Ultimate Investofin Ltd., New Delhi V. ACIT, Central Circle- 29 , New Delhi

ITA 6663/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1129 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 17-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY GOYAL
• Assessee Lawyers: SSH VED JAI N; SANTOSH GUPTA
• Keywords: Opportunity of being heard
• Section: 153A; 68

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH A, NEW DELHI BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 6663/DEL/2018 ASSESSMENT YEAR: 2013-14 M/S. ULTIMATE INVESTOFIN LTD., D - 26, DSIIDC COMPLEX, KIRTI NAGAR, NEW DELHI. PAN AABCS 1872N (APPELLANT) VS. ACIT, CENTRAL CIRCLE - 29 NEW DELHI. (RESPONDENT) APPELLANT BY S/SH. VED JAIN & MISS UMANG LUTHRA, ADV. S/SH. ASHISH GOEL, & SANTOSH GUPTA, CA RESPONDENT BY SH. SANJAY GOYAL, CIT/DR ORDER PER L.P. SAHU, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 20.08.2018 PASSED BY THE CIT(A) FOR THE ASSESSMENT YEAR 2013-1 4 ON THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)[CIT(A)] IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTIO N OF THE ASSESSEE THAT THE ORDER PASSED BY THE LEARNED AO U/S 153A IS BAD AND LIABLE TO BE QUASHED AS THE SAME HAS BEEN FRAMED CONSEQUENT TO A SEARCH WHI CH ITSELF WAS UNLAWFUL AND INVALID IN THE EYES OF LAW. DATE OF HEARING 1 4 .0 3 .2019 DATE OF PRONOUNCEMENT 15.03.2019 ITA NO. 6663/DEL/2018 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTIO N OF THE ASSESSEE THAT THE ASSESSMENT FRAMED UNDER SECTION 153A ARE IN VIOLATI ON OF THE STATUTORY CONDITIONS OF THE ACT AND THE PROCEDURE PRESCRIBED UNDER THE LAW AND AS SUCH THE SAME IS BAD IN THE EYE OF LAW AND LIABLE TO BE QUASHED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTIO N OF THE ASSESSEE THAT THE ASSESSMENT ORDER PASSED BY THE AO IS BARRED BY LIMI TATION HAVING BEEN PASSED BEYOND THE STATUTORY PERIOD PRESCRIBED IN THE ACT. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTIO N OF THE ASSESSEE THAT THE AO HAS ERRED IN MAKING THE ASSESSMENT WITHOUT PROPER S ERVICE OF STATUTORY NOTICES. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTIO N OF THE ASSESSEE THAT THE PROCEEDINGS INITIATED UNDER SECTION 153A ARE BAD IN LAW IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE BE ING FOUND DURING THE SEARCH. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTIO N OF THE ASSESSEE THAT THE ASSESSMENT ORDER PASSED BY THE LEARNED AO IS BAD IN LAW AS THE SAME HAS BEEN PASSED WITHOUT APPLICATION OF HIS OWN MIND. 8. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING AN A DDITION OF RS. 46,68,700/- MADE BY THE AO ON ACCOUNT OF TRADE PAYABLE U/S 68 O F THE ACT. (II) THAT THE ABOVE ADDITION HAS BEEN CONFIRMED DESP ITE THE SAME BEING MADE ARBITRARILY REJECTING THE EXPLANATION GIVEN BY THE ASSESSEE. 9. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE AD DITION MADE BY THE LD. AO REJECTING THE EXPLANATION AND EVIDENCES BROUGHT IN RECORD BY THE ASSESSEE TO ITA NO. 6663/DEL/2018 3 PROVE THE IDENTITY AND CREDITWORTHINESS OF THE INVE STORS AS WELL AS THE GENUINENESS OF THE TRANSACTIONS. (II) THAT THE ADDITION HAS BEEN CONFIRMED WITHOUT PO INTING OUT ANY DEFECT IN THE EVIDENCES FILED BY THE ASSESSEE. 10. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE AD DITION DESPITE THE FACT THAT THE ADDITION MADE BY THE AO ARE ON THE BASIS OF EXT RANEOUS CONSIDERATIONS GROSSLY INDULGING INTO CONJECTURES AND SURMISES. 11. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE AD DITION MADE BY THE AO DESPITE THE FACT THAT THE ABOVE ADDITION WAS MADE O N THE BASIS OF THE MATERIAL COLLECTED AT THE BACK OF THE ASSESSEE WITHOUT GIVIN G IT AN OPPORTUNITY TO REBUT THE SAME. 12. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION DESPITE THE FACT THAT THE ORDER WAS PASSED RELYING ON THE INSPECTORS REPORT WHICH WAS NEVER CONFRONTED TO THE ASSESSEE. 13. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION DESPITE THE FACT THAT THE AO HAS PASSED THE ORDER RELYING ON THE STATEMENT RE CORDED WITHOUT GIVING ASSESSEE PROPER OPPORTUNITY TO CROSS EXAMINE THE SA ME. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS ADDITI ON OF RS.46,68,700/- MADE BY THE AO ON ACCOUNT OF THE TRADE PAYABLE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS RETURN OF INCOME ORIGINALLY ON 30.09.2013 DECLARING A TOTAL INCOME O F RS.82,44,890/-. THEREAFTER, A SEARCH TOOK PLACE ON 10.12.2015. BASED ON THIS SEAR CH OPERATION, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 153A AND COMPLE TED THE ASSESSMENT BY ITA NO. 6663/DEL/2018 4 MAKING AN ADDITION OF RS.46,68,700/- BEING THE TRAD E PAYABLES AS PER THE BALANCE SHEET AS ON 31.03.2013. THE ASSESSEE CARRIED THE MA TTER IN APPEAL BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE AND THE ORDER OF ASSESSING OFFICER CONFIRMED THE ACTION OF THE ASSES SING OFFICER VIDE IMPUGNED ORDER. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ADDITIONS MADE BY THE AO ARE NOT SUSTAINABLE BOTH O N FACTS AND LAW. IT WAS SUBMITTED THAT THE ASSESSEE DULY FILED ITS RETURN O F INCOME ON 30.09.2013. NOTHING INCRIMINATING WAS FOUND DURING THE COURSE OF THE SE ARCH AS IS EVIDENT FROM THE ASSESSMENT ORDER. THE ASSESSING OFFICER HAS MADE AD DITION OF RS.46,68,700/- WHICH WAS TRADE PAYABLE AS PER THE BALANCE SHEET AS ON 31.03.2013. OUR ATTENTION WAS INVITED TO THE ASSESSMENT ORDER TO POINT OUT TH AT THE OBSERVATION MADE AND DISCUSSION IN THE ASSESSMENT ORDER ARE NOT RELATED TO THIS ADDITION OF RS.46,68,700/-. THE ASSESSING OFFICER HAS GONE WITH THE PRESUMPTION THAT THIS AMOUNT IS SHARE CAPITAL. ON THE CONTRARY THESE ARE TRADE PAYABLES TO VARIOUS PARTIES IN RESPECT OF THE TRANSACTIONS CARRIED OUT DURING THE YEAR. OUR ATTENTION WAS FURTHER INVITED TO THE AUDITED BALANCE SHEET WH ERE THIS AMOUNT IS BEING SHOWN UNDER THE HEAD TRADE PAYABLES. THE DETAILS OF THE SAME WAS ALSO FILED BEFORE THE ASSESSING OFFICER WITH COMPLETE ADDRESS AND PAN OF EACH OF THE TRADERS WHOM THESE AMOUNTS WERE PAYABLE. COPY OF TH E SAME IS PLACED AT PAPER BOOK PAGE 83. FURTHER, CONFIRMATIONS OF CREDITORS W ITH ITRS WERE ALSO FILED WITH THE ASSESSING OFFICER, WHICH ARE ALSO PLACED AT THE PAPER BOOK PAGES 84 TO 103. ON THE BASIS OF THIS IT WAS CONTENDED BY THE LD. AR TH AT ADDITIONS ARE UNTENABLE AND NEED TO BE DELETED. ITA NO. 6663/DEL/2018 5 5. ON THE OTHER HAND, THE LD. DR RELIED UPON THE OR DERS PASSED BY THE AUTHORITIES BELOW AND SUBMITTED THAT THE LD. AUTHOR ITIES BELOW ARE JUSTIFIED IN MAKING AND SUSTAINING THE IMPUGNED ADDITION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE ENTIRE MATERIAL AVAILABLE ON RECORD INCLUDING THE ORDERS PASSED BY THE AUTHORITIES BELOW. ONGOING THROUGH THE SAME, WE NOTE THAT THIS ADDITION OF RS. 46,68,700/- HAS BEEN MADE BY THE ASSESSING OFFICER UNDER THE IMPRESSION THAT THI S IS SHARE CAPITAL/UNSECURED LOANS THOUGH HE HAS MENTIONED, IN THE ASSESSMENT OR DER, THE SAME AS TRADE PAYABLES. DURING THE COURSE OF THE ASSESSMENT PROCE EDINGS, THE ASSESSEE COMPANY HAS SUBMITTED DETAILS OF THESE TRADE PAYABLES WITH ADDRESS AND PAN. THE ASSESSEE COMPANY ALSO SUBMITTED THE CONFIRMATIONS AND ITRS C REDITORS. THE AO THEREAFTER HAS NOT CARRIED OUT ANY INVESTIGATION OR VERIFICATI ON BEFORE MAKING THE IMPUGNED ADDITION NOR HAS THE ASSESSING OFFICER POINTED OUT ANY ERROR OR MISTAKE IN THE DOCUMENTS SUBMITTED BY THE ASSESSEE. BESIDES, A P ERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THERE IS NO DISCUSSION OF ANY NAME OF TH E CREDITOR OR AMOUNT OF EACH OF THE CREDITORS. THE TOTAL FIGURE HAS BEEN ADDED BY T HE ASSESSING OFFICER SIMPLICITER. THE CIT(A) HAS ALSO CONFIRMED THE ADDITION WITHOUT EVEN CONSIDERING THE FACTS AND CONTENTION OF THE ASSESSEE. AFTER EXAMINATION O F THE FACTS AND DOCUMENTS PLACED IN THE PAPER BOOK, WE, THEREFORE, ARE OF THE VIEW THAT THE ASSESSING OFFICER HAS MADE THE ADDITION WITHOUT APPRECIATING THE FACT S AND EVIDENCES ADDUCED BY THE ASSESSEE. SIMILARLY, THE CIT(A) HAS TOTALLY I GNORED THE FACTS AND IN A MECHANICAL WAY CONFIRMED THE ORDER PASSED BY THE AO . THE ASSESSEE HAVING SUBMITTED THE DETAILS AND EXPLANATION WITH EVIDENCE S IN SUPPORT OF IMPUGNED ITA NO. 6663/DEL/2018 6 TRADE PAYABLES, IT WAS INCUMBENT UPON THE ASSESSING OFFICER TO VERIFY THE SAME IN CASE HE WAS NOT SATISFIED THEREWITH. HOWEVER, INSTE AD OF EXAMINING THE FACTS AND THE EXPLANATIONS OFFERED BY THE ASSESSEE, THE AO HA S IN AN ARBITRARY MANNER MADE THE ADDITION, PARTICULARLY WHEN THESE AMOUNTS ARE A PPEARING IN THE AUDITED BALANCE SHEET AND BEING SHOWN AS TRADE PAYABLES. I T APPEARS THAT THE ASSESSING OFFICER WHILE PASSING THE IMPUGNED ASSESSMENT ORDER WAS IMPRESSED WITH THE ISSUE OF SHARE CAPITAL/UNSECURED LOANS INVOLVED IN OTHER GROUP CASES OF THE ASSESSEE, WHEREAS THE ISSUE INVOLVED IN THIS CASE P ERTAINED TO THE TRADE PAYABLES AS EXPLAINED BY THE ASSESSEE. IN PRESENCE OF ALL TH ESE FACTS, WE DEEM IT APPROPRIATE TO REMIT THE CASE BACK TO THE FILE OF THE ASSESSING OFFICER FOR PASSING THE ASSESSMENT ORDER AFRESH AFTER EXAMINING THE CLAIM O F ASSESSEE REGARDING IMPUGNED TRADE PAYABLES IN THE LIGHT OF EVIDENCES F ILED BEFORE THE AUTHORITIES BELOW WHICH ALSO FORM PART OF PAPER BOOK BEFORE US. THE ASSESSEE IS DIRECTED TO ADDUCE ALL THE MATERIAL BEFORE THE ASSESSING OFFICE R IN SUPPORT OF ITS CLAIM. NEEDLESS TO SAY, THE ASSESSEE SHALL BE GIVEN REASON ABLE OPPORTUNITY OF BEING HEARD. ACCORDINGLY, THE APPEAL OF THE ASSESSEE DES ERVES TO BE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT THE APPEAL ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH, 2019. SD/- SD/- (BHAVNESH SAINI) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 19.03.2019 *AKS*