M/s I.G.B. Infrastructure Ltd., New Delhi V. ITO, New Delhi

CO 99/DEL/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0351 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 02-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI C.M. GARG, JM ITA NO.1984/DEL/2011 ASSESSMENT YEAR : 2007-08 ITO, WARD-11(3), NEW DELHI. VS. IGB INFRASTRUCTURE LTD., 10 TH MILESTONE, MATHURA ROAD, ISHWAR NAGAR, NEW DELHI. PAN: AABCI3469B CO NO.99/DEL/2013 (ITA NO.1984/DEL/2013) ASSESSMENT YEAR : 2007-08 IGB INFRASTRUCTURE LTD., 10 TH MILESTONE, MATHURA ROAD, ISHWAR NAGAR, NEW DELHI. PAN: AABCI3469B VS. ITO, WARD-11(3), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJAN BHATIA, ADVOCATE DEPARTMENT BY : SHRI T. VASANTHAN, SR. DR DATE OF HEARING : 19.03.2015 DATE OF PRONOUNCEMENT : .03.2015 ITA NO.1984/DEL/2011. CO NO.99/DEL/2013. 2 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARISE OUT OF THE ORDER PASSED BY THE CIT(A ) ON 9.2.2011 IN RELATION TO THE ASSESSMENT YEAR 2007-08. 2. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE DELETION OF ADDITION OF RS.2,06,91,000/-. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE, IS ENGAGED IN THE BUSINESS OF REAL ESTATE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THERE WAS A CREDIT TO THE TUNE OF RS.2,06,91,000/- IN THE NAME OF SHRI NARENDER KUMAR . VIDE ORDER SHEET ENTRY DATED 4.12.2009, THE ASSESSEE WAS ASKED TO FU RNISH CONFIRMATION FROM THE SAID PARTY, WHICH WAS NOT COMPLIED WITH. THE ASSESSEE SUBMITTED THAT THE SAID LIABILITY WAS DISCHARGED IN THE SUBSEQUENT YEAR. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE SUBSTANT IATING THE GENUINENESS OF THE CREDIT, THE AO MADE ADDITION OF RS.2,06,91,000/- AS UNEXPLAINED CREDIT, IMPLIEDLY U/S 68 OF THE INCOME- TAX ACT, 1961 ITA NO.1984/DEL/2011. CO NO.99/DEL/2013. 3 (HEREINAFTER ALSO CALLED `THE ACT). THE ASSESSEE ARGUED BEFORE THE LD. CIT(A) THAT SOME LAND WAS PURCHASED BY THE ASSESSEE FROM SHRI NARENDER KUMAR FOR A SUM OF RS.18,74,07,000/- WHICH APPEARED AS STOCK IN ITS BALANCE SHEET UNDER THE HEAD INVENTO RIES. IT WAS EXPLAINED THAT THE SAID PURCHASE WAS MADE IN THE IMMEDIATELY PRECEDING YEAR ENDING 31.3.2006 AND THE BALANCE OF RS.2,06,91,000/ - WAS PAYABLE TO SHRI NARENDER KUMAR AGAINST THE SAID TRANSACTION OF PURCHASE OF LAND. THE ASSESSEE ALSO SUBMITTED THAT AS ON 31.3.2006 TH E AMOUNT PAYABLE TO SHRI NARENDER KUMAR WAS 3,36,91,000/- AND AFTER MAK ING PAYMENT OF RS.1.30 CRORE DURING THE YEAR IN QUESTION, THE OUT STANDING BALANCE STOOD REDUCED TO RS.2,06,91,000/-. THE ASSESSEE SUBMITTE D THAT CONFIRMATION COULD NOT BE OBTAINED FROM SHRI NARENDER KUMAR AS T HE TIME GIVEN BY THE AO WAS TOO SHORT. CONSIDERING THESE FACTS, THE LD. CIT(A) DELETED THE ADDITION. THE REVENUE IS AGGRIEVED AGAINST THE DELETION OF THIS ADDITION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN PRINCIPLE, THERE CAN BE NO D ISPUTE ON THE ITA NO.1984/DEL/2011. CO NO.99/DEL/2013. 4 PROPOSITION THAT AN ADDITION U/S 68 OF THE ACT CAN BE MADE ONLY IF THERE IS A FRESH CREDIT IN THE BOOKS OF ACCOUNT OF THE ASSES SEE ARISING IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION. IF THE BALANCE IS OUTSTANDING FROM EARLIER YEAR, THEN, IT CANNOT BE A CASE OF MAKING ADDITION U/S 68 IN A LATER YEAR. THE CASE O F THE LD. AR BEFORE THE LD. CIT(A) REMAINED THAT THE LAND WORTH RS.18.74 CR ORE WAS PURCHASED FROM SHRI NARENDER KUMAR AND, AFTER MAKING THE PAYM ENT, THE CLOSING BALANCE PAYABLE TO HIM AS ON 31.3.2006 STOOD AT RS. 3.36 CRORE, OUT OF WHICH A SUM OF RS.1.30 CRORE WAS PAID DURING THE YE AR, LEAVING THE REMAINING CLOSING BALANCE AT RS.2.06/- CRORE. IF T HIS POSITION IS CORRECT, THEN, OF COURSE, THERE CAN BE NO ADDITION OF RS.2.0 6 CRORE AND ODD IN THE INSTANT YEAR FOR THE REASON THAT IT EMERGED AS A PA RT OF THE OPENING BALANCE. ON A SPECIFIC QUERY FROM THE BENCH, THE L D. AR COULD NOT DRAW OUR ATTENTION TO ANY MATERIAL FILED BEFORE THE AO S TATING THESE FACTS THAT THE SAID AMOUNT OF RS.2.06 CRORE WAS FROM THE BROUG HT FORWARD BALANCE. THE BALANCE SHEET FILED BY THE ASSESSEE, THOUGH SHO W THE BALANCES AT THE LEVEL STATED, BUT THE NAMES OF THE PARTIES ARE NOT GIVEN. THE EXPLANATION ITA NO.1984/DEL/2011. CO NO.99/DEL/2013. 5 TENDERED BEFORE THE LD. CIT(A) WAS NOT GIVEN TO THE AO, ENABLING HIM TO EXAMINE ITS VERACITY W.R.T. THE BOOKS OF ACCOUNTS. UNDER SUCH CIRCUMSTANCES, WE SET ASIDE THE IMPUGNED ORDER ON T HIS SCORE AND REMIT THE MATTER TO THE FILE OF THE AO FOR EXAMINING THE ASSESSEES CLAIM ON THE ABOVE LINES. IF IT IS FOUND THAT THE AMOUNT OF CRE DIT IN THE NAME OF SHRI NARENDER KUMAR AT THE BEGINNING OF THE YEAR STOOD A T RS.3,36,91,000/- AND THE CLOSING BALANCE AT RS.2,06,91,000 PERTAINED TO SH. NARINDER KUMAR OUT OF SUCH OPENING BALANCE, THEN, OF COURSE, THERE CAN BE NO QUESTION OF MAKING ANY ADDITION FOR THIS SUM IN THE CURRENT YEAR. IF THE POSITION TURNS OUT TO BE OTHERWISE, THEN THE AO MAY PROCEED AS PER LAW. NEEDLESS TO SAY, THE ASSESSEE WILL BE ALLOWED A REA SONABLE OPPORTUNITY OF BEING HEARD IN SUCH FRESH PROCEEDINGS, IN WHICH IT WILL BE AT LIBERTY TO FILE ANY FRESH EVIDENCE IN SUPPORT OF ITS CLAIM. G ROUND NO. 1 TAKEN BY THE ASSESSEE IN ITS CROSS OBJECTION AGAINST THE LD. CIT(A) NOT SPECIFICALLY ADJUDICATING ITS CASE THAT THE ADDITION OF RS.2,06, 91,000 DID NOT RELATE TO THE YEAR UNDER CONSIDERATION ETC., HAS THEREFORE, B ECOME INFRUCTUOUS IN VIEW OF OUR ABOVE FINDING. ITA NO.1984/DEL/2011. CO NO.99/DEL/2013. 6 5. GROUND NO.2 OF THE ASSESSEES CROSS OBJECTION I S AGAINST THE DIMINUTION IN THE VALUE OF INVESTMENT AMOUNTING TO RS.3,67,395/- WHICH WAS ALREADY TAXED IN THE IMMEDIATELY PRECEDING YEAR . 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. THIS ISSUE DOES NOT ARISE OUT OF THE ASSESSMENT ORDER, BECAUSE THE ASSESSEE WROTE BACK THIS AMOUNT AND OFF ERED IT FOR TAXATION AND AS SUCH THERE WAS NO CONTROVERSY. THE ASSESSEE TOOK UP A GROUND BEFORE THE LD. CIT(A) CHALLENGING THE NON-TAXABILIT Y OF THIS SUM ON THE GROUND THAT THE SAME AMOUNT WAS DISALLOWED BY THE A O IN THE PRECEDING YEAR AND HENCE ON ITS REVERSAL, IT SHOULD NOT BE T AXED ONCE AGAIN IN THIS YEAR. HOWEVER, THIS GROUND REMAINED UNDISPOSED OF A T THE END OF THE LD. CIT(A). THE CASE OF THE ASSESSEE IS THAT THE SAID SUM OF RS.3,67,395/- WAS CLAIMED AS DEDUCTION IN THE PRECEDING YEAR WHIC H WAS DISALLOWED BY THE AO AND THE REVERSAL BY MEANS OF WRITE BACK OF THIS AMOUNT IN THE CURRENT YEAR COULD NOT BE CHARGED TO TAX AS IT WOUL D RESULT IN TO DOUBLE TAXATION OF THE SAME AMOUNT. IN PRINCIPLE, WE AGRE E WITH THE CONTENTION URGED ON BEHALF OF THE ASSESSEE, BUT THERE IS NO MA TERIAL TO SUPPORT THE ITA NO.1984/DEL/2011. CO NO.99/DEL/2013. 7 CONTENTION MADE BEFORE US. SINCE NECESSARY DETAILS IN THIS REGARD ARE NOT AVAILABLE AND THE IMPUGNED ORDER IS SILENT ON THIS ASPECT, WE REMIT THIS MATTER TO THE FILE OF THE AO FOR EXAMINING THE VERA CITY OF THE ASSESSEES CONTENTION. IF IT IS FOUND THAT THE ADDITION MADE TO THE TUNE OF RS.3.67 LAC IN THE PRECEDING YEAR ON THIS ACCOUNT HAS ATTAI NED FINALITY INASMUCH AS THE ASSESSEE HAS NOT CHALLENGED IT IN THE APPELL ATE PROCEEDINGS, THEN, THE AMOUNT OF RS.3.67 LAC, REPRESENTING THE WRITE B ACK OF THE SAME AMOUNT, SHOULD NOT BE TAXED IN THE ASSESSMENT OF TH E CURRENT YEAR. 7. GROUND NO.3 OF THE CO WAS NOT PRESSED. THE SAME IS, THEREFORE, DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CO OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 20.03.201 5. SD/- SD/- [C.M. GARG] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 20 TH MARCH, 2015. ITA NO.1984/DEL/2011. CO NO.99/DEL/2013. 8 DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.