Jay Dee Exportsthrough:mr. S. Krishnan, Advocate v. Principle Commissioner Of Income Tax Delhi-Vii

$~129 *IN THE HIGH COURT OF DELHI AT NEW DELHI +ITA 886/2016 & CM Nos. 45959-61/2016 JAY DEE EXPORTSThrough:Mr. S. Krishnan, Advocate. ..... Appellant Versus PRINCIPLE COMMISSIONER OF INCOME TAX DELHI-VII ..... Respondent Through:None. CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHATHON'BLE MR. JUSTICE NAJMI WAZIRIO R D E R%14.12.2016 1.This matter is taken up today as 12.12.2016, when it was originallylisted, was declared a holiday on account of “Id-E-Milad”. CM No.45960/2016 (for exemption) 2.Allowed, subject to all just exceptions. 3.The application stands disposed off. ITA 886/2016 & CM Nos. 45959 & 45961/2016 4.There is a delay of 1210 days in filing the appeal and 87 days in re-filing the same, which is inordinate on any account. On this ground alone,the appeal is liable to be dismissed. 5.In any event, we are considering the merits of the appeal. 6.The assessee is aggrieved in this appeal under Section 260-A of theIncome Tax Act, 1961 (hereinafter to be referred as ‘the Act’) by the order of the Income Tax Appellate Tribunal (for short ‘ITAT’) dated 26.10.2012,which held that the claim of its having incurred expenditure to the tune ofRs.44,99,920/- was not substantiated and upheld the addition under Section69C of the Act. 7.The assessee, a manufacturer and exporter of readymade garments,had for Assessment Year (AY) 2001-02, when it enjoyed the benefit underSection 80-HHC of the Act, claimed expenditure. The Assessing Officer outof nine head of payments made towards suppliers and during the course ofinquiry was satisfied with respect to three Delhi based suppliers.Withrespect to the others, addition was made and the respondent claim wasdisallowed.The Commissioner of Income Tax (Appeals) [for short‘CIT(A)’] refused to take on record the additional material and confirmedthe AO’s order. The ITAT on 26.02.2008 remitted the matter to the CIT(A).The CIT (A) took note of the materials and held that the purchases, from theparties at Erode, were bogus, against which the appellant/assessee requestedfor cross-examination of the parties.In these circumstances, the remandreport was sought and obtained.This report did not make any mentionapropos the cross-examination. Having regard to all these circumstances,the CIT(A) disallowed the assessee’s appeal.The Revenue’s appeal wasallowed. The assessee’s attempt to have a rectification of the ITAT orderwas unsuccessful. 8.It is urged on behalf of the assessee that ITAT has unreasonablyconstrued the record. The order of the ITAT was modified by this Court in awrit petition to the effect that the opportunity for cross-examination was notgranted – what the Appellate Tribunal had recorded.Assessee highlightsthat the omission to grant an opportunity to cross-examine the concerned suppliers and more importantly, the broker Shri N.K. Jain, who had obtainedthe money, has gravely prejudiced it. It is submitted that both in the remandas well as the appellate proceedings, what transpires was that the chequeswhich passed through normal banking channels towards payments ofsuppliers, were ultimately encashed by one or other of Shri Jain’s concerns.It was submitted that in these circumstances, the burden, if any, underSection 69C of the Act can be said to have been discharged in the absence ofany other query by the Revenue. suppliers and more importantly, the broker Shri N.K. Jain, who had obtainedthe money, has gravely prejudiced it. It is submitted that both in the remandas well as the appellate proceedings, what transpires was that the chequeswhich passed through normal banking channels towards payments ofsuppliers, were ultimately encashed by one or other of Shri Jain’s concerns.It was submitted that in these circumstances, the burden, if any, underSection 69C of the Act can be said to have been discharged in the absence ofany other query by the Revenue. 9.This Court has considered the materials.Whilst it is a matter ofrecord that the appellants/ assessee was not granted opportunity to cross-examine Shri Jain, who appears to have deposed at an earlier stage in theproceedings, what appears nevertheless on the record is that the amountsstated to have been paid to all six suppliers, were completely disowned ordisclaimed by one of them, who chose to respond to summons.Thesummons were not responded to by the other five suppliers. The chequesthrough which payments were made to the suppliers are part of the record.They, clearly, were drawn in the name of specific textile suppliers. In thecircumstances, there was no occasion for anyone to have disputed thecheques. Furthermore, there is complete omission to explain why each ofthe textile suppliers – if the materials were, in fact, genuinely supplied –uniformly endorsed the entire amounts to the broker or the brokersconcerned. Furthermore, the assessee, in our opinion, ought to have takengreater care in showing further documentary evidence, such as copies ofrailway receipts, etc. or other collateral materials given the nature of burdeninitially placed upon it. Besides supplying copies of invoices, the assesseedoes not appear to have substantiated its claim for having purchased the materials from the concerned parties. 10.Having regard to all these factual circumstances, we are of the opinionthat no question of law arises in this appeal.11.For the foregoing reasons, the appeal as well as the pendingapplications is dismissed. S. RAVINDRA BHAT, J. DECEMBER 14, 2016sb NAJMI WAZIRI, J.