ACIT, New Delhi V. M/s. Kiran Udyog, New Delhi

ITA 6906/DEL/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6777 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 31-12-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURENDRA MEENA
• Assessee Lawyers: PRANSHU GOELC A
• Section: 142(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI B BEN CH, NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER, AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.6906/DEL/2015 [ASSESSMENT YEAR: 2011-12] ACIT, CIRCLE-51(1), ROOM NO.1504, 15 TH FLOOR, E-2 BLOCK, DR. S.P. MUKHERJEE CIVIC CENTRE, MINTO ROAD, NEW DELHI M/S KIRAN UDYOG, PLOT NO.47, GALI NO.-6, ANAND PARBAT INDL. AREA, NEW DELHI-110005 PAN-AAAFK0049H APPELLANT RESPONDENT APPELLANT BY SHRI SURENDRA MEENA SR. DR RESPONDENT BY SHRI PRANSHU GOEL-C.A. DATE OF HEARING 08/08/2019 DATE OF PRONOUNCEMENT 18 / 10 /2019 ORDER PER SUCHITRA KAMBLE, JUDICIAL MEMBER THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 01/10/2015 PASSED BY THE CIT(A)-17, NEW DELHI, FOR ASSESSMENT YEAR- 2011-12. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD. CIT(A) HAS NOT APPRECIATED THE FACTS AN D CIRCUMSTANCES OF THE CASE THAT ASSESSEE WAS UNABLE TO PROVE THE G ENUINENESS AND CREDITWORTHINESS OF THE LENDER DURING THE COURS E OF ASSESSMENT PROCEEDINGS AND REMAND REPORT. HOWEVER, THE FACTS O F THE CASES UPON WHICH THE LD. CIT(A) HAS RELIED ARE TOTALLY DI FFERENT FROM THIS CASE. 2 2. THE LD. CIT(A) HAS ERRED IN ACCEPTING THE ADDITI ONAL SUBMISSIONS OF THE ASSESSEE DURING THE APPELLATE PROCEEDINGS IN SPITE OF THE OBJECTION RAISED BY THE AO. 3. THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND RESALE OF ALUMINIUM CASTING OF AUTO PARTS AND JOB W ORK. THE ASSESSEE HAS DECLARED INCOME FROM BUSINESS OR PROFESSION. THE AS SESSEE FILED ITS RETURN OF INCOME ON 27/09/2011 DECLARING INCOME OF RS.2,01,86,310/-. THE CASE WAS SELECTED FOR SCRUTINY. ACCORDINGLY, NO TICE U/S 143(2) WAS ISSUED ON 27/09/2012 AND SERVED UPON THE ASSESSEE. SUBSEQUENTLY, NOTICE U/S 142(1) ALONG WITH QUESTIONNAIRE WAS ISSU ED AND SERVED UPON THE ASSESSEE. IN RESPONSE TO THESE NOTICES, THE CHA RTERED ACCOUNTANT/AUTHORISED REPRESENTATIVE OF THE ASSESSE E ATTENDED THE ASSESSMENT PROCEEDINGS FROM TIME TO TIME. THE ASSES SMENT WAS COMPLETED ON 25/03/2014 AT A TOTAL INCOME OF RS.4,6 9,86,080/- AFTER MAKING ADDITION OF FOLLOWING INCOME:- A. LIABILITY OF UNSECURED LOAN OF RS.2,66,97,000/- B. ADDITION OUT OF EXPENSES ON ACCOUNT OF PERSONAL EXP ENDITURE OF PARTNERS OF RS.1,02,766/- 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE CIT(A) DID NOT APP RECIATE THE FACT THAT THE ASSESSEE WAS UNABLE TO PROVE THE GENUINENE SS AND CREDITWORTHINESS OF THE LENDER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS AT THE STAGE OF REMAND REPOR T AS CALLED FOR BY THE CIT(A). THE LD. DR FURTHER SUBMITTED THAT THE LOAN TRANSACTIONS WITH 3 M/S V.M. TRADING COMPANY DID NOT OCCUR IN ASSESSMEN T YEAR 2011-12 AND AS PER THE INCOME TAX RETURN OF THE SAID PARTY, IT HAS ONLY ANNUAL INCOME OF RS.4,08,378/- DURING THE YEAR. THUS, THE LD. DR SUBMITTED THAT THE GENUINENESS OF THE LOAN AND THE CREDITWORT HINESS OF THE SAID PARTY FROM WHOM LOAN TRANSACTION WAS DEALT WITH WAS NEVER PROVED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AS WELL A S DURING THE APPELLATE PROCEEDINGS BEFORE THE CIT(A). THE CREDIT OF RS.2,6 6,97,000/- WERE UNEXPLAINED WHICH WAS EXTENDED INTO BOOKS OF THE AS SESSEE AND FURTHER INVESTED INTO OTHER ENTITIES. THEREFORE, THE ASSESS ING OFFICER WAS RIGHT IN MAKING ADDITION IN THAT RESPECT. 6. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS RECEI VED UNSECURED LOAN OF RS.2,66,97,000/- FROM M/S V. M. TRADING COM PANY ON 31/03/2011. THREE CHEQUES NUMBERS 106828, 106829 AN D 106830 DATED 31/03/2011 OF CENTRAL BANK OF INDIA WERE GIVE N BY M/S V. M. TRADING COMPANY AND THE SAME CHEQUES WERE NOT IN CA SH DURING THE YEAR. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSE ES ACCOUNT OFFICE INADVERTENTLY MENTIONED CHEQUE NUMBER 106824, 10682 5 AND 106826 INSTEAD OF CHEQUE NUMBER 106828, 106829 AND 106830. THUS, THIS WAS A CLERICAL MISTAKE DONE INADVERTENTLY. THE SAID CHE QUES WERE NOT CLEARED BEFORE 31 ST MARCH, THAT IS WHY THEY WERE NOT REFLECTING IN THE BANK ACCOUNT OF THE ASSESSEE AND WERE OUTSTANDING IN THE BANK RECONCILIATION STATEMENT. BANK RECONCILIATION STATEMENT WAS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE SAID CHEQUES GOT CLEARE D IN THE NEXT FINANCIAL YEAR, FOR WHICH BANK STATEMENT OF M/S V. M. TRADING CO. WHO HAS ADVANCE THE MONEY AS WELL AS THE ASSESSEE WAS F ILED DURING THE 4 COURSE OF ASSESSMENT PROCEEDINGS, WHICH SHOWS THAT NONE OF THE CHEQUES WERE CLEARED DURING THE YEAR UNDER ASSESSMENT. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE CIT( A) HAS RIGHTLY DELETED THIS ADDITION AS THERE WAS NO EVIDENCE PLACED ON RE CORD BY THE ASSESSING OFFICER THAT THERE WAS ANY CASH DEPOSITS BEFORE OR AFTER OR CASH WITHDRAWAL BEFORE OR AFTER LOAN GIVEN WHICH SQUARED UP. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE PERUSAL OF THE ASSESS MENT ORDER, ORDER OF THE CIT(A) AS WELL AS THE REMAND REPORT FILED BEFOR E THE CIT(A). IT CAN BE SEEN THAT ALL THE EVIDENCES BEFORE THE AUTHORITIES WERE NOT IN CONSONANCE WITH THE GENUINENESS AND CREDITWORTHINESS OF THE LO AN TRANSACTIONS. IN FACT, THE CIT(A) MENTIONED THAT DURING THE YEAR 31/ 03/2011. FURTHER LOAN WAS RECEIVED OF RS.2,66,97,000/-, OUT OF WHICH A PAYMENT OF RS.2,49,95,000/- WAS MADE DURING THE YEAR FINANCIAL YEAR 2010-11 AND THEREBY THERE WAS CLOSING BALANCE OF RS.6,04,02,000 /- AS ON 31/03/2011, THE LOAN AMOUNT OF RS.6,04,02,000/- WAS REPAID DURING THE FINANCIAL YEAR 2011-12 AND ALL THESE FIGURES OR REC EIPTS AND PAYMENT OF LOAN AMOUNT WAS APPEARING IN THE BANK STATEMENT OF THE ASSESSEE AS WELL AS M/S V. M. TRADING COMPANY. BUT AT THE SAME TIME, AS REGARDS AY 2011-12 I.E. FY 2010-11, THERE WAS NO DOCUMENTARY E VIDENCE RELATING TO THE CREDITWORTHINESS OF THE M/S V. M. TRADING COMPA NY WAS PRODUCED BEFORE EITHER OF THE REVENUE AUTHORITIES. THEREFORE , IT WILL BE APPROPRIATE TO REMAND BACK THIS ISSUE TO THE FILE OF THE CIT(A) THEREBY PROVING THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION BEFORE THE REVENUE AUTHORITIES BY THE ASSESSEE. NEEDLESS TO SAY THAT T HE ASSESSEE BE GIVEN 5 PROPER HEARING BY FOLLOWING PRINCIPLE OF NATURAL JU STICE. THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18/10/2019. SD/- SD/- [PRASHANT MAHARISHI] [SUCHITRA KAM BLE] ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI; DATED: 18/10/2019. F{X~{T? F{X~{T? F{X~{T? F{X~{T? FA FA FA FA P.S P.SP.S P.S COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 6 DATE OF DICTATION 16/10/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16/10/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE G OES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER