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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’, NEW DELHI
Before: SH. BHAVNESH SAINI & SH. O.P. KANT
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘D’, NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER & 329/Del/2010 Assessment Years: 2000-01 & 2005-06 Vs. M/s. Junoon Capital Services Income Tax Officer, Ward-4(2), Room No. 413A, C.R. Building, Pvt. Ltd., 104-Mukand House, I.P. Estate, New Delhi Commercial Complex, Azadpur, New Delhi PAN : AABCJ1667L (Appellant) (Respondent) And ITA Nos.331/Del/2010 Assessment Years: 2005-06 Income Tax Officer, Ward-4(2), Vs. M/s. Juneja Nagpal Room No. 413A, C.R. Building, Construction Pvt. Ltd., 203- I.P. Estate, New Delhi Mukand House, Commercial Complex, Azadpur, New Delhi PAN : AAABCJ0067G (Appellant) (Respondent) Department by Sh. Amit Jain, Sr.DR Assessee by Sh. Vivek Agrawal, CA Date of hearing 08.11.2017 Date of pronouncement 17.11.2017 ORDER PER O.P. KANT, A.M.:
These appeals by the Revenue are directed against separate orders passed by the Ld. Commissioner of Income-tax (Appeals)-VII, New Delhi, in the case of assessees having details as under:
S.No. of assessee Assessment Date of year order of the CIT-(A) 1 328/Del/2010 M/s. Junoon Capital 2000-01 17.11.2009 Services Pvt. Ltd. 2. 329/Del/2010 M/s. Junoon Capital 2005-06 17.11.2009 Services Pvt. Ltd. 3. 331/Del/2010 M/s. Juneja Nagpal 2005-06 06.11.2009 Constructions Pvt. Ltd.
In all these appeals, identical issue of additions under section 68 of the Act is involved, therefore these appeals were heard together and disposed off by way of this consolidated order for convenience.
First we take up the appeal in ITA No. 328/Del/2010. The grounds raised by the Revenue are reproduced as under:
The order of the learned CIT (Appeals) is erroneous & contrary to facts & law.
2. On the facts and in the circumstances of the case and in law, the learned CIT (Appeals) has erred in deleting the addition of Rs.55,00,000/- made by A.O. u/s. 68 of the I.T. Act being the bogus cash credits and Rs. 10,000/- being the unaccounted cash paid as commission for obtaining accommodation entries.. 2.1 The Ld. CIT(A) ignored the fact that the assessee did not discharge the onus of proving the creditworthiness of the creditors and genuineness of the transactions. 3 .The appellant craves leave to add, to alter, or amend any grounds of the appeal raised above at the time of hearing.
At the outset, the Ld. Sr. DR submitted that in all these appeals the Ld. CIT-(A) has not complied with the procedure of admitting additional evidences furnished during first appellate proceeding before him. The Ld. Sr. DR referred to para-4.1 of learned CIT-(A) in the case of M/s. Junoon Capital Services Private Limited (assessment year 2000-01) and submitted that assessee claimed to have filed following documents in assessment as well as appellate proceedings:
“a) Share application form received from the shareholders containing the complete details ot applicants which includes Name of the applicants, Address, PAN, assessment particulars, No. of shares applied, Mode of payments of Share Application Money, details of Bank of Share Holders, Branch, Cheque No., Date and Occupation of Applicants; b) Confirmation from shareholders containing the complete details of amount invested. Cheque number. Date, Bank particulars. PAN and Income-Tax particulars; c) Copy of PAN Card of shareholders; d) Copy of acknowledgement of Income l ax Return of shareholders; e) Copy of Bank Statement of shareholders reflecting the transaction; f) Copy of audited Balance sheet of shareholders duly disclosing the Transactions; and g) Copy of Form no. 2 filed in ROC showing that the shares were allotted.”
The learned Sr. DR contended that all above documents were furnished first time before the learned CIT-(A) and were not filed before the Assessing Officer. In this respect, he produced original assessment record of the relevant assessment year. He submitted that learned CIT- (A) has decided the appeal relying on the above documents, which is a clear case of contravention of Rule 46A of Income Tax Rules, 1962 (in short ‘the Rules’) and accordingly, he requested that the matter may be restored to the file of the Ld. CIT-(A) for complying the Rule 46A of the Rules .
The learned Sr. DR submitted that in other two appeals also the part of the documents relied upon by the Ld. CIT-(A), were not furnished before the Assessing Officer. He particularly referred to relevant paras of the assessment orders and submitted that the assessee only filed confirmation of the said parties before the Assessing Officer and no documents were filed before the Assessing Officer. He submitted that all other documents relied upon by the Ld. CIT-(A) have been filed first time before him without providing opportunity to the Assessing Officer to examine those documents, thus, it has resulted into contravention of the Rule 46A of ‘the Rules’. Accordingly, he submitted that issue in dispute in these two appeals might also be restored to the file of the Ld. CIT-(A) for complying the provisions of Rule 46A of ‘the Rules’.
During hearing before us, the assessment record produced by the Ld. Sr. DR in the case of M/s. Junoon Capital Services Private Limited for assessment year 2000-01, was shown to Ld. counsel of the assessee and after perusal of the assessment record, he also admitted that the relevant documents were not furnished before the Assessing Officer and produced for the first time before the Ld. CIT-(A). The Ld. counsel of the assessee also concurred with the proposal of the Ld. Sr. DR to restore the matter back to the file of the Ld. CIT-(A) for complying the conditions of Rule 46A of the Rules. The Ld. counsel also withdrawn his application under Rule 27 of the ITAT Rules filed on 06/11/2017 in challenging validity of the reassessment proceeding under section 147 of the Act. 8. We have heard the rival submission and perused the relevant material on record. In ITA No. 328/Del/2010 the Assessing Officer has mentioned in the impugned assessment order that despite opportunities provided, no replies were filed and therefore, the order was passed under section 144 of Income-tax Act, 1961 (in short ‘the Act’). He mentioned in the assessment order that the assessee received amount from entry operators M/s Shayam Investment and Trading Company Private Limited in the form of share capital of Rs.5,00,000/- and share premium of Rs.45,00,000/- but not furnished any details to discharge onus under section 68 of the Act and accordingly, he made the addition. The Assessing Officer also made addition towards commission on getting accommodation entries from the entry provider. Before the Ld. CIT-(A), the assessee submitted documents, a list of which has already been reproduced in earlier paras of this order. The assessee claimed that these documents were already filed before the Assessing Officer. The Ld. CIT-(A), without verifying this fact whether those documents were available with the Assessing Officer or filed for the first time before him, he relied on all the documents and following the decision of the Hon’ble Apex Court in the case of CIT Vs. Lovely Exports Private Limited, (2008) 216 CTR 195 (SC) deleted the additions.
Before us, the Ld. Sr. DR produced the original assessment record, which was also shown to the Ld. counsel of the assessee. The Ld. counsel of the assessee also concurred with this fact that the documents relied upon by the Ld. CIT-(A) were not available before the Assessing Officer. This fact also gets confirmed from the finding of the Assessing Officer that no replies were filed by the assessee in discharging his onus under section 68 of the Act.
In view of above factual finding, it is evident that the documents relied upon by the Ld. CIT-(A) were produced for the first time before him and thus were in the nature of additional evidences. Regarding admission of the additional evidences, the relevant Rule 46A of the Rules, is reproduced as under:
“46A. (1) The appellant shall not be entitled to produce before the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)], any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the [Assessing Officer], except in the following circumstances, namely :— (a) where the [Assessing Officer] has refused to admit evidence which ought to have been admitted ; or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the [Assessing Officer] ; or (c) where the appellant was prevented by sufficient cause from producing before the [Assessing Officer] any evidence which is relevant to any ground of appeal ; or (d) where the [Assessing Officer] has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. (2) No evidence shall be admitted under sub-rule (1) unless the [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)] records in writing the reasons for its admission. (3) The [Deputy Commissioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)] shall not take into account any evidence produced under sub-rule (1) unless the [Assessing Officer] has been allowed a reasonable opportunity— (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. (4) Nothing contained in this rule shall affect the power of the [Deputy Commis-sioner (Appeals)] [or, as the case may be, the Commissioner (Appeals)] to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the [Assessing Officer]) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271.]” (Emphasis supplied externally)
11. We find that in Rule(3) of Rule 46A of the Rules, has clearly specified that the Commissioner shall not take into account the additional evidences unless the Assessing Officer has been allowed a reasonable opportunity to examine those additional evidences.
12. It is evident from the above finding of the Ld. CIT-(A) that he has admitted the additional evidences by way share application form, confirmation from cash creditors, copy of their PAN card, bank statement, audited balance sheet etc for the first time in appeal without confronting the AO with the same and allowing him any opportunity to furnish his comments and without verification, thus, sub-Rule (3) of Rule 46A has not been complied with. Therefore, we feel it appropriate to restore the issue to the ld. CIT-(A) to comply with the requirements of Rule 46A and take a fresh decision on merits in accordance with law. We order accordingly. Both the parties shall be afforded adequate opportunity of being heard.
In the result, appeal in is allowed for statistical purposes.
In also, the additions made by the Assessing Officer are in respect of section 68 of the Act and both parties agreed that Ld. CIT-(A) has not complied the conditions of Rule 46A of the Rules in admitting documents, other than the confirmations of the parties. In view of the above, following our finding in ITA No. 328/Del/2010, we restore the matter to the file of learned CIT-(A) for complying the conditions of Rule 46A of the Rules and decide the appeal afresh after allowing opportunity of being heard to both the parties. Both the appeals are accordingly allowed for statistical purposes.
In the result, all the three appeals of the Revenue are allowed for statistical purposes.
The decision is pronounced in the open court on 17th Nov., 2017.