H.M. ICE & STORAGE PVT. LTD.,DELHI vs. DCIT, NEW DELHI

The assessee claimed to have filed confirmation letter and other details in respect of M/s Ankur Marketing Ltd. before the Assessing Officer, however, the summon under Section 131 of the Act, sent to the principle officer of M/s Ankur Marketing Ltd. on 07.11.2008 by the ld Assessing Officer, returned unserved with the remark that “no such person exists at the said address.” According to the Assessing Officer, the assessee failed to establish the very existence and identity of the share applicant and, therefore, he held the money credited in the books of account of the assessee from M/s Ankur Marketing Ltd. as unexplained cash credit in terms of Section 68 of the Act. The assessment was completed by the Assessing Officer under Section 147 r.w.s. 143(3) of the Act and an addition of Rs. 13 lakhs was made to the returned income.

Aggrieved, the assessee filed an appeal before the learned Commissioner of Income Tax (Appeals) challenging the action of the ld. Assessing Officer of reopening of assessment under Section 148 of the Act as well as the addition made of Rs. 13 lakhs. The objection of the assessee against reopening of the assessment was rejected by the learned Commissioner of Income Tax (Appeals). In the course of appellate proceedings, the learned Commissioner of Income Tax (Appeals) forwarded the submission of the assessee calling for a remand report from the Assessing Officer, who in his report reiterated the findings made in the H.M. Ice & Storage Pvt. Ltd. assessment order. In the rejoinder, the assessee also submitted the fact of shifting of address of the share applicant from F-25, Lajpat Nagar, Part-I to 3/71, Gita Colony, Delhi w.e.f. 19.01.2009. From these submissions, the learned Commissioner of Income Tax (Appeals) observed that summon was sent at the registered address of the said share applicant much before change of address to new place, the assessee not only failed to produce the said share applicant before the Assessing Officer but even before her. Further, relying on the judgment of the Hon’ble High Court in the case of Commissioner of Income Tax Vs. Nova Promoters and Finlease (P) Ltd., 342 ITR 169, wherein it is held that unless the identity of the share applicants is proved along with the genuineness of the transactions and creditworthiness of the party, the provisions of section 68 could be said to have been rightly invoked, upheld the addition of Rs. 13 lakhs made by the learned Assessing Officer under Section 68 of the Act. Aggrieved, the assessee is before us with the present appeal.

At the time of hearing, the ground no. 1 of the appeal was not pressed by the learned Authorized Representative and hence, ground No. 1 of the assessee is dismissed.

As regard ground No. 2 of the assessee’s appeal, the learned Authorized Representative submitted that all the documents in support of the identity, creditworthiness and genuineness of the transaction were duly filed before the learned Assessing Officer, and therefore, the assessee had fully complied with the requirement of Section 68 of the Act. The learned Authorized Representative H.M. Ice & Storage Pvt. Ltd. also filed an application on 5th August, 2013 for admitting additional evidence in the form of paper book, containing at page nos. 1 to 59. The additional evidence contained copy of annual return of the assessee company for the year ending 31.03.2012 and copy of balance-sheet, profit and loss account of M/s Ankur Marketing Ltd. as on 31.03.2012 filed with the Registrar of company, Delhi, etc. Further, learned Authorized Representative requested that it was evident from the balance sheet and profit and loss account of the said share applicant that it still exists, which confirms the identity of the share applicant and, therefore, the addition sustained by the Commissioner of Income Tax (Appeals) may be deleted. 6.1 On the other hand, the learned Departmental Representative objected to the admission of additional evidences under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 (for short “the Rules, 1963”) on the ground that the additional evidences filed pertain to the financial year 2011-12, i.e. a long period from the assessment year under consideration and lot of people might have changed hands over the effective ownership of the company and therefore, those documents were not relevant to the issue in dispute. The learned Departmental Representative further submitted that the share applicant was mere a paper company at relevant period of time and was engaged in providing accommodation entry. Further, he submitted that the summon issued to the said share applicant company under Section 131 of the Act returned unserved with the remark that “no such person exists at the addresses” and the said applicant H.M. Ice & Storage Pvt. Ltd. could not be produced by the assessee neither before the Assessing Officer, nor before the Commissioner of Income Tax(Appeals). Therefore, the identity, creditworthiness and genuineness of the share applicant could not be established. Further, the learned Departmental Representative also relied on the judgment of the Hon’ble Jurisdictional High Court in the case of Commissioner of Income Tax vs. M/s. Navodaya Castles Pvt. Ltd., reported in 2014-TIOL- 1775-HC-DEL-IT. 6.2 We have heard the rival submissions and perused the material on record. Before we decide the issue in dispute, we feel it appropriate to decide the issue of admission of additional evidences. We have noted that the additional evidences filed by the assessee were not available with the assessee before 31.03.2012 and therefore same could not be filed before the lower authorities. On the other hand, we have also noted that the evidences are not pertaining to the year under consideration. In the company, the ownership gets changed with the change of promoters, so after the relevant period of time the company might have been owned by someone else. We have seen from the order of the ld CIT(A) that the address of the company has also been changed frequently. Thus the documents of the company for a period after 12 years from the relevant period would not serve useful purpose in ascertaining the requirements of section 68 of the Act. Under Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963, it is the Tribunal, if required and if find that sufficient opportunity to the assessee was not provided by the Income Tax Authorities, may admit the H.M. Ice & Storage Pvt. Ltd. additional evidence. For sake of convenience, the Rule 29 is reproduced as under: “29. The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or , if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced.” 6.3 In the present case, the assessee failed to establish that no sufficient opportunity was provided, which is clear from the fact that the evidence which are proposed for admission belongs to the financial year 20011-12 and that is much later than the relevant assessment year. Thus in our view, the Annual Return of company and Balance sheet etc filed in the office of Registrar of Companies after almost a period of 12 years, cannot substantiate the case of the assessee and according to us these are not having any bearing to the issue in dispute before us. We are, therefore, not admitting the additional evidence submitted by the assessee. 6.4 Keeping in view of the facts and circumstance of the case, we find that the Assessee has not produced the share applicant and has not proved the genuineness of the transaction and creditworthiness of the party and not filed the sufficient evidences before the lower authorities as well before the Tribunal, which shows that the Assessee has not fulfilled the requirement of Section 68 of the I.T. Act, 1961. Therefore, we are of the considered view that the Learned H.M. Ice & Storage Pvt. Ltd. Commissioner of Income Tax (Appeals) has passed a well reasoned order which does not need any interference on our part, hence, we uphold the same. Accordingly, ground No. 2 of the assessee is dismissed.

Ground no. 3 being general in nature, no adjudication is required.

In the result, the appeal filed by the assessee is dismissed. The decision is pronounced in the open court on 20th January, 2016.