M/s ACIT, New Delhi v. M/s Zamil Air Conditioners India Pvt. ltd.,, New Delhi

ITA 1513/DEL/2016 | 2011-2012
Pronouncement Date: 29-11-2019 | Result: Dismissed

Appeal Details

RSA Number 151320114 RSA 2016
Assessee PAN AAACA0907F
Bench Delhi
Appeal Number ITA 1513/DEL/2016
Duration Of Justice 3 year(s) 8 month(s) 8 day(s)
Appellant M/s ACIT, New Delhi
Respondent M/s Zamil Air Conditioners India Pvt. ltd.,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2019
Appeal Filed By Department
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 29-11-2019
Assessment Year 2011-2012
Appeal Filed On 21-03-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI R.K. PANDA ACCOUNTANT MEMBER AND SHRI KULDIP SINGH JUDICIAL MEMBER ITA NO.1513/DEL./2016 (ASSESSMENT YEAR : 2011-12) ACIT CIRCLE 27 (2) VS. M/S. ZAMIL AIR CONDITIONE RS NEW DELHI. INDIA PVT. LTD. 1 ST FLOOR H-9/B-1 MOHAN COOPERATIVE INDUSTRIAL ESTATE MATHURA ROAD BADARPUR NEW DELHI. (PAN : AAACA0907F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANOMEET DALAL AR SHRI YISHU GOEL AR REVENUE BY : SHRI SARAS KUMAR SENIOR DR DATE OF HEARING : 28.11.2019 DATE OF ORDER : 29.11.2019 O R D E R PER KULDIP SINGH JUDICIAL MEMBER : THE APPELLANT ACIT CIRCLE 27 (2) NEW DELHI (HERE INAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 01.12.2015 PASSE D BY THE LD. DISPUTE RESOLUTION PANEL-2 NEW DELHI IN CONSONANCE WITH THE ORDERS PASSED BY THE TPO/AO UNDER SECTION 144C (5) OF THE ITA NO.1513/DEL./2016 2 INCOME-TAX ACT 1961 (FOR SHORT THE ACT) QUA THE ASSESSMENT YEAR 2011-12 ON THE GROUNDS INTER ALIA THAT:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE DRP-2 ERRED IN DIRECTING AO TO DELETE THE ADDITION MADE BY AO IN RESPECT OF UNSECURED LOAN OF RS.44 68 21 921/- AFTER TALLYING THE AMOUNTS OF UNSECURED LOANS FROM DOCUMENTS FURNISHED BY THE ASSESSEE. THE DRP FURTHER FAILED TO APPRECIATE TH AT THE ASSESSEE COMPANY HAD FAILED TO PRODUCE THE PARTIES AT THE TIME OF PASSING THE ASSESSMENT ORDER AND THE GENUINENESS AND CREDIT WORTHINESS OF THE PARTIES WE RE NOT PROVED. 2. ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTU RING OF AIR- CONDITIONERS & ITS PART AND HAVING ITS MANUFACTURIN G UNITS AT NALAGARH AND BAHADURGARH. THE ASSESSEE IS ALSO INT O EXPORTS FROM ITS BAHADURGARH UNIT-II. 3. DURING THE ASSESSMENT PROCEEDINGS ASSESSING OFF ICER (AO) HAS SHOWN INCREASE IN THE UNSECURED LOAN TO THE TUN E OF RS.44 68 21 921/- DURING THE YEAR UNDER ASSESSMENT DETAILED AS UNDER :- SL.NO. NAME OF PARTIES FROM WHOM LOANS TAKEN AMOUNT 1 K.G. EMBROIDERY LTD. 55 00 000 2 VILKHU LIFE SCIENCE LTD. 3 25 50 000 3 AMRIT SALES PROMOTION PVT. LTD. 1 40 00 000 4 VINJYOTI TRACOM 75 00 000 5 GURVINDER PAL SINGH 14 46 85 582 6 LOKSHEEL INTERNATIONAL PVT. LTD. 7 75 86 339 7 S.E. INVESTMENT LTD. 16 50 00 000 TOTAL 44 68 21 921 ITA NO.1513/DEL./2016 3 4. ON FAILURE OF THE ASSESSEE TO DISCHARGE THE ONUS TO PROVE THE GENUINENESS OF THE TRANSACTION CREDITWORTHINESS AN D IDENTITY OF THE CREDITORS AO MADE ADDITION OF RS.44 68 21 921/- UN DER SECTION 68 OF THE ACT ON ACCOUNT OF NON-GENUINE/BOGUS TRANSACT IONS. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. D RP CONTAINING TRANSFER PRICING ISSUES ALSO BY RAISING OBJECTIONS. LD. DRP DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY DIRECTING THE AO TO DELETE THE ADDITION AFTER TALLYING THE AMOUNT OF UNSECURED LOANS FROM DOCUMENTS FURNISHED BY THE ASSESSEE. FEE LING AGGRIEVED THE REVENUE HAS COME UP BEFORE THE TRIBU NAL BY WAY OF FILING THE PRESENT APPEAL. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. BEFORE LD. DRP IT WAS THE CASE OF THE ASSESSEE THAT ADEQUATE OPPORTUNITY OF BEING HEARD WAS NOT GIVEN BY THE AO DURING THE ASSESSMENT PROCEEDINGS TO SUBSTANTIATE ITS CLAIM QU A UNSECURED LOANS. LD. DRP AFTER ENTERTAINING THE ADDITIONAL EVIDENCE CALLED REMAND REPORT FROM THE AO AND PROCEEDED TO DELETE T HE ADDITION BY RETURNING FOLLOWING FINDINGS :- ITA NO.1513/DEL./2016 4 DRP HAS DULY EXAMINED THE ISSUE. THE PANEL HEREBY ADMITS THE ADDITIONAL EVIDENCE FURNISHED IN REFERENCE TO UNSEC URED LOANS AS THESE ARE VITAL TO DECIDE THE ISSUE. IT IS NOTE TH AT THE ASSESSEE HAD FURNISHED NECESSARY EVIDENCE IN RESPECT OF TWO PART IES DURING THE ASSESSMENT PROCEEDING AND IN RESPECT OF REMAINING P ARTIES DURING PROCEEDINGS BEFORE DRP. THE AO HAS NOT DRAW N ANY ADVERSE INFERENCE IN RESPECT OF THESE EVIDENCES. B Y FURNISHING NAME ADDRESS PAN AND BANK STATEMENT/TAX RETURN T HE ASSESSEE HAD DISCHARGED ITS ONUS. THE PANEL THEREFORE DIREC TS THE AO TO DELETE THE ADDITION AFTER TALLYING THE AMOUNTS OF U NSECURED LOANS FROM DOCUMENTS FURNISHED BY THE ASSESSEE. THE OBJE CTION IS DISPOSED OFF ACCORDINGLY. 8. WHEN ASSESSEE HAS DULY FURNISHED NAME ADDRESSES PAN BANK STATEMENT AND INCOME-TAX RETURN TO PROVE THE U NSECURED LOANS DISPUTED BY THE AO AND DURING THE REMAND PROCEEDING S THE AO HAS NOT TAKEN ANY ADVERSE INFERENCE QUA THE EVIDENC ES PRODUCED BY THE ASSESSEE WE FIND NO ILLEGALITY OR PERVERSITY I N DELETING THE ADDITION BY THE LD. DRP. 9. NOW THE SECOND ISSUE ARISES FOR DETERMINATION A S RAISED BY THE LD. DR FOR THE REVENUE IS AS TO WHETHER LD. DR P WAS EMPOWERED TO ENTERTAIN ADDITIONAL EVIDENCE AND TO C ALL THE REMAND REPORT FROM THE AO TO DECIDE THE ISSUE IN QUESTION. 10. WE ARE OF THE CONSIDERED VIEW THAT SINCE PROCEE DINGS BEFORE THE LD. DRP ARE IN CONTINUATION OF THE ASSESSMENT P ROCEEDINGS INITIATED BY THE AO AND THE FINDINGS OF THE LD. DRP WOULD FURTHER ENABLE THE ASSESSEE TO AVAIL OF THE REMEDIES BEFORE THE APPELLATE AUTHORITIES WE ARE OF THE CONSIDERED VIEW THAT IT WAS WITHIN THE PURVIEW OF LD. DRP TO ENTERTAIN THE ADDITIONAL EVID ENCE TO CALL THE ITA NO.1513/DEL./2016 5 REMAND REPORT AND THEN DECIDE THE ISSUE. MOREOVER LD. DRP HAS PROCEEDED TO DECIDE THE ISSUE BY FOLLOWING THE RULE OF NATURAL JUSTICE BY PROVIDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHICH ENCOMPASSES ENTERTAINING OF THE ADDITIONAL EV IDENCE CALLING THE REMAND REPORT AND AFTER HEARING THE PARTIES DE CIDE THE ISSUE IN QUESTION. 11. IDENTICAL ISSUE HAS ALREADY BEEN DECIDED BY THE HONBLE HIGH COURT OF BOMBAY IN CASE OF VODAFONE INDIA SERV ICES (P.) LTD. IN FAVOUR OF THE ASSESSEE BY RETURNING FOLLOWI NG FINDINGS :- 47. HOWEVER AS NO FINAL ASSESSMENT ORDER HAS Y T B EEN PASSED BY THE ASSESSING OFFICER AND THE ISSUES ARE STILL A T LARGE BEFORE THE DRP THE SAME COULD BE URGED BEFORE THE DRP. IN THE FACTS OF THE PRESENT CASE WE ARE NOT INCLINED TO SET ASIDE THE D RAFT ASSESSMENT ORDER OF THE AO OR THE ORDER OF THE TPO AND REMAND THE MATTER TO AO BECAUSE THE AO HAS ALREADY FILED AN AFFIDAVI T CONTESTING THE PETITION ON MERITS AND JUSTIFYING THE STAND THA T THE ALLEGED SHORTFALL IN PREMIUM UPON ISSUE OF SHARES IS CHARGE ABLE TO INCOME TAX UNDER CHAPTER X . HENCE INSTEAD OF REMA NDING THE MATTER TO THE AO TO EXAMINE THIS QUESTION WE ARE O F THE VIEW THAT THE MERITS OF THIS QUESTION MUST BE CONSIDERED BY D RP UNDER SECTION 144C(5) READ WITH SECTION 144C (8). IN A GI VEN CASE IF THE DRP REQUIRES ANY FURTHER MATERIAL DRP MAY EXERCISE ITS POWERS EITHER UNDER SECTION 144C(7) OR (5) I.E. BY DIRECTI NG THE ASSESSING OFFICER TO MAKE ENQUIRY INTO THIS ASPECT OF THE MAT TER AND REPORT OR ALTERNATIVELY DECIDE IT ITSELF AND GIVE FINAL DI RECTIONS TO THE ASSESSING OFFICER. THE PROCESS BEFORE THE DRP IS A CONTINUATION OF THE ASSESSMENT PROCEEDINGS AS ONLY THEREAFTER WO ULD A FINAL APPEALABLE-ASSESSMENT ORDER BE PASSED. TILL DATE TH ERE IS NO APPEALABLE ASSESSMENT ORDER. THE PROCEEDING BEFORE THE DRP IS NOT AN APPEAL PROCEEDING BUT A CORRECTING MECHANISM IN THE NATURE OF A SECOND LOOK AT THE PROPOSED ASSESSMENT ORDER BY HIGH FUNCTIONARIES OF THE REVENUE KEEPING IN MIND THE IN TEREST OF THE ASSESSEE. IT IS A CONTINUATION OF THE ASSESSMENT PR OCEEDINGS TILL SUCH TIME A FINAL ORDER OF ASSESSMENT WHICH IS APPE ALABLE IS PASSED BY THE ASSESSING OFFICER. THIS ALSO FINDS SU PPORT FROM SECTION 144C( 6) WHICH ENABLES THE DRP TO COLLECT E VIDENCE OR CAUSE ANY ENQUIRY TO BE MADE BEFORE GIVING DIRECTIO NS TO THE ASSESSING OFFICER UNDER SECTION 144C(5). THE DRP PR OCEDURE ITA NO.1513/DEL./2016 6 CAN ONLY BE INITIATED BY AN ASSESSEE OBJECTING TO T HE DRAFT ASSESSMENT ORDER. THIS WOULD ENABLE CORRECTION IN T HE PROPOSED ORDER DRAFT ASSESSMENT ORDER) BEFORE A FINAL ASSESS MENT ORDER IS PASSED. THEREFORE WE ARE OF THE VIEW THAT IN THE P RESENT FACTS THIS ISSUE COULD BE AGITATED BEFORE AND RECTIFIED BY THE DRP. 12. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE WE AR E OF THE CONSIDERED VIEW THAT LD. DRP BEING WELL WITHIN POWE R TO CALL THE ADDITIONAL EVIDENCE CALL FOR REMAND REPORT DECIDE THE ISSUE IN CONTROVERSY IN FAVOUR OF THE ASSESSEE ON THE BASIS OF FACTS AND LAW APPLICABLE THERETO IN RIGHT EARNEST. MOREOVER JUDI CIOUS EXERCISE HAS BEEN CARRIED OUT BY THE LD. DRP TO STOP THE MUL TIPLICITY OF THE PROCEEDINGS AND TO IMPART THE JUSTICE WHICH CANNOT BE DENIED ON THE BASIS OF HYPER TECHNICALITIES. SO FINDING NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER PASSED BY THE LD. DRP THE PRESENT APPEAL FILED BY THE REVENUE IS HEREBY DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF NOVEMBER 2019. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 29 TH DAY OF NOVEMBER 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-12 NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.