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M/s Eva Developers Pvt. Ltd., L-001, Green Valley Apartments, Plot No-18, Sector-22, Dwarka Delhi Vs. Income Tax Of f icer, Ward-8(4) , New Delhi .
January, 03rd 2020
                       DELHI BENCH: `B': NEW DELHI


                            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



      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-


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

          (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

                                                                         Page | 2
                                                            ITA No.6726/Del/2019

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
                                                                         Page | 3
                                                             ITA No.6726/Del/2019

      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
                                                                          Page | 4
                                                            ITA No.6726/Del/2019

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 opportunity to te 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
                                                                         Page | 5
                                                            ITA No.6726/Del/2019

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

                                                                         Page | 6
                                                            ITA No.6726/Del/2019

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


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)
Dated: 01/01/2020
Copy forwarded to:
  1. Appellant
  2. Respondent
  3. CIT
  4. CIT(Appeals)
  5. DR: ITAT

                                                   ASSISTANT REGISTRAR
                                                         ITAT NEW DELHI

                                                                         Page | 7
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