DCIT, New Delhi V. M/s Spark Engineering (P) Ltd., New Delhi

ITA 5699/DEL/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2717 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 27-06-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 16-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: P N MEHTA
• Section: 144; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER & SHRI RAJPAL YADAV, JUDICIAL MEMBER ITA NO.5699/DEL/2010 ASSESSMENT YEAR: 2006-07 DCIT, CIRCLE 9(1), ROOM NO. 163, C.R. BLDG., NEW DELHI. VS. M/S SPARK ENGINEERING (P) LTD., 909, ANSAL BHAWAN, 16 K.G. MARG, NEW DELHI. AAACS0974L (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SATPAL SINGH, SR. DR RESPONDENT BY: SH. P.N. MEHTA, ADV. O R D E R PER S.V. MEHROTRA, A.M. THIS APPEAL, FILED BY THE REVENUE IS DIRECTED AGA INST THE ORDER DATED 16/09/2010 OF CIT(A)-XII, NEW DELHI FOR A.Y. 2006-0 7. 2. THE ASSESSEE, A PRIVATE LIMITED COMPANY, IN THE RELEVANT ASSESSMENT YEAR, WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF FREE WHEELS, ASSETS, DE-RAILLERS AND SHIFTERS. IT HAD FILED ITS RETURN OF INCOME DECLARING AN INCOME OF RS. 24,06,467/-. 2.1 THE AO HAS OBSERVED THAT SINCE IN SPITE OF VARI OUS NOTICES, ASSESSEE DID NOT APPEAR BEFORE HIM, THEREFORE, ASSESSMENT HA D TO BE FRAMED U/S 144 OF THE INCOME TAX ACT. HE, INTER-ALIA, MADE AN ADD ITION U/S 68 OF RS. 24,27,746/- OBSERVING AS UNDER: ITA NO. 5699/DEL/2010- SPARK ENGINEERING ( P) LTD. 2 DURING THE YEAR THE ASSESSEE HAS INCREASED ITS UNSECURED LOAN BY RS. 24,27,746/- FROM RS. 41,27,70 4/- TO RS. 65,55,450/-. THE ASSESSEE HAS NOT FILED ANY CONFIRMATION WITH REGARD TO THE ABOVE LOANS. I, THEREFORE, MAKE AN ADDITION OF RS. 24,27,746/- TO T HE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE I.T. ACT. 3. BEFORE LD. CIT(A), THE ASSESSEE HAD, INTER-ALIA, SUBMITTED AS UNDER: 6.2 WE ARE ENCLOSING CONFIRMED COPIES OF LOAN ACCOUNTS ALONGWITH BANK STATEMENT IN CASES WHERE FR ESH AMOUNTS HAVE BEEN LENT AS WELL AS COPY OF INCOME TA X RETURN IN EVIDENCE OF THE GENUINENESS AND CREDIT WORTHINESS OF THE UNSECURED LOANS. PERUSAL OF THE BANK ACCOUNTS OF THE LENDERS, WHO HAVE INTRODUCED FRESH LOANS, REVEAL THAT THE AMOUNTS INTRODUCED ARE FROM THE WITHDRAWALS MADE FROM THESE VERY LOAN ACCOUNTS ON 3 1 ST MARCH, 2005. THESE AMOUNTS WERE WITHDRAWN ON THE LA ST DAY OF THE PREVIOUS YEAR AND REINTRODUCED IN THE CU RRENT YEAR UNDER REFERENCE. THUS, THERE IS NO FRESH INTRODUCTION OF ANY LOANS IN THE FOLLOWING THREE CA SES: 1. BRIJ KUMAR AGGARWAL (HUF) RS. 7,00,000 2. PRADEEP KUMAR AGGARWAL (HUF) RS. 11,00,000 3. ANOOP AGGARWAL (HUF) RS. 8,00,000 IN THE BALANCE TWO CASES OF 1. MR. BRIJ KUMAR AGGARWAL RS. 3,69,957 2. MR. ANOOP AGGARWAL RS. 88,013 THESE AMOUNTS HAVE BEEN TRANSFERRED FROM THE CURRENT ACCOUNT MAINTAINED WITH THE SAME COMPANY. IN THESE CASES ALSO THERE IS NO FRESH INTRODUCTION. ITA NO. 5699/DEL/2010- SPARK ENGINEERING ( P) LTD. 3 3.1 LD. CIT(A) CALLED FOR A REMAND REPORT FROM AO, WHO, IN RESPONSE TO THE SAME, SUBMITTED THAT ASSESSEE HAD SQUARED OFF T HE LOAN DURING THE YEAR AND FRESH LOAN WAS ACCEPTED IN THE ASSESSMENT YEAR UNDER CONSIDERATION FOR WHICH NO CONFIRMATION WAS FILED B Y THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE S REPLY IS CONTAINED IN PARA 7 OF LD. CIT(APPEALS) ORDER IN WH ICH ASSESSEE DENIED THE ALLEGATIONS MADE BY THE AO AND EXPLAINED HOW TH E LOAN WAS TAKEN. IT WAS FURTHER CLARIFIED THAT CONFIRMATIONS WERE FI LED BEFORE LD. CIT(A) AND COPIES WERE SENT TO AO. LD. CIT(A) DELETED THE ADD ITION OBSERVING IN PARA 8 AS UNDER: 8. THE SUBMISSION GIVEN BY THE APPELLANT HAS BEEN PERUSED. DURING THE APPELLATE PROCEEDINGS THE ASSE SSEE HAS SUBMITTED THE CONFIRMATION OF ACCOUNTS FROM THE PARTIES WHO HAD ADVANCED THE LOAN. IT HAS SUBMITTE D A COPY OF BANK ACCOUNT, DETAIL OF THEIR PAN NO. AND T HE COPY OF ACKNOWLEDGEMENT OF RETURN FILED BY THEM. T HE APPELLANT HAS ALSO SUBMITTED DETAILS OF THE OPENING BALANCE OF LOAN, ADDITION MADE IN THEIR ACCOUNT ON ACCOUNT OF NEW LOANS TAKE DURING THE YEAR, AS WELL AS CLOSING BALANCE. IN THE REMAND REPORT THE ASSESSIN G OFFICER HAS NOT QUESTIONED THE GENUINENESS OF THE TRANSACTION. I AM CONVINCED THAT SINCE THE APPELLA NT HAS BEEN ABLE TO IDENTIFY THE CREDITORS, ESTABLISH THE GENUINENESS OF THE TRANSACTION AS WELL AS THEIR CREDITWORTHINESS THE REQUIREMENT OF SECTION 68 ARE MET. THE ADDITION OF RS. 24,27,746/- IS HEREBY DELETED. ITA NO. 5699/DEL/2010- SPARK ENGINEERING ( P) LTD. 4 4. HAVING HEARD BOTH THE PARTIES, WE DO NOT FIND AN Y REASON TO INTERFERE WITH THE FINDINGS OF LD. CIT(A) WHICH REMAIN UN-CON TROVERTED BY THE DEPARTMENT. LD. CIT(A) HAS RIGHTLY OBSERVED THAT I N THE REMAND REPORT THE AO HAS NOT QUESTIONED THE GENUINENESS OF THE TRANSA CTION. ONCE ALL THE NECESSARY DETAILS WERE SENT FOR AOS COMMENT IN THE REMAND PROCEEDINGS THEN, UNLESS THE AO GIVES ANY ADVERSE COMMENT IN RE GARD TO THE DOCUMENTS ON WHICH HAS COMMENTS ARE CALLED FOR, THE GENUINENESS OF THE DOCUMENTS CANNOT BE DOUBTED. 5. IN THE RESULT, THE DEPARTMENTS APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/07/2013 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 31/07/2013 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR