ITO, New Delhi V. M/s. Beetal Plantations (P) Ltd., Delhi

ITA 3140/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0311 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-02-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS ANUSHA KHURANA
• Keywords: Additional evidence; Tax effect
• Section: 148; 144

Judgement Text

I.T.A. NO. 3139, 3140/DEL/2010 1/1 IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH A NEW DELHI, BENCH A NEW DELHI, BENCH A NEW DELHI, BENCH A BEFORE SHRI I. P. BANSAL, JUDICIAL MEMBER AND SHRI A K GARODIA, ACCOUTANT MEMBER ITA NO. 3139, 3140 /DEL/2010 (ASSESSMENT YEARS 2005-06, 2006-07) I.T.O., WARD 2(4), VS. M/S. BEVERLY FARMS (P) LTD ., NEW DELHI 1011, ROOTS TOWERS, 7, LAXMI NAGAR DISTT. CENTRE, DELHI 110 092 (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAACB4662J APPELLANT BY: MRS. ANUSHA KHURANA, SR. DR RESPONDENT BY: NONE ORDER ORDER ORDER ORDER PER A. K. GARODIA, PER A. K. GARODIA, PER A. K. GARODIA, PER A. K. GARODIA, AM: AM: AM: AM: 1. BOTH THESE APPEALS OF THE REVENUE ARE DIRECTED A GAINST TWO SEPARATE ORDERS OF LD. CIT(A) V, NEW DELHI DATED 21 ,04,2010 FOR THE ASSESSMENT YEARS 2005-06 & 2006-07. BOTH THESE APP EALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. NONE APPEARED ON BEHALF O F THE ASSESSEE IN SPITE OF NOTICE AND HENCE, WE PROCEED TO DECIDE THESE TWO APPEALS EX-PARTE QUA THE ASSESSEE. 2. FIRST, WE TAKE UP THE APPEAL OF THE REVENUE FOR THE ASSESSMENT YEAR 2005-06 IN I.T.A. NO. 3139/DEL/2010 . THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE IS AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DI RECTING TO DELETE THE ADDITION OF ` 6.10 LACS MADE BY THE A.O. ON ACCOUNT OF COMMISSION. THE LD. CIT(A) FAILED TO APPRECIATE THE FEATURES OF RULE 46A WHICH REQUIRE AFFORDING REASON ABLE OPPORTUNITY TO THE A.O. TO CONSIDER FRESH EVIDENCE. 3. LD. D.R. SUPPORTED THE ASSESSMENT ORDER. I.T.A. NO. 3139, 3140/DEL/2010 2/2 4. AT THIS JUNCTURE, IT WAS POINTED OUT BY THE BENC H THAT THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE ON ACCOUN T OF LOW TAX EFFECT IN VIEW OF BOARDS INSTRUCTION NO.5/2008 LD. SR. DR COULD NOT SHOW THAT THE TAX EFFECT IN THE PRESENT CASE IS MOR E THAN THE PRESCRIBED LIMIT. ONE MORE REASON WAS POINTED OUT BY THE BENCH FOR NON MAINTAINABILITY OF APPEAL OF THE REVENUE. IT W AS POINTED OUT BY THE BENCH THAT AS PER PARA 2.2 OF HIS IMPUGNED ORDE R IT IS HELD BY THE LD. CIT(A) THAT THE ISSUE OF NOTICE BY THE A.O . U/S 148 IS NOT VALID. NO GROUND HAS BEEN RAISED BY THE REVENUE ON THIS ASPECT AND ONCE IT IS ACCEPTED BY THE REVENUE THAT THE ISSUANC E OF NOTICE U/S 148 IS NOT VALID, THE ASSESSMENT ORDER ITSELF DOES NOT SURVIVE AND HENCE THERE IS NO NECESSITY TO ADJUDICATE UPON MERI T OF THE CASE. ON THIS ASPECT ALSO LD. D.R. HAD NOTHING TO SAY. F OR THESE TWO REASONS, WE HOLD THAT THIS APPEAL OF THE REVENUE IS NOT MAINTAINABLE AND DISMISS THE SAME ACCORDINGLY. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 6. NOW, WE TAKE UP THE APPEAL OF THE REVENUE FOR TH E ASSESSMENT YEAR 2006-07 IN I.T.A. NO. 3140/DEL/2010 . THE ONLY EFFECTIVE GROUNDS OF APPEAL RAISED BY THE REVENUE I S AS UNDER: THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DI RECTING TO DELETE THE ADDITION OF ` 44,80,000/- MADE BY THE A. O. ON ACCOUNT OF UNEXPLAINED SOURCES OF UNSECURED LOANS. THE LD. CIT(A) FAILED TO APPRECIATE THE FEATURES OF RULE 46 A WHICH REQUIRE AFFORDING REASONABLE OPPORTUNITY TO THE A. O. TO CONSIDER FRESH EVIDENCE. 7. LD. DR OF THE REVENUE SUPPORTED THE ASSESSMENT O RDER. REGARDING THIS PART OF THE GROUND FOR VIOLATION OF RULE 46A OF THE I. T. RULES, IT IS SEEN FROM THE IMPUGNED ORDER OF LD. CI T(A) THAT REMAND REPORT WAS DULY CALLED FOR BY THE LD. CIT(A) AND TH E SAME WAS SUBMITTED BY THE A.O. ALSO AND LD. CIT(A) HAS CONSI DERED THE REMAND REPORT SUBMITTED BY THE A.O. AND HENCE RULE 46A HAS BEEN DULY ADHERED TO BY THE LD. CIT(A) AND THERE IS NO V IOLATION OF RULE 46A BY THE LD. CIT(A). REGARDING THIS ASPECT OF RU LE 46A THAT REASONABLE OPPORTUNITY WAS PROVIDED BY THE A.O., IT IS POINTED OUT I.T.A. NO. 3139, 3140/DEL/2010 3/3 BY THE BENCH THAT ON PAGE 6 OF THE IMPUGNED ORDER, IT HAS BEEN NOTED BY THE LD. CIT(A) THAT THE ASSESSEE FILED PAP ERS BEFORE THE A.O. ON 11.12.2008 AND 15.12.2008 WHICH WERE TAKEN ON RECORD AND NO FURTHER QUERY HAS BEEN RAISED EITHER ON ORDER SH EET OR BY ANY SHOW CAUSE NOTICE U/S 144 OF THE I. T. ACT AFTER RE CEIVING THE PAPERS FORM THE ASSESSEE. IT IS FURTHER NOTED BY THE LD. CIT(A) ON THE SAME PART THAT THE A.O. CLOSED THE PROCEEDINGS OF THE CA SE OF ASSESSMENT YEAR 2006-07 ON 14.12.2008 BY PASSING THE ORDER U/S 144 WITHOUT ISSUING ANY NOTICE U/S 144 FOR COMPLETING THE CASE UNDER BEST JUDGMENT ALTHOUGH THE A.O. CONTINUED PROCEEDINGS FO R THE ASSESSMENT YEAR 2005-06 TILL 29.12.2008 U/S 143(3)/ 144 OF THE SAME ASSESSEE COMPANY. IT IS ALSO NOTED BY THE LD .CIT(A) THAT THE ORDER SHEET ENTRY OF THIS CASE SHOWS THAT ASSESSEE WAS NEVER ASKED FOR FILING ANY SPECIFIC DETAILS REGARDING THE CREDI TORS OF THE COMPANY AND NO INQUIRY HAS BEEN DONE BY THE A.O. FOR VERIFI CATION OF THE CREDITORS. CONSIDERING THESE FACTS, WE ARE SATISFI ED THAT THE REQUIREMENT OF RULE 46A OF THE INCOME TAX RULES 196 2 HAVE BEEN FULFILLED FOR ADMISSION OF ADDITIONAL EVIDENCE BECA USE UNDER THESE FACTS OF THE PRESENT CASE, IT CANNOT BE SAID THAT T HE A.O. HAS GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE FOR ADDUCING EVIDENCE REGARDING THE CREDITORS OF THE ASSESSEE COMPANY BEC AUSE AFTER FILING CERTAIN DOCUMENTS BY THE ASSESSEE, NO FURTHER QUERY HAS BEEN RAISED BY THE A.O. THIS PART OF THE GROUND IS THER EFORE, REJECTED. 8. ON MERIT ALSO, LD. D.R. SUPPORTED THE ASSESSMENT ORDER. BUT WE FIND THAT THE ADDITION WAS MADE BY THE A.O. FOR WANT OF CONFIRMATION FOR UNSECURED LOAN CREDITOR OF ` 44.80 LACS. IN THE IMPUGNED ORDER, IT IS NOTED BY THE LD. CIT(A) THAT FOR ALL THESE LOAN CREDITORS, THE ASSESSEE HAS DULY FURNISHED THE PAN, INCOME TAX RETURN COPIES, BALANCE SHEETS, DETAILS OF SOURCE AN D COPIES OF BANK STATEMENTS OF THE LOAN CREDITORS. ON THE BASIS OF THESE DOCUMENTS, IT IS HELD BY THE LD. CIT(A) THAT THERE IS NOTHING TO DOUBT REGARDING THE LOAN CREDITORS WHEREIN IDENTITY, CREDITWORTHINE SS AND GENUINENESS OF TRANSACTION IS SELF EXPLANATORY AND IN THE FORM OF I.T.A. NO. 3139, 3140/DEL/2010 4/4 COPY OF INCOME TAX RETURN ACKNOWLEDGMENT, BANK STAT EMENT AND NET WORTH OF THESE LOAN CREDITORS. NET WORTH OF THE LO AN CREDITORS I.E. ANKUR COMMERCIAL LTD. WHO HAS GIVEN LOAN OF ` 05.75 LACS, IS NOTED BY THE LD. CIT(A) AT ` 500 LACS. SIMILARLY, FOR TH E 2 ND LOAN CREDITOR M/S. THRUST PLANTATION P. LTD. WHO HAD GIVEN UNSECU RED LOAN OF ` 28.05 LACS TO THE ASSESSEE NOT WORTH OF ` 93.45 LAC S IS NOTED AND SIMILARLY FOR THE 3 RD LOAN CREDITOR M/S. APEX SOFTWARE WHO HAD GIVEN UNSECURED LOAN OF ` 11 LACS TO THE ASSESSEE COMPANY , NET WORTH HAS BEEN RECORDED BY THE LD. CIT(A) AT ` 111.19 LACS. COPY OF DETAILS OF SOURCES AND BANK STATEMENTS OF LOAN CREDITORS ARE A LSO AVAILABLE ON RECORD AS NOTED BY LD. CIT(A). IT IS ALSO NOTED BY LD. CIT(A) THAT THERE WAS NO EFFORT MADE BY THE A.O. TO PURSUE TO C ALL THE CREDITORS. UNDER THESE FACTS, WE DO NOT FIND ANY REASON TO INT ERFERE IN THE ORDER OF LD .CIT(A) ON MERIT OF THE CASE ALSO AND H ENCE, WE DECLINE TO INTERFERE IN THE ORDER OF LD. CIT(A). 9. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. 10. PRONOUNCED IN THE OPEN COURT ON 4 TH MAR., 2011. SD./- SD./- (I. P. BANSAL) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 4 TH MAR., 2011 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI