ITO, WARD- 8(2), NEW DELHI V. EMDET JAMSHEDPUR PVT. LTD., NEW DELHI

ITA 4162/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2884 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 22-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ASEEM CHAWLA
• Keywords: Assessment record
• Section: 13; 22; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 4162/DEL/2017 : ASSTT. YEAR : 2012-13 INCOME TAX OFFICER, WARD-8(2), NEW DELHI VS EMDET JAMSHEDPUR PVT. LTD., F-406, SARITA VIHAR, MAIN MATHURA ROAD, NEW DELHI-110044 (APPELLANT) (RESPONDENT) PAN NO. A A ACE6783B ASSESSEE BY : SH. ASEEM CHAWLA, ADV. REVENUE BY : SH. MAHESH THAKUR, SR. DR DATE OF HEAR ING: 05 . 08 .20 2 1 DATE OF PRONOUNCEMENT: 22 .10 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER OF THE LD. CIT(A)-3, NEW DELHI, DATED 22. 03.2017. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENU E: 1. LD. CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS.2,81,50,000/- MADE BY THE ASSESSING OFFICER. U/S 68 OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACTS OF THE CASE THAT THE ASSESSEE HAS FAILED TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENES S OF THE INVESTOR COMPANIES BASED AT KOLKATA. 3. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF RUBBER AND AUTO PARTS FOR TATA MOT ORS & OTHERS. ITA NO. 4162/DEL/2017 EMDET JAMSHEDPUR PVT. LTD. 2 4. THE ASSESSEE HAS RECEIVED UNSECURED LOANS FROM T HE FOLLOWING PARTIES: (PAGE NO. 2 TO 7 OF THE AO) S.NO. NAME OF THE COMPANY AMOUNT 1. BHAGYASHREE VINCOM (P) LTD 26,50,000 2. BISWAS SHARES & SEC (P) LTD 10,00,000 3. CAPSTONE TRADERS(P) LTD 15,00,000 4. FESTINO AGENCIES (P) LTD 10,00,000 5. GANJANAND AGRO (P) LTD 11,50,000 6. JUTEX TRADE (P) LTD 10,00,000 7. KANHAIYA VINCOM (P) LTD 22,00,000 8. KIRAN TRADEWINGS (P) LTD 5,00,000 9. KUBER GOODS (P) LTD 15,00,000 10. MAYUR VANIJYA (P) LTD 15,00,000 11. MODWEAR EXPORTS (P) LTD 42,00,000 12. NARROTTAM COMM. (P) LTD 25,00,000 13. OCTAL COMMODITIES (P) LTD 10,00,000 14. PARIJAT COMMODEAL (P) LTD 10,00,000 15. SANJOG VYAPAR (P) LTD 15,00,000 16. SHYAM BABA DIST. (P) LTD 17,50,000 17. SNEH TIE UP (P) LTD 7,50,000 18. TRIKUTA COMM. (P) LTD. 14,50,000 TOTAL 2,81,50,000 5. THE ASSESSING OFFICER HELD THAT THE ITR FOR THE A.Y. 2012- 13 SHOWS MEAGER OR NIL INCOME FOR ALL THESE LOAN PA RTIES AND THE DEBITS & CREDITS (THE TRANSACTIONS) HAVE TAKEN PLACE ON THE SAME DAY AND HENCE CAME TO THE CONCLUSION THAT THIS IS A TYPICAL OF THE TRENDS SHOWN IN ACCOMMODATION ENTRIE S. THE AO HELD THAT IT IS WELL KNOWN IN SUCH ENTITIES OF ENTR Y OPERATORS, FUNDS ARE ROUTED THROUGH THEM AS SHARE CAPITAL WITH PREMIUM SO AS TO CREATE CAPITAL, WHICH IS NOT REAL BUT LIES ON LY IN THE BOOKS. IN ORDER TO VERIFY THE VERACITY OF THE TRANSACTIONS AND THE TRUE CAPACITY OF THE ENTITIES, THE AO HAS ASKED THE ASSE SSEE TO ITA NO. 4162/DEL/2017 EMDET JAMSHEDPUR PVT. LTD. 3 PRODUCE THE DIRECTORS OF THE SAID ENTITIES FROM WHE RE FUNDS HAD BEEN RECEIVED FOR PERSONAL EXAMINATION. SINCE, THE ASSESSEE HAS FAILED TO PRODUCE THE DIRECTORS OF THE SAID ENTITIE S TO ASCERTAIN THEIR CREDITWORTHINESS, THE AO HELD THAT THE BASIC REQUIREMENTS OF PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT, 1961 ARE NOT FULFILLED AND TREATED THE AMOUNTS AS UNEXPLAINED CR EDIT OF THE ASSESSEE. 6. THE LD. CIT(A) ON VERIFICATION OF THE ASSESSMENT RECORD FOUND THAT THE ASSESSING OFFICER HAS DIRECTLY CALLE D FOR THE DETAILS FROM THE COMPANIES WHO HAS GIVEN THE LOANS. THE LENDERS HAVE SENT THE REPLIES TO THE ASSESSING OFFI CER WHICH HAVE BEEN KEPT ON THE RECORD. IT WAS REVEALED THAT THE LENDER COMPANIES HAVE GIVEN THE LOANS AND THE INTEREST HAS BEEN PAID BY THE ASSESSEE COMPANY AT THE MARKET RATE. THE LD. CIT(A) HELD THAT THE EVIDENCE ADDUCED DURING THE APPELLATE PROCEEDINGS SHOW THAT THE TRANSACTIONS ARE IN THE N ATURE OF NORMAL COMMERCIAL TRANSACTIONS AS PER THE PRACTICE IN THE MONEY MARKET. 7. WE HAVE GONE THROUGH THE SUBMISSIONS MENTIONED A T PAGE NOS. 3 TO 21 OF THE ORDER OF THE LD. CIT(A) AND ALS O THE JUDGMENTS RELIED UPON BY THE ASSESSING OFFICER AT P AGE NOS. 9 & 10. WE FIND THAT THE ASSESSING OFFICER HAS SOUGHT T O PRODUCE THE DIRECTORS OF THE SAID ENTITIES FOR EXAMINATION AND RECODING OF STATEMENT ON 23.02.2015, 03.03.2015 AND 11.03.20 15 WHICH THE ASSESSEE FAILED TO DO SO. THE ASSESSEE DID NOT EVEN SEEK THE ISSUE OF SUMMONS FROM THE ASSESSING OFFICER. ALL TH E LOANS HAVE BEEN RECEIVED FROM ENTITIES AT KOLKATA AND A CATEGO RICAL FINDING HAS BEEN GIVEN THAT THE TRANSACTIONS HAVE BEEN TAKE N ON THE ITA NO. 4162/DEL/2017 EMDET JAMSHEDPUR PVT. LTD. 4 SAME DAY AS PER THE BANK STATEMENT. THE PRIMARY ONU S CASTED UPON THE ASSESSEE TO PROVE THE IDENTITY, GENUINENES S AND CREDITWORTHINESS OF THE TRANSACTION HAS NOT BEEN DI SCHARGED BY THE ASSESSEE ON THE FIRST PAGE. MERE PAYMENT OF INT EREST CANNOT CONNOTE DISCHARGE OF THE ONUS BY THE ASSESSEE. HENC E, IN THE INTEREST OF JUSTICE, WE REMAND THE MATTER BACK TO T HE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO THE ASSESSEE TO DISCHARGE HIS ONUS TO THE SATISFACTION OF THE ASSESSING OFFICER I N ACCORDANCE WITH THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT, 1961. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 22/10/2021. SD/- SD/- (AMIT SHUKLA) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22/10/2021 *SUBODH KUMAR, SR. PS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR