M/s. Advance Agencies Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 4880/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3895 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-05-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 09-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI
• Assessee Lawyers: M K GIRI
• Keywords: Opportunity of being heard; Additional evidence
• Section: 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH A DELHI ] BEFORE SHRI R. P. TOLANI, JM AND SHRI K. D. RA NJAN, AM I. T. APPEAL NO. 4880 (DEL) OF 2010 ASSESSMENT YEAR : 2007-08. M/S. ADVANCE AGENCIES PVT. LTD., THE INCOME-T AX OFFICER, 414/1, 4 TH FLOOR, DDA COMM. COMPLEX VS. W A R D : 1 (2), DISTT. CENTRE, J A N A K P U R I, N E W D E L H I. N E W D E L H I 110 058. P A N / G I R NO. AAD CA 8460 C. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI ANOOP SHARMA, ADV.; & SHRI M. K. GIRI , ADV.; DEPARTMENT BY : MS. BANITA DEVI, SR. D. R.; O R D E R. PER K. D. RANJAN, AM : THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 20 07-08 ARISES OUT OF ORDER OF THE LD. CIT (APPEALS)-IV, NEW DELHI. 2. THE GROUNDS OF APPEAL RAISED ARE REPRODUCED AS F OLLOWS :- 1. THE LD. CIT (APPEALS) ERRED IN REJECTING ASSES SEES CONTENTION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46-A(1) OF THE INCOME TAX RULES; 2. THE LD. CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.25,00,000/-, BEING SHARE CAPITAL RECEIVED FROM SHARE-HOLDERS, UN DER SECTION 68 OF THE INCOME TAX ACT. 2 I. T. APPEAL NO. 4880 (DEL) OF 2010 3. THE FIRST ISSUE FOR CONSIDERATION RELATES TO REJ ECTING THE ASSESSEES CONTENTION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46-A OF THE INCOME-TAX RULES. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE INTRODUC ED SHARE CAPITAL OF RS.25 LAKHS IN THE NAME OF FOUR PERSONS I.E. VEERBHADREN CH. RS.5,00,000/-; BE ENA SHAJI RS.5 LAKHS; DEEPA S. RS.5 LAKHS; AND BENI PRASAD RAM NARAIN RS.10 LAKHS. THE ASSESS ING OFFICER ASKED THE ASSESSEE TO PROVE THE IDENTITY, THE CREDITWORTHINESS AND GENUINENESS OF T HE TRANSACTIONS IN RESPECT OF SHARE APPLICANTS. THE AO ISSUED NOTICE UNDER SECTION 133(6) TO THE SH ARE APPLICANTS. NOTICE IN THE CASE OF VEERBHADREN CH. WAS RECEIVED BACK UN-SERVED. IN CA SE OF BEENA SHAJI IT WAS REPLIED THAT NO SUBSCRIPTION WAS MADE IN THE ASSESSEE COMPANY. NO REPLY FROM DEEPA S. AND BENI PRASAD RAM NARAIN WAS RECEIVED. THE AO, THEREFORE, TREATED TH E AMOUNT OF UNSUBSTANTIATED SHARE CAPITAL AS UNEXPLAINED AND ADDED THE SAME UNDER SECTION 68 OF THE ACT. 4. ON APPEAL THE ASSESSEE FILED ADDITIONAL EVIDEN CE TO WHICH THE ASSESSING OFFICER HAD STRONGLY OBJECTED BY SAYING THAT THE ADDITIONAL EVI DENCE SHOULD NOT BE ADMITTED UNDER RULE 46A(1) AS NONE OF THE CONDITIONS STATED THEREIN HAD BEEN COMPLIED WITH BY THE ASSESSEE. IT WAS ALSO REPORTED THAT THE MONEY HAD BEEN RECEIVED THRO UGH DEMAND DRAFT AND NOT THROUGH ACCOUNT PAYEE CHEQUES AND, THEREFORE, SOURCES OF MONEY COUL D NOT BE EXPLAINED BY THE SHARE APPLICANTS. IT WAS ALSO REPORTED THAT THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF LOVELY EXPORTS P. LTD. WAS NOT APPLICABLE TO THE FACTS OF THE CASE. THE LD. CIT (APPEALS) ON CONSIDERATION OF THE FACTS HELD THAT ON THE ISSUE WHETHER ADDITIONAL EVI DENCE SHOULD BE ADMITTED OR NOT, THE POWERS OF THE LD. CIT (A) TO ADMIT ADDITIONAL EVIDENCE WERE R ESTRICTED. HE RELIED ON THE DECISION OF ITAT, DELHI BENCH IN THE CASE OF ITO VS. MITTAL INTERNATI ONAL (I) PVT. LTD. IN 2008 474 ITAT DEL. AND ALSO THE DECISION OF HONBLE DELHI HIGH COURT I N THE CASE OF MOZER BAER INDIA & OTHERS VS. ADDL. CIT 17 DTR (DEL) 98 WHEREIN IT HAS BEEN HELD THAT ON BARE READING OF RULE 46-A THE ASSESSEE DOES NOT HAVE RIGHT TO FILE ADDITIONAL EVI DENCE UNLESS HIS CASE FALLS WITHIN ONE OF THE SITUATIONS PRESCRIBED UNDER RULE 46-A. THE DISCRET ION TO PERMIT THE ADDITIONAL EVIDENCE LIES WITH THE LD. CIT (A). THEREFORE, IT CANNOT BE SAID THAT THE LD. CIT (APPEALS) IS DUTY BOUND TO ADMIT ANY EVIDENCE THAT THE ASSESSEE WISHES TO ADDUCE, BA SED ON WHICH HE WOULD CONDUCT A DE NOVO EXAMINATION OF THE CASE BEFORE HIM. THE LD. CIT (A ) IN VIEW OF DECISION OF HONBLE DELHI HIGH COURT AND THE ITAT OBSERVED THAT THE ASSESSING OFFI CER FROM SEPTEMBER, 2008 TILL ISSUANCE OF 3 I. T. APPEAL NO. 4880 (DEL) OF 2010 ORDER ON 21 ST DECEMBER, 2009 HAD GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO FILE NECESSARY DETAILS, WHICH HAVE NOT BEEN DONE BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FOR THE REASONS BEST KNOWN TO HIM. SUCH ADMISSION OF ADDITIONAL EV IDENCE COULD NOT BE PERMITTED UNDER RULE 46-A(1) OF THE RULES. HE ALSO OBSERVED THAT THE LD . AR OF THE ASSESSEE HAD RELIED ON CERTAIN DECISIONS PERTAINING TO RULE 46-A(4) READ WITH SECT ION 250(4) OF THE ACT, WHICH ACCORDING TO THE LD. CIT (A) WAS NOT APPLICABLE. THE LD. CIT (A), T HEREFORE, REJECTED ADMISSION OF ADDITIONAL EVIDENCE AND DECIDED THE APPEAL ON MERITS WITHOUT T AKING INTO ACCOUNT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. 5. BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FILED PAN NUMBERS AND THE ADDRESSES OF SHARE APPLICANTS. IN CASE OF VEERBHADREN CONFIRMATION WAS ALSO FILED BEFORE THE ASSESSING OFFICER. IN CASE OF BENI PRASAD RAM NARAIN, CONFIRMATION, BANK STATEMENT AND INCOME-TAX RETURN OF KANPUR TYRE HOUSE WAS FILED. HE FURTHER SUBMITTED THAT IF ENQUIRY LETTERS SENT AT THE ADDRESS GIVEN BY THE ASSESSEE WERE RECE IVED BACK, THE AO SHOULD HAVE GIVEN OPPORTUNITY TO THE ASSESSEE. SINCE THE ASSESSEE WA S NOT GIVEN OPPORTUNITY TO CROSS EXAMINE THE ASSESSEE FILED ADDITIONAL EVIDENCE BEFORE THE LD. C IT (A) WHICH WERE NOT ADMITTED BY THE LD. CIT (A) ON THE GROUND THAT THE ASSESSEE WAS GIVEN LONG TIME TO PRODUCE THE EVIDENCES, BUT THE OPPORTUNITY WAS NOT AVAILED OFF. IN VIEW OF THESE F ACT IT HAS BEEN SUBMITTED THAT ADDITIONAL EVIDENCE SHOULD BE ADMITTED AND THE ISSUE SHOULD BE DECIDED BY THE TRIBUNAL. ON THE OTHER HAND, THE LD. SR. DR SUPPORTED THE ORDER OF THE ASSESSING OFFICER VEHEMENTLY. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE CASE BEFORE US IT IS A FACT THAT THE NOTICES ISSUED IN CASE OF ONE OF THE SHARE APPLICANTS HAD BEEN RECEIVED BACK. ONE OF THE APPLICANTS HAD STATED TH AT SHE HAD NOT MADE ANY DEPOSIT IN THE COMPANY WHEREAS NO REPLY WAS RECEIVED FROM TWO PERS ONS. IT IS ALSO A FACT THAT THE ASSESSING OFFICER ON RECEIPT OF REPLY OR RECEIPT OF NOTICE RE CEIVED UN-SERVED, NO FURTHER OPPORTUNITY WAS PROVIDED BY HIM TO THE ASSESSEE. THEREFORE, IN OUR CONSIDERED OPINION, THE LD. CIT (APPEALS) SHOULD HAVE ADMITTED THE ADDITIONAL EVIDENCE AND AD JUDICATED UPON. WE, THEREFORE, ADMIT THE ADDITIONAL EVIDENCE AND DIRECT THE LD. CIT (APPEALS ) TO DECIDE THE ISSUE AFRESH, AFTER CONSIDERING 4 I. T. APPEAL NO. 4880 (DEL) OF 2010 THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. LD C IT(A) WILL DECIDE THE ISSUE ON MERITS AFTER AFFORDING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 27 TH MAY, 2011. SD/- SD/- [ R. P. TOLANI ] [ K. D. RANJ AN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27 TH MAY, 2011. * MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT.