ITO, New Delhi V. M/s. Laxmi Container Pvt. Ltd., New Delhi

ITA 3423/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0352 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-02-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 13-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Assessee Lawyers: S K SARKAR
• Keywords: Unexplained cash credit; Additional evidence; Accommodation entries
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO.3423/DEL/2010 ASSESSMENT YEAR : 2003-04 ITO, WARD 4 (3), NEW DELHI. VS. M/S LAXMI CONTAINER PVT. LTD., 23, MASJID ROAD, JANGPURA, BHOGAL, NEW DELHI 110 014. PAN : AAACL0148F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. SARKAR, CA REVENUE BY : SHRI A.K. MONGA, DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECT ED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 20 TH MAY, 2010 FOR ASSESSMENT YEAR 2003-04. GROUNDS OF APPEAL READ AS UNDER:- 1. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND CON TRARY TO FACTS AND LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE A DDITION OF RS. 10 LAKH MADE BY AO U/S 68 OF THE I.T. ACT BEIN G THE UNEXPLAINED CASH AND RS. 10,000/- BEING THEN UNACCOUNTED CASH PAID FOR OBTAINING ACCOMMODATION ENTRIES. 2.1 THE LD. CIT(A) IGNORED THE FACT THAT THE ASSESSEE DID NOT DISCHARGE THE ONUS OF PROVING THE CREDIT-WORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. 2.2 THE LD. CIT(A) IGNORED THE FACT THAT THE ASSESSEE COMPANY IS INVOLVED IN T HE BUSINESS OF OBTAINING ITA NO.3423/DEL/2010 2 COMPANY IS INVOLVED IN THE BUSINESS OF OBTAINING ACCOMMODATION ENTRIES. 3. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, OR AMEN D ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 2. THE IMPUGNED ASSESSMENT ORDER DATED 23 RD DECEMBER, 2008 IS AN ORDER PASSED U/S 143 (3) READ WITH SECTION 147 OF T HE INCOME-TAX ACT, 1961 (THE ACT). THE ASSESSEE FILED RETURN OF INCO ME ON 28 TH NOVEMBER, 2003 AT NIL AFTER ADJUSTING CURRENT YEARS INCOME OF ` 36,810/- WITH THE BROUGHT FORWARD LOSSES. THE SAME WAS PROCESSED U/S 143 (1) OF THE ACT VIDE INTIMATION DATED 10 TH FEBRUARY, 2004. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FRO M DIT (INVESTIGATION) REGARDING BENEFICIARIES AND OPERATION OF ACCOMMODATION ENTRIES IN DELHI, AFTER RECORDING THE REASONS, THE ASSESSING OFFICER HAD REOPENED THE ASSESSMENT U/S 148 OF THE ACT. ACCORDING TO THE INFORMATION, THE ASSESSEE WAS THE BENEF ICIARY OF CREDIT ENTRIES RECEIVED BY IT FROM IME INTERNATIONAL PVT. LTD. OF ` 5 LAC EACH ON 24 TH MARCH, 2003. THE ASSESSEE WAS REQUIRED TO FURNISH THE LATEST ADDRESS OF IME INTERNATIONAL PVT. LTD., COPY OF BANK ACCOUNT OF THE SAID CONCERN FROM 01.04.2002 TO 31 ST MARCH, 2003 MAINTAINED WITH KVB, KAROL BAGH, NEW DELHI AND SIMILAR BANK ACCOUNT OF THE ASSESSEE COMPANY. THE ASSESSEE SUBMITTED THE REQUISITE INFORMATIO N, HOWEVER, THE ASSESSING OFFICER ALSO ISSUED SUMMONS TO THE SAID PARTY I N RESPONSE TO WHICH NONE APPEARED ON BEHALF OF THE CRED ITOR AND, IN THESE CIRCUMSTANCES, THE ADDITION OF ` 10 LAC WAS MADE ON ACCOUNT OF UNEXPLAINED CREDIT AND FURTHER ` 10,000/- ON ACCOUN T OF COMMISSION FOR RECEIVING THE SAID AMOUNT. ACCORDINGLY, THE ADDITIO N OF ` 10,10,000/- WAS MADE. DURING THE COURSE OF FIRST APPELLATE PROCEED INGS, THE ASSESSEE HAD SUBMITTED THE FOLLOWING DOCUMENTS IN TERMS OF RULE 46A(2) OF INCOME-TAX RULES, 1962:- ITA NO.3423/DEL/2010 3 I) CONFIRMATION OF THE LOAN CREDITOR, IME INTERNATIONAL PRIVATE LIMITED. II) BALANCE SHEET AS AT 31.3.03 OF IME INTERNATIONAL PR IVATE LIMITED. III) INCOME TAX ACKNOWLEDGEMENT FOR ASSESSMENT YEAR 2 003-04 OF IME INTERNATIONAL PRIVATE LIMITED. 3. ACCORDINGLY, LEARNED CIT (A) HAS CALLED FOR REMAN D REPORT FROM THE ASSESSING OFFICER AND IN PARA 4.2, LEARNED CIT (A) HAS REPRODUCED THE REMAND REPORT OF THE ASSESSING OFFICER. IT HAS BEEN WRITTEN IN THE REMAND REPORT THAT IN RESPONSE TO SUMMONS ISSUED U/S 131, THE ASSESSEE APPEARED ON 24 TH FEBRUARY, 2010 AND FILED PART DETAILS AS REQUIRED. LEARNED ASSESSING OFFICER HAS ALSO EXAMINED TH E BALANCE SHEET OF IME INTERNATIONAL PVT. LTD. FOR ASSESSMENT YEAR 2003-04 AND HE FOUND THAT THE SAID COMPANY HAD GIVEN LOANS WORTH ` 1,18,67,775/- WHICH LOANS HAVE BEEN RECEIVED BY THE SAID CONCERN IN ASSESSMENT YEARS 2004-05 AND 2005-06. THE COPIES OF ACCOUNTS WER E ALSO ENCLOSED. FURTHER, THE ASSESSING OFFICER HAS SUBMITTED TO THE CIT (A) THAT THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE SHOUL D NOT BE ADMITTED AS THEY COULD BE ADMITTED ONLY IN SPECIFIED CIRCUMSTANCES WHICH THE ASSESSEE HAS FAILED TO FULFILL. HOWEVER, TAKI NG INTO ACCOUNT THE FACT THAT THE ASSESSING OFFICER HAS NOT MADE ANY ADV ERSE COMMENTS AGAINST THE EVIDENCES AND EXPLANATION FILED B Y THE ASSESSEE AND, THEREFORE, HE IS NOT JUSTIFIED IN MAKING THE ADD ITION IN THE ASSESSMENT ORDER. THE ASSESSEE HAD ADDUCED DOCUMENTARY EVI DENCE TO SUBSTANTIATE ITS CLAIM NOT ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BUT ALSO DURING THE COURSE OF REMAND AS WE LL AS APPELLATE PROCEEDINGS. THE IDENTITY OF LENDER WAS ESTABLISHED AN D IT WAS BORNE ON THE RECORD OF INCOME-TAX DEPTT., THE LENDERS BAN K ACCOUNT AND ALSO THE PAN. THE CREDIT WORTHINESS OF THE LENDER IS ALSO E STABLISHED FROM THE FACT THAT THE LENDER HAS FILED INCOME-TAX RETURN AND IT HAD SUFFICIENT FUND TO MAKE THE INVESTMENT AND TO ADVANCE THE LOANS AND THOSE LOANS ITA NO.3423/DEL/2010 4 HAVE DULY BEEN DISCLOSED IN THE BALANCE SHEET. THERE IS NO MATERIAL ON RECORD TO SUGGEST THAT MONEY DIRECTLY OR INDIRECTLY E MANATED FROM THE ASSESSEE, THEREFORE, IT COULD BE SAID THAT ASSESSEES OWN MON EY WERE BROUGHT BACK IN THE GUISE OF LOAN. HE, THEREFORE, H ELD THAT ALL THE THREE INGREDIENTS WERE PROVED, NAMELY, THE IDENTITY OF THE CREDITOR, CAPACITY OF THE CREDITOR TO ADVANCE MONEY AND GENUINENESS OF T HE TRANSACTIONS. THE COMMISSION OF ` 10,000/- IS ALSO DELETED BEING CONSE QUENTIAL TO DELETION OF THE MAIN ADDITION. THE DEPARTMENT IS AG GRIEVED, HENCE, IN APPEAL. 4. RELYING UPON THE FINDINGS RECORDED IN THE ASSESSMENT ORDER, IT WAS PLEADED BY LEARNED DR THAT THE ASSESSEE COULD NOT SAT ISFACTORILY EXPLAIN THE CREDITS APPEARING IN ITS BOOKS OF ACCOUNT AND, HENCE, ASSESSING OFFICER WAS RIGHT IN MAKING THE ADDITION AND L EARNED CIT (A) HAS WRONGLY DELETED THE SAME. 5. ON THE OTHER HAND, RELYING UPON THE VARIOUS DOCUM ENTARY EVIDENCE SUBMITTED BEFORE THE ASSESSING OFFICER AND CIT (A), IT WAS PLEADED BY LEARNED AR THAT IN THE PRESENT CASE THE ASSE SSEE HAS BEEN ABLE TO PROVE ALL THE THREE INGREDIENTS FOR PROVING THE GENUINENESS OF THE CREDITS AND, HENCE, LEARNED CIT (A) HAS RIGHTLY D ELETED THE ADDITION AND HIS ORDER SHOULD BE UPHELD. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION S IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. THE IDENTITY OF THE CREDITOR IS NOT IN DOUBT AS IT HAD APPEARED BEFORE THE ASSESSING OFFICER DU RING THE REMAND PROCEEDINGS AND THE NECESSARY DOCUMENTS WERE ALSO SUBMITTED SHOWING THE IDENTITY. A FINDING HAS BEEN RE CORDED BY THE CIT (A) THAT THE LENDER WAS EXISTING ON THE RECORD OF THE INCOME-TAX DEPTT AND IT HAS THE CAPACITY OF ADVANCING THE LOAN WHICH WAS EXISTING IN THE BALANCE SHEET OF THE LENDER. THE MONEY WAS TH ROUGH CHEQUES ITA NO.3423/DEL/2010 5 AND THERE IS NO MATERIAL ON RECORD TO SUGGEST THAT THE SAID MONEY EMANATED FROM THE ASSESSEE. THEREFORE, WE ARE OF THE O PINION THAT KEEPING IN VIEW THE EVIDENCE FILED BY THE ASSESSEE AND FACTS EXISTING ON RECORD, LEARNED CIT (A) HAS RIGHTLY CONCLUDED THA T THE ASSESSEE HAD DISCHARGED ITS ONUS LAID UPON IT U/S 68 OF THE ACT, HEN CE, IT IS NOT A FIT CASE WHERE THE ADDITION MADE BY THE ASSESSING OFFICER CO ULD BE HELD JUSTIFIED. WE DECLINE TO INTERFERE IN THE DELETIONS MADE BY THE CIT (A) AS THE ASSESSEE WAS ABLE TO DISCHARGE THE ONUS LAID UPON IT . WE CONFIRM THE ORDER OF THE CIT (A) AND THE APPEAL FIL ED BY THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 11.02.20 11. SD/- SD/- [K.G. BANSAL] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 11.02.2011. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES