M/s. International Asset Reconstruction Co. Pvt. Ltd., Mumbai V. ITO, New Delhi

ITA 3192/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7213 (ITAT-DELHI)
• Duration Of Justice: 4 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 21-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTAHA
• Assessee Lawyers: RA JEEV WAGLAY
• Keywords: Unexplained cash credit; Additional evidence; Notional interest
• Section: 68

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI I.C.SUDHIR , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER I TA NO . 3192/DEL/2012 (ASSESSMENT YEAR: 2008 - 09 ) INTERNATIONAL ASSET RECONSTRUCTION CO. PVT. LTD., A - 508, 5 TH FLOOR, ATRIUM KANAKIA SPACES, ANDHERI KURLA ROAD, ANDHERI (EAST), MUMBAI VS. ITO, RANGE - 11(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJEEV WAGLAY, ADV REVENUE BY: SH. T. VASANTAHA, SR. DR DATE OF HEARING 26/04/ 2016 DATE OF PRONOUNCEMENT 21 / 06 /2016 O R D E R PER PRASHANT MAHARISHI , A . M . 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT ( A) - XV, NEW DELHI DATED 01.05.2012 FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL AS UNDER: - 1) THE ASSESSING OFFICER HAS ERRED IN ADDING AN AMOUNT OF RS. 34,93,068/ - AS INCOME OF THE APPELLANT COMPANY BEING IN HIS OPINION ALLEGED UNEXPLAINED CASH CREDIT U/S 68 OF INCOME TAX ACT, 1961, DUE TO FAILURE TO PROVE THE GENUINENESS AND CREDIBILITY OF INVESTORS CONTRIBUTION TOWARDS SHARE CAPITAL OF THE APPELLANT COMPANY IN THE RELEVANT PREVIOUS YEAR AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XV HAS FURTHER ERRED IN SUSTAINING THE SAID ADDITION. 2) THE ASSESSING OFFICER HAS ERRED IN ADDING INCOME OF RS. 7,57,688/ - AS NOTIONAL INTEREST RECEIVED WITHOUT UNDERSTANDING THE TRANSACTION OF PURCHASING NON PERFORMING ASSET FROM A BANK FOR RECONSTRUCTION OF THE BAD DEBT, WHICH IS THE MAIN BUSINESS OF THE APPELLANT COMPANY AND THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) - XV HAS FURTHER ERRED IN SUSTAINING THE SAID ADDITION. 3. THE ASSESSEE COMPANY IS ENGAGED IN BUSINESS OF SECURITIZATION AND ASSET RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY ACT 2002. IT ACTS AS A N INVESTMENT MANAGER FOR VARIOUS TRUST SET UP FOR SECURITIZATION. THESE FINANCIAL ASSETS ARE THEN ACQUIRED UNDER SEPARATE TRUST AND COMPANY MAY ALSO DIRECTLY ACQUIRE THE RECONSTRUCTED COMPANY. PAGE 2 OF 3 4. THE BRIEF FACTS OF THE CASE IS THAT ASSESSEE IS A PRIVATE LIMI TED COMPANY WHICH FILED ITS RETURN OF INCOME SHOWING NIL INCOME ON 31.03.2009 WHICH WAS PROCESSED ON 29.01.2010. SUBSEQUENTLY, THE CASE WAS PICKED UP FOR SCRUTINY. DURING THE YEAR COMPANY HAS RAISED THE SHARE CAPITAL OF RS. 5.88 CRORES . A SUM OF RS. 232870 8/ - WAS RECEIVED FROM MR. ADIT JAIN AND RS. 1164360/ - FROM SHRI M. K. GIRINATH. DURING THE COURSE OF HEARING ASSESSEE DID NOT SUBMIT THE CONFIRMATION WITH RESPECT TO THESE TWO PARTIES AND THEREFORE ADDITION WAS MADE U/S 68 OF THE INCOME TAX ACT. FURTHER, A DDITION OF RS. 7.57 LACS WAS ALSO MADE ON ACCOUNT OF INTEREST ON NON PERFORMING ADVANCES. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT ( A) WHO IN TURN CONFIRMED THE ADDITION AS REQUISITE DETAILS WERE NOT FILED BEFORE HIM ALSO. 5. BEFORE US THE LD AR HAS SUBMITTED A PAPER BOOK ALONG WITH WRITTEN SUBMISSION AND STATED NOW COMPLETE INFORMATION WITH RESPECT TO BOTH THE CREDITORS IS AVAILABLE WITH THE ASSESSEE AND SAME IS PRODUCED BEFORE US WITH A REQUEST TO ENTERTAIN THIS ADDITIONAL EV IDENCE. THE INFORMATION SUBMITTED IS RETURN OF INCOME OF THOSE TWO CREDITORS ALONG WITH THEIR PAN CARD AND THEIR BANK STATEMENTS. THEREFORE HIS SUBMISSION WAS THAT IN VIEW OF THIS EVIDENCES THE ADDITION HAS WRONGLY BEEN MADE IN THE HANDS OF THE ASSESSEE. H E FURTHER, REFERRED TO THE APPLICATION FILED ON 04.11.2015 FOR ADMISSION OF ADDITIONAL EVIDENCE. 6. LD DR OBJECT ED TO THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE WITH A REQUEST FOR ADMISSION STATING THAT ASSESSEE HAS FAILED TO SUBMIT IT BEFORE LOWER AUTHO RITIES DESPITE ADEQUATE OPPORTUNITY. 7. AS THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE ARE RELEVANT FOR DECIDING THE ISSUE AND FURTHER, IT WAS STATED THAT AS THESE DOCUMENTS WERE REQUIRED TO BE COLLECTED FROM THE LENDER COULD NOT BE COLLECTED AT THE T IME OF HEARING OF THE CASES DUE TO THE FACT THAT THESE LENDERS COULD NOT BE CONTACTED. IT IS FURTHER APPARENT THAT THERE WAS A CHANGE OF COUNSEL TOO AS PLEADED BY THE ASSESSEE WHERE THE CASE OF THE ASSESSEE COULD NOT BE REPRESENTED IN THE PROPER MANNER. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE WE SET ASIDE THE APPEAL TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO CONSIDER THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND THAN THE DECIDE THE ISSUE AFRESH AFTER GRANTING ADEQUATE OF HEARING TO THE ASSESSEE. PAGE 3 OF 3 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 1 / 06 /2016 . - S D / - - S D / - ( I.C.SUDHIR ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 1 / 06 / 2016 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI