ITO 1(1)(1), MUMBAI V. DIPANKAR STEEL P.LTD, MUMBAI

ITA 849/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0979 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 06-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PURSHOTTAM KUMAR
• Keywords: Unexplained cash credit; Bogus Share capital; Additional evidence; Non compliance
• Section: 133(6); 68; 144

Judgement Text

1 DIPANK AR STEEL PVT. LTD. IN THE INCOME TAX APPELLATE TRIBUNNAL MUMBAI BENCH D, MUMBAI BEFORE SHRI SAKTIJIT DEY(JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) I.T.A.NO.849/MUM/2014 (ASSESSMENT YEAR: 2010-11) ITO 1 (1) (1) R. NO. 534/579, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI PIN: 400020 V/S DIPANKAR STEEL P. LTD. FORMERLY M/S. BESTIAN STEEL P. LTD. OFF NO. 13/14/15, IST FLOOR, 204 BHAT BAZAR MASJID BUNDER, MUMBAI PIN: 400009 PAN : AADCD8268M APPELLANT RESPONDENT APPELLANT BY PURSHOTTAM KUMAR RESPONDENT BY NONE DATE OF HEARING 19.04.2017 DATE OF ORDER 03.05.2017 O R D E R PER ASHWANI TANEJA, AM:- THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER PASSED BY LD. CIT (A)-1 MUMBAI[IN SHORT CIT(A)], DATED 29.1 1.2013 PASSED AGAINST THE ASSESSMENT ORDER U/S 144 OF THE I.T. ACT, DATED 05. 03.2013 FOR AY 2010-11 ON THE FOLLOWING GROUNDS.:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE U/S 68 O F THE I.T. ACT, 1961 ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF RS.6,01,00 ,000/- RELYING UPON THE ADDITIONAL EVIDENCE AND REMAND REPORT DESP ITE CONFIRMING 2 DIPANK AR STEEL PVT. LTD. THE ACTION OF AO IN ASSESSING THE INCOME BY EX-PART E ORDER U/S144 OF THE I.T. ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ADMITTING OR ACCEPTING THE ADDITIONAL EVID ENCES FURNISHED BY THE ASSESSEE BEFORE HIM WITHOUT APPRECIATING THE FA CT THAT THE SAME WERE NOT PRODUCED BEFORE THE AO AT THE TIME OF ASSE SSMENT PROCEEDINGS AND HENCE WAS IN VIOLATION OF RULE 46A OF THE I.T. RULES. 2. NONE APPEARED ON THE BEHALF OF THE ASSESSEE. IT IS NOTED THAT ON EARLIER OCCASIONS ALSO NONE HAS APPEARED ON BEHALF OF THE A SSESSEE. UNDER THESE CIRCUMSTANCES, WE HAVE NO OTHER OPTION BUT TO DISPO SE OF APPEAL EXPARTE QUA THE ASSESSEE. DURING THE COURSE OF HEARING BEFORE U S, LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE ASSESSI NG OFFICER. HOWEVER, HE ALSO FAIRLY SUBMITTED THAT IN THIS CASE REMAND REPORT HA S BEEN SUBMITTED BY THE AO, WHEREIN DETAILED EXAMINATION WAS MADE BY AO BEFORE SENDING THE REMAND REPORT. 3. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE LOWER AUTHORITIES. IT IS NOTED THAT THE SOLITARY ISSUE INVOLVED IN THIS CASE IS WITH REGARD TO ADDITION MADE U/S68 BY THE AO ON ACCOUNT OF SHARE APPLICATIO N MONEY RECEIVED FROM TWO PARTIES NAMELY, M/S SIDDHAM INFRASTRUCTURE PVT. LTD. AND M/S SUNDARAM CLOTHING PVT. LTD. IT IS NOTED BY US, THAT ADDITION WAS MADE BY ASSESSING OFFICER BY PASSING AN ORDER EXPARTE U/S144 ON THE GROUND TH AT NO DETAILS OR EVIDENCES WERE SUBMITTED BY ASSESSEE TO THE AO FOR SUBSTANTIA TING THESE AMOUNTS AS ENVISAGED U/S 68 OF THE ACT. HOWEVER, DURING THE CO URSE OF HEARING BEFORE LD. CIT(A) VARIOUS EVIDENCES WERE SUBMITTED BY THE ASSE SSEE WHICH WAS SENT BY THE LD. CIT(A) TO ASSESSING OFFICER FOR DETAILED EX AMINATION AND SENDING REMAND REPORT. THE PERUSAL OF ORDER PASSED BY THE LD. CIT( A) REVEALS THAT REMAND REPORT WAS SENT BY THE AO WHEREIN AMOUNT RECEIVED F ROM BOTH THE ABOVE SAID PARTIES WERE EXAMINED BY THE AO AND HE FOUND IT TO BE DULLY VERIFIED. AFTER 3 DIPANK AR STEEL PVT. LTD. CONSIDERING THE REMAND REPORT LD. CIT(A) DELETED TH E ADDITION MADE BY THE AO BY MAKING FOLLOWING OBSERVATIONS.:- THE APPELLANT HAS CONTESTED ADDITION OF RS.6,01,00, 000/- VIDE GROUND NO.2 OF APPEAL. DURING THE APPELLATE PROCEEDINGS, S UBMISSIONS WERE MADE AND FILED VIDE LETTER DTD. 24.10.2013 CONTAINI NG THE COPIES OF FINAL ACCOUNTS OF THE INVESTORS IN THE ASSESSING COMPANY ALONGWITH CONFIRMATION OF ACCOUNTS DULY SIGNED AND SUBMITTED ALONGWITH THE PAN NUMBERS. IT WAS SUBMITTED VIDE LETTER DTD. 24.10.20 13 THAT- WITH REFERENCE TO THE ABOVE AND UNDER THE INSTRUCTI ON FROM OUR ABOVE REFERRED CLIENT, WE WOULD LIKE TO STATE THAT THE APPELLANT HAS FILED E-RETURN OF THE ABOVE MENTIONED ASSESSMENT YE AR DECLARING TOTAL LOSS OF RS.47,509/- ON 29.03.2011. THE RETURN WAS PROCESSED U/S143(1) OF THE I.T. ACT, 1961. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) AND 142 (1) OF THE ACT WERE ISSUED. SINCE THE NOTICES WERE SERVED BY AFFIX TURE, THE APPELLANT WAS NOT AWARE OF THE NOTICES SERVED BY TH E ASSESSING OFFICER. THE APPELLANT DID NOT COMPLY WITH THE NOTI CES. FINALLY, THE ASSESSMENT WAS COMPLETED U/S 144 (BEST JUDGMENT ASS ESSMENT) OF THE I.T. ACT, 1961 DETERMINING TOTAL TAXABLE INCOME OF RS.6,01,00,000/-. THE NON COMPLIANCE ON PART OF THE APPELLANT WAS ONLY BECAUSE OF NOT KNOWING THE FACT THAT NOTICES H AD BEEN SERVED. WE ARE SUBMITTING HEREWITH DETAILED SUBMISSION IN F ORM OF PAPER BOOK OF YOUR KIND PERUSAL. THE DOCUMENTS (COPY OF FINANCIAL STATEMENTS, CONFIR MATION LETTERS AND COPIES OF RETURN OF INCOME OF INVESTORS AND APPELLA NT ALONGWITH SUBMISSIONS) WAS FORWARDED TO THE AO FOR COMMENTS V IDE LETTER DTD. 28.10.2013 OF THIS OFFICE, PLACED ON RECORD. THE REMAND REPORT WAS RECEIVED FROM THE AO VIDE HIS LETTER DTD.18.11.2013 BEARING NO. ITO-1 (1)(1)/ REMAND REP ORT/2013-14 AFTER DUE VERIFICATION OF THE DOCUMENTS. THE AO HAS REPOR TED THAT- DURING THE REMAND PROCEEDINGS NOTICES U/S 133(6) O F THE I.T. ACT, 1961 WERE ISSUED TO THE SHARE APPLICANTS I.E. M/S S IDDHAM INFRASTRUCTURE PVT. LTD. AND M/S SUNDARAM CLOTHING PVT. LTD. IN RESPONSE TO THE NOTICES BOTH THE SHARE APPLICANTS P ROVIDED THE FOLLOWING DETAILS (I) COPY OF SHARE APPLICATION (II ) COPY OF RETURN OF INCOME (III) COPY OF BALANCE SHEET AND COPY OF BANK STATEMENT 4 DIPANK AR STEEL PVT. LTD. HIGHLIGHTING THE TRANSACTIONS. ON VERIFICATION OF T HE ABOVE DOCUMENTS, IT IS NOTICED THAT M/S SIDDHAM INFRASTRU CTURE PVT. LTD. AND M/S SUNDARAM CLOTHING PVT. LTD. INVESTED RS.2,8 0,00,000/- AND RS.3,20,00,000/- RESPECTIVELY OUT OF THEIR SHAR E CAPITAL IN THE CASE OF M/S BESTIAN STEEL PVT. LTD. (BESTIAN STEEL I.E. APPELLANT) IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE ON THIS ISSUE, IT CAN BE SEEN THAT THE INVESTMENTS AND CREDIT ENTRIES TO THE EXTENT OF RS.6,00,00,000/- ARE REPORTEDLY VERIFIED AND EXPLAI NED IN TERMS OF SECTION 68 OF THE I.T. ACT, 1961 BASED ON WHICH THE ADDITIO N WAS MADE BY THE AO IN APPEALED ORDER WITHOUT CONSIDERING ANY SUBMISSIO NS/EXPLANATIONS OF THE APPELLANT AND WITHOUT ANY VERIFICATION. HOWEVER , SINCE THE INVESTMENTS/CREDITS REMAIN VERIFIED IN REFERENCE TO CONFIRMATIONS OF THE PARTIES, TRANSACTIONS IN THE RESPECTIVE BOOKS OF AC COUNTS OF THE PARTIES AND PAN HELD BY THE TRANSACTING PARTIES AS ALSO TO THE SATISFACTION OF AO AS PER REMAND REPORT. I FIND THAT THE CREDIT ENTRIE S ARE DULY EXPLAINED WITHIN THE MEANING OF SECTION 68 OF THE I.T. ACT. ACCORDINGLY, THE AO IS DIRECTED TO DELETE THE ADDIT ION OF RS.6,00,00,000/- AND ADDITION OF RS.1,00,000/- IS CONFIRMED AS NO EX PLANATION HAS BEEN FILED EITHER BEFORE THE AO OR IN APPELLATE PROCEEDI NGS. HENCE, GROUND NO.2 OF APPEAL IS PARTLY ALLOWED. 4. IT IS NOTED THAT FROM THE PERUSAL OF THE ABOVE THAT THE ASSESSING OFFICER HAS GIVEN A REMAND REPORT WHEREIN HE HAS CONFIRMED THAT HE HAS VERIFIED REQUISITE DETAILS AND CONFIRMATIONS ABOUT THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE. NOTHING WRONG HAS BEEN FO UND BY THE LD. AO IN THE IMPUGNED TRANSACTIONS. RELYING UPON THE SAME, LD. C IT(A) HAS DELETED THE ADDITION. IT IS NOTED THAT NOTHING WRONG WAS FOUND BY LD. CIT(A) ALSO. DURING THE COURSE OF HEARING BEFORE US ALSO LD. DR WAS NOT ABLE TO POINT OUT ANYTHING WRONG IN THE ORDER OF LD. CIT(A). RATHER, HE FAIRLY SUBMITTED THAT ONCE POSITIVE REMAND REPORT HAS BEEN GIVEN BY THE AO, THEN, LD. D R CAN HAVE NO OBJECTION AND THE APPEAL FILED BY THE REVENUE IS WITHOUT ANY LEGAL BASIS. IT IS ALSO NOTED THAT IN THE CENTRAL SCRUTINY REPORT PREPARED BY THE ASSESSING OFFICER AND SUBMITTED TO THE CONCERNED CIT FOR FILING OF APPEAL , IT HAS BEEN CLEARLY MENTIONED THAT LD. CIT(A) HAD ALLOWED THE APPEAL OF THE ASSESSEE IN VIEW OF 5 DIPANK AR STEEL PVT. LTD. THE REMAND REPORT SUBMITTED BY THE AO AFTER NECESSA RY VERIFICATION. THEREFORE, DECISION OF THE LD. CIT(A) WAS ACCEPTABLE AND HENCE SECOND APPEAL WAS NOT RECOMMENDED ON THIS GROUND I.E.THE GROUND WITH REGA RD TO ADDITION OF SHARE APPLICATION MONEY U/S 68 OF THE ACT. UNDER THESE CI RCUMSTANCES, WE ARE NOT ABLE TO UNDERSTAND AS TO HOW AND WHY THIS APPEAL HA S BEEN FILED BY THE REVENUE, WHICH IS PRIMA FACIE NOT MAINTAINABLE. THUS, TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND TH AT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF LD. CIT(A). THUS, SAME IS HEREB Y UPHELD. AS A RESULT, APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE CONCL USION OF THE HEARING. SD/- SD/- (SAKTIJIT DEY) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT:03.05.2017 V.P.SINGH/- COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , D, BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES