Compact Innovations Ltd., New Delhi V. ITO, New Delhi

ITA 1591/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52987 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KRISHNA
• Assessee Lawyers: RACHNA GOYAL
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 234B; 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.1591/DEL/2011 ASSESSMENT YEAR : 2006-07 COMPACT INNOVATIONS LTD., C/O SHRI C.S. ANAND, ADVOCATE, 104, PANKAJ TOWER, 10 LSC, SAVITA VIHAR, NEW DELHI. PAN : AAACC6503F VS. ITO, WARD 3 (4), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : MS RACHNA GOYAL, ADVOCATE REVENUE BY : SHRI KRISHNA, CIT, DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 24 TH JANUARY, 2011 FOR ASSESSMENT YEAR 2006-07. THE GROUNDS OF APPEAL READ AS UNDER:- 1. THAT ON THE FACTS OF THE CASE AND UNDER THE PROVISIO NS OF THE IT ACT, 1961, THE LEARNED CIT (A) HAS ERRED IN NOT ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS, VIDE AN APPLICATION UNDER R ULE 46-A OF THE IT RULES. THE OBSERVATIONS OF THE LEARNED CIT (A) ARE EITHER FACTUALLY INCORRECT OR LEGALLY UNTENABLE. 2. THE NATURAL JUSTICE HAS BEEN DENIED TO THE ASSESSEE COMPANY. ITA NO.1591/DEL/2011 2 3. THAT ON THE FACTS OF THE CASE AND UNDER THE PROVISI ONS OF THE IT ACT, 1961, THE LEARNED CIT (A) HAS ERRED IN NOT DIS APPROVING THE LD. A.O.S ALLEGATION THAT THE BOOKS OF ACCOUNT, ETC. HAD NOT BEEN PRODUCED DURING THE COURSE OF ASSESSMENT PROCEED INGS. 4. THAT ON THE FACTS OF THE CASE AND UNDER THE PROVISION S OF THE IT ACT, 1961, THE LEARNED CIT (A) HAS ERRED IN UPHOLD ING THE ADDITION OF RS.7,00,000/- MADE BY THE LD. A.O. U/S 68 OF THE IT ACT, 1961, ON A/C OF LOSING BALANCE APPEARING IN THE ACCOUNT OF PINKI GUPTA (ONE OF THE DIRECTORS OF THE ASSESSEE COMPA NY) AS ON 31.03.2006, THEREBY ALTOGETHER IGNORING THE SUPPORTING DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS, VIDE AN APPLICATION UNDER R ULE 46A OF THE IT RULES. THE OBSERVATIONS OF THE LEARNED CIT (A) ARE EITHER FACTUALLY INCORRECT OR LEGALLY UNTENABLE. 5. THAT ON THE FACTS OF THE CASE AND UNDER THE PROVISION S OF THE IT ACT, 1961, THE LEARNED CIT (A) HAS ERRED IN UPHOLD ING THE ADDITION OF RS.15,50,000/- MADE BY THE LD. A.O. U/S 6 8 OF THE IT ACT, 1961, ON A/C OF FRESH SHARE CAPITAL OF RS.10,50, 000/- SUBSCRIBED BY THE DIRECTORS/SHARE HOLDERS OF THE ASSES SEE COMPANY AND RS.5,00,000/- SUBSCRIBED BY OTHER TEN PARTIES/SHAREHOLDERS, THEREBY ALTOGETHER SUPPORTING DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS, VIDE AN APPLICATION UNDER R ULE 46A OF THE IT RULES. THE OBSERVATIONS OF THE LEARNED CIT (A) ARE EITHER FACTUALLY INCORRECT OR LEGALLY UNTENABLE. 6. THAT ON THE FACTS OF THE CASE AND UNDER THE PROVISION S OF THE IT ACT, 1961, THE LEARNED CIT (A) HAS ERRED IN HOL DING THAT THE INTEREST U/S 234B OF THE IT ACT, 1961 WAS CHARGEABLE . THE OBSERVATIONS OF THE LEARNED CIT (A) ARE EITHER FACTUALLY INCORRECT OR LEGALLY UNTENABLE. NOTE: THE APPELLANT CRAVES LEAVE TO AMEND/MODIFY THE AFOREMENTIONED GROUNDS OF APPEAL AND/OR TO RAISE ANY ADDITIONAL GROUND(S) APPEAL, DURING THE COURSE OF APPELLATE PROC EEDINGS. 2. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF THERMOCOLE PACKAGING AND SUPPLYING THE SAME TO THE TELEVISION INDUSTRY. DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER FOUND THAT THERE WAS UNSECURED LOANS IN THE NAME OF ITA NO.1591/DEL/2011 3 MS PINKI GUPTA OF ` 7 LAC AND IN ADDITION TO THAT TH E ASSESSEE HAD ALSO RECEIVED SHARE APPLICATION MONEY OF ` 15,50,000/- FR OM 14 PERSONS WHICH ARE LISTED AT PAGE 2 OF THE IMPUGNED ORDER. T HE ASSESSEE FAILED TO FURNISH CONFIRMATION, BANK STATEMENTS WITH PAN AND INCOME-TAX RETURN OF MS PINKI GUPTA AND THE AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. IN RESPECT OF SHARE APPLICATION MONEY, THE ASSESSEE WAS REQUIRED TO FURNISH CONFIRMATION IN RESPECT OF ALL TH E 14 SHARE APPLICANTS AND IN THE ABSENCE OF ANY SUCH CONFIRMATION THE SAID AMOUNT WAS ALSO ADDED TO THE INCOME OF THE ASSESSEE. 3. BEFORE CIT (A), IT WAS THE CASE OF THE ASSESSEE THAT T HE ALL THE REQUIRED EVIDENCE WAS BROUGHT TO THE OFFICE OF THE A SSESSING OFFICER IN THE LATE OF EVENING OF 26 TH DECEMBER, 2008 WHEN THE ASSESSING OFFICER REFUSED TO TAKE THE SAID EVIDENCE ON RECORD BY STATING THAT THE ASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETED AND, THUS, NO FURTHER SUBMISSION IS POSSIBLE. IT WAS PLEADED BEFORE THE CIT (A) THAT THE ASSESSEE HAS BEEN DENIED PROPER OPPORTUNITY OF BEING HEARD AND TO FILE REQUIRED EVIDENCE, THEREFORE, THE EVIDENCE SHOULD BE ADMITTED WHICH WAS SOUGHT TO BE PRODUCED BEFORE THE ASSESSING OFFI CER ON THE DATE OF FRAMING THE ASSESSMENT. LEARNED CIT (A) HAS CALL ED FOR THE REMAND REPORT FROM THE ASSESSING OFFICER WHICH WAS SUBMIT TED VIDE LETTER DATED 8 TH SEPTEMBER, 2010 WHEREIN THE ASSESSING OFFICER, REFERRING TO RULE 46A HAD OBJECTED TO THE ADMISSION O F THE ADDITIONAL EVIDENCE. LEARNED CIT (A), REFERRING TO THE PROVISI ONS OF RULE 46A AND THE DECISION OF THE DELHI TRIBUNAL IN THE CASE OF ITO VS. MITTAL INTERNATIONAL (I) PVT. LTD.2008-TIOL-474-ITAT-DEL H AS HELD THAT AS THE INGREDIENTS OF RULE 46A HAVE NOT BEEN COMPLIED WITH, THEREFORE, THE ADDITIONAL EVIDENCE SOUGHT TO BE FURNISHED BY THE ASSESSE E CANNOT BE ADMITTED AT THE APPELLATE STAGE. LEARNED CIT (A) HA S ALSO REJECTED THE CONTENTION OF THE ASSESSEE THAT DENIAL OF PROPER OPPORT UNITY TO THE ASSESSEE IS DENIAL OF NATURAL JUSTICE ON THE GROUND THAT LD. ASSESSING ITA NO.1591/DEL/2011 4 OFFICER HAD GRANTED SUFFICIENT OPPORTUNITIES TO THE A SSESSEE. IT IS IN THIS MANNER, LEARNED CIT (A) HAS UPHELD THE TWO ADDITIONS WHICH HAVE BEEN CHALLENGED BY THE ASSESSEE IN THE AFOREMENTIONED GROUND S OF APPEAL. IT MAY BE SEEN FROM THE AFOREMENTIONED GROUNDS OF APP EAL THAT THE ASSESSEE IS AGITATING THE ADJUDICATION OF LEARNED CIT (A ) VIDE WHICH IT HAS BEEN HELD THAT THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE COULD NOT BE ADMITTED UNDER RULE 46A. IN GROUND NO .6, THE ASSESSEE HAS CHALLENGED THE LEVY OF INTEREST U/S 234B WHICH IS C ONSEQUENTIAL IN NATURE. 4. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. IT HAS BEEN RECORDED IN THE ORDER OF THE CIT (A) THAT IN THE EV ENING OF 26 TH DECEMBER, 2008 THE ASSESSEE HAD REQUESTED THE ASSESSING OFFI CER FOR BRINGING ON RECORD VARIOUS DOCUMENTARY EVIDENCE VIDE WHICH THE ASSESSEE WAS SUPPORTING ITS CASE WITH REGARD TO THE AFOREME NTIONED TWO ADDITIONS. THE FACT THAT THE ASSESSEE SOUGHT TO PROD UCE THE ADDITIONAL EVIDENCE TO SUPPORT ITS CASE ON 26 TH DECEMBER, 2008 HAS NOT BEEN CONTROVERTED BY ANY MATERIAL PLACED ON RECORD. THE SAID EVIDENCE WAS REFUSED TO BE TAKEN ON RECORD BY THE ASSESSI NG OFFICER SIMPLY FOR THE REASON THAT THE ASSESSMENT PROCEEDINGS WERE CLOSED. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE ASSE SSEE SHOULD NOT HAVE BEEN DENIED TO PLACE ON RECORD THE EVIDENC E BY THE ASSESSING OFFICER. IN ANY CASE, THE SAID EVIDENCE SHOULD HAVE B EEN ADMITTED BY THE LEARNED CIT (A) IN THE INTEREST OF JUSTICE. THER EFORE, WE RESTORE THE ISSUE REGARDING BOTH THE IMPUGNED ADDITIONS TO THE FIL E OF ASSESSING OFFICER FOR RECONSIDERATION AND ADJUDICATION AS PER P ROVISIONS OF LAW AFTER PROVIDING THE ASSESSEE WITH A REASONABLE OPPORTUNI TY TO PLACE ON RECORD ALL THE EVIDENCES TO SUPPORT ITS CASE. WE DIREC T ACCORDINGLY. 5. WITH THESE OBSERVATIONS THESE TWO ADDITIONS ARE RESTOR ED TO THE FILE OF AO FOR FRESH ADJUDICATION IN THE MANNER AFOR ESAID. ITA NO.1591/DEL/2011 5 6. SO FAR AS IT RELATES TO LEVIABILITY OF INTEREST U/S 234B, WE HAVE ALREADY OBSERVED THAT THE SAME IS CONSEQUENTIAL IN NATU RE AND AFTER GIVING EFFECT TO THE AFOREMENTIONED DIRECTIONS, INTE REST U/S 234B WILL BE RECALCULATED ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. THE ORDER PRONOUNCED IN THE OPEN COURT ON 17.10.201 1. SD/- SD/- [SHAMIM YAHYA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED,17.10.2011. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES