Income Tax Appellate Tribunal - Delhi
Rajendra Engineering Udyog Pvt. Ltd., ... vs Ito, New Delhi on 3 July, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'F' NEW DELHI
BEFORE SHRI S. V. MEHROTRA, VICE PRESIDENT
AND
SMT SUCHITRA KAMBLE, JUDICIAL MEMBER
I.T.A .No.-268/Del/2017 (A.Y 2010-11)
Rajendra Engineering Udyog Pvt. vs ITO
Ltd. Ward 15(3),
B-308, Okhla Industrial Area, New Delhi
Phase-1
New Delhi (RESPONDENT)
AACCR3357G
(APPELLANT)
Appellant by Sh. Ved Jain, Adv & Sh.
Ashish Goel, CA
Respondent by Sh. F. R. Meena, Sr. DR
Date of Hearing 08.06.2017
Date of Pronouncement 03.07.2017
ORDER
PER SUCHITRA KAMBLE, JM
This appeal is filed by the Assessee against the order dated 8/9/2016 passed by the CIT(A) 11, New Delhi for Assessment Year 2010-11.
2. The grounds of appeal are as under:-
1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)J is bad both in the eye of law and on facts.
2(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the order passed by the AO under Section 144 of the Act despite the fact that non-appearance before the AO was on account of reasons beyond the control of the assessee.
(ii) That the learned CIT(A) has erred both on facts and in law in confirming the additions made by the AO in order under Section 144 of the Act, despite the fact that all explanation and evidences were duly filed before the AO.
3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming all the additions made by the AO without giving any finding on the merits of the additions so made.
4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of AO in rejecting the books of accounts despite the same having been properly kept by the assessee.
5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 1,25,81,426/- being 10% of gross sales made by the AO without there being any basis for the same.
6. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs.56,32,180/- being 10% of the job work charges without there being any basis for the same.
7.(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs.27,50,000/- account of share capital, treating the same as unexplained..
(ii) That the addition has been made by the AO despite the assessee filing all explanation and evidences to prove the same.
8(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs.2,69,825/- account of unsecured loans.
(ii) That the addition has been made by the AO despite the assessee filing all explanation and evidences to prove the same.
9(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs.85,80,320/- account of sundry creditors.
(ii) That the addition has been made by the AO despite the assessee filing all explanation and evidences to prove the same.
(iii) That the addition has been confirmed ignoring the fact that sundry creditors arising out of normal business purchases, 100% addition treating the same as bogus is not called for.
10(i). On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs.1,61,22,818/- being investment in fixed assets.
(ii) That the addition has been made by the AO despite the assessee filing all explanation and evidences to prove the same."
3. The return of income of Rs.11,33,490/- was filed by the assessee company on 15/10/2010 while e-filing and the same was processed u/s 143(1) of the Income-tax Act. The case was selected for scrutiny notice u/s 143(2) of the Act was issued on 25/8/2011 and was duly served on the assessee company. Subsequently, questionnaire dated 27/7/2012 along with notice u/s 142(1) was issued to the assessee company. Initially, on 25/10/2012 the assessee's representative attended the assessment proceedings. However, thereafter non attended on behalf of the assessee company. Thereafter, questionnaire and notice u/s 142(1) where again successfully issued on 12/12/2012 and 31/12/2012 and duly served on the assessee company. The assessment records were later to transfer to the present Assessing Officer on 30/1/2013 to fresh notice u/s 143(2) was issued on 31/1/2013. However, non compliance was made by the Assessing Company. Subsequently, while show cause notice dated 1/2/2013 and notice u/s 142(1). The assessee company was informed that in the event of non compliance it would be presumed that they had have no explanation to offer assessment order u/s 144 was finalized on merit. While considering the documentary evidence the Assessing Officer has assessed the income as follows:-
Net Profit: (Rs.) (Rs) (a) 10% of the assessee gross sales of Rs. 12,58,14,262/- 1,25,81,426/- (b) 10% of the job work charges rec3eived of Rs.5,63,21,797/- 56,32,180/- (c) 100% of unexplained share capital received 27,50,000/- (d) 100% of unexplained unsecured loan received 2,69,825/- (e) 100% of bogus sundry creditors 85,80,320/- (f) 100% of unexplained investments in fixed assets. 1,61,22,818/- Total Income Assessed at Rs.4,59,36,569/-
4. Aggrieved by the same, the assessee filed appeal before the CIT(A). The CIT(A) held that the A.O had no other alternative but determine the total income of the appellant by restoring to the method of estimation only. Therefore, the addition made in the assessment order was upheld by the CIT(A).
5. The Ld. AR submits that while the Assessing Officer has not taken into cognizance that estimation towards 100% of unexplained investment in fixed assets cannot be taken as the same is not as per the law. Therefore, the Ld. AR requested that one more opportunity to be given to the assessee and all the facts related to the assessed income may be verified by the Assessing Officer. The Ld. AR further submitted that the assessed income of the assessee at Rs.4,59,36,596/- against the return income of Rs.11,33,490/- without appreciating the material already available in record. The addition u/s 69 of the Act of Rs.1,61,22,818/- on account of unexplained investment in fixed assets by the assessee without appreciating the explanation furnished by the assessee before him is not justified under the law and the same may be deleted.
6. The Ld. DR submitted that the Assessing Officer has categorically given reasons while invoking Section 144 of the Act. The CIT(A) also has taken cognizance of the relevant materials. Hence, the Ld. DR submitted that the appeal of the assessee be dismissed.
8. We have heard both the parties and perused all the material available on records. As per Section 69 of the Act, the addition on account of unexplained investment in fixed assets by the assessee cannot be simplicitor be taken as 100% as the same has to be verified. The CIT(A) has not taken the congnizance of this legal position. The same needs to be explained by the assessee to the Assessing Officer. Since the order under Section 144 of the Act was passed, the assessee did not have the opportunity to explain the same. Therefore, it is just and proper to remit this issue to the file of the Assessing Officer and decided afresh. Needless to say that the assessee be given opportunity to be heard.
9. In result, appeal of the assessee is partly allowed for statistical purpose.
Order pronounced in the Open Court on 03rd July, 2017.
Sd/- Sd/-
(S. V. MEHROTRA) (SUCHITRA KAMBLE)
VICE PRESIDENT JUDICIAL MEMBER
Dated: 03/07/2017
R. Naheed *
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
Date
1. Draft dictated on 08/06/2017 PS
2. Draft placed before author PS
08/06/2017
3. Draft proposed & placed before .2017 JM/AM
the second member
4. Draft discussed/approved by JM/AM
Second Member.
5. Approved Draft comes to the 03.06.2017 PS/PS
Sr.PS/PS
6. Kept for pronouncement on PS
7. File sent to the Bench Clerk 03.06.2017 PS
8. Date on which file goes to the AR
9. Date on which file goes to the
Head Clerk.
10. Date of dispatch of Order.