DCIT, NEW DELHI vs. M/S DELHI DIAMONDS PVT. LTD., NEW DELHI

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ITA 2121/DEL/2017Status: DisposedITAT Delhi12 November 2021AY 2012-134 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) had properly considered the evidence produced by the assessee, including the source of funds and creditworthiness of shareholders. The AO had failed to consider the evidence presented during assessment. Therefore, the Tribunal found no reason to interfere with the CIT(A)'s findings.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting additions made by the AO under Section 68 of the Income Tax Act. The additions pertained to share capital and ROC fees. The assessee company is primarily in the business of trading jewellery items.

What were the issues?

Whether the additions made by the AO under Section 68 for share capital and ROC fees were justified, considering the evidence provided by the assessee.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘B’ NEW DELHI

Before: MS SUCHITRA KAMBLE & DR. B. R. R. KUMAR

Hearing: 11.10.2021Pronounced: 12.11.2021

Date of Hearing 11.10.2021 Date of Pronouncement 12.11.2021 ORDER

PER SUCHITRA KAMBLE, JM

1.

This appeal is filed by the Revenue against the order dated 20/1/2017 passed by CIT(A)-3, New Delhi for Assessment Year 2012-13.

2.

The grounds of appeal

are as under:- “1. "Ld. CIT(A) erred in law and on the facts and in the case in deleting the addition of Rs. 3,67,00,000/- made by the AO u/s 68 of the Income Tax Act."

2. Ld. CIT(A) erred in law and on the facts and in the case in deleting the addition of Rs. 30,00,000/- made by the AO u/s 68 of the Income Tax Act." 3. "Ld. CIT(A) erred in law and on the facts and in the case in deleting the addition of Rs. 96,337/- made by the AO for want of details."

3. The assessee Company is primarily in the business of trading and jewellery items. The assessee company filed its return of income on 14/9/2012 for the Assessment Year declaring an income of Rs. 1,19,04,440/-. The Assessing Officer disallowed Rs. 3,67,00,000/- u/s 68 of the Act. The Assessing Officer also made addition of Rs. 30,00,000/- u/s 68 thereby treating the said income as income from undisclosed sources as well as disallowed Rs. 96,337/- in respect of claim of ROC fees to certain extent.

4.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.

5.

The Ld. DR submitted that the assessee has not produced all the relevant material before the Assessing Officer during the assessment proceedings. The CIT(A) has not given opportunity to the Assessing Officer to confront the evidences placed before him. Thus, Ground No.1 of the Revenue’s appeal be considered and allowed. As regards Ground No. 2, the Ld. DR relied upon the assessment order. As regards Ground No. 3, the Ld. DR submitted that due to the smallness of the amount, the same is not pressed.

6.

The Ld. AR submitted that as regards Ground No. 1 of the Revenue’s appeal all the details were given to the Assessing Officer but the same was not taken in proper spirit while framing assessment order. The CIT(A) has taken all the cognizance of each of the 9 parties and given a proper relief. Hence, the Ld. AR relied upon the order of the CIT(A). As regards Ground No.2, the Ld. AR relied upon the order of the CIT(A).

7.

We have heard both the parties and perused the material available on record. As regards Ground No. 1 of the Revenues’ appeal, the CIT(A) has taken cognizance of all the evidences produced before the Assessing Officer at the stage of assessment itself. In fact, the details of Shri Murari Lal Soni and Shri Mukesh Soni shows that both the parties had enough funds to contribute the share capital to their unit Delhi Diamond Pvt. Ltd. Their source of contribution to share capital was also explained by them as well as by the assessee before the Assessing Officer. It is further noticed that the share holders as well as their source of income/funds are fully identifiable, genuine and the creditworthiness of each party was never doubted by the Assessing Officer. Therefore, there is no need to interfere with the findings of the CIT(A). Hence, Ground No. 1 of the Revenue’s appeal is dismissed. As regards Ground No. 2 the same is also dealt properly by the CIT(A) as per the evidences produced before the Assessing Officer. In fact, the Assessing Officer has not taken into account the evidences produced by the assessee during the assessment proceedings. Thus, there is no need to interfere with the same. Hence, Ground No. 2 of the Revenue’s appeal is dismissed. As regards Ground No. 3, the same is not pressed, hence dismissed.

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