Jhabua Power Investments Ltd., New Delhi V. ITO, Ward- 13(3), New Delhi

ITA 4670/DEL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5107 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 25-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Unexplained cash credit; Corroborative evidences
• Section: 69C; 133(6); 68

Judgement Text

1 ITA NO. 4670/DEL/2018 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: SMC, NEW DELHI) BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER ITA NO:-4670/DEL/2018 ( ASSESSMENT YEAR: 2014-15) JHABUA POWER INVESTMENTS LTD. THAPAR HOUSE, 124 JANPATH NEW DELHI PAN NO. AADCG5445K VS. INCOME TAX OFFICER WARD 13 (3) NEW DELHI APPELLANT RESPONDENT ASSESSEE BY : SH. P. C. YADAV, ADVOCATE REVENUE BY : SH. S. L. ANURAGI, SR. DR DATE OF HEARING : 21.05.2019 DATE OF PRONOUNCEMENT : 22 .05.2019 ORDER PER: N. K. BILLAIYA, AM THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS]-5, NEW DEL HI DATED 19.04.2018 FOR ASSESSMENT YEAR 2014-15. 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE AS SESSEE THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITIONS MADE B Y THE A.O U/S 68 OF THE ACT WHEN THE A.O HAS MADE THE ADDITION U/ S 69C OF THE ACT. 2 ITA NO.-938/DEL/2018 3. FACTS ON RECORD SHOW THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 23/09/2014. THE RETURN OF INCOME WAS SEL ECTED FOR SCRUTINY ASSESSMENT AND ACCORDINGLY STATUTORY NOTIC ES WERE ISSUED AND SERVED UPON THE ASSESSEE. 4. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PRO CEEDINGS THE A.O NOTICED THAT THE ASSESSEE HAS MADE PURCHASE OF LINEN FABRIC TO THE TUNE OF RS. 4,97,589/- TO VERIFY THE PURCHASES. THE ASSESSEE ISSUED NOTICES U/S 133(6) OF THE ACT TO M/S KUMAR S ALES FROM WHOM THE PURCHASES WERE MADE. THE NOTICE SENT RETU RNED UNSERVED, THE SAME WAS CONFRONTED TO THE ASSESSEE A ND THE ASSESSEE FURNISHED NEW ADDRESS M/S KUMAR SALES. TH EREAFTER, FRESH NOTICE WAS ISSUED TO M/S KUMAR SALES AT NEW A DDRESS WHICH WAS DULY SERVED. THE A.O ASKED M/S KUMAR SALES TO CONFIRM THE TRANSACTION WITH SUPPORTING EVIDENCE. ON RECEIVING NO PLAUSIBLE REPLY ONCE AGAIN NOTICE WAS ISSUED AND SERVED UPON M/S KUMAR SALES. ONCE AGAIN, NO REPLY WAS RECEIVED AND THE A .O FORMED A BELIEF THAT THE ASSESSEE HAS CLAIMED BOGUS EXPENSES ON ACCOUNT OF PURCHASE FROM M/S KUMAR SALES AND PROCEEDED BY MAKI NG THE ADDITION OF RS.4,97,589/- U/S 69C OF THE ACT. 3 ITA NO.-938/DEL/2018 5. THE ASSESSEE ASSAILED THE ASSESSMENT BEFORE THE CIT(A) AND STRONGLY CONTENDED THAT THE PURCHASES ARE DULY RECO RDED IN THE BOOKS OF ACCOUNTS SUPPORTED BY INVOICES AND, THEREF ORE, PROVISIONS OF SECTION 69C DO NOT APPLY ON THE FACTS OF THE CAS E. IT WAS FURTHER POINTED OUT THAT THE A.O HAS ACCEPTED THE SALES MAD E OUT OF THE PURCHASES. 6. THE CIT (A) WAS CONVINCED THAT SECTION 69C IS NO T APPLICABLE ON THE FACTS OF THE CASE. HOWEVER, THE CIT (A) WAS OF THE OPINION THAT THE A.O SHOULD NOT HAVE ACCEPTED THE CREDIT IN THE BOOKS AMOUNTING TO RS. 5,02,075/- AS EXPLAINED. THE CIT( A) ASKED THE ASSESSEE TO SHOW CAUSE WHY THE CREDIT IN THE BOOKS OF RS.5,020,75/- BE NOT TREATED AS UNEXPLAINED CREDIT U/S 68 OF THE ACT. THE ASSESSEE FILED A DETAILED REPLY DATED 18/ 4/2018. IN ITS SUBMISSION, THE ASSESSEE EXPLAINED THE SALE TRANSAC TION BY FURNISHING COPIES OF THE SALE INVOICES AND ALSO THE BANKS STATEMENT SHOWING THAT THE MONEY HAS BEEN RECEIVED THROUGH BA NKING CHANNEL. THE REPLY OF THE ASSESSEE DID NOT FIND AN Y FAVOUR WITH THE CIT (A) WHO MADE ADDITION OF CREDIT OF RS.5,02,075/ - U/S 68 OF THE 4 ITA NO.-938/DEL/2018 ACT. HOWEVER, THE ASSESSEE CIT(A) RESTRICTED THE A DDITION TO RS.4,97,589/-, THE ADDITION WHICH THE A.O MADE. 7. BY THIS, THE ASSESSEE BEFORE ME. THE COUNSEL FO R THE ASSESSEE REITERATED WHAT HAS BEEN STATED DUE BEFORE THE LOWE R AUTHORITIES. PER CONTRA, THE DR STRONGLY STATED THAT SINCE, THE CIT(A) HIMSELF HAS NOT EXAMINED THE GENUINENESS OF THE CREDIT ENTRIES. THE MATTER MAY BE RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION 8. I HAVE CAREFULLY CONSIDERED THE ORDER OF THE AUT HORITIES BELOW. IT IS NOT IN DISPUTE THAT THE A.O MADE IMPUGNED ADD ITION OF RS. 4,97,589/- TREATING THE PURCHASES AS BOGUS EXPENSES . IT IS EQUALLY TRUE THAT THE PURCHASES WERE DEBITED IN THE REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE. THE SALES OUT OF THE PURC HASES WERE ACCEPTED BY THE A.O. I FURTHER FIND THAT THE NOTICE S ISSUED BY THE A.O ON THE ADDRESS OF M/S KUMAR SALES WERE DULY SER VED. NOTHING PREVENTED THE A.O TO ISSUE SUMMONS TO M/S KUMAR SAL ES TO FORCE ITS ATTENDANCE AND EXAMINE THE TRANSACTION. I FURT HER FIND THAT THE CIT(A) REALIZING THAT SECTION 69C IS NOT APPLICABLE ON THE FACTS OF THE CASE INVOKED SECTION 68 OF THE ACT. IN FIND TH AT THE ASSESSEE 5 ITA NO.-938/DEL/2018 HAS FURNISHED ALL THE DETAILS OF SALES MADE TO M/S OVERSEAS AND SUCH DETAILS CAN BE SEEN FROM THE FOLLOWING CHART:- DETAILS OF SALES: S. NO. DATE PARTY NAME QUANTITY INVOICE AMOUNT 1 4/1/2014 M S OVERSEAS 945 68,985 2 14/01/2014 M S OVERSEAS 1.050 76,891 3 23/01/2014 M S OVERSEAS 1,510 107,738 4 14/02/2014 M S OVERSEAS 945 67,426 5 13/03/2014 M S OVERSEAS 1,201 89,054 6 18/03/2014 M S OVERSEAS 1,240 91,981 TOTAL 6,891 502,075 9. THE SALE INVOICES ARE EXHIBITED AT PAGES 5 TO 10 OF THE PAPER BOOK. IN MY CONSIDERED OPINION, THE POWER OF THE C IT(A) ARE CO TERMINUS TO THAT OF THE A.O AND, THEREFORE, HE SHOU LD HAVE EXAMINED THE TRANSACTION IF HE WANTED TO INVOKE THE PROVISIONS OF SECTION 68 OF THE ACT. FAILING WHICH THE ACTION OF THE CIT (A) CANNOT BE UPHELD. THE CONTENTION OF THE DR THAT FRESH OPPO RTUNITY SHOULD BE GIVEN TO THE CIT (A) TO EXAMINE THE TRANSACTION DOES NOT HAVE ANY FORCE. IN MY CONSIDERED VIEW, NO SECOND INNINGS SH OULD BE GIVEN TO 6 ITA NO.-938/DEL/2018 EXAMINE THE SAME SET OF FACTS WHICH WERE VERY MUCH BEFORE THE LOWER AUTHORITIES. I DO NOT FIND ANY MERIT IN THE ORDER OF THE CIT(A). I HAVE ACCORDINGLY DIRECT THE A.O TO DELETE THE ADD ITION OF RS. 4,97,589/-. THE APPEAL FILED BY THE ASSESSEE IS AC CORDINGLY ALLOWED. 10. IN RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 .05.201 9. SD/- (N.K.BILLAIYA) ACCOUNTANT MEMBER DATED: .05.2019 R.N COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELH 7 ITA NO.-938/DEL/2018 DATE OF DICTATION 21.05.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 21.05.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 22.05.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 22.05.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 22.05.2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER