TMI Blog2018 (5) TMI 1385X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 69C which is unexplained expenditure, however, from the submissions made by assessee before Ld.CIT (A) as well as observations of Ld.CIT (A) himself, it appears that it is an amount received by assessee from M/s Virat Exim, and therefore cannot be considered to be an expenditure in the hands of assessee. Under such circumstances we deem it fit and proper to set aside this issue back to the file of Ld.AO for proper verification as per law. - ITA No.327/Del/2012 And ITA No.590/Del/2012 - - - Dated:- 21-5-2018 - SRI R.K.PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER For The Assessee : None For The Department : Sri Amit Jain, Sr. D.R. ORDER PER BEENA A PILLAI, JUDICIAL MEMBER The present Cross Appeals have been filed by the revenue as well as assessee against order dated 22/11/11 passed by Ld. CIT (A)-31 for assessment year 2008-09 on the following grounds of appeal: ITA No. 327/Del/2012 (assessee s appeal) i) On the facts and in the circumstances of the case and in law, the order passed by the learned CIT (A), upholding the validity of the assessment order, is arbitrary unjustified and bad in law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has not appeared before this Tribunal subsequently on 30/11/15, 30/03/16, 28/05/16, 21/09/16, 23/01/17, 27/04/17, 03/08/17, 16/11/17 and 08/02/18. For all these dates notices intimating date of hearing have been served upon assessee, report of the same has been placed on record by the revenue. Today again neither any representative on behalf of assessee/assessee himself appeared before us, nor has any adjournment application been filed. 2.1 . From the above conduct of assessee it is very clear that assessee is not interested in proceeding with the present appeal. Sufficient time and opportunity has been granted to assessee to present its case. We are therefore constrained to dispose of present appeals on merits, based upon paper book filed by assessee as well as the documents available on record, on the basis of arguments advanced by Ld. CIT DR. 3. Brief facts of the case are as under: From assessment order it is observed that assessee did not file its return of income voluntarily before the due date under section 139 of the Act for the year under consideration. Notice under section 142(1) was issued on 11/09/09 fixing the case on 18/09/09. Since none attend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to assessee towards land development expenses and earth filling fee and there is no land purchase involved with assessee. It was also informed by M/s Virat Exim Pvt.Ltd that the said payment was made in lieu of an agreement with assessee and that the said agreement is not available, since it was destroyed in a fire that broke on 16/08/10 at their premises. 3.3 . Since no documentary evidences were produced by assessee in support of any of its expenses, payments/cash received, Ld. AO made addition in the hands of assessee as under: * addition on account of undisclosed expenditure made for development of land and earth filling ₹ 53 75 370/- * addition made on account of alleged payment received from the farmers ₹ 53,75,370/- 4. Aggrieved by the order of Ld. AO assessee preferred appeal before Ld.CIT(A). Before Ld. CIT (A) apart from challenging the additions made by Ld.AO, assessee challenged validity of assessment order passed under section 143 (3) of Act to be invalid as Assessing Officer had not issued the mandatory notice under section 143 (2) of the Act. 5. Ld. CIT (A) observed from the assessment records and decided the legal ground as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eted the addition made by Ld.AO on account of alleged payment received from farmers amounting to ₹ 63,75,370/-. 6. Aggrieved by the order of Ld. CIT (A) revenue as well as assessee filed appeal before this Tribunal. 7. ITA No. 327/Del/12 (assessee s appeal) In the appeal filed by assessee, ground number (i) has been raised challenging validity of assessment order passed in the absence of notice under section 143 (2) of the Act which is alleged to have been not issued by Ld.AO. 8. Admittedly assessee had not filed its return of income under section 139 (1) or 139 (4) of the Act. It was upon the notice issued by Ld.AO under section 142 (1) that assessee filed the return of income with the Assessing Officer instead of e-filing, which is mandatory for a company. 9. We have perused the paper book filed by assessee wherein notice issued under section 142 (1) by Ld.AO dated 09/09/10 is placed at page 1. In response to the said notice assessee vide letter dated 30/09/10 submitted a return along with the audited accounts with Ld.AO. On perusal of the return of income so filed by assessee along with the audited accounts, Ld.AO issued notice dated 8/10/2010, callin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the notice dated 08/10/10 makes it amply clear that the assessment proceedings have been initiated in the case of assessee for the relevant assessment year. We therefore do not find any infirmity in the observations of Ld. CIT (A) and the same is upheld. 10. Thus we are inclined to dismiss ground number (i) of assessee s appeal. 11 . Ground number (ii) has been raised by assessee against the addition being confirmed by Ld. CIT (A) under section 69C of the Act being unexplained expenditure. 11.1 . On perusal of the order passed by Ld. CIT (A) assessee had submitted as under: This addition has been made on the reasoning that the appellant had allegedly carried some land filling work at some site belonging to M/s Virat Exim and must have incurred expenses in cash out of the books of accounts. The addition is made on the basis of an alleged statement made by some party known as Virat Exim who had settled the dues of the farmers to whom the appellant had made certain payments. The A.O. believed the concocted story of M/s Virat and that too without verifying the correctness of his claim and the reason for making it. The A.O. did not given an opportunity to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. by the assessing officer to verify the genuineness of the transaction. However, the reply received from M/s Virat Exim Pvt. Ltd. was not brought into the knowledge of the appellant company. Appellant reiterate that the addition was made purely relying on the statement made by M/s Virat Exim Pvt. Ltd. that the amount was paid to the appellant company towards the earth filing expenses incurred by the appellant company. The addition was made merely on the basis of presumption and suspicion. The factum of the reply should have been brought into the knowledge of the appellant company and the AO should have conducted independent investigation. The reply of M/s Virat Exim Pvt. Ltd. should have been confronted with the appellant company,. The appellant company should have been provided an opportunity to cross-examine the party. The addition was made without affording an opportunity to the appellant company to establish the truth. The addition was made on the basis of a third party statement. No evidence was brought on record to prove that appellant company had actually received the amount on account of earth filing expenses. The reply given by M/s Virat Exim Pvt. Ltd. itself cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was made towards land development expenses and earth filling fee and there was no land purchase involved with respect to the said payment. The copy of agreement might also be available with the appellant, however not declared or produced for clarification either at assessment stage or appellate stage. The appellant wants to take advantage of loss of agreement of M/s virat Exim (P) Limited in fire. When M/s Virat Exim Pvt. Ltd. has stated that money was paid for a particular purpose there was no reason to disbelieve the same. If the payment was made for purchase of land there was no compelling reason to conceal this fact. When the payment is not denied, why the purpose shall be concealed? The demand of the appellant for cross examination is unwarranted. In the case of T.D. Nadar Vs CIT (1964) 51 ITR 20 Mad. it is held that the department can rely on any evidence though it has not been subjected to cross examination. There is no denial of natural justice if the AO refuses to enable an informant for cross examination. However if a witness is examined in the presence of the assessee he must be allowed to cross examine. No corroboratory evidence was brought before me to establish that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions made/statements given by any representatives of M/s.Virat Exim, along with any documents/evidences submitted by M/s Virat Exim. Upon receiving submissions as called for to the satisfaction of Ld. AO, Ld. AO shall then conduct necessary enquiries/investigations to determine correct income and its nature in the hands of assessee. 12. Accordingly this ground raised by assessee stands allowed for statistical purposes. 13. In the result appeal filed by assessee stands partly allowed for statistical purposes. 14 . ITA No.590/del/2012 (Department s appeal) Only ground raised by revenue is against the addition of ₹ 53,75,370/- being deleted by Ld. CIT (A). 14.1. During the first appellate proceedings assessee submitted as under: Addition of ₹ 53,75,370/-for alleged undisclosed income in the books of account. An addition of ₹ 53,75,370/- was made on the allegation that the appellant company had received the amount of ₹ 53,75,370/- in cash from various farmers as the appellant company had reduced the advances given to the farmers during the financial year in question and the same has not been recorded in the books of accounts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the conditions it does not call for additions. Thus addition of the same amount i.e. ₹ 53,75,370/- is without any basis hence deleted. 16. On perusal of the observations by Ld.CIT (A), it appears that Ld.CIT (A) has deleted the addition on presumption that either the advances that are returned by the farmers are due to failure of the deal or advances are converted into consideration for purchase. In our considered opinion both these possibilities are without any support of evidence filed by assessee either before Ld.AO or before Ld.CIT (A). 17. On perusal of additions made by Ld. AO in totality, which is partly dealt with in foregoing paragraphs while dealing with assessee s appeal, as well as the current ground raised in revenue s appeal, we are of considered opinion that no proper investigation has been conducted by either Ld.CIT (A) or by Ld.AO. Accordingly we are inclined to set aside this ground raised by the revenue to Ld. AO for proper investigation as per law. 18 . Ld.AO shall call upon assessee as well as M/s Virat Exim to ascertain genuineness of amount received by assessee, in the light of documents/evidences advanced by both the parties. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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