Adonis International Ltd., New Delhi v. ITO, New Delhi

ITA 1188/DEL/2010 | 2006-2007
Pronouncement Date: 14-11-2014

Appeal Details

RSA Number 118820114 RSA 2010
Assessee PAN AAACA6606R
Bench Delhi
Appeal Number ITA 1188/DEL/2010
Duration Of Justice 4 year(s) 7 month(s) 28 day(s)
Appellant Adonis International Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 14-11-2014
Appeal Filed By Assessee
Bench Allotted A
Tribunal Order Date 14-11-2014
Date Of Final Hearing 27-08-2014
Next Hearing Date 27-08-2014
Assessment Year 2006-2007
Appeal Filed On 17-03-2010
Judgment Text
INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A : NEW DELHI BEFORE SHRI G. D. AGARWAL HONBLE VICE PRESIDENT AND SHRI A. T. VARKEY JUDICIAL MEMBER ITA NO. 1188 /DEL/ 2010 ( ASSESSMENT YEAR 2006 - 07) ADONIS INTERNATIONAL LTD. B - 176 IIND FLOOR EAST OF KAILASH NEW DELHI PAN:AAACA6606R VS. ITO COMPANY WARD - 1(2) C.R. BUILDING NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : VED JAIN & VENKTESH CA RESPONDENT BY : A MISHRA CIT DR O R D E R PER A. T. VARKEY JUDICIAL MEMBER THIS APPEAL ARISES FROM AN ORDER DATED 21 ST JANUARY 2010 OF LD CIT(A) - IV NEW DELHI FOR ASSESSMENT YEAR 2006 - 07. 2. GROUND NO. 2 OF THE APPEAL READS AS UNDER: - 2(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE IN SUPPORT OF ITS CONTENTION. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CI T(A) HAS ERRED BOTH ON FACTS AND IN LAW IN NOT TAKING INTO CONSIDERATION THE ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE DESPITE THE FACT THAT THE LEARNED CIT(A) HAS CALLED FOR THE REMAND REPORT AND HAD DISCUSSED AND RELIED UPON THESE EVIDENCES WHILE DI SMISSING THE APPEAL OF THE ASSESSEE. 3. FACTS RELEVANT TO THE SAID GROUND ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF EXPORT OF TEXTILE PRODUCTS. FOR THE INSTANT YEAR THE ASSESSEE FURNISHED RETURN OF INCOME ON 29 TH NOVEMBER 2006 DECLAR ING NIL INCOME WHICH CAME TO BE ASSESSED AT AN INCOME OF RS.1 27 33 014/ - BY AN ORDER DATED 19.12.2008 U/S 143 ( 3) OF THE INCOME TAX ACT 1961 (HEREIN AFTER THE ACT) . BEFORE THE LD CIT(A) THE ASSESSEE FURNISHED ADDITIONAL EVIDENCES IN PAGE NO. 2 RESPECT OF THE ADD ITIONS MADE IN THE ORDER OF ASSESSMENT. A REMAND REPORT WAS SOUGHT BY THE LD CIT(A) AND THEREFORE HE REJECTED THE CONTENTION FOR ADMISSION OF ADDITIONAL EVIDENCE BY HOLDING AS UNDER: - AFTER GOING THROUGH THE OBSERVATIONS OF THE ASSESSING OFFICER SUBMISS IONS OF THE AR OF THE APPELLANT AND THE REMAND REPORT IT IS OBSERVED THAT THE ASSESSING OFFICER HAD PROVIDED AMPLE OPPORTUNITY TO THE APPELLANT FOR PROVIDING THE VARIOUS DOCUMENTS TO ESTABLISH THE IDENTITY GENUINENESS AND CREDITWORTHINESS WITH REGARD TO T HE CREDIT OF RS. 29 84 400/ - . DESPITE LARGE NUMBER OF OPPORTUNITIES PROVIDED AT THE TIME OF ASSESSMENT APPELLANT HAD NOT PROVIDED THE BASIC DETAILS. THE AR OF THE APPELLANT HAS NOT PROVIDED ANY JUSTIFICATION AS TO WHY THESE DOCUMENTS COULD NOT BE SUPPLIED AT THAT TIME AND WHY THERE IS A CASE FOR ADMITTING THE ADDITIONAL EVIDENCE. ON THE OTHER HAND THE ASSESSING OFFICER HAS STRONGLY ARGUED THAT THERE IS NO CASE OF ADMITTING ADDITIONAL EVIDENCE AT THIS STAGE SINCE THERE IS NOT SUFFICIENT REASON BEFORE THE AP PELLANT TO DO SO. THE ASSESSING OFFICER HAS ALSO RELIED UPON A LARGE NUMBER OF JUDICIAL PRONOUNCEMENTS WHICH HAVE HELD THAT ADMISSION OF ADDITIONAL EVIDENCE SHOULD ONLY BE CONSIDERED FOR REMOVING CERTAIN LACUNAE AND SHOULD NOT BE ADMITTING THE CIRCUMSTANCE S WHERE THE ASSESSEE HAD DELIBERATELY NOT PRODUCED SUCH EVIDENCE AT THE TIME OF ASSESSMENT. ALSO KEEPING IN VIEW THE PROVISIONS OF RULE 46A THERE SHOULD HAVE BEEN AMPLE REASON WHICH PREVENTED THE ASSESSEE FROM PROVIDING THE DESIRED DOCUMENTS BEFORE THE ASSESSING OFFICER. IN THE PRESENT CIRCUMSTANCES THE AR OF THE APPELLANT HAS NOT MADE OUT ANY CASE FOR JUSTIFYING THE ADMISSION OF ADDITIONAL EVIDENCE. ACCORDINGLY THE ADDITIONAL EVIDENCE CANNOT BE ADMITTED. WITHOUT PREJUDICE TO THE SAME EVEN ON MERITS TH E APPELLANT HAS NOT ESTABLISHED THE IDENTITY CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. ONLY PROVIDING THE PAN AND ADDRESS OF THE PERSON IS NOT SUFFICIENT TO DISCHARGE THE INITIAL ONUS AS ESTABLISHED BY LAW. THE ONUS OF ESTABLISHING THE THREE IS SUES OF IDENTITY CREDITWORTHINESS AND GENUINENESS HAS NOT BEEN DISCHARGED BY THE APPELLANT. MERELY ESTABLISHING THE IDENTITY IS NOT GOOD ENOUGH IN CASE OF UNSECURED LOANS WHICH IS THE ISSUE IN THIS CASE. IN VIEW OF THE ABOVE OBSERVATIONS I AM STRONGLY INCLINED TO AGREE WITH THE FINDINGS OF THE ASSESSING OFFICER AND THIS GROUND OF THE AP PELLANT IS THEREFORE DISMISSED. PAGE NO. 3 4. BEFORE US THE LD AR SUBMITTED THAT AO HAD MADE THE FOLLOWING ADDITIONS: - PARTICULARS AMOUNT - RS DISALLOWANCE OF EXPENSES ON ACCOUNT OF NON - DEDUCTION OF TAX AT SOURCE 1 09 08 317 ADDITION UNDER SECTION 68 IN RESPECT OF THE UNSECURED LOANS 29 84 400 ADHOC 10% DISALLOWANCE OF THE SELLING EXPENSES 5 74 372 5. ON THE OTHER HAND THE LD DR SUPPORTED THE DECISION OF THE LOWER AUTHORITIE S. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS WE ARE OF THE CONSIDERED OPINION THAT THE LD CIT(A) HAVING OBTAINED THE REMAND REPORT IN THE INTEREST OF JUSTICE OUGHT TO HAVE ADMITTED THE ADDITIONAL EVIDENCE WHEN SUCH EVIDENCE GOES TO THE ROOT OF THE IS SUES INVOLVED. MOREOVER THE ASSESSEE HAS STATED THAT NO OPPORTUNITY WAS GRANTED BEFORE MAKING THE DISALLOWANCE OF RS.1 09 08 317/ - U/S 40(A)(I) OF THE ACT. EVEN WITH REGARD TO UNSECURED LOAN ASSESSEE HAD FURNISHED CONFIRMATIONS OF THE DIRECTORS . FURTHER EVIDENCE FURNISHED SHOULD NOT HAVE BEEN BRUSHED ASIDE ON A HYPER - TECHNICAL MANNER TO DEFEAT THE ENDS OF JUSTICE. THE PROCESS OF ASSESSMENT IS TO ARRIVE AT THE CORRECT INCOME. THE LD CIT(A) THUS SHOULD NOT HAVE APPROACHED THE ISSUE MECHANICALLY AND REJECT ED THE ADDITIONAL EVIDENCE. THEREFORE IN THE INTEREST OF JUSTICE WE ADMIT THE ADDITIONAL EVIDENCE AND REMIT THE MATTER BACK TO THE FILE OF AO TO DECIDE THE MATTER IN ACCORDANCE TO LAW. 7. IN THE RESULT THE GROUND NO.2 IS ALLOWED. AND THE REMAINING GROUNDS ARE NOT BEING ADJUDICATED AS THE APPEAL STANDS REMITTED BACK TO THE FILE OF AO FOR FRESH ADJUDICATION AS STATED ABOVE. NEEDLESS TO SAY THAT SUFFICIENT OPPORTUNITY MAY BE GRANTED TO THE ASSESSEE DURING THE DE - NOVO PROCEEDING BEFORE HIM . PAGE NO. 4 8. IN THE RESULT THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 4 . 11 . 2014. - S D / - - S D / - ( G. D. AGARWAL) (A. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 1 4 / 11 / 2014 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT NEW DELHI