Sh. Anupam Kasera, New Delhi V. JCIT, New Delhi

ITA 1693/DEL/2016

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7682 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 31-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VINAY CHOUDHARY
• Assessee Lawyers: SOUMIL AGARWAL
• Keywords: Opportunity of being heard
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI D BEN CH, NEW DELHI [THROUGH VIDEO CONFERENCE] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI KULDIP SINGH, JUDICIAL MEM BER ITA NO. 1693/DEL/2016 [ASSESSMENT YEAR: 2011-12] SHRI ANUPAM KASERA VS. THE J.C.I.T 30, NETAJI SUBASH MARG RANGE - 30 DARYA GANJ, NEW DELHI NEW DELHI PAN : AALPK 3189 R [APPELLANT] [RESPONDENT] DATE OF HEARING : 12.01.2021 DATE OF PRONOUNCEMENT : 19.01.2021 ASSESSEE BY : SHRI SOUMIL AGARWAL, ADV REVENUE BY : SHRI VINAY CHOUDHARY, SR. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-16, NEW DELHI DATED 03.02.2016 PERTAININ G TO A.Y 2011-12. 2 2. THE ASSESSEE IS AGGRIEVED BY THE FOLLOWING ADDIT IONS/ DISALLOWANCES: I) RS. 18,83,198/- ON ACCOUNT OF COMMISSION EXPENSE S; II) RS. 30,80,000/- ON ACCOUNT OF UNSECURED LOAN; A ND III) RS. 7,27,226/- ON ACCOUNT OF INTEREST PAID ON UNSECURED LOAN. 3. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEB ITED RS. 23,83,198/- TO HIS PROFIT AND LOSS ACCOUNT ON ACCOUNT OF COMMIS SION PAID. THE ASSESSEE WAS ASKED TO FURNISH THE LIST OF PAYEES AL ONGWITH THEIR ADDRESSES. ON THE GIVEN ADDRESSES, THE ASSESSING O FFICER ISSUED LETTERS U/S 133(6) OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] AND DIRECTED THE PAYEES TO FURNISH THE FOLLOWING INFORMATION: 1. COPY OF ACCOUNT OF THE ABOVE NOTED PERSON IN YO UR BOOKS OF ACCOUNT FOR THE YEAR ENDING 31-03-2011, DULY CONFIRMED BY YOU. 3 2. FULL DETAILS OF SERVICES PROVIDED BY YOU TO THE A BOVE NOTED PERSON. 3. DETAILS OF CLIENTS ARRANGED BY YOU FOR THE ABOVE NOTED PERSON. 4. COPY OF SALE ORDERS PROCURED BY YOU FOR THE ABOVE NOTED PERSON. 5. COPY OF AGREEMENT ENTERED IN TO BY YOU WITH THE ABOVE NOTED PERSON AND WITH THE PARTIES WHOM THE SA LES WERE MADE BY THE ABOVE NOTED PERSON THROUGH YOU. 6. COPY OF THE CORRESPONDENCE MADE BY YOU WITH THE ABOVE NOTED PERSON AND THE CLIENTS ARRANGED BY YOU FOR THE ABOVE NOTED PERSON, 7. DETAILS OF THE BASIS OF COMMISSION CHARGED BY YOU FROM THE ABOVE NOTED PERSON. 8. WHETHER YOU HAVE PROVIDED SIMILAR SERVICES TO OTH ER PARTIES, IF YES DETAILS OF THE SAME. 9. COPY OF THE ACKNOWLEDGEMENT OF YOUR RETURN OF INCOME FOR THE A.Y. 2011-12 AND THE COPY OF YOUR STATEMENT OF INCOME FOR THE ABOVE NOTED A.Y. 4 10. COPY OF YOUR BANK ACCOUNT DEPICTING THE TRANSACTIONS MADE WITH THE ABOVE NOTED DURING THE F .Y. 2010-11.' 4. THE FOLLOWING DETAILS WERE NOT FURNISHED: I) FULL DETAILS OF SERVICES PROVIDED BY YOU TO THE ABOVE NOTED PERSON. II) DETAILS OF CLIENTS ARRANGED BY YOU FOR THE ABOV E NOTED PERSON. III) COPY OF SALE ORDERS PROCURED BY YOU FOR THE AB OVE NOTED PERSON. IV) COPY OF AGREEMENT ENTERED IN TO BY YOU WITH THE ABOVE NOTED PERSON AND WITH THE PARTIES WHOM THE SALES WE RE MADE BY THE ABOVE NOTED PERSON THROUGH YOU. V) COPY OF THE CORRESPONDENCE MADE BY YOU WITH THE ABOVE NOTED PERSON AND THE CLIENTS ARRANGED BY YOU FOR TH E ABOVE NOTED PERSON. VI) DETAILS OF THE BASIS OF COMMISSION CHARGED BY Y OU FROM THE ABOVE NOTED PERSON. VII) WHETHER YOU HAVE PROVIDED SIMILAR SERVICES TO OTHER PARTIES, IF YES DETAILS OF THE SAME . 5 5. ON NOT RECEIVING COMPLETE DETAILS, THE ASSESSING OFFICER FURTHER ISSUED SUMMONS CALLING FOR DETAILS MENTIONED ELSEWH ERE. THE ASSESSING OFFICER OBSERVED THAT NONE OF THE PERSONS COMPLIED WITH THE SUMMONS. THE ASSESSING OFFICER FORMED A BELIEF THAT THE PAYM ENT OF COMMISSION IS NOT PROVED AND, ACCORDINGLY, ALLOWED EXPENDITURE OF RS.3 LAKHS ONLY AND MADE ADDITION OF RS.18,83,198/-. 6. THE ASSESSEE CARRIED THE MATTER BEFORE THE C ITA BUT WITHOUT ANY SUCCESS. 7. BEFORE US, THE LEARNED COUNSEL FOR THE ASSES SEE STATED THAT THE ASSESSEE HAS FURNISHED COMPLETE DETAILS ALONG WITH CONFIRMATIONS OF THE PAYEES. IT IS THE SAY OF THE LEARNED COUNSEL THAT A LL PAYMENTS ARE SUPPORTED BY INVOICES OF THE COMMISSION AGENTS AND, THEREFORE, NO DISALLOWANCE SHOULD BE MADE. 8. PER CONTRA, THE LD. DR STRONGLY SUPPORTED TH E FINDINGS OF THE CITA. 9. WE HAVE GIVEN CAREFUL CONSIDERATION TO THE O RDERS OF THE AUTHORITIES BELOW AND HAVE ALSO CONSIDERED THE RELEVANT DOCUMEN TARY EVIDENCES BROUGHT TO OUR NOTICE. NO DOUBT, PAYMENTS ARE SUPPO RTED BY INVOICES AND 6 CONFIRMATIONS BUT THE MOOT POINT IS THAT NO EVIDENCE HAS BEEN SUBMITTED FOR RENDITION OF SERVICES BY THE PAYEES. IT IS TRUE THAT IN EARLIER ASSESSMENT YEARS, SIMILAR COMMISSIONS WERE ALLOWED TO SOME PAR TIES AND ALSO IN SUBSEQUENT ASSESSMENT YEAR. BUT THE QUESTION REMAIN S AS TO WHETHER IN THE YEAR UNDER CONSIDERATION THERE WAS ANY RENDITIO N OF SERVICES BY THE PAYEES. MERELY BECAUSE THE PAYEES HAVE SHOWN COMMIS SION INCOME IN THEIR RESPECTIVE RETURN OF INCOMES AND TRANSACTIONS HAVE BEEN DONE THROUGH BANKING CHANNELS WOULD NOT SUFFICE, AS RENDITION OF SERVICES HAVE TO BE PROVED. 10. CONSIDERING THE FACTS OF THE EARLIER ASSESSM ENT YEARS AND SUBSEQUENT ASSESSMENT YEARS, WHERE SIMILAR COMMISSION HAS BEEN ALLOWED, WE ARE OF THE CONSIDERED VIEW THAT IN THOSE YEARS THE ASSESSE E MUST HAVE ESTABLISHED/PROVED THE RENDITION OF SERVICES. CONSI DERING THE FACTS IN TOTALITY, IN OUR CONSIDERED OPINION, 50% OF THE COM MISSION DISALLOWED BY THE ASSESSING OFFICER NEEDS TO BE ALLOWED. WE, ACCO RDINGLY, RESTRICT THE DISALLOWANCE TO RS.9,40,000/- AND DIRECT THE ASSESS ING OFFICER TO DELETE THE BALANCE. GROUND NO. 1 IS PARTLY ALLOWED. 11. GROUND NO. 2 RELATES TO ADDITION ON ACCOUNT OF UNSECURED LOANS RECEIVED FROM THE FOLLOWING PARTIES: 7 I. SAPEBELLE TRADER LINKERS PVT LTD II. ISHWAR DAS GUPTA III. SHRI BINOD CHOUDHARY 12. THE ASSESSEE WAS ASKED TO EXPLAIN THE GENUI NENESS OF THE LOANS TAKEN FROM THE AFOREMENTIONED PARTIES IN LIGHT OF S ECTION 68 OF THE ACT. THE ASSESSEE FILED CONFIRMATIONS, COPY OF LEDGER AC COUNT AND INCOME TAX RETURNS OF THE AFOREMENTIONED PARTIES. THE ASSESSIN G OFFICER ISSUED SUMMONS TO THE PARTIES CALLING FOR CONFIRMATIONS AN D SOURCE. THE ASSESSING OFFICER OBSERVED THAT THE SUMMONS WERE NOT COMPLIED WITH. THE ASSESSING OFFICER FORMED A BELIEF THAT THE LOANS ARE NOT GENU INE AND, ACCORDINGLY, MADE ADDITION. 13. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD . CIT(A) BUT WITHOUT ANY SUCCESS. 14. BEFORE US, THE LEARNED COUNSEL FOR THE ASSE SSEE DREW OUR ATTENTION TO THE DOCUMENTARY EVIDENCES TO PROVE THE GENUINENE SS OF THE TRANSACTIONS. IT IS THE SAY OF THE LEARNED COUNSEL OF THE ASSESSEE THAT IN CASE OF SAPEBELLE TRADER LINKERS PVT LTD AND ISHWAR DAS GUPTA, THE LOANS HAVE BEEN REPAID IN SUBSEQUENT YEARS AND IN THE CAS E OF VINOD CHOUDHARY, THE LEARNED COUNSEL RELIED UPON HIS SUBMISSIONS MAD E BEFORE THE LD. CITA. 8 15. THE LD. D R STRONGLY SUPPORTED THE FIN DINGS OF THE ASSESSING OFFICER AND VEHEMENTLY STATED THAT THE ASSESSEE HAS NOT DIS CHARGED THE INITIAL BURDEN CAST UPON HIM BY PROVISIONS OF SECTION 68 OF THE ACT. 16. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW AND HAVE ALSO CONSIDERED THE RELE VANT DOCUMENTARY EVIDENCES BROUGHT ON RECORD IN THE FORM OF PAPER BO OK. SAPEBELLE TRADER LINKERS PVT LTD 17. ON PERUSAL OF CONFIRMATION OF ACCOUNT, WE F IND THAT IN THIS CASE THERE WAS AN OPENING CREDIT BALANCE OF RS. 39.58 LA KHS WHICH MEANS THAT THIS CREDITOR IS COMING FROM THE EARLIER A.Y. THERE FORE, ITS IDENTITY CANNOT BE QUESTIONED IN THE YEAR UNDER CONSIDERATION. OUT OF THE OPENING BALANCE, RS. 20 LAKHS WAS REPAID ON 15.04.2010. THE REAFTER, THE LOANS OF RS.25 LAKHS, 20 LAKHS AND RS.15 LAKHS WERE TAKEN. R S.10 LAKHS WAS REPAID ON 3.02.2000 AND CLOSING BALANCE AT THE END OF THE YEAR WAS RS.75.26 LAKHS. COPIES OF INCOME TAX RETURNS AND ST ATEMENT OF ACCOUNTS OF THIS COMPANY ARE ALSO PLACED IN THE PAPER BOOK AND HAVE BEEN DULY CONSIDERED BY US. 9 18. THE BANK STATEMENTS OF THIS COMPANY ARE ALSO AT PAG ES 2 TO 23 OF THE PAPER BOOK. THE BANK STATEMENT OF THIS COMPANY SHOWS TRANSACTIONS IN CRORES. THEREFORE, IT CAN BE SAFELY CONCLUDED THAT THIS COMPANY HAS SUFFICIENT CREDIT WORTHINESS TO GIVE THE IMPUGNED L OAN. CONSIDERING THE FACT THAT THERE WAS OPENING BALANCE AND PART OF LOA N HAS BEEN REPAID DURING THE YEAR AND FULL LOAN HAS BEEN REPAID IN SU BSEQUENT YEAR, WE ARE OF THE CONSIDERED VIEW THAT THE APPELLANT HAS DISCHARG ED THE INITIAL ONUS CAST UPON HIM BY PROVISIONS OF SECTION 68 OF THE ACT. TH EREFORE, NO ADDITION IS CALLED FOR IN THE CASE OF SAPEBELLE TRADERS LINKERS PVT LTD. THE ASSESSING OFFICER IS DIRECTED TO DELETE THE IMPUGNED ADDITION . ISHWAR DASS GUPTA 19. THE ASSESSING OFFICER AND THE LD CITA PROCE EDED BY EXAMINING THE DOCUMENTS, TREATING SHRI ISHWAR DAS GUPTA AS AN IND IVIDUAL, WHEREAS THE DOCUMENTS REFERRED TO AND RELIED UPON BY AR SHOW TH AT SHRI ISHWAR DAS GUPTA IS HUF. THE INCOME TAX RETURN IS ALSO THAT OF HUF AND BANK STATEMENT IS ALSO THAT OF HUF. SINCE THE FACTS ARE NOT CLEARLY COMING OUT FROM THE ORDERS OF THE AUTHORITIES BELOW, WE RESTOR E THIS ADDITION TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICE R IS DIRECTED TO EXAMINE THIS TRANSACTION AFRESH IN LIGHT OF THE STATEMENT M ADE BY THE LD. COUNSEL 10 FOR THE ASSESSEE THAT THE LOAN HAS BEEN TAKEN FROM SHRI ISHWAR DAS GUPTA, HUF. THE ASSESSEE IS DIRECTED TO FURNISH NECESSARY EVIDENCES BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER IS DIRE CTED TO EXAMINE THE SAME AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS ADDITION IS ALLOWED FOR STATISTICAL PURPOSES. SHRI BINOD CHOUDHARY 20. THE LD. COUNSEL FOR THE ASSESSEE HAS HEAVIL Y RELIED UPON THE SUBMISSIONS MADE BEFORE THE CIT(A), WHICH MEANS THA T HE HAS NOTHING MORE TO ADD TO WHAT HAS BEEN ALREADY STATED BEFORE THE LOWER AUTHORITIES. WE FIND THAT THE ASSESSEE HAS ONLY FILED COPY OF LE DGER ACCOUNT OF SHRI BINOD CHOUDHARY IN THE BOOKS OF DELHI SUGAR COMPANY WHICH HAS NOT BEEN CONFIRMED BY SHRI BINOD CHOUDHARY THOUGH THE PAN IS MENTIONED THERE. NO OTHER EVIDENCE HAS BEEN BROUGHT TO OUR NOTICE. THER EFORE, WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE LEARNED COUNSEL WHICH HAVE BEEN DULY CONSIDERED BY THE CIT(A) DURING THE FIRST APPELLATE PROCEEDINGS. ADDITION ON ACCOUNT OF LOAN FROM SHRI BINOD CHOUDHARY IS, AC CORDINGLY, CONFIRMED. GROUND NOS. 2 AND 3 TAKEN TOGETHER ARE PARTLY ALLOW ED. 11 21. NEXT ADDITION RELATES TO INTEREST PAID ON U NSECURED LOAN CONSIDERED HEREINABOVE. QUA OUR FINDINGS GIVEN HEREINABOVE, WE DIRECT THE ASSESSING OFFICER TO ALLOW INTEREST PAYMENT TO SAPEBELLE TRAD ERS LINKERS PVT LTD KEEPING IN ABEYANCE THE ALLOWANCE OF INTEREST IN RE SPECT OF ISHWAR DAS GUPTA AFTER DECIDING THE ISSUE AS PER OUR DIRECTION S GIVEN HEREINABOVE AND DISALLOW THE INTEREST PAID TO SHRI BINOD CHOUDHARY. GROUND NO 4 IS ACCORDINGLY DECIDED. 22. IN THE RESULT THE APPEAL OF THE ASSESSEE IN I TA NO. 1693/DEL/2016 IS ALLOWED IN PART FOR STATISTICAL PU RPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19.01. 2021. SD/- SD/- [KULDIP SINGH] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : JANUARY, 2021 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 12 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION 1 2 . 0 1 . 2 0 2 1 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 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 ORDER DATE OF DISPATCH OF THE ORDER