M/s Capricorn Packaging & Manufacturing Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 2381/DEL/2013

• Counselvise Citation: 238120114 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-01-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 23-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Principle of natural justice; Opportunity of cross examination
• Section: 133(6); 147; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO.2381 /DEL/201 3 (ASSESSMENT YEAR - 2 004 - 05 ) CAPRICORN PACKAGING & MANUFACTURING PVT. LTD., T - 24A, GREEN PARK EXT., NEW DELHI - 1100 16 P AN - AAACC4179R (APPELLANT) VS ITO, WARD - 3(2), NEW DELHI. (RESPONDENT) APPELLANT BY SH. ASHWANI TANEJA, ADV RESPONDENT BY SMT PARWINDER KAUR, SR. DR ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 25 . 02.2013 OF CIT(A) - VI , N EW DELHI PERTAINING TO 200 4 - 0 5 ASSESSMENT YEAR . A LTHOUGH VARIOUS GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN THE PRESENT APPEAL H OWEVER THE PARTIES WERE HEARD ONLY IN RESPECT OF GROUND NO. - 5 WHICH READS AS UNDER: - 5 . THAT HAVING REGARD TO FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN PASSING THE IMPUGNED ORDER CONTRARY TO LAW AND FACTS AND WITHOUT PROVIDING ADEQUATE OPPORTUNITY OF HE ARING AND WITHOUT CONSIDERING THE PRINCIPLES OF NATURAL JUSTICE AND WITHOUT AFFORDING THE OPPORTUNITY OF CROSS EXAMINATION. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE DECLARED AN INCOME OF RS. 2,334 / - BY WAY OF FILING ITS RETURN ON 3 0 .10.20 0 4 WH ICH WAS RE - OPENED ON THE BASIS OF INFORMATION RECEIVED RESULTIN G IN PASSING OF THE ORDER DATED 23.12.2011 PASSED U/S 147 OF THE ACT WHEREIN ADDITION OF RS.1,50,000/ - WAS MADE. THE ASSESSEE CLAIMED IT TO BE A CREDIT ENTRY COMING FROM THE ACCOUNT OF S H. GUPTESWHAR MARKETING PVT. LTD. AS PER THE ASSESSMENT ORDER T HE ADDITION WAS MADE ON THE BASIS OF STATEMENT OF OATH U/S 131 OF I.T. ACT, 1961 OF ENTRY OPERATORS AND PERSONS WHO WERE FOR THE OPERATORS AND WERE SHOW N AS DIRECTORS IN MANY COMPANIES 2 I.T.A .NO. - 238 1 /DEL/2013 CONTROL L ED BY THE OPERATORS WHO WERE OPERATING BANK ACCOUNTS AS PER THE INFORMATION AVAILABLE WITH THE INVESTIGATION WING. THE AO WAS OF THE VIEW THAT THE ASSESSEE HAD BEEN PROVIDED ACCOMMODATION ENTRY RESULTING IN THE MAKING OF THE ADDITION. THE ISSUE WAS CHAL LENGED IN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ADDITION MADE. 3. ADDRESSING THE GROUND AGITATED LD. AR DISPUTED THE FACTS TAKEN ON RECORD. ADDRESSING THE SPECIFIC GROUND IT WAS HIS SUBMISSION THAT THE ASSESSMENT ORDER IS DATED 23.1 2 .2011 AND THE I NFORMATION REL IED UPON BY THE AO ON FACTS WAS CONFRONTED TO THE ASSESSEE ON 23.12.2011 . IT WAS SUB M I T T E D THAT THIS FACT ITSELF WOULD SHOW THAT ADEQUATE OPPORTUNITY WAS NOT PROVIDED. FOR READY - REFERENCE ATTENTION WAS INVITED TO PARA 5.2 OF THE ASSESSMENT ORDER . THE SAME IS EXTRACTED HEREUNDER FOR READY - REFERENCE: - 5.2 . THE ASSESSEE HAS FILED DOCUMENTS IN SUPPORT OF ITS CLAIM THAT THE AMOUNT IN QUESTION WAS SHARE APPLICATION MONEY RECEIVED FROM THE SAID PARTY. THESE DOCUMENTS INCLUDE COPIES OF UNDATED CONFIRMATION AND BALANCE SHEET OF THE SAID PARTY. WHAT WE ARE DEALI NG WITH HERE IS NOT A NORMAL BUSINESS TRANSACTION WHERE THE GENUINENESS MAY BE PROVED IF BOTH THE PARTIES CONFIRM THE SAME. THIS IS A CASE OF A COLLUSIVE & SHAM TRANSACTION WHICH EXISTS ONLY ON PAPER AND WHICH HAS BEEN ENTERED INTO TO FACILITATE BOTH THE PARTIES. IN SUCH A SCENARIO SELF SERVING EVIDENCES HAVE BEEN GENERATED AND PRODUCED BEFORE THE DEPARTMENT. MORE IMPORTANTLY, NOTICE U/S 133(6) WAS ISSUED TO M/S SGMPL REQUIRING THE PARTY TO FILE CONFIRMATION IN RESPECT OF THE TRANSACTION CLAIMED BY THE ASSESSEE BUT THERE WAS NO COMPLIANCE BY THE SAID PARTY. ON 23.12.2011, S H RI V.K.KILA, ATTENDED AND HE WAS CONFRONTED WITH THE FACT THAT NOTICE WAS SENT TO M/S SGMPL AT THE NEW ADDRESS GIVEN BY HIM BUT THERE WAS NO COMPLIANCE AND AS A RESULT THE CLAIM OF T HE ASSESSEE REGARDING RECEIPT OF RS.1,50,000/ - REMAINED UNSUBSTANTIATED. IT IS NOT SURPRISING THAT THERE WAS NO COMPLIANCE FROM THE PARTY, IN QUESTION, AS IT HAS ALREADY BEEN ADMITTED DURING THE COURSE OF INVESTIGATION BY THE INV. WING THAT THE TRANSACTIO N IN QUESTION WERE A SHAM. AS SUCH, THE PARTIES WILL NOT OFFER THEMSELVES FOR EXAMINATION OR SCRUTINY IN VIEW OF THEM BEING RENDERED ANSWERLESS TO QUESTIONS REGARDING THEIR CREDITWORTHINESS. 3. 1. INVITING ATTENTION TO HOW THE ISSUE WHICH WAS AGITATED BE FORE THE CIT(A) WAS DECIDED BY HIM, A TTENTION WAS INVITED TO PARA 5.5 OF THE IMPUGNED ORDER WHEREIN THIS CLAIM WAS DISMISSED HOLDING AS UNDER: - 5.5 . IN THE SIXTH GROUND OF APPEAL, THE APPELLANT HAS CONTESTED THAT THE PRINCIPAL OF NATURAL JUSTICE HAS NO T FOLLOWED BY THE AO IN THE CASE OF APPELLANT COMPANY. HOWEVER, IT IS OBSERVED THAT PROPER OPPORTUNITY OF 3 I.T.A .NO. - 238 1 /DEL/2013 BEING HEARD HAS BEEN GIVEN BY THE AO TO THE APPELLANT COMPANY HENCE THIS GROUND OF APPEAL IS BEING REJECTED. 3. 2 . IN THESE CIRCUMSTANCES IT WAS HIS LIMITED PRAYER THAT LET THE ISSUE BE RESTORED TO THE AO IN ORDER TO PROVIDE THE ASSESSEE AN OPPORTUNITY TO ADDRESS THE FACTS. THE LD. SR. DR THOUGH PLACED RELIANCE UPON THE AUTHORITIES BELOW HOWEVER HAD NO OBJECTION IF THE ISSUE IS RESTORED TO THE AO. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON A CONSIDERATION OF THE FACTS AND CIRCUMSTANCES AVAILABLE ON RECORD IN THE LIGHT OF THE SUBMISSIONS ADVANCED BEFORE THE BENCH, WE DEEM IT APPROPRIATE TO RESTORE THE ISSUE BACK TO THE AO. THE ASSESSEE SHALL BE AT LIBERTY TO PRODUCE FRESH EVIDENCE IN SUPPORT OF ITS CLAIM AND THE AO CONSIDERING THE SUBMISSIONS SHALL PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATI STICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 8 T H OF JANUARY 2015 . S D / - S D / - ( T.S.KAPOOR ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 8 / 01 /201 5 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI