Global Relocation Pvt. Ltd., New Delhi V. ITO, Ward- 12(2), New Delhi

ITA 5141/DEL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9704 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 27-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: KAMAL AHUJA
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.5141/DEL/2018 ASSESSMENT YEAR: 2006-07 GLOBAL RELOCATION PVT. LTD., E-2/4, VASANT VIHAR, NEW DELHI. PAN: AABCG7287M VS. ITO, WARD-12(2), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KAMAL AHUJA, ADVOCATE REVENUE BY : SHRI S.L. ANURAGI, SR.DR DATE OF HEARING : 08.08.2019 DATE OF PRONOUNCEMENT : 24.09.2019 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30 TH MAY, 2018 OF THE CIT(A)-42, NEW DELHI, RELATING TO ASSESSMENT YE AR 2006-07. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY ENGAGED IN THE CONSULTANCY BUSINESS IN REAL ESTATE AND EARNS COMMI SSION THEREON. IT FILED ITS RETURN OF INCOME ON 30.11.2006 DECLARING TOTAL LOSS OF RS.1,1 3,138/-. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NOTED THAT THE ASSESSEE IN ITS BANK ACCOUNT NO.7630 MAINTAINED WITH ICICI BANK, HAS MAD E CASH DEPOSIT OF RS.6,75,000/- ON 03.01.2006. SINCE THE TOTAL COMMISSION INCOME F OR THE YEAR TOTALED ONLY TO ITA NO.5141/DEL/2018 2 RS.3,87,000/-, THE ASSESSING OFFICER ASKED THE ASSE SSEE TO PRODUCE THE CASH BOOK AND EXPLAIN THE SOURCE OF DEPOSIT OF RS.6,75,000/-. TH E ASSESSEE WAS UNABLE TO CONFIRM OR EXPLAIN THE SOURCE OF DEPOSIT OF RS.6,75,000/-. TH EREFORE, THE ASSESSING OFFICER, INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT, M ADE AN ADDITION OF RS.6,75,000/- TO THE TOTAL INCOME OF THE ASSESSEE. SIMILARLY, THE A SSESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED A SUM OF RS.72,567/- ON ACCOUN T OF OFFICE MAINTENANCE AND RS.90,000/- ON ACCOUNT OF RENT PAID WHICH INCLUDED A PAYMENT OF RS.65,000/- TO M/S ORIENT CERAMICS. SINCE THE ASSESSEE COMPANY EXPRES SED ITS INABILITY TO PRODUCE NECESSARY VOUCHERS FOR THE EXPENDITURE INCURRED TOW ARDS OFFICE MAINTENANCE AND RENT PAID TO ORIENT CERAMICS, THE ASSESSING OFFICER MADE ADDITION OF RS.1,37,567/-. SIMILARLY, HE ALSO MADE AN ADDITION OF RS.5,100/- O N ACCOUNT OF DONATION. THE ASSESSING OFFICER ACCORDINGLY DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.7,04,529/-. IN APPEAL, THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. SO FAR AS THE ADDITION OF RS.6,75,000/- IS CONCERNED, HE UPHELD THE ACTION OF THE ASSESSING OFFICER BY OBSERVING AS UNDER:- 5.2 THE FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY DURING THE YEAR HAS CLAIMED TO BE ENGAGED N THE CONSULTANCY BUSINESS IN REAL ESTATE AND EARNED COMMISSION OF RS. 3,87,000/-. 5.3 DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOT ICED CASH DEPOSIT OF RS.6,75,000/- ON 03.01.2006 IN THE BANK A/C NO.763 0 MAINTAINED WITH ICICI BANK. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF THE SAME. IN RESPONSE, THE ASSESSEE ADMITTED IT TO BE UNEXPLAINED CASH DEPOSIT VIDE LET TER LETTER 11.09.2008. DURING THE APPELLATE PROCEEDINGS, THE ASSESSES TOOK A POSITION THAT THE CASH DEPOSIT IN THE BANK ACCOUNT WAS RECEIVED IN LIEU OF SHARE APPLICATION M ONEY FROM MRS. VIMMI KAPOOR WIFE OF MR. UMESH KAPOOR, DIRECTOR OF THE APPELLANT COMPANY. APPELLANT ALSO SUBMITTED COPY OF BOARD RESOLUTION, DATED 01.03.200 6 IN RESPECT OF ALLOTMENT OF 75,000 SHARES TO SUPPORT ITS CONTENTION. ITA NO.5141/DEL/2018 3 5.4 I FIND THAT THE BOARD MEETING TOOK PLACE ON 01. 03.2006 AT 3 P.M WHEREIN IT IS RECORDED THAT THE APPELLANT HAS TO MAKE THE PAYM ENT OF BALANCE 90% OF SHARE APPLICATION MONEY. THE CASH DEPOSIT IN THE BANK ACC OUNT OF THE APPELLANT IS ALSO ON 01.03.2006. I FIND THAT THE PLEA OF DEPOSIT OF SHA RE APPLICATION MONEY IN CASH IS AN AFTERTHOUGHT BECAUSE IF THE CASH WAS DEPOSITED ON 0 1.03.2006 IN THE BANK ACCOUNT IN THAT CASE THE FACT OF DEPOSIT OF CASH OUGHT TO HAVE BEEN RECORDED IN THE BOARD MEETING HELD ON THE SOME DATE AT 3 P.M. 5.5. MOREOVER, MRS. VIRNMI KAPOOR, WIFE OF MR. UMES H KAPOOR DIRECTOR OF THE COMPANY WAS PRESENT IN THE BOARD MEETING AND IT CAN NOT BE THE CASE THAT HE WAS NOT AWARE OF ANY CASH DEPOSIT BY HIS WIFE. FURTHER, THE APPELLANT COMPANY WAS ASKED THAT WHETHER RECEIPT WAS DULY RECORDED IN THE BOOKS OF ACCOUNT AS SHARE APPLICATION MONEY IN THE HAND OF MRS. VIMMI KAPOOR IN RESPONSE TO THE SAME THE APPELLANT COMPANY RESPONDED THAT THE SAME WAS RETURNED BACK T O THE MRS. VIMMI KAPOOR ON 28.03.2006. IT CANNOT BE THE CASE THAT WHEN SHARES HAVE BEEN ALLOTTED ON 01.03.2008 AND SHARE APPLICATION MONEY HAS TAKEN THE CHARACTER OF SHARE CAPITAL, IT IS NO LONGER RETURNABLE BY THE COMPANY ALLOTTING SHARES. ACCORDI NGLY, THE RESPONSE OF THE ASSESSEE COMPANY IS AN AFTERTHOUGHT TO COVER UP AND EXPLAIN THE SOURCE OF CASH. MOREOVER, THE APPELLANT HAS FAILED TO PRODUCE THE V OUCHER OF CASH RECEIPT FROM MRS. VIMMI KAPOOR AND CASH PAYMENT TO MRS. VIMMI KAPOOR . IN VIEW OF THE ABOVE DISCUSSION, I DO NOT FIND MERIT IN THE SUBMISSION O F THE APPELLANT COMPANY. HENCE, THE GROUND OF APPEAL IS DISMISSED. 3. HE ALSO SUSTAINED THE ADDITION MADE BY THE ASSES SING OFFICER ON ACCOUNT OF OFFICE MAINTENANCE AND RENT ON THE GROUND THAT THE ASSESSEE FAILED TO SUBSTANTIATE WITH EVIDENCE TO HIS SATISFACTION. SIMILARLY, DONATION MADE BY THE ASSESSING OFFICER WAS ALSO CONFIRMED BY HIM ON THE GROUND THAT THE ASSESS EE FAILED TO EXPLAIN AS TO HOW THE DONATION EXPENDITURE IS WHOLLY AND EXCLUSIVELY FOR THE BUSINESS OF THE ASSESSEE. 4. AGGRIEVED WITH SUCH ORDER OF THE LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL CHALLENGING THE ORDER OF THE CIT(A) IN SUS TAINING THE VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER. 5. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITIONS ON THE GROUND THAT THE ASSES SEE FAILED TO SUBSTANTIATE WITH ITA NO.5141/DEL/2018 4 EVIDENCE TO HIS SATISFACTION REGARDING THE SOURCE O F DEPOSIT IN THE BANK ACCOUNT AND FAILED TO SUBMIT THE BILLS AND VOUCHERS FOR CLAIM O F OFFICE MAINTENANCE EXPENSES AND RENT PAID TO M/S ORIENT CERAMICS. IN ABSENCE OF AN Y EVIDENCE TO SUPPORT THE CLAIM OF DONATION EXPENDITURE, THE SAME WAS DISALLOWED BY TH E ASSESSING OFFICER. HE, SUBMITTED THAT ALTHOUGH FULL DETAILS WERE FILED DUR ING THE COURSE OF APPEAL PROCEEDINGS, HOWEVER, THE LD.CIT(A), WITHOUT APPRECIATING THE FA CTS PROPERLY, HAS UPHELD THE ADDITIONS MADE BY THE ASSESSING OFFICER. HE SUBMIT TED THAT GIVEN AN OPPORTUNITY, THE ASSESSEE IS IN A POSITION TO SUBSTANTIATE WITH EVID ENCE TO THE SATISFACTION OF THE ASSESSING OFFICER REGARDING THE NATURE AND SOURCE O F CASH DEPOSIT IN THE BANK ACCOUNT AND THE GENUINENESS OF EXPENDITURE INCURRED ON ACCO UNT OF OFFICE MAINTENANCE, RENT AND DONATION. 6. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDER OF THE ASSESSING OFFICER AND CIT(A). HE SUBMITTED THAT THE ASSESSEE MISERABLY FAILED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A) TO S UBSTANTIATE ITS CLAIM, THEREFORE, NO FURTHER OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE AND THE ADDITIONS MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) SHOUL D BE UPHELD. 7. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I FIND THE ASSESSI NG OFFICER IN THE INSTANT CASE MADE ADDITION OF RS.6,75,000/- ON THE GROUND THAT THE AS SESSEE COULD NOT EXPLAIN THE SOURCE OF THE CASH DEPOSIT IN THE BANK ACCOUNT MAINTAINED WITH ICICI BANK. SIMILARLY, DUE TO FAILURE OF THE ASSESSEE TO SUBSTANTIATE THE CLAIM O F EXPENSES ON ACCOUNT OF OFFICE ITA NO.5141/DEL/2018 5 MAINTENANCE AND RENT PAID TO M/S ORIENT CERAMICS, T HE ASSESSING OFFICER MADE ADDITION OF RS.1,37,567/-. SIMILARLY, HE DISALLOWE D AN AMOUNT OF RS.5,100/- BEING DONATION PAID SINCE THE ASSESSEE COULD NOT SUBSTANT IATE WITH EVIDENCE TO JUSTIFY THE ALLOWABILITY OF SUCH DONATION. WE FIND ALTHOUGH TH E ASSESSEE FILED CERTAIN DETAILS BEFORE THE CIT(A), HE REJECTED THE CONTENTION OF TH E ASSESSEE AND SUSTAINED THE VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT GIVEN AN OPPORTUNITY, THE ASSESSEE IS IN A POSITION TO SUBSTANTIATE THE NATURE AND SOURCE OF SUCH CASH DEPOSIT AND THE ALLO WABILITY OF VARIOUS EXPENSES WHICH WERE DISALLOWED BY THE ASSESSING OFFICER AND SUSTAI NED BY THE CIT(A). CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE IN TEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE HI S CASE AND DECIDE THE ISSUES AS PER FACT AND LAW. I HOLD AND DIRECT ACCORDINGLY. THE G ROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY, ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 4.09.2019. SD/- ( R.K. PANDA) ACCOUNTANT MEMBER DATED: 24 TH SEPTEMBER, 2019 DK ITA NO.5141/DEL/2018 6 COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI