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Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI
Before: SHRI SHAMIM YAHYA & MS. ASTHA CHANDRA
Assessee by: Shri S. Krishnan, Advocate and Shri V. Rajakumar, Advocate Department by : Shri Gurpreet Shah Singh, Sr. DR Date of Hearing 10.01.2023 Date of pronouncement 19.01.2023 O R D E R PER ASTHA CHANDRA, JM
The appeal by the assessee is directed against the order dated 13.5.2019 of the Ld. Commissioner of Income Tax Appeals-2, New Delhi (“CIT(A)”) pertaining to assessment year (“AY”) 2011-12.
The assessee has taken the following grounds of appeal: “1. That the order as passed by the Ld. CIT(A) is both in law and against the facts of the case;
2. Because Ld. CIT(A) erred in law & facts while confirming the addition of Rs. 23,00,000/- for alleged bogus capital merely on the basis of report sent by the DCIT(Investigation) to the Assessing Officer and without making any proper or independent verification with regard to two companies namely G.T. Complex Pvt. Ltd. for Rs. 15,00,000/- and Pooja Warehousing Pvt. Ltd. for Rs. 8,00,000/- under the nature & circumstances of the case;
3. Therefore, it is humbly prayed that the addition of Rs. 23,00,000/- may kindly be deleted in interest of justice.” 3. The brief facts are that for AY 2011-12 the assessee company filed its original e-return on 30.9.2011 declaring loss of Rs. 59,44,054/- which was processed under section 143(1) of the Income Tax Act, 1961 (the “Act”). The case was subsequently reopened on the basis of information from DDIT(Inv.)U.III-Gurgaon that search under section 132 of the Act on M/s. Skylark Group revealed that the assessee has obtained accommodation entries amounting to Rs. 23 lacs during the previous year relevant to AY 2011-12 which has escaped assessment. Notice under section 148 of the Act was issued in response to which the assessee submitted that the return already on record be treated as return filed in response to notice under section 148.
During re-assessment proceedings, the Ld. Assessing Officer (“AO”) 4. issued questionnaire on 7.09.2018 fixing the date for compliance on 18.09.2018. Again show cause notice under section 142(1) was issued on 30.10.2018 fixing the date for compliance on 6.11.2018. Penalty notice under section 271(1)(b) was also issued on 19.11.2018. Notice under section 133(6) was also issued to Chief Manager Vijaya Bank on 17.11.2018 asking for relevant information regarding bank account of the assessee and the bank responded by confirming that the assessee received Rs. 8 lacs from G T Complex Pvt. Ltd. and Rs. 15 lacs from Pooja Warehousing Pvt. Ltd. on 31.1.2011 and 22.1.2011 respectively.
According to Ld. AO the assessee has not been able to prove the genuineness of the transactions of the entries of Rs. 23 lacs and as per investigation of DDIT (Inv.) U-III Gurgaon, Rs. 23 lacs are accommodation entries, hence the same is added to the income of the assessee in his order dated 31.11.2018 under section 143(3) r.w.s. 147 of the Act.
The assessee appealed before the Ld. CIT(A) who confirmed the impugned addition of Rs. 23 lacs against which the assessee has come up in appeal before the Tribunal.
The Ld. AR submitted that the order of the Ld. AO gives the impression that the notices issued by him to the assessee remained un- responded which is not factually correct. The assessee had filed evidence before the Ld. AO to prove that both the entities namely G T Complex Pvt. Ltd. and Pooja Warehousing Pvt. Ltd. had made the impugned investment in the assessee company but the Ld. AO did not make any independent inquiry and made addition solely on the basis of report of the Investigation wing of the Department. The Ld. AR further contended that written submission along with Paper Book containing 41 pages were filed before the Ld. CIT(A) which is acknowledged by the Ld. CIT(A) in para 3 and 5 of his appellate order. He emphatically contended that all the papers contained in the Paper Book including bank statement, copy of ITR, balance sheet of share applicants etc. were produced before the Ld. AO as well. But neither the Ld. AO nor the Ld. CIT(A) examined the evidence placed before them and adverse inference against the assessee has been drawn by both the authorities which is not legally permissible. The Ld. AR, therefore, urged that the matter be sent back to the Ld. AO for fresh consideration and decision.
The Ld. DR had no objection to the above request of the Ld. AR of the assessee.
On hearing the Ld. Representative of the parties and perusal of the material on record, we are of the considered view that it would be just and fair if in the interest of justice, the order of the Ld. CIT(A) is set aside and the matter is restored back to the file of the Ld. AO to examine and consider the evidence on his records and re-decide the matter in the light of the result of his enquiry and investigation after allowing reasonable opportunity of hearing to the assessee. We order accordingly.
In the result, for statistical purposes, the appeal of the assessee is treated as allowed.