Ita 530/2017Paras Salescorporationappellantthrough:mr. Sanatkapoor,Advocate v. Commissionerof Incometax-1(Central)Through:mr. Sanjaykumar,Mr. Rahulchaudhary, Advocates

$-31,32*IN THE HIGH COURT OF DELHI AT NEW DELHI 31 + ITA 530/2017PARAS SALESCORPORATIONAppellantThrough:Mr. SanatKapoor,Advocate. versus COMMISSIONEROF INCOMETAX-1(CENTRAL)Through:Mr. SanjayKumar,Mr. RahulChaudhary, Advocates. Respondent WITH 32 +ITA 531/2017PARAS SALESCORPORATIONThrough:Mr. SanatKapoor,Advocate. Appellant versus COMMISSIONEROF INCOMETAX-1 (CENTRAL)....RespondentThrough:Mr. SanjayKumar,Mr. RahulChaudhary, Advocates. CORAM:JUSTICE S.MURALIDHARJUSTICE PRATHIBA M. SINGH ORDER25.07.2017 o/o CM APPL. No. 26088/2017(Exemption)IN ITA 530/2017 CM APPL. No. 26091/2017(Exemption)IN ITA 531/2017 1. Allowed,subjectto alljust exceptions. ITA 530/2017&ITA 531/2017 Signature Not Verified ^ CM APPL.Nn. 26090/2017(Delayin re-filing^IN ITA 530/2017CM APPL.No. 26093/2017(Delayin re-filing)TNITA531/2017 2. For the reasons stated,the delay in re-filingthese appeals is condoned.Accordingly,theseapplicationsstanddisposedof. TTA 530/2017^ CM APPL. 26089/2017(STAY)TTA 531/2017& CM APPL.26092/2017(STAY) 3. The Assesseeis in appealagainstthe impugnedorderdated20 January,2017 passedby the IncomeTax AppellateTribunal(TTAT) in ITA Nos.4917/Del/2009and 1034/Del/2010for the assessmentyears ('AYs')2004-05 and 2005-06 respectively. 4. Admit.The followingquestionoflaw is framedfor considerationin theseappeals: Whether the ITAT was in the matter to the justified remandingAssessingOfficer('AO')for the purposeofaffordingthe Assesseeanopportunityfor cross-examinationofMr. SanjayKumarGarg and forre-adjudicatingthe matterafresh? 5. The facts, in brief, leading to the filing of these appeals is that theAssesseeis engagedin the businessoftradingin food grainsin NayaBazar,NewDelhi.Whilepassingthe assessmentorderunderSection143 (3) oftheIncome Tax Act, for the AY 2004-05 on 21^^ December, 2006, the AOrejected the books of accounts of the Assessee and enhanced the GrossProfit(GP)ratioto 2% insteadofdeclarationmade by the Assesseeof 1.4%againstpurchasesfromMr. Gargand 1.8%againstotherpurchases. ITA 530/2017 & ITA 531/2017 6. This was done on the basis of a statementmade Mr.purportedly bySanjay Kumar Garg. The AO records in the order dated 21'' December,2006,thatthe Assesseeclaimedto have made purchasesfrom ten firms. Atthis stage, it was pointed out to the Assessee that "all the above namedconcerns were the Benami concerns of Sanjay Kumar Garg". The AOfurthernotesthat asurveyunder Section133Aofthe Act was conductedatthe businessofMr.who statedthathe was in the businessofpremises Garg,providingaccommodationentriesto varioustradersinNayaBazar. 7. It is the case ofthe Assesseethat Mr. Garg did not specificallyname theAssessee.His furthercase is that there is no documentthat has been foundduring the survey of the premises of Mr. Garg. The ledger account,waspurportedlypreparedby the AO himself,as the Assesseesubmitsthattherewas no ledgeraccountofthe Assesseeamongthe documentsrecoveredfromthe premisesof Mr. Garg. 8. Whenthe matterwas beingheardin appeal,the AO informedthe CIT (A)that Mr. had noteven in his own assessment Garg co-operatedproceedingsand had never appearedin person. The CIT (A), accordingly,deletedtheadditionsmadeby the AO and allowedthe appealin partby way ofits orderdated 9'^ October, 2009. A similar order was passed by the AO and acorrespondingorder by CIT (A) for the AY 2005-06.Againstboth sets oforders,the Revenuewent in appealbeforethe ITAT whereinthe impugnedcommon order was passed. 9. The ITAT has, in the impugnedorder, simplynotedthe facts. The ITAT ITA 530/2017 & ITA 531/2017 noted that during the appellateproceedingsbefore the CIT (A), a[remandreportwas calledfor from the AO. In said remandreportof the AO, it hasbeen stated that all these concerns from whom the Assessee made purchases,were accommodationentries.It also noted that Mr. providingonly though has been summoned to for cross-examination theGarg appearduringremand proceedings,he failedto appear. 9. The ITAT has, in the impugnedorder, simplynotedthe facts. The ITAT ITA 530/2017 & ITA 531/2017 noted that during the appellateproceedingsbefore the CIT (A), a[remandreportwas calledfor from the AO. In said remandreportof the AO, it hasbeen stated that all these concerns from whom the Assessee made purchases,were accommodationentries.It also noted that Mr. providingonly though has been summoned to for cross-examination theGarg appearduringremand proceedings,he failedto appear. 10. The ITAT noted that the statement of Mr. Garg was not confronted tothe Assessee the assessmentandof cross- duringproceedings opportunityexaminationwas notThe ITAT has also observedthat it was not provided.clear whether the AO had summoned Mr. Sanjay Kumar Garg for furtherexaminationor not. Accordingto ITAT even if Mr. Garg was not available,the AO oughtto have examinedthe genuinenessofthe concernsfrom whichthe Assessee made purchases. As a result, the ITAT considered itappropriatetoremandthe matterto the AO for freshadjudication. 11. It is seenthatthe CIT (A) calledfor a remandreportof theAO. The CIT(A) was informedby the AO that despitenotices,Mr. SanjayKumar Gargdid not appearand was , therefore,was not availablefor cross-examination.the Court finds that no is to be servedConsequently, purpose going byremandingthe matter to the AO for summoningand cross-examiningMrGarg. 12. As far as summoning the concerns from whom the Assessee madepurchases is concerned, the Court finds that sufficient material anddocuments were the Assessee at the of the already provided by stageITA 530/2017&ITA 531/20174of6 assessmentproceedings.The detailsprovidedby the Assesseehave been setout in a tabular form in the memo of appeal.The details of the sales made byeach of these enterprisesas per their sales tax assessmentorders have beenset out. It shows that the percentage of purchases made by the Assesseeconstitutesa smallpercentageof the overallsalesof theseentities. 13. Mr. Kapoor informs this Court that the Sales Tax order passed by theSales Tax Authoritiesin respect of these firms, the registrationdetails,andthe fact of the been made have payments having upon paying chequesalreadybeen furnished.It ispointedout thatthe AO did not make any effortto verify the above factual aspects. 14. In the circumstances, the Court is of the view that remanding the matterto the AO for theofthe abovefirms oncewhen allpurposeexaminingagain,detailsarealreadyavailableonrecord,wouldnotserveany usefulpurpose. 15. The end result is that the ITAT has not examined the issues raised beforeit on merits and instead remanded the matter to the AO which, in the opinionof the Court, would interminably delay the matter. 16. For the aforementioned reasons, the Court is of the view that the matterought to have been consideredby the ITAT itselfparticularlywhen all therelevant details were available with the AO. 17. Accordingly,the question framed by the Court is answered in thenegative, i.e., in favour of the Assessee and against the Revenue. TheITA 530/2017&ITA531/2017Page 5 of 6 commonorderdated20^^ January,2017 oftheITATis herebysetaside. 18. The appeals of the Revenue i.e. ITA Nos. 4917/Del/2009 and1034/Del/2010 are restored to the file of ITAT for a fresh decision onmerits. It would be to the to before the ITAT open parties producedocumentswhich form the part of the assessmentrecord for AYs 2004-05and 2005-06. 19. ITA Nos. 4917/Del/2009 and 1034/Del/2010 shall be listed before theITATon 11^^ September,2017 for directions. S.MURALIDHAR,J JULY 25,2017/j PRATHIBA M. SINGH, J ITA 530/2017 & ITA 531/2017