IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `B': NEW DELHI
BEFORE
SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
AND
SHRI A.N.MISSHRA, ACCOUNTANT MEMBER
ITA No.6726/Del/2019
(ASSESSMENT YEAR-2015-16)
M/s Eva Developers Pvt. Ltd., Income Tax Officer,
L-001, Green Valley Apartments, Ward-8(4),
Plot No-18, Sector-22, Dwarka New Delhi.
Delhi-110077. Vs.
PAN AMCS 3484K
(Appellant) (Respondent)
Appellant By Sh. Hiren Mehta, CA
Respondent by Ms. Nidhi Srivastava, CIT-DR
Date of Hearing 26.11.2019
Date of Pronouncement 01.01.2020
ORDER
PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER:
This appeal has been preferred by the assessee against the order
dated 29.07.2009 passed by the learned Commissioner of Income Tax
(Appeals)-34, New Delhi {CIT(A)} and pertains to Assessment Year 2015-
16.
2.0 The brief facts of the case are that the return for the year
under consideration was filed showing Nil income. The case was selected
for limited scrutiny through CASS with the following reasons:
ITA No.6726/Del/2019
(Asst.Year:2015-16)
(i) large increase of unsecured loans during the year
(ii) large increase in sundry creditors with respect to turn over
as compared to the preceding year.
(iii) purchase of property reported in Form-26QB.
2.1 As per the Assessing Officer (AO), initially there was no
compliance by the assessee to the notices. Subsequently, one Authorized
Representative (AR) did attend the proceedings but the details required
by the Assessing Officer were not filed. The Assessing Officer proceeded
to frame the assessment u/s 144 of the Income Tax Act, 1961
(hereinafter called as `the Act') and completed the assessment at an
income of Rs.24,38,16,570/- after making an addition of
Rs.16,57,30,000/- on account of alleged unverifiable credits added back
u/s 68 of the Act. Another addition of Rs.7,80,86,567/- was made on
account of outstanding liability of the company towards M/s Parsvnath
Developers Ltd. as Sundry Creditors which also remained unverifiable
because of the non-response to the notice issued u/s 133(6) of the Act.
2.2 Aggrieved, the assessee preferred an appeal before the learned
First Appellate Authority. However, here also the assessee did not get
any relief and the appeal of the assessee was dismissed, although the
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ITA No.6726/Del/2019
(Asst.Year:2015-16)
learned CIT (Appeals) did admit additional evidences under Rule-46A of
the Act.
2.3 The assessee is now before the Tribunal challenging the
action of the learned CIT (Appeals) in dismissing the assessee's appeal
and has raised the following grounds of appeal.
"1. That on the facts and circumstances of the case and in law,
the CIT(A)-34, New Delhi (hereinafter referred to as CIT(A) was
not justified in passing an ex-parte order.
2. That on the facts and circumstances of the case and in law
the CIT(A) was not justified in passing an ex-parte order without
considering the submissions filed vide letter dated 09.04.2019
filed during appellate proceedings.
3. That on the facts and circumstances of the case and in law
the CIT(A) was not justified in confirming the addition of
Rs.16,57,30,000/- as unexplained cash credit u/s 68 of the I.T.
Act by holding that appellate failed to establish the identity,
genuineness and credit worthiness of the transactions
completely ignoring the fact that all the parties from unsecured
loans were either shareholders/directors of the assessee
company; companies having common shareholders/company;
sister concerns and not entry providing companies.
4. That on the facts and circumstances of the case and in law,
the CIT(A) was not justified in confirming addition of
Rs.7,80,86,567/- in respect of liability payable to M/s Parsvnath
Developers for land purchases from them by incorrectly applying
the provisions of section 41(1) of the I.T. Act as remission &
cessation of the liability without appreciating that the above
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ITA No.6726/Del/2019
(Asst.Year:2015-16)
amount was never claimed as expenditure in the assessment
year under appeal or earlier assessment years as the appellant
company was yet to recognize revenue having not achieved 30%
of completion in its real estate project.
5. That the appellant craves leave to add, alter, modify any of
the grounds at the time of hearing or before the hearing."
3.0 At the outset, the learned Authorized Representative (AR)
submitted that the observation of the Assessing Officer that the assessee
had not co-operated during the assessment proceedings and had not
filed the required documents was incorrect. He drew our attention to the
affidavit of the erstwhile Authorized Representative who had appeared
from time to time before the Assessing Officer and submitted that this
affidavit was dated 22nd of Dec., 2017 i.e. a day immediately after the
assessment order was passed. It was submitted that it has been
submitted in the affidavit that the said Authorized Representative had
attended the assessment proceedings and had also visited the office of
the Assessing Officer on 20.12.2017 along with complete submissions
and all the documents required to prove the genuineness of the
transactions and the creditworthiness of the loans but since the AO was
not feeling well, he requested the Authorized Representative (AR) to
attend the office on 22.12.2017. However, the assessment was finalized
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ITA No.6726/Del/2019
(Asst.Year:2015-16)
on 21.02.2017 itself which came to be known to the assessee only
through the e-mail received from the Income Tax Department. The
learned Authorized Representative (AR) submitted that, thus, it is not the
case that the assessee did not cooperate in the assessment proceedings
but rather it was the case that the assessee was not given the
opportunity to file the required documents. The learned Authorized
Representative (AR) prayed that in the interest of justice, the Assessing
Officer should be directed to re-examine the issues.
4.0 The learned CIT-DR submitted that the learned CIT (Appeals)
had given proper opporunity to the assessee by admitting additional
evidences under Rule-46A of the Income Tax Rules, 1962 and had also
called for remand report from the Assessing Officer, and therefore, no
further opportunities should be given to the assessee.
5.0 We have heard the rival submissions and have also perused
the material on record. As far as, the addition of Rs.16,57,30,000/- is
concerned, it is seen from a perusal of the order of the learned First
Appellate Authority that the Assessing Officer (AO) has mentioned in the
remand report that only three out of fifteen parties had complied with the
notices issued u/s 133(6) of the I.T. Act and, therefore, it was established
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ITA No.6726/Del/2019
(Asst.Year:2015-16)
that the assessee had failed to prove the identity, genuineness and
creditworthiness of the transactions in the nature of unsecured loans.
Thereafter, the learned CIT (Appeals) has proceeded to uphold the entire
addition. As far as, the addition of Rs.7,80,86,567/- pertaining to
Sundry Creditors (M/s Parsvnath Developers Ltd.) is concerned, it is
seen that the amount has been added u/s 41(1) of the Act. However, no
additional evidences were admitted by the learned CIT (Appeals) in this
regard although, the assessee had sought to file copy of registry and
ledger account with M/s Parsvnath Developers Ltd. and had submitted
that this outstanding liability pertained to outstanding on account of
land purchased. Thus, evidently, both the issues were not examined in
proper perspective by the learned CIT (Appeals). We also note that there
was a sufficient cause for the failure of the assessee to produce the
require documents before the Assessing Officer as the assessment was
finalized before the appointed date on which the assessee was directed to
appear before the Assessing Officer with the required documents.
Therefore, on overall facts of the case and in interest of substantial
justice, we restore the issues to the file of the Assessing Officer with the
direction to re-examine the issues and pass the assessment order in
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ITA No.6726/Del/2019
(Asst.Year:2015-16)
accordance with law after giving due opportunity to the assessee to
present its case. We also direct the assessee to fully co-operate in the
assessment proceedings and provide the required information and
documentary evidences before the Assessing Officer when called upon to
do so failing which the Assessing Officer shall be at liberty to proceed ex-
parte qua the assessee and frame the assessment in accordance with
law.
6.0 In the final result, the appeal of the assessee stands allowed
for statistical purposes.
Order pronounced in the Open Court on 01/01/2020.
Sd/- Sd/-
(A.N.MISSHRA) (SUDHANSHU SRIVASTAVA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 01/01/2020
PK/Ps
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
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