Malik Enterprises Pvt. Ltd., Delhi V. ITO, Ward-16(2), New Delhi

ITA 5494/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1178 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 29-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 143(3); 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DLEHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO. 5494/DEL/2017 ASSESSMENT YEAR: 2009-10 MALIK ENTERPRISES PVT. LTD., VS. INCOME-TAX OFFICE R, 2144, TURKMAN GATE, DELHI. WARD 16(2), NEW DELHI. PAN : AAACM1403C (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SH. RAMESH KUMAR, SR. DR DATE OF HEARING: 07/07/2021 DATE OF ORDER : 07/07/2021 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 09/06/2017 PASSED BY T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-38, NEW DELHI ('LD. CIT(A)') FOR THE ASSESSMENT YEAR 2009-10, MALIK ENTERPRISES PVT. LTD.(THE ASSESSEE) FILED THIS APPEAL. 2. BRIEF FACTS, AS ARE NECESSARY FOR DISPOSAL OF TH IS APPEAL, ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 29.09.2009 DECLARING AN INCOME OF RS.1,34,069/-. AS SESSMENT U/S. 143(3) OF THE INCOME TAX ACT (FOR SHORT THE ACT) WAS COM PLETED BY MAKING AN ADDITION OF RS.29,15,560/- U/S. 41 OF THE ACT. IN A PPEAL AGAINST SUCH AN ORDER, THE CIT(A) OBSERVED THAT THE ASSESSING OFFIC ER SHOULD HAVE MADE 2 THE ADDITION U/S. 68 OF THE ACT INSTEAD OF SECTION 41 AND KEEPING IN VIEW SUCH DIRECTIONS, PROCEEDINGS U/S. 147 WERE TAKEN UP AND ORDER U/S. 147/148/144 OF THE ACT WAS PASSED ON 19.12.2014 BY MAKING AN ADDITION OF RS.3.45 LACS IN RESPECT OF THE SUM RECEIVED BY A SSESSEE ON 20.12.2008 BY WAY OF CHEQUE FROM M/S. SHIV CRAFT, HOLDING IT T O BE UNEXPLAINED CREDITS IN THE BOOKS OF ACCOUNT OF ASSESSEE. 3. AGGRIEVED BY THE SAME, ASSESSEE PREFERRED AN APP EAL BEFORE THE CIT(A) AND ARGUED THAT THE PARTY, M/S. SHIV CRAFT I S A CUSTOMER OF ASSESSEE COMPANY TO WHOM THE ASSESSEE MADE SALES WO RTH RS.3.45 LACS DURING THE FINANCIAL YEAR 2011-12 AGAINST THE SALE ADVANCE BALANCE OF RS.3.45 LACS AS ON 31.03.2009 AND THEREFORE, SUCH S UM OF RS.3.45 LACS CANNOT BE HELD AS UNACCOUNTED CREDIT IN THE BOOKS O F ACCOUNT OF ASSESSEE TO MAKE AN ADDITION U/S. 68 OF THE ACT. ASSESSEE S UBMITTED THE COPY OF LEDGER ACCOUNT OF THE CUSTOMER, CONFIRMATIONS FOR T HE YEARS 2008-09, 2009-10 AND 2011-12 BEFORE THE AUTHORITIES TO ESTAB LISH THE FACT OF RECEIPT OF ADVANCE OF RS.3.45 LACS DURING F.Y. 2008 -09 AND SALE IN RESPECT OF WHICH WAS CONCLUDED IN F.Y. 2011-12. 4. WHEN THE MATTER IS CALLED, THERE IS NO REPRESENT ATION FROM THE ASSESSEE. NOTICE WAS SENT TO THE ADDRESS GIVEN IN F ORM NO. 36. IF THE ASSESSEE IS AVAILABLE IN SUCH ADDRESS, SUCH NOTICE SHOULD HAVE BEEN SERVED ON THE ASSESSEE. IF FOR ANY REASON, THE ASSE SSEE IS NOT AVAILABLE THERE, IT IS FOR THE ASSESSEE TO MAKE ARRANGEMENTS FOR SERVICE OF SUCH NOTICE BY FURNISHING THE ADDRESS WHERE THE ASSESSEE WOULD BE AVAILABLE, OR TO DELIVER IT TO SOME AUTHORISED PERSON, OR BY M AKING REQUEST TO THE POSTAL DEPARTMENT TO DETAIN THE MAIL TILL THE ASSES SEE CLAIMS THE SAME. NON-SERVICE OF NOTICE IS SOLELY ATTRIBUTABLE TO THE CONDUCT OF ASSESSEE. IN 3 THESE CIRCUMSTANCES, WE PROCEED TO DECIDE THE APPEA L BASING ON THE MATERIAL AVAILABLE ON RECORD. 5. LEARNED DR PLACES RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW, BUT FAIRLY SUBMITTED THAT THERE WAS NO ADVERSE INFE RENCE DRAWN BY THE REVENUE AGAINST THE CONCLUSION OF SALE WORTH RS.3.4 5 LACS IN F.Y. 2011-12. 6. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF SUBMISSIONS MADE BY LD. DR. IT IS AN ADMITTED FACT THAT THE ASSESSIN G OFFICER FORMED A BELIEF OF ESCAPEMENT ON THE BASIS OF CREDIT ENTRY WROTH RS .3.45 LACS AS ON 31.03.2009 IN THE NAME OF M/S. SHIV CRAFT AND THE A SSESSMENT ORDER READS THAT THE ASSESSEE FILED LETTERS DATED 26.07.2 014 AND 30.06.2014 CONTAINING THE CONFIRMED COPY OF LEDGER ACCOUNT TO THAT EXTENT. ASSESSEE ALSO SUBMITTED THAT THE TRANSACTION DOES NOT INVOLV E ANY UNSECURED LOAN SINCE THE ASSESSEE DID NOT TAKE ANY LOAN FROM THIS PARTY, INASMUCH AS THERE ARE REGULAR RUNNING TRANSACTIONS OF SALE AND RECEIPTS AGAINST THE SALE MADE BY THE ASSESSEE. ASSESSEE FURTHER SUBMITT ED THAT IN SUBSEQUENT ASSESSMENT YEARS IN SOME CASES THERE ARE DEBIT BALANCES AND IN SO FAR AS M/S. SHIV CRAFT IS CONCERNED, IT WAS N IL BY THE END OF F.Y. 2011- 12. 7. IN SO FAR AS THESE FACTS ARE CONCERNED, ABSOLUTE LY THERE IS NOT DISPUTE. AUTHORITIES DID NOT MAKE ANY ADVERSE COMME NT ON THE CONCLUSION OF SALE IN F.Y.2011-12. LEARNED CIT(A), HOWEVER, OBSERVED THAT IT IS INCONCEIVABLE THAT ANY TRADE CREDITOR WILL MA KE PAYMENT OF RS.3.45 LACS AND WOULD NOT CONFIRM THE TRANSACTION AND THIS ARISES DOUBT AS TO THE GENUINENESS OF THE TRANSACTION. IT IS A MERE DOUBT WITHOUT ANY SUBSTANCE TO CONCLUDE THAT THERE WERE ANY UNSECURED LOANS, MU CH LESS FROM M/S. SHIV CRAFT. IT IS ONLY BECAUSE THE ASSESSING OFFICE R DID NOT RECEIVE ANY 4 CONFIRMATION, THE ASSESSING OFFICER HAD TAKEN STAND THAT THIS PARTICULAR ENTRY OF RS.3.45 LACS RELATES TO UNSECURED LOANS WH EREAS IN RESPECT OF OTHER SIMILAR TRANSACTIONS, THE ASSESSING OFFICER B ELIEVED THOSE TO BE SALE TRANSACTIONS AND THE RECEIPT OF ADVANCE AMOUNTS TOW ARDS SUCH SALES. LEARNED CIT(A), HOWEVER, NOTED THAT COPY OF DVAT-31 WAS FILED WITH THE SALES TAX DEPARTMENT REFLECTING THE NAMES OF THE PA RTIES TO WHOM SALES WERE MADE DURING THE QUARTER ENDED ON 30.09.2011 DU RING THE F.Y. 2011- 12, RESULTING IN NIL BALANCE; AND THE COPY OF LEDGE R ACCOUNT DULY CONFIRMED BY M/S. SHIV CRAFT ALONGWITH NAME, ADDRES S AND APN FOR THE A.Y. 2009-10, 2010-11, 2011-12 AND 2012-13 ALREADY SUBMITTED BEFORE THE ASSESSING OFFICER. ON THE FACE OF ALL THESE DET AILS FURNISHED, THERE WAS AMPLE OPPORTUNITY FOR THE ASSESSING OFFICER TO VERI FY WHETHER THIS WAS A REAL SALE TRANSACTION OR A TRANSACTION OF UNSECURED LOAN. MERE SUSPICION CANNOT BE A BASIS TO MAKE ADDITION WHEN THERE ARE S UFFICIENT EVIDENCE ON RECORD TO DISPROVE SUCH A SUSPICION OR AT LEAST AFF ORDING A GROUND FOR VERIFICATION. IN THE CIRCUMSTANCES, WE FIND THAT TH E CONCLUSION OF FACTS REACHED BY THE AUTHORITIES BELOW HAVE NO FACTUAL BA SIS TO SUSTAIN. WE, THEREFORE, DELETE THE ADDITION. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF JULY, 2021. SD/- SD/- (PRASHANT MAHARISHI) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/07/2021 AKS