The ACIT, Central Circle-1(1), Ahmedabad V. M/s. Navratna Organisers & Developers Pvt.Ltd., Ahmedabad

ITSSA 571/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0779 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-06-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 20-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Additional evidence
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI S.S. GODARA JUDICIAL MEMBER I T (SS) A NO . 571 / AHD/ 2011 A. Y . 200 5 - 06 ACIT CENTRAL CIRCLE 1(1) AHMEDABAD. VS NAVRATNA ORGANIZERS & DEVELOPERS PVT . LTD., 2 ND FLOOR, KAYCREST, OPP. GUJARAT GAS COMPANY LTD., NR. PARIMAL CROSSING, AHMEDABAD. PAN: AAACN 5181E (APPELLANT) (RESPONDENT) REVENUE BY : MS. ABHA RANI SINGH , CIT - D.R. , ASSESSEE(S) BY : NONE / DATE OF HEARING : 16 / 0 6 /201 5 / DATE OF PRONOUNCEMENT: 19/ 0 6 /201 5 / O R D E R PER SHRI S.S. GODARA , JUDICIAL MEMBER TH IS REVENUE S APPEAL FOR A.Y. 2005 - 06 , ARISE S FROM ORDER OF C I T(A) - I , AHMEDABAD DATED 3 0 . 8 .201 1 PASSED I N CASE NO . CIT(A) - I/CC.1(1)/77/2010 - 11 DELETING ADDITION OF RS.25,79,875/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF CESSATION OF LIABILITY U/S.41, IN PROCEEDINGS U/S. 143(3) R.W.S. 153A(1) R.W.S. 250 ( A ) OF THE INCOME TAX ACT , 1961, IN SHORT THE ACT . IT (SS) A NO S . 571 /AHD/20 1 1 NAVRATNA ORGANIZERS & DEVELOPERS PVT. LTD. FOR A.Y. 200 5 - 0 6 - 2 - 2. CASE CALLED TWICE. NOBODY HAS COME TO REPRESENT THE ASSESSEE. ITS AUTHORIZED REPRESENTATIVE HAS FILED AN ADJOURNMENT PETITION. HOWEVER, NOBODY IS PRESENT TO PURSUE THE SAME. WE REJECT THE ASSESSEE S AD JOURNMENT PETITION IN THESE CIRCUMSTANCES AND PROCEED TO DEAL WITH THE CASE ON MERITS. 3. THE REVENUE S SOLE SUBSTANTIVE GROUND SEEKS TO RESTORE ADDITION OF RS.25,79,875/ - MADE ON ACCOUNT OF CESSATION OF LIABILITY U/S.41 BY PLEADING ADMISSION OF ADDITIO NAL / FRESH EVIDENCE IN THE LOWER APPELLATE PROCEEDINGS IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962. IT REITERATES THE PLEADINGS RAISED IN THE GROUND AND PRAYS FOR ACCEPTANCE OF THE APPEAL. 4. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF LAND DEVELOPMENT. THE DEPARTMENT CONDUCTED A SEARCH IN THE GROUP CASES ON 10.5.2006. THIS CULMINATED IN ISSUANCE OF SECTION 153A NOTICE DATED 4.5.2007. THE ASSESSEE FILED ITS RETURN ON 8.6.2007 ADMITTING INCOME OF RS.11,28,440/ - . THE ASSESSING OFFICER TOO K UP SCRUTINY. HE INTER ALIA NOTICED FROM THE ASSESSEE S BOOKS GIVING DETAILS OF ITS PROJECTS NAMELY KAIVANNA BOOKING AMOUNT OF RS.25,79,875/ - IN THE BALANCE SHEET UNDER THE HEAD CONTRIBUTION AND LIABILITY FOR KALHAR PROJECTS. HE SOUGHT CLARIFICA TION QUA THE OUTSTANDING LIABILITY IN IT (SS) A NO S . 571 /AHD/20 1 1 NAVRATNA ORGANIZERS & DEVELOPERS PVT. LTD. FOR A.Y. 200 5 - 0 6 - 3 - VIEW OF THE FACT THAT IT HAD ALREADY CLAIMED THE SAME IN THE BALANCE SHEET OF ASSESSMENT YEAR 2003 - 04 SQUARING OF ALL ACCOUNTS WITH THE COMPANIES RELATED TO THIS PROJECT. HE SOUGHT ASSESSEE S EXPLANATION FOR INVOKING I T AS A CASE OF CESSATION OF LIABILITIES/UNEXPLAINED CASH CREDITS. THE ASSESSEE DOES NOT SEEM TO HAVE FILED ANY REPLY. THE ASSESSING OFFICER REITERATED CONTENTS OF SHOW CAUSE NOTICE AND OBSERVED THAT THE IMPUGNED LIABILITY WAS A TRADING LIABILITY. HE WOULD ALSO OBSERVE THAT THE ASSESSEE HAD NOT DISCLOSED THE SAME SEPARATELY AND WRONGLY CLAIMED IT UNDER THE HEAD FOR KALHAR PROJECT . THE ASSESSING OFFICER ACCORDINGLY HELD THAT THIS LIABILITY HAD CEASED TO EXIST SINCE THE ACCOUNTS HAD BEEN SQUARED OFF LONG BA CK . THESE OBSERVATIONS LEAD TO IMPUGNED ADDITION OF RS.25,79,875/ - IN ASSESSMENT ORDER DATED 31.12.2008. 5. THE ASSESSEE PREFERRED AN APPEAL. IT FILED ADDITIONAL EVIDENCE REGARDING THREE PERSONS RELATED TO THE IMPUGNED LIABILITY S/SHRI MANOJ KADIA, VIVEK KASTURCHAND AND SMT. YAGNI SHAH ALONG WITH ALL NECESSARY PARTICULARS OF BOOKS OF ACCOUNTS, INVOICES, RECEIPT NOTES, FREIGHT BILLS, NAMES, ADDRESSES, PAN S ETC. THE CIT(A) IN HIS ORDER DATED 16.3.2010 DIRECTED THE ASSESSING OFFICER TO PASS A CONSEQUENTIAL OR DER AFTER VERIFYING THE ASSESSEE S EXPLANATION ON FACTUAL ASPECT OF THE ISSUE. IT (SS) A NO S . 571 /AHD/20 1 1 NAVRATNA ORGANIZERS & DEVELOPERS PVT. LTD. FOR A.Y. 200 5 - 0 6 - 4 - 6. THE ASSESSING OFFICER TOOK UP CONSEQUENTIAL PROCEEDINGS. WE FIND FROM ITS ORDER DATED 13.7.2010 THAT HE DID NOT VERIFY THE ASSESSEE S EVIDENCE ALREADY ON RECORD AND REITERA TED THE IMPUGNED ADDITION OF CESSATION OF LIABILITY MADE IN THE FIRST ROUND OF ASSESSMENT (SUPRA). 7. THE ASSESSEE PREFERRED YET ANOTHER APPEAL. THE CIT(A) HAS GRANTED IT RELIEF BY DELETING THE IMPUGNED ADDITION AS UNDER: 6. I HAVE CAREFULLY CONSIDERED T HE ENTIRE FACTS OF THE CASE ON RECORD AS WELL AS THE FINDINGS OF THE AO AND THE SUBMISSIONS OF THE APPELLANT IN THIS REGARD. THE LD. A.R. ON BEHALF OF THE APPELLANT STRONGLY OBJECTED THE RETENTION OF THE ADDITION MENTIONING THAT THE OBSERVATION MADE BY THE ASSESSING OFFICER ALLEGING NON - COMPLIANCE IS GROSSLY INCORRECT. THE LD. A.R. SUBMITTED THAT THE APPELLANT HAD ATTENDED BEFORE THE MR. GAURAV BATHAM, THE THEN ASSESSING OFFICER ON 08.06.2010 AND COMPLETE DETAILS WERE PLACED ON HIS RECORD. THE SAID DETAILS ARE AVAILABLE ON THE RECORDS OF THE ASSESSING OFFICER. THE NEW INCUMBENT WHO PASSED THE IMPUGNED ASSESSMENT ORDER DID NOT ALLOW ANY OTHER OPPORTUNITY TO THE ASSESSEE AND UNNECESSARILY ALLEGED FOR NON - COMPLIANCE ON 08.06.2010. 6.1 I HAVE VERY CAREFULLY CON SIDERED THE WRITTEN SUBMISSIONS PLACED ON THE RECORDS BY THE APPELLANT AND ALSO THE DOCUMENTARY EVIDENCES NAMELY PHOTOCOPIES OF THE ACCOUNT OF SHRI MANOJ KEDIA BEGINNING FROM 1 ST APRIL, 2000 AND ENDING ON 31 ST MARCH, 2009, DOCUMENTS IN THE MATTER OF ALLOTM ENT OF BUNGALOW IN SECTOR 4, COPIES OF ACCOUNTS OF MANOJ KEDIA FROM BOOKS OF THE KALHAR SOCIETY AND THEREAFTER, THE ACCOUNTS HAS BEEN SQUARED OFF. COPIES OF THE ACCOUNTS CONTAINING THE RELEVANT DETAILS VIZ. HIS NAME, COMPLETE ADDRESS, PAN, BANKING TRANSACT IONS ETC. DULY CONFIRMED BY SHRI MANOJ KEDIA AND OTHER DOCUMENTARY EVIDENCES HAVE ALSO BEEN VERY CAREFULLY CONSIDERED. THE APPELLANT HAD DISCHARGED THE PRIMARY LEGAL OBLIGATION AND PROVIDED ALL THE DOCUMENTARY EVIDENCES ESTABLISHING GENUINENESS OF TRANSACT IONS AND LIABILITY. THE ADDITION OF RS.17,53,000/ - RETAINED BY THE ASSESSING OFFICER IS THEREFORE DELETED. IT (SS) A NO S . 571 /AHD/20 1 1 NAVRATNA ORGANIZERS & DEVELOPERS PVT. LTD. FOR A.Y. 200 5 - 0 6 - 5 - 6.2 I HAVE VERY CAREFULLY CONSIDERED THE WRITTEN SUBMISSIONS PLACED ON THE RECORDS BY THE APPELLANT AND ALSO THE DOCUMENTARY EVIDENCES NAMELY PHOTOC OPIES OF THE ACCOUNT OF SHRI VIVEK KASTURCHAND BEGINNING FROM 1 ST APRIL, 2004 AND ENDING ON 31 ST MARCH, 2009 AND ALSO PHOTOCOPIES OF DOCUMENTS, ALLOTMENTS LETTERS ETC. IN THE MATTER OF ALLOTMENT OF UNIT NO.401 IN KAIVANNA BUILDING AND THEREAFTER THE FACT T HAT THE ACCOUNTS HAS BEEN SQUARED OFF. COPIES OF ACCOUNTS AS CONFIRMED BY SHRI VIVEK KASTURCHAND HAVE ALSO BEEN VERY CAREFULLY CONSIDERED. THE APPELLANT HAD DISCHARGED THE PRIMARY LEGAL OBLIGATION AND PROVIDED ALL THE DOCUMENTARY EVIDENCES IN THE MATTER OF GENUINENESS OF THE TRANSACTIONS AND LIABILITY TOWARDS VIVEK KASTURCHAND. THE ADDITION OF RS, 2,86,375 / - RETAINED BY THE ASSESSING OFFICER IS THEREFORE DELETED. 6.3 I HAVE VERY CAREFULLY CONSIDERED THE WRITTEN SUBMISSIONS PLACED ON THE RECORDS BY THE APPELL ANT AND ALSO THE DOCUMENTARY EVIDENCES NAMELY PHOTOCOPIES OF THE ACCOUNT OF SMT . YAGINI A SHAH BEGINNING FROM 1 ST APRIL, 2004 AND ENDING ON 31 ST MARCH, 2009 AND ALSO PHOTOCOPIES OF DOCUMENTS, ALLOTMENTS LETTERS ETC. IN THE MATTER OF ALLOTMENT OF OFFICE BEA RING UNIT NO. 603 IN KAIVANNA BUILDING AND THEREAFTER THE FACT THAT THE ACCOUNTS HAS BEEN SQUARED OFF. COPIES OF ACCOUNTS AS CONFIRMED BY SMT. YAGINI A. SHAH HAVE ALSO BEEN VERY CAREFULLY CONSIDERED. THE APPELLANT HAD DISCHARGED THE PRIMARY LEGAL OBLIGATIO N AND PROVIDED ALL THE DOCUMENTARY EVIDENCES IN THE MATTER OF GENUINENESS OF THE TRANSACTIONS AND LIABILITY TOWARDS SMT. YAGINI A. SHAH. THE ADDITION OF RS.5,40,500 / - RETAINED BY THE ASSESSING OFFICER IS THEREFORE DELETED. 6.4 AS SUCH ENTIRE ADDITION OF R S.25,79,875/ - IS DELETED. 7. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED. THIS LEAVES THE REVENUE AGGRIEVED. 8. WE HAVE HEARD THE REVENUE AND GONE THROUGH THE CASE FILE. ITS MAIN GROUND IS VIOLATION OF RULE 46A IN ADMISSION OF ADDITIONAL/FRESH EVID ENCE IN LOWER APPELLATE PROCEEDINGS. FACTS OF THE CASE ALREADY STAND NARRATED HEREINABOVE. THE CASE FILE REVEALS THAT THE CIT(A) HAD ADMITTED ADDITIONAL EVIDENCE IN THE IT (SS) A NO S . 571 /AHD/20 1 1 NAVRATNA ORGANIZERS & DEVELOPERS PVT. LTD. FOR A.Y. 200 5 - 0 6 - 6 - FIRST ROUND OF HEARING (SUPRA) AND REMITTED THE ISSUE BACK TO THE ASSESSING OFFICER. TH E ASSESSEE HAD FILED ADDITIONAL EVIDENCE CONTAINING OLD DETAILS OF ITS LIABILITY IN QUESTION PERTAINING TO THREE PERSONS STATED HEREINABOVE. THE ASSESSING OFFICER PASSED A VERY BRIEF ORDER WITHOUT TAKING INTO CONSIDERATION THE EVIDENCE ALREADY ON RECORD AD MITTED BY THE CIT(A). IT IS I N THE SECOND ROUND OF LOWER APPELLATE PROCEEDINGS THAT THE ASSESSEE S ADDITIONAL EVIDENCE HAS BEEN CONSIDERED ON MERITS. THE ORDER UNDER CHALLENGE DOES NOT PROVE THAT IT HAS PLACED ON RECORD ANY OTHER MATERIAL EXCEPT THAT ALREA DY ON RECORD. THE REVENUE DOES NOT PLEAD ANY GRIEVANCE SO FAR AS THE MERIT OF THE ISSUE ARE CONCERN ED . WE HOLD IN THESE CIRCUMSTANCES THAT THE CIT(A) HAS NOT ADMITTED ANY ADDITIONAL EVIDENCE IN THE ORDER UNDER CHALLENGE SO AS TO VIOLATE RULE46A OF THE INCOME TAX RULES. THE REVENUE S PLEADINGS FAIL. THE CIT(A) FINDINGS UNDER CHALLENGE ARE UPHELD. 9. THE REVENUE S APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON THIS DAY, THE 19 TH JUNE , 201 5 AT AHMEDABAD. SD/ - SD/ - ( N.S. SAINI ) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 19 / 0 6 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . IT (SS) A NO S . 571 /AHD/20 1 1 NAVRATNA ORGANIZERS & DEVELOPERS PVT. LTD. FOR A.Y. 200 5 - 0 6 - 7 - / COPY OF T HE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6 . / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD