TaxTMI 
TaxTMI 
2018 (2) TMI 1145
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.... nor any application for adjournment was filed before the bench. On perusal of the record in the case of M/s Amrapali Princely Estate Private Limited in ITA No. 4841/Del/2014 and C.O. No. 152/Del/2015, we find that in past on many occasions, the appeal and cross objection have been adjourned either on the request of the assessee or due to absence of the assessee. On 07/09/2017, nobody was present on behalf of the assessee and, thus, case was adjourned to 21/11/2017. Again on 21/11/2017, on the request of the assessee case was adjourned to 22/11/2017. Similarly, in the case of the another assessee M/s Ultra Home Construction Private Limited, also the case was adjourned on many occasions, on the request of the assessee's counsel. On 22/11/2017, on the request of the assessee, the appeals and cross objection were clubbed alongwith appeal and cross objection in the case of M/s Amrapali Princely Estate Pvt. Ltd. and cases were adjourned to 27/11/2017. Again on next date of hearing i.e. 27/11/2017, none was present on behalf of the assessee(s) and thus the fresh notice was issued to the assessee(s) fixing the appeal on 30/01/2018. This notice was duly sent by the registered post at the a....
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....interested in prosecution of the appeal. 3.3 Considering the facts of the case and keeping in view the provisions of Rule 19(2) of the Income-tax (Appellate Tribunal) Rules, 1963 as were considered in the case of CIT vs. Multiplan India Ltd., (38 ITD 320)(Del), the assessee's cross objectins are liable to be dismissed for want of prosecution. 3.4 The Hon'ble Madhya Pradesh High Court in the case of Estate of Late Tukojirao Holkar vs. CWT (223 ITR 480) has held as under: "if the party, at whose instance the reference is made, fails 'to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference. " 3.5 Similarly, Hon'ble Punjab & Haryana High Court in the case of New Diwan Oil Mills vs. CIT (2008) 296 ITR 495) returned the reference unanswered since the assessee remained absent and there was not any assistance from the assessee. 3.6 Their Lordships of Hon'ble Supreme Court in the case of CIT vs. B. Bhattachargee & Another (118 ITR 461 at page 477-478) held that the appeal does not mean, mere filing of the memo of appeal but effectively pursuin....
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....ere issued by the Assessing Officer and assessment proceedings under section 143(3) read with section 153A of the Act were completed on 31/03/2013 after making certain additions to the returned income. Aggrieved with the additions made, the assessee filed appeal before the Ld. CIT-(A), who partly allowed the appeal of the assessee. Aggrieved, the Revenue is in appeal before the Tribunal raising the grounds as reproduced above. 7. The ground No. 1 (wrongly numbered as 8) is general in nature and it is covered by other grounds of the appeal and, therefore, we are not adjudicating upon specifically. 8. The ground No. 2 (wrongly numbered as 9) relates to addition of Rs. 5,08,25,724/- made by the Assessing Officer on account of bogus purchases of raw material. 8.1 The facts qua the addition are that in the search action Ledger accounts of the parties from whom the assessee made purchases of raw material/building construction material like cement, iron and steel etc. worth Rs. 44,87,02,688/- were found, which are inventarised as pages No. 77 to 105 of Annexure A-1 at premises searched by party AB-1. In the statement recorded under section 132(4) of the Act, Sh. Anil Sharma, dire....
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....s are such voluminous and big, which person of status of these parties in no manner can match. d) Money routed through the bank accounts are at first stage transferred to other accounts and at second stage these are withdrawn mostly in cash, which is repatriated to the beneficiary i.e. the assessee company and its associates in cash. e) Moreover, failure on the part of the assessee to produce such parties inspite of the repeated opportunity given to them conclusively prove that no such party actual exist which can stand and own-up the transactions alleged to be routed through their bank accounts and issue of purchase bills. 8.4 The Ld. CIT-(A), however, deleted the addition. The relevant finding of the Ld. CIT-(A) are reproduced as under: "6.2 The facts are that the appellant purchased certain construction materials (steel, hardware, etc.) from these 3 parties. The purchase orders, biils. payment details and other supporting documents relating to these purchases were produced before the AO. The payments for the purchases were made by the appellant from its bank accounts with Bank of Baroda (A/c No.21580200000057) and HDFC Bank (A/c No.01938630000187) a....
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....hough technical rules of evidence are not strictly applicable to tax proceedings (Dhakeswari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 & Dhakeswari Cotton Mills Ltd. v. CIT [1955] 2/7 ITR 126 (SC)}, taxing authorities are not required to put on blinkers while looking at the documents produced before them and they are to look into the surrounding circumstances to find out the reality of the recitals made in those documents {CIT v. Durga Prasad More [1971 ] 82 ITR 540 (SC)}. Therefore, in the present case it was not appropriate to require the appellant to produce the party for physical verification without finding any defect in the documentary evidence produced. From the documents produced, it is seen that the seller were duly registered with the VAT authority having TIN as follows: M/s Balaji Enterprises - 09465706633, M/s Bajranj Trading Co. - 09166106335, M/s SC Trading Co. - 09265706785; and VAT @ 4.5% / 5% as applicable was also deducted on the sales. The appropriate course of action in the circumstances was to inform the V AT authorities about the tax deducted so that the deposit of tax could have been verified by them. The AO of the selling parties could have also been inform....
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..../- which included the unexplained purchases in dispute also. Nothing has been brought on record by the assessee that Sh. Anil Sharma retracted at any time from the statement given by him under section 132(4) of the Act. The summons issued to concerned suppliers also remain unserved and the assessee also failed to produce those parties before the Assessing Officer. 8.6.1 The Ld. CIT-(A) pointed out following defects and observed that the Assessing Officer did not carry out enquiries which should have been carried out in the case: i. It was not appropriate to enforce to produce the parties for physical verification without finding any defect in the documentary evidence produced. ii. The AO should have informed the VAT authorities about the tax deducted and verified the VAT so deposited. iii. The AO should have informed the Assessing Officer of the supplier parties for taking any action in their hands if so required. iv. The AO should have investigated the bank accounts of the supplier parties. 8.6.2 We find that Ld. CIT-(A) neither called for a remand report from the Assessing Officer nor carried out enquiries himself. In the case of Jansampa....
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....prone to abuse." 8.6.3 The Hon'ble High Court further in Paras - 38 and 39, observed that various provisions under which the Ld. CIT-(A) could have carried out enquiries. The relevant paragraphs are reproduced as under: "38. The provision of appeal, before the CIT (Appeals) and then before the ITAT, is made more as a check on the abuse of power and authority by the AO. Whilst it is true that it is the obligation of the AO to conduct proper scrutiny of the material, given the fact that the two appellate authorities above are also forums for fact-finding, in the event of AO failing to discharge his functions properly, the obligation to conduct proper inquiry on facts would naturally shift to the door of the said appellate authority. For such purposes, we only need to point out one step in the procedure in appeal as prescribed in Section 250 of the Income Tax Act wherein, besides it being obligatory for the right of hearing to be afforded not only to the assessee but also the AO, the first appellate authority is given the liberty to make, or cause to be made, "further inquiry", in terms of subsection (4) which reads as under:- "The Commissioner (Appeals) may, befo....
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....Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions made. It was also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the face of the allegations of the Revenue that the account statements reveal a uniform pattern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. This necessitated a detailed scrutiny of the material submitted by the assessee in response to the notice under Section 148 issued by the AO, as also the material submitted at the stage of appeals, if deemed proper by way of making or causing to be made a "further inquiry" in exercise of the power under Section 250(4). This approach not having been adopted, the impugned order of ITAT, and consequently that of CIT (Appeals), cannot be approved or upheld. 43. In the result, the questions of law stand answered in favour of the Revenue though with a direction that the matter of assessment arising out of notice under Section 148 Income Tax Act issued on 18.04.2007 for AY 2004-05 in respect of....
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....o the questions asked by the Assessing Officer. In view of the above facts, the Assessing Officer was of the opinion that the assessee has sold nine flats at the rate of Rs. 75,00,000/- per flat in respect of which payment through cheque were made at the rate of Rs. 25,00,000/- per flat and the balance amount of Rs. 50,00,000/- per flat were received in cash and accordingly, he made the addition of Rs. 4,50,00,000/- 9.2 Before the Ld. CIT-(A), the assessee submitted that it was a case of extension of the original financing agreement of June, 2008 and nine flats were allocated against the assured return and there is no evidence that nine flats/three flats were sold by the assessee and purchased by M/s. MBPL. The Ld. CIT-(A) mentioned that these flats continued to be reflected in the balance sheet of the assessee company. The relevant finding of the Ld. CIT-(A) is reproduced as under: "7.3 I have considered the rival contentions in the matter. It is apparent from the MOU itself that the transaction is a financing transaction. The view of the Assessing Officer arose from the fact that he assumed that since 3 flats were held by MB PI. @ Rs.75,00,000/- per Hat, the actual co....
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....e of each flat being Rs. 75,00,000/- and accordingly, he presumed that balance amount of Rs. 4,50,00,000/- was paid in cash. The Ld. CIT-(A) on the basis of the submission of the assessee allowed relief to the assessee. The Ld. CIT-(A) did not verify the agreements in respect of three flats. He did not verify as why the flat numbers of the three flats claimed to have been booked by M/s MBPL differs from the flat numbers mentioned in MOU. The Ld. CIT-(A) has mentioned that these flats continued to be reflected in the balance sheet of the assessee company, however, he has not mentioned, whether - the evidences relied upon by him in this regard are additional evidence. The Assessing Officer has also not been provided opportunity to rebut those evidences. If according to the Ld. CIT-(A), there was no sale of the flats to M/s MBPL, then he has not brought on record whether the money invested by MBPL was returned back by the assessee alongwith interest. We find that Hon'ble Delhi High Court in the case of Jansampark Advertising and Marketing Private Limited (supra) has observed that in the event of AO failing to discharge its function properly, the obligation to conduct proper Inquiry on....
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....sion of Ld. DR and perused the relevant material on record. We agree with the finding of the Ld. CIT-(A) that scrap is necessarily generated from the construction activity. The assessee has adjusted receipt from the sale of scrap towards the cost of construction. Thus, to that extent, the cost of construction has been reduced. According to us, in the normal presentation of account, any receipt or income is credited to the right hand side of the profit and loss account and any expenditure or loss is debited to the left hand side of the profit and loss account. Another way of presentation could be of adjusting the account of receipt or income against expenditure or vice - versa and debit or credit the excess expenditure or income on respective side. The resultant effect of both the ways of presentation on the profit or loss of the assessee would be same. But, the effect would be different, if either the expenditure or income has not been claimed in the relevant year. In the case, the assessee has shown income from sale of scraps and adjusted the same against the construction expenses, but it is not clear whether the construction expenses have been claimed in the year under considerat....
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....vered by the other grounds of the appeal and, thus, we are not adjudicating upon. 16. The ground No. 2 of the appeal relates to addition of Rs. 60,29,48,809/- made by the Assessing Officer on account of bogus purchases. The addition of bogus purchases consists of two amounts. The amount of Rs. 33,19,51,724/- is in respect of the 17 parties and amount of Rs. 27,09,97,085 is in respect of the one party. The facts and circumstances and the finding of the Ld. CIT-(A) in the year under consideration are identical to the finding of the Ld. CIT-(A) in the immediately preceding years i.e. Assessment year 2010-11, wherein in the identical ground raised, we have restored the issue to the file of the Ld. CIT(A) for deciding afresh. Accordingly, to have a consistent view on the issue in dispute, this ground of appeal is also restored to the file of the Ld. CIT(A), with directions similar to what has been given in ITA No. 417/Del/2014 for assessment year 2010-11. Accordingly, the ground of appeal is allowed for statistical purposes. 17. The ground No. 3 of the appeal relates to addition of Rs. 97,75,832/- made by the AO on account of the scrap sales. The identical addition in assessment y....