ITO, New Delhi V. M/s DOS Leasing & Finance Pvt Ltd, New Delhi

ITA 1019/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8583 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-07-2009
• Assessment Year: 1999-2000
• Appeal Filed On: 19-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P PURI BALDEV RAJ
• Assessee Lawyers: MANISH GUPTA
• Keywords: Unexplained cash credit; Accommodation entries; TDS; Set aside
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI DEEPAK R. SHAH, ACCOUNTANT MEMBER ITA NO. 1019/DEL/2009 ASSESSMENT YEAR : 1999-2000 INCOME TAX OFFICER, WARD 10(4), CR BUILDING, NEW DELHI. VS. M/S DOS LEASING & FINANCE P. LTD., F-83, MANASAROVAR GARDEN, NEW DELHI. PAN: AAACD0819R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANISH GUPTA, DR REVENUE BY : SHRI S.P. PURI, BALDEV RAJ, CA O R D E R PER I.P. BANSAL, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER OF THE CIT (A) DATED 7 TH JANUARY, 2009 FOR ASSESSMENT YEAR 1999-2000. GROUN DS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.11,00,000/- U/S 68 OF THE IT ACT, 1961 AS CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION REGARDING RECEIPT OF SHARE APPLICATION MONEY FROM M /S SUMA FINANCE & INVESTMENT (P) LTD. WAS NOT PROVED BEFORE THE A.O., IN SPITE OF SEVERAL OPPORTUNITIES AFFORDED TO THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.22,000 /-, AS ALLEGED PAYMENT OF COMMISSION TO THE ABOVE SAID SHA RE APPLICANT. ITA NO.3620/DEL/2006 2 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARIN G. IT IS PRAYED THAT THE ORDER OF THE CIT (A) BEING CO NTRARY TO THE FACTS ON RECORD AND THE SETTLED POSITION OF LAW BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD RECEIVED LOANS AMOUNTING TO RS.12 LAC FROM M/S SUMA FINANCE & INVE STMENT (P) LTD. OUT OF WHICH A SUM OF RS.11 LAC WAS OUTSTANDING AS BALANCE AS ON THE LAST DAY OF THE ACCOUNTING YEAR I.E., 31 ST MARCH, 1999. THE DETAILS AS DESCRIBED BY THE ASSESSING OFFICER AT PAGE 3 OF THE ORDER IS AS UNDE R:- OPENING BALANCE LOAN ISSUED DURING THE YR. RECEIVED BACK DURING THE YEAR BALANCE AS ON 31.3.1999. RS.3,50,000/- 12,00,000/- RS.4,50,000/- RS.11,00,00 0/- 3. THE ASSESSEE VIDE ITS LETTER DATED 19 TH DECEMBER, 2006 HAD FILED CONFIRMATIONS. IN ORDER TO VERIFY THE TRANSACTION THE ASSESSING OFFICER ISSUED SUMMONS U/S 131 IN RESPONSE TO WHICH AN EMPLOYEE O F THE COMPANY HAD FILED AN AFFIDAVIT SIGNED BY SHRI THAKUR PRASAD S/O SHRI SASHI DHAR SHARMA CONFIRMING THE COPY OF ACCOUNT AND IT WAS STATED THAT THE AMOU NTS ADVANCED TO THE ASSESSEE WAS INTEREST BEARING LOAN ON WHICH INTERES T OF RS.1,97,395/- WAS COMPUTED @ 24% FROM WHERE TDS OF RS.39,478/- WAS D EDUCTED. THE PAN NO. WAS ALSO MENTIONED WHICH IS AAACS0309P AND THE PRES ENT ADDRESS WAS ALSO GIVEN VIDE COLUMN NO.10. COPY OF THE SAID AFFIDAVI T IS PLACED AT PAGES 37 TO 39 OF THE PAPER BOOK. HOWEVER, THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE PROOF OF THE GENUINENESS OF THE TRANSAC TION AND THE CREDIT WORTHINESS OF THE PARTY. IN RESPONSE, IT WAS SUBMITTED THAT T HEY HAVE ALREADY WRITTEN LETTER TO PRINCIPAL OFFICER OF M/S SUMA FINANCE AND INVESTMEN T (P) LTD. TO PRODUCE HIMSELF BEFORE THE ASSESSING OFFICER, BUT THE SAME REMAINED UNCOMPLIED WITH. BANK PASSBOOK WAS ALSO SUBMITTED SHOWING THE PAYMENTS MA DE TO THE ASSESSEE. HOWEVER, IT WAS NOTICED BY THE ASSESSING OFFICER TH AT SOME CASH DEPOSITS WERE MADE IN THE BANK ACCOUNT OF M/S SUMA FINANCE & INVE STMENT PVT. LTD. THEREFORE, THE ASSESSING OFFICER TREATED THE AMOUNT GIVEN BY M/S SUMA FINANCE ITA NO.3620/DEL/2006 3 & LEASING PVT. LTD. TO THE ASSESSEE AS UNEXPLAINED CASH CREDIT AND THE BALANCE OUTSTANDING AS ON THE LAST DAY OF THE YEAR WAS ADDE D TO THE INCOME OF THE ASSESSEE WITH THE COMMISSION OF RS.22,000/-. IT IS IN THIS MANNER THE ADDITION OF RS.11,22,000/- WAS MADE BY THE ASSESSING OFFICER. BEFORE THE LD. CIT (A) IT WAS SUBMITTED THAT AMPLE EVIDENCE WAS FILED BEFORE THE ASSESSING OFFICER TO PROVE THE GENUINENESS OF THE CREDIT. THE CREDITOR WAS A LIMITED COMPANY AND ALSO ASSESSED TO TAX. THE INCOME-TAX RETURN WAS DULY FI LED AND ASSESSMENT ORDER OF THE SAID CREDITOR WAS ALSO PRODUCED. IT WAS SUBMIT TED THAT TO CONFIRM THE COPY OF ACCOUNT AN AFFIDAVIT WAS ALSO FILED BY THE EMPLOYER OF THE CREDITOR COMPANY. BANK ACCOUNT OF THE CREDITOR COMPANY WAS ALSO PRODU CED AND, THUS, THE AMOUNT OF CREDIT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE W AS WRONGLY TREATED TO BE UNEXPLAINED CREDIT U/S 68 OF THE ACT. LD. CIT(A) A FTER EXAMINING ALL THE EVIDENCES AND AFTER SEEKING REMAND REPORT FROM ASSESSING OFFI CER HAS DELETED THE ADDITION. THE DEPARTMENT IS AGGRIEVED BY DELETION OF ADDITION OF RS.11,22,000/- AND, HENCE, HAS FILED THE ABOVE APPEAL. 4. IT WAS SUBMITTED BY LD. AR THAT AMOUNT RECEIVED BY THE ASSESSEE FIRM WAS INTEREST BEARING LOAN ON WHICH 24% INTEREST WAS PAYABLE. ALL THE AMOUNTS WERE RECEIVED BY ACCOUNT PAYEE CHEQUES. THE CREDIT OR IS A LIMITED COMPANY WHICH IS ALSO LISTED WITH DELHI STOCK EXCHANGE AND THE SAID COMPANY HAS BEEN DESIGNATED AS NON-BANKING FINANCE COMPANY. TO SUPP ORT THE CREDIT, THE FOLLOWING EVIDENCES WERE FILED:- I) COPY OF CERTIFICATE OF INCORPORATION; II) PAN III) COPIES OF AUDITED ACCOUNT OF THE CREDITOR IV) CONFIRMATORY AFFIDAVIT V) COPY OF ASSESSMENT ORDER IN THE CASE OF SUMA FIN ANCE AND INVESTMENT PVT. LTD. WHEREIN THOUGH THE SAID ASSESS EE WAS HELD TO BE INVOLVED IN ACCOMMODATION ENTRIES THE NAME OF TH E ASSESSEE ITA NO.3620/DEL/2006 4 DID NOT APPEAR IN THE LIST OF WHICH TRANSACTION THE CREDITOR WAS TREATED TO BE CARRYING ON ACCOMMODATION ENTRY. 5. LD. DR RELYING ON THE ORDER OF THE ASSESSING OFF ICER PLEADED THAT ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER AND LD. C IT (A) HAS WRONGLY DELETED THE SAME. 6. REFERENCE WAS MADE BY LD. AR TO THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CEMENT CORPORATION L TD. 159 ITR 78 (SC). IT WAS SUBMITTED THAT PAID UP CAPITAL OF THE CREDITOR COMP ANY STOOD AT RS.6.87 CRORE AND RESERVES WERE AT RS.1.26 CRORE. THUS, IT WAS SUBMI TTED THAT CREDIT WORTHINESS OF THE CREDITOR COULD NOT BE DOUBTED. IT WAS ALSO SUB MITTED THAT IN VIEW OF OVERWHELMING EVIDENCE FURNISHED TO SUPPORT THE CRED IT, THE LD. CIT (A) HAS RIGHTLY DELETED THE ADDITION AND HIS ORDER SHOULD BE UPHELD . 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. WE HAVE CAREFULLY GONE THROUGH THE EVIDENCE SUBMITTED BY THE ASSESSEE TO SUPPORT THE CASH CREDI T. IN RESPONSE TO SUMMONS ISSUED BY THE ASSESSING OFFICER THE EMPLOYEE OF THE CREDITOR COMPANY HAS FILED DETAILED AFFIDAVIT CONFIRMING ALL THE TRANSACTIONS. WE HAVE ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDER OF THE CREDITOR FOR TH E YEAR UNDER CONSIDERATION AND FOUND THAT THOUGH THE ADDITION HAS BEEN MADE ON ACCOUNT OF COMMISSION EARNED BY THAT CONCERN FROM THE DEPOSITS GIVEN AS A CCOMMODATION ENTRIES, BUT THE NAME OF THE ASSESSEE IS NOT LISTED IN THOSE TRA NSACTIONS. THE CREDITOR HAS BEEN ASSESSED U/S 143(3)/147 OF THE ACT AT AN INCOM E OF RS.3,06,090/- AGAINST THE RETURNED INCOME OF RS.1,16,910/-. THE ONLY ADD ITION MADE TO THE INCOME IS A SUM OF RS.1,89,175/- BEING 1% COMMISSION WORKED OUT ON THE TRANSACTIONS TREATED TO BE ACCOMMODATION ENTRIES AND SUCH PARTIE S ARE MENTIONED AT PAGE 5 OF THE ASSESSMENT ORDER WHICH DOES NOT INCLUDE THE NAME OF THE ASSESSEE. ITA NO.3620/DEL/2006 5 8. KEEPING IN VIEW ALL THESE EVIDENCES, IT CANNOT B E SAID THAT THE ASSESSEE DID NOT DISCHARGE INITIAL BURDEN OF PROVING THE CAS H CREDIT APPEARING IN ITS BOOKS OF ACCOUNT. IN THIS VIEW OF THE SITUATION, WE SEE NO REASON TO INTERFERE IN THE ORDER OF THE LD. CIT (A) VIDE WHICH THE IMPUGNED AD DITION HAS BEEN DELETED. WE DECLINE TO INTERFERE. THEREFORE, WE HOLD THAT THE LD. CIT (A) WAS RIGHT IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CR EDIT AND COMMISSION THEREON. 9. IN THE RESULT, THE DEPARTMENT APPEAL IS DISMISSE D. . 10. THE ORDER PRONOUNCED IN THE OPEN COURT ON 24.07 .2009. [DEEPAK R. SHAH] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 24.07.2009. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES