Chadha Finlease Ltd., Bareilly V. ACIT, New Delhi

ITA 3013/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90932 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 08-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARVINDER KAUR
• Keywords: Unexplained cash credit; Additional evidence
• Section: 133(6); 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI C.M. GARG : JUDICIAL MEMBER ITA NO. 3013/DEL/2011 A.Y. 2007-08 CHADHA FINLESE LTD., VS. ACIT, CIRCLE 3(1), D-851, 2 ND FLOOR, NEW DELHI. NEW FRIENDS COLONY, NEW DELHI. C/O M/S SATNAM SINGH CHAWLA & ASSOCIATES, L-2/A RAMPUR GARDEN BAREILLY (UP) PAN: AAACC 5071 C ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI SANAT KAPOOR ADV. RESPONDENT BY : SMT. PARVINDER KAUR SR. DR DATE OF HEARING : 23/03-2015 DATE OF ORDER : 22-04-2015. O R D E R PER S.V. MEHROTRA, A.M:- THIS APPEAL, PREFERRED BY THE ASSESSEE, IS DIRECTE D AGAINST THE ORDER OF CIT(A)-VI, NEW DELHI DATED 25-02-2011, RELATING TO AY 2007-08. FOLLOWING GROUNDS ARE RAISED: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING AN ADDITION OF RS.12077814.00 AS UNEXPLAINED CREDIT U/S 68 OF THE INCOME TAX ACT 1961. 2 ITA 3013/DEL/2011 CHADHA FINLEASE LTD. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THE NATURE OF TRANSACTION WAS OF PURCHASE AND SALE OF SHARES ENTE RED INTO BY THE ASSESSEE WITH THE SHARE BROKING CONCER N, M/S SAI SOFT SECURITIES. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE SUM OF RS.12077814.00 REPRESENTED THE TOTAL OF THE CREDIT SIDE OF THE COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF MIS SAI SOFT SECURITIES. 4. THE ENTIRE ADDITION HAS BEEN CONFIRMED WITHOUT APPRECIATING THE FACTS OF THE CASE BY THE ASSESSING OFFICER AS WELL AS THE COMMISSIONER OF INCOME TAX (APPEALS) . 5. THE ASSESSEE RESERVES HIS RIGHT TO ADD, AMEND, ALTER OR DELETE ANY GROUND OF APPEAL AT THE TIME OF HEARING. 2. BRIEF FACTS ARE THAT THE ASSESSEE COMPANY HAD FI LED ITS RETURN OF INCOME DECLARING INCOME OF RS. 28,64,910/-. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS IT TRANSPIRED THAT THE ASSESSEE COMPANY HAD RECEIVED/ TAKEN LOAN/ AMOUNTS FROM VARIOUS PARTIES. IN ORDER TO VER IFY THE SAME NOTICE U/S 133(6) WAS ISSUED ON 17-11-2009 TO M/S SAI SOFT SEC URITIES, MORADABAD. THE PARTY DID NOT RESPOND AND, THEREFORE, AO SHOW C AUSED THE ASESSSEE AS TO WHY THE AMOUNT OF RS. 1,20,77,814/- RECEIVED FROM M /S SAI SOFT SECURITIES BE NOT DISALLOWED AS THE PARTY HAD NOT RESPONDED TO THE NOTICE ISSUED U/S 133(6) OF THE ACT. THE ASSESSEE FILED COPY OF ACCOU NT OF THE FIRM GIVING FULL DETAILS OF TRANSACTIONS. THE AO HAS OBSERVED THAT T HE COPY OF ACCOUNT FILED BY THE ASSESSEE WAS SIMPLY A PIECE OF PAPER WITH A RUBBER STAMP OF M/S SAI SOFT SECURITIES. THE COPY OF ACCOUNT DID NOT BEAR T HE PAN NO. OF THE PARTY, THE DETAILS OF THE AO ASSAILING THE ABOVE PARTY AND ITS COPY OF RETURN WERE 3 ITA 3013/DEL/2011 CHADHA FINLEASE LTD. NOT FILED SO AS TO ESTABLISH THE IDENTITY OF THE LE NDER AND ITS CAPACITY TO LEND MONEY. SINCE IT WAS A TIME BARRING ASSESSMENT, THE AO MADE ADDITION OF RS. 1,20,77,814/-, INTER ALIA, OBSERVING THAT ASSESSEE FAILED TO DISCHARGE ITS ONUS OF PROVING THE GENUINENESS AND CREDITWORTHINESS OF THE PERSONS WHO HAD DEPOSITED MONEY WITH THE ASSESSEE. 3. BEFORE LD. CIT(A) IT WAS SUBMITTED THAT AO ADDED THE TOTAL CREDIT SIDE OF CONFIRMATION OF M/S SAI SOFT SECURITIES, A FIRM WHICH WORKS AS SHARE BROKER TO THE ASSESSEE COMPANY. THE ASSESSEE IN DET AIL EXPLAINED THE TRANSACTIONS WITH THEM AND FURTHER STATED BEFORE CI T(A) AS UNDER: 5. IT WAS FURTHER ADDED THAT ON 4TH DECEMBER 2009, THE ASSESSING OFFICER HAD TOLD THE AR THAT HE HAD ISSUE D NOTICE UNDER SECTION 133(6) TO M/S SAI SOFT . 6 SEC URITIES FOR CONFIRMATION THE VALIDITY OF THE TRANSACTIONS W ITH THE ASSESSEE COMPANY BUT NO REPLY HAS BEEN SUBMITTED BY THE SAID FIRM. SO ASSESSING OFFICER ASKED THE AR OF THE ASSESSEE COMPANY TO SUBMIT THE DETAILS/INFORMATION REGARDING THE TRANSACTIONS WITH M/S SAI SOFT SECURI TIES. THE AR IMMEDIATELY ON 8TH DECEMBER 2009 SUBMITTED T HE CONFIRMATION COPY OF M/S SAI SOFT SECURITIES DULY S INGED BY AUTHORIZED PERSON BUT IT DOES NOT CONTAIN THE PA N OF THE SAID FIRM. THIS WAS POINTED OUT BY THE ASSESSIN G OFFICER AND AR PROMISED TO FURNISH THE SAME 9TH DECEMBER 2009. BUT WHEN ON 9TH DECEMBER 2009 AR WENT TO FURNISH THE PAN OF M/S SAI SOFT SECURITIES BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFICER REFUSE D TO ACCEPT THAT AS THE ASSESSMENT ORDER WAS ALREADY PAS SED. THUS THE ASSESSING OFFICER PASSED THE ASSESSMENT OR DER WITHOUT GIVING A REASONABLE OPPORTUNITY TO SUBMIT T HE DETAILS INFORMATION AND MADE THE ADDITIONS OF RS. 1,20,77,814/-. DURING THE APPEAL PROCEEDINGS, THE L D. AR FILED AN EXPLANATION REGARDING THE NATURE OF EACH TRANSACTION RECORDED IN THE SO CALLED PIECE OF PAPE R WHICH WAS A CONFIRMATION OF M/S SAI SOFT SECURITIES WITH A REQUEST THAT THE SAME MAY BE VIEWED AS ADDITIONAL EVIDENCE IN SUPPORT OF EXISTENCE OF M/S SAI SOFT SE CURITIES 4 ITA 3013/DEL/2011 CHADHA FINLEASE LTD. WHICH COULD NOT BE FILED BEFORE THE ASSESSING OFFIC ER AT THE TIME OF ASSESSMENT PROCEEDINGS BECAUSE A REASON ABLE OPPORTUNITY TO FURNISH THE DETAILS/ INFORMATION WAS NOT GRANTED BY THE ASSESSING OFFICER. IT WAS ALSO ADDED THAT THESE ARE NOT THE ADDITIONAL EVIDENCES, BUT IS JUST FURTHER EXPLANATION REGARDING THE EVIDENCE ALREADY PRODUCED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. 6. A COPY OF THE PETITION U/R 46A, ALONG WITH ENCLO SURES, WAS SENT TO ASSESSING OFFICER, WHO OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE. WITHOUT PREJUDICE TO THE ABOVE IT WAS ALSO SUBMITTED THAT IN ITS SUBMISS ION FILED DURING APPEAL PROCEEDINGS, THE ASSESSEE PRODU CED A COPY OF ACCOUNT OF M/S SAI SOFT SECURITIES CLAIMING THAT THE SAME HAS BEEN SUBMITTED DURING THE ASSESSMENT PROCEEDINGS. IN THE COPY OF ACCOUNT OF M/S SAI SOFT SECURITIES FILED NOW THE PAN OF THE COMPANY IS MANU ALLY AMENED AND NOT TYPED. THIS PAN NUMBER IS NOT AVAILA BLE IN THE COPY OF ACCOUNT FURNISHED BY THE ASSESSEE DU RING THE ASSESSMENT PROCEEDINGS. IT WAS FURTHER ADDED TH AT THE ASSESSEE IN THE DOCUMENTS FILED DURING APPEAL PROCEEDINGS ONCE AGAIN FAILED TO PROVIDE THE COPY O F ITR FILED BY THE M/S SAI SOFT SECURITIES. NO LEDGER FOL IO NUMBER/SHARE CERTIFICATE FOR SALE/PURCHASE OF SHARE S HAVE BEEN FURNISHED BY THE ASSESSEE. IN HIS REJOINDER, THE LD. AR REITERATED HIS EARLIER ARGUMENTS IN FAVOUR OF ADMISSION OF ADDITIONAL EVIDENCE. 4. LD. CIT(A) CONFIRMED THE ADDITION. 5. LD. COUNSEL REFERRED TO PAGE 18 OF THE PB WHEREI N LEDGER ACCOUNT OF M/S SAI SOFT SECURITIES IN THE BOOKS OF ASSESSEE IS CONTAINED TO DEMONSTRATE THAT THERE WERE REGULAR TRANSACTIONS BETWEEN ASSESS EE AND M/S SAI SOFT SECURITIES. WE FIND FROM THE SAID LEDGER ACCOUNT TH AT SUM OF RS. 27,40,000/- WAS GIVEN BY ASSESSEE THROUGH BANKING CHANNEL AND T HERE ARE TWO DEBITS 5 ITA 3013/DEL/2011 CHADHA FINLEASE LTD. REGARDING SALE OF SHARES OF ERA CONST. RS. 43,85,41 6/-; AND GAIL RS. 18,88,440/-. THEREAFTER ASSESSEE HAS AGAIN GIVEN CH EQUE OF RS. 6 LACS. ALL THESE TRANSACTIONS ARE UP TO 30-10-2006 AND THEREAF TER THERE ARE TWO ENTRIES RELATING TO PURCHASE OF SHARES AND AMOUNTS RECEIVED FROM M/S SAI SOFT SECURITIES. THIS LEDGER ACCOUNT HAS BEEN CONFIRMED BY M/S SAI SOFT SECURITIES ALSO GIVING THE CIRCLE WHERE IT IS ASSES SED AS WELL AS THE PAN NO. CONSIDERING THE FACT THAT THE ASSESSMENT WAS COMPLE TED ON ACCOUNT OF BEING TIME BARRING, WE ARE OF THE OPINION THAT THE MATTER NEEDS TO BE RESTORED BACK TO THE FILE OF AO FOR DE NOVO ADJUDICATION, PARTICU LARLY BECAUSE IN THE REMAND REPORT THE AO HAS NOT GIVEN DETAILED FINDING S. WE DIRECT ACCORDINGLY. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 22-04-2015. SD/- SD/- (C.M. GARG ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22-04-2015. MP: C OPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR