H.M. Ice & Storage Pvt. Ltd., Delhi V. DCIT, New Delhi

ITA 719/DEL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2923 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-12-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 05-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Keywords: Reopening of assessment; Unexplained cash credit; Additional evidence
• Section: 143(3); 147; 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SH. H.S. SIDHU , JUDICIAL M EMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER ITA NO . 719 /DEL/ 2013 ASSESSMENT YEAR: 2001 - 02 M/S H.M. ICE & STORAGE PVT. LTD., AK - 2, SHALIMAR BAGH, DELHI (PAN: AABCH0840H ) VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 12(1), NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. G . N. GUPTA, ADV. RESPONDENT BY MS. ANIMA BARNWAL, SR. DR DATE OF HEARING 01.12.2015 DATE OF PRONOUNCEMENT 20.01.2016 ORDER PER O.P. KANT , A. M. : THE PRESENT APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 26.11.2012 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XXVI, DELHI, PASSED FOR THE ASSESSMENT YEAR 2001 - 02, RAISING FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX(A) - XXVI, NEW DELHI, HAS ERRED IN HOLDING THAT THE ASSUMPTION OF JURISDICTION BY ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 12(1), NEW DELHI, UNDER THE PROVISIONS OF SE CTION 147/148 OF THE INCOME TAX ACT, 1961 WAS NOT VITIATED AND BAD IN LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX(A) - XXVI, NEW DELHI ERRED IN HOLDING THAT THE SHARE APPLICATION MONEY OF RS. 13,00,000/ - FROM M/S ANKUR MARKETING LTD. WAS NOT PROPERLY EXPLAINED AND FURTHER WAS TAXABLE U/S 68 OF THE INCOME TAX ACT, 1961. 3. THAT THE APPELLANT CRAVES LIBERTY TO ADD, ALTER, VARY OR AMEND ANY GROUND OF APPEAL. 2 ITA NO. 719/DEL/201 3, AY: 2001 - 02 H.M. ICE & STORAGE PVT. LTD. 2.1 THE FACTS IN BRIEF ARE THAT THE ASSESSEE , A P RIVATE LIMITED COMPANY , FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2001 - 02 ON 30.10.2001, DECLARING LOSS OF RS. 58418/ - , WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) . SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT ON 31.03.2008 AFTER DULY RECORDING THE REASONS FOR REOPENING OF THE ASSESSMENT. IN RESPONSE TO THE REMINDER ISSUED BY THE ASSESSING OFFICER, THE ASSESSEE FILED A LETTER STATING THAT THE ORIGINAL RETURN FILED UNDER SECTION 139(1) OF THE ACT SHOULD BE TREATED AS THE RETURN FILED UNDER SECTION 148 OF THE ACT. THE ASSESSING OF FICER OBSERVED THAT THE ASSESSEE COMPANY HAD RECEIVED A SUM OF RS. 13 LAKHS FROM M/S ANKUR MARKETING LTD. AS SHARE APPLICATION MONEY, AGAINST WHICH, 1,30,000/ - EQUITY SHARES HAVING FACE VALUE OF RS. 10 LAKH WERE ALLOTTED TO THE SAID COMPANY. THE LD ASSESSI NG OFFICER FURTHER OBSERVED THAT A CCORDING TO THE INFORMATION RECEIVED FROM THE DIRECTOR OF INVESTIGATION, THE SAID M/S ANKUR MARKETING LTD. WAS AN ACCOMMODATION ENTRY PROVIDER . T HE DETAIL OF SHARE APPLICATION MONEY RECEIVED FROM THE SAID COMPANY AS NOTED BY THE LD ASSESSING OFFICER WAS AS UNDER: ASSESSEE BANK A/C VALUE OF MONEY TAKEN INSTRUMENT NO. BY WHICH MONEY TAKEN DATE ON WHICH MONEY TAKEN BANK A/C FROM WHICH MONEY GIVEN CANARA BANK WAZIRPUR 500,000.00 450551 6.5.200 0 CA11011938 BANK OF PUNJAB, CONNAUGHT PLACE CANARA BANK WAZIRPUR 300,000.00 450556 9.6.2000 CA11011938 BANK OF PUNJAB CONNAUGHT PLACE 3 ITA NO. 719/DEL/201 3, AY: 2001 - 02 H.M. ICE & STORAGE PVT. LTD. CANARA BANK WAZIRPUR 500,000.00 450552 8.5.2000 CA11011938 BANK OF PUNJAB CONNAUGHT PLACE 3. THE ASSESSEE CLAIMED TO HAVE FILED CONFIRMATION LETTER AND OTHER DETAILS IN RESPECT OF M/S ANKUR MARKETING LTD. BEFORE THE ASSESSING OFFICER, HOWEVER, THE SUMMON UNDER SEC TION 131 OF THE ACT , SENT TO THE PRINCIPLE OFFICER OF M/S ANKUR MARKETING LTD. ON 07 .11.2008 BY THE LD ASSESSING OFFICER, RETURNED UNSERVED WITH THE REMARK THAT NO SUCH PERSON EXIST S AT THE SAID ADDRESS. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE FAILED TO ESTABLISH THE VERY EXISTENCE AND IDENTITY OF THE SHARE APPLICANT AND, THER EFORE, HE HELD THE MONEY CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE FROM M/S ANKUR MARKETING LTD. AS UNEXPLAINED CASH CREDIT IN TERMS OF SECTION 68 OF THE ACT. THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 147 R.W.S. 143(3) OF T HE ACT AND AN ADDITION OF RS. 13 LAKHS WAS MADE TO THE RETURNED INCOME. 4. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CHALLENGING THE ACTION OF THE LD. ASSESSING OFFICER OF REOPENING OF ASSESSMENT UNDE R SECTION 148 OF THE ACT AS WELL AS THE ADDITION MADE OF RS. 13 LAKHS . THE OBJECTION OF THE ASSESSEE AGAINST REOPENING OF THE ASSESSMENT WAS REJECTED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). IN THE COURSE OF APPELLATE PROCEEDINGS, THE LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) FORWARDED THE SUBMISSION OF THE ASSESSEE CALLING FOR A REMAND REPORT FROM THE ASSESSING OFFICER, WHO IN HIS REPORT REITERATED THE FINDINGS MADE IN THE 4 ITA NO. 719/DEL/201 3, AY: 2001 - 02 H.M. ICE & STORAGE PVT. LTD. ASSESSMENT ORDER. IN THE REJOINDER, THE ASSESSEE ALSO SUBMITTED THE F ACT OF SHIFTING OF ADDRESS OF THE SHARE APPLICANT FROM F - 25, LAJPAT NAGAR, PART - I TO 3/71, GITA COLONY, DELHI W.E.F. 19.01.2009. FROM THESE SUBMISSIONS , THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT SUMMON WAS SENT AT THE REGISTERED ADDRESS OF THE SAID SHARE APPLICANT MUCH BEFORE CHANGE OF ADDRESS TO NEW PLACE, T HE ASSESSEE NOT ONLY FAILED TO PRODUCE THE SAID SHARE APPLICANT BEFORE THE ASSESSING OFFICER BUT EVEN BEFORE HER. FURTHER, RELY ING ON THE JUDGMENT OF THE HON BLE HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. NOVA PROMOTERS AND FINLEASE (P) LTD., 342 ITR 16 9 , WHEREIN IT IS HELD THAT UNLESS THE IDENTITY OF THE SHARE APPLICANTS IS PROVED ALONG WITH THE GENUINENESS OF THE T RANSACTIONS AND CREDITWORTHINESS OF THE PARTY, THE PROVISIONS OF SECTION 68 COULD BE SA ID TO HAVE BEEN RIGHTLY INVOKED, UP HELD THE ADDITION OF RS. 13 LAK H S MADE BY THE LEARNED ASSES S ING OFFICER UNDER SECTION 68 OF THE ACT. AGGRIEVED, THE ASSESSEE IS BEFORE US WITH THE PRESENT APPEAL. 5. AT THE TIME OF HEARING, THE GROUND NO. 1 OF THE APPEAL WAS NOT PRESSED BY THE LEARNED AUTHORIZED REPRESENTATIVE AND HENCE, GROUND N O. 1 OF THE ASSESSEE IS DISMISSED. 6. AS REGARD GROUND N O. 2 OF THE ASSESSEE S APPEAL, TH E LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT ALL THE DOCUMENTS IN SUPPORT OF THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION WERE DULY FILED BEFORE THE LEARNED ASSESSING OFFICER, AND THEREFORE, THE ASSESSEE HAD FULLY COMPLIED WITH T HE REQUIREMENT OF SECTION 68 OF THE ACT. THE L EARNED AUTHORIZED REPRESENTATIVE 5 ITA NO. 719/DEL/201 3, AY: 2001 - 02 H.M. ICE & STORAGE PVT. LTD. ALSO FILED AN APPLICATION ON 5 TH AUGUST, 2013 FOR ADMITTING ADDITIONAL EVIDENCE IN THE FORM OF PAPER BOOK, CONTAINING AT PAGE NOS. 1 TO 59 . THE ADDITIONAL EVIDENCE CONTAINED COP Y OF ANNUAL RETURN OF THE ASSESSEE COMPANY FOR THE YEAR ENDING 31.03.2012 AND COPY OF BALANCE - SHEET, PROFIT AND LOSS ACCOUNT OF M/S ANKUR MARKETING LTD. AS ON 31.03.2012 FILED WITH THE REGISTRAR OF COMPANY, DELHI , ETC . FURTHER, LEARNED AUTHORIZED REPRESENTATIVE REQUESTED THAT IT WAS EVIDENT FROM THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF THE SAID SHARE APPLICANT THAT IT STILL EXISTS, WHICH CONFIRMS THE IDENTITY OF THE SHARE APPLICANT AND , THEREFORE, THE ADDITION SUSTAINED BY THE COMMISSIONER OF INCOME TAX (APPEALS) MAY BE DELETED. 6.1 ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE S UNDER RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 (FOR SHORT THE RULES, 1963 ) ON THE GROUND THAT THE ADDITIONAL EVIDENCE S FILED PERTAIN TO THE FINANCIAL YEAR 2011 - 12 , I.E. A LONG PERIOD FROM THE ASSE SSMENT YEAR UNDER CONSIDERATION AND LOT OF PEOPLE MIGHT HAVE CHANGED HANDS OVER THE EFFECTIVE OWNERSHIP OF TH E COMPANY AND THEREFORE, THOSE DOCUMENTS WERE NOT RELEVANT TO THE ISSUE IN DISPUTE. THE L EARNED DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE SHARE APPLICANT WAS MERE A PAPER COMPANY AT RELEVANT PERIOD OF TIME AND WAS ENGAGED IN PROVIDING ACCOMMO DATION ENTRY. FURTHER, HE SUBMITTED THAT THE SUMMON ISSUED TO THE SAID SHARE APPLICANT COMPANY UNDER SECTION 131 OF THE ACT RETURNED UNSERVED WITH THE REMARK THAT NO SUCH PERSON EXISTS AT THE ADDRESSES AND THE SAID APPLICANT 6 ITA NO. 719/DEL/201 3, AY: 2001 - 02 H.M. ICE & STORAGE PVT. LTD. COULD NOT BE PRODUCED BY THE ASSESSEE NEITHER BEFORE THE ASSESSING OFFICER, NOR BEFORE THE COMMISSIONER OF INCOME TAX(APPEALS). THEREFORE, THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE APPLICANT COULD NOT BE ESTABLISHED. FURTHER, THE L EARNED DEPARTMENTAL REPRESENTATIVE A LSO RELIED ON THE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. M/S. NAVODAYA CASTLES PVT. LTD., REPORTED IN 2014 - TIOL - 1775 - HC - DEL - IT . 6.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RE CORD. BEFORE WE DECIDE THE ISSUE IN DISPUTE, WE FEEL IT APPROPRIATE TO DECIDE THE ISSUE OF ADMISSION OF ADDITIONAL EVIDENCE S . WE HAVE NOTED THAT T HE ADDITION AL EVIDENCES FILED BY THE ASSESSEE WERE NOT AVAILABLE WITH THE ASSESSEE BEFORE 31.03.2012 AND THEREFORE SAME COULD NOT BE FILED BEFORE THE LOWER AUTHORITIES. ON THE OTHER HAND, W E HAVE ALSO NOTED THAT THE EVIDENCES ARE NOT PERTAI NING TO THE YEAR UNDER CONSIDERATION . I N THE COMPANY, THE OWNE RSHIP GETS CHANGED WITH THE CHANGE OF PROMOTERS, SO AFTER THE RELEVANT PERIOD OF TIME THE COMPANY MIGHT HAVE BEEN OWNED BY SOMEONE ELSE. WE HAVE SEEN FROM THE ORDER OF THE LD CIT(A) THAT THE ADDRESS OF THE COMPANY HAS ALSO BEEN CHANGED FREQUENTLY. THUS THE DOCUMENTS OF THE COMPANY FOR A PERIOD AFTER 12 YEARS FROM THE RELEVANT PERIOD WOULD NOT SERVE USEFUL PURPOSE IN ASCERTAINING THE REQUIREMENTS OF SECTION 68 OF THE ACT. UNDER RULE 29 OF THE INCOME - TAX ( APPELLATE TRIBUNAL) RULES , 1963 , IT IS THE TRIBUNAL, I F REQUIRED AND IF FIND THAT SUFFICIENT OPPORTUNITY TO THE ASSESSEE WAS NOT PROVIDED BY THE INCOME TAX AUTHORITIES , MAY ADMIT THE 7 ITA NO. 719/DEL/201 3, AY: 2001 - 02 H.M. ICE & STORAGE PVT. LTD. ADDITIONAL EVIDENCE. FOR SAKE OF CONVENIENCE, THE RULE 29 IS REPRODUCED AS UNDER: 29. THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PRODUCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIBUNAL, BUT IF THE TRIBUNAL REQUIRES ANY DOCUMENT TO BE PRODUCED OR ANY WITNESS TO BE EXAMINED OR ANY AFFIDAVIT TO BE FILED TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTAN TIAL CAUSE, OR , IF THE INCOME - TAX AUTHORITIES HAVE DECIDED THE CASE WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE EITHER ON POINTS SPECIFIED BY THEM OR NOT SPECIFIED BY THEM, THE TRIBUNAL, FOR REASONS TO BE RECORDED, MAY ALLOW S UCH DOCUMENT TO BE PRODUCED OR WITNESS TO BE EXAMINED OR AFFIDAVIT TO BE FILED OR MAY ALLOW SUCH EVIDENCE TO BE ADDUCED. 6.3 I N THE PRESENT CASE, THE ASSESSEE FAILED TO ESTABLISH THAT NO SUFFICIENT OPPORTUNITY WAS PROVIDED, WHICH IS CLEAR FROM THE FACT THAT THE EVIDENCE WHICH ARE PROPOSED FOR ADMISSION BELONG S TO THE FINANCIAL YEAR 2001 1 - 12 AND THAT IS MUCH LATER THAN THE RELEVANT ASSESSMENT YEAR. THUS IN OUR VIEW, THE ANNUAL RETURN OF COMPANY AND BALANCE SHEET ETC FILED IN THE OFFICE OF REGISTRAR OF COM PANIES AFTER ALMOST A PERIOD OF 12 YEARS , CANNOT SUBSTANTIATE THE CASE OF THE ASSESSEE AND ACCORDING TO US THESE ARE NOT HAVING ANY BEARING TO THE ISSUE IN DISPUTE BEFORE US. WE ARE, THEREFORE, NOT ADMITTING THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSE SSEE. 6.4 KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCE OF THE CASE, WE FIND THAT THE ASSESSEE HAS NOT PRODUCED THE SHARE APPLICANT AND HAS NOT PROVED THE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE PARTY AND NOT FILED THE SUFFICIEN T EVIDENCES BEFORE THE LOWER AUTHORITIES AS WELL BEFORE THE TRIBUNAL, WHICH SHOWS THAT THE ASSESSEE HAS NOT FULFILLED THE REQUIREMENT OF SECTION 68 OF THE I.T. ACT, 1961. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE LEARNED 8 ITA NO. 719/DEL/201 3, AY: 2001 - 02 H.M. ICE & STORAGE PVT. LTD. COMMISSIONER OF INCOME T AX (APPEALS) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME. ACCORDINGLY, GROUND N O. 2 OF THE ASSESSEE IS DISMISSED. 7 . GROUND NO. 3 BEING GENERAL IN NATURE, NO ADJUDICATION IS REQUIRED. 8 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2016 . SD/ - SD/ - ( H.S. SIDHU ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 20 TH JANUARY, 2016 . RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI