ITO, NEW DELHI vs. M/S. SPOTLIGHT SECURITIES PVT. LTD., NEW DELHI

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ITA 6709/DEL/2016Status: DisposedITAT Delhi26 October 2017AY 2007-084 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(A) had not adjudicated the legal issue of reopening raised by the assessee. Therefore, the case was remanded back to the CIT(A) to decide the legal issue first before considering the merits.

What were the facts?

The Revenue appealed the deletion of an addition of Rs. 5 lakhs made on account of accommodation entry for share application money. The assessee had also filed a cross-objection challenging the reopening of the assessment.

What were the issues?

Whether the reopening of assessment under Section 148 was valid and whether the CIT(A) properly adjudicated the legal grounds raised by the assessee.

Which sections of the Income-tax Act were involved?

Section 148,Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI

Before: SHRI N.K. SAINI

Hearing: 21.09.2017Pronounced: 26.10.2017

Date of Hearing : 21.09.2017 Date of Pronouncement : 26.10.2017 ORDER

The appeal of the department and the cross-objection by the assessee are directed against the order dated 19.10.2016

2 ITA.No.6709/Del./2016 & CO.No.135/Del./2017 M/s. Spotlight Securities Pvt. Ltd., New Delhi. of Ld. CIT(A)-17, New Delhi. In the departmental appeal the only ground raised read as under :

1.

"The Ld. CIT(A) erred in deleting the addition of Rs.5 lakh made by the AO on account of accommodation entry of Rs.35 lakhs towards share application money ignoring the statement of Sh. Praveen Kumar Jain who had admitted during the course of search having floated many concerns for providing accommodation entries ' 1.1. In the cross-objection the assessee has raised the following grounds :

“1. That in the facts and circumstances of the case and in law, Ld. Assessing officer proceeded contrary to provision of law in initiating reassessment proceedings under section 148 of Act.

2.

That in the facts and circumstances of the case and in law Ld. Assessing offer erred in assuming jurisdiction to re-assess the appellant in absence of service of mandatory notice under section 143(2) of Act post rejection of objections filed by appellant.

3. That appellant craves leave to amend, alter grounds of cross objections before hearing.”

3 ITA.No.6709/Del./2016 & CO.No.135/Del./2017 M/s. Spotlight Securities Pvt. Ltd., New Delhi. 2. During the course of hearing, the Learned Counsel for the Assessee at the very outset stated that the issue relating to reopening of the case under section 148 of the I.T. Act was not adjudicated by the Ld. CIT(A). The present contention of the Learned Counsel for the Assessee was not controverted by the Ld. D.R. After considering the submissions of both the parties, it is noted that the Ld. CIT(A) did not adjudicate the legal issue raised by the assessee against the reopening of the case which is evident from the observations of the Ld. CIT(A) in para-2 of the impugned order which reads as under :

“2. Ground No.1 relates to contention of the appellant against reopening the case and issuance of notice u/s.148 of the Act. Since, the appeal is decided in favour of the appellant on merits, therefore, this legal ground is not adjudicated. Ground No.4 is general in nature.”

3.

We, therefore, deem it appropriate to remand the case back to the file of the Ld. CIT(A) to be adjudicated afresh in accordance with law after allowing reasonable opportunity of 4 ITA.No.6709/Del./2016 & CO.No.135/Del./2017 M/s. Spotlight Securities Pvt. Ltd., New Delhi. being heard, only after adjudicating the legal issue, the Ld.

CIT(A) should give the findings on the merit of the case.

4.

In the result, appeal of the department as well as cross objection of the assessee are allowed for statistical purposes.

Order pronounced in the open Court on 26.10.2017.

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