DCIT, New Delhi V. M/s Rahul Polymers Pvt. Ltd., New Delhi

ITA 1274/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4022 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 11-05-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 11-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus Share capital; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : F NEW DELHI) (DELHI BENCH : F NEW DELHI) (DELHI BENCH : F NEW DELHI) (DELHI BENCH : F NEW DELHI) BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER SHRI A.D. JAIN, JUDICIAL MEMBER SHRI A.D. JAIN, JUDICIAL MEMBER SHRI A.D. JAIN, JUDICIAL MEMBER I.T.A. NO.1274/DEL./2011 I.T.A. NO.1274/DEL./2011 I.T.A. NO.1274/DEL./2011 I.T.A. NO.1274/DEL./2011 (ASSESSMENT YEAR : 2003 (ASSESSMENT YEAR : 2003 (ASSESSMENT YEAR : 2003 (ASSESSMENT YEAR : 2003- -- -04) 04) 04) 04) DCIT, CEN. CIR.12, DCIT, CEN. CIR.12, DCIT, CEN. CIR.12, DCIT, CEN. CIR.12, VS. VS. VS. VS. RAHUL POLYMERS RAHUL POLYMERS RAHUL POLYMERS RAHUL POLYMERS PVT. LTD., PVT. LTD., PVT. LTD., PVT. LTD., NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. H HH H- -- -82, SOUTH EXTN., PART 82, SOUTH EXTN., PART 82, SOUTH EXTN., PART 82, SOUTH EXTN., PART- -- -I, I,I, I, NEW DELHI NEW DELHI NEW DELHI NEW DELHI- -- -15. 15. 15. 15. (PAN/GIR NO. : AABCR6014K) (PAN/GIR NO. : AABCR6014K) (PAN/GIR NO. : AABCR6014K) (PAN/GIR NO. : AABCR6014K) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : NONE ASSESSEE BY : NONE ASSESSEE BY : NONE ASSESSEE BY : NONE REVENUE BY : SHRI SUDESH GARG, CIT(DR) REVENUE BY : SHRI SUDESH GARG, CIT(DR) REVENUE BY : SHRI SUDESH GARG, CIT(DR) REVENUE BY : SHRI SUDESH GARG, CIT(DR) ORDER ORDER ORDER ORDER PER A.D. JAIN, JM THIS IS DEPARTMENTS APPEAL FOR ASSESSMENT YEAR 2006-07 CONTENDING THAT THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF `11,00,000 ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL E VEN THOUGH NO EVIDENCE EXPLAINING THE SOURCE THEREOF WAS FILED DURI NG ASSESSMENT AND THE ADDITIONAL EVIDENCE WAS ADMITTED IN VIOLATIO N OF PROVISIONS OF RULE 46A OF THE I.T. RULES, 1962. 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE DESPITE N OTICE. HOWEVER, FINDING THAT THE MATTER CAN BE PROCEEDED IN THE ABSENCE OF THE ASSESSEE, WE ARE DOING SO. 3. THE AO ADDED THE INCREASE IN THE ASSESSEES SHARE CAPIT AL, AMOUNTING TO `11 LAKHS DURING THE YEAR, AS INCOME FRO M UNDISCLOSED SOURCES. THE ASSESSEE COMPANY HAD RECEIVED THE ADDITIONA L SHARE CAPITAL FROM ITS SHARE CAPITAL FROM ITS SHARE HOLDER DI RECTORS, NAMELY, S/SHRI RAVINDER KUMAR JAIN AND RAJ KUMAR JAIN, TO R EPAY BORROWING FROM MIDAS LIDA IN EARLIER YEARS. 4. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED CONFIRMATIO N OF S/SHRI RAVINDER KUMAR JAIN & RAJ KUMAR JAIN CONCERNING THE IR CONTRIBUTION OF I.T.A. NO.1274/DEL./2011 (A.Y. : 2003-04) 2 SHARE CAPITAL OF `.5.50 LAKHS, THE ASSESSEE ALSO FILED THE IR PAN PARTICULARS AND COPIES OF THEIR RELEVANT BANK ACCOUNT S. IT WAS SUBMITTED THAT BOTH THE SHAREHOLDER DIRECTORS WERE ALSO ASSESSED BY THE SAME AO AND THAT COPIES OF THEIR BANK ACCOUNTS WER E ON RECORD WITH THE AO. 5. THE CIT(A) DELETED THE ADDITION BY HOLDING AS FOL LOWS: SINCE THE APPELLANT HAS SUBMITTED CONFIRMATIONS OF TH E SHAREHOLDER DIRECTORS WITH PAN AND ASSESSMENT PARTICULARS ALONG WITH THEIR BANK PASSBOOKS, (BEFORE ME AND SENT TO AO) T HEY ARE ADMITTED AS EVIDENCES U/S 250(4) OF THE I.T. ACT, 1961 AND ADDITON OF `11,00,000 ON ACCOUNT OF SHARE CAPITAL IS DELETED. 6. A PERUSAL OF THE ABOVE OBSERVATION OF THE CIT(A) SH OWS THAT HE HAS NOWHERE IN THE IMPUGNED ORDER, MENTIONED ANY FAC T AS TO WHAT THE OBSERVATIONS/OBJECTIONS OF THE AO TO THE ADMISSION OF TH E ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WERE AND AS TO WHAT THE A O HAD STATED IN THIS REGARD IN THE REMAND REPORT. IT HAS ALSO NOT BEEN STATED BY THE CIT(A) AS TO WHAT THE ASSESSEE HAD TO SAY IN HIS REJOINDER TO THE REMAND REPORT. THE SECOND AND THIRD SUB-PARAS OF PARA 3 OF THE IMPUGNED ORDER CATEGORICALLY MENTION A REMAND REPOR T HAVING BEEN FILED BY THE AO AND A REJOINDER THERETO HAVING BEEN SUBMITTED BY THE ASSESSEE. 7. IN VIEW OF THE ABOVE, WE DEEM IT APPROPRIATE TO REMIT THIS MATTER TO THE FILE OF THE AO, TO BE DECIDED AFRESH IN ACCOR DANCE WITH LAW, ON CONSIDERING THE AFORESAID ADDITIONAL EVIDENCE FILED B Y THE ASSESSEE BEFORE THE CIT(A), WHICH ADDITIONAL EVIDENCE COMPRI SED THE CONFIRMATIONS FROM THE SHAREHOLDER DIRECTORS OF THE ASSE SSEE COMPANY, NAMELY, S/SHRI RAVINDER KUMAR JAIN & RAJ KUMAR JAIN , THEIR PAN PARTICULARS AND THEIR RELEVANT BANK ACCOUNTS. THE ASSE SSEE WILL BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING, AND THE A SSESSEE, NO DOUBT, SHALL COOPERATE WITH THE AO. I.T.A. NO.1274/DEL./2011 (A.Y. : 2003-04) 3 8. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APPEAL F ILED BY THE DEPARTMENT IS TREATED AS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 11.05.2011. SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED: MAY 11, 2011. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-I, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT