EMDET JAMSHEDPUR PVT. LTD., NEW DELHI V. ITO, WARD- 8(2), NEW DELHI

MA 228/DEL/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4270 (ITAT-DELHI)
• Duration Of Justice: 5 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 19-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASIM CHAWLA
• Keywords: TDS
• Section: 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Ms. Astha Chandra, Judicial Member MA No. 228/Del/2021 (in ITA No. 4162/Del/2017 : Asstt. Year : 2012-13) Emdet Jamshedpur Pvt. Ltd., F-406, Sarita Vihar, Main Mathura Road, New Delhi-110044 Vs Income Tax Officer, Ward-8(2), New Delhi (APPELLANT) (RESPONDENT) PAN No. AAACE6783B Assessee by : Sh. Asim Chawla, Adv. & Sh. Manu K. Giri, Adv. Revenue by : Sh. Sanjay Kumar, Sr. DR Date of Hearing: 20.05.2022 Date of Pronouncement: 20.05.2022 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The Miscellaneous Application has been filed by the assessee arising out of the order in ITA No. 4162/Del/2017 dated 22.10.2021. 2. The Assessing Officer sought production of the Directors of the loaner companies which could not be fulfilled by the assessee. The assessee has filed all the documents to prove identity, genuineness and creditworthiness of the loan parties. The repayment of the loans over a period of time along with the interest and the details of TDS is on record. The ld. CIT(A) disagreed with the contention of the AO and held that based on the all other supportive documents and evidences, the loans can be treated as genuine and no adverse influence could be drawn MA No. 228/Del/2021 Emdet Jamshedpur Pvt. Ltd. 2 on the loan transaction. The Tribunal remanded the matter to the file of the Assessing Officer to examine the Directors of the lender entities. The ld. AR argued that based on the judgment of the Hon’ble jurisdictional High Court in the case of CIT Vs. Victor Electodes Ltd. in ITA 586/2010 order dated 12.05.2010 wherein it was held that, “9. There was no legal obligation on the assessee to produce some Director or other representative of the applicant companies before the Assessing Officer. Therefore, failure of assessee to produce them could not, by itself, have justified the additions made by the Assessing Officer, when the assessee had furnished documents, on the basis of which, the Assessing Officer, if he so wanted, could have summoned them for verification. No attempt was made by the Assessing Officer to summon the Directors of the applicant companies. The addresses of these companies must be available on the share applications, Memorandum and Articles of Association and their Income Tax Returns. If the Assessing Officer had any doubt about identity of the share applicants, he could have summoned the Directors of the applicant companies. No such attempt was, however, made by him. Therefore, the Commissioner of Income Tax(Appeals) and the Income Tax Appellate Tribunal, in our view were justified in holding that the identity of share applicants and the genuineness of the transactions had been established by the assessee.” the assessee cannot be defaulted for not producing the Directors and it is for the AO to invoke his statutory powers as deemed fit. 3. The ld. CIT(A) at para 3, page 22 of the appellate order dated March 22, 2017 has observed the following: “The verification of the assessment folder reveal that the Assessing Officer has directly called for the details from the companies who MA No. 228/Del/2021 Emdet Jamshedpur Pvt. Ltd. 3 had given the loans. The lenders have sent the replies to the Assessing Officer which are kept on record. The perusal of the details filed by the lenders reveal that the company has taken the loans and the interest has been paid by the company at the market rate. The evidence adduced during the appellate proceedings show that the transactions are in the nature of normal commercial transactions as per the practice in the money market.” 4. Keeping in view, the facts brought on record, the MA of the assessee is being allowed, thereby affirming the order of the ld. CIT(A). 5. In the result, the Miscellaneous Application of the assessee is allowed. (Order Pronounced in the Open Court on 20/05/2022). Sd/- Sd/- (Astha Chandra) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 20/05/2022 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR