Wisdom Exports Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 2754/DEL/2011

• Counselvise Citation: 275420114 RSA 2011
• Duration Of Justice: 2 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 13-08-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 27-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S MEENA
• Keywords: Opportunity of being heard; Principle of natural justice; Capital receipt
• Section: 143(3); 68

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I : NEW DELHI BEFORE SHRI R. P. TOLANI, JUDICIAL MEMBER AND SHRI B. C. MEENA , ACCOUNTANT MEMBER ITA NO. 2754 /DEL/ 2011 ASSESSMENT YEAR: 2007 - 08 WISDOM EXPORTS PVT. LTD., FLAT NO. 10, C - 1/2, MODEL TOWN, NEW DELHI 110009, PAN AAACW0094M VS. ITO, WARD 18(3), C. R. BUILDING, I. P. ESTATES, NEW DELHI (RESPONDENT) (APPELLANT) APPELLANT BY : SHRI SALIL KAPOOR, ADVOCATE , C A RESPONDENT BY: SHRI R. S. MEENA, CIT DR O R D E R PER B. C. MEENA, AM THE APPEAL HAS BEEN FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF LD. CIT (A) , XXI, NEW DELHI DATED 25.03.2011. 2. THE ASSESSEE HAS SUBMITTED THE REVISED GROUNDS OF APPEAL TAKEN BY THE ASSESSEE WHICH READS AS UNDER: 1. THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) AND THE ADDITIONS MADE ARE ILLEGAL, BAD IN LAW, WITHOUT JURISDICTION AND AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 2. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCE OF THE CASE THE ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN PASSING THE ASSESSMENT ORDER IN HASTE AND WITHOUT PROVIDING PROPER AND REASONABLE OPPORTUNITY OF BEING PAGE NO. 2 ITA NO. 2754 /DEL/201 1 HEARD TO THE APPELLANT AND CIT(A) HAS ERRED IN LAW IN UPHOLDING THE SAME. 3. THAT THE LD. CIT(A) AND THE ASSESSING OFFICER HAS FAILED TO APPRECIATE THAT DURING THE ASSESSMENT YEAR THE ASSESSEE RECEIVED RS. 12,00,00,000/ - AS SHARE CAPITAL IN ITS BANK ACCOUNT AND THE SAME IS NOT INCOME CHARGEABLE TO BE TAX AND THE SAME COULD NOT BE ASSESSED AS UNEXPLAINED INCOME U/S 68. 4. THAT THE LEARNED CIT(A) AND T HE ASSESSING OFFICER FAILED TO APPRECIATE THAT DURING THE ASSESSMENT YEAR THE ASSESSEE RECEIVED ONLY RS. 12,00,00,000/ - AS SHARE CAPITAL BUT ASSESSING OFFICER HAS WRONGLY AND ILLEGALLY ADDED RS. 24,00,00,000/ - U/S 68 OF THE INCOME TAX ACT, 1961. THE SAID ADDITION OF RS. 24,00,00,000/ - IS ILLEGAL. UNJUST AND IS UNCALLED FOR AND IT IS LIABLE TO BE DELETED. 5. THAT THE IDENTITY AND CREDITWORTHINESS OF SHAREHOLDER AND GENUINENESS OF TRANSACTION ARE PROVED AND ASSESSING OFFICER HAS ERRED IN LAW IN MAKING ADD ITION U/S 68 OF THE ACT AND CIT(A) ALSO ERRED IN UPHOLDING THE SAME. 6. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE LD. CIT(A) CONFIRMED THE MISTAKE COMMITTED BY THE ASSESSING OFFICER WHEREIN HE HELD THAT SHARE APPLICATION MONEY IS LIABLE TO BE HELD AS INCOME TWICE, ONCE WHEN RECEIVED AS SHARE APPLICATION MONEY AND SECONDLY W HEN THE SAME IS CONVERTED INTO SHARE CAPITAL. HOWEVER, THIS WOULD AMOUNT TO DOUBLE TAXATION AND HENCE LIABLE TO BE DELETED. 7. THAT THE CIT(A) HAS FAILED TO APPRECIATE AND ALSO ERRED IN FACTS IN IGNORING THE VITAL FACTS THAT NO QUERY WAS EVER RAISED BY TH E ASSESSING OFFICER IN RESPECT OF PRODUCING THE DIRECTOR OF APPLICANT COMPANIES AND IT IS WRONGLY MENTIONED IN THE ASSESSMENT ORDER. 3. AT THE OUTSET OF HEARING LD AR HAS POINTED OUT THAT ADDITION UNDER SECTION 68 OF IT ACT FOR SHARE CAPITAL RECEIPT O F RS. 24,00,00,000/ - HAD BEEN MADE WHILE THE RECEIPT OF THE SHARE CAPITAL DURING THE RELEVANT FINANCIAL YEAR WAS ONLY OF RS. 12,00,00,000/ - . LD AR PLEA D ED THAT LD CIT(A) HAS NOT CONSIDER ED THE DOCUMENTS SUBMITTED BEFORE HIM. IN THE REVISED GROUNDS THE ASSES SEE HAS TAKEN THE PLEA THAT ASSESSING OFFICER HAS PASSED THE PAGE NO. 3 ITA NO. 2754 /DEL/201 1 ORDER IN HASTE WITHOUT PROVIDING PROPER AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT AND THE CIT(A) HAS ERRED IN LAW IN UPHOLDING THE SAME WITHOUT APPRECIATING THE CORRECT FACTS OF THE CASE. HE PLEADED THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDE D DE NOVO. ON THIS PROPOSITION THE LD. DR WAS ALSO NOT HAVING ANY SERIOUS OBJECTION IN THIS REGARD. 4. AFTER HEARING BOTH SIDES AND CONSIDERING THE RELEVANT FACTS OF THE CASE , WE FIND IT PROPER AND APPROPRIATE IN THE INTEREST OF JUSTICE AND EQUITY TO SET ASIDE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDE D DE NOVO AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEA R D TO THE ASS ESSEE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONO UNCED IN THE OPEN COURT ON 1 4 .08.2013 . - S D / - - S D / - (R. P. TOLANI ) (SHRI B. C. MEENA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 1 4 /08/2013 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI