ITO, New Delhi v. M/s L.R. Finvest Pvt. Ltd., New Delhi

ITA 1684/DEL/2010 | 2006-2007
Pronouncement Date: 13-02-2012 | Result: Allowed

Appeal Details

RSA Number 168420114 RSA 2010
Assessee PAN AAACL1553E
Bench Delhi
Appeal Number ITA 1684/DEL/2010
Duration Of Justice 1 year(s) 9 month(s) 28 day(s)
Appellant ITO, New Delhi
Respondent M/s L.R. Finvest Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 13-02-2012
Appeal Filed By Department
Order Result Allowed
Bench Allotted D
Tribunal Order Date 13-02-2012
Date Of Final Hearing 01-02-2012
Next Hearing Date 01-02-2012
Assessment Year 2006-2007
Appeal Filed On 15-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `D : NEW DELHI) BEFORE SHRI U.B.S. BEDI JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER ITA NOS.932 & 1684/DEL./2010 (ASSESSMENT YEAR : 2006-07) ITO WARD 4(3) VS. M/S L.R. FINVEST (P) LTD. NEW DELHI. 65A OMPRO TOWER KALU SARAI SARVAPRIYA VIHAR NEW DELHI. (PAN/GIR NO.AAACL1553E) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : MS. NAMITA PANDEY DR ORDER PER U.B.S. BEDI J.M. THESE TWO APPEALS OF THE REVENUE ARE DIRECTED AGAI NST THE ORDERS PASSED BY THE CIT(A)-VII NEW DELHI DATED 18.1.2010 AND 04.02.20 10 WHEREBY DELETION OF ADDITION OF RS.60 60 000/- AND PENALTY OF RS.22 39 796/- IMPOS ED U/S 271(1)(C) OF THE I.T. ACT 1961 HAVE RESPECTIVELY BEEN CHALLENGED FOR THE ASS ESSMENT YEAR 2006-07. 2. SINCE THESE APPEALS WERE HEARD TOGETHER AND PERT AIN TO THE SAME ASSESSEE. THEREFORE THEY ARE BEING DISPOSED OF BY SINGLE ORD ER FOR THE SAKE OF CONVENIENCE. I.T.A. NO.932/DEL./2010 (QUANTUM APPEAL) 3. THE FINDING OF THE ASSESSING OFFICER IN THE ASS ESSMENT ORDER WITH RESPECT TO THE IMPUGNED ADDITION IS AS UNDER: 3. ON EXAMINING THE DETAILS FURNISHED BY THE ASSE SSEE VIDE LETTER DATED 26.11.2008 IT WAS NOTICED THAT DURING THE YEAR TH E ASSESSEE HAS RAISED SHARE CAPITAL OF RS. 95 00 000/- FROM FOLLOWING PARTIES : - I.T.A. NOS.932 & 1684/DEL./2010 (A.Y. : 2006-07) 2 (I) APPURVA PROJECT & CONSTRUCTION P.LTD. RS. 15 00 000/- (II) SHAILESH MAURYA RS. 15 00 000/- (III) IIBS INFONEST PVT. LTD. RS. 30 00 000/- (IV) ADVANTAGE ENGG. & DEVELOP. PVT. LTD. RS. 35 00 000/- 4. THEREAFTER THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 26.11.2008 WAS REQUIRED TO FURNISH THE LATEST COMPLETE ADDRESSES O F ALL THE PARTIES WHO HAVE MADE INVESTMENT IN THE SHARE CAPITAL OF THE ASSESSEE COM PANY BY WAY OF APPLYING FOR ITS SHARES. ACCORDINGLY FOLLOWING INFORMATION U/S 133( 6) OF I. TAX ACT VIDE LETTERS DATED 05.12.2008 WAS SOUGHT FROM ALL PARTIES APPEAR ING AT SL. NO. (I) TO (III) AND WERE DIRECTED TO FILE THE SAME ON OR BEFORE 15.12.2 008 :- (1) WHETHER YOU HAVE SUBSCRIBED ANY AMOUNT TO THE SHARE CAPITAL OF M/S L.R. FINVEST PVT. LTD. DURING THE PERIOD FROM 01.04 .2005 TO 31.03.2006. IF YES THEN PLEASE SUBMIT THE FOLLOWING DETAILS :- (A) COPY OF APPLICATION FORM FILLED IN FOR ALLOTMEN T OF SHARES. (B) YOUR PAN NO. AND WARD/ CIRCLE WHERE YOU ARE ASS ESSED TO I. TAX. (C) NO. OF SHARES APPLIED FOR AND NO. OF SHARES ALL OTTED. ALSO FURNISH COPY OF ALLOTMENT LETTER. (D) SOURCES OF YOUR INCOME. ALSO STATE THE SOURCES OF INVESTMENT MADE IN SHARE CAPITAL OF ABOVE ASSESSEE. (E) COPY OF YOUR BALANCE SHEET AND PROFIT & LOSS AC COUNT. (2) COPY OF ACCOUNT OF M/S L.R. FINVEST PVT. LTD. IN YOUR BOOKS OF ACCOUNT FOR THE PERIOD FROM 1.4.2005 TO 31.03.2006. 5. HOWEVER THE LETTER ISSUED TO M/S APURVA PROJEC T & CONSTRUCTION PVT. LTD. WAS RECEIVED BACK WITH POSTAL REMARKS 'NO SUCH COMPANY AT THE GIVEN ADDRESS I.E. AT 2876/5 HENCE RETURNED TO SENDER'. FURTHER NO INFORMATION WAS RECEIVED FROM SHRI SHAILESH MAURYA AND M/S IIBS INF ONEST PVT. LTD. ACCORDINGLY THE ASSESSEE'S A.R. VIDE ORDER SHEET ENTRY DATED 15 .12.2008 WAS ASKED TO SHOW CAUSE AS TO WHY TH~ SHARE CAPITAL RECEIVED FROM THES E THREE PARTIES BE NOT TREATED AS UNEXPLAINED CASH CREDITS AND DISALLOWED U/S 68 O F I.TAX ACT. THE CASE WAS ADJOURNED FOR 17.1.2008 TO FURNISH THE REPLY. ON TH IS DAY THE A.R. APPEARED AND REQUESTED FOR ADJOURNMENT FOR 2 MORE DAYS WHICH WA S GRANTED TO HIM. FINALLY ON 19.12.2008 THE ASSESSEE FILED ITS REPLY THEREIN SUB MITTING THAT THE ASSESSEE HAS ISSUED SHARES LONG BACK IN THE F. Y. 2005-06 AND AS PER THEIR RECORDS THE COPY OF SHARE CERTIFICATE NAME AND ADDRESS DETAILS OF PAY MENTS RECEIVED HAVE ALREADY BEEN SUBMITTED. HERE IT IS PERTINENT TO MENTION THA T THE INFORMATION U/S 133(6) OF I.TAX ACT AS CALLED FOR FROM THE ABOVE 3 PARTIES WA S NOT RECEIVED TILL THE DATE OF PASSING OF ASSESSMENT ORDER. I.T.A. NOS.932 & 1684/DEL./2010 (A.Y. : 2006-07) 3 6. IN VIEW OF THE ABOVE IT IS ESTABLISHED THAT TH E ASSESSEE FAILED TO DISCHARGE ITS PRIMARY ONUS OF PROVING THE IDENTITY AND CREDIT WORTHINESS OF THE CONCERNED PARTY AND ALSO GENUINENESS OF THE TRANSACTIONS IN T ERMS OF PROVISIONS OF SECTION 68 OF LTAX ACT WHICH READS AS FOLLOWS :- 'WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF TH E ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR AND THE ASSESSEE OFFERS NO E XPLANATION: ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERE D BY HIM .IS NOT IN THE OPINION OF THE ASSESSING OFFICER SATISFACTORY THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. 7. IN VIEW OF THE FACTS NARRATED ABOVE THE TOTAL AMOUNT STATED TO BE RECEIVED ON ACCOUNT OF SHARE CAPITAL FROM M/S APPURVA PROJEC T & CONSTRUCTION P.LTD. OF RS. 15 00 000/- SHRI SHAILESH MAURYA OF RS. 15 00 000/- AND M/S IIBS INFONEST PVT. LTD. OF RS. 30 00 000/- TOTALING TO RS. 60 00 000/- REMAINED UNEXPLAINED. ACCORDINGLY THE SHARE CAPITAL MONEY RECEIVED BY TH E ASSESSEE AMOUNTING TO RS. 60 00 000/- IS HELD TO BE THE ASSESSEE'S OWN UNACCO UNTED MONEY WHICH HAS ONLY BEEN ROUTED THROUGH THE BANK ACCOUNT OF THE PAYERS TO THE BANK ACCOUNT OF THE ASSESSEE IN THE SHAPE OF SHARE APPLICATION MONEY. H ENCE THE UNEXPLAINED AMOUNT OF RS. 60 00 000/- IS TREATED AS INCOME OF THE ASSE SSEE U/S 68 OF I.TAX ACT AND THE SAME IS ADDED BACK TO ITS TOTAL INCOME. 8. AS I AM SATISFIED THAT THE ASSESSEE HAS FURNISH ED INACCURATE PARTICULARS OF ITS INCOME AND HAS CONCEALED ITS INCOME THEREFORE PENALTY PROCEEDINGS U/S 271(1)(C) OF I.TAX ACT HAVE SEPARATELY BEEN INITIAT ED. 4. THE ASSESSEE CHALLENGED SUCH ACTION OF THE ASSES SING OFFICER BEFORE THE FIRST APPELLATE AUTHORITY AND RELIED UPON WRITTEN SUBMISS IONS FILED AND VARIOUS CASE LAWS CITED AND INCORPORATED BY THE CIT(A) IN PARA.5.2 OF HIS O RDER. THE CIT(A) WHILE CONSIDERING AND ACCEPTING THE PLEA OF THE ASSESSEE HAS CONCLUDE D TO DELETE THE IMPUGNED ADDITION AS PER PARAS. 6 TO 6.3 OF HIS ORDER AS UNDER: 6. I HAVE CONSIDERED THE WRITTEN SUB MISSION ON B EHALF OF THE APPELLANT THE FINDINGS OF FT ASSESSING OFFICER AND THE FACTS ON R ECORD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE FOLLOWING PARTICULARS / DETAILS WERE FURNISHED ON BEHALF OF THE APPELLANT:- A) AFFIDAVITS FROM THE SHARE HOLDERS CONTAINING THE COMPLETE DETAILS OF APPLICANTS WHICH INCLUDES NAME OF THE APPLICANTS ADDRESS PA N ASSESSMENT PARTICULARS I.T.A. NOS.932 & 1684/DEL./2010 (A.Y. : 2006-07) 4 NUMBER OR SHARES APPLIED MODE OF PAYMENTS OF SHARE APPLICATION MONEY DETAILS OF BANK OF SHARE HOLDERS BRANCH CHEQUE NO . B) CONFIRMATION FROM SHARE HOLDERS CONTAINING THE C OMPLETE DETAILS OF AMOUNT INVESTED CHEQUE NUMBER DATE BANK PAL1ICULARS. PA N AND INCOME-TAX PAL1ICULARS; C) PAN OF THE SHARE HOLDERS; D) COPY OF ACKNOWLEDGMENT OF INCOME TAX RETURN OF S HARE HOLDERS; E) COPY OF AUDITED BALANCE SHEET OF SHARE HOLDERS D ULY SHOWING AUTHORIZED & PAID-UP CAPITAL F) COPY OR FORM NO. 2 (I.E. RETURN OF ALLOTMENT OF SHARES) FILED IN ROC; G) ROC SITE STATUS REPORT IN RESPECT OF THE SHARE-A PPLICANT COMPANIES; AND H) BALANCE SHEET SHOWING AUTHORIZED & PAID CAPITAL. 6.1 REGARDING THE SHARE APPLICATION MONEY/SHARE CA PITAL/SHARE PREMIUM IT IS NOW WELL SETTLED THAT WHERE THE ASSESSEE HAD FURNIS HED (I) THE NAMES AND ADDRESSES OR THE SHARE APPLICANTS (II) THE GIR NOS. /P.A.N. NOS. (III) THE WARD NOS. WHERE ASSESSED (IV) THE MODE OF PAYMENT AND (V ) OTHER INFORMATION WHICH THE ASSESSEE KNOWS OR POSSESSES THEN IT CAN BE SAI D THAT INITIAL BURDEN ON THE ASSESSEE CAN BE SAID TO BE DISCHARGED. ONCE THE IDE NTITY OR THE SHAREHOLDERS WAS ESTABLISHED IT ALSO STANDS ESTABLISHED THAT THE SHA REHOLDERS HAVE INVESTED MONEY IN THE PURCHASE OF SHARES AND HENCE THE ONUS ON THE P ART OF THE ASSESSEE COMPANY IS DISCHARGED AND THERE CAN NOT BE ANY ADDITION IN THE HANDS OF THE ASSESSEE COMPANY ON ACCOUNT OF SHARE APPLICATION MONEY OR SHARE CAPI TAL. RELIANCE IS PLACED ON THE FOLLOWING DECISIONS OF THE APEX COURT AND THE JURIS DICTIONAL HIGH COURT OF DELHI:- I) CIT VS. LOVELY EXPORTS (P) LTD. (2008) 216 CTR(S C) 195; II) CIT VS. DIVINE LEASING & FINANCE LTD. (2007) 29 9 ITR 268 (DEL.). HON'BLE DELHI HIGH COURT IN PARA. 13 & 16 HAS HELD AS UNDER :- 13. THERE CANNOT BE TWO OPINIONS ON THE ASPECT THA T THE PERNICIOUS PRACTICE OF CONVERSION OF UNACCOUNTED MONEY THROUGH THE MASQUERADE OR CHANNEL OF INVESTMENT IN THE SHARE CAPITAL OF A COM PANY MUST BE FIRMLY EXCORIATED BY THE REVENUE. EQUALLY WHERE THE PREPO NDERANCE OF EVIDENCE INDICATES ABSENCE OF CULPABILITY AND COMPLEXITY OF THE ASSESSEE IT SHOULD NOT BE HARASSED BY THE REVENUE'S INSISTENCE THAT IT SHOULD PROVE THE NEGATIVE. IN THE CASE OF A PUBLIC ISSUE THE COMPAN Y CONCERNED CANNOT BE EXPECTED TO KNOW EVERY DETAIL PERTAINING TO THE IDE NTITY AS WELL AS FINANCIAL WORTH OF EACH OF ITS SUBSCRIBERS. THE COMPANY MUST HOWEVER MAINTAIN I.T.A. NOS.932 & 1684/DEL./2010 (A.Y. : 2006-07) 5 AND MAKE AVAILABLE TO THE ASSESSING OFFICER FOR HIS PERUSAL ALL THE INFORMATION CONTAINED IN THE STATUTORY SHARE APPLIC ATION DOCUMENTS. IN THE CASE OF PRIVATE PLACEMENT THE LEGAL REGIME WOULD NO T BE THE SAME. A DELICATE BALANCE MUST BE MAINTAINED WHILE WALKING T HE TIGHTROPE OF SECTIONS 68 AND 69 OF THE I.T. ACT. THE BURDEN OF P ROOF CAN SELDOM BE DISCHARGED TO THE HILT BY THE ASSESSEE; IF THE ASSE SSING OFFICER HARBOURS DOUBTS OF THE LEGITIMACY OF ANY SUBSCRIPTION HE IS EMPOWERED NAY DUTY- BOUND TO CARRY OUT THOROUGH INVESTIGATIONS. BUT IF THE ASSESSING OFFICER FAILS TO UNEARTH ANY WRONG OR ILLEGAL DEALINGS HE CANNOT OBDURATELY ADHERE TO HIS SUSPICIONS AND TREAT THE SUBSCRIBED CAPITAL AS THE UNDISCLOSED INCOME OF THE COMPANY. 16. IN THIS ANALYSIS A DISTILLATION OF THE PRECEDE NTS YIELDS THE FOLLOWING PROPOSITIONS OF LAW IN THE CONTEXT OF SECTION 68 OF THE INCOME-TAX ACT. THE ASSESSEE HAS TO PRIMA FACIE PROVE (1) THE IDENTITY OF THE CREDITOR/SUB- SCRIBER; (2) THE GENUINENESS OF T HE TRANSACTION N AMELY: WHETHER IT HAS BEEN TRANSMITTED THROUGH BANKING OR OTHER INDISPUTA BLE CHANNELS: (3) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDI TOR/SUBSCRIBER; (4) IF RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/SUBSCRIBER ARE FURNISHED TO THE DEPARTMENT ALONG WITH COPIES O F THE SHAREHOLDERS REGISTER. SHARE APPLICATION FORMS SHARE TRANSFER R EGISTER ETC. IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATI ON BY THE ASSESSEE. (5) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY BECAUSE THE CREDITOR/SUBSCRIBER FAILS OR NEGLE CTS TO RESPOND TO ITS NOTICES; (6) THE ONUS WOULD NOT STAND DISCHARGED IF THE CREDITOR/SUBSCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSEE NOR SHOULD THE ASSESSING OFFICER TAKE SUCH REPUDIATION AT FACE VAL UE AND CONSTRUE IT WITHOUT MORE AGAINST THE ASSESSEE. (7) THE ASSESSI NG OFFICER IS DUTY- BOUND TO INVESTIGATE THE CREDITWORTHINESS OF THE CR EDITOR/SUBSCRIBER THE GENUINENESS OF THE TRANSACTION AND THE VERACITY OF THE REPUDIATION. ' III) CIT VS. VALUE CAPITAL SERVICES LTD. (2008) 307 ITR 334 (DEL.)- HON'BLE DELHI HIGH COURT HAS HELD AS UNDER:- '5. WHILE SETTING ASIDE THE ORDER OF THE COMMISSION ER OF INCOME-TAX (APPEALS) THE TRIBUNAL RELIED UPON TWO DECISIONS O F THIS COURT NAMELY CIT V. STELLAR INVESTMENT LTD. [J 99 J} 192 ITR 287 AND A FULL BENCH DECISION IN CIT V. SOPHIA FINANCE LTD. [199'J 205 I TR 98. SEVERAL OTHER DECISIONS HAVE BEEN RENDERED BY THIS COURT FOLLOWIN G THE ABOVE TWO DECISIONS. THE PRINCIPLE THAT HAS BEEN LAID DOWN BY THE VARIOUS DECISIONS RENDERED BY THIS COURT FROM TIME TO TIME IS THAT IF THE EXISTENCE OF THE APPLICANT IS PROVED NORMALLY NO FURTHER INQUIRY IS NECESSARY. 6. LEARNED COUNSEL FOR THE REVENUE SUBMITS THAT T HE CREDITWORTHINESS OF THE APPLICANTS CAN NEVERTHELESS BE EXAMINED BY THE ASSESSING OFFICER. IT IS QUITE OBVIOUS THAT IS VERY DIFFICULT FOR THE ASSESS EE TO SHOW THE CREDIT- I.T.A. NOS.932 & 1684/DEL./2010 (A.Y. : 2006-07) 6 WORTHINESS OF STRANGERS. IF THE REVENUE HAS ANY DOU BT WITH REGARD TO THEIR ABILITY TO MAKE THE INVESTMENT THEIR RETURNS MAY B E REOPENED BY THE DEPARTMENT. 7. IN ANY CASE WHAT IS CLINCHING IS THE ADDITIONAL BURDEN ON THE REVENUE. IT MUST SHOW THAT EVEN IF THE APPLICANT DOES NOT HA VE THE MEANS TO MAKE THE INVESTMENT THE INVESTMENT MADE BY THE APPLICAN T ACTUALLY EMANATED FROM THE COFFERS OF THE ASSESSEE SO AS TO ENABLE IT TO BE TREATED AS THE UNDISCLOSED INCOME OF THE ASSESSEE. THIS HAS NOT BE EN DONE IN SO FAR AS THE PRESENT CASE IS CONCERNED AND THAT HAS BEEN NOTED B Y THE TRIBUNAL ALSO. 8. UNDER THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE TRIBUNAL HAS NOT COMMITTED ANY ERROR IN DELETING THE ADDITION. 9. NO SUBSTANTIAL QUESTION OF LAW ARISES'. IV) CIT VS. TD! MARKETING PVT. LTD. (2009) 26 DTR ( DEL.) 358;AND V) SHAY SHAKTI STEEL MINES (P) LTD. VS. CIT (2009) 179 TAXMAN 25 WHEREIN THE HON'BLE DELHI HIGH COURT HAS OBSERVED A S UNDER:- 'IN ANY EVENT WE ALSO NOTE THAT THE SUPREME COURT I N THE CASE OF CIT V. LOVELY EXPORTS (P.) LTD. [2008} 216 CTR 195 CONSIDERED THE QUESTION AS TO WHETHER THE SHARE APPLICATION MONEY CAN BE REGARDED AS UNDISCLOSED INCOME UNDER SECTION 68 OF THE INCOME- TAX ACT 1961. THE SUPREME COURT DISMISSING THE SLP OBSERVED THAT IF T HE SHARE MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER THEN THE DEPARTMENT IS FREE TO PROCEED TO ASSESS THEM INDIVIDUALLY IN ACCORDANCE WITH LAW. THE SUPREME COURT DID NOT FIND ANY INFIRMITY WITH THE IMPUGNED JUDGMENT OF THE HIGH COURT WHICH WAS A COMMON ORDER ALONG WITH THE DECIS ION IN CIT V. DIVINE LEASING & FINANCE LTD. [2008) 299 ITR 26R (DELHI). SINCE THE COMMISSIONER OF INCOME-TAX (A) HAS NOT ONLY FOUND T HAT THE IDENTITY OF EACH OF THE SHAREHOLDERS STOOD ESTABLISHED BUT HAS ALSO EXAMINED THE FACT THAT EACH OF THEM WERE INCOME-TAX ASSESSEES AND HAD DISCLOSED THE SHARE APPLICATION MONEY IN THEIR ACCOUNTS WHICH WERE DULY REFLECTED IN THEIR INCOME-TAX RETURN AS WELL AS IN THEIR BALANCE SHEET S. IN THESE CIRCUMSTANCES WE SEE MERIT IN WHAT THE LEARNED COUNSEL FOR THE AP PELLANT HAS SUBMITTED AND WE FEEL THAT THE TRIBUNAL WAS UNJUSTIFIED IN CO MING TO THE CONCLUSION THAT THE CIT(A) HAD NOT CONSIDERED THE MATTER IN TH E RIGHT PERSPECTIVE. CONSEQUENTLY WE DECIDE THE QUESTION IN FAVOUR OF T HE ASSESSEE AND SET ASIDE THE ORDER PASSED BY THE TRIBUNAL. ' 6.2 IN THE PRESENT CASE THE ASSESSEE CAN BE SAID T O HAVE DISCHARGED ITS ONUS UNDER SECTION 68 OF THE ACT. THE APPELLANT HAS GIVE N ALL THE NECESSARY DETAILS IN ORDER TO ESTABLISH THE IDENTITY OF THE SHARE APPLIC ANTS. AFTER CONSIDERING THE ENTIRE I.T.A. NOS.932 & 1684/DEL./2010 (A.Y. : 2006-07) 7 MATERIAL PLACED ON RECORD IT IS FAIR TO CONCLUDE T HAT THE SHARE APPLICANTS WERE EXISTING PARTIES AND THE PAYMENTS WERE MADE THROUGH BANKING CHANNELS. IT IS ALSO SEEN THAT THE ASSESSING OFFICER COULD NOT POINT OUT ANY DISCREPANCY IN THE EVIDENCES RELIED UPON BY THE ASSESSEE. HE HAS NEIT HER BROUGHT OUT ANY DIRECT OR INFERENTIAL EVIDENCE TO CONTRADICT THE CONTENTION O F THE ASSESSEE. FURTHER WHAT IS THE DESIRED DOCUMENTARY EVIDENCE REQUIRED TO SUPPOR T THE CLAIM OF THE ASSESSEE AS REQUIRED BY THE A.O. IS NOT COMING OUT OF THE ORDER OF THE A.O. THOUGH THE SHARE- APPLICANTS COULD NOT BE EXAMINED BY THE AO SINCE T HEY WERE EXISTING ON THE FILE OF THE INCOME TAX DEPARTMENT AND THEIR INCOME-TAX D ETAILS WERE MADE AVAILABLE TO THE AO IT WAS EQUALLY THE DUTY OF THE AO TO HAV E TAKEN STEPS TO VERIFY THEIR ASSESSMENT RECORDS AND IF NECESSARY TO ALSO HAVE TH EM EXAMINED BY THE RESPECTIVE AOS HAVING JURISDICTION OVER THEM (SHARE-APPLICANTS ) WHICH HAS NOT BEEN DONE BY HIM. 6.3 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE STATED ABOVE. IT IS HELD THAT THE ADDITION OF. RS.60 00 0001-CAN NOT BE SUSTAINED AND ACCORDINGLY THE SAME IS DIRECTED TO BE DELETED. THE CONSEQUENTIAL ADDITION ON ACCOUNT OF COMMISSION OF RS.60 000/- FOR OBTAINING THC SAID ACCOMMODATION EN TRIES IS ALSO DIRECTED TO BE DELETED. AS A RESULT GROUNDS OF APPEAL NOS. 3 AND 4 ARE ALLOWED. 5. AGGRIEVED BY THE ORDER OF THE CIT(A) DEPARTMENT HAS COME UP IN APPEAL AND WHILE RELYING UPON THE ASSESSING OFFICERS ORDER I T WAS SUBMITTED THAT IN THE ABSENCE OF NECESSARY EVIDENCE AND MATERIAL HAVING BEEN PRODUCE D BY THE ASSESSEE BEFORE THE ASSESSING OFFICER ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE IMPUGNED ADDITION WHEREAS CIT(A) HAS JUST DELETED THE ADDITION WITHOU T GIVING PROPER BASIS AND PLACING RELEVANT MATERIAL ON RECORD. IT WAS ALSO POINTED O UT THAT IF THE PAPER BOOK OF THE ASSESSEE IS LOOKED INTO IT WOULD TRANSPIRE THAT CONFIRMATIO NS FILED BY THE ASSESSEE ARE DIFFERENT THAN CONSIDERED BY THE CIT(A) TO GRANT RELIEF AND CASE LAWS CITED AND APPLIED BY THE CIT(A) WOULD ALSO BE FOUND TO BE NOT APPLICABLE T O SUPPORT THE ORDER OF CIT(A) BY GIVING REFERENCE TO VARIOUS PAGES OF THE PAPER BOO K AND SPECIFIC REFERENCE TO PAGE 41 OF PAPER BOOK WHICH IS CONFIRMATION OF ACCOUNT OF IIBS INFONEST PVT. LTD. WHERE A SUM OF RS.5 LAKHS IS SHOWN TO HAVE BEEN RECEIVED BY CHEQUE WHEREAS RS.25 LAKHS BEING CASH RECEIVED AS SHARE APPLICATION MONEY. SIMILARLY OT HER DETAILS GIVEN IN THE CONFIRMATION I.T.A. NOS.932 & 1684/DEL./2010 (A.Y. : 2006-07) 8 LETTERS OR CONNECTED PAPERS IS NOT IN CONFORMITY WI TH THE PLEA RAISED AND ACCEPTED. SO IN THE INTEREST OF JUSTICE ORDER OF CIT(A) SHOULD BE SET ASIDE AND MATTER BE RESTORED BACK ON THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATI ON OF THE ISSUE AFRESH BECAUSE VITAL DOCUMENTS HAVE EITHER BEEN OVERLOOKED OR NOT APPROP RIATELY CONSIDERED BEFORE GIVING THE RELIEF TO THE ASSESSEE. IT WAS THUS PLEADED FOR SE TTING ASIDE THE ORDER OF CIT(A) AND RESTORING THE MATTER TO THE ASSESSING OFFICER FOR R ECONSIDERATION. 6. DESPITE SENDING NOTICE SUFFICIENTLY IN ADVANCE ASSESSEE DID NOT APPEAR NOR ANY APPLICATION FOR ADJOURNMENT HAS BEEN RECEIVED. THE REFORE WE PROCEED TO DECIDE THE APPEAL EX-PARTE QUA-THE-ASSESSEE AFTER CONSIDERING THE ARGUMENTS OF LD.DR AND MATERIAL PLACED ON RECORD. 7. WE HAVE HEARD THE LD.DR CONSIDERED THE MATERIAL ON RECORD AND FIND THAT IN ORDER TO DELETE THE IMPUGNED ADDITION CIT(A) HAS C ONSIDERED CERTAIN DOCUMENTS SUCH AS CONFIRMATORY LETTERS AND OTHER RELATED PAPERS. BUT THERE ARE CLEAR CUT DISCREPANCIES IN SUCH DOCUMENTS WHICH ARE APPARENT FROM THE EVIDENC E FURNISHED IN THE PAPER BOOK. IN VIEW OF DISCREPANCIES NOTICED AND THERE BEING NO EV IDENCE OR MATERIAL TO EXPLAIN SUCH DISCREPANCIES WE IN THE INTEREST OF JUSTICE AND T O HAVE FAIR PLAY IN THE MATTER SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK ON THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO RE-DECIDE THE ISSUE IN RELATION TO IMPUGNED ADDITION AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. WE HOLD AND DIREC T ACCORDINGLY. I.T.A. NO.1684/DEL./2010 8. ASSESSING OFFICER IN THIS CASE IMPOSED PENALTY O F RS.22 39 796/- U/S 271(1)(C) OF THE I.T. ACT 1961 WITH RESPECT TO THE ADDITION MA DE BY THE ASSESSING OFFICER TO THE EXTENT OF RS.60 60 000/-. IN APPEAL THE SAID IMPUG NED ADDITION WAS DELETED BY THE I.T.A. NOS.932 & 1684/DEL./2010 (A.Y. : 2006-07) 9 CIT(A) IN APPEAL SO PENALTY WAS ALSO DIRECTED TO BE DELETED IN FIRST APPEAL AGAINST WHICH DEPARTMENT IS IN APPEAL. DESPITE SENDING NOTICE SU FFICIENTLY IN ADVANCE ASSESSEE DID NOT APPEAR NOR ANY APPLICATION FOR ADJOURNMENT HAS BEEN RECEIVED. THEREFORE WE PROCEED TO DECIDE THE APPEAL EX-PARTE QUA-THE-ASSESSEE AFTER H EARING THE LD.DR AND CONSIDERING THE MATERIAL ON RECORD. 9. LD.DR. SUBMITTED THAT SINCE THE ORDER OF THE CIT (A) WITH RESPECT TO DELETION OF ADDITION IS BEING SET ASIDE ON THE FILE OF THE ASSE SSING OFFICER. THEREFORE THE APPEAL WITH RESPECT TO PENALTY SHOULD ALSO BE SET ASIDE ON THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. 10. AFTER HEARING THE LD.DR. AND CONSIDERING THE MA TERIAL ON RECORD WE FIND THAT IMPUGNED ADDITION ON THE BASIS OF WHICH PENALTY HAS BEEN MADE U/S 271(1)(C) OF THE ACT HAS BEEN SET ASIDE AND THE MATTER HAS BEEN RESTORED BACK ON THE FILE OF THE ASSESSING OFFICER. THEREFORE THE ORDER OF CIT(A) IN PENALTY PROCEEDINGS IS ALSO SET ASIDE AND MATTER IS RESTORED BACK ON THE FILE OF THE ASSESSIN G OFFICER WITH THE DIRECTION TO DECIDE THE PENALTY MATTER AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. 4 AS A RESULT BOTH THE APPEALS OF THE DEPARTMENT ARE ACCEPTED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 13.02.2012. SD/- SD/- (B.C. MEENA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : FEBRUARY 13 2012 SKB I.T.A. NOS.932 & 1684/DEL./2010 (A.Y. : 2006-07) 10 COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-VII NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR ITAT