Lalit Jain, New Delhi V. ITO, Ward- 59(4), New Delhi

ITA 6759/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3595 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 09-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: C L SHARMA
• Section: 133(6)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI (SMC) BENCH, NEW DELHI BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NOS. 6759 & 6760/DEL./2017 ASSESSMENT YEAR: 2012-13 SHRI LALIT JAIN, 114, F.F., RAM NAGAR, KRISHNA NAGAR, NEW DELHI. PAN AFIPJ 2842Q (APPELLANT) VS. INCOME - TAX OFFICER, WARD 59(4), NEW DELHI (RESPONDENT) APPELLANT BY SHRI C.L. SHARMA, ADVOCATE RESPONDENT BY SHRI KAUSHLENDRA TIWARI, SR. DR ORDER BOTH THE APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST DIFFERENT ORDERS OF THE LD. CIT(A)-19, NEW DELHI DATED 08.08.2017 FOR T HE ASSESSMENT YEAR 2012- 13, CHALLENGING THE ADDITION OF RS.17,02,000/- ON A CCOUNT OF UNSECURED LOAN TAKEN FROM M/S. SILVERLIGHT DRESSES PVT. LTD. AND D ATED 27.08.2017 FOR THE ASSESSMENT YEAR 2012-13, CHALLENGING LEVY OF PENALT Y U/S. 271(1)(C) OF THE IT ACT IMPOSED ON THE BASIS OF SAME ADDITION. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE DECLARED INCOME UNDER THE HEADS INCOME FROM BUSINESS AND PROFESSIO N AND INCOME FROM OTHER SOURCES. THE ASSESSEE IS AN INDIVIDUAL AND E NGAGED IN THE BUSINESS OF MANUFACTURING OF EMBROIDERED CLOTHS IN THE NAME AND STYLE OF M/S. VARDHMAN DATE OF HEARING 25.01.2018 DATE OF PRONOUNCEMENT 01 .02.2018 ITA NOS. 6759 & 6760/DEL./2017 2 TEXTILES. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN UNSECURED LOANS OF RS.39,48,500/- IN THE BALANCE SH EET. THE ASSESSING OFFICER ISSUED NOTICE U/S. 133(6) TO THE PARTIES. IN THE CA SE OF M/S. SILVERLIGHT DRESSES PVT. LTD., FROM WHOM THE ASSESSEE HAS CLAIMED TO HA VE RECEIVED UNSECURED LOAN AMOUNTING TO RS.17,02,000/-, NOTICE U/S. 133(6 ) WAS RECEIVED UN-SERVED WITH THE REMARKS OF THE POSTAL AUTHORITIES THAT NO SUCH COMPANY EXISTS AT THIS ADDRESS. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WH Y THIS LOAN SHOULD NOT BE TREATED AS UNEXPLAINED, BUT ON THIS DATE NONE ATTEN DED THE PROCEEDINGS NOR ANY REPLY WAS FILED BY THE ASSESSEE. THEREAFTER, TH E ASSESSEES REPRESENTATIVE APPEARED BEFORE THE ASSESSING OFFICER AND STATED TH AT THE ADDRESS OF THE CREDITOR COMPANY IS CORRECT. THE ASSESSING OFFICER DEPUTED INSPECTOR TO SERVE NOTICE U/S. 133(6) WHO HAS ALSO REPORTED THAT NO SU CH COMPANY EXISTS AT THE GIVEN ADDRESS. THE ASSESSING OFFICER, THEREFORE, NO TED THAT DESPITE GIVING ADEQUATE OPPORTUNITY, THE ONUS UPON THE ASSESSEE RE MAINED UN-DISCHARGED. THE ASSESSING OFFICER, ACCORDINGLY, TREATED THE SAI D LOAN AS UNEXPLAINED AND MADE THE ADDITION. THE LD. CIT(A) CONFIRMED THE ADD ITION. 3. THE ASSESSING OFFICER ON THE BASIS OF SAME ADDIT ION LEVIED PENALTY U/S. 271(1)(C) OF THE IT ACT, WHICH HAS BEEN CONFIRMED B Y THE LD. CIT(A). ITA NOS. 6759 & 6760/DEL./2017 3 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, I AM OF THE VIEW THAT THE MATTER ON QUANTUM REQUIRES RECONSIDERATION AT THE LEVEL OF THE ASSESSING OFFICER. THE MATERIAL ON RECORD CLEARLY SUPPORTS THE FINDING OF THE AUTHORITIES BELOW THAT THE ASSESSEE FAILED TO PROVE THE EXISTENCE OF THE C REDITOR COMPANY. THEREFORE, MERE FILING OF THE DOCUMENTS WOULD NOT BE SUFFICIEN T TO DISCHARGE THE ONUS UPON THE ASSESSEE TO PROVE THE GENUINE CREDIT IN TH E MATTER. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS WIL LING TO PRODUCE THE DIRECTOR/RESPONSIBLE PERSON OF THE CREDITOR, M/S. S ILVERLIGHT DRESSES PVT. LTD. BEFORE THE ASSESSING OFFICER FOR HIS EXAMINATION ON OATH AT HIS OWN COST AND EFFORTS AND THEREFORE, HE SHOULD BE GIVEN ONE MORE OPPORTUNITY TO PROVE THE GENUINE CREDIT IN THE MATTER. IN VIEW OF THE SUBMIS SIONS OF THE LD. COUNSEL FOR THE ASSESSEE AND UNDERTAKING GIVEN BEFORE ME, THE L D. DR ALSO SUGGESTED THAT ASSESSEE MAY BE ALLOWED OPPORTUNITY TO PRODUCE THE DIRECTOR/RESPONSIBLE PERSON OF THE CREDITOR BEFORE THE ASSESSING OFFICER FOR EXAMINATION ON OATH. IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THIS ISSUE TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION TO DECIDE THE SAME AFRESH ON THE BASIS OF MATERIAL AVAILABLE ON RECORD WITH LIBERTY TO ASSESSEE TO PRODUCE THE DIRECTOR/RESPONSIBLE PERSON OF THE CREDITOR COMPANY, M/S. SILVERLIGHT DRESSES PVT. LTD. FOR EXAMINATION ON OATH. THE ASSESSING OFFICER SHALL GIVE REASONABLE AND SUFFICIENT OPPORT UNITY OF BEING HEARD TO THE ITA NOS. 6759 & 6760/DEL./2017 4 ASSESSEE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. SINCE THE QUANTUM ADDITION IS RESTORED TO THE FI LE OF ASSESSING OFFICER, AT THIS STAGE PENALTY IS NOT LEVIABLE U/S. 271(1)(C) O F THE IT ACT. HOWEVER, THE ASSESSING OFFICER SHALL BE AT LIBERTY TO INITIATE P ENALTY PROCEEDINGS AGAINST THE ASSESSEE AFTER PASSING THE QUANTUM ORDER, IF SO ADV ISED, IN ACCORDANCE WITH LAW. ACCORDINGLY, THIS APPEAL OF THE ASSESSEE IS AL LOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 6759/DEL./2017 IS ALLOWED FOR STATISTICAL PURPOSES. HOWEVER, THE APPE AL OF THE ASSESSEE IN ITA NO. 6760/DEL./2017 IS ALLOWED SUBJECT TO THE LIMITA TIONS AS NOTED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI