TaxTMI 
TaxTMI 
2018 (12) TMI 1668
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....n-law ab initio. 2) That on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in upholding the validity of the assessment order passed by Id. AO u/s. 143(3) r.w.s. 147 of the Act in the case of the appellant. The appellant prays for quashing the same as wrong and bad-in-law. 3) a) Without prejudice to other grounds of appeal, that on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in upholding the addition of Rs. 13,11,73,783/- on account of unexplained expenditure u/s. 69C of the Act, solely on the basis of information of undervaluation of imports received from the Directorate of Revenue Intelligence (DRI) without any independent or cogent findings of any such undervaluation and differential payments by the appellant. b) Without prejudice to above, that even if the impugned undervaluation of imports is assumed for a moment, then also the source of the differential payments for such under valuation are very much evident from the information of DRI and the assessment order passed by Id. AO i.e.' corresponding differential sales realizations. Thus, when the source of impugned un....
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....le Bench is; a) The additional ground which has been raised before the Hon'ble Bench without adducing any reasons or explaining the causes as to by the aforesaid ground of appeal is being taken for the first time before the Hon'ble bench. b) The assessee has not supported the filing of additional ground of appeal by filing an affidavit under Rule 10 of ITAT Rules and the assessee cannot be allowed to raise such additional ground in mechanical manner. c) In the appeal before the first appellate authority, the appellant had challenged the validity of proceedings u/s. 147/148 of the Act which was duly dealt with and dismissed by the QT(A). The assessee has already challenged the same in the ground of appeal no. 1 & 2 as per appeal memo in form no. 36. d) The additional ground raised by the appellant now, does not arise from the facts as found by the authorities below i.e. AO and the CIT(A). Hence, as per decision of Hon'ble Supreme Court in the case of NTPC vs. CIT 229 ITR 383 (1998), the Hon'ble Bench may not like to use its discretion to may not allow such new ground which does not arise from the facts available with the lower authorities. (e) "He who ....
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....tement of facts indicate voluntary payment of differential duty of Rs. 1 crore on 12-13/08/2010 (consequent to DRI raid) by the appellant. In such a situation coupled with non-compliance to notices issued by AO, the Hon'ble Bench may like to consider the "maxim' and decision of Hon'ble Apex court before admitting the appellant the filing of additional ground. 2. Though the Hon'ble ITAT has the discretion to admit additional grounds, the discretion can be exercised only if the appellant is in a position to show the cause as to what prevented him from taking this additional ground at the time of filing of original appeal memo. In the application submitted by the appellant seeking admission of additional ground, the appellant is not in a position to show the as to what prevented him from taking the additional ground. In the application submitted by the appellant seeking admission of additional grounds, the appellant has squarely failed to show any reason or cause that prevented it to raise the additional grounds. The request for admission of new grounds at the stage of hearing is only due to carelessness and callousness on the part of the assessee. The assesse....
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....its and certificates, not to accept them if it decides not to allow the assessee to raise the new contention - Moti Ram V CIT (1958) 34 ITR 646 (SC) 3.5. The Tribunal cannot be said to exercise its discretion arbitrarily if it refuses to permit a party to raise an entirely new point involving additional evidence or investigation into fresh facts, which points was within the' knowledge of the party and could have been raised at an earlier stage -Manji Dana V. CIT (1998) 229 ITR 383 (SC) 3.6. If, as a result of a judicial decision given while the appeals is pending before the Tribunal, it is found that a non-taxable item is tax or a permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item - National Thermal Power Co. Ltd., V. CIT (1998) 229 ITR 383 (SC). 3.7. A question which ought to have been argued before and decided by the first appellate authority but had not been dealt with by it, could be allowed to be taken up before superior authorities - CIT V. Commonwealth Trust (India) Ltd., (1996) 87 Taxm....
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....tion in favour of the assessee. 3.13. There may be several factors justifying the raising of such a new plea in an appeal and each case has to be considered in its own facts. The AAC must be satisfied that the ground raised was bonafide and that the same could not have been raised earlier for good reasons. 187 ITR 688 (SC) Jute Corporation of India Ltd. 4. In view of the above submissions, it is requested that the matter may be decided on merits keeping in view the various judicial pronouncements which have been enumerated in the written submissions filed by the Department." 5. However it is noticed that the facts of the case of the assessee are different than pretended by the Ld. DR. vide above cited submission. The Ld. DR raised the objection that as per the rule it is required to file an affidavit when some new facts are brought on record however on perusal of the assessment order para-2 it is noticed that the AO has himself noticed the issue of notice under section 142(1), therefore, we observe there was no new facts contemplated by the assessee by way of this application. Therefore, there is no necessity to file affidavit in support of the application. We have al....
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....Trust (India) Ltd. (1996) 87 taxman 393/221 ITR 474 (Ker.) iv) CIT Vs. Begum Noor Banu Alladin, 204 ITR 166, 203 (AP); v) Indian Steel & Wire Products Ltd.CIT, 208 ITR 740 (Cal); vi) CIT Vs. Karamchand Premchand P.Ltd. 74 ITR 254 (Guj) 3. We have duly considered rival submissions and gone through the record carefully. As far as objection of the Revenue regarding non-filing of affidavit is concerned let us take note of Rule 10 of the IT(Appellate Tribunal) Rules, which reads as under: "Where a fact which cannot be borne out by, or is contrary to, the record is alleged, it shall be stated clearly and concisely and supported by a duly sworn affidavit." 4. A perusal of the above rule would indicate that it contemplates for filing of affidavit when some new facts are brought on record. A perusal of the assessment order para-2 would indicate that the AO has himself noticed the issue of notice under section 142(1), therefore, there is no new facts is being contemplated by the assessee by way of this application. There is no necessity to file affidavit in support of the application. It is also pertinent to observe that Hon'ble Supreme Court in the case of NTPC Vs. CIT....
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....sp; (RAJPAL YADAV)" 6. The brief fact of the case is that information was received from Directorate of the Revenue Intelligence Znanl Unit, Ahmedabad that the DRI conducted a search on 10th August, 2010 at the office premises of M/s. R.G. International, Proprietor Shri Govind Gopal, Suart that assesse has imported polyster film by restoring to under valuation of import price. The differential amount over and above the trade value were transmitted by them to the overseas supplier through illegal channels. It was stated that by under valuation of polyster films the assessee has suppressed the value of polyster film to the tune of Rs. 13,11,73,783/- during F.Y. 2010-11. Therefore, a notice u/s 142(1) of the Income Tax Act 1961 was issued to the assessee in this reg....
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....The assessee has also explained that the payment of almost 30 to 40% of sales were received in cash and same were deposited in the bank a/c. He has further stated that gross profits margin on main items like polyster film, PET film etc. was around 0 to 3% and in Nylon-6 Mono filament they have suffered loss .And the gross margin was between 2% to 3%. It is also stated that after deducting various expenses, he has suffered losses in his business. The assessee has also given the working of gross margin of various items traded by them. Thereafter, the assessing officer stated that assessee could not quantify the income andt has not filed his return of income, therefore, he has issued show case dated 18th March, 2014 in order to complete the assessmemt. The contents of show cause notice is reproduced as under:- "As you are aware that your case was re-opened u/s. 147 of the I.T.Act, and notice u/s. 148 of the I.T.Act was issued on , 16.1.2013 and served upon you on 17.1.2013. However, no ROI was filed by you as required u/s. 148 of the I.T.Act. Subsequently, Notice u/s.!42(l) of the I.T.ACT dated 17.7.2013 alongwith detailed questionnaire was issued and served upon you on 25.....
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....o prepare the exact Profit & Loss account. As per the show cause notice issued by the DRI, during 2010-11, you have imported 25,50,687.70 kg of Polyester Films declaring assessable value of Rs. 15,21,65,003/-. However, as per the actual assessable value, the total value of the imported goods is Rs. 28,33,38,783/-. On verification of P&L Account for F.Y.2009-10, it is noticed that you have declared GP^ @7.37%on total sales. Therefore, taking a reasonable view, and considering the GP of 7.37% in the last previous year, the GP in the current year is also taken @7.37%. Accordingly, total sales value of the imported goods will be increased by 7.37% and GP of Rs. 2,08,82,068/- and the total sale value of the goods for the year under consideration will be Rs. 30,42,20,851/-. During the F.Y.2009-10, relevant to A.Y.2010-11, you had declared Net Profit @3.31%. Therefore, you are requested \to show cause as to why the Net Profit for the current year should also not be taken @3.31%. Hence, Net profit for the year under consideration @3.31% on total sales of Rs. 30,42,20,851/- is calculated at Rs. 1,00,69,710/-. Therefore, you are requested to explain as to why the amount of Rs. 1,00,69,....
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....the domestic markets. ' No incriminating materials/documents have been found at my business premises. I have no knowledge of transactions that have been made /carried out by Mr. Jayesh Mamrawala. The entire show cause notice of DRI is based on emails of Jayesh Mamrawala or other incriminating things found from him in which there is no mention of my name. I have already disowned all these incriminating material before DRI /Customs authorities. The Custom Authorities have not yet passed any adjudication order against me. In view of above, I humbly pray to your honour to kindly not to make addition of Rs. 13,11,73,783/- as unexplained expenditure u/s. 69C in my hands. 2) Sir, without prejudice to my above contention, I humbly beg to submit that if, by any stretch of logic or reasoning, a view is taken that above mentioned undervaluation or any part thereof and corresponding differential ' payments were made for or in my name then also the same are not unexplained expenditure as in the SCN of DRI it is clearly mentioned that payments of undervaluation were made by Mr. Jayesh Mamrawala out of corresponding or similar differential sales realizations of those goods. The c....
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....ne. In view of above, I pray your honour to consider my case sympathetically and not to make such a huge addition, which does not represent any income actually earned by me." 7. The assessing officer has not accepted the submission of the assessee stating that assessee has not given any explanation regarding the amount of Rs. 13,11,73,783/- paid to overseas supplier through illegal means. Therefore, the assessing officer presumed that the aforesaid amount paid to the overseas supplier was out of books and it was the unexplained expenditure of the assessee. He observed since the assessee has not given any explanation regarding the source of Rs. 13,11,73,783/- therefore the same was treated as unexplained expenditure and added to the total income of the assessee u/s. 69C of the act. The assessing officer has also stated that the total assessable value of the imported goods was Rs. 28,33,38,783 and after applying the GP rate of F.Y.2009-10 the total sale value of the imported goods will be increased by 7.37% with GP of Rs. 2,08,82,068/ and the total sale value of the goods for the year under consideration will be Rs. 30,42,20,851/. He has stated that during the F.Y.2009-10,rel....
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....the Medapati Venkayamma vs. ITO vide ITA no. 252/Vizag/2013. The relevant part of the decision is reproduced as under:- "5. We have heard the rival submissions and perused the material placed on record. The assessing officer has passed the order in this case u/s 143(3) of I.T. Act. In this case, the assessee did not file the return of income hence the assessing officer issued notice u/s 142(1). There was no return of income filed by the assessee in response to the notice issued u/s 142(1). The assessing officer is empowered to issue notice u/s 142(1) for the purpose of making assessment under I.T. Act and calling for information in the following circumstances. (a) For the purpose of making the assessment, where the return is furnished u/s 139 of I.T. Act. (b) Where the assessee has not furnished return of income directing the assessee to furnish the return of income in respect of his income or the income of any other person in respect of whom he is assessable under this Act. 5.1. From the above, it is clear that the assessing officer is authorized to call for the return of income and also collect information for the purpose of making assessment u/s 142(1). In case,....
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....come or loss to the best of his judgment and determine the sum payable by the assessee 37[* * *] on the basis of such assessment : [Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment : Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub-section (1) of section 142 has been issued prior to the making of an assessment under this section.] [(2) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.] 5.2. In this case, the assessing officer has issued notice u/s 142(1) within time limit allowed for ....
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.... 148 also. Therefore, provisions of section 142(1), 148 are para materia for furnishing the return of income except recording the reasons in the case of section 148. Once the assessing officer has initiated assessment proceedings, the assessing officer cannot resort to reassessment unless the assessment proceedings are concluded. In this case, the assessment proceedings were initiated by issue of notice u/s 142(1) and before concluding the assessment proceedings, the assessing officer has issued notice u/s 148 for reassessment. Since the notice u/s 148 is issued without concluding the assessment proceedings, the notice issued u/s 148 is bad in law and cannot be sustained. The assessing officer is not permitted to carry on the assessment proceedings and reassessment proceedings simultaneously. Hon'ble ITAT Delhi Bench SMC' in the case of Sunil Kumar Jain Vs. ACIT 71 Taxman.com 136 held that two parallel proceedings on similar subject matter cannot be sustained. Proceedings u/s 147 cannot stand during continuation of proceedings u/s 154. Similarly, the Hon'ble Delhi High Court in the case of Mastech Technologies Ltd. Vs. DCIT 84 taxman.com 20 (2017), Delhi, held that wher....
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....return should be in the appropriate form as prescribed in Rule 12 of the Income-tax Rules, 1962. A blank return form is enclosed. It should be duly verified and signed in accordance with the provision on or Section 140 of the said Act, and delivered at my office on or before 9.12.2011. (b) Produce or cause to be produced before me at my office at Room No.209- 2ND Floor, Aayakar Bhavan, Majura Gate, Surat on O9.12.2011 at 11:30 A.M. the accounts and/or documents specified overleaf [as per Annexure enclosed] (c) Furnish in writing and verified in the prescribed manner information called for as per annexure and on the points or matters specified therein before me at my office at Room No.209, Aayakar Bhavan, Majura Gate, Surat on 09.12.2011 at 11:30 A.M. Yours faithfully, Sd/- [R.S.MEENA] Income tax Officer Ward.3 (3), Surat" However, the assessee has not filed the return of income. It is noticed that notice u/s. 142(1) was issued on 01-12-2011 directing the assessee to file the return of income as the assessee has not filed the return of income, therefore, the assessing officer should have completed the assessment u/s. 144 on or before 31-03-2014. It is observed that....