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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI Before Sh. N. K. Saini, AM and Sh. Sudhanshu Srivastava, JM Asstt. Year : 2006-07 : Asstt. Year : 2007-08 United Refrigeration & Industries Vs Asstt. Commissioner of Income 21/73, Old Rajinder Nagar, Tax, Central Circle-7, New Delhi-110060 New Delhi (APPELLANT) (RESPONDENT) PAN No. AAAFC2025R Assessee by : Sh. Salil Kapoor, Adv. Revenue by : Sh. Umesh Chander Dubey, Sr. DR Date of Hearing : 05.01.2017 Date of Pronouncement : 22.03.2017 ORDER Per N. K. Saini, AM:
These two appeals by the assessee are directed against the separate orders each dated 27.10.2010 of the ld. CIT(A)- I, New Delhi.
2. Since these appeals relating to the same assessee, having similar issues involved were heard together so these are being disposed off by this consolidated order for the sake of convenience and brevity.
3. The grounds raised in 2006-07 read as under:
2 & 431/Del/2011 United Refrigeration & Industries “1. The learned CIT [A] has erred in confirming the order of the Assessing officer. 2.1 The Department has not confronted the documents which it has collected behind the back of the assessee, and afforded an opportunity to cross-examine the person from whom it has recovered the documents and then gave him an adequate and reasonable opportunity to rebut them. 2.2 The assessment is based on photocopies found from a third party [Transworld ICT Solutions Pvt. Ltd., in Bangalore.] which are neither authenticated nor has found the original documents and such that unauthenticated photocopies are not admissible evidences. 2.3 The documents relied by the authorities below either do not bear the signatures of the assessee or bear forged signatures. 2.4 That the Department has not found /located the said bank but has extracted information about the alleged bank account from the data bank of Transworld ICT Solutions Pvt. Ltd., in Bangalore. 2.5 The Department has not been able to get any data nor able to locate the said First Curacao International Bank. 2.6 The assessment is made on the basis of dumb documents which have no relation to the assessee and no funds from the alleged huge income has flown to it.
3 & 431/Del/2011 United Refrigeration & Industries 2.7 The learned AO has ignored the fact that Authorities outside India have found that the said First Curacao International Bank is involved in cyber crime and VAT frauds. 2.8 The learned AO has ignored the fact that the owners of First Curacao International Bank and the Transworld ICT Solutions Pvt. Ltd., of Bangalore are the same person[s] who, are involved in cyber crime spread over a number of countries. 3.1 That the assessee has neither opened the alleged bank account with the First Curacao International Bank nor has done, any e-trading. 3.2 That the alleged account opening documents bear forged signatures, and is not in accordance to the Partnership deed of the firm. 3.3 That the balance sheet and Profit & loss account of the firm alleged to be found with the Transworld ICT Solutions Pvt. Ltd., of Bangalore do not bear any signatures of the partners of the assessee firm but some chartered accountants who were neither examined by the Department nor confronted to the assessee. 3.4 The learned AO has ignored the fact that the computer found from the premises of the assessee and its' partners do not have any record of operations by internet of the said or any other bank account.
4 & 431/Del/2011 United Refrigeration & Industries 3.5 The learned AO has- ignored the fact that the alleged communication received by the assessee from First Curacao International Bank does not have any address on which the assesses could have communicated, either enquiring about it or denying that they do not have any connection with it. 3.6 The learned AO has ignored the fact that the assessee has filed criminal complaints against all the parties which are still under process. 3.7 The learned AO has ignored the fact that the Exchange Control Authorities in India under FEMA are investigating against Transworld ICT Solutions Pvt. Ltd., of Bangalore and a number of others and they are yet to decide on the erring parties.
4. That without prejudice to the foregoing that the Account was not opened by the appellant there are a large number of arithmetical errors and double additions in the amount worked out by the learned AO in the addition made.
5. The learned AO has ignored the fact that the loan agreement with the alleged Mr. Ajiab Singh of Wise berry Services U.K. does not bear the signatures of the partners of the assessee.
6. The disallowance of RS. 36,300 as l/5th of the total expenses shown in P&L A/c as un-vouched is wrong as the total expenses debited in P&L A/c including consumable stores are Rs. 1,20,983 only.
7. The interest charged u/s 234A and 234B are wrong.
5 & 431/Del/2011 United Refrigeration & Industries 8. That the above grounds are independent and without prejudice to each other.
9. That the appellant seeks leave to add, amend, alter or abandon any of the above grounds at the time of hearing of the appeal.”
4. The facts of the case in brief are that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was carried on 24.01.2007 at the registered office of the assessee as well as the residences of its partner. The assessee firm was ostensibly engaged in the business of electrical and electronic products, refrigeration and air conditioning plants. It was found that the assessee was carrying e-trading activities with business entities located in United Kingdom, Spain, Turkey, UAE and other countries. The assessee company was found to be a 100% wholly owned subsidiary of Transworld ICT British Virgin Islands that was a group company of First Curacao International Bermuda. The AO issued the notice u/s 153A of the Act on 05.03.2008 requiring the assessee to file the returns for 6 assessment years starting from assessment year 2001-02. The assessee filed the return of income for the assessment years 2003-04 to 2006-07 on 16.07.2008 and also furnished the photocopies of the returns of income which were already 6 & 431/Del/2011 United Refrigeration & Industries filed before the AO for the respective assessment years and stated that the same may be treated as the return of income for the purpose of Section 153A of the Act. However, the AO framed the assessment at an income of Rs.15,41,86,913/- which was computed as under: “Profit and Gains of Business as per computation of Income filed along with the return of income: Rs. (-) 4,540 Add: Disallowance I. Expenses disallowed as unvouched Rs. 36,300 II. Income from e-trading activity Undisclosed by the assessee Rs.15,41,40,768 III. Income from interest Rs.14,385 Total Income Rs.15,41,86,913”
5. Being aggrieved the assessee carried the matter to the ld. CIT(A) and furnished various documents which are summarized by the ld. CIT(A) in para 4 of the impugned order and read as under: “The written submissions made by the appellant in the course of appeal proceedings, in regard to various documents are summarized here under: Sr. No. Document Remarks by Appellant Annexure-A-01: Bank This is an alleged bank account with 1. Account statement of M/s First Curacao Bank transcript of United Refrigeration and which was taken by the Department Industries having a client from Transworld ICT Solutions Pvt. reference number -04-801- Ltd., Bangalore. It does not bear any 204330-01 authentication or signatures.
Annexure-A-02: Corporate This is a document taken by the banking account application Department from Transworld ICT form bearing the signature of Solutions Pvt. Ltd. Bangalore. It Sh. Ravinder Datta dated does not bear any authentication or 18.11.2005. signatures. The signatures on the form are not signatures of Mr.
7 & 431/Del/2011 United Refrigeration & Industries Ravindra Dutta but his forged signatures. FIR filed by assesses, Forensic expert report also submitted by the assessee before the CIT[A].
Annexure-A-03: Company This is a document taken by the History Questionnaire. Department from Transworld ICT Solutions Pvt. Ltd. Bangalore. It does not bear any authentication or signatures. The assessee denies having submitted it.
4. Annexure-A-04: Form I This is a document taken by the Regarding Expected Wire Department from Transworld ICT Transfer Activity. Solutions Pvt. Ltd. Bangalore. It does not bear any authentication or signatures. The assesses denies having submitted it.
5. Annexure-A-05: Sample Form This is a document taken by the of Certification of Legal Department from Transworld ICT Compliance Solutions Pvt. Ltd. Bangalore. It does not bear any authentication or signatures. The assesses denies having submitted it.
Annexure-A-06: Partnership This is a document taken by the Deed of the Firm. Deapartment from Transworld ICT Solutions Pvt. Ltd. Bangalore. This is a copy of the partnership deed of the assessee but the assessee denies having submitted it to Transworld ICT Solutions Pvt. Ltd. Bangalore and /or First Curacao Bank. It may have been taken in a unauthorized manner from some other source.
Annexure-A-07: Copy of Bank This is a document taken by the Statement (Account Number - Department from Transworld ICT 20172) of M/s United Solutions Pvt. Ltd. Bangalore. This is Refrigeration & Industries in a copy of the Bank statement of the Bank of India assessee but the assessee denies Paharganj. having submitted it to Transworld ICT Solutions Pvt. Ltd. Bangslore and /or First Curacao Bank. It may have been taken in a unauthorized manner from some other source. Annexure-A-08: VAT Return This is a document taken by the 8. acknowledgement form of M/s Department from Transworld ICT 8 & 431/Del/2011 United Refrigeration & Industries United Refrigeration & Solutions Pvt. Ltd. Bangalore. This is Industries a copy of the VAT Return of the assessee but the assessee denies having submitted it to Transworld ICT Solutions Pvt. Ltd. Bangalore and /or First Curacao Bank. It may have been taken in a unauthorized manner from some other source.
9. Annexure-A-09: Sales Tax This is a document taken by the Return Of M/s United Department from Transworld ICT Refrigeration and Industries Solutions Pvt. Ltd. Bangalore. This is attested on 9.11.2005 a copy of the Sales tax Return of the assessee but the assesses denies having submitted it to Transworld ICT Solutions Pvt. Ltd. Bangalore and /or First Curacao Bank. It may have been taken in a unauthorized manner from some other source.
Amiexure-A-10: Copy of PAN This is a document taken by the of M/s United Refrigeration Department from Transworld ICT and industries Solutions Pvt. Ltd. Bangalore. This is attested on 9.11.2005 a copy of the PAN of the assessee but the assessee denies having submitted it to Transworld ICT Solutions Pvt. Ltd. Bangalore and /or First Curacao Bank. It may have been taken in a unauthorized manner from some other source. Annexure-A-11: Copy of This is a document taken Department 11. Income Tax Return of Sh. from Transworld Solutions Pvt. Ltd. Ravinder Datta and M/s Bangalore. This copies of tax returns United refrigeration and etc but the assessee denies having industries for the A.Y 2005-06 submitted it to Transworld ICT attested on 9.11.2005 Solutions Pvt. Ltd. Bangalore and /or First Curacao Bank. It may have been taken in a unauthorized manner from some other source.
12. Annexure-A-12: Form of This is a document taken by the Benefic al Ownership Department from Transworld ICT declaration of M/s United Solutions Pvt. Md. Bangalore. It refrigeration and industries does not bear any authentication or signatures. The assessee denies having submitted it.
13. Annexure-A-13: An email This is a document taken by the from Ellyanne Sales Resident Department from Transworld ICT 9 & 431/Del/2011 United Refrigeration & Industries Compliance Officer , First Solutions Pvt. Ltd. Bangalore. It Curacao International Bank does not bear any authentication or N.V to" signatures. The assessee denies Ravinderdatta@hotmail.com” having operated an e-mail with such a name. No such e-mail or email address were found from the computer found at the premises of the appellant which was seized by the department. Annexure- A-14: Copy of 14. This is a document taken by the passport and PAN copy of Department from Transworld ICT Mr. Ravender Datta attested Solutions Pvt. Ltd. Bangalore, on 9.11.2005 These are copies of passport etc but the assessee denies having submitted it to Transworld ICT Solutions Pvt. Ltd. Bangalore and /or First Curacao Bank. It may have been taken in a unauthorized manner from some other source.
Annexure-A-16: Letter of This is a document taken by the trust and reliability issued by Department from Transworld ICT U.K. Properties (Services), Solutions Pvt. Ltd. Bangalore. It Ltd., 89, Whitehorn Road , does not bear any authentication or Yiewlsey, West Drayton signatures. The assessee denies Middlesex , UB78LA having submitted it.
Annexure-A-17: Letter of This is a document taken by the trust and reliability issued by Department from Transworld ICT U.K. Frozen Food, 20th Floor Solutions Pvt. Ltd. Bangalore. It Wembley point, 1 Harrow does not bear any authentication or Road, Wembley, Middlesex, signatures. The assessee denies HA96DE having submitted it.
Annexure-A-19: Letter of This is a document taken by the good standing given by Paul Department from Transworld ICT Bailey Vice President, Solutions Pvt. Ltd. Bangalore. It Transworld Payment does not bear any authentication or Solutions Limited signatures. It is apparently issued, by Transworld itself. The assessee denies having submitted it.
Annexure-A-20: Audited This is a document taken by the Consolidated Income Department from Transworld ICT statement of M/s United Solutions Pvt. Ltd. Bangalore. It Refrigeration and industries bears the signatures of a firm of for the different assessment chartered accountants but does not year taken from the data bank bear any signatures of the appellant.
10 & 431/Del/2011 United Refrigeration & Industries of Transworld Solutions Pvt. The appellant declares that it has Ltd. during the search in its never dealt with such a firm of premises on 19.12.2006 chartered accountants. Furner the format of the accounts is also different from the format used in India. The assessee denies having submitted it. Annexure-A-21: Special Test 19. This document came to the address key - 4304 for generating the of the appellant. It is a common test key for operating the e- feature that public receive a banking account number of communications offering 20. Annexure-A-22: Password loans, money making deals and UEVV 2468 for operating the huge prize moneys etc. The e-banking account in First appellant considered it to be a Curacao International Bank. communication of such nature and N.V.(FICB) left it. It is to be noted that the communication does not bear any address of the sender even to enable the appellant make any correspondence on them.
6. Apart from the above, the assessee also furnished the written submissions which has been incorporated in para 4.2 at page no. 28 to 34 of the impugned for, for the cost of repetition, the same is not reproduced herein.
7. The ld. CIT(A) after considering the submissions of the assessee confirmed the addition made by the AO by observing in paras 5 & 6 of the impugned order which read as under: “5. I have considered the submission made by the appellant and evidence placed on record as well as documents found during the search operation on the appellant and, M/s Transworld ICT Solutions Pvt. Ltd. In the instant case, the Assessing Officer had made the addition of Rs. 15,41,40,768/- by holding that appellant firm has 11 & 431/Del/2011 United Refrigeration & Industries income for e-trading activities. The basis adopted by the learned Assessing Officer to make the addition is that, there is evidence found in the course of search of M/s Transworld ICT Solutions Pvt. Ltd. and, the appellant that it was having a bank account with the First Curacao bank an internet bank registered in the Netherland Antilles. In the said internet account, it was seen that during the period 5.1.2006 to 7.07.2006 that total value of credit entries appearing during the said period in the account in British Pounds 959120658. The total debit entries appearing in the account are British Pounds 959112966 which includes wire transfer to the tune of British Pounds 411456746. It was further seen that Money was being credited into the account of United Refrigeration, India from companies such as M/s Ultimate Security Agency Ltd., M/s Worldwide U.K. Import and Export Ltd., the Satellite House Ltd., Globalex Ltd. which were all based in the United Kingdom. Against these credits there were almost simultaneous debits of approximately the same amounts in favour of foreign companies such as Golden date SL, Korowai Business Invest SI, Siyah Yaxilim Ltd, Amber Telecom which were based in Spain, Turkey and the UAE. However, the appellant both in the course of assessment proceedings and appeal proceedings has denied the existence of the account. According to the appellant, the documents seized from the premises of M/s Transworld ICT Solutions Pvt. Ltd. cannot be relied upon without cross examination of director of M/s Transworld ICT Solutions Pvt. Ltd., It has been contended that the failure of the director to 12 & 431/Del/2011 United Refrigeration & Industries appear before the learned officer shows that the evidence cannot be relied upon an affidavit supported by report of handwriting expert has also been placed on record to submit that signature on the bank opening forms and other documents of the partner of the appellant firm are forged signatures. It has been contended that activities if M/s Transworld ICT Solutions Pvt. Ltd. were conducted is an illegal manner and therefore cannot be relied upon. It has also been submitted that, rot a sing e rupee or income has come to the partners or the appellant firm. In other words, as a result of search no assets have been found to support such a huge addition. As regards, the documents found belonging to the partner from M/s Transworld ICT Solutions Pvt. Ltd., it was submitted that, the same cannot be relied upon as they may have been submitted to some other person authority and third person has utilized them in the unauthorized manner. In fact, it has also been stated that since the person opening the alleged account did not have the papers relating to Mr. Ajay Lamba the other partner, he may have got the account opened in an unauthorized manner for which the First Curacao Bank and /or Transworld ICT Solutions Pvt. Ltd. Bangalore have connived with him. Further as regards that two communications/letters containing the Key Number and the passwords received by the appellants, it has been noted that, it did not have any address of the person sending it in order to give credence and /or take any further action on them. Thus they were deemed to be some sort of anonymous letters.
13 & 431/Del/2011 United Refrigeration & Industries 5.1 From the aforesaid submission it is evident that, the appellant as not led any material (tangible or otherwise) to establish that the conclusion drawn by the learned officer on the basis of evidence found as a result of search is not tenable. At this juncture, it is appropriate to again list out the evidence which clearly demonstrate appellant had a bank account and income therefrom is the income of the appellant:
1. 1. Photocopy of Bank Statements of M/s United Refrigeration and Industries in First Curacao Bank Limited, show both credit and debit entries to the tune $1.2 billion with from the period between 5.1.2006 and 7.7.2006.
2. Corporate Banking Account Application Form which bears the signature of Sh. Ravender Datta.
3. Company History Questionnaire which bears the details relating to the business activities of the firm.
4. Form regarding expected Wire Transfer activity which bears the name of the important countries under both the heads namely incoming wire transfer and outgoing wire transfer.
5. Sample Form of Certification of Legal Compliance is an undertaking signed by Sh. Ravender Datta stating that the firm shall comply with the laws of United Kingdom and India.
6. Partnership Deed of the Firm is the copy of the partnership deed signed by all the three partners.
14 & 431/Del/2011 United Refrigeration & Industries 7. Photocopy of Bank Statement which bears the credit and debit entries of the firm for the relevant period.
VAT return acknowledgement which bears the signature of Shri Ravender Datta.
9. Sales Tax Return is attested by the Notary, New Delhi.
10. Photocopy of PAM is attested by notary, New Delhi.
11. Photocopy of Income Tax Return is attested by the Notary, New Delhi.
Form of beneficial ownership declaration of M/s United Refrigeration & Industries which appoints Sh. Ravender Datta as the representative of the client.
13. Copy of E- mail from Ellyanne Salas, Resident compliance officer of First Curacao International Bank to Sh. Ravinder Datta is a request to Sh. Ravender Datta to provide the missing documents for the e-banking account.
Photocopy of Passport of Sh. Ravder Datta and PAN copy of Sh. Dana attested on 9.11.2005 is attested by the Notary, New Delhi.
15. Copy of Electricity Bill is attested by the Notary, New Delhi.
16. Letter of trust and reliability issued by U.K. Properties(Services) Ltd., 89, whitethorn Road, Yiewlsey, West Drayaton Middlesex, UB7 8LA is in favour of M/s United Refrigeration and Industries.
17. Letter of trust and reliability issued by U.K. frozen Food, 20th floor, wembley Point, 1 Harrow Road, Wembley, Middlesex, HA96DE is in favour of M/s United Refrigeration and Industries.
15 & 431/Del/2011 United Refrigeration & Industries 18. Good Conduct Certificate given by the Bank of India, Paharganj, Delhi branch in favour of M/s United Refrigeration & Industries is in favour of M/s United Refrigeration and Industries.
Letter of Good Standing Given by paul bailey, vice President, Transworld Solutions Pvt. Ltd. in favour of Sh. Ravinder Datta of M/s United Refrigeration and Industries is in favour of Shri Ravender Datta of M/s United Refrigeration and Industries.
Audited Consolidated Income Statement of M/s United Refrigeration &, Industries which belongs to M/s United Refrigeration and In Industries.
Special Test Key-4304 for generating the test key for operating the e-banking account which tells the procedure to generate the test key by using the special test key dated 30.12.2005.
Password; UEVV2468 for the operating the e- banking account in First Curacao International Bank N. V. (FICB) which gives the password for operating the account dated 30.12.2005.
Loan Agreement between Mr.: Ajaib Singh owner of Wiseberry Services Limited, UK and Sh. Ravender Datta owner of M/s United Refrigeration and Industries, India which is a corresponding wire transfer entry in the bank account of M/s United Refrigeration and Industries in FICB on 27th March 2006 for the above amount." 5.2 All what the appellant has placed on record is an affidavit and copy of the handwriting expert.
16 & 431/Del/2011 United Refrigeration & Industries These documents do not rebut the substantive evidence gathered by the revenue both from the premises of the appellant and the premises of M/s Transworld ICT Solutions Pvt. Ltd. In fact, the learned officer has rightly highlighted that denial of Shri Ravender Datta cannot be accepted in light of seizure of letter dated 30.12.2005 from the First Curacao International Bank addressed to Ravender Datta from the residence of Shri Datta during the course of search informing him about the acceptance of application for the opening of the account of United Refrigeration & Industries with the Bank. The letters give the special test key numbers and the internet banking password for the operation of the internet banking account of United Refrigeration & Industries with the First Curacao Bank. The letters informing Shri Ravender Datta of the internet banking password for operating of the internet bank account is clear evidence of Shri Ravender Data's involvement. This is so because due to security reasons, the internet banking used id and password are sent by separate letters by Post, ONLY to the authorized user of the account. It is like the PIN Number of a debit card which is sent specially by post to the owner of the debit card. Therefore, in this case since Sh. Ravender Datta was the authorized user the account, the internet banking password and user id/test keys would have been sent only to him and no one else. Since it is apparent that huge transactions have been carried on through the said bank account, and since only Mr. Ravender Datta was aware of the internet banking password/Test key needed for the operation of the account, it is obvious that Shri Ravender Datta 17 & 431/Del/2011 United Refrigeration & Industries either operated the account on his own and carried on the internet trading activity or else passed on the information to someone else to enable its operation. In either case, Shri Ravender Datta had full knowledge of the fact that an internet bank account, had been opened, and the fact that e-trading activity was being carried on through the same. Also, Loan agreement between Ravender Datta and one Shri Ajaib Singh, proprietor of Wiseberry Service U. K. was found from the registered office of United Refrigeration & Industries. As per the agreement, Shri Datta has advanced a loan of British Pounds 150000 to Shri Ajaib Singh of U. K. at the rate of interest of 9% as owner of M/s United Refrigeration and Industries. This agreement was produced by Shri Ajay Lamba, the other partner of United Refrigeration and Industries who said that it had arrived by post some months ago and he had informed Sh. Ravender Datta accordingly. As per the bank statement of United Refrigeration with the First Curacao Bank it is seen that when the difference between the debits and credits (income of united) becomes substantial, this is transferred out of the account through wire transfer. The loan agreement between Ravendra Datta and Ajaib Singh represents one such wire transfer which is done on 28.03.2006. 5.3 In light of the above clinching evidence no credence can be given to the general statements made by the appellant. Infact the statement of Shri Ajay Lamba one of the partner of the appellant firm recorded on 24.01.2007 supports the conclusion the appellant firm had a bank account 18 & 431/Del/2011 United Refrigeration & Industries which was involved in e-trading activities. The judgments relied upon are totally inapplicable as the papers found from the residence of the assessee are no sheaf of papers but documents having independent evidentiary value by themselves taken from an authenticated source. The fact which reinforces the above finding is the recovery of test key and password from the residence of the authorized representative of the firm Sh. Ravender Datta. Moreover, the loan agreement which was found from the registered office of the assessee is backed by a wire transfer entry in the hank account of the assessee in First Curacao International Bank N.V. Infact, few of the documents do not bear signature of all the partners is of no consideration as it is not a requirement of law that all partners must sign all the documents including loan agreement. On the contrary, element of partnership is an extension of principle of agency. It appears that, the appellant firm has attempted to shift the burden on one of the partners namely Shri Ajay Lamba when it submits that he may have got the account opened in an unauthorized manner for which first Curacao bank and/or M/s Transworld ICT Solutions Pvt. Ltd. have connived with him. This submissions itself demonstrates the stands of the appellant is contradictory and, establishes that, the entire submission are based on hypothetical grounds and divorced from material en record. The filing of criminal complaints do not shift the burden and hence the submissions made are altogether unreliable and not sustainable. The appellant in the concise grounds has also raised a contention that there are airthmathetical error in 19 & 431/Del/2011 United Refrigeration & Industries the addition but no submissions have been made in this regard and therefore same is rejected. In light of the aforesaid, the addition made by the learned officer of Rs.15,41,40,768/- is confirmed The aforesaid findings thus dispose of Ground Nos. 1 to 4 of Concise Grounds of Appeal
6. Ground No. 5 of the Concise Grounds of Appeal is regarding disallowance of Rs. 36,300/-. The Assessing Officer has held in this regard as under: "In the return of income filed for the Assessment Year 2006-07 in response to notice u/s 153A the assessee has shown a loss of Rs. (-4540). However the profit and loss account attached with the return of income shows different figures. In the receipt side assesses has shown Rs.1,25,552 as service charge and various expenses amounting to Rs.1,20,983/- have been debited to the profit and loss account. The profit and loss account filed alongwith the return shows an income of Rs.4,569 instead of loss of Rs. (-4540) which the assessee has shown in the return of income. Hence income of the assessee as per the Profit and Loss account is taken as Rs.4,569 and not Rs. (-4540). The assessee was asked vide notice u/s 142 dated 20.11.2008 to produce the books of account in support of its claim of expenses made to earn the above income. Another opportunity was given through order sheet entry dated 10.12.2008 for producing the books of account. The assessee has failed in both the occasions to produce the same.
20 & 431/Del/2011 United Refrigeration & Industries In the light of above facts 1/5lh of all the expenses shown in the profit and loss account amounting to Rs. 36,300/- has been disallowed as being not incurred for the p.. poses of the business and added back to income for the relevant assessment year.”
8. Now the assessee is in appeal. The ld. Counsel for the assessee furnished an application dated 14.06.2014 under Rule 29 of the ITAT Rules, 1963 stating therein as under: “Sub- Request for Admission of Additional Evidence under Rule 29 of ITAT Rules 1963 With reference to the above, the assessee most humbly prays as under-
1. 1. The assessment in the abovementioned case was completed at an income of Rs.15,41,86,913/- against returned NIL income u/s 153A r.w.s 143(3) of the Income Tax Act 1961 by the Astt. Commissioner of Income Tax, Central Circle - 7, New Delhi.
2. Inter alia, addition was made in the hands of the assessee, to the tune of Rs.15,41,40,768/-by treating undisclosed investment U/s 69. The basis of the bank account alleged in the name of the assessee firm in First Curacao Bank, NV.
3. The appellant could not the following documents as evidences because the same were not in its possession. This document has been obtained after persistent follow ups and request by the assessee with the help of his brother Sh. Rajesh Dutta, who is a British National. The list of documents is as follows: i) Letter relating to First Curacoa International Bank N.V. dated 24 January, 2006.
21 & 431/Del/2011 United Refrigeration & Industries ii) Criminal Complaint No. 3812/2010 filed before MM Tis Hazari Court against M/s Transworld ITC Solutions Pvt. Ltd. iii) Company Details: Certificate of Incorporation of U.K Property Services Ltd. iv) Company Details: Certificate of Incorporation of M/s Michael Kelly Haulage Ltd. v) Letter from Michael Kelly Dated 5/10/2012. vi) Company Details: Certificate of Incorporation of Risedale Ltd. vii) Company Details: Certificate of Incorporation of Wiseberry Service Ltd. viii) Letter written to Mr. Ajaib Singh dated 1/10/2012 with courier receipt. ix) Letter from Mr. Ajaib Singh dated 9/10/2012 with Envelope.
These documents were not available with the assessee at the time of proceedings before the lower authorities.
The assessee most humbly requests the Honourable Bench to admit the following additional evidences which are necessary for a just and fair disposal of appeal by the bench.”
The ld. Counsel for the assessee reiterated the contention made in the aforesaid application dated 14.06.2014 and submitted that the documents now procured by the assessee go to the root of the matter to resolve the present controversy. It was further submitted that the assessee could obtain those documents after persistent follow up and the evidences could not be procured earlier due to the circumstances beyond the control of the assessee. He requested to admit the additional evidences/documents.
10. In his rival submissions the ld. DR object for admission of the additional evidences and submitted that no specific reason has been given for not producing those documents before the authorities below, therefore, the same should not be admitted.
We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the main addition has been made by the AO u/s 69 of the Act on the basis of alleged bank account in the name of the assessee firm in First Curacao International Bank, Netherland. The assessee now furnished the new documents first time before the Tribunal. The said documents/evidences have been admitted by the earlier Bench on 11.09.2015 as noted in the order sheet which read as under: “The Counsel for the assessee requested for admission of additional evidence filed by the assessee in the paper book and the Ld. DR has opposed the same. After considering the augments, we are of the view that the additional evidence filed in paper book by the assessee needs to be admitted. Accordingly we admit additional evidence for both the Assessment years in appeal before us. Hearing adjourned to 13th October, 2015.”
23 & 431/Del/2011 United Refrigeration & Industries 12. These documents/evidences are relevant to resolve the present controversy and could not be furnished earlier before the authorities below because the assessee could not lay its hands. These additional evidences/documents now furnished by the assessee are relevant to resolve the present controversy and go to the root of the matter but these documents/evidences were not available to the authorities below, so they did not have any occasion to comment upon the same. We, therefore, considering the totality of the facts, deem it appropriate to set aside the cases for both the assessment years under consideration back to the file of the AO to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. We also direct the assessee to cooperate and not to seek undue or unwarranted adjournments.
In the result, the appeals of the assessee are allowed for statistical purposes. (Order Pronounced in the Court on 22/03/2017)