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Income Tax Appellate Tribunal, DELHI BENCH: ‘B’: NEW DELHI
Before: SHRI K.N. CHARY & SHRI ANADEE NATH MISSHRA
[A] This appeal has been filed by the Assessee against the impugned appellate order dated 08.08.2016 passed by Learned Commissioner of Income Tax (Appeals)-2, New Delhi, [in short, “Ld.CIT(A)”] pertaining to Assessment Year 2008-09. The Assessee has raised following grounds of appeal:-
“1. That the Commissioner of Income Tax (Appeals) (“CIT(A)”) erred on facts and in law in confirming the addition of Rs. 2,59,90,054 under section 68 of the Income Tax Act, 1961, (“the Act”) earlier made by the assessing officer (“the AO”) under section 41(1) of Rs. 15,50,000 and section 68 of the Act of Rs. 2,44,40,054. Page 1 of 51 ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd.
That the CIT(A) erred on facts and in law by making the addition of Rs. 15,50,000 under section 68 of the Act after hearing and on being satisfied with the submissions of appellant that addition of said amount can-not be made under section 41(1) qua the facts of the case and thereby erred in flip-flopping the addition from section 41(1) to section 68 of the Act. 2.1 That the CIT(A) erred on facts and in law by not appreciating the fact that the amount of Rs. 15,50,000 shown as unclaimed receipt during AY 2008-09 has been duly reconciled with the names of respective security depositor and the said amount was shifted from unclaimed receipts to outstanding liabilities in AY 2009-10.
That the CIT(A) has erred on facts and in law in upholding the order passed by Assessing Officer in treating the receipt of refundable security deposit as unexplained credited and charging it to tax under section 68 of the Act on the ground that the appellant had failed to prove the credit worthiness of depositors ignoring the fact that the appellant had abundantly proved (a) identity of agents and (b) genuineness of transaction and as far as “credit worthiness” of depositors is concerned, law does not require the appellant to prove the same considering the nature of business and facts of the case. 3.1 That the CIT(A) erred on facts and in law by not appreciating that the appellant has discharged the primary onus casted upon him by section 68 of the Act by proving the identity of depositors and genuineness of transaction and now the burden of proof has been shifted upon Revenue. 3.2 That CIT(A) erred on facts and in law by overlooking the fact that the “refundable” security deposits received from Agents were actually refunded to them in subsequent years at the time of their disassociation with the appellant. 3.3 That the CIT(A) erred on facts and in law by not appreciating that the position of law with respect to addition made under section 68 of the Act qua the “refundable security deposits” from business agents is different from the position and requirement of law with respect to ordinary loan transaction from a third party. 3.4 That the CIT(A) erred on facts and in law by not appreciating that nothing has been brought on record by the Revenue to show that the impugned amount has been originated form the appellants own coffers and not received from the Business Partners/Agents of appellant. 3.5 That the CIT(A) erred in upholding the addition made by assessing officer without appreciation the fact that none of the PAN/Conformation put on record by the appellant found to be false, collusive and fictious by the Revenue authorities. Therefore the explanation given by the appellant can- not be rejected on the basis of surmises and conjectures.
ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. 3.6 That the CIT(A) erred in facts in not appreciating that merely because the 76 depositors are not responding the notices issued under section 133(6) of the Act, it can-not be inferred that PAN, address and confirmations filed by the appellant are incorrect inasmuch as the non- receipt back of un-served letters to 76 depositors by Revenue authorities itself means that the letters have been served upon them and the address provided by the appellant is correct.
Without Prejudice
CIT(A) erred on facts and in law in not following the binding precedent of Hon’ble Delhi High Court in the case of CIT v. Kinetic Capital Finance Ltd.: 354 ITR 296 wherein it was held that Revenue has to advert to each and every entry and not to pick up a couple of entries and label entire set of deposits made as undisclosed income. Accordingly, security deposits received from 93 parties from whom confirmation were also provided by assessee, should not be considered for making addition under Section 68 of the Act.
The appellant craves leave to add, alter, amend or vary the above grounds of appeal at or before the time of hearing.”
[B] Vide Assessment Order passed under Section 143(3) of the Income Tax Act, 1961 (in short “the I.T. Act”). The relevant portion of the Assessment Order is reproduced as under:-
“ ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd.
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ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. [C] The Assessee filed appeal before the Ld. CIT(A). Vide impugned appellate order dated 08.08.2016, the Ld. CIT(A) dismissed the assessee’s appeal. The relevant portion of the order dated 08.08.2016 of the Ld. CIT(A) is reproduced as under:
“ ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd.
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[D] This present appeal has been filed by the assessee against the aforesaid impugned appellate order dated 08.08.2016 of the Ld. CIT(A). At the time of hearing, Revenue was represented by Shri Dheeraj Garg, the learned Senior Departmental Representative (“Ld. Sr. DR”, for short). However, none was present from the assessee’s side. In the absence of any representation from assessee’s side, at the time of hearing before us, we heard the Ld. Sr. DR; who relied upon the order of the Assessing Officer and the aforesaid impugned order dated 08.08.2016 of the Ld. CIT(A). After perusal of the materials on record, including the order of the AO and the aforesaid impugned order dated 08.08.2016 of the Ld. CIT(A), we find that the Ld. ITA No.-6352/Del/2016. M/s Carol Securities Pvt. Ltd. CIT(A) has passed speaking order on merits. Relevant portion of the impugned order of the Ld. CIT(A) has already been reproduced in foregoing paragraph [C] of this order.
We find that the Ld. CIT(A) has given detailed reasons for his decision on merits in the aforesaid impugned appellate order dated 08.08.2016 of Ld. CIT(A). During appellate proceedings in Income Tax Appellate Tribunal (“ITAT”, for short) no material has been brought for our consideration to persuade us to take a view different from the view taken by the Ld. CIT(A) in the impugned order on merit. After hearing the Ld. Sr. DR and after perusal of materials on record, and further, in view of the foregoing discussion, we decline to interfere with the aforesaid impugned appellate order dated 08.08.2016 of Ld. CIT(A), and accordingly, this appeal is dismissed.
[E] Before we part; we explicitly clarify that the assessee will be at liberty to approach ITAT for restoration of the appeal in accordance with Proviso to Rule 24 of Income Tax (Appellate Tribunal), Rules, 1963. If the assessee does approach ITAT for restoration of the appeals in ITAT, the matter will be considered in accordance with law having regard to the facts and circumstances.
[F] In the result, appeal filed by Assessee is dismissed.
Order pronounced in the open court on 06/01/20.