Smt. Usha Kapoor, New Delhi V. ACIT, New Delhi

CO 224/DEL/2012

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2131 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 02-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 25-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V R SONBHADRA
• Assessee Lawyers: R K TANDON
• Section: 143(3); 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1949/DEL/2012 ASSESSMENT YEAR: 2008-09 ASSISTANT COMMISSIONER OF INCOME TAX VS. SMT. USHA KAPOOR, CIRCLE 36(1), NEW DELHI G-87, PREET VIHAR, DELH I-92 (PAN:AHEPK8691A) (APPELLANT) (RESPONDENT) AND CROSS OBJECTION NO. 224/DEL/2012 (IN ITA NO. 1949/DEL/2012) ASSESSMENT YEAR: 2008-09 SMT. USHA KAPOOR, VS. ACIT, CIRCLE 36(1) G-87, PREET VIHAR, DELHI-92 NEW DELHI (PAN:AHEPK8691A) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. V.R. SONBHADRA, SR . DR ASSESSEE BY : SH. R.K. TANDON, CA DATE OF HEARING : 02-02-2016 DATE OF ORDER : 15-02-2016 ORDER PER H.S. SIDHU, J.M. THE DEPARTMENT HAS FILED THIS APPEAL AND ASSESSEE HAS FILED THE CROSS OBJECTION WHICH IS EMANATE FROM THE ORDER DATED 18. 01.2012 OF LD. CIT(A)-XXVII, NEW DELHI PERTAINING TO ASSESSME NT YEAR 2008-09. 2. THE REVENUE HAS ORIGINALLY RAISED THE FOLLOWING GROUNDS IN ITS APPEAL WHICH READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS. 2.21 CRORES UNDER SECTION 68 OF THE I.T. ACT, 1961. ITA NO.1949/DEL/2012 & CO NO. 224/DEL/2012 2 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RI GHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) O F APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. THE REVENUE FURTHER RAISED THE FOLLOWING ADDITI ONAL GROUNDS ON 10.7.2013: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF INTEREST O F RS. 9,99,175/- DEBITED TO P&L ACCOUNT ON THE UNSECURED LOAN OF RS. 2.21 CRORES. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALLOW OR AMEN D ANY OR ALL THE GROUND OF APPEAL BEFORE OR DURING THE COURS E OF HEARING OF THE APPEAL. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN DECLARING INCOME OF RS. 74,30,567/- ON 30.9.2008. THE CASE WA S PROCESSED U/S. 143(1) OF THE I.T. ACT AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, NOTICE U/S. 143(2) DATED 25.9.2009 WAS ISSUED AND DULY SERVED UPON THE ASSESSEE. LATER ON NOTICE U/S. 142(1) ALO NGWITH QUESTIONNAIRE WAS ISSUED. IN RESPONSE TO THE NOTICE, LD. AR OF THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS AND FILED NECESSARY DETAILS. AFTER CONSDIERING THE DOCUMENTS, THE AO DETERMINED THE INCOME OF THE ASSE SSEE AT RS. 3,25,77,242/- BY MAKING VARIOUS ADDITIONS VIDE ORDER DATED 31.12. 2010 PASSED U/S. 143(3) OF THE I.T. ACT, 1961. 5. AGGRIEVED BY THE AFORESAID ORDER OF THE ASSESSI NG OFFICER DATED 31.12.2010 PASSED U/S. 143(3), ASSESSEE FILED AN AP PEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 18.01.2012 HAD DECIDED THE ISSUES IN DISPUTE IN FAVOUR OF THE ASSESSEE BY PARTLY ALLOWING THE APPEAL OF THE ASSESSEE. 6. AGGRIEVED WITH THE AFORESAID FINDING OF THE LD . CIT(A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO.1949/DEL/2012 & CO NO. 224/DEL/2012 3 7. APROPOS DELETION OF ADDITION OF RS. 2.21 CRORES MADE U/S. 68 OF THE I.T. ACT. 7.1 ON THIS ISSUE, LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL FILED B Y THE REVENUE. IN CONNECTION WITH ADDITION OF RS. 2,21,50,000/- IS CONCERNED, I T WAS THE MAIN CONTENTION OF THE LD. DR THAT ASSESSEE FAILED TO PROVE THE CRED ITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS BY WAY OF ADDUCING ANY CORROBOR ATIVE EVIDENCE AND THEREFORE, THE AO HAS RIGHTLY HELD THAT INITIAL ON US CAST UPON THE ASSESSEE HAS NOT BEEN SATISFACTORILY DISCHARGED, HENCE, THE ADDI TION WAS RIGHTLY MADE BY THE AO AND MAY BE UPHELD ACCORDINGLY. 7.2 ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT LD. CIT(A) HAS PAS SED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE AND THE SAME M AY BE UPHELD. HE STATED THAT RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTIT Y OF THE CREDITOR/ SUBSCRIBER WERE FURNISHED TO THE DEPARTMENT ALONGWITH COPIES O F THE SHAREHOLDERS REGISTER, SHARE APPLICATION FORMS, SHARE TRANSFER REGISTER ETC. IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATI ON BY THE ASSESSEE. HE FURTHER STATED THAT AO IS DUTY BOUND TO INVESTIGATE THE CREDITWORTHINESS OF THE CREDITOR/ SUBSCRIBER, THE GENUINENESS OF THE TRANSA CTIONS AND THE VERACITY. IN ORDER TO SUPPORT HIS CONTENTION, LD. COUNSEL OF THE ASSESSEE HAS FILED A PAPER BOOK HAVING PAGES 1 TO 30 CONTAINING THE COPIES OF THE FOLLOWING DECISIONS: I) CIT VS. SHIV DHOOTI PEARLS & INVESTMENT LTD. [20 15] 64 TAXMANN.COM 329 (DELHI) HIGH COURT OF DELHI II) CIT-IV VS. DWARKADHISH INVESTMENT (P) LTD. (201 0) 194 TAXMAN 43 (DELHI) HIGH COURT OF DELHI. III) CIT-1 VS. APEX THERM PACKAGING (P) LTD. (2014) 42 TAXMANN.COM 473 (GUJARAT) HIGH COURT OF GUJARAT. IV) CIT VS. SHYAM SUNDER & CO. (1989) 45 TAXMAN 248 (CAL.) HIGH COURT OF CALCUTTA. V) CIT VS. METACHEM INDUSTRIES (2001) 116 TAXMAN 57 2 (MP) HIGH COURT OF MADHYA PRADESH, INDORE BENCH. ITA NO.1949/DEL/2012 & CO NO. 224/DEL/2012 4 VI) VEER METALS VS. ACIT (1995) 51 TTJ 132 (DELHI) ITAT, DELHI D BENCH. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES AND PRECEDENTS R ELIED UPON BY THE LD. CIT(A) IN HIS IMPUGNED ORDER AND THE CASE LAWS CITED BY TH E LD. COUNSEL OF THE ASSESSEE, AS AFORESAID. WITH REGARD TO ISSUE RELATI NG TO DELETION OF ADDITION OF RS. 2,21,50,000/- MADE UNDER SECTION 68 OF THE I.T. ACT, 1961 IS CONCERNED, WE FIND THAT THE REASON UNDER WHICH THE A.O. HAS ADDE D BACK THE AMOUNT OF UNSECURED LOANS FROM THE THREE CREDITORS TO THE INC OME OF THE ASSESSEE IS THAT THERE WERE CASH DEPOSITS IN THEIR BANK ACCOUNTS, OU T OF WHICH VARIOUS PAYMENTS WERE MADE BY THE CREDITORS TO THE ASSESSEE THROUGH CHEQUE. THE A.O., THEREFORE, HELD THAT THE ASSESSEE HAD FAILED TO PROVE THE GENU INENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF CREDITORS. 8.1 WE NOTE THAT THE ASSESSEE HAD FILED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS CONFIRMATIONS FROM ALL THE THREE CREDI TORS GIVING THEIR, PAN AND COMPLETE ADDRESS ALONG WITH A COPY OF THEIR BANK AC COUNTS. DURING THE COURSE OF THE APPELLATE PROCEEDINGS, COPIES OF THE AUDITED ACCOUNTS (AUDITED BALANCE SHEET AND P&L ACCOUNT AND ALSO FORM 3CD IN CASE OF AVINASH LAL SACHDEVA AND SOMA RANI) OF ALL THE THREE CREDITORS WERE ALSO FILED TO PROVE THEIR CREDITWORTHINESS. FURTHER, IN THE CASE OF MRS. SOMA RANI A COPY OF HER ITR FOR A.Y. 2007-08 ALONG WITH A COPY OF THE ASSESSMENT OR DER U/S 143(3) FOR THE SAME YEAR WAS ALSO FILED. SIMILARLY, IN THE CASE OF MRS. PREETI SACHDEVA A COPY OF HER ITR FOR THE ASSESSMENT YEAR 2006-07 WAS ALSO FILED. IN HIS REMAND REPORT THE AO HAS STATED THAT THIS DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE WAS FRESH EVIDENCE AND MAY NOT BE CONSIDERED AS THE SAME WAS NOT FILED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND THE ASSESSEE DID NOT FULFILL THE CONDITIONS OF RULE 46A OF THE IT RULES. THE ASSESSEE ON THE OTHER HAND, HAS SUBMITTED THAT THIS EVIDENCE WAS PRODUCED BEFORE THE AO DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS BUT WAS NOT ACCEPTED BY THE AO AS THE S AME WAS NOT ACCOMPANIED BY RELEVANT ITRS. WE HAVE OBSERVED THAT A SWORN AFF IDAVIT HAS ALSO BEEN FILED BY THE AR OF THE ASSESSEE TO THIS EFFECT. KEEPING I N VIEW THIS SITUATION, IT WAS HELD BY THE LD. CIT(A) THAT THE ASSESSEE WAS PREVEN TED BY SUFFICIENT CAUSE FROM ITA NO.1949/DEL/2012 & CO NO. 224/DEL/2012 5 FILING THIS EVIDENCE BEFORE THE AO AND THE DOCUMENT ARY EVIDENCE FILED BY THE ASSESSEE BEING RELEVANT TO THE GROUNDS OF APPEAL, W HICH WAS RIGHTLY ADMITTED BY THE LD. CIT(A). 8.2 WE OBSERVE THAT FROM THE AUDITED ACCOUNTS OF AL L THE THREE CREDITORS, DULY SIGNED BY THE RELEVANT CREDITOR AND HIS CAS, IT WAS SEEN THAT THEY HAVE SHOWN SUBSTANTIAL SALES / RECEIPTS IN THE PROFIT & LOSS A CCOUNT ALONGWITH INTEREST INCOME EARNED ON THE AMOUNT OF UNSECURED LOAN ADVAN CED TO THE APPELLANT. SUBSTANTIAL AMOUNT OF NET PROFIT HAS ALSO BEEN REFL ECTED IN THE PROFIT & LOSS ACCOUNT OF ALL THE CREDITORS, THE DETAILS OF WHICH HAVE ALREADY BEEN REPRODUCED ABOVE. IN THE BALANCE SHEETS OF THE CREDITORS, AMOU NTS RECEIVABLE FROM VARIOUS PERSONS HAVE BEEN DULY REFLECTED UNDER THE HEAD SUN DRY DEBTORS. NO ENQUIRIES HAVE BEEN MADE BY THE A.O. EVEN AFTER THE COPIES OF AUDITED ACCOUNTS WERE FORWARDED TO HIM. SO NOTHING HAS BEEN BROUGHT ON RE CORD BY THE A.O. TO SHOW THAT THESE AUDITED ACCOUNTS ARE FALSE OR FABRICATED . FURTHER, NO ENQUIRIES HAVE BEEN MADE FROM THE CREDITORS, IN SPITE OF THE INFOR MATION ABOUT THEM BEING AVAILABLE ON RECORD. THEREFORE, WITHOUT CONDUCTING ANY INQUIRY AND WITHOUT BRINGING ANY MATERIAL ON RECORD, THE DOCUMENTARY EV IDENCE FILED BY THE ASSESSEE CANNOT BE REJECTED. IN VIEW OF THE ABOVE, WE NOT E THAT THE ASSESSEE HAD DISCHARGED HIS INITIAL ONUS IN RESPECT OF ESTABLISH ING THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS O F THE TRANSACTIONS IN RESPECT OF UNSECURED LOANS RAISED DURING THE YEAR FROM THE FOLLOWING THREE CREDITORS: (A) AVINASH LAL SACHDEVA RS. 83,50,000/- (B) SOMA RANI RS. 1,01,50,000/- (C) PREETI SACHDEVA RS. 36,50,000/- TOTAL RS. 2,21,50,000/- 8.2.1 WE ALSO NOTE THAT AO WITHOUT MAKING ANY ENQ UIRY AND WITHOUT BRINGING ANY MATERIAL ON RECORD TO THE CONTRARY, WAS NOT JUS TIFIED IN REJECTING THE EVIDENCE FILED BY THE ASSESSEE AND ADDING BACK THE AMOUNT OF THE UNSECURED LOANS TO THE INCOME OF THE ASSESSEE. THEREFORE, THE ADDITION OF RS.2,21,50,000/- ON THIS ACCOUNT WAS RIGHTLY DELETED BY THE LD. CIT (A) WHILE PASSING A WELL REASONED ORDER, WHICH IN OUR OPINION, DOES NOT NEED ANY INTERFERENCE ON OUR ITA NO.1949/DEL/2012 & CO NO. 224/DEL/2012 6 PART, HENCE, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DISMISS THE GROUND RAISED BY THE REVENUE. 9. APROPOS ADDITIONAL GROUND RELATING TO DELETION OF ADDITION OF INTEREST OF RS.9,99,175/- DEBITED TO P&L ACCOUNT ON THE UNSECUR ED LOAN OF RS. 2,21,50,000/-. 9.1 ON THE ISSUE OF INTEREST OF RS. 9,99175/- RAISE D VIDE ADDITIONAL GROUND, LD. DR RELIED UPON THE ORDER OF THE AO AND REITERAT ED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL FILED BY THE REVENUE. LD. D R STATED THAT ASSESSEE HAD CLAIMED AN AMOUNT OF RS. 29,68,675/- AS INTEREST EX PENDITURE IN THE PROFIT AND LOSS ACCOUNT.. OUT OF THIS AN AMOUNT OF RS. 9,99,17 5/- WAS DISALLOWED ON THE UNSECURED LOAN RAISED DURING THE YEAR ON THE GROUND THAT SAME WERE DISALLOWED U/S. 68 OF THE ACT. THE BALANCE AMOUNT OF RS. 19,9 7,500/- WAS DISALLOWED BY OBSERVING THAT THE ASSESSEE HAS DEBITED ITS INCOME AND EXPENDITURE ACCOUNT BY INTEREST COMPONENT TOWARDS LIABILITIES, WHEREAS NO INCOME HAS BEEN SHOWN FROM INVESTMENT AND LOAN AND ADVANCES GIVEN. THER EFORE, HE STATED THAT THE BALANCE INTEREST AMOUNT WAS RIGHTLY DISALLOWED BY T HE AO ON THE GROUND THAT INTEREST PAID WAS ON THE FUNDS WHICH WERE DIVERTED TOWARDS INTEREST FREE ADVANCES AND DEPOSITS AND INVESTMENTS WHICH DID NOT RESULT IN ANY INCOME. 9.2 ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSE E RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT LD. CIT(A) HAS PAS SED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON THE ISSUE I N DISPUTE AND THE SAME MAY BE UPHELD. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS, WE FIND THAT THE INTEREST AMOUNT CLAIMED IN THE PROFI T AND LOSS ACCOUNT HAS BEEN DISALLOWED BY THE AO ON TWO GROUNDS. THE AMOUNT OF RS. 9,99,175/- HAS BEEN DISALLOWED ON THE GROUND THAT CORRESPONDING UNSEC URED LOANS ON WHICH THIS INTEREST HAS BEEN CREDITED, HAD BEEN HELD AS NOT EX PLAINED SATISFACTORILY AND WERE ADDED TO THE INCOME OF THE ASSESSEE. SINCE WE HAVE UPHELD THE DECISION OF THE LD. CIT(A) OF DELETION OF ADDITION, RELATING TO UNSECURED LOANS RAISED DURING THE YEAR WHICH HAVE BEEN HELD AS EXPLAINED A ND THE ADDITION OF UNSECURED LOANS WAS DELETED. THEREFORE, INTEREST AM OUNTING TO RS.9,99,175/- WAS ALLOWABLE TO THE ASSESSEE. HENCE , THE ADDITION ON THIS ITA NO.1949/DEL/2012 & CO NO. 224/DEL/2012 7 ACCOUNT WAS RIGHTLY DELETED BY THE LD. CIT(A). IN OUR CONSIDERED OPINION, THIS DECISION OF LD. CIT(A) DOES NOT NEED ANY INTERFEREN CE ON OUR PART, HENCE, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE IN DISPUTE AND DISMISS THE ADDITIONAL GROUND RAISED BY THE REVENUE. ASSESSEES CROSS OBJECTION 11. AS FAR AS ASSESSEES CROSS OBJECTION IS CONCERN ED, THE SAME IS ONLY SUPPORTIVE TO THE LD. CIT(A)S ORDER. SINCE WE HAVE DISMISSED THE APPEAL OF THE REVENUE ON BOTH THE ISSUES, AS AFORESAID, HENC E, THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND DISMISSE D AS SUCH. 12. IN THE RESULT, THE REVENUES APPEAL AS WELL AS ASSESSEES CROSS OBJECTION STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/02/2016. SD/- SD/- (L.P. SAHU) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED: 15/2/2016 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSITANT REGISTRAR