M/s. Om Shubham Investment & Finance Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 2923/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2944 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 11-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K JIWANI
• Keywords: Unexplained cash credit
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC, NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 2923/DEL/2017 ASSESSMENT YEAR: 2004-05 M/S OM SHUBHAM INVESTMENT & VS. ITO, WARD 19(1), FINANCE PVT. LTD., NEW DELHI 109, GUPTA TOWER, AZADPUR, DELHI 110 033 (PAN: AAAC0154K) (ASSESSEE) (RESPONDENT) A SSESSEE BY : SH. SALIL AGGARWAL, ADV. & SH. SHAILESH GUPTA, ADV. REVENUE BY : SH. V.K. JIWANI, SR. DR. ORDER THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER DATED 04.5.2016 PASSED BY THE LD. CIT(A)-12, NEW DELHI RELATING TO ASSESSMENT YEAR 2004-05 ON THE FOLLOWING GROUNDS:- 1. THAT THE LD. CIT(A) HAS GROSSLY ERRED BOTH IN LAW A ND ON FACTS IN SUSTAINING AN ASSESSMENT UNDER SECTION 143(3)/147 OF THE ACT AT AN INCOME OF RS. 11,14,060 /- AS AGAINST RETURNED LOSS OF RS. 1,14,060/-, UNDER SECT ION 68 OF THE ACT. 2. THAT THE LD. CIT(A) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN SUSTAINING THE INITIATION OF THE PROCEEDIN GS UNDER SECTION 147 OF THE ACT AND, FURTHER COMPLETION OF ASSESSMENT UNDER SECTION 143(3)/147 OF THE ACT WITH OUT 2 SATISFYING THE STATUTORY PRE-CONDITIONS FOR INITIA TION OF THE PROCEEDINGS AND, COMPLETION OF ASSESSMENT UNDER THE ACT. 3. THAT THE LD. CIT(A) HAS FURTHER ERRED IN LAW AND ON FACTS IN SUSTAINING THE INITIATION OF PROCEEDINGS U/S. 147 O F THE ACT ON THE BASIS OF INFORMATION RECEIVED FROM DIT(INVESTIGATION) MECHANICALLY AND WITHOUT INDEPEN DENT APPLICATION OF MIND. 3.1 THAT FURTHER, THE REASONS RECORDED WERE MERE REASON S TO SUSPECT AND WERE JUST TO MAKE FISHING AND ROVING ENQUIRIES, AS NO INDEPENDENT ENQUIRY WAS CONDUCTED BY THE AO BEFORE ISSUING SUCH NOTICE UNDER SECTION 148 AND AS SUCH THE PROCEEDING INITIATED UNDER SECTION 148 WAS A MERE PRETENCE. 4. THAT THE LD. CIT(A) HAS FURTHER ERRED BOTH IN LA W AND ON FACTS IN SUSTAINING AN ADDITION OF RS. 10 LACS AS A LLEGED ACCOMMODATION ENTRY RECEIVED BY ASSESSEE APPELLAN T, AND HELD TO BE UNEXPLAINED CASH CREDIT U/S. 68 OF THE A CT. 4.1 THAT IN DOING SO, THE LD. CIT(A) HAS COMPLETELY IG NORED AND OVERLOOKED ALL THE NECESSARY DOCUMENTS WHICH WE RE FILED BEFORE HIM EXPLAINING THE FACT THAT THE APPEL LANT COMPANY HAS SOLD ITS SHAREHOLDING IN VARIOUS COMPAN IES AND AS A RESULT RECEIVED RS. 10 LACS, WHICH FACT WA S ALSO DULY CONFIRMED BY THE SHAREHOLDERS BY FILING DIRECT REPLIES TO AO IN RESPONSE TO NOTICE SO ISSUED AND AS SUCH, THE ADDITION SO MADE SHOULD HAVE BEEN DELETED . 3 4.2 THAT THE LD. CIT(A) HAS FURTHER ERRED IN RECORDING ADVERSE FINDINGS WHICH ARE PERVERSE, COUNTRY TO MAT ERIAL AVAILABLE ON RECORD AND HAVE BEEN RECORDED WITHOUT CONSIDERING THE FACTUAL SUBSTRATUM OF THE CASE AND HENCE SUCH FINDINGS SO RECORDED ARE VITIATED AND DESERVES TO BE DELETED. 4.3 THAT THE LD. CIT(A) FURTHER GROSSLY ERRED IN RELYIN G THE JUDGMENTS WHICH ARE WHOLLY MISPLACED AND ARE INAPPLICABLE TO THE FACTS OF THE CASE OF THE APPELL ANT COMPANY. 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY THE PARTIES, HENCE, THE SAME ARE NOT REPRODUCED HERE F OR THE SAKE OF BREVITY. 3. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE STATED THAT ASSESSEE HAS FILED ALL THE RELEVANT EVIDENCES BEFOR E THE AO AS WELL AS LD. CIT(A) IN SPITE OF THE SAME THE REVENUE HAS DECIDED THE ISSUE AGAINST THE ASSESSEE. HE HAS ALSO FILED PAPER BOOK IN WHIC H HE HAS ATTACHED VARIOUS DOCUMENTARY EVIDENCES. HE STATED THAT REVEN UE AUTHORITIES HAVE NOT PROPERLY APPRECIATED THE EVIDENCES FILED BY THE ASSESEE AND DECIDE THE ISSUE IN DISPUTE AGAINST THE ASSESSEE. HE FURTH ER STATED THAT LD. CIT(A) COMPLETELY IGNORED AND OVERLOOKED ALL THE NE CESSARY DOCUMENTS WHICH WERE FILED BEFORE HIM EXPLAINING THE FACT THA T THE ASSESSEE COMPANY HAS SOLD ITS SHAREHOLDING IN VARIOUS COMPAN IES AND AS A RESULT RECEIVED RS. 10 LACS, WHICH FACT WAS ALSO DULY CONF IRMED BY THE SHAREHOLDERS BY FILING DIRECT REPLIES TO AO IN RESP ONSE TO NOTICE SO ISSUED 4 AND AS SUCH, THE ADDITION SO MADE SHOULD HAVE BEEN DELETED. HOWEVER, THE AO ALSO MADE THE BASIS FOR ADDITION FOR NON-PR ODUCTION OF DIRECTORS AND NON-FURNISHING THEIR RESIDENTIAL ADDRESS. BUT O N THIS GROUND NO ADDITION IS PERMISSIBLE, BECAUSE THE AO HAS SENT TH E NOTICES TO THE SHAREHOLDERS DIRECTLY AND THEY HAVE CONFIRMED THE I NVESTMENT IN THE ASSESSEE COMPANY. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW ESPECIALLY THE ORDER OF THE LD. CIT(A) AND DR AW MY ATTENTION TOWARDS ITS PARA NO. 8.2. TO 8.7 REITERATED THE CO NTENTS THEREOF ESPECIALLY PARA NO. 8.4 WHEREIN IT WAS MENTIONED THAT INQUIRI ES CONDUCTED BY THE AO ESTABLISHED THE FACT THAT THE IDENTITY AND CRED ITWORTHINESS OF M/S ARIES CRAFTS (P) LTD., M/S ADONIS FINANCIAL SERVICE S (P) LTD. AND M/S DU SECURITIES (P) LTD. FORMERLY KNOWN AS ADONIS SECURI TIES (P) LTD. HAD NOT BEEN PROVED NEITHER THE GENUINENESS OF THE TRANSAC TION ALSO HAS BEEN ESTABLISHED. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS. I FIND THAT ASSESSEE HAS FILED ALL THE RELEVANT EVIDENCES BEFOR E THE AO AS WELL AS LD. CIT(A). BEFORE ME THE LD. COUNSEL OF THE ASSESSEE H AS ALSO FILED A PAPER BOOK CONTAINING PAGES 1 TO 166 WHICH WERE ALSO PR ODUCED BEFORE THE LOWER AUTHORITIES, EXCEPT THE PAGE NO. 118 TO 162 I .E. COPY OF WRITTEN SUBMISSION DATED 28.9.2016 FILED BEFORE THE LD. CIT (A) AND THE COPIES OF THE CASE LAWS. I FURTHER FIND THAT ASSESSEE COMPANY HAS SOLD ITS SHAREHOLDING IN VARIOUS COMPANIES AND AS A RESULT R ECEIVED RS. 10 LACS, WHICH FACT WAS ALSO DULY CONFIRMED BY THE SHAREHOLD ERS BY FILING DIRECT REPLIES TO AO IN RESPONSE TO NOTICE SO ISSUED (COP Y THEREOF ATTACHED WITH THE PAPER BOOK AT PAGE NO. 114 TO 117) AND EARLIER REPLIES MADE TO THE AO AT PAGE NO. 52 TO 113 OF THE PAPER BOOK. HOWEVER , THE AO ALSO MADE 5 THE BASIS FOR ADDITION FOR NON-PRODUCTION OF DIREC TORS AND NON-FURNISHING THEIR RESIDENTIAL ADDRESS. BUT IN MY CONSIDERED OP INION, ONLY ON THIS GROUND NO ADDITION IS SUSTAINABLE IN THE EYES OF L AW. IN VIEW OF ABOVE AND IN THE INTEREST OF JUSTICE, I AM OF THE VIEW THAT T HE ISSUES IN DISPUTE NEEDS TO BE ADJUDICATED AFRESH AT THE LEVEL OF THE AO, A FTER EXAMINING ALL THE DOCUMENTS AND ISSUING SUMMON/NOTICES TO THE SHAREH OLDERS, IF NECESSARY AND PROCEED FURTHER, AS PER LAW. THEREFORE, THE AS SESSEE IS DIRECTED TO FURNISH ALL THE DOCUMENTS/EVIDENCES WITH REGARD TO THE ISSUES IN DISPUTE BEFORE THE AO AND ACCORDINGLY AO IS ALSO DIRECTED T O DECIDE THE ISSUES IN DISPUTE AFRESH, AS PER LAW, AFTER EXAMINING ALL THE DOCUMENTS/EVIDENCES FILED BY THE ASSESSEE AND ISSUE SUMMON/NOTICES TO THE SHAREHOLDERS, IF NECESSARY AND PROCEED FURTHER, AS PER LAW. WITH THI S OBSERVATION, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 12/03/2018. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 12/03/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES