Laoleen Investment (P) Ltd., Ghaziabad V. ITO, Ghaziabad

ITA 3715/DEL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6562 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 25-10-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 08-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-1, NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO.3715/DEL/2015 ASSESSMENT YEAR : 2010-11 LAOLEEN INVESTMENT (P) LTD., MODI BHAWAN, MODI NAGAR, GHAZIABAD 201 204. VS. INCOME TAX OFFICER, WARD-1(5), GHAZIABAD PAN : AAACL 2854 Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJEEV AHUJA, CA RESPONDENT BY : SHRI S. K. JAIN, SR. DR DATE OF HEARING : 25-10-2016 DATE OF PRONOUNCEMENT : 01-12-2016 O R D E R PER S.V. MEHROTRA, A.M : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 14.05.2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), GHAZIABAD, U/S 143(3) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) RELATING TO A.Y. 2010-11. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED RETURN OF INCOME DECLARING NIL INCOME. THE ASSESSING OFFICER NOTICE D THAT THE CURRENT LIABILITIES OF RS.28,34,657/- INCLUDED THE LIABILIT IES FROM THE FOLLOWING THREE PARTIES :- 1. M/S ALPHA HI TECH GASES PVT. LTD. - RS.10,00,00 0 2. M/S UJALA GASES AND CHEMICALS PVT. LTD. - RS. 5,00,000 2 ITA NO.3715/DEL/2015 3. M/S ATTLANTIC COMMERCIAL PVT. LTD. - RS. 4 0,000 RS.15,40,000/- 3. HE FURTHER NOTED THAT THE ASSESSEE FURNISHED THE CONFIRMATIONS FROM THESE PARTIES, THEIR PAN AND WARD/CIRCLE WHERE THEY ARE ASSESSED TO TAX AS THE LIABILITIES WERE VERY OLD COMING FORWARD FROM T HE YEAR 1992 TO 1998. AS THE ASSESSEE FAILED TO FURNISH THE CONFIRMATION AND NO EVIDENCE WAS FURNISHED INDICATING THAT IT WAS NOT A TRADING LIAB ILITY, HE REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE SAME MAY NOT B E TAXED U/S 41(1) OF THE ACT. HE MADE AN ADDITION OF RS.15,40,000/- TREATIN G THE SAME AS UNCLAIMED LIABILITIES ON THE GROUND OF CESSATION OF THESE LIA BILITIES. 4. LD. CIT(A) DELETED THE ADDITION TO THE EXTENT OF RS.1,44,000/- AND CONFIRMED THE BALANCE OF RS.13,96,000/-. 5. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AND HAS TAKEN FOLLOWING GROUNDS :- THE UNDER MENTIONED GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER: 1. (A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD COMMISSIONER OF INCOME TAX (APPEALS), GHAZIABAD [HE REINAFTER REFERRED TO AS CIT(A)] GROSSLY ERRED IN UPHOLDING THE ORDER OF THE LD ASSESSING OFFICER [HEREINAFTER REFERRED TO AS LD AO] CONFIRMI NG THE ADDITION OF CURRENT LIABILITIES OTHER THAN TRADING LIABILITY AM OUNTING TO RS. 15,40,000/0 U/S 41 (1) OF THE ACT WITHOUT ANY MATER IAL AND BASIS, WHICH IS BAD IN LAW AND NOT CALLED FOR. (B) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY THE LD AO IS BAD IN LAW AND THE LIA BILITY DETERMINED UNDER SECTION 143(3) OF THE ACT IS LIABLE TO BE DEL ETED. THE ORDER PASSED BY THE LD. AO IS PERVERSE, WITHOUT APPLICATION OF M IND AND WITHOUT JURISDICTION. 3 ITA NO.3715/DEL/2015 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO AND CIT(A) BOTH HAS GROSSLY ERRED IN LAW AND ON THE FACTS OF THE CASE TO HOLD THAT THE CURRENT LIABILITIES TO PAY A SUM O F RS. 15,40,000/- HAS CEASED TO EXIST AND CIT(A) WAS FURTHER ERRED TO CON FIRM THE SAID ADDITION BY APPLYING THE PROVISIONS OF SECTION 41(1) OF THE ACT., WHICH IS ARBITRARY, UNTENABLE AND BAD IN LAW AND NOT CALLED FOR. 6. LD. COUNSEL REFERRED TO THE SUBMISSIONS MADE BEF ORE LD. CIT(A) CONTAINED IN THE PAPER BOOK AT PAGES 1 TO 9 AND POI NTED OUT THAT THOUGH THE CONFIRMATIONS COULD NOT BE FILED BEFORE THE ASSESSI NG OFFICER BUT ALL DETAILS INCLUDING PAN AND WARD/CIRCLE UNDER WHICH THE PARTI ES WERE ASSESSED WERE FURNISHED BEFORE THE LD. CIT(A), WHICH ARE AS UNDER :- S. NO. NAME & ADDRESS PAN ASSESSING OFFICER AMOUNT OUTSTANDING SINCE 1. M/S ALPHA HI-TECH GASES (P) LTD. REG. ADD: A-263, IIND FLOOR, DEFENSE COLONY, NEW DELHI 110024 [e-mail] AAACA9967B WARD-2(2), C.R. BUILDING, DELHI 10,00,000/- 1997-98 2. M/S UJALA GAS AND CHEMICALS (P) LTD. REG. ADD: A-263, IIND FLOOR, DEFENSE COLONY, NEW DELHI 110024 [e-mail] AAACU1521B WARD- 27(2), C.R. BUILDING DELHI 5,00,000/- 1997-98 3. M/S ATLANTIC COMMERCIAL COMPANY LTD., REG. OFFICE: 606, 6 TH FLOOR, VIKRANT TOWER, 4, RAJENDRA PLACE, NEW DELHI 110008 [e-mail] AAACA5877C WARD-3(4), C.R. BUILDING, DELHI 40,000/- 1992-93 TOTAL 15,40,000/- 4 ITA NO.3715/DEL/2015 7. HE, THEREFORE, SUBMITTED THAT THE MATTER MAY BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION OF T HE DETAILS. 8. THE LD. DR SUBMITTED THAT NO PROOF HAS BEEN FURN ISHED BY ASSESSEE AS TO HOW THESE WERE SHORT TERM LOANS AND NOT CLAIMED AS DEDUCTION IN EARLIER YEARS. HE, FURTHER, POINTED OUT THAT PART RELIEF H AS BEEN ALLOWED BY LD. CIT(A). 9. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE RECORD OF THE CASE. THE MAIN REASON FOR ADDITION W AS THAT ASSESSEE FAILED TO FURNISH THE CONFIRMATION FROM THE PARTIES AND ALSO PAN AS WELL AS WARD/CIRCLE OF THESE COMPANIES. THE ASSESSEES CON TENTION IS THAT IT HAD NOT CLAIMED ANY ALLOWANCE OR DEDUCTION IN THE FORM OF L OSS OR EXPENDITURE IN THE PREVIOUS YEAR 1997-98, THE YEAR IN WHICH THE ASSESS EE HAD RECEIVED THE PAYMENT OF RS.10,00,000/- FROM M/S ALPHA HI-TECH GA SES (P) LTD. AND RS.5,00,000/- FROM M/S UJALA GAS AND CHEMICALS (P) LTD. AND HAD ALSO NOT CLAIMED ANY LOSS OR EXPENDITURE DURING ANY SUBSEQUE NT PREVIOUS YEAR. THE ASSESSEE HAD SHOWN THESE LIABILITIES UNDER THE HEAD CURRENT LIABILITIES BUT SINCE DETAILS WERE NOT FURNISHED, THE ASSESSING OFF ICER DID NOT TREAT THEM AS TRADING LIABILITIES. UNDER SUCH CIRCUMSTANCES, FOR PROPER APPRECIATION OF FACTS, IT IS NECESSARY THAT PROPER ENQUIRIES BE CAR RIED OUT ON THE BASIS OF DETAILS FURNISHED BY ASSESSEE BEFORE LD. CIT(A). I , THEREFORE, RESTORE THIS 5 ITA NO.3715/DEL/2015 MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE DETAILS AS FURNISHED BEFORE THE LD. CIT(A), REPRODUCED EARLIER . 10. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01 ST DAY OF DECEMBER, 2016. SD/- SD/- (SUDHANSHU SRIVASTAVA) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01-12-2016. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT; 2) THE RESPONDENT; 3) THE CIT; 4) THE CIT(A)-, NEW DELHI; 5) THE DR, I.T.A.T., NEW DELHI; BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI