M/s. ONS Creations Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 6250/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91218 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 12-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA SENIOR
• Keywords: Bogus Share capital; Opportunity of being heard; Additional evidence; Reasonable cause
• Section: 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA NO.6250/DEL./2013 (ASSESSMENT YEAR : 2005-06) M/S. ONS CREATIONS PVT. LTD., VS. ITO, WARD 13 (4 ), M 2 / A4, JHULE LAL APARTMENT, NEW DELHI. PITAMPURA, NEW DELHI 110 088. (PAN : AAACO7606H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN, FCA REVENUE BY : SHRI P. DAM KANUNJNA, SENIOR DR DATE OF HEARING : 12.06.2015 DATE OF PRONOUNCEMENT : 17.06.2015 O R D E R PER GEORGE GEORGE K., JUDICIAL MEMBER : THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DI RECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-X VI, NEW DELHI DATED 30.09.2013. THE RELEVANT ASSESSMENT YEAR I S 2005-06 . 2. THE ASSESSMENT IN ASSESSEES CASE WAS COMPLETED U/S 144 OF THE INCOME-TAX ACT, 1961 ON 28.12.2007 AT A TOTAL INCOM E OF RS.2,54,57,920/- AS AGAINST THE RETURNED INCOME OF RS.1,30,730/-. T HE LD. CIT, DELHI V, NEW DELHI PASSED AN ORDER DATED 18.05.2009 U/S 263 AND DIRECTED THE ITA NO.6250/DEL./2013 2 ASSESSING OFFICER TO MAKE ADDITION OF RS.61,85,419/ - TO THE ASSESSEES INCOME ON ACCOUNT OF UNEXPLAINED LOANS ALONG WITH A NY INTEREST CLAIMED ON THOSE LOANS AND A FURTHER ADDITION OF RS.40 LACS ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL AS THE ASSESSEE FAILED TO ESTABLISH BEFORE THE CIT DURING THE PROCEEDINGS U/S 263 THE IDENTITY AND CR EDITWORTHINESS OF THE PERSONS FROM WHOM THE AFORESAID LOANS AND SHARE CAP ITALS SHOWN TO HAVE BEEN RECEIVED. AGAINST THE ORDER OF THE CIT PASSED U/S 263 OF THE ACT, THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL, JUSTIFYING THE ORDER OF THE CIT DELHI V PASSED U/S 263, RESTORED T HE MATTER BACK TO THE ASSESSING OFFICER FOR PROVIDING AN OPPORTUNITY OF B EING HEARD BEFORE MAKING ANY ADDITION ON THE ISSUES. IN THAT VIEW OF THE MATTER, THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN ITS CASE ON 13.01.2012 BUT NO COMPLIANCE WAS MADE ON THE SAID DATE. THE ASSES SING OFFICER GAVE ANOTHER OPPORTUNITY AND FIXED THE CASE FOR 06.02.20 12 BUT ON THAT DAY ALSO, NOBODY APPEARED ON BEHALF OF THE ASSESSEE. ACCORDI NGLY, THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER GIVING EFFECT T O THE ORDER OF CIT DELHI V DATED 18.05.2009 AS AMENDED BY THE TRIBUNALS ORD ER DATED 27.05.2011 AND COMPLETED THE ASSESSMENT ON TOTAL INCOME OF RS. 3,56,43,339/- AFTER MAKING ADDITION ON ACCOUNT OF UNEXPLAINED LOANS OF RS.61,85,419/- AND ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL OF RS.40 LACS . ITA NO.6250/DEL./2013 3 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT (APPEALS). THE CIT (A) CONFIRMED THE ADDITIONS MA DE BY THE ASSESSING OFFICER. 4. THE ASSESSEE, BEING AGGRIEVED, IS IN APPEAL BEFO RE US BY TAKING EIGHT GROUNDS. 5. AT THE OUTSET OF THE HEARING, THE LD. COUNSEL HA S RAISED GROUND NO.4 WHICH READS AS UNDER :- 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED BOTH ON FACTS AND IN LAW IN NOT ADMITTING THE ADDITIONAL EVIDENCES FILED BY THE ASS ESSEE UNDER RULE 46A OF THE ACT DESPITE THE FACT THAT THE RE WAS A REASONABLE CAUSE FOR THE ASSESSEE FOR NOT FILING TH E SAME BEFORE THE AO. THE LD. COUNSEL SUBMITTED THAT THE TRIBUNAL HAD EAR LIER DIRECTED THE ASSESSING OFFICER TO PASS THE ASSESSMENT ORDER AFTE R PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, HOWEVER , THE ASSESSING OFFICER PASSED THE ORDER EX-PARTE. THE LD. COUNSEL SUBMITT ED THAT NO NOTICE WAS EVER SERVED ON THE ASSESSEE, THEREFORE, THERE WAS N O OCCASION FOR THE ASSESSEE TO APPEAR BEFORE THE ASSESSING OFFICER. T HE LD. COUNSEL SUBMITTED THAT ADDITIONAL EVIDENCES UNDER RULE 46A OF THE ACT WERE PRODUCED BEFORE THE CIT (A). THE ASSESSEE PLEADED BEFORE THE CIT (A) TO ACCEPT THESE EVIDENCES AS THE SAME ESTABLISHES THE GENUINENESS OF THE TRANSACTIONS DONE BY THE ASSESSEE AND GO TO THE ROO T OF THE ADDITIONS MADE BY THE ASSESSING OFFICER. IT WAS ALSO SUBMITTED TH AT SINCE THESE ITA NO.6250/DEL./2013 4 DOCUMENTS/ EVIDENCES HAD BEEN PROCURED AFTER COMPLE TION OF THE ASSESSEE, THERE WAS NO OCCASION TO FILE THESE EVIDENCES DURIN G THE COURSE OF THE ASSESSMENT. LD. COUNSEL SUBMITTED THAT CIT (A) HAS ERRED IN NOT ACCEPTING THE ADDITIONAL EVIDENCES WHICH GOES TO THE ROOT OF THE MATTER. THEREFORE, HE PLEADED TO ADMIT THE ADDITIONAL EVIDENCES AND RE STORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER. 6. LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES B ELOW. 7. WE HAVE HEARD BOTH THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. WE FIND THAT THE TRIBUNAL HAS EARLIER R ESTORED THE MATTER TO THE ASSESSING OFFICER FOR PROVIDING AN OPPORTUNITY OF B EING HEARD TO THE ASSESSEE, HOWEVER, THE ORDER WAS PASSED EX-PARTE. THE ASSESSEE SUBMITTED ADDITIONAL EVIDENCES UNDER RULE 46A BEFORE THE CIT (A) BUT THE CIT (A) HAS NOT ADMITTED THE SAME. WE FIND FROM THE ORDER OF THE CIT (A) THAT THE CIT (A) HIMSELF RECORDED THAT THE EVIDENCES FILED B Y THE ASSESSEE GOES TO THE ROOT OF THE ISSUES. THE RELEVANT FINDING OF TH E CIT (A) READS AS FOLLOWS: 4.7 WITHOUT PREJUDICE TO THE ABOVE, SINCE THE EVIDENCES FILED BY THE APPELLANT GOES TO THE ROOT O F THE ISSUES IN APPEAL, THEREFORE, TO DECIDE THE ISSUE IN APPEAL ON MERIT, IT IS NECESSARY TO EXAMINE THE EVIDENCES SUB MITTED BY THE APPELLANT. FROM THE ORIGINAL ASSESSMENT ORDE R, IT IS EVIDENT THAT THE BOOKS OF ACCOUNTS WERE NEVER PRODU CED BEFORE THE AO BY THE APPELLANT, DESPITE SEVERAL OPPORTUNITIES ALLOWED. AS EVIDENT FROM THE ORIGINAL ASSESSMENT, THE DIRECTOR AND AIR APPEARED BEFORE TH E AO ON SEVERAL OCCASIONS BUT FAILED TO PRODUCE THE BOOK S OF ACCOUNTS DESPITE REPEATED REMINDERS BY THE AO TO PR ODUCE ITA NO.6250/DEL./2013 5 THE SAME. IN THE ABSENCE OF BOOKS OF ACCOUNTS THE TRANSACTIONS OF UNSECURED LOANS AND SHARE APPLICATI ON MONEYS RECEIVED BY THE APPELLANT FROM THE CASH CRED ITORS! SHARE APPLICANTS ARE NOT VERIFIABLE. IN THIS VIEW OF THE MATTER, WE ADMIT THE ADDITIONAL EVIDENCES. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE AUTHORI TIES BELOW AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICE R TO DECIDE AFRESH AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 17 TH DAY OF JUNE, 2015. SD/- SD/- (S.V. MEHROTRA) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 17 TH DAY OF JUNE, 2015 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XVI, NEW DELHI 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.