Case Law Details

Case Name : M/s Om Shubham Investment & Finance Pvt. Ltd. Vs. ITO (ITAT Delhi)
Appeal Number : I.T.A. No. 2923/Del/2017
Date of Judgement/Order : 12/03/2018
Related Assessment Year : 2004-05
Courts : All ITAT (5189) ITAT Delhi (1169)

M/s. Om Shubham Investment & Finance Pvt. Ltd. Vs. ITO (ITAT Delhi)

Assessee has filed all the relevant evidences before the AO as well as Ld. CIT(A). Before me the Ld. Counsel of the assessee has also filed a Paper Book containing pages 1 to 166 which were also produced before the lower authorities, except the page no. 118 to 162 i.e. copy of written submission dated 28.9.2016 filed before the Ld. CIT(A) and the copies of the case laws. I further find that assessee company has sold its shareholding in various companies and as a result received Rs. 10 lacs, which fact was also duly confirmed by the shareholders by filing direct replies to AO in response to notice so issued (copy thereof attached with the Paper Book at page no. 114 to 117) and earlier replies made to the AO at page no. 52 to 113 of the Paper Book. However, the AO also made the basis for addition for non-production of Directors and non-furnishing their residential address. But in my considered opinion, only on this ground no addition is sustainable in the eyes of law. In view of above and in the interest of justice, I am of the view that the issues in dispute needs to be adjudicated afresh at the level of the AO, after examining all the documents and issuing summon/notices to the shareholders, if necessary and proceed further, as per law. Therefore, the assessee is directed to furnish all the documents/evidences with regard to the issues in dispute before the AO and accordingly AO is also directed to decide the issues in dispute afresh, as per law, after examining all the documents/evidences filed by the assessee and issue summon/notices to the shareholders, if necessary and proceed further, as per law.

FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-

This appeal is filed by assessee against the Order dated 04.5.2016 passed by the Ld. CIT(A)-12, New Delhi relating to Assessment Year 2004-05 on the following grounds:-

1. That the Ld. CIT(A) has grossly erred both in law and on facts in sustaining an assessment under section 143(3)/147 of the Act at an income of Rs. 11,14,060/- as against returned loss of Rs. 1,14,060/-, under section 68 of the Act.

2. That the ld. CIT(A) has further erred both in law and on facts in sustaining the initiation of the proceedings under section 147 of the Act and, further completion of assessment under section 143(3)/147 of the Act without satisfying the statutory pre- conditions for initiation of the proceedings and, completion of assessment under the Act.

3. That the Ld. CIT(A) has further erred in law and on facts in sustaining the initiation of proceedings u/s. 147 of the Act on the basis of information received from DIT(Investigation) mechanically and without independent application of mind.

3.1 That further, the reasons recorded were mere reasons to suspect and were just to make fishing and roving inquiries, as no independent inquiry was conducted by the AO before issuing such notice under section 148 and as such the proceeding initiated under section 148 was a mere pretence.

4. That the Ld. CIT(A) has further erred both in law and on facts in sustaining an addition of Rs. 10 lacs as alleged accommodation entry received by assessee – appellant, and held to be unexplained cash credit u/s. 68 of the Act.

4.1 That in doing so, the Ld. CIT(A) has completely ignored and overlooked all the necessary documents which were filed before him explaining the fact that the appellant company has sold its shareholding in various companies and as a result received Rs. 10 lacs, which fact was also duly confirmed by the shareholders by filing direct replies to AO in response to notice so issued and as such, the addition so made should have been deleted.

4.2 That the Ld. CIT(A) has further erred in recording adverse findings which are perverse, country to material available on record and have been recorded without considering the factual substratum of the case and hence such findings so recorded are vitiated and deserves to be deleted.

4.3 That the Ld. CIT(A) further grossly erred in relying the judgments which are wholly misplaced and are inapplicable to the facts of the case of the appellant company.

2. Facts narrated by the revenue authorities are not disputed by the parties, hence, the same are not reproduced here for the sake of brevity.

3. At the time of hearing, Ld. Counsel of the assessee stated that assessee has filed all the relevant evidences before the AO as well as Ld. CIT(A) in spite of the same the Revenue has decided the issue against the assessee. He has also filed Paper Book in which he has attached various documentary evidences. He stated that revenue authorities have not properly appreciated the evidences filed by the assesee and decide the issue in dispute against the Assessee. He further stated that Ld. CIT(A) completely ignored and overlooked all the necessary documents which were filed before him explaining the fact that the assessee company has sold its shareholding in various companies and as a result received Rs. 10 lacs, which fact was also duly confirmed by the shareholders by filing direct replies to AO in response to notice so issued and as such, the addition so made should have been deleted. However, the AO also made the basis for addition for non-production of Directors and non-furnishing their residential address. But on this ground no addition is permissible, because the AO has sent the notices to the shareholders directly and they have confirmed the investment in the assessee company.

4. On the other hand, Ld. DR relied upon the orders of the authorities below especially the order of the Ld. CIT(A) and draw my attention towards its para no. 8.2. to 8.7 reiterated the contents thereof especially para no. 8.4 wherein it was mentioned that inquiries conducted by the AO established the fact that the identity and creditworthiness of M/s Aries Crafts (P) Ltd., M/s Adonis Financial Services (P) Ltd. and M/s DU Securities (P) Ltd. Formerly known as Adonis Securities (P) Ltd. had not been proved neither the genuineness of the transaction also has been

5. I have heard both the parties and perused the records. I find that assessee has filed all the relevant evidences before the AO as well as Ld. CIT(A). Before me the Ld. Counsel of the assessee has also filed a Paper Book containing pages 1 to 166 which were also produced before the lower authorities, except the page no. 118 to 162 i.e. copy of written submission dated 28.9.2016 filed before the Ld. CIT(A) and the copies of the case laws. I further find that assessee company has sold its shareholding in various companies and as a result received Rs. 10 lacs, which fact was also duly confirmed by the shareholders by filing direct replies to AO in response to notice so issued (copy thereof attached with the Paper Book at page no. 114 to 117) and earlier replies made to the AO at page no. 52 to 113 of the Paper Book. However, the AO also made the basis for addition for non-production of Directors and non-furnishing their residential address. But in my considered opinion, only on this ground no addition is sustainable in the eyes of law. In view of above and in the interest of justice, I am of the view that the issues in dispute needs to be adjudicated afresh at the level of the AO, after examining all the documents and issuing summon/notices to the shareholders, if necessary and proceed further, as per law. Therefore, the assessee is directed to furnish all the documents/evidences with regard to the issues in dispute before the AO and accordingly AO is also directed to decide the issues in dispute afresh, as per law, after examining all the documents/evidences filed by the assessee and issue summon/notices to the shareholders, if necessary and proceed further, as per law. With this observation, the Appeal of the assessee is allowed for statistical purposes.

6. In the result, the appeal filed by the assessee stands allowed for statistical purposes.

Order pronounced on 12/03/2018.

Download Judgment/Order

More Under Income Tax

Posted Under

Category : Income Tax (27621)
Type : Judiciary (11771)
Tags : ITAT Judgments (5372) Section 68 (216)

Leave a Reply

Your email address will not be published. Required fields are marked *