ITO, New Delhi V. M/s. Uggarware Polymers Ltd., New Delhi

ITA 4742/DEL/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7297 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 25-09-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 31-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Deemed to accrue or arise in india; Reason to believe
• Section: 147; 68; 148

Judgement Text

ITA NO. 4742/ DEL/ 2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H , NEW DELHI BEFORE SHRI SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A. N O. 4742/DEL/2011 A.Y. : 2004 - 05 INCOME TAX OFFICER, WARD 18(2), ROOM NO. 247, CR BUILDING, NEW DELHI VS. M/S UGGARWARE POLYMERS LTD., S 524, SHAKARPUR, DELHI 110 092 (PAN: AAACU4842P) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. SAMEER SHARMA, SR. DR ASSESSEE BY : NONE A S DATE OF HEARING : 25 - 9 - 2014 DATE OF ORDER : 26 - 9 - 2014 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - XX I , NEW DELHI DATED 16 . 8 .201 1 P ERTAINING TO ASSESSMENT YEAR 2004 - 05 ON THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 15,00,000/ - BROUGHT TO TAX AS DEEMED INCOME BY THE AO U/S. 68 OF THE I.T. ACT TREATING THE CREDITS AS UNE XPLAINED. ITA NO. 4742/ DEL/ 2011 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 15,00,000/ - WITHOUT APPRECIATING THE FACT THAT THE GENUINENESS OF THE CREDIT ENTRIES WAS NOT PROVED AS THE DIRECTORS OF THE COMPANY WHO ADVANC ED RS. 15,00,000/ - TO THE ASSESSEE COMPANY DID NTO COMPLY WITH THE SUMMONS ISSUED BY THE AO FOR CROSS VERIFICATION. 3. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGTH TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DUR ING THE HEARING OF APPEAL. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY FILED ITS ORIGINAL RETURN OF INCOME ON 30.10.2004 DECLARING NIL INCOME. THE CASE WAS PROCESSED U/S. 143(1) VIDE INTIMATION DATED 22.6.2005 BUT NO NOTICE U/S. 143(2 ) WAS ISSUED. LATER ON A NOTICE UNDER SECTION 148 WAS ISSUED ON 17.3.2010, ASKING THE ASSESSEE TO FILE A RETURN OF INCOME. REASONS FOR REOPENING THE CASE U/S. 147 WERE ALSO RECORDED. AO IN HIS ORDER DATED 13.1.2010 PASSED U/S. 143(3)/148 HAS OPINED THAT THE GENUINENESS OF THE TRANSACTION OF THE CREDITOR HAS NOT BEEN PROVED. THE CREDIT IN THE BOOKS OF THE ASSESSEE REMAINS UNEXPLAINED AND IS TREATED AS ITS INCOME U/S. 68 OF THE I.T. ACT, 1961. THUS, HE OBSERVED THAT HE HAS REASON TO BELIEVE THAT THE ASSES SEE HAS CONCELAED ITS INCOME TO THE EXTENT OF RS. 15,00,000/ - AND FOR WHICH PENALTY PROCEEDINGS U/S. 271(1)(C) WILL BE INITIATED SEPARATELY . ACCORDINGLY, THE AO ADDED AN AMOUNT OF RS. 15,00,000/ - TO THE INCOME OF THE ASSESSEE. 3. AGAINST THE AFORESAID O RDER DATED 13.1.2010 PASED BY THE AO, ASSESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 16.8.2011 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION OF RS. 15,00,000/ - . ITA NO. 4742/ DEL/ 2011 3 4. AGGRIEVED BY THE LD. FIRST APPELLATE AUTHORITY AFORESAID ORDER DATED 16.8.2011, REVENUE PREFERRED AN APPEAL BEFORE US. 5. DURING THE HEARING LD. DR RELILED UPON THE ORDER OF THE ASSESSING OFFICER AND REITERATED THE CONTENTION RAISED IN THE GROUNDS O F APPEAL FILED BY THE DEPARTMENT. 6. NONE APPEARED ON BEHALF OF THE ASSESSEE. 7. UPON HEARING THE LD. DR AND PERUSING THE RECORDS, WE ARE OF THE OPINION THAT THE APPEAL CAN BE DECIDED EXPARTE QUA ASSESSEE. WE FIND THAT AO IN HIS ORDER AS ADDED AN AMOUNT OF RS. 15,00,000/ - IN THE ASSTT. YEAR 2004 - 05 U/S. 68 OF THE IT ACT, WHEREIN, HE HAS HELD THAT IDENTITY, CREDITWORTHINESS AND GENUINESS OF THE TRANSACTION WERE NOT SATISFIED BECAUSE SUMMONS WERE ISSUED TO THE DIRECTOR OF THE COMPANY AND NONE ATTEN DED BEFOR ETHE AO. SO, AMOUNT IN QUESTION REMAINED UNEXPLAINED. WE FIND THAT IT HAS BEEN FURTHER OBSERVED BY THE AO THAT MERE FILING THE CONFIRMATION FROM THE PARTY DOES NOT PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. SO, ASSES SING OFFICER HAS INVOKED PROVISIONS OF SECTION 68 OF THE IT ACT. IN THIS REGARD, LD. AR OF THE ASSESSEE HAS SUBMITTED PLETHORA OF JUDGMENTS SUPPORTING HIS CASE, WHERIEN, LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS RELIED ON THE JUDGMENT AND HAS T O PRODUCED COPIES OF THE JUDGMENT ON RECORD. LD. AR S RELIANCE ON THE JUDGMENT OF HON BLE DELHI HIGH COURT IN THE CASE OF WINSTEAL 330 ITR 603, VICTOR 329 ITR 271 AND DWARKADISH 330 ITR 298 AND OASIS HOSPITALITY 333 ITR 119, WHEREIN IT HAS BEEN HE LD THAT CONFIRMATION OF SHARE APPLICNT IS SUFFICIENT IF ALL THE DETAILS WITH REGARD TO INCOME TAX PARTICULARS, BANK STATEMENT ETC. ARE PRODUCED TO PROVE THE IDENTITY OF THE SHAREHOLDERS. WE FIND THAT IN THIS CASE IT IS FOUND THAT DURING THE COURSE OF THE ASSESSMENT PRCOEEDINGS ASSESSEE HAS GIVEN COPY OF CONFIRMATION OF THE SHARE APPLICANTS ALONG WITH COPY OF IT RETURN AND COPY OF ITA NO. 4742/ DEL/ 2011 4 BANK STATEMENT IN ALL THE CASE. THEREFORE, WE FIND THAT LD. CIT(A) HAS CORRECTLY OPINED THAT THE ASSESSEE S CASE IS COVERED BY THE FOUR JUDGMENTS AS AFORESAID OF THE HON BLE DELHI HIGH COURT. WE FIND THAT LD. CIT(A) HAS ACCORDINGLY HELD THAT THE ISSUE IS COVERED BY THE ABOVE MENTIONED JUDGMENTS OF THE HON BLE HIGH COURT AND CORRECTLY DECIDED THE ISSUE IN FAVOR OF THE ASSESSEE. I N VIEW OF THE AFORESAID DISCUSSIONS AND PRECEDENTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER FO THE LD. CIT(A), HENCE, WE UPHOLD THE SAME AND DECIDE THE ISSUE AGAINS T THE REVENUE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORD ER PRONOUNCED IN THE O PEN C OURT ON 26 / 9 /20 1 4 . SD/ - SD/ - [ J.S. REDDY ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 26 / 9 /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 ITA NO. 4742/ DEL/ 2011 5