M/S TRUWAY ENTERPRISES PVT. LTD., JAIPUR V. INCOME TAX OFFICER, WARD-2-1, JAIPUR

ITA 526/JPR/2018

• Counselvise Citation: [2019] 113 COUNSELVISE.COM (IT) 6346 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 25-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S NEHRA JCIT ITA NOS; CO JP MS
• Assessee Lawyers: S L PODDAR
• Keywords: Opportunity of being heard; Rule of consistency; Additional evidence; Reasonable cause; Corroborative evidences; Tax effect; Set aside
• Section: 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH A, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 526/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2009-10. M/S. TRUWAY ENTERPRISES PVT. LTD., B-17A, JAIPUR TOWER, OPP. ALL INDIA RADIO, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 2(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AACCT 6982 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 737/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2009-10. THE INCOME TAX OFFICER, WARD 2(2), JAIPUR. CUKE VS. M/S. TRUWAY ENTERPRISES PVT. LTD., B-17A, JAIPUR TOWER, OPP. ALL INDIA RADIO, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AACCT 6982 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT CROSS OBJECTION NO. 19/JP/2018 (ARISING IN VK;DJ VIHY LA- @ ITA NO. 737/JP/2018) FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2009-10. M/S. TRUWAY ENTERPRISES PVT. LTD., B-17A, JAIPUR TOWER, OPP. ALL INDIA RADIO, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 2(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AACCT 6982 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI A.S. NEHRA (JCIT) 2 ITA NOS. 526, 737 & CO 19/JP/2019 M/S. TRUWAY ENTERPRISES PVT. LTD., JAIPUR. LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30.10.2019 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 13.11.2019. VKNS'K@ ORDER PER BENCH : THESE CROSS APPEALS AND CROSS OBJECTION BY THE ASS ESSEE AND REVENUE RESPECTIVELY ARE DIRECTED AGAINST THE ORDER DATED 2 3 RD MARCH, 2018 OF LD. CIT (APPEALS) FOR THE ASSESSMENT YEAR 2009-10. 2. THE BRIEF FACTS LEADING TO THE CONTROVERSY INVOL VED IN THESE CROSS APPEALS AND CROSS OBJECTION ARE THAT THE AO MADE ADDITION UNDER SECTION 68 OF THE IT ACT ON ACCOUNT OF SHARE PREMIUM RECEIVED BY THE ASSESSEE F ROM TWO COMPANIES, NAMELY, M/S. DHANVARSHA MOTOR FINANCE PVT. LTD. AND M/S. LI NK DISTRIBUTORS PVT. LTD. FOR WANT OF SUPPORTING EVIDENCE TO PROVE THE IDENTITY, CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. ON APPEAL, THE LD. CIT (A) GRANTED PART RELIEF IN RESPECT OF THE AMOUNT RECEIVED DURING THE PRECEDING YEAR AND NOT DURING THE YEAR UNDER CONSIDERATION. THUS BOTH ASSESSEE AS WELL AS THE DEPARTMENT ARE AGGRIEVED BY THE IMPUGNED ORDER OF THE LD. CIT (A) AND FILED THE SE CROSS APPEALS. 3. AS REGARDS THE APPEAL FILED BY THE DEPARTMENT, I T IS NOTED THAT THE TAX EFFECT IN THE SAID APPEAL IS NOT EXCEEDING THE MONETARY L IMIT AS REVISED BY THE CBDT VIDE CIRCULAR DATED 08.08.2019 FOR THE PURPOSE OF FILING OF APPEAL BY THE DEPARTMENT BEFORE THE INCOME TAX APPELLATE TRIBUNAL FROM RS. 2 0,00,000/- TO RS. 50,00,000/-. THE LD. D/R HAS NOT DISPUTED THE FACT THAT THE TAX EFFECT IN THE REVENUES APPEAL IS NOT EXCEEDING RS. 50.00 LACS. FOR READY REFERENCE, WE REPRODUCE THE CBDT CIRCULAR NO. 17 OF 2019 DATED 08.08.2019 AS UNDER :- 3 ITA NOS. 526, 737 & CO 19/JP/2019 M/S. TRUWAY ENTERPRISES PVT. LTD., JAIPUR. FURTHER ENHANCEMENT OF MONETARY LIMITS FOR FILING O F APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL, HIGH COURTS A ND SLPS/APPEALS BEFORE SUPREME COURT - AMENDMENT TO CIRCULAR 3 OF 2018 - MEASURES FOR REDU CING LITIGATION. CIRCULAR NO. 3/2018 DATED 11TH JULY 2018 HAS BEEN R EPLACED BY CIRCULAR NO. 17/2019 DATED 8TH AUGUST 2019 TO ENHANCE MONETARY L IMITS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL , HIGH COURTS AND SLPS/APPEALS BEFORE SUPREME COURT FOR REDUCING LITI GATION. APPEALS/SLPS IN INCOME - TAX MATTERS MONETARY LIMI T (RS.) (PREVIOUS LIMIT) MONETARY LIMIT (RS.) (REVISED LIMIT) BEFORE APPELLATE TRIBUNAL 20,00,000 50,00,000 BEFORE HIGH COURT 50,00,000 1,00,00,000 BEFORE SUPREME COURT 1,00,00,000 2,00,00,000 THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFFEC T SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES I N THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPU TED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL CAN BE FILED IN RE SPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT. NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT. FURTHER, EVEN IN THE CASE OF COMPOSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, NO APPEAL SHALL BE FILED IN RESPECT OF AN ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFF ECT IS LESS THAN THE MONETARY LIMIT. IN CASE WHERE A COMPOSITE ORDER/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. ACCORDINGLY, THE APPEAL OF THE DEPARTMENT IS NOT MA INTAINABLE BEING MONETARY LIMIT IS LESS THAN/NOT EXCEEDING RS. 50,00,000/-. 4 ITA NOS. 526, 737 & CO 19/JP/2019 M/S. TRUWAY ENTERPRISES PVT. LTD., JAIPUR. 4. THE DEPARTMENT IS AT LIBERTY TO FILE THE MISCELL ANEOUS APPLICATION IN CASE THE TAX EFFECT IN THIS APPEAL IS FOUND TO BE MORE THEN RS. 50,00,000/- OR THE CASE FALLS IN ANY OF THE EXCEPTIONS OF THE CIRCULAR. 5. THE ASSESSEE IN ITS APPEAL HAS RAISED THE FOLLOW ING GROUNDS :- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ADDITIO N OF RS. 25,00,000/- RECEIVED BY THE APPELLANT DURING THE YE AR A SHARE APPLICABLE MONEY AS UNEXPLAINED U/S 68 OF THE INCOM E TAX ACT, WITHOUT PROVIDING OPPORTUNITY TO THE ASSESSEE AND E VEN ISSUING SHOW CAUSE NOTICE U/S 251(2) OF THE INCOME TAX ACT. 2. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING. 6. THE ASSESSEE HAS ALSO FILED AN APPLICATION UNDER RULE 29 OF THE ITAT RULES FOR FILING THE ADDITIONAL EVIDENCE. THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS APP ELLATE PROCEEDINGS THE ASSESSEE COULD NOT SUBMIT THE NECESSARY DOCUMENTS AND OTHER EVIDENCES IN SUPPORT OF CREDITWORTHINESS AND GENUINENESS OF THE SHARE APPLI CANTS/SHARE APPLICATION MONEY AND PAYMENT. SOME OF THE EVIDENCES SUBMITTED DURING THE ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDINGS WERE OVERLOOKED BY THE ASSESSING OFFICER/LEARNED CIT (A). THE ASSESSEE COULD NOT SUBMIT THE NECESSAR Y DOCUMENTS AND OTHER EVIDENCES IN SUPPORT OF CREDITWORTHINESS AND GENUIN ENESS OF THE SHARE APPLICANTS/SHARE APPLICATION MONEY AND PAYMENT AS T HE COMPANIES WERE CLOSED THEIR BUSINESSES AND WERE NOT TRACEABLE. THE ADDITIONAL E VIDENCES ARE CRUCIAL FOR THE DISCHARGE OF JUSTICE. HE HAS RELIED UPON THE DECISI ON OF PUNE BENCH OF THE TRIBUNAL IN CASE OF MARUTI CIVIL WORKS VS. ITO, 136 TTJ 448 (PUNE) AS WELL AS THE JUDGMENT OF 5 ITA NOS. 526, 737 & CO 19/JP/2019 M/S. TRUWAY ENTERPRISES PVT. LTD., JAIPUR. HONBLE SUPREME COURT IN CASE OF NTPC VS. CIT, 229 ITR 383 (SC). THE LD. A/R HAS FURTHER SUBMITTED THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN CASE OF SISTER CONCERN OF THE ASSESSEE M/S. GOLDWAY ENTERPRISES PVT. LTD. VS. ITO IN ITA NO. 561/JP/201 9 AND ALLOWED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. THE TRIBUNAL HAS A LSO REMANDED THE MATTER TO THE RECORD OF THE AO FOR ADJUDICATION OF THE SAME AFRES H AFTER CONSIDERING THE ADDITIONAL EVIDENCE AND GIVING AN OPPORTUNITY OF HEARING TO TH E ASSESSEE. THUS THE LD. A/R HAS PLEADED THAT THE ADDITIONAL EVIDENCE FILED BY THE A SSESSEE MAY BE ADMITTED AND THE MATTER REMANDED TO THE RECORD OF THE AO. 7. ON THE OTHER HAND, THE LD. D/R HAS VEHEMENTLY OP POSED TO THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND SUBMITTED THAT D ESPITE SUFFICIENT OPPORTUNITY GIVEN BY THE AO AS WELL AS BY THE LD. CIT (A), THE ASSESSEE DID NOT FILE ANY EVIDENCE IN SUPPORT OF THE CLAIM. THEREFORE, IN THE ABSENCE OF REASONABLE CAUSE FOR NOT FILING THE SAID EVIDENCE BEFORE THE AUTHORITIES BELOW, THE SAME CANNOT BE ACCEPTED AT THIS STAGE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. IT IS A MATTER OF RECORD THAT THE AO MADE THE ADDITION UNDER SECTION 68 FOR WANT OF EVIDENCE WHICH WAS SUSTAINED BY THE LD. CIT (A) ON SIMILAR GROUNDS OF NO DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE. NOW TH E ASSESSEE HAS FILED THE ADDITIONAL EVIDENCE IN SUPPORT OF THE CLAIM. THE AS SESSEE SOUGHT TO FILE THE ADDITIONAL EVIDENCE, THE DETAILS OF WHICH ARE AS UN DER :- 6 ITA NOS. 526, 737 & CO 19/JP/2019 M/S. TRUWAY ENTERPRISES PVT. LTD., JAIPUR. (I) LEDGER ACCOUNT/CONFIRMATION OF M/S. DHANVARSHA MOTO R FINANCE PVT. LTD. (II) BANK ACCOUNT STATEMENT OF M/S. DHANVARSHA MOTOR FIN ANCE PVT. LTD. REFLECTING THE TRANSACTIONS. (III) COPY OF ACKNOWLEDGEMENT OF RETURN AND AUDIT REPORT ALONG WITH ALL ANNEXURE OF M/S. DHANVARSHA MOTOR FINANCE PVT. LTD. FOR AY 2009-10. (IV) COPY OF ACKNOWLEDGEMENT OF RETURN OF M/S. LINK DIST RIBUTORS PVT. LTD. FOR AY 2009-10. (V) LEDGER ACCOUNT/CONFIRMATION OF M/S. LINK DISTRIBUTO RS PVT. LTD. (VI) BANK ACCOUNT STATEMENT OF M/S. LINK DISTRIBUTORS PV T. LTD. SINCE THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IS RELEVANT FOR DECIDING THE ISSUE OF IDENTITY AND CREDITWORTHINESS OF THE CREDITORS A ND GENUINENESS OF THE TRANSACTIONS, THEREFORE THE SAME IS REQUIRED TO BE VERIFIED AND E XAMINED. WE FURTHER NOTE THAT IDENTICAL ISSUE ARISING FROM IDENTICAL FACTS HAS BE EN CONSIDERED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN CASE OF M/S. GOLDWAY ENTE RPRISES PVT. LTD. VS. ITO (SUPRA), THE SISTER CONCERN OF THE ASSESSEE VIDE ORDER DATED 03.10.2019 IN PARA 2.3 TO 2.4 AS UNDER :- 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE CONTENTS OF THE APPLICATION, WE NO TICED THAT THE ASSESSEE WANTED TO PLACE ON RECORD DOCUMENTS IN THE SHAPE OF BANK ACCO UNT STATEMENT, COPY OF ACKNOWLEDGEMENT OF RETURN, LEDGER ACCOUNTS AND CONF IRMATION ETC. FROM TWO PARTIES I.E. M/S. DHANVARSHA MOTOR FINANCE PVT. LTD AND M/S . LINK DISTRIBUTORS PVT LTD. AS PER FACTS, INITIALLY THE ADDITION OF RS. 1.20 CRORE S WERE MADE BY THE AO. HOWEVER, THE LD. CIT(A) RESTRICTED THE ADDITION TO RS. 20.00 LAC S AS THE ASSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF THESE TWO PARTIES. THEREFORE, I N THESE CIRCUMSTANCES OF THE CASE, THESE DOCUMENTS ARE NECESSARY TO ADJUDICATE UPON TH E CONTROVERSY AROSE BETWEEN 7 ITA NOS. 526, 737 & CO 19/JP/2019 M/S. TRUWAY ENTERPRISES PVT. LTD., JAIPUR. THE PARTIES AND THUS IN OUR VIEW NO PREJUDICE SHALL BE CAUSED TO REVENUE IN CASE THE APPLICATION FILED BY THE ASSESSEE IS ALLOWED AND TH E DOCUMENTS RAISED AT SERIAL NO. 1 TO 6 ARE ADMITTED AS ADDITIONAL EVIDENCE. WE ORDER ACCORDINGLY. 2.4 SINCE WE HAVE ALLOWED THE APPLICATION FOR LEADI NG THE ADDITIONAL EVIDENCE OF THE ASSESSEE BY ADMITTING THE DOCUMENTS PLACED AT SERIA L NO. 1 TO 6 IN THE PAPER BOOK WHICH REQUIRES VERIFICATION. THEREFORE, WE RESTORE THIS ISSUE TO THE FILE OF THE AO TO VERIFY THE FOLLOWING DOCUMENTS AND ALSO TO PASS AFR ESH ASSESSMENT ORDER BY PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 1. LEDGER ACCOUNT/ CONFIRMATION OF M/S. DHANVARSHA MOTOR FINANCE PVT. LTD. 2. BANK ACCOUNT STATEMENT OF M/S. DHANVARSHA MOTOR FINANCE PVT. LTD. REFLECTI NG THE TRANSASCTIONS. 3. COPY OF ACKNOWLEDGEMENT OF RETURN AND AUDIT REPORT ALONGWIT H ALL ANNEXURE OF M/S. DHANVARSHA MOTOR FINANCE PVT. LTD. FOR A.Y. 2009-10 . 4. COPY OF ACKNOWLEDGEMENT OF RETURN OF M/S. LINK DISTRIBUTORS PVT LTD. FOR A. Y. 2009-10. 5. LEDGER ACCOUNT/ CONFIRMATION OF M/S. LINK DISTRIBUTORS PVT LTD. 6. BANK ACCOUNT STATEMENT OF M/S. M/S. LINK DISTRIBUTORS PVT LTD. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STAT ISTICAL PURPOSE. THUS IT IS CLEAR THAT IN THE SAID CASE THE TRIBUNAL HAS CONSIDERED AN IDENTICAL EVIDENCE SOUGHT TO BE FILED BY THE ASSESSEE IN SUP PORT OF THE CLAIM AND, THEREFORE, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS TO MAIN THE RULE OF CONSISTENCY, WE FOLLOW THE EARLIER ORDER OF THE COO RDINATE BENCH OF THIS TRIBUNAL AND CONSEQUENTLY THE MATTER IS SET ASIDE TO THE RECORD OF THE AO TO ADJUDICATE THE SAME AFRESH AFTER CONSIDERING AND VERIFICATION OF THE AD DITIONAL EVIDENCE FILED BY THE ASSESSEE. NEEDLESS TO SAY THAT THE ASSESSEE BE GI VEN ADEQUATE OPPORTUNITY OF HEARING BEFORE PASSING THE FRESH ORDER. 9. AS REGARDS THE CROSS OBJECTION FILED BY THE ASSE SSEE, ONCE THE ASSESSEE HAS ALREADY FILED THE APPEAL AGAINST THE IMPUGNED ORDER WHICH HAS BEEN DECIDED BY THIS 8 ITA NOS. 526, 737 & CO 19/JP/2019 M/S. TRUWAY ENTERPRISES PVT. LTD., JAIPUR. COMPOSITE ORDER, THEREFORE, THE CROSS OBJECTION FIL ED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED. 10. IN THE RESULT, APPEAL OF THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED WHEREAS THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13/11/2019 . SD/- SD/- FOE FLAG ;KNO FOT; IKY JKWO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13/11/2019. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-M/S. TRUEWAY ENTERPRISES PVT. LTD., J AIPUR. 2. IZR;FKHZ@ THE RESPONDENT-THE ITO WARD 2(1), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO.526, 737 & CO 19-18/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR