ITO, New Delhi V. M/s. Himtaj Builders P. Ltd., New Delhi

ITA 3930/DEL/2016

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5419 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 04-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 68; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “C” BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI G.S.PANNU, PRESIDENT & SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.3930/Del/2016 [Assessment Year : 2012-13] ITO, Ward-11(3), C.R.Building, I.P.Estate, New Delhi. vs Himtaj Builders P. Ltd., C-1/67, Safdarjung Development Area, New Delhi-110016. PAN-AACCH6380B APPELLANT RESPONDENT C.O.No.298/Del/2016 [In ITA No.3930/Del/2016] [Assessment Year : 2012-13] Himtaj Builders P.Ltd., C-1/67, Safdarjung Development Area, New Delhi-110016. PAN-AACCH6380B vs ITO, Ward-11(3), C.R.Building, I.P.Estate, New Delhi. APPELLANT RESPONDENT Appellant by Shri Gagan Kumar, Adv. Respondent by Shri Umesh Takyar, Sr.DR Date of Hearing 01.11.2021 Date of Pronouncement 31.12.2021 ORDER PER KUL BHARAT, JM : The Revenue and the assessee have filed appeal and Cross Objection against the order of Ld. CIT(A)-4, New Delhi dated 29/4/2016 pertaining to the Assessment Year 2012-13. 2. First we take up the Revenue’s appeal in ITA No. 3930/Del/2016. The Revenue has raised following grounds of appeal:- ITA No.3930/Del/2016 & C.O.No.-296/Del/2016 Page | 2 ITA No.3930/Del/2016 [Assessment Year : 2012-13] 1. “That the Ld. CIT(A) has erred in law and facts of the case in giving relief to the assessee. 2. That the Ld. CIT(A) has erred in deleting the addition of Rs. 3,03,90,000/- u/s 68 of the Income Tax Act, though the assessee has failed to prove identity and creditworthiness of the alleged lenders, as well as genuineness of the transaction. 3. That the Ld. CIT(A) has erred in giving relief to the appellant by ignoring various facts as enumerated in the assessment order, as well as judicial pronouncements on the issue, including the decision of jurisdiction High Court. 4. The appellant craves leave for reserving the right to amend, modify, add or forego any ground(s) of appeal at any time before or during the hearing of appeal.” The effective ground in the Revenue’s appeal is against deletion of addition of Rs. 3,03,90,000/- made by the Assessing Officer by invoking the provisions of Section 68 of the Income Tax Act, 1961, in short “the Act”. 3. The facts giving rise to the present appeal are that the assessee company was engaged in the business as building development of Colonies, Promoters and contractors of residential, commercial and industrial buildings. The case of the assessee was selected for scrutiny assessment and the assessment u/s 143(3) of the Act was framed vide order dated 30/3/2015. The Assessing Officer during the assessment proceedings called upon the assessee to explain the short term borrowings of Rs. 3,03,900,00/- from four parties namely M/s Karamjeet Singh & Company Ltd., M/s Rosemary Commercial Pvt. Ltd., D. M. Trading Pvt. Ltd. and Shri Dharmender Singhal. The assessee in responses to ITA No.3930/Del/2016 & C.O.No.-296/Del/2016 Page | 3 the notice issued by the Assessing Officer filed its explanation. The Assessing Officer was not satisfied with the explanation offered by the assessee and treating the borrowings as an unexplained made addition of the same. Thereby the Assessing Officer computed an assessed income at Rs.3,04,02,620/- against the returned income of Rs. 12,619/-. 4. Aggrieved against this, the assessee preferred appeal before the Ld.CIT(A) who after considering the submissions deleted the additions and allowed the appeal of the assessee. 5. Aggrieved against this, the Revenue has filed the present appeal. 6. Ld. Departmental Representative vehemently argued that the Ld.CIT(A) was not justified in deleting the additions. The Ld. SR. DR submitted that the Assessing Officer was justified in making the addition because the assessee could not prove the genuineness of transaction. He strongly relied upon the assessment order he submitted that an interim report dated 26/3/2015 was obtained from DDIT (Inv.) Unit-41 (1) Kolkata in respect of M/s D.M. Trading Pvt. Ltd. and M/s Rosemary Commercial Pvt. Ltd. He submitted that in view of the report of the Investigation Wing, the Assessing Officer was justified to make addition in respect of these parties. 7. Per contra, Ld. Counsel for the assessee submitted these submissions and supported the order of the Ld.CIT(A). He submitted that during the year the substantial amount was received from M/s Karamjeet Singh & Company Ltd., there is no discussion by the Assessing Officer in respect of this assessee, he submitted that the assessee duly discharged its primary onus by providing ITA No.3930/Del/2016 & C.O.No.-296/Del/2016 Page | 4 the relevant documents in support of the claim. He submitted that the Ld.CIT (A) was justified in deleting the addition, in the facts and circumstances of the present case, further he reiterated the submissions as made before the Ld.CIT (A). It was contended that the assessee had provided evidences in support of its claim in the assessee Form 16, ITR of lenders, Bank Statement of Lenders, Pan details of Lenders and independent confirmation by lenders in response to notice u/s 133(6) of the Act. He further submitted that the Assessing Officer has observed that no business activity was carried out, in this respect, it was submitted that the assessee company was incorporated in February 2011 with objectives of doing business as owner builders, colonizers, developers, promoters, contactors of residential, commercial and industrial building. It was contended that the real estate business had fallen down from 2012. The fall in the industry also affected the assessee badly. Further, in respect of M/s Rosemary Commercial Pvt. Ltd. it was stated that new address was filed as part of balance confirmation from the concerned party vide reply dated 13/6/2014. He submitted that the transactions was genuine, the assessee company had recorded the amount received as unsecured loan and also paid interests there on, the interest was also paid in the next years. In-fact, factum of payment of interest was also confirmed by the lenders companies. Therefore, the assessee discharged his initial burden. The A.O failed to bring any adverse material, he submitted that the appeal of the Revenue may be dismissed. 8. In rejoinder, Ld. DR submitted that the merely providing the documents could not relieve, the assessee from its liability to prove the genuineness of the ITA No.3930/Del/2016 & C.O.No.-296/Del/2016 Page | 5 transaction. He submitted that in the facts and circumstances of the case, the action A.O may be affirmed. 9. We have heard the rival submission and perused the material available on record and gone through the orders of the authorities below. The Assessing Officer made addition in respect of following parties:- S. No. Name of the applicants Loan amount (In Rs.) 1 Karamjeet Singh & Company Ltd. 2,35,00,000/- 2 Rosemary Commercials Pvt. Ltd. 43,50,000/- 3 D.M. Trading Pvt. Ltd. 25,00,000/- 4 Dharmender Singhal 40,000/- Admittedly in respect of the party at Serial No. 1, the A.O has not given any adverse finding. Moreover, the Assessing Officer did not discuss the transaction related to this party in the impugned assessment order. The Ld.CIT (A) deleted the addition in respect of this party by giving finding on fact by observing as under:- “The appellant company had received unsecured loans from private parties. These parties consist of mainly corporate assessees, details of whom are also available in public domain and are also liable for filing Income Tax returns. The party named Karamjeet Singh & Company ltd. is a lender, from whom, Rs. 2.35 Crores was taken out of total loan of Rs. 3.03 Crores. The aforesaid lender is a mining contractor with turnover and net worth of multi crores. The loan amount was taken via Bank and no evidence of cash deposit was available on record nor found by the AO. Notice u/s 133(6) of the Act was issued and reply was also filed by the lender confirming the loan transaction. ITA No.3930/Del/2016 & C.O.No.-296/Del/2016 Page | 6 10. The aforesaid finding on fact is not rebutted by the Revenue by placing any contrary material on record. We, therefore, do not see any reason to interfere in the finding of the Ld.CIT(A). As the A.O has not brought any adverse material and coupled with the fact, there is no whisper of discussion regarding this transaction in the assessment order. Therefore, in our considered view, the Ld.CIT(A) has rightly deleted this addition. 11. In respect of the other transaction, it is stated by the Ld.CIT(A) that the assessee has submitted all documents, all the notices issued u/s 133(6) of the Act were duly served and replied were also filed. Further, it is stated that the correct address of M/s Rose Mary Commercial Pvt. Ltd. was supplied and the enquiry was made at the old address. It is stated by the Ld.CIT(A) that the loan amount was taken from this party through bank route of Rs. 43,50,000/-. The turnover of these company was Rs. 7,24,27,295/-and net worth was of Rs. 8,99,93,447/- in the opinion of the Ld.CIT(A) this party has credit worthiness for giving such loan. The Ld.CIT(A) has observed that the Assessing Officer failed to make any independent enquiry regarding these parties. Ld. Counsel for the assessee during the course of hearing placed reliance on the judgment of the Hon’ble Delhi High Court in the case of Kamlesh Gupta. We are in agreement with finding of the Ld.CIT(A) as the assessee has provided evidences in support of its claim but no independent enquiry was made by the Assessing Officer to verify the veracity of the same. The A.O ought to have caused necessary investigation before drawing adverse inference against the assessee. Therefore, in our ITA No.3930/Del/2016 & C.O.No.-296/Del/2016 Page | 7 considered view, the Ld.CIT(A) was justified in deleting the addition. The ground by the Revenue is dismissed. 12. Now we take up the Cross Objection of the assessee. The assessee has raised following grounds of Cross Objection. From the grounds of Cross- Objection it is evident that the same have been raised in support of the impugned order. Since we have dismissed the appeal of Revenue, the Cross- objection of assessee has become infructuous. Hence, the Cross-objection of the assessee is dismissed being infructuous. 13. In the result, both appeal of Revenue and Cross Objection of assessee is dismissed. Above decision was pronounced on conclusion of Virtual Hearing in the presence of both the parties on 31 st December, 2021. Sd/- Sd/- (G.S.PANNU) (KUL BHARAT) PRESIDENT JUDICIAL MEMBER *R. N * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI