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Batra Henley Cables, Grandlay Cinema Complex,New Friends Colony,New Delhi. vs Income Tax Officer, Ward 12(7), New Delhi.
March, 28th 2014
                                      1                         ITA No.123/Del/2013
                                                                  Asstt.Year: 1997-98

                    DELHI BENCH `A' NEW DELHI


                         Assessment Year : 1997-98

Batra Henley Cables,           vs         Income Tax Officer,
Grandlay Cinema Complex,                  Ward 12(7),
New Friends Colony,                       New Delhi.
New Delhi.
(Appellant)                             (Respondent)
                     Appellant by:    Ashwani Kumar
                    Respondent by :   Gagan Sood, DR



      In this appeal, the assessee has raised various issues which can be

summarized as under:-

      i)     Ld. Commissioner of Income Tax(A) was not justified in

             upholding the addition of Rs.99,14,298/- being the difference

             between the profit of Rs.28,998/- as per P&L account and the

             profit of Rs.99,43,296/- on account of alleged undeclared value

             of clearance of wires ad cable deposited in four banks.

      ii)    Ld. Commissioner of Income Tax(A) was not justified in

             upholding the following additions:-
                                      2                      ITA No.123/Del/2013
                                                               Asstt.Year: 1997-98

            a) a sum of Rs.7,632/- i.e. 1/6th out of telephone expenses on

               the ground of absence of bills;

            b) a sum of Rs.6,054/- i.e. 1/6th out of vehicle running and

               maintenance in the absence of vouchers;

            c) a sum of Rs.2,183/- i.e. 1/6th out of rebate and discount;

            (iii) a sum of Rs.2,45,000/- on account of unexplained sources

            in the capital accounts of the partners.

2.    Ld. counsel for the assessee at the outset contends that the books of

accounts of the assessee were impounded by the Central Excise Department.

Against the additions, assessee preferred an appeal before the ITAT in ITA

No. 997/Del/2004 dated 22.2.2008 setting aside the assessment and restoring

the matter back to the file of Assessing Officer with a direction to make a

fresh assessment. The assessee was directed to produce books of accounts

which were lying in the custody of Central Excise Department. During fresh

assessment proceedings also, the assessee could not get release of books of

accounts from Central Excise Department.               In these compelling

circumstances, Assessing Officer was forced to again pass assessment

without the books of accounts. The additions were repeated and confirmed

by the Commissioner of Income Tax(A). Ld. counsel contends that now the

books of accounts have been released by the Central Excise Department and
                                       3                      ITA No.123/Del/2013
                                                                Asstt.Year: 1997-98

assessee is in a position to produce the same before the Assessing Officer.

Since the earlier order of ITAT was to the effect that the assessment should

be framed after verification of the books of accounts, in the interest of

substantial justice, it is pleaded that the impugned assessment being without

verifications of books needs again to be set aside.

3.    Ld. counsel for the assessee gave an undertaking that the assessee will

fully cooperate with the fresh assessment proceedings if they are directed

and produce the relevant information before the Assessing Officer. It is

pleaded that this situation has arisen because of the reasons beyond the

control of the assessee and so far assessee has not been heard based on the

books of accounts. Therefore, it is desirable and in the interest of principles

of natural justice that the present assessment may be set aside and restored

back to reframe the assessment expeditiously. Ld. counsel relied on the

order of Assessing Officer.

4.    We have heard the rival submissions and perused the material

available on record. ITAT vide its order directed the Assessing Officer to

reframe the assessment looking at the crucial reason that the books of

accounts remained in the custody of Central Excise Department. Thus, the

emphasis was on proper assessment based on verification of the books of

accounts which could not be achieved in the second round as the books
                                           4                        ITA No.123/Del/2013
                                                                      Asstt.Year: 1997-98

could not be produced by the Central Excise Department. The fault is not

attributable to the assessee. It has been admitted that books of accounts have

now been released and an undertaking has been given that they will be

produced before the Assessing Officer and full cooperation will be rendered

by the assessee in expeditiously finalizing the assessment. In our considered

view and if the present assessment is set aside in these peculiar

circumstances and restored back to the Assessing Officer to reframe the

same afresh after giving the assessee an adequate opportunity of being heard

in accordance with law.

5.        In the result, the assessee's appeal is allowed for statistical purposes.

          Order pronounced in the open court on 24.3.2014.

    Sd/-                                                       Sd/-
(G.D. AGRAWAL)                                          (R.P. TOLANI)
VICE PRESIDENT                                        JUDICIAL MEMBER

DT. 24th MARCH 2014

Copy forwarded to:-

     1.      Appellant
     2.      Respondent
     3.      CIT(A)
     4.      CIT 5. DR                                 By order

                                                      Asstt. Registrar
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