ITO, New Delhi V. M/s. Line Investment Pvt. Ltd., New Delhi

ITA 4029/DEL/2011

• Counselvise Citation: 402920114 RSA 2011
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 06-08-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 05-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: UDAIBIR SINGH KOCHAR; Y S KOCHAR
• Keywords: Opportunity of being heard
• Section: 147; 68; 148; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER ITA NO.4029/DEL/2011 ASSESSMENT YEAR : 2003-04 ITO, WARD 4 (4), ROOM NO.234-B, CR BUILDING, IP ESTATE, NEW DELHI. VS. LINE INVESTMENT PVT. LTD., 163-A, SAINIK FARMS, WESTERN AVENUE, NEW DELHI. PAN: AAACL1338F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI Y.S. KOCHAR, CA & SHRI UDAIBIR SINGH KOCHAR, ADVOCATE. REVENUE BY : SHRI SHASHI BHUSHAN SHUKLA, SR. DR ORDER PER A.D. JAIN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE DEPARTMENT FOR ASSESSMENT YEAR 2003-04 AGAINST THE ORDER DATED 23.06.2011 PASSED BY T HE CIT (A)-VII, NEW DELHI, DELETING THE ADDITION OF ` 10 LAC, MADE U/S 68 OF THE IT ACT ON ACCOUNT OF UNEXPLAINED INCOME. THE FOLLOWING GR OUNDS HAVE BEEN TAKEN:- 1. THE ORDER OF THE LEARNED CIT (APPEALS) IS ERRONE OUS & CONTRARY TO FACTS & LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, TH E LD. CIT (A) HAS ERRED IN DELETING ADDITION MADE ON ACCOU NT OF UNEXPLAINED INCOME U/S 68 OF RS.10,00,000/- IGNORIN G: (A) THE FINDINGS & INVESTIGATIONS MADE BY THE INVESTIGATION WING OF THE DEPARTMENT AND THE ASSESSING OFFICER AS MENTIONE D IN THE ASSESSMENT ORDER. ITA NO.4029/DEL/2011 2 (B) THE DICTUM GIVEN BY THE HONBLE SUPREME COURT IN CIT VS . DURGA PRASAD MORE 82 ITR 540 & SUMATI DAYAL VS. CIT 214 ITR 801 IN WHICH APEX COURT HAS LAID DOWN THE PROPOSITION THAT THE COURTS & TRIBUNALS SHOULD SEE THE PREPONDERANCE OF PR OBABILITIES WHILE CONSIDERING THE EVIDENCE FURNISHED BY THE ASSES SEE. (C) THAT IN THE CASE OF ITO WARD 6 (3) VS. MAYANK CONTAINE RS PVT. LTD. IN ITA NO.2283/DEL/09 DATED 11.08.2009 THE HONBL E ITAT WHILE REFERRING TO THE DECISION OF LOVELY EXPORTS (SUP RA) AND DIVINE LEASING & FINANCE (SUPRA) HAS HELD THAT IN OU R VIEW, HONBLE DELHI HIGH COURT AND HONBLE SUPREME COURT WH ILE RENDERING JUDGEMENTS IN THE ABOVE CASE WERE NOT DEALI NG WITH THE CASE OF HAWALA OPERATIONS AND BOGUS ENTRY PROVIDER S. IN ANY CASE, WHEN THESE ENQUIRED WERE INITIATED BY THE A.O ., THE SAME SHOULD HAVE BEEN CONSIDERED BY THE CIT (A). SI NCE CIT (A) HAS NOT CONSIDERED THE PECULIAR AND NOTORIOUS FACTS OF THIS CASE, WE ARE INCLINED TO SET ASIDE THE MATTER TO THE CIT (A) FO R DECIDING THE MATTER AFRESH AFTER GIVING THE ASSESSEE AND A.O. AN OPPORTUNITY OF BEING HEARD. (D) THAT THE A.O. IS DUTY BOUND U/S 68 TO ENQUIRE INTO THE CREDITWORTHINESS, IDENTITY OF THE CREDITORS & GENUINENESS OF THE TRANSACTIONS. THE CIT (A) HAS ERRED IN IGNORING SUCH FINDINGS RECORDED BY THE A.O. IN THE ASSESSMENT ORDER. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE, INVOK ING RULE 27 OF THE ITAT RULES, 1963, HAS SOUGHT TO SUPPORT THE IMPU GNED ORDER STATING THAT THE LD. CIT (A) HAS NOT DECIDED GROUND N OS. 1 TO 5 TAKEN BY THE ASSESSEE BEFORE HIM, WHICH GROUNDS RELATE TO THE SER VICE OF NOTICES U/S 148 AND 143 (2) OF THE ACT, THE LEGALITY AND VAL IDITY OF ISSUANCE OF NOTICE U/S 148 OF THE ACT AND THE VALIDITY OF THE SU BSEQUENT PASSING OF THE ASSESSMENT ORDER U/S 147 READ WITH SECTION 143 (3) O F THE ACT. 3. IN THIS REGARD, IT IS SEEN THAT THE LD. CIT (A) HA S OBSERVED IN PARA 5 OF HIS ORDER THAT: 5. THE APPELLANT HAS ALSO RAISED GROUNDS OF APPEA L NO.1 TO 5 RELATING TO THE SERVICE OF NOTICES UNDER SECTION 148 AND 143 (2) OF THE ACT, THE LEGALITY AND VALIDITY OF ISSUING NOTI CE UNDER SECTION 148, AND SUBSEQUENT PASSING THE ASSESSMENT ORD ER UNDER SECTION 147 READ WITH SECTION 143 (3) OF THE ACT. THESE GROUNDS ARE NOT BEING ADJUDICATED AS THE APPEAL HAS AL READY BEEN DECIDED ON THE MERITS OF THE CASE. ITA NO.4029/DEL/2011 3 4. THUS, INSTEAD OF FIRST DEALING WITH THE JURISDICTIO NAL GROUNDS 1 TO 5 TAKEN BEFORE HIM BY THE ASSESSEE, AS IS THE REQUIREMEN T OF THE LAW, LD. CIT (A) HAS DECIDED THE MERITS OF THE CASE AND ON SUCH DECISION, HAS NOT ADJUDICATED THE SAID GROUND NOS. 1 TO 5, WHICH PERTAINED TO JURISDICTIONAL ISSUES. 5. RULE 27 OF THE ITAT RULES STATES: THE RESPONDENT THOUGH HE MAY NOT HAVE APPEALED, MAY SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUND S DECIDED AGAINST HIM. 6. THEREFORE, THE GRIEVANCE SOUGHT TO BE RAISED BY TH E ASSESSEE IN THE APPEAL FILED BY THE DEPARTMENT, THOUGH NO APPEA L HAS BEEN FILED BY THE ASSESSEE ITSELF, IS JUSTIFIED. 7. NOW, IF THE JURISDICTIONAL ISSUES TAKEN BY THE ASSESSEE BY WAY OF GROUND NOS.1 TO 5 BEFORE THE LD. CIT (A) ARE DECIDED IN FAVOUR OF THE ASSESSEE, NOTHING ON MERITS WOULD SURVIVE. ON THE OTHE R HAND, IF THE DECISION OF THE LD. CIT (A) ON THESE ISSUES GOES AGAINST THE ASSESSEE, THE DECISION OF THE LD. CIT (A) ON THE MERITS OF THE ADDITION WOULD STILL REMAIN. 8. IN VIEW OF THE ABOVE, WE DEEM IT PROPER TO REMIT THIS MATTER TO THE LD. CIT (A) FOR DECIDING GROUND NOS.1 TO 5 TAKEN BY THE ASSESSEE BEFORE THE LD. CIT (A), IN ACCORDANCE WITH LAW, BY AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE ASSESSING OF FICER. AS SUCH, THE GROUNDS TAKEN BY THE DEPARTMENT ON THE MER ITS OF THE CASE, I.E., AGAINST THE ACTION OF THE LD. CIT (A) IN DELET ING THE ADDITION MADE BY THE ASSESSING OFFICER, ARE NOT BEING GONE INTO AT TH IS STAGE. ALSO, BECAUSE OF THE AFORESAID OBJECTION TAKEN BY THE LEARN ED COUNSEL FOR THE ITA NO.4029/DEL/2011 4 ASSESSEE, NO ARGUMENTS ON THE MERITS OF THE CASE WERE ADDR ESSED BEFORE US. 9. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APPEAL OF THE DEPARTMENT IS TREATED AS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 31.08.20 12. SD/- SD/- [J.S. REDDY] [A.D. JAIN] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 31 ST AUGUST, 2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES