DCIT, New Delhi V. M/s. Ajnara India Ltd., New Delhi

ITA 2265/DEL/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6637 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: SANJAY MEHRA
• Keywords: Unexplained cash credit; Additional evidence
• Section: 142(1); 133A; 68

Judgement Text

1 ITA NO. 2265/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G. D. AGRAWAL, VICE PRESIDENT AND SMT SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A .NO.-2265 /DEL/2012 (ASSESSMENT YEAR 2008-09) DCIT CIRC LE-1(1), ROOM NO. 390 C. R. BUILDING NEW DELHI (APPELLANT) VS AJNARA INDIA LTD. 502, SACHDEVA COMMUNITY CENTRE, KARKARDOOMA NEW DELHI AAACA4700C (RESPONDENT) APPELLANT BY SH. S. K. JAIN, SR. DR RESPONDENT BY SH. SANJAY MEHRA, CA ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE DEPARTMENT AGAINST THE ORDER DATED 21/2/2012 PASSED BY CIT(A)-IV, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS:- 1. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF RS.3,05,00,000/- U/S 68 OF THE INCOME T AX ACT ON ACCOUNT OF UNEXPLAINED CASH CREDIT. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND (S) OF DATE OF HEARING 09.08.2016 DATE OF PRONOUNCEMENT 09.11.2016 2 ITA NO. 2265/DEL/2012 APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CONST RUCTION AND DEALING IN REAL ESTATE AND PROPERTIES. RETURN DECLARING AN INCOME OF RS.1,53,55,720/- WAS FILED THROUGH ELECTR ONIC MEDIA ON 21/10/2008. THE SAID RETURN WAS PROCESSED U/S 1 43(1). SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY. NOTICE U/S 143(2) AND 142(1) ALONG WITH DETAIL QUESTIONNAIRE W ERE ISSUED TO THE ASSESSEE IN RESPONSE TO THIS NOTICE ASSESSEES REPRESENTATIVE FILED DETAILS OF THE PROCEEDINGS FROM TIME TO TIME . IN THIS CASE, A SURVEY U/S 133A WAS CARRIED OUT BY ADIT INVESTIGA TION, GHAZIABAD ON 4/9/2008. THE ADIT SUBMITTED HIS RETU RN OF THE SURVEY OPERATION. IN HIS REPORT, ADIT HAS STATED T HAT SURVEY WAS CONDUCTED ON VARIOUS PREMISES. ON THE BASIS OF UNFOUNDED MATERIAL DOCUMENTS OF FICTITIOUS SHARE APPLICATION MONEY WORTH RS.21,72,00,00/- WERE FOUND. THE ASSESSING OFFICER HELD THAT THE AMOUNT OF RS.3,05,00,000./- INTRODUCED AS SHARE CAPITAL OF COMPANY WAS UNEXPLAINED CASH PROCEEDS OF THE ASSESS EE COMPANY INCONFORMITY WITH PROVISIONS LAID DOWN U/S 68 OF THE INCOME TAX ACT, 1961 AND ADDED THE SAME TO THE TOTA L INCOME OF THE ASSESSEE COMPANY. 4. AGGRIEVED BY THIS THE ASSESSEE FILED APPEAL BEFO RE THE CIT(A). THE CIT(A) FOLLOWED THE ORDER OF THE PREDE CESSOR CIT(A)- IV, NEW DELHI FOR ASSESSMENT YEAR 2006-07 & 2007-08 AS WELL AS ITAT ORDER VIDE ASSESSMENT YEAR 2007-08 (ITA NO. 3 ITA NO. 2265/DEL/2012 3612/DEL/2010) AND DELETED THE SAID ADDITION. THE CIT(A) HAS ALSO DISCUSSED VARIOUS HIGH COURT DECISIONS WHILE A LLOWING THE APPEAL OF THE ASSESSEE. THE DEPARTMENT IS IN APPEAL BEFORE US. 5. THE LD. DR RELIED ON THE ASSESSING OFFICERS ORD ER AND SUBMITTED THAT THE ASSESSING OFFICER HAS RIGHTLY TA KEN COGNIZANCE AND ADDED THE SAID INCOME AS UNDISCLOSED INCOME U/S 68 OF THE ACT. 6. THE LD. AR SUBMITTED THE ISSUE IN THE PRESENT AS SESSMENT YEAR IS ALREADY COVERED IN THE FAVOUR OF THE ASSESS EE AS PER THE ORDER PASSED BY ITAT, NEW DELHI BENCH IN THE ASSESS MENT YEAR 2007-08 (ITA NO. 3612/DEL/2010 DATED 10.12.2010. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RECORDS. THE AO IN THE REMAND REPORT HAS NOT CONSID ERED THE DOCUMENTARY EVIDENCES SUBMITTED BY THE ASSESSEE AND HAS REPEATED THE OBSERVATIONS MADE IN THE ASSESSMENT OR DER WITHOUT GIVING ANY OPPORTUNITY OF CROSS-EXAMINATION TO THE ASSESSEE. THE ASSESSEE HAS SUFFICIENTLY DISCHARGED ITS ONUS WITH REGARD TO EXPLAINING THE NATURE AND SOURCE OF THE ABOVE SHARE CAPITAL. EVEN IN THE EVENT OF THE INVESTOR COMPANIES BEING B OGUS, AS ALLEGED, NO ADDITION CAN BE MADE U/S 68 IN THE HAND S OF THE ASSESSEE COMPANY. THE ID. AR HAS ACCORDINGLY ARGUE D THAT THE SAID ADDITION OF RS.3,05,00,000/- U/S 68 MADE BY TH E AO IN THE HANDS OF THE ASSESSEE COMPANY WAS ILLEGAL. THE ID. AR HAS RELIED 4 ITA NO. 2265/DEL/2012 UPON VARIOUS CASE LAWS IN SUPPORT OF HIS CLAIM. SIM ILAR ADDITION OF RS.8.45 CRORES MADE IN THE CASE OF THE ASSESSEE FOR A.Y. 2006- 07 U/S 68 ON ACCOUNT OF SHARE CAPITAL BASING ON THE SAME REPORT OF ADIT (INV.) WAS FULLY DELETED BY THE PREDECESSOR CIT(A)-IV, NEW DELHI VIDE HIS ORDER DATED 05.10.2009 IN APPEAL NO. 80/08- 09. THE ORDER OF THE CIT(A) WAS ACCEPTED BY THE DEP ARTMENT AND NO FURTHER APPEAL WAS FILED. SIMILARLY, ADDITION OF RS.3.47 CRORES MADE U/S 68 ON ACCOUNT OF SHARE CAPITAL IN THE CASE OF THE ASSESSEE FOR A.Y. 2007-08 BASING ON THE SAME REPORT OF THE ADIT WAS ALSO DELETED BY THE PREDECESSOR CIT(A)-IV, NEW DELHI VIDE HIS ORDER DATED 05.05.2010 IN APPEAL NO. 50/09-10. THE DEPARTMENT PREFERRED APPEAL AGAINST THE ABOVE ORDER OF CIT(A) FOR A.Y. 2007-08 WHICH WAS DISMISSED BY THE ITAT, D ELHI BENCH VIDE ORDER DATED 10.10.2010 IN ITA NO.3612/DEL/2010 . THE ID. AR HAS FILED COPIES OF THE ABOVE ORDERS, IT IS ARGU ED THAT MOST OF THE PARTIES FROM WHOM SHARE CAPITAL HAS BEEN RECEIV ED DURING A.Y. 2008-09 ARE THE SAME FROM WHOM SHARE CAPITAL H AD BEEN RECEIVED IN THE EARLIER TWO YEARS. IN VIEW OF THE A BOVE, IT IS ARGUED THAT THE IMPUGNED ADDITION MADE IN A.Y. 2008 -09 HAS NO MERIT AND NEEDS TO BE DELETED. NOW, COMING TO TH E ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE AO DURING THE REMAND PROCEEDING IN THE FORM OF BANK STATEMENT OF APPELLA NTS DIVIDEND ACCOUNT MAINTAINED WITH CORPORATION BANK, NEW DELHI - DILSHAD GARDEN BRANCH, THE SAME IS ONLY TO CORROBORATE THE ASSESSEES STAND TAKEN BEFORE THE AO DURING THE ASSESSMENT PRO CEEDING THAT THE ACCOUNT PAYEE DIVIDEND CHEQUES ISSUED BY T HE ASSESSEE COMPANY WERE DULY ENCASH BY THE SHAREHOLDERS THROUG H BANK CLEARING. THE ADDITIONAL EVIDENCES HAD BEEN DULY CO NFRONTED TO 5 ITA NO. 2265/DEL/2012 THE AO DURING THE REMAND PROCEEDING AND NO ADVERSE COMMENT ON MERIT WAS GIVEN BY THE AO IN HIS REMAND REPORT. CONSIDERING THE ABOVE, THE SAID EVIDENCES WERE RIGHTLY ADMITTED UNDER RULE 46A BY THE CIT(A). THE AO HAS FAILED TO PROVIDE CRO SS- EXAMINATION OF THE PARTIES WHOSE STATEMENTS WERE RE LIED UPON BY THE ADIT/INSPECTOR REPORT TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDING. THE AO HAS FAILED TO PROVIDE ANY OPPORTUNITY OF CROSS-EXAMINATION TO THE ASSESSEE DU RING THE REMAND PROCEEDING AS WELL. IT IS IMPORTANT TO MENTI ON THAT THE AO IN A.Y. 2007-08 WAS ALSO UNABLE TO PROVIDE SUCH CROSS- EXAMINATION DURING THE ASSESSMENT/REMAND PROCEEDING , ALTHOUGH SPECIFIC QUERY IN THIS REGARD HAD BEEN MAD E BY THE CIT(A) IN THE REMAND PROCEEDING AS IS EVIDENT FROM THE ORDERS OF THE CIT(A) AND ITAT. ITA NO. 3612/DEL/2010 FOR ASSE SSMENT YEAR 2007-08, THE ISSUE IS IDENTICAL. IT IS PERTINE NT TO NOTE THAT ON THE BASIS OF THE REPORT OF INVESTIGATION WING TO THE EFFECT THAT APPLICANT COMPANIES WERE NOT FOUND EXISTENT AT THE GIVEN ADDRESSES AND THE DIRECTORS WERE ALSO NOT AVAILABLE AT THE ADDRESSES GIVEN AS PER AFTER GOING THROUGH THE ORDE R DATED 10.12.2010 PASSED BY THE ITAT IN THE ENQUIRY CONDUC TED BY INVESTIGATION WING, SHARE APPLICATION MONEY RECEIVE D BY THE ASSESSEE DURING ASSESSMENT YEAR 2006-07 WAS TREATED BY THE ASSESSING OFFICER TO BE UNEXPLAINED INCOME OF THE A SSESSEE, AND ON AN APPEAL, THE SAME WAS DELETED BY THE CIT(A) BY GIVING IDENTICAL REASONS AND BASIS AS GIVEN IN THIS ASSESS MENT YEAR. DEPARTMENT HAS NOT PREFERRED ANY APPEAL AGAINST THE CIT(A)S ORDER PERTAINING TO ASSESSMENT YEAR 2006-07. THE CI T(A) HAS TAKEN INTO COGNIZANCE ALL THE RELEVANT JUDGMENTS PA SSED BY THE 6 ITA NO. 2265/DEL/2012 VARIOUS HIGH COURT ESPECIALLY JURISDICTIONAL HIGH C OURT. THUS APPEAL OF THE REVENUE DOES NOT SUSTAIN AS DR COULD NOT MAKE OUT ANY DIFFERENCE BETWEEN THE ASSESSMENT YEAR 2007 -08 AND THE PRESENT ASSESSMENT YEAR 2008-09. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT 09TH OF NOVEMBER, 2016. SD/- SD/- (G. D. AGRAWAL) (SUCHITRA KAMBLE) VICE PRESIDENT JUDICIAL ME MBER DATED: 09/11/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 7 ITA NO. 2265/DEL/2012 DATE 1. DRAFT DICTATED ON 09.08.2016 PS 2. DRAFT PLACED BEFORE AUTHOR 09.08.2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 0 9 .10.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 0 9 .1 1 .2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. ITA NO. 2265/DEL/2012