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Shri Satish Sehrawat 1, Prakash House Opp State Bank of Patiala Main Road, Mahipalpur New Delhi 110 037.Vs. The D.C.I.T Circle 24(1) New Delhi
November, 21st 2015
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
                                  2


                              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).
                                  3


     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 " .
                                4


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.
                              5


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
                                6





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
                                   7


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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