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ACIT Central Circle-23, Room No. 359, E-2, ARA Centre, Jhandewalan Extension New Delhi Vs. Hillridge Investment Ltd. 106, Palco House, T-10 Main Patel Road, Patel Nagar New Delhi
August, 28th 2015
                                        1                          ITA NO.711.Del.13

                         DELHI BENCH: `C' NEW DELHI
                          I.T.A .No.-711/Del/2013
                       (ASSESSMENT YEAR-2009-10)

     ACIT                                     vs   Hillridge Investment Ltd.
     Central Circle-23, Room No. 359,              106, Palco House, T-10
     E-2, ARA Centre, Jhandewalan                  Main Patel Road, Patel Nagar
     Extension                                     New Delhi
     New Delhi                                     AAACH0604A

                 Appellant by       Sh.T. Vasanthan, SR. DR
                 Respondent by      Sh.R. C. Rai, CA

                          Date of Hearing          24.08.2015
                       Date of Pronouncement       27 .08.2015


      This appeal is filed by Revenue against order dated 23/11/2012 passed by
CIT(A) New Delhi. The main ground of appeal raised herein, is as follows:-
      "1.   On the facts and in the circumstances of the case, the CIT(A) has erred in
            deleting the addition of Rs.2,78,57,082/- made by the AO u/s 68 of the
            Income tax Act, 1961."

2.    During the year under consideration the assessee dealt with shares. During the
course of assessment proceeding, the assessee was asked to furnish the copy of the
cash book, bank pass book for the F.Y 2008-09 and to explain the sources of credit
entries there in, proving the identity and creditworthiness of the creditor as well as
the genuineness of transaction, in respect of all the credit entries in its all the bank
                                        2                          ITA NO.711.Del.13

accounts, by providing confirmed copy of account, PAN, full address, return of income
and the bank statement of the creditor etc.

3.    The AO observed in the assessment order that the assessee has not given any
explanation whatsoever in respect of credit/deposits of Rs.2,78,57,082/- in its various
bank accounts during the F.Y 2008-09.          In other words the assessee has not
discharged the primary onus cast upon it of establishing the identity and
creditworthiness of the creditor as well as the genuineness of transaction as required
u/s 68 of the Income Tax Act 1961 (hereinafter referred to as the Act).

4.    In the assessment order u/s 143(3) of the Act dated 19/12/2011 addition of
Rs.2,78,57,082/- was made u/s 68 of the Act. But the assessee has claimed that no
show-cause notice was issued to it. In the written submissions filed on 30/7/2012
the Assessee stated that "All the confirmations were furnished before Ld. Assessing
Officer during the assessment proceedings.     It seems that these confirmations were
skipped or over looked by Ld. Assessing Officer." The Assessee thereafter again filed
confirmations during the first appellate proceedings before the Ld. CIT(A).

5.    When the Ld. CIT(A), asked the comments of the assessing officer vide letter
dated 22/10/2012 quoted Rule 46A of the I.T. Rules and stated that the fresh
evidences need not be admitted under Rule 46A of the I.T Rules as assessee company
did not produce the supporting documentary evidence to establish credit worthiness
of the creditors during assessment proceedings, though sufficient opportunity was
provided to produce the details.

6.    The remand report was handed over to the assessee for filing rejoinder. The
assessee filed rejoinder dated 21/11/2012 and         submitted that documents filed
during appellate proceedings are noting but documents submitted during assessment
proceeding, therefore, the A.O's objection that fresh evidence should not be admitted
was irrelevant.   Further assessee contended that the addition made by A.O in
assessment order represented either sale consideration of investment or repayment of
loan advanced in earlier year.     There is no credit in the books of A/c's as such,
                                        3                             ITA NO.711.Del.13

therefore of Provisions of Sec 68 does not apply, as these bank deposits are business
receipts. The Ld. CIT(A) deleted the said addition.

7.    The DR submitted that as per the finding recorded in CIT(A)'s order in Para
3.7, the assessee has not submitted proper evidence or detail confirmation of the
alleged creditors at the relevant time before the AO, therefore, the addition was rightly
made and the Ld. CIT(A) was not justified in deleting the addition.

8.    In his rival submissions, he AR submitted that there is a clear finding in Para
3.7 of the CIT(A)'s order that the assessee has also filed detailed chart to prove that
proceeds are either sale of shares or repayment of loan during assessment
proceedings.   The AR further submitted that similar issue was decided by the
Tribunal, Delhi Bench in ITA No. 710/Del/2013, in the case of Assistant CIT Vs.
Worldlink Telecom Ltd., wherein the Tribunal has dismissed the Department's appeal
as there was necessary evidence supplied by the assessee before the Assessing Officer
in Para 11 reads as under:-

      "      On consideration of the above facts of the case, we find that the assessee had
      filed all the necessary evidence in support to establish the identity and
      creditworthiness of the payers as well as genuineness of the transaction with this
      contention that there was no credit in the books of the accounts and the bank
      deposits in question were sale proceeds of investment of return of loan advanced
      earlier as the assessee was in the business of financing and trading also accepted
      by the assessee in Para No.2 of the assessment order. Hence, the assessee had
      thus discharged its primary onus to establish the claim. The onus was thereafter
      shifted upon the Assessing Officer to rebut those explanations and evidence filed by
      the assessee to justify the addition in question. Since the Assessing Officer has
      failed to rebut the above submissions and to dislodge the evidence filed by the
      assessee in support of the claim, the Ld. CIT(Appeals) in our view has rightly
      deleted the addition. The First Appellate Order in this regard is thus upheld. The
      ground is accordingly rejected."

9.    In the present case, the addition in question is on account of deposits in bank
account of assessee. The assessee contended before CIT (A) that these deposits are
not credit in nature in the books of accounts u/s 68 but business proceeds which are
either on account of sale of investment or repayment of loan as the assessee company
is in the business of trading in shares & money lending.          The assessee further
                                        4                          ITA NO.711.Del.13

contended that confirmations from the persons from whom money received was
treated as unexplained deposits by Assessing Officers were filed during assessment
proceeding along with complete address, their PAN, copy of PAN card and copy of
acknowledgement of Return of Income etc. In the remand report dated 22/10/2012,
A.O did not comment on the submission of the assessee that these documents were
filed before him. In the remand report A.O has stated that these evidences were fresh
and requested not to admit the same under Rule 46A.          However, it appears that
confirmation of accounts of all alleged creditors along with full address, PAN and
details of cheque, date of payment & name of cheque issuing bank, acknowledgement
of Return of Income for A.Y 2009-10 of creditors were available on assessment record
filed during assessment proceedings. Assessee also filed detailed chart before AO to
prove that proceeds were either sale of shares or repayment of loan during assessment
proceedings, but the same were overlooked by the Assessing Officer and made
addition. The Ld. CIT(A) by considering the above facts deleted the addition made by
the A.O. Thus the Deptt is in appeal.

10.   In light of the above said discussion and perusal of the CIT(A)'s order as well as
assessment order, there is a clear finding given by the CIT(A) that the assessee has
given a detailed chart related to proceeds of sale of shares and repayment of loan
during the assessment proceedings but the Assessing Officer has overlooked these
evidences and made addition. We are of the view that the impugned addition was
rightly deleted by the Ld. CIT(A).

11.   In result, the appeal is dismissed.

The order is pronounced in the open court on 27th of August 2015.

     Sd/-                                                  Sd/-
  ( N. K. SAINI)                                     (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER                                    JUDICIAL MEMBER

Dated:    27/08/2015

*R. Naheed*
                                              5                        ITA NO.711.Del.13

Copy forwarded to:

1.                          Appellant
2.                          Respondent
3.                          CIT
4.                          CIT(Appeals)
5.                          DR: ITAT                       ASSISTANT REGISTRAR
                                                                ITAT NEW DELHI


1.    Draft dictated on                           24.08.2015 PS

2.    Draft placed before author                  25.08.2015 PS

3.    Draft proposed & placed before            JM/AM
      the second member              26.08.2015

4.    Draft  discussed/approved         by                    JM/AM
      Second Member.

5.    Approved   Draft    comes    to   the        .08.2015   PS/PS

6.    Kept for pronouncement on                               PS

7.    File sent to the Bench Clerk                 .08.2015   PS

8.    Date on which file goes to the AR

9.    Date on which file goes to the
      Head Clerk.

10.   Date of dispatch of Order.
6   ITA NO.711.Del.13
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