ACIT, New Delhi V. M/s. Shreeraj Roto India Ltd., New Delhi

ITA 553/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4242 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 05-02-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS ROLEE AGARWAL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `G: NEW DELHI BEFORE SHRI C.L.SETHI, JM & SHRI SHAMIM YAHYA, AM I.T. A. NO.553/DEL OF 2010 ASSESSMENT YEAR: 2006-07 ASSTT. COMMR. OF INCOME-TAX, VS M/S SHREERAJ ROTO INDIA LTD. CIRCLE 8(1), NEW DELHI. G-6, DSIDC INDL. COMPLEX , ROHTAK ROAD, NANGLOI, NEW DELHI. APPELLANT RESPONDENT APPELLANT BY: MRS. ROLEE AGARWAL RESPONDENT BY: NONE ORDER PER C.L. SETHI, JM: THE REVENUE IS IN APPEAL AGAINST THE ORDER DATED 3. 11.2009 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF AN ASSESSMENT M ADE BY THE AO U/S 143(3) OF THE INCOME-TAX ACT, 1961 (THE ACT) PERTAI NING TO THE ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. LD. CIT(A) ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN DELETING THE ADDITION OF RS.6,44,532/- MADE BY THE AO U/S 68 OF THE I.T. ACT ON ACCOUNT OF UNSECURED LOAN FROM PAWAN KUMAR. 2. LD. CIT(A) ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN DELETING THE ADDITION 2 OF RS.1421/- MADE BY THE AO ON ACCOUNT OF SHORT AND EXCESS. 3. LD. CIT(A) ERRED IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN ACCEPTING ADDITIONAL EVIDENCE IN CONTRAVENTION WITH RULE 46A OF THE I.T. RULES, 1962. 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAD ACCEPTED FRESH UNSECURED LOANS OF RS.15,69,130/- WHILE THE OLD UNSECURED LOANS OF RS.19,69,100/- WERE RETURNED . THE ASSESSEE WAS ASKED TO FILE CONFIRMATION ALONG WITH THE SUPPORTIN G EVIDENCES TO PROVE THE GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE VIDE LETTER DATED 22.12.2008 FILED THE CONFIRMATIONS BEFORE THE AO, WHICH WERE L OOKED INTO BY THE AO. HOWEVER, AO STATED THAT THE CONFIRMATIONS FILED BY THE ASSESSEE WERE NOT SUPPORTED BY ANY DOCUMENTS LIKE COPY OF BANK STATEM ENT, COPY OF INCOME- TAX RETURN OF THE PARTIES AND EVEN IT HAS NOT BEEN MENTIONED AS TO WHETHER THEY WERE ASSESSED TO TAX OR NOT. IN THESE CIRCUMS TANCES, THE AO MADE THE ADDITION OF RS.15,69,130/-, BEING THE UNEXPLAINED U NSECURED LOAN INTRODUCED BY THE ASSESSEE IN THE RELEVANT YEAR. BEING AGGRIE VED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). 4. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT T HE EXCEPT RS.2,35,532/-, THE BALANCE AMOUNT REPRESENTING LOAN WERE THE BALANCE CARRIED FORWARD FROM EARLIER YEARS AND NO NEW FRESH LOANS W ERE TAKEN. IT WAS FURTHER 3 SUBMITTED THAT THE FRESH LOAN OF RS.2,35,532/- WAS EVEN SUPPORTED BY EVIDENCES AND, THEREFORE, THIS ADDITION WAS ALSO NO T WARRANTED. 5. AFTER HEARING THE ASSESSEE, THE CIT(A) DELETED T HE ADDITION BY OBSERVING THAT NO FRESH LOAN, DURING THE PREVIOUS Y EAR, WAS TAKEN AND ALL THE BALANCES WERE BROUGHT FORWARD FROM THE PREVIOUS YEA RS. THE CIT(A) FURTHER STATED THAT IN THE CASE OF PAWAN KUMAR, THERE WAS A N OPENING BALANCE OF LOAN AMOUNT OF RS.4,09,000/-, WHICH WAS SHOWN IN TH E BALANCE SHEET IN THE NAME OF M/S ROTO INDIA, AND AT THE CLOSE OF THE YEA R, THE SUM OF RS.2,35,532/- WAS TRANSFERRED TO THE ACCOUNT OF PAW AN KUMAR. THE CIT(A) FURTHER STATED THAT SHRI PAWN KUMAR APPEARED BEFORE HIM AND STATED THAT HE WAS A PROPRIETOR OF M/S ROTO INDIA AND AT THE SAME TIME HE IS ALSO THE DIRECTOR OF THE ASSESSEE COMPANY. ALL THESE DETAIL S RELIED UPON BY THE CIT(A) INCLUDING THE STATEMENT OF SHRI PAWN KUMAR W ERE NOT PUT TO THE AO FOR HIS EXAMINATION AND VERIFICATION. THUS, THE DE PARTMENT HAS TAKEN A GROUND THAT CIT(A) HAS ACCEPTED CERTAIN ADDITIONAL EVIDENCES IN CONTRAVENTION OF RULE 46A OF THE INCOME-TAX RULES, 1962. 6. AFTER PERUSING THE CIT(A)S ORDER, WE FIND THAT THE CONTENTION OF THE DEPARTMENT THAT CIT(A) HAS ACCEPTED ADDITIONAL EVID ENCE WITHOUT GIVING ANY OPPORTUNITY TO THE AO IS CORRECT INSOFAR AS ADDITIO N OF RS.6,44,532/- DELETED BY THE LEARNED CIT(A) IS CONCERNED. THE ASSESSEE I S NOT BEFORE US TO EXPLAIN 4 THE MATTER. WE, THEREFORE, FIND IT FIT TO RESTORE THE MATTER RAISED IN THIS APPEAL BACK TO THE FILE OF THE AO FOR HIS FRESH ADJUDICATI ON WITH A DIRECTION TO EXAMINE AND VERIFY THE FACTS OF THE CASE WHETHER AN AMOUNT OF RS.4,09,000/- WAS AN OPENING BALANCE IN THE NAME OF M/S ROTO INDI A, AND WHETHER RS.2,35,532/- HAS BEEN TRANSFERRED FROM THE ACCOUNT OF M/S ROTO INDIA TO THE NAME OF SHRI PAWAN KUMAR, AND IF IT IS SO, THE ADDI TION OF RS.6,44,532/- SHALL NOT BE CALLED FOR. HOWEVER, WITH REGARD TO A NY FRESH LOAN INTRODUCED BY THE ASSESSEE IN THE CURRENT YEAR, THE AO SHALL E XAMINE THE VARIOUS EVIDENCES THAT MAY BE PRODUCED BY THE ASSESSEE BEFO RE HIM AND THEN DECIDE THE MATTER AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND BY WAY OF PASSING A SPEAKING AND REASO NED ORDER. WE ORDER ACCORDINGLY. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S TREATED TO BE ALLOWED FOR STATISTICAL PURPOSES. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 5 TH APRIL, 2010 IMMEDIATELY AFTER THE HEARING WAS OVER. (SHAMIM YAHYA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5 TH APRIL , 2010 VIJAY 5 COPY TO: 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT(A)-XI, NEW DELHI 5. DR ASSISTANT REGISTRAR