ITO, New Delhi V. M/s. Mehrasons Jewellers Pvt. Ltd., New Delhi

ITA 2943/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3082 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 01-06-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 12-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Additional evidence; Accommodation entries
• Section: 133A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER AND SH. L.P.SAHU, ACCOUNTANT MEMBER ITA NO. 2943/DEL/2014 (ASSESSMENT YEAR: 2004-05) ITO WARD-6(3) NEW DELHI VS. MEHRASONS JEWELLERS PVT. LTD. 2, AJMAL KHAN ROAD, KAROL BAGH NEW DELHI PAN : AAACM1118L PAN : (APPELLANT) (RESPONDENT) REVENUE BY SH. S.R. SENAPATI , SR. DR ASSESSEE BY NONE O R D E R PER L.P.SAHU, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST ORDE R OF THE LD. CIT(A)-IX, NEW DELHI ORDER DATED 07.02.2014 FOR ASSESSMENT YEA R 2004-05 ON THE FOLLOWING GROUNDS OF APPEAL :- 1. THE ORDER OF THE LEARNED CIT (APPEALS) IS ERRONEOU S AND CONTRARY TO FACTS AND LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LA W, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.95,00,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDIT FROM AN ENTRY OPERATOR COMP LETELY IGNORING THE FINDINGS GIVEN BY THE HONBLE DELHI HIGH COURT IN CASES LIKE CIT V. NOVA PROMOTERS 342 ITR 169, CIT V. NR PORTFOLIO [2013] 29 TAXMANN. COM 291 (DELHI), CIT V. N TARIKA PROPERTIES (ITA NO.2080/2010, DATED 28.11.20 13) ETC. WHEREIN THE HONBLE DELHI HIGH COURT HAS CLEARLY HELD THAT REOP ENING OF ASSESSMENT IS JUSTIFIED IN CASE OF INFORMATION RECEIVED FROM THE INVESTIGATION WING AND THE ONUS IS ON THE ASSESSEE TO ESTABLISH IDENTITY & CRE DITWORTHINESS OF CREDITORS DATE OF HEARING 12 .0 3 .2018 DATE OF PRONOUNCEMENT 26 . 0 3 .2018 2 ITA NO. 2943.DEL.2014 AND GENUINENESS OF TRANSACTIONS. 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE A.O. MADE NO EFFORTS IN V ERIFYING THE FACTS BY SUMMONING THE PARTIES BY COMPLETELY IGNORING THE FA CTS THAT THE ASSESSEE WAS GIVEN REPEATED OPPORTUNITIES BUT THE ASSESSEE FAILE D TO MAKE COMPLIANCE OF ANY OF THE STATUTORY NOTICES AS CLEARLY MENTIONED IN TH E ASSESSMENT ORDER? 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE ORDER OF THE LD. CIT(A)ERRED IN HOLDING THAT THE CASE OF THE ASS ESSEE IS OF MISTAKEN IDENTITY WITHOUT PROVIDING THE A.O. ANY OPPORTUNITY TO REBUT THE CLAIM OF THE ASSESSEE UNDER RULE 46A. 5. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD.CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSESSEE WITHOUT CA LLING FOR REMAND REPORT FROM THE A.O. DESPITE THE FACT THAT ADDITIONAL EVIDENCES WERE SUBMITTED BY THE ASSESSEE AND WITHOUT PROVIDING ANY OPPORTUNITY TO T HE A.O. UNDER RULE 46A. 6. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE T O EACH OTHER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME ON 01.11.2004 DECLARING A LOSS OF RS. 29,90,704/-. THE CASE WAS PROCESSED U/S 143(1) OF THE IT ACT ON 29.12.2004. 3. NONE PRESENT ON BEHALF OF THE ASSESSEE DESPITE O F MANY NOTICES WERE ISSUED TO THE ASSESSEE . THEREFORE, THE CASE WAS HEARD IN THE ABSENCE OF THE ASSESSEE. 4. THE BRIEF FACTS OF THE CASE ARE THAT A SURVEY OP ERATION WAS CONDUCTED U/S 133A ON 20.11.2007 BY ITO (INVESTIGATION),UNIT VI(3 ), NEW DELHI IN THE CASE OF SH. SURESH KUMAR GUPTA AT HIS VARIOUS BUSINESS PREM ISES, WHEREIN SEVERAL LEDGER ACCOUNTS MAINTAINED IN TALLY FOR THE PERIOD OF 2003 -04 WERE FOUND, IT WAS OBSERVED THAT SH. S.K.GUPTA IS ENGAGED AS AN ENTRY OPERATOR AND PROVIDED ACCOMMODATION ENTRIES TO VARIOUS BENEFICIARIES THROUGH A LARGE NU MBER OF SHELL COMPANIES MANAGED BY HIM. IT WAS FURTHER OBSERVED BY THE INVE STIGATION WING THAT THE ASSESSEE COMPANY WAS ALSO A BENEFICIARIES COMPANY W HO HAVE RECEIVED ACCOMMODATION ENTRIES FROM SH. S.K.GUPTA AND HIS AS SOCIATES. 3 ITA NO. 2943.DEL.2014 5. ON THE BASIS OF INFORMATION RECEIVED FROM THE IN VESTIGATION WING, THE CASE WAS REOPENED BY ISSUING NOTICE U/S 147/148 AFTER RE CORDING REASONS FOR MAKING REASSESSMENT . THE LD. ASSESSING OFFICER ISSUED VAR IOUS STATUTORY NOTICES U/S 142(1). THE ASSESSEE DID NOT COMPLY TO THE STATUTORY NOTICE S ISSUED BY THE ASSESSING OFFICER, THEREFORE, ASSESSMENT PROCEEDINGS WERE COMPLETED EX -PARTE AFTER FOLLOWING THE DUE PROCEDURES FOR MAKING ASSESSMENT U/S 144 AND FINALL Y ON THE BASIS OF MATERIALS AVAILABLE ON RECORD THE ASSESSING OFFICER COMPLETE D THE ASSESSMENT U/S 144 BY MAKING ADDITION ON ACCOUNT OF UN-EXPLAINED CASH CRE DIT U/S 68 OF RS. 95,00,000/-. AGGRIEVED BY THE ADDITIONS THE ASSESSEE APPEALED BE FORE THE CIT(A). THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE, HE ALLOWED THE APPEAL OF THE ASSESSEE WITHOUT VERIFYING THE DOCUMENTS SUBMIT TED BY THE ASSESSEE AND DELETED THE ADDITIONS THE LD. CIT (A) ALSO ACCEPTED THE ADD ITIONAL EVIDENCE FILED BY THE ASSESSEE. FEELING AGGRIEVED BY THE ORDER OF THE CIT (A), THE REVENUE IS IN APPEAL BEFORE THE ITAT. 6. AT THE OUTSET OF THE HEARING, THE LD. DR SUBMITT ED THAT THE LD. CIT(A) HAS DELETED THE ADDITIONS WITHOUT MAKING ANY VERIFICATI ON OF THE FACTS AS POINTED OUT BY THE ASSESSING OFFICER. THE ASSESSMENT WAS COMPLETED EX-PARTE U/S 144 OF THE INCOME TAX ACT 1961. THE ASSESSEE DID NOT APPEAR BE FORE THE LD. ASSESSING OFFICER AND HE SUBMITTED ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) . THE LD. CIT (A) WITHOUT CALLING REMAND REPORT FROM THE ASSESSING OF FICER ACCEPT THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE. IN THE INTEREST OF NATURAL JUSTICE AT LEAST THE REMAND REPORT SHOULD HAVE BEEN CALLED FOR FROM THE ASSESSI NG OFFICER. THEREFORE, LD. DR REQUESTED THAT THE MATTER SHOULD GO BACK TO CIT(A) FOR AFRESH ADJUDICATION AFTER GIVING DUE OPPORTUNITY TO THE LD. ASSESSING OFFICER WHICH WAS NOT GRANTED EARLIER. 7. AFTER HEARING THE ARGUMENTS OF THE LD. DR AND P ERUSING THE MATERIALS AVAILABLE ON RECORD, WE OBSERVE THAT THE ASSESSEE H AS FILED A PAPER BOOK WHICH 4 ITA NO. 2943.DEL.2014 CONTAINS PAGE NO. 1 TO 49 WHICH HAS NOT BEEN CERTIF IED BY THE APPELLANT OR ANY OTHER AUTHORIZED PERSONS. THE LD. CIT(A) HAS DECIDED THE ISSUE ON THE BASIS OF DOCUMENTS FILED BEFORE HIM. THERE IS NO CLEAR FROM THE ORDER OF THE LD. CIT(A) THAT WHAT TYPE OF DOCUMENTS WERE SUBMITTED BEFORE HIM BY THE ASSE SSEE AND ON THOSE DOCUMENTS WHETHER THE LD. CIT HAS CONDUCTED ANY ENQUIRY OR NO T . THE REMAND REPORT WERE ALSO NOT CALLED FROM THE ASSESSING OFFICER WHERE A S THE ASSESSEE HAS FILED ADDITIONAL EVIDENCE UNDER RULE 46A WHICH HAS BEEN A CCEPTED BY HIM WITHOUT CONDUCTING ANY FURTHER ENQUIRY. IN THESE CIRCUMSTA NCES , WE THINK IT APPROPRIATE IN THE INTEREST OF NATURAL JUSTICE TO RESTORE THE MAT TER BACK TO THE FILE OF LD. CIT(A) FOR DECIDING THE APPEAL AFRESH AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSING OFFICER. THE ASSESSEE IS DIRECTED TO COOPERATE WITH THE FIRST APPELLATE AUTHORITY IN HEARING THE APPEAL, AND SHALL NOT SEEK ANY UNNECESSARY ADJOURNMENT. WE ORDER ACCORDINGLY. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH, 2018. SD/- SD/- (BHAVNESH SAINI) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 26 .03.2018 BINITA COPY OF ORDER TO: - 1) THE APPELLANT; 2) THE RESPONDENT; 3) THE CIT; 4) THE CIT(A)-, NEW DELHI; 5) THE DR, I.T.A.T., NEW DELHI; TRUE COPY BY ORDER ITAT, NEW DELHI ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI 5 ITA NO. 2943.DEL.2014 S.NO. DETAILS DATE 1 DRAFT DICTATED ON 23.03.2018 2 DRAFT PLACED BEFORE AUTHOR 23.03.2018 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5 APPROVED DRAFT COMES TO THE SR. PS/PS 6 KEPT FOR PRONOUNCEMENT ON 7 FILE SENT TO BENCH CLERK 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE A.R. 10 DATE OF DISPATCH OF ORDER 6 ITA NO. 2943.DEL.2014