Ritika Textiles (P) Ltd., Delhi V. ITO, New Delhi

ITA 5877/DEL/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5484 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 15-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 22-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MEENAKSHI VOHRA SENIOR
• Assessee Lawyers: KAPIL GOYAL
• Keywords: Double taxation relief; Tangible material; Accommodation entries; Borrowed satisfaction
• Section: 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.5877/DEL./2013 (ASSESSMENT YEAR : 2004-05) M/S. RITIKA TEXTILES (P) LTD., VS. ITO, WARD 15 ( 4), C/O MR. KAPIL GOEL, ADVOCATE, NEW DELHI. A 1/25, SECTOR 15, ROHINI, DELHI 110 085. (PAN : AAACR6028E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KAPIL GOYAL, ADVOCATE REVENUE BY : MS. MEENAKSHI VOHRA, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE CIT (APPEALS)-XVIII, NEW DELHI DATED 19.10.2012. THE G ROUNDS OF APPEAL READ AS UNDER :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LEARNED CIT-A ERRED IN UPHOLDING THE REOPENING ACTION U/S 148 OF THE ACT CONVENIENTLY IGNORING ASSESSEES CONTENT IONS IN WRITTEN SUBMISSIONS, WITHOUT ADJUDICATING HOW REASONS RECOR DED IN INSTANT CASE SATISFY THE BASIC REQUIREMENT OF : A. AVAILABLE TANGIBLE MATERIAL ON RECORD; B. PROVIDING LIVE NEXUS BETWEEN INFORMATION USED AN D REASONS FRAMED; ITA NO.5877/DEL./2012 2 C. INDEPENDENT APPLICATION OF MIND (AS A.O. ACTED O N DICTATES AND DIRECTIONS OF INVESTIGATION WING) 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, LEARNED CIT (A) ERRED IN UPHOLDING THE ADDITIO N MADE BY LD. A.O. AMOUNTING TO RS.15,50,000 WITHOUT APPRECIATING THAT ASSESSEES CASE IS COVERED BY DELHI ITAT ORDER IN CASE OF INDI A TEX FAB 5.10.2012 BEING SUITABLY IGNORED BY LD. CIT-A AS ON LY FOR NON PROVIDING OF ALLEGED CREDITWORTHINESS OF SHARE HO LDERS ADDITION HAS BEEN SUSTAINED U/S 68 OF THE ACT. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO, AMEND, MODIFY, RESCIND, SUPPLEMENT OR ALTER ANY OF THE GROUNDS STATED HEREI N ABOVE, EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 2. THE RETURN OF INCOME WAS FILED ON 01.11.2004 DEC LARING INCOME OF RS.1,050/- ONLY. IT WAS PROCESSED U/S 143(1) OF TH E INCOME-TAX ACT, 1961. LATER ON, INFORMATION WAS RECEIVED FROM ADDL. DIT (INV.), UNIT-VI, NEW DELHI THAT THE ASSESSEE IS AMONGST ONE OF THE BENEFICIARIES OF THE BOGUS ACCOMMODATION ENTRIES AND HAS RECEIVED AN AMOUNT OF RS.6,50,650/- ON 13.1 2.2003 FROM M/S. ETHNIC CREATION PVT. LTD. AND RS.9 LACS ON 20.12.2003 FROM M/S. MASTRO MARKETING P. LTD. THE CASE WAS REOPENED BY ISSUING NOTICE U/S 148. I N RESPONSE TO THAT, ASSESSEE FILED AN APPLICATION THAT RETURN FILED U/S 139(1) MAY BE TREATED AS A RETURN FILED IN COMPLIANCE WITH NOTICE RECEIVED U/S 148. IN RESPON SE TO THAT, ASSESSEE FILED AN APPLICATION THAT RETURN FILED U/S 139(1) MAY BE TRE ATED AS A RETURN FILED IN COMPLIANCE WITH NOTICE RECEIVED U/S 148. 3. WHILE PLEADING ON BEHALF OF THE ASSESSEE THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAS REOPENED THE CASE PURELY ON T HE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION WING WITHOUT VERIFYING THE SAME FROM THE RECORDS AND FRAMING HIS MIND INDEPENDENTLY. HE ALSO SUBMITTED THAT AS SESSING OFFICER HAS NOT ITA NO.5877/DEL./2012 3 CONFRONTED THE STATEMENTS RECORDED OF THE PERSONS W HICH HAVE BEEN RELIED AND APPLIED AGAINST THE ASSESSEE. IT WAS ALSO PRAYED T HAT ASSESSEE WAS NOT PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE WITNESSES WHO HAVE RELIED TO INITIATE SUCH PROCEEDINGS. HE ALSO SUBMITTED THAT THE REASON RE CORDED IS BASED ONLY ON BANK TRANSACTIONS AND LOOSE REFERENCE TO THE STATEMENT B Y SOME ENTRY PROVIDERS. HE PLEADED THAT THERE WAS NO REFERENCE TO THE NATURE O F TRANSACTIONS AND THERE WAS NO APPLICATION OF MIND OF THE ASSESSING OFFICER. THE REOPENING HAS BEEN DONE ON THE BASIS OF BORROWED SATISFACTION WITHOUT VERIFICATION OR ENQUIRIES. HE RELIED ON THE FOLLOWING DECISIONS :- (I) EMIRATES SHIPPING LINE, FZE ON INDIA UAE DTAA (26.07.2012 ORDER); (II) ANIRUDH SINHJI KARAN SINHJI JADEJA VS. STATE O F GUJARAT (1995) 5 SCC 302; (III) IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORD INARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.315 OF 2012 IND IVEST PTE LTD., SINGAPORE 13 MARCH, 2012; (IV) DELHI BENCH OF INCOME TAX APPELLATE TRIBUNAL I N RAINEE SINGH 125 TTJ 816 (APPROVED BY DELHI HIGH COURT 330 ITR 417). HE ALSO RELIED ON THE DECISION OF HON'BLE SUPREME C OURT IN THE CASE OF ITO VS. M. PIRAI CHOODI 334 ITR 262 WHEREIN IT IS HELD THAT WHEN AN ORDER HAS BEEN PASSED WITHOUT GRANTING THE ASSESSEE AN OPPORTUNITY TO CRO SS EXAMINE AND ASSESSEE PREFERRED A WRIT PETITION THEN THE HON'BLE HIGH COU RT OUGHT NOT TO HAVE SET ASIDE THE ORDER OF ASSESSMENT BUT TO HAVE ONLY GRANTED THE AS SESSEE AN OPPORTUNITY OF CROSS EXAMINE THE WITNESSES. ITA NO.5877/DEL./2012 4 4. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE H AVE ALSO GONE THROUGH THE CASE LAWS RELIED ON. WITH REGARD TO REOPENING OF T HE ASSESSMENT, WE HOLD THAT THE ASSESSMENT HAS BEEN REOPENED BY RECORDING THE REASO NS AND IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. RA JESH JHAVERI STOCK BROKERS P. LTD. REPORTED IN 291 ITR 500 AND CIT VS. INDIA TERM INAL CONNECTOR SYSTEMS LTD. DATED 21.03.2012 AND ALSO IN VIEW OF THE DECISION O F HON'BLE SUPREME COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. VS. DCIT REP ORTED IN 340 ITR 64, WE UPHOLD THE ORDER OF THE CIT (A) WITH RESPECT TO THE REOPENING OF THE ASSESSMENT. 4.1 AFTER CONSIDERING ALL THE ASPECTS OF THE CASE, WE FIND IT APPROPRIATE THE ASSESSEE DESERVES TO BE PROVIDED AN OPPORTUNITY TO CROSS EXAMINE THE PERSONS WHOSE STATEMENTS HAVE BEEN USED AGAINST THE ASSESSEE AND ALSO DESERVES TO BE PROVIDED A COPY OF THE STATEMENT RECORDED BY THOSE PERSONS. H OWEVER, IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF ITO VS. M. PIRAI CHOODI, CITED SUPRA, WE FIND IT APPROPRIATE TO RESTORE THE ISSUE TO THE FIL E OF THE ASSESSING OFFICER. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 30 TH DAY OF JANUARY, 2014. SD/- SD/- (R.P. TOLANI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 30 TH DAY OF JANUARY, 2014 TS ITA NO.5877/DEL./2012 5 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVIII, DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.