ITO, New Delhi V. H.S. Poddar & Sons HUF, New Delhi

ITA 416/DEL/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7479 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-12-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 24-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Principle of natural justice; Additional evidence; Accommodation entries
• Section: 148; 144

Judgement Text

ITA NO. 416 /DEL/ 2011 & CO NO. 225/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C , NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI H.S. SIDHU , JUDICIAL MEMBER I.T.A. NO. 416 /DEL/201 1 A.Y. : 2002 - 03 INCOME TAX OFFICER, WARD - 25(1), NEW DELHI D - 304A, VIKAS BHAVAN, NEW DELHI VS. H.S. PODDAR & SONS (HUF), D - 94, PUSHPANJALI ENCLAVE, PITAMPUR, DELHI 110 034 (PAN: AAAHA3152C) (APPELLANT) (RESPONDENT) AND C.O. NO. 225 /DEL/201 2 (IN ITA NO. 416/ DEL/201 1 A.Y. : 2002 - 03 H.S. PODDAR & SONS (HUF), D - 94, PUSHPANJALI ENCLAVE, PITAMPUR, DELHI 110 034 (PAN: AAAHA3152C) V S. INCOME TAX OFFICER, WARD - 25(1), NEW DELHI D - 304A, VIKAS BHAVAN, NEW DELHI (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. VIKRAM SAHAY, SR. DR ASSESSEE BY : SH. AMIT GO YAL , CA DATE OF HEARING : 15 - 12 - 2014 DATE OF ORDER : 1 9 - 12 - 2014 ORDER PER H.S. SIDHU, JM: - TH ESE ARE THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE EMANATE OUT OF THE COMMON O RDER DATED 29.11.2010 PASSED BY THE LD. CIT(A) - VIII , NEW DELHI PERTAINING TO ASSESSMENT YEAR 2002 - 03 . ITA NO. 416 /DEL/ 2011 & CO NO. 225/DEL/2012 2 2. THE GROUNDS RAISED IN THE REVENUE S APPEAL READ AS UNDER: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW CIT(A) HAS ERRED IN 1. DELETING THE ADDITION OF RS. 50,00,000/ - BY ADMITTING THE EVIDENCE IN CONTRAVENTION TO RULE 46A OF THE I.T. ACT, 1961. 2. NOT TAKING INTO ACCOUNT THE REMAND REPORT OF THE AO WHEREI N HE HAS REQUESTED TO EXAMINATION OF BANK ACCOUNTS OF THE ASSESSEE OF M/S MKM FINSEC (P) LTD. AND ITS ASSOCIATES TO PROVE THE GENUINENESS OF THE TRANSACTIONS VIDE WHICH THE MONEY WAS TRANSFERRED TO THE ASSESSEE. THE APPELLANT CRAVES THE RIGHT TO ADD, A FTER OR AMEND ANY GROUND OF APPEAL. 3. THE GROUNDS RAISED IN THE ASSESSEE S CROSS OBJECTION READ AS UNDER: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, NOTICE U/S. 148 ISSUED IN THIS CASE IS ILLEGAL, VOID, WITHOUT JURISDICTION AND BARRED BY LIMITATION AND ACCORDINGLY ASSESSMENT ORDER PASSED ON THE FOUNDATION OF SUCH NOTICE IS LIABLE TO BE QUASHED. THE COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN NOT HOLDING SO. THE ASSESSEE CRAVES LEAVE TO ADD ONE OR MORE GROUND OR TO ALTER / MODIFY THE EXISTING GROUND BEFORE OR AT THE TIME OF HEARING OF APPEAL. 4. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSMENT WAS COMPLETED U/S. 144 OF THE I.T. ACT DUE TO NON ATTENDANCE OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE AO HAD REC EIVED CERTAIN INFORMATION FROM THE INVESTIGATION WING OF THE DEPARTMENT THAT THE ASSESSEE HAD TAKEN ACCOMMODATION ENTRIES AMOUNTING TO RS. 40,00,000/ - FROM MKM FINSEC (P) LTD., A COMPANY INVOLVED IN PROVIDING LARGE SCALE ENTRIES. THE AO COMPLETED THE R EASSESSMENT PROCEEDING U/S. 144 R.W.S. 147 OF THE I.T. ACT AND MADE ADDITION ON ACCOUNT OF ACCOMMODATION ENTRIES OF RS. 40 LACS ITA NO. 416 /DEL/ 2011 & CO NO. 225/DEL/2012 3 AND UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT OF RS. 10 LACS VIDE ORDER DATED 18.12.2009. 5. AGAINST THE AFORESAID ASSESSMENT ORDER DATED 18 .12.200 9 PASSED UNDER SECTION 144 READ WITH SECTION 147 OF THE I.T. ACT, 1961, ASSESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 29.11.2010 HAS DELETED THE ADDITION OF RS. 40 LACS BY HOLDING THE SAME AS BALANCE RECEIVED IN LIEU OF OUTSTANDING BALANCE WITH MKM FINSEC (P) LTD. ON ACCOUNT OF BUSINESS TRANSACTIONS. REGARDING THE ADDITION OF RS. 10 LACS, THE LD. CIT(A) DELETED THE SAME BY HOLDING IT TO BE FULLY EXPLAINED A FTER EXAMINING THE CASH BOOK PRODUCED BEFORE HIM. 6. AGAINST THE ORDER DATED 29 . 11 .201 0 OF THE LD. CIT(A), REVENUE FILED AN APPEAL AND ASSESSEE FILED CROSS OBJECTION BEFORE US. 7. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE, SH. AMIT GOYAL HAS REQUESTED THAT ASSESSEE MAY BE ALLOWED TO WITHDRAW HIS CROSS OBJECTION . ACCORDINGLY, WE ALLOW THE REQUEST OF THE ASSESSEE S COUNSEL FOR WITHDRAWING THE ASSESSEE S CROSS OBJECTION AND THE SAME IS DISMISSED AS WITHDRAWN. 8. ON THE OTHER HAND, LD. DEP ARTMENT REPRESENTATIVE RELIED UPON THE ORDER OF THE ASSESSING OFFICER . 9. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS . WE HAVE ALSO GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES, THREE PAPER BOOK S FILED BY THE ASSESSEE AND THE CASE LAW S RE LIED UPON BY THE ASSESSEE . WE FIND THAT LD. CIT(A) HAS CIT(A) HAS OBSERVED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING THE REQUISITE DETAILS / EVIDENCE BEFORE THE AO. WE ALSO FIND THAT LD. CIT(A) OBSERVED THAT AO WAS ALLOWED SUFFICIENT OPPORTUNITY TO EXAMINE THE DETAIL S / EVIDENCE FILED IN THE COURSE OF APPELLATE ITA NO. 416 /DEL/ 2011 & CO NO. 225/DEL/2012 4 PROCEEDINGS. THEREFORE, THE LD. CIT(A) HAS RIGHTLY ACCEDED TO THE REQUEST OF THE ASSESSEE BY ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS AND THE SAME WAS TAKEN ON RECORD. IN OUR OPINION, THE SAME DOES NOT REQUIRE OUR INTERFERENCE AND HENCE, WE ARE OF THE VIEW THE LD. CIT(A) HAS RIGHTLY ADMITTED THE ADDITIONAL EVIDENCES AND THERE IS NO VIOLATION OF RULE 46A OF THE I.T. RULES. 9.1 WITH REGARD TO ADDITION OF RS. 4 0,00,000/ - IS CONCERNED, WE FIND THAT LD. CIT(A) HAS HELD THAT AO DID NOT HAVE ANY MATERIAL, LET ALONE CREDIBLE MATERIAL TO HOLD THAT THE ASSESSEE HAD RECEIVED THE AMOUNT IN QUESTION ONLY AS AN ACCOMMODATION ENTRY AND ON THE OTHER HAND, THE ASSESSEE HAS SU CCESSFULLY DEMONSTRATED AS TO HOW THE AMOUNT IN QUESTION WAS RECEIVED IN LIEU OF OUTSTANDING WITH MKM FINSEC (P) LTD. WE FIND THAT LD. CIT(A) ACCORDINGLY DELETED THE ADDITION OF RS. 40,00,000/ - , WHICH IN OUR OPINION DOES NOT NEED ANY INTERFERENCE ON OUR PA RT, HENCE, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 9.2 WITH REGARD TO ADDITION OF RS. 10,00,000/ - IS CONCERNED, WE FIND THAT LD. CIT(A) HAS OBSERVED THAT CASH DEPOSIT MADE IN THE BANK ACCOUNT WITH CANARA BANK ON 14.3.2002, HERE ALSO I FIND THAT THE AO WAS NOT JUSTIFIED IN MAKING THE SUBJECT ADDITION. WE FIND THAT LD. CITA(A) HAS FURTHER OBSERVED THAT NO QUESTION WAS RAISED BY HIM DURING THE COURSE OF ENTIRE ASSESSMENT PROCEEDINGS WITH REGARD TO THE DEPOSIT IN QUESTION AND THEREFORE, THE ADDITION WAS IN VIOLATION OF NATURAL JUSTICE. WE FIND LD. CIT(A) HAS FURTH ER OBSERVED THAT THE ASSESSEE HAS SUCCESSFULLY EXPLAINED THE SOURCE OF DEPOSIT BY FILING NOT ONLY THE BANK ACCOUNT BUT ALSO THE CASH BOOK FOR THE ENTIRE FY IN QUESTION. W E FIND THAT LD. CIT(A) HAS RIGHTLY ALLOWED AN OPPORTUNITY TO EXAMINE ALL THESE DOCU MENTS AND HE HAS NOT POINTED OUT ANY DEFECTS IN THE EXPLANATION SUBMITTED BY THE ASSESSEE. WE FIND THAT LD. CIT(A) HAS PERSONALLY VERIFIED THE CASH BOOK AND ON SUCH ITA NO. 416 /DEL/ 2011 & CO NO. 225/DEL/2012 5 EXAMINATION, HE WAS SATISFIED THAT THE SOURCE OF DEPOSIT OF RS. 10 LACS WAS FULLY EXPLA INED. ACCORDINGLY, HE DIRECTED TO DELETE THE ADDITION OF RS. 10 LACS, WHICH IN OUR CONSIDERED OPINION IS WELL REASONED DECISION OF THE LD. CIT(A) AND THE SAME IS NOT REQUIRED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON T HIS ISSUE. 1 0 . IN THE RESULT, THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED AS WITHDRAWN AND THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 19 - 12 - 2014. SD/ - SD/ - [ G.D. AGRAWAL ] [ H.S. SIDHU ] VICE PRESIDENT JUDICIAL MEMBER DATE 19 / 12 /201 4 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES