DY.CIT, CC-45, MUMBAI V. POOJA EQUIREASEARCH PVT. LTD, MUMBAI

ITA 3909/MUM/2011

• Counselvise Citation: 390919914 RSA 2011
• Duration Of Justice: 3 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-01-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 12-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PREMAND J
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Unexplained cash credit; Opportunity of being heard; Accommodation entries
• Section: 131; 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./ I.T.A. NOS.3879 & 3909/MUM/2011 ( / ASSESSMENT YEARS :2003-04 & 2002-03) DY.COMMISSIONER OF INCOME TAX-CENTRAL CIRCLE-45, ROOM NO.659, 6 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 / VS. M/S POOJA EQUIREASEARCH PVT.LTD., A/25, ABHINAV APARTMENT, MATHURADAS ROAD, KANDIVALI,(W), MUMBAI-400067 ( / APPELLANT) .. ( !' / RESPONDENT) ./ #$ ./ PAN/GIRNO.:AAACP6499F % / REVENUE BY : SHRI PREMAND J !' & % / ASSESSEE BY SHRI M SUBRAMANIAN ' ( & ) * / DATE OF HEARING : 1.1.2015 +, & ) * /DATE OF PRONOUNCEMENT : 16.01.2015 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: BOTH THE APPEALS FILED AT THE INSTANCE OF REVENUE A RE DIRECTED AGAINST THE SEPARATE ORDERS PASSED BY LD CIT(A)-36, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEAR 2002-03 AND 2003-04. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT. 3879&3909/MUM/2011 2 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. IN ASSESSMENT YEAR 2002-03, THE ASSESSING OFFICER HAS ASSESSED THE CRE DIT BALANCE OF RS.70,83,180/- APPEARING IN THE NAME OF M/S NAGESHW AR INVESTMENTS PVT LTD U/S 68 OF THE ACT. IN ASSESSMENT YEAR 2003-04 , THE ASSESSING OFFICER HAS ASSESSED FOLLOWING CASH CREDITS AS INCOME OF TH E ASSESSEE U/S 68 OF THE ACT:- SHARE APPLICATION MONEY FROM M/S D KUMAR TRADING COMPANY PRIVATE LIMITED 10,00,000 UNSECURED LOAN FROM M/S R KESHAVLAL TRADERS PRIVATE LIMITED 75,00,000 THE ASSESSMENT OF BOTH THE YEARS HAVE BEEN RE-OPENE D BY THE ASSESSING OFFICER, CONSEQUENT TO THE INFORMATION RECEIVED AT THE TIME OF SEARCH CONDUCTED IN THE CASE OF M/S SKS ISPAT GROUP. IN C ONNECTION WITH THE ABOVE SAID SEARCH PROCEEDINGS, THE DIRECTORS OF THE COMPANIES, FROM WHOM THE ASSESSEE HAD RECEIVED LOANS/SHARE APPLICAT ION MONEY, WERE EXAMINED AND IN THE STATEMENTS TAKEN FROM THEM ON O ATH U/S 131 OF THE ACT, IT APPEARS THAT THEY HAVE ADMITTED THAT THEY H AVE GIVEN ACCOMMODATION ENTRIES. UNDER THESE BACKGROUND, THE ASSESSING OFFICER REJECTED THE DOCUMENTS FILED BY THE ASSESSEE AND AC CORDINGLY ASSESSED THE ABOVE AMOUNTS AS UNEXPLAINED CASH CREDITS IN THE RE SPECTIVE YEARS U/S 68 OF THE ACT. 3. HOWEVER, A PERUSAL OF THE ORDERS PASSED BY L D CIT(A) WOULD SHOW THAT THE LD CIT(A) HAS FAILED TO CONSIDER AND ADDRE SS THE GROUND ON WHICH THE IMPUGNED ASSESSMENTS HAVE BEEN MADE. WE NOTICE THAT THE LD CIT(A) HAS DELETED THE ASSESSMENTS OF CASH CREDITS IN BOTH THE YEARS ON THE REASONING THAT THE ASSESSEE HAS DISCHARGED THE BURDEN PLACED UPON IT U/S 68 OF THE ACT BY PROVING THE IDENTITY AND CREDI T WORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTIONS. WE MAY NOTICE THAT THE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITIONS O NLY DOUBTING ABOUT 3879&3909/MUM/2011 3 THE GENUINENESS OF THE TRANSACTIONS ON THE BASIS OF FACTS, WHICH SURFACED DURING THE COURSE OF SEARCH PROCEEDINGS CONDUCTED I N THE HANDS OF M/S SKS ISPAT GROUP AND ALSO ON THE BASIS OF STATEMENT TAKEN FROM THE DIRECTORS OF THE PARTIES FROM WHOM THE ASSESSEE HAD RECEIVED FUNDS. WE NOTICE THAT THE LD CIT(A) HAS FAILED TO ADDRESS THO SE VITAL ISSUE, ON WHICH THE IMPUGNED ADDITIONS HAVE BEEN MADE. THUS, THE QU ESTION OF GENUINENESS OF TRANSACTIONS REMAIN UNASWERED IN BOT H THE YEARS. 4. UNDER THESE SET OF FACTS, WE ARE NOT ABLE TO SUSTAIN THE ORDERS OF LD CIT(A) IN BOTH THE YEARS, SINCE THE FIRST APPELLATE AUTHORITY HAS FAILED TO ADDRESS THE GROUND ON WHICH THE IMPUGNED ADDITIONS HAVE BEEN MADE. HENCE, IN OUR VIEW, THE ADDITIONS MADE IN BOTH THE YEARS REQUIRE FRESH ADJUDICATION BY LD CIT(A) BY DULY ADDRESSING THE G ROUND ON WHICH THE IMPUGNED ADDITIONS HAVE BEEN MADE. ACCORDINGLY, WE SET ASIDE THE ORDERS PASSED BY LD CIT(A) IN BOTH THE YEARS AND RESTORE T HEM TO HIS FILE WITH THE DIRECTION TO EXAMINE THEM AFRESH. THE LD CIT(A) IS DIRECTED TO CONSIDER AND ADDRESS THE GROUNDS ON WHICH THE ASSESSING OFFI CER HAD MADE THE ADDITIONS. AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD, THE LD CIT(A) MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 16TH JAN,2015. +, ' - ./ 0 1 16 TH JAN 2015 , & 2( 3 SD SD ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER . ' ( MUMBAI: 16TH JAN, 2015. 3879&3909/MUM/2011 4 . . ./ SRL , SR. PS ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. ' 7) ( ) / THE CIT(A)- CONCERNED 4. ' 7) / CIT CONCERNED 5. 6. 89 2 !): , * : , . ' ( / DR, ITAT, MUMBAI CONCERNED 2 ; < ( / GUARD FILE. = ' / BY ORDER, TRUE COPY > # (ASSTT. REGISTRAR) * : , . ' ( /ITAT, MUMBAI