ITO, New Delhi V. M/s. Niharika Impex Pvt. Ltd., New Delhi

ITA 328/DEL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1838 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 09-12-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 20-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJANA
• Keywords: Additional evidence; Accommodation entries
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : E : NEW DELHI BEFORE SHRI R.S. SYAL, AM & SHRI C.M. GARG, JM ITA NO.328/DEL/2012 ASSESSMENT YEAR : 2001-02 ITO, WARD-13(2), CR BUILDING, NEW DELHI. VS. NIHARIKA IMPEX PVT. LTD., R-684, NEW RAJINDER NAGAR, NEW DELHI. PAN: AABCN4689G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANDEEP SAPRA, ADVOCATE DEPARTMENT BY : SHRI P. DAM KANUNJANA, SR. DR DATE OF HEARING : 09.12.2015 DATE OF PRONOUNCEMENT : 10.12.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 25.8.2011 IN RELATION TO THE ASSESSME NT YEAR 2001-02. ITA NO.328/DEL/2012 2 2. THE ONLY ISSUE RAISED IN THIS APPEAL THROUGH VAR IOUS GROUNDS IS AGAINST THE DELETION OF ADDITION OF RS.10 LAC MADE BY THE AO U/S 68 OF THE ACT ON ACCOUNT OF SHARE APPLICATION MONEY CLAIM ED TO HAVE BEEN PAID BY M/S ANKUR MARKETING LTD. TO THE ASSESSEE C OMPANY. THE FACTS APROPOS THIS ISSUE ARE THAT SOME INFORMATION WAS RE CEIVED FROM THE INVESTIGATION WING ABOUT THE ACCOMMODATION ENTRIES RECEIVED BY THE ASSESSEE. ON SUCH BASIS, THE AO RESORTED TO REOPEN ING OF ASSESSMENT. DURING THE COURSE OF SUCH ASSESSMENT PROCEEDINGS, I T WAS OBSERVED THAT OUT OF FRESH SHARE APPLICATION MONEY OF RS.23 LAC, THE ASSESSEE HAD SHOWN TO HAVE RECEIVED A SUM OF RS.10 LAC FROM M/S ANKUR MARKETING LTD. IT WAS NOTICED BY THE AO THAT M/S ANKUR MARKE TING LTD. WAS SUBJECTED TO CERTAIN INQUIRIES AND INVESTIGATIONS B Y THE INVESTIGATION WING, WHICH TRANSPIRED THAT IT HAD NO CREDIT WORTHI NESS AND WAS ACTING AS AN ENTRY OPERATOR. SUMMONS U/S 131 WERE ISSUED O N 9.9.2008 TO THE PRINCIPAL OFFICER OF THIS COMPANY REQUIRING HIM TO ATTEND HIS OFFICE ALONG WITH BOOKS OF ACCOUNT. SUCH NOTICE WAS RECEIV ED BACK WITH THE POSTAL REMARKS: NO SUCH COMPANY. LOCAL INQUIRIES WERE ALSO GOT MADE AT THE GIVEN ADDRESS THROUGH INSPECTOR OF THE WARD, WHO REPORTED THAT ITA NO.328/DEL/2012 3 NO SUCH COMPANY WAS FOUND TO BE OPERATING FROM THE GIVEN ADDRESS. THE AO ALSO CALLED FOR THE BANK STATEMENT OF THIS C OMPANY FROM THE CONCERNED BANK, A PERUSAL OF WHICH REVEALED THAT TH ERE WERE SEVERAL DEPOSITS IN THE BANK STATEMENT AND CREDIT ENTRIES W ERE MADE AGAINST SUCH DEPOSITS. THE ASSESSEE WAS CONFRONTED WITH THE REP ORT OF INVESTIGATION WING AND THE FINDINGS REVEALED AS A RESULT OF THE I NDEPENDENT INQUIRY CONDUCTED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY AN ADVERSE INFERENCE BE NOT DRAWN REGARDING THE CAPACITY OF SUCH ALLEGED COMPANY. FIN DING NO MERIT IN THE ASSESSEES CONTENTION, AN ADDITION OF RS.10 LAC WAS MADE U/S 68 OF THE ACT. THE ASSESSEE FILED AN AFFIDAVIT FROM DIRECTOR OF M/S ANKUR MARKETING LTD. BEFORE THE LD. CIT(A) CONFIRMING TO HAVE MADE INVESTMENT OF RS.10 LAC IN THE ASSESSEE COMPANY. SU CH ADDITIONAL EVIDENCE WAS SENT TO THE AO FOR GIVING REMAND REPOR T. AFTER CONSIDERING SUCH ADDITIONAL EVIDENCE, THE LD. CIT(A ) CHOSE TO DELETE THE ADDITION. THE REVENUE IS AGGRIEVED AGAINST SUCH DE LETION OF ADDITION. ITA NO.328/DEL/2012 4 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTICED THAT THE ASSESSE E DID NOT FURNISH ANY EVIDENCE AT THE ASSESSMENT STAGE ABOUT THE GENUINEN ESS OF THE TRANSACTIONS TO THE SATISFACTION OF THE AO. THE IN QUIRIES CONDUCTED OR CAUSED TO BE CONDUCTED BY THE AO DID NOT YIELD ANY POSITIVE RESULT FAVORING THE ASSESSEE. WHEN THE ASSESSEE WAS CONFRO NTED WITH THE SAME, IT DID NOT HAVE ANY ANSWER. IT WAS ONLY DURING THE COURSE OF THE FIRST APPELLATE PROCEEDINGS THAT THE ASSESSEE FILED AN AF FIDAVIT CLAIMED TO HAVE COME FROM ONE DIRECTOR OF ANKUR MARKETING LTD. THE LD. CIT(A) SENT THE SAME TO THE AO AND HAS RECORDED IN THE IMPUGNED ORDER ON PAGE 6 THAT: HOWEVER, THE AO HAS NOT COMMENTED ON THESE A SPECTS IN THE REMAND REPORT. WHEN WE PERUSE THE TWO REMAND REPOR TS DATED 12.1.2011 AND 2.2.2011, COPIES OF WHICH HAVE BEEN P LACED ON RECORD, WE FIND THAT IN THE FIRST REMAND REPORT THERE IS A DIR ECT REFERENCE TO THE AO CONDUCTING CERTAIN INQUIRY AND INVESTIGATION ABOUT M/S ANKUR MARKETING LTD. SUMMONS U/S 131 WERE ONCE AGAIN ISSUED AT THE ADDRESS GIVEN BY THE DIRECTOR OF THE COMPANY IN THE AFFIDAVIT SUBMIT TED DURING THE COURSE OF THE FIRST APPELLATE PROCEEDINGS. IN THE SECOND REMAND REPORT, THE AO ITA NO.328/DEL/2012 5 HAS OBSERVED THAT THE SUMMONS DATED 10.1.2011 ISSUE D FOR APPEARANCE ON 20.1.2011 WERE AGAIN RECEIVED BACK UNSERVED WITH THE POSTAL REMARKS: LEFT WITHOUT ADDRESS. THESE RECORDINGS I N THE REMAND REPORT AMPLY DEMONSTRATE THE INACCURACIES IN THE IMPUGNED ORDER REGARDING THE CONTENTS OF THE REMAND REPORT. THERE IS ENOUGH JUS TIFICATION FOR NOT ACCEPTING THE IMPUGNED ORDER ON THIS SCORE BECAUSE OF THE NON-SERVICE OF THE SUMMONS U/S 131 ONCE AGAIN AT THE ADDRESS GIVEN BY THE DIRECTOR IN THE AFFIDAVIT FILED FOR THE FIRST TIME BEFORE THE L D. CIT(A). THIS CORRECT FACTUAL POSITION IS IN SHARP CONTRAST TO THE LD. CI T(A) RECORDING THAT THE AO HAS NOT ADVERSELY COMMENTED ON THESE ASPECTS IN THE REMAND REPORT. THE IMPUGNED ORDER, THEREFORE, DOES NOT MERIT ACCEP TANCE ON THIS SCORE. 4. BE THAT AS IT MAY, THE LD. AR CONTENDED THAT THE CONTENTS OF REMAND REPORT ABOUT NON-SERVICE OF SUMMONS AT THE ADDRESS GIVEN BY THE DIRECTOR OF THE COMPANY IN THE AFFIDAVIT, WERE NOT CONFRONTED TO THE ASSESSEE. WE FIND THAT THOUGH THERE IS SOME DISCU SSION ABOUT THIS ASPECT IN THE REMAND REPORT, BUT THERE IS NO MENTION ABOUT THE FACT OF NON- SERVICE HAVING BEEN BROUGHT TO THE NOTICE OF THE AS SESSEE, WHICH OUGHT TO ITA NO.328/DEL/2012 6 HAVE BEEN DONE. UNDER THE GIVEN CIRCUMSTANCES, WE S ET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF THE AO FOR CONFRONTING THE ASSESSEE WITH THE NON-SERVICE OF SU MMONS AND GIVING ONE MORE OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE DIRECTOR OF THE COMPANY IN SUPPORT OF THE GENUINENESS OF THE TRANSA CTION OR DOING ANY OTHER THING(S) WHICH THE AO FEELS LIKE DOING TO SAT ISFY HIMSELF ABOUT THE GENUINENESS OF SHARE CAPITAL CONTRIBUTED BY M/S ANK UR MARKETING LTD. IF, AGAIN THE ASSESSEE FAILS TO SATISFY THE AO ON T HIS COUNT, THE AO IS FREE TO MAKE ADDITION U/S 68 OF THE ACT. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 10.12.201 5. SD/- SD/- [C.M. GARG] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 10 TH DECEMBER, 2015. DK ITA NO.328/DEL/2012 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.