DCIT, Ghaziabad V. Shri Davinder Singh Chawla, Ghaziabad

ITA 3387/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5672 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 08-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Additional evidence; Deemed dividend; Set aside
• Section: 143(3); 142(1); 2(22)(e); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEM BER & SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO.-3387/DEL/2016 ASSESSMENT YEAR: 2011-12 DY. COMMISSIONER OF INCOME TAX CIRCLE-1, GHAZIABAD VS . SHRI DAVINDER SINGH CHAWLA R-2/9, RAJ NAGAR, GHAZIABAD APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : MS. RAKHI VIMAL, SR. DR ORDER PER ANADEE NATH MISSHRA, A.M.: [A] THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE IMPUGNED APPELLATE ORDER DATED 30.03.2016 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- GHAZI ABAD [IN SHORT, LD. CIT(A)] PERTAINING TO ASSESSMENT Y EAR 2011- 12. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF AP PEAL :- 1. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT IN DELETING ADDITION OF RS.1,44,00,000/-WHEN THE ASSES SEE HAS FAILED TO PROVE THE CAPACITY, IDENTITY AND CREDITWORTHINESS OF THE LENDERS. 2 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 2. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT IN DELETING ADDITION OF RS.1,44,00,000/-000/- AS THE PLETHORA OF DECISIONS OF THE HON'BLE SUPREME CO URT AND HIGH COURTS MADE IT CLEAR THAT ASSESSEE IS EXPE CTED TO ESTABLISH PROOF OF IDENTITY OF HIS CREDITORS, CAPAC ITY OF CREDITORS TO ADVANCE MONEY AND GENUINENESS OF THE TRANSACTIONS. 3. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT IN DELETING ADDITION AS PER PROVISION TO SECT ION 2(22)(E) OF THE I.T. ACT OF RS.1,13,83,287/-(149418 11 - 3558524) WHEN ASSESSEE IS HAVING SUBSTANTIAL INTERE ST IN THE COMPANIES FROM WHERE LOAN WAS TAKEN. 4. THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT IN DELETING ADDITION AS PER PROVISION TO SECTION 2(22) (E) OF THE I.T. ACT OF RS. 1,13,83,287/-(14941811 -3558524 ) WHEN ASSESSEE WAS NOT FILED ANY EXPLANATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS DESPITE SPECIFIC Q UERY BY NOTICE U/S 142(1) DATED 20.03.2016. 5. THEREFORE, THE ORDER OF LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED. [B] VIDE THE ASSESSMENT ORDER DATED 31.03.2014 PASSED U/S 143(3) OF INCOME TAX ACT, THE TOTAL INCOME OF T HE ASSESSEE WAS DETERMINED AT 4,47,87,971/-, ROUNDED O FF TO 4,47,87,970/- (AND AGRICULTURAL INCOME OF RS. 2,70, 000/- FOR RATE PURPOSES) AS AGAINST RETURNED INCOME OF RS . 17,01,775/-. THE RELEVANT PORTION OF THE ASSESSMENT ORDER IS REPRODUCED AS UNDER :- 3 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 4 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 5 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) [C] THE ASSESSEE FILED APPEAL BEFORE THE LD. C IT(A) WHO, VIDE IMPUGNED APPELLATE ORDER DATED 30.03.2016 ALLO WED PARTIAL RELIEF TO THE ASSESSEE WHILE HE SUSTAINED A DDITIONS OF RS. 1,44,00,000/- MADE U/S 68 OF INCOME TAX ACT AND ADDITIONS OF RS. 1,13,83,287/- AS DEEMED DIVIDEND U /S 2(22)(E) OF INCOME TAX ACT. THE RELEVANT PORTION O F THE AFORESAID IMPUGNED APPELLATE ORDER DATED 30.03.2016 OF THE LD. CIT(A) IS REPRODUCED AS UNDER :- 6 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 7 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 8 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 9 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 10 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 11 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 12 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 13 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 14 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) 15 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) [D] THIS PRESENT APPEAL BEFORE US WAS FILED B Y REVENUE AGAINST THE AFORESAID IMPUGNED APPELLATE ORDER DATE D 30.03.2016. AT THE TIME OF HEARING BEFORE US, REVEN UE WAS REPRESENTED BY LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE, MS. RAKHI VIMAL. HOWEVER, THE ASSES SEE WAS NEITHER PRESENT IN PERSON NOR WAS REPRESENTED B Y ANY AUTHORISED REPRESENTATIVE. ON AN EARLIER DATE OF HE ARING FIXED ON 11.04.2018 HEARING WAS ADJOURNED, AT THE W RITTEN REQUEST OF SH. SUMIT BAJAJ, ADVOCATE. ON SUBSEQUENT DATES OF HEARINGS FIXED ON 25.09.2018, 17.12.2018, 13.08. 2019, 13.05.2019, 08.07.2019, 16.09.2019 AND 04.11.2019 A LSO; NEITHER THE ASSESSEE WAS PRESENT IN PERSON NOR WAS 16 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) REPRESENTED BY ANY AUTHORISED REPRESENTATIVE. IN TH E ABSENCE OF ANY REPRESENTATION FROM THE ASSESSEES S IDE WE ARE DECIDING THIS APPEAL AFTER HEARING THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE (LD. SR.DR FOR SHORT) , IN ACCORDANCE WITH RULE 25 OF INCOME TAX (APPELLATE TR IBUNAL) RULES, 1962. AT THE TIME OF HEARING, THE LD. DEPART MENTAL REPRESENTATIVE DREW OUR ATTENTION TO THE FACT THAT NOWHERE IN THE IMPUGNED APPELLATE ORDER DATED 30.03.2016 OF THE LD. CIT(A), HAS THE LD. CIT(A) MENTIONED, THAT HE H AS ADMITTED THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT (A). YET, EVEN WITHOUT SPECIFICALLY ADMITTING THE ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE DURING APPELLATE PROCEEDI NGS BEFORE THE LD. CIT(A), PARTIAL RELIEF HAS BEEN GRAN TED BY LD. CIT(A) TO THE ASSESSEE ON THE BASIS OF ADDITIONAL E VIDENCES. SHE SUBMITTED THAT THE ADDITIONAL EVIDENCES FURNISH ED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS BEFOR E THE LD. CIT(A) SHOULD BE IGNORED IN THE ABSENCE OF SPECIFIC ADMISSION OF THE SAME BY THE LD. CIT(A), AND THE OR DER OF THE ASSESSING OFFICER SHOULD BE UPHELD. [D.1] AFTER HEARING THE LD. DR AND ON PERUSAL OF T HE RECORDS, WE FIND THAT THE LD. CIT(A) HAS INDEED ALL OWED PARTIAL RELIEF TO THE ASSESSEE ON THE BASIS OF ADDI TIONAL EVIDENCES FURNISHED BY THE ASSESSEE DURING APPELLAT E PROCEEDINGS BEFORE LD. CIT(A). HOWEVER, WE FIND NO SPECIFIC MENTION IN THE IMPUGNED APPELLATE ORDER DATED 30.03.2016 OF THE LD. CIT(A) TO THE EFFECT THAT THE ADDITIONAL 17 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) EVIDENCES HAD BEEN ADMITTED BY HIM. MOREOVER, WE AL SO FIND THAT THE LD. CIT(A) HAS FAILED TO RECORD THE R EASONS IN ACCORDANCE WITH RULE 46A(2) OF INCOME TAX RULES, 19 62. FURTHER, THE LD. CIT(A) IS DUTY BOUND, UNDER RULE 4 6A(3) TO ALLOW A REASONABLE OPPORTUNITY TO THE ASSESSING OFF ICER (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO CROSS-EXA MINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PR ODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. HOWE VER, THE LD. CIT(A) HAD FAILED TO PROVIDE SUCH REASONABLE OP PORTUNITY TO THE ASSESSING OFFICER. THE LD. CIT(A) HAD ONLY P ROVIDED A PERFUNCTORY OPPORTUNITY, AND A VERY SHORT TIME TO T HE ASSESSING OFFICER. THE LETTER ASKING THE ASSESSING OFFICER TO SEND REPORT IS DATED 08.03.2016 WHEREAS THE TIME WA S ALLOWED TO THE ASSESSING OFFICER UP TO AN EARLIER D ATE 16.03.2015. IT IS NOT UNDERSTOOD HOW A LETTER DATED 08.03.2016 CAN BE RESPONDED TO BY THE ASSESSING OFF ICER BY AN EARLIER DATE OF 16.03.2015. EVEN IF 16.03.2015 I S TREATED AS A TYPOGRAPHICAL MISTAKE, AND READ AS 16.03.2016, EVEN THEN, THE TIME ALLOWED BY THE LD. CIT(A) TO THE ASS ESSING OFFICER WAS OF ONLY A FEW DAYS IN THE MONTH OF MARC H. THEREFORE, WE ARE OF THE VIEW THAT THE LD. CIT(A) H AD FAILED TO PROVIDE REASONABLE OPPORTUNITY TO THE ASSESSING OFFICER FOR WHICH THE ASSESSING OFFICER WAS ENTITLED UNDER RULE 46A(3) OF INCOME TAX RULES. IN VIEW OF FOREGOING, W E ARE OF THE VIEW THAT THE LD. CIT(A) HAD FAILED IN DUE COMP LIANCE OF RULE 46A(2) AS WELL AS RULE 46A(3) OF INCOME TAX RU LES; IN GRANTING PARTIAL RELIEF TO THE ASSESSEE ON THE BASI S OF 18 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE DURI NG THE APPELLATE PROCEEDINGS BEFORE LD. CIT(A). THEREFORE, WE SET ASIDE THE IMPUGNED APPELLATE ORDER DATED 30.03.2016 OF THE LD. CIT(A), AND DIRECT HIM TO PASS A FRESH ORDER ON MERITS AFTER FOLLOWING DUE PROCEDURE PRESCRIBED UNDER RULE 46A OF INCOME TAX RULES. [E] APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPO SES. ORDER PRONOUNCED IN THE OPEN COURT ON 18/02/2020 SD/- SD/- (AMIT SHUKLA) (ANADEE NATH MISSHR A) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18/02/2020 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT, NEW DELHI DATE OF DICTATION 05/02/2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06 /02 /2020 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 19 ITA NO. 3387/DEL/2016 (DAVINDER SINGH CHAWLA) DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER