ACIT, New Delhi V. M/s Rishi Buildwell Pvt. Ltd., New Delhi

ITA 92/DEL/2009

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74235 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 19-12-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 09-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NITIN CHOUDHARY
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.92/DEL/2009 ASSESSMENT YEAR : 2004-05 ACIT, M/S RISHI BUILDWELL PVT. LTD., CENTRAL CIRCLE-8, S-25, GREEN PARK EXTN., NEW DELHI. V. NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AACCR AACCR AACCR AACCR- -- -2944 2944 2944 2944- -- -K K K K APPELLANT BY : MS. MEENAKSHI VOHRA, SR. DR. RESPONDENT BY : SHRI AJAY WADHWA & SHRI NITIN CHOUDHARY, FC A. ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORD ER OF LD CIT(A) DATED 29.10.2008. THE ONLY ISSUE RAISED IN THI S APPEAL IS REGARDING DELETION OF AN AMOUNT OF ` .52 LAKHS BY LD CIT(A) THE ADDITION OF WHICH WAS MADE BY THE ASSESSING OFFICER U/S 69C OF THE INCOME TAX ACT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED IT S RETURN OF INCOME ON 31.10.2004 DECLARING LOSS OF ` .248360/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. DURING ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER OBSERVED THAT IN SCHEDULE C TO BAL ANCE SHEET DATED 31.3.2004 THERE WAS AN AMOUNT OF ` .52 LAKHS SHOWN AGAINST M/S IK INTERNATIONAL PVT. LTD. IN THE PREVIOUS YEAR COLU MN RELATING TO YEAR ENDING 31.3.2003. THEREFORE, THE ASSESSING OFFICER INFE RRED THAT IN THE YEAR UNDER CONSIDERATION THIS AMOUNT SHOULD HAVE BEEN REFLECTED AS ITA NO92/DEL/2009 2 OPENING BALANCE IN THE ACCOUNT OF SUCH PARTY. HOWEV ER, ASSESSING OFFICER FOUND FROM THE COPY OF ACCOUNT OF THIS CONCE RN FOR THE PERIOD 1.4.2003 TO 31.3.2004 THAT NO SUCH OPENING BALANCE W AS REFLECTED AND NEITHER THERE WAS ANY OPENING BALANCE IN THE CONFIRM ATION LETTER OF M/S IK INTERNATIONAL PVT. LTD. THE ASSESSING OFFICER CONCLU DED THAT SUCH OPENING BALANCE WAS AN UNDISCLOSED INVESTMENT WHICH WAS NOT DISCLOSED BY THE ASSESSEE IN THE CURRENT YEAR AND THEREF ORE HE MADE ADDITION U/S 69C OF THE ACT. 3. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE LD CIT( A) AND SUBMITTED THAT THE AMOUNT OF ` .52 LAKHS APPEARING AGAINST THE NAME OF M/S IK INTERNATIONAL PVT. LTD. AS ON 31.3.2003 WAS IN FACT AMOUNT BELONGING TO OTHER LIABILITIES COMPRISING OF TWO CRED ITORS NAMELY M/S AERENS BUILDWELL PVT. LTD. AND SH ISHWAR GUPTA & SONS HUF. IT WAS SUBMITTED THAT BY MISTAKE AUDITORS HAS CLASSIFIED THIS AM OUNT AGAINST THE NAME OF M/S IK INTERNATIONAL PVT. LTD. WHEREAS DU RING THIS PERIOD NO AMOUNT WAS RECEIVED FROM M/S IK INTERNATIONAL PVT. LT D. THE LD CIT(A) AFTER GOING THROUGH THE SUBMISSIONS OF ASSESSEE AND AFTER O BTAINING REMAND REPORT FROM THE ASSESSING OFFICER DELETED THE AD DITION MADE BY ASSESSING OFFICER BY HOLDING AS UNDER:- THE DETAILED SUBMISSIONS WERE FORWARDED TO THE ASSESSING OFFICER FOR HIS COMMENTS AND NECESSARY ACTION. VIDE HIS LETTER DATED 11.3.2008 ENCLOSED HIS ORIGINAL REPORT DATED 13 .9.2007 AND SUBMITTED HIS ARGUMENTS. HE HAS REITERATED HIS ORIG INAL CONTENTION AS IN THE ASSESSMENT ORDER. I HAVE PERUSED TH E DETAILED SUBMISSIONS OF THE ASSESSEE AS WELL AS THAT OF ASSESSING OFFICER. THERE IS SUBSTANCE IN THE CONTENTION OF THE ASSESSEE AS REGARDS TO THE MISTAKE CREPT IN THE BALANCE SHEET A BOUT THE CREDIT BALANCES AS ON 31.3.2003. INSTEAD OF SHOWING THE SAME UNDER OTHER CREDITORS/CUSTOMERS THE SAME HAS BEEN SHOWN U NDER M/S IK INTERNATIONAL PVT. LTD. IT IS VERY MUCH EVIDE NT THAT THE SAID ITA NO92/DEL/2009 3 SUM OF ` .52 LAKHS IS OUTSTANDING AS ON 1.4.2003 AND THE SAME HAS BEEN REPAID IN THE F.Y. 2003-04 RELEVANT TO ASSESSME NT YEAR 2004-05. THIS AMOUNT REPRESENTS ADVANCES FROM M/S AERENS BUILDWELL LTD. AND ISHWAR GUPTA & SONS (HUF). THESE AMO UNTS WERE REPAID OUT OF THE FUNDS RECEIVED FROM HOLDING C OMPANY I.E. M/S IK INTERNATIONAL PVT. LTD. THE SAID AMOUNT RECEIV ED FROM HOLDING COMPANY IS STILL OUTSTANDING AS AT THE END OF T HE YEAR. IN FACT THE ASSESSEE HAS PAID INTEREST TO M/S AERENS BUILDWELL LTD. ON THE OUTSTANDING AMOUNT OF ` .37 LAKHS IN THE CURRENT YEAR. BOTH PRINCIPAL AMOUNT AND INTEREST WERE REPAID IN THIS YEA R. ALL THESE TRANSACTIONS HAD TAKEN PLACE THROUGH BANKING CHANNEL AND DULY REFLECTED IN THE ACCOUNTS MAINTAINED BY THE ASSESSEE. WI THOUT APPRECIATING THESE FACTS, THE ASSESSING OFFICER PROCEEDED TO MAKE ADDITION OF ` .52 LAKHS BY HOLDING THE VIEW THAT THE LIABILITY HAS BEEN SQUARED UP FROM UNDISCLOSED SOURCES AND ACCORDI NGLY INVOKED SECTION 69C OF IT ACT. ON PERUSAL OF THE FAC TS, I FIND THERE IS NO OCCASION TO WARRANT THE CASE OF THE ASSESSEE T O BE BROUGHT U/S 69C SINCE THE AMOUNTS WERE DULY REPAID OUT OF THE FUNDS RECEIVED FROM M/S IK INTERNATIONAL PVT. LTD. AN D DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS DURING THE YEA R UNDER REFERENCE. THEREBY THE ADDITION DESERVES TO BE DELETE D. ACCORDINGLY, ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 5. AT THE OUTSET, THE LD DR SUBMITTED THAT ASSESSEE HAD SI GNED THE BALANCE SHEET AND HAD ITSELF REFLECTED THE AMOUNT OF ` .52 LAKHS IN SCHEDULE-C AGAINST THE NAME OF M/S IK INTERNATIONAL P VT. LTD. AND WHEN CORNERED THE ASSESSEE HAS COOKED UP THE STORY. THEREFORE , HE ARGUED THAT ASSESSMENT ORDER BE UPHELD. 6. THE LD AR, ON THE OTHER HAND, SUBMITTED THAT ` .52 LAKHS BELONGS TO TWO PERSONS M/S AERENS BUILDWELL LTD. AND ISHWAR GUPT A & SONS ITA NO92/DEL/2009 4 (HUF). IN THIS RESPECT OUR ATTENTION WAS INVITED TO PA PER BOOK PAGE 29 WHERE A PART OF BALANCE SHEET RELATED TO FINANCIAL Y EAR 31.3.2003 WAS PLACED. OUR ATTENTION WAS INVITED TO ` .52 LAKHS REFLECTED AGAINST ADVANCE FROM CUSTOMERS. THE LD AR FURTHER TOOK US TO P AGE 59 WHERE A COPY OF ACCOUNT OF ASSESSEE WAS PLACED IN THE BOOKS OF M/ S AERENS BUILDWELL PVT. LTD. AND OUR ATTENTION WAS INVITED TO THE FACT THAT AS ON 31.3.2003 BALANCE DUE FROM THE ASSESSEE WAS ` .37 LAKHS. SIMILARLY, HE TOOK US TO PAGE 62 WHERE A COPY OF CONFIRMATION FROM M/S AERENS BUILDWELL PVT. LTD. WAS PLACED. OUR ATTENTION WAS ALSO INVITED TO PAGE 68 WHERE CONFIRMATION FROM ISHWAR GUPTA & SONS ( HUF) FOR THE PERIOD ENDING ON 31.3.2003 WAS PLACED. ON THE BASIS OF THESE DOCUMENTS, IT WAS ARGUED THAT THE AMOUNT OF ` .52 LAKHS BELONGED TO THESE PARTIES AND WERE REFLECTED IN THE BALANCE SHEET AS ON 31.3.2003 AGAINST ADVANCES FROM CUSTOMERS WHICH BY MISTAKE WAS REF LECTED AGAINST THE NAME OF M/S IK INTERNATIONAL PVT. LTD. I N THE YEAR UNDER CONSIDERATION. THE LD AR FURTHER SUBMITTED THAT LD CI T(A) HAS RIGHTLY UNDERSTOOD THE FACTS OF THE CASE AND AFTER GOING THROU GH THE ENTIRE FACTS DELETED THE ADDITION. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM PAPER BOOK PAGE 29 WE FIND THAT ` .52 LAKHS WAS REFLECTED IN THE BALANCE SHEET AS ON 31.3.2003 UNDER SCHEDULE-4 AS ADVANCE FROM CUSTOME RS. THE BREAK UP OF THIS ADVANCE FROM CUSTOMERS IS PLACED AT PA PER BOOK PAGE 34 WHICH MENTION THE NAMES OF M/S AERENS BUILDWELL PVT . LTD. ` .37 LAKHS AND ISHWAR GUPTA & SONS (HUF) ` .15 LAKHS. THEREFORE, ONE THING BECOMES APPARENT IS THAT ` .52 LAKHS REPRESENTED AMOUNTS FROM THESE TWO PERSONS AS CAN BE ASCERTAINED FROM THE ABOVE DOCUME NTS. THE CONFIRMATION BY THESE PARTIES ALSO SUPPORT THE CONTENTI ON OF ASSESSEE, THE COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S I K INTERNATIONAL PVT. LTD. PLACED AT PAPER BOOK PAGE 70 & 71 DOES NOT REFLECT ANY ITA NO92/DEL/2009 5 OPENING BALANCE AND RATHER THE AMOUNT OF ` .53,50,000/- REFLECTED IN THE BALANCE SHEET FOR THE YEAR UNDER CONSIDERATION WA S RECEIVED IN THE CURRENT YEAR ONLY. THEREFORE, FROM THE FACTS AND CIR CUMSTANCES IT CAN BE CONCLUDED THAT DURING THE YEAR UNDER CONSIDERATIO N THE ASSESSEE BY MISTAKE REFLECTED THIS AMOUNT AGAINST M/S IK INTERNATIO NAL PVT. LTD,. UNDER THE HEAD OF PREVIOUS YEAR FIGURES AND LD CIT(A ) HAS RIGHTLY DELETED THE ADDITION. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD CIT(A). 8. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE RE VENUE IS DISMISSED. 9. ORDER PRONOUNCED IN THE OPEN COURT ON 14TH DAY O F FEBRUARY, 2014. SD/- SD/- (I.C. SUDHIR) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 14.02.2014. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). DATE OF HEARING 19.12.2014 DATE OF DICTATION 11.2.2014 DATE OF TYPING 12.2.2014 DATE OF ORDER SIGNED BY BOTH THE MEMBERS & PRONOUNCEMENT. ITA NO92/DEL/2009 6 DATE OF ORDER UPLOADED ON NET & SENT TO THE BENCH CONCERNED.