Jagtap Builders and Developers Pvt Ltd, Pune V. ITO, Ward 11(2), Pune

ITA 900/PUN/2012

• Counselvise Citation: 90024514 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-09-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 07-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANTKUMAR C LEUVA
• Keywords: Salary income; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 900/PN/2012 (ASSESSMENT YEAR 2006-07) JAGTAP BUILDERS AND DEVELOPERS PVT. LTD., S.NO.32, TRIMURTI BUILDING PIMPLE GAURAV, PUNE 411027. PAN NO. AABAS5442E .. APPELLANT VS. ITO, WARD-11(2), PMT COMMERCIAL COMPLEX, SWARGATE, PUNE 411037 .. RESPONDENT APPELLANT BY : SHRI SUNIL GANOO RESPONDENT BY : SHRI HEMANT KUMAR C. LEUVA DATE OF HEARING : 25-09-2013 DATE OF PRONOUNCEMENT : 26-09-2013 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 01-11-2011 OF THE CIT(A)-I, PUNE RELATING TO ASSESS MENT YEAR 2006-07. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS A COMPANY ENGAGED IN THE BUSINESS AS BUILDER AND DEVELOPER. IT FILED ITS RETURN OF INCOME ON 07- 12-2006 DECLARING INCOME OF RS.15,104/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE AS SESSEE HAS OBTAINED SHARE CAPITAL OF RS.L LAKH AND UNSECURED LOAN OF RS .25,25,000/- FROM THE DIRECTORS/SHAREHOLDERS OF THE COMPANY. THE ASSESSIN G OFFICER ASKED THE ASSESSEE TO SUBMIT THE DETAILS OF THE SHARE CAPITAL OF RS. 1 LAKH AND UNSECURED LOAN OF RS.25,25,000/- ALONG WITH SOURCE OF CAPITAL, PAN COPY 2 AND THE I.T. RETURN ETC. THE ASSESSEE FILED THE D ETAILS OF SHARE CAPITAL AND UNSECURED LOAN OBTAINED FROM 7 PERSONS, THE DETAILS OF WHICH ARE AS UNDER: SR.NO. NAME SHARE CAPITAL UNSECURED LOAN 1 SANJAY JAGTAP RS. 35,000/- 5,00,000/- 2 SMT. SUNANDA 40,000/ - 10,25,000/ - 3 SMT. KAVITA JAGTAP 5,000/ - 2,00,000/ - 4 SMT. CHHAYA 5,000/ - 2,00,000/ - 5 VIJAY JAGTAP 5,000/ - 2,00,000/ - 6 RAJENDRA JAGTAP 5,000/- 2,00,000/- 7 NITESH JAGTAP 5,000/ - 2,00,000/ - TOTAL 1,00,000/- 25,25,000/- 2.1 IT WAS SUBMITTED BY THE ASSESSEE THAT THE ABOV E DIRECTORS/SHAREHOLDERS ARE NOT ASSESSED TO TAX AND THEY ARE HAVING AGRICUL TURAL/SALARY INCOME. THE ASSESSING OFFICER THEREAFTER ASKED THE ASSESSEE TO PRODUCE THE DIRECTORS ALONG WITH DOCUMENTARY PROOF REGARDING THEIR CREDIT WORTHINESS AND GENUINENESS OF THE LOAN TRANSACTION, I.E. BANK PASS BOOK, 7/12 EXTRACTS, RETURN OF INCOME, IF ANY, AND COPY OF SALARY INCOME , STATEMENT ETC. THERE WAS NO COMPLIANCE BY THE ASSESSEE. IN VIEW OF THE A BOVE FAILURE ON THE PART OF THE ASSESSEE THE ASSESSING OFFICER RELYING ON VARIO US DECISIONS ADDED THE AMOUNT OF RS.L LAKH OBTAINED AS SHARE CAPITAL AND R S.25,25,000/- OBTAINED AS UNSECURED LOAN TO THE TOTAL INCOME OF THE ASSESSEE. 3. BEFORE THE CIT(A) THE ASSESSEE DID NOT CHALLENG E THE ADDITION OF RS.25,25,000/- OBTAINED AS UNSECURED LOAN. SO FAR A S THE ADDITION OF RS.L LAKH IS CONCERNED IT WAS SUBMITTED THAT THE ADDITIONS OF RS.L LAKH WAS MADE BASING ON ASSUMPTIONS AND PRESUMPTIONS AFTER IGNORING THE FACTS AND CIRCUMSTANCES OF THE CASE. IT WAS SUBMITTED THAT TH E ASSESSEE HAD TRIED TO SUBMIT DETAILED EXPLANATIONS IN RESPECT OF THE SHAR EHOLDERS ALONG WITH THEIR PAN NOS. THE ASSESSEE FILED CERTAIN DETAILS BEFORE CIT(A) WHICH WERE NOT FILED BEFORE THE ASSESSING OFFICER. HOWEVER, THE LD .CIT(A) DID NOT ACCEPT 3 THOSE DETAILS SINCE THERE WAS NO REQUEST FOR ADMISS ION OF ADDITIONAL EVIDENCE U/R. 46A. RELYING ON VARIOUS DECISIONS HE SUSTAINED THE ADDITION OF RS. 1 LAKH MADE BY THE ASSESSING OFFICER U/S. 68 OF THE INCOME TAX ACT. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : '1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT ADMITTING THE FRESH EVIDENCE SUBMI TTED BY THE APPELLANT ALONG WITH SUBMISSIONS DT.21/10/2011 IN THE FORM OF CONFI RMATION LETTERS, COPIES OF IT. RETURNS, COPIES OF 7/12 EXTRACTS ETC IN RESPECT OF THE SHARE CAPITAL OF RS. ONE LAC RECEIVED BY THE APPELLANT COMPANY FROM ITS DIRECTORS ON THE FLIMSY AND ERRONEOUS GROUNDS WHEN IN FACT THE AUTHORISED R EPRESENTATIVES OF THE APPELLANT DURING THE COURSE OF THE APPELLATE PROCEE DINGS DID MAKE A SPECIFIC ORAL REQUEST FOR ADMISSION OF THE SAID ADDITIONAL E VIDENCE U/R.46 A OF THE I.T. RULES 1962. THE APPELLANT REQUESTS THAT THE SAID AD DITIONAL EVIDENCE BE ADMITTED AND THE APPEAL MAY PLEASE BE DECIDED ON ME RITS AFTER CONSIDERING THE SAID ADDITIONAL EVIDENCE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. ONE LAC MADE BY THE LEARNED ASSESSING OFFICER ON THE GROUND OF ALLEGED UNPROVED SHARE CAPITAL FROM DIRECTORS OF THE APPELLANT COMPANY U/S.68 OF THE I. T.ACT 1961. THE AFORESAID ADDITION BEING ARBITRARY, PERVERSE, DEVOID OF MERIT S AND BEING LEGALLY UNSUSTAINABLE THE SAME MAY PLEASE BE VACATED.' 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT VARIOUS DETAILS WERE FURNISHED BEFORE THE CIT(A) TO SUBSTANTIATE THE SOU RCE OF RS.L LAKH INVESTED BY THE 7 DIRECTORS/SHAREHOLDERS TOWARDS THE SHARE CAPI TAL OF THE COMPANY. HOWEVER, THE LD.CIT(A) MERELY BASING ON TECHNICALIT IES DID NOT CONSIDER THOSE EVIDENCES AND REJECTED THE SAME ON THE GROUND THAT THERE IS NO APPLICATION ON THE PART OF THE ASSESSEE FOR ADMISSI ON OF ADDITIONAL EVIDENCES. HE SUBMITTED THAT ALTHOUGH THERE WAS NO WRITTEN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES, HOWEVER, THERE W AS ORAL REQUEST TO THE CIT(A). HE SUBMITTED THAT IN THE INTEREST OF JUSTIC E THE MATTER MAY BE RESTORED TO THE FILE OF THE CIT(A) WITH A DIRECTION TO ADMIT THE ADDITIONAL EVIDENCES AND DECIDE THE ISSUE ON MERIT. 4 6. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND SUBMITTED THAT THE ASSESSEE HAD NOT FILED THOSE DOCUMENTS BEF ORE THE ASSESSING OFFICER AND THERE WAS NO PROPER APPLICATION AS PER RULES FO R ADMISSION OF ADDITIONAL EVIDENCES. UNDER THESE CIRCUMSTANCES, THE LD.CIT(A) WAS FULLY JUSTIFIED IN REJECTING THE ADDITIONAL EVIDENCES. HE ACCORDINGLY SUPPORTED THE ORDER OF THE CIT(A). 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BY BOTH THE SIDES. FROM THE VARIOUS DETAILS WE FIND THE ASSESSING OFFICER MADE ADDITION OF RS.L LAKH TOWARD S SHARE CAPITAL INTRODUCED BY THE 7 SUBSCRIBERS TO THE MEMORANDUM O F ASSOCIATION ON THE GROUND THAT THE ASSESSEE WAS UNABLE TO EXPLAIN THE CREDIT WORTHINESS OF THOSE PERSONS. IT IS AN ADMITTED FACT THAT THE ASSE SSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD STATED BEFORE THE ASSESS ING OFFICER THAT THOSE PERSONS ARE NOT ASSESSED TO TAX AND THEY ARE HAVING AGRICULTURAL/SALARY INCOME. ALTHOUGH THE ASSESSING OFFICER HAD ASKED TH E ASSESSEE TO PRODUCE VARIOUS DETAILS, ADMITTEDLY, THE ASSESSEE DID NOT P RODUCE 7/12 EXTRACTS AND VARIOUS OTHER DETAILS AS REQUIRED BY HIM. HOWEVER, WE FIND WHEN THE ASSESSEE PRODUCED THE VARIOUS DETAILS, BEFORE THE C IT(A), HE REJECTED THE SAME ON THE GROUND THAT THERE IS NO WRITTEN APPLICA TION ON PART OF THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENCES U/R. 46A. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTERE ST OF JUSTICE, WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE LD.C IT(A) WITH A DIRECTION TO ADMIT THE ADDITIONAL EVIDENCES FILED BEFORE HIM AND DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTU NITY OF BEING HEARD TO 5 THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PU RPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS THE 26 TH DAY OF SEPTEMBER, 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTAN T MEMBER PUNE DATED: 26 TH SEPTEMBER 2013 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I, PUNE 4 CIT-I, PUNE 5. THE D.R, 'A' PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE 6