ITO, New Delhi V. M/s. Mela Ram Steels Pvt. Ltd., New Delhi

ITA 4826/DEL/2014

• Counselvise Citation: 482620114 RSA 2014
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 05-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHIRANJAN SENAPATI
• Keywords: Accommodation entries
• Section: 142(1); 147; 148

Judgement Text

ITA NO. 4826/DEL/2014 1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC - 2 : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 4826 /DEL/201 4 A.Y. : 200 8 - 0 9 INCOME TAX OFFICER, VS. M/S MELA RAM STEELS PVT. LTD. WARD 6( 3), Y - 26, LOHA MANDI, NARAINA, NEW DELHI NEW DELHI 110 028 (PAN:AAACM5881E) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. SUDHIRANJAN SENAPATI, SR . DR ASSESSEE BY NONE PRESENT DATE OF HEARING : 05 - 0 8 - 2015 DATE OF ORDER : 1 0 - 0 9 - 2015 PER H.S. SIDHU, JM: - O R D E R THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - IX , NEW DELHI DATED 27 . 6 .201 4 PERTAINING TO ASSESSMENT YEAR 200 8 - 0 9 . 2. T HE GROUNDS OF APPEAL READ AS UNDER: - 1. T HE ORDER OF THE LEARNED CIT(APPEALS) IS ERRONEOUS AND CONTRARY TO FACTS & LAW. 2 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (APPEALS) HAS NOT TAKEN INTO CONSIDERATION THAT THE ASSESSEE HAD NOT PROVED THE CREDITWORTHINE SS OF THE CREDITOR AS CREDITS IN THE BANK ITA NO. 4826/DEL/2014 2 ALC OF THE CREDITOR HAS COME AND TRANSFERRED TO THE ASSESSEE IMMEDIATELY? 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (APPEALS) HAS ERRED NOT CONSIDERING THAT THE GENUINENE SS OF THE TRANSACTIONS HAD NOT BEEN PROVED IN THE CONTEXT OF REGULAR CREDITS IN THE BANK STATEMENTS OF THE CREDITORS, IMMEDIATE TRANSFER OF FUNDS AND THEREAFTER, PETTY BALANCE IN THE BANK ACC O UNT OF THE CREDITORS? 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSEE COULD NOT / PRODUCE THE DIRECTOR FOR STATEMENT AT WHICH TIME THE ACCOMMODATION ENTRY WAS TAKEN FROM MLS GREEN MARK INDIA LTD. AND MLS GANPATI FINCAP SERVICES LTD., THEREFORE, CASE LAW OF CIT VS. MLS NOVA PROMOTERS AND F INLEASE PVT. LTD., 342 ITR 169 (DEL) APPLIED ON THIS ISSUE. THIS FACT HAS NOT BEEN CONSIDERED BY THE LD.CIT(A)? 5. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, OR AMEND ON THE GROUND OF AT THE APPEAL RAISED ABOVE AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING OF MS PLATES, ROUTES PLATES AND OTHER IRON AND STEEL PRODUCTS. THAT THE ASSESSEE COMPANY FILED THEIR RETURN FOR THE ASSESSMENT YEAR 2008 - 09 DECLARING AN INCOME OF RS.92,124/ - ON 8.9.2008. THE CASE WAS INITIALLY PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961, THEREAFTER ON THE BASIS OF INFORMATION RECEIVED FROM THE OFFICE OF THE DIT(INV.), NEW DELHI, THAT THE APPELLANT ITA NO. 4826/DEL/2014 3 COMPANY RECEIVED ACCOMMODATION ENTRIES DURING THE YEAR 2007 - 08 (AY 2008 - 09) TO THE TUNE OF RS. 13 LAKHS FROM M/S GREEN MARK INFRA LTD., EARLIER KNOWN AS M/S JIVAN REALTORS LTD. AND FROM M/S GANPATI FINCAP SERVICES PVT. LTD. (RS. 7 LAKHS AND RS. 6 LAKHS RESPECTIVELY), THE ASSESSMENT IN THE CASE WAS REOPENED U/S. 147 OF THE ACT, AS SUCH THE NOTICE WAS ISSUED U/S. 148 OF THE ACT, TO THE ASSESSEE COMPANY. IN RESPONSE TO THE NOTICE ISSUED U/S. 148, THE ASSESSEE COMPANY FILED LETTER DATED 14.4.2013, THAT THE ITR FILED ORIGINALLY ON 28.9.2008 MAY PL EASE BE TREATED AS FILED IN RESPONSE TO THE NOTICE ISSUED U/S. 148 OF THE ACT. THEREAFTER NOTICES U/S. 143(2) AND 142(1) OF THE ACT, WERE ISSUED AND SERVED UPON TO THE ASSESSEE COMPANY. THE ASSESSMENT WAS COMPLETED ON 13.3.2014 U/S. 143(3)/147 WITH AN AD DITION OF RS. 13,26,000/ - U/S. 68 OF THE ACT. 4. AGGRIEV E D WITH THE AFORESAID ORDER DATED 13 . 3 .201 4 , ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 2 7 . 6 .2014 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE . 5. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. IN THIS CASE THE NOTICE WAS SENT TO THE ASSESSEE FOR HEARING BY REGD. AD POST ON 0 5 .0 8 .2015 AT THE ADDRESS MENTIONED IN FORM NO. 36 VIDE COLUMN NO. 10, BUT NOBODY APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED. IN MY CONSIDERED OPINION, NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND AGAIN ON THE SA ME ADDRESS. THEREFORE, I AM OF THE CONSIDERED VIEW THAT THE CASE MAY BE DECIDED EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR . ITA NO. 4826/DEL/2014 4 7. LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 8 . I HAVE HEARD THE LD. DR AND PERUSED THE RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES. I FIND FROM THE RECORDS THAT THE INVESTING COMPANIES WERE HAVING SUFFICIENT FUNDS IN THEIR BANK A/C WHEREFROM THE FUNDS WERE INVESTED BY THEM WITH THE ASSESSE E COMPANY. THE SHARE APPLICANTS HAVE NOT INTRODUCED ANY CASH IN THEIR BANK A/C PRIOR TO THE INVESTMENT OF FUNDS WITH THE ASSESSEE COMPANY. THEY WERE HAVING SUFFICIENT CAPITAL ALSO IN THEIR CAPITAL A/C WHEREFROM THE INVESTMENTS HAVE BEEN MADE WITH THE A SSESSEE COMPANY. THESE DOCUMENTS ARE NOT CONTRADICTED BY AO MAKING INDEPENDENCY INQUIRY. THE DIRECTOR OF THE COMPANY GIVING THE AMOUNT HAS PROVIDED CONFIRMATION ABOUT THE TRANSACTION. THUS, THE IDENTITY OF THE CREDITORS IS ESTABLISHED. THE THIRD PARTY EVIDENCE THAT IS THE STATEMENT OF SH. ASEEM GUPTA WAS NEVER PROVIDED TO THE ASSESSEE FOR CROSS EXAMINATION AND SH. ASEEM GUPTA IS NOT IN A NY WAY RELATED TO THE CREDITOR COMPANY. THEREFORE, APPLYING THE PRINCIPLE LAID DOWN IN THE CASE OF CIT VS. DIVINE LEASING & FINANCE LTD. (2008) 299 ITR 268 (DELHI) IT CAN BE HELD THAT AS THE ASSESSEE HAD FURNISHED THE PAN, BANK DETAILS AND OTHER PARTICU LARS OF THE SHARE APPLICANTS, IT HAD DISCHARGED THE ONUS OF PROVING THE IDENTITY AND CREDITWORTHINESS OF THE INVESTORS AND THAT THE TRANSACTIONS WERE NOT BOGUS. IN VIEW OF THIS, THE ADDITIONS MADE BY THE AO ARE NOT SUSTAINABLE , HENCE, THE SAME WAS RIGHTL Y DELETED BY THE LD. CIT(A). IN VIEW OF THE ABOVE, I DO NOT FIND ANY INFIRMITY IN THE WELL REASONED ORDER PASSED BY THE LD. CIT(A), HENCE, I UPHOLD THE IMPUGNED ORDER OF LD. CIT(A) AND DECIDE THE ISSUE IN DISPUTE AGAINST THE REVENUE. ITA NO. 4826/DEL/2014 5 9 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 0 / 9 /201 5 . S D / - [ H.S. SIDHU ] JUDICIAL MEMBER DATE: 1 0 / 9 /201 5 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