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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC-I’ NEW DELHI
Before: SMT DIVA SINGH
Date of Hearing 10.09.2015 Date of Pronouncement 23..09.2015 ORDER
The present appeal has been filed by the Revenue assailing the correctness of the order dated 29.10.2013 of CIT(A)-IX, New Delhi pertaining to 2002-03 assessment year on the following grounds:-
1. “Ld. CIT(A) erred in deleting the addition of Rs.21,22,325/- disallowed by AO on account of share application money received, without appreciating that the assessee company has failed to submit confirmations from the said parties during the course of assessment proceedings as well as remand report proceedings. Ld.CIT(A) erred in ignoring the decision of Hon’ble High Court of Delhi in the case of Nova Promoters & Finlease Pvt.Ltd. and in the latest judgement in the case of CIT vs N.R.Portfolio Pvt.Ltd. respectively, the jurisdiction High Court have decided the same issue in favour of revenue.
2. The appellant craves, leave or reserving the right to amend, modify, alter, add or forego any Ground(s) of appeal at any time before or during the hearing of this appeal.”
2. At the time of hearing, an adjournment petition was moved by the firm “BGJC” stating that Power of Attorney has been received today and time is sought to prepare. The said written request it is seen was not accompanied by any Power of Attorney in the name of the firm or any person as till date the assessee has not as per record appointed any counsel. It is further seen that on the two occasions when the appeal came up for hearing the assessee remained
I.T.A .No.-11/Del/2014 unrepresented. Infact the notice sent to the assessee had come back unserved with the comment “No such Firm”. In the circumstances, the petition seeking time was rejected and it was considered appropriate to proceed with the appeal ex-parte qua the assessee respondent on merit after hearing the Ld. Sr.DR.
The Ld. Sr. DR relying upon the assessment order submitted that the assessment in the present case was concluded u/s 144 wherein in response to the notice issued u/s 143(2) the assessee repeatedly remained unrepresented. As a result of this, it was pointed out the following conclusion was drawn by the AO:- “As is evident from above, the assessee has adopted a very highly un-cooperative attitude in matters of its statutory obligation to comply the notices. The repeated disobedience clearly proves that assessee is not in position to prove the veracity of income, expenditure and loans and investment raised in the name of share application money. Accordingly, I have been constrained to complete the case ex-parte u/s 144 of the I.T.Act.”
Addressing the facts it was submitted that the returned loss of Rs.20,84,175/- was assessed at Rs. 17,337/- in the following manner:- 3. Brief facts and background of the case 3.1. “The appellant company was incorporated on 14.6.2000 is engaged in the business of providing internet services, web-hosting and event management services. Appellant filed the return of income on 30.10.2002 for the year consideration declaring loss of Rs.20,84,175/, and unabsorbed depreciation of Rs.49,33,022/-. The same was processed u/s 143(1) at a total of Rs.20,84,175/-. Subsequently, the case was selected for scrutiny on random basis and First notice u/s 143(2) dated 13.10.2003 was sent through registered post. Another notice dated 13.10.2003 was served personally. Subsequently, notice u/s 143(2) and 142(1) dated 16.09.2004 was sent along with questionnaire dated 13.09.2004 through registered post fixing the case for 30.11.04. As no compliance was made by the appellant company on 24.09.2004 i.e. the date for which the case was adjourned o the request of the AR, the AO passed order u/s 144 of the Act on 22.12.2004 an made the following additions:- Gross Loss as per P&L Account (-) Rs. 55,02,747/- Add depreciation for separate consideration Rs. 34.18,572/- Net Loss Rs. 20,84,175/- i) Expenses disallowed Rs. 5,00,000/- ii) Share application money unexplained Rs. 21,22,325/- iii) Unexplained loan Rs. 21,985/- Gross Total Income Rs. 5,60,135/- iv) Depreciation disallowed Rs.5.77.472/- (Rs. 49,33,022 -43,55,550/-) Income was assessed at a loss of Rs. 17,337/-.” Page 2 of 3
I.T.A .No.-11/Del/2014
In the appellate proceedings, it was submitted the Ld.CIT(A) admitted fresh evidence and granted relief not only violating the principle as laid down by the Jurisdictional High Court in the case of Nova Promoters and CIT vs N.R. Portfolio Pvt. Ltd. (cited supra) but also the judgement of the Delhi High Court in the case of Manish Buildwell. Accordingly it was his prayer that the issue may be restored to the AO and the impugned order be set aside.
Having heard the submissions and perused the material available on record, I am of the view that in the peculiar facts and circumstances of the case, the impugned order on fact cannot be upheld as it is found to be in direct conflict with the decisions rendered by the Jurisdictional High Court as relied upon by the Revenue in the grounds raised
and also the decision of the Hon’ble High Court in the case of Manish Buildwell as cited by the Ld. Sr.DR. Accordingly in view of the above the appeal of the Revenue is allowed and the impugned order is set aside and the issue is restored back to the file to the CIT(A) with the direction to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard.