ACIT, New Delhi V. M/s. Hillridge Investment Ltd., New Delhi

ITA 711/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97136 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: R C RAI
• Keywords: Business income; Assessment record
• Section: 143(3); 68; 6

Judgement Text

1 ITA NO.711.D EL.13 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A .NO.- 711/DEL/2013 (ASSESSMENT YEA R-2009-10) ACIT CENTRAL CIRCLE-23, ROOM NO. 359, E-2, ARA CENTRE, JHANDEWALAN EXTENSION NEW DELHI (APPELLANT) VS HILLRIDGE INVESTMENT LTD. 106, PALCO HOUSE, T-10 MAIN PATEL ROAD, PATEL NAGAR NEW DELHI AAACH0604A (RESPONDENT) APPELLANT BY SH.T. VASANTHAN, SR. DR RESPONDENT BY SH.R. C. RAI, CA ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY REVENUE AGAINST ORDER DATED 23/11/2012 PASSED BY CIT(A) NEW DELHI. THE MAIN GROUND OF APPEAL RAISED HEREIN, IS AS FOLLOWS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,78,57,082/- MADE BY T HE AO U/S 68 OF THE INCOME TAX ACT, 1961. 2. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE DEALT WITH SHARES. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE ASSESSEE WAS A SKED TO FURNISH THE COPY OF THE CASH BOOK, BANK PASS BOOK FOR THE F.Y 2008-09 AND T O EXPLAIN THE SOURCES OF CREDIT ENTRIES THERE IN, PROVING THE IDENTITY AND CREDITWO RTHINESS OF THE CREDITOR AS WELL AS THE GENUINENESS OF TRANSACTION, IN RESPECT OF ALL T HE CREDIT ENTRIES IN ITS ALL THE BANK DATE OF HEARING 24.08.2015 DATE OF PRONOUNCEMENT 27 .08.2015 2 ITA NO.711.D EL.13 ACCOUNTS, BY PROVIDING CONFIRMED COPY OF ACCOUNT, P AN, FULL ADDRESS, RETURN OF INCOME AND THE BANK STATEMENT OF THE CREDITOR ETC. 3. THE AO OBSERVED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION WHATSOEVER IN RESPECT OF CREDIT/DEPOSIT S OF RS.2,78,57,082/- IN ITS VARIOUS BANK ACCOUNTS DURING THE F.Y 2008-09. IN OTHER WOR DS THE ASSESSEE HAS NOT DISCHARGED THE PRIMARY ONUS CAST UPON IT OF ESTABLI SHING THE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR AS WELL AS THE GEN UINENESS OF TRANSACTION AS REQUIRED U/S 68 OF THE INCOME TAX ACT 1961 (HEREINAFTER REFE RRED TO AS THE ACT). 4. IN THE ASSESSMENT ORDER U/S 143(3) OF THE ACT DA TED 19/12/2011 ADDITION OF RS.2,78,57,082/- WAS MADE U/S 68 OF THE ACT. BUT T HE ASSESSEE HAS CLAIMED THAT NO SHOW-CAUSE NOTICE WAS ISSUED TO IT. IN THE WRITTEN SUBMISSIONS FILED ON 30/7/2012 THE ASSESSEE STATED THAT ALL THE CONFIRMATIONS WERE FURNISHED BEFORE LD. A SSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. IT SEEM S THAT THESE CONFIRMATIONS WERE SKIPPED OR OVER LOOKED BY LD. ASSESSING OFFICER. THE ASSESSEE THEREAFTER AGAIN FILED CONFIRMATIONS DURING THE FIRST APPELLATE PROCEEDING S BEFORE THE LD. CIT(A). 5. WHEN THE LD. CIT(A), ASKED THE COMMENTS OF THE A SSESSING OFFICER VIDE LETTER DATED 22/10/2012 QUOTED RULE 46A OF THE I.T. RULES AND STATED THAT THE FRESH EVIDENCES NEED NOT BE ADMITTED UNDER RULE 46A OF TH E I.T RULES AS ASSESSEE COMPANY DID NOT PRODUCE THE SUPPORTING DOCUMENTARY EVIDENCE TO ESTABLISH CREDIT WORTHINESS OF THE CREDITORS DURING ASSESSMENT PROCEEDINGS, THO UGH SUFFICIENT OPPORTUNITY WAS PROVIDED TO PRODUCE THE DETAILS. 6. THE REMAND REPORT WAS HANDED OVER TO THE ASSESSE E FOR FILING REJOINDER. THE ASSESSEE FILED REJOINDER DATED 21/11/2012 AND SUBM ITTED THAT DOCUMENTS FILED DURING APPELLATE PROCEEDINGS ARE NOTING BUT DOCUMEN TS SUBMITTED DURING ASSESSMENT PROCEEDING, THEREFORE, THE A.OS OBJECTION THAT FRE SH EVIDENCE SHOULD NOT BE ADMITTED WAS IRRELEVANT. FURTHER ASSESSEE CONTENDED THAT TH E ADDITION MADE BY A.O IN ASSESSMENT ORDER REPRESENTED EITHER SALE CONSIDERAT ION OF INVESTMENT OR REPAYMENT OF LOAN ADVANCED IN EARLIER YEAR. THERE IS NO CREDIT IN THE BOOKS OF A/CS AS SUCH, 3 ITA NO.711.D EL.13 THEREFORE OF PROVISIONS OF SEC 68 DOES NOT APPLY, A S THESE BANK DEPOSITS ARE BUSINESS RECEIPTS. THE LD. CIT(A) DELETED THE SAID ADDITION . 7. THE DR SUBMITTED THAT AS PER THE FINDING RECORD ED IN CIT(A)S ORDER IN PARA 3.7, THE ASSESSEE HAS NOT SUBMITTED PROPER EVIDENCE OR DETAIL CONFIRMATION OF THE ALLEGED CREDITORS AT THE RELEVANT TIME BEFORE THE A O, THEREFORE, THE ADDITION WAS RIGHTLY MADE AND THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETI NG THE ADDITION. 8. IN HIS RIVAL SUBMISSIONS, HE AR SUBMITTED THAT T HERE IS A CLEAR FINDING IN PARA 3.7 OF THE CIT(A)S ORDER THAT THE ASSESSEE HAS ALS O FILED DETAILED CHART TO PROVE THAT PROCEEDS ARE EITHER SALE OF SHARES OR REPAYMENT OF LOAN DURING ASSESSMENT PROCEEDINGS. THE AR FURTHER SUBMITTED THAT SIMILAR ISSUE WAS DECIDED BY THE TRIBUNAL, DELHI BENCH IN ITA NO. 710/DEL/2013, IN T HE CASE OF ASSISTANT CIT VS. WORLDLINK TELECOM LTD., WHEREIN THE TRIBUNAL HAS DI SMISSED THE DEPARTMENTS APPEAL AS THERE WAS NECESSARY EVIDENCE SUPPLIED BY THE ASS ESSEE BEFORE THE ASSESSING OFFICER IN PARA 11 READS AS UNDER:- ON CONSIDERATION OF THE ABOVE FACTS OF THE CASE, WE FIND THAT THE ASSESSEE HAD FILED ALL THE NECESSARY EVIDENCE IN SUPPORT TO ESTA BLISH THE IDENTITY AND CREDITWORTHINESS OF THE PAYERS AS WELL AS GENUINENE SS OF THE TRANSACTION WITH THIS CONTENTION THAT THERE WAS NO CREDIT IN THE BOOKS OF THE ACCOUNTS AND THE BANK DEPOSITS IN QUESTION WERE SALE PROCEEDS OF INVESTME NT OF RETURN OF LOAN ADVANCED EARLIER AS THE ASSESSEE WAS IN THE BUSINESS OF FINA NCING AND TRADING ALSO ACCEPTED BY THE ASSESSEE IN PARA NO.2 OF THE ASSESSMENT ORDE R. HENCE, THE ASSESSEE HAD THUS DISCHARGED ITS PRIMARY ONUS TO ESTABLISH THE C LAIM. THE ONUS WAS THEREAFTER SHIFTED UPON THE ASSESSING OFFICER TO REBUT THOSE E XPLANATIONS AND EVIDENCE FILED BY THE ASSESSEE TO JUSTIFY THE ADDITION IN QUESTION. SINCE THE ASSESSING OFFICER HAS FAILED TO REBUT THE ABOVE SUBMISSIONS AND TO DISLOD GE THE EVIDENCE FILED BY THE ASSESSEE IN SUPPORT OF THE CLAIM, THE LD. CIT(APPEA LS) IN OUR VIEW HAS RIGHTLY DELETED THE ADDITION. THE FIRST APPELLATE ORDER IN THIS REGARD IS THUS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 9. IN THE PRESENT CASE, THE ADDITION IN QUESTION IS ON ACCOUNT OF DEPOSITS IN BANK ACCOUNT OF ASSESSEE. THE ASSESSEE CONTENDED BEFORE CIT (A) THAT THESE DEPOSITS ARE NOT CREDIT IN NATURE IN THE BOOKS OF ACCOUNTS U/S 6 8 BUT BUSINESS PROCEEDS WHICH ARE EITHER ON ACCOUNT OF SALE OF INVESTMENT OR REPAYMEN T OF LOAN AS THE ASSESSEE COMPANY IS IN THE BUSINESS OF TRADING IN SHARES & MONEY LEN DING. THE ASSESSEE FURTHER 4 ITA NO.711.D EL.13 CONTENDED THAT CONFIRMATIONS FROM THE PERSONS FROM WHOM MONEY RECEIVED WAS TREATED AS UNEXPLAINED DEPOSITS BY ASSESSING OFFICE RS WERE FILED DURING ASSESSMENT PROCEEDING ALONG WITH COMPLETE ADDRESS, THEIR PAN, COPY OF PAN CARD AND COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME ETC. IN THE RE MAND REPORT DATED 22/10/2012, A.O DID NOT COMMENT ON THE SUBMISSION OF THE ASSESS EE THAT THESE DOCUMENTS WERE FILED BEFORE HIM. IN THE REMAND REPORT A.O HAS STA TED THAT THESE EVIDENCES WERE FRESH AND REQUESTED NOT TO ADMIT THE SAME UNDER RULE 46A. HOWEVER, IT APPEARS THAT CONFIRMATION OF ACCOUNTS OF ALL ALLEGED CREDITORS A LONG WITH FULL ADDRESS, PAN AND DETAILS OF CHEQUE, DATE OF PAYMENT & NAME OF CHEQUE ISSUING BANK, ACKNOWLEDGEMENT OF RETURN OF INCOME FOR A.Y 2009-10 OF CREDITORS W ERE AVAILABLE ON ASSESSMENT RECORD FILED DURING ASSESSMENT PROCEEDINGS. ASSESSEE ALSO FILED DETAILED CHART BEFORE AO TO PROVE THAT PROCEEDS WERE EITHER SALE OF SHARES OR R EPAYMENT OF LOAN DURING ASSESSMENT PROCEEDINGS, BUT THE SAME WERE OVERLOOKED BY THE AS SESSING OFFICER AND MADE ADDITION. THE LD. CIT(A) BY CONSIDERING THE ABOVE F ACTS DELETED THE ADDITION MADE BY THE A.O. THUS THE DEPTT IS IN APPEAL. 10. IN LIGHT OF THE ABOVE SAID DISCUSSION AND PERUS AL OF THE CIT(A)S ORDER AS WELL AS ASSESSMENT ORDER, THERE IS A CLEAR FINDING GIVEN B Y THE CIT(A) THAT THE ASSESSEE HAS GIVEN A DETAILED CHART RELATED TO PROCEEDS OF SALE OF SHARES AND REPAYMENT OF LOAN DURING THE ASSESSMENT PROCEEDINGS BUT THE ASSESSING OFFICER HAS OVERLOOKED THESE EVIDENCES AND MADE ADDITION. WE ARE OF THE VIEW TH AT THE IMPUGNED ADDITION WAS RIGHTLY DELETED BY THE LD. CIT(A). 11. IN RESULT, THE APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 27 TH OF AUGUST 2015. SD/- SD/- ( N. K. SAINI) (SU CHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27/08/2015 *R. NAHEED* 5 ITA NO.711.D EL.13 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 24.08.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 25.08.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 26.08.2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS .08.2015 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK .08.2015 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 6 ITA NO.711.D EL.13