ITO, New Delhi V. M/s. Nitin Processor Ltd., Delhi

ITA 915/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58540 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 23-01-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 05-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMARDR
• Assessee Lawyers: MANOJ KUMARAR
• Keywords: Unexplained cash credit; Additional evidence
• Section: 147; 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI F BENC H BEFORE SMT. DIVA SINGH, JM & SHRI A.N. PAHUJA, AM ITA NO.915/DEL/2010 ASSESSMENT YEAR:2000-01 INCOME TAX OFFICER, WARD-13(3), ROOM NO. 338,C.R. BUILDING, NEW DELHI V/S . M/S NITIN PROCESSOR LTD. B-1757, SHASTRI NAGAR, DELHI [PAN : AAACN 4390 H] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI MANOJ KUMAR,AR REVENUE BY SHRI B.R.R. KUMAR,DR DATE OF HEARING 23-01-2012 DATE OF PRONOUNCEMENT 25-01-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 5 TH MARCH, 2010 BY THE REVENUE AGAINST AN ORDER DATED 16 TH DECEMBER, 2009 OF THE LEARNED CIT(A)-XVI, NEW DELH I, RAISES THE FOLLOWING GROUNDS:- 1) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION O F ` `15,46,150/- MADE ON ACCOUNT OF SHARE APPLICATION M ONEY U/S 68 OF THE INCOME-TAX ACT, 1961, DESPITE OF THE FACT THAT THE ASSESSEE HAD FAILED TO ESTABLISH THE IDENTITY, GENU INENESS OF THE TRANSACTION AND CREDIT WORTHINESS OF THE PARTIES FR OM WHOM THE SHARE APPLICATION MONEY WAS RECEIVED. 2) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF ` ` 38,653/-, MADE ON ACCOUNT OF COMMISSION U/S 68 OF THE INCOME-TAX A CT, 1961 BY HOLDING THAT SINCE THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 HAS BEEN DELETED, THERE REMAINS NO JUSTIFICATION FOR SUSTAINING THIS ADDITION. ITA NO.915/DEL./2010 2 3) THE APPELLANT CRAVES TO BE ALLOWED TO ADD, DELE TE OR AMEND ANY OTHER GROUNDS OF APPEAL. 2. ADVERTING FIRST TO GROUND NOS.1 & 2 IN THE APPE AL, FACTS IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING LOSS OF ` ` 49,01,710/- FILED ON 30.11.2000 BY THE ASSESSEE, WAS PROCESSED ON 28 TH JUNE, 2001 U/S 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). SU BSEQUENTLY, THE INVESTIGATION WING INFORMED THE ASSESSING OFFICER (A.O. IN SHORT) THAT THE ASSESSEE OBTAINED ACCOMMODATION ENTRY IN THE GARB OF SHARE APPLICATIO N MONEY FROM THE FOLLOWING PARTIES DURING THE YEAR UNDER CONSIDERATION:- AMOUNT (IN ` `) DATE OF ENTRY NAME OF ENTRY GIVER 1,00,200 26.02.2000 M/S BATRA INVESTMENTS 7,85,000 28.03.2000 M/S MY MONEY SECURITIES LTD. 1,00,200 15.03.2000 M/S MY MONEY SECURITIES LTD. 5,00,750 18.03.2000 M/S MY MONEY SECURITIES LTD. 60,000 10.03.2000 M/S MY MONEY SECURITIES LTD. 2.1 IN THE LIGHT OF AFORESAID INFORMATION, THE AO REOPENED THE ASSESSMENT U/S 147 OF THE ACT WITH THE ISSUE OF A NOTICE U/S 148 OF THE ACT ON 22 ND SEPTEMBER, 2006. IN RESPONSE, THE ASSESSEE INFORMED VIDE LETT ER DATED 06.11.2006 THAT THE RETURN FILED ON 30.11.2000 MAY BE TREATED AS RETURN IN RESPONSE TO NOTICE U/S 148 OF THE ACT. DURING THE COURSE OF REASSESSMENT PROCE EDINGS, THOUGH THE AO ISSUED SUMMONS TO THE AFORESAID PARTIES, NONE RESPO NDED WHILE THE INSPECTOR DEPUTED TO MAKE INQUIRIES INFORMED THAT NO SUCH CO MPANY EXISTED AT THE ADDRESSES FURNISHED BY THE ASSESSEE. ACCORDINGLY, W HILE EXPLAINING THE MODUS OPERANDI OF THE ENTRY OPERATORS, THE AO CONCLUDED T HAT THE ASSESSEE FAILED TO ESTABLISH IDENTITY OF THE AFORESAID PERSONS AS ALSO GENUINENESS OF THE TRANSACTIONS AND ACCORDINGLY, ADDED AN AMOUNT OF ` `15,84,803/- INCLUDING COMMISSION OF ` ` 38,653/- @2.5% OF ` ` 15,46,150/- U/S 68 OF THE ACT. ITA NO.915/DEL./2010 3 3. ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDIT ION IN THE FOLLOWING TERMS:- 5.2 THE AR REFERRED TO THE REASONS/GROUNDS ON THE BASIS OF WHICH THE ASSESSING OFFICER MADE THE ADDITIONS VIZ. THAT THE SUMMONS WERE ISSUED U/S 131 WHICH WERE NOT COMPLIED WITH AND THAT THE INSPECTOR OF THE WARD DEPUTED TO VERIFY TH E EXISTENCE/GENUINENESS/CREDITWORTHINESS OF THE PARTI ES HAD SUBMITTED IN WRITING ABOUT THE NON-AVAILABILITY OF ABOVE MENTIONED PARTIES AT THE GIVEN ADDRESSES AND IT IS CONTENDED THAT AS THE AMOUNT HAS BEEN REPAID BY THESE PARTIES, THE APPELL ANTS CASE DOES NOT FALL UNDER THE MISCHIEF OF SECTION 68 OF THE AC T AND, HENCE, THE ADDITION IS UNWARRANTED. THE AR FURTHER DREW MY AT TENTION TO THE REPORT OF THE INSPECTOR WHICH IS DATED 14.11.2007 W HEREAS THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE ON 23.10 .2007 I.E. BEFORE THE DATE OF SUBMISSION OF INSPECTORS REPORT AND HENCE, IT APPEARS THAT THE REPORT HAS BEEN PREPARED WHILE SIT TING IN OFFICE. IN VIEW OF ABOVE SUBMISSIONS, THE AR REQUESTED FOR DEL ETION OF ADDITION SO MADE U/S 68 OF THE ACT. 5.3 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE A R OF THE APPELLANT COMPANY. AFTER PERUSING THE STATEMENT OF ACCOUNTS/LEDGER ACCOUNTS OF M/S BATRA INVESTMENT AN D M/S MY MONEY SECURITIES LTD., THERE IS NO DENYING THE FACT THAT THE AMOUNT HAD BEEN RECEIVED BACK BY THE APPELLANT COMPANY FRO M BOTH THE CONCERNS. IN THE CASE OF M/S BATRA INVESTMENT, THE APPELLANT COMPANY ADVANCED ` `1,20,000/- ON 02.04.1999 AND RECEIVED BACK ` ` 1,00,000/- AND ` ` 20,000/- BY CHEQUES ON 28.02.2000 AND 09.03.2000 RESPECTIVELY. SIMILAR IS THE CASE OF M/ S MY MONEY SECURITIES LTD. WHERE THE LEDGER ACCOUNT SHOWS OPEN ING BALANCE OF ` ` 14,45,000/- AS ON 01.04.1999 WHICH THE PAYMENTS HAD BEEN RECEIVED ON DIFFERENT DATES IN THE MONTH OF MARCH, 2000. IF THIS IS THE CASE THEN I DO AGREE WITH THE LEARNED AR THAT N O ADDITION CAN BE MADE UNDER THE PROVISIONS OF SECTION 68 OF THE A CT AS THESE ARE NEITHER CREDITS NOR ANY LOANS AND THAT THE APPELLAN T HAS RECEIVED BACK ITS OWN MONEY ADVANCED TO BOTH THE CONCERNS ON AN EARLIER DATES. IT IS FURTHER OBSERVED THAT THE ASSESSING O FFICER HAS FAILED TO CORROBORATE THE ADDITIONS WITH CONCRETE EVIDENCES A ND ALSO FAILED TO PROVIDE ANY OPPORTUNITY TO CROSS-EXAMINE THE PERSON S WHO STATED THAT THE APPELLANT COMPANY INDULGED IN RECEIPT OF A CCOMMODATION ENTRIES. IN VIEW OF ABOVE, I DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF ` ` 15,46,150/- 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A).THE LD. DR WHILE CARRYIN G US THROUGH THE FINDINGS OF THE ITA NO.915/DEL./2010 4 AO AND THE LD. CIT(A) CONTENDED THAT THE LD. CIT(A) ACCEPTED ADDITIONAL EVIDENCE WITHOUT GIVING ANY OPPORTUNITY TO THE AO. WHILE IN VITING OUR ATTENTION TO PAGE 7 OF THE PAPER BOOK, THE LD. DR POINTED OUT THAT INSPECT OR REPORTED THAT THE AFORESAID COMPANIES WERE NOT FOUND AT THE ADDRESS GIVEN BY TH E ASSESSEE. ON THE OTHER HAND, THE LD. AR ON BEHALF OF THE ASSESSEE WHILE IN VITING OUR ATTENTION TO COPY OF THE LETTER DATED 5.11.2007 ADDRESSED TO THE AO SUBM ITTED THAT THE ASSESSEE PLACED BEFORE THE AO CONFIRMATION AS ALSO COPY OF I NCOME-TAX RETURN OF M/S MY MONEY SECURITIES LTD. AND M/S BATRA INVESTMENT, THE REBY ESTABLISHING IDENTITY OF THE AFORESAID PERSONS. IT WAS SUBMITTED THAT AMOUNT OF ` ` 14,45,000/- RECEIVED FROM M/S MY MONEY SECURITIES LTD. WAS AN OLD REALIZ ATION RECEIVED DURING THE YEAR AGAINST THE OPENING BALANCE AND LIKEWISE AMOUN T OF ` `1,20,000/- PAID IN THE EARLIER YEAR ON 2 ND APRIL, 1999 VIDE CHEQUE NO.298006 ,WAS RECEIVED BA CK IN THE YEAR UNDER CONSIDERATION SINCE THESE WERE MERELY UN SECURED LOANS AND THE LD. CIT(A) THROUGH INDEPENDENT VERIFICATION FROM THE BA NK FOUND THAT THE AMOUNT WAS RETURNED THROUGH CHEQUES BY THE AFORESAID PARTIES, THERE WAS NO JUSTIFICATION FOR MAKING THE ADDITION, THE LD. AR ARGUED. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. AT THE OUTSET, THE LD. DR DID NOT REFER US T O ANY DOCUMENT WHICH HAD BEEN ADMITTED BY THE LD. CIT(A) BY WAY OF ADDITIONAL EVI DENCE . THE LD. CIT(A) ON THE BASIS OF MATERIAL ON RECORD CONCLUDED THAT THE ASSE SSEE COMPANY ADVANCED ` `1,20,000/- ON 02.04.1999 TO M/S BATRA INVESTMENT A ND RECEIVED BACK ` ` 1,00,000/- AND ` ` 20,000/- BY CHEQUES ON 28.02.2000 AND 09.03.2000 RESPECTIVELY. LIKEWISE LEDGER ACCOUNT OF M/S MY MON EY SECURITIES LTD. REFLECTED OPENING BALANCE OF ` ` 14,45,000/- AS ON 01.04.1999 AND THE PAYMENTS HAD B EEN RECEIVED BACK ON DIFFERENT DATES IN THE MONTH OF MA RCH, 2000. THE LD. DR APPEARING BEFORE US DID NOT REFER US TO ANY MATERIA L, SUGGESTING THAT THE AFORESAID AMOUNTS WERE RECEIVED BY THE ASSESSEE BY WAY OF ACCOMMODATION ENTRY OR EVEN BY WAY OF SHARE APPLICATION MONEY OR UNSECURED LOANS. INDISPUTABLY, THE ASSESSEE FILED CONFIRMATION AND C OPIES OF IT RETURNS OF BOTH THE AFORESAID PARTIES BEFORE THE AO. IN THESE CIRCUMSTA NCES, THE LD. CIT(A) DELETED ITA NO.915/DEL./2010 5 THE ENTIRE ADDITION. IN THE LIGHT OF AFORESAID FIN DINGS OF FACTS RECORDED BY THE LD.CIT(A),ESPECIALLY WHEN THE REVENUE HAVE NOT PLAC ED BEFORE US ANY MATERIAL SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER, WE ARE NOT INCLINED TO INTERFERE. THEREFORE, GROUND NOS.1 & 2 IN THE APPE AL ARE DISMISSED. 6. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.3 IN THE APPEAL, ACCORDINGLY, T HIS GROUND IS ALSO DISMISSED. 7. IN THE RESULT, APPEAL IS DISMISSED. SD/- SD /- (DIVA SINGH) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. INCOME TAX OFFICER, WARD 13(3), C.R. BUILDING, N EW DELHI. 2. M/S NITIN PROCESSOR LTD., B-1757, SHASTRI NAGAR, DELHI. 3. CIT CONCERNED. 4. CIT(A)-XVI,NEW DELHI 5. DR, ITAT,F BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT