Shivalik Cotex Limited, New Delhi V. ITO, Ward- 23(2), New Delhi

ITA 5819/DEL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9542 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 07-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: SWARANENDU CHATTERJEE; ITISHA GULATI S
• Keywords: Opportunity of being heard
• Section: 131; 68; 27; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.5819/DEL/2018 ASSESSMENT YEAR: 2007-08 SHIVALIK COTEX LIMITED, C-586, LGF, DEFENCE COLONY, NEW DELHI. PAN: AAICS3938E VS. ITO, WARD-23(2), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SWARANENDU CHATTERJEE, & MS ITISHA GULATI, ADVOCATES REVENUE BY : SHRI S.L. ANURAGI, SR. DR DATE OF HEARING : 01.07.2019 DATE OF PRONOUNCEMENT : 01.07.2019 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 31 ST MAY, 2018 OF THE CIT(A), NEW DELHI, RELATING TO ASSESSME NT YEAR 2007-08. 2. ALTHOUGH A NUMBER OF GROUNDS HAVE BEEN RAISED BY THE ASSESSEE, THEY ALL RELATE TO THE ORDER OF THE CIT(A) IN CONFIRMING THE ADDITI ON OF RS.10 LAKHS MADE BY THE ASSESSING OFFICER U/S 68 OF THE IT ACT. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY. THE CASE OF THE ASSESSEE WAS REOPENED BY ISSUE OF NOTICE U/S 148 ON 27 TH MARCH, 2014, AFTER RECORDING ITA NO.5819/DEL/2018 2 REASONS FOR ISSUE OF NOTICE AND AFTER OBTAINING THE APPROVAL FROM THE ADDL. CIT U/S 151 OF THE IT ACT. THE REASON FOR SUCH REOPENING WAS O N ACCOUNT OF ACCEPTING OF ACCOMMODATION ENTRY BY THE ASSESSEE COMPANY FROM TH E FOLLOWING TWO COMPANIES:- 1. M/S TEJASVI INVESTMENT PVT. LTD. RS.5,00,000/- 2. M/S SINGHAL SECURITIES PVT. LTD. RS.5,00,000/- RS.10,00,000/- =========== 4. THE ASSESSEE, IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT, SUBMITTED THAT THE RETURN ALREADY FILED MAY BE TREATED AS RETURN F ILED IN RESPONSE TO NOTICE U/S 148. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS ASKED TO PRODUCE THE PRINCIPAL OFFICER OF M/S TEJASVI INVESTMENT PVT. LT D. AND M/S SINGHAL SECURITIES PVT. LTD. ALONG WITH THEIR CONFIRMATION, BANK STATEMENTS , ITRS, ETC. THE ASSESSEE FAILED TO DO SO, BUT, REQUESTED TO ISSUE NOTICE U/S 131 OF TH E IT ACT. IN RESPONSE TO NOTICE U/S 131 TO THESE PARTIES, REPLIES WERE RECEIVED FROM TH E ABOVE TWO PARTIES, BUT, NOBODY ATTENDED FOR PERSONAL DEPOSITION. THE ASSESSING OF FICER, THEREFORE, CONFRONTED THE SAME TO THE ASSESSEE AND ASKED THE ASSESSEE TO SUBS TANTIATE SUCH ACCOMMODATION ENTRY OF RS.10 LAKHS. SINCE THERE WAS NO COMPLIANCE FROM THE SIDE OF THE ASSESSEE TO HIS SATISFACTION, THE ASSESSING OFFICER MADE ADDITION O F RS.10 LAKHS BEING THE AMOUNT RECEIVED AS SHARE CAPITAL NOT PROVED AND INVOKING T HE PROVISIONS OF SECTION 68 OF THE IT ACT, THE ASSESSING OFFICER TREATED THE SAME AS I NCOME OF THE ASSESSEE. ITA NO.5819/DEL/2018 3 5. IN APPEAL, THE LD.CIT(A) NOT ONLY SUSTAINED THE ADD ITION SO MADE BY THE ASSESSING OFFICER, BUT, FURTHER ENHANCED THE SAME B Y RS.20,000/- BEING THE AMOUNT INCURRED BY THE ASSESSEE FOR ARRANGING SUCH BOGUS S HARE CAPITAL. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) HAS NOT GIVEN EFFECTIVE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIA TE HIS CASE. NO ENHANCEMENT NOTICE WAS GIVEN BY HIM FOR ENHANCING THE INCOME OF THE AS SESSEE. HE SUBMITTED THAT IN THE INTEREST OF JUSTICE, THE ASSESSEE MAY BE GIVEN AN O PPORTUNITY TO SUBSTANTIATE HIS CASE BEFORE THE CIT(A). 8. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED ON TH E ORDER OF THE CIT(A) AND OPPOSED THE ARGUMENTS ADVANCED BY THE LD. COUNSEL F OR THE ASSESSEE FOR RESTORING THE ISSUE TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICAT ION. 9. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I HAVE ALSO CONSI DERED THE VARIOUS DECISIONS CITED BEFORE ME. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) IS NOT JUSTIFIED. SUBSEQUENT TO HEARING OF THE APPEAL BY THE CIT(A), THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF PCIT VS. NRA IRON & STEEL (P) LTD. (2019) 103 TAXMANN.COM 48 (SC) AND THE DECISION OF THE HON'BLE DELHI HIGH COURT PCIT VS. NDR ITA NO.5819/DEL/2018 4 PROMOTERS PVT. LTD. (2019) 410 ITR 379 (DEL) WERE PRONOUNCED. NEITHER THE ASSESSEE NOR THE CIT(A) HAD THE BENEFIT OF THESE DECISIONS. CONSIDERING THE TOTALITY OF THE FACTS AND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE CIT(A) WITH A DIRECTION TO GIVE ONE MORE OPPORTUNIT Y TO THE ASSESSEE TO SUBSTANTIATE ITS CASE. NEEDLESS TO SAY, THE LD.CIT(A) SHALL DECIDE THE ISSUE AS PER FACT AND LAW, AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. I HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 10. IN THE RESULT, THE APPEAL FILED BY THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 0 1.07.2019. SD/- ( R.K. PANDA) ACCOUNTANT MEMFBE R DATED: 01 ST JULY, 2019 DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI