Hill Take Buildwell Private Ltd., New Delhi V. ITO, New Delhi

ITA 1433/DEL/2012

• Counselvise Citation: 143320114 RSA 2012
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 27-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SATPAL SINGH
• Keywords: Gift; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C NEW DELHI) BEFORE SHRI RASJPAL YADAV, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.1123/DEL/2012 ASSESSMENT YEAR : 2007-08 ITO, HILLTAKE BUILDWELL PVT.LTD., WARD-12 (4), K-3/106, DLF PHASE-II, NEW DELHI. V. GURGAON. I.T.A. NO.1433/DEL/2012 ASSESSMENT YEAR : 2007-08 HILLTAKE BUILDWELL PVT. LTD., ITO, K-3/106, DLF PHASE-II, WARD-12 (4), GURGAON. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/ PAN /GIR/ PAN /GIR/ PAN /GIR/NO. NO. NO. NO.AABCH AABCH AABCH AABCH- -- -6511 6511 6511 6511- -- -K KK K APPELLANT BY : SHRI SATPAL SINGH, SR. DR. RESPONDENT BY : SHRI TARUN ROHTAGI, C.A. ORDER PER TS KAPOOR, AM: THESE ARE CROSS APPEALS FILED BY THE REVENUE AS WELL AS B Y ASSESSEE AGAINST THE ORDER OF LD CIT(A) DATED 7.12.2011. THE REVENUE HAS TAKEN EIGHT GROUNDS OF APPEALS BUT THE EFFECTIVE GROUND OF APPEAL IS THE GRIEVANCE OF REVENUE THAT LD CIT(A) HAD WRON GLY DELETED THE ADDITION OF ` .27,65,779/- WHICH INCLUDED ` .24,00,000/- AS SHARE APPLICATION MONEY AND ` .3,65,779/- AS CESSATION OF LIABILITY. THE EFFECTIVE GROUND OF APPEAL TAKEN BY THE ASSESSEE IS REGA RDING UPHOLDING OF DISALLOWANCE OF ` .13,50,000/- U/S 68 OF THE INCOME TAX ACT, 1961 . ITA NO1123 & 1433/DEL/12 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN REAL ESTATE BUSINESS AND RENTING OF BUILDING S. THE RETURN OF INCOME WAS FILED ON 29.10.2009 DECLARING LOSS OF ` .15,371/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT ASSESSEE HA D RECEIVED AN AMOUNT OF ` .24 LAKHS IN THE FORM OF SHARE APPLICATION MONEY AND ` .13.50 LAKHS TOWARDS UNSECURED LOANS FROM ONE MRS. SIPIKA GOEL. THE ASSESSING OFFICER OBSERVED THAT IN SCH EDULE-C OF BALANCE SHEET THE NAME FROM WHOM THE UNSECURED LOAN W AS TAKEN WAS WRITTEN AS LIPIKA KHAITAN. THE ASSESSING OFFICER FURTHER OBSERVED THAT DESPITE HUGE INVESTMENT OF ` .37.50 LAKHS IN THE ASSESSEE COMPANY MRS. SIPIKA GOEL HAD NOT FILED ANY RETURN OF INCOME. HE FURTHER OBSERVED THAT AT ONE PLACE SHE HAD MENTIONED HER SIR NAME AS GOEL WHEREAS AT ANOTHER PLACE SHE HAD MENTIONED AS GOYAL. ON QUERY, IT WAS SUBMITTED BY THE ASSESSEE THAT LIPIKA KHAITAN HAD REC EIVED A GIFT OF ` .38.60 LAKHS FROM HER HUSBAND SHRI NAVIN KHAITAN AND OUT OF THESE PROCEEDS SHE HAD INVESTED IN THE ASSESSEE COMPANY IN THE F ORM OF SHARE APPLICATION MONEY AND UNSECURED LOANS. THE ASSESSIN G OFFICER REQUIRED THE ASSESSEE TO FILE COPY OF RETURN AND BALAN CE SHEET OF SHRI NAVIN KHAITAN FOR ASSESSMENT YEAR 2007-08 AND WAS ALSO RE QUIRED TO PROVE SOURCE OF ALLEGED GIFT TO MRS. SIPIKA GOEL. HOW EVER, THE ASSESSEE DID NOT FILE ANY REPLY. THEREFORE, THE ASSESSING OFFICE R HELD THAT ASSESSEE WAS NOT ABLE TO PROVE THE SOURCE OF CASH CREDIT IN ITS BOOKS OF ACCOUNTS AND THEREFORE HE MADE AN ADDITION OF ` .37.50 LAKHS U/S 68 OF THE INCOME TAX ACT, 1961. HE FURTHER OBSERVED THAT A SSESSEE HAD SHOWN RENT PAYABLE IN ITS CURRENT LIABILITIES TO THE T UNE OF ` ./3,65,779/- AS ON 31.3.2007 AND SAME FIGURE WAS OUTSTANDING AS ON 31 .3.2006. THEREFORE, THE ASSESSEE WAS REQUIRED TO FILE CONFIRMATIO N OF SAID LIABILITY FROM THE CREDITOR. THE ASSESSEE, HOWEVER, DID NOT REPLY TO THE ITA NO1123 & 1433/DEL/12 3 QUERY OF ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICE R MADE THE ADDITION AS UNPROVED LIABILITY. 3. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE LD CIT(A ) AND SUBMITTED VARIOUS SUBMISSIONS. THE LD CIT(A) UPHELD THE ADDITION ON ACCOUNT OF UNSECURED LOANS AMOUNTING TO ` .13.50 LAKHS HOLDING THAT IDENTITY OF THE CREDITOR WAS NOT ESTABLISHED AS IT WAS N OT CLEAR AS TO WHY MRS. GOEL HAS GIVEN ADDRESS OF GURGAON IN HER BANK ACCOUNT INSTEAD OF HER ADDRESS IN BIHAR. FURTHER HE HELD THAT IT WAS NOT CLEAR AS TO FROM WHICH ACCOUNT THE MONEY WAS TRANSFERRED IN T HE ACCOUNT OF MRS. SIPIKA GOEL. IT WAS NOT PROVED AS TO WHETHER MRS. LIPIKA KHAITAN MENTIONED IN THE BALANCE SHEET AS MRS. SIPIKA GOEL WER E THE SAME PERSONS. 4. WITH REGARD TO MERITS OF THE CASE REGARDING UNSECUR ED LOANS, THE LD CIT(A) OBSERVED THAT UNSECURED LOAN OF ` .13.50 LAKHS AND SHARE APPLICATION MONEY OF ` .24 LAKHS WERE INVESTED OUT OF CREDITS IN THE ACCOUNT OF ASSESSEE FROM 6.10.2006 TO 3.11.2006 AND AF TER THE INVESTMENT THERE WERE NO ENTRIES AFTER 31.12.2006. RE GARDING FINANCIAL STATUS OF SHRI NAVIN KHAITAN HUSBAND OF THE MRS. SIPIKA GOEL, THE LD CIT(A) OBSERVED THAT THOUGH NET WORTH OF HER HUSBAND AS CERTIFIED BY ONE SHRI RABENDRA BAHADUR RAUT, REGISTERED AUDITOR W AS FILED BUT NO COPY OF BANK ACCOUNT OR COPY OF INCOME TAX RETURN O F SHRI NAVIN KHAITAN WAS FILED TO PROVE THE CREDITWORTHINESS OF MR. NAVIN KHAITAN. THEREFORE, ON MERITS ALSO HE UPHELD THE ADDITION OF ` .13.50 LAKHS. AS FAR AS SHARE APPLICATION MONEY IS CONCERNED, THE LD CI T(A) ON THE BASIS OF VARIOUS CASE LAWS RELIED UPON BY HIM DELETED THE AD DITION ON THE BASIS THAT ASSESSEE HAD DISCHARGED ITS ONUS BY SUPPLYING TH E SHARE APPLICATION FORM AND COPY OF PAN CARD AND COPY OF B ANK ACCOUNT. THEREFORE, HE DELETED THE ADDITION OF ` .24. LAKHS. 5. AS REGARDS THE ADDITION DUE TO CESSATION OF LIABILIT Y OF ` .3,65,779/-, THE LD CIT(A) DELETED THE ADDITION BY HOLDING AS UNDER:- ITA NO1123 & 1433/DEL/12 4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APP ELLANT. THE LIABILITY OF ` .3,65,79/- HAS BEEN SHOWN IN THE BALANCE SHEET ON ACCOUNT OF RENT PAYABLE. THE SAME WAS PAYABLE TO MRS. SAYAR JAIN WHO IS A DIRECTOR OF THE COMPANY. THE LIABILITY WAS CREATED IN F.Y. 2005-06. IN THIS REGARD I HAVE GONE THROUGH THE APPELLANTS LETTRER DATED 29.10.2009 ALONG WITH ITS ENCLOSURE PLA CED AT PAGE NOS. 26-29 OF THE PAPER BOOK. AT PAGE NO.29, THERE I S A BALANCE SHEET OF MRS. SAYAR JAIN AS ON 31.3.2007 IN WHICH AN A MOUNT OF ` .3,65,779/- HAS BEEN DULY SHOWN UNDER THE HEAD ASSETS AG AINST THE NAME OF THE APPELLANT. THIS INFORMATION WAS DULY FILED BEFORE THE ASSESSING OFFICER WHICH WAS SOMEHOW OVER LOOKED AT TH E TIME OF THE ASSESSMENT ORDER. AS THE LIABILITY HAS BEEN DULY REFLECTED IN THE BALANCE SHEET OF THE APPELLANT AND HAS BEEN DULY ACKNOWLEDGED BY MRS. SAYAR JAIN IN HER BALANCE SHEET AS RECEIVABLE FROM THE APPELLANT, THERE IS NOTHING UNP ROVED ABOUT THE LIABILITY. FURTHER THE LIABILITY DOES NOT SEIZE T O EXIST JUST BECAUSE THE SAME AMOUNT OF LIABILITY WAS OUTSTANDING I N THE PRECEDING F.Y. ALSO. THEREFORE, THE ADDITION OF ` .3,65,779/- MADE ON THIS ACCOUNT IS DELETED. 6. AGGRIEVED WITH THE ORDER BOTH REVENUE AS WELL AS A SSESSEE IS IN APPEAL BEFORE US. 7. AT THE OUTSET, THE LD DR READ RELEVANT PORTION OF ASSESSMENT ORDER AND ALSO THE ORDER OF LD CIT(A) AND ARGUED THA T LD CIT(A) HAD ON THE ONE HAND STATED THAT IDENTITY OF THE CREDITOR WA S NOT PROVED AND THEREFORE HE UPHELD THE ADDITION OF ` .13.50 LAKHS WHEREAS IN THE CASE OF SHARE APPLICATION MONEY HE DELETED THE ADDITION O F ` .24 LAKHS BY HOLDING THAT ASSESSEE HAD DISCHARGED HER ONUS. ITA NO1123 & 1433/DEL/12 5 8. THE LD DR FURTHER ARGUED THAT SHARE APPLICATION MONEY AND UNSECURED LOANS WERE RECEIVED FROM SAME PERSON AND WHEN ONCE IDENTITY AND CREDITWORTHINESS WAS NOT PROVED FOR ADVAN CING OF LOAN OF ` .13.50 LAKHS HOW IT CAN BE SAID TO HAVE BEEN PROVED F OR MAKING INVESTMENT IN THE SHARE APPLICATION MONEY TO THE EXT ENT OF ` . 24 LAKHS. REGARDING THE PROOF OF LIABILITY THE LD DR SUBMITTED THAT ASSESSEE WAS NOT ABLE TO PROVE THE EXISTENCE OF LIABILITY THOUGH A NUMBER OF OPPORTUNITIES WERE PROVIDED TO IT. THEREFORE, IT WA S ARGUED THAT THE LD CIT(A) HAD WRONGLY DELETED THE ADDITION MADE BY ASSESSI NG OFFICER. 9. THE LD AR, ON THE OTHER HAND, SUBMITTED THAT ASSESSE E HAD INVESTED IN THE FORM OF SHARE CAPITAL AS WELL AS UNSECU RED LOANS AND THE AMOUNTS WERE INVESTED FROM HER BANK ACCOUNT AND SH E HAD RECEIVED A GIFT OF ` .38.60 LAKHS FROM HER HUSBAND THROUGH VARIOUS CHEQUES. HE INVITED OUR ATTENTION TO PAGES 14 TO 16 W HEREIN COPY OF BANK ACCOUNT MRS. SIPIKA GOEL WAS PLACED AND FURTHER OUR ATTENTION WAS INVITED TO PAPER BOOK PAGE 21 WHERE A COPY OF BA NK ACCOUNT OF THE ASSESSEE WAS PLACED. HE INVITED OUR ATTENTION TO TH E FACT THAT THE AMOUNTS WERE TRANSFERRED FROM THE ACCOUNT OF MRS. SIPK A GOEL TO THE ACCOUNT OF THE ASSESSEE COMPANY. HE FURTHER TOOK US THRO UGH PAGES 12 & 13 WHERE A COPY OF APPLICATION FOR SHARES ALONG WIT H COPY OF PAN NUMBER OF MRS. SIPKA GOEL WAS PLACED. FROM THESE DOCU MENTS, THE LD AR SUBMITTED THAT IDENTITY WAS PROVED BECAUSE OF PAN N UMBER AND CREDITWORTHINESS WAS PROVED FROM THE BANK ACCOUNT. FUR THER HE TOOK US TO PAGE 17 WHERE A COPY OF BALANCE SHEET OF MRS. SIPI KA GOEL WAS PLACED WHEREIN SHE HAD SHOWN THE LOANS TO ASSESSEE AND SHAR E APPLICATION TO ASSESSEE IN HER BALANCE SHEET. SIMILARLY PAGE 18 WAS REFERRED WHERE A COPY OF CONFIRMATION BY MRS. SIPIKA GOEL WAS PLACED. IN VIEW OF THESE FACTS, IT WAS ARGUED THAT ASSESSEE HAD EX PLAINED IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIO NS. THEREFORE, THE ACTION OF LD CIT(A) IN CONFIRMING THE ADDITION OF ` .13.50 LAKHS WAS ITA NO1123 & 1433/DEL/12 6 NOT JUSTIFIED. HE TOOK SIMILAR ARGUMENTS FOR DEFENDI NG THE APPEAL OF REVENUE AND SUBMITTED THAT AMOUNT OF ` ..24 LAKHS WAS FULLY EXPLAINED FROM THE BANK ACCOUNT OF ASSESSEE OF MRS. SIPIKA GOEL. IN VIEW OF THE ABOVE, HE ARGUED THAT ONCE THESE INGREDIENTS OF IDENT ITY, GENUINENESS AND CREDITWORTHINESS WERE PROVED, THE ASSESSEE WAS NOT R EQUIRED TO PROVE THE SOURCE OF SOURCE. OUR ATTENTION WAS ALSO INVI TED TO PAPER BOOK PAGES 28 & 29 WHEREIN COPY OF LETTER WRITTEN BY AR OF ASSESSEE TO CIT(A) WAS PLACED. THE LD AR SUBMITTED THAT HE HAD AP PLIED TO FILE ADDITIONAL EVIDENCE UNDER RULE 46A WHICH THE LD CIT (A) DID NOT CONSIDER. INVITING OUR ATTENTION TO ASSESSMENT ORDER HE SUBMITTED THAT THE ASSESSEE WAS REQUIRED TO FURNISH COPY OF RETURN, BALA NCE SHEET OF SHRI NAVIN KHAITAN ON 8.12.2009 AND ASSESSMENT ORDER WA S COMPLETED ON 22.12.2009 THEREFORE THERE WAS LITTLE TIME TO GET THESE DOCUMENTS AND SINCE SHRI NAVIN KHAITAN WAS NOT A RESIDENT OF IND IA, THEREFORE, IT WAS NOT POSSIBLE TO PRODUCE EVIDENCE OF CREDITWORTHINE SS IN SUCH A SHORT PERIOD. IN VIEW OF THE ABOVE ARGUMENTS, HE SUBM ITTED THAT THE APPEAL OF THE ASSESSEE BE ALLOWED AND THAT OF REVENUE BE DISMISSED. 10. THE LD DR, ON THE OTHER HAND, INVITED OUR ATTEN TION TO THE FACT THAT ASSESSEE HAD APPLIED FOR 26667 SHARES @ ` .90/- PER SHARE AS PER PAPER BOOK PAGE 12. HOWEVER, SHE SHOULD HAVE PAID ` .24,00030/- WHEREAS SHE HAD PAID ` .24 LAKHS. THEREFORE, THE ENTRY OF ` .24 LAKHS DOES NOT APPEAR TO BE GENUINE. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PA RTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ENTRIES OF ` .13.50 LAKHS AND ` .24 LAKHS ARE DULY REFLECTED IN THE BANK ACCOUNT OF MRS. SIPIKA GOEL AND THAT OF ASSESSEE COMPANY . HOWEVER, THE NET WORTH OR CAPACITY OF SHRI NAVIN KHAITAN HUSB AND OF MRS. SIPIKA GOEL WAS NOT PROVED AS HIS COPY OF BANK ACCOUNT OR HIS PERSONAL RETURN WAS NOT PLACED ON RECORD WHICH COULD HAVE SUBSTANTIATE D THE GIFTS MADE BY HIM TO HER WIFE. THE LD CIT(A) ON THE ONE H AND HAD DISPUTED ITA NO1123 & 1433/DEL/12 7 THE IDENTITY OF DEPOSITOR FOR UPHOLDING THE ADDITION OF ` .13.50 LAKHS WHEREAS FROM THE SAME PERSON THE INVESTMENT OF ` .24 LAKHS IN THE FORM OF SHARE CAPITAL HAS BEEN ACCEPTED. THE LD CIT(A ) HAS TAKEN A CONTRADICTORY STAND IN ALLOWING AND DISALLOWING THE C LAIMS OF ASSESSEE. THE LD ARS CONTENTION THAT ASSESSEE WAS NOT REQUIRED TO PROVE SOURCE OF SOURCE DOES NOT CARRY ANY FORCE IN VIEW OF THE FAC T THAT MRS. SIPIKA GOYAL IS NOT AN ASSESSEE AND THERE ARE HARDLY ANY ENTRI ES IN HER BANK ACCOUNT OTHER THAN CREDIT ENTRIES AND DEBIT ENTRIES R ELATING TO ALLEGED GIFT AND INVESTMENT THEREOF AND MOREOVER HIS HUSBAND I S ALSO NOT AN ASSESSEE NOR ANY PROOF OF HIS INCOME IN NEPAL WAS FILED. THE LD AR HAS CONTENDED THAT THERE WAS LITTLE TIME TO COMPLY WITH THE REQUIREMENT OF ASSESSING OFFICER FOR FILING DOCUMENTS RELATING TO MR. K HAITAN AND APPLICATION BEFORE LD CIT(A) FOR ADDITIONAL EVIDENC E WAS ALSO REJECTED. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE A RE OF THE OPINION THAT MATTER SHOULD BE RE-ADJUDICATED BY THE ASSESSING OFFICER WHO ON THE BASIS OF FURTHER EVIDENCE IF ANY REQUIRED SHOULD EXAMINE THE GENUINENESS OF GIFTS MADE BY SHRI NAVIN KHAITAN TO MRS. SIPIKA GOEL AND THEN ARRIVE AT THE CONCLUSION AFRESH. 12. AS REGARDS THE DELETION OF ADDITION OF ` . 3.65,779/- WE FIND THAT LD CIT(A) ON THE BASIS OF CONFIRMATION FROM OTHER PERSON S TO WHOM THE LIABILITY WAS RELATED HAD RIGHTLY DELETED THE ADDITI ON AND WE DO NOT FIND ANY INFIRMITY IN THAT. 13. IN VIEW OF THE ABOVE, THE REVENUES APPEAL IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES AND ASSESSEES APPEAL IS ALSO ALLOWED FOR STATISTICAL PURPOSES. 14. ORDER PRONOUNCED IN THE OPEN COURT ON 18TH DAY OF OCTOBER, 2013. SD/- SD/- (RAJPAL YADAV) (T.S. KAPOO R) JUDICIAL MEMBER ACCOUNTANT MEMBER ITA NO1123 & 1433/DEL/12 8 DT. .10.2013. 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). DATE OF HEARING 9.10.2013 DATE OF DICTATION 10.10.2013 DATE OF TYPING 11.10.2013 DATE OF ORDER SIGNED BY 18.10.2013 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.