DCIT, New Delhi V. M/s. Shikhankit Real Estates Pvt. Ltd., New Delhi

ITA 216/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91442 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 19-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 14-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Keywords: Non compliance; Capital receipt
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI A.T. VARKEY.: JUDICIAL MEMBER ITA NO. 216/DEL/2011 ASSTT. YR: 2007-08 DCIT,CENTRAL CIR. 19, VS. M/S SHIKHANKIT REAL EST ATES NEW DELHI. PVT. LTD. H-472, NEW RAJINDER NAGAR , NEW DELHI-110060. PAN: AAHCS 6351 C ( APPELLANT ) (RESPONDENT) APPELLANT BY : SHRI B.R.R. KUMAR SR. DR RESPONDENT BY : NONE DATE OF HEARING: : 19/05/2015. DATE OF ORDER : 24/07/2015. O R D E R PER S.V. MEHROTRA, A.M.. : THIS APPEAL, BY THE REVENUE, IS DIRECTED AGAINST CI T(A)-III, DELHIS ORDER DATED 27-10-2010 IN APPEAL NO. 134/2009-10, RELATING TO A.Y. 200-08. 2. NONE PUT IN APPEARANCE ON BEHALF OF THE ASSESSEE AT THE HEARING DESPITE ISSUE OF NOTICE FOR HEARING. WE PROCEED TO DISPOSE OF THE APPEAL, EX PARTE, QUA THE ASSESSEE, ON MERITS AND IN THAT PROC ESS WE HAVE HEARD LD. DR AND PERUSED THE ENTIRE MATERIAL AVAILABLE ON RECORD . 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FO R THE ASSESSMENT YEAR UNDER CONSIDERATION HAD FILED ITS RETURN OF INCOME DECLARING A LOSS OF RS. 13,927/-. THE AO IN HIS ASSESSMENT ORDER HAS POINTE D OUT THAT VARIOUS OPPORTUNITIES WERE AFFORDED TO ASSESSEE AND WHEN NO TICE U/S 144/145(3) WAS ISSUED, THEN ONLY THE ASSESSEE RESPONDED TO HIS PRO POSAL REGARDING ADDITION ON ACCOUNT OF UNSECURED LOANS TO THE TUNE OF RS. 47 ,93,329/- . THE AO HAD ISSUED FOLLOWING NOTICE: IT IS SEEN THAT ASSESSEE HAS NOT BEEN CARRYING OUT ANY BUSINESS ACTIVITY FOR LAST MANY YEARS. STILL IT IS SHOWING U NSECURED LOANS TO THE TUNE OF RS.47,93,329/- AS PAYABLE. SINCE LO ANS ARE LONG OUTSTANDING AND THERE DOES NOT APPEAR TO BE ANY OBL IGATION ON ASSESSEE TO REPAY THESE LOANS, IT CLEARLY IMPLIES T HAT THERE IS CESSATION OF LIABILITY TO PAY THOSE LOANS. SAME IS PROPOSED TO BE ADDED BACK. 4. THE ASSESSEE FILED FOLLOWING REPLY: 'WE ARE IN RECEIPT OF YOUR LETTER REGARDING THE ADM ITTED OLD BALANCES OUTSTANDING AND WE HAVE BEEN ASKED TO STAT E AS TO WHY THESE OLD OUTSTANDING BALANCES 'MAY NOT BE TREATED AS INCOME OF THE ASSESSEE. OUR SUBMISSION IN THIS REGARD ARE THA T THE REASONS FOR TREATING SUCH OLD BALANCES AS PER INCOME HAVE N OT BEEN ELABORATELY EXPLAINED AND EVEN IF IT PROPOSE U/S 41 , THE SAME WOULD NOT BE APPLICABLE AT ALL IN ANY CASE AND IN A NY CIRCUMSTANCES, YOUR KIND ATTENTION IS INVITED TO TH E PROVISION OF SECTION 41 AND EVEN AFTER PERUSING THE PROVISION IF YOU STILL HOLD THAT SUCH ADMITTED OLD BALANCES ARE TAXABLE, WE MAY KINDLY BE INFORMED IN THE MATTER SO THAT WE MAY FILE A DETAI LED REPLY. AT PRESENT WE FEEL THAT THE PROPOSAL FOR TAXING THE AD MITTED OLD BALANCES IS ILLEGAL, INVALID AGAINST THE PROVISION OF LAW AND NEED BE WITHDRAWN IMMEDIATELY WITHOUT ANY FURTHER DELAY. ON THE CONTRARY, IT WOULD HAVE BEEN IN THE INTEREST OF JUS TICE AND FAIR 3 PLAY IF IN THIS NOTICE ITSELF WE HAVE BEEN GIVEN TH E REASONS FOR SUCH PROPOSAL. IN ANY CASE, WE REQUEST YOU ONCE AGA IN TO KINDLY CONSIDER THE MATTER FRESH AND INTIMATE TO US THE RE ASONS.' 5. THE AO OBSERVED AS UNDER: 'THE REPLY OF THE ASSESSEE ITSELF SPEAKS VOLUMES AB OUT ITS SERIOUSNESS IN COMPLETING THE ASSESSMENT. THE CONTE NTION OF ASSESSEE IS DEALT WITH IN THE FOLLOWING PARAS. THE CONDUCT OF ASSESSEE, AS DISCUSSED ABOVE, CLEARLY SHOWS THAT SH E OR HER AR HAS BEEN DELIBERATELY NOT ATTENDING THE ASSESSMENT PROCEEDINGS FOR THE REASONS BEST KNOWN. TO THEM. THE NON COMPLI ANCE OF STATUTORY NOTICES ALSO IMPLIES THAT ASSESSEE IS UNA BLE TO SUSTAIN OR JUSTIFY THE CONTENTS OF THE RETURN OF INCOME FIL ED BY HER. THE NON-CO-OPERATIVE ATTITUDE OF ASSESSEE LEAVES ME WIT H NO OPTION OTHER THAN FRAMING THE ASSESSMENT EX PARTE TO THE B EST OF MY JUDGMENT. IT IS PERTINENT TO MENTION HERE THAT THIS NON COMPLIANCE OF STATUTORY NOTICES IS NOT ONLY IN THIS CASE BUT IN ALL THE 11 CASES OF THIS GROUP THEREBY INDICATING THEIR CONTEMPTUOUS ATTITUDE TOWARDS ASSESSMENT PROCEEDINGS UNDER THE I .T. ACT, 1961. 6. AFTER CONSIDERING VARIOUS DECISIONS, HE COMPLETE D THE ASSESSMENT U/S 144 AFTER MAKING ADDITION OF RS. 47,93,329/- OBSERV ING AS UNDER: IT IS AN ESTABLISHED PRINCIPLE THAT WHEN AN AMOUNT IS RECEIVED EVEN AS A CAPITAL RECEIPT, THE AMOUNT CHANGES CHARA CTER WHEN THE AMOUNT BECOMES ASSESSES OWN MONEY BEING UNCLAIM ED BECAUSE OF LIMITATION OR OTHERWISE AND IN SUCH CASE S COMMONSENSE DEMANDS THAT THE AMOUNT SHOULD BE TREAT ED AS INCOME OF THE ASSESSEE[ 7 ITR 316(CA)] THE SAME PRINCIPLE HAS ALSO BEEN APPROVED BY HON'B LE SUPREME COURT BY HOLDING THAT THOUGH THE DEPOSITS R ECEIVED DURING THE COURSE OF BUSINESS WERE OF THE CAPITAL N ATURE BUT WHEN DEPOSITS ARE NOT CLAIMED OR CLAIM OF DEPOSITOR IS BARRED BY 4 LIMITATION SUCH MONEY IS TO BE TREATED AS INCOME OF ASSESSEE, [CIT V. SUNDARAM IYENGER--AND SONS LTD 222ITR 344]. 7. LD. CIT(A) DELETED THE ADDITION AFTER CONSIDERIN G, INTER ALIA, THE FOLLOWING SUBMISSIONS OF ASSESSEE: NOW COMING TO THE PRESENT CASE, THE LIABILITY AS PE R THE BALANCE SHEET ENCLOSED IS NOT ANY TRADING LIABILITY. BESIDE S, THE LIABILITIES ARE OLD. THE LIABILITIES ARE AS GIVEN IN SCHEDULE-B ARE LOAN WHICH ARE CARRIED FORWARD FROM YEAR TO YEAR. THE LO ANS WERE TAKEN FOR THE PURPOSE OF THE PROPERTIES WHICH STILL EXIST IN ITS CLOSING STOCK. THEREFORE, THE FIRST CONDITION IS NO T SATISFIED IN AS MUCH AS THERE IS NO TRADING LIABILITY AND MUCH LESS NO SUCH DEDUCTION WAS ALLOWED IN THE EARLIER YEARS. THE LIA BILITY DOES NOT CEASED TO EXIST. FIRSTLY, NO EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE AD TO PROVE THAT THE LIABILITY HAS CE ASED. THIS IS ONLY HIS PRESUMPTION AND ASSUMPTION. IN ANY CASE, T HE ASSESSEE COMPANY HAS PAID THIS LIABILITY IN SUBSEQUENT YEARS AS PER EVIDENCE ENCLOSED. RELIANCE HAS BEEN PLACED ON THE JUDGMENT IN THE CASE OF TVS SUNDARAM LYENGER AND ON THAT BASIS, A LARGE AMOUNT OF ABOUT RS.47 LAKHS HAS BEEN TREATED AS INC OME. BUT THE PERUSAL OF THE JUDGMENT AS PER COPY ENCLOSED WO ULD REVEAL THAT THE FACTS OF THAT CASE ARE COMPLETELY DIFFEREN T FROM THE FACTS OF OUR CASE. THE FACTS OF THAT CASE ARE NOT EVEN NE ARER TO THE FACTS OF OUR CASE. IN THAT CASE, THE ASSESSEE HIMSE LF HAS TRANSFERRED THE AMOUNT OF LIABILITY TO THE P & L AC COUNT. IT WAS HELD THAT THE ASSESSEE ITSELF HAD TREATED THE MONEY AS ITS OWN MONEY AND TAKEN THE AMOUNT TO THE P & L ACCOUNT, TH E AMOUNT WAS ASSESSABLE IN THE HANDS OF THE ASSESSEE. BUT IN THE PRESENT CASE, THE FACTS ARE COMPLETELY CONTRARY IN AS MUCH AS WE HAVE NOT BECOME RICHER BY AND SUCH AMOUNT. WE HAVE NOT T RANSFERRED THE LIABILITY TO THE P & L ACCOUNT AND EVEN WE HAVE PAID THE LIABILITY IN SUBSEQUENT YEARS. EXCEPT THE GUESS WOR K, DOUBT AND 5 PRESUMPTION, THERE IS NO IOTA OF EVIDENCE IN THE AD DITION BASKET OF THE AO. HENCE, IT IS SUBMITTED THAT THE ADDITION MAY KINDLY BE DELETED. 8. AS NOTED EARLIER, THOUGH DETAILS WERE FURNISHED BEFORE AO, THE LD. CIT(A) HAS ALLOWED THE ASSESSEES APPEAL WITHOUT CA LLING FOR A REMAND REPORT FROM THE AO. THEREFORE, WE ARE OF THE CONSID ERED OPINION THAT MATER NEEDS TO BE RESTORED BACK TO THE FILE OF AO FOR FRE SH ADJUDICATION. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) A ND RESTORE THE MATTER TO THE FILE OF AO WITH THE DIRECTION TO DECIDE THE ISS UE AFRESH, IN ACCORDANCE WITH LAW, AFTER AFFORDING REASONABLE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE AND THE RELEVANT MATERIAL. WE ORDER ACCORD INGLY. 9. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 24/07/2015.. SD/- SD/- (A.T. VARKEY. ) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: ____/07/2015. *MP* COPY OF ORDER TO: 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI.