Shivganesh Buildtech Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1186/DEL/2013

• Counselvise Citation: 118620114 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-07-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 01-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y S KAKKAR SR D R ITA NOS; DEL
• Assessee Lawyers: R P MALL; CS AGARWAL SR SH BP JAIN
• Keywords: Unexplained cash credit; Additional evidence; Corroborative evidences; Assessment record

Judgement Text

ITA NOS. 1186 & 1213/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 1186/DEL/2013 A.Y. : 2006-07 SHIVGANESH BUILDTECH PVT. LTD., (FORMERLY KNOWN AS BUZZ ESTATES PVT. LTD.,), 621A, DEVIKA TOWERS, 6, NEHRU PLACE, NEW DELHI 110019 (PAN: AAKCS2413G) VS. INCOME TAX OFFICER, WARD 3(1), NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) AND AND AND AND I.T.A. NO. 1213 /DEL/201 3 A.Y. : 2006-07 INCOME TAX OFFICER, WARD 3(1), NEW DELHI VS. BUZZ ESTATES PVT. LTD.,), 621A, DEVIKA TOWERS, 6, NEHRU PLACE, NEW DELHI 110019 (PAN: AAKCS2413G) ASSESSEE BY : SH. CS AGARWAL, SR. ADVOCATE, SH. BP JAIN, CA AND SH. RP MALL, ADV. DEPARTMENT BY : MS. Y.S. KAKKAR, SR. D.R. ITA NOS. 1186 & 1213/DEL/2013 2 ORDER ORDER ORDER ORDER PER PER PER PER H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU : : : : J JJ JM MM M THESE ARE THE CROSS APPEALS FILED BY THE ASSESSE E AND REVENUE EMANATE OUT OF THE ORDER PASSED BY THE LD. CIT(A)-VIII, NEW DELHI DATED 4.12.2012 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED IN THE ASSESSEES APPEAL READ AS UNDER:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING AN ADDITION OF RS.50,OOO/-, A SUM RECEIVED AS SHARE CAPITAL IN RESPECT OF SHARES ISSUED BY THE ASSESSEE TO SHRI DEEPAK GUPTA, OUT OF AN ADDITION MADE OF RS.1,00,000/RECEIVED BY WAY OF SHARE CAPITAL. 1.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THE SOURCE OF THE AFORESAID SUM WAS DULY ESTABLISHED, BEING THE AMOUNT PROVIDED BY SHRI ANUPAM NAGALIA AND THUS THERE COULD HAVE BEEN NO JUSTIFICATION TO HOLD, THAT THE SAID SUM ITA NOS. 1186 & 1213/DEL/2013 3 OF RS. 50,000/- RECEIVED FROM SHRI ANUPAM NAGALIA, IN RESPECT OF WHICH SHARES ISSUED TO SHRI DEEPAK GUPTA COULD BE HELD TO BE UNEXPLAINED CREDIT IN THE HANDS OF THE ASSESSEE COMPANY. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH ON FACTS AND IN LAW, IN UPHOLDING THE DISALLOWANCE OF RS. 9,88,377/- DEBITED BY THE ASSESSEE UNDER THE HEAD 'PURCHASE ACCOUNT ON ACCOUNT OF MUTATION EXPENSES'. 2.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THERE COULD HAVE BEEN NO VALID JUSTIFICATION TO HOLD, THAT THE ASSESSEE HAD FAILED TO ESTABLISH THE SOURCE OF EXPENSES INCURRED AND DEBITED AS MUTATION EXPENSES. 2.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THE EXPENSES ON MUTATION HAD BEEN INCURRED BY THE ITA NOS. 1186 & 1213/DEL/2013 4 COMPANY M/S VATIKA LIMITED AND THE ASSESSEE HAD PAID A COST OF REGISTRATION OF LAND PURCHASED INCLUDING MUTATION EXPENSES THROUGH M/S VATIKA LIMITED WHO HAD DULY RECORDED SUCH PAYMENTS IN ITS ACCOUNTS, AND WAS DULY CONFIRMED BY M/S VATIKA LIMITED. IT IS THEREFORE PRAYED, THE ADDITION AND DISALLOWANCE SUSTAINED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AGGREGATING TO RS.10,37,377/-, WHICH OUGHT TO HAVE BEEN DELETED BY THE COMMISSIONER OF INCOME TAX (APPEALS) BE DIRECTED TO BE DELETED AND ALTOGETHER AND THE APPEAL BE ALLOWED . 3. THE GROUNDS RAISED IN THE REVENUES APPEAL READ AS UNDER:- 1. WHETHER THE LD. CIT(A) HAS ERRED ON FACTS IN LAW IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED SOURCE OF SHARE CAPITAL OF RS. 50,000/- INTRODUCED OF SH. ANUPAM NAGELIA IGNORING THE FACT THAT- ITA NOS. 1186 & 1213/DEL/2013 5 (A) THE ASSESSEE FAILED TO GIVE ANY DETAILS REGARDING NAMES, ADDRESS OR INCOME-TAX ASSESSMENT PARTICULARS OF SHARE SUBSCRIBERS DESPITE HAVING BEEN SPECIFICALLY ASKED TO DO SO. (B) THE ASSESSEE FAILED TO FURNISH CONFIRMATION FROM THE PURPORTED SHARE APPLICANTS. 2. WHETHER THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 10.41 LAKHS MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITED IN BANK ACCOUNT IGNORING THE FACT THAT THE ASSESSEE HAS NOT FURNISHED ANY SUPPORTING VOUCHERS AND THE COMPLETE BOOKS OF ACCOUNT. 3. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD, OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. ITA NOS. 1186 & 1213/DEL/2013 6 4. LD. COUNSEL OF THE ASSESSEE HAS FILED THE SYNOPSIS IN BRIEF IN SUPPORT OF HIS ARGUMENTS, WHICH READ AS U NDER:- THE CAPTIONED TWO APPEALS ARISE OUT OF THE ORDER O F THE LEARNED CIT (A) DATED 04.12.2012 AND PERTAIN TO ASS ESSMENT YEAR 2006-2007. 1.1 IT MAY AT THE OUTSET BE SUBMITTED THAT THE APP EAL HAD BEEN FILED BY THE ASSESSEE AFTER THE ASSESSEE M/S B UZZ ESTATES PRIVATE LIMITED WAS MERGED WITH THE APPELLANT I.E. M/S SHIV GANESH BUILDTECH PRIVATE LIMITED; WHEREAS THE REVEN UE HAS FILED THE APPEAL IN THE NAME OF THE COMPANY BEFORE ITS MERGER I.E. M/S BUZZ ESTATES PRIVATE LIMITED AND THUS SUCH AN APPEAL FILED IS NOT MAINTAINABLE, SINCE IT HAD CEASED TO E XIST FACTUALLY AND LEGALLY WHEN THE APPEAL WAS FILED. 1.2 SINCE HOWEVER BOTH THE APPEALS ARISES FROM TH E SAME ORDER OF CIT (A) DATED 04.12.2012, CONSOLIDATED SUB MISSIONS ARE BEING MADE IN RESPECT OF BOTH THE APPEALS WHICH ARE REPRODUCED HEREUNDER:- IN RESPECT OF ITA NO. 1186/DEL/2013 IN RESPECT OF ITA NO. 1186/DEL/2013 IN RESPECT OF ITA NO. 1186/DEL/2013 IN RESPECT OF ITA NO. 1186/DEL/2013 1.3 IN THE ABOVE APPEAL FILED BY THE ASSESSEE, TH E ASSESSEE COMPANY HAS DISPUTED THE ADDITION MADE BY THE ITA NOS. 1186 & 1213/DEL/2013 7 LEARNED A.O., IN RESPECT OF AN ADDITION MADE OF AN AMOUNT OF RS. 50,000/- RECEIVED BY IT AS SHARE CAPITAL CONTRI BUTION FROM SHRI DEEPAK GUPTA. IN GROUND NO.2, THE APPELLANT HAS CHALLENGED THE AD DITION SUSTAINED OF RS. 9,88,377/-, DEBITED BY IT UNDER TH E HEAD PURCHASE ACCOUNT ON ACCOUNT OF MUTATION EXPENSES'. IN RESPECT OF ITA NO. 1213/DEL/2013 IN RESPECT OF ITA NO. 1213/DEL/2013 IN RESPECT OF ITA NO. 1213/DEL/2013 IN RESPECT OF ITA NO. 1213/DEL/2013 IT IS AN APPEAL FILED BY THE REVENUE WHEREIN THE RE VENUE HAS CHALLENGED THE DELETION OF THE TWO SUMS NAMELY: (I) RS. 50,000/- BEING THE SUM RECEIVED BY WAY OF SHARE CAPITAL FROM SHRI ANUPAM NAGALIA; (II) RS. 10,41,000/- ON ACCOUNT OF ALLEGED UNEXPL AINED CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE. 4. FIRSTLY, TAKING UP THE ASSESSEE'S APPEAL, I.E. I TA NO. 1186/DEL/2013, IT IS SUBMITTED THAT, IN THE APPEAL FILED BY THE ASSESSEE THE FIRST GROUND PERTAINS TO AN ADDITION O F RS. 50,000/- WHICH REPRESENTS SUM RECEIVED AS SHARE CAPITAL. IN THIS CASE, THE ASSESSEE HAD ISSUED 5000 SHARES IN THE NAME OF SHRI DEEPAK GUPTA AND THE AFORESAID SUM WAS CREDITED IN THE BOOKS AGAINST THE ISSUE OF SUCH SHARE CAPITAL BUT WAS PAI D ON HIS ITA NOS. 1186 & 1213/DEL/2013 8 BEHALF BY SHRI ANUPAN NAGALIA AND WAS DULY CONFIRME D (SEE PAGE 68 OF THE PAPER BOOK). IT IS SUBMITTED THAT, A SSESSEE HAD LED EVIDENCE TO ESTABLISH THAT, SHARES WERE ISSUED AND THE AFORESAID AMOUNT WAS RECEIVED AGAINST THE ISSUE OF THE SHARE CAPITAL. THE ASSESSEE COMPANY WAS INCORPORATED ON 15.04.2005, WITH A SHARE CAPITAL OF RS. 1,00,000/- ONLY. THE AFORESAID SHARE CAPITAL WAS CONTRIBUTED BY THOSE SH AREHOLDERS, WHO WERE PROMOTER SHAREHOLDERS. 5. THE LEARNED A.O. HAD MADE THE ADDITION OF THE SA ID SUM WHEN HE HELD THAT THE SOURCE OF THE CASH OF RS. 1,0 0,000/- HAS NOT BEEN EXPLAINED BY THE ASSESSEE COMPANY. IN FACT , IN MAKING SUCH AN OBSERVATION THE LEARNED A.O. FAILED TO COMPREHEND THAT, NO SUCH INFERENCE COULD HAVE BEEN DRAWN BY HIM WITHOUT CALLING UPON THE ASSESSEE TO PRODUCE EV IDENCE IN SUPPORT OF THE SHARE CAPITAL. IN VIEW THEREOF, LEAR NED A.O. HAVING MADE THE ADDITION, AND ASSESSEE DISPUTED THE SAID ADDITION BEFORE THE CIT (A) AND SUBMITTED THAT, SAI D SUM REPRESENTS SHARE CAPITAL CONTRIBUTED BY THE SHAREHO LDERS. IT WAS EXPLAINED THAT THE AFORESAID CONTRIBUTION WAS RECEI VED FROM SHRI ANUPAM NAGALIA THROUGH BANKING CHANNEL AND WAS NOT A CASH DEPOSIT IN THE BOOKS OF THE ASSESSEE. ITA NOS. 1186 & 1213/DEL/2013 9 6. FURTHER, SINCE THE ASSESSEE HAD NOT BEEN PROVIDE D ANY OPPORTUNITY BY THE LEARNED A.O., BEFORE THE LEARNED CIT (A), IT MADE AN APPLICATION UNDER RULE 46A OF THE INCOME TA X ACT FOR THE ADMISSION OF ADDITIONAL EVIDENCE NAMELY: (A) DETAIL OF SHARE CAPITAL; (B) CONFIRMATION OF SHARE CAPITAL; (C) SOURCES THEREOF; (D) COPY OF THE CASH BOOKS; TO SUPPORT THAT THE PA YMENT OF SHARE CAPITAL FROM THE SHAREHOLDERS NAMELY SHRI ANUPAM NAGALIA AND SHRI DEEPAK GUPTA WAS CONTRIBUTED BY SHRI ANUPAM NAGALIA AND PAYMENT WAS MADE BY SHRI ANUPAM NAGALIA THROUGH CHEQUE. (SEE PAGE 99). THE ASSESSEE FURTHER SUBMITTED THAT, SHRI ANUPAM NA GALIA HAD PAID A SUM OF RS. 10,10,000/- BY A CHEQUE NO. 3 20983 DATED 02.05.2005, DRAWN IN FAVOUR OF ASSESSEE, WHIC H WAS DULY REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE (SEE PAGE 99) AND IT WAS OUT OF RS. 10,10,000/- A SUM OF RS. 1,00 ,000/WAS CREDITED TO THE SHARE CAPITAL ACCOUNT AND THAT OUT OF RS. 1,00,000/- SO CREDITED, SHARES WERE ISSUED FOR RS. 50,000/- EACH ITA NOS. 1186 & 1213/DEL/2013 10 IN THE NAME OF SHRI ANUPAM NAGALIA AND SHRI DEEPAK GUPTA. IT WAS THE BALANCE SUM OF RS. 9,10,000/- WAS CREDITED TO THE LOAN ACCOUNT OF THE ASSESSEE. 8. FROM THE AFORESAID IT WOULD BE SEEN THAT, IN FA CT THERE WAS NO CASH DEPOSIT IN THE BOOKS OF THE ASSESSEE, (AS W AS ASSUMED BY THE LEARNED A.O. INSTEAD THERE WAS A CREDIT BY W AY OF CHEQUE WHICH SUM WAS RECEIVED FROM SHRI ANUPAM NAGA LIA. THIS SUM OF RS. 10,10,000/- HAS NOT BEEN INCLUDED I N THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CREDIT. AN TH E CONTRARY, INSTEAD OF THE AFORESAID SUM, ALL WHAT HAS BEEN BRO UGHT TO TAX BY THE LEARNED A.O. WAS THE AMOUNT OF RS. 1,00,000/ - DESPITE THE FACT, THE CREDIT WAS OF RS. 10,10,000/- AND WAS THROUGH A CHEQUE. SINCE THE AFORESAID SUM OF RS. 10,10,000/- HAD BEEN RECEIVED BY THE ASSESSEE FROM SHRI ANUPAM NAGALIA W HO HAD ADVANCED RS. 9,10,000/- AS LOAN TO THE ASSESSEE COM PANY, THE SAID SUM WAS CREDITED TO THE LOAN ACCOUNT OF SHRI A NUPAM NAGALIA (SEE PAGE 70) AND WAS DEBITED TO BANK ACCOU NT; WHEREAS RS. 1,00,000/- WAS APPROPRIATED TOWARDS THE SHARE CAPITAL, BEING THE CONTRIBUTION MADE BY SHRI ANUPAM NAGALIA ON HIS OWN BEHALF AND ON BEHALF OF ABOVE SHAREHOLDE R NAMELY SHRI DEEPAK GUPTA. TO SUPPORT THE SOURCE OF CREDIT OF RS. ITA NOS. 1186 & 1213/DEL/2013 11 10,10,000/- ASSESSEE HAD FILED BEFORE THE LEARNED A .O. A COPY OF THE CONFIRMATION AS WELL AS COPY OF THE BANK ACC OUNT OF SHRI ANUPAM NAGALIA. (SEE PAGE 70 &. PAGE 95) 9. IT IS THUS EVIDENT THERE COULD HAVE BEEN NO VALI D BASIS WHATSOEVER TO HAVE HELD THAT RS. 1,00,000/- BEING T HE CREDIT TO THE SHARE CAPITAL IS AN UNEXPLAINED CASH DEPOSIT ON WHICH FINDING, THE LEARNED A.O. HAS MADE AN ADDITION OF R S. 1,00,000/- IT IS THUS SUBMITTED, THAT THE LEARNED A.O. HAD ERR ED IN MAKING THE ADDITION OF RS. 1,00,000/- AND THE CIT(A) HAS E RRED WHILE DELETING ADDITION OF RS. 50,000/- AS EXPLAINED STIL L SUSTAINED AN ADDITION OF RS. 50,000/- WHICH SUM REPRESENTS CONTR IBUTION TOWARDS SHARE CAPITAL AGAINST THE ISSUE OF SHARES I N THE NAME OF SHRI DEEPAK GUPTA. IT IS SUBMITTED THAT, THE ASSESS EE HAS NOT RECEIVED NOR THERE IS ANY OTHER CREDIT OF RS. 50,00 0/- AND THAT TOO, IN CASH AS A SUM ALLEGEDLY RECEIVED FROM SHRI DEEPAK GUPTA. DESPITE THE AFORESAID FACT, THE LEARNED CIT (A) HAS SUSTAINED THE ADDITION OF RS. 50,000/- REPRESENTING SHARE CAPITAL IN RESPECT OF SHARES ALLOTTED TO SHRI DEEPA K GUPTA. IT IS SUBMITTED WITH RESPECT THAT, THERE IS CONTRADICTION IN TERMS. THE SOURCE OF RS. 10,10,000/- IS SHRI ANUPAM NAGALIA, T HE LEARNED A.O. DOES NOT DISPUTE THE CREDIT OF RS. 10,10,000/- IN THE BOOKS ITA NOS. 1186 & 1213/DEL/2013 12 OF THE ASSESSEE AS THE SUM EMANATING FROM SHRI ANUP AM NAGALIA BUT HE MAKES AN ADDITION OF RS. 1,00,000/- ON AN ASSUMPTION THAT, THERE IS A SHARE CAPITAL WHICH IS THE SUM RECEIVED 'IN CASH', WHICH IS A FACTUALLY INCORRECT FINDING OF THE A.O. THE LEARNED CIT (A) HOWEVER HAS HELD THAT SINC E NO CONFIRMATION HAS BEEN FILED IN THE ACCOUNT OF SHRI DEEPAK GUPTA, THE IDENTITY OF SHRI DEEPAK GUPTA HAS NOT BE EN PROVED BY THE ASSESSEE. IT IS SUBMITTED, THE SAME IS NON-I SSUE, SINCE THE FACTUAL MATRIX AS STATED ABOVE SHOWS THAT IT IS OUT OF AN AMOUNT OF RS. 10,10,000/- THE SUM CREDITED RS. 1,00 ,000/- WAS CREDITED TO SHARE CAPITAL ACCOUNT AND RS. 9,10,000/ - TO LOAN ACCOUNT, AND HENCE IT CANNOT BE HELD THAT THE CREDI TS REMAIN UNEXPLAINED. IN FACT, THE A.O. HAD PROCEEDED TO MAK E AN ADDITION ON THE BASIS OF HIS UNSUBSTANTIATED FINDIN G THAT A SUM OF RS. 1,00,000/- IS A CREDIT IN CASH WHICH IS FACT UALLY INCORRECT. 10. IT IS SUBMITTED WITH RESPECT THAT, THE LEARNED A.O. AND LEARNED CIT (A) FAILED TO APPRECIATE AND COMPREHEND THAT, THE APPELLANT IS A COMPANY HAVING ONLY TWO SHAREHOLDERS NAMELY SHRI ANUPAM NAGALIA AND SHRI DEEPAK GUPTA AND THERE COULD BE NO COMPANY WITH ONLY ONE SHAREHOLDER. IT IS THUS SUBMITTED THE FINDINGS THAT, ASSESSEE HAS FAILED TO ESTABLISH THE IDENTITY OF ITA NOS. 1186 & 1213/DEL/2013 13 SHRI DEEPAK GUPTA IS HIGHLY ARBITRARY. IN ANY CASE, IT IS SUBMITTED THE SAME IS NOT EITHER RELEVANT SINCE THE ISSUE INVOLVED IS ABOUT THE CREDIT IN THE BOOKS WHETHER T HE SAID CREDIT IS EXPLAINED OR IS OTHERWISE. 11. WITHOUT PREJUDICE TO THE AFORESAID, THE APPELLA NT SUBMITS THAT, IF THE IDENTITY OF SHRI DEEPAK GUPTA IS HELD AS NOT PROVED, THEN THERE WAS NO COMPANY AND NO ASSESSMENT COULD B E MADE ON THE COMPANY. THE ASSESSEE SUBMITS THAT, IT BEING AN UNDISPUTED POSITION THAT, ASSESSEE IS A COMPANY AND THERE BEING NO ADVERSE FINDING BY THE LEARNED A.O. IN HIS ORDER THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE IDENTITY O F THE SHAREHOLDER, LEARNED CIT(A) COULD NOT HAVE WITHOUT GIVING AN OPPORTUNITY CONCLUDED THAT ASSESSEE HAS FAILED TO E STABLISH THE IDENTITY OF SHRI DEEPAK GUPTA. 12. THE ASSESSEE HOWEVER WITHOUT PREJUDICE TO THE A FORESAID SUBMISSIONS THAT, SHRI ANUPAM NAGALIA HAS IDENTIFIE D SHRI DEEPAK GUPTA AND OTHERWISE TOO, HIS IDENTITY ESTABL ISHED FROM THE FOLLOWING DOCUMENTS ON RECORD. (I) MEMORANDUM OF ARTICLES OF ASSOCIATION (PAGE 7 1 - 94) ITA NOS. 1186 & 1213/DEL/2013 14 (II) CERTIFICATE OF INCORPORATION SHOWING THAT ON THE BASIS OF THE AFORESAID MEMORANDUM COMPANY HAS BEEN INCORP ORATED. 13. NOW, IN RESPECT OF THE ADDITION MADE BY THE LE ARNED A.O. AND SUSTAINED BY CIT (A) OF RS. 9,87,377/- THE ASSE SSEE SUBMITS THAT, THE AFORESAID ADDITION HAS BEEN MADE WITHOUT ANY BASIS. THE SAID ADDITION IS TOTALLY ILLOGICAL AND IS FANCI FUL. PERUSAL OF THE ANNUAL ACCOUNTS I.E. PROFIT AND LOSS ACCOUNT (SEE P AGE 5) REFLECTS THAT, IN THE INSTANT YEAR ASSESSEE HAD INC URRED AN EXPENDITURE OF RS. 14,12,97,149/- TOWARDS THE COST OF TRADING ASSETS AND THE SAME WAS REFLECTED AS CLOSING STOCK (SEE PAGE 6). THE LEARNED A.O. HAS NOT DISPUTED EITHER THE CO ST INCURRED OR THE VALUE OF CLOSING STOCK, DESPITE THE SAME, HE HA S MADE ADDITION BY OBSERVING IN HIS ORDER IN PARA 3 AS UND ER: 'MUTATION EXPENSES: FROM THE PURCHASE ACCOUNT OF LAND, IT IS SEEN THAT THIS ACCOUNT ALSO INCLUDES THE MUTATION EXPENSES OF RS. 9,87,377 /-.THE ASSESSEE COMPANY WAS ASKED TO EXPLAIN THE SOURCES O F THE MUTATION EXPENSES WHETHER THE EXPENSES WERE PAID I N CASH OR THROUGH CHEQUE. BUT, THE ASSESSEE COMPANY HAS FAILE D TO EXPLAIN THE SOURCES OF MUTATION EXPENSES. HENCE, UN DER THE ITA NOS. 1186 & 1213/DEL/2013 15 CIRCUMSTANCES, THE MUTATION EXPENSES OF RS. 9,87,37 7/- IS DISALLOWED AND ADDED IN TAXABLE INCOME AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES.' READING THE AFO RESAID OBSERVATION, IT WOULD BE SEEN THAT, THE FINDING OF THE LEARNED A.O. IS THAT, WHEN THE ASSESSEE WAS CALLED UPON, WH ETHER THE EXPENDITURE WERE PAID IN CASH OR THROUGH CHEQUE, IT HAD FAILED TO EXPLAIN THE SOURCE OF MUTATION EXPENSES. IT IS R ESPECTFULLY SUBMITTED, SUCH FINDING IS WHOLLY ARBITRARY AS THE ENTIRE SUM WAS FUNDED BY M/S VATIKA LIMITED WHO HAS CONFIRMED THE SAME. A COPY OF THE ACCOUNTS OF M/S VATIKA LIMITED IN THE BOOKS OF THE ASSESSEE (SEE PAGE 113 - 116) SHOWS THAT, THE SAID SUM WAS INCURRED BY M/S VATIKA LIMITED AND WAS DEBITED TO T HE ACCOUNT OF ASSESSEE AND AS SUCH THE ASSESSEE COULD NOT HAVE INCURRED THE SAID SUM AGAIN EITHER IN CASH OR BY CHEQUE, IT IS FURTHER EVIDENT THAT, THE AFORESAID SUM OF RS. 9,87,377/- W AS INCURRED ON MUTATION OF THE LAND ACQUIRED FOR THE ASSESSEE B Y MIS VATIKA LIMITED (SEE PAGE 117 OF PAPER BOOK). THIS IS ALSO WELL DEMONSTRATED FROM THE FOLLOWING TABLE WHICH SHOWS D ETAILS OF MUTATION EXPENSES DEBITED IN LAND PURCHASE ACCOUNT IN THE BOOKS OF VATIKA LIMITED TO THE DEBIT OF THE ACCOUNT OF ASSESSEE IN THEIR BOOKS: ITA NOS. 1186 & 1213/DEL/2013 16 DATE TOTAL AMOUNT MUTATION PAGE OF PAPER DEBITED EXPENSES BOOK INCLUDED IN TOTAL AMOUNT 14.09.2005 61,69,625.00 1,38,125.00 118 16.09.2005 1,49,74,375.00 3,34,375.00 119 19.09.2005 34,00,700.00 75,000.00 120 28.09.2005 2,49,79,900.00 91,900.00 121 28.09.2005 9,74,400.00 5,400.00 122 28.09.2005 7,04,900.00 3,900.00 123 28.09.2005 1,09,60,937.00 40,000.00 124 03.10.2005 2,18,72,000.00 80,000.00 125 03.10.2005 81,92,750.00 30,000.00 126 05.10.2005 17,92,650.00 9,800.00 127 07.10.2005 1,35,41,237.00 49,852.00 128 10.10.2005 53,01,100.00 19,550.00 129 ITA NOS. 1186 & 1213/DEL/2013 17 24.10.2005 90,67,750.00 33,000.00 130 25.10.2005 67,94,600.00 25,100.00 131 28.10.2005 5,01,625.00 2,775.00 132 28.10.2005 19,93,500.00 36,000.00 133 18.11.2005 23,23,850.00 12,600.00 134 TOTAL 9,87,377.00 15. IT WOULD FURTHER BE SEEN THAT, AS PER THE LEDGE R ACCOUNT OF M/S VATIKA LIMITED IN THE BOOKS OF ASSESSEE, A SUM OF RS. 17,63,03,759/- HAS BEEN CREDITED AND THE SAID CREDI T REPRESENTS RS. 14,12,97,149/- TOWARDS COST OF LAND WHICH INCLU DES RS. 9,87,377/- AS MUTATION EXPENSES. FURTHER TO THE AFO RESAID SUM OF RS. 14,12,97,149/- A FURTHER SUM OF RS. 3,50,00, 000/- HAD BEEN PAID AS A LOAN BESIDES INCURRING THE PRELIMINA RY EXPENSES OF RS. 6,610/- AS IS TABULATED BELOW: DETAIL OF VATIKA LIMITED 1. LAND PURCHASED RS. 14,12,97,149/ 2. CHEQUE PAID TO ASSESSEE RS. 3,50,00,000/- 3. PRELIMINARY EXPENSES INCURRED ITA NOS. 1186 & 1213/DEL/2013 18 RS. 4,810/- RS. 200/- RS. 1,600/- RS. 6,610/ DUE ON 31.03.2006 RS. 17,63,03,759/- APART THERE FROM THE BREAKUP OF RS. 14,12,97,149/- INCLUDES THE SAID SUM OF RS. 9,87,377/- AND IS ALSO DEMONSTRATED AS BELOW: INVENTORY 1. LAND PURCHASED RS. 12,90,52,625/- 2. LAND (MISC. FIXED ASSETS) RS. 35,14,207/- 3. LAND REGISTRATION, STAMP PAPER ETC.RS. 77,42,94 0/- 4. MUTATION EXPENSES RS. 9,87,377/- RS. 14,12,97,149/- 16. THE LEARNED CIT (A) IN HIS ORDER HAS NOTED THAT , THE ASSESSEE IN SUPPORT OF THE FACT THAT, EXPENSES HAVE BEEN INCURRED BY M/S VATIKA LIMITED ON BEHALF OF THE ASS ESSEE HAD PLACED ON RECORD A COPY OF LAND ACCOUNT OF M/S VATI KA LIMITED (PAGES 113 -116) IN THE BOOKS OF THE ASSESSEE COMPA NY. HE HAS ITA NOS. 1186 & 1213/DEL/2013 19 FURTHER NOTED THAT, ASSESSEE HAD FURNISHED BEFORE H IM, A COPY OF THE COLLABORATION AGREEMENT WITH M/S VATIKA LIMI TED AS WELL AS COPY OF ACCOUNT OF M/S VATIKA LIMITED IN THE BOO KS OF THE ASSESSEE AND ALSO DEBIT NOTES (PAGES 118 - 134) ISS UED BY M/S VATIKA LIMITED TO ESTABLISH THE MUTATION EXPENSES H AD BEEN INCURRED BY M/S VATIKA LIMITED ON BEHALF OF THE ASS ESSEE, WHICH SUM HAS DULY BEEN INCORPORATED BY THE ASSESSEE IN T HE BOOKS OF ACCOUNTS. 17. IT IS THUS SUBMITTED THAT, DESPITE THE AFORESA ID FACTS THE LEARNED CIT (A) HAS ERRED IN SUSTAINING THE ADDITIO N WITHOUT DISPUTING EITHER THE GENUINENESS OF THE EVIDENCE ON THE GROUND THAT SINCE THE ASSESSEE WAS ASKED TO PRODUCE BILLS OR OTHER SUPPORTING EVIDENCE LIKE VOUCHERS INDICATING THE NA TURE OF THESE EXPENSES. IN FACT HIS FINDING THAT, THE DEBIT NOTES OF ASSOCIATED CONCERN DOES NOT HOLD GOOD, IS WHOLLY AR BITRARY. EVEN OTHERWISE, IT IS SUBMITTED, SINCE NO CLAIM OF DEDUCTION HAS BEEN CLAIMED, NO ADDITION COULD BE HELD TO BE TENAB LE IN LAW AS THE SAME IS AGAINST THE PRINCIPLES OF ACCOUNTANCY A ND COMPUTATION OF INCOME UNDER LAW. IT IS SUBMITTED TH AT, ASSUMING AND FOR THE SAKE OF AN ARGUMENT, THOUGH DI SPUTED THAT, NO EXPENDITURE WAS INCURRED AS HAS BEEN ASSUM ED THEN IT ITA NOS. 1186 & 1213/DEL/2013 20 IS NOT KNOWN UNDER WHICH OF THE PROVISION OF INCOME TAX ACT, SUCH AMOUNT COULD BE ADDED TO THE INCOME, WHEN NO S UCH EXPENSES HAVE BEEN CLAIMED, AS A DEDUCTION. WITHOUT PREJUDICE TO THE AFORESAID AND IN THE ALTERNATIVE IT IS SUBMI TTED, THE FACT THAT THE EXPENDITURE HAS BEEN INCURRED CANNOT BE DI SPUTED, WHICH EXPENDITURE HAD BEEN INCURRED BY M/S VATIKA L IMITED ON BEHALF OF THE ASSESSEE WHICH IS DULY DEBITED IN THE BOOKS OF M/S VATIKA LIMITED IN THE ACCOUNT OF THE ASSESSEE, WHO IS COLLABORATOR OF THE ASSESSEE. THUS THE ADDITION MAD E AND SUSTAINED BY THE CIT (A) IS HIGHLY ILLEGAL, ARBITRA RY, WITHOUT APPLICATION OF MIND, IN DISREGARD OF THE BASIC PRIN CIPLES OF THE ACCOUNT AS WELL AS THE STATUTORY PROVISION OF THE I NCOME TAX ACT. 18. IN RESPECT OF THE DEPARTMENTAL APPEAL I.E. ITA NO.: 1213/DEL/2013 18.1 THAT THE RESPONDENT ASSESSEE SUBMITS THAT FOR THE REASONS STATED BY THE LEARNED CIT(A) IN HIS ORDER IN RESPEC T OF THE TWO SUMS, HE HAS CORRECTLY DELETED THE AFORESAID SUMS. THE RESPONDENT FURTHER SUBMITS THAT WHILE DELETING THE ADDITION MADE OF RS. 10,41,000/-, THE LEARNED CIT (A) HAS NO TED THAT SOURCE OF THE CREDITS IN THE BOOKS OF THE ACCOUNT O F THE ITA NOS. 1186 & 1213/DEL/2013 21 ASSESSEE IS OUT OF CASH WITHDRAWN FROM THE BANK ON 04.05.2005 AND 07.05.2005 AND WAS THEREAFTER IN THE BOOKS OF T HE ASSESSEE WAS SHOWN AS CASH IN HAND. IT IS AN ADMITT ED FACT THAT THERE ARE NO ADVERSE OBSERVATION MADE IN RESPECT OF THE CORRECTNESS AND COMPLETENESS OF THE BOOKS OF ACCOUN T MAINTAINED BY THE ASSESSEE. IN VIEW THEREOF IT IS S UBMITTED THAT WHEN ASSESSEE RE-DEPOSITED THE SAME OUT OF THE CASH BALANCE, THEN HE CLEARLY ERRED IN HOLDING THAT CREDITS ARE U NEXPLAINED. IN FACT IN SO DOING, HE HAS MERELY STATED THAT THE AMO UNT WAS DEPOSITED AFTER TWO AND HALF MONTHS AFTER THE DATE OF THE WITHDRAWAL BUT HE IGNORED THE FACT THAT THE SAME SU M OF WITHDRAWAL REMAIN TO BE CASH IN HAND AND WAS DULY R EFLECTED IN THE BOOKS OF THE ASSESSEE. IT IS SUBMITTED THAT THE MERE FACT THAT IT WAS KEPT IN CASH IN HAND AND FOR BUSINESS N EEDS OF THE ASSESSEE COMPANY CANNOT BE HELD TO BE ANY VALID BAS IS FOR MAKING THE ADDITION. THE ASSESSEE SEEKS TO SUPPORT ITS SUBMISSION FROM THE JUDGMENT IN THE CASE OF S. R. VENKATARATNAM VS COMMISSIONER OF INCOME-TAX REPORTE D IN 127 ITR 807 AND IN FACT THERE ARE SEVERAL JUDGMENTS UPH OLDING THE AFORESAID SUBMISSION OF THE ASSESSEE. ITA NOS. 1186 & 1213/DEL/2013 22 18.2 FURTHER IN RESPECT OF THE ADDITION OF RS. 50,0 00/- BEING THE SUM RECEIVED BY WAY OF SHARE CAPITAL FROM SHRI ANUP AM NAGALIA, ASSESSEE HAS ALREADY MADE ITS SUBMISSION I N PARA 4-12 HEREINABOVE. IT IS RETREATED THAT ALL WHAT IS REQUI RED IS SATISFY THE A.O. WAS TO EXPLAIN THE SOURCE OF CREDIT OF RS. 10,10,000/-. THE A.O. HAD DULY ACCEPTED THAT OUT OF THE SAID SUM OF RS. 10,10,000/- WAS AN AMOUNT RECEIVED AS A LOAN AND DE SPITE THEREOF HE MADE AN ADDITION OUT OF THE SAID SUM OF RS. 1,00,000/- OUT OF WHICH SHARE WERE ISSUED IN THE NA ME OF SHRI. ANUPAM NAGALIA AND SHRI. DEEPAK GUPTA. IT IS SUBMIT TED THERE HAS NOT BEEN ANY DISPUTE THE CREDIT IN THE BOOKS IS FROM SHRI. ANUPAM NAGALIA. IN SUCH CIRCUMSTANCES, IT IS PRAYED THAT IT BE HELD THAT THE LEARNED A.O. HAD ERRONEOUSLY MADE THE ADDITION WHICH IT IS SUBMITTED IS HIGHLY UNWARRANTED AND IS EVIDENTLY ARBITRARY BOTH ON FACT AND IN LAW. 4.1 LD. COUNSEL OF THE ASSESSEE HAS ALSO FILED THE PAPER BOOK FROM PAGES NO. 1 TO 157 CONTAINING THE VARIOUS DOC UMENTS AND DETAILS FILED DURING THE PROCEEDINGS BEFORE THE LOW ER AUTHORITIES. 5. ON THE OTHER HAND, LEARNED DR HAS ARGUED AT LEN GTH. SHE ALSO FILED A PAPER BOOK FROM PAGE 1 TO 68 CONTAININ G THE ITA NOS. 1186 & 1213/DEL/2013 23 ASSESSMENT RECORD OF THE ASSESSING OFFICER AND RELE VANT DOCUMENTS. SHE SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO SUBMIT THE DETAILS OF EQUITY SHARE CAPI TAL FOR THE NEW SHARE CAPITAL INTRODUCED DURING THE YEAR ALONGW ITH CONFIRMATIONS AND INCOME TAX PARTICULARS OF SUBSCRI BERS. IN RESPONSE TO WHICH, THE ASSESSEE ONLY STATED THAT TH E COMPANY WAS INCORPORATED WITH THE SHARE CAPITAL OF `1 LAKH. NO FURTHER EXPLANATION/EVIDENCE WITH REGARD TO THE SHARE CAPIT AL OF `1 LAKH WAS FURNISHED BEFORE THE ASSESSING OFFICER. EVEN B EFORE THE CIT(A), THE ASSESSEE HAS NOT FURNISHED THE CONFIRMA TION OF TWO SHAREHOLDERS IN WHOSE ACCOUNT `50,000/- EACH WAS CR EDITED BUT, ON THE OTHER HAND, THE ASSESSEES EXPLANATION IS THAT THE ASSESSEE HAD RECEIVED A CHEQUE OF `10,10,000/- ON 2 .5.2005 FROM SHRI ANUPAM NAGALIA AND OUT OF THIS `10,10,000 /-, A SUM OF `1,00,000/- WAS CREDITED TO THE SHARE CAPITAL AC COUNT IN THE NAME OF TWO PERSONS SHRI ANUPAM NAGALIA AND SHRI DE EPAK GUPTA. BALANCE `9,10,000/- WAS CREDITED TO THE LOA N ACCOUNT OF THE ASSESSEE. THAT WHEN CHEQUE OF `10,10,000/- WAS RECEIVED FROM ANUPAM NAGALIA, WHY AND ON WHAT BASIS IT WAS C REDITED AT THREE DIFFERENT PLACES? SHE ALSO STATED THAT THE B OOKS OF ITA NOS. 1186 & 1213/DEL/2013 24 ACCOUNT WERE NEVER PRODUCED BEFORE THE ASSESSING OF FICER EITHER DURING ORIGINAL ASSESSMENT PROCEEDINGS OR TH E REMAND PROCEEDINGS SO THAT THE CONTENTION OF ASSESSEE CAN BE VERIFIED. THE ASSESSEE ALSO DID NOT PRODUCE CONFIRMATION FROM SHAREHOLDERS. 5.1 WITH REGARD TO CASH DEPOSIT OF `10,41,000/- IN THE BANK ACCOUNT, SHE SUBMITTED THAT THE ONLY EXPLANATION GI VEN BY THE ASSESSEE IS THAT THE AMOUNT IS DEPOSITED OUT OF EAR LIER CASH WITHDRAWN FROM THE BANK. HERE AGAIN, THERE IS A GA P OF MORE THAN TWO AND HALF MONTHS BETWEEN THE WITHDRAWAL AND THE DEPOSIT. THAT THE ASSESSEE IS A COMPANY WHICH IS I N THE BUSINESS OF REAL ESTATE. THAT IT WAS FOR THE ASSES SEE TO ESTABLISH THAT NO EXPENDITURE WAS INCURRED DURING T HE PERIOD OF TWO AND HALF MONTHS I.E. BETWEEN THE WITHDRAWAL OF THE CASH FROM THE BANK AND DEPOSIT OF CASH IN THE BANK. SHE REITERATED THAT THE ASSESSEE DID NOT PRODUCE THE CASH BOOK EVE N IN REMAND PROCEEDINGS. IN THE ABSENCE OF CASH BOOK, T HE ASSESSEE CANNOT VERIFY THE AVAILABILITY OF CASH ON THE DATE ON WHICH MONEY IS DEPOSITED IN THE BANK ACCOUNT. WITH REGARD TO MUTATION EXPENSES OF `9,87,377/-, AGAIN, THE ASSESS EE DID NOT PRODUCE ANY EVIDENCE EXCEPT THAT THE EXPENSES WERE MET BY ITA NOS. 1186 & 1213/DEL/2013 25 THE SISTER CONCERN. THAT THE ASSESSEE TERMED IT AS A MUTATION EXPENSES BUT WHEN THE ASSESSING OFFICER ASKED THE A SSESSEE TO PRODUCE THE VOUCHERS FOR THE EXPENSES, THE ASSESSEE SUBMITTED THAT THE EXPENSES WERE INCURRED ON IDENTIFICATION O F LAND, INSPECTION THEREOF, SEARCHING OF REGISTRARS RECORD S, EXPENSES INCURRED ON REPORT FROM ADVOCATES, BROKERAGE ETC. HOW AND WHY THESE EXPENSES WERE PAID BY THE SISTER CONCERN VATIKA LIMITED IS NOT EXPLAINED AND MOREOVER, IF THE SISTE R CONCERN IS DEBITING SOME AMOUNT IN THE ACCOUNT OF THE ASSESSEE , THEY HAVE TO PRODUCE THE SUPPORTING EVIDENCE TO WHOM THE Y HAVE MADE THE PAYMENT AND FOR WHAT PURPOSE. NO SUCH DET AILS WERE PRODUCED EITHER DURING THE ORIGINAL ASSESSMENT PROC EEDINGS OR DURING THE REMAND PROCEEDINGS. SHE REFERRED TO THE LETTER OF THE CIT(A) WHICH IS AT PAGE 6 OF THE DEPARTMENTS P APER BOOK WHEREIN THE CIT(A) HAS MENTIONED THAT THE AR HAS SU BMITTED BEFORE THE CIT(A) THAT THE ASSESSEE IS READY TO OFF ER COOPERATION IN EXAMINATION OF ADDITIONAL EVIDENCE. ON THAT BASIS, THE CIT(A) ASKED THE ASSESSING OFFICER TO CA LL FOR THE RELEVANT VOUCHERS AND THE BOOKS OF ACCOUNT FOR VERI FICATION AND THEN SUBMIT ANOTHER REMAND REPORT. SHE REFERRED TO THE ORDER SHEET ENTRY DATED 1.11.2010 AND POINTED OUT THAT TH E BOOKS OF ITA NOS. 1186 & 1213/DEL/2013 26 ACCOUNT AND VOUCHERS NOT PRODUCED. SHE, THEREFORE, SUBMITTED THAT EITHER THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED I.E. ALL THE ADDITIONS MADE BY THE ASSESSING OFFICE R SHOULD BE SUSTAINED OR ALTERNATIVELY, THE MATTER MAY BE SENT BACK TO THE FILE OF THE ASSESSING OFFICER FOR RE-EXAMINATION. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE U S. WITH REGARD TO SHARE CAPITAL OF `1 LAKH, THE QUERY RAISE D BY THE ASSESSING OFFICER READS AS UNDER:- FURNISH THE DETAILS OF THE EQUITY SHARE CAPITAL FO R THE NEW SHARES CAPITALS INTRODUCED DURING THIS YEAR ALO NG WITH CONFIRMATIONS, IT PARTICULARS OF SUBSCRIBERS. 6.1 IN RESPONSE TO THIS, THE REPLY FURNISHED BY THE ASSESSEE READS AS UNDER:- THE ASSESSEE COMPANY WAS INCORPORATED 15-04- 2005 UNDER THE COMPANIES ACT, 1956 WITH A SHARE CAPITAL OF RS.1,00,000/- OTHER THAN INITIAL SHARE C APITAL OF RS.1,00,000/- NO FURTHER EQUITY SHARE CAPITAL WA S RAISED DURING THE YEAR UNDER CONSIDERATION. 6.2 FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE HAS NOT GIVEN ANY DETAILS WITH REGARD TO THE SHARE CAPI TAL OF `1 LAKH, NOT EVEN THE NAME OF THE SHAREHOLDER AND THE CONFIRMATION OF THE SHAREHOLDER. BEFORE THE CIT(A) , THE ITA NOS. 1186 & 1213/DEL/2013 27 ASSESSEE EXPLAINED THAT IT HAD RECEIVED THE SUM OF `10,10,000/- BY CHEQUE FROM SHRI ANUPAM NAGALIA, OU T OF WHICH, `50,000/- IS CREDITED TO THE SHARE CAPITAL A CCOUNT OF SHRI ANUPAM NAGALIA, `50,000/- TO THE SHARE CAPITAL ACCOUNT OF SHRI DEEPAK GUPTA AND BALANCE `9,10,000/ - IN THE LOAN ACCOUNT. EXCEPT THIS EXPLANATION, NO CONF IRMATION FROM ANYBODY WAS PRODUCED AND MOREOVER, WHY THE CHEQUE RECEIVED FROM SHRI ANUPAM NAGALIA WAS CREDIT ED BY SHARE CAPITAL BY SHRI DEEPAK GUPTA IS EXPLAINED. IN OUR OPINION, THE MATTER NEEDS PROPER EXAMINATION AT THE END OF THE ASSESSING OFFICER. WITH REGARD TO THE OTHER TWO ITEMS, WE FIND THAT SO FAR AS CASH DEPOSIT IN THE B ANK IS CONCERNED, THE ONLY EXPLANATION OF THE ASSESSEE IS CASH WITHDRAWAL FROM THE BANKS TWO AND HALF MONTHS BEFOR E. HOWEVER, HERE AGAIN, THE ASSESSEE HAS NOT PRODUCED THE CASH BOOK FROM WHICH THE ASSESSING OFFICER MAY VERI FY WHETHER THE CASH WITHDRAWN TWO AND HALF MONTHS BACK IS AVAILABLE. THE ASSESSEE IS A COMPANY WHICH IS IN T HE BUSINESS OF REAL ESTATE. THERE, LEARNED DR RIGHTLY POINTED OUT THAT IT NEEDS TO BE VERIFIED WHETHER NO EXPENDI TURE IS INCURRED BY THE ASSESSEE COMPANY DURING THE TWO AND HALF ITA NOS. 1186 & 1213/DEL/2013 28 MONTH PERIOD. SIMILARLY, WITH REGARD TO MUTATION EXPENSES, NO VOUCHERS FOR THE EXPENSES ARE SUBMITTE D. THE ONLY EXPLANATION OF THE ASSESSEE IS THAT THE PA YMENT HAS BEEN MADE BY M/S VATIKA LIMITED AND THE EXPENSE S WERE INCURRED FOR IDENTIFICATION OF LAND, INSPECTIO N THEREOF, SEARCHING OF REGISTRARS RECORD, EXPENSES INCURRED ON REPORTS FROM ADVOCATES, BROKERAGES ETC. NOW, IF A THIRD PARTY IS DEBITING SOME ACCOUNT IN THE NAME OF THE ASSESSEE, THE THIRD PARTY WOULD CERTAINLY GIVE THE DETAILS TO THE ASSESSEE TO WHOM THEY HAVE MADE THE PAYMENT AND FOR WHICH PURPOSE. NO SUCH VOUCHERS/DETAILS OR EVIDENCE ARE PRODUCED BEFORE THE ASSESSING OFFICER EITHER IN ORIGINAL ASSESSMENT PROCEEDINGS OR IN REMAND PROCEEDINGS DESPITE ASSURANCE GIVEN TO CIT(A). THE CIT(A) WROTE A LETTER TO THE ASSESSING OFFICER DATED 15.8. 2010, COPY OF WHICH IS AT PAGE 6 OF THE DEPARTMENTS PAPE R BOOK. IT READS AS UNDER:- THE INCOME-TAX OFFICER, WARD 3(1), NEW DELHI. ITA NOS. 1186 & 1213/DEL/2013 29 SUB : APPLICATION UNDER RULE 46A(1) FOR PRODUCTION OF ADDITIONAL EVIDENCE BEFREO CIT(APPEALS) IN THE CASE OF M/S BUZZ ESTATES PVT.LTD. A.Y. 2006-07 REG. PLEASE REFER TO THE SUBJECT CITED ABOVE. IN YOUR REMAND REPORT, YOU HAVE RAISED THE ISSUE TH AT IN THE ABSENCE OF SUPPORTING VOUCHERS AND BOOKS OF ACCOUNTS, COMMENTS CANNOT BE OFFERED ON THE ADDITIONAL EVIDENCE. IN HIS REJOINDER, THE AR HAS SUBMITTED THAT HE IS READY TO OFFER COOPERATION IN EXAMINATION OF ADDITIONAL EVIDENCE. FOR ASCERTAINING THE FACTUAL POSITION, YOU ARE REQUESTED TO EXAMINE THE DOCUMENTS FILED BY THE APPELLANT. IN THIS REGARD, YOU MAY CALL FOR THE RELEVANT VOUCHERS AND BOOKS OF ACCOUNTS FOR VERIFICATION. YOUR REPORT MUST REACH THIS OFFICE W ITHIN ONE MONTH OF RECEIPT OF THIS LETTER. SD/- (GEETMALA MOHANANEY) COMMISSIONER OF INCOME TAX (APPEALS)-VI, NEW DELHI ITA NOS. 1186 & 1213/DEL/2013 30 6.3 FROM THE ABOVE, IT IS SEEN THAT BEFORE THE CIT( A), THE ASSESSEE AGREED THAT HE WILL PRODUCE THE BOOKS OF A CCOUNT AND SUPPORTING EVIDENCE FOR VERIFICATION BEFORE THE ASS ESSING OFFICER AND THEREFORE, THE CIT(A) DIRECTED THE ASSE SSING OFFICER TO CALL FOR THE RELEVANT VOUCHERS AND BOOKS OF ACCO UNT FOR VERIFICATION. THE DR HAS PRODUCED THE PHOTOCOPY OF THE ORDER SHEET DATED 1.11.2010 IN WHICH ASSESSING OFFICER HA S RECORDED THAT THE BOOKS OF ACCOUNT AND VOUCHERS NOT PRODUCED . CONSIDERING THE TOTALITY OF THESE FACTS, WE AGREE W ITH THE SUBMISSION OF THE LEARNED DR THAT THE ENTIRE MATTER NEEDS COMPLETE RELOOK AND RE-EXAMINATION BY THE ASSESSING OFFICER. WE, THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORIT IES BELOW ON ALL THE POINTS RAISED EITHER IN REVENUES APPEAL OR IN ASSESSEES APPEAL AND RESTORE THE MATTER TO THE FILE OF THE AS SESSING OFFICER TO BE READJUDICATED AFRESH IN ACCORDANCE WI TH LAW. WE ALSO DIRECT THE ASSESSEE TO PRODUCE THE BOOKS OF AC COUNT AND ALL THE SUPPORTING EVIDENCE BEFORE THE ASSESSING OF FICER FOR VERIFICATION. IF THE ASSESSEE AGAIN FAILS TO PRODU CE THE SAME, THE ASSESSING OFFICER WILL BE AT LIBERTY TO DRAW TH E ADVERSE INFERENCE. WITH THIS REMARK, WE SET ASIDE THE ORDE RS OF AUTHORITIES BELOW AND RESTORE THE MATTER TO THE ASS ESSING ITA NOS. 1186 & 1213/DEL/2013 31 OFFICER. WE DIRECT THE ASSESSING OFFICER TO ALLOW ADEQUATE OPPORTUNITY TO THE ASSESSEE, FOR PRODUCTION OF BOOK S OF ACCOUNTS AND EVIDENCES/EXPLANATION ETC. 7. IN THE RESULT, BOTH THE APPEALS ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT 22-8-2014. SD/- SD/- [ [[ [G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL] ]] ] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 22/8/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NOS. 1186 & 1213/DEL/2013 32