M/s. Alnajib Mutual Benefits Ltd., Bijnor V. ACIT, Bijnor

CO 397/DEL/2010

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2105 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-01-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 10-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Assessee Lawyers: HS MADAN
• Keywords: Rejection of books of accounts; Additional evidence
• Section: 68; 69; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 4547 /DEL/201 0 A.Y. 200 6 - 07 ACIT, RANGE NAJIBABAD VS. A L - N AJIB MUTUAL BENEFITS LTD. 12/112, MAJEED GUNJ NAJIBABAD C.O. NO. 397/DEL/2010 (IN ITA 4547 /DEL/201 0 A.Y. 200 6 - 07 A L - N AJIB MUTUAL BENEFITS LTD. VS. ACIT NAJIBABAD RANGE NAJIBABAD (APPELLANT) (RESPONDENT) A SSESSEE BY : SH. HS MADAN, ADV. RE VENUE BY : SH.KK JAISWAL, D.R. ORDER PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX (APPEALS) , BAREILLY DT. 2.6.2010 P ERTAINING TO THE ASSESSMENT YEAR (A.Y.) 2006 - 07. THE ASSESSEE HAS FILED THE CROSS OBJECTION. 2. FACTS IN BRIEF: - M/S AL - NAJIB MILLI MUTUAL BENEFITS LTD., IS REGISTERED WITH THE REGISTRAR OF COMPANIES, UTTAR PRADESH AS PER COPY OF MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATION FILED BY WAY OF PAPER BOOK . IT HAS BEEN DECLARED AS A NIDHI COMPANY U/S 620 - A OF THE COMPANIES ACT, 1956 BY THE GOVERNMENT OF INDIA, MINISTRY OF LAW, JUSTICE & CO. AFFAIRS, NEW DELHI AS PER DECLARATION ORDER AND NOTIFICATION DATED ITA 4547/DEL/2010 AY 2006 - 07 CROSS OBJECTION NO. 397/DEL/2010 (IN ITA 4547/DEL/10) AL - NAJIB MUTUAL BENEFITS LTD., NAJIBABAD ~ 2 ~ 12/05/1993. THE ASSESSEE COMPANY BEING A NIDHI COMPANY, ITS ACTIVITIES, SUCH AS ACCEPTING OF DEPOSITS FROM MEMBERS AND GIVING LOANS TO THEM ETC. ARE WITHIN THE PERMITTED REGULATIONS OF RESERVE BANK OF INDIA. AS PER ITS MAIN AIMS AND OBJECTS, MENTIONED IN THE MEMORANDUM OF ASSOCIATION, T HE ASSESSEE ACCEPTS DEPOSITS FROM ITS MEMBERS (SHAREHOLDERS) ONLY , IN DIFFERENT CATEGORIES. IT HAS 38 BRANCHES IN DIFFERENT STATES, NORMALLY IN VILLAGES AS PER LIST SUBMITTED. DEPOSITORS ARE NORMALLY AGRICULTURISTS, HAWKERS, DAILY EARNERS, FERRIWALA, LABOURERS AND SMALL TRADERS ETC., WHO DEPOSIT THEIR PETTY AMOUNTS FROM TIME TO TIME. COMPANY HAS EMPLOYED REGULAR DEPOSIT COLLECTORS, WHO GO FROM DOOR TO DOOR TO RECEIVE DEPOSITS FROM THE ACCOUNT HOLDERS. HENCE THE NUMBER OF DEPOSIT ACCOUNTS ARE IN LAKH S. ANY PERSON WHO WANTS TO OPEN A DEPOSIT ACCOUNT IN COMPANY, FIRST HAS TO BE COME SHAREHOLDER OF COMPANY. THIS COMPANY ALSO GIVES LOANS TO MEMBERS ONLY AGAINST MOVABLE AND IMMOVABLE ASSETS AS PER RULES FRAMED BY THE RESERVE BANK OF INDIA FROM TIME TO TIM E. 3. THE A.O. REJECTED THE BOOKS OF ACCOUNTS OF THE ASESSEE U/S 145 OF THE ACT ON THE GROUND THAT BOOKS OF ONLY FEW BRANCHES WERE PRODUCED. HE MADE AN ADHOC ADDITION OF RS.40 LAKHS U/S 69 OF THE ACT. 3.1 . THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE L D.CIT(A) ADMITTED ADDITIONAL EVIDENCE UNDER RULE 46A AND CALLED FOR A REMAND REPORT. T HEREAFTER HE DELETED THE ADDITION. 4. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS. THE CIT(A), BAREILLY HAS ERRED IN FACT AS WELL AS IN LAW IN DELETING THE ADDITION OF RS.40 LACS WITHOUT APPRECIATION OF FULL FACTS OF THE CASE WHEREAS THE AO HAS RIGHTLY MADE ADDITION U/S 68 OF THE INCOME TAXACT, 1961. 2. UNDER THE CIRCUMSTANCES OF THE CASE WHETHER THE CIT(A), BAREILLY IS JUSTIFIED IN FACT AS WELL AS IN LAW IN DELETING THE ADDITION OF RS.40 LACS WITHOUT ADJUDICATION OF THE ISSUE REGARDING APPLICATION OF PROVISIONS OF S.145 OF THE ACT. ITA 4547/DEL/2010 AY 2006 - 07 CROSS OBJECTION NO. 397/DEL/2010 (IN ITA 4547/DEL/10) AL - NAJIB MUTUAL BENEFITS LTD., NAJIBABAD ~ 3 ~ 5. WE HAVE HEARD SHRI HS MADAN, THE LD.COUNSEL FOR THE ASSESSEE AND SHRI KK JAISWAL, THE LD.D.R. ON BEHALF OF THE REVENUE. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF MATERIAL ON RECORD, ORDERS OF LOWER AUTHORITIES, CASE LAWS CITED, WE H OLD AS FOLLOWS . 6. WE ARE OF THE CONSIDERED OPINION THAT NO INTERFERENCE WHATSOEVER IS CAL LED FOR IN THE ORDER OF THE LD.CIT(A). NO ADHOC ADDITION CAN BE MADE U/S 68 OF THE ACT. THE ASSESSEE HAS PRODUCED IT S ACCOUNTS BEFORE THE A.O. AND NO ADVERSE OBSERVATIONS WERE MADE ON THE SAME BY THE A.O. EVEN IN THE REMAND PROCEEDINGS THE A.O. DID NOT RECORD ANY ADVERSE FINDINGS AGAINST THE ASSESSEE. THERE IS NO BASIS FOR REJECTION OF ACCOUNTS. THE ASSESSEE CLAIMS THAT THE BOOKS OF ALL THE BRANCHES WERE IN FACT PRODUCED BEFORE THE A.O. THERE IS NO INFIRMITY IN THE ORDER OF THE LD.CIT(A). 6.1. BE IT A S IT MAY, AS NO ADHOC ADDITION WHATSOEVER BE MADE U/S 68 OF THE ACT, WE UPHOLD THE ORDER OF THE FIRST APPELLATE AUTHORITY AND DISMISS THIS APPEAL OF THE REVENUE. 7. THE CROSS OBJECTION IS FILED ONLY IN SUPPORT OF THE ORDER OF THE FIRST APPELLATE AUTHORITY. HENCE THE SAME IS DISPOSED OF AS INFRUCTUOUS. 8. IN THE RESULT THE REVENUE S APPEAL IS DISMISSED. ASSESSEE S CROSS OBJECTION IS DISPOSED OF AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 0 1 S T MARCH, 2016. S D / - S D / - (H.S. SIDHU) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 0 1 S T MARCH, 2016 * MANGA ITA 4547/DEL/2010 AY 2006 - 07 CROSS OBJECTION NO. 397/DEL/2010 (IN ITA 4547/DEL/10) AL - NAJIB MUTUAL BENEFITS LTD., NAJIBABAD ~ 4 ~ COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR