M/s Cybersys Infotech Ltd., Meerut V. ACIT, New Delhi

ITA 1673/DEL/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7500 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-08-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 06-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUNIL CHANDER SHARMA
• Section: 143(3); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND S SS SHRI SUDHANSHU SRIVASTAVA HRI SUDHANSHU SRIVASTAVA HRI SUDHANSHU SRIVASTAVA HRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1673/DEL/2011 1673/DEL/2011 1673/DEL/2011 1673/DEL/2011 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2004 2004 2004 2004 - -- - 05 0505 05 M/S CYBERSYS INFOTECH M/S CYBERSYS INFOTECH M/S CYBERSYS INFOTECH M/S CYBERSYS INFOTECH LIMITED, LIMITED, LIMITED, LIMITED, 17A/41, WEA KAROL 17A/41, WEA KAROL 17A/41, WEA KAROL 17A/41, WEA KAROL BAGH, BAGH, BAGH, BAGH, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : AABCC3734B. PAN : AABCC3734B. PAN : AABCC3734B. PAN : AABCC3734B. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -3(1), 3(1), 3(1), 3(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJAY MALIK, ADVOCATE. RESPONDENT BY : SHRI SUNIL CHANDER SHARMA, CIT - DR. DATE OF HEARING : 02.08.2016 02.08.2016 02.08.2016 02.08.2016 DATE OF PRONOUNCEMENT : 03.08.2016 03.08.2016 03.08.2016 03.08.2016 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: :- -- - THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-0 5 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-VI, NE W DELHI DATED 8 TH FEBRUARY, 2011. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE :- A) THE DOCUMENTARY EVIDENCE RELATING TO THE IDENTI TY OF THE CREDITOR, HIS FINANCIAL WORTHINESS AND GENUINENESS O F TRANSACTION FURNISHED IN THE COURSE OF SET ASIDE ASSESSMEN T PROCEEDINGS BY THE APPELLANT HAD NEITHER BEEN FOUND TO BE FALSE NOR CONTROVERTED IN ANY WAY. ON THE BASIS OF DOCUMENTARY EVIDENCE ABOUT THE NATURE AND SOURCE AND PARTICULARLY IN VIEW OF THE FACT THAT THE CREDITOR WAS A ITA-1673/DEL/2011 2 REGULAR TAX ASSESSEE HAVING BEEN ALLOTTED PA NO. BY THE INCOME-TAX DEPARTMENT, THE ONUS OF PROOF THAT LAY UP ON ASSESSEE STOOD CONCLUSIVELY DISCHARGED. B) THE MG. DIRECTOR WAS NOT UNDER THE CONTROL OF THE APPELLANT. ACCORDINGLY, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE MADE A SPECIFIC REQUEST TO THE A.O. TO SUMMON THE CREDITOR BY ISSUE OF NOTICE U/S 131 OF I.T. ACT. THE ASSESSING OFFICER NEITHER ISSUED SUMMON U/ S 131 OF I.T. ACT NOR BROUGHT ON RECORD ANY EVIDENCE IN REBUTTAL OF THE EVIDENCE ADDUCED BY THE APPELLANT. C) THAT ON FACTS AND IN LAW AND IN VIEW OF VARIOUS JUDICIAL PRONOUNCEMENT PARTICULARLY THE DECISION OF THE HON'BLE SUPREME COURT IN ORISSA CORPORATION LTD., CASE 159 ITR 78(SC), THERE WAS NO LEGAL WARRANT TO TREAT THE DEPOSIT AS UNEXPLAINED INCOME CHARGEABLE TO TAX. D) THAT THE ADDITION OF RS.10 LACS MADE BY THE A.O. A ND SUSTAINED BY THE LD.CIT(A) DESERVES TO BE DELETED BEING VOID, WITHOUT JURISIDCITON AND UNTENABLE ON FACTS AND IN LAW. 3. THE FACTS OF THE CASE ARE THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 20 TH DECEMBER, 2006 IN WHICH THE ASSESSING OFFICER MADE THE ADDITION OF `10 LAKHS FOR UNEXPLAINED LIABILITY. WHEN THE MATTER REACHED TO THE ITAT, TH E ITAT IN ITA NO.1268/DEL/2008 VIDE ORDER DATED 11 TH NOVEMBER, 2008 SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH THE FO LLOWING FINDING:- 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF BOTH THE AUTHORITIES, PERUSED RECORDS AND CAREFULLY GONE THROUG H THE ORDERS OF THE TAX AUTHORITIES BELOW. WE FIND THA T IN THE INSTANT CASE THE CIT(A) WAS NOT JUSTIFIED IN DELETING T HE IMPUGNED ADDITION MERELY BY PLACING RELIANCE ON THE SE SUBMISSIONS OF THE ASSESSEE AS WELL AS ON THE DOCUMENTS FILED ON RECORD BY THE ASSESSEE. WE ARE FURTHER OF THE OPINION, THAT ONCE THE AO HAS ASKED THE ASSESSEE TO GIVE CORRECT ADDRESS OF THE CREDITOR AND THE ASSESSEE FAILED T O DO SO, THE AO WAS PREVENTED FROM CONDUCTING PROPER ENQUIRIES TO VERIFY THE IDENTITY AND CREDIT WORTHINE SS OF THE ITA-1673/DEL/2011 3 CREDITOR AS WELL AS THE GENUINENESS OF THE TRANSACTION. HOWEVER, KEEPING IN VIEW OF THE SUBMISSIONS OF THE LD.A .R. FOR THE ASSESSEE WHEREIN HE STATED THAT EVEN TODAY HE WA S PREPARED TO GIVE CORRECT ADDRESS OF THE CREDITOR COMP ANY AND WAS ALSO READY TO PRODUCE M.D. OF THE COMPANY FOR EXAMINATION BEFORE THE AO RELATING THE GENUINENESS OF THE LOAN TRANSACTION. WE CONSIDER IT APPROPRIATE TO SET A SIDE THE ORDERS OF THE TAX AUTHORITIES BELOW WITH REGARD T O IMPUGNED ADDITION OF RS.10 LAKHS AND RESTORE THE MATTE R TO THE FILE OF THE AO TO REEXAMINE THE SAME AFRESH ON ME RITS AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE. IT IS ENJOINED UPON THE ASSESSEE THAT IT WOULD GIVE THE CORRECT ADDRESS OF THE CREDITOR TO THE AO AND SHALL PRODUCE THE M.D. OF THE COMPANY FOR EXAMI NATION BEFORE THE AO FOR VERIFYING THE GENUINENESS OF THE LO AN TRANSACTION OF RS.10 LAKHS. WITH THESE OBSERVATIONS THE ORDERS OF TAX AUTHORITIES BELOW ARE SET ASIDE AND THE ISSUE RESTORED TO THE FILE OF THE AO FOR COMPLIANCE. 4. DURING THE SET ASIDE PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE MANAGING DIRECTOR OF THE CR EDITOR COMPANY. HOWEVER, INSPITE OF SUFFICIENT OPPORTUNITY, THE ASSESSEE DID NOT PRODUCE THE MD OF THE CREDITOR COMPANY. THEREF ORE, THE ASSESSING OFFICER AGAIN MADE THE ADDITION OF `10 LAKHS FOR UNE XPLAINED LIABILITY. THE ORDER OF THE ASSESSING OFFICER IS SUSTAINED BY THE L EARNED CIT(A). HENCE, THIS APPEAL BY THE ASSESSEE. 5. AT THE TIME OF HEARING BEFORE US, THE LEARNED COU NSEL ARGUED AT LENGTH AND HIS SUBMISSION WAS TWOFOLD (I) THE ASSESSEE HAS ALREADY DISCHARGED THE ONUS BY PRODUCING NECESSARY EVIDENCE IN SUPPORT OF THE LIABILITY AND (II) THE ASSESSING OFFICER OUGHT TO HAVE ISSUED NOTICE U/S 131 TO THE CREDITOR. IN SUPPORT OF THIS CONTENTION, HE RELIED UPON THE FOLLOWING DECISIONS :- (I) CIT VS. GANGESHWARI METAL (P.) LTD. [2014] 361 ITR 10 (DELHI). (II) ITO VS. SHANTI ENTERPRISE [2016] 71 TAXMANN.COM 275( GUJARAT). ITA-1673/DEL/2011 4 6. LEARNED CIT-DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF AUTHORITIES BELOW AND HE STATED THAT THE TRIBUNAL HAS SET ASIDE THE MATTER WITH THE SPECIFIC PURPOSE AS PER THE REQUEST OF THE ASSESSEE. HOWEVER, IN THE SET ASIDE PROCEEDINGS, THE ASSESSEE DID N OT COMPLY WITH THE UNDERTAKING GIVEN BY HIM BEFORE THE ITAT. IN THE ABOVE CIRCUMSTANCES, THE ASSESSING OFFICER WAS FULLY JUSTIFIED IN MAKING THE ADDITION OF `10 LAKHS. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES AND HAVE PERUSED THE MATERIAL PLACED BEFORE US. WE F IND THAT IN THE FIRST ROUND OF THE PROCEEDINGS BEFORE THE ITAT, IT WA S SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE ASSESSEE IS READY TO GIVE THE CORRECT ADDRESS OF THE CREDITOR COMPANY AND ALSO READY TO PROD UCE THE MD OF THE COMPANY FOR EXAMINATION BEFORE THE ASSESSING OFFICE R. HOWEVER, WE FIND THAT DURING THE SET ASIDE PROCEEDINGS, THE ASSESSE E FURNISHED A LETTER DATED 5 TH NOVEMBER, 2009 IN WHICH THE ASSESSEE REFERRED TO THE DOCUMENTS PRODUCED BY THE ASSESSEE DURING THE ORIGINAL A SSESSMENT PROCEEDINGS AND CLAIMED THAT THOSE DOCUMENTS WERE SUFFI CIENT TO DISCHARGE THE BURDEN. WITH REGARD TO PRODUCTION OF THE MD OF THE CREDITOR COMPANY, THE ASSESSEE REQUESTED FOR ISSUE OF SUMMO NS U/S 131 TO THE ASSESSING OFFICER. WE FIND THAT THE MATTER WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER BY THE ITAT BECAUSE TH E ASSESSEE HAS CLAIMED BEFORE THE ITAT THAT IT WILL PRODUCE THE CO RRECT ADDRESS OF THE CREDITOR AND ALSO THE MD OF THE CREDITOR COMPANY. W E FIND THAT THE ASSESSEE DID NOT FULFILL THE OFFER MADE BY HIM BEFORE T HE ITAT. THE ASSESSING OFFICER WAS NOT MAKING THE FRESH ASSESSMENT BUT HE WAS ONLY GIVING EFFECT TO THE ORDER OF THE ITAT IN WHIC H HE WAS BOUND BY THE DIRECTION GIVEN BY THE ITAT. SINCE THE ASSESSEE DID NO T COMPLY WITH THE DIRECTION OF THE ITAT WHICH WAS GIVEN ON THE OFF ER OF THE ASSESSEE ITA-1673/DEL/2011 5 MADE BEFORE THE ITAT, THEREFORE, IN OUR OPINION, TH E ORDER OF THE ASSESSING OFFICER IS QUITE JUSTIFIED AND HAS RIGHTLY BEEN UPHELD BY THE LEARNED CIT(A). WE, THEREFORE, FIND NO MERIT IN TH E APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 03.08.2016. SD/- SD/- (SUDHANSHU SRIVASTAVA (SUDHANSHU SRIVASTAVA (SUDHANSHU SRIVASTAVA (SUDHANSHU SRIVASTAVA ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S CYBERSYS INFOTECH LIMITED, M/S CYBERSYS INFOTECH LIMITED, M/S CYBERSYS INFOTECH LIMITED, M/S CYBERSYS INFOTECH LIMITED, 17A/41, WEA KAROL BAGH, NEW DELHI. 17A/41, WEA KAROL BAGH, NEW DELHI. 17A/41, WEA KAROL BAGH, NEW DELHI. 17A/41, WEA KAROL BAGH, NEW DELHI. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -3(1), NEW DELHI. 3(1), NEW DELHI. 3(1), NEW DELHI. 3(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR