M/s Spark Fincap (P) Ltd., Delhi V. ITO, New Delhi

ITA 2210/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9929 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 08-09-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 25-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RENU AMITABH
• Assessee Lawyers: S N PRASAD
• Keywords: Retrospective amendment; Question of law; Tax effect; Revenue expenditure
• Section: 260A; 201(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `E : NEW DELHI) BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.2210/DEL./2009 (ASSESSMENT YEAR : 2005-06) M/S SPARK FINCAP (P) LTD., VS. ITO, WARD 9(1), 708, UNESCO APARTMENTS, NEW DELHI. 55, I.P. EXTENSION, PATPARGANJ, DELHI 110 092. (PAN/GIR NO.AABCS0892E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJEEV SAXENA & S.N. PRASAD REVENUE BY : MS. RENU AMITABH, SR.DR ORDER PER A.K. GARODIA: AM THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-XII, NEW DELHI, DATED 19.1.200 9 FOR ASSESSMENT YEAR 2004-05. 2. GROUND NO.1 IS GENERAL AND IS DISMISSED AS SUCH. 3. GROUND NOS.2 & 3 WERE NOT PRESSED AND ACCORDING LY REJECTED AS NOT PRESSED. 4. GROUND NO.4 OF THE APPEAL READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.13,490/- VIS--VIS SHARE CAPITAL ENHANCEMENT, DISALLOWED BY THE AO WITHOUT APPRECIATING THE PROVISIONS OF SECTION 3 5D OF THE ACT. 5. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS.13,490 UNDER THE HEAD DEFERRED REVENUE EXPENDITURE WRITTE N OFF. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE BASIS OF SUCH CLAIM AND ALLOWABILITY OF THE EXPENSES. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFI CER THAT IT WAS OUT OF THE ROC FEES PAID ON ACCOUNT OF INCREASE IN AUTHORIZED CAPITAL. IT WAS ALSO SUBMITTED THAT 1/5 TH OF THE EXPENSES ARE CLAIMED AS PRELIMINARY EXPENSES WRITT EN OFF. IT IS OBSERVED BY THE ASSESSING OFFICER IN PARA.11 OF THE ASSESSMENT ORDE R THAT THE ASSESSEE FAILED TO PROVE THAT THE SAID EXPENSES ARE COVERED U/S 35D OF THE ACT OR NOT. THE ASSESSING OFFICER FOLLOWED I.T.A. NO.2210/DEL./2009 (A.Y. : 2004-05) 2 THE JUDGMENT OF THE HON'BLE APEX COURT RENDERED IN THE CASE OF BROOKE BOND INDIA LTD. VS. CIT AND PSIDC LTD., VS. CIT, REPORTED IN 225 IT R 798 AND 225 ITR 792, RESPECTIVELY. BEING AGGRIEVED, THE ASSESSEE CARRIE D THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS), BUT WITHOUT S UCCESS. NOW, THE ASSESSEE IS IN FURTHER IN APPEAL BEFORE US. 6. BEFORE US, LD.AR OF THE ASSESSEE PLACED RELIAN CE ON THE JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF CIT VS . MULTI METALS LTD., AS REPORTED IN 188 ITR 151. LD.SR.DR OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND IT WAS POINTED OUT BY HIM THAT AS REQUIRED IN SECTI ON 35D(1)(II), THE ASSESSEE HAS TO SHOW THAT THESE EXPENSES WERE INCURRED IN CONNECTION WIT H EXTENSION OF THE ASSESSEES UNDERTAKING OR IN CONNECTION WITH SETTING UP OF A N EW UNIT. IT IS ALSO SUBMITTED THAT AS PER SUB-SECTION (3) OF SECTION 35D, IT HAS TO BE SEEN A S TO WHETHER THE EXPENDITURE CLAIMED BY THE ASSESSEE EXCEEDS 2-1/2% OF THE COST OF THE PRO JECT AND, HENCE IT IS ESSENTIAL THAT THE ASSESSEE BRINGS THOSE FACTS ON RECORD. IT WAS SUBM ITTED THAT THIS WAS NOT DONE AND, HENCE NO DEDUCTION IS ALLOWABLE TO THE ASSESSEE U/S 35D OF THE ACT. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE AUTHORITIES BELOW. WE FIND T HAT NOTHING HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW OR BEFORE US TO SHOW THAT THE ASSESSEE IS COVERED BY THE PROVISIONS OF CLAUSE (II) OF SUB- SECTION(1) OF SECTION 35D OF THE ACT. IT IS AN ADMITTED POSITION THAT THESE EXPENSES ARE NOT INCURRED BEFORE THE COMMENCEMENT OF THE BUSINESS OF THE ASSESSEE COMPANY AND, HENCE SEC TION 35D(1)(I) IS NOT APPLICABLE. AS PER SECTION 35D(1)(II), THE ASSESSEE HAS TO SHOW TH AT THERE IS EXTENSION OF THE UNDERTAKING OF THE ASSESSEE OR THERE IS SETTING UP OF A NEW UNI T BY THE ASSESSEE COMPANY. NO EVIDENCE HAS BEEN FURNISHED BY THE ASSESSEE IN THIS REGARD T O SHOW THAT THE ASSESSEE HAS UNDERTAKEN EXTENSION OF ITS UNDERTAKING OR THE ASSESSEE IS SET TING UP OF A NEW UNIT AND, HENCE SECTION 35D IS NOT APPLICABLE IN THE PRESENT CASE AND, THER EFORE, WE DO NOT GO INTO THE NATURE OF EXPENSES OF FEES TO EXAMINE AS TO WHETHER THE SAME IS COVERED BY THE VARIOUS EXPENSES NOTED IN SUB-SECTION (2) OF SECTION 35D. REGARDING THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT RENDERED IN MULTI METALS LTD.(SUPRA), W E FIND THAT IN THIS CASE, ONLY DISPUTE BEFORE HONBLE RAJAS THAN HIGH COURT WAS WHETHER TH E FEES PAID TO ROC FOR INCREASE IN AUTHORISED CAPITAL CAN BE ALLOWED U/S 35D OR NOT, A ND THIS ASPECT WAS NOT IN DISPUTE I.T.A. NO.2210/DEL./2009 (A.Y. : 2004-05) 3 BEFORE THE HONBLE RAJASTHAN HIGH COURT AS TO WHETH ER SECTION 35D(1) IS APPLICABLE OR NOT. IN THE PRESENT CASE, WE HAVE NOTED THAT SECTI ON 35D(1) IS NOT APPLICABLE FOR THE REASON THAT THE CONDITIONS REQUIRED TO BE FULFILLED BY THE ASSESSEE AS PER SECTION 35D(1)(II) ARE NOT FULFILLED BY THE ASSESSEE. SUB-SECTION (2) OF SECTION 35D WILL BE RELEVANT ONLY IF THE ASSESSEE FULFILLS THE CONDITIONS SPECIFIED IN S UB-SECTION (1) OF SECTION 35D. SINCE THIS JUDGMENT OF RAJASTHAN HIGH COURT IS WITH REGARD TO SUB-SECTION (2) OF SECTION 35D, THIS JUDGMENT DOES NOT HELP THE ASSESSEE IN THE PRESENT CASE BECAUSE THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS OF SECTION 35D(1). THIS G ROUND IS, THEREFORE, REJECTED. 8. GROUND NOS.5 TO 8 ARE INTER-CONNECTED, WHICH REA D AS UNDER: 5. CIT(A) HAS FAILED TO APPRECIATE THE ADDITION OF RS.5,00,000/-, MADE BY THE AO, TREATING THE SHARE APPLICATION MONEY AS CASH CR EDIT U/S 68 OF THE ACT, IS NOT SUSTAINABLE IN LAW SINCE THE ASSESSEE HAS SUCCE SSFULLY DISCHARGED HIS BURDEN BY SUBMITTING THE IDENTITY AND INCOME TAX PA RTICULARS OF THE INVESTORS. 6. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE AO HAS NOT SUCCESSFULLY DI SCHARGED IT BURDEN IN AS MUCH AS HE HAS FAILED TO ISSUE SUMMONS TO THE INVES TORS. 7. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS FAILED TO APPRECIATE NEITHER THE INVESTIGATING WING NOR THE A O HAS PROVIDED THE OPPORTUNITY TO CROSS EXAMINE THE INVESTORS, WHOSE S TATEMENT HAS BEEN USED AGAINST THE ASSESSEE. 8. WITHOUT PREJUDICE TO THE ABOVE THE CIT(A) HAS ER RED IN NOT FOLLOWING THE VERDICT OF HONBLE APEX COURT IN THE CASE OF LOVELY EXPORT REPORTED IN 216 CTR 195. 9. BRIEFLY STATED, THE FACTS ARE THAT IT IS NOTED B Y THE ASSESSING OFFICER IN PARA.6 OF THE ASSESSMENT ORDER THAT IT WAS GATHERED FROM THE INFORMATION FURNISHED BY THE INV. WING THAT THE ASSESSEE HAS TAKEN BOGUS ENTRIES IN THE FORM OF SHARE APPLICATION MONEY FROM THE GROUP/MEMBERS ENGAGED IN THIS TRADE. THE ASSESSEE COMPANY WAS ASKED BY THE ASSESSING OFFICER TO SUBSTANTIATE ITS CLAIM OF HAVI NG RECEIVED SHARE APPLICATION MONEY TO THE TUNE OF RS.5 LAKHS FROM M/S GLOBETECH SOLUTIONS PVT. LTD. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE PRINCIPAL OFFICER OF THIS COMPANY, BUT HE WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER. ON 31.12.20 07, AN AFFIDAVIT OF SHRI SATYENDER SINGH, DIRECTOR OF THIS COMPANY WAS FILED. SINCE, THE ASSESSEE HAS NOT PRODUCED THE PRINCIPAL OFFICER OF THIS COMPANY, THE ASSESSING OF FICER HELD THAT THIS IS AN UNEXPAINED CASH CREDIT AND MADE AN ADDITION OF THIS AMOUNT U/S 68 OF THE ACT. BEING AGGRIEVED, THE I.T.A. NO.2210/DEL./2009 (A.Y. : 2004-05) 4 ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CO MMISSIONER OF INCOME-TAX (APPEALS). IT IS NOTED BY THE COMMISSIONER OF INCOME-TAX (APPE ALS) THAT ALTHOUGH PARTICULARS OF PAN OF THE COMPANY IS ON RECORD AND THE MONEY HAS C OME THROUGH BANKING CHANNEL, BUT IT IS NOT ENOUGH. HE CONFIRMED THE ASSESSMENT ORDE R. NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 10. IT WAS SUBMITTED BY THE LD.AR OF THE ASSESSEE T HAT THIS ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE A PEX COURT RENDERED IN THE CASE OF LOVELY EXPORTS AS REPORTED 216 CTR 195. LD.DR OF T HE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE JUDGMENT CITED BY THE LD.AR OF THE ASSESSEE. WE FIND THAT THE IDENTITY OF THE INVESTOR COMPANY IS NOT IN DOUBT AS THE ASSE SSEE HAS FURNISHED THE PARTICULARS OF PAN OF THE INVESTOR OF THE ASSESSEE COMPANY AND TH E MONEY HAS COME THROUGH BANKING CHANNEL AND HENCE, THIS JUDGMENT OF HON'BLE APEX C OURT RENDERED IN THE CASE OF LOVELY EXPORTS(SUPRA) IS SQUARELY APPLICABLE IN THE PRESEN T CASE. IT IS HELD BY THE HON'BLE APEX COURT IN THIS CASE THAT IF THE IDENTITY OF THE INVE STORS IS ESTABLISHED, THE ASSESSMENT OF THE INVESTORS CAN BE REOPENED AS PER LAW, BUT NO ADDITI ON CAN BE MADE IN THE HANDS OF THE COMPANY, WHO HAS RECEIVED THE SHARE APPLICATION MON EY. RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENT, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND THE ADDITION OF RS.5 LAKH IS DELETED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. 13. ORDER PRONOUNCED IN OPEN COURT ON 08.09.2009. (A.D. JAIN) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: SEPT. 08, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-XII, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT I.T.A. NO.2210/DEL./2009 (A.Y. : 2004-05) 5 TAX EFFECT 3159 DEL 2009 AKG AM IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI A.D. JAIN AND SHRI A.K. GARODIA I.T.A. NO. 3159/DEL/2009 ASSESSMENT YEAR : 2003-04. THE INCOME-TAX OFFICER, WARD-51(1), ROOM NO.510, 5 TH FLOOR, AAYAKAR BHAWAN, LAXMI NAGAR, DISTRICT CENTRE, LAXMI NAGAR, DELHI. PERMANENT A/C. NO.AABCP6565D V/S M/S. PBG FABRICS LIMITED, CHPRA COMPLEX, COMMUNITY VIHAR, DELHI-110092. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. RENU AMITABH, SR. D.R. RESPONDENT BY : SHRI P.S. KOHLI, ADVOCATE.. ORDER I.T.A. NO.2210/DEL./2009 (A.Y. : 2004-05) 6 PER A.K. GARODIA, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORD ER OF CIT(APPEALS)-XXIV, NEW DELHI PASSED IN APPEAL NO. 1 87/07-08 DATED 02.04.2009 FOR THE ASSESSMENT YEAR 2002-03. 2. THE GROUNDS OF APPEAL RAISED IN THIS APPEAL ARE A S OVERLEAF:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AS WELL AS IN LAW THE LD. CIT(A) HAS ERRED IN HOLDI NG THAT THE DATE OF ISSUANCE U/S 197 OF THE ACT IS IMMATERIAL TO THE STATUTORY PROVISIONS OF THE ACT I F THE SAME HAS BEEN ISSUED WITHIN THAT PARTICULAR FINANCIAL YEAR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AS WELL AS IN LAW THE LD. CIT(A) HAS ERRED IN HOLDI NG THAT THE ASSESSEE IS NOT IN DEFAULT AS PROVIDED IN SECTION 201(1) OF THE ACT FOR NOT DEDUCTING TAX AT SOURCE U/S 194-A ON THE PAYMENT OF INTEREST MADE TO M/S ASSOCIATES INDIA FINANCIAL SERVICES (P) LTD. PRIOR TO 24-01-2003, SINCE THE PARTY PRODUCED CERTIFICATE U/S 197 IN FORM NO.15AA ISSUED ON 24- 01-2003. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AS WELL AS IN LAW THE LD. CIT(A) HAS ERRED IN OVERRULING BOARD CIRCULAR NO.744 DT. 17-03-1999, WHICH CURTAIL THE POWER OF AO TO ISSUE AUTHORIZATIO N U/S 197 WITH RETROSPECTIVE EFFECT. I.T.A. NO.2210/DEL./2009 (A.Y. : 2004-05) 7 4. THOUGH THE REVENUE EFFECT IS 1,84,320/- ONLY WHI CH IS LESS THAN THE LIMIT PRESCRIBED BY THE BOARD, SIN CE THE LEGAL ISSUES ARE INVOLVED IN THIS CASE, APPEAL TO THE ITAT IS BEING FILED IN VIEW OF THE CLAUSE (B) O F PARA.8 OF THE BOARD INSTRUCTION NO.05/2008 DT. 15/05/2008. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING . 3. IN THIS CASE, THE TAX EFFECT IS ADMITTE DLY BELOW RS.TWO LAKHS, BEING RS.1,17,296/-. THEREFORE, IT WAS PLEADED BY THE LD. COUNSEL THAT THE APPEAL OF THE R EVENUE MAY BE DISMISSED IN LIMINE. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE. AS PER C.B.D.T. INSTRUCTION NO. 5 DATED 16.7.2007, CLARIFYING THE MEANING OF TAX EFFECT AS GIVEN IN BOARDS INSTRUCTION NO.2/2005, DATED 24.10.2005, IT I S PROVIDED THAT TAX EFFECT MEANS TAX EXCLUDING INTERE ST. THUS, ONLY THE EFFECT OF INCOME-TAX IS TO BE SEEN AN D NOT THE INTEREST THEREON. WHILE CONSIDERING THE EFF ECT OF INSTRUCTION NO.2 DATED 24.10.2005, ITAT DELHI I.T.A. NO.2210/DEL./2009 (A.Y. : 2004-05) 8 BENCHES ARE CONSISTENTLY TAKING THE VIEW THAT REVENUE AUTHORITIES MUST GIVE RESPECT TO THE C.B.D.T. CIRCUL ARS AND SHOULD NOT FILE APPEAL IN SMALL AND PETTY CASES. THE WHOLE IDEA OF THE CIRCULAR IS NOT TO WASTE ENERGY OF THE DEPARTMENT ON SMALL MATTERS AND SAVE IT FOR HIGH- TAX YIELDING CASES. JURISDICTIONAL HIGH COURT IN CASE OF CIT VS. MANISH BHAMBRI VIDE ORDER DATED 1.8.2007 IN I.T.A. NO.683/DEL/07, HAVE UPHELD THE ORDER OF THE ITAT VIDE WHICH THE APPEAL FILED BY THE REVENUE WAS REFUSED TO BE ENTERTAINED BECAUSE OF THE LOW INCOME- TAX. THE SAID ORDER OF HONBLE JURISDICTIONAL HIGH COURT IS REPRODUCED BELOW FOR THE SAKE OF CONVENIENCE:- THE REVENUE IS AGGRIEVED BY AN ORDER DATED 8TH AUGU ST, 2006 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, D ELHI BENCH 'D' IN IT(SS) NO. 513/DEL/2003 RELEVANT FOR T HE BLOCK PERIOD 1ST APRIL, 1990 TO 14TH FEBRUARY, 2001. THE QUESTION THAT AROSE BEFORE THE ASSESSING OFFICE R WAS WITH REGARD TO CERTAIN DEPOSITS IN THE BANK ACCOUNT OF T HE ASSESSEE AND SINCE THE AMOUNTS WERE NOT EXPLAINED, TAX WAS L EVIED. I.T.A. NO.2210/DEL./2009 (A.Y. : 2004-05) 9 IN APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE VIEW CANVASSED BY THE ASSESSEE AND HEL D THAT THE EXPLANATION GIVEN BY HIM WAS ACCEPTABLE AND, IN ANY CASE, THE ASSESSEE CANNOT BE EXPECTED TO RECOLLECT EACH AND EVERY ENTRY MADE IN THE BANK. IT MAY BE MENTIONED THAT THE AMOUNT IN DISPUTE IS R S.30,000/- FOR THE ASSESSMENT YEAR 1999-2000 AND RS.83,000/- F OR THE ASSESSMENT YEAR 2001-2002. IT MAY ALSO BE MENTIONED THAT FOR THE ASSESSMENT YEAR 1999-2000, THE ASSESSING OFFICE R HAS ALREADY ACCEPTED THE EXPLANATION WITH REGARD TO A G IFT OF RS.60,000/-. AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS),-AN APPEAL WAS FILED BEFORE THE INCOME TA X APPELLATE TRIBUNAL. THE TRIBUNAL FOUND THAT IN VIEW OF INSTRUCTIONS ISSUED BY THE CBDT WHERE THE TAX EFFEC T IS LESS THAN RS.L LAC, THE DEPARTMENT SHOULD NOT FILE AN AP PEAL BEFORE THE TRIBUNAL. IN THE PRESENT CASE, THE TAX EFFECT I S LESS THAN RS.L LAC. UNDER THE CIRCUMSTANCES, THE TRIBUNAL DID NOT ENTERTAIN THE APPEAL. THE REVENUE, FEELING AGGRIEVED BY THE DECISION OF T HE TRIBUNAL, HAS COME UP BEFORE US UNDER SECTION 260A OF THE I.T.A. NO.2210/DEL./2009 (A.Y. : 2004-05) 10 INCOME TAX ACT, 1961. IT IS CONTENDED BY LEARNED CO UNSEL FOR THE REVENUE THAT THE TRIBUNAL IS A FACT FINDING AUT HORITY AND SHOULD HAVE ADJUDICATED THE MATTER ON MERITS. WE AR E OF THE VIEW THAT THE ISSUE RAISED BY THE REVENUE IS NOT AT ALL SUBSTANTIAL AND THE AMOUNT IN DISPUTE IS QUITE INSI GNIFICANT, CONSIDERING THAT THE CASE IS ONE OF A BLOCK ASSESSM ENT. THERE IS NO JUSTIFICATION FOR THE INCOME TAX DEPARTMENT T O GO ON BURDENING THE TRIBUNAL, THE COURT WITH EVERY CASE R IGHT UP TO THE END. APART FROM BURDENING THE TRIBUNAL AND COUR TS, IT ALSO CAUSES AVOIDABLE EXPENSES TO THE ASSESSEE. IT IS COMMON KNOWLEDGE THAT THE ASSESSEE HAS TO PAY FOR LEGAL FE ES AND MERELY BECAUSE THE INCOME TAX DEPARTMENT HAS GOT UN LIMITED RESOURCES, THERE IS NO JUSTIFICATION THAT EVERY CAS E SHOULD BE DRAGGED ON. UNDER THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT TH E TRIBUNAL WAS JUSTIFIED IN REFUSING TO ENTERTAIN THE APPEAL B ECAUSE OF THE INSIGNIFICANT AMOUNT INVOLVED IN THE MATTER. NO SUB STANTIAL QUESTION OF LAW ARISES. WE, THEREFORE, DISMISS THIS APPEAL. I.T.A. NO.2210/DEL./2009 (A.Y. : 2004-05) 11 4. RESPECTFULLY FOLLOWING THIS DECISION, THE APPEAL FILED BY THE DEPARTMENT IS DISMISSED IN LIMINE. 5. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON 8TH SEPTEMBER, 2009 AFTER CONCLUSION OF THE HEARING. [A.D. JAIN] [A.K. GARODIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 08-09-2009. *RELLI* COPY OF THE TRIBUNAL ORDER FORWARDED TO: - 1. THE INCOME-TAX OFFICER, WARD- 51(1), ROOM NO.510 , 5 TH FLOOR, AAYKAR BHAWAN, LAXMI NAGAR DISTRICT CENTRE, LAXMI N AGAR, DELHI-110092., . 2. M/S. PBG FABRICS LIMITED, 107-08, CHOPRA COMPLEX , COMMUNITY CENTRE, PREET VIHAR, DELHI-110092. 3. THE CIT(APPEALS)-XXIV, NEW DELHI.. 4. THE CIT, DELHI-XVII, NEW DELHI. 5. THE DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, INCOME -TAX APPELLATE TRIBUNAL, DELHI BENCHES, L OK NAYAK BHAWAN, N EW DELHI. 08.09.2009 08.09.2009 I.T.A. NO.2210/DEL./2009 (A.Y. : 2004-05) 12 2210 DEL 2009AKG AM SKB GROUND OF APPEAL: 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE C IT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.13,490/- VIS--VIS SHARE CAPITAL ENHANCEMENT, DISALLOWED BY THE AO WITHOUT APPRECIATING THE PROVISIONS OF SECTI ON 35D OF THE ACT. 10. CIT(A) HAS FAILED TO APPRECIATE THE ADDITION OF RS.5,00,000/-, MADE BY THE AO, TREATING THE SHARE APPLICATION MONEY AS CASH CR EDIT U/S 68 OF THE ACT, IS NOT SUSTAINABLE IN LAW SINCE THE ASSESSEE HAS SUCCE SSFULLY DISCHARGED HIS BURDEN BY SUBMITTING THE IDENTITY AND INCOME TAX PA RTICULARS OF THE INVESTORS. 11. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE AO HAS NOT SUCCESSFULLY DI SCHARGED IT BURDEN IN AS MUCH AS HE HAS FAILED TO ISSUE SUMMONS TO THE INVES TORS. 12. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS FAILED TO APPRECIATE NEITHER THE INVESTIGATING WING NOR THE A O HAS PROVIDED THE OPPORTUNITY TO CROSS EXAMINE THE INVESTORS, WHOSE S TATEMENT HAS BEEN USED AGAINST THE ASSESSEE. 13. WITHOUT PREJUDICE TO THE ABOVE THE CIT(A) HAS E RRED IN NOT FOLLOWING THE VERDICT OF HONBLE APEX COURT IN THE CASE OF LOVELY EXPORT REPORTED IN 216 CTR 195.