ITO, New Delhi V. M/s. Triumph Infrastructure (P) Ltd., New Delhi

ITA 459/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4937 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 23-05-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 27-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN GOTRU
• Keywords: Onus to prove
• Section: 143(3); 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 459/DEL/2014 A.Y. 2005-06 INCOME TAX OFFICER, VS. M/S TRIUMPH INFRASTRUCTU RE WARD-16(1), (P) LTD., NEW DELHI J-10, SAKET, NEW DELHI (PAN: AACCT03138B) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. SHRAVAN GOTRU, SR. DR ASSESSEE BY : NONE ORDER PER H.S. SIDHU, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-19, NEW DELHI DATED 01.10.2013 PERTAINING TO ASSESSMENT YEAR 2005-06 ON THE FOLLOW ING GROUNDS:- 1. LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 1,25,54,000/- DISALLOWED BY AO ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED, WITHOUT APPRECIATING THAT THE ASSESSEE COMPANY HAS FAILED TO SUBMIT CONFIRMATIONS FROM THE SAID PARTIES 2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS. CIT(A) ERRED IN IGNORING THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF NOVA PROMOTERS AND FINLEASE PVT. LTD., AND THE LATEST JUDGMENT IN THE CASE OF CIT VS. NR PORTFOLIO PVT. LTD. RESPECTIVELY, THE JURISDICTION HIGH COURT HAVE DECIDED THE SAME ISSUE IN FAVOUR OF ASSESSEE. 2. THE APPELLANT CRAVES, LEAVE OR RESERVING THE RIGHT TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 3,34 ,958/-. ACCORDINGLY, A NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (HER EINAFTER REFERRED AS THE ACT) WAS ISSUED ON 27.10.2006 AND SERVED UPON T HE ASSESSEE. THE CASE OF THE ASSESSEE WAS FIXED FOR HEARING ON 27.1 1.2006. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AR OF THE ASS ESSEE ATTENDED THE PROCEEDINGS ON CERTAIN DATES. AO OBSERVED THAT SIN CE BEGINNING OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS BEEN FOUND LACKING IN FURNISHING THE REQUISITE DETAILS/ INFORMATION. AO FURTHER OBSERVED THAT IT IS APPARENT FROM THE RECORDS THAT THE ASSESSEE HAS ALREADY BEEN ALLOWED SUFFICIENT TIME AND OPPORTUNITY TO FURNISH THE REQ UISITE DETAILS/ INFORMATION AND THERE WAS NO PROPER RESPONSE, WHICH ESTABLISHES THAT ASSESSEE DELIBERATELY ADOPTED DELAY TACTICS IN FURN ISHING THE DETAILS OF 3 PERSONS, WHO HAD SUBSCRIBED TO THE SHARE PREMIUM A CCOUNT OR SHARE CAPITAL DURING THE FY 2004-05. THE ASSESSEE VIDE IT S LETTER DATED 6.12.2007 HAS PROVIDED THE NAMES AND AMOUNT OF SHAR E PREMIUM AND SHARE CAPITAL SUBSCRIBED BY 9 PERSONS. THE AO OBSE RVED THAT THE PARTICULARS OF PAN, ACKNOWLEDGEMENT RECEIPT OF IT RETURN, P&L ALC AND BALANCE SHEET (WITHOUT SCHEDULES) IN RESPECT OF 6 C OMPANIES NAMELY; M/S. VRN SECURITIES LTD., M/S. AM SOFT GLOBAL PVT. LTD., M/S. KOHLI EXIM PVT. LTD., M/S. NICE ELECTRONICS PVT. LTD., M/S. GA NEX POWER CORPORATION LTD.; M/S. BANKEY BIHARI CORPORATION LTD. WERE FIL ED; NONE OF THE BALANCE SHEETS OF THE SIX COMPANIES SHOW FURTHER BREAK-UP O F INVESTMENTS TO PROVE SUBSCRIPTION TO SHARE CAPITAL OR SHARE PREMIU M ACCOUNT IN M/S. TRIUMPH INFRASTRUCTURE PVT. LTD.; ) CONFIRMATIONS F ROM THESE 6 COMPANIES WERE FILED ON 24.12.2007; BUT THE ASSESSEE DID NOT PROVIDE THE SCHEDULE OF INVESTMENTS WHICH WAS PART AND PARCEL OF THE RES PECTIVE BALANCE SHEETS OF THE SAID SIX COMPANIES; (IV) THE NAME OF M/S. TRIUMPH INFRASTRUCTURE PVT. LTD. DOES NOT FIGURE IN THE LIS T OF COMPANIES IN WHICH MIS. BANKEY BIHARI CORPORATION LTD. HAD MADE INVEST MENTS AGGREGATING TO RS. 4,25,50,000/- IN THE DETAILS OF SCHEDULE -3 OF INVESTMENTS FORMING PART OF ITS BALANCE SHEET AS AT 31.03.2005; AS REGA RD, M/S. PRASHANT PROPERTIES & INVESTMENTS LTD., MUMBAI, THE ASSESSEE HAS NOT EVEN FILED CONFIRMATION FROM THIS COMPANY REGARDING SUBSCRIPTI ON OF SHARE CAPITAL AMOUNTING TO RS. 20,00,000/- AND SHARE APPLICATION MONEY OF RS. 54,000/-. AO FURTHER OBSERVED THAT IN VIEW OF THE H ONBLE DELHI HIGH COURT DECISION DATED 30.7.2007 IN THE CASE OF CIT V S. HIMALAYA 4 INTERNATIONAL LTD. IT HAS BEEN HELD THAT IF THE AO HARBORS DOUBTS OF THE LEGITIMACY OF ANY SUBSCRIPTION, HE IS EMPOWERED, NA Y DUTY-BOUND TO CARRY OUT THOROUGH INVESTIGATION U/S. 68 OF THE I.T. ACT, 1961. THE ASSESSEE HAS TO PRIMA FACIE PROVE (I) THE IDENTITY OF THE CR EDITOR/ SUBSCRIBER (II) THE GENUINENESS OF THE TRANSACTION (III) THE CREDITWORT HINESS, WHICH HE HAS NOT DONE, THEREFORE, THE AO ADDED RS. 1,12,54,000/- (RS . 30,00,000 _+ RS. 62,00,000 + RS. 20,54,000/- AS UNEXPLAINED SOURCES U/S. 68 OF THE ACT) VIDE ORDER DATED 28.12.2007 PASSED U/S. 143(3) OF T HE ACT BY ASSESSING THE INCOME OF THE ASSESSEE AT RS. 2,46,51,592/-. A GAINST THE ASSESSMENT ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 01.10.2013 HAS DELETED THE AD DITION IN DISPUTE BY PARTLY ALLOWING THE APPEAL OF THE ASSESSEE. AGGRI EVED WITH THE IMPUGNED ORDER PASSED BY THE LD. CIT(A), REVENUE I S IN APPEAL BEFORE THE TRIBUNAL. 3. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 4. IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE WAS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR ITS AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FILED ANY APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE F ACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ISSUE INV OLVED IN THE PRESENT APPEAL, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE W OULD BE SERVED TO ISSUE NOTICE AGAIN AND AGAIN TO THE ASSESSEE, THERE FORE, WE ARE DECIDING 5 THE PRESENT APPEAL EXPARTE QUA ASSESSEE, AFTER HEAR ING THE LD. DR AND PERUSING THE RECORDS. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORD S, ESPECIALLY THE ORDER OF THE LD. CIT(A). WE FIND THAT LD. FIRST APP ELLATE AUTHORITY HAS ADJUDICATED THE ISSUE AND HELD AS UNDER:- IT IS CLEAR THAT THE APPELLANT HAS DISCHARGED HIS BURDEN OF PROOF IN RESPECT OF IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND THE GENUINENESS OF THE TRANSACTIONS. THE APPELLANT HAS POINTED OUT THE HE HAS FILED THE CONFIRMATION ALONGWITH COMPLETE ADDRESS AND PAN OF THE SHARE INVESTORS ALONGWITH A COPY OF THEIR INCOME TAX RETURN, AUDITED FINAL ACCOUNTS INCLUDING BALANCE SHEET, AND SHARE APPLICATION FORM. HE STATED THAT ALL TRANSACTIONS HAVE BEEN THROUGH BANK AND THE SHARE INVESTORS ARE DULY ASSESSED TO TAX. IN VIEW OF THE IN VIEW OF THE EVIDENCE FILED B Y THE APPELLANT, THE ONUS HAD SHIFTED TO THE AO, BUT THE AO HAS NOT BEEN ABLE TO CONTROVERT THE EVIDENCE FILED BY THE APPELLANT. CONSIDERING THE JUDICIAL DECISIONS ON THIS SUBJECT, INCLUDING THOS E BY THE HONBLE JURISDICTIONAL HIGH COURT AND ITAT, THE ADDITION MADE U/S. 68 IS NOT SUSTAINABLE IN LAW 6 AND IS THEREFORE, DELETED. THE GROUNDS ARE ACCORDINGLY ALLOWED. 6. ON GOING THROUGH THE AFORESAID FINDINGS OF THE LD.CIT(A) AS WELL AS THE FINDING OF THE ASSESSING OFFICER MADE IN THE AS SESSMENT ORDER, WE FIND THAT AO HAS PASSED THE ASSESSMENT ORDER 28.12 .2007 U/S. 143 OF THE INCOME TAX ACT, 1961 BY HOLDING THAT ASSESSEE H AS FAILED TO DISCHARGE THE BURDEN CAST UPON IT TO SATISFY THE GENUINENES S AND CREDITWORTHINESS OF THE COMPANIES. HOWEVER, THE LD. CIT(A) IN HIS IM PUGNED ORDER APPELLANT HAS DISCHARGED HIS BURDEN OF PROOF IN RES PECT OF IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND THE GENUINENE SS OF THE TRANSACTIONS. LD. CIT(A) FURTHER STATED THAT THE ASSESSEE HAS POI NTED OUT THE HE HAS FILED THE CONFIRMATION ALONGWITH COMPLETE ADDRESS AND PAN OF THE SHARE INVESTORS ALONGWITH A COPY OF THEIR INCOME TAX RETU RN, AUDITED FINAL ACCOUNTS INCLUDING BALANCE SHEET, AND SHARE APPLICA TION FORM. HE FURTHER STATED THAT ALL TRANSACTIONS HAVE BEEN THROUGH BAN K AND THE SHARE INVESTORS ARE DULY ASSESSED TO TAX. IN VIEW OF EVID ENCE FILED BY THE ASSESSEE, THE ONUS HAD SHIFTED TO THE AO, BUT THE A O HAS NOT BEEN ABLE TO CONTROVERT THE EVIDENCE FILED BY THE ASSESSEE. IN VIEW OF AFORESAID DISCUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE REMAIN NON- COOPERATIVE BEFORE THE AO AND DID NOT FILE REQUISI TE DOCUMENTS BEFORE THE AO, AS ASKED BY HIM AND AS A RESULT THEREOF, THE AO DID NOT VERIFY THE DOCUMENTS FURNISHED BY THE ASSESSEE AND ALSO NOT D ONE THE INDEPENDENT INQUIRY AND VERIFICATION PROPERLY. THEREFORE, IN T HE INTEREST OF JUSTICE, WE THINK IT PROPER TO SET ASIDE THE ISSUE IN DISPUTE TO THE FILE OF THE AO TO 7 DECIDE THE SAME AFRESH, AFTER MAKING INDEPENDENT INQUIRY AND VERIFICATION, AS DEEM FIT. HOWEVER, THE ASSESSEE I S ALSO DIRECTED TO SUBMIT ALL THE NECESSARY DOCUMENTS, AS ASKED BY THE AO DUR ING THE ASSESSMENT PROCEEDINGS AND FULLY COOPERATE WITH THE AO AND DID NOT TAKE ANY UNNECESSARY ADJOURNMENT. ACCORDINGLY, THE ISSUE IN DISPUTE IS SET ASIDE TO THE FILE OF THE AO WITH THE AFORESAID DIRECTIONS. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 01/09/2017. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE:01/09/2017 '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