ITO, New Delhi V. Sh Rajat Lihla, Delhi

ITA 596/DEL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6995 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 09-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RASMITA JHA
• Keywords: Additional evidence
• Section: 144

Judgement Text

1 ITA NO. 59 6/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT ME MBER & SMT. BEENA PILLAI, JUDICIAL MEMBER I.T.A .NO.-596/DEL /2012 (ASSESSMENT YEAR-2007- 08) ITO, WARD 29(3), NEW DELHI. VS RAJAT LIHLA, PROP. M/S SULOCHANA EXPORTS, 1717, 1 ST FLOOR, GALI PIAO WALI, DARIBA KALAN, CHANDNI CHOWK, DELHI. ABMPL5358D APPELLANT BY SMT. RASMITA JHA, SR. DR RESPONDENT BY SH. VED JAIN, CA ORDER PER BEENA PILLAI, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER OF THE LD. CIT(A)S-XXV, NEW DELHI, VIDE HIS ORDER DATED 30/11/2011 FOR A.Y. 2007-08 ON THE FOLLOWING GROUND S: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) XXV, NEW DELHI HAS ERRED IN DELETING THE ADD ITION OF RS. 21,52,440/- MADE BY THE ASSESSING OFFICER IN TH E ABSENCE OF CONFIRMATIONS OF SUNDRY CREDITORS. 2. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) XXV, NEW DELHI HAS ERRED IN DELETING THE ADD ITION OF DATE OF HEARING 09.12.2015 DATE OF PRONOUNCEMENT 11.02.2016 2 ITA NO. 59 6/DEL/2012 RS. 75,000/- MADE BY THE ASSESSING OFFICER IN THE A BSENCE OF CONFIRMATIONS OF UNSECURED LOAN. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE FILED ITS RETURN OF INCOME ON 31/10/07 DECLARING TOTAL INCOME AT RS. 1,48,395/-. THE CASE WAS PROCESSED U /S 143(1). SUBSEQUENTLY IT WAS SELECTED FOR SCRUTINY AND NOTIC ES WERE ISSUED TO THE ASSESSEE. 2.1. THE LD. AO COMPLETED THE ASSESSMENT EX-PARTE U /S 144 ON 23/12/09 BY MAKING THE FOLLOWING ADDITIONS: I) ADDITION ON ACCOUNT OF UNVERIFIED SUNDRY CREDITORS AMOUNTING TO RS. 21,52,440/- II) ADDITION ON ACCOUNT OF UNVERIFIED UNSECURED LOANS AMOUNTING TO RS. 75,000/-. 3. AGGRIEVED BY THE ORDER OF THE LD. AO THE ASSESSE E PREFERRED AN APPEAL BEFORE THE LD. CIT(A). 3.1. BEFORE THE LD. CIT(A) THE ASSESSEE ARGUED THAT THE LD.AO WAS NOT JUSTIFIED IN MAKING ADHOC ADDITIONS MERELY BECA USE THE ASSESSEE WAS NOT ABLE TO REPRESENT THE CASE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, AS THE ASSESSEE WAS OUT OF THE COUNTRY. ACCORDINGLY, THE ASSESSEE SUBMITTED ALL THE DETAILS IN RESPECT OF THE SUNDRY CREDITORS AND UNSECURED LOANS BEFORE THE LD. CIT(A). THE LD. CIT(A) CALLED FOR THE REMAND REPORT IN LIEU OF THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. AFTER CONSIDERING THE REMAN D REPORT, THE LD. CIT(A) DELETED THE ADDITION MADE BY THE ASSESSEE IN RESPECT OF THE SUNDRY CREDITORS AND UNSECURED LOANS. 3 ITA NO. 59 6/DEL/2012 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. GROUND NO. 1 : 4.1 IT WAS CONTENDED BY THE LD. AR THAT THE ASSESSE E IS A PROPRIETOR OF M/S SULOCHNA EXPORTS AND THE LIST OF SUNDRY CRED ITORS AS ON 31/03/07 WAS SUBMITTED BEFORE THE LD. CIT(A) ON WHI CH THE REMAND REPORT WAS CALLED FOR. IN THE REMAND REPORT THE LD . AO HAS RECORDED THAT THE ASSESSEE HAS FURNISHED THE CONFIRMATION FR OM THE UNSECURED LENDERS. HE HAS FURTHER RECORDED THAT THE SE CREDITORS ARE CONTINUING FROM THE PREVIOUS YEAR AND ARE OLD CREDI TORS WHICH IS PROVED FROM THE OPENING AND THE CLOSING BALANCES. FURTHER THE LD. AR SUBMITTED THAT THE SUNDRY CREDITORS AS ARE VERY MUCH EXISTING AND THAT THE ASSESSEE HAS ALSO MADE SOME PAYMENTS T O CERTAIN SUNDRY CREDITORS DURING THE YEAR WHICH PROVES THAT THE LIABILITY OF THE SUNDRY CREDITORS HAS NOT SEIZED, AND THEY CONTI NUE TO BE A LIABILITY FOR THE ASSESSEE, WHICH HAS TO BE PAID BA CK BY THE ASSESSEE, AND AS SUCH, THE LD. AO WAS NOT JUSTIFIED TO MAKE T HE ADDITIONS. 4.2. ON THE CONTRARY, THE LD. DR SUBMITS THAT THE A SSESSEE DID NOT FILE THE PROPER BOOKS OF ACCOUNTS BEFORE THE LD. AO . SHE RELIES UPON THE ORDER OF THE LD. AO. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE PAPER BOOK FILED BEFORE US. THE RE MAND REPORT DATED 4.3.11 IS PLACED AT PAGES 79 TO 81 OF THE PAP ER BOOK. IT IS OBSERVED THAT THE LD. AO HAS RECORDED A FINDING THA T THE UNSECURED CREDITORS HAVE BEEN EXISTING WITH THE ASSESSEE EVEN IN THE PREVIOUS YEAR AND THAT THE ASSESSEE HAS FILED THE CONFIRMATI ONS FROM THESE 4 ITA NO. 59 6/DEL/2012 PARTIES AT THE TIME OF FIRST APPELLATE PROCEEDINGS. IT IS ALSO OBSERVED THAT THE LD. AO COULD NOT PRODUCE ANY MATERIAL ON R ECORD TO PROVE THAT THESE DETAILS FILED BY THE ASSESSEE ARE NOT GE NUINE. THE LD. AO HAS THEREFORE, FAILED TO JUSTIFY THE ADDITIONS MADE IN RESPECT OF THE UNSECURED LOANS. IT IS ALSO OBSERVED THAT THESE CR EDITORS WERE OLD AND, THEREFORE, DID NOT PERTAIN TO THE YEAR UNDER C ONSIDERATION AND HAS BEEN BROUGHT FORWARD FROM THE EARLIER YEARS WHI CH HAS NOT BEEN DISPUTED BY THE REVENUE. 5.1. THE AMOUNT PAYABLE TO THESE CREDITORS CAN BE A DDED TO THE ASSESSEES TOTAL INCOME ONLY IN THE YEAR IN WHICH T HE ASSESSEES LIABILITY TO PAY THE AMOUNT GETS SEIZED, OR GETS EX TINGUISHED, AND NOT IN THE YEAR UNDER CONSIDERATION, WHERE THE ASSESSEE HAS ADMITTEDLY SHOWN THE LIABILITY IN THE BALANCE SHEET. WE, THER EFORE, DO NOT FIND ANY INFIRMITY WITH THE ORDER OF THE LD. CIT(A). THE GROUND NO. 1 OF THE REVENUE IS, THEREFORE, DISM ISSED. GROUND NO. 2: 6. THE LD. AR SUBMITTED THAT THE ADHOC ADDITION MAD E BY THE AO UNDER THE HEAD UNSECURED LOANS DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS WAS BECAUSE THE DETAILS WERE NOT AVAILABLE. THE LD. AR SUBMITTED THAT THE DETAILS WERE SUBMITTE D BEFORE THE LD. CIT(A) AS ADDITIONAL EVIDENCE ON WHICH A REMAND REP ORT WAS CALLED FOR. IN THE REMAND REPORT THE LD. AO HAS ACCEPTED THAT THESE LOANS DOES NOT BELONG TO THE PRESENT YEAR UNDER CONSIDERA TION AND THAT THESE ARE OLD CONTINUING LOANS. ON THE BASIS OF TH E FINDINGS OF THE LD. AO IN THE REMAND REPORT THE LD. CIT(A) DELETED THE ADDITIONS. 5 ITA NO. 59 6/DEL/2012 6.1. ON THE CONTRARY, THE LD. DR VEHEMENTLY SUPPORT ED THE FINDINGS OF THE LD. AO. 7. WE OBSERVE THAT THERE IS A CONSIDERABLE MERIT IN THE SUBMISSIONS OF THE LD. AR. AS THE LOANS PERTAIN TO THE PREVIOU S YEARS WHICH HAVE BEEN BROUGHT FORWARD IN THIS YEAR AND HAS BEEN SHOW N AS A LIABILITY IN THE BALANCE SHEET. THIS POSITION HAS BEEN ACCEPT ED BY THE LD.AO IN HIS REMAND REPORT AT PAGE 81 OF THE PAPER BOOK. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, THE FINDINGS OF THE LD. CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. THIS GROUND OF APPEAL FILED BY THE REVENUE IS DISMI SSED. 8. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11.2.2016 SD/- SD/- (N.K. SAINI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11.2.2016 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO. 59 6/DEL/2012 DATE 1. DRAFT DICTATED ON 09.12.15 2. DRAFT PLACED BEFORE AUTHOR 14.12.15 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 11.2.16 6. KEPT FOR PRONOUNCEMENT ON 11.2.16 7. FILE SENT TO THE BENCH CLERK 11.2.16 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.