M/s Sharda Steel Idustries Ltd., Kanpur V. DY. Commissioner of Income Tax, Kanpur

ITA 126/LKW/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7256 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 17-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence; Reasonable cause
• Section: 133(6)

Judgement Text

I.T.A. NO.126/LKW/2017 ASSESSMENT YEAR:2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO.126/LKW/2017 ASSESSMENT YEAR:2013-14 M/S SHARDA STEEL INDUSTRIES LTD. 76/43, 2 ND FLOOR, HALSEY ROAD, KANPUR. PAN:AACCS 6086 R VS. DY.C.I.T., CENTRAL CIRCLE-1, KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LEARNED CIT(A)-IV, KANPUR DATED 07/12/2016. 2. THE GRIEVANCE OF THE ASSESSEE IN THE GROUNDS OF APPEAL IS THE ACTION OF LEARNED CIT(A) BY WHICH HE HAS CONFIRMED THE ADD ITION OF RS.35,00,000/- WHICH THE ASSESSING OFFICER HAD MADE ON ACCOUNT OF UNSECURED LOAN. THE ASSESSEE IS FURTHER AGGRIEVED WITH THE ACTION OF LE ARNED CIT(A) BY WHICH HE HAS REJECTED THE APPLICATION MADE BY THE ASSESSEE U NDER RULE 46 OF THE I.T. RULES. 3. AT THE OUTSET, LEARNED A. R. SUBMITTED THAT THE ASSESSEE HAD RECEIVED UNSECURED LOAN OF RS.20,00,000/- AND RS.15,00,000/- FROM TWO COMPANIES APPELLANT BY SHRI ASHISH JAISWAL, ADVOCATE RESPONDENT BY SHRI J. S. MINHAS, CIT (DR) DATE OF HEARING 25/09/2018 DATE OF PRONOUNCEMENT 28 / 09 /201 8 I.T.A. NO.126/LKW/2017 ASSESSMENT YEAR:2013-14 2 AND DURING ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO FURNISH THE CONFIRMED COPY OF ACCOUNTS, BANK STATEMENT AND COPY OF ITR AND IN REPLY THE ASSESSEE FILED CONFIRMED COPIES OF ACCOUNTS BUT THE COPIES OF BANK ACCOUNTS AND ITR COULD NOT BE FILED AND THEREFORE, THE ASSESSING OFFICER HELD THE SAME TO BE UNEXPLAINED UNSECURED LOAN AND MADE THE ADDITION ACCORDINGLY. LEARNED A. R. SUBMITTED THAT WHEN THE INFORMATION CALLED FOR BY THE ASSESSING OFFICER WAS MADE AVAILABLE TO THE ASSESSEE THE ASSESSEE APPROACHED ASSESSING OFFICER IN THE FIRST WEEK OF M ARCH 2016 BUT ASSESSING OFFICER SHOWED HIS INABILITY STATING THAT HE HAS AL READY PASSED THE ORDER ON 29/02/2016 AND THAT IS WHY THERE WAS A REASONABLE C AUSE FOR NOT FILING THE DOCUMENTS BEFORE THE ASSESSING OFFICER AS THE ASSES SING OFFICER HAD ALREADY COMPLETED THE ASSESSMENT. IT WAS SUBMITTED THAT I N THIS WAY THE COPIES OF ITR AND BANK STATEMENTS OF THE UNSECURED LOAN CREDI TORS COULD NOT BE FILED DURING ASSESSMENT AND THEREFORE, THEY WERE FILED BE FORE LEARNED CIT(A) AS ADDITIONAL EVIDENCE WHICH LEARNED CIT(A) HAD REMAND ED TO THE ASSESSING OFFICER FOR HIS COMMENTS. IT WAS SUBMITTED THAT TH E ASSESSING OFFICER DID NOT MAKE ANY COMMENTS ON THE MERITS OF THE DOCUMENT S BUT STATED THAT SINCE THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITY , THE ADDITIONAL EVIDENCE SHOULD NOT BE ACCEPTED AND LEARNED CIT(A) DID NOT C ONSIDER THE ADDITIONAL EVIDENCE AND REJECTED THE APPLICATION AND ALSO DISM ISSED THE APPEAL OF THE ASSESSEE. THE LEARNED A. R. SUBMITTED THAT IT WAS W RONG ON THE PART OF LEARNED CIT(A) TO REJECT THE ADDITIONAL EVIDENCE AS THE ADDITIONAL EVIDENCES WERE CRUCIAL IN DECIDING THE APPEAL OF THE ASSESSEE AND THERE WAS REASONABLE CAUSE FOR NOT FILING THE SAME BEFORE ASS ESSING OFFICER. ARGUING UPON MERITS THE LEARNED A. R. SUBMITTED THAT ASSESS ING OFFICER HAD ISSUED NOTICES U/S 133(6) OF THE ACT FOR WHICH THE ASSESSI NG OFFICER DID NOT RECEIVE REPLY AND THEREFORE, HE HELD THAT THE UNSECURED LOA NS WERE UNEXPLAINABLE. THE LEARNED A. R. SUBMITTED THAT WHEN ASSESSEE FURN ISHED THE COMPLETE I.T.A. NO.126/LKW/2017 ASSESSMENT YEAR:2013-14 3 PARTICULARS OF UNSECURED LOAN CREDITORS, THE ONUS O F THE ASSESSEE IS DISCHARGED. 4. LEARNED D. R., ON THE OTHER HAND, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT EVEN AFTER REM AND REPORT THE ASSESSING OFFICER ISSUED NOTICE U/S 133(6) TO THE L ENDERS TO WHICH ALSO THE ASSESSING OFFICER DID NOT GET ANY REPLY AND THEREFO RE, LEARNED CIT(A) HAS RIGHTLY NOT ACCEPTED THE ADDITIONAL EVIDENCE AND RI GHTLY DISMISSED THE APPEAL OF THE ASSESSEE. LEARNED A. R. IN HIS REJOINDER SU BMITTED THAT THE ASSESSING OFFICER AFTER THE REMAND FROM LEARNED CIT(A) DID NO T ISSUE ANY NOTICE U/S 133(6) AS THE SAME WAS ISSUED ONLY DURING ASSESSMEN T PROCEEDINGS WHICH FACT IS VERIFIABLE FROM THE COPY OF REMAND REPORT P LACED AT PAGES 9 & 10 OF THE PAPER BOOK. LEARNED A. R. FURTHER SUBMITTED TH AT THE NON RECEIPT OF REPLIES AGAINST THE NOTICES U/S 133(6) IS NOT IN TH E HANDS OF THE ASSESSEE AND THE BURDEN OF THE ASSESSEE IS DISCHARGED ONCE I T HAS FURNISHED THE REQUIRED INFORMATION AND RELIANCE IN THIS RESPECT W AS PLACED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF OR ISSA CORPORATION (P) LTD. [1986] 159 ITR 78 (SC). 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IT IS CORRECT THAT ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS ISSUED NOTICE U/S 133(6) TO THE UNSECURED LOAN CREDITORS FOR WHICH NO REPLY WAS RECEIVED BY THE AS SESSING OFFICER. THE SAID NOTICES WERE ISSUED ON 01/02/2016 AS IS APPARE NT FROM THE COPY OF REMAND REPORT AND THE ASSESSMENT WAS COMPLETED ON 2 9/02/2016 AND THEREFORE, IT IS WRONG ON THE PART OF LEARNED D. R. TO STATE THAT EVEN AFTER THE REMAND PROCEEDINGS THE ASSESSING OFFICER HAD IS SUED NOTICES U/S 133(6). THE NOTICES U/S 133(6) WERE ISSUED TO UNS ECURED LOAN CREDITORS ON 01/02/2016 AND ASSESSMENT WAS COMPLETED ON 29/02/20 16 WHEREAS THE I.T.A. NO.126/LKW/2017 ASSESSMENT YEAR:2013-14 4 ASSESSING OFFICER COULD HAVE WAITED FOR ONE MORE MO NTH FOR THE REPLIES TO THE NOTICES U/S 133(6). WE FURTHER FIND THAT WHEN A SSESSEE APPROACHED ASSESSING OFFICER WITH THE INFORMATION REQUIRED BY HIM, THE ASSESSING OFFICER HAD ALREADY COMPLETED THE ASSESSMENT. WE FIND THAT ASSESSEE DURING THE APPELLATE PROCEEDINGS HAD FILED THE INFORMATION AS REQUIRED BY THE ASSESSING OFFICER AS ADDITIONAL EVIDENCE WHICH LEARNED CIT(A) HAS NOT ACCEPTED. THESE ADDITIONAL EVIDENCES ARE IN THE FORM OF COPY OF BANK STATEMENT AND COPY OF ITR OF UNSECURED LOAN WHICH GOES TO THE ROO T OF THE MATTER FOR DECIDING THE CREDITWORTHINESS AND GENUINENESS OF UN SECURED LOANS AND THEREFORE, THE LEARNED CIT(A) HAVING CO-TERMINUS PO WER WITH THAT OF THE ASSESSING OFFICER SHOULD HAVE EXAMINED THE SAME AND SHOULD HAVE DECIDED THE SAME ON MERITS. THEREFORE, WE DEEM IT APPROPRI ATE TO REMIT THE ISSUE BACK TO LEARNED CIT(A) WHO SHOULD DECIDE THE ISSUE AFRESH AFTER TAKING INTO ACCOUNT THE ADDITIONAL EVIDENCE. NEEDLESS TO SAY T HE ASSESSEE WILL BE PROVIDED REASONABLE OPPORTUNITY OF BEING HEARD. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 28/09/2 018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:28/09/2018 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW