M/s. Ritika Sales Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 5910/DEL/2014

• Counselvise Citation: 591020114 RSA 2014
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 10-09-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: APPLICATION REJECTED
• Keywords: Principle of natural justice; Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC - I NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 5910 / DEL/ 201 4 (ASSESSMENT YEAR - 20 05 - 06) RITIKA SALES PVT. LTD., F - 49, BALI NAGAR, DELHI GATE, NEW DELHI - 110015. PAN - AACCR6629M ( APPELLANT) VS ITO, WARD - 15(4), NEW DELHI. (RESPONDENT ) APPELLANT BY APPLICATION REJECTED RESPONDENT BY DR.B.R.R.KUMAR, SR.DR ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 28.08.2014 OF CIT(A) - XVIII, NEW DELHI PERTAINING TO 2005 - 06 ASSESSMENT YEAR ON VARIOUS GROUNDS. 2. A T THE TIME OF HEARING, AN ADJO URNMENT WAS MOVED ON BEHALF OF THE ASSESSEE . HOWEVER CONSIDERING THE MATERIAL AVAILABLE ON RECORD QUA GROUND NO. 5 AND 6 RAISED AFTER HEARING THE LD. SR. DR THE SAID REQUEST WAS REJECTED. THE SAID GROUNDS READ AS UNDER: - 5. THAT THE IMPUGNED ASSESSMENT ORDER PASSED BY THE LEARNED ASSESSING OFFICER IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND HAS BEEN PASSED WITHOUT AFFORDING OPPORTUNITY TO CROSS EXAMINE THE SUBSCRIBER IN THE SHARE CAPITAL OF THE ASSESSEE OR THE DIRECTOR OF THE SUBSCRIBER COMPANIES NA MELY MR.ASEEM GUPTA AND/OR SH. MANOJ GUPTA BASED UPON WHOSE STATEMENTS AO HEAVILY RELIED AND HAVE MADE ADDITIONS OF RS.10,01,000/ - 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED AO IS BAD BOTH IN THE EYE OF LAW AND ON T HE FACTS OF THE CASE AS THE SAME HAS BEEN MADE ON THE BASIS OF MATERIAL COLLECTED AT THE BACK OF THE ASSESSEE AND WITHOUT CONFRONTING THE SAME TO THE ASSESSEE IN CLEAR VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. DATE OF HEARING 10 .0 9 .2015 DATE OF PRONOUNCEMENT 23 .0 9 .2015 I.T.A .NO. - 5910/ DEL/201 4 PAGE 2 OF 3 3. T HE RELEVANT FACTS OF THE CASE AR E THAT THE ASSESSEE RETURNED AN INCOME OF RS.5265/ - WHICH AFTER BEING PROCESSED WAS SUBJECTED TO RE - OPENING I N VIEW O F THE INFORMATION RECEIVED FROM THE IT (INVESTIGATION) INFORMING THAT THE ASSESSEE HAD RECEIVED ACCOMMODATION ENTRIES AMOUNTING TO RS.10 LA CS FROM THE FOLLOWING PARTIES: - AMOUNT DATE NAME OF ENTRY PROVIDER NAME OF BANK BRANCH OF BANK 600000 30.12.2004 MODERATE CREDIT CORP. LTD. ABN AMRO BANK NRR 400000 30.12.2004 MODERATE CREDIT CORP LTD. ABN AMRO BANK NRR 4 . AS A RESULT OF THIS AFTER HEARING THE ASSESSEE AN ADDITION OF RS.10 LACS WAS MADE . T HE SAID ADDITION WAS CHALLENGED IN APPEAL BEFORE THE CIT(A) WHO CONSIDERING THE DETAILED SUBMISSION ASSAILING THE ASSUMPTION OF JURISDICTION DISMISSED THE GROUNDS OF T HE ASSESSEE AND THEREAFTER PROCEEDED TO CONSIDER THE ISSUE ON MERIT. HOWEVER ON A PERUSAL OF THE GROUNDS RAISED BEFORE THE CIT(A) IT IS SEEN THAT THE ASSESSEE HAD SPECIFICALLY RAISED THE FOLLOWING GROUND NO.4 BEFORE THE CIT(A) AS IS FOUND REPRODUCED AT PA GE 2 OF THE IMPUGNED ORDER: - 4. WE FIND THAT THE LD.AO HAS JUST RELIED ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WINGS WITHOUT GOING FURTHER INTO VERIFYING THE FACTS AND USED THE INFORMATION TO MAKE THE ADDITIONS WITHOUT AFFORDING AN OPPORTUNITY TO THE APPELLANT TO CROSS EXAMINE. THUS RULES OF NATURAL JUSTICE HAVE NOT BEEN ADHERED TO BY THE LD.A.O. THAT THE LD. ITO, WARD - 15(4), NEW DELHI IS NOT JUSTIFIED IN MAKING THE ADDITION OF RS.10,00,000/ - ON A/C OF THE UNDISCLOSED SOURCE WITHOUT MENTIONING THE SECTION OF INCOME TAX ACT, 1961 IN WHICH ITS PERT AINS TO BE ADDED IN THE INCOME OF THE ASSESSEE AND RS.1000/ - ADDED UNDER SECTION 69(C) OF THE I.T.ACT, 1961. NEITHER ON THE FACTS OF THE CASE NOR LEGALLY, ON OUR LETTER DATED 01.11.2012. 5. ON A PERU SAL OF THE FINDING ARRIVED AT IT , I T IS SEEN THAT ALL THE ASPECTS BROUGHT OUT IN THE ABOVE QUOTED GROUND HAVE NOT BEEN CONSIDERED LEADING TO THE R A I S ING OF THE A B O V E TWO SPECIFIC GROUNDS BEFORE THE ITAT. IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT THE IMPUGNED ORDER ON THIS GROUND NEEDS TO BE RESTORED FOR ADJUDICATION THEREON. ACCORDINGLY SINCE THE ASSUMPTION OF JURISDICTION ON ITS VARIOUS FACETS IS UNDER CHALLENGE THE ENTIRE ORDER IS SET ASIDE INCLUDING THE FINDING ON MERIT. THE LD .CIT(A) SHALL FIRST DECIDE THE JURISDICTIONAL ISSUES AND THEREAFTER IF NEED BE SHALL PROCEED ON MERIT AFTERWARDS. I.T.A .NO. - 5910/ DEL/201 4 PAGE 3 OF 3 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 3 R D OF SEPTEMBER, 2015. S D / - (DIVA SINGH) JUDICIAL MEMBER DATED: 2 3 /09 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI