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Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI ANUBHAV SHARMA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the ld. CIT-26, New Delhi dated 22.10.2019 pertaining to Assessment Year 2013-14.
2. The grievances of the assessee read as under:
“1. That on the facts and circumstances of the case and in law the learned Commissioner of Income Tax (A) has grossly erred in confirming the addition made in the order passed under section 263 rws 143(3) of the Act as the order of assessment passed under section 153A/143(3) of the Act was neither erroneous nor prejudicial to the interest of the revenue and as such impugned order so passed is without jurisdiction and deserves to be quashed as such.
2. That on the facts and circumstances of the case and in law the learned Commissioner of Income Tax (A) erred in confirming addition of Rs 96, 90,000/- in respect of unsecured loan received from Suhana Marketing Pvt Ltd without going through the facts of the case, statutory provisions as well as explanation filed during the course of assessment proceeding and order so passed shows lack of application of mind
3. That on the facts and circumstances of the case and in law the learned Commissioner of Income Tax (A) has failed to consider that no incriminating material have been found during the course of search and the assessment have already been completed u/s 153A/ 143(3) of the Income Tax Act and, therefore, the proceedings initiated and order passed are illegal, invalid and unsustainable.
4. The appellant craves leave to add, alter, amend, or vary the above grounds of appeal at or before the time of hearing.”
Briefly stated, the facts of the case are that a search and seizure operation/s 132 of the Income-tax Act, 1961 [the Act, for short] was carried out on J.P. Minda Group on 20.09.2013. The assessee was issued notice u/s 153A of the Act and in response to the same, the assessee filed return of income declaring NIL income.
4. A query letter was issued to the assessee, in response to which, the assessee filed necessary details and on perusal of the details, returned NIL income of the assessee was assessed as such.
5. Invoking powers conferred upon by provisions of section 263 of the Act, the PCIT issued a show cause notice asking the assessee to show cause as to why the assessment order dated 30.03.2016 be not treated as erroneous and prejudicial to the interest of the Revenue.
6. Proceedings initiated u/s 263 of the Act were completed by an order dated 30.03.2018. The order of the PCIT was challenged before the ITAT but the appeal was withdrawn and the Tribunal, in dismissed the appeal as withdrawn.
7. Pursuant to the directions of the PCIT, fresh assessment proceedings were initiated and the assessee was asked to explain the transaction of Rs. 95 lakhs with M/s Suhana Marketing Pvt Ltd. Reply of the assessee dated 15.10.2018 is exhibited at pages 3 and 4 of the assessment order.
8. After considering the same, the Assessing Officer observed that the assessee has failed to file current status of unsecured loans taken/received from M/s Suhana Marketing Pvt Ltd. The Assessing Officer further observed that M/s Suhana Marketing Pvt Ltd did not respond to the notice issued u/s 133(6) of the Act and basis these observations, the Assessing Officer made addition of Rs. 95 lakhs u/s 68 of the Act.
Assessment was challenged before the ld. CIT(A) but the ld. CIT(A), after quoting the order of the PCIT framed u/s 263 of the Act, concluded as under:
“iv. In view of the above facts having been examined by a senior authority and the detailed factual analysis, the contentions of the appellant are not acceptable. It is also pertinent to note here that the appellant has not furnished the complete details about transaction involving the transaction of Rs 95 lakhs. Besides, mere
TDS on a payment is not sufficient evidence to justify the genuineness of transaction especially in absence of details of the nature and profile of the transaction in question. In view of the factual discussions above, the appeal is not on strong footing to merit relief for the appellant. The AO is bound to follow the directions so issued. The action of the AO is upheld.”
The ld. counsel for the assessee vehemently stated that the Assessing Officer has completely ignored the reply of the assessee dated 07.12.2018 and has also failed to acknowledge the reply of M/s Suhana Marketing Pvt Ltd. It is the say of the ld. counsel for the assessee that not only the Assessing Officer erred but also the first appellate authority grossly erred in not considering these clinching evidences and dismissing the appeal of the assessee solely quoting the order of the PCIT u/s 263 of the Act.
Per contra, the ld. DR strongly supported the findings of the Assessing Officer and read the operative part.
We have given thoughtful consideration to the orders of the authorities below. It is true that the Assessing Officer has only considered the reply of the assessee dated 15.10.2018 and has completely ignored the following letter of the assessee filed on 07.1.2018:
“Assistant Commissioner of Income tax Central -13 Jhandewalan Extension New Delhi
Sub In the mailer of M/s Jay Ace Technologies Lid. A Y 2013-1-4. Notice u s 142( I) of (he Income fax Act: - reg
Dear Sir.
With reference to notice received from your office dated 02/1 1/2018 the required information is being as under:-
1 The latest confirmation in respect of unsecured loan of Rs 95 lacs from Suhana Marketing Pvt Ltd alone with ITR and Bank statement is enclosed. 2 The said unsecured loan received from Suhana Marketing Pvt Ltd is outstanding as on date. 3 The copy of document showing the interest paid is enclosed 4 The unsecured loan received from Suhana Marketing Pvt I.id is genuine and all the documentary evidence to prove the genuineness of the transaction has ahead) been provided, further the copy of notice issued u/s 133(6) may please be provided to file the reply.
We hope you will find the above details in order and shall be pleased to submit any further information as may be required in connection with the above matter.
Thanking you. Yours faithfully. For SANJAY SATPAL & ASSOCIATES CHARTERED ACCOUNTANTS
Alongwith the letter, the assessee had filed the confirmation of accounts from M/s Suhana Marketing Pvt Ltd which is exhibited at page 22A of the Paper Book.
The Assessing Officer continued to err by totally dismissing/rejecting/ignoring the following reply from M/s Suhana Marketing Pvt Ltd:
“The Assessing Officer. The Assistant Commissioner of Income tax. Central Circle IT Room No.355, Jhandewalan Ext New Delhi I 10055
Your assessed Jay Ace Technologies Ltd. (PAN: AAACJ3128K) (‘JATL’) Asst. Year : 2,013-14
Dear Sir.
It has come to our notice that the aforesaid matter is under assessment proceedings under Section 142(1) /143(2) and it further appears that you have sent a notice to us but the same could not be delivered Perhaps the address was erroneous or otherwise and we sincerely regret the inconvenience caused to you in this regard.
With respect to our transaction with Jay Ace Technologies Ltd. (’JATL"), we would like to submit the following documents before your goodself:-
Copy of Audited Statement of Accounts for the Financial Year 2012-13.
The Loans given to .lay Ace Technologies Ltd. has been included in Schedule II to the Balance Sheet as at 31.03.2013.
3. Confirmation of account with JATL.
Bank Statement reflecting the transactions with JATL.
Our Income Tax acknowledgement for the assessment year under consideration i.e. assessment year 2013-14.
Our Income I ax acknowledgement for the assessment year 2018-19.
Evidence with respect to filing with the Ministry of Company Affairs. Government of India for the Financial Year 2012-13.
Evidence with respect to filing with the Ministry of Company Affairs, Government of India for the Financial Year 2017-18.”
This reply of M/s Suhana Marketing Pvt Ltd was delivered in the office of the Income tax as per the following tracking of consignment note from the Postal Department :
Delivery Location Delivered On Booked At Booked On Destination Tariff Article Pincode Type Kolkatta 11/12/2018 Swami Ram Tirth Nagar 14/12/2018 110055 70.80 Speed Post GPO 18:35:25 SO 18:11:00 Event Details For : EW214990570IN Current Status : : Item Delivered Date Time Office Event 14/12/2018 18:11:00 Swami Ram Tirth Nagar SO Item Delivered 14/12/2018 12:05:12 Swami Ram Tirth Nagar SO Out for Delivery 14/12/2018 10:10:32 Swami Ram Tirth Nagar SO Item Received 11/12/2018 19:19:19 Kolkatta GPO Item Dispatched 11/12/2018 • 19:07:34 Kolkatta GPO Item Bagged 11/12/2018 18:35:25 Kolkatta GPO Item Booked More Information » Booked At Booked On Destination Pincode Tariff Article Type Delivered At Delivered On Event Details For : EW214990570IN Current Status : Bag Opened at Swami Ram Tirth Nagar S.O Date Time Office Event 14/12/2018 10:28:22 Swami Ram Tirth Nagar S.O Bag Opened 13/12/2018 12:15:58 NSH NEW DELHI Bag Despatched to Swami Ram Tirth Nagar S.O 13/12/2018 10:45:52 NSH NEW DELHI Item Bagged for Swami Ram Tirth Nagar S.O 13/12/2018 . 10:44:52 NSH NEW DELHI Item Received 13/12/2018 08:09:35 NSH NEW DELHI Bag Received 13/12/2018 03:20:28 PALAM I MO Bag Received 12/12/2018 09:14:56 NSH KOLKATA AIRPORT Bag Despatched to PALAM TMO
In light of the aforementioned demonstrative evidences, it would be safe to conclude that the assessee has successfully discharged the initial burden cast upon it by provisions of section 68 of the Act.
Therefore, the addition made u/s 68 of the Act is uncalled for and deserves to be deleted. Thus, the order of the ld. CIT(A) is set aside and the Assessing Officer is directed to delete the addition of Rs. 95 lakhs. Ground raised by the assessee is allowed.
In the result, the appeal of the assessee in is allowed.
The order is pronounced in the open court on 31.05.2023.