ITO, New Delhi V. M/s. Shitiz Metal Ltd., New Delhi

ITA 2378/DEL/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6287 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 11-02-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 19-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Assessee Lawyers: AJAY GUPTA
• Keywords: Unexplained cash credit; Principle of natural justice; Onus to prove; Reassessment proceedings
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: '[G]': NEW DELHI BEFORE SH. C . M . GARG , JU DICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER ITA NO. 2826 / DEL/2010 ASSESSMENT YEAR: 2004 - 05 SHITIZ METAL LTD, D - 819, 2 ND FLOOR, NEW FRIENDS COLONY , NEW DELHI (PAN:AABCS4823R) (APPELLANT) V/S INCOME - TAX OFFICER, WARD - 8 (2), NEW DELHI (RESPONDENT) AND ITA NO. 2378/DEL/2010 ASSESSMENT YEAR : 2004 - 05 INCOME - TAX O FFICER, WARD - 8 (2), NEW DELHI (APPELLANT) V/S SHITIZ METAL LTD, D - 819, 2 ND FLOOR, NEW FRIENDS COLONY, NEW DELHI (PAN:AABCS4823R) (RESPONDENT) ASSESSEE BY SH . AJAY GUPTA, CA AND SH . SAMEER KAPOOR, CA DEPARTMENT BY MS. ANIMA BARNWAL, SR . DR DATE OF HEARING 11/02/2016 DATE OF PRONOUNCEMENT 23/03/2016 ORDER PER O.P. KANT, A.M.: THESE CROSS APPEALS BY THE ASSESSEE AND REVENUE ARE DIRECTED AGAINST THE ORDER DATED 23 RD OF MARC H 2010, OF LEARNED COMMISSIONER OF ITA NO. 2826 & 2378 /DEL/2010 SHITIZ METAL LTD. , NEW DELHI 2 INCOME - TAX (APPEALS) - XI, NEW DELHI FOR ASSESSMENT YEAR 2004 - 05. AS BOTH THE APPEALS ARE EMANATING FROM THE SAME IMPUGNED ORDER, THEY ARE HEARD TOGETHER AND ARE DISPOSED OF BY THIS CONSOLIDATED ORDER. 2. THE GROUNDS OF A PPEAL RAISED BY THE ASSESSEE IN ITA NO. 2826/DEL/2010 ARE AS UNDER: ON THE FACTS AND CIRCUMSTAN CES OF THE CASE AND IN LAW, THE AUTHORITIES BELOW ERRED IN: (I) U PHOLDING THE VALIDITY OF THE PROCEEDINGS UNDER SECTION 147 OF THE INCOME - TAX ACT 1961; (II) ADDING AN AMOUNT OF RS. 1, 20, 00, 000/ - UNDER SECTION 68 OF THE ACT; (III) ADDING A SUM OF RS. 2, 40, 000/ - ON ACCOUNT OF SALARY; THE ABOVE ADDITIONS BEING ERRONEOUS, UNWARRANTED AND ILLEGAL MUST BE CRUSHED 3 . THE SOLE GROUND IN THE APPEAL OF THE R EVENUE IN ITA NO. 2378/DEL/2010 READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN DELETING THE ADDITION OF RS. 66, 25, 000/ - MADE BY THE AO UNDER SECTION 68 OF IT ACT ITA NO. 2826/DEL/2010 4 . FIRST , WE TAKE UP THE APPEAL OF THE ASSESSEE. 4 . 1 THE FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY WAS INCORPORATED ON 08/10/1982. THE ASSESSEE COMPANY INVESTED ITS FUNDS IN VARIOUS PUBLIC AND PRIVATE LIMITED COMPANIES. FOR THE YEAR UNDER CONSIDERATION THE ITA NO. 2826 & 2378 /DEL/2010 SHITIZ METAL LTD. , NEW DELHI 3 ASSES SEE COMPANY FILED ITS RETURN OF INCOME ON 13 TH DECEMBER 2004, DECLARING A LOSS OF RS. 35 / - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143 (1) OF THE INCOME - TAX ACT,1961 (IN SHORT THE ACT). SUBSEQUENTLY THE CASE OF THE ASSESSEE W AS REO PENED UNDER SECTION 147 OF THE A CT THROUGH A NOTICE ISSUED UNDER SECTION 148 OF THE A CT DATED 03/11/2008, AFTER RECORDING REASONS . IN RESPONSE , THE ASSESSEE FILED RETURN OF INCOME DECLARING A LOSS OF RS. 40 / - UNDER THE HEAD BUSINESS AND DECLARING NIL INCOME ON ACCOUNT OF CAPITAL GAINS ON SALE OF PROPERTY BEARING NO. D - 819, NEW FRIEN DS COLONY, NEW DELHI FOR RS. 2,40,00, 000/ - . IT WAS CLAIMED IN THE IN THE RETURN OF INCOME THAT PROPERTY WA S PURCHASED AT A SUM OF RS. 2, 40 ,00, 000/ - AND THUS THERE WAS NO CA PITAL GAIN. T HIS TRANSACTION WAS NOT DISCLOSED IN THE ORIGINAL RETURN OF INCOME FILED. IN THE REASSESSMENT PROCEEDINGS, THE ASSESSING O FFICER NOTED THAT NO BOOKS OF ACCOUNTS WERE PRODUCED BY THE ASSESSEE AND THUS AFTER DISCUSSION HE, ASSESSED THE INCOME AT RS. 1,88,65, 000/ - MAKING A DDITIONS ON FOLLOWING THREE ACCOUNTS (I) ADDITION OF RS. 1,20,00, 000/ - FOR UNEXPLAINED CREDIT IN BOOKS OF ACCOUNTS. (II) DISALLOWANCE OF RS. 2,40, 000/ - FOR SALARY PAID TO MS AKANSHA GUPTA AND MS. V ASUDHA GUPTA, THE DAUGHTERS OF THE DIRECTOR SH. AJAY KUMAR GUPTA (I II) ADVANCE RECEIVED OF RS. 66,25, 000/ - AGAINST PROPERTY AT GAZIABAD. 4 .2 AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. COMMISSIONER OF I NCOME - TAX (APPEALS), WHO UPHELD THE ADDITIONS ON 1 ST TWO ACCOUNTS , AGAINST, WHICH THE ASSESSEE IN APPEAL BEFORE US AND DELETED THE THIRD ADDITION OF RS. 66, 25, 000/ - AGAINST WHICH THE R EVENUE IS IN APPEAL. ITA NO. 2826 & 2378 /DEL/2010 SHITIZ METAL LTD. , NEW DELHI 4 5 . AT THE OUTSET, THE LD. AUTHORIZED R EPRESENTATIVE ( IN SHORT AR ) OF THE ASSESSEE SUBMITTED NOT TO PRESS THE GROUND NO. 1 AND 3 OF THE APPEAL, AND THUS BOTH THE GROUNDS ARE DISMISSED AS NOT PRESSED. 6. T HE SOLE GROUND LEFT FOR ADJUDICATION IS I N RESPECT OF ADDITION OF RS. 1,20,00, 000/ - . THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE COMPANY AGREED TO PURCHASE A PRO PERTY FROM M/S BHARTI OVERSEAS TRADING C OMPANY (BOTC) AT A VALUE OF RS. 2,40,00, 000/ - ON BEHALF OF SMT. SUSHMA GUPTA AND S MT. SHASHI GARG ON 18 TH JULY 2003 THROUGH A UNREGISTERED SALE AGREEMENT. SUBSEQUENT LY, WITHIN A SHORT PERIOD, THE PROPERTY WAS SOLD THROUGH THREE DIFFERENT REGISTERED SALE DEEDS TO SMT. SUSHMA GUPTA AND S MT. SHASHI GARG . THE LD. AR SUBMITTED THAT THOUGH ALL THE THREE SALE AGR EEMENTS WERE REGISTERED AT A TOTAL VALUE OF RS. 1,20,00, 000/ - HOWEVER THE PROPER TY WAS ACTUALLY SOLD FOR RS. 2,40,00, 000/ - AND THUS THERE WAS NO CAPITAL GAIN IN THE ENTIRE TRANSACTION OF PURCHASE AND SALE OF THE PROPERTY. THE LD. AR FURTHER SUBMITTED THAT FINDING OF THE ASSESSING O FFICER THAT THE PROPERT Y WAS PURCHASE D AND SOLD AT RS.1,20,00, 000/ - AND THE BALANCE AMOUNT OF RS.1,20,00, 000/ - RECEIVED IN LIEU OF SALE OF PROPERTY WERE IN FACT AMOUNTS RECEIVED ON SOME OTHER ACCOUNT, ARE NOT CORRECT . THE PAYMENTS RECEIVED WERE DULY EXPLAINED BY THE ASSESSEE IN THE COURSE O F SC RUTINY PROCEEDINGS AND THE ASSESSING O FFICER ALSO GATHERED INFORMATION IN RESPECT OF THOSE PARTIES DIRECTLY, HOWEVER, THE ASSESSING O FFICER WITHOUT MENTIONING THE VERIFICATION MADE FROM THE PARTIES, HELD THE AMOUNT RECEIVED FROM THOSE PARTIES AS UNEXPLAINE D CASH CREDIT UNDER SECTION 68 OF THE A CT. THE LD AR FURTHER SUBMITTED THAT LD CIT (A PPEAL ) WAS ALSO REQUESTED TO ISSUE SUMMONS TO THOSE PARTIES AS THOSE PEOPLE WERE APPEA RING BEFORE THE TRIAL COURT IN C IVIL AND CRIMINAL PROCEEDINGS. THE LD. AR REFERRED TO THE PAGES 3 TO 48 OF 3 RD ITA NO. 2826 & 2378 /DEL/2010 SHITIZ METAL LTD. , NEW DELHI 5 PAPER BOOK AND SUBMITTED THAT ALL THE DOCUMENTS IN RESPECT OF IDENTITY, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS WERE DULY AVAILABLE BEFORE THE AO. THE LD. AR ALSO REFERRED TO THE STATEMENT OF MR PAWAN KUMAR GARG IN THE CIVIL SUIT FILED REGARDING ADVANCING MONEY PLACED AT PAGES 49 TO 57 OF THE 3 RD PAPER BOOK. 6.1 THE LD. DEPARTMENTAL R EPRESENTATIVE (IN SHORT DR) , ON THE OTHER HAND , RELIED ON THE ORDER OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE DID NOT SUBMIT THE BOOKS OF ACCOUNTS INCLUDING CASH BOOK , EVEN AFTER REPEATED REQUEST BY THE ASSESSING OFFICER . HE FURTHER SUBMITTED THAT THE ASSESSEE REFERRED TO THE LITIGATIO N GOING ON BETWEEN THE FAMILY/ CONCERNS OF DIRECTOR SH. AJAY KUMAR, GUPTA AND S H. PAWAN KUMAR GARG, HUSBAND OF SMT . SHASHI GARG BUT DID NOT MAKE ATTEMPT TO SUBSTANTIATE THE MONEY INTRODUCED IN THE COMPANY IN THE NAME OF DIFFERENT PERSONS. THE LD DR FURTHE R SUBMIT TED THAT MR . PAWAN KUMAR GRAG, HUSBAND OF SHASHI GRAG HAS NARRATED THE FACT OF INTRODUCTION OF CREDITING FICTITIOUS NAMES AND SAME WAS NOT REFUTED BY THE ASSESSEE COMPANY. HE ALSO REFERRED TO THE PRACTICE OF OBTAINING DEMAND DRAFTS BELOW RS. 50,00 0 WITHOUT HAVING ANY PAN DETAIL AS MENTIONED BY THE ASSESSING OFFICER IN PARA 6 OF HIS ORDER . HE SUBMITTED THAT THE ADDITION OF RS. 1,20,00,000/ - FOR UNEXPLAINED CREDIT UNDER SECTION 68 OF THE A CT MAY BE UPHELD IN VIEW OF FAILURE OF THE ASSESSEE IN DISCHA RGING ITS BURDEN OF PROOF . 6.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD INCLUDING THE THREE PAPER BOOKS FILED BY THE ASSESSEE. THE ASSESSEE MADE AGREEMENT FOR PURCHASE OF A PROPERTY LOCATED AT F R IENDS COLONY, NEW DELHI, FOR A SUM OF RS. 2 ,40,00,000/ - FROM THE SELLER , IS A UNDISPUTED FACT . THIS AGREEMENT WAS NOT REGISTERED FOR THE PURPOSE OF ITA NO. 2826 & 2378 /DEL/2010 SHITIZ METAL LTD. , NEW DELHI 6 STAMP DUTY. SUBSEQUENTLY, THE ASSESSEE TRANSFERRED THIS PROPERTY THROUGH THREE REGISTERED SALE DEEDS TO SMT SUSHAMA GUPTA AND SMT SHASHI GARG. BOTH THE BUYERS OF PROPERTY ARE RELATED TO THE DIRECTORS OF THE ASSESSEE COMPANY . I T WAS CLAIMED BY THE ASSESSEE COMPANY THAT THE PROPERTY WAS TRANSFERRED FOR A SUM OF RS. 2,40,00, 000/ - BUT FOR THE PURPOSE OF STAMP DUTY, THE PROPERTY WAS REGISTERED ONLY AT RS. 1,20,00,000/ - . THUS ACCORDING TO THE ASSESSEE, THERE WAS NO CAPITAL GAIN IN THE TRANSACTION OF PURCHASE AND SALE OF THE PROPERTY. THE ASSESSING O FFICER ASKED FOR THE DETAIL AND SOURCE OF PAYMENT OF RS. 2,40,00, 000/ - , WHICH WAS REPLIED BY THE AS SESSEE VIDE LETTER DATED 12 /06/2009 AS UNDER: S. NO NAME AND ADDRESS OF THE PERSON MONEY INTRODUCED 1 SMT SHASHI GARG, RS. 65, 00, 000/ - 2 SMT. SUSHMA GUPTA RS. 60,00,000/ - OTHER SOURCES 3 M/S PAWAN RESOURCES P LTD RS. 34,75,000/ - 4 M/S SUN TECH VISION LTD RS. 20,00,000/ - 5 M/S G K MITTAL ( HUF) RS. 15,00,000/ - 6 M/S SKETCH INDIA ELECTRONICS (P) LTD RS. 11,00,000/ - 7 M/S N P AUDIO SYSTEM RS. 9,00,000/ - 8 PAWAN KUMAR GARG RS. 12,75,000/ - 9 SH ROOP BASANT GUPTA RS. 5,00,000/ - 10 SH SACHIN GARG RS. 4,00,000/ - 11 SH ANUJ GARG RS. 4,00,000/ - 6.3 THE A SSESSING O FFICER CALLED FOR ON FIVE DIFFERENT DATES, THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY ALONG WITH CASH BOOK AND LEDGER ACCOUNTS OF THE PERSONS WHO HAS INTRODUCED THE MONEY IN THE COMPANY , HOWEVER , THE BOOKS OF ACCOUNTS WERE NOT PRODU CED BY THE ASSESSE E BEFORE THE ASSESSING OFFICER. THE ASSESSING O FFICER HAS CLAIMED THAT NO DOCUMENTS IN SUPPORT OF THE MONEY INTRODUCED AS OTHER SOURCES WERE FILED AS PER THE REQ UIREMENTS OF SECTION 68 OF THE A CT AND HE HELD THAT PROPERTY ITA NO. 2826 & 2378 /DEL/2010 SHITIZ METAL LTD. , NEW DELHI 7 WAS TRANSACTED AT RS.1,20, 00,000/ - ONLY AND THE BALANCE MONEY INTRODUCED IN THE BOOKS OF THE COMPANY WAS UNACCOUNTED MONEY OF THE COMPANY ITSELF. THE RELEVANT FINDING OF THE A SSESSING O FFICER IS AS UNDER: IN VIEW OF THE DISCUSSION, AS ABOVE, IT IS HELD THAT THE SALE OF THE PROPERTY TOOK PLACE IT A PRICE OF RS. 1, 20, 00, 000/ - ONLY (AS DEPICTED IN THE REGISTERED SALE DEEDS) AND THE AGREEMENT TO SELL IS AN UNRELIABLE DOCUMENT SINCE IT IS UNREGISTERED. THE AMOUNTS PURPORTEDLY CLAIMED TO HAVE BEEN RECEIVED IN LIEU OF SALE OF PROPERTY ARE IN FACT AMOUNTS RECEIVED ON SOME OTHER ACCOUNT WHOSE EXPLANATION IS NOT FORTHCOMING FROM THE ASSESSEE COMPANY. HERE, IT WOULD NOT BE OUT OF CON TEXT TO MENTION THAT A RATHER SHAMEFUL PRACTICE IS WIDELY PREVALENT IN THE INDIAN ECONOMY AND PARTICULARLY IN METROPOLITAN CITIES. WE ALL KNOW ABOUT THE PARALLEL ECONOMY (BLACK MONEY ECONOMY) AND ALSO ABOUT IT BEING MULTIPLE TIMES THE SIZE OF THE WHITE MON EY ECONOMY. THE SHAMEFUL PRACTICE WHICH IS BEING TALKED ABOUT HERE IS THE PRACTICE OF EXCHANGE OF DEMAND DRAFTS IN LIEU OF PAYMENT OF CASH OF EQUAL AND AMOUNT PLUS COMMISSION AT RATES RANGING FROM 1% TO 5%. IT IS VERY EASY TO PROCURE THESE DEMAND DRAFTS FR OM THE ENTRY OPERATORS . THE SOURCE OF THESE DEMAND DRAFTS CAN BE SHOWN TO BE ANYTHING. THERE ARE NO WAYS AND MEANS FOR THE ASSESSING OFFICER TO INVESTIGATE THE SOURCE OF THE SAME EVEN BY THE INDEPENDENT MEANS. TAKE, FOR EXAMPLE, A CASE WHERE AN ASSESSEE DEPOSITS ONE SUCH DEMAND DRAFT IN HIS ACCOUNT FOR AN AMOUNT SAY RS. 25,000/ - . THE ASSESSEE WILL SIMPLY SUBMIT THE DD ALONG WITH THE PAY - IN - SLIPS TO HIS BANK. THE ASSESSEE WILL NOT MENTION THE NAME OF THE BRANCH OF BANK WHICH HAS ISSUED THE DD. THE PAYMENT IS MADE THROUGH CENTRALISED CLEARING. IN THE ABSENCE OF MENTION OF THE NAME (IN THE PAY - IN - SLIP) OF THE ISSUING BRANCH, IT IS JUST IMPOSSIBLE TO TRACE OUT THE SOURCE FROM WHICH THE DD WAS MADE. AND IN HIS BOOKS OF ACCOUNTS THE ASSESSEE CAN SHOW RECEIPT OF THIS DD FROM ANY PARTY THAT THE ASSESSEE MAY CHOOSE TO SHOW. THE CREDIT ENTRY TO THE ACCOUNT OF THAT PARTY WOULD BE ITA NO. 2826 & 2378 /DEL/2010 SHITIZ METAL LTD. , NEW DELHI 8 ACTUALLY BOGUS AND, THEREFORE, IF A DISPUTE ARISES, THEN, WHO SHOULD BE BELIEVED? THERE ARE HUNDREDS OF SUCH ENTRIES (OFFICE MARLA AMOUNTS R ANGING FROM RS. 10,002 RS. 49,900/ - ) WHICH ARE ATTRIBUTED TO VARIOUS PARTIES BY THE ASSESSEE BUT THE SAME ARE NOT SUBSTANTIATED FROM THE ACCOUNTS OF THOSE PARTIES. THE TRUTH IS THAT THE ASSESSEE HAS UTILISED UNACCOUNTED CASH TO PURCHASE THE DEMAND DRAFTS F ROM THE ENTRY OPERATORS AND NOW, WHEN IT HAS BEEN CAUGHT AND CANNOT PROVE THE SOURCE OF THE SAME, IS SHYING AWAY FROM PRODUCING ITS BOOKS OF ACCOUNTS ETC BECAUSE UPON THE ORIGINAL OF THE SAME IT WOULD BE CLEARLY REVEALED THAT THE DEMAND DRAFTS DID NOT ORIG INATE FROM THE ACCOUNTS OF THE SO - CALLED OTHER SOURCES FROM WHICH PAYMENTS WERE RECEIVED (EVENTS WHICH ARE NOT RECORDED IN THE SALE DEEDS) TO SHOW THAT THE PROPERTY HAD BEEN SOLD FOR RS. 2.40 CRORES AND NOT RS. 1.20 CRORES. THEREFORE, THE EXPLANATIONS FI LED IN THIS REGARD (BEING NEITHER SUBSTANTIATED AND ALSO BEING CONTRADICTORY) ARE REJECTED. THEREFORE, THIS SUM OF RS. 1, 20, 00, 000/ - IS BEING ADDED BACK TO THE RETURNED INCOME OF THE ASSESSEE COMPANY, FOR A. Y. 07 - 08, UNDER SECTION 68 OF THE INCOME - TAX A CT, 1961 . 6.4 T HE LD. CIT (A PPEAL ) ALSO HELD THAT NO PLAUSIBLE EXPLANATION WAS SUBMITTED BY THE ASSESSEE IN RESPECT OF THE CREDITS AND THE PERSON LENDING THE CREDITS COULD NOT BE PRODUCED BEFORE THE DEPARTMENT IN SPITE OF REPEATED OPPORTUNITIES. THE RELEVANT FINDINGS OF THE LD. CIT (A PPEAL ) IN PARA 2.4 ARE AS UNDER: .. THE FACT REMAINS THAT THE AGREEMENT TO SELL IS UNREGISTERED DOCUMENT. THERE IS NO BAR FROM INCOME TAX POINT OF VIEW FOR EXECUTING AN AGREEMENT AND NOT GETTING IT REGISTERED BUT THE ISSUE ARISES ONLY WHEN DIFFERENT AMOUNT S SHOWN AT DIFFERENT STAGES FOR THE SAME TRANSACTION WHICH IS NEITHER PERMITTED FROM THE POINT OF VIEW OF THE RELEVANT IT ACT OR THE STAMP DUTY LAW OF THE STATE GOVT. IT IS ALSO AN ADMITTED FACT THAT IN SPITE OF REPEATED REQUEST NO BOOKS OF ACCOUNTS WERE E VER ITA NO. 2826 & 2378 /DEL/2010 SHITIZ METAL LTD. , NEW DELHI 9 PRODUCED BEFORE THE AO PROBABLY TO COVER OF THE TRANSACTIONS. THE AO HAS NOTED THAT THERE WERE NUMBER OF ENTRIES OF A SMALL AMOUNTS RANGING FROM RS. 10,000 TO RS. 49,900/ - AND IT IS WELL - KNOWN THAT THE REQUIREMENT OF PAN CAN BE OBLIGATED IF DEMAND DRAF T IS PURCHASED BELOW RS. 50,000/ - . THE AO HAS ADDED RS. 1,20, 00, 000/ - UNDER SECTION 68 OF THE ACT. BEFORE ME THE APPELLANT ADMITTED IN NO UNCERTAIN TERMS THAT THE SALE DEED WAS REGISTERED AT RS. 1.20 CRORE IN PLACE OF RS. 2.40 CRORE. OUT OF RS. 1.20 CRORE , RS. 0.70 CRORE WAS SHOWN IN THE NAME OF SMT. SUSHMA AND RS. 0.50 CRORE WAS SHOWN IN THE NAME OF SMT. SHASHI. HENCE FROM THE REGISTRATION POINT OF VIEW THIS WAS A MONEY PAID BY THESE 2 PARTIES TO THE APPELLANT COMPANY BUT THE APPELLANT HAS PAID RS. 2.40 CRORE TO BOTC. THE APPELLANT FOR THE LIMITED PURPOSE OF THIS TRANSACTION HAS RECEIVED RS. 1.20 CRORE FROM THE 2 PERSONS AND THE BALANCE AMOUNT OF RS. 1.20 CRORE IN NAME OF VARIOUS DIFFERENT PERSONS AND PAID THE ENTIRE AMOUNT OF RS. 2.40 CRORE TO BOTC FOR T HE PROPERTY TRANSACTION. IT IS IMMATERIAL FOR THE PURPOSE OF IT ACT THAT THERE ARE COURT CASES BETWEEN GUPTA GROUP AND GARG GROUP AND IT THE CIVIL OR CRIMINAL CASES PENDING BEFORE THE COURT OF LAW HAS NO BEARING FROM THE IT POINT OF VIEW. THE FACT ALSO RE MAINS THAT THERE WAS AN INTRODUCTION OF RS. 1.20 CRORE BY THE APPELLANT COMPANY IN THE DIFFERENT NAMES IN THE CREDIT OF THE BOOKS OF THE COMPANY FOR THE PERIOD UNDER CONSIDERATION FOR WHICH NO PLAUSIBLE EXPLANATION COULD BE SUBMITTED BY THE APPELLANT. SUCH PERSONS LENDING THE CREDITS COULD NOT BE PRODUCED THE DEPARTMENT IN SPITE OF REPEATED OPPORTUNITIES. ONE OF THE WITNESSES PAWAN KUMAR GARG HAS NARRATED THE FACTS REGARDING INTRODUCTION OF CREDIT IN THE FICTITIOUS NAMES AND THE APPELLANT COULD NOT REFUTE S UCH CLAIM OF SH GARG. THIS SHOWS THAT THERE IS A HOLE IN THE ARGUMENT AND THE PRECONDITIONS OF INVOKING SECTION 68 DOES EXIST AND THE AO HAS RIGHTLY INVOKED THE SECTION. THE ADDITION OF RS. 1.20 CRORE UNDER SECTION 68 STANDS SUSTAINED. 6.5 W HEREAS , BEFOR E US THE ASSESSEE HAS CLAIMED THAT ALL THE DOCUMENTS RELATED TO IDENTITY, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF ITA NO. 2826 & 2378 /DEL/2010 SHITIZ METAL LTD. , NEW DELHI 10 THE PERSONS WHO LANDED MONEY TO THE ASSESSEE COMPAN Y WERE ALREADY SUPPLIED TO THE ASSESSING O FFICER BY THOSE PERSONS, HOWEVER THE ASSESSING OFFICER DID NOT CONSIDER THOSE DOCUMENTS AND OTHER ENQUIRIES CONDUCTED BY HIM IN RESPECT OF THOSE PERSONS. THE ASSESSEE COMPANY HAS FILED COPY OF ALL THOSE DOCUMENTS FROM PAGES 3 TO 48 OF THE 3 RD PAPER BOOK. 6.6 IN VIEW OF THE ASSERTIONS OF THE PARTIES ON THE ISSUE OF EXAMINATION OF DOCUMENTS , WE ARE OF OPINION THAT THE VITAL EVIDENCES HAVE NOT BEEN CONSIDERED BY THE ASSESSING OFFICER WHILE ARRIVING AT THE CONCLUSION THAT MONEY RECEIVED FROM DIFFERENT PERSONS WAS UNEXPLAINED . THE LD. CIT(APPEALS) HAS ALSO NOT ATTENDED THE REQUEST OF THE ASSESSEE TO SUMMON AND EXAMINE THOSE PERSONS. THUS, IN THE INTEREST OF NATURAL JUSTICE, WE RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING O FFICER WITH THE DIRECTION TO EXAMINE THE CREDIT S INTRODUCED OF RS. 1,20,00,000/ - HELD AS UNEXP LAINED UNDER SECTION 68 OF THE A CT IN ACCORDANCE TO LAW. THE ASSESSING O FFICER IS DIRECTED TO PROVIDE SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO SUBMIT ALL THE RELEVANT DOCUMENTS IN SUPPORT OF ITS CLAIM INCLUDING THE BOOKS OF ACCOUNTS BEFORE THE ASSESSING O FFICER. ACCORDINGLY , THE GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT , APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO. 2378/DEL/2010 8. IN ITA NO. 2378/DEL/2010, THE R EVENUE HAS CO NTESTED THE DELETION OF RS. 66,25, 000/ - MADE BY THE AO UNDER SECTION 68 OF THE A CT. THE FACTS IN BRIEF OF THE CASE ARE ALREADY MENTIONED IN APPEAL OF THE ASSESSEE IN ITA NO. 2826/DEL/2010 . ITA NO. 2826 & 2378 /DEL/2010 SHITIZ METAL LTD. , NEW DELHI 11 9. THE LD. DR RELYING ON THE ORDER OF THE ASSESSING O FFICER SUBMITTED THAT A SUM OF RS. 66,25, 000/ - WAS OBSERVED BY THE ASSESSING O FFICER AS LIABILITY UNDER THE HEAD ADVANCE AGAINST SALE OF PROPERTY AND ON QUERY IT WAS STATED BY THE ASSESSEE THAT SAID ADVANCE WAS RECEIVE D AGAINST PLOT OF LAND NO. 32, S OUTH OF GT ROAD , I NDUSTRIAL AREA , GHAZIABAD FROM S H RI RAJESHWAR KUMAR MITTAL , V IDE AGREEMENT TO SALE DATED 01/10/2001. THE LD. DR FURTHER SUBMITTED THAT NO COPY OF AGREEMENT TO SALE WAS FILED BY THE ASSES SEE AND THE ASSESSEE FAILED TO EXPLAIN AS WHY THE PROPERTY WAS NOT TRANSFERRED EVEN AFTER A LAPSE OF MORE THAN 8 YEARS. SINCE THE ASSESSEE FAILED TO EXPL AIN THE SAID ADVANCE OF RS. 66,25, 000/ - , THE A SSESSING O FFICER HAS RIGHTLY HELD THE MONEY AS OWN MONEY OF THE ASSESSEE AND ADDED UNDER SECTION 68 OF THE A CT. ON THE OTHER HAND , LD. AR RELYING ON THE FINDING OF THE CIT (A PPEAL ) SUBMITTED THAT THE ADVANCE IN QUESTION WAS NOT RECEIVED IN THE YEAR UNDER CONSIDERATION AND THEREFORE PROVISIONS OF SECTION 68 WERE NOT APPLICABLE. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE ARE AGREED WITH THE SUBMISSI ON OF THE L D AR THAT THE AMOUNT OF ADVANCE IN QUESTION WAS RECEIVED IN ASSESSMENT YEAR PRIOR TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE LD. CIT (A PPEAL ) IN PARA 4.3 OF ORDER HAS ALLOWED RELIEF TO THE ASSESSEE . THE RELEVANT PART OF HIS ORDER IS REPRODUC ED AS UNDER: THE CRUX OF THE ISSUE IN THE INSTANT CASE IS THAT THE AMOUNT WERE SHOWN AS ADVANCED AGAINST GHAZIABAD LEND BUT NO DOCUMENTARY EVIDENCE WAS EVER PRODUCED BEFORE THE AO IN SPITE OF REPEATED REQUESTS. BEFORE THE AO IT WAS STATED THAT THE DOCUMEN TS ARE NOT PRESENTLY AVAILABLE BUT THE SAME WAS NEVER PRODUCED TILL THE DATE OF ASSESSMENT ORDER. NO SALE DEED HAS EVER EXECUTED AND THIS AMOUNT HAS BEEN KEPT AND SHOWN AS ITA NO. 2826 & 2378 /DEL/2010 SHITIZ METAL LTD. , NEW DELHI 12 ADVANCE AGAINST SALE OF PROPERTY. IRRESPECTIVE OF THE FACT AS TO WHETHER THERE WAS A N AGREEMENT TO SELL WITH A PARTY OR WHETHER THE DEED WAS REGISTERED OR NOT, THE FACT REMAINS THAT THE AMOUNT HAS BEEN SHOWN AS ADVANCE IN AY 04 - 05. THE SAME HAS BEEN CONTINUED TO BE SHOWN RIGHT FROM AY 00 - 01 TILL THE TIME OF COMPLETION OF THE ASSESSMENT B UT IT IS ALSO A FACT THAT THE AMOUNT HAS BEEN SHOWN AS ADVANCE IN NOT AS A CREDIT HENCE APPLICABILITY OF SECTION 68 DOES NOT ARISE. UNDER THE CIRCUMSTANCES SUCH ADDITION IS ORDERED TO BE DELETED. 11. W E ARE OF THE OPINION THAT FINDING S OF THE LD. COMMIS SI ONER OF I NCOME - TA X (A PPEALS ) ON THE ISSUE IN DISPUTE ARE WELL REASONED AND WE DON T FIND ANY INFIRMITY IN THE SAID FINDINGS OF THE LD. COMMISSIONER OF I NCOME - TAX (A PPEALS ) . ACCORDINGLY , WE UPHOLD THE FINDING S OF THE LD. COMMISSIONER OF I NCOME - TAX (A PPEALS ) O N THE ISSUE IN DISPUTE. T HE GROUND OF THE APPEAL OF THE R EVENUE IS DISMISSED ACCORDINGLY. 12. IN THE RESULT , APPEAL OF THE R EVENUE IS DISMISSED. (ORDE R PRONOUNCED IN THE COURT ON 2 3 /03/2016). S D / - S D / - (C.M.GARG ) (O.P.KANT ) JUDICIAL MEMEB E R ACCOUNTANT MEMBER DATED: 2 3 / 03/2016 LAPTOP COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR