IN THE INCOM E TAX APPELLAT E TRIBUNAL, DELHI BENCHÉS,
DELHI ` G ' BENCH
BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER, AND
SHRI A.T. VARKEY, JUDICIAL MEMBER
ITA No. 389/DEL/2009
[Assessment Year: 2005-06]
Shri Sati sh Sehrawat Vs. The D.C.I.T
1, Prakash House Circle 24(1)
Opp State Bank of Patiala New Delhi
Main Road, Mahipalpur
New Delhi 110 037.
PAN No. ABAPS 4331 H
ITA No. 502/DEL/2011
[Assessment Year: 2005-06]
The D.C.I.T Vs. Shri Sati sh Sehrawat
Circle 24(1) 1, Prakash House
New Delhi Opp State Bank of Patiala
Main Road, Mahipalpur
New Delhi 110 037.
PAN No. ABAPS 4331 H
(Appellant) (Respondent)
Assessee by : Shri Sanjay Gupta
Shri Jatin Gupta, Adv
Department by : Smt Richa Rastogi, Sr. DR
Date of Hearing : 10.11.2015
Date of Pronouncement : 20.11.2015
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ORDER
PER N.K.SAINI, A .M .
The appeal filed by the assessee is directed against the
order dated 2.12.2008 of the ld. CIT(A)-XXIII, New Delhi on
quantum addition while the departmental appeal i s relating
to the deletion of penalty and is directed against the order
dated 8.11.2010 of the ld. CIT(A)-XXIII, New Delhi.
2. In assessee ' s appeal, the following grounds have been
raised:
"1. On facts and circumstances of the case, the ld. CIT(A) has
erred in law in rejecting the claim of the assessee regarding
starting of new business of dealing in precious Gems and manis.
2. On facts and circumstances of the case, the ld. CIT(A) has
erred in law in disallowing the claim of Rs. 1,00,00,000/-
claimed on account of Bad Debts/Loss on a/c of Fraud.
3. On facts and circumstances of the case, the ld. CIT(A) has
erred in law in making the disallowance of Rs. 1,00,000/- on
account of Bad Debts/ Fraud loss, ignoring the fact that out of
this amount Rs. 20 lakhs have been suo moto added by the
assessee to the income u/s 40A(3).
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4. On facts and circumstances of the case, the ld. CIT(A) has
erred in law in making the disallowance of Rs. 7,75,751/- out of
Vehicle Repair expenses on ad hoc basis without having any
material on record.
5. On facts and circumstances of the case, the ld. CIT(A) has
erred in law in upholding the disallowance of Rs. 2,50,000/- out
of Car petrol/depreciation/insurance expenses on ad hoc basis
purely based on presumption and without having any material
on record.
6. On facts and circumstances of the case, the ld. CIT(A) has
erred in law in making the disallowance of Rs. 61,562/- out of
Telephone Expenses on ad hoc basis and without having material
on record.
7. On facts and circumstances of the case, the ld. CIT(A) has
erred in law in upholding the disallowance of Rs. 41000/-
claimed on account of Donations.
3. In the departmental appeal, the solitary ground raised
reads as under:
" On the facts and on the circumstances of the case, the
ld. CIT(A) has erred in law and on the facts in deleting
the penalty of Rs. 37,25,070/- imposed by the AO u/s
271(1)(c) " of the Act " .
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4. From the above grounds, it is gathered that the assessee
has challenged the various additions sustained by the ld .
CIT(A) w hile the department is in appeal against the deletion
of penalty for the A.Y 2005-06 u/s 271(1)(c) of the Income-
tax Act, 1961 [hereinafter referred to as ` the Act ' .
5. In the instant case, the assessee moved an application
for admission of additional evidence in the form of FIR
lodged with the police [Economics Offence Wing] in support
of his one ground of appeal. On the basis of which a charge
sheet w as filed in the court of ACMM, Patiala House Court ,
New Delhi in April 2011. It w as also stated that new
evidence could not be produced before the authorities below
as the same was not available with the assessee at that time.
However, this evidence is very crucial to prove the ground of
appeal of the assessee and could not be produced earlier fo r
the reasons beyond the control of the assessee. A request
has been made for the admission of additional evidence u/r
29 of the Income-tax Rules, 1963.
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6. During the course of hearing, the ld. Counsel for the
assessee reiterated the contents of the application moved for
admission of additional evidence and requested to admit the
same.
7. In her rival submissions, the ld. DR submitted that the
assessee did not furnish the documents before the authoritie s
below and nothing w as stated before the authorities below
relating to the FIR filed against Shri Ram Guru, resident o f
Naintharai, Brindavan and other persons. She also stated
that the new evidence furnished at this stage may not be
admitted.
8. We have considered the rival submissions and perused
the material available on record. In the present case, it i s
noticed that the assessee lodged an FIR against the persons
to whom a sum of Rs. 1 crore was paid, which was claimed as
bad debt/loss, but the claim of the assessee was not
accepted and the addition was made. That addition was
sustained by the ld . C IT(A) alongwith other additions. The
AO levied the penalty u/ s 271(1)(c) of the Act considering
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the additions sustained by the ld. CIT(A) as the concealed
income of the assessee. However, the penalty levied on the
said addition u/s 271(1)(c) of the Act was deleted by the ld .
CIT(A) and the department is in appeal. In the instant case
it is an admitted fact that the assessee could not produce the
copy of charge-sheet fi led in the court of ACMM, Patiala
House Court, New Delhi before the authorities below as the
same was not available when the assessment o rder on
28.12.2008 was passed. However, this evidence is crucial to
decide the controversy relating to bad debt/brought forward
loss and goes to the root of the matter. Therefore, thi s
evidence deserves to be admitted u/r 29 of the Income-tax
Rules, 1963. Since the new evidence was not available before
the authorities below , they have no occasion to examine the
same and make their comments. We, therefore, consider it
appropriate to set aside thi s case back to the file of the AO
to be decided afresh in accordance with law after providing
due and reasonable opportunity of being heard to the
assessee. Since the case related to addition sustained by the
ld. CIT(A) is set aside to the file of the AO, the issue relating
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to the imposition of penalty u/s 271(1)(c) of the Act being
co-related is also set aside to the file of the AO.
9. In the result, the appeal of the assessee as well as of
the department are allowed for statistical purposes.
[Order P ronounced in the Court on .11.2015]
Sd/- Sd/-
(A.T. VARKEY) (N.K.SAINI)
JUDICIAL MEMBER ACCOUNTANT MEMER
Dated : 20 t h November, 2015.
VL/-
Copy to:
1. The Appellant By order
2. The Respondent
3. The CIT
4. The CIT(A) Assistant Registrar
5. The DR
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