Xenial Investments Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 2404/DEL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69431 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 29-10-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 18-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Income from undisclosed sources
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH H HH H : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.2404/DEL/2012 2404/DEL/2012 2404/DEL/2012 2404/DEL/2012 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2004 2004 2004 2004- -- -05 0505 05 M/S XENIAL INVESTMENTS M/S XENIAL INVESTMENTS M/S XENIAL INVESTMENTS M/S XENIAL INVESTMENTS PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., H HH H- -- -21, SHAKURPUR, 21, SHAKURPUR, 21, SHAKURPUR, 21, SHAKURPUR, DE DEDE DELHI. LHI. LHI. LHI. PAN : AAACX0051B. PAN : AAACX0051B. PAN : AAACX0051B. PAN : AAACX0051B. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -18(4), 18(4), 18(4), 18(4), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. SAMPATH, ADVOCATE. RESPONDENT BY : SHRI SAMEER SHARMA, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LEARNED CIT(A)-XXI, NEW DELHI DATED 16 TH MARCH, 2012 FOR THE AY 2004- 05. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN CONFIRMING THE FO LLOWING ACTIONS OF THE ASSESSING OFFICER : 1. IN HIS PRECIPITATELY COMPLETING THE ASSESSMENT U /S 254/144 OF THE INCOME-TAX ACT, 1961 WITHOUT PROVIDI NG DUE AND ADEQUATE OPPORTUNITY OF HEARING; 2. IN TREATING THE SHARE APPLICATION MONEY RECEIVED AS INCOME FROM UNDISCLOSED SOURCES AND MAKING AN ADDIT ION OF RS. ONE CRORE TO THE RETURNED INCOME U/S 68 OF T HE ACT. BOTH THE ABOVE ACTIONS BEING MOST ARBITRARY, ERRONE OUS, UNTENABLE AND UNLAWFUL, IT IS PRAYED THAT THE SAME MUST BE QUASHED. ITA-2404/DEL/2012 2 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT IN THIS CASE, ITAT HAS SET ASIDE THE M ATTER TO THE FILE OF THE ASSESSING OFFICER VIDE ORDER DATED 5 TH MARCH, 2009 IN ITA NO.1616/DEL/2008. THAT THE ITAT DIRECTED THE ASSES SING OFFICER TO RE- EXAMINE THE ISSUE IN THE LIGHT OF THE DECISION OF H ON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF STELLAR INVESTMENT LTD. A ND SOPHIA FINANCE LTD. THAT THE ASSESSING OFFICER DID NOT CARRY OUT THE DIRECTION OF THE ITAT AND REPEATED THE ADDITION IGNORING THE EVIDENC ES PRODUCED BEFORE THE ASSESSING OFFICER WHICH WERE IN THE FORM OF CON FIRMATIONS OF THE CREDITORS WHEREIN PERMANENT ACCOUNT NUMBERS OF ALL THE SHARE APPLICANTS ARE MENTIONED. HE ALSO STATED THAT IF T HE SHARE APPLICANTS ARE NOT AVAILABLE AT THE ADDRESS GIVEN IN THE APPLI CATION, IT IS NOT THE FAULT OF THE ASSESSEE. HE, THEREFORE, SUBMITTED TH AT THE ADDITION OF ` 1 CRORE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF U NEXPLAINED SHARE APPLICATION MONEY MAY BE DELETED. 4. LEARNED SR.DR, ON THE OTHER HAND, STATED THAT FR OM THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 133(6) TO ALL THE SHAREHOLDERS AND MO ST OF THE SHAREHOLDERS WERE NOT FOUND AT THE ADDRESS GIVEN AN D EVEN WHERE THE NOTICE UNDER SECTION 133(6) WAS SERVED, NO REPLY WA S RECEIVED. THAT THE ASSESSING OFFICER HAS GIVEN THE CHART IN THIS R EGARD AT PAGES 3 & 4 OF THE ASSESSMENT ORDER. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE TO THE ASSESSEE POINTING OUT THE ABOVE FACTS THAT NONE OF THE SHAREHOLDERS HAS RESPONDED TO THE NOTICE ISSUED UND ER SECTION 133(6). THAT THE ASSESSEE NEITHER FURNISHED ANY REPLY THERE TO NOR APPEARED ON THE DATE OF HEARING. THAT THE ONUS IS UPON THE ASS ESSEE TO PROVE THE CREDIT BY WAY OF SHARE APPLICATION MONEY IN ITS BOO KS OF ACCOUNT. THAT THE ASSESSEE NEITHER APPEARED NOR FURNISHED ANY SAT ISFACTORY EXPLANATION OF NON-AVAILABILITY OF ALL THE 85 SHARE HOLDERS AT THE ADDRESS GIVEN. HE, THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT(A) SHOULD BE SUSTAINED. ITA-2404/DEL/2012 3 5. IN THE REJOINDER, IT IS STATED BY THE LEARNED CO UNSEL THAT IN THE CONFIRMATIONS, ALL THE SHARE APPLICANTS HAVE GIVEN THEIR PERMANENT ACCOUNT NUMBERS. THAT THE ASSESSING OFFICER SHOULD HAVE VERIFIED FROM THEIR INCOME TAX RECORD. HE ALSO STATED THAT BY FU RNISHING CONFIRMATION AND PERMANENT ACCOUNT NUMBERS OF ALL THE SHARE APPL ICANTS, THE ASSESSEE HAS DULY DISCHARGED THE ONUS WHICH LAY UPO N IT. HE ALTERNATIVELY SUBMITTED THAT IN ANY CASE, THE MATTE R CAN BE SET ASIDE ONCE AGAIN FOR VERIFICATION FROM THEIR INCOME TAX F ILES. 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THAT THE ITAT HAS SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING O FFICER WITH THE FOLLOWING DIRECTION:- 5. WE HAVE CONSIDERED THE FACTS OF THE CASE AND RI VAL SUBMISSIONS. WE FIND THAT IT IS THE COMMON CASE OF BOTH THE PARTIES THAT ENQUIRIES WERE NOT PROPERLY MADE B Y THE AO OR THE LD.CIT(A) IN ACCORDANCE WITH THE DECISION IN THE CASE OF STELLAR INVESTMENT LTD. AND SOPHIA FINANCE LD. THEREFORE, WE THINK IT FIT TO RESTORE THE MATTER TO THE FILE OF THE AO TO EXAMINE THE EVIDENCE STATED TO HAVE BEEN RECEIVED FROM VARIOUS PARTIES, HEAR THE ASSESSEE AF RESH AND MAKE DE NOVO ASSESSMENT AS PER LAW. 7. THAT THE ASSESSING OFFICER FIXED THE CASE FOR HE ARING FOR THE FIRST TIME FOR 05.08.2009. HOWEVER, NONE ATTENDED ON THE GIVEN DATE. ON THE NEXT DATE OF HEARING, THE ASSESSEES AUTHORIZED REPRESENTATIVE DID APPEAR AND FURNISH SOME DETAILS. ON ANOTHER DATE O F HEARING, THE ASSESSEE FURNISHED THE COPY OF CONFIRMATIONS OF THE SHARE APPLICANTS. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE UND ER SECTION 133(6) TO ALL THE SHARE APPLICANTS BUT NO REPLY WAS RECEIVED FROM A SINGLE SHARE APPLICANT. IN MOST OF THE CASES, THE NOTICES HAVE RETURNED BACK AND WHERE THE NOTICE HAD NOT BEEN RETURNED BACK, NEITHE R ANYBODY APPEARED BEFORE THE ASSESSING OFFICER NOR ANY REPLY WAS FILED. THE ASSESSING OFFICER ISSUED DETAILED SHOW CAUSE NOTICE DATED 24.11.2009 ITA-2404/DEL/2012 4 IN WHICH COMPLETE DETAILS OF NOTICES ISSUED UNDER S ECTION 133(6) AND THE RESPONSE OF EACH SHARE APPLICANT WERE GIVEN. T HEREAFTER, THE ASSESSEE WAS ASKED TO FURNISH FURTHER EVIDENCE, IF ANY, IN THIS REGARD AND A FINAL DATE OF HEARING WAS GIVEN FOR 30 TH NOVEMBER, 2009. HOWEVER, ON THAT DATE, NEITHER ANYBODY APPEARED ON BEHALF OF THE ASSESSEE NOR ANY REQUEST FOR ADJOURNMENT WAS MADE. THEREFORE, THE ASSESSING OFFICER REPEATED THE ADDITION OF ` 1 CRORE AS UNEXPLAINED SHARE APPLICATION MONEY. 8. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND THE FACTS OF THE CASE, WE ARE OF THE OPINION THAT THE MATTER NEEDS TO BE SET ASIDE ONCE AGAIN TO THE FILE OF THE ASSESSING OFFICER. W E ARE CONSCIOUS THAT THE MATTER HAS ALREADY BEEN SET ASIDE ONCE BUT, WE FIND THAT DURING THE SET ASIDE PROCEEDINGS, NEITHER THE ASSESSEE MAD E SINCERE EFFORTS OF APPEARING BEFORE THE ASSESSING OFFICER AND EXPLAINI NG THE CREDIT IN THE FORM OF SHARE APPLICATION MONEY IN ITS BOOKS OF ACC OUNT NOR THE ASSESSING OFFICER EXAMINED THE EVIDENCES PRODUCED B EFORE HIM. THE ASSESSEE HAS PRODUCED THE CONFIRMATIONS BEFORE THE ASSESSING OFFICER WHICH CONTAINED THE PERMANENT ACCOUNT NUMBERS OF TH E SHARE APPLICANTS. THEREFORE, IF THE PERSONS WERE NOT AVA ILABLE AT THE ADDRESS, VERIFICATION COULD HAVE BEEN MADE FROM THE CONCERNE D INCOME TAX AUTHORITIES WHO ARE ASSESSING THE SHARE APPLICANTS AS PER THE PERMANENT ACCOUNT NUMBERS GIVEN BY THEM IN THE CONF IRMATIONS. AT THE SAME TIME, IT WAS THE DUTY OF THE ASSESSEE TO C OOPERATE DURING ASSESSMENT PROCEEDINGS AND EXPLAIN WHY THE LARGE NU MBER OF SHARE APPLICANTS ARE NOT AVAILABLE AT THE ADDRESSES GIVEN . IF THEIR ADDRESSES HAVE CHANGED, THE ASSESSEE SHOULD HAVE GIVEN THE CO RRECT ADDRESS BECAUSE IF ANY SHAREHOLDER HAS CHANGED THE ADDRESS, HE WILL CERTAINLY INFORM TO THE COMPANY HIS NEW ADDRESS. IF THE SHAR ES ARE SO TRANSFERRED, THE ASSESSEE COULD HAVE TOLD THE ASSES SING OFFICER THAT THOSE APPLICANTS HAVE TRANSFERRED THE SHARES AND, T HEREFORE, CURRENT ADDRESSES OF THOSE SHAREHOLDERS ARE NOT AVAILABLE W ITH IT. WE ALSO FIND ITA-2404/DEL/2012 5 THAT THERE IS MUCH DEVELOPMENT IN LAW AFTER THE DEC ISION OF ITAT DATED 5 TH MARCH, 2009. THE ITAT HAS SET ASIDE THE MATTER FO R MAKING ASSESSMENT DE NOVO. HOWEVER, IN THE DIRECTION, IT HAS DIRECTED THE ASSESSING OFFICER TO MAKE THE ASSESSMENT IN THE LIG HT OF THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ST ELLAR INVESTMENT LTD. AND SOPHIA FINANCE LTD. WE FIND THAT THEREAFTER, O N THIS ISSUE, THERE ARE A LARGE NUMBER OF DECISIONS OF HON'BLE JURISDIC TIONAL HIGH COURT AS WELL AS HONBLE APEX COURT. FOR THIS REASON ALSO, THE MATTER NEEDS TO BE RE-EXAMINED AFRESH BY THE ASSESSING OFFICER IN T HE LIGHT OF THE SUBSEQUENT DECISIONS OF HONBLE APEX COURT AS WELL AS HON'BLE JURISDICTIONAL HIGH COURT. WE, THEREFORE, DEEM IT PROPER TO SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND RESTORE THE MAT TER TO THE FILE OF THE ASSESSING OFFICER FOR READJUDICATION IN ACCORDANCE WITH LAW. WE ORDER ACCORDINGLY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DEE MED TO BE ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2013. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 31.10.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : M/S XENIAL INVESTMENTS PVT.LTD., M/S XENIAL INVESTMENTS PVT.LTD., M/S XENIAL INVESTMENTS PVT.LTD., M/S XENIAL INVESTMENTS PVT.LTD., H HH H- -- -21, SHAKURPUR, DELHI. 21, SHAKURPUR, DELHI. 21, SHAKURPUR, DELHI. 21, SHAKURPUR, DELHI. 2. RESPONDENT : INCOME TAX OF INCOME TAX OF INCOME TAX OF INCOME TAX OFFICER, FICER, FICER, FICER, WARD WARD WARD WARD- -- -18(4), NEW DELHI. 18(4), NEW DELHI. 18(4), NEW DELHI. 18(4), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR