TaxTMI 
TaxTMI 
TaxTMI 
2012 (9) TMI 156
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....aged u/s 68 upon the assessee has not been properly discharged as the assessee did not respond when confronted with returned notices from the claimed creditors; b) ld.CIT(A) has admitted fresh evidence in contravention of the provisions of sub rule (3) of Rule 46A. c) the findings of Hon'ble Supreme Court in the case of Lovely Exports Pvt. Ltd. was in response of an SLP and not in a Civil appeal which has not binding precedent under Article 141 of the Constitution of India, as held by Hon'ble Tribunal in ITA No. 2927/Del/2009, M/s Dhingra Global Credence Pvt. Ltd. A.Y. 05-06 dated 31/12/2009; d) the ld. CIT(A) reliance upon the ratio laid down by the jurisdictional High Court in cases of CIT vs. Winstrel Petrochemical P. Ltd. and CIT vs. Victor Electronics Ltd. is misplaced as in the said cases the Hon'ble High Court did not absolve the assessee from the responsibilities of furnishing proper and complete details regarding the creditors as has been overlooked by the ld. CIT(A). e) recently the Hon'ble Tribunal has held in several cases namely Omega Biotech Ltd. in ITA No. 2860/Del/2009; Optibelt Pvt. Ltd. in ITA No. 1964/Del/2009; Aryan Management Services Pvt. Ltd. in ITA No. 2....
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....e assessee was asked to produce the Principal Officer of the above mentioned companies, who had advanced share application money to assessee; 6. The AO has observed that the notices were sent to both the addresses of the assessee viz. 21-A, Darya Ganj, Delhi and 1510/11, Shiv Ashram, 2nd Floor, Room No. 1,S.V. Mukerji Marg, New Delhi 110006. He pointed out that on the date of hearing the assessee's representative refused to furnish such details. He further pointed out that the notices sent were returned by postal authorities with the remark "address incomplete" with respect to 21A, Darya Ganj, Delhi and with the remark "premises locked from a long time" with respect to 1510/11, Shiv Ashram, 2nd Floor, Room No. 1,S.V. Mukerji Marg, New Delhi 110006. Since no compliance was made and also the assessee failed to explain as to why the letters sent at the addresses as provided by it were returned by the postal authorities with the remark "premises locked for a long time" and "incomplete address", the AO relying on the decision of Hon'ble Delhi High Court in the case of CIT vs. Divine Leasing and Finance Ltd., made an addition of Rs. 3,35,35,000/- u/s 68. 7. Before ld. CIT(A) the assess....
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....of assessee to produce them could not by itself justify the additions made by the AO when the assessee had furnished documents, on the basis of which the AO, if he so wanted could have summoned them. v) The submission of AR that the AO had not provided any opportunity with regard to return of the notices sent to the various parties and the new address of the parties had never been taken by the AO for making verifications. vi) The AO has not brought anything on record to prove that the share application money originated from the coffers of the assessee itself. The ld. CIT(A) following the decision of Hon'ble Delhi High Court in the case of CIT vs. Value Capital Services (supra). vii) AO had completed the assessment for A.Y. 2007-08 after considering these parties also, which were not accepted in A.Y. 2006-07. 8. He further relied on the decision of Hon'ble Supreme Court in the case of CIT vs. Lovely Exports (P) Ltd., 216 CTR 195. 9. Ld. DR submitted that in the present case two issues are involved. First is acceptance of fresh evidence by ld. CIT(A) in violation to Rule 46A of the Income Tax Rules and second is deletion of addition of Rs. 3,35,35,000/- on merits. Ld. DR submitt....
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....moters & Finlease (P) Ltd. 13. Ld. DR submitted that ld. CIT(A) has relied on the findings of AO for A.Y. 2007-08, but the facts are distinguishable inasmuch as in A.Y. 2007- 08 eight persons had filed affidavits on which basis AO accepted the amounts received as share application money but in the current assessment year even no affidavits were filed. Further no explanation was being given by the assessee for not producing the persons particularly when in next year affidavits were filed. He submitted that AO had sent the notices at the addresses given by the assessee which were returned unserved. Thus, he did whatever he could possibly do in the given circumstances. He submitted that firstly ld. CIT(A) erred in holding that by furnishing confirmation and Income Tax particulars of the share applicant companies, assessee had discharged its onus. He pointed out that though the initial onus of furnishing details of the share applicants stood discharged but since notices requisitioning such information were returned by the Postal Department, the onus shifted back on the assessee. Despite being confronted with such issues, the AR failed to offer any explanation, whatsoever. Therefore, ....
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....O. Therefore, to such extent, assessee failed to discharge its onus. In all the aforesaid cases, Hon'ble High Court did not absolve assessee of the responsibility of furnishing proper and complete details so as to enable the Revenue to carry out further investigation, if need be. In view of the same, the instant case is distinguishable on facts from the cases cited aforesaid and relied upon by CIT(A), while allowing relief. Thus, such cases do not support the case of the assessee and reliance upon the same by CIT(A) was, therefore, factually incorrect. 14. Ld. DR further referred to the decision of Indore Bench Tribunal in the case of Agarwal Coal Corporation P. Ltd. vs. Addl. CIT (2012) 13 ITR (Trib) 531, wherein on page 14, Tribunal observed as under: - "On the issue of discharge of onus/burden, the assertion of learned counsel for the assessee is that the onus shifted to the Department when copy of the share application from, permanent account number, name and addresses and Registrar of Companies registration, etc., were filed by the assessee. We are not agreeing with the submission of the assessee in view of the fact that at the addresses (4 places) given to the Depart....
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....17H 2,000,000/- Confirmation, bank Statement, copy of ITR, Balance sheet & P&L Account Including PAN 160-179 3. Dost International Ltd. 4697/3, 2nd Floor, Neepal Carrier Building, 21-A, Daryaganj, Delhi. AACCD2033M 370,000/- Confirmation, bank Statement, copy of ITR, Balance sheet & P&L Account Including PAN 180-196 4. Kuber Buildmart Pvt. Ltd. H-69, Ground Floor, DDA Flats, Ashok Vihar, New Delhi -110052 AACCK6410H 400,000/- Confirmation, bank Statement, copy of ITR, Balance sheet & P&L Account Including PAN 197-216 5. Maloo Construction Pvt. Ltd., 13, Bonafield lane, 6th Floor, Kolkata-700001 AABCM5690A 6,300,000/- Confirmation, bank Statement, copy of ITR, Balance sheet & P&L Account Including PAN 217-228 6. Maloo Finance & Builders Pvt. Ltd., 13, Bonafield lane, 6th Floor, Kolkata-700001 AABCM5692C 4,500,000/- Confirmation, bank Statement, copy of ITR, Balance sheet & P&L Account Including PAN 229-240 7. Mohit Finance & Builders Pvt. Ltd. 13, Bonafield lane, 6th Floor, Kolkata-700001 AABCM5689H 300,000/- Confirmation, bank Statement, copy of ITR, Balance sheet & P&L Account Including PAN 240-255 8. Paras Builders Pvt. Ltd., 13, Bonafield Lane,....
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.... of avoiding to produce the directors. However, since the time was short, as proceedings effectively started from 5.11.08, the directors could not be produced as they were residing outside Delhi. In this regard, ld. Counsel referred to the submissions made before CIT(A) as reproduced at page 14 of his order: - "7. In connection of the production of the principal officers, it was submitted that they are away from the cities as in the remote places of Tamil Nadu as such the compliances of their attendance cannot be made and non-attendance of principal officers cannot be made the ground for making additions where all other credentials were proved and the same cannot be a ground for making additions in view of the fact that the investment made by those applicants and subscribers to the share application money have already been assessed by their respective ward officers for the very same assessment year, when the credentials have been established and have been accepted by the AO this cannot be a ground for making addition in the hands of the assessee company." 18. Ld. Counsel referred to the decision of Hon'ble Delhi High Court in the case of Nova Promoters & Finlease P Ltd. (supra) a....
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....e share applicant and the genuineness of the transaction. In such a case, the AO cannot sit back with folded hands till the assessee exhausts all the evidence or material in his possession and then come forward to merely reject the same, without carrying out any verification or enquiry into the material placed before him. The case before us does not fall under this category and it would be a travesty of truth and justice to express a view to the contrary." 19. He, therefore, submitted that merely on account of non-production of directors on account of compelling circumstances, no adverse inference could be drawn. 20. We have considered the submissions of both the parties and have perused the record of the case. 21. The AO admittedly made the addition for the following reasons as summarized by him at page 9 of his order: - "1. No compliance of the notices issued. 2. Notices sent at the addresses as provided by the assessee are returned by the postal authorities with the remark as "Address Incomplete" & "Premises locked from a long time". 3. Debit entries are mostly same as credit entries. 4. Debit entries and credit entries in the bank statement are mostly in round figures. ....