Lamba Bricks Pvt. Ltd., Bhiwani V. ACIT, Bhiwani

ITA 709/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5109 (ITAT-DELHI)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 07-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: NK JAIN; NATASHA SANGWAN S
• Keywords: Opportunity of being heard
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SMC : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 709/DEL/2017 ASSESSMENT YEAR: 2012-13 LAMBA BRICKS PVT. LTD., VS. ACIT, BHIWANI H.NO. 1751, HUDA, SECTOR-13, DISTT. BHIWANI-127021 (HARYANA) (PAN: AABCL0419J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. N.K. JAIN & MS. NATASHA SANGWAN, ADVOCATES REVENUE BY : SH. T. VASANTHAN, SR. DR. ORDER THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 25.11.2016 OF THE LD. CIT(A), ROHTAK PERTAINING TO ASSESSMENT YEAR 2012-13 ON THE FOLLOWING GROUNDS:- 1. THE LD. CIT(A) HAS GONE WRONG IN MAKING ADDITION BY DISALLOWING RENT OF RS. 1,20,000/- OUT OF RENT PAID AS PER AGREEMENT AND RS. 21,947 OUT OF ELECTRICITY EXPENSES PAID AS @ PER AGREEMENT ON WHICH THE PREMISE IS TAKEN ON RENT MORE SO WHEN THE GROSS RENT PAID HAS BEEN ASSESSED AS HOUSE PROPERTY INCOME IN THE ASSESSMENT OF LAND LADY. 2 2. THAT THE LD. CIT(A) HAS ERRED IN LAW IN CONFIRMING THE ADDITION OF RS. 10,78,000/- BEING THE SHARE APPLICATION MONEY INVESTED BY THE NEW AND EXISTING SHARE HOLDERS, WITHOUT CONSIDERING AND IGNORING THE AFFIDAVITS, PAN, MODE OF PAYMENT BEING THROUGH BANKING CHANNEL ALONG WITH COMPLETE DETAIL OF IDENTITY AND ADDRESS PROOFS AND CREDITWORTHINESS OF ALL THE SHARE HOLDERS AS FILED WITH THE REGISTRAR OF COMPANIES, DELHI, ONLY FOR NON PRODUCTION OF SHARE APPLICANTS WITHOUT CONSIDERING REQUEST FOR SUMMONING THEM. 3. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE LD. AO HAS VIOLATED PRINCIPLE OF NATU RAL JUSTICE BY SHOWING THE ASSESSE DIRECTOR ALONG WITH THE COUNSEL AS NOT PRESENT AND COMPLETING THE ASSESSMENT WITHOUT PROVIDING FAIR OPPORTUNITY EVEN WHEN THE ASSESSE ATTENDED THE AO'S OFFICE ALONG WITH THE COUNSEL AND SHOWN PRESENT IN OTHER CASES. 4. THAT THE LD. CIT(A) HAS GONE WRONG IN NOT ADJUDICATING GROUND NO 3 AND 5. 5. THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 6. THE APPEAL IS WITHIN LIMITATION. 3 7. THE APPELLANT CRAVES LEAVE TO ADD AMEND OR RESCINDS ANY GROUND ARISING FROM THE ORDER AT THE TIME OR BEFORE HEARING OF APPEAL. IN THESE CIRCUMSTANCES IT IS PRAYED THAT THE APPEAL MAY KINDLY BE ACCEPTED AS PRAYED FOR AND ALL THE ADDITIONS MAY BE DELETED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE AO HAS MADE THE ADDITIONS OF RS. 1,20,000/- OF THE DISALLOWING CLAI M OF RENT AND DISALLOWING RS. 21,947/- ON ACCOUNT OF DISALLOWANCE OF ELECTRICITY EXPENSES AND ADDITION OF RS. 10,78,000/- HAS BEEN MADE U/S. 68 OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF ALLEGED UNEX PLAINED SHARE MONEY AND COMPLETED THE ASSESSMENT AT RS. 17,21,480 /- VIDE ORDER DATED 30.3.2015 PASSED U/S. 143(3) OF THE INCOME TA X ACT, 1961. AGAINST THE ASSESSMENT ORDER, THE ASSESSEE APPEALE D BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 25.11.201 6 HAS DISMISSED THE APPEAL OF THE ASSESSEE. 3. AGGRIEVED WITH IMPUGNED ORDER DATED 25.11.2016, ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL. 4. LD. COUNSEL OF THE ASSESSEE WITH REGARD TO GROU ND NO. 1 HAS STATED THAT LD. CIT(A) HAS WRONGLY CONFIRMED THE ADDITION BY DISALLOWING RENT OF RS. 1,20,000/- OUT OF RENT PAID AS PER AGREEMENT AND RS. 21,947/- OUT OF ELECTRICITY EXPENSES PAID A S PER AGREEMENT ON WHICH THE PREMISES IS TAKEN ON RENT MORE SO WHEN THE GROSS RENT 4 PAID HAS BEEN ASSESSED AS HOUSE PROPERTY INCOME IN THE ASSESSMENT AS LAND LADY. 4.1 WITH REGARD TO GROUND NO. 2 RELATING TO CONFIRM ING THE ADDITION OF RS. 10,78,000/-, LD. COUNSEL OF THE ASSESSEE HA S STATED THAT REVENUE MADE THE ADDITION OF RS. 10,78,000/- BEING THE SHARE APPLICATION MONEY INVESTMENT BY THE NEW AND EXISTIN G SHARE HOLDERS, WITHOUT CONSIDERING AND IGNORING THE AFFIDAVITS, PA N, MODE OF PAYMENT BEING THROUGH BANKING CHANNEL ALONG WITH CO MPLETE DETAIL OF IDENTITY AND ADDRESS PROOFS AND CREDITWORTHINESS OF ALL THE SHARE HOLDERS AS FILED WITH THE REGISTRAR OF COMPANIES, D ELHI, ONLY FOR NON PRODUCTION OF SHARE APPLICANTS WITHOUT CONSIDERING REQUEST FOR SUMMONING THEM. AT THE TIME OF HEARING LD. COUNSEL OF THE ASSESEE HAS STATED THAT ASSESSEE IS READY TO PRODUCE THE SH ARE HOLDERS BEFORE THE AO AS REQUIRED BY THE AO FOR EXAMINATION BY THE AO AND REQUESTED THAT ONE CHANCE TO PRODUCE THE SHARE HOLD ERS BEFORE THE AO MAY BE GIVEN TO THE ASSESEE FOR PROVING THE CRED ITWORTHINESS, GENUINENESS AND IDENTITY OF THE TRANSACTIONS AND CR EDITWORTHINESS OF SHARE HOLDERS AND WILL PRODUCE ALL THE NECESSARY DO CUMENTS / EVIDENCES BEFORE THE AO. HE ALSO UNDERTAKES THAT A SSESSEE WILL FULLY COOPERATE WITH THE AO AND DID NOT TAKE ANY UNNECESS ARY ADJOURNMENT FOR COMPLETION OF ASSESSMENT. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW, E SPECIALLY THE CONTENTION RAISED IN THE GROUND OF APPEAL. WITH REG ARD TO GROUND NO. 1 IS CONCERNED, I FIND THAT ENQUIRY CONDUCTED REVEA LED THAT THE FARE RENT OF THE LOCALITY FOR ONE FLOOR IS RS. 14000/- T O RS. 15000/-. THEREFORE, THE MAXIMUM RENT OF 1/3 RD OF GROUND FLOOR COMES TO RS. 5000/- PER MONTH. HENCE, THE DISALLOWING THE RENT C LAIMED IN EXCESS OF RS. 5000/- PER MONTH AND ADDITION OF RS. 1,20,00 0/- WAS RIGHTLY 5 MADE AND RIGHTLY CONFIRMED BY THE LD. CIT(A), WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART. I FURTHER NOTE THAT TH E ELECTRICITY BILL AMOUNTING TO RS. 26,636/- OF ENTIRE BUILDING IS NOT THE LIABILITY OF THE TENANT AND THE LIABILITY OF PAYING RENT IS RESTRICT ED TO THE RENTED PORTION. THE RENT ATTRIBUTABLE TO 1/3 RD OF GROUND FLOOR CAN FAIRLY BE SAID TO BE 1/6 TH OF THE TOTAL OF ELECTRICITY BILL OF WHOLE BUILDING . THEREFORE, THE EXCESS ELECTRICITY BILL I.E. 5/6 TH OF THE TOTAL ELECTRICITY BILL AMOUNTING TO RS. 21,947/- WAS RIGHTLY DISALLO WED AND CONFIRMED, WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, H ENCE, I UPHOLD THE ACTION OF THE LD. CIT(A) AND DISMISS THE GROUND NO. 1 RAISED BY THE ASSESSEE. 7. WITH REGARD TO GROUND NO. 2 RELATING TO ADDITION OF RS. 10.78 LACS IS CONCERNED, I FIND THAT REVENUE HAS MADE T HE ADDITION OF RS. 10,78,000/- BEING THE SHARE APPLICATION MONEY I NVESTMENT BY THE NEW AND EXISTING SHARE HOLDERS, WITHOUT CONSIDE RING AND IGNORING THE AFFIDAVITS, PAN, MODE OF PAYMENT BEING THROUGH BANKING CHANNEL ALONG WITH COMPLETE DETAIL OF IDENTITY AND ADDRESS PROOFS AND CREDITWORTHINESS OF ALL THE SHARE HOLDERS AS FILED WITH THE REGISTRAR OF COMPANIES, DELHI, ONLY FOR NON PRODUCTION OF SHARE APPLICANTS WITHOUT CONSIDERING REQUEST FOR SUMMONING THEM. I FURTHER FIND THAT NOW THE ASSESSEE IS READY TO PRODUCE THE SHARE HOLD ERS BEFORE THE AO AS REQUIRED BY THE AO FOR EXAMINATION AND REQUES TED THAT ONE CHANCE TO PRODUCE THE SHARE HOLDERS BEFORE THE AO M AY BE GIVEN TO THE ASSESEE FOR PROVING THE CREDITWORTHINESS, GENUI NENESS AND IDENTITY OF THE TRANSACTIONS AND CREDITWORTHINESS OF SHARE HOLDERS AND HE WILL PRODUCE ALL THE NECESSARY DOCUMENTS / E VIDENCES BEFORE THE AO. I FURTHER FIND THAT LD. COUNSEL OF THE ASS ESSEE UNDERTAKES ON BEHALF OF THE ASSESSEE THAT ASSESSEE WILL FULLY COOPERATE WITH THE AO AND DID NOT TAKE ANY UNNECESSARY ADJOURNMENT FOR COMPLETION OF ASSESSMENT. IN VIEW OF THE ABOVE, I SET ASIDE THIS ISSUE IN DISPUTE TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH UNDER THE LAW AND EXAMINE THE SHARE HOLDERS WHICH WILL BE PRODUCED BY THE ASSESSEE, 6 AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO FULLY COOPERATE WITH TH E AO AND PRODUCE ALL THE SHARE HOLDERS AND OTHER DOCUMENTS BEFORE TH E AO AND DID NOT TAKE ANY UNNECESSARY ADJOURNMENT. 8. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 08-08-2017. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED :08-08-2017 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.