ITA NOS. 2204, 2205 & 2206/DEL/2010
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "D" NEW DELHI
BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER
AND
SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
I.T.A. Nos. 2204, 2205 & 2206/Del/2010
A.Yrs. : 2004-05, 2005-06 & 2006-07
DCIT, CC-17, New Delhi, vs. Sh. Lalit Mohan Goel, Prop.,
Room No. 353, ARA Centre, E-2, M/s Roshan Lal Lalit Mohan,
Jhandewala Extn., New Delhi 7, New Gadodia Market,
New Delhi 110 006
(PAN: AAAPM2944H)
(Appellant) (Respondent)
Assessee by : Sh. K. Sampath, Advocate
Department by : Sh. D.K. Mishra, C.I.T.(D.R.)
ORDER
PER SHAMIM YAHYA : AM
These appeals by the Revenue are directed against the orders of
the Ld. Commissioner of Income Tax (A) for the assessment years
2004-05, 2005-06 & 2006-07 respectively.
2. One common issue raised is that Ld. Commissioner of Income Tax
(A) erred in deleting the addition made on account of lower GP rate
made by the Assessing Officer.
3. Since the facts are identical in this cases, we are adjudicating
this issue with reference to the order of the authorities below for the
assessment year 2004-05.
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4. In this case the assessee is proprietor of M/s Roshan Lal Lalit
Mohan. This concern is dealing in various kiryana items including Hing
and Dry Fruits. The AO in the assessment order has rejected the books
of accounts of the assessee observing that the same are not reliable.
She has proceeded to estimate G.P. rate of the assessee after rejecting
the books of accounts. As it is a case of search assessment involving
seven assessment years, she has passed a common order and books
of accounts of the assessee has been rejected for all the years.
However when it came to estimation of G.P., she found 10% G.P. rate
as reasonable for all the years. Thus, in the years where G.P. rate was
more than 10% she has not disturbed the book results but the years
for which G.P. rate was less than 10% she has estimated G.P. at 10%
and for the difference amount addition has been made by her. In this
assessment year the difference of RS.56 lacs between G.P. estimated
at 10% being Rs. 1.53 crores and G.P. declared being RS.97 lacs has
been added. The reasons given by the AO. for rejecting the book
results can be summarized as under:-
(i) The GP rate shown by the assessee fluctuated from 35% to
119% in Hing and 7.4% to 79.85% on Hingra. For example, in AY 2005-
06 the assessee earned a GP of RS. 2,78,39,447/- on sale of Hing of
RS.2,33,04,766/- " which yielded a GP rate of 119.45%.
(ii) The enquiries from the NAFED revealed that assessee had
pledged his stock worth Rs.45.67 crores to obtain a loan of RS.59.72
crores. The stock of Hing in this pledged stock was valued @ 1945/- to
RS.2,245/- per Kg. which is much higher than the value of almost
RS.300/- per Kg. claimed by the assessee.
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(iii) As per 'Moda Bahi' impounded during survey, the sale
transactions of Hing have been shown @ ranging from RS.250/- per Kg.
to RS.1 ,775/- per Kg, in the same month.
(iv) In annexure A seized from the residence of Sh. J.K. Khanna,
a broker of Hing, the assessee shown to have sold Hing at the rate of
RS.900/- per Kg. on 10.02.2003, in any case much above RS.300/- per
Kg. as claimed by the assessee.
(v) In the enquiries made in Rajasthan from the alleged seven
consigners of the assessee, its claim regarding consignment sale was
found to be bogus as the addresses of the five out of seven consignees
were found to be vacant plots and sixth consignee's addresses was a
residence.
4.1. Thus by referring these instances the A.O. basically wanted to
state that the rate of Hing has been shown by the assessee being
highly variable for which there may not be any valid explanation. This
according to A.O. establishes the allegation that this group is engaged
in large scale under invoicing of Hing.
4.2. Accordingly after rejecting the books of accounts, the A.O. has
made addition of G.P. for this Assessment Year 2004-05 of
RS.56,00,000/- as the declared G.P. was RS.97 lacs and 10% estimated
G.P. on total turnover of RS.15.36 crores comes to RS.1.53 crores. No
reason has been given by A.O. for adopting G.P. rate at 10% except by
saying that 10% is average GP. Rate.
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5. Upon assessee's appeal Ld. Commissioner of Income Tax (A)
considered the submissions of the assessee elaborately. Ld.
Commissioner of Income Tax (A) also obtained Remand Report from
the Assessing Officer and also considered the Rejoinder filed by the
assessee. Ld. Commissioner of Income Tax (A) held as under:-
"The A.O. has rejected the books of accounts and for this purpose
she has referred some seized materials based on which in my
opinion the only conclusion can be drawn that the rate of Hing
shown by the appellant varies substantially from RS.250/- per kg
to RS.2,245/per kg. These papers do not speak anything else. On
the other hand the appellant is having an explanation of variation
of rate of Hing as per which the Hing is sold/purchased in
different purities and the range of purity itself varies
substantially. The appellant is also maintaining quantitative detail
also as how the purity of Hing varies by mixing other ingredients
like maida, oil etc. Thus, the reasons for variation of rate of Hing
are quite justified. The A.O. has also mentioned that some of the
consignment agents have either not been found on the given
addresses or they have not shown these sales in their sales tax
return. In some cases as mentioned by A.O. even addresses
provided are actually empty plot. In one case namely M/s Gopal
International, the business premises was found to be the
residence from where no existence of said concern could be
noticed. However in the case of M/s Shanti Lal and Company as
mentioned by A.O. it is genuine concern. The A.O. by citing these
instances concluded that allegation of under invoicing against the
appellant is established. However, in my opinion, the instances
cited by her are not sufficient to come to conclusion that there is
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defect in books of accounts as variation in the rate of Hing and
non traceability of some of consignment agents do not amount to
defect in the books of accounts. The non availability of some of
the consignment agents does not affect the book results as it is
not the case of purchases. If sellers are not traceable then it is a
strong case of rejection of books of accounts but not in the case
of consignment agents for sales as in any case to that extent
sales has already been recorded by the appellant irrespective of
fact whether the consignment agents in turn have shown the
same or not in their Sales tax returns. Further if A.O. was satisfied
that the appellant is engaged in the under invoicing then she
could have estimated the total sales but she has not disturbed
the sales while rejecting the books of accounts. Since she has not
estimated the total sales, it means that she is satisfied with the
figure of total sales. Only consequential action done by her is to
estimate the G.P. by adopting 10% G.P. rate on average basis.
The very fact that she is adopting G.P. rate being average of
declared G.P. rates of all the years itself shows that the G.P. rate
shown by the appellant in respective years is correct. The mere
fact that the assessee has shown 10% in some year shows that
appellant's G.P. declared is correct as in the years in which she
has pointed out some discrepancy based on seized material als6,
the G.P. rate declared is more than 10%. There is no basis given
by AO. as whatsoever and as to how and why the G.P. rate should
be fixed for 10% for all the years continuously. It is worth
mentioning that AO. has referred the defects for all the years in
the books and accepted the book results in some of the years
where GP. rate is more than 10% though according to her there
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ITA NOS. 2204, 2205 & 2206/DEL/2010
may be defect in the books for those years also. This itself is a
contradictory action on her part. I also agree with the submission
of the appellant that the instances pointed out by her is related to
Hing and Hingra which constituted not more than 25% of total
turnover by the appellant in any of the years and G.P. rate
declared in all the years for the Hing is more than 10%. Thus, I
find from all the angles that there is no case of firstly rejection of
books of accounts(book results) and secondly estimating the G.P.
rate at 10% for all the years and thereby making the addition
wherever G.P. rate declared is less than 10% and accepting the
result whereas G.P. rate is more than 10%. Based on the above
discussion, the action of AO. in rejecting the books of accounts
and making the addition for lower G.P. rate is not approved. The
appellant gets a relief of RS.1,67,00,000/- during this year."
6. Against the above order the Revenue is in appeal before us.
7. We have heard the rival contentions in light of the materials
produced and precedents relied upon. We find that Assessing Officer
in this case has rejected the books of accounts. For this purpose the
Assessing Officer has referred some seized materials. These materials
show that the rate of Hing shown by the assessee varies substantially
from Rs. 250/- per kg to Rs. 2,245/per kg. Assessee in this regard has
given explanation that Hing is sold /purchased in different purities and
the range of purity itself varies substantially. The assessee has
maintained quantitative detail also as how the purity of Hing varies by
mixing other ingredients like maida, oil etc. Thus, we agree with the
Ld. Commissioner of Income Tax (A) that the reasons for variation of
rate of Hing are justified.
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7.1 We further note that Assessing Officer has observed that some of
the consignment agents have either not been found on the given
addresses or they have not shown these sales in their sales tax return.
We further note that Assessing Officer by citing some instances in this
regard concluded that allegation of under invoicing against the
assessee is established. The Ld. Commissioner of Income Tax (A) in
this regard has observed that the instances cited are not sufficient to
come to conclusion that there is defect in books of accounts as
variation in the rate of Hing and non traceability of some of
consignment agents do not amount to defect in the books of accounts.
7.2 We further note that the non availability of some of the
consignment agents does not affect the book results as it is not the
case of purchases. Moreover, the sales pertaining to consignment sale
has already been recorded by the assessee irrespective of fact whether
the consignment agents in turn have shown the same or not in their
Sales tax returns. Furthermore, we note that Assessing Officer has
not estimated the sales in this regard, if Assessing Officer is not
satisfied that the assessee is engaged in the under invoicing then she
could have estimated the total sales but she has not disturbed the
sales while rejecting the books of accounts. Hence, we agree with the
Ld. Commissioner of Income Tax (A)'s inference that since the
Assessing Officer has not estimated the total sales, it means that she
is satisfied with the figure of total sales.
7.3 We further note that Assessing Officer has estimated the GP by
adopting 10% G.P. rate on average basis. The very fact that she is
adopting G.P. rate being average of declared G.P. rates of all the years
itself shows that the G.P. rate shown by the assessee in respective
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ITA NOS. 2204, 2205 & 2206/DEL/2010
years is correct. There is no basis given by the Assessing Officer as to
how and why the G.P. rate should be fixed for 10% for all the years
continuously. Assessing Officer has referred the defects for all the
years in the books and accepted the book results in some of the years
where GP rate is more than 10%. This is a contradictory action on the
part of the Assessing Officer. Thus, we agree with the Ld.
Commissioner of Income Tax (A) that there is no case of firstly
rejection of books of accounts and secondly estimating the G.P. rate at
10% for all the years and thereby making the addition wherever G.P.
rate declared is less than 10% and accepting the result whereas G.P.
rate is more than 10%. Thus, in the background of the aforesaid
discussion, we agree with the Ld. Commissioner of Income Tax (A) that
the action of the Assessing Officer in rejecting the books of accounts
and making the addition for lower GP rate cannot be sustained.
7.4 The following case laws which were referred by the Ld.
Departmental Representative are not applicable on the facts of this
case.
- In 381 ITR 341 P. Abdul Khader vs. C.I.T. (Mad.) the matter
pertained to rejection of accounts due to unexplained cash
credit.
- In 72 ITR 194 C.I.T. vs. Devi Prasad Vishwanath Prasad (SC),
the matter related to estimation of income of unexplained
cash credit.
- In 288 ITR 10 Kachawala Gems vs. JCIT (SC), the matter
pertained to the rejection of the books of account by
pointing out several defects including doubt regarding
genuineness of certain purchases and low GP rate.
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- 2 SOT 81 ITO vs. Allied Metal Engineering. In this case the
Tribunal dealt with the matter that assessee has sold to the
sister concern at a very low price and the sister concern
made sale to 3rd party at a much higher profit. This was
held to be a clear case of diversion of profit by colourable
device warranting the addition.
- 254 CTR 392 C.I.T. vs. Chetan Das Laxman Das (Del.). In
this case it was held that there is no condition in section
153A that addition should strictly be made on the basis of
evidence found in the course of search or other post-search
material or information available with the Assessing Officer
which can be related to evidence found. It was further held
that seized material can also be relied upon to draw
inference that there can be similar transactions throughout
the period of six years covered by section 153A.
- 1 DTL Online 2011 (P&H). In this case revenue authorities
have rejected the books of accounts while determining the
income from business. They could also rely upon the same
books of accounts for the purpose of making the addition
towards cash credit.
7.5 Thus, from the above discussion, we find that the ratio from the
said expositions do not apply on the facts of the present case. In the
background of the aforesaid discussions, we uphold the order of the
Ld. Commissioner of Income Tax (A).
8. Another issue raised in I.T.A. No. 2206/Del/2010 is that the Ld.
Commissioner of Income Tax (A) erred in deleting the addition of Rs.
1.92 crores made on account of suppressed sales.
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9. On this issue Assessing Officer observed that assessee has
pledged his stock with NAFED and obtained loans. An enquiry made
from NAFED revealed that loan was obtained for Rs. 59.72 crores. The
assessee, as per NAFED had declared the value of stock pledged at `
45.67 crores. Upon the recovery proceedings by the NAFED, as per
the order of the Hon'ble Delhi High Court, NAFED could realize only a
sum of ` 11.66 crores by selling the stock pledged. Assessing Officer
further observed that assessee has credited its profit and loss account
for the year ending 31.3.2006 by a sum of Rs. 26.49 crores as stock
transferred to NAFED. From this the Assessing Officer inferred that
although the assessee has claimed the value of stock for Rs. 45.67
crores, the value of stock was much lower. Assessing Officer opined
that since the assessee has credited its account with a sum of Rs.
26.49 crores, the balance amount of Rs. 19.18 crores was nothing but
sale made by the assessee out of books. Assessing Officer further
opined that for this sale outside the books, the assessee would have
earned a GP rate of 10% on this undeclared sales which amounted to
Rs. 1.92 crores for which addition was made for the A.Y. 2006-07.
10. Upon assessee's appeal Ld. Commissioner of Income Tax (A) held
as under:-
"The Assessing Officer in the assessment order has mentioned
that the assessee has declared the value of stock pledged with
NAFED at Rs.45.67 crores whereas as on 31/3/2006 the closing
stock shown is only RS.26.49 crores. There is no dispute on these
two figures. The appellant agrees with the value of stock pledged
to NAFED being Rs.45.67 crores. To that extent also there is no
dispute. But it is the submission of the appellant that total stock
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ITA NOS. 2204, 2205 & 2206/DEL/2010
pledged over a period upto 31/12/2005 being Rs.45.67 crores is
not the stock available with various godowns of NAFED as on
31/3/2006 as there are releases also and these releases can be
done only after due approval from NAFED. Thus, the stock lying
with NAFED godowns is a dynamic one and it is not correct to
presume that the stock hypothecated and deposited with NAFED
will continue to remain the same. The letter from NAFED as
referred by AO. in the remand report does not say that on
31/3/2006, the stock of appellant, lying with it is worth Rs.45.67
crores. It only says that the appellant (M/s RLLM) has deposited
warehouse receipts for the total declared value of Rs.45.67
crores. Thus there is no contradiction in the claim of appellant
with reference to this letter also as already mentioned that
appellant is also saying that he has deposited stock worth
Rs.45.67 crores in total. According to appellant the stock is
deposited with NAFED, hypothecated to it and on payment of
loan the stock is released and sold. The appellant has filed
reconciliation which is at page 476 of paper book as per which
total stock deposited with Jaswant Cold Storage and Ice Factory,
Sumanglam Cold Storage Pvt.Ltd, Janak Cold Storage,
Indraprastha Ice and Cold Storage Ltd and Lawrence Cold Storage
was Rs.456,686,914.00. This represents the total stock deposited
with these cold storages. However, out of the same, stock of
Rs.19,84,11,664/- has been released also after due approval from
NAFED. There is a minor difference in the valuation of
Rs.62,54,082/-. This difference is on account of cartage etc to be
considered for the valuation of closing stock for accounting
purposes though in the statement given to cold storage/god owns
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ITA NOS. 2204, 2205 & 2206/DEL/2010
generally it is shown at cost price. Thus, though as per this
reconciliation the stock is only of Rs.25,86,95,250/-, due to this
difference of valuation, the stock as per books is increased by
Rs.62,54,082/- and the same is shown at Rs.26,49,49,332/-. The
appellant has also produced full particulars of stock deposited,
cold storage wise and item-wise which are submitted in paper
book from page 476 to 481. The summary reconciliation
statement being page No.476 of the paper book is enclosed in
this order forming part of the order for the better appreciation of
the facts. Each release is supported by the letter issued by
NAFED to the respective cold storage. Only after such letter the
stock is released. I have personally verified the letters issued
from NAFED to link with the reconciliation statement to verify the
claim of the appellant that there is regular release also from this
cold storage. For ready reference purposes one letter dated
24/8/2004 issued from NAFED is enclosed herewith and forming
part of this order which clearly supports the claim of the
appellant that there is a regular release of the goods also from
the hypothecated stocks kept in these cold storages. As already
mentioned, the A.O. has not commented adversely upon the
reconciliation statement and also about the claim of appellant
that there is regular release of stock also from these cold
storages. Thus, appellant's contention is accepted that action of
A.O. in comparing the total stock deposited and hypothecated to
NAFED with the closing stock of appellant lying with NAFED as
appearing in the books of accounts as on 31/3/2006 is not
correct.
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ITA NOS. 2204, 2205 & 2206/DEL/2010
Based on the above discussion, it is clear that A.O. for making the
addition has not appreciated the issue properly and compared
two unequal figures to arrive at conclusion that the appellant has
sold goods worth Rs.19.18 crores unaccountedly. Rather the
explanation given by the appellant and reconciliation statement
filed which is fully verifiable, based on the documents filed by it
upon which AO. has also not commented adversely during
remand proceedings, it is very clear that the appellant has not
only shown exactly the same stock lying in the various godowns
of NAFED and in its profit and loss account as on 31/3/2006 but
the value is increased by almost RS.60 lacs which is due to
valuation of stock by considering the cartage etc. It is, therefore,
held that the conclusion drawn by AO. is not correct. There is no
evidence whatsoever even otherwise with the AO. as a result of
search which may suggest unaccounted sales to the extent as
held by AO. Therefore her action of holding unaccounted sale to
the extent of RS.19.18 crores and thereby estimating the G.P. at
RS.1.92 crores is not upheld. The addition so made is, therefore,
deleted. Relief Rs. 1.92 crores."
11. Against the above order the Revenue is in appeal before us.
12. We have heard the rival contentions in light of the material
produced and precedent relied upon. We find that in this case the Ld.
Commissioner of Income Tax (A) has obtained the remand report from
the Assessing Officer and also considered the rejoinder of the
assessee. Ld. Commissioner of Income Tax (A) observed that as
regards the irregularities of the assessee with NAFED as mentioned by
the Assessing Officer in the Remand Report of not depositing the
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hypothecated stock, selling the same and not depositing the sales
proceeds and also to NAFED, showing inflated value of properties
given for collateral purposes etc., are not having any revenue impact
as it will not affect the computation of total income for the year.
12.1 Ld. Commissioner of Income Tax (A) further observed that no
instance in the remand report has been brought out by the Assessing
Officer to establish that stock hypothecated to NAFED has been sold
and not recorded in the books of accounts.
12.2 Ld. Commissioner of Income Tax (A) further considered the
submissions of the assessee that the total stock pledged over a period
upto 31.12.2005 being Rs. 45.67 crores was not the stock available
with various godowns of NAFED as on 31.3.2006 as there are releases
also and these releases can be done only after due approval from
NAFED. Thus, he observed that the stock lying with NAFED godowns
was a dynamic one and it is not correct to presume that the stock
hypothecated and deposited with NAFED will continue to remain the
same. Ld. Commissioner of Income Tax (A) further observed that
according to the assessee the stock is deposited with NAFED
hypothecated to it and on payment of loan, the stock is realized and
sold.
12.3 The assessee has filed reconciliation, as per which the total stock
deposited at various places was Rs. 456,686,914/-. This represented
the total stock with these cold-storages. However, out of the same
stock of Rs. 19,84,11,664/- has been released also after due approval
from NAFED. Ld. Commissioner of Income Tax (A) observed that there
is minor difference in the valuation of Rs. 62,54,082/-. This difference
was on account of cartage etc. to be considered for the valuation of
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closing stock for accounting purposes though in the statement given to
cold storage / godowns generally it is shown at cost price. Thus,
though as per the reconciliation the stock is only of Rs. 25,86,95,250/-,
due to this difference of valuation, the stock as per books is increased
by Rs. 62,54,082/- and the same was shown at Rs. 26,49,49,332/-.
12.4 Ld. Commissioner of Income Tax (A) also gave a finding that
assessee has given full particulars of stock deposited, cold storage-
wise and item-wise. The necessary reconciliation statement was also
submitted. Furthermore, Ld. Commissioner of Income Tax (A) noted
that each release was supported by the letter issued from NAFED to
link with the reconciliation statement to verify the claim of the
assessee that there is regular release also from this cold storage. Ld.
Commissioner of Income Tax (A) further observed that Assessing
Officer has not commented adversely upon the reconciliation
statement and also about the claim of the assessee that there is
regular release of stock also from this cold-storage. Hence, Ld.
Commissioner of Income Tax (A) accepted the assessee's contention
that action of the Assessing Officer in comparing the total stock
deposited and hypothecated to NAFED with closing stock of assessee
lying with NAFED as appearing in the books of accounts as on
31.3.2006 was not correct. Hence, we are in agreement with the Ld.
Commissioner of Income Tax (A) that Assessing Officer for making the
addition has not appreciated the issue properly and has compared to
unequal figures to arrive at a conclusion that assessee has sold goods
worth of Rs. 19.18 crores unaccountedly.
12.5 Assessee has submitted proper explanation and reconciliation
statement in this regard. Ld. Commissioner of Income Tax (A) has
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given a finding that this reconciliation statements are fully verifiable,
based on the documents filed by the assessee upon which the
Assessing Officer has not commented adversely during remand
proceedings. Thus, Ld. Commissioner of Income Tax (A) observed that
it was very clear that assessee has not only shown exactly the same
stock lying in the various godowns of the NAFED and in its profit and
loss account as on 31.3.2006, but the value was increased by almost
Rs. 60 lacs which was due to valuation of stock by considering the
cartage etc. Thus, we find that there is no evidence whatsoever even
otherwise with the Assessing Officer as a result of search which may
suggest unaccounted sales to the extent as held by the Assessing
Officer. Therefore, we agree with the Ld. Commissioner of Income Tax
(A) that action of holding unaccounted sales to the extent of Rs. 19.18
crores and thereby estimating the GP at Rs. 1.92 crores cannot be
upheld.
12.6 We further find that it is a settled law that detail of stock to the
Bank at a higher figure than that recorded in assessee's books of
accounts alone cannot be a reason for addition in the hands of the
assessee. In this regard, we refer to the decision of the Hon'ble
Punjab and Haryan High Court in the case of C.I.T. vs. Sidhu Rice and
General Mills 281 ITR 428. In this decision, the Hon'ble High Court has
held that Ld. Commissioner of Income Tax (A) and Tribunal have
recorded concurrent finding of fact that Assessing Officer has not
brought any material on record to show that the assessee infact
possessed quantity of stock as reflected in the bank statement as
against the stock depicted in the balance sheet and deleted the
addition, no case is made out for interference with the concurrent
finding of the fact.
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12.7 In the background of the aforesaid discussions and precedent, we
do not find any infirmity in the order of the Ld. Commissioner of
Income Tax (A), hence, we uphold the same.
13. Another issue raised in I.T.A. NO. 2206/Del/2010 is that Ld.
Commissioner of Income Tax (A) erred in deleting the addition of ` 90
lacs made on account of shortage in stock.
14. On this issue Assessing Officer observed that during the course
of search, the statement of assessee was recorded where he admitted
that he is having the stock of about Rs. 41 crores in out of which
stocks of Rs. 30 crores was said to be with Jaswant Cold Storage.
However, the actual stock available as found by the Survey Team was
only Rs. 21 crores. Assessing Officer inferred the shortage in the stock
indicate sales out of books to Rs. 9.00 crores. Therefore, the Assessing
Officer made addition @ 10% GP on this unrecorded sales and arrived
at the addition of Rs. 90 lacs.
15. Upon assessee's appeal, Ld. Commissioner of Income Tax (A)
noted that Assessing Officer has referred that Survey was conducted
at Jaswant Cold Storage and based on that Survey, the stock of
assessee lying at Jaswant Cold Storage was Rs. 21.80 crores. As per
Ld. Commissioner of Income Tax (A) this information was gathered
behind the back of the assessee. He observed that the material
gathered behind the back of the assessee has not been confronted to
the assessee. Thus, Ld. Commissioner of Income Tax (A) held that
there is violation of principles of natural justice in this case. Ld.
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Commissioner of Income Tax (A) concluded that material gathered by
the Revenue has not been confronted to the assessee either during
assessment proceedings or during remand proceedings. Hence, Ld.
Commissioner of Income Tax (A) held that he had no option but to
delete the addition made by the Assessing Officer of Rs. 90 lacs as
principles of natural justice has not been allowed.
16. Against the above order the Revenue is in appeal before us.
17. We have heard the rival contentions in light of the material
produced and precedent relied upon. We find that Ld. Commissioner
of Income Tax (A) has deleted the addition in this regard on the ground
that material has been gathered by the Revenue behind the back of
the assessee and the assessee has not been confronted with the same.
17.1 We find that Hon'ble Apex Court in the case of Kapurchand
Shrimal Vs. CIT, 131 ITR 451, has held Appellate Authority has the
jurisdiction as well as the duty to correct all errors in the proceedings
under appeal and issue the appropriate directions to the Authority
whose order is in appeal before it.
18. From the above, we find that Ld. Commissioner of Income Tax (A)
has erred in deleting the addition in this regard by holding that
material gathered were not confronted to the assessee. In our
considered opinion, interest of justice will be served, if the matter is
18
ITA NOS. 2204, 2205 & 2206/DEL/2010
remitted to the file of the Assessing Officer to consider the issue
afresh, after confronting the material gathered to the assessee. We
direct and hold accordingly.
19. In the result, the Revenue Appeals being I.T.A. Nos.
2204/Del/2010 & 2205/Del/2010 stand dismissed and I.T.A. No.
2206Del/2010 is partly allowed for statistical purposes.
Order pronounced in the Open Court on 18/4/2013.
Sd/- Sd/-
JAIN]
[A.D. JAIN] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date:- 18/4/2013
SRBHATNAGAR
Copy forwarded to: -
1. Appellant 2. Respondent 3. CIT 4. CIT (A)
5. DR, ITAT
TRUE COPY
By Order,
Assistant Registrar,
ITAT, Delhi Benches
19
ITA NOS. 2204, 2205 & 2206/DEL/2010
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