the appellant and commented on its merit. He remained silent on this issue in his remand report.

Even in the preceding assessment year, similar addition has been deleted by my predecessor In facts and circumstances of the case, I infer that the appellant's claim for hire charges are to be allowed. This ground of appeal is allowed.”

3. Aggrieved by the order of Ld. CIT(A), Revenue filed appeal before the Tribunal. This tribunal vide order dated 17th October, 2014, dismissed the revenue’s appeal. The Revenue preferred miscellaneous application (M.A.) before this Tribunal wherein it relied upon the order of this Tribunal for the Assessment Year 2003-04 which was set aside to the file of A.O. for re-examination of the issue of ‘hire charges’ and to pass fresh assessment order after affording reasonable opportunity to the assessee. The 6 I.T.A.No.1046/Del/2016 appeal was accordingly restored back to the Assessing Officer.

4. We have perused the assessment record, orders passed by the authorities below and the order passed by coordinate bench of this Tribunal for the year under consideration. It is observed from the remand report reproduced by Ld. CIT(A) in his order that the Assessing Officer has not been able to verify the expenses as the assessee had not produced any documents like bills / vouchers. As this Tribunal for the Assessment Year 2003- 04 has set aside the issue relating to the ‘hire charges’ to the Ld. Assessing Officer for verification. Following the rule of consistency, we direct the A.O. to verify the issue afresh by giving proper opportunity of being head to the assessee. It is also directed that he assessee may submit all necessary details that will be required by the Assessing Officer for due and proper verification of the expenses claimed. Ld. Assessing Officer may consider the claim n the basis of documents filed by the assessee.