M/s Rajasthan Samaj Trust, New Delhi V. DCIT, Ghaziabad

ITA 605/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7829 (ITAT-DELHI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 05-04-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SONEBHADRA
• Section: 12A; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H, NEW DELHI BEFORE SHRI S. V. MEHROTRA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER I.T.A. NO.605/DEL/2016 (ASSESSMENT YEAR 1010-11) RAJASTHAN SAMAJ TRUST, VS. DCIT, CIRCLE 2, KC-72, KAVI NAGAR, GHAZIABAD GHAZIABAD-201002( U.P.) GIR / PAN :AAATR5928C (APPELLANT) (RESPONDENT) APPELLANT BY :SHRI SANDEEP SAPRA, ADV. RESPONDENT BY :SHRI V. R. SONEBHADRA, SR. DR DATE OF HEARING: 05.04.2016 DATE OF PRONOUNCEMENT: 05.05.2016 ORDER PER BEENA A. PILLAI, JM: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) GHAZIABAD DATED 01.12.2015 FOR THE ASSESSMENT YEAR 2010-11, ON THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE AUTHORITIES BELOW HAD ERRED ON FACTS AND IN LAW IN MAKING/CONFIRMING ADDITION OF RS.4,50,000/- U/S 68 OF I.T. ACT, 1961. 2. WITHOUT PREJUDICE TO GROUND NO. 1 ABOVE, THE ADDITION OF RS.4,50,000/- U/S 68 OF I.T. ACT HAS BE EN MADE BY THE AO WITHOUT PROVIDING REASONABLE OPPORTUNITY TO THE APPELLANT TO PROVE ITS CASE. 2 I.T.A.NO.605./DEL/2016 VARIOUS OBSERVATIONS MADE BY THE AUTHORITIES BELOW IN THEIR RESPECTIVE ORDERS ARE EITHER INCORRE CT OR ARE UNTENABLE. THE FACTS STATED AND THE EVIDENCE FI LED BEFORE THE AUTHORITIES BELOW HAD EITHER BEEN IGNORE D OR HAD NOT BEEN APPRECIATED PROPERLY. 2. THE BRIEF FACTS OF THIS CASE ARE AS UNDER: THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE I S A TRUST REGISTERED U/S 12A OF THE I.T. ACT, 1961 AND HAD FILED ITS RETURN OF INCOME ON 28.03.2011 DECLARING TOTAL INCOME OF RS.40,710/-. HE OBSERVED THAT THE ASSESSEE HAD RECEIVED UNSECURED LOAN OF RS.4.50 LACS DURING THE YEAR UNDER CONSIDERATION. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) OF HT A CT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE WAS CALLED UP ON TO PRODUCE DETAILS REGARDING UNSECURED LOAN AND TO PRO VE THE CAPACITY, IDENTITY AND CREDITWORTHINESS OF THE LEND ERS. THE ASSESSEE FILED ITS REPLY DATED 18 TH OCT., 2012 WHICH STATED THAT THE TRUST HAS NOT AVAILED ANY UNSECURED LOAN DURING THE YEAR UNDER CONSIDERATION. 2.1 ACCORDINGLY, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PRODUCE THE NARRATION OF THE BANK ENTRI ES WITH SUPPORTING DOCUMENTS. THE ASSESSEE AGAIN FILED A R EPLY ON 23.01.2013 SUBMITTING THAT HE ASSESSEE TRUST INT ENDED TO PROVIDE FUNDS TO ANOTHER TRUST NAMELY SETH BRIJL AL NEVATIA RAJASTHAN SAMAJ TRUST, WHICH PROPOSED TO SE T UP A COMMUNITY CENTRE FOR THE BENEFIT OF PUBLIC AT LAR GE. THE ASSESSEE HAD SUBMITTED DURING THE ASSESSMENT PROCEEDINGS THAT DURING THE RELEVANT PERIOD OF TRAN SFER OF 3 I.T.A.NO.605./DEL/2016 FUNDS, THE ASSESSEE HAD TWO FDRS WITH PUNJAB NATION AL BANK OF RS.1.50 LACS AND RS.4.50 LACS. IT WAS SUBM ITTED BEFORE THE ASSESSING OFFICER THAT DUE TO PREMATURE ENCASHMENT OF FDRS, ASSESSEE HAD FACED LOSS OF INTE REST AND HAD ENCASHED THE FDRS FOR A LOWER VALUE AND THU S GOT RS.1.59 LACS FROM ITS ENCASHMENT. IT WAS SUBMI TTED BY THE ASSESSEE THAT INSTEAD OF ENCASHING THE OTHER FDR, ARRANGED FOR A TEMPORARY LOAN OF RS.4.50 LACS FROM M/S. SIGNET VYAPAR PVT. LTD. AND REPAID THE SAID LOAN LA TER ON, OUT OF MATURITY OF FDR. THE ASSESSING OFFICER DIREC TED THE ASSESSEE TO PRODUCE PRINCIPAL OFFICER / MANAGING DI RECTOR OF M/S. SIGNET VYAPAR PVT. LTD. ALONG WITH THEIR AU DITED BALANCE SHEET, ORIGINAL BOOKS OF ACCOUNTS WITH BANK STATEMENT FOR VERIFICATION AND CREDITWORTHINESS OF THE LENDER. ACCORDINGLY, ASSESSEE SUBMITTED CONFIRMATI ON, COPIES OF ITR AS WELL AS COPIES OF ITS BANK STATEME NT REFLECTING THE SAID LOAN TRANSACTIONS. THE ASSESSI NG OFFICER RECORDED THAT THE BANK STATEMENT ALSO REFLE CTS AVAILABILITY OF FUNDS WITH THE LENDER FOR DISBURSIN G LOAN. 2.2 MEANWHILE, ASSESSING OFFICER SENT A LETTER TO T HE PRINCIPAL OFFICER / MANAGING DIRECTOR OF M/S. SIGNE T VYAPAR PVT. LTD. TO FURNISH THE CONFIRMATION REGARD ING THESE TRANSACTIONS, DETAILS OF ITS BUSINESS ACTIVI TIES AND COPY OF ACCOUNTS OF M/S. RAJASTHAN SAMAJ TRUST IN T HEIR BOOKS OF ACCOUNTS ALONG WITH ITS BANK STATEMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSEE WAS CONFRONTED WITH THE ISSUE ON THIS POINT TO M/S. SIG NET 4 I.T.A.NO.605./DEL/2016 VYAPAR PVT. LTD. WHICH WAS RECEIVED BACK UNSERVED W ITH THE POSTAL REMARKS NOT KNOWN. THE ASSESSEE ACCORDINGLY CHECKED UP THE PARTIES ADDRESS AND CAME TO KNOW THAT THE REGISTERED OFFICE OF THE ABOVE COMPAN Y HAS BEEN SHIFTED, WHICH WAS INFORMED TO LD. ASSESSING O FFICER. ACCORDINGLY, THE ASSESSING OFFICER SENT A QUERY TO THE NEW ADDRESS OF THE COMPANY, FROM WHICH REPLY WAS RECEIV ED BY THE ASSESSING OFFICER ON 28.02.2014. THE SAID REPL Y FROM M/S. SIGNET VYAPAR PVT. LTD. WAS ACCOMPANIED WITH T HE RETURN OF INCOME AND THE BALANCE SHEET FOR THE YEAR UNDER CONSIDERATION. ON VERIFICATION OF DETAILS RECEIVED FROM M/S. SIGNET VYAPAR PVT. LTD., THE ASSESSING OFFICER OBSERVED THAT THERE IS NO REAL GENERATION OF INCOME IN M/S. SIGNET VYAPAR PVT. LTD. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE REPLY TO THE 2 ND LETTER SENT TO M/S. SIGNET VYAPAR PVT. LTD. WAS POSTED FROM NIRMAN VIHAR, NEW DELHI AND THE SIGNATURES OF AUTHORIZED SIGNATORY OF M/S. SIGNET VYAPAR PVT. LTD. DID NOT T ALLY WITH THE SIGNATURES OF AUTHORIZED SIGNATORY ON THE CONFI RMATION LETTER FILED BY THE ASSESSEE ALONG WITH ASSESSEES REPLY DATED 23.01.2013. 2.3 ASSESSING OFFICER MADE ADDITION OF RS.4.50 LACS U/S 68 OF THE ACT AS THE EXPLANATION OFFERED BY THE ASS ESSEE WAS NOT SATISFACTORY. 3. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASS ESSEE PREFERRED APPEAL BEFORE LD. CIT(A). 5 I.T.A.NO.605./DEL/2016 3.1 LD. CIT(A) CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER ON THE GROUND THAT GENUINENESS OF THE TRANSACTION HAS NOT BEEN ESTABLISHED BY THE ASSESSE E. 3.2 AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE US NOW. 4. LD. A.R. SUBMITTED THAT HE REPLY RECEIVED FROM M /S. SIGNET VYAPAR PVT. LTD. VIDE LETTER DATED 28.02.201 3 HAS NOT BEEN CONFRONTED TO THE ASSESSEE BY THE ASSESSIN G OFFICER. HE FURTHER SUBMITTED THAT THE ASSESSING O FFICER HAS OBSERVED THE DIFFERENCE IN THE SIGNATURES IN TH E CONFIRMATION FILED BY THE ASSESSEE VIDE ITS LETTER DATED 23.01.2013 AND THE LETTER RECEIVED FROM M/S. SIGNET VYAPAR PVT. LTD. DATED 28.02.2013. LD. A.R. THUS SUBMITTED THAT THE ISSUE NEEDS TO BE SENT BACK TO T HE ASSESSING OFFICER FOR DUE VERIFICATION OF DIFFERENC E IN SIGNATURES. 5. ON THE CONTRARY, LD. D.R. THOUGH SUPPORTED THE ORDERS PASSED BY THE AUTHORITIES BELOW, DID NOT OBJ ECT IF THE ISSUE BE SET ASIDE TO THE FILE OF ASSESSING OFF ICER FOR PROPER VERIFICATION. 6. WE HAVE PERUSED THE ORDERS PASSED BY THE AUTHORITIES BELOW AND THE ARGUMENTS ADVANCED BY BOT H THE PARTIES BEFORE US. WE ARE OF THE CONSIDERED OP INION THAT THE ISSUE HAS NOT BEEN PROPERLY VERIFIED BY TH E ASSESSING OFFICER EVEN AFTER OBSERVING THAT THERE I S DIFFERENCE IN THE SIGNATURES OF AUTHORIZED SIGNATOR Y OF M/S. SIGNET VYAPAR PVT. LTD. IN THE CONFIRMATION FI LED BY 6 I.T.A.NO.605./DEL/2016 THE ASSESSEE AND THAT SENT BY M/S. SIGNET VYAPAR PV T. LTD. TO MEET THE ENDS OF JUSTICE, IT NEEDS TO BE E NQUIRED IN DETAIL. 6.1 WE, THEREFORE, SET ASIDE THE ISSUE TO THE FILE THE ASSESSING OFFICER FOR DE NOVO VERIFICATION. THE ASS ESSING OFFICER MAY CARRY OUT FRESH ENQUIRIES AFTER GIVING PROPER NOTICE TO THE ASSESSEE. IT IS DIRECTED THAT THE AS SESSEE MAY PARTICIPATE AND WOULD SUPPORT THE ASSESSMENT PROCEEDINGS BY PROVIDING ALL THE NECESSARY DETAILS / INFORMATION CALLED UPON BY THE ASSESSING OFFICER. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE STA ND ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STAN DS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH MAY, 2016. SD./- SD./- (S. V. MEHROTRA) (BEENA A. PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 05.05.2016 SP. COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI) 7 I.T.A.NO.605./DEL/2016 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 3/5/16 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 4/5/16 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 5/5/16 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 5/5/16 SR. PS/PS 7 FILE SENT TO BENCH CLERK 6/5 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER