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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’: NEW DELHI
Before: SHRI INTURI RAMA RAO & SMT. SUCHITRA KAMBLE
ORDER PER INTURI RAMA RAO, A.M.: The present appeal filed by the assessee is directed against the order of ld. CIT(A), dated 22.07.2013 passed for the assessment year 2006-07. The assessee raised the following grounds of appeal: i. That on the facts of circumstances of the case, Ld. CIT (A) is not justified ill dismissing the appeal of the Appellant u/s 144 of the Income Tax Act, 1961. ii. That the Appellant was prevented by reasonable and sufficient cause due to which he could not appear before the Ld. ITO I CIT(A) as stated in the statement of facts. iii. That the Ld. CIT(A) is not justified in confirming the addition of Rs. 1,79,76,000/- made by Ld. Assessing Officer. iv. That the Ld. Assessing Officer had added Rs. 1,50,00,000/- on account of cash credit u/s 68 by saying that the genuineness and the credit worthiness of the unsecured loan is not proved. While the identities of the subscribers are on records through confirmed copy of account, copy of ITRs (non- resident) and copy of their NRO bank statements and the transactions have also been undertaken through banking channel inasmuch as the loan was given through account payee cheque, the credit worthiness has also been established and the appellant had given full particulars of the party from whom loan is received through complete details with regard to their tax return and assessments. The said loan was given by Mr. Shashi Bhushan Saurabh who is an NRI from their NRO Alc and is staying at KIEV, Ukraine and doing pharmaceutical business in the name of Mls Rainbow Limited. His business income has been transferred from Ukraine to Indian NRO account. Ld. CIT(A) was not justified in confirming this addition of loan Rs. 1,50,00,000/- made by Ld. Assessing Officer. Thus the Ld. ITO has made addition without considering the material available on records. However the CIT has also confirmed the addition while passing the appeal. v. That the Ld. CIT(A) is not justified in confirming the addition of Rs. 29,76,0001- on account of un-explained investment u/s 69 of LT. Act made by assessing officer. That as per sec. 69 only the investment which was not recorded in the books of accounts and the assesse has no explanation about the nature and sources of investment, then it will be deemed to be the income of the assesse of such financial year. That the appellant received as unsecured loans and the same is invested in the land stock and in advances. This was the only transactions taken place during the assessment year 2006-2007 and the confirmation for the same was also filed during the course of assessment. vi. The said investments is already disclosed in the balance sheet and the source of investment is also explained which was already added do the income of the assesse. Once the source of investment is already added to the income then the investment itself cannot be added twice to income and in this case, it is not an unexplained investment which already recorded in the books of account. vii. That since the addition made by the Ld. ITO is wrong and illegal in the eyes of law and the same deserves to be deleted in the interest of justice. viii. That the appellant craves the right to add, or to delete or to amend any grounds of appeal
if any, before and at the time of hearing.
2. The brief facts of the case are that the appellant is a company incorporated under the provisions of the Companies Act, 1956. The return of income for the assessment year 2006-07 was filed on 29th November, 2006, disclosing nil income. During the previous year relevant to the assessment year under consideration the appellant had not carried on any business activities. Against the said return of income, the assessment was completed under Section 144 of the Income-tax Act, 1961 (for short “the Act”) vide order dated 30th December, 2008 at a total income of Rs. 1,79,76,000/-. While doing so, the learned Assessing Officer made addition of unsecured loan of Rs. 1,56,00,000/- and the addition on account of investments for the purchase of land for Rs. 29,76,000/-. Being aggrieved, an appeal was filed before the learned CIT(A) who vide order dated 22.07.2013 confirmed the action of the Assessing Officer since nobody appeared on behalf of the appeal before him. Being aggrieved, the appellant is before us with the present appeal.
3. Before us, the learned counsel for the assessee made a submission that the reasons for non-appearance before the Assessing Officer as well as before the ld. CIT(A), was on account of negligence of the Chartered Accountants, namely, M/s. Suresh C. Gupta and Associates who was entrusted with the responsibility causing appearances before the various authorities of Income Tax Department. To this effect, he has drawn our attention to the affidavit filed by the appellant dated 20th June, 2014, which read as under: “Affidavit of Sh. Shashi Bhushan Saurabh, S/o Sh. Sita Ram Yadav, aged about 49 years, resident of B-2/18, Vasant Vihar, New Delhi-110057. I, the above named deponent solemnly affirm and state on oath as under: 1. That I am one of the Directors of the company M/s Pyramid Buildwell Pvt. Ltd., 214, 2nd Floor, Rectangle-I, D-4, District Centre, Saket, New Delhi – 110017, since 09.03.2006 and as such am fully competent to depose this affidavit.
That the assessment for the A.Y. 2006-07 of M/s Pyramid Buildwell Pvt. Ltd. had been framed under Section 144 of the Income Tax Act, 1961 and the appeal was also decided ex-parte by the Commissioner of Income Tax (Appeals)-XVII, New Delhi.
That I am an NRI and is staying at KIEV, UKRAINE. Other Director of the Appellant company is also an NIR and most of time staying out of India. 4. That I had entrusted the entire Income Tax and ROC work of M/s Pyramid Buildwell Pvt. Ltd. to M/s Suresh C. Gupta & Associates, Chartered Accountants. However, the said counsel did not appear/represented the case before the ITO and Ld. CIT(Appeals) for the reasons best know to them. 5. We both the directors of the company were under the bonafide belief that M/s Suresh C. Gupta & Associates, a Chartered Accountant Firm is taking proper care and attending the assessment and appeal proceedings regularly. The said CA firm never informed day to day proceedings. 6. That due to non-appearing on the part of the counsel on day to day proceedings the case was decided ex-parte by Ld. A.O. as well as Ld. CIT(A)-XVII, New Delhi. 7. That when we came to know that M/s Suresh C. Gupta & Associates, a Chartered Accountant firm is not taking proper care of our cases we have changed our counsel.” In the circumstances, he made a prayer that the matter may be restored back to the file of the Assessing Officer for de novo assessment. 3. On the other hand, the ld. Sr. DR had no serious objection for restoring the matter to the file of the Assessing Officer. 4. We heard the rival submission and perused the material on record. The averments made in the affidavit filed by one of the Directors of the appellant’s company have not been disputed by the Department. We are of the considered opinion that the interest of justice would meet, if the matter is restored to the file of the Assessing Officer for de novo assessment, after affording reasonable opportunity of being heard to the assessee company. We order accordingly.
In the result, the appeal filed by the assessee is allowed for statistical purposes. The decision is pronounced in the open court on 30th October, 2015.