Parveen Commodity Brokers (P) Ltd., New Delhi V. ITO, ward- 19(3), New Delhi

ITA 5173/DEL/2018

AI Insights

The case involves M/s Parveen Commodity Brokers (P) Ltd., the appellant, contesting an order from the CIT (A)-38, New Delhi, which upheld the Assessing Officer's decision that significantly increased the appellant's declared income for the assessment year 2013-14. The primary issues revolved around the addition of income under Section 56(2)(viia) of the Income Tax Act, which the appellant contested as being incorrectly applied to shares held as stock in trade, and the addition of unexplained cash deposits. The CIT(A)'s decision was challenged on grounds of lack of proper opportunity and adherence to natural justice, among others. The Income Tax Appellate Tribunal (ITAT) decided to restore the matter to the A.O. for a fresh examination, acknowledging the procedural oversights in the initial hearings.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 108633 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 04-06-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 30-07-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SD. RAJESH DHANESTA.
• Keywords: Gift; Principle of natural justice; Additional evidence
• Section: 143(3)

Judgement Text

1 ITA No. 5173/Del/2018 Parween Commodity Brokers. Ltd. Vs. ITO IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH: ‘F’ NEW DELHI ] BEFORE DR. B. R. R. KUMAR, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER I.T.A. No. 5173/DEL/2018 (A.Y. 2013-14) M/s Parveen Commodity Brokers (P) Ltd. C/o. Babubhai & Co. 152, Office Complex Jhandewalan Extension. Phase-1 New Delhi PAN No. AAECP0080A ( APPELLANT ) Vs. ITO Ward-19 (3) New Delhi ( RESPONDENT ) ORDER PER YOGESH KUMAR U.S., JM This appeal is filed by the assessee against the order dated 03/10/2017 passed by the CIT (A)-38, (hereinafter referred to ‘CIT(A)’)New Delhi for assessment year 2013-14. Assessee by : Sh. Parth Dawar, Adv Department by: Sd. Rajesh Dhanesta. Sr. DR Date of Hearing 05.06.2023 Date of Pronouncement 07.06.2023 2 ITA No. 5173/Del/2018 Parween Commodity Brokers. Ltd. Vs. ITO 2. The assessee has raised the following grounds of appeal:- “1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the action of learned Assessing Officer in computing the total income of the appellant at Rs.7,59,33,453/- as against the returned income of Rs. 1,03,290/- u/s 143(3) of the Act. 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding an addition of Rs. 7,36,05,163/- u/s 56(2)(viia) of the Act. 2.1. That the basis adopted by the learned Assessing Officer and upheld by learned Commissioner of Income Tax (Appeals) to invoke the provision contained in Section 56(2)(viia) of the Act on the shares held as stock in trade and holding the same as gift income is factually incorrect, legally misconceived and therefore untenable. 2.2. That various adverse findings including fair market value worked out and conclusions recorded in the impugned order are factually incorrect, contrary to record, legally misconceived and without granting any opportunity much less any valid show cause notice to the appellant. 3. That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding an addition of a sum of Rs. 22,25,000/- representing alleged unexplained cash deposit in the bank account of the appellant company held as unexplained money. 4. That both the authorities below have framed the impugned order without granting sufficient and effective proper opportunity to 3 ITA No. 5173/Del/2018 Parween Commodity Brokers. Ltd. Vs. ITO the appellant company and therefore the same are contrary to principle of natural justice and hence vitiated. 5. That even otherwise, the order of assessment framed is illegal, invalid and untenable having been framed not in conformity with the instructions issued by the CBDT in respect of the selection of cases for scrutiny and framing of assessment under section 143(3) of the Act. 6. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the levy of interest under section 234A, 234B, 234C and 234D of the Act which are not leviable on the facts and circumstances of the case of the appellant company. It is therefore, prayed that addition/disallowances so upheld by the learned Commissioner of Income Tax (Appeals) alongwith interest levied be deleted and appeal of the appellant company be allowed. 3. Brief facts of the case are that, the assessee filed return of income declaring income of Rs. 1,03,290/-. Assessment order came to be passed by making addition of Rs. 7,36,05,163/- as income from other sources u/s 56(2)(viia) of the Act and further made addition of Rs. 22,25,000/- as unexplained money in the books of accounts. Accordingly, computed the income of the assessee at Rs. 7,59,33,453/- as against the returned income of Rs. 1,03,290/-. The assessee preferred an Appeal before the CIT(A), the Ld.CIT(A) vide order dated 03/10/2017 dismissed the Appeal filed by the assessee ex-parte. Aggrieved by the order dated 03/10/2017, passed by the 4 ITA No. 5173/Del/2018 Parween Commodity Brokers. Ltd. Vs. ITO CIT(A), the assessee filed the present Appeal on the grounds mentioned above. The assessee had also filed an application U/R 29 of the Income Tax Rules for admission of additional evidence. 4. Both the Ld. AR as well as Ld. DR have agreed that since the Appeal has been decided by the CIT(A) ex-parte and considering the fact that the assessee had filed an application u/s 29 of the Income Tax Rules for admission of additional evidence, submitted that the matter may be restored to the file of the A.O. for de-novo adjudication. Recording the submission of both the parties, the issues involved in the present Appeal are restored to the file of the A.O. for de-novo adjudication. 5. In the result, Appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on : 07/06/2023 . Sd/- Sd/- ( Dr. B. R. R. KUMAR ) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 07/06/2023 *R.N, Sr. PS* Copy forwarded to :- 1. Appellant 2. Respondent 3. CIT 4. CIT (Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA No. 5173/Del/2018 Parween Commodity Brokers. Ltd. Vs. ITO