Order passed on non submission of document for reason beyond of control can be restored on submission

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH `F’: NEW DELHI

BEFORE SHRI C.L.SETHI, JUDICIAL MEMBER AND

SHRI B.C. MEENA, ACCOUNTANT MEMBER

I.T. A. No.3184/Del/2010

Assessment Year: 2007-08

M/s. R.L. Allied Industries,

50-F, Kohlapur Road,

Kamla Nagar, New Delhi.

PAN: AAAFR5507P

(Appellant)

Vs.

Income-tax Officer,

Ward 20(1), New Delhi.

 (Respondent)

Appellant by: Shri K.R. Manjani, Advocate.

Respondent by: Smt. Pratima Kaushik, Sr. DR.

O R D E R

PER C.L. SETHI, JUDICIAL MEMBER:

The assessee is in appeal against the order dated 09.06.2010 passed by the learned Commissioner of Income-tax (Appeals) pertaining to the Assessment Year 2007-08.

2. In this appeal, the assessee has disputed the following additions confirmed by the learned CIT(A):-

a) Trading addition of Rs.2,03,938/-

b) Creditors Rs.32,38,736/- (Even though it was shown that proper opportunity was not given, confirmations are available and addition cannot be made for balances which were outstanding for more than last two years).

c) Rs.23,513/- in respect of depreciation on additional machinery, even though it is held by CIT(A) that machinery is purchased.

d) Rs.1,62,513/- in respect of brokerage.

e) 50% of Rs.17,851/- in respect of electricity expense.

f) 50% of Rs.1,00,000/- in respect of machinery repairs.

3. The assessee has also contested that the AO was unjustified in completing the assessment under sec. 144 of the Act.

4. We have heard both the parties and carefully gone through the orders of the authorities below. On perusal of assessment order, we find that the assessment has been completed under sec. 143(3) of the Act. Notices under sec. 143(2) and/or under sec. 142(1) were issued and served upon the assessee from time to time. The AO made certain additions for want of details and evidences required to be filed by the assessee. The AO afforded several opportunities to the assessee during the assessment proceedings. The AO even asked the Managing Partner to appear before him for his statement. However, the partner did not appear on the ground of illness. These facts were highlighted by the learned CIT(A) in his order. In the light of the categorical observations made by the AO as well as by the learned CIT(A), we are of the considered view that the AO has not committed any illegality in completing the assessment under sec. 143(3) of the Act, in the course of which, he made certain additions in the absence of evidence and in the light of the material available on record. Therefore, this ground raised by the assessee is totally without any basis and merit. It is thus rejected.

5. In the course of hearing of this appeal, the learned counsel for the assessee pointed out that various documents and papers available with the assessee could not be produced before the AO for the reason beyond the control of the assessee inasmuch as the various confirmations from the various parties could not be obtained by the time the assessment was completed. He further submitted that out of 17 trade creditors for Rs.45,51,754/-, confirmations for Rs.24,30,268/- were available and filed before the CIT(A). He further pointed out that it was stated before the learned CIT(A) that confirmations of Rs.3,37,064/- were in process to be received within two days, and the remaining parties were outside Delhi and their balances were being brought down from earlier years. He further stated that a duplicate purchase voucher with regard to the purchase of machinery was also filed before the learned CIT(A). He further submitted that the gross profit rate could be applied having regard to the past record of the assessee. In the course of hearing of this appeal, the assessee has submitted further papers before us in the form of confirmations from M/s. O.S. Timber Traders and Surendra Enterprises, which have in the mean time collected by the assessee. The assessee has also filed before us Paper Book containing various details. In the order of the learned CIT(A) the submission of the assessee has been reproduced. From the submission filed before the CIT(A) it is clear that confirmations for Rs.24,30,268/- were filed and a duplicate purchase voucher of machinery from Rajendra Plywood Industries (P) Ltd. was also filed. But the learned CIT(A) has nowhere stated as to why these additional evidences filed before him, were not considered. The learned CIT(A) has confirmed the aforesaid additions made by the Assessing Officer for the reason that no confirmation and other details were filed by the assessee. However, with regard to the addition of Rs.71,851/- on account of non-verification of electricity and power expenses, and addition of Rs.1,00,000/- on account of non-furnishing of machinery repair expenses, the learned CIT(A) reduced the disallowance to 50% by observing that disallowance on estimated basis was on higher side. He further stated that the addition on account of machinery was not called for as the same was not debited to the profit & loss account. However, he disallowed the depreciation thereupon amounting to Rs.23,513/- Now, since the assessee has produced certain evidences before us and same were also produced before the learned CIT(A) and since these documents could not be produced before the AO because they were not available with the assessee at that point of time, we are of the considered opinion that the matter involving in this appeal be restored back to the file of the AO for his fresh adjudication after examining all the details and evidences that may be filed by the assessee before him. We do hereby direct the AO to produce and furnish all the documents and papers that have been filed before us, before the AO for his examination and verification. The assessee shall also produce further evidences before the AO to support its stand. The AO shall examine and verify those details that may be filed by the assessee before him and then decide the issues as per law after providing reasonable opportunity of being heard to the assessee. The assessee is hereby directed to cooperate with the AO in finalizing the assessment as per law, in the absence of which, the AO shall be at liberty to decide the matter as per materials available on record and as per law. We order accordingly.

6. In the result, the appeal filed by the assessee is treated to be partly allowed for a statistical purpose.

7. This decision is pronounced in the Open Court on 23rd September, 2011.

Sd/- Sd/-

(B.C. MEENA) (C.L. SETHI)

ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 23rd September, 2011.

Copy of the order forwarded to:-

1. Appellant

2. Respondent

3. CIT

4. CIT(A)

5. DR

By Order

*mg Deputy Registrar, ITAT.