M/s Amaltas Hotels Pvt. Ltd., Indore V. The ACIT 3(1), Indore

CO 3/IND/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 6993 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-03-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 24-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: S S SOLANKI
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 306/IND/2011 A.Y. 2003-04 ACIT 3(1) INDORE :: APPELLANT VS M/S AMALTAS HOTELS PVT. LTD. INDORE PAN AABCA 4859 ::RESPONDENT ITA NO. 307/IND/2011 A.Y. 2003-04 M/S AMALTAS HOTELS PVT. LTD. INDORE :: APPELLANT VS ACIT 3(1) INDORE ::RESPONDENT 2 CO NO. 3/IND/2012 (ARISING OUT OF ITA NO. 306/IND/2011) M/S AMALTAS HOTELS PVT. LTD. INDORE :: OBJECTOR VS ACIT 3(1), INDORE :: RESPONDENT REVENUE BY SHRI ARUN DEWAN ASSESSEE BY SHRI S.S. SOLANKI DATE OF HEARING 23 .03.2012 DATE OF PRONOUNCEMENT 23 .03.2012 O R D E R PER JOGINDER SINGH , JUDICIAL MEMBER THE ASSESSEE AS WELL AS THE REVENUE ARE IN CROSS APPEALS FOR THE ASSESSMENT YEAR 2003-04 AND THE ASSESSEE HAS ALSO PREFERRED CROSS OBJECTION AGAINST THE ORDER DATED 5.8.2011 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS). 3 2. FIRSTLY, WE SHALL TAKE UP APPEAL OF THE REVENUE WHEREIN THE DEPARTMENT IS AGGRIEVED BY THE ORDER OF THE LEARNED FIRST APPELLATE AUTHORITY IN DELETING THE ADDITION OF RS.34,20,000/- MADE U/S 68 OF THE ACT AND FURTHE R IN ACCEPTING THE FRESH EVIDENCE IN VIOLATION OF RULE 4 6A OF THE INCOME TAX RULES. DURING HEARING, THE LEARNED SR. DR, SHRI ARUN DEWAN, ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE GROUND RAISED. ON THE OTHER H AND, LEARNED COUNSEL FOR THE ASSESSEE, SHRI S.S. SOLANKI , DEFENDED THE IMPUGNED ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT IN ITS AUDITE D ACCOUNTS FILED WITH THE RETURN, IT WAS NOTICED BY T HE LEARNED ASSESSING OFFICER THAT THE ASSESSEE HAD SHO WN UNSECURED LOANS OF RS.47,50,000/- (UNDER SCHEDULE 2 ) FROM DIRECTORS, RELATIVES AND ASSOCIATES, ETC. IT WAS ALSO FOUND BY THE ASSESSING OFFICER THAT THE ASSESSEE PL EDGED 4 THE FIXED DEPOSITS OF THE AMOUNT OF RS.47,50,000/- WITH THE BANK FOR THE PURPOSE OF OBTAINING BANK GUARANTE E. ON A QUERY FROM THE ASSESSING OFFICER REGARDING THE NATURE AND OTHER DETAILS OF THE UNSECURED LOANS, NO DETAILS WERE FILED BY THE ASSESSEE. HOWEVER, VIDE LETTER DATED 28.3.2006 (DURING THE ASSESSMENT PROCEEDINGS) ADDRESSED TO THE LEARNED ASSESSING OFFICER, IT WAS CLAIMED BY THE ASSESSEE THAT THE AMOUNT OF RS.47,50,000/- IS IN FACT SHARE APPLICATION MONEY A ND WAS WRONGLY SHOWN AS UNSECURED LOAN. THIS CLAIM OF THE ASSESSEE WAS REJECTED RESULTING INTO ADDITION OF TH E IMPUGNED AMOUNT U/S 68 OF THE ACT. ON APPEAL BEFOR E THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSES SEE FILED THE DETAILS IN THE FORM OF ADDITIONAL EVIDENC E AND WAS CLAIMED BY THE ASSESSEE THAT THE ENTIRE SHARE APPLICATION MONEY WAS RECEIVED BY THE ASSESSEE FROM MANAGING DIRECTORS, THEIR FAMILY MEMBERS AND CLOSE BUSINESS ASSOCIATES. THE COMMISSIONER OF INCOME TA X (APPEALS) EXAMINED THE DETAILS AND FOUND THAT THE F IRST 5 SHARE APPLICANTS, NAMELY, SHRI SURESHCHAND BHADORIA (RS. 4 LACS), DR. Y.S. BHADORIA (RS.2 LACS) AND SHR I N.S. BHADORIA (RS. 10 LACS) ARE THE DIRECTORS/CLOSE RELA TIVES WHO CONFIRMED THE TRANSACTION BY FILING AFFIDAVITS ALONG WITH SOURCE OF INCOME. SHRI ARUN ARORA (RS.1.8 LA C), GENERAL MANAGER OF THE ASSESSEE HOTEL, SHRI K.S. TH AKUR (RS. 1 LAC), AN ADVOCATE, CONNECTED WITH THE MANAGE MENT ALSO CONFIRMED THE TRANSACTION WITH THE HELP OF AFF IDAVITS. SHRI MAHESH JOSHI (RS. 2 LACS), A LIQUOR CONTRACTOR , HAVING SUBSTANTIAL FUNDS (PAN ABIPJ0330M). REMAND REPORT WAS SOUGHT FROM THE ASSESSING OFFICER WHO VI DE REPORT DATED 2 ND FEBRUARY, 2007 DOUBTED THE CAPACITY OF SUCH PERSONS. HOWEVER, THE COMMISSIONER OF INCOME TAX (APPEALS) TREATED THE AMOUNT OF RS.20,80,000/- AS EXPLAINED. 3.1 FOR THE REMAINING PERSONS (SL. NOS. 7 TO 14) AS MENTIONED IN PARA 4.3.3 OF THE ORDER OF COMMISSIONE R OF 6 INCOME TAX (APPEALS), THE AMOUNT OF RS. 13.40 LACS WAS ALSO TREATED AS EXPLAINED. 3.2 FOR THE REMAINING PERSONS MENTIONED IN PARA 4.3 .4 OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS ) THE AMOUNT OF RS.13.30 WAS TREATED AS UNEXPLAINED AND W AS DIRECTED TO BE ADDED TO THE INCOME OF THE ASSESSEE. 3.3 NOW FOR THE AMOUNT OF RS.13.30 (UNEXPLAINED) TH E ASSESSEE IS AGGRIEVED AND IS IN CROSS APPEAL AND FO R THE ADDITION DELETED THE REVENUE IS IN APPEAL BEFORE US . 4. KEEPING IN VIEW THE TOTALITY OF FACTS NARRATED I N THE ASSESSMENT ORDER/IMPUGNED ORDER AND THE ASSERTION MADE BEFORE US, WE FIND THAT COMMISSIONER OF INCOME TAX (APPEALS) HAS DISCUSSED THE ISSUE AT LENGTH AND FO UND THAT THE AMOUNT OF RS. 34,20,000/- WAS EITHER FROM THE DIRECTORS OR THE CLOSE RELATIVES/FRIENDS AND THEIR SOURCE WAS ALSO EXPLAINED, THEREFORE, WE FIND NO JUSTIFICA TION TO INTERFERE WITH THE SAME, ESPECIALLY WHEN THE ASSESS EE HAS DISCHARGED ITS ONUS OF PROVING THE TRANSACTION IN 7 QUESTION, AS PROVIDED UNDER THE PROVISIONS OF THE A CT. THE ASSESSEE HAS PROVED THE NATURE, SOURCE, CREDITWORTHINESS AND IDENTITY OF SHARE APPLICANTS. WE, THEREFORE, CONFIRM THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND DISMISS THE APPEAL OF THE REVENUE. 4.1 SO FAR AS THE APPEAL OF THE ASSESSEE IS CONCERN ED, THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT SUFFICIENT TIME WAS NOT GRANTED TO THE ASSESSEE AND THE ASSESSEE IS IN A POSITION TO SUBSTANTIATE ITS CLAIM ALONG WITH THE SOURCE OF THE DISPUTED AMOUNT WITH THE HEL P OF EVIDENCES, CONSEQUENTLY, KEEPING IN VIEW THE PRINCI PLE OF NATURAL JUSTICE THAT NO PERSON SHOULD BE CONDEMNED UNHEARD, WE REMAND THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION IN ACCORDA NCE WITH LAW FOR WHICH DUE OPPORTUNITY OF BEING HEARD W ITH FURTHER LIBERTY TO ADDUCE EVIDENCE, IF ANY, TO SUBS TANTIATE ITS CLAIM BE PROVIDED TO THE ASSESSEE. THEREFORE, T HE 8 APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES ONLY. 5. THE CROSS OBJECTION PREFERRED BY THE ASSESSEE WA S NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE , THEREFORE, IT IS DISMISSED AS NOT PRESSED. FINALLY, (A) THE APPEAL OF THE REVENUE IS DISMISSED. (B) THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES AND (C) THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SID ES AT THE CONCLUSION OF HEARING ON 23.3.2012 (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: .3.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE 9