Nandita Juneja, Faridabad vs Assessee

Assessee by : Sh. R.S. Singhvi, CA Department by : Sh. K.K. Jaiswal, Sr. DR

Date of Hearing : 20-4-2015 Date of Order : 21-4-2015

ORDER

PER H.S. SIDHU : JM This appeal by the Assessee is directed against the Order of

the Ld. Commissioner of Income Tax (Appeals)-XXV, New Delhi

dated 25.3.2010 pertaining to assessment year 2002-03 on the

following grounds:-

1. That on the facts and circumstances of the case, the Ld.

CIT(A) was not justified in sustaining an addition of Rs.

23,45,411/- on the alleged ground of unverified purchases

and services obtained from M/s Mahesh Export (Rs.

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ITA NO. 4897/Del/2010

19,62,272/-, M/s Looms (Rs. 2,39,292/-) and M/s Rahul

Creation (Rs. 1,43,886/-).

2. That claim of expenses is fully supported from bills and

vouchers and payments were also made through bank.

3. That all the expenses are in respect of execution of export

orders and the claim of purchases and services have direct

nexus with export orders and there is no basis for any

adverse inferences.

4. That the lower authorities have not allowed proper and

reasonable opportunity and whole basis of disallowance is

illegal, arbitrary and misconceived.

5. That orders of lower authority are not justified on facts and

law of the case and the same are bad in law.

2. The facts narrated by the Revenue are not disputed by both

the parties, therefore, need not to narrate for the sake of

convenience.

3. At the time of hearing, Ld. Counsel of the assessee stated that

AO has completed the assessment and made the addition in dispute

without providing sufficient opportunity to the assessee. Similarly,

Ld. CIT(A) has also dismissed the appeal filed by the assessee and

wrongly upheld the assessment order. He stated that assessee has

filed all the necessary evidences before the AO as well as before the

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Ld. CIT(A), but the same has not been properly appreciated by both

the authorities. He requested that in the interest of justice, matter

may be set aside to the file of the AO to decide the issues in dispute

afresh, under the law with the direction to provide sufficient

opportunity to the assessee for substantiating its claim.

4. On the contrary, Ld. DR has not raised any serious objection on

the request of the Ld. Counsel of the assessee.

5. We have heard both the parties and perused the relevant

records available with us, especially the order passed by the

Revenue authorities, we are of the considered view that the

assessee has filed the return of income on 31.10.2002. The AO

selected the case of the assessee and completed the same after

issuing the notice to the assessee. Assessee derived income from

export business and claimed deduction u/s. 80HHC at Rs.

11,73,798/- and interest from bank and NSC. As per record, the AO

issued notices under section 136(6) of the I.T. Act to the following

parties:-

i) M/s Paras Sons, Kalkaji, New Delhi. ii) M/s Mahesh Exports, Salem. iii) M/s RS Hand Embroidery. iv) M/s Loom, Lal Kuan, New Delhi v) M/s Tropical Transport, Bhikaji Cama Place, new Delhi

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vi) M/s Rahul Creations. 5.1 Out of the aforesaid parties, in the case of M/s Mahesh

Exports, M/s RS Hand Embroidery, M/s Rahul Creations and M/s

Loom, compliance was not made. These facts were confronted to

the assessee's counsel and was asked to produce these parties for

proving the genuineness of the transactions made to them, but the

assessee failed to produce these parties before the AO. Even after,

requesting the assessee's counsel by the AO, assessee nor his

authorised representative appeared before the AO for substantiating

its claim. But in the last, the AO completed the assessment on the

basis of material available on record i.e. copy of bank account,

invoice etc. which are not verifiable and the AO made the addition

u/s 69 of the I.T. Act as unexplained expenditure in the case of M/s

Mahesh Exports Rs. 1962272/-; M/s Looms Rs. 239293/- and M/s

Rahul Creations Rs. 143886/- and M/s RS Hand Embroidery Rs.

136840/- totalling to Rs. 24,82,251/- and completed the assessment

u/s. 143(3) of the I.T. Act on 29.3.2005. Ld. First Appellate Authority

has also upheld the order of the AO on the basis of the Remand

Report of the AO. But we are of the view that the AO as well as the

Ld. CIT(A) has not given sufficient time to the assessee for producing

the disputed parties on whom accounts the unexplained expenditure

has been added to the income of the assessee u/s. 69 of the I.T.

Act. Therefore, in the interest of justice, we deem it fit to set aside

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the issues in dispute to the file of the AO with the directions to

decide the same afresh under the law, after providing full

opportunity to the assessee. It is made clear that the assessee

should co-operate and made the compliance of all the notices, order

or directions of the AO, if any, for the early completion of the

assessment, because the assessment year in dispute is an old one

i.e. 2002-03.

6. In the result, the Appeal filed by the Assessee stands allowed for statistical purposes.

Order pronounced in the Open Court on 21/4/2015.

Sd/- Sd/-

[S.V. MEHROTRA] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER

Date 21/4/2015 "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

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