ITO, New Delhi V. M/s Apogee Investment Pvt. Ltd., New Delhi

ITA 2751/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65492 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-09-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 27-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PIRTHI LAL
• Keywords: Additional evidence; Question of law; Onus to prove
• Section: 147; 68; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: A NEW DELHI BEFORE SHRI AD JAIN, JM AND SHRI J.SUDHAKAR REDDY, A.M. ITA NO: 2751/DEL/2011 ASSESSMENT YEAR : - 2002-03 ITO, WARD 2(1), C.R.BLDG. VS. M/S APOGEE INVESTMENT S P.LTD. NEW DELHI B 3/226, PASCHIM VIHAR NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANOJ KUMAR, C.A.. DEPARTMENT BY : SHRI PIRTHI LAL, SR.D.R. O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGA INST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-V, NEW DELHI D T. 22.3.2011 PERTAINING TO ASSESSMENT YEAR 2002-03. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION, I S WHETHER THE FIRST APPELLATE AUTHORITY WAS RIGHT IN DELETING THE ADDIT ION MADE U/S 68 OF THE INCOME TAX ACT, 1961 BY THE A.O. THE FACTS ARE BR OUGHT OUT AT PARA 2, PAGE 1 OF THE LD.CIT(A)S ORDER WHICH IS EXTRACTED FOR REA DY REFERENCE. 2. THE APPELLANT IS IN THE BUSINESS OF FINANCING OF VEHICLES AND INVESTMENT IN OTHER COMPANIES. RETURN OF INCOME FOR THE ASSESSME NT YEAR 2002-03 DECLARING AN INCOME OF RS.38,290.00 WAS FILED ON 17.11.2002 W HICH WAS DULY PROCESSED UNDER SECTION 143(1). NOTICE UNDER SECTION 147 WAS ISSUED ON 27.3.2009 ON THE BASIS OF INFORMATION FROM INVESTIGATING WING, NEW D ELHI ABOUT RECEIPT OF RS.60,00,000/- ALLEGED TO BE BOGUS ON ACCOUNT OF AC COMMODATION ENTRIES. AS NO RESPONSE WAS RECEIVED IN RESPONSE TO THE NOTICE UND ER SECTION 148 NOR WAS THERE ANY RESPONSE TO THE NOTICE UNDER SECTION 142(1), TH EREFORE ASSESSMENT WAS COMPLETED UNDER SECTION 144 ON 11.12.2009 AND THUS THE ASSESSING OFFICER 2 MADE AN ADDITION OF RS.60,30,000/- ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3. ON APPEAL THE FIRST APPELLATE AUTHORITY UPHELD T HE REOPENING ON MERITS. THE FIRST APPELLATE AUTHORITY OBSERVED THAT THE ASS ESSEE HAS RECEIVED SHARE APPLICATION MONEY FROM FIVE PRIVATE LIMITED COMPANI ES, WHICH SUM WAS ADDED U/S 68 AS THE ASSESSEE DID NOT COMPLY WITH TH E NOTICES GIVEN BY THE AO. BEFORE THE FIRST APPELLATE AUTHORITY THE ASSESSEE S UBMITTED ADDITIONAL EVIDENCES IN THE FORM OF PAN NO., BOARD RESOLUTIONS , CONFIRMATIONS AS WELL AS MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATI ON ON EACH OF THESE PRIVATE LIMITED COMPANIES, WHICH HAVE MADE SHARE AP PLICATION INVESTMENTS IN THE ASSESSEE COMPANY. COPY OF ITR/ACKNOWLEDGEMENT, BANK STATEMENTS, BOOKS OF ACCOUNTS OF THE PARTIES AND SHARE HOLDERS REGISTER ETC. WERE EXAMINED BY THE AO IN THE REMAND PROCEEDINGS. NO ADVERSE FI NDING WAS GIVEN BY THE AO. THE AO WAS OF THE VIEW, THAT IN VIEW OF THE REPORT OF THE INVESTIGATION WING, THE ADDITIONS SHOULD BE UPHELD. THE FIRST APPELLATE AU THORITY DELETED THE ADDITION BY OBSERVING THAT THE AO ADDED THE AMOUNT PRIMARILY BECAUSE THE ASSESSEE FAILED TO PRODUCE THE CONCERNED PERSONS, WHEREAS TH E ASSESSEE HAS PRODUCED ALL RELEVANT DOCUMENTS AND THE AO HAD THE POWER TO SUMMON THE DIRECTOR HIMSELF, IF HE DOUBTED THE IMPUGNED TRANSACTIONS. 4. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- 1. THE LD.CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING ADDITION OF RS.60,30,000/- MADE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 IGNORING THAT:- A) THE ASSESSEE FAILED TO SUBMIT NECESSARY DETAILS DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS EVEN AS SEVERAL OPPORTUNITIE S WERE ALLOWED TO 3 HIM. LD.CIT(A) WAS NOT RIGHT IN ENTERTAINING ADDIT IONAL EVIDENCE DURING THE APPELLATE PROCEEDINGS. B) THE ASSESSEE FAILED TO DISCHARGE HIS ONUS TO PROVE NECESSARY INGREDIENTS OF S.68 OF THE INCOME TAX ACT, 1961. 5. WE HAVE HEARD MR.PIRTHILAL, SR.D.R. ON BEHALF OF THE REVENUE AND SRI MANOJ KUMAR, THE LD.COUNSEL FOR THE ASSESSEE. 6. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRC UMSTANCES OF THE CASE AND ON PERUSAL OF THE MATERIAL AVAILABLE ON RECORD AS WELL AS THE CASE LAWS CITED, WE HOLD AS FOLLOWS. 7. THIS IS A CASE WHERE THE AO PASSED AN ORDER U/S 144 OF THE ACT AS THE ASSESSEE HAS NOT RESPONDED TO THE NOTICES NOR FURN ISHED ANY INFORMATION. BEFORE THE LD.CIT(A) THE ASSESSEE PRODUCED THE FOL LOWING EVIDENCES:- I. PAN NUMBER; II. BOARD RESOLUTION; III. CONFIRMATION OF ALL THE SUBSCRIBERS; IV. MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOC IATION; V. COPY OF ITRS/ACKNOWLEDGEMENT OF THE FILING OF RE TURN; VI. BANK STATEMENTS; VII. AUDITED BALANCE SHEET. THE LD.CIT(A) ADMITTED THESE ADDITIONAL EVIDENCES A ND FORWARDED THE SAME TO THE AO FOR A REMAND REPORT. THE AO AT THAT STAGE H AS NOT OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE. IN FACT HE VERIF IED THE DOCUMENTS SUBMITTED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM THAT THE SU BSCRIBERS TO THE SHARE CAPITAL WERE GENUINE AND HAS NOT FOUND ANYTHING ADVERSE. T HE ONLY GROUND ON WHICH 4 THE AO SEEKS SUSTENANCE OF ADDITION, IS THAT THE RE PORT OF THE INVESTIGATION WING SUMMARIZED IN PARA 3 OF AOS ORDER WARRANTS AD DITION. FURTHER IT IS ALSO STATED BY THE AO THAT NO DIRECTOR OF SHARE SUBSCRI BER COMPANIES HAVE BEEN PRODUCED. 8. THE LD.CIT(A), IN OUR VIEW, WAS RIGHT IN COMING TO A CONCLUSION THAT THE AO ON VERIFICATION OF THE DOCUMENTS SUBMITTED BY TH E ASSESSEE, DURING REMAND PROCEEDINGS, HAS NEITHER BROUGHT OUT ANY DIRECT OR INFERENTIAL EVIDENCE TO CONTRADICT THE CONTENTIONS OF THE ASSESSEE. NON PR ODUCTION OF THE PERSON, IN OUR VIEW, CANNOT BE A GROUND FOR SUSTAINING THE ADD ITION, SPECIFICALLY WHEN OVERWHELMING EVIDENCE IS FURNISHED BY THE ASSESSEE. THE AO HAD THE POWER TO SUMMON THE DIRECTORS HIMSELF IN CASE OF DOUBT. CO MING TO THE FINDING OF THE INVESTIGATION WING, THESE ARE VAGUE AND THE ASSESSE E HAS NOT BEEN CONFRONTED WITH THE COMMENTS AND MATERIAL OF THE INVESTIGATION WING. 9. COMING TO THE LEGAL POSITION, THE JURISDICTIONAL HIGH COURT IN ITA NO. 212/2012 JUDGEMENT DT. 11.4.2012 IN THE CASE OF GO EL SONS GOLDEN ASSET PVT.LTD. HELD AS FOLLOWS:- 3. WE HAVE EXAMINED THE SAID CONTENTION AND FIND T HAT THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS FILED CONF IRMATION LETTERS FROM THE COMPANIES, THEIR PAN NUMBERS, COPY OF BANK STATEMEN TS, AFFIDAVITS AND BALANCE SHEET. THEREAFTER THE ASSESSING OFFICER HAD ASKED THE ASSESSEE TO PRODUCE THE SAID DIRECTORS/PARTIES. ASSESSEE EXPRESSED ITS INA BILITY TO PRODUCE THEM. THE ASSESSING OFFICER DID NOT CONSEQUENT THERETO CONDUC T ANY INQUIRY AND CLOSED THE PROCEEDINGS. THIS IS A CASE WHERE THE ASSESSING OF FICER HAS FAILED TO CONDUCT NECESSARY INQUIRY, VERIFICATION AND DEAL WITH THE M ATTER IN DEPTH SPECIALLY AFTER THE AFFIDAVIT/CONFIRMATION ALONG WITH THE BANK STAT EMENTS ETC. WERE FILED. IN CASE THE ASSESSING OFFICER HAD CONDUCTED THE SAID E NQUIRIES AND INVESTIGATION PROBABLY THE CHALLENGE MADE BY THE REVENUE WOULD BE JUSTIFIED. IN THE ABSENCE 5 OF THESE INQUIRIES AND NON-VERIFICATION OF THE DETA ILS AT THE TIME OF ASSESSMENT PROCEEDINGS, THE FACTUAL FINDINGS RECORDED BY THE A SSESSING OFFICER WERE INCOMPLETE AND SPARSE. THE IMPUGNED ORDER PASSED C ANNOT BE TREATED AND REGARDED AS PERVERSE. THE APPEAL IS DISMISSED AS N O SUBSTANTIAL QUESTION OF LAW ARISES. 10. THE PROPOSITION LAID DOWN SQUARELY APPLICABLE T O THE FACTS OF THE PRESENT CASE AND HENCE WE UPHOLD THE ORDER OF THE FIRST APP ELLATE AUTHORITY AND DISMISS THIS APPEAL OF THE REVENUE. 11. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER, 2012 . SD/- SD/- (A.D. JAIN) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: THE 21 ST SEPTEMBER, 2012 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR 1. DATE OF DICTATION: 13/09/2012 2. DRAFT PLACED BEFORE THE AUTHOR ON: 18/09/2012 3. DRAFT PROPOSED AND PLACED BEFORE SECOND MEMBER ON: 4. DRAFT DISCUSSED/APPROVED BY THE SECOND MEMBER ON: 5. APPROVED DRAFT CAME TO SR.P.S. ON: 21/09/2012 6. DATE OF PRONOUNCEMENT : 21/09/2012 7. FILE SENT TO BENCH CLERK ON : 21/09/2012 8. DATE ON WHICH FILE GIVEN TO HEAD CLERK ON: 9. DATE OF DISPATCHING THE ORDER ON :