Aglient Technologies (International) Private Limited, Gurgaon V. DCIT Circle-1(1), Gurgaon

ITA 6727/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9922 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I1
• Assessment Year: 2015-2016
• Appeal Filed On: 13-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Assessee Lawyers: ADMITTING ADDITIONAL
• Keywords: Unexplained cash credit; Additional evidence
• Section: 68; 144; 133(6); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B: NEW DELHI BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI A.N.MISSHRA, ACCOUNTANT MEMBER ITA NO.6726/DEL/2019 (ASSESSMENT YEAR-2015-16) M/S EVA DEVELOPERS PVT. LTD., L-001, GREEN VALLEY APARTMENTS, PLOT NO-18, SECTOR-22, DWARKA DELHI-110077. PAN AAMCS 3484K VS. INCOME TAX OFFICER, WARD-8(4), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY SH. HIREN MEHTA, CA RESPONDENT BY MS. NIDHI SRIVASTAVA, CIT-DR DATE OF HEARING 26.11.2019 DATE OF PRONOUNCEMENT 01.01.2020 ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER DATED 29.07.2009 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-34, NEW DELHI {CIT(A)} AND PERTAINS TO A SSESSMENT YEAR 2015- 16. 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE RETUR N FOR THE YEAR UNDER CONSIDERATION WAS FILED SHOWING NIL INCOME. T HE CASE WAS SELECTED FOR LIMITED SCRUTINY THROUGH CASS WITH THE FOLLOWIN G REASONS: ITA NO.6726/DEL/2019 (ASST.YEAR:2015-16) PAGE | 2 (I) LARGE INCREASE OF UNSECURED LOANS DURING THE YE AR (II) LARGE INCREASE IN SUNDRY CREDITORS WITH RESPE CT TO TURN OVER AS COMPARED TO THE PRECEDING YEAR. (III) PURCHASE OF PROPERTY REPORTED IN FORM-26QB. 2.1 AS PER THE ASSESSING OFFICER (AO), INITIALLY T HERE WAS NO COMPLIANCE BY THE ASSESSEE TO THE NOTICES. SUBSEQUE NTLY, ONE AUTHORIZED REPRESENTATIVE (AR) DID ATTEND THE PROCEEDINGS BUT THE DETAILS REQUIRED BY THE ASSESSING OFFICER WERE NOT FILED. THE ASSESS ING OFFICER PROCEEDED TO FRAME THE ASSESSMENT U/S 144 OF THE INCOME TAX A CT, 1961 (HEREINAFTER CALLED AS THE ACT) AND COMPLETED THE ASSESSMENT AT AN INCOME OF RS.24,38,16,570/- AFTER MAKING AN ADDITIO N OF RS.16,57,30,000/- ON ACCOUNT OF ALLEGED UNVERIFIABL E CREDITS ADDED BACK U/S 68 OF THE ACT. ANOTHER ADDITION OF RS.7,80,86,5 67/- WAS MADE ON ACCOUNT OF OUTSTANDING LIABILITY OF THE COMPANY TOW ARDS M/S PARSVNATH DEVELOPERS LTD. AS SUNDRY CREDITORS WHICH ALSO REMA INED UNVERIFIABLE BECAUSE OF THE NON-RESPONSE TO THE NOTICE ISSUED U/ S 133(6) OF THE ACT. 2.2 AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BE FORE THE LEARNED FIRST APPELLATE AUTHORITY. HOWEVER, HERE ALSO THE A SSESSEE DID NOT GET ANY RELIEF AND THE APPEAL OF THE ASSESSEE WAS DISMI SSED, ALTHOUGH THE ITA NO.6726/DEL/2019 (ASST.YEAR:2015-16) PAGE | 3 LEARNED CIT (APPEALS) DID ADMIT ADDITIONAL EVIDENCE S UNDER RULE-46A OF THE ACT. 2.3 THE ASSESSEE IS NOW BEFORE THE TRIBUNAL CHALL ENGING THE ACTION OF THE LEARNED CIT (APPEALS) IN DISMISSING T HE ASSESSEES APPEAL AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A)-34, NEW DELHI (HEREINAFTER REFERRED TO A S CIT(A) WAS NOT JUSTIFIED IN PASSING AN EX-PARTE ORDER. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) WAS NOT JUSTIFIED IN PASSING AN EX-PARTE ORDER WITHOUT CONSIDERING THE SUBMISSIONS FILED VIDE LETTER DATED 09.04.2019 FILED DURING APPELLATE PROCEEDINGS. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDI TION OF RS.16,57,30,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT BY HOLDING THAT APPELLATE FAILED TO ESTABLISH T HE IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE TRANSACTI ONS COMPLETELY IGNORING THE FACT THAT ALL THE PARTIES F ROM UNSECURED LOANS WERE EITHER SHAREHOLDERS/DIRECTORS OF THE ASS ESSEE COMPANY; COMPANIES HAVING COMMON SHAREHOLDERS/COMPA NY; SISTER CONCERNS AND NOT ENTRY PROVIDING COMPANIES. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION OF RS.7,80,86,567/- IN RESPECT OF LIABILITY PAYABLE TO M/S PARSVNATH DEVELOPERS FOR LAND PURCHASES FROM THEM BY INCORREC TLY APPLYING THE PROVISIONS OF SECTION 41(1) OF THE I.T. ACT AS REMISSION & CESSATION OF THE LIABILITY WITHOUT APPRECIATING THA T THE ABOVE ITA NO.6726/DEL/2019 (ASST.YEAR:2015-16) PAGE | 4 AMOUNT WAS NEVER CLAIMED AS EXPENDITURE IN THE ASSE SSMENT YEAR UNDER APPEAL OR EARLIER ASSESSMENT YEARS AS TH E APPELLANT COMPANY WAS YET TO RECOGNIZE REVENUE HAVING NOT ACH IEVED 30% OF COMPLETION IN ITS REAL ESTATE PROJECT. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, M ODIFY ANY OF THE GROUNDS AT THE TIME OF HEARING OR BEFORE THE HE ARING. 3.0 AT THE OUTSET, THE LEARNED AUTHORIZED REPRESEN TATIVE (AR) SUBMITTED THAT THE OBSERVATION OF THE ASSESSING OFF ICER THAT THE ASSESSEE HAD NOT CO-OPERATED DURING THE ASSESSMENT PROCEEDIN GS AND HAD NOT FILED THE REQUIRED DOCUMENTS WAS INCORRECT. HE DREW OUR ATTENTION TO THE AFFIDAVIT OF THE ERSTWHILE AUTHORIZED REPRESENTATIV E WHO HAD APPEARED FROM TIME TO TIME BEFORE THE ASSESSING OFFICER AND SUBMITTED THAT THIS AFFIDAVIT WAS DATED 22 ND OF DEC., 2017 I.E. A DAY IMMEDIATELY AFTER THE ASSESSMENT ORDER WAS PASSED. IT WAS SUBMITTED THAT IT HAS BEEN SUBMITTED IN THE AFFIDAVIT THAT THE SAID AUTHORIZED REPRESENTATIVE HAD ATTENDED THE ASSESSMENT PROCEEDINGS AND HAD ALSO VI SITED THE OFFICE OF THE ASSESSING OFFICER ON 20.12.2017 ALONG WITH COMP LETE SUBMISSIONS AND ALL THE DOCUMENTS REQUIRED TO PROVE THE GENUINE NESS OF THE TRANSACTIONS AND THE CREDITWORTHINESS OF THE LOANS BUT SINCE THE AO WAS NOT FEELING WELL, HE REQUESTED THE AUTHORIZED REPRE SENTATIVE (AR) TO ATTEND THE OFFICE ON 22.12.2017. HOWEVER, THE ASSES SMENT WAS FINALIZED ITA NO.6726/DEL/2019 (ASST.YEAR:2015-16) PAGE | 5 ON 21.02.2017 ITSELF WHICH CAME TO BE KNOWN TO THE ASSESSEE ONLY THROUGH THE E-MAIL RECEIVED FROM THE INCOME TAX DEP ARTMENT. THE LEARNED AUTHORIZED REPRESENTATIVE (AR) SUBMITTED TH AT, THUS, IT IS NOT THE CASE THAT THE ASSESSEE DID NOT COOPERATE IN THE ASS ESSMENT PROCEEDINGS BUT RATHER IT WAS THE CASE THAT THE ASSESSEE WAS NO T GIVEN THE OPPORTUNITY TO FILE THE REQUIRED DOCUMENTS. THE LEA RNED AUTHORIZED REPRESENTATIVE (AR) PRAYED THAT IN THE INTEREST OF JUSTICE, THE ASSESSING OFFICER SHOULD BE DIRECTED TO RE-EXAMINE THE ISSUES . 4.0 THE LEARNED CIT-DR SUBMITTED THAT THE LEARNED CIT (APPEALS) HAD GIVEN PROPER OPPORTUNITY TO THE ASSESSEE BY ADM ITTING ADDITIONAL EVIDENCES UNDER RULE-46A OF THE INCOME TAX RULES, 1 962 AND HAD ALSO CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER , AND THEREFORE, NO FURTHER OPPORTUNITIES SHOULD BE GIVEN TO THE ASSESS EE. 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE A LSO PERUSED THE MATERIAL ON RECORD. AS FAR AS, THE ADDITION OF RS.16,57,30,000/- IS CONCERNED, IT IS SEEN FROM A PERUSAL OF THE ORDER O F THE LEARNED FIRST APPELLATE AUTHORITY THAT THE ASSESSING OFFICER (AO) HAS MENTIONED IN THE REMAND REPORT THAT ONLY THREE OUT OF FIFTEEN PARTIE S HAD COMPLIED WITH THE NOTICES ISSUED U/S 133(6) OF THE I.T. ACT AND, THER EFORE, IT WAS ESTABLISHED ITA NO.6726/DEL/2019 (ASST.YEAR:2015-16) PAGE | 6 THAT THE ASSESSEE HAD FAILED TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTIONS IN THE NATURE OF UNSECURED LOANS. THEREAFTER, THE LEARNED CIT (APPEALS) HAS PROCEEDED TO UPHOLD THE ENTIRE ADDITION. AS FAR AS, THE ADDITION OF RS.7,80,86,567 /- PERTAINING TO SUNDRY CREDITORS (M/S PARSVNATH DEVELOPERS LTD.) IS CONCERNED, IT IS SEEN THAT THE AMOUNT HAS BEEN ADDED U/S 41(1) OF TH E ACT. HOWEVER, NO ADDITIONAL EVIDENCES WERE ADMITTED BY THE LEARNED C IT (APPEALS) IN THIS REGARD ALTHOUGH, THE ASSESSEE HAD SOUGHT TO FILE CO PY OF REGISTRY AND LEDGER ACCOUNT WITH M/S PARSVNATH DEVELOPERS LTD. A ND HAD SUBMITTED THAT THIS OUTSTANDING LIABILITY PERTAINED TO OUTSTA NDING ON ACCOUNT OF LAND PURCHASED. THUS, EVIDENTLY, BOTH THE ISSUES WE RE NOT EXAMINED IN PROPER PERSPECTIVE BY THE LEARNED CIT (APPEALS). WE ALSO NOTE THAT THERE WAS A SUFFICIENT CAUSE FOR THE FAILURE OF THE ASSES SEE TO PRODUCE THE REQUIRE DOCUMENTS BEFORE THE ASSESSING OFFICER AS T HE ASSESSMENT WAS FINALIZED BEFORE THE APPOINTED DATE ON WHICH THE AS SESSEE WAS DIRECTED TO APPEAR BEFORE THE ASSESSING OFFICER WITH THE REQUIR ED DOCUMENTS. THEREFORE, ON OVERALL FACTS OF THE CASE AND IN INTE REST OF SUBSTANTIAL JUSTICE, WE RESTORE THE ISSUES TO THE FILE OF THE A SSESSING OFFICER WITH THE DIRECTION TO RE-EXAMINE THE ISSUES AND PASS THE ASS ESSMENT ORDER IN ITA NO.6726/DEL/2019 (ASST.YEAR:2015-16) PAGE | 7 ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. WE ALSO DIRECT THE ASSESSEE TO FU LLY CO-OPERATE IN THE ASSESSMENT PROCEEDINGS AND PROVIDE THE REQUIRED INF ORMATION AND DOCUMENTARY EVIDENCES BEFORE THE ASSESSING OFFICER WHEN CALLED UPON TO DO SO FAILING WHICH THE ASSESSING OFFICER SHALL BE AT LIBERTY TO PROCEED EX- PARTE QUA THE ASSESSEE AND FRAME THE ASSESSMENT IN ACCORDANCE WITH LAW. 6.0 IN THE FINAL RESULT, THE APPEAL OF THE ASSESSE E STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01/01/2020. SD/- SD/- (A.N.MISSHRA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 01/01/2020 PK/PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI