ITO, New Delhi V. M/s Bhagwati Builders, New Delhi

ITA 4221/DEL/2009

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81745 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-10-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 29-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAKKAR
• Assessee Lawyers: N K GUPTA
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI A.T. VARKEY, JM ITA NO.4221/DEL/2009 ASSESSMENT YEAR : 2001-02 ITO, WARD 47(1), ROOM NO.188, CR BUILDING, IP ESTATE, NEW DELHI. VS. BHAGWATI BUILDERS, E-315, BASEMENT, GREATER KAILASH PART-1, NEW DELHI. PAN : AAAFB3037G ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI N.K. GUPTA, CA DEPARTMENT BY : MS KAKKAR, SR. DR ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A) ON 31.8.09 IN RELATION TO THE ASSESS MENT YEAR 2001-02. 2. ALL THE GROUNDS RAISED IN THIS APPEAL ARE AGAINS T THE DELETION OF ADDITION OF ` 20 LAC MADE BY THE AO U/S 68 OF THE A CT. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE AO RECEIVED A REPORT FROM THE INVESTIGATION WING REVEALING THAT T HE ASSESSEE HAD ITA NO.4221/DEL/2009 2 TAKEN ENTRY OF ` 20 LAC FROM M/S P.S DAXELOR AFTER PAYING COMMISSION @ 1% TO THE ENTRY PROVIDER. AFTER ISSUING NOTICE U /S 148, THE ASSESSEE WAS CALLED UPON TO EXPLAIN ITS POSITION ON THIS ENT RY. THE ASSESSEES REPRESENTATIVE APPEARED CONTENDING THAT THE FIRM WA S NOT DOING ANY BUSINESS FOR THE LAST 9-10 YEARS AND IT WAS DISSOLV ED LONG BACK. THE AUTHORIZED REPRESENTATIVE FURTHER SUBMITTED THAT HO W THE TRANSACTION OF ` 20 LAC COULD TAKE PLACE WHEN THE BUSINESS ITSE LF WAS CLOSED LONG BACK. THE AO OBSERVED THAT AT THE TIME OF SEARCH A T THE PREMISES OF M/S P.S. DAXELOR, THE INVESTIGATION WING CAME TO KN OW THAT THE ASSESSEE, NAMELY, M/S BHAGWATI BUILDERS, HAD RECEIV ED ` 20 LAC AS ACCOMMODATION ENTRY. IN THE ABSENCE OF ANY DETAILS FURNISHED BY THE ASSESSEE, THE AO MADE ADDITION U/S 68 OF THIS SUM. THE LD. CIT(A) GOT CONVINCED WITH THE SUBMISSIONS ADVANCED ON BEHALF O F THE ASSESSEE AND ORDERED FOR THE DELETION OF ADDITION. THE REVEN UE IS AGGRIEVED AGAINST SUCH DELETION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT CAN BE SEEN FROM THE SUBMISS IONS ADVANCED BY THE ASSESSEE BEFORE THE AO AS WELL AS THE LD. CIT(A ), WHICH HAVE NOT BEEN REFUTED WITH ANY COGENT MATERIAL, THAT THE AS SESSEES BUSINESS WAS CLOSED FOR THE LAST 9-10 YEARS AND THE FIRM ITS ELF WAS DISSOLVED ITA NO.4221/DEL/2009 3 LONG BACK. THE ONLY BASIS ON WHICH SUCH ADDITION W AS MADE BY THE AO IS THE INFORMATION RECEIVED FROM THE INVESTIGATION WING. WHEN THE ASSESSEE CATEGORICALLY STATED BEFORE THE AO THAT NO SUCH ENTRY WAS EVER RECEIVED, WE FAIL TO APPRECIATE AS TO HOW ANY ADDITION U/S 68 COULD HAVE BEEN MADE WITHOUT FIRST CONTROVERTING TH E ASSESSEES CONTENTION IN THIS REGARD. IT IS TRITE LAW THAT A P ARTICULAR CONTENTION RAISED BY THE ASSESSEE HAS TO BE TAKEN AS CORRECT U NLESS PROVED OTHERWISE. IT IS IMPERMISSIBLE ON THE PART OF THE AO TO SET ASIDE THE CONTENTION MADE BY ASSESSEE AND PROCEED ON A PRESUM PTION CONTRARY TO SUCH CONTENTION WITHOUT ANY THING FURTHER. IT I S JUST BASIC THAT SECTION 68 CAN BE INVOKED ONLY IF SOME CREDIT IS AP PEARING IN THE BOOKS OF THE ASSESSEE. IN THE ABSENCE OF ANY SUCH C REDIT, THERE CAN BE NO QUESTION OF TAKING RECOURSE TO SECTION 68. WHEN WE ADVERT TO THE FACTS OF THE INSTANT CASE, IT IS NOTICED THAT THERE IS NO MENTION WHATSOEVER IN THE ASSESSMENT ORDER ABOUT THE FACT T HAT ANY SUCH ENTRY APPEARED IN THE BOOKS OF ACCOUNT OF THE ASSES SEE. ANOTHER FACTOR WHICH MERITS MENTION IS THAT THE ASSESSEE HA D ONLY ONE BANK ACCOUNT WITH VIJAYA BANK WHICH STOOD CLOSED ON 7.7. 99. THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDER ATION RUNS FROM 1.4.2000 TO 31.3.2001. WHEN THE ASSESSEE DID NOT H AVE ANY BANK ITA NO.4221/DEL/2009 4 ACCOUNT AT THE MATERIAL TIME AND FURTHER THE BUSINE SS STOOD CLOSED, WE FAIL TO APPRECIATE AS TO HOW THE AO COULD MAKE A DDITION SIMPLY ON THE BASIS OF SOME REPORT OF THE INVESTIGATION WING. BEFORE MAKING ANY SUCH ADDITION, THE MINIMUM REQUIRED FROM THE AO WAS TO FIRST CONFRONT THE DETAILS OF SUCH INVESTIGATION REPORT TO THE ASS ESSEE AND THEN PROVE THAT THIS AMOUNT WAS CREDITED IN THE BOOKS OF THE A SSESSEE WHICH WAS UNEXPLAINED WITHIN THE MEANING OF SECTION 68 OF THE ACT. NOTHING OF THIS SORT HAS BEEN DONE IN THE INSTANT CASE. CONSI DERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES PREVAILING IN THE INSTA NT CASE, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) WAS FULL Y JUSTIFIED IN DELETING THIS ADDITION. WE, THEREFORE, COUNTENANCE THE IMPU GNED ORDER ON THIS SCORE. 5. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 01.10.201 4. SD/- SD/- [ A.T. VARKEY ] [ R.S. SYAL ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 01 ST OCTOBER, 2014. DK ITA NO.4221/DEL/2009 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI. **