DCIT, New Delhi V. M/s. India Probuild (P) Ltd., New Delhi

ITA 1360/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82120 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-11-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: ANANDI PRASAD
• Keywords: Unexplained cash credit
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI N. K. SAINI , ACCOUNTANT MEMBER AND SHRI C. M. GARG, JUDICIAL MEMBER I.T.A .NO. - 1360 /DEL/201 3 (ASSESSMENT YEAR - 200 9 - 10 ) DCIT VS. M/S INDIAN PROBUILD (P) LTD. CIRCLE - 1 1 (1), ROOM NO.312, (FORMERLY KNOWN AS SRFF C.R. NEW DELHI. CAPITAL SERVICES (P) LTD. 474 - 475, AGGARWAL MILLENNIUM TOWER, 2 NETAJI SUBHASH PLACE, PITAMPURA, NEW DELHI - 110034. PAN: AA CCS3179H (APPELLANT) (RESPONDENT) REVENUE BY: - SH. SATPAL SINGH, SR. DR. ASSESSEE BY: - SH. ANANDI PRASAD , AR ORDER PER N. K . SAINI, AM THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 11.12.2012 OF LD. CIT ( APPEALS ) - XIII, NEW DELHI . 2. VIDE GROUND NO. 1; T HE GRIEVANCE OF THE DEPARTMENT RELATES TO THE DELETION OF ADDITION OF RS. 6,90,81,532/ - MADE BY THE AO ON ACCOUNT OF SALE OF SHARE S OF M/S INDIAN REALTY LTD. 3. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE WAS ENGA GED IN THE BUSINESS OF GIVING THE PROPERTY ON RENT AND FILED ITS RETURN OF INCOME ON 29.09.2009 SHOWING THE TOTAL INCOME AT R S . NIL. THE CASE WAS SELECTED FOR I.T.A .NO. - 1360/DEL/2013 2 SCRUTINY . D URING THE COURSE OF ASSESSMENT PROCEEDINGS , T HE AO NOTICED THAT THE ASSESSEE SOLD SHAR ES OF M/S SRFF INTERNATIONAL LIMITED (INDIAN REALTORS LIMITED) TO M/S ANI EXIMS PVT. LTD AND INCURRED LOSS OF RS. 6.75 CRORE. THE AO ASKED THE ASSESSEE TO PROVIDE EVIDENCE REGARDING GENUINENESS OF THE TRANSACTION AND ALSO SENT A LETTER TO M/S INDIAN REALTO RS LIMITED . THE AO OBSERVED THAT THE ASSESSEE PROVIDED THE COPY OF THE CERTIFICATES BUT IN THAT CERTIFICATE THE NAME OF THE COMPANY HAD NOT BEEN PRINTED . T HE AO WAS OF THE VIEW THAT T HE ASSESSEE MERELY CLAIM ED LOSS ON ASSETS AND THAT THE TRANSACTION WAS NOT GENUINE. THE AO ADDED THE LOSS OF RS.6.75 CRORE TO THE INCOME OF THE ASSESSEE. 4. BEING AGGRIEVED , THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE AO WHILE CALCULATING THE TAXABLE INCOME OF THE AS SESSEE ADDED LOSS OF SHARES OF RS.6.75 CRORE IN BOOK LOSS OF RS.6,90,81,532/ - FOR WHICH DIFFERENCE CAME TO RS.15,81532 / - (RS.6,90,81,532 / - ( ) RS.6,75,00,000/ - ) HOWEVER, THE AO HAD WRITTEN AS BALANCE EXPENSES NOT CLAIMED BY THE ASSESSEE AS PER COMPUTATI ON OF RS.18,07,988/ - WITHOUT GIVING ANY SPECIFIC REASON S , THEREFORE, THE ADDITION MADE BY THE AO WAS BASELESS. 5. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE SOLD THE SHARES ON 3.10.2008 AT THE RATE OF RS.15.6 PER SHARE & RS .15.65 PER SHARE AN D TOTAL 8 LAC SHARES WERE SOLD FOR RS.1.25,00,000/ - TO M/S ANI EXIMS PVT. LTD. THE LD. CIT(A) FURTHER OBSERVED THAT THE ASSESSEE HAD FILED COPY OF THE STATEMENT OF ICICI BANK WHEREIN THE AMOUNT OF RS.1 CRORE HAD BEE N CREDITED ON 15.04.2008 AND RS.25 LACS ON 05.05.2008. THE LD. CIT(A) I.T.A .NO. - 1360/DEL/2013 3 POINTED OUT THAT THE ASSESSEE FILED COPY OF PAN OF M/S ANI EXIMS PVT. LTD. BEFORE THE AO WHICH ESTABLISHED THAT THE SALE OF SHARE S W ERE GENUINE. THE LD. CIT(A) CATEGORICALLY STATED THAT THE ASSESSEE HAD NOT CLAIMED LOSS OF SALE OF SHARE S O F M/S INDIAN REALTORS LTD., AMOUNTING TO RS. 6,75,00,000/ - IN THE BOOKS OF ACCOUNT , THE LD. CIT(A) OBSERVED THAT WHATEVER WAS ASKED FOR WAS SUBMITTED BEFORE THE AO THEREFORE THE ADDITION MADE WAS NOT J USTIFIED. NOW, THE DEPARTMENT IS IN APPEAL. 6 . THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO AND REITERATED THE OBSERVATIONS MADE BY THE AO IN THE ASSESSMENT ORDER DATED 16.12.2011. IN HIS RIVAL SUBMISSIONS T HE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE LOSS WAS NEVER CLAIMED BY THE ASSESSEE IN THE BOOKS OF ACCOUNT . IT WAS STATED THAT THE EXPENSES WERE NOT CLAIMED AND FOR THAT REASON THE INCOME DECLARED WAS NIL . IT WAS FURTHER STATED THAT THE AO ARBITRARILY MADE THE ADDITION IN SPITE OF THE FACT THAT THE ASSESSEE DID NOT CLAIM ANY LOSS O N SHARES. FOR THE AFORESAID CONTENTION THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE COMPUTATION OF THE INCOME, COPY OF WHICH IS PLAC ED ON RECORD AT PAGE 28 OF THE ASSESSEE S PAPER BOOK. 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE IT IS NOTICED THAT THE ASSESSEE ITSELF DISALLOWED ALL THE EXPENSES CLAIMED IN THE COMPUTATION OF INCOME. THE SAID EXPENSES ALSO INCLUDED LOSS OF RS.6 ,75,00,000/ - WHICH CLEARLY SHOWS THAT THE ASSESSEE HAD NOT CLAIMED THE LOSS OF THE SHARES IN ITS COMPUTATION OF INCOME I.T.A .NO. - 1360/DEL/2013 4 AND EVEN NO LOSS WAS CARRIED FORWARD. THEREFORE THE ADDITION MADE BY THE AO WAS WITHOUT ANY BASIS , SINCE THE ASSESSEE NEVER CLAIMED THE EXPENSES OR THE LOSS OF THE SHARE AGAINST THE INCOME . IN THAT VIEW OF MATTER, WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS RIGHTLY DELETED ARBITRARY ADDITION MADE BY THE AO. WE D O NOT SE E ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 8 . VIDE GROUND NO. 2 THE ISSUE RAISED BY THE DEPARTMENT RELATES TO THE DELETION OF ADDITION OF RS.8,50,000/ - MADE BY THE AO U/S 68 OF THE IT ACT 1961,( HEREINAFTER REFERRED AS THE ACT ). 9 . FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT M/S INDIAN REALTORS PVT. LIMITED HAD GIVEN A LOAN OF RS. 8,50,000/ - TO THE ASSESSEE AND THE CONFIRMATION FURNISHED BY THE IT WAS BASICALLY A PHOTO COPY AND SIMPLY SIGNED BY THE SO CALLED DIRECTOR OF M/S INDIAN REALTORS PVT. LIMITED. THE AO FU RTHER OBSERVE THAT THE ADDRESS OF THE COMPANY WAS NOT MENTIONED AND PAN WAS ALSO NOT PROVIDED . T HE AO OBSERVED THAT THE ASSESSEE FAIL ED TO PROVE THE GENUINENESS OF THE LOAN . H E THEREFORE, TREATED THE SAME AS UNEXPLAINED CASH CREDIT AND ADDED U/S 68 OF THE ACT. 10 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE VIDE LETTER DATED 15 TH DECEMBER 2011 FURNISHED THE DETAIL S OF ALL UNSECURED LOAN S OUTSTANDING AS ON 31.3.2009 AND THEIR CONFIRMATION, FULL ADDRESS OF LOAN PROVIDERS AND PAN OF M/S INDIAN REALTORS PVT. LIMITED. IT WAS FURTHER SUBMITT ED THAT THE ASSESSEE FURNISHED T W O CONFIRMATION S, ONE WHICH WAS OBTAIN ED ON 3 RD JUNE 2009 AT THE TIME OF CASH I.T.A .NO. - 1360/DEL/2013 5 CREDIT ( WHICH WAS PROVIDED BY THE ASSESSEE AND COUNTER CONFIRMED BY THE LOAN PROVIDER, ) AND OTHER IN THE FORM OF COPY OF ACCOUNTS FROM 1 ST APRIL, 2005 TO 31 ST MARCH, 2009 IN THE BOOKS OF ACCOUNT OF M/S INDIAN REALTOR S PVT. LIMITED. THE ASSESSEE ALSO FURNISHED THE COPY OF B ALANCE S HEET AS ON 31 ST MARCH, 2009 AND CONTENDED THAT THE AO ISSUED A LETTER TO THE LOAN PROVIDER INDEPENDENTLY AND THE INFORMATION DATED 24 TH NOVEMBER, 2011 WAS SENT TO THE AO IN RESPONSE TO LETTER U/S 133(6) OF THE ACT WHICH CLEARLY ESTABLISHED THAT AMPLE EVIDENCES WERE FURNISHED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: I. CIT VS. RANCHHOD JIVABHAI NAKHAVA [2012] 208 TAXMAN 35 (GUJ.) II. ORISSA CORPN. (P) LTD. THE HON BLE SUPREME COURT (SC) III. CIT VS. KAMDHENU STEEL & ALLOYS LTD. [2012] 19 TAXMANN.COM 26 (DELHI) (H.C.) IV. CIT VS. ORBITAL COMMUNICATION (P.) LTD. [2010] 327 ITR 560 (DEL) (H.C) 11 . THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE AO MENTIONED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAD FILED THE PHOTO COPY OF CONFIRMATION AND NOT THE ORIGINAL . THE LD. CIT(A) POINTED OUT THAT DURING THE APPELLATE PR OCEEDINGS THE ASSESSEE FILED THE COPIES OF SUBMISSIONS FURNISHED BEFORE THE AO WHICH REVEALED THAT THE COPY OF CONFIRMATION WAS FILED AND PLACED AT PAGE NO. 12 S HOWING THE AMOUNT OF RS. 8,50,000/ - AS A N OPENING BALANCE ON 1.4.2008. HE ALSO MENTIONED THAT THE ASSESSEE HAD GIVEN PAN OF M/S INDIAN REALTORS PVT. LIMITED AND ACCOUNT I.T.A .NO. - 1360/DEL/2013 6 STATEMENT OF LOAN REVEALED THAT THE OPENING BALANCE AS ON 1.4.2005 WAS AT RS.11,66,666/ - , T HEREAFTER AN AMOUNT OF RS.83,334/ - WAS PAID TO THE ASSESSEE THROUGH CHEQUE OF INDIAN BANK ON 9.12.2005 WHICH MADE THE TOTAL BALANCE AT RS.12,50,000/ - . THE LD. CIT(A) ALSO POINTED OUT THAT ON 1.12.2005 ANOTHER AMOUNT OF RS.1,00,000/ - WAS PAID TO THE ASSESSEE BY CHEQUE OF INDIAN BANK WHICH MADE THE TOTAL OUTSTANDING BALANCE ON DECEMBER 2005 AT RS .13,50,000/ - . AS AGAINST THIS THE ASSESSEE PAID RS.5 LAC ON 29.02.2008 BY THE CHEQUE OF ICICI BANK AND THE BALANCE OF RS.8,50 ,000/ - REMAINED OUTSTANDING AS ON 1.04.2008 WHICH CLEARLY ESTABLISHED THAT NO LOAN AMOUNT WAS ACCEPTED BY THE ASSESSEE DURING THE YEAR, SO IT COULD NOT BE ADDED AS UNEXPLAINED CASH CREDIT IN THE ASSESSMENT YEAR 2009 - 10. ACCORDINGLY THE ADDITION MADE BY THE AO WAS DELETED. 1 2 . NOW THE DEPARTMENT IS IN APPEAL, THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO AND REITERATED THE OBSERV ATION MADE IN THE ASSESS MENT ORDER DATED 16.12.2011 . I N HIS RIVAL SUBMISSIONS , T HE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND STRONGLY SUPPORTED THE IMPUGNED ORDER. 1 3 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD . IN THE PRESENT CASE IT IS NOTICED THAT THE LD. CIT(A) AFTER VERIFY FROM THE RECORD C ATEGORICAL LY STATED THAT A SUM OF RS.13,50,000/ - WAS OUTSTANDING AS ON DECEMBER 2005 AS A GAINST THE SAID AMOUNT A SUM OF RS.5 LAC WAS PAID DURING THE YEAR UNDER CONSIDERATION AND I.T.A .NO. - 1360/DEL/2013 7 THE OUTSTANDING BALANCE AS ON 1.4.2008 WAS RS.8,50,000/ - WHICH CLEARLY ESTABLISHED THAT THE ASSESSEE DID NOT RECEIVE ANY AMOUNT AS A LOAN FROM M/S INDIAN REALTORS PVT . LIMITED DURING THE YEAR UNDER CONSIDERATION . I N THE I NST ANT CASE NOTHING WAS BROUGHT ON RECORD TO ESTABLISH THAT THE AMOUNT OUTSTANDING AS ON DECEMBER 2005 WAS NOT GENUINE THEREFORE, THE ADDITION MADE BY THE AO FOR THE YEAR UNDER CONSIDERATION WAS NOT JUSTIFIED. ACCORDINGLY, WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS RI GHTLY DELETED THE IMPUGNED ADDITION. IN THAT VIEW OF THE MATTER WE DO NOT SEE ANY MERIT IN THIS GROUND OF THE DEPARTMENT AL APPEAL. 1 4 . IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 /1 1 /2014. SD/ - SD/ - (C. M. GARG ) ( N. K. SAINI ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED: 14 /1 1 /2014 *AK VERMA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR