M/s. EON Auto Industires (P) Ltd., New Delhi V. DCIT, New Delhi

ITA 3178/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87136 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 21-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS ANURADHA MISHRA
• Assessee Lawyers: SALIL KAPOOR SANAT KUMAR
• Section: 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL IN (DELHI BENCH B NEW DELHI) BEFORE SHRI S.V.MEHROTRA, ACCOUNTANT MEMBER AND SHRI C.M.GARG, JUDICIAL MEMBER ITA NO. 3178/DEL/2013 (ASSESSMENT YEAR: 2007-08) EON AUTO INDUSTRIES (P) LTD. VS. DCIT A-100, MAYAPURI INDUSTRIAL AREA CENTRAL CIRCLE -17 NEW DELHI NEW DELHI PAN : AABCE7796B (APPLICANT) (RESPO NDENT) ASSESSEE BY : SH. SALIL KAPOOR, SANAT KUMAR, ADV. REVENUE BY : MRS. ANURADHA MISHRA, CIT DR DATE OF HEARING : 24.03.2015 DATE OF PRONOUNCEMENT : 26 .03.2015 ORDER PER C.M.GARG, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) II NEW DELHI DATED 11/03/2013 IN APPEAL NO. 324/ 09-10 FOR A.Y. 2007- 08. ITA NO. 3178/ DEL/2013 2 2. THE LD COUNSEL OF THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT THE ASSESSEE DOES NOT WANT TO PRESS LEGAL GROU ND 1 TO 5 AND THEREFORE THESE GROUNDS ARE DISMISSED AS NOT PRESSE D. FROM REMAINING GROUNDS ON MERITS IT IS VIVID THAT THE SO LE CONTROVERSY IS RAISED IN GROUND NO. 6 AND OTHER GROUNDS OF THE ASS ESSEE ARE ARGUMENTATIVE AND SUPPORTIVE TO THE MAIN GROUND NO. 6 WHICH READS AS UNDER :- 6. THAT THE LD. CIT(A) HAS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ERRED IN LAW AND ON FACT S IN UPHOLDING THE ADDITION OF RS. 10 LAKHS MADE BY THE AO ON ACCOUNT OF PAYMENT MADE TO A THIRD PARTY BY CHEQUE. 3. APROPOS ABOVE GROUND OF APPEAL THE LD. COU NSEL OF THE ASSESSEE SUBMITTED THAT THE CIT(A) IN VIEW OF FACTS AND CIRCUMSTANCES OF THE CASE HAS ERRED IN UPHOLDING TH E ADDITION OF RS. 10,00,000/- MADE BY THE AO ON ACCOUNT OF PAYMENT MA DE TO A THIRD PARTY BY CHEQUE. THE LD COUNSEL VEHEMENTLY CONTENDE D THAT THE CIT(A) CONFIRMED THE ADDITION WITHOUT CONSIDERING RATHER IGNORING THE VARIOUS SUBMISSIONS AND EVIDENCE ON RECORD WHICH WA S SUBMITTED BY THE ASSESSEE. THE LD. COUNSEL VEHEMENTLY CONTENDED THAT IN ANY CASE NO ADDITION CAN BE MADE IN THE HANDS OF THE AS SESSEE SINCE THE ALLEGED PAYMENT WAS MADE BEFORE THE DATE OF INCORPO RATION OF THE ASSESSEE COMPANY AND OBSERVATIONS GIVEN BY THE LOWE R AUTHORITIES ITA NO. 3178/ DEL/2013 3 AGAINST THE ASSESSEE ARE FACTUALLY INCORRECT AND AR E BASED ON GUESSWORK , SURMISES AND CONJECTURES AND ALSO CONT RARY TO THE FACTS AND EVIDENCE ON RECORD. THE LD COUNSEL ALSO CONTEND ED THAT THE CIT(A) HAS WRONGLY AND ILLEGAL UPHELD THE UNSUSTAIN ABLE ADDITIONS MADE BY THE AO WHICH CANNOT BE JUSTIFIED BY ANY MAT ERIAL ON EVIDENCE ON RECORD. THE LD. COUNSEL FURTHER, POINTE D OUT THAT THE ASSESSEE GAVE PROPER EXPLANATION, EVIDENCE AND MATE RIAL ON RECORD TO JUSTIFY THAT THE IMPUGNED PAYMENT WAS MADE ON 23 .10.2006 BY M/S B.L.KASHYAP AND SONS LTD. AND THE ASSESSEE COMPANY WAS INCORPORATED AND CAME INTO EXISTENCE ON 5.12.2006. THEREFORE, THE ASSESSEE COMPANY CANNOT BE HELD RESPONSIBLE FOR MAK ING PAYMENTS OF THIS IMPUGNED AMOUNT OF 10,00,000/- AND THUS ADD ITION U/S 68 OF THE ACT CANNOT BE MADE IN THE HANDS OF ASSESSEE. 4. REPLYING TO THE ABOVE THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITIONS ON THE BASIS O F MATERIAL AND EVIDENCE AVAILABLE BEFORE HIM WHICH WAS RIGHTLY CON FIRM BY THE CIT(A). HOWEVER, THE LD. DR FAIRLY ACCEPTED THAT TH E PAYMENT WAS MADE ON 23.10.2006 AND THE ASSESSEE COMPANY WAS INC ORPORATED ON 5.12.2006. HENCE IF IT IS FOUND JUST AND PROPER THEN THE ITA NO. 3178/ DEL/2013 4 DEPARTMENT HAS NO OBJECTION IF THE MATTER IS RESTOR ED TO THE FILE OF AO FOR LIMITED VERIFICATION. PLACING REJOINDER TO THE ABOVE CONTENTIONS TO THE REVENUE THE LD. COUNSEL OF THE ASSESSEE SUBMITT ED THAT AS PER EVIDENCE AND MATERIAL SUBMITTED BY THE ASSESSEE BEF ORE THE AUTHORITIES BELOW IT IS AMPLE CLEAR THAT THE IMPUGN ED PAYMENT WAS MADE BY M/S B.L.LASHYAP AND SONS LTD. ON 23.10.2006 AS ADVANCE AGAINST PURCHASE OF A PROPERTY TO THE OWNER AND SUB SEQUENTLY THE SAME PROPERTY WAS PURCHASED BY THE ASSESSEE COMPANY DURING THE FINANCIAL YEAR 2007-08 PERTAINING TO AY 2008-09, TH EREFORE, THE ASSESSING OFFICER WAS CONFUSED AND INCORRECT IN HOL DING THE IMPUGNED PAYMENT WAS MADE BY THE ASSESSEE COMPANY OUT OF BO OKS OF ACCOUNTS. THE LD. COUNSEL FAIRLY SUBMITTED THAT IF THE SOLE ISSUE IS RESTORED TO THE FILE OF AO FOR PROPER VERIFICATION AND EXAMINATION IN THE LIGHT OF EXPLANATION, EVIDENCE AND MATERIAL PLACED BY THE ASSESSEE DURING ASSESSMENT AND FIRST APPELLATE PROCEEDINGS T HEN THE ASSESSEE HAS NO OBJECTION TO SUPPORT HIS CASE BEFORE THE ASS ESSING OFFICER AGAIN. 5. ON CAREFUL CONSIDERATION ON ABOVE SUBMISS ION AT THE VERY OUTSET WE NOTE THAT THERE IS A CONFUSION ABOUT THE DATE OF PAYMENT AND INCORPORATION OF THE ASSESSEE COMPANY. AS PER FACTS UNDISPUTED ITA NO. 3178/ DEL/2013 5 AND ADMITTED BY BOTH THE PARTIES IT IS HELD THAT TH E ASSESSEE COMPANY WAS INCORPORATED ON 5.12.2006 AND THE LEGAL EXISTEN CE OF ASSESSEE COMPANY CAN ONLY BE CONSIDERED FROM THE DATE OF INC ORPORATION I.E. 5.12.2006. THE LD. COUNSEL OF THE ASSESSEE AS WELL AS LD. DR IS ALSO AGREED THAT THE IMPUGNED PAYMENT OF RS. 10,00,000/- WAS MADE ON 23.10.2006 TO THE THIRD ENTITY BY CHEQUE. THE CONT ROVERSY REMAINS THAT WHETHER THE PAYMENT WAS MADE BY ASSESSEE COMPA NY OUT OF BOOKS OF ACCOUNTS OR THE SAME WAS MADE BY M/S B.L.K ASHYAP & SONS LTD. OR ANY OTHER ENTITY TO THE THIRD PARTY. 6. THIS FACT SET OUT BY US HEREINABOVE REQUIRE S EXAMINATION AND VERIFICATION AT THE END OF THE AO IN THE LIGHT OF E XPLANATION, EVIDENCE AND MATERIAL FILED BY THE ASSESSEE BEFORE AUTHORITI ES BELOW HENCE, THE SOLE ISSUE IS RESTORED TO THE FILE OF AO FOR PR OPER EXAMINATION AND VERIFICATION OF THE ISSUE AS STATED ABOVE AFTER AFF ORDING DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE AND WITHOUT BEING PREJUDICED AND INFLUENCED BY THE EARLIER ASSESSMENT ORDER AND FIRST APPELLATE ORDER OF THE CIT(A). BEFORE WE PART WITH THE ORDER, WE ALSO MAKE IT CLEAR THAT OUR OBSERVATIONS IN THIS ORDER AND CONCL USION IN THIS APPEAL SHALL NOT HAVE ANY BEARING ON THE DECISION OF THE A PPEAL PERTAINING TO ASSESSMENT YEAR 2008-09. FINALLY MAIN GROUND NO. 6 OF THE ASSESSEE ITA NO. 3178/ DEL/2013 6 IS DEEM TO BE ALLOWED FOR STATISTICAL PURPOSE IN TH E MANNER AS INDICATED ABOVE AND GROUND NO. 7, 8, 9, 10 AND 11 S UPPORTIVE TO GROUND NO. 6 ARE ALSO DEEM TO BE ALLOWED FOR STATIS TICAL PURPOSES. 7. GROUND NO. 12 PERTAINING TO LEVY OF INTEREST U /S 234 (B) OF THE ACT IS SUBSEQUENTLY TO THE MAIN GROUND AND SINCE MAIN G ROUND OF THE ASSESSEE HAS BEEN RESTORED TO THE FILE OF AO, THERE FORE, CONSEQUENTIAL GROUND NO. 12 BEING CONSEQUENTIAL IS ALSO RESTORED TO THE FILE OF AO FOR ADJUDICATION IN ACCORDANCE WITH THE OUTCOME OF THE MAIN GROUND OF THE ASSESSEE. IN THE RESULT, APPEAL OF THE ASSESSEE IS DEEM TO BE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 26 TH MARCH , 2015. SD/- SD/- (S.V.MEHROTRA) (C.M.GARG) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED 26 TH MARCH, 2015 B.RUKHAIYAR COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI. BY ORDER AR, ITAT N. DELHI ITA NO. 3178/ DEL/2013 7 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 2 4 .03.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 25.03.2015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER