IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES : "B" NEW DELHI
BEFORE SHRI I.C. SUDHIR, J.M. AND
SHRI J.SUDHAKAR REDDY, A.M.
ITA no.643/Del/2012
Assessment Year : 2003-04
ITO, Ward 10(3) vs. Diamond Proteins P.Ltd.
Room no. 199C E 27, Kamla Nagar
New Delhi New Delhi 110 007
PAN: AABCD 6035 A
C.O.No. 97/Del/2013
(In ITA 643/Del/2012)
AY: 2003-04
M/s Diamond Proteins Pvt.Ltd. vs. ITO, Ward 10(3)
New Delhi New Delhi
(Appellant) (Respondent)
Assessee by:- Shri Ashwani Taneja, Adv.
Department by:- Smt. Parwinder Kaur, Sr.D.R.
ORDER
PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER
This is an appeal filed by the Revenue directed against the order of
Ld.CIT(Appeals)-IV, New Delhi dt. 14.12.2011 pertaining to the Assessment
Year 2003-04 on the following grounds.
"1. The Ld.CIT(A) has erred on facts and in circumstances of the case
by deleting the addition of Rs.55,02,380/- made by the AO on account
of unexplained investment.
2. The CIT(A) has erred on facts and in circumstances of the case by
admitting the submissions of the assessee without verifying the same
by way of calling the assessment record or a remand report under Rule
46A of the I.T.Rules.
ITA No. 643/Del/2012 &
C.O. 97/Del/2013
AY 2003-04
Diamond Proteins Pvt.Ltd.
1.1. The C.O. has been filed on the following grounds.
"1. That having regard to the facts and circumstances of the case, Ld.CIT(A) has
erred in law and on facts in confirming the action of Ld.AO in reopening the
impugned assessment that too without assuming jurisdiction as per law and
without recording valid reasons and without complying with the mandatory
conditions of provisions of sections 147 to 153 of the Income Tax Act, 1961.
2. That in any case and in any view of the matter, the action of Ld.CIT(A) in
confirming ;the action of Ld.AO in reopening the impugned case and in framing
the impugned assessment u/s 147/144 which is bad in law, unjustified, against
the principles of natural justice and void ab initio more so reasons recorded are
invalid in the eyes of law and no valid satisfaction u/s 151 has been obtained
before issuance of notice u/s 148.
2. We first take up the appeal of the Revenue.
3. Facts in brief:- The assessee is a company engaged in carrying on
business of trading in books and machines. It filed its return of income on
30.6.2003 declaring `nil' income under the regular provisions of the Act, after
adjusting carry forward unabsorbed depreciation and declaring book profit of
Rs.94,644/- u/s 115 JB of the Act. The return was processed u/s 143(1) of
the Act. A notice u/s 148 was issued on 23rd October,2009. In response a
letter was filed dt. 5th November,2009 stating that the return filed earlier may
be taken as return in response to the notice u/s 148 of the Act.
3.1. The AO rejected the objections filed by the assessee on the reopening.
He completed the assessment by adding an amount of Rs.55,27,737/- as
unexplained investment.
3.2. Aggrieved the assessee carried the matter in appeal.
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ITA No. 643/Del/2012 &
C.O. 97/Del/2013
AY 2003-04
Diamond Proteins Pvt.Ltd.
3.3. The First Appellate Authority upheld the reopening of the assessment.
On merits he allowed the claim of the assessee.
4. Aggrieved the Revenue filed an appeal and the assessee filed a C.O. on
reopening.
5. The Ld.Sr.D.R. Smt. Parwinder Kaur, submitted that the Ld.CIT(A) at
page 9 of his order, admitted additional evidence. She argued that the
assessee had not filed any evidence or document before the AO during the
course of assessment proceedings except filing objections for reopening the
assessment u/s 147 of the Act. She drew the attention of the Bench to the last
page of the assessment order and submitted that in the absence of any details
filed, the claim of the assessee remained unverified. She prayed that the issue
should be set aside to the file of the AO for fresh adjudication, in view of a fresh
claim made by the assessee. She relied on the judgement of Hon'ble Himachal
Pradesh High Court in the case of CIT vs. Shree Kangra Steel Pvt.Ltd. reported
in 320 ITR 691, and submitted that the AO should be given an opportunity.
5.1. The Ld.Counsel for the assessee Shri Ashwani Taneja, on the other hand
opposed the contentions and pointed out that the assessee in the case of KC
Fibres forwarded all the documents to the AO. He drew the attention of the
Bench to para 5 of the Ld.CIT(A)'s order and submitted that the facts are so
apparent and all the information was very much in the possession of the AO
and setting aside the matter to the AO for fresh adjudication would be unjust
and unnecessary.
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ITA No. 643/Del/2012 &
C.O. 97/Del/2013
AY 2003-04
Diamond Proteins Pvt.Ltd.
6. Rival contentions heard. On a careful consideration of the facts and
circumstances of the case, on perusal of orders of the lower authorities and the
case laws cited, we hold as under.
7. The Ld.CIT(A) at para 5 observed as follows.
"Äs per the facts of the case, the amount of Rs.55,02,380/- communicated by the
ITO, Ward 5(4), New Delhi vide letter dt. 27.3.2006 consisted of sale
cosndieration of land of Rs.22,50,000/- and amounts received from eight parties
on sale of stock and fixed assets of Rs.32,52,380/-. As per letters dt. 20.3.2006
and 27.3.2006 submitted by the assessee company to the ITO, Ward 5(4), New
Delhi in response to summons u/s 131 issued by the above ITO in the course of
the assessment proceedings in the case of M/s K.C.Fibres Ltd., which forms part
of the assessment order of the assessee company, the copies of sale deed in
respect of sale of land of Rs.22.50 lacs and confirmation of eight parties in
respect of sale of stock etc. of Rs.32.52 lacs were duly filed by the assessee
company with the ITO, Ward 5(4), New Delhi who had forwarded these
documents to the AO of the assessee company."
7.1. Thereafter he extracted the letters referred to above dated 20.3.2006 and
written submissions dt. 25.11.2011 and concluded as follows.
"Perusal of the above chart clearly shows that the assessee company received
Rs.55,02,380/- during the year under consideration consisting of Rs.22,50,000/-
on account of sale of factory land Rs.7,50,000/- as loan from M/s Swarnim
Credit & Holding Ltd. And the balance of Rs.25,02,380/- on account of sale of
books etc. Out of the amount of Rs.55,02,380/-, the assessee has given loan of
Rs.16,00,000/- to M/s Swarnim Investment & Finance Pvt.Ltd. and
Rs.39,00,000/- was invested as share application money in M/s K.C.Fibres Ltd.
As regards the sale of land, two cheques of Rs.17.50 lacs and Rs.5 lacs totaling
Rs.22.50 lacs were received by the assessee on account of sale of factory land.
Thus, no part of the above sale consideration consisted of small denomination
DDs of Rs.19,500/- each. Copy of the Conveyance Deeds and Bank statements
in respect of above sale were also duly submitted to the AO. The AO has not
made any adverse comments with regard to the above sale of land and the AO
has also not made any independent enquiry to dispute the claim of the assessee
in this regard. In view of the above, the above amount of Rs.22.50 lacs cannot
be held to be unexplained receipt/investment by the assessee. Further, the loan
of Rs.7,50,000/- from M/s Swarnim Credit & Holding Ltd. is by way of single
cheque and is duly supported by confirmation of ledger account by the above
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ITA No. 643/Del/2012 &
C.O. 97/Del/2013
AY 2003-04
Diamond Proteins Pvt.Ltd.
party filed before the AO and no adverse comment in this regard has been made
by the AO. Therefore, the above amount of Rs.7,50,000/- cannot be held as
unexplained receipt/investment by the assessee. As regards, the amount of
Rs.25,02,380/- received on account of sale of books and machinery, as per the
tabular chart reproduced above, the copy of ledger account in the books of the
assessee and confirmation of purchase by the buyer parties have been duly
furnished before the AO. The amounts received are also by single cheques of
larger denominations, except Rs.3,80,000/- received on 9.10.2002 from M/s
Manas Publication, Rs.2,46,000/- received from M/s Indian Publisher and
Distributors on 9.10.2002, Rs.2,47,000/- received from M/s Officer Books on
9.10.2002 and Rs.1,90,000/- received from M/s Goel Polymers Pvt.Ltd. on
9.10.2002 which are by way of total 111 small DDs of Rs.19,500/- each and
these DDs had been purchased by payment of cash by various parties as per
details given in the assessment order. In respect of the above sale proceeds
totaling Rs.10,63,000/- (Rs.3,80,000/- + Rs.2,46,000/- + Rs.2,47,000/-) which
was received by small denomination DDs, the assessee has furnished
confirmation from the purchaser parties along with ledger account copies before
the AO as mentioned above. The assessee has also furnished complete address
of all the above mentioned four purchaser parties along with their PAN details in
each of the above cases.
7.2. Ld.CIT(A) further observed that the amount of Rs.10.63 lakhs form part
of the regular sales recorded in the books and hence cannot be termed as
unexplained receipt/investment in the hands of the assessee. He observed that
most of these documents and evidences were submitted before the AO and the
AO has not made any adverse comments. No independent enquiry was
conducted by the AO. In any event the amount of Rs.10.63 lakhs comprising
of small denomination Demand Drafts of Rs.19,500/- each were sent back to
the AO for verification. The other additions were deleted.
7.3. The Ld.D.R. could not controvert any of the factual findings recorded by
the Ld.CIT(A).
7.4. In view of the above discussion the request of the Ld.CIT,D.R. for setting
aside the matter to the file of the AO for de novo adjudication is devoid of merit.
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ITA No. 643/Del/2012 &
C.O. 97/Del/2013
AY 2003-04
Diamond Proteins Pvt.Ltd.
7.5. In the result we uphold the order of the Ld.CIT(A) and dismiss this
appeal of the Revenue.
8. Coming to the Cross Objection filed by the assessee, we are of the
opinion that in view of our decision in the Revenue's appeal on merits,
adjudicating the same would be an academic exercise and hence we dispose of
the C.O. as infructuous and dismiss the same.
9. In the result, both the Revenue's appeal as well as the assessee's Cross
Objection are dismissed.
Order pronounced in the Open Court on 24th September, 2014.
Sd/- Sd/-
(I.C.SUDHIR) (J. SUDHAKAR REDDY)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: the 24th September, 2014
*manga
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ITA No. 643/Del/2012 &
C.O. 97/Del/2013
AY 2003-04
Diamond Proteins Pvt.Ltd.
Copy of the Order forwarded to:
1.Appellant;
2.Respondent;
3.CIT;
4.CIT(A);
5.DR;
6.Guard File
By Order
Asst. Registrar
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