ITO, New Delhi V. Sh. Abhishek Kumar, New Delhi

ITA 4896/DEL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7037 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 15-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 29-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Assessee Lawyers: GULSHAN GABA
• Keywords: Unexplained cash credit; Additional evidence; Non compliance
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-II, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO . 4896 /DEL/20 1 5 A.Y. : 2008 - 200 9 INCOME TAX OFFICER, WARD 32(5), ROOM NO. 1308, 13 TH FLOOR, CIVIC CENTRE, MINTO ROAD, NEW DELHI VS SH. ABHISHEK KUMAR, 110/5, GAUTAM NAGAR, NEW DELHI 110 049 (PAN:AAOTPK2416F) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : SH. AMRIT LAL, SR. DR ASSESSEE BY : SH. GULSHAN GABA, AR DATE OF HEARING: 08-09-2016 DATE OF ORDER : 04-10-2016 ORDER ORDER ORDER ORDER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST TH E ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-11, NE W DELHI FOR THE ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED IN THE REVENUES APPEAL READ AS UNDER:- 1. THE LD.CIT(A) ERRED IN NOT EXERCISING HIS POWER UNDER SECTION 250(4) OF THE I.T. ACT AS IT IS INCUMBENT ON CIT{A) TO IN VOKE SECTION 250(4) AS HELD BY HON'BLE DELHI HIGH COURT IN ITA NO.525/2 014 DATED 11/03/2015 IN THE CASE OF CIT VS. JANSAMPARK ADVERT ISING AND MARKETING PVT. LTD. AND ALSO BOMBAY HIGH COURT (231 ITR 1). 2 2. THE LD.CIT{A) HAS ERRED IN DELETING THE ADDITION OF RS.22,54,338/- AS THE LD.CIT{A) DID GIVE ANY DIRECTION TO AO TO CO NDUCT ANY SPECIFIC ENQUIRY WHILE SEEKING REMAND REPORT AND TH E ASSESSEE FILED NOT GIVE ANY DIRECTION TO AO TO CONDUCT ANY SPECIFI C ENQUIRY WHILE SEEKING REMAND REPORT AND THE ASSESSEE FAILED TO DI SCHARGE HIS ONUS ON THE IDENTITY, CREDITWORTHINESS AND GENUINENESS O F TRANSACTIONS EVEN IN THE REMAND REPORT. 3. THE LD.CLT{A) ERRED IN OBSERVING THAT MERE NON-C OMPLIANCE OF SUMMONS CANNOT BE THE BASIS TO MADE ADDITION IN PAR A 4.12 AND PARA 4.16 OF ITS ORDER WHEREAS THE AO IS RIGHT IN I SSUING SUMMONS FOR VERIFICATION OF DOCUMENTS SUBMITTED BY THE ASSESSEE AND ALSO TO DETERMINE THE GENUINENESS OF TRANSACTIONS. 4. THE LD.CIT(A) ERRED IN DELETING ADDITION OF RS.1 4,00,000/- WHEREAS THE ONUS WAS ON THE ASSESSEE TO ESTABLISH THE FAIL ED TO DISCHARGE HIS ONUS ON THE IDENTITY, CREDITWORTHINESS AND GENUINEN ESS OF TRANSACTIONS. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF AP PELLATE PROCEEDINGS BEFORE HON'BLE ITAT APPEAL. IT IS PRAYED THAT THE ORDER OF THE CIT (A) BEING C ONTRARY TO THE FACTS ON RECORD AND THE SETTLED POSITION OF LAW, BE SET A SIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE F ILED HIS RETURN OF INCOME ON 26.3.2008 DECLARING INCOME OF RS. 1,59,81 0/- WHICH WAS PROCESSED U/S. 143(1) OF THE I.T. ACT AND SUBSEQUEN TLY CASE WAS SELECTED 3 FOR SCRUTINY UNDER CASS AND AO ISSUED STATUTORY NOT ICES U/S. 143(2) FOR COMPLIANCE. IN RESPONSE THERETO, THE ASSESSEE SUB MITTED HIS REPLY, BUT THE AO WAS NOT SATISFIED WITH THE SAME AND MADE THE FOLLOWING ADDITIONS:- I) ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S. 68 RS. 22,54,388/- II) ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S. 56(2). RS. 14,00,000/- 3.1 AFTER MAKING THE AFORESAID ADDITIONS, THE AO AS SESSED THE INCOME OF THE ASSESSEE AT RS. 38,14,200/- VIDE HIS ORDER DATE D 10.12.2010 PASSED U/S. 143(3) OF THE I.T. ACT, 1961. 4. AGGRIEVED WITH THE AFORESAID ORDER OF THE AO, TH E ASSESSEE FILED APPEAL BEFORE THE LD.CIT(A) WHO VIDE HIS IMPUGNED O RDER DATED 12.1.2011 DELETED THE ADDITIONS THEREBY ALLOWING TH E APPEAL OF THE ASSESSEE. 5. AGAINST THE ORDER OF THE LEARNED CIT(A) THE REVE NUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 7. ON THE CONTRARY, THE LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT THE LD. CIT (A) HAS PASSED A WELL 4 REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, THEREFORE, THE APPEAL OF THE REVENUE MAY BE DISMISS ED. 8. I HAVE HEARD BOTH THE PARTIES AND PERUSED RECORD S, ESPECIALLY THE ORDERS OF THE LOWER AUTHORITIES. WITH REGARD TO E FFECTIVE GROUND NO. 2 RELATING TO DELETION OF ADDITION OF RS. 22,54,388/ - IS CONCERNED, I FIND THAT THE LD. CIT(A) HAS ELABORATELY DISCUSSED THE ISSUE AND GAVE HIS FINDING VIDE PARA NO. 4.12 AT PAGE NO. 14 OF HIS IM PUGNED ORDER. FOR THE SAKE OF CONVENIENCE, THE RELEVANT FINDING OF THE LD . CIT(A) IS REPRODUCED BELOW:- 4.12 I HAVE CAREFULLY GONE THROUGH THE ORDER OF TH E AO AND THE SUBMISSIONS OF THE APPELLANT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT FILED CONFIRMATION, ITR, COMPUTATION OF INCOME, BANK STATEMENT, AND BALANCE SHEET AS ON 31.03.2008 OF TH E LENDER AND THE PAYMENT WERE MADE THROUGH THE LOAN WAS ALSO REPAID BACK BEFORE THE INITIATION OF BANKI NG CHANNELS. THE LOAN WAS ALSO REPAID BACK BEFORE THE INITIATION OF ASSESSMENT PROCEEDINGS. THE AO DID NO T MAKE ANY SPECIFIC ENQUIRIES IN THE ASSESSMENT PROCEEDINGS AS WELL AS IN THE REMAND PROCEEDINGS TO DISCREDIT THE DOCUMENTS PRODUCED BY THE AFORESAID ASPECTS AND NO EFFORTS WERE MADE TO PURSUE THE LEND ER TO DETERMINE THEIR CREDIT WORTHINESS. MOREOVER THER E WAS NO ADVERSE MATERIAL IN THE HANDS OF AO WHICH CA STS ASPERSIONS ON THE GENUINENESS OF TRANSACTION. MERE NON COMPLIANCE OF SUMMON CANNOT BE THE BASIS TO MAKE 5 ADDITION. SO IN VIEW OF ABOVE AND ON THE BASIS OF V ARIOUS COURT CASES RELIED UPON BY THE APPELLANT AND AO, I AM UNABLE TO SUSTAIN THE ADDITION OF RS. 22,54,388/- U LS 68 OF INCOME TAX ACT, 1961 MADE BY THE ASSESSING OFFIC ER AND ACCORDINGLY THE ASSESSING OFFICER IS DIRECTLY T O DELETE THE IMPUGNED ADDITION. 9. AFTER PERUSING THE FINDING OF THE LD. CIT(A), I FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILE D CONFIRMATION, ITR, COMPUTATION OF INCOME, BANK STATEMENT, AND BALANCE SHEET AS ON 31.03.2008 OF THE LENDER AND THE PAYMENT WERE MADE THROUGH THE LOAN WAS ALSO REPAID BACK BEFORE THE INITIATION OF BANKI NG CHANNELS. THE LOAN WAS ALSO REPAID BACK BEFORE THE INITIATION OF ASSES SMENT PROCEEDINGS. IT WAS NOTED THAT THE AO DID NOT MAKE ANY SPECIFIC ENQ UIRIES IN THE ASSESSMENT PROCEEDINGS AS WELL AS IN THE REMAND PRO CEEDINGS TO DISCREDIT THE DOCUMENTS PRODUCED BY THE AFORESAID ASPECTS AND NO EFFORTS WERE MADE TO PURSUE THE LENDER TO DETERMINE THEIR CREDIT WORTHINESS. MOREOVER, THERE WAS NO ADVERSE MATERIAL IN THE HAND S OF AO WHICH CASTS ASPERSIONS ON THE GENUINENESS OF TRANSACTION. MERE NON COMPLIANCE OF SUMMON CANNOT BE THE BASIS TO MAKE ADDITION. SO IN VIEW OF ABOVE AND ON THE BASIS OF VARIOUS COURT CASES RELIED UPON BY THE ASSESSEE BEFORE THE LD. CIT(A) AND AO, I AM OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS RIGHTLY OBSERVED THAT HE IS UNABLE TO SUSTAIN THE ADDITION OF RS. 22,54,388/- ULS 68 OF INCOME TAX ACT, 1961 MADE BY THE ASSESSING OFFICER 6 AND ACCORDINGLY THE ASSESSING OFFICER WAS RIGHTLY DIRECTED TO DELETE THE IMPUGNED ADDITION. IN THE BACKGROUND, I AM OF THE V IEW THAT LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEE D ANY INTERFERENCE ON MY PART, HENCE, I UPHOLD THE SAME. ACCORDINGLY, THE GROUND NO. 2 RAISED BY THE REVENUE IS DISMISSED. 10. WITH REGARD TO ANOTHER EFFECTIVE GROUND NO. 4 R ELATING TO DELETION OF ADDITION OF RS. 14,00,000/- IS CONCERNED, I FIND TH AT THE LD. CIT(A) HAS ELABORATELY DISCUSSED THE ISSUE AND GAVE HIS FINDI NG VIDE PARA NO. 4.21 AT PAGE NO. 20 & 21 OF HIS IMPUGNED ORDER. FOR THE SA KE OF CONVENIENCE, THE RELEVANT FINDING OF THE LD. CIT(A) IS REPRODUCE D BELOW:- 4.21 I HAVE CAREFULLY GONE THROUGH THE SUBMISSIONS OF THE AR OF THE APPELLANT AND HAVE GONE THROUGH THE ASSESSME NT ORDER AND THE CONFIRMATION AND AFFIDAVIT OF SH. ANUP JOSH I IN WHICH HE HAS STATED THAT HE HAS ADVANCE A SUM OF RS. 14,0 0,000/- AS LOAN TO THE APPELLANT. IN THE PRESENT CASE, THE INTENTION TO REPAY GETS ESTABLISHED BY THE FACT THAT THE APPELLA NT HAS SHOWN IT AS A LOAN IN THE BALANCE SHEET AND THIS FA CT HAS BEEN FURTHER SUPPORTED BY THE SH. ANUP JOSHI BY SUBMITTI NG LOAN CONFIRMATION CERTIFICATES DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND ADDITIONAL EVIDENCES SUBMITTED HERE WITH. THE ADDITIONAL EVIDENCES WERE ALSO FORWARDED TO THE LD. AO DURING THE COURSE OF APPELLATE PROCEEDINGS BUT HE DID NOT BRING ON RECORD AN ADVERSE FINDING WITH REGARD TO THE VALIDI TY OF THE 7 DOCUMENTS. I HAVE ALSO GONE THROUGH THE CASE LAWS R ELIED UPON BY THE LD. AR AND AO AND HAVE COME TO THE CON CLUSION THAT SINCE THE AMOUNT ADVANCED WAS IN THE NATURE OF LOAN WHICH WAS REPAYABLE IN FUTURE AND HENCE THE PROVIS ION OF SECTION 56(2)(VI) OF THE INCOME TAX ACT CANNOT BE I NVOKED AGAINST THE APPELLANT AND THEREFORE THE ASSESSING OFFICER IS DIRECTED TO DELETE THE IMPUGNED ADDITIONS. 11. AFTER PERUSING THE FINDING OF THE LD. CIT(A), I FIND FROM THE CONFIRMATION AND AFFIDAVIT OF SH. ANUP JOSHI WHEREI N IT WAS STATED THAT HE HAS ADVANCED A SUM OF RS. 14,00,000/- AS LOAN TO TH E ASSESSEE. IN THE PRESENT CASE, THE INTENTION TO REPAY GETS ESTABLISH ED BY THE FACT THAT THE ASSESSEE HAS SHOWN IT AS A LOAN IN THE BALANCE SHEE T AND THIS FACT HAS BEEN FURTHER SUPPORTED BY THE SH. ANUP JOSHI BY SUB MITTING LOAN CONFIRMATION CERTIFICATES DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND ADDITIONAL EVIDENCES. LD. CIT(A) FORWARDED THE ADDITIONAL EVIDENCES TO THE AO DURING THE COURSE OF APPELLATE PROCEEDIN GS BUT HE DID NOT BRING ON RECORD ANY ADVERSE FINDING WITH REGARD TO THE VA LIDITY OF THE DOCUMENTS. I NOTE THAT THE LD. CIT(A) HAS ALSO GONE THROUGH THE CASE LAWS RELIED UPON BY THE LD. AR AND AO AND HAVE COM E TO THE RIGHT CONCLUSION THAT SINCE THE AMOUNT ADVANCED WAS IN TH E NATURE OF LOAN WHICH WAS REPAYABLE IN FUTURE AND HENCE THE PROVIS ION OF SECTION 56(2)(VI) OF THE INCOME TAX ACT CANNOT BE INVOKED A GAINST THE ASSESSEE AND THEREFORE THE ASSESSING OFFICER WAS RIGHTLY DI RECTED TO DELETE THE IMPUGNED ADDITION. IN THE BACKGROUND, I AM OF THE VIEW THAT LD. CIT(A) 8 HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEE D ANY INTERFERENCE ON MY PART, HENCE, I UPHOLD THE SAME. ACCORDINGLY, THE GROUND NO. 4 RAISED BY THE REVENUE IS DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/10/2016. S SS SD DD D/ // /- -- - [ [[ [H.S. H.S. H.S. H.S. SIDHU SIDHU SIDHU SIDHU] ]] ] JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR DATE: 04-10-2016 COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 9