DCIT, CIRCLE- 8, REWARI V. SHREE BALAJI GRIT & ROLLING PVT. LTD., REWARI

ITA 3807/DEL/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 2695 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 11-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY TRIPATHI
• Keywords: Unexplained cash credit; Opportunity of being heard; TDS
• Section: 68; 143(1); 205; 143(2); 192

Judgement Text

1 ITA No. 3807/Del/2017 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘G’ NEW DELHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No.3807/Del/2017 Assessment Year: 2013-14 DCIT, Circle-8 Rewari Vs. M/s Shree Balaji Grit & Rolling Pvt. Ltd., 1020-P, Sector-06, Dharuhera, Distt. Rewari. PAN :AANCS1000N (Appellant) (Respondent) ORDER PER YOGESH KUMAR U.S., JUDICIAL MEMBER: The present appeal is preferred by the Revenue for the assessment year 2013-14 against order dated 25.04.2017, passed under Section 250(6) of the Income-Tax Act, 1961 (“the Act”) by the Commissioner of Income-Tax(Appeals), Rohtak. 2. None appeared for the assessee. The order-sheet reveals that even after issue of notices repeatedly on 02.02.2021, 12.04.2021, 21.06.2021, 03.09.2021, 22.11.2021 and 10.02.2022 the assessee failed to appear before the Tribunal. The notice issued by fixing the date of hearing as 05.05.2022 has Appellant by Shri Sanjay Tripathi, Sr. DR Respondent by None Date of hearing 05.05.2022 Date of pronouncement 10.05.2022 2 ITA No. 3807/Del/2017 been returned with the endorsement “left”. Since the appeal is pending from 2017, we are constrained to decide the matter after hearing the learned DR. 3. Brief facts of the case are that, the assessee had filed his return of income for the assessment year 2013-14 on 29/12/2013 declaring loss of Rs. 1,89,26,397/-. The return was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS. Accordingly, notice u/s 143(2) of the Act had been issued. Assessment proceedings had been initiated against the assessee, which has been duly represented by the Representative of the assessee. The assessment order came to be passed on 11/03/2016 by making addition of Rs. 4,50,00,000/- on the ground that, the share application money invested by the share applicants are unexplained cash credit u/s 68 of the Act, disallowed Rs. 17,755/-under section 36(1)(iii) of the Act and further dissolved a sum of Rs. 1,227/- of interest on Service tax, TDS, Excise and VAT. As against the assessment order dated 11/03/2016, the assessee preferred an appeal before the CIT(Appeals). The learned CIT(Appeals) has partly allowed the appeal by deleting the addition of Rs. 4,50,00,000/- made by the Assessing Officer. Aggrieved by the said deletion vide order dated 25/04/2017 the Revenue is before this Tribunal by way of instant appeal on following ground:- “1. On the facts and circumstances of the case, the Ld.CIT(A) has erred in deleting the addition of Rs. 4,50,00,000/- made by the A.O on account of share application money which was unexplained/undisclosed source money made u/s 68 of the I.T. Act, 3 ITA No. 3807/Del/2017 1961 as the assessee company has failed to prove identity, creditworthiness and genuineness of the transactions made with M/s Omnipresent Credit Pvt. Ltd, Telic Finvest Pvt. Ltd, Sidheshwari Commotrade Pvt. Ltd. and Satellite Infra Project Pvt. Ltd.” 4. The learned DR drew our attention to the order of CIT(Appeals) and submitted that the learned CIT(Appeals) has not considered or appreciated the facts, the learned Assessing Officer has passed well reasoned assessment order based on the Investigations. Learned DR has drawn our attention to the assessment order and relied on the following findings of the Assessing Officer: “During the previous year, the assessee had received share application money wroth Rs. 4.5 crore from 4 share applicants as below:- Sr . No . Share applicant Number of Shares Face value per share (Rs) Premiu m per share (Rs) Share applicatio n money (Rs) 1 Omnipresent Credits Pvt. Ltd. Shop No. 465, 2 nd Floor, Agarwal Chamber-III, 26VS, Block Shakarpur, Delhi- 110092 (PAN AAACO1229Q) 16,667 10 140 25,00,000 2 Telic Finvest Pvt Ltd 2650/2, 1st floor, Gali Raghunandan, Naya Bazar, Delhi- 110006 (PAN 54,667 10 140 82,00,000 4 ITA No. 3807/Del/2017 AAACT3771C) 3 Sidheshwari Commotrade Pvt Ltd 46, 3 rd Floor, Strand Road, Koikata (PAN AAMCS7615N) 10 140 2,63,00,0 00 4 Satellitelnfraproje cts Pvt Ltd 52, Weston Street, Kolkata-700012 (PAN AAFCR2818B) 10 140 80,00,000 Total share application money 4,50,00,0 00 For the above four share applicant companies, commission was issued to the DDIT(lnv) Unit-2(3), New Delhi vide letter no F. NO. DCIT/Rwr/2015-16/609 dt 7.12.2015 for the companies at sr no 1 & 2 and to the DDIT(lnv) Unit-4(1), Kolkata vide letter no F. NO. DCIT/Rwr/2015-16/ 607 dt 7.12.2015 for the companies at sr no 3 & 4 to conduct enquiry and furnish the report. Reports dt 26.02.2016 & 29.02.2016 were received from the Investigation wing wherein the share applicants were reported as lacking in identity, creditworthiness & genuineness and same are also enclosed as part of the order. Regarding Telic Finvest Pvt. Ltd., even identity was not proved as the party was not existing at the address provided by the assessee company and as per the latest return filing address. Regarding Omnipresent Credits Pvt. Ltd, creditworthiness & genuineness was not proved by the party despite being given enough opportunities. Regarding Sidheshwari Commotrade Pvt. Ltd, no identity was proved as the party was not existing at the address provided by the assessee company and as per the MCA website. Further, the past directors were held as The assessee was provided with the reports received and was show caused vide letter dt 29.02.2016 as to why the share capital introduced worth Rs 4.5 Cr may not be added u/s 68 of the IT Act’ 1961 on the basis of findings 5 ITA No. 3807/Del/2017 of the reports and compliance was fixed for 7.03.2016. On 8.03.2016, the assessee attended and requested for adjournment. Vide noting sheet entry dt 8.03.2016, the assessee was given adjournment for 11.03.2016 and was again given show cause as to why the share application money worth Rs 4.5 Cr may not be treated as unexplained cash credit u/s 68 of the IT Act’1961 in case no reply is received from the assessee on the said date and matter shall be decided on basis of material available on record. On the said date i.e. on 11.03.2016, the neither filed any reply nor he attended the case.” 5. The learned DR vehemently submitted that, none of the above facts have been taken into consideration or discussed in the order of the learned CIT(A). The impugned is non speaking, which is cryptic and the same has been passed without assigning the reasons, therefore, sought for interference by the Tribunal. 6. We have heard learned DR, perused the material on record and gave our thoughtful consideration. The ld. Assessing Officer rightly found that, assessee has not discharged the burden of proving the genuineness and creditworthiness of the source of the cash credit of the 4 share applicants worth Rs. 4.5 crores. Beside the same, the addition has been made by the Assessing Officer based on the Report of the Investigation wing and other materials. But the learned CIT (Appeals) has neither discussed the said facts and nor even mentioned regarding the full exercise and investigation done by the Assessing Officer and the findings made thereon. The CIT (A) has not even 6 ITA No. 3807/Del/2017 discussed how the judgment of Hon’ble Supreme Court in the case of CIT Vs. Stellar Investment Ltd. 192 ITR 287 and the judgment of Delhi High Court in the case of Sophia Investment Ltd. 205 ITR 98 are applicable to the facts and circumstances of the case apart from mentioning the same in his order. 7. Therefore, in our considered opinion, if the matter is restored to the file of CIT (Appeals) for fresh adjudication after verifying the materials on record with a direction to pass speaking order, the substantial justice would be rendered. Accordingly, we allow the ground of appeal by setting aside the Order of CIT (A) and remand the matter to the file of CIT (Appeals) for fresh consideration to pass speaking order in accordance with law. Nevertheless the parties shall be provided with opportunity of being heard. 8. In the result, the appeal of the Department is allowed for statistical purposes. Order pronounced in the open court on 10 th May, 2022. Sd/- Sd/- ( ANIL CHATURVEDI ) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 10 th May, 2022. *MP/R.N* Copy forwarded to: 1. Appellant 7 ITA No. 3807/Del/2017 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi