Sh. Bishan Dass Sharma, Ludhiana V. ACIT, Ludhiana

ITA 529/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6797 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 09-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: JASVINDER SINGH
• Keywords: Additional evidence; Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR , ACCOUNTANT MEMBER ITA NO. 529/CHD/2016 ASSESSMENT YEAR: 2008-09 SH. BISHAN DASS SHARMA PROP. VS. THE ACIT CIRCLE (I) M/S DAWN ENGG. ENTERPRISES LUDHIANA 160/279, STREET NO. 1 NEW MOTI NAGAR, LUDHIANA PAN NO. AEBPS1924G (APPELLANT) (RESPONDENT) APPELLANT BY : SH. JASVINDER SINGH RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 08/08/2017 DATE OF PRONOUNCEMENT : 28/09/2017 ORDER PER DR. B.R.R. KUMAR, A.M: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A)-I, LUDHIANA DT. 24/02/2016. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER OF THE LEARNED CIT. (APPEALS) I, LUDHIANA IS ILLEGAL, WRONG, ARBITRARY AND AGAINST LAW AND THE FACTS OF THE CASE . 2. THAT THE LEARNED C.I.T (APPEALS) IS NOT JUSTIFIE D IN NOT ADMITTING THE ADDITIONAL EVIDENCE FILED BEFORE HER UNDER RULE 46A OF THE INC OME TAX ACT 1962. 3. THAT THE LEARNED C.I.T. (APPEALS) IS NOT JUSTIFIED IN CONCURRING WITH THE LD. A.O AND THEREBY CONFIRMING THE ADDITION OF RS. 8,40,326 /- AS DEEMED DIVIDEND U/S 2(22)(E) OF THE INCOME TAX ACT, 1961 WHICH THE ACTI ON/ORDER OF THE CIT(A) IS PERVERSE AND NEEDS INTERFERENCE BY THIS HON'BLE TRI BUNAL FOR WHICH THE APPELLANT RESPECTFULLY PRAYETH VIDE THIS PRESENT APPEAL. 4. THAT LEARNED CIT(A) IS NOT JUSTIFIED IN CONCURRING WITH THE A.O AND THEREBY CONFIRMING THE ADDITIONS(SUPRA) WITHOUT APPRECIATIN G THE FACTS, THE REPLIES GIVEN 2 AND EVIDENCES FILED BY THE APPELLANT WHICH NEEDS DU E CONSIDERATION BY THIS HON'BLE TRIBUNAL. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS THE PROPRIETOR OF M/S DAWN ENGINEERING ENTERPRISES AND ALSO A DIRECTOR IN M/S DAWN MOTORS PVT. LTD, A PRIVATE LIMITED COMPANY WITH A SHARE HOLDING OF 19. 3% 4. DURING THE ASSESSMENT PROCEEDINGS, ON VERIFICATI ON OF THE ACCOUNT OF THE ASSESSEE WITH THE M/S DAWN MOTORS PVT. LTD. IT WAS FOUND THAT AN AMOUNT OF RS. 8,40,326/- HAS BEEN OUTSTANDING AS DEBIT BALANCE IN THE BOOKS OF THE ASSESSEE. HENCE THE ASSESSING OFFICER HAS TREATED THIS AMOUNT OF RS. 8,40,323/- AS DIVIDEND UNDER SECTION 2(22)(E) IN HANDS OF THE ASSESSEE. 5. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE L D. CIT(A). 6. THE CIT(A) UPHELD THE ADDITION UNDER SECTION 2(2 2)(E) ON THE GROUNDS THAT THE ASSESSEE TRIED TO CONCEAL THE LOAN RECEIVED AS TRADE TRANSACTION. 7. BEFORE US THE ASSESSEE SUBMITTED THAT EARLIER TH E PROCEEDINGS WERE BEING HANDLED BY THE ACCOUNTANT OF THE COMPANY AND THE AP PELLANT WAS NOT ACTIVELY PARTICIPATING IN THE ASSESSMENT PROCEEDING S AS HE WAS ON TOURS FOR MOST OF THE TIME AND HENCE THE CASE COULD NOT BE PROPERL Y APPRISED BEFORE THE LD. CIT(A). IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A ) HAS REJECTED THE REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCES. HE ARGUED THAT H AD THE ADDITIONAL EVIDENCES BEEN ADMITTED HE WOULD HAVE GOT THE DUE J USTICE. 8. LD. DR HAS OBJECTED TO THE CONTENTION OF THE ASS ESSEE AND ARGUED THAT THE ASSESSEE HAS ENOUGH TIME TO SUBMIT HIS EXPLANAT ION BEFORE THE ASSESSING OFFICER WHICH HE FAILED TO DO. 9. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES. THE COORDINATE BENCH OF ITAT, DELHI ABENCH IN THE CASE ELECTRA ( JAIPUR)(P) LTD. VS. INSPECTING ASSISTANT COMMISSIONER (1988) 26 ITD 0236 HAS LAID THAT THE ASSESSEE SHOULD NOT BE DISQUALIFIED FROM PRODUCING THE ADDITIONAL EVIDE NCE MERELY ON THE GROUND 3 THAT EVIDENCE WAS NOT PLACED BEFORE THE AUTHORITIES BELOW. THE SOLE PURPOSE OF JUDICIARY AS WELL AS OF THE REVENUE IS TO GET AT TH E TRUTH. IF THE TRUTH IS THAT THE TRANSACTIONS WERE GENUINE AND WAS DICTATED BY THE B USINESS NEEDS, SUCH A PAYMENT SHOULD NOT BE DISALLOWED MERELY ON THE GROU ND THAT THE ASSESSEE WAS UNABLE TO LEAD PROPER EVIDENCE OR ON THE GROUND THA T THE EVIDENCES PRODUCED WERE NOT SUFFICIENT. SIMILARLY IN THE CASE OF TAKE RAM VS. CIT 357 ITR 1 33 (SUPREME COURT) THE HONBLE APEX COURT SET ASIDE THE ORDER PASSED BY TH E HIGH COURT AND REMANDED THE MATTER BACK WITH A DIRECTION TO PASS A N ORDER BY TAKING COGNIZANCE OF THE DOCUMENTS WHICH COULD NOT BE PLAC ED EARLIER BY THE ASSESSEE. THUS KEEPING IN VIEW THE ABOVE JUDGMENT AND TO FIND OUT THE TRUTH, THE MATTER IS HEREBY REMANDED BACK TO THE LD. CIT(A) WI TH A DIRECTION TO PASS ORDER AFTER ADMISSION OF THE ADDITIONAL EVIDENCES PRODUCE D BY THE ASSESSEE. 10. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28/09/2017. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28/09/2017 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR