Dispo Medical Devices (P) Ltd., Delhi V. ITO, New Delhi

ITA 5388/DEL/2012

• Counselvise Citation: 538820114 RSA 2012
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-09-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 22-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAMEER SHARMA
• Assessee Lawyers: HITEN MEHTA
• Keywords: Unexplained cash credit
• Section: 147; 68; 148; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B NEW DELHI BEFORE SHRI R.P. TOLANI, J.M. AND SHRI J.SUDHAKAR REDDY, A.M. ITA NO. 5388/DEL/2012 ASSESSMENT YEAR : 2004-05 DISPO MEDICAL DEVICES P.LTD. VS. ITO, WARD 10(3) B 10, SWASTHYA VIHAR, VIKAS MARG NEW DELHI DELHI 110 092 PAN: AAACD 8655 R (APPELLANT) (RESPONDENT) APPELLANT BY:- SHRI HITEN MEHTA, C.A. RESPONDENT BY :- SH. SHAMEER SHARMA, SR.D.R . O R D E R PER J.SUDHAKAR REDDY, AM THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX (APPEALS)-XIII, NEW D ELHI DT. 103.10.2012 PERTAINING TO THE ASSESSMENT YEAR 2004-05. 2. FACTS IN BRIEF:- THE FACTS OF THE CASE ARE BROUGHT OUT AT PARA 4 OF THE LD.COMMISSIONER OF INCOME TAX (APPEALS)S ORDER WHI CH IS EXTRACTED FOR READY REFERENCE. 4. IN THIS CASE ORIGINAL RETURN OF INCOME WAS FIL ED DECLARING AN INCOME OF RS.3,65,968/-. THE RETURN WAS ACCEPTED U/S 143(1) OF THE ACT, THEREAFTER, ORDER U/S 154 WAS PASSED ON 15.3.2007 AND PROVISIONS OF S ECTION 115 JB WERE APPLIED AND BOOK PROFIT WAS COMPUTED. THEREAFTER T HE CASE WAS REOPENED U/S 147 OF THE ACT AND NOTICE U/S 148 OF THE IT ACT WAS ISSUED ON 30.3.2011 ON THE 2 BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATIO N WING OF THE DEPARTMENT WHEREIN SH. SURESH KUMAR GUPTA, DIRECTOR OF THE GAL AXY MINES & STONES HAD MADE A STATEMENT THAT HE WAS ENGAGED IN PROVIDING A CCOMMODATION ENTRY TO VARIOUS BENEFICIARIES THROUGH NUMBER OF SHELL COMPA NIES CONTROLLED BY HIM. IT IS SEEN THAT DURING THE YEAR APPELLANT HAS RECEIVED AC COMMODATION ENTRIES WORTH RS.1,70,00,000/- FROM GALAXY MINES & STONES. SINC E THE APPELLANT FAILED TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENES S OF THE TRANSACTIONS, THEREFORE, THE AMOUNT OF RS. 1,70,00,000/- WAS ADDE D U/S 68 OF THE IT ACT. DURING THE YEAR, THE APPELLANT HAS ALSO RECEIVED LO AN FROM SH. DEEPAK ARORA AND SUDESH ARORA OF RS.1,83,644/-AND RS.20,00,000/- FRO M SUDESH ARORA RESPECTIVELY. WITH REGARD TO THESE LOAN TRANSACTION S, THE APPELLANT FAILED TO PROVE GENUINENESS, CREDITWORTHINESS AND IDENTITY, THEREFO RE, THE AMOUNT OF RS. 21,83,644/-WAS ADDED BY THE ASSESSING OFFICER. THE APPELLANT HAS CLAIMED EXPENSES OF RS. 57,80,090/-DURING THE YEAR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT FAILED TO PRODUCE ANY D ETAILS AND VOUCHERS OF THE PARTIES TO WHOM PAYMENTS WERE MADE. THEREFORE, 15% OF SUCH EXPENSES WHICH COMES TO RS. 8,67,015/-WERE DISALLOWED AND ADDED TO THE 'TOTAL INCOME.' 3. WE HAVE HEARD SHRI HIREN MEHTA, C.A. THE LD.COU NSEL FOR THE ASSESSEE AND SHRI SHAMEER SHARMA, THE LD.SR.D.R. ON BEHALF O F THE REVENUE. 4. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED AS FOL LOWS:- THAT THE THREE ISSUES THAT ARISE IN THIS APPEAL ARE : 1.2 SUSTENANCE OF ADDITION OF RS.1.70 CRORES BY C IT (APPEALS) IN RESPECT OF ALLEGED UNEXPLAINED CASH CREDITS ON ACCOUNT OF UNSE CURED LOAN OF THE EQUIVALENT AMOUNT RECEIVED FROM M/S GALAXY MINES AND STONES PV T. LTD. 1.2 SUSTENANCE OF ADDITION OF RS.20.00 LAC IN RESPE CT OF ALLEGED UNSUBSTANTIATED CASH CREDITS PERTAINING TO EQUIVALENT AMOUNT RECEIV ED FROM MRS. SUDESH ARORA, DIRECTOR OF THE COMPANY. 1.3 PART SUSTENANCE OF DISALLOWANCE OF RS.3,12,309 /- ON ACCOUNT OF ALLEGED NON-PRODUCTION OF VOUCHERS/BILLS OF VARIOUS EXPENSE S. 3 2. AS PER AFFIDAVIT DATED 28.09.2013 FILED BY THE A SSESSEE, ADEQUATE AND REASONABLE OPPORTUNITY WAS NOT PROVIDED BY CIT (APP EALS) BY DECLINING THE REQUEST FOR ADJOURNMENT ON 3.10.2013. COMPLETE SEQU ENCE OF FACTS ARE MENTIONED IN THE AFFIDAVIT ITSELF. 3. IN VIEW OF THE SAME THE ENTIRE MATTER NEEDS TO BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER, FOR FOLLOWING REASON S:- 3.1 THE ASSESSEE DISCHARGED ITS INITIAL ONUS TO PRO VE IDENTITY, GENUINENESS AND CREDIT WORTHINESS WITH RESPECT TO UNSECURED LOAN OF RS.1.70 CRORES BY FILING CONFIRMATION OF THE PARTY, BANK STATEMENT OF THE PA RTY AND LEDGER ACCOUNT. THESE DOCUMENTS ARE AVAILABLE ON PAGE 32-48 OF THE PAPER BOOK. PAN PARTICULARS ARE ALSO AVAILABLE ON PAGE 32. HOWEVER, THE ASSESSING O FFICER HAS DISREGARDED THE SAME AND MERELY RELIED ON THE REPORT OF THE INVESTI GATION WING AND STATEMENT OF SHRI SURESH KUMAR GUPTA, DIRECTOR OF M/S GALAXY MIN ES & STONES PVT. LTD. RECORDED BY INVESTIGATION WING. NONE OF THE ABOVE E VIDENCES WAS CONFRONTED TO THE ASSESSEE FOR REBUTTAL IN RESPECT OF SPECIFIC RE QUEST MADE VIDE LETTER DATED 08.12.2011 (PAGE 28 OF THE PAPER BOOK) FILED DURING ASSESSMENT PROCEEDINGS. 3.2 NO INQUIRIES WERE CONDUCTED BY THE ASSESSING O FFICER FOR VERIFYING THE ABOVE MENTIONED EVIDENCES FILED BY THE ASSESSEE. 3.3 THE ASSESSING OFFICER IN HIS REMAND REPORT DATE D 07.08.2012 HAS COMPLETELY DISREGARDED THE LETTER DATED 23.07.2012 (PAGE 61-63 OF THE PAPER BOOK) WHEREIN ALL THE ITEMS POINTED OUT BY THE ASSESSING OFFICER IN HIS REMAND REPORT HAVE BEEN EXPLAINED BY THE ASSESSEE. HE HAS ALSO DISREGARDED THE EVIDENCE AVAILABLE ON PAGES 64-65 OF THE PAPER BOOK IN THE FORM OF CONFIR MATION OF THE PARTY REGARDING COMMISSION ON SALES AGGREGATING RS.2,04,664/- INCUR RED BY THE ASSESSEE. 3.4 REGARDING THE LOAN OF RS.20 LAC FROM MRS SUDESH ARORA, DIRECTOR, BOTH THE LOWER AUTHORITIES HAVE DISREGARDED THE FACT THAT TH E BANK STATEMENT OF HER ACCOUNT WITH BANK OF BARODA WAS NOT AVAILABLE BEING AN OLD RECORD (REFER PAGE 83 OF THE PAPER BOOK). MOREOVER, THE SOURCE OF THIS AMOUNT STANDS DULY EXPLAINED (REFER PAGE 54 OF THE PAPER BOOK) IN AS MUCH AS THE LOAN WAS EXTENDED OUT OF REFUND OF LOAN RECEIVED FROM ANOTHER COMPANY NAMELY M/S YORCO SCIENTIFIC UDYOG PVT. LTD. 4. IT HAS BEEN HELD IN VARIOUS CASES THAT WHERE THE EVIDENCES FILED BY THE ASSESSEE WERE TO BE EXAMINED BY THE ASSESSING OFFIC ER, IT WOULD BE IN THE INTEREST OF JUSTICE TO RESTORE THE MATTER TO THE FI LE OF THE ASSESSING OFFICER. 4 HE RELIED ON THE FOLLOWING CASE LAWS: ANMOL COLOUR INDIA PVT. LTD. VS. ITO 31 SOT 18 (JAI PUR) (URO); DHANNA RAM GARG VS. ITO 49 SOT 73 (DEL){URO). 5. THE LD.SR.D.R. AGREED THAT THE ISSUE SHOULD BE R ESTORED TO THE FILE OF THE ASSESSING OFFICER ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE TH E ISSUE TO THE FILE OF THE A.O. FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH DECEMBER, 2013. SD/- SD/- (R.P. TOLANI) ( J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 06 TH DECEMBER, 2013 *MANGA 5 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR