ITO, New Delhi V. M/s Value Fabrics Pvt. Ltd., Moradabad

ITA 3892/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74039 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 22-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 27-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 68

Judgement Text

ITA NO. 3892/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO. 3892/DEL/2012 A.Y. : 2007-08 ITO, ROOM NO. 225A, CENTRAL REVENUE BUILDING, NEW DELHI 110 002 VS. M/S VALUE FABRICS PVT. LTD., 52-ASALATPURA, BADI MASJID, MORADABAD-244001 (UP) (PAN: AABCV4422D) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : DR. RAKESH GUPTA, SR. ADV., SH. ASHWANI TANEJA, ADV., SH. SOMIL AGARWAL, DEPARTMENT BY : MS. NIDHI SRIVASTAVA, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS-XIX), NEW D ELHI DATED 24.5.2012 PERTAINING TO ASSESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED READ AS UNDER:- I) LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN SETTING ASIDE THE ISSUE OF ADDITION OF RS. 1,75,20, 000/- MADE BY THE AO UNDER SECTION 68 OF THE I.T. ACT AS THE INCOME TAX ACT, 1961 DOES NOT CONFER ANY POWER ON T HE CIT(A) TO SET ASIDE THE ASSESSMENT. ITA NO. 3892/DEL/2012 2 II) LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN ACCEPTING ADDITIONAL EVIDENCES IN CONTRAVENTION OF RULE 46A OF THE I.T. RULES, 1962 WITHOUT CONFRONTING THE AO. III) LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF TH E CASE IN ALLOWING THE EXPENSES OF RS. 51,601/- ON THE BASIS OF ADDITIONAL EVIDENCE ACCEPTED BY HIM BY VIOLATING TH E PROVISIONS OF RULE 46A OF THE I.T. RULES. IV) THE APPELLANT CRAVES, LEAVE OR RESERVING THE RI GHT TO AMEND, MODIFY, ALTER, ADD OR FORGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. IN THIS CASE THE AO NOTED THAT PERUSAL OF RETU RN OF THE ASSESSEE REVEALS THAT DURING THE YEAR THE ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY OF RS. 1,75,20,000/-. DESP ITE SEVERAL OPPORTUNITIES ASSESSEE FAILED TO COMPLY WITH THE NO TICES OF THE AO. AO OBSERVED THAT THE ONUS WAS UPON THE ASSESSEE TO PROVE THE CREDITWORTHINESS AND GENUINENESS AND IDENTITY OF TH E SHAREHOLDERS. SINCE THE SAME WAS NOT DONE, AO TREATED THE SAME A S UNDISCLOSED INCOME OF THE ASSESSEE AND ADDED THE SAME UNDER S ECTION 68 OF THE I.T. ACT. 4. BEFORE THE LD. CIT(A) ASSESSEE SUBMITTED THAT A SSESSEE HAS ONLY RECEIVED RS. 12,00,000/- SHARE APPLICATION MON EY DURING THE FINANCIAL YEAR 2006-07. THE BALANCE OF RS. 1,63,20, 000/- WAS SHARE APPLICATION MONEY RECEIVED DURING THE FINANCIAL YEA R 2005-06. THE TOTAL OF THE AFORESAID SUMS AS ON 31.3.2007 CAME TO RS. 1,75,20,000/-. IN THIS REGARD, COPY OF THE BALANCE SHEET OF THE ASSESSEE WAS REFERRED WHICH WAS SAID TO HAVE BEEN F ILED ALONGWITH THE RETURN. REGARDING THE SHARE APPLICATION MONE Y OF RS. 12,00,000/- RECEIVED DURING THE FINANCIAL YEAR 2006 -07 FROM THREE ITA NO. 3892/DEL/2012 3 PARTIES, ASSESSEE SUBMITTED COPY OF APPLICATION FO R SHARES AND CONFIRMATION LETTER AND PAN NUMBER. CONSIDERING T HE ABOVE, LD. CIT(A) DIRECTED AS UNDER:- SINCE THE DOCUMENTS AND THE DETAILS AS MENTIONED IN ABOVE PARAS ARE FILED FOR THE FIRST TIME EITH ER BY THE AR ON HIS OWN OR ON ENQUIRY FROM THE UNDERSIGNED IN THESE PROCEEDINGS IN THE INTEREST OF JUSTICE, THE AO IS HEREBY DIRECTED TO VERIFY TH E GENUINENESS OF THE DOCUMENTS AND THE CONTENTIONS OF THE AR AND IF HE IS SATISFIED WITH THE EXPLANATI ON, NO ADDITION IS CALLED FOR. THE ISSUE OF ADDITION OF RS. 1,75,20,000/- IS SET ASIDE FOR LIMITED VERIFICATION AS MENTIONED ABOVE. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE FIND THAT AS REGARDS THE CONTENTION OF THE ASSESSEE THAT THE AMOUNT OF RS. 12,00,000/- WAS RECEIVED AS SHARE APPLICATI ON MONEY FOR THE IMPUGNED FINANCIAL YEAR AND THE BALANCE RS. 1,63,20 ,000/- PERTAIN TO FINANCIAL YEAR 2005-06, IT IS A MATTER OF FACTUAL V ERIFICATION. IF THE ASSESSEE HAS ONLY RECEIVED RS. 12,00,000/- SHARE AP PLICATION MONEY DURING FINANCIAL YEAR 2006-07, AO CAN CONSIDER ONLY THE SAID AMOUNT U/S. 68 OF THE IT ACT FOR A.Y. 2007-08. REST AMOUN T CANNOT BE CONSIDERED IN THE CURRENT YEAR AS SHARE APPLICATION MONEY RECEIPT UNDER SECTION 68 OF THE I.T. ACT. ACCORDINGLY, WE REMIT THIS ISSUE TO THE FILE OF THE AO. THE AO SHALL MAKE EXAMINATION OF THE SUBMISSIONS OF THE ASSESSEE AND DECIDE AS PER DIREC TIONS AS ABOVE. 7. AS REGARD THE BALANCE AMOUNT OF SHARE APPLICATIO N MONEY AMOUNTING TO RS. 12,00,000/- RECEIVED FROM THREE PA RTIES, ASSESSEE ITA NO. 3892/DEL/2012 4 HAS NOT SUBMITTED ANY DOCUMENT WHATSOEVER BEFORE TH E AO. ASSESSEE HAS SUBMITTED COPY OF APPLICATION OF SHARE S AND CONFIRMATION AND PAN NUMBER BEFORE THE LD. CIT(A). LD. CIT(A) REMITTED THESE DOCUMENTS AND THE CONTENTION OF THE LD. AR TO THE FILE OF THE AO FOR EXAMINATION. LD. CIT(A) FURTHE R DIRECTED THAT IF THE AO IS SATISFIED WITH THE EXPLANATION, NO ADDITION I S CALLED FOR. AGAINST THE ABOVE DIRECTIONS, REVENUE IS IN APPEAL BEFORE US. 8. WE FIND THAT REVENUES CONTENTION IN THIS REGARD IS CORRECT THAT LD. CIT(A) DOES NOT HAVE ANY POWER TO SET ASIDE THE ISSUE TO AO. HOWEVER, WE FIND THAT ASSESSEE HAS FAILED TO SUBMIT THE RELEVANT DOCUMENTS BEFORE THE AO. HOWEVER, HE HAS SUBMITTE D SOME DETAILS BEFORE THE LD. CIT(A). IN OUR CONSIDERED OPINION, INTEREST OF JUSTICE WILL BE SERVED, IF THE MATTER IS REMITTED TO THE FI LE OF THE AO. ACCORDINGLY, WE REMIT THIS ISSUE TO THE FILE OF THE AO. AO SHALL EXAMINE THE ISSUE AFRESH REGARDING THE IDENTITY OF THE DEPOSITORS, GENUINENESS OF THE TRANSACTIONS AND THE CREDITWORTH INESS OF THE SHARE APPLICANTS. NEEDLESS TO ADD THAT THE ASSESSE E SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 9. GROUND NO. 3 RAISED BY THE REVENUE IS REGARDING THE ALLOWANCE OF EXPENSES OF RS. 51,601/-. WE FIND THAT THE SAME IS NOT ARISING OUT OF THE ORDER OF THE LD. CIT(A). HENCE, THE SAME I S DISMISSED. ITA NO. 3892/DEL/2012 5 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23/1/2014, U PON CONCLUSION OF HEARING. SD/- SD/- [ [[ [A.T. VARKEY A.T. VARKEY A.T. VARKEY A.T. VARKEY] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 23/1/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 3892/DEL/2012 6