M/s. Behl Promoters & Realtors Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 3407/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3470 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 03-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R C DANDAY
• Keywords: Depreciation; Non-deduction of tax
• Section: 143(3); 133(6); 131; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.3407/DEL/2014 ASSESSMENT YEAR : 2009-10 BEHL PROMOTERS & REALTORS PVT. LTD., B-29, PAMPOSH ENCLAVE, NEW DELHI. VS. ACIT, CENTRAL CIRCLE- 21, NEW DELHI. PAN : AAMPB3279L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KAPIL GOEL, ADV. DEPARTMENT BY : SHRI R. C. DANDAY, SR.DR DATE OF HEARING : 30-08-2017 DATE OF PRONOUNCEMENT : 30-10-2017 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 24.03.2014 OF CIT(A)-XII, NEW DELHI RELATING TO ASS ESSMENT YEAR 2009-10. 2. IN GROUND NO.1, THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT(A) IN UPHOLDING THE DISALLOWANCE OF RS.12,05,421/- MADE B Y THE ASSESSING OFFICER ON ACCOUNT OF EXPENSES AND DEPRECIATION. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY AND FILED ITS RETURN OF INCOME ON 30.09.2009 DECLARING TOTAL INCO ME OF RS.3,00,817/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE COMPANY HAS SHOWN COMMISSION INCOME AND TR ADING IN FABRIC. 2 ITA NO.3407/DEL/2014 HOWEVER, THE COMMISSION HAS BEEN RAISED ONLY IN THE MONTH OF AUGUST, 2008 AND BOTH PROCEEDS OF RS.5,00,000/- EACH WERE RECEIV ED ON THE SAME DAY. HOWEVER, NO TDS WAS DEDUCTED BY M/S SATHI PROPERTIE S AND M/S SATHI ASSOCIATES AND FURTHER NO DETAILS ARE MENTIONED IN COPY OF THE BILL REGARDING SERVICES RENDERED BY THE ASSESSEE COMPANY FOR WHICH COMMISSION WAS PAID. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESS EE HAS MADE THE TRADING OF FABRIC ONLY IN THE MONTH OF FEBRUARY AND MARCH, 200 9. NEITHER ANY PAYMENT WAS RECEIVED NOR ANY PAYMENT WAS MADE AGAINST THE S ALE OR PURCHASE. HE OBSERVED THAT ALL PURCHASES WERE MADE FROM M/S STAL LION TEXTILES AND SIMILARLY ALL SALES WERE MADE TO M/S ANSHU GARMENTS PVT. LTD. . HE, THEREFORE, WAS OF THE OPINION THAT THE ASSESSEE HAS NOT DONE ANY BUSINESS IN THE PRESENT YEAR AND THE COMMISSION INCOME SHOWN BY THE ASSESSEE IS THE ASSE SSEES OWN MONEY WHICH IS BEING INTRODUCED THROUGH THIS ROUTE. ACCORDING TO THE ASSESSING OFFICER, THE EXPENSES CLAIMED BY THE ASSESSEE DURING THE YEAR AR E NOT ALLOWABLE AS THE ASSESSEE COMPANY HAS NOT DONE ANY WORK DURING THE Y EAR. HE, THEREFORE, DISALLOWED THE EXPENSES CLAIMED UNDER THE HEAD ADMI NISTRATIVE & SELLING EXPENSES AMOUNTING TO RS.9,62,282/- AND DEPRECIATIO N AMOUNTING TO RS.2,43,139/- AND ACCORDINGLY MADE ADDITION OF RS.1 2,05,421/- TO THE TOTAL INCOME OF THE ASSESSEE. 3 ITA NO.3407/DEL/2014 4. IN APPEAL, LD. CIT(A) SUSTAINED THE ADDITION MAD E BY THE ASSESSING OFFICER. WHILE DOING SO, HE OBSERVED THAT THE ASSE SSEE HAS RECEIVED SMALL COMMISSION ONLY TWICE FOR WHICH NO TDS WAS DEDUCTED AND NO DETAILS WERE MENTIONED IN THE COPY OF BILL REGARDING SERVICES RE NDERED BY THE ASSESSEE FOR WHICH COMMISSION WAS PAID TO THEM. ACCORDING TO HI M, THE ASSESSEE HAS VIRTUALLY DONE NO BUSINESS ACTIVITY AND HAS CLAIMED HUGE EXPENSES. FURTHER, THE ASSESSEE BEFORE HIM COULD NOT PROVE IF THERE IS ONG OING BUSINESS ACTIVITY. HE ACCORDINGLY UPHELD THE ACTION OF THE ASSESSING OFFI CER. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD. COUNSEL FOR THE ASSESSEE STRONGLY OBJECTED T O THE ORDER OF THE CIT(A). HE SUBMITTED THAT IF THE PAYER DOES NOT DEDUCT TDS, THE CHARACTER OF INCOME CANNOT CHANGE. REFERRING TO PAGE 104 OF PAPER BOOK , LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO DISALLOWANCE HAS BEEN MA DE IN THE ASSESSMENT ORDER PASSED U/S 143(3) FOR ASSESSMENT YEAR 2008-09 UNDER IDENTICAL CIRCUMSTANCES. FURTHER, ASSESSING OFFICER NEVER CALLED FOR THE BOO KS OF ACCOUNT. REFERRING TO PAGE 58 OF PAPER BOOK, LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE SCHEDULE 8 : ADMINISTRATIVE & SELLIN G EXPENSES, WHICH INCLUDES THE MAJOR EXPENSES SUCH AS RENT, SALARY AND MANAGER IAL REMUNERATION, ETC.. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS AS SESSED THE INCOME AS BUSINESS 4 ITA NO.3407/DEL/2014 INCOME, WHICH WAS CLAIMED BY THE ASSESSEE IN THE RE TURN OF INCOME FILED. THEREFORE, NO DISALLOWANCE SHOULD HAVE BEEN MADE. 7. LD. DR ON THE OTHER HAND STRONGLY SUPPORTED THE ORDER OF THE CIT(A). HE SUBMITTED THAT NO GENUINE BUSINESS ACTIVITY HAS BEE N CARRIED OUT BY THE ASSESSEE. THEREFORE, UNDER THESE CIRCUMSTANCES, THE REVENUE A UTHORITIES ARE FULLY JUSTIFIED IN DISALLOWING ADMINISTRATIVE EXPENSES AND DEPRECIA TION. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE BEFORE US. WE FIND THE ASSE SSING OFFICER DISALLOWED THE ADMINISTRATIVE EXPENSES OF RS.9,62,282/- AND DEPREC IATION OF RS.2,43,139/- ON THE GROUND THAT THE ASSESSEE HAS NOT DONE ANY BUSIN ESS DURING THE YEAR. ACCORDING TO HIM, NO TDS WAS DEDUCTED BY M/S SATHI PROPERTIES AND M/S SATHI ASSOCIATES FROM WHOM THE COMMISSION WAS RECEIVED BY THE ASSESSEE. FURTHER, ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE CO MPANY HAS MADE THE TRADING OF FABRIC ONLY IN THE MONTH OF FEBRUARY AND MARCH, 2009 AND NEITHER ANY PAYMENT WAS RECEIVED NOR ANY PAYMENT WAS MADE AGAIN ST THE SALE OR PURCHASE. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE HA S INTRODUCED ITS OWN MONEY THROUGH THIS ROUTE AND, THEREFORE, THE EXPENSES NOT BEING GENUINELY INCURRED FOR THE PURPOSES OF BUSINESS SHOULD BE DISALLOWED. WE FIND IN APPEAL LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER IN DISAL LOWING THE ADMINISTRATIVE 5 ITA NO.3407/DEL/2014 EXPENSES AND DEPRECIATION. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAS DONE GENUINE BUSINES S AND NO SUCH DISALLOWANCE WAS MADE IN THE PRECEDING YEAR. WE FIND MERIT IN T HE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT MERE NON-DEDUCTION OF TAX BY THE PAYER CANNOT CHANGE THE CHARACTER OF THE INCOME. WE FIND THE AS SESSING OFFICER IN THE ASSESSMENT ORDER HAS ALSO MENTIONED THAT ASSESSEE C OMPANY HAS MADE TRADING OF FABRIC ONLY IN THE MONTH OF FEBRUARY AND MARCH, 200 9. THIS OTHERWISE INDICATES THAT THE ASSESSEE HAS DONE SOME BUSINESS. FURTHER, THE ASSESSING OFFICER HAS COMPUTED THE INCOME OF THE ASSESSEE AS INCOME FROM BUSINESS AND NOT INCOME FROM OTHER SOURCES. WE FURTHER FIND THE MAJOR AMOU NT OF THE ADMINISTRATIVE EXPENSES RELATES TO THE RENT AND SELLING AND MANAGE RIAL REMUNERATION ETC.. MERELY BECAUSE THERE IS MEAGER BUSINESS THE SAME, I N OUR OPINION, CANNOT BE A GROUND TO DISALLOW THE VARIOUS EXPENSES INCURRED BY THE ASSESSEE. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT SUCH EXPENSES AR E BOGUS OR NOT GENUINE. HE HAS MERELY DISALLOWED THE SAME ON THE GROUND THAT T HE ASSESSEE HAS NOT DONE ANY BUSINESS DURING THE YEAR. AS MENTIONED EARLIER THE ASSESSING OFFICER HIMSELF HAS MENTIONED IN THE BODY OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS DONE TRADING OF FABRIC IN THE MONTH OF FEBRUARY AND MARCH, 2009. CONSIDERING THE TOTALITY OF FACTS OF THE CASE, WE ARE OF THE CO NSIDERED OPINION THAT THE EXPENSES CLAIMED BY THE ASSESSEE UNDER THE HEAD ADM INISTRATIVE AND SELLING 6 ITA NO.3407/DEL/2014 EXPENSES AND THE DEPRECIATION CANNOT BE DISALLOWED. WE THEREFORE SET-ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICE R TO ALLOW THE EXPENSES. THE FIRST GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 9. IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT(A) IN DISALLOWING THE UNSECURED LOAN OF RS.1,00,05,000/-. 10. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSE E COMPANY HAS RECEIVED A LOAN OF RS.25,00,000/- FROM SHRI TANVIR UR RAHMAN W HICH WAS UTILIZED BY THE ASSESSEE FOR BOOKING MADE IN M/S NAGPAL BUILDERS PV T. LTD.. THE SAID BOOKING WAS CANCELLED AND AN AMOUNT OF RS.30,00,000/- WAS R ECEIVED BACK FROM M/S NAGPAL BUILDERS P. LTD. ON 03.11.2008 AND THE SAID AMOUNT WAS UTILIZED BY THE ASSESSEE TO TRANSFER THE SAME TO ANOTHER ACCOUNT AN D THE SAME LOAN AMOUNT WAS OUTSTANDING AT THE END OF THE FINANCIAL YEAR. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF THE LOAN. SIN CE THE ASSESSEE, ACCORDING TO HIM, FAILED TO DO SO AND IN ABSENCE OF ANY CONFIRMA TION FILED BY THE ASSESSEE, THE ASSESSING OFFICER MADE ADDITION OF RS.25,00,000/- T O THE TOTAL INCOME OF THE ASSESSEE. 11. SIMILARLY, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE COMPANY HAS NOT SHOWN ANY WORK DURING THE YEAR BUT HAS RAISED U NSECURED LOANS FROM M/S TKS PROJECT P. LTD. AND M/S D.D. TOWNSHIP LTD. FOR RS.5,00,000/- AND 7 ITA NO.3407/DEL/2014 RS.75,00,000/- RESPECTIVELY. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF THE LOAN. IN SUPPORT OF ITS CLA IM, THE ASSESSEE COMPANY JUST FILED ONLY THE CONFIRMATION WITHOUT FILING THE COPY OF ITR AND CAPACITY TO PROVE THE GENUINENESS OF THE TRANSACTIONS. IN VIEW OF TH E ABOVE, THE ASSESSING OFFICER HELD THAT THE ASSESSEE COULD NOT SUBSTANTIATE THE C LAIM. HE ACCORDINGLY MADE ADDITION OF RS.80,00,000/-. THUS, HE MADE TOTAL AD DITION OF RS.1,05,00,000/- TO THE TOTAL INCOME OF THE ASSESSEE. 12. BEFORE THE CIT(A), IT WAS SUBMITTED THAT THE AS SESSING OFFICER HAS MADE THE ADDITION ON GENERAL ALLEGATIONS THAT DOCUMENTAR Y EVIDENCE HAS NOT BEEN FURNISHED DURING THE ASSESSMENT PROCEEDINGS. IT WA S ARGUED THAT NO SUMMONS U/S 133(6) OF THE I.T. ACT HAS BEEN ISSUED TO VERIF Y THE TRANSACTION. IT WAS SUBMITTED THAT THE ASSESSEE HAS FILED ALL THE DETAI LS TO PROVE THE IDENTITY, CREDITWORTHINESS AS WELL AS GENUINENESS OF THE AMOU NT RECEIVED FROM THE ABOVE PARTIES. HOWEVER, THE ASSESSING OFFICER WITHOUT GO ING THROUGH THE DETAILS FURNISHED BEFORE HIM AND WITHOUT GIVING ANY REASONA BLE OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF TRANSA CTION HAS MADE THE ADDITION. VARIOUS DECISIONS WERE BROUGHT TO THE NOTICE OF THE CIT(A) FOR THE PROPOSITION THAT THE ADDITION MADE BY THE ASSESSING OFFICER AMO UNTING TO RS.1,05,00,000/- IS NOT JUSTIFIED. 8 ITA NO.3407/DEL/2014 12.1 HOWEVER, LD. CIT(A) WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE AND UPHELD THE ADDITION MADE BY THE AS SESSING OFFICER BY OBSERVING AS UNDER :- 4.1 I HAVE CONSIDERED THE GROUND RAISED IN APPEAL AND THE FACTS OF THE CASE. I HAVE ALSO CONSIDERED THE SUBMISSION FILED BY THE AR OF T HE APPELLANT. 4.2 THE APPELLANT HAS RAISED GROUND AGAINST THE ADD ITION OF RS.1,00,05,000/- MADE ON ACCOUNT OF UNPROVEN UNSECURED LOAN. THE ASSESSI NG OFFICER HAS DISALLOWED THE AMOUNT HOLDING THAT GENUINENESS OF THE LOAN AND CAPACITY TO PROVE THE CREDITWORTHINESS OF THE PERSONS IS NOT PROVED. THE APPELLANT SUBMITTED THAT THE SAID AMOUNT OF RS.1,00,05,000/- INCLUDES RS.25, 00,000/- FROM TANVIR UR REHMAN, RS.5,00,000/- FROM TKS PROJECTS PVT. LTD., RS.75,00,000/- FROM DD TOWNSHIP LTD. HOWEVER IT IS EVIDENT THAT THERE IS NOTHING TO PROVE THE GENUINENESS OF THE SAID LOANS. IT IS FOR THE ASSES SEE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE PERSONS WHO HAVE GIVEN THE LOAN. FURTHER, AS THE APPELLANT HAD NOT DONE ANY BUSINESS THE REASON FOR WHICH THE LOANS WERE TAKEN IS ALSO NOT JUSTIFIED. DURING THE APPEAL PROCEEDINGS ALSO THE APPELLANT HAS NOT PROVED THE GENUINENESS OF THE LOA NS HENCE I AM FORCED TO AGREE WITH THE ASSESSING OFFICER ON THE ISSUE. THE CASE LAW RELIED UPON BY THE APPELLANT IS DISTINGUISHABLE ON FACTS. THE DISALLO WANCE OF THE LOAN OF RS.1,00,05,000/- HAS BEEN CORRECTLY MADE. GROUND D ISALLOWED. 13. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), TH E ASSESSEE IS IN APPEAL BEFORE US. 14. LD. COUNSEL FOR THE ASSESSEE STRONGLY OBJECTED THE ADDITION SUSTAINED BY THE LD. CIT(A). REFERRING TO PAGE 69 OF THE PAPER BOOK, HE DREW THE ATTENTION OF THE BENCH TO THE CONFIRMATION OF ACCOUNTS RECEIVED FROM M/S D.D. TOWNSHIP LTD. FOR RS.75,00,000/-. HE SUBMITTED THAT DESPITE GIVEN PAN DETAILS OF THE ASSESSEE, THE ASSESSING OFFICER NEVER ISSUED ANY SU MMONS U/S 131 NOR CALLED FOR ANY INFORMATION U/S 133(6) OF THE I.T. ACT. FURTHE R, ALL THE AMOUNTS WERE RECEIVED IN CHEQUE. REFERRING TO PAGE 69 OF THE PA PER BOOK, HE DREW THE 9 ITA NO.3407/DEL/2014 ATTENTION OF THE BENCH TO THE COPY OF THE CONFIRMAT ION OF ACCOUNTS FROM M/S D.D. TOWNSHIP LTD. FOR THE ASSESSMENT YEAR 2009-10 ALONG WITH COPY OF BANK STATEMENT, COPY OF ITR FOR THE ASSESSMENT YEAR 2009 -10 WITH COMPUTATION OF TOTAL INCOME. REFERRING TO PAGE 91 OF THE PAPER BO OK, HE DREW THE ATTENTION OF THE BENCH TO THE COPY OF CONFIRMATION OF ACCOUNTS F ROM M/S TKS PROJECTS PVT. LTD. FOR THE ASSESSMENT YEAR 2009-10 ALONG WITH AUD IT REPORT. REFERRING TO PAGE 66 TO 68 OF THE PAPER BOOK, HE DREW THE ATTENTION O F THE BENCH TO THE COPY OF THE CONFIRMATION OF ACCOUNTS FROM TANVIR UR. REHMAN ALONG WITH COPY OF BANK STATEMENT FROM 06.08.2008 TO 06.09.2008, COPY OF IT R FOR THE ASSESSMENT YEAR 2009-10. HE SUBMITTED THAT THE ASSESSEE HAS DISCHA RGED THE ONUS CAST ON IT. HOWEVER, THE ASSESSING OFFICER DID NOT ISSUE ANY SU MMONS U/S 131 NOR CALLED THE INFORMATION U/S 133(6) OF THE I.T. ACT. 15. REFERRING TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. GANGESHWARI METAL (P.) LTD. REPORTED IN 361 ITR 10, HE SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID DECISION HAS HEL D THAT WHERE THERE IS A CLEAR LACK OF ENQUIRY ON THE PART OF THE ASSESSING OFFICE R ONCE THE ASSESSEE HAD FURNISHED ALL THE RELEVANT MATERIAL, IN SUCH AN EVE NTUALLY NO ADDITION CAN BE MADE U/S 68 OF THE I.T. ACT. REFERRING TO THE DECI SION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. D. K. GARG VIDE ITA 11 5/2005 ORDER DATED 04.08.2017, LD. COUNSEL FOR THE ASSESSEE DREW THE A TTENTION OF THE BENCH TO PARA 10 ITA NO.3407/DEL/2014 14 OF THE ORDER AND SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID DECISION HAS HELD THAT WHERE THE ASSESSEE DISCHARGES THE INI TIAL ONUS OF ESTABLISHING THE IDENTITY AND CREDITWORTHINESS OF THE CREDIT PROVIDE R AND THE GENUINENESS OF THE TRANSACTIONS, BE IT ONE OF LOAN OR SUBSCRIBING TO S HARE CAPITAL, THE ONUS SHIFTS TO THE REVENUE TO SHOW THE CONTRARY. WHERE THE ASSESS ING OFFICER FAILS TO MAKE SUCH AN ENQUIRY, A COURT MIGHT DELETE THE ADDITIONS MADE BY THE ASSESSING OFFICER. 16. REFERRING TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PR.CIT VS. SOFTLINE CREATIONS PVT. LTD. VIDE ITA 50 4/2016 ORDER DATED 31.08.2016, HE SUBMITTED THAT THE HON'BLE HIGH COUR T IN THE SAID DECISION HAS HELD THAT WHERE THE ASSESSEE HAS PROVIDED THE PAN N UMBERS OF THE SHARE APPLICANTS TO HIGHLIGHT THEIR IDENTITY AS WELL AS P RODUCED THE AFFIDAVITS OF THE DIRECTORS AND THE BANK DETAILS OF THE SHARE APPLICA NTS WERE PROVIDED, IN SUCH CIRCUMSTANCES, IT CANNOT BE HELD THAT THE ASSESSEE HAS NOT ESTABLISHED THE IDENTITY OF THE SHARE APPLICANTS, THE GENUINENESS OF TRANSAC TIONS AND THEIR CREDITWORTHINESS. 17. REFERRING TO THE DECISION OF THE HON'BLE SUPREM E COURT IN THE CASE OF CIT VS. ORISSA CORPORATION P. LTD. REPORTED IN 159 ITR 78, HE SUBMITTED THAT THE HON'BLE SUPREME COURT IN THE SAID DECISION HAS HELD THAT WHERE THE ASSESSEE HAS GIVEN THE NAMES AND ADDRESSES OF THE ALLEGED CREDIT ORS AND IT WAS IN THE 11 ITA NO.3407/DEL/2014 KNOWLEDGE OF THE REVENUE THAT THE SAID CREDITORS WE RE INCOME-TAX ASSESSEES AND THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE AND THE REVENUE, APART FROM ISSUING NOTICES U/S 131 AT THE INSTANCE OF THE ASSE SSEE, DID NOT PURSUE THE MATTER FURTHER AND DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WHETHER THEY WERE CREDITWORTHY AND IN SUC H CIRCUMSTANCES THE ASSESSEE COULD NOT DO ANYTHING FURTHER AND THE ADDITION MADE BY THE ASSESSING OFFICER WAS RIGHTLY DELETED. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE SET-ASIDE. 18. LD. DR ON THE OTHER HAND STRONGLY SUPPORTED THE ORDER OF THE CIT(A). REFERRING TO THE DECISION OF HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS. NIPUN BUILDERS & DEVELOPERS (P.) LTD. REPORTED IN 3 50 ITR 407, HE SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID DECISION HA S HELD THAT WHERE THE ASSESSEE FAILED TO PROVE IDENTITY AND CAPACITY OF SUBSCRIBER COMPANIES WHO PAID SHARE APPLICATION MONEY, AMOUNT SO RECEIVED WAS LIABLE TO BE TAXED U/S 68 OF THE I.T. ACT. 19. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTERS & FINLEASE (P) LTD. REPORTED IN 342 ITR 169, LD. DR SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID D ECISION HAS HELD THAT AMOUNT RECEIVED BY ASSESSEE FROM ACCOMMODATION ENTRY PROVI DERS IN GARB OF SHARE APPLICATION MONEY, WAS TO BE ADDED TO ITS TAXABLE I NCOME U/S 68 OF THE I.T. ACT. 12 ITA NO.3407/DEL/2014 20. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ULTRA MODERN EXPORTS (P.) LTD. REPORTED IN 40 T AXMANN.COM 458, LD. DR SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID D ECISION HAS HELD THAT WHERE IN ORDER TO ASCERTAIN GENUINENESS OF ASSESSEES CLA IM RELATING TO RECEIPT OF SHARE APPLICATION MONEY, THE ASSESSING OFFICER SENT NOTIC ES TO SHARE APPLICANTS WHICH WERE RETURNED UNSERVED, HOWEVER, THE ASSESSEE STILL MANAGED TO SECURE DOCUMENTS SUCH AS THEIR INCOME-TAX RETURNS AS WELL AS BANK ACCOUNT PARTICULARS, IN SUCH CIRCUMSTANCES, THE ASSESSING OFFICER WAS JU STIFIED IN DRAWING ADVERSE INFERENCE AND ADDING AMOUNT IN QUESTION TO ASSESSEE S TAXABLE INCOME U/S 68 OF THE I.T. ACT. 21. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. FROSTAIR (P.) LTD. REPORTED IN 26 TAXMANN.COM 1 1, LD. DR SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID DECISION HAS HELD TH AT WHERE DETAILS FURNISHED BY ASSESSEE ABOUT SHARE APPLICANTS WERE INCORRECT, ADD ITION U/S 68 WAS PROPER. 22. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. N. R. PORTFOLIO PVT. LTD. REPORTED IN 263 CTR 4 56, LD. DR SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID DECISION HAS HELD TH AT IF ASSESSING OFFICER DOUBTS THE DOCUMENTS PRODUCED BY ASSESSEE, THE ONUS SHIFTS ON ASSESSEE TO FURTHER SUBSTANTIATE THE FACTS OR PRODUCE THE SHARE APPLICANT IN PROCEEDING. 13 ITA NO.3407/DEL/2014 23. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. EMPIRE BUILTECH (P.) LTD. REPORTED IN 366 ITR 1 10, LD. DR SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID DECISION HAS HELD TH AT U/S 68 IT IS NOT SUFFICIENT FOR ASSESSEE TO MERELY DISCLOSE ADDRESS AND IDENTIT IES OF SHAREHOLDERS; IT HAS TO SHOW GENUINENESS OF SUCH INDIVIDUALS OR ENTITIES. 24. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MAF ACADEMY (P.) LTD. REPORTED IN 361 ITR 258, LD. DR SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID DECISION HAS HELD TH AT WHERE ASSESSEE, A PRIVATE LIMITED COMPANY, SOLD ITS SHARES TO UNRELATED PARTI ES AT A HUGE PREMIUM AND THEREUPON WITHIN SHORT SPAN OF TIME THOSE SHARES WE RE PURCHASED BACK EVEN AT A LOSS, SHARE TRANSACTIONS IN QUESTION WERE TO BE REG ARDED AS BOGUS AND, THUS, AMOUNT RECEIVED FROM SAID TRANSACTIONS WAS TO BE AD DED TO ASSESSEES TAXABLE INCOME U/S 68 OF THE I.T. ACT. 25. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. FOCUS EXPORTS (P.) LTD. REPORTED IN 51 TAXMANN. COM 46, LD. DR SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID DECISION HA S HELD THAT WHERE IN RESPECT OF SHARE APPLICATION MONEY, ASSESSEE FAILED TO PROV IDE COMPLETE ADDRESS AND PAN OF CERTAIN SHARE APPLICANTS WHEREAS IN CASE OF SOME OF SHARE APPLICANTS, THERE WERE TRANSACTIONS OF DEPOSITS AND IMMEDIATE W ITHDRAWALS OF MONEY FROM BANK, IMPUGNED ADDITION MADE U/S 68 WAS TO BE CONFI RMED. 14 ITA NO.3407/DEL/2014 26. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NAVODAYA CASTLES PVT. LTD. REPORTED IN 50 TAXMA NN.COM 110, LD. DR SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID D ECISION HAS HELD THAT IN CASE OF PRIVATE LIMITED COMPANIES, GENERALLY PERSONS KNO WN TO DIRECTORS OR SHAREHOLDERS, DIRECTLY OR INDIRECTLY, BUY OR SUBSCR IBE TO SHARES AND, THEREFORE, AN ASSESSEE CANNOT SIMPLY FURNISH SOME DETAILS AND REM AIN QUIET WHEN SUMMONS ISSUED TO SHAREHOLDERS REMAIN UNSERVED AND UNCOMPLI ED, THEIR RELUCTANCE AND HIDING MAY REFLECT ON GENUINENESS OF TRANSACTION AN D CREDITWORTHINESS OF CREDITORS. 27. REFERRING TO THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SUMAN GUPTA VS. ITO VIDE ITA NO.680/2012 ORDER DATE D 07.08.2012, LD. DR SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID D ECISION HAS HELD THAT WHERE IDENTICAL AMOUNTS WERE FOUND TO HAVE BEEN DEPOSITED IN ACCOUNTS OF HALF A DOZEN LENDERS PRIOR TO LENDING, AND ASSESSEE COULD ONLY P RODUCE ONE LENDER FOR EXAMINATION, ADDITION IS TO BE MADE AS ASSESSEE FAI LED TO PROVE GENUINENESS OF LOANS. 28. REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SANRAJ ENGINEERING PVT. LTD. VS. CIT VIDE ITA 79/20 16, LD. DR SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID DECISION HAS HEL D THAT THE ADDITION MADE U/S 15 ITA NO.3407/DEL/2014 68 ON ACCOUNT OF UNSECURED LOANS WAS JUSTIFIED, WHE RE INITIAL ONUS OF PROVING THE CREDITWORTHINESS OF THE LENDERS WAS NOT DISCHAR GED BY THE ASSESSEE. 29. REFERRING TO THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF NARESH CHANDRA JAIN VS. CIT VIDE ITA NO.335 OF 2009 , LD. DR SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAID DECISION HAS HEL D THAT THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT AMOUNT OF LOAN RECEIVED B Y ASSESSEE WAS UNEXPLAINED INCOME U/S 68 IN AS MUCH AS IDENTITY, GENUINENESS, CREDITWORTHINESS OF THE TRANSACTION IS NOT PROVED. 30. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSING OFFICER MADE ADDI TION OF RS.25,00,000/- BEING LOAN RECEIVED FROM SHRI TANVIR UR RAHMAN ON THE GRO UND THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS AND FAILED TO FILE THE CONFIRMATION OF THE SAID TRANSACTIONS. SIMILARLY, HE ALSO ADDED AN AMOUNT O F RS.80,00,000/- BEING AMOUNT OF RS.5,00,000/- RECEIVED FROM TKS PROJECT P VT. LTD. AND RS.75,00,000/- RECEIVED FROM D.D. TOWNSHIP LTD. ON THE GROUND THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE LOA N AND HAD FILED THE CONFIRMATION WITHOUT FILING THE COPY OF ITR AND CAP ACITY TO PROVE THE GENUINENESS OF THE TRANSACTIONS. WE FIND THE CIT(A ) UPHELD THE ADDITION MADE 16 ITA NO.3407/DEL/2014 BY THE ASSESSING OFFICER. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT HE HAS FILED THE NECESSARY DETAILS AND THE ASS ESSING OFFICER WITHOUT GOING THROUGH THE DETAILS SO FILED MADE ADDITION WHICH HA S BEEN SUSTAINED BY THE CIT(A). 31. SO FAR AS ADDITION OF RS.25,00,000/- BEING THE AMOUNT OF LOAN RECEIVED FROM SHRI TANVIR UR RAHMAN IS CONCERNED, WE FIND FR OM THE PAPER BOOK AT PAGE 66 THAT THE ASSESSEE HAS FILED THE CONFIRMATION OF ACCOUNTS FROM SHRI TANVIR UR RAHMAN GIVING HIS PAN DETAILS. SIMILARLY, WE FIND THE COPY OF THE ACKNOWLEDGE OF THE RETURN OF INCOME OF SHRI TANVIR UR RAHMAN PLACED AT PAGE 68 OF THE PAPER BOOK SHOWING INCOME OF RS.68,930/-. SIMILARLY, FROM PAGE 67 OF THE PAPER BOOK, WE FIND THE BANK STATEMENT FOR T HE PERIOD FROM 06.08.2008 TO 06.09.2008 SHOWING THE AMOUNT OF RS.25,00,000/- GIV EN FROM HIS OVERDRAFT ACCOUNT. 32. SIMILARLY, SO FAR AS THE AMOUNT OF RS.75,00,000 /- RECEIVED FROM D.D. TOWNSHIP LTD. IS CONCERNED, WE FIND THE ASSESSEE HA S FILED THE CONFIRMATION FROM THE SAID COMPANY WITH PAN NUMBER, COPY OF WHIC H IS PLACED AT PAGE 69 OF THE PAPER BOOK. THE ASSESSEE HAS FILED THE BANK STATEMENT OF THE SAID COMPANY SHOWING THE AMOUNT PAID FROM THE BANK ACCOU NT, COPY OF WHICH IS PLACED AT PAGE 70 -71 OF THE PAPER BOOK. ACKNOWLED GEMENT OF THE INCOME-TAX RETURN FILED BY THE SAID COMPANY FOR THE ASSESSMENT YEAR 2009-10 IS ALSO PLACED 17 ITA NO.3407/DEL/2014 AT PAGE 72 OF THE PAPER BOOK, THE COMPUTATION OF IN COME ALONG WITH AUDITED ACCOUNTS ARE ENCLOSED IN THE PAPER BOOK FROM PAGES 73 TO 90 OF THE PAPER BOOK. 33. SO FAR AS THE AMOUNT OF RS.5,00,000/- RECEIVED FROM M/S TKS PROJECT PVT. LTD. IS CONCERNED, WE FIND THE ASSESSEE HAS FILED T HE CONFIRMATION OF THE SAID PARTY ALONG WITH PAN NUMBER AND THE COPY OF THE AUD ITED ACCOUNTS. ALTHOUGH THE SAID AMOUNT WAS RECEIVED THROUGH BANKING CHANNE L, HOWEVER, BANK STATEMENT OF THE SAID COMPANY IS NOT ENCLOSED IN TH E PAPER BOOK FROM THE CONFIRMATION FILED. THUS, A PERUSAL OF THE PAPER B OOK SHOWS THAT THE ASSESSEE HAS FILED CERTAIN DETAILS TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTIONS. HOWE VER, THE ABOVE DETAILS ACCORDING TO THE ASSESSING OFFICER ARE NOT SUFFICIE NT TO PROVE THE LOAN TRANSACTIONS IN TERMS OF SECTION 68 OF THE I.T. ACT . FURTHER, THE ASSESSING OFFICER HAS NEITHER SUMMONED THE ABOVE PARTIES NOR ASKED THE ASSESSEE TO PRODUCE THEM BEFORE HIM FOR HIS EXAMINATION. FOR A CCEPTING ANY CASH CREDIT/LOAN TRANSACTIONS AS GENUINE, THE ONUS IS AL WAYS ON THE ASSESSEE TO SUBSTANTIATE WITH EVIDENCE TO THE SATISFACTION OF T HE ASSESSING OFFICER REGARDING THE IDENTITY AND CREDITWORTHINESS OF THE LOAN CREDI TORS AND GENUINENESS OF THE TRANSACTIONS. IN THE INSTANT CASE, ALTHOUGH CERTAI N DETAILS WERE FILED THESE WERE NOT PROPERLY APPRECIATED BY THE ASSESSING OFFICER N OR DID HE ISSUE SUMMONS U/S 131 OR CALLED FOR INFORMATION U/S 133(6) OF THE I.T . ACT. CONSIDERING THE TOTALITY 18 ITA NO.3407/DEL/2014 OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUS TICE, WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE WITH EV IDENCE TO HIS SATISFACTION REGARDING THE IDENTITY AND CREDITWORTHINESS OF THE LOAN CREDITORS AND GENUINENESS OF THE TRANSACTIONS. THE ASSESSING OFF ICER SHALL DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING ONE MORE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. THE SEC OND ISSUE RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PUR POSES. 34. IN THE RESULT, THE APPEAL STANDS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF OCTOBER, 2017. SD/- SD/- (SUDHANSHU SRIVASTAVA) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 30-10-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI