ITO, New Delhi V. M/s Bhoomidar Builders (P) Ltd., New Delhi

ITA 2924/DEL/2010

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0036 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 25-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 11-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Income from undisclosed sources; Principle of natural justice
• Section: 142(1); 133(6); 37(1); 131; 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL IN (DELHI BENCH A NEW DELHI) BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SHRI C.M.GARG, JUDICIAL MEMBER ITA NO. 2924/DEL/2010 (ASSESSMENT YEAR: 2007-08) ITO VS. BH OOMIDAR BUILDERS (P) LTD. WARD 2(4), F.F. Q-1-C, PRIVATE COLONY, ROOM NO. 381, SRINIWAS PURI, C.R. BUILDING, I.P.ESTATE, NEW DELHI NEW DELHI AACCS0712L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI Y.KAKKAR, DR RESPONDENT BY : SANDEEP SAPRA , ADV. DATE OF HEARING : 25.02.2015 DATE OF PRONOUNCEMENT : 06.05.2015 ORDER PER C.M.GARG, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE DEPARTMENT A GAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) V DATED 26.3.2010 IN APPEAL NO. 98/09-10 FOR AY 2007-08. ITA NO.2924/ DEL/2010 2 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS IN T HIS APPEAL :- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS. 47,00,000/- BEING UNEX PLAINED SHARE APPLICATION MONEY AND RS. 11,70,000/- BEING UNEXPLAINED UNSECURED LOAN U/S 68 OF THE I.T. AC T, IGNORING THE FACT THAT NECESSARY DETAILS WERE NOT S UBMITTED AND THE ONUS OF PROVING NECESSARY INGREDIENTS OF SE CTION 68 WAS NOT DISCHARGED BY THE ASSESSEE. 3. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APPEAL ARE THAT THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS AND STATUTOR Y NOTICE U/S 143(2) IF THE INCOME TAX ACT, 1961 (FOR SHORT THE A CT) WAS ISSUED ON 15.9.2008 WHICH WAS NOT COMPLIED. SUBSEQUENTLY, NOT ICE U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER NOTED THAT IN SPITE OF SHOW CAUSE DATED 11. 12.2009, THE ASSESSEE COMPANY HAS NOT BOTHERED TO ADDUCE ANY EVI DENCE TO PROVE THE GENUINENESS / EXISTENCE AND CREDITWORTHIN ESS OF SHARE APPLICANTS WHO GIVEN A SUM OF RS. 47 LACS TO THE AS SESSEE COMPANY AS SHARE APPLICATION MONEY. THE AO TREATED THE SAID AMOUNT OF SHARE APPLICATIONS AS UNEXPLAINED DEPOSITS AND ADDED THE SAME U/S 68 OF THE ACT AS INCOME FROM UNDISCLOSED SOURCES TO THE R ETURN INCOME OF THE ASSESSEE. THE AO ALSO NOTED THAT THE ASSESSEE C OMPANY HAS SHOWN UNSECURED LOAN FROM THE DIRECTORS DURING THE YEAR OF RS. 11,70,000/- AND ACCEPT CONFIRMATION NO OTHER DOCUME NT WAS ITA NO.2924/ DEL/2010 3 SUBMITTED BY THE ASSESSEE TO PROVE GENUINENESS, CRE DITWORTHINESS OF THE SAID AMOUNT AND THEREFORE THE ASSESSING OFFICER HOLD THAT IN ABSENCE OF ANY SUPPORTING DOCUMENT THE SAID AMOUNT IS ADDED TO THE RETURN INCOME OF THE ASSESSEE COMPANY AS THE INCOME FROM UNDISCLOSED SOURCES U/S 68 OF THE ACT. BEING AGGRIE VED BY THE ABOVE ASSESSMENT ORDER THE ASSESSEE PREFER CIT(A) WHICH W AS ALLOWED BY PASSING THE IMPUGNED ORDER OF BOTH THE GROUNDS. NOW THE AGGRIEVED REVENUE IS BEFORE THIS TRIBUNAL IN THIS SECOND APPE AL WITH THE MAIN GROUND AS REPRODUCED HEREINABOVE. 4. SHARE APPLICATION MONEY THE LD. DEPARTMENTAL REPRESENTATIVE (DR) POINTED OUT THAT THE ASSESSING OFFICER AFTER D ETAILED DELIBERATIONS RIGHTLY HELD THAT THE ASSESSEE COMPAN Y DID NOT ADDUCE ANY EVIDENCE TO PROVE THE GENUINENESS, EXISTENCES A ND CREDITWORTHINESS OF SHARE APPLICANTS THEREFORE, THE SAME WAS RIGHTLY TREATED AS INCOME FROM UNDISCLOSED SOURCES. THE LD. DR VEHEMENTLY, CONTENDED THAT THE CIT(A) SIMPLY RELYIN G ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF M/S LOVELY EXPORTS PVT. LTD. 216 CTR 195 (SC) OBSERVE THAT THE AR HAD PROVED THE IDENTITY AND GENUINENESS OF THE SHARE APPLICANT COMPANYS, THERE FORE, THE AMOUNT ITA NO.2924/ DEL/2010 4 ADDITION CANNOT BE SUSTAINED AND THE CIT(A) DIRECTE D TO DELETE THE ADDITION WITHOUT ANY BASIS AND JUSTIFIED REASONING. 5. REPLYING TO THE ABOVE THE LD. COUNSEL OF THE ASSESSEE PLACING RELIANCE ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF CIT VS. GANGENWARY METALS PVT. LTD. 361 ITR 10 (DEL.), DECISION OF HONBLE MADRAS HIGH COURT IN TH E CASE OF SMT. REETU DEVI VS. CIT 271 ITR 466 AND DECISION OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION P . LTD. 159 ITR 78 (SC) SUBMITTED THAT THE ASSESSING OFFICER DID NOT PROVI DE DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE AND TO SUBM IT RELEVANT DOCUMENTS AND EXPLANATION REGARDING ALLEGED SHARE A PPLICATION MONEY. THE LD. COUNSEL OF THE ASSESSEE DRAWN OUR AT TENTION TOWARDS ASSESSMENT ORDER PAGE 3 PARA 2 AND SUBMITTED THAT T HE AO ISSUED OFFICE LETTER VIDE DATED 11.12.2009 FIXING THE DATE OF 14.12.2009 ASKING TO PRODUCE SHARE APPLICANTS AND TO PROVIDE C OPIES OF THEIR BANK STATEMENTS AND INCOME TAX RETURN ETC. FIXING T HE DATE FOR 14.12.2009 I.E. ONLY AFTER 2 DAYS. THE LD. COUNSEL FURTHER POINTED OUT THAT THE AO PROVIDED ONLY 2 DAYS TIME WHICH WERE IN FACT HOLIDAYS AND AFTER LAPSE OF 2 DAYS I.E. 14.12.2009 THE AO PASSED IMPUGNED ORDER BY HOLDING THAT NO REPLY HAS BEEN RECEIVED FROM TH E ASSESSEE ITA NO.2924/ DEL/2010 5 COMPANY AND ITS ACTIONS ARE AS SPEAKING QUITE CLEAR THAT THE ASSESSEE HAS NOTHING TO OFFER ON THIS ISSUE. THE LD . COUNSEL VENEMENTLY CONTEDED THAT THE ASSESSING OFFICER WRON GLY NOTED THAT NON-REFERENCE TO SHARE PREMIUM IN THE CONFIRMATIONS BY THE SAID FOUR SHARE APPLICANTS AND THE NON-RESPONSE TO THE NOTICE U/S 133(6) OF THE ACT PROVES THAT THE SAID AMOUNTS ARE ONLY INTRODUCT ION OF UNEXPLAINED FUNDS IN THE GARB OF SHARE APPLICATION MONEY BY THE ASSESSEE COMPANY. 6. THE LD. COUNSEL FURTHER DRAWN OUR ATTEN TION TOWARDS PARAGRAPH NO. 3.1 TO 3.8 OF THE IMPUGNED ORDER AND SUBMITTED THAT THE CIT(A) AFTER DETAILED DELIBERATIONS AND AFTER C ONSIDERING THE EXPLANATION AND DOCUMENTARY EVIDENCE FILED BY THE A SSESSEE AND ALSO CONSIDERING THE RELEVANT PROPOSITIONS AND RATI O OF THE CASE WAS RIGHTLY HELD THAT THE ASSESSEE HAD PROVED THE IDENT ITY AND GENUINENESS OF THE SHARE APPLICANTS COMPANIES AND T HEREFORE THE AMOUNT ADDITION CANNOT BE SUSTAINED. THE LD. COUNSE L PARTED WITH THE ARGUMENTS WITH A FINAL SUBMISSION THAT THE ASSE SSES CASE IS SQUARELY COVERED BY THE DECISION OF HONBLE JURISDI CTIONAL HIGH COURT IN THE CASE OF CIT VS. GANGESWARY METALS PVT. LTD. (SUPRA). ITA NO.2924/ DEL/2010 6 7. ON CAREFUL CONSIDERATION ON ABOVE SUBMISSION S AND CAREFUL PERUSAL OF THE RELEVANT MATERIAL PLACED BEFORE US A T THE VERY OUTSET WE NOTE THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED CONFIRMATIONS, COPIES OF THE SHARE APPLIC ATION AND THE ASSESSING OFFICER ISSUED NOTICE U/S 133(6) OF THE A CT ON 4.11.2009 TO CONFIRM THE AMOUNTS OF SHARE APPLICATION MONEY TO M /S UNITED PETROLEUM PVT. LTD, BHAWANI ENGINEERING SERVICES PV T. LTD, FORT LEATHER PVT. LTD. AND PMP FARMS PVT. LTD. BUT THE RE WAS NO RESPONSE FROM THESE COMPANIES. THE ASSESSING OFFICE R AGAIN ISSUES THE SHOW CAUSE NOTICE ON 11.12.2009 TO THE ASSESSEE TO PRODUCE THESE SHARE APPLICANTS AND TO SUBMIT COPIES OF THEI R BANK STATEMENTS AND INCOME TAX RETURNS ETC. FIXING THE DATE ON 14.1 2.2009 ONLY AFTER TWO DAYS. FROM OPERATIVE PART OF THE ORDER ON THIS ISSUE AT PAGE 3 OF THE ASSESSMENT ORDER WE NOTE THAT THE ASSESSING OFF ICER ALLEGED THAT THE ASSESSEE COMPANY HAS NOT BOTHERED TO ADDUCE ANY EVIDENCE TO PROVE THE GENUINENESS/ EXISTENCE AND CREDITWORTHINE SS OF THESE SHARE APPLICANTS AND MADE A ADDITION TREATING THE S AME AS INCOME FROM UNDISCLOSED SOURCES. UNDER THESE FACTS AND CIR CUMSTANCES, WE MADE SAFELY INFER THAT THE ASSESSING OFFICER DID NO T PROVIDE DUE OPPORTUNITY TO PRODUCE ALLEGED SHARE APPLICANTS INT O SUBMIT COPIES OF ITA NO.2924/ DEL/2010 7 THEIR BANK STATEMENT, INCOME TAX RETURNS AND OTHER RELEVANT DOCUMENTS. 8. FROM BARE READING OF THE IMPUGNED ORDER, WE NOTE THAT THE CIT(A) GRANTED RELIEF FOR THE ASSESSEE WITH FOLLOWI NG OBSERVATIONS AND CONCLUSION 3.1. AGAINST THIS, A.R. OF THE APPELLA NT SUBMITTED THAT THE ASSESSEE COMPANY RECEIVED A SUM OF RS. 33,00,000/- AS SHARE APPLICATION MONEY FROM THE FOUR COMPANIES I./ E. M/S UNITED PETROLEUM (P) LTD. BHAWANI ENGINEERING SERVI CES (P), FORT LEATHER (P) LTD., PMP FARMS (P) LTD. AND NOT RS. 47,00,000/- AS ALLEGED BY THE ASSESSING OFFICER. TH E ASSE4SSING OFFICERS OBSERVATION THAT WRONG NUMBER OF SHARES WERE APPLIED FOR BY THE FOUR DIFFERENT SHARE APPLIC ANTS IN THE SHARE APPLICATION FORMS IS HIGHLY UNJUSTIFIED AND W ITH RESPECT IT IS SUBMITTED AS MALICIOUS. THERE IS ABSOLUTELY N O VALID BASIS FOR THE AFORESAID ALLEGATION WHICH IS WHOLLY UNSUBS TANTIATED BY ANY MATERIAL. THE ASSESSEE COMPANY DID NOT CHARG E ANY SHARE PREMIUM; THEREFORE ASSESSING OFFICERS OBSERV ATION THAT SHARE PREMIUM AMOUNT HAS NOT BEEN MENTIONED IS ALSO MEANINGLESS. THE TABLE (ANNEXED TO THIS ORDER) CONT AINING DETAILS OF SHARE APPLICATION MONEY FROM ABOVE COMPA NIES, BANK DETAILS, A.O. DETAILS, CHEQUE NO. IS ENCLOSED FOR READY REFERENCE. 3.2 AS REGARDS UN-COMPLIED NOTICES DAT ED 4.11.2009 ISSUED U/S 133(6) TO M/S UNITED PETROLEUM (P) LTD. BHAWANI ENGINEERING SERVICES (P), FORT LEATHER (P) LTD. AND PMP FARMS (P) LTD, A.R OF THE APPELLANT SUBMITTED THA T HE ASSESSEE COMPANY WAS ISSUED NOTICE DATED 11.12.2009 ASKING TO PRODUCE THE PARTIES ON 14.12.2009. IT IS RESPECTFULLY SUBMITTED THAT A FAIR AND PROPER OPPORTUNITY OF BEI NG HEARD WAS NOT GRANTED TO THE ASSESSEE TO COMPLY WITH THE NOTICE. THE NOTICE WAS DATED 11 TH DECEMBER (FRIDAY) AND 12 TH & 13 TH DECEMBER BEING SATURDAY AND SUNDAY WERE HOLIDAYS AN D THE ASSESSMENT ORDER WAS FRAMED ON 14 TH DECEMBER ITSELF. BEFORE COMING TO ANY ADVERSE CONCLUSION, THE LEARNE D ITA NO.2924/ DEL/2010 8 ASSESSING OFFICER OUGHT TO HAVE GIVEN A PROPER OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. THE ADDITION BEING HIG HLY ARBITRARY AND IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE IS LIABLE TO DELETED AS SUCH. 3.3 IT IS SUBMITTED THAT THE DIFFICULTY ON THE PART OF ASSESSEE TO PRODUCE THE DETAILS/PARTIES IN A SHORT SPAN OF T IME PERTAINING TO TRANSACTIONS WHICH TOOK PLACE YEARS A GO SHOULD HAVE BEEN BORNE IN MIND BY THE DEPARTMENT AND SHOUL D UNDER NO CIRCUMSTANCES BE UNDERESTIMATED OR TAKEN ADVANTAGE OF. AFTER A LAPSE OF NUMBER OF YEARS, AN ASSESSEE SHOULD NOT BE PLACED UPON THE RACK AND CALLED UPON TO EXPLAIN THE TRANSACTIONS PERTAINING TO THIRD PARTIE S. 3.4 IF THE LEARNED ASSESSING OFFICER WAS OF THE OPINION THAT SHARE APPLICANTS WERE TO BE EXAMINED PERSONALLY, HE WAS FULLY EMPOWERED TO ENFORCE THE ATTENDANCE OF THE SA ID PARTIES BY VIRTUE OF POWERS BESTOWED UPON HIM U/S 131 OF TH E INCOME TAX ACT. HOWEVER, HE FAILED TO EXERCISE SUCH POWER AS REPORTED IN NATHURAM PREM CHAND VS. CIT (ALLAHABAD H.C.) (49 ITR 561). THE HEAD NOTE OF THE CASE LAW IS PROD UCED AS UNDER FOR READY REFERENCE: NO INFERENCE CAN BE DRAWN AGAINST AN ASSESS EE MERELY BECAUSE THE ASSESSEE HAD TAKEN A DASTI SUMMONS FOR PRODUCTION OF WITNESS AND HAD NOT PRODUCED HIM. IT IS THE DUTY OF ITO TO ENFORCE ATTENDANCE OF THE WITNESS IF HIS EVIDENCE IS MATERIAL, IN EXERCISE OF POWERS U/S 37(1) OF THE I. T.ACT, 1922 READ WITH ORDER XVI RULE OF CIVIL PROCEDURE CODE. IT IS MOST RESPECTFULLY SUBMITTED THAT FOR A NY DEFAULT ON THE PART OF THE ASSESSING OFFICER TO SUMMON THE WITNESS , THE ASSESSEE COULD NOT BE PENALIZED. 3.5 AS REGARDS ASSESSING OFFICERS OBSER VATION THAT THE ASSESSEE COMPANY HAS FAILED TO ADDUCE ANY EVIDENCE TO PROVE THE GENUINENESS/EXISTENCE AND CREDIT WORTHINE SS OF SHARE APPLICANTS, IT IS SUBMITTED THAT THE AMOUNTS WERE PAID BY THE PARTIES BY CHEQUES, THE AMOUNT SO RECEIVED B Y CHEQUES HAD NOT ONLY BEEN ESTABLISHED, BUT THAT EVE N THE IDENTITY OF THE PARTIES AS WELL AS THE GENUINENESS OF THE TRANSACTIONS HAD BEEN PROVED BY THE ASSESSEE. THE ASSESSING OFFICER ALSO FAILED TO APPRECIATE THE FAC T THAT THE PARTIES HAD ADVANCED THE MONEY AS A SHAREHOLDER AND THE ASSESSEE COMPANY HAD NEITHER ANY AUTHORITY TO KNOW THEIR ITA NO.2924/ DEL/2010 9 SOURCE OF INVESTMENT NOR HAD ANY ACCESS TO THEIR BO OKS OF ACCOUNTS. THE A.R. PLACED RELIANCE IN THE CASE OF C IT. VS. STELLAR INVESTMENT LTD. 192 ITR 287 AS CONFIRMED BY THE HONBLE SUPREME COURT IN 251 ITR 263. 3.6 IT IS NOT THE BURDEN OF THE ASSESSEE , TO PROVE HOW THE PARTIES HAPPENED TO OBTAIN THE AMOUNT. EVEN IF THE PARTIES HAD FAILED TO SHOW HOW THEY HAD RECEIVED THE AMOUNT , THEN, THE SAID AMOUNT COULD HAVE, AT BEST, BEEN TREATED A S INCOME FROM UNDISCLOSED SOURCES OF THE PARTIES, BUT THE FA ILURE, IF, ANY, ON THE PART OF PARTIES TO SHOW THEIR CREDITWOR THINESS COULD NOT HAVE BEEN STRETCHED TO MEAN THAT THE SAID AMOUNTS FORMED INCOME OF THE ASSESSEE- NEMI CHAND KOTHARI V . C.I.T (2003) 264 I.T.R. 254 (GAU) IT IS SUBMITTED THAT AN ASSESSEE CAN BE SAID TO HAVE DISCHARGED THE PRIMARY ONUS IF HE ESTABLISHES THE IDENTITY OF THE APRTIES. IN THE INS TANT CASE, THE ASSESSSEE HAD FILED THE CONFIRMATIONS AND THERE IS NO EVIDENCE TO REBUT THE CASE OF THE ASSESSEE. 3.7 SINCE NO MATERIAL DIRECT OR INDIRECT , EXISTS ON RECORD TO COME TO CONCLUSION THAT THE AMOUNTS IN QUESTION ACT UALLY BELONGED TO, OR OWNED BY THE ASSESSEE, THEREFORE AD DITION MADE UNDER SECTION 68 OF THE INCOME TAX ACT DESERVE S TO BE DELETED. 3.8 I HAVE PERUSED THE ASSESSMENT ORDER, GROUNDS OF APPEALS, AND CONSIDERED THE SUBMISSIONS MADE BY A.R . OF THE APPELLANT. SINCE THE AR HAD PROVED THE IDENTITY AND GENUINENESS OF SHARE APPLICANT COMPANIES, THEREFORE , THE ADDITION OF RS. 47,00,000/- CANNOT BE SUSTAINED AND THE SAME IS DELETED, FOLLOWING THE SUPREME COURT CASE IN THE CASE OF M/S LOVELY EXPORTS (P) LTD. REPORTED IN 216 CTR 195 . THE AO IS DIRECTED TO PASS ON THE INFORMATION TO OTHER AOS OF THE ABOVE SHARE APPLICANT COMPANIES SO THAT NECESSARY A CTION CAN BE TAKEN AT THE OTHER END, IF FOUND TO BE FIT. THERE IS NO SHARE PREMIUM PAID BY THESE COMPANIES AS SHARE APPL ICANT TO THE APPELLANT COMPANY. 9. IN VIEW OF THE ABOVE SUBMISSIONS OF BOT H THE SIDES FROM OPERATIVE PART ON THE ISSUE ON TOP OF PAGE 3 OF THE ASSESSMENT ORDER ITA NO.2924/ DEL/2010 10 WE CLEARLY OBSERVE THAT THE ASSESSING OFFICER ASK T HE ASSESSEE TO SUBMIT BANK STATEMENTS, COPIES OF THE ITR RETURNS E TC. OF THE SHARE APPLICATION MONEY DEPOSITORS APPLICANTS BY ISSUING NOTICE DATED 11.12.2009 FIXING THE DATE OF HEARING FOR 14.12.200 9 I.E. ONLY AFTER 2 DAYS AND THE AO PASSED THE ASSESSMENT ORDER ON THE VERY SAME DATE I.E. 14.12.2009. IN THIS SITUATION, WE ARE IN AGREEMENT WITH THE CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE THAT THE ASSESSING OFFICER DID NOT PROVIDE DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE TO FURNISH REQUIRED BANK STATEMENTS COPIES OF THE ITR AND OTHER RELEVANT SUPPORTIVE EVIDENCE TO EXPLAIN SHARE APPLICATION MO NEY ALLEGED DURING ASSESSMENT PROCEEDINGS. FROM BARE READING OF THE OPERATIVE PARAGRAPH NO. 3.8 AT PAGE 5 OF THE IMPUGNED ORDER W E NOTE THAT THE CIT(A) GRANTED RELIEF BY HOLDING THAT THE AR HAD P ROVED THE IDENTITY OF GENUINENESS OF SHARE APPLICANT COMPANIES, THEREF ORE, IMPUGNED ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY CANN OT BE SUSTAINED BY FOLLOWING THE DECISION OF HONBLE APEX COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD. (SUPRA). AT THE SAME TIME, FROM DELIBERATIONS AND ADJUDICATION OF THE CIT(A) FROM PARA 3 TO 3.7 WE NO TE THAT THE CIT(A) DID NOT BOTHER TO ASK THE ASSESSEE TO SUBMIT BANK S TATEMENTS, ITR AND OTHER RELEVANT DETAILS OF THE SHARE APPLICANTS FROM THE ASSESSEE ITA NO.2924/ DEL/2010 11 AND SIMPLY HELD THAT THE ASSESSEE HAS DISCHARGED IT S ONUS REQUIRED U/S 68 OF THE ACT THIS IS ALSO NOT A PROPER APPROAC H. ON THE BASIS OF FOREGOING DISCUSSION, WE ARE OF THE CONSIDERED OPIN ION THAT THE AUTHORITIES BELOW HAD NOT DECIDED THE ISSUE AS PER REQUIREMENTS OF THE RELEVANT PROVISIONS OF THE ACT INCLUDING SECTIO N 68 OF THE ACT AND AS PER RECENT DECISION OF HONBLE JURISDICTIONAL HI GH COURT OF DELHI IN THE CASE OF CIT VS. GANGESHWARI METALS PVT. LTD. 36 1 ITR 10 (S. DELHI) AND DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION PVT. LTD. 159 ITR 78 (SC) , THEREFORE, WE FIND IT JUST AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF AO FOR A FRESH ADJUDICATION BY FOLLOWING THE RELEVANT PROVISIONS O F THE ACT AND PROPOSITION AND RATIO OF THE DECISIONS ON THE ISSUE INCLUDING AFORESAID DECISIONS OF HONBLE SUPREME COURT AND JURISDICTION AL HIGH COURT OF DELHI AND AFTER AFFORDING DUE OPPORTUNITY OF HEARIN G AND ASSESSEE AND WITHOUT BEING PREJUDICED FROM THE EARLIER ASSES SMENT AND IMPUGNED ORDER. ACCORDINGLY FIRST ISSUE OF GROUND N O. 1 OF THE REVENUE IS DEEM TO BE ALLOWED FOR STATISTICAL PURPO SE. 10. ISSUE OF UNSECURED LOAN FROM DIRECTOR THE APROPOS THIS ISSUE THE LD. DR SUPPORTING THE ASSESSMENT ORDER, S UBMITTED THAT THE ASSESSEE COMPANY ONLY SUBMITTED A CONFIRMATION FROM MR. ATUL ITA NO.2924/ DEL/2010 12 BHASIN REGARDING THE AMOUNT OF UNSECURED LOAN BUT N O OTHER DOCUMENT OR EVIDENCE HAS BEEN SUBMITTED BY THE ASSE SSEE TO PROVE GENUINENESS, CREDITWORTHINESS FOR THE SAID AMOUNT. THE LD. DR ALSO CONTENDED THAT IN ABSENCE OF ANY PROPER EXPLANATION AND SUPPORTING DOCUMENTARY EVIDENCE. THE ASSESSING OFFICER HAD NO T OPEN BUT TO AT THE SAME TO THE RETURN INCOME OF THE ASSESSEE COMPA NY AS INCOME FROM UNDISCLOSED SOURCES U/S 68 OF THE ACT. THE LD. DR VEHEMENTLY CONTENDED THAT THE CIT(A) GRANTED RELIEF FOR THE AS SESSEE WITHOUT ANY BASIS AND DIRECTED THE AO TO VERIFY FROM THE IT RE TURNS OF THE DIRECTOR AND HIS WIFE, WITHOUT ANY BASIS. REPLYING TO THE A BOVE, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSIN G OFFICER DID NOT ASK ANY FURTHER DOCUMENTS OR EVIDENCE SUCH AS BANK STATEMENT, INCOME TAX RETURN AND STATEMENT OF INCOME OF THE DI RECTOR MR. ATUL BASIM DURING THE ASSESSMENT PROCEEDINGS. THE LD. CO UNSEL ALSO CONTENDED THAT IN THIS SITUATION THE ASSESSING OFFI CER WAS NOT JUSTIFIED IN HOLDING THAT IN ABSENCE OF ANY OTHER DOCUMENT TH E AMOUNT OF UNSECURED LOAN DESERVE TO BE ADDED TO THE RETURN OF INCOME OF THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCES. THE LD . COUNSEL ALSO POINTED OUT THAT THE CIT(A) HAS GRANTED RELIEF FOR THE ASSESSEE AFTER ITA NO.2924/ DEL/2010 13 CONSIDERING ALL THE RELEVANT EVIDENCE AND DETAILS, WHICH IS QUITE JUSTIFIED AND SUSTAINABLE. 11. ON CAREFUL CONSIDERATION ON ABOVE SUBMISS IONS AND PERUSAL OF THE RELEVANT OPERATIVE PART OF THE ASSESSMENT OR DER AND THE IMPUGNED ORDER WE NOTE THAT THE ASSESSING OFFICER D ID NOT PROVIDE PROPER OPPORTUNITY TO SUBMIT SUPPORTING DOCUMENT AN D EVIDENCE DURING THE ASSESSMENT PROCEEDINGS AND PROCEEDED TO MAKE ADDITION U/S 68 OF THE ACT BY MAKING ADVERSE REMARKS AGAINST THE ASSESSEE. FROM PARAGRAPH NO. 4.7 OF THE IMPUGNED ORDER WE NOT E THAT THE CIT(A) ADJUDICATED THE ISSUE IN FAVOUR OF THE ASSES SEE BY HOLDING THAT THE AO DID NOT GIVE PROPER OPPORTUNITY TO THE AR TO EXPLAIN HIS CASE AND GRANTED RELIEF BY DIRECTING THE AO VERIFY THE R ETURNS OF THE CONCERNED DIRECTOR AND HIS WIFE. THE RELEVANT OPERA TIVE PARAGRAPH NO. 4.7 READS AS UNDER :- I HAVE PERUSED THE ASSESSMENT ORDER, G ROUNDS OF APPEALS, WRITTEN SUBMISSIONS, CONSIDERED THE SUBMIS SIONS MADE BY THE A.R OF THE APPELLANT COMPANY. SINCE THE AO DID NOT GIVE PROPER OPPORTUNITY TO AR TO EXPLAIN HIS CA SE, THERE IS NEGLIGENCE ON THE PART OF AO. THE AO IS DIRECTED TO VERIFY THE DIRECTORS RETURNS AND HIS WIFES RETURNS, OR PASS ON THE NECESSARY INFORMATION TO CONCERNED AO FOR VERIFICAT ION OF THE INVESTMENTS MADE BY DIRECTOR AND HIS WIFE. IF THERE IS INSUFFICIENT FUND WITH THEM, THEN ADDITION CAN BE M ADE IN THEIR INDIVIDUAL HANDS AND NOT IN CASE OF THE COMPANY U/S 68 OF THE I.T. ACT AS PER THE CASE OF CIT VS. M/S LOVELY EXPO RTS (P) LTD. (SUPREME COURT) REPORTED IN 216 CTR 195. ITA NO.2924/ DEL/2010 14 IN VIEW OF ABOVE, WE NOTE THAT THE ASSESSIN G OFFICER DID NOT ASK ANY FURTHER DOCUMENT OR EVIDENCE FROM THE ASSESSEE TO EXPLAIN AMOUNT OF UNSECURED LOAN AS MENTIONED IN THE STATEM ENTS OF ACCOUNTS FILED ALONGWITH RETURN OF INCOME. ON APPEA L BEFORE CIT(A) THE FIRST APPELLATE AUTHORITY CONSIDERED THE SITUAT ION PROPERLY AND DIRECTED THE AO TO VERIFY THE AMOUNT OF UNSECURED L OAN FROM INCOME TAX RETURNS OF DIRECTOR AND HIS WIFE AT THIS POINT. WE ARE INCLINED TO HOLD THAT THE CIT(A) ENJOYS CO-TERMINUS POWER WITH THE AO AND THEREFORE THE CIT(A) CAN ALSO EXAMINED VERIFY THE R ELEVANT DOCUMENTS AND EVIDENCE AND THE CIT(A) HAS ALSO EMPOWERED TO A SK THE ASSESSEE TO SUBMIT RELEVANT DOCUMENTS AND EVIDENCE OR TO PRODUCE RELEVANT PERSON SUPPORTING THE CONFIRMATION AMOUNT OF UNSECURED LOAN AS SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCO UNTS. HENCE, WE ARE OF THE CONSIDERED OPINION THAT THE AO WAS NOT J USTIFIED IN MAKING ADDITION WITHOUT AFFORDING THE DUE OPPORTUNITY OF H EARING FOR THE ASSESSEE AND WITHOUT CONSIDERING THE RELEVANT DETAI LS AND EVIDENCE SUCH AS BANK STATEMENT, IT RETURNS OF THE DIRECTOR AND HIS WIFE ETC. THE CIT(A) OBSERVED THIS LAPSE ON THE PART OF THE A O AND AFTER CONSIDERING THE SAME GRANTED RELIEF FOR THE ASSESSE E SUBJECT TO VERIFICATION OF THE AO. WE ARE UNABLE TO SEE ANY PE RVERSITY OR ANY ITA NO.2924/ DEL/2010 15 OTHER VALID REASON TO INTERFERE WITH THE IMPUGNED O RDER IN THIS REGARD AND WE UPHELD THE SAME CONFIRMING THE DELETION OF A MOUNT OF UNSECURED LOAN FROM THE DIRECTOR. ACCORDINGLY, APPE AL OF THE REVENUE PARTLY DISMISSED ON THIS ISSUE I.E. SECOND LIMB OF THE SOLE GROUND OF THE REVENUE. 12. ACCORDINGLY FIRST PART OF THE GROUND OF TH E REVENUE IS DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES AND SECOND P ART OF THE GROUND OF THE REVENUE IS DISMISSED AS INDICATED ABOVE. ORDER PRONOUNCED IN OPEN COURT ON 6 TH MAY, 2015. SD/- SD/- (N.K.SAINI) (C.M.GARG) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED 6 TH MAY, 2015 B.RUKHAIYAR COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI. AR, ITAT N. DELHI ITA NO.2924/ DEL/2010 16