Espire Infolabs Pvt. Ltd., Delhi V. ACIT, New Delhi

ITA 6034/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9980 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 25-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Principle of natural justice; Application of stay; Additional evidence; Rule 8D
• Section: 142(1); 14A; 250; 68

Judgement Text

1 ITA NO. 6034/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 6034/DEL/ 2016 (A.Y 2012-13) ALONG WITH S. A NO. 105/DEL/2019 ESPIRE INFOLABS PVT. LTD. A-41, ESPIRE CAMPUS, MATHURA ROAD, MOHAN CO-OPERATIVE DELHI AABCE2107L (APPLICANT) VS ACIT CIRCLE -8 (1) NEW DELHI (RESPONDENT) APPLICANT BY SH. RAJIV SAXENA, ADV & SH. SHYAM SUNDER, AR RESPONDENT BY MS. ASHIMA NEB, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL AND STAY APPLICATION ARE FILED BY THE A SSESSEE AGAINST THE ORDER DATED 27/09/2016 PASSED BY CIT (A)-37, NEW DE LHI. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- APPEAL AGAINST THE APPELLATE ORDER UNDER SECTION 25 0 OF THE INCOME TAX ACT, 1961 (THE ACT) FOR ASSESSMENT YEAR 2012-13 PASSED B Y THE COMMISSIONER OF INCOME TAX (APPEALS) - 37, NEW DELHI (HEREINAFTER R EFERRED TO AS LD. CIT(A)). 1. GROUND NO. 1 THE ID. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCL E 8(1) (HEREINAFTER REFERRED TO AS AO) AND ID. CIT(A) HAVE ERRED IN MAKING THE ADDITIONS UNDER SECTION 68 OF THE ACT IN RESPECT OF THE UNSECURED LOAN OBTAINE D FROM THE ASSESSEE FROM DATE OF HEARING 19.02.2019 DATE OF PRONOUNCEMENT 02.04.2019 2 ITA NO. 6034/DEL/2016 M/S TRACON BUILDERS AND DEVELOPERS PVT. LTD. AND M/ S JASMINE INFRATECH PVT. LTD. 2. GROUND NO. 2 THE ID. CIT(A) HAS ERRED ON THE FACTS AS WELL AS IN LAW IN REJECTING THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT UNDER RU LE 46A OF THE INCOME TAX RULES, 1962 (THE RULES) AND FURTHER ERRED IN HOLDIN G THAT THERE EXISTED NO JUSTIFIABLE COGENT TENABLE REASON FOR NOT AVAILING MULTIPLE OPPORTUNITIES GRANTED BY THE AO DURING THE ASSESSMENT PROCEEDINGS . CERTAIN ADDITIONAL DOCUMENTS PROPOSED TO BE SUBMITT ED BY THE APPLICANT THROUGH APPLICATION UNDER RULE 46A. THE ID. CIT(A) HAS COMPLETELY IGNORED THE LEGITIMACY OF THE ADDITIONAL DOCUMENTS PROPOSED TO BE SUBMITTED BY THE APPELLANT, WHILE PASSING ORDER UNDER SECTION 250 OF THE ACT. ACCORDINGLY, THE APPELLANT PRAYS BEFORE THIS COURT TO ADMIT THE ADDITIONAL EVIDENCE FILED BEFORE THE CIT(A). 3. THE ASSESSEE FILED THE INCOME TAX RETURN DECLARI NG INCOME OF RS. 1,31,34,430/- ON 30/11/2012. THE RETURN WAS PROCESS ED U/S 143 (1) OF THE INCOME TAX ACT, 1961. THE CASE WAS SELECTED FOR SCR UTINY AND NOTICE U/S 143 (2) WAS ISSUED AND SERVED UPON THE ASSESSEE. THE NO TICE U/S 142(1) OF THE ACT WAS ISSUED ALONG WITH THE QUESTIONNAIRE AND SERVED ON THE ASSESSEE. IN RESPONSE TO WHICH THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, ATTENDED FROM TIME TO TIME AND FILED NECESSARY DETAILS WHICH WERE TAKEN ON RECORD BY THE ASSESSING OFFICER. THE BOOKS OF ACCOUNT WERE CALLED FOR & EXAMINED ON TEST- CHECK BASIS BY THE ASSESSING OFFICER. DURING THE PR OCEEDINGS WHEN THE QUESTIONNAIRE ISSUED TO THE ASSESSEE ALONGWITH NOTI CE U/S 142(1), THE ASSESSEE WAS SPECIFICALLY ASKED TO FURNISH FOLLOWING DETAILS REGARDING UNSECURED LOAN: (1) CONFIRMATION OF CONCERNED PERSON (2) COPY OF RETURN OF INCOME ALONG WITH BALANCE SHE ET (3) BANK STATEMENT OF SUCH PERSON. THE ASSESSEE DID NOT FURNISH THE COMPLETE DETAILS O THER THAN CONFIRMATION OF THE TWO COMPANIES NAMELY (1) M/S TRACON BUILDERS AN D DEVELOPERS PRIVATE 3 ITA NO. 6034/DEL/2016 LIMITED AND M/S JASMINE INFRATECH PRIVATE LIMITED F ROM WHERE UNSECURED LOAN WAS RECEIVED. CONSIDERING THE PROCEEDING AND THE OP PORTUNITY GIVEN TO THE ASSESSEE, THE ASSESSING OFFICER PRESUMED THAT THE A SSESSEE HAD NOTHING TO SUBMIT IN THIS REGARD. ON EXAMINATION OF LOAN CONFI RMATION FILED BY ASSESSEE, THE ASSESSING OFFICER OBSERVED THAT IN BOTH CASES C ONFIRMATION LETTERS ARE PRINTED FROM SAME PRINTER WITH SAME FONTS AND BOTH THESE CONFIRMATION SEEMS TO BE PAPER ENTITIES OPERATING FROM THE SAME PREMIS ES. IN ABSENCE OF THE SUBMISSION OF ANY DOCUMENTS TO SH OW THE CREDITWORTHINESS OF THE LOAN CREDITORS, THE ASSESSI NG OFFICER MADE ADDITION OF RS. 2,50,00,000/- U/S 68 OF INCOME TAX ACT AS UNEXP LAINED CREDITS IN THE BOOKS OF ASSESSEE. THE ASSESSING OFFICER ALSO MADE ADDITION ON ACCOUNT OF DISALLOWANCE OF EXPENSES UNDER SECTION 14A READ WIT H RULE 8D AT RS. 3,15,223/-. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE AS SESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE AP PEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THE ASSESSEE PLACED VA RIOUS DOCUMENTS BEFORE THE ASSESSING OFFICER BUT COULD NOT PRODUCED ITR AN D BANK STATEMENTS RELATING TO CREDITORS DUE TO PAUCITY OF TIME, BUT PRODUCED B ALANCE SHEETS OF BOTH THE COMPANIES WHICH DEPICTED THE CREDITWORTHINESS OF TH OSE COMPANIES. THE LD. AR M/S TRACON BUILDERS AND DEVELOPERS PVT, LTD B-LL/58 MCIE, DELHI MATHURA ROAD, NEW DELHI REGISTERED OFFICE: M/S ESPIRE INFOLABS PVT. LTD. A-41 ESPIRE CAMPUS, MOHAN COOPERATIVE ESTATE, MATHURA ROAD, NEW DELHI-110044 UNSECURED LOAN AMOUNT RS. 1,17,50,000/- M/S JASMINE INFRATECH PVT. LTD B-LL/100 MCIE DELHI MATHURA ROAD, NEW DELHI REGISTERED OFFICE: M/S ESPIRE INFOLABS PVT. LTD. A- 41ESPIRE CAMPUS, MOHAN COOPERATIVE ESTATE, MATHURA ROAD, NEW DELHI-110044 UNSECURED LOAN AMOUNT RS. 1,32,50,000/- 4 ITA NO. 6034/DEL/2016 SUBMITTED THAT THE ASSESSING OFFICER WAS AWARE OF D ETAILS OF COMPANIES, ASSESSED IN DELHI, REGISTERED ADDRESS AND HEAD OFFI CER BUT NO EFFORTS WERE MADE BY THE ASSESSING OFFICER TO ENQUIRE ABOUT BANK DETA ILS FROM THE RESPECTIVE COMPANIES. THE LD. AR SUBMITTED THAT THE ASSESSEE F ILED APPLICATION UNDER RULE 46A BEFORE THE CIT(A) AND CIT(A) CALLED FOR RE MAND REPORT ON 24.08.2016, BUT COMPLETED THE HEARING WITHOUT CALLING REMAND RE PORT ON 27.09.2016. THE LD. AR SUBMITTED THAT THE ASSESSEE PRODUCED BANK ST ATEMENT AND ITRS RELATING TO BOTH THE PARTIES, BUT THE CIT(A) HAS NO T TAKEN COGNIZANCE OF THE SAME. 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). THE LD. DR ALSO SUBMITTED THAT THE ASSESSEE WAS GIVEN AMPLE OPPORTUNITY OF FILING THE DOCUMENTS BEFORE THE REVE NUE AUTHORITIES WHICH THE ASSESSEE FAILED TO AVAIL AT THE RELEVANT TIME, THER EFORE, THE ADDITION U/S 68 IS JUST AND PROPER. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD BEFORE US. IT IS PERTINENT TO N OTE THAT THE DOCUMENTS SUCH AS ITR AND THE BANK STATEMENT OF THE PARTIES WERE N OT PRODUCED BEFORE THE ASSESSING OFFICER BUT THE SAME WAS FILED BEFORE THE CIT(A) BY MAKING APPLICATION UNDER RULES 46A OF THE INCOME TAX RULES , 1962 BY THE ASSESSEE. THE CIT(A) REJECTED THIS APPLICATION SOLELY ON THE GROUND THAT MULTIPLE OPPORTUNITY WAS GRANTED TO THE ASSESSEE. IN FACT, T HE CIT(A) THOUGH CALLED FOR REMAND REPORT HAS TAKEN A DECISION WITHOUT WAITING FOR THE REMAND REPORT. THE ASSESSING OFFICER ALSO HAS NOT GIVEN PROPER OPPORTU NITY TO THE ASSESSEE FOR GRANTING REASONABLE TIME TO PRODUCE THOSE DOCUMENTS AT THE TIME OF ASSESSMENT PROCEEDINGS. THUS, PRINCIPLE OF NATURAL JUSTICE HAS NOT BEEN CORRECTLY FOLLOWED BY THE REVENUE AUTHORITIES. IT W ILL BE APPROPRIATE TO ADMIT THE ADDITIONAL EVIDENCE AT THIS JUNCTURE AND WE ARE REMANDING BACK THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFYING THE DOCUMENTS PRODUCED BY THE ASSESSEE BEFORE THE CIT(A) AS WELL AS THE DOCUMENTS /EVIDENCE WHICH WAS 5 ITA NO. 6034/DEL/2016 PRODUCED AT THE TIME OF THE ASSESSMENT PROCEEDINGS. NEEDLESS TO SAY THAT THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWI NG PRINCIPLES OF NATURAL JUSTICE. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSE. 8. AS REGARDS THE STAY APPLICATION FILED BY THE ASS ESSEE, SINCE WE HAVE DECIDED THE APPEAL, THE SAME BECOMES INFRUCTUOUS, H ENCE DISMISSED. 9. IN RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND APRIL, 2019 . SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 02/04/2019 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO. 6034/DEL/2016 DATE OF DICTATION 19.02.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 19.02.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 0 2 . 0 4 .2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 0 2 . 0 4 .2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 0 2 . 0 4 .2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK