M/s. JKD Capital & Finlease Ltd., New Delhi V. ITO, New Delhi

ITA 2723/DEL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5490 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 13-01-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 05-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 68

Judgement Text

ITA NO. 2723/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2723/DEL/2012 A.Y. : 200 5 - 0 6 M/S JKD CAPITAL & FINLEASE LTD., C/O M/S RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI 110 049 (PAN: AABC31581F) VS. INCOME TAX OFFICER, WARD-4(2), NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. ASHWANI TANEJA, CA DEPARTMENT BY : SH. S.N. BHATIA, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS-VII), N EW DELHI DATED 11.3.2010 PERTAINING TO ASSESSMENT YEAR 2005-06. 2. THE ISSUE RAISED IS THAT LD. CIT(A) HAS ERRED I N LAW ON FACTS IN CONFIRMING THE ADDITION OF RS. 17 LACS THAT TOO WIT HOUT GIVING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE AND WITHOUT SERVING THE MANDATORY NOTICES AS PER LAW. 3. THE MAIN GROUND IN THIS CASE PERTAINS TO ADDITIO N OF RS. 17,00,000/- BY THE AO ON ACCOUNT UNEXPLAINED CREDIT ENTRIES IN THE BANK ACCOUNT IN TERMS OF SECTION 68 OF THE I.T. ACT . IT WAS FOUND BY THE AO DURING THE ASSESSMENT PROCEEDINGS THAT THERE WERE CERTAIN ITA NO. 2723/DEL/2012 2 CREDIT ENTRIES IN THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE WAS, THEREFORE, ASKED TO EXPLAIN THE SOURCES OF THE FOLLOWING CREDIT ENTRIES APPEARING IN THE BANK ACCOUNT:- I) RS. 2,00,000/- FROM NUREERU & FARMS ON 31.7.20 04. II) RS. 8,00,000/- FROM MAHINDRA URBAN CO-OP BANK, GHAZIABAD ON 27.9.2004 AND III) RS. 7,00,000/- FROM MAHINDRA URBAN CO-OP BANK, GHAZIABAD ON 27.9.2004. HOWEVER, THE ASSESSEE DID NOT GIVE ANY REPLY TO THE ABOVE QUERY MADE BY THE ASSESSING OFFICER. IN THE BACKGRO UND OF THE ABOVE FACTS, THE ASSESSING OFFICER ADDED THE AMOUNT OF RS. 17.00.000/- TO THE TOTAL INCOME OF THE ASSESSEE COM PANY. 4. UPON ASSESSEES APPEAL LD. CIT(A) AFFIRMED THE A CTION OF THE ASSESSING OFFICER. HE NOTED THAT NO DETAILS AND SU PPORTING EVIDENCE WHATSOEVER WERE FURNISHED BY THE ASSESSEE DURING TH E COURSE OF ASSESSMENT PROCEEDINGS OR DURING THE APPELLATE PROC EEDINGS. HENCE, HE DID NOT FIND ANY INFIRMITY IN THE ORDER O F THE AO. LD. CIT(A) CONCLUDED AS UNDER:- AS PER THE RATIO LAID DOWN BY THE APEX COURT AND THE JURISDICTIONAL HIGH COURT OF DELHI, THE ASSESSI NG OFFICER IS DUTY BOUND TO INVESTIGATE THE IDENTITY A ND CREDITWORTHINESS OF THE SHARE APPLICANTS AND THE GENUINENESS OF THE TRANSACTION. IN THE INSTANT CAS E, THE APPELLANT HAS FAILED TO DISCHARGE ITS PRIMARY BURDEN OF PROVING THE IDENTITY OF THE SHARE APPLICANTS AS THE RELEVANT DETAILS OF THE ADDRESS O R ITA NO. 2723/DEL/2012 3 PAN IDENTITY OF THE SUBSCRIBER WERE NOT FURNISHED T O THE DEPARTMENT ALONG WITH COPIES OF THE SHAREHOLDERS REGISTER, SHARE APPLICATION FORMS, SHARE TRANSFER REGISTER ETC. IN VIEW OF THE FOREGOING DISCUSSION, I AM OF THE CONSIDERED VIEW THAT THE AO WAS JUSTIFIED IN ADDING THE AMOUNT OF RS. 17,00,000/- TO THE INCOME OF THE ASSESSEE IN TH E FINANCIAL YEAR IN QUESTION. THEREFORE, THE ORDER O F THE ASSESSING OFFICER IN RESPECT OF THE ADDITION OF RS. 17,00,000/- IS CONFIRMED. 5. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. AT THE OUTSET, LD. COUNSEL OF THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS NOT BEEN GIVEN PROPER OPPORTUNITY OF BEING HEAR D. HE SUBMITTED THAT THE ASSESSMENT ORDER WAS PASSED ON 2 8.12.2007. HE SUBMITTED THAT THE QUERY IN THIS REGARD CAME FR OM THE ASSESSING OFFICER ON 20.12.2007. WITHIN A SHORT WHILE OF O NE WEEK ASSESSEE WAS NOT IN A POSITION TO SUBMIT THE NECESSARY DETAI LS. THE ASSESSING OFFICER HAS PROCEEDED TO MAKE THE ADDITIONS WITHOUT GETTING THE DETAILS FROM THE ASSESSEE. HE FURTHER POINTED OUT THAT THE ORDER OF THE LD. CIT(A) IS ALSO EXPARTE. HE PRAYED THAT ONE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE, SO THAT ASSESSEE MAY SUB MIT THE NECESSARY DETAILS BEFORE THE REVENUE AUTHORITIES. LD. DR DID NOT HAVE ANY SERIOUS OBJECTION TO THIS PROPOSITION. AC CORDINGLY, WE SET ASIDE THE ISSUE TO THE FILE OF THE AO. THE ASSESSI NG OFFICER SHALL ITA NO. 2723/DEL/2012 4 CONSIDER THE CASE AFRESH, AFTER GIVING THE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13/1/2014. SD/- SD/- [ [[ [I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 13/1/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 2723/DEL/2012 5