ITO, New Delhi V. M/s Life Style Products P. Ltd., Delhi

ITA 2834/DEL/2010

• Counselvise Citation: 283420114 RSA 2010
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 11-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 07-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI B.C. MEENA ITA NO. 2834/DEL/2010 ASSTT. YR: 2006-07 INCOME-TAX OFFICER, VS. M/S LIFE STYLE PRODUCTS P. LTD., WARD 4(4), NEW DELHI. 201, NEELKANTH HOUSE, S-52 4, SHAKKAR PUR, SCHOOL BLOCK, DELHI-110092. PAN/GIR NO. AAACL1235H (APPELLANT) ( RESPONDENT ) APPELLANT BY : MS. Y. KAKKAR DR RESPONDENT BY : NONE O R D E R PER R.P. TOLANI, J.M : THIS IS REVENUES APPEAL AGAINST CIT(A)S ORDER DAT ED 29-03-2010 RELATING TO A.Y. 2006-07. 2. NONE APPEARED FOR THE ASSESSEE DESPITE ISSUE OF NOTICE FOR HEARING. FROM ORDER-SHEET IT IS FOUND THAT THE ASSESSEE HAS BEEN AVOIDING TO APPEAR IN THE MATTER. THEREFORE, WE HAVE NO OPTION BUT TO DEC IDE THE APPEAL EX PARTE QUA THE ASSESSEE, ON MERITS AND IN THAT PROCESS WE HAVE HEARD LEARNED DR AND PERUSED THE RECORD. 3. BRIEF FACTS ARE THAT DURING THE COURSE OF ASSESS MENT THE AO FOUND THAT ASSESSEE RECEIVED SHARE APPLICATION MONEY OF RS. 74 ,00,000/-. HOWEVER, IN RESPECT OF SHARE MONEY OF RS. 20,00,000/- RECEIVED FROM M/S TECHNOCOM ASSOCIATES PVT. LTD. AND M/S K.R. FINCAP PVT. LTD., THEY WERE THE COMPANIES BELONGING TO ONE SHRI MAHESH GARG OF BHIWANI, HARYA NA, WHO WAS FOUND TO BE INDULGING IN ACCOMMODATION ENTRY RACKET. ACCORDI NG TO AO THE ASSESSEE ITA 2834/DEL/10 M/S LIFE STYLE PRODUCTS P. LTD. 2 FAILED TO PROVE THE GENUINENESS OF TRANSACTION AND CREDITWORTHINESS OF THESE PARTIES AND THE ABOVE AMOUNT WAS ADDED U/S 68. 3.1. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL, WH ERE CIT(A) RELIED ON FOLLOWING JUDGMENTS: - CIT VS. LOVELY EXPORTS (P) LTD. (2008) 216 CTR (SC) 195; - CIT VS. DIVINE LEASING & FINANCE LTD. (2007) 299 IT R 268 (DEL.) - CIT VS. VALUE CAPITAL SERVICES LTD. (2008) 307 ITR 334 (DEL.) - CIT VS. TDI MARKETING PVT. LTD. (2009) 26 DTR (DEL. ) 358; - BHAV SHAKTI STEEL MINES P. LTD. VS. CIT (2009) TAXM AN 25. AND HELD THAT ASSESSEE HAD DISCHARGED ITS ONUS; AO FAILED TO MAKE NECESSARY ENQUIRIES; AND DELETED THE ADDITION. 4. LEARNED DR VEHEMENTLY ARGUES THAT THE CIT(A), FU NCTIONING AS APPELLATE AUTHORITY, HAS POWER CO-TERMINUS WITH THE POWERS OF AO, BESIDES HAVING POWER OF ENHANCEMENT. IF IT WAS FOUND THAT T HE AO HAS NOT MADE INDEPENDENT INQUIRIES, CIT(A) COULD HAVE CARRIED OU T THE ENQUIRIES ON HIS OWN ACCORD OR ASKED THE AO TO SUBMIT A REMAND REPOR T ON ASSESSEES EXPLANATION AND EVIDENCE. IN RESPECT OF M/S ANUPAM BUILDMART PVT. LTD., THE SHARE APPLICATION WAS INITIALLY CLAIMED BY ASSE SSEE TO BE OF RS. 10,00,000/- BUT AT THE FAG END OF ASSESSMENT ON 20- 11-2008 ASSESSEE CLAIMED IT TO BE RS. 7,50,000/-. THE ASSESSMENT WAS GETTING TIME BARRED ON 31-12- 2008 AND THE IMPUGNED ORDER WAS PASSED BY AO ON 22- 12-2008. IF THE ASSESSEE CHANGED HIS EXPLANATION AS LATE AS ON 20-1 1-2008, IT WILL NOT BE POSSIBLE FOR AO TO MAKE INDEPENDENT INQUIRIES. CI T(A) HIMSELF BEING THE INQUIRY OFFICE, COULD HAVE ORDERED FOR INDEPENDENT INQUIRIES OR ASKED THE AO TO SUBMIT A REMAND REPORT. INSTEAD OF BRINGING THE PROCEEDINGS TO A LOGICAL END, CIT(A) HAS DELETED THE ADDITION BY ALLEGING TH AT THE AO HAS FAILED TO MAKE NECESSARY INQUIRIES. SINCE CIT(A) HAS FAILED T O TAKE APPROPRIATE ACTION ITA 2834/DEL/10 M/S LIFE STYLE PRODUCTS P. LTD. 3 IN EXERCISE OF HIS POWERS, THE MATER NEEDS TO BE SE T ASIDE AND RESTORED BACK TO THE FILE OF AO FOR FRESH EXAMINATION. 5. AFTER HEARING LEARNED DR AND GOING THROUGH RELEV ANT MATERIAL AVAILABLE ON RECORD WE FIND MERIT IN THE ARGUMENT O F LEARNED DR. THE ASSESSEES COMPLIANCE AND EXPLANATION CAME AT A LAT E STAGE OF PROCEEDINGS AND UNDER THESE CIRCUMSTANCES, THE AO WAS NOT IN A POSITION TO TAKE APPROPRIATE STEPS FOR INDEPENDENT INQUIRIES. BESIDE S, THE STATEMENT OF MAHESH GARG OR THE ACTION TAKEN BY THE DEPARTMENT I N HIS ASSESSMENT, HAS NOT BEEN REFERRED TO BY THE CIT(A). IT ALSO EMERGES FROM RECORD THAT THE CIT(A) ALSO FAILED TO EXERCISE HIS POWERS IN A DILI GENT MANNER. IN THESE CIRCUMSTANCES WE ARE INCLINED TO SET ASIDE THE MATT ER BACK TO THE FILE OF AO AS THE NECESSARY INQUIRIES ARE REQUIRED TO BE MADE AFRESH IN ACCORDANCE WITH LAW. WE ORDER ACCORDINGLY. 6. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES ONLY. PRONOUNCED IN OPEN COURT ON 31-01-2012. SD/- SD/- ( B.C. MEENA ) ( R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31-01-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR ITA 2834/DEL/10 M/S LIFE STYLE PRODUCTS P. LTD. 4