M/s. Associate Business Computers, New Delhi V. ACIT, New Delhi

CO 66/DEL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3767 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 18-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S R SENAPTI SENIOR
• Keywords: Unexplained cash credit; Additional evidence; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE HONBLE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.2875/DEL./2015 (ASSESSMENT YEAR : 2008-09) ACIT, CIRCLE 52 (1), VS. M/S. ASSOCIATE BUSINESS CO MPUTERS, NEW DELHI. 38, 2 ND FLOOR, TODAR MAL ROAD, BENGALI MARKET, NEW DELHI 110 001. (PAN : AAAFA7223R) CO NO.453/DEL/2015 (IN ITA NO.2875/DEL./2015) (ASSESSMENT YEAR : 2008-09) CO NO.66/DEL/2016 (IN ITA NO.2875/DEL./2015) (ASSESSMENT YEAR : 2008-09) M/S. ASSOCIATE BUSINESS COMPUTERS, VS. ACIT, CIRCLE 52 (1), 38, 2 ND FLOOR, TODAR MAL ROAD, NEW DELHI. BENGALI MARKET, NEW DELHI 110 001. (PAN : AAAFA7223R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHISH CHADHA, CA MS. DEVINA SHARMA, ADVOCATE REVENUE BY : SHRI S.R. SENAPTI, SENIOR DR DATE OF HEARING : 14.05.2018 DATE OF ORDER : 18.05.2018 O R D E R ITA NO.2875/DEL./2015 CO NO.453/DEL/2015 CO NO.66/DEL/2016 2 PER BENCH : THE AFORESAID APPEAL FILED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARE BEING DISPOSED OF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUSSIO N. 2. THE APPELLANT, ASSISTANT COMMISSIONER OF INCOME- TAX, CIRCLE 52 (1), NEW DELHI (HEREINAFTER REFERRED TO A S THE REVENUE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE T HE IMPUGNED ORDER DATED 27.02.2015 PASSED BY LD. CIT (APPEALS)-18, NE W DELHI QUA THE ASSESSMENT YEAR 2008-09 ON THE GROUNDS INTER AL IA THAT :- I. WHETHER THE CIT(A) HAS ACTED IN GROSS VIOLATION OF PROVISION U/S 250 OF I.T. ACT READ WITH RULE 46A (1) & (2), BY ADMITTING ADDITIONAL EVIDENCE CONTRARY TO PROVISIONS THERETO. II. WHETHER THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.42,79,925/- OUT OF TOTAL ADDITIONS O F RS.55,97,839/- MADE BY THE AO BY DISALLOWING THE LIABILITIES CLAIMED AS IDENTITY, CAPACITY AND GENUI NENESS OF TRANSACTIONS WERE NOT ESTABLISHED. III. WHETHER THE CIT(A) HAS ERRED IN NOT APPRECIAT ING THE FINDINGS OF THE REMAND REPORT SUBMITTED BY THE AO. 3. THE OBJECTOR, M/S. ASSOCIATE BUSINESS COMPUTERS, BY FILING THE PRESENT CROSS OBJECTIONS SUPPORTING THE ORDER D ATED 27.02.2015 PASSED BY THE LD. CIT (APPEALS)-18, NEW DELHI QUA T HE ASSESSMENT YEAR 2008-09 ON THE GROUNDS INTER ALIA T HAT :- ITA NO.2875/DEL./2015 CO NO.453/DEL/2015 CO NO.66/DEL/2016 3 CO NO.453/DEL/2015 1. AS PER THE ORDER U/S 250 DATED 27.02.2015 ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-18, THE LD. CIT (APPEALS) HAD ADMITTED THE ADDITIONAL EVIDE NCE UNDER RULE 46A ON MERITS. 2. THE CIT (APPEALS) HAS DELETED THE ADDITION OF RS.42,79,925/- OUT OF TOTAL ADDITION OF RS.55,97,83 9/- MADE BY THE A.O. ON THE BASIS OF ADDITIONAL EVIDENC E SUBMITTED BY THE ASSESSEE AND ONLY AFTER ESTABLISHI NG THE IDENTITY, CAPACITY AND GENUINENESS OF THE TRANSACTI ONS. 3. THE FINDINGS OF THE REMAND REPORT SUBMITTED BY THE A.O. AND SUBSEQUENT REPLY SUBMITTED BY THE ASSE SSEE HAS BEEN DULY APPRECIATED AND CONSIDERED BY THE CIT (APPEALS). CO NO.66/DEL/2016 1. AS PER THE ORDER U/S 250 DATED 27.02.2015 ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-18, THE LD. CIT (APPEALS) HAD ADMITTED THE ADDITIONAL EVIDE NCE UNDER RULE 46A ON MERITS. 2. THE FINDINGS OF THE REMAND REPORT SUBMITTED BY THE A.O. AND SUBSEQUENT REPLY SUBMITTED BY THE ASSE SSEE HAS BEEN DULY APPRECIATED AND CONSIDERED BY THE CIT (APPEALS). 3. THE APPEAL SHOULD NOT BE ADMITTED AS THE TAX EFFECT ON THE RELIEF PROVIDED BY THE COMMISSIONER O F INCOME TAX (APPEALS) IS LESS THAN RS. 10 LAKHS AND ACCORDING TO CLAUSE 3 OF CIRCULAR NO.21/2015 DATED 10 TH DECEMBER 2015 ISSUED BY THE CBDT, THE MINIMUM MONETARY LIMIT FOR APPEALS BEFORE APPELLATE TRIBUNA L HAS BEEN SET AT RS. 10 LAKHS. FURTHER, CLAUSE 10 OF THE SAID CIRCULAR STATES THAT 'IT WILL APPLY RETROSPECT IVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNALS. PENDING APPEALS BELOW THE SPECIFIED MONETARY TAX EFFECT LIMITS MAY BE WITHDRA WN / NOT PRESSED.' THE CALCULATION OF TAX EFFECT IS AS U NDER. ITA NO.2875/DEL./2015 CO NO.453/DEL/2015 CO NO.66/DEL/2016 4 (A) TOTAL ADDITIONS MADE BE THE LD. A.O. WAS RS.55,97,839 AND PURSUANT TO THE LETTER OF COMMISSIONER OF INCOME TAX (APPEALS) VIDE LETTER NO . CIT-(A)-XVII/2013-14 DATED 26/07/2013 REGARDING ADMISSION OF ADDITIONAL EVIDENCES UNDER RULE 46A, T HE LD. A.O. SUBMITTED HIS FINAL REMAND REPORT ON 28110/2013. IN HIS FINAL REMAND REPORT THE LD. A.O. HAS ADMITTED FURTHER CONFIRMATIONS / EVIDENCES OF RS.13,02,693/- AND RECOMMENDED FOR ADDITION OF BALANCE RS.42,95,146/-. (B) ON THE BASIS OF ADDITIONAL EVIDENCED SUBMITTED BY THE ASSESSEE AND ONLY AFTER ESTABLISHING THE IDENTI TY, CAPACITY AND GENUINENESS OF THE TRANSACTIONS THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DELETED ADDITION OF RS.42,79,925 OUT OF TOTAL ADDITION OF RS.55,97,839 MADE BY THE LD. A.O. (C) THUS, FURTHER RELIEF PROVIDED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS RS.29,77,23 2 AND THE TAX EFFECT @ 30.9% IS RS.9,19,965/-. 4. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : ASSESSING OFFICER MADE AD DITION OF RS.55,97,839/- ON ACCOUNT OF UNEXPLAINED CREDITS FR OM 42 SUNDRY CREDITORS OUT OF WHOM ONLY 13 CREDITORS HAVE CONFIR MED THE BALANCES AS SHOWN IN THE BOOKS OF ASSESSEE AS THE L ETTERS UNDER SECTION 133 (6) OF THE INCOME-TAX ACT, 1961 (FOR SH ORT THE ACT) ISSUED TO THE REMAINING SUNDRY CREDITORS WERE RECEI VED BACK WITH THE REMARKS NO SUCH PERSON IS RESIDING AT THE GIVE N ADDRESS. 5. ASSESSEE CARRIED THE MATTER BY WAY OF APPEAL BEF ORE THE LD. CIT (A) WHO HAS DELETED THE ADDITION OF RS.42,79,92 5/- AND ITA NO.2875/DEL./2015 CO NO.453/DEL/2015 CO NO.66/DEL/2016 5 CONFIRMED THE BALANCE ADDITION BY PARTLY ALLOWING T HE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE T HE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. ASSESSEE ALSO FILED ONE CROSS OBJECTION (CO NO.453/DEL/2015) SUPPORTING THE ORDER PASSED BY THE LD. CIT (A) AND FILED ANOTHER CROSS OBJECTION ( CO NO.66/DEL/2016) THAT THE APPEAL FILED BY THE REVEN UE IS NOT MAINTAINABLE BECAUSE OF CIRCULAR NO.21/2015 DATED 1 0.12.2015 ISSUED BY CBDT DUE TO LOW TAX EFFECT. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.2875/DEL/2015 (REVENUES APPEAL) CO NO.453/DEL/2015 (ASSESSEES CO) 7. UNDISPUTEDLY, THE ADDITION HAS BEEN MADE BY THE AO FOR WANT OF CONFIRMATION FILED BY THE ASSESSEE FROM THE SUNDRY CREDITORS AND THE LETTER ISSUED U/S 133 (6) OF THE ACT TO SELECTED CREDITORS RECEIVED BACK UNSERVED FOR WANT OF CORR ECT ADDRESS. IT IS ALSO NOT IN DISPUTE THAT DURING THE APPELLATE PR OCEEDINGS, THE ASSESSEE HAS FILED APPLICATION UNDER RULE 46A OF TH E INCOME-TAX ITA NO.2875/DEL./2015 CO NO.453/DEL/2015 CO NO.66/DEL/2016 6 RULES, 1962 TO FILE THE CONFIRMATION FROM THE SUNDR Y CREDITORS WHICH HAS BEEN ALLOWED AFTER CALLING REMAND REPORT FROM THE AO. 8. WHEN THE LD. CIT (A) HAS DELETED THE ADDITION ON THE BASIS OF REMAND REPORT DATED 28.10.2013 FILED BY THE AO REGA RDING 14 CREDITORS SUPPORTED WITH PAN NUMBERS, INVOICES, BAL ANCE CONFIRMATION AND RECONCILIATION STATEMENT IN CASE O F 14 CREDITORS QUA THE AMOUNT OF RS.45,19,601/- AND NO DISCREPANCI ES HAVE BEEN POINTED OUT BY THE AO DURING THE REMAND PROCEEDINGS NOR HE HAS REJECTED THE BOOKS OF ACCOUNT DURING ASSESSMENT PRO CEEDINGS, NO GROUND IS MADE OUT TO INTERFERE INTO THE FINDINGS R ETURNED BY LD. CIT (A). THE LD. CIT (A) HAS EXAMINED THE AMOUNT P ERTAINING TO SUNDRY CREDITORS IN DETAIL IN THE LIGHT OF THE REMA ND REPORT AND HAS RIGHTLY DELETED THE ADDITION OF RS.42,79,925/- AFTE R VERIFYING THE GENUINENESS AND CREDITWORTHINESS OF THE SUNDRY CRED ITORS AND CONFIRMED THE REMAINING ADDITION MADE BY THE AO. 9. SO FAR AS QUESTION OF ALLOWING THE ADDITIONAL EV IDENCE UNDER RULE 46A BY LD. CIT (A) IS CONCERNED, WE ARE OF THE CONSIDERED VIEW THAT THE OPPORTUNITY TO LEAD ADDITIONAL EVIDEN CE HAS BEEN GRANTED ONLY AFTER PROVIDING OPPORTUNITY TO THE AO WHO HAS FILED A COMPREHENSIVE REMAND REPORT, WHICH WAS NECESSARY TO ADVANCE THE CAUSE OF JUSTICE. MOREOVER, ADDITIONAL EVIDENCE CA N BE ENTERTAINED ITA NO.2875/DEL./2015 CO NO.453/DEL/2015 CO NO.66/DEL/2016 7 AT ANY STAGE OF THE PROCEEDINGS IF THE SAME IS NECE SSARY FOR COMPLETE ADJUDICATION OF THE CONTROVERSY AT HAND. 10. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE FI ND NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER, HEN CE APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. 11. CROSS OBJECTIONS (CO NO.453/DEL/2015) FILED BY THE ASSESSEE SUPPORTING THE FINDINGS RETURNED BY LD. CI T (A) ARE DECIDED IN FAVOUR OF THE ASSESSEE AS THE APPEAL FIL ED BY THE REVENUE IS NOT SUSTAINABLE. CO NO.66/DEL/2016 (ASSESSEES CO) 12. SO FAR AS CROSS OBJECTIONS (CO NO.66/DEL/2016) FILED BY THE ASSESSEE TO DISMISS THE APPEAL FILED BY THE REVENUE FOR WANT OF LOW TAX EFFECT IS CONCERNED, THE SAME ARE NOT MAINTAINA BLE BECAUSE TAX EFFECT IN THIS CASE IS MORE THAN RS.10 LAKHS IN THI S CASE, HENCE CROSS OBJECTIONS (CO NO.66/DEL/2016) IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 18 TH DAY OF MAY, 2018. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH ) PRESIDENT JUDICIAL MEMBER DATED THE 18 TH DAY OF MAY, 2018 TS ITA NO.2875/DEL./2015 CO NO.453/DEL/2015 CO NO.66/DEL/2016 8 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-18, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.