Sponge Sales (India) Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1300/DEL/2011

• Counselvise Citation: 130020114 RSA 2011
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 17-10-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 14-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MOHNATY
• Assessee Lawyers: RAKESH KUMAR SEHGAL
• Keywords: Reopening of assessment; Opportunity of being heard
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI B.K. HALDAR, ACCOUNTANT MEMBER I.T.A. NO.1300/DEL/2011 ASSESSMENT YEAR : 2002-03 M/S SPONGE INDIA PVT. LTD., ITO, B-125, ANAND VIHAR, WARD-9 (2), NEW DELHI. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAACS AAACS AAACS AAACS- -- -1697 1697 1697 1697- -- -Q QQ Q APPELLANT BY : SHRI RAKESH KUMAR SEHGAL, C.A.. RESPONDENT BY : SHRI S. MOHNATY, SR. DR. ORDER PER B.K. HALDAR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD CIT(A)-XII, NEW DELHI DATED 19.1.2001 FOR ASSESSMENT YE AR 2002-03, THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEALS:- 1. THE ADDITION OF `.4,00,000/- OF SHARE CAPITAL AS AN ACCOMMODATION ENTRY BY THE ASSESSING OFFICER AND CONFIR MATION OF THE SAME BY THE CIT(A) IS CONTRARY TO FACTS AND LAW AND THEREFORE THE ADDITION IS LIABLE TO BE DELETED. 2. RE-ASSESSMENT PROCEEDINGS INITIATED U/S 147 READ WITH SECT ION 148 OF THE INCOME TAX ACT, 1961 ARE CONTRARY TO LAW AND ITA NO1300/DEL/11 2 THEREFORE, THE RE-ASSESSMENT ORDER FRAMED IN CONSEQUENT TO SUCH UNLAWFUL RE-ASSESSMENT PROCEEDING IS LIABLE TO BE QUASHED , 3. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY OF TH E GROUNDS OF APPEAL. 2. ON RECEIVING INFORMATION FROM INVESTIGATION WING OF THE INCOME TAX DEPARTMENT THAT THE ASSESSEE RECEIVED ACCOMMODATION ENTRY FROM M/S LAND MARK COMMUNICATION PVT. LTD. AMOUNTING TO ` .4,00,000/- ON 26.5.2001, THE ASSESSING OFFICER REOPENED THE ASSESSMENT OF THE ASSESSMENT YEAR 2002-03 U/S 148 OF THE ACT. THE ASSESSEE OB JECTED TO SUCH REOPENING OF ASSESSMENT AND THE OBJECTION OF THE ASSE SSEE WAS DISPOSED OFF BY THE ASSESSING OFFICER AS PER HIS ORDER DATE D 8.9.2009. THE ASSESSING OFFICER ALSO ADDED THE IMPUGNED AMOUNT OF `.4,00,000/- AS UNDISCLOSED INCOME OF THE ASSESSEE. AGGRIEVED, THE ASSE SSEE FILED APPEAL BEFORE THE LD CIT(A). 3. BEFORE THE LD CIT(A), THE ASSESSEE CHALLENGED BOTH T HE VALIDITY OF REOPENING OF ASSESSMENT U/S 148 OF THE ACT AS WELL AS THE ADDITION OF `.4,00,000/- ON MERIT. THE LD CIT(A) DECIDED BOTH THE ISSUES AGAINST THE ASSESSEE. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE T HE TRIBUNAL. 4. BEFORE US, THE LD AR FOR THE ASSESSEE HAS CONTENDED TH AT THE ASSESSING OFFICER IN THE ORDER DATED 8.9.2009 DISPOSED O FF THE OBJECTION OF THE ASSESSEE TO THE REOPENING OF THE ASSESSMEN T BY ITA NO1300/DEL/11 3 REJECTING THE SOME ARBITRARILY. THE LD CIT(A) HAS AL SO REJECTED THE APPEAL OF THE ASSESSEE ON THIS ISSUE WITHOUT CONSIDERING THE SUBMISSIONS OF THE ASSESSEE. HE HAS ALSO NOT MET OUT THE CONT ENTIONS RAISED BY THE ASSESSEE. 5. THE LD DR, ON THE OTHER HAND, WAS NOT IN A POSITIO N TO BRING TO THE NOTICE OF THE BENCH DETAILS OF INFORMATION WHICH WERE AVAILABLE TO THE ASSESSING OFFICER BEFORE RECORDING THE REASONS FOR R EOPENING OF THE ASSESSMENT. 6. IN VIEW OF THE CIRCUMSTANCES MENTIONED ABOVE, WE D O NOT HAVE THE NECESSARY FACTUAL MATRIX TO DECIDE THE ISSUE OF VAL IDITY OF REOPENING U/S 148 OF THE ACT. WE ARE OF THE CONSIDER ED OPINION THAT DETAILS OF INFORMATION AVAILABLE WITH THE ASSESSING OFFI CER THOSE WERE CONSIDERED BY HIM BEFORE RECORDING THE REASONS FOR RE OPENING ARE ABSOLUTELY NECESSARY FOR DECIDING THE ISSUE AT HAND. WE FIND THAT THE FACTUAL MATRIX HAS ALSO NOT BEEN GONE INTO BY THE LD CIT(A). WE, THEREFORE, SET ASIDE THE ORDER OF THE LD CIT(A) ON TH IS ISSUE AND REMIT THE MATTER BACK TO HIS FILE WITH THE DIRECTION THAT FACTUAL MATRIX WHICH ARE RELEVANT FOR DECIDING THE ISSUE SHOULD FIRST BE BR OUGHT ON RECORD AND THEN THE ISSUE BE RE-DECIDED AS PER LAW AFTER GIV ING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. THUS GROUND NO .2 TAKEN BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO1300/DEL/11 4 7. AS ON THE ISSUE OF VALIDITY OF REOPENING OF ASSESSMENT HAS BEEN REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER, WE ALSO SET ASIDE THE ORDER OF THE LD CIT(A) ON THE ISSUE OF ADDITION OF ` .4,00,000/- AND REMIT THE MATTER BACK TO HIS FILE WITH THE DIRECTION THAT A FRESH ORDER BE PASSED AS PER LAW AFTER GIVING THE ASSESSEE ADEQUATE OPPO RTUNITY OF BEING HEARD. THIS GROUND TAKEN BY THE ASSESSEE IS ALSO AL LOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 9. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE O F HEARING I.E. 17 TH OCTOBER, 2011. SD/- SD/- (DIVA SINGH) (B.K. HALD AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 17.10.2011. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO1300/DEL/11 5 DATE OF HEARING 17.10.2011 DATE OF DICTATION 17.10.2011 DATE OF ORDER SIGNED BY THE HON'BLE MEMBER. 18.10.2011 DATE OF ORDER SENT TO THE CONCERNED BENCH 18.10.2011