ITO, Chandigarh V. M/s Mega Packages, Chandigarh

ITA 892/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73406 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 30-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 06-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH GUPTADR
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 892/CHD/2013 ASSESSMENT YEAR: 2008-09 THE ITO, VS. M/S MEGA PACKAGES, WARD 1(2) PLOT NO. 156 CHANDIGARH INDL. AREA, PHASE II CHANDIGARH PAN NO.AAMFM1966F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKHILESH GUPTA(DR) RESPONDENT BY : SHRI RAKESH GUPTA DATE OF HEARING : 30/12/2013 DATE OF PRONOUNCEMENT : 03/01/2014 ORDER PER T.R.SOOD, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 28/06/2013 OF CIT(APPEALS), CHANDIGARH 2. IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS & CONT RARY TO FACTS & LAW. 2. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS OF RS. 34,29,660/- MADE BY AO ON ACCOUNT OF UNSECURED LOAN S. 3. THE LD. CIT(A) HAS ERRED IN ADMITTING THE ADDITIONA L EVIDENCE WITHOUT ASSESSING ANY REASONS FOR ITS ADMI SSION DESPITE THE OBJECTIONS FROM THE AO IN HIS REPORT. 4. THE APPELLATE CRAVES LEAVE TO ADD, TO ALTER, OR AME ND ANY GROUNDS OF THE APPEAL RAISED ABOVE ON THE TIME OF T HE HEARING. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT IN T HIS CASE ASSESSMENT WAS COMPLETED UNDER SECTION 144 BECAUSE ASSESSEE DID NOT ATTEND T HE PROCEEDINGS DESPITE VARIOUS OPPORTUNITIES. DURING THE ASSESSMENT PROCEEDINGS AO NOTICED THAT AS PER THE INFORMATION TO THE AUDIT REPORT UNSECURED LOANS WERE SHOWN AT R S. 35,29,660 AGAINST RS. 1 LAC SHOWN IN AY 2007-08. THEREFORE DURING THE YEAR THE LOAN TO THE EXTENT OF RS. 34,29,660 HAVE BEEN RAISED. SINCE THE GENUINENESS AND CREDIT WORTHINESS OF THE LOANS WAS NOT PROVED THIS AMOUNT WAS ADDED TO THE INCOME OF THE A SSESSEE. 4. ON APPEAL IT WAS MAINLY SUBMITTED BEFORE LD. CIT (A) THAT LOANS HAVE BEEN PROCURED FROM FINANCIAL INSTITUTION THEREFORE THE S AME CANNOT BE TREATED AS UNSECURED LOANS , EVIDENCE WAS ALSO FILED BEFORE HIM. THE LD. CIT(A) FORWARDED THE SUBMISSIONS AND EVIDENCE TO AO. IN RESPONSE AO SIMPLY STATED TH AT NO SUCH EVIDENCE WAS FILED DURING THE ASSESSMENT PROCEEDINGS. HOWEVER LD. CIT(A) AGRE ED WITH SUBMISSION AND DELETED THE ADDITION. 5. BEFORE US LD. DR SUBMITTED THAT NO EVIDENCE WAS FILED BEFORE AO DURING THE ASSESSMENT PROCEEDING AND LD. CIT(A) HAS NOT RECORD ED ANY REASONS FOR ADMISSION OF ADDITIONAL EVIDENCE THEREFORE HIS ORDER SHOULD BE S ET ASIDE. 6. ON THE OTHER HAD LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT ASSESSEE FIRM WAS CONSTITUTED BY TWO PARTNERS AND THE SAME WAS DISSOL VED BECAUSE ONE PARTNER MR. K.S. BAJWA HAD GONE ABROAD AND THERE WERE CERTAIN DISPUT ES ETC. THATS WHY ASSESSMENT PROCEEDINGS WERE NOT ATTENDED PROPERLY. WHEN THE MA TTER HAD TRAVELED TO TRIBUNAL AND IT IS ONLY AFTER THE TRIBUNAL SET ASIDE THE MATTER TO THE FILE OF CIT(A) THAT THESE EVIDENCES WERE FURNISHED BEFORE HIM. THE CIT HAS DULY ASKED F OR THE REMAND REPORT THEREFORE NO FAULT CAN BE FOUND WITH HIS ORDER. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND FORCE IN THE SAME. THE TRIBUNAL WHILE ADJUDICATING THE ASSESSES APPEA L IN ITA 759/CHD/2012 IN PARA 6 HAD MADE FOLLOWING OBSERVATION: WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE FIRM CONSTITUTED OF TWO PARTNE RS, ONE OF WHICH IS THE AGGRIEVED EX-PARTNER OF THE ASSESSEE FIRM I. E. MR. INDER RAJ SINGH GREWAL. ON THE DISSOLUTION OF THE FIRM I.E. 2 0.03.2008 THE BUSINESS OF THE FIRM WAS CARRIED ON BY THE OTHER PA RTNER OF THE FIRM MR. K.S. BAJWA WHO WAS ACTIVELY ENGAGED BOTH IN THE BUSINESS AND ALSO IN FILING OF RETURNS ETC. THE BUSINESS WAS TAK EN OVER BY HIM. HOWEVER, MR. K.S.BAJWA LEFT THE COUNTRY AND WENT AB ROAD. THE PLEA OF THE OTHER PARTNER IS THAT HE DID NOT INTIMA TE ANYTHING ABOUT THE CASE TO HIM. THE ABOVE CLEARLY SHOWS THAT THERE WERE SOME PROBLE MS AMONGST PARTNER THAT IS WHY ASSESSMENT PROCEEDINGS COULD NOT BE ATTENDED. F URTHER THE LD. CIT(A) HAS ADJUDICATED THE ISSUE VIDE PARA 7.1 WHICH IS AS UND ER: THE ADDITION ON THIS ACCOUNT PERTAINS TO UNSECURE D LOANS. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. COUNSEL FOR THE APPELLANT HAS FILED A COPY OF BALANCE SHEET AND HAS SUBMITTED THAT THESE LOANS WERE FROM FINANCIAL INSTITUTIONS A ND NOT FROM ANY INDIVIDUAL AND SO THESE COULD NOT BE TREATED AS UNE XPLAINED CASH CREDITS. THE APPELLANT HAS ALSO SUBMITTED EVIDENCE REGARDING THESE LOANS BEING FROM FINANCIAL INSTITUTIONS. THE EVIDEN CE FILED BY THE APPELLANT WAS FORWARDED TO THE ASSESSING OFFICER FO R HIS COMMENTS UNDER RULE 46A(3) OF THE INCOME TAX RULES, 1962 AND HE HAS SUBMITTED THAT NO SUCH EVIDENCE / REPLY WAS FILED B Y THE APPELLANT IN ASSESSMENT PROCEEDINGS. THE ADDITIONAL EVIDENCE FILED BY THE APPELLANT IS ADMITTED AND IT IS HELD THAT AS THE UN SECURED LOANS ARE FROM FINANCIAL INSTITUTIONS, THE DISALLOWANCE IN RE SPECT OF THE SAME CANNOT BE MADE. HENCE, THE ADDITION MADE ON THIS AC COUNT IS DELETED. GROUND OF APPEAL NO. 11 IS ALLOWED. THE ABOVE CLEARLY SHOWS THAT WHATEVER EVIDENCE WAS FILED WAS CONFRONTED TO THE AO BY ASKING THE REMAND REPORT. SINCE LOANHAVE BEEN RECEIVED FROM FINANCIAL INSTITUTIONS THE SAME CANNOT BE TREATED AS UNEXPLAI NED CASH CREDIT. THEREFORE, WE FIND NOTHING WRONG WITH THE ORDER OF LD. CIT(A) AND CONF IRM THE SAME. 8. IN THE RESULT REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 03/01/20 14 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 03/01/2014 AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR ITAT, CHANDIGARH