M/S. U.S. FOOD (P) LTD.,UTTAR PRADESH vs. ADDL. CIT, MORADABAD

This appeal is directed by assessee against the order of ld. CIT(A), Bareilly dated 27.02.2013 for the assessment year 2003-04 on the following grounds : “

The ld. AR of the assessee by way of written synopsis, submitted that the ld. Authorities below have wrongly made and confirmed the addition made on account of unexplained cash credits ignoring the fact that similar addition on the same ground with respect to cash credits from the same persons stood deleted by CIT(A) in A.Y. 2006-07 and no appeal was filed by the Revenue. It was submitted that the addition is not justified after rejecting the confirmations of share applicants filed by the assessee before the authorities below. It was submitted that the decision relied by ld. CIT(A) in Nova Promoters (supra) is not applicable in the instant case in view of the decisions rendered by Hon’ble Supreme Court in the case of Lovely Exports Pvt. Ltd., 216 CTR 195 and Steller Investment Limited 251 ITR 263. Further reliance is placed on the following decisions :

The ld. DR on the other hand relied on the orders of the authorities below and submitted that the authorities below have passed well reasoned orders and the same need no interference.

We have considered the rival submissions and have perused the impugned order and entire material on record. A perusal of the impugned order reveals that the ld. CIT(A) has relied upon the decision of Hon’ble Delhi High Court in the case of Nova Promoters (supra), wherein the extent of applicability of decision of Hon’ble Supreme Court rendered in Lovely Exports (supra) has been analyzed in detail. On this, it is opined by Hon’ble Delhi High Court that where the complete particulars of the share applicants in respect of their identity, creditworthy and genuineness are furnished to the Assessing Officer and the Assessing Officer has not conducted any enquiry into the same or has no material in his possession to show that those particulars are false and cannot be acted upon, then no addition can be made in the hands of the company u/s 68 of the Income Tax Act, 1961 and the remedy open to the revenue is to go after the Share Applicants in accordance with law. In the instant case a perusal of written synopsis furnished by the ld. AR speaks that the Assessing Officer made addition of aggregate sum of Rs.4,50,000/- as unexplained cash credit to the total income of assessee after rejecting the confirmations filed by each one of the cash creditors, whereas the assessment order categorically speaks that regarding the share application money, the assessee was asked to submit the confirmation and other proofs to establish the genuineness of the funds taken as cash credits. In the following three cases, the assessee could not even submit the PAN. Also, there is no whisper in the impugned order that the assessee submitted any documentary evidence before the authorities below with respect to the alleged share applicants. The ld. CIT(A) while applying the decision of Hon’ble Delhi High Court in the case of Nova Promoters (supra) also does not record any finding that complete particulars of the share applicants were not furnished by the assessee before the authorities below or that the Assessing Officer had sufficient material in his possession to show that those particulars so furnished by the assessee are false or fabricated. The photocopies of confirmations of share applicants are placed on record before us, but there being doubt on their submission before the authorities below and lack of findings of lower authorities thereupon, the decisions relied upon by the ld. CIT(A) and the assessee, cannot be applied to the case in hand. Keeping in view the averments made on behalf of the assessee in the written synopsis regarding submission of confirmation etc. before the Assessing Officer and the contradictory finding of Assessing Officer in this regard given in the assessment order, we deem it expedient in the interest of justice that the matter should be restored to the file of Assessing Officer to decide the issue afresh after considering the documentary evidence evidences alleged to have been furnished or to be furnished by the assessee. The assessee is directed to furnish complete particulars of the share applicants and necessary documentary evidences in respect of their identity, creditworthiness and genuineness, as contemplated u/s. 68 of the IT Act. Needless to say, the assessee shall be afforded reasonable opportunity of being heard to put up its case both on factual and legal aspects of the case. We order accordingly.