Versatile Vinimay Pvt. Ltd., Delhi V. ITO, Ward- 26(2), New Delhi

ITA 3031/DEL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4457 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 01-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence; Set aside
• Section: 143(1); 148; 6; 263; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F: NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P.KANT, ACCOUNTANT MEMBER ITA NO.3031/DEL/2018 (ASSESSMENT YEAR-2008-09) M/S. VERSATILE VINIMAY PRIVATE LTD. 1705, 4 TH FLOOR ONKAR BHAWAN BHAGIRATH PLACE, CHANDNI CHOWK, DELHI-110006 PAN AACCV 6712F VS. INCOME TAX OFFICER WARD-5(4), KOLKATA. (APPELLANT) (RESPONDENT) APPELLANT BY SH. VED JAIN, CA RESPONDENT BY SH. UMESH TAKYAR, SR. DR DATE OF HEARING 25.02.2020 DATE OF PRONOUNCEMENT 26.02.2020 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER: THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT (APPEALS)-6, KOLKATA {CIT(A)} DATED 31.10.2016 FOR ASSESSMENT YEAR: 2008-09, CHALLENGING THE ADDITION OF RS.8,58,00,000 /- U/S 68 OF THE I.T. ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT AO NO TED IN THE ASSESSMENT ORDER THAT ASSESSEE FILED HIS RETURN OF INCOME ON 2 6.03.2009 DECLARING THE TOTAL LOSS OF RS.376/-. THE RETURN WAS PROCESSED U/ S 143(1) OF THE I.T. ACT. ITA NO.3031/DEL/2018 (ASST. YEAR: 2008-09) PAGE | 2 THE ASSESSEE DERIVES INCOME FROM COMMISSION, LOANS & ADVANCES AND INVESTMENT IN SHARES. THE AO FOUND THAT ASSESSEE HA D DEBITED PRELIMINARY EXPENSES WRITTEN OFF DUE TO RAISING OF SHARE CAPITA L, WHICH IS INADMISSIBLE AS PER PROVISIONS OF SECTION 35D OF THE I.T. ACT, W HICH HAS ESCAPED ASSESSMENT. THE AO THEREFORE, ISSUED NOTICE U/S 148 AND SUBSEQUENTLY PASSED ORDER U/S 147/143(3) ON 30.04.2010 DETERMINI NG THE TOTAL INCOME AT RS.19,220/-. THE LD. CIT INITIATED THE PROCEEDIN GS U/S 263 OF THE I.T. ACT AND SET ASIDE THE RE-ASSESSMENT ORDER WITH A DI RECTION TO DO THE ASSESSMENT AFRESH. THE AO ISSUED NOTICES TO THE ASS ESSEE TO EXPLAIN RAISING OF SHARE CAPITAL AND IN THE ABSENCE OF ANY EXPLANATION/DOCUMENTS, AO MADE THE ADDITION OF RS. 8.58 CRORES U/S. 68 OF THE I.T. ACT. 3. THE LD. CIT(A) NOTED SEVERAL DATES OF HEARING, W HEN NOTICE HAVE BEEN ISSUED FOR HEARING OF THE APPEAL, HOWEVER, NONE APP EARED ON BEHALF OF THE ASSESSEE. THE LD. CIT(A), THEREFORE, NOTED THAT ASS ESSEE IS NOT INTERESTED IN PROSECUTING THE APPEAL. THE LD. CIT(A) IN ABSENCE O F ASSESSEE DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE ADDITI ON. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH TH E PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. C OUNSEL FOR THE ASSESSEE SUBMITTED THAT LD. CIT(A) PASSED THE ORDER WITHOUT GIVING REASONABLE ITA NO.3031/DEL/2018 (ASST. YEAR: 2008-09) PAGE | 3 OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHICH IS IN VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. HE HAS SUBMITTED THA T SINCE THERE WAS A CHANGE OF ADDRESS OF THE ASSESSEE, THEREFORE NO NOT ICES HAVE BEEN SERVED UPON THE ASSESSEE. THE ASSESSEE HAS ALSO FILED AN A PPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES UNDER RULE-29 OF THE ITAT, RULES, 1963. THE ASSESSEE, IN THE AFORESAID APPLICATION HAS MENT IONED THAT AO PASSED THE EX-PARTE ASSESSMENT ORDER AND LD. CIT(A) ALSO D ECIDED THE APPEAL IN ABSENCE OF THE ASSESSEE BECAUSE THE ASSESSEE SHIFTE D TO DELHI, AND HE WAS ACCORDINGLY ASSESSED AT DELHI. THEREFORE, NO NOTICE HAVE BEEN SERVED UPON THE ASSESSEE, WHICH RESULTED INTO BOTH THE EX-PARTE ORDERS. IT IS ALSO STATED THAT SINCE BOTH THE ORDERS HAVE BEEN PASSED EX-PART E THEREFORE, ASSESSEE COULD NOT PRODUCE ANY DOCUMENTS TO PROVE THE IDENTI TY OF THE INVESTORS THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANS ACTIONS. NON APPEARANCE BEFORE THE AUTHORITIES BELOW WAS BEYOND THE CONTROL OF ASSESSEE. THE ASSESSEE ALONG WITH APPLICATION FOR A DMISSION OF ADDITIONAL EVIDENCES FILED THE ADDITIONAL EVIDENCES WHICH CONS ISTS OF ITR ACKNOWLEDGMENT, APPLICATION FORM FOR ISSUE OF EQUIT Y SHARE, LEDGER ACCOUNT, CONFIRMATION, BOARD RESOLUTION, AUDITED BA LANCE SHEET, BANK STATEMENT OF ALL THE INVESTORS WHICH ARE 21 IN NUMB ER. IT IS THEREFORE, ITA NO.3031/DEL/2018 (ASST. YEAR: 2008-09) PAGE | 4 PRAYED THAT ON PERUSAL OF THESE ADDITIONAL EVIDENCE S ASSESSEE WILL BE ABLE TO PROVE THE THREE INGREDIENTS OF SECTION 68 OF I.T .ACT, THEREFORE, SAME MAY BE ADMITTED AS ADDITIONAL EVIDENCES. THE LD. COUNSE L FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT MATTER MAY BE REMANDED TO THE CIT(A) FOR FRESH ADJUDICATION OF THE ISSUE. 5. ON THE OTHER HAND, LD. DR ALSO SUGGESTED THAT MATTER MAY REMANDED TO THE LD. CIT(A) FOR DECISION AFRESH. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE HONBLE SUPREME COURT IN THE CASE OF TEK RAM (DEAD TRHOUGH LRS.) VS. CIT, 262 CTR 118 AND HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MUKTA METAL WORKS VS. CIT, 336 ITR 555 HELD THAT ADDITIONAL EVIDENCES BE ADMITTED AS RELEVANT A ND REQUIRED TO BE LOOKED INTO. THE HONBLE DELHI HIGH COURT IN THE CA SES OF CIT VS. TEXT HUNDRED INDIA PVT. LTD. (2013) 351 ITR 57 AND CIT V S. VIRGIN SECURITIES AND CREDITS PVT. LTD. [2011] 332 ITR 336 HELD THAT ADDITIONAL EVIDENCES BEING NECESSARY AND CRUCIAL FOR DISPOSAL OF APPEALS SHALL HAVE TO BE ADMITTED. IN THE PRESENT CASE THE AO HAD MADE THE ADDITION U/S 6 8 IN ABSENCE OF ASSESSEE. THE LD. CIT(A) ALSO CONFIRMED THE ADDITIO N BECAUSE NO EVIDENCE HAVE BEEN PRODUCED BEFORE HIM. THE ABOVE ADDITIONAL EVIDENCES PRIMAFACIE ITA NO.3031/DEL/2018 (ASST. YEAR: 2008-09) PAGE | 5 EXPLAINED THE IDENTITY OF THE INVESTORS, THEIR CRED ITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS IN THE MATTER AS SU BMITTED BY THE ASSESSEE. SINCE THE ASSESSEE HAS SHIFTED TO DELHI AND THERE WAS CHANGE OF ADDRESS AND THE ASSESSEE ASSESSED AT DELHI, THER EFORE, NONE OF THE NOTICES HAVE BEEN SERVED UPON THE ASSESSEE. THE EXP LANATION OF ASSESSE IS ACCEPTABLE THAT THE IMPUGNED ORDER HAVE BEEN PASSED IN VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. SINCE THE ADDITIONAL EVIDENCES GOES TO THE ROOT OF THE MATTER, ARE NECESSARY, RELEVANT AND CRUCIAL FOR DISPOSAL OF THE APPEAL, THEREFORE, WE ARE OF THE VIEW THAT ADDITION AL EVIDENCES BE ADMITTED. FURTHER THE ASSESSEE WAS PREVENTED BY THE SUFFICIEN T CAUSE IN NOT PRODUCING THESE EVIDENCES BEFORE THE AUTHORITIES BE LOW. WE, ACCORDINGLY, ADMIT THE ADDITIONAL EVIDENCES FOR DISPOSAL OF THE APPEAL. SINCE, THE AUTHORITIES BELOW HAVE NO OCCASION TO EXAMINE THE A DDITIONAL EVIDENCES, THEREFORE, MATTER REQUIRES RE-CONSIDERATION AT LEVE L OF THE LD. CIT(A). FURTHER NO OPPORTUNITIES HAVE BEEN GIVEN TO THE ASS ESSEE TO DEFEND THE APPEAL BEFORE THE CIT(A). WE THEREFORE, SET ASIDE T HE ORDER OF LD. CIT(A) AND RESTORE THE APPEAL OF ASSESSEE TO HIS FILE WITH A DIRECTION TO RE-DECIDE THE APPEAL OF THE ASSESSEE IN ACCORDANCE WITH LAW, BY GIVING REASONABLE AND SUFFICIENT OPPORTUNITIES OF BEING HEARD TO THE ASSESSEE AND TO THE AO. ITA NO.3031/DEL/2018 (ASST. YEAR: 2008-09) PAGE | 6 ASSESSEE IS DIRECTED TO FILE ONE SET OFF ADDITIONAL EVIDENCES SO ADMITTED ABOVE BEFORE THE LD. CIT(A) FOR DISPOSAL OF THE APP EAL. THE LD. CIT(A) SHALL TAKE INTO CONSIDERATION THE ADDITIONAL EVIDENCES FI LED BEFORE HIM AT THE TIME OF DECIDING APPEAL OF ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26/02/2020 . SD/- SD/ - (O.P.KANT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26/02/2020 PK/PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI