ITO, New Delhi V. M/s Tiger Shoe Company P Ltd., New Delhi

ITA 3048/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2219 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 09-12-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 02-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G S SOHTA
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 69C; 68

Judgement Text

ITA NO. 3048/DEL/2009 2006-07 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH H: NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 3048/DEL/2009 A.Y. : 2006-07 INCOME TAX OFFICER, M/S TIGER SHOE COMPANY P L TD. WARD 16(3), NEW DELHI VS. S-1, 179 DB GUPT A ROAD, KAROL BAGH, NEW DELHI (PAN: AAACT 0329A) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SH. G.S. SOHTA, SR. DR O R D E R PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDERS OF THE LD. CIT(A) DATED 27.4.2009 AND PERTAINS TO A SSESSMENT YEAR 2006-07. 2. THE ISSUE RAISED IS THAT THE LD. CIT(A) HAS ERR ED IN DELETING THE ADDITION OF RS. 49,00,000/- MADE UNDER SECTION 68 OF THE IT ACT AND ALSO DELETING THE ADDITION OF RS. 98,000/- MADE UNDER SECTION 69C OF THE IT ACT. ITA NO. 3048/DEL/2009 2006-07 2 3. IN THIS CASE THE ASSESSEE COMPANY HAS RECEIVED S HARE APPLICATION MONEY. AO PROCEEDED TO VERIFY THE GENU INENESS OF THE SAID SHARE APPLICATION MONEY. AO VERY ELABORAT ELY CONSIDERED THE ISSUE AND BY INVESTIGATION, AO CAM E TO THE CONCLUSION THAT MONEY HAS BEEN ROUTED IN ACCOUNTS OF THE ASSESSEE FROM FICTITIOUS NON-EXISTENT ENTITIES, WHI CH CAN PROVE THEIR EXISTENCE BY SOME DOCUMENTS LIKE BANK ACCOUNT S, PAN CARDS, OLD RETURNS WHICH HAVE BEEN PREPARED BY METH ODS BEST KNOWN TO THE ASSESSEE. ACCORDINGLY, AO ADDED THE S UM OF RS. 49,00,000/- AS UNEXPLAINED CREDIT UNDER SECTION 68 OF THE ACT. AO ALSO ADDED 2% OF SUCH TRANSACTION AMOUNTING TO RS. 98,000/- HOLDING THAT SUCH TRANSACTIONS ARE CARRIED OUT BY ACCOMMODATION PROVIDERS AND CHARGE UPTO 2% OF THE TRANSACTION. 4. UPON ASSESSEES APPEAL THE LD. CIT(A) CONSIDERED THE ISSUE AND INTER-ALIA NOTED IN PARA 10 OF HIS ORDER THAT A SSESSEE HAS GIVEN ALL THE DETAILS AND THE AO HAS NOT VERIFIED T HE DETAILS FURNISHED BY THE ASSESSEE. HE LATER ON IN PARA 11 OF HIS ORDER ITA NO. 3048/DEL/2009 2006-07 3 WENT ON TO CONCLUDE THAT HE HAD NO HESITATION TO CO NCLUDE THAT ASSESSEE HAS PROVIDED NECESSARY DETAILS AND AO HAS NOT BROUGHT OUT ANYTHING TO DISPUTE THE FACTS, DETAILS FURNISHED BY THE ASSESSEE. REFERRING TO CASE LAW INTER-ALIA OF APEX COURT DECISION IN CIT VS. LOVELY EXPORTS P LTD. 216 CTR 1 95, HE DELETED THE ADDITION. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD THE LD. DR AND NONE APPEARED ON BE HALF OF THE ASSESSEE. WE HAVE CAREFULLY PERUSED THE RECOR DS. WE FIND IN THIS CASE THE AO HAS GIVEN A VERY ELABORATE FIN DING THAT AFTER DUE VERIFICATION, HE HAS FOUND THAT THE COMPANIES W HICH HAVE CONTRIBUTED THE SHARE APPLICATION MONEY ARE NON-EXI STENT. ON THE OTHER HAND, THE LD. CIT(A) IS GIVING A DIAMETRI C OPPOSITE FINDING THAT ASSESSEE HAS FURNISHED THE DETAILS AN D AO HAS NOT MADE ANY VERIFICATION. AT THE SAME TIME, HE IS ALS O OBSERVING THAT AO HAS NOT BROUGHT OUT ANYTHING ON RECORD DE SPITE CONDUCTING INDEPENDENT EXAMINATION BY ISSUING NOTIC ES. WE FIND THAT IT IS NOT THE CASE THAT LD. CIT(A) HAS HI MSELF CONDUCTED THE VERIFICATION. IT IS A SETTLED LAW THAT POWERS OF THE CIT(A) AND AO ARE CO-TERMINUS. 6.1 IN THIS REGARD, WE ALSO DRAW SUPPORT FROM THE APEX COURT DECISION IN THE CASE OF KAPURCHAND SHRIMAL VS. CIT, 131 ITR ITA NO. 3048/DEL/2009 2006-07 4 451 WHEREIN IT WAS HELD THAT IT IS THE DUTY OF THE APPELLATE AUTHORITY TO CORRECT THE LACUNAE IN ORDER OF AUTHO RITY BELOW AND ISSUE APPROPRIATE DIRECTIONS WHEN NEEDED. 6.2 IN THE LIGHT OF THE AFORESAID DISCUSSION, WE D EEM IT APPROPRIATE TO REMIT THIS ISSUE TO THE FILES OF THE LD. CIT(A) TO EXAMINE THE ISSUE AFRESH AND GIVE A FINDING THEREON ACCORDINGLY. NEEDLESS TO ADD THAT THE ASSESSEE SHO ULD BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10/12/2009 AFTER CONCLUSION OF THE HEARING. SD/- SD/- [R.P. TOLANI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10/12/2009 SRB COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCH