Sai Tirupathi Aqua Private Limited, New Delhi V. ITO WARD - 22(2), New Delhi

ITA 1410/DEL/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5409 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2016-2017
• Appeal Filed On: 13-07-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 68

Judgement Text

1 ITA NO. 1410/DEL/2020 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI R. K. PANDA ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 1410/DEL/2020 (A.Y 2016-17) (THROUGH VIDEO CONFER ENCING) SAI TIRUPATHI AQUA PVT. LTD. 39A, LIG FLATS, TAIMOOR NAGAR, NEW FRIENDS COLONY, NEW DELHI AATCS2794K (APPELLANT) VS ITO WARD-22(2) NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 25/02/2020 PASSED BY CIT(A)-34, NEW DELHI FOR ASSESSMENT YEA R 2013-14.2016-17. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. CIT-A ERRED IN LAW AND ON FACTS IN CONF IRMING THE ADDITION FOR THE SUM OF RS. 39,99,900/- UNDER SECTION 68 OF THE ACT AS UNEXPLAINED CASH CREDIT WITHOUT APPRECIATING THE FACTS OF THE CASE, SUCH ADDITION IS REQUESTED TO BE DELETED. 2. THE LD. CIT-A ERRED IN CONFIRMING THE ADDITION OF RS. 28,00,000/- OF OPENING BALANCE AS UNEXPLAINED CASH CREDIT UNDER SE CTION 68 OF THE ACT IN THE YEAR UNDER CONSIDERATION, SUCH ADDITION IS REQUESTE D TO BE DELETED. APPELLANT BY SH. ADIL MAHMOOD, CA RESPONDENT BY SH. PRAKASH DUBEY, SR. DR DATE OF HEARING 08.08.2021 DATE OF PRONOUNCEMENT 23.09.2021 2 ITA NO. 1410/DEL/2020 3. THE LD. CIT-A ERRED IN LAW AND ON FACTS NOT CONS IDERING THE WHOLE FINANCIAL STATEMENT TO ESTABLISH CREDITWORTHINESS O F THE SHAREHOLDER; SUCH ADDITION IS NEEDS TO BE DELETED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT-A ERRED IN CHARGING INTEREST U/S 234A, 234B, 234C. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE INITIATION OF PENALTY PROCEEDING UNDER SECTION 271(1)(B) AND 2 71(1(C) IS BAD IN LAW KEEPING IN VIEW THE GROUNDS MENTIONED ABOVE. 3. THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF FISHING OPERATION OF FISH HATCHERIES AND FISHING FARM. RETURN OF INC OME WAS FILED ON 17/10/2016 AT TOTAL INCOME OF RS. 12,55,660/- AND REVISED RETU RN WAS FILED ON 2/3/2017 AT THE SAME INCOME. THE ASSESSING OFFICER OBSERVED TH AT THE ASSESSEE HAS ISSUED SHARES AT PREMIUM RELATING TO M/S SWARNIM EXPORTS P VT. LTD. WHICH IS ONE OF THE COMPANY TO WHOM 3,00,000 SHARES HAVE BEEN ALLOT TED AT A PREMIUM OF RS. 3.333 WITH FACE VALUE OF RS. 10 TOTALLING AT RS. 3. 333 PER SHARE AGGREGATING TO RS. 39,99,900/-. THE ASSESSEE COMPANY FURNISHED A COPY OF RECORD OF A PRIVATE PLACING OFFER IN WHICH DETAILS OF PROFIT PL ACING OFFER IS GIVEN. A SHOW CAUSE NOTICE WAS ISSUED ON 15/12/2018, BUT NO REPLY /SUBMISSIONS WERE FURNISHED BY THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER DATED 20/1/22018 AND MADE ADDITION U/S 68 TO THE EXTENT OF RS. 39,99,900/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF TH E ASSESSEE. 5. THE LD. AR SUBMITTED THAT A SUM OF RS. 39,99,900 /- CREDITED TO THE CAPITAL ACCOUNT OF THE ASSESSEE COMPANY THROUGH ALL OTMENT OF SHARE ON PREMIUM AMOUNT PAID THROUGH CHEQUE AND THUS THE GEN UINENESS OF THE TRANSACTIONS IS ESTABLISHED. THE LD. AR FURTHER SU BMITTED THAT THE BALANCE 3 ITA NO. 1410/DEL/2020 SHEET WHICH WAS FILED CLEARLY STATE OUT THAT OUT OF TOTAL SHARE AT PREMIUM ALLOTTED TO M/S SWARNIM EXPORT PVT. LTD FOR A SUM O F RS. 39,99,000/-, A SUM OF RS.28,00,000/- IS BROUGHT FORWARD FROM PREVIOUS ASS ESSMENT YEAR I.E. ASSESSMENT YEAR 2015-16 AND ONLY RS. 12,00,000/- TH ROUGH BANK TRANSFER WAS CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE COMPAN Y ON 15/5/2015 WHICH IS RELATING TO THE CURRENT ASSESSMENT YEAR 2016-17. T HE ASSESSING OFFICER AS WELL AS THE CIT(A) HAS NOT TAKEN THE COGNIZANCE OF THE EVIDENCES PRODUCED BEFORE THE REVENUE AUTHORITIES AND IN-FACT THE ASSESSING O FFICER HAS NOT CALLED FOR THE COMPANY TO WHOM THE SHARES WERE ALLOTTED WHICH IS A N EXISTING COMPANY. THUS, THE LD. AR SUBMITTED THAT THE MATTER MAY BE R EMANDED BACK TO THE FILE OF THE ASSESSING OFFICER FOR PROPER ADJUDICATION OF EVIDENCES PRODUCED BY THE ASSESSEE. 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A) AND FURTHER SUBMITTED THAT NO DOCUMENTARY EVIDENCE WAS PRODUCED BEFORE THE ASSESSING OFFICER BY THE ASSESSEE DESPITE GIVING AM PLE OPPORTUNITY. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE EVIDENCES BROUGHT ON RECORD BEFORE THE CIT(A) WERE NOT AT ALL MENTIONED IN THE ASSESSMENT ORDER. IN-FACT THE ASSESSING OFFICER OBSERVED THAT NO DETAILS WERE FILED BY THE ASSESSEE. THE CIT(A) HAS ALSO NOT TAKEN PROPER COGNIZANCE OF THE EVIDENCES FILED BEFORE THE APPELLATE AUTHORITY AND IT DEEMS FIT THAT THE PROPER VERIFIC ATION WAS NOT AT ALL DONE IN THE PRESENT CASE EITHER BY THE CIT(A) OR BY THE ASS ESSING OFFICER. THEREFORE, WE ARE REMANDING BACK THE ENTIRE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR TAKING COGNIZANCE OF THE EVIDENCES AS WELL AS SUMMO N THE REPRESENTATIVE/DIRECTOR OF THE COMPANY M/S SWARNIM EXPORT PVT. LTD. TO WHOM THE SHARES WERE ALLOTTED FOR RECORDING OF HIS STATEMENT AND AFTER CONSIDERING ALL THE ASPECTS, PASS APPROPRIATE ORDER AS PER LAW. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOL LOWING PRINCIPLES OF NATURAL JUSTICE. WE HOLD AND DIRECT ACCORDINGLY. 4 ITA NO. 1410/DEL/2020 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23RD DAY OF SEPTEMBER, 2021. SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED : 23/09/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 08.09.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 08.09.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE 5 ITA NO. 1410/DEL/2020 ORDER DATE OF DISPATCH OF THE ORDER