ACIT, New Delhi V. M/s. Gurdyal Shyam Lal Pvt. Ltd., Delhi

ITA 6085/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6822 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 20-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 10-11-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURJIT KUMA R
• Keywords: Unexplained cash credit
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. NO.6085/DEL/2015 ASSESSMENT YEAR: 2008-09 ACIT, CIRCLE-10(2), NEW DELHI. V. M/S. GURDYAL SHYAM LAL PVT. LTD., KUCHA USTAD DAG, CHANDANI CHOWK, DELHI. TAN/PAN: AAACG 0726A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SURJIT KUMAR, SR.D.R. RESPONDENT BY: NONE DATE OF HEARING: 04 07 2018 DATE OF PRONOUNCEMENT: 17 07 2018 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE IMPUGNED ORDER DATED 14.09.2015 PASSED BY THE CIT(A)-IV, NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED U/S. 144 FOR THE ASSESSMENT YEAR 2008-09. IN THE GR OUNDS OF APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUND S:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF CASE & IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ADDRESS ON NOTICE/ASSESSMENT ORDER IS DIFFERENT FROM THAT ON THE RETURN FILED BY THE ASSESSEE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF CASE & IN LAW, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT RETURN OF INCOME AS WELL AS THE GENUINENESS OF THE UNSECURED LOAN AMOUNTING OF RS. 97,72,281/. I.T.A. NO.6085/DEL/2015 2 2. THE BRIEF FACTS ARE THAT ASSESSEE HAS FILED ITS RETURN OF INCOME DECLARING THE LOSS OF 13,80,692/- ON 02.02.2 009. THE SAID RETURN WAS SELECTED FOR SCRUTINY AND IT HAS BE EN NOTED BY THE LD. ASSESSING OFFICER IN THE ASSESSMENT ORDER T HAT DESPITE ISSUANCE OF NOTICES, THE ASSESSEE FAILED TO COMPLY WITH THE SAID NOTICES AND ACCORDINGLY HE PROCEEDED TO COMPLE TE THE ASSESSMENT U/S.144. FROM THE PERUSAL OF THE BALANCE SHEET, HE NOTED THAT ASSESSEE HAS SHOWN UNSECURED LOAN AMO UNTING TO RS.97,72,281/-, WHICH HAS BEEN ADDED BY HIM ON T HE GROUND THAT SAME IS UNEXPLAINED CASH CREDIT. APART FROM THAT, ASSESSING OFFICER HAS NOTED THAT ASSESSEE HAS SHOWN SALE AT RS.25,88,565/- WHICH HAS BEEN ESTIMATED TO RS.30 LA CS. AFTER INVOKING THE PROVISION OF SECTION 44AD, HE WORKED O UT THE NET PROFIT AT RS.1,50,000/-. 3. BEFORE THE LD. CIT(A), ASSESSEE SUBMITTED TH AT THE NOTICES SENT BY THE ASSESSING OFFICER WERE NOT RECEIVED, BE CAUSE SAME WERE SENT ON INCOMPLETE ADDRESS AS THE COMPLETE ADD RESS IS 4884, KUCHA USTAD DAG, CHANDNI CHOWK, DELHI, WHEREA S THE ASSESSING OFFICER HAS NOT MENTIONED CHANDNI CHOWK, THEREFORE, IN ABSENCE OF SERVICE OF ANY NOTICE THE ASSESSEE COULD NOT APPEAR BEFORE THE ASSESSING OFFICER. LD. CIT(A) HELD THAT SIMPLY BECAUSE THERE ARE UNSECURED LOAN IN THE BALANCE SHEET, THE SAME CANNOT BE ADDED U/S.68 AND EVEN THE BLIND ESTIMATION OF SALES IS ALSO INCORRECT. HE THUS DELE TED THE ENTIRE ADDITION. I.T.A. NO.6085/DEL/2015 3 4. AT THE STAGE OF THIS TRIBUNAL ALSO, THERE IS NO COMPLIANCE BY THE ASSESSEE ON THE NOTICES SENT BY THE REGISTRY . IT IS NOTICED THAT AGAIN THE ADDRESS MENTIONED IN FORM-36 BY THE DEPARTMENT ITSELF IS INCOMPLETE AS CHANDNI CHOWK HA S NOT MENTIONED AGAIN. ALREADY VARIOUS DATES OF HEARING H AVE BEEN FIXED, THEREFORE WE THOUGHT APPROPRIATE TO DISPOSE OF THE APPEAL ON THE BASIS OF MATERIAL ON RECORD. 5. FROM THE PERUSAL OF THE ORDER, WE FIND THA T NONE OF THE AUTHORITIES HAVE GIVEN ANY REASON EITHER FOR MAKING THE ADDITION OR FOR DELETING THE SAME. IN SO FAR AS THE UNSECURED LOANS OUTSTANDING AS ON 31 ST MARCH, 2008 AS SHOWN IN THE BALANCE SHEET, THE ASSESSEE HAD GIVEN FOLLOWING DET AILS IN THE STATEMENT OF FACTS BEFORE CIT (A) :- FOLLOWING UNSECURED LOANS WERE OUTSTANDING ON 31.03 .2008: LOAN FROM ICICI BANK (SECURED BY PERSONAL PROPERTIE S OF DIRECTORS) RS. 65,03,941 .00 LOANS FROM DIRECTORS RS. 19,04,000.00 LOANS FROM SHAREHOLDERS RS. 13,64,339.60 TOTAL RS. 97,72,280 .60 4. THE LD. ASSESSING OFFICER HAD INCORRECTLY TREATE D ALL THE UNSECURED LOANS AS NEW IN THE ASSESSMENT ORDER PASSED BY HIM. THE COMPANY, DURING THE FINANCIAL YEAR 2007-08 DID NOT TAKE ANY NEW LOAN, ALL THE LOANS OUTSTANDIN G AS ON 31.03.2008 WERE OLD LOANS. THE FOLLOWING TABLE SHOWS THE BALANCES OF THE UNSEC URED LOANS AS ON 31.03.2007 AND 31.03.2008: UNSECURED LOANS FROM BALANCE AS ON 31.03.2007 BALANCE AS ON 31.03.2008 ICLCI BANK (SECURED BY PERSONAL PROPERTIES OF THE DIRECTORS) RS.65,69,745.00* RS. 65,03,941 .00 DIRECTORS RS. 19,04,000.00 RS. 19,04,000.00 I.T.A. NO.6085/DEL/2015 4 SHAREHOLDERS RS. 13,64,339.60 RS. 13,64,339.60 TOTAL RS. 98,38,084.60 RS. 97,72,280.60 THE BALANCES MENTIONED ABOVE CAN ALSO BE VERIFIED W ITH THE FINANCIAL STATEMENTS OF FINANCIAL YEAR 2006-07 & 2007-08 (ATTACHED). {ANNEX URE 5} 'THE BALANCE OF LOAN FROM ICICI BANK AS ON 31. 03.2 007 WAS INCORRECTLY SHOWN AS 'SECURED LOAN' IN THE BALANCE SHEET AS ON 31.03.200 7, AS THE SAME WAS SECURED BY THE PERSONAL PROPERTIES OF THE DIRECTORS AND NOT BY THE ASSETS OF THE COMPANY. THIS MISTAKE WAS RECTIFIED IN THE NEXT YEAR AND THE BALANCE OF L OAN FROM ICICI BANK WAS CORRECTLY SHOWN AS UNSECURED LOAN IN THE BALANCE SHEET AS ON 31.03.2008. 5. EARLIER, THE COMPANY WAS AVAILING A CASH CREDIT LIMIT FACILITY WITH THE CENTRAL BANK OF INDIA (CBI), WHICH WAS TAKEN OVER THROUGH A LOAN FROM ICLCI BANK DURING THE FINANCIAL YEAR 2006-07. THE LOAN AGREEMENT WITH THE ICLCI BANK, LOAN DISBUR SEMENT MEMO AND THE COPY OF CHEQUES ISSUED BY THE ICICI BANK IN THE FAVOUR OF C ENTRAL BANK OF INDIA FOR CLOSURE OF THE LOAN ARE ATTACHED FOR YOUR PERUSAL. {ANNEXURE 3 & 4} THE BALANCES MENTIONED IN THE TABLE ABOVE, WERE ALS O DISCLOSED IN THE AUDITED FINANCIAL STATEMENTS OF FINANCIAL YEAR 2006-07 (ATTACHED). {A NNEXURE.5} THUS THERE IS CATEGORICAL AVERMENT BY THE ASSESSEE THAT NO FRESH LOAN HAS BEEN TAKEN IN THIS YEAR AS THESE LOA NS WERE APPEARING IN THE BALANCE SHEET AS ON 31 ST MARCH, 2007. IN SUCH A CASE, OSTENSIBLY NO ADDITION U/S.68 CAN BE M ADE. ON THE ISSUE OF ESTIMATION OF SALES ALSO NO REASON HAS BEEN GIVEN BY THE ASSESSING OFFICER AND INVOKING OF SECTION 44 AD IS NOT CORRECT, BECAUSE ASSESSEE IS NOT INTO CIVIL CONSTRU CTION. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT IN SO LOAN FROM BALANCE AS ON 31.03.2006 BALANCE AS ON 31.03.2007 CENTRAL BANK OF INDIA RS.71,88,732.38 'NIL ICICL BANK NIL RS.65,69,745.00 I.T.A. NO.6085/DEL/2015 5 FAR AS ADDITION OF RS.97,92,280/-, THE SAME ARE NOT SUSTAINABLE, HOWEVER THE ASSESSING OFFICER IS DIREC TED TO VERIFY THAT IF THE UNSECURED LOAN APPEARING IN THE BALANCE SHEET AS ON 31 ST MARCH, 2008 IS COMING FROM THE EARLIER YEARS AS ST ATED BY THE ASSESSEE IN THE AFORESAID STATEMENT OF FACTS , THEN SUCH AN ADDITION SHOULD BE DELETED. IN SO FAR AS ESTIMAT ION OF SALES IS CONCERNED, THIS ISSUE IS ALSO RESTORED BACK TO T HE FILE OF THE ASSESSING OFFICER TO COMPUTE THE INCOME AFTER VERIF YING THE BOOKS OF ACCOUNT AFTER GIVING DUE AND REASONABLE OP PORTUNITY TO THE ASSESSEE. NEEDLESS TO SAY THAT THE NOTICES S HOULD BE SENT ON THE CORRECT ADDRESS AS MENTIONED ABOVE. WIT H THIS DIRECTION, THE APPEAL OF THE REVENUE IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JULY, 2018. SD/- SD/- [L.P. SAHU] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17 TH JULY, 2018 PKK: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR I.T.A. NO.6085/DEL/2015 6 DATE 1. DRAFT DICTATED ON (DIRECT ON COMPUTER) 04.07.2018 2. DRAFT PLACED BEFORE AUTHOR 06.07.2018 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE COMES BACK TO PS/SR. PS 8. UPLOADED ON 9. FILE SENT TO THE BENCH CLERK 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER.