ITO, New Delhi v. M/s. North East Builders, New Delhi

ITA 4064/DEL/2009 | 2006-2007
Pronouncement Date: 04-11-2011 | Result: Dismissed

Appeal Details

RSA Number 406420114 RSA 2009
Bench Delhi
Appeal Number ITA 4064/DEL/2009
Duration Of Justice 2 year(s) 27 day(s)
Appellant ITO, New Delhi
Respondent M/s. North East Builders, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 04-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 04-11-2011
Date Of Final Hearing 13-10-2011
Next Hearing Date 13-10-2011
Assessment Year 2006-2007
Appeal Filed On 07-10-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER I.T.A NO. 4064/DEL/09 ASSTT. YEAR 2006-07 ITO WARD-32 (3) NEW DELHI. VS. M/S. NORTH EAST BUILDERS A-106 LAJPAT NAGAR-1 NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R.S. NEGI SR. DR RESPONDENT BY: SHRI ANOOP SHARMA ADVOCATE ORDER PER RAJPAL YADAV JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF LD. CIT(A) DATED 13 TH AUGUST 2009 PASSED FOR ASSTT. YEAR 2006-07. THE S OLITARY GRIEVANCE OF THE REVENUE IS THAT LD. CIT(A) HAS ERR ED IN DELETING THE ADDITION OF `25 LACS WHICH WAS MADE BY THE AO WITH THE AID OF SECTION 69 OF THE INCOME TAX ACT 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED ITS RETURN OF INCOME ON 20 TH SEPTEMBER 2006 DECLARING INCOME OF ` 88 983/-. TH E CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMEN T AND A NOTICE U/S 143(2) WAS SERVED UPON THE ASSESSEE. IN RESPONSE TO THE NOTICE SHRI S. JASORIA CHARTERED ACCOUNTANT APPEARED ON BEHALF OF THE ASSESSEE AND ITA NO. 4064/DEL/09 ASSTT. YEAR 2006-07 2 FILED NECESSARY DETAILS. ON SCRUTINY OF THE ACCOUNT S IT REVEALED TO THE AO THAT M/S. JMD PROMOTERS LTD. HAS ACKNOWLEDGED THE R ECEIPT OF ` 25 LACS BY CHEQUE BEARING NO. 240275/- DATED 6.10.2005 OF JAMM U & KASHMIR BANK LTD GIVEN BY SHRI KEDAR GUPTA ON BEHALF OF THE ASSE SSEE. ACCORDING TO THE AO IN THE BOOKS OF ASSESSEE THIS AMOUNT IS ACCOUNTE D FOR AS A PARTNER CAPITAL OF M/S. ARG INTERNATIONAL LTD. BUT IN THE A UDITED BALANCE SHEET OF M/S. ARG INTERNATIONAL LTD THIS AMOUNT IS NOT REFL ECTED IN THE SCHEDULE OF UNSECURED LOANS. LD. AO HAS CONFRONTED THE ASSESSEE . IT HAS FILED CONFIRMATION FROM SHRI KEDAR GUPTA. HOWEVER AO WAS NOT SATISFIED WITH THE CONTENTION OF ASSESSEE AND HE MADE AN ADDITION OF ` 25 LACS ON ACCOUNT OF UNEXPLAINED INVESTMENT. 3. ON APPEAL LD. FIRST APPELLATE AUTHORITY HAS OBSE RVED THAT AO FAILED TO APPRECIATE THE FACTS AND CIRCUMSTANCES IN RIGHT PERSPECTIVE. THE FINDING OF LD. CIT (A) READ AS UNDER :- 4.1 I HAVE CONSIDERED THE FACTS OF THE CASE. THE LE ARNED AO HAS MADE ADDITION U/S 69 ON THE BASIS OF THE FOLLOWING :- (A) THE BANK STATEMENT OF THE APPELLANT FIRM DOES N OT REFLECT THE FACT OF PAYMENT OF ` 25 LACKS IN ITS BANK ACCOUNT WITH M/S. HDFC LTD. AND STANDARD CHARTERED BANK. (B) THE BALANCE SHEET PROFIT AND LOSS AND LIST OF UNSECURED LOANS OF M/S. ARG INTERNATIONAL LTD. DOES NOT REFLECT THAT RS. 25 LAC S WAS TAKEN FROM M/S. KEDAR GUPTA. (C) LEGER ACCOUNT OF THE APPELLANT FIRM IN THE BOOK S OF M/S. JMD PROMOTORS LTD. REVEALS THAT AN AMOUNT OF RS. 25 LACS RECEIVED FROM THE APPELLANT FIRM BY CHEQUES. THE AO FOUND OUT THAT THE APPELLANT FIRM H AS SUBMITTED CONTRADICTORY EVIDENCE I.E. WHILE MR. KEDAR NATH S CONFIRMATION STATES THAT CHEQUE HAS BEEN ISSUED IN THE NAME OF NORTH EA ST BUILDERS BUT THE MONEY WAS NOT TRANSFERRED FROM THE BANK ACCOUNTS OF THE ASSESSEE FIRM. THE AO HAS SUBMITTED IN THE REMAND REPORT THAT THE LEDGER ACCOUNT OF MR. KEDAR GUPTA IN THE BOOK OF ARG INTERNATIONAL IS AN AFTERTHOUGHT AND THE NEW EVIDENCE SHOULD NOT BE CONSIDERED BY THE UNDERS IGNED. ITA NO. 4064/DEL/09 ASSTT. YEAR 2006-07 3 4.2 THE FACTS OF THE CASE ARE STRAIGHTFORWARD AND S IMPLE. PAYMENT OF RS. 25 LACS WAS MADE BY THE CHEQUES BY MR. KEDAR GUPTA TO M/S. JMD PROMOTORS LTD. THIS PAYMENT HAS BEEN MADE BY CHEQUE NO. 240275/- D ATED 6/10/2005 BY MR. KEDAR GUPTA. THIS FACT HAS BEEN CONFIRMED BY THE RE CIPIENT M/S. JMD PROMOTORS AND ALSO BY THE PAYER SH. KEDAR GUPTA. LEARNED AO H AS ALSO CONFIRMED THIS POINT IN THE ORDER U/S 143(3). THE SAID PAYMENT HAS BEEN MADE BY SHRI KEDAR GUPTA ON BEHALF OF M/S. ARG INTERNATIONAL LTD. TOWARDS THE C APITAL CONTRIBUTION IN THE APPELLANT FIRM M/S. NORTH EAST BUILDERS. SHRI KEDAR GUPTA HAS CONFIRMED THIS FACT THAT THE PAYMENT WAS ON ACCOUNT OF ARG INTERNATIONA L LTD. AND WAS ISSUED IN THE NAME OF M/S. NORTH EAST BUILDERS. SINCE THE FACT OF PAYMENT OF CHEQUE OF MR. KEDAR GU PTA TO JMD PROMOTORS LTD. VIDE CHEQUE NO. 240275 DATED 6/10/05 IS A FAC T RECOGNIZED BY THE AO ALSO HOW DOES THE AO EXPECTS THE CHEQUE TO BE DEBITED FR OM THE BANK ACCOUNT OF THE APPELLANT FIRM. SHRI KEDAR GUPTA IS BEING SHOWN AS CREDITOR IN THE BOOKS OF M/S. ARG INTERNATIONAL LTD. )AS CAPITAL CONTRIBUTION IN THE APPELLANT FIRM)/THROUGH A JOURNAL ENTRY. THE PAYMENT OF RS. 25 LACS HAS BEEN MADE BY SHRI KEDAR GUPTA TO JMD PROMOTORS LTD. ON BEHALF OF M/S. NORTH EAST BUIL DERS THE APPELLANT FIRM. THIS FACT HAS ALSO BEEN CONFIRMED BOTH BY THE PAYER AND THE RECIPIENT. THE APPELLANT HAS BEEN CREDITED IN THE BOOKS OF M/S. JMD PROMOTORS LTD. ACCORDINGLY. THE AO HAS NOT VERIFIED THAT THE SAME AMOUNT HAS BEEN SHOW N AS SHARE APPLICATION MONEY IN THE BOOKS OF ARG INTERNATIONAL LTD. ON THE OTHER END THE APPELLANT FIRM HAS CLEARLY SHOWN THIS MONEY AS SHARE CAPITAL MONEY RECEIVED FROM M/S. ARG INTERNATIONAL LTD. 5. THE AO HAS NOT APPRECIATED THE BASIC ACCOUNTING ENTRIES UNDERLYING THE TRANSACTION WHICH CLEARLY SHOWS THAT THROUGH THE S INGLE TRANSACTION OF PAYMENT OF THE CHEQUE NO. 240275 DATED 6.10.2005 TO M/S. JMD PR OMOTORS LTD. BY SHRI KEDAR GUPTA M/S. ARG INTERNATIONAL HAS BEEN SHOWN AS PRO VIDING CAPITAL OF RS. 25 LACS IN THE APPELLANT FIRM THROUGH PASSING OF A JOURNAL ENTRY WHILE THROUGH ANOTHER JOURNAL ENTRY IN THE BOOKS OF ARG INTERNATIONAL SH RI KEDAR GUPTA HAS BEEN SHOWN AS A CREDITOR [FOR MAKING PAYMENT ON BEHALF OF ARG INTERNATIONAL] AND THE APPELLANT FIRM HAS BEEN SHOWN TO HAVE A CREDIT ENT RY EQUIVALENT TO RS. 25 LACS IN THE BOOKS OF M/S. JMD PROMOTORS LTD. THROUGH ANOTHER JOURNAL ENTRY IN THE BOOKS OF M/S. JMD PROMOTORS LTD. THE AO OUGHT TO HAVE EXAMINE D THE LEDGER ACCOUNT OF SHRI KEDAR GUPTA IN THE BOOKS OF ARG INTERNATIONAL FOR WHICH HE HAD THE OPPORTUNITY WHILE EXAMINING THE SAME INDEPENDENTLY. IT CANNOT BE TREATED AS AN ADDITIONAL EVIDENCE BUT ONLY AS A MATTER OF FACT EM ERGING FROM THE BOOKS OF ACCOUNT WHICH WERE EXAMINED BY THE AO BUT WERE NO T OBSERVED. IN VIEW OF THE ABOVE I THEREFORE DELETE THE ADDITION OF RS. 25 LA CKS MADE BY THE AO ON THIS GROUND AS WELL. 4. WITH THE ASSISTANCE OF LD. REPRESENTATIVE WE HAV E GONE THROUGH THE RECORD CAREFULLY. ON PERUSAL OF THE OBSERVATION REC ORDED IN PARAGRAPH NO. 4.2 EXTRACTED SUPRA WE ARE OF THE VIEW THAT ASSESSE E HAS SPECIFICALLY EXPLAINED THE SOURCE OF ` 25 LACS. IT HAS ALSO PROD UCED THE SUPPORTING EVIDENCE. IN BRIEF THE EXPLANATION OF THE ASSESSEE IS THAT ` 25 LACS PAID TO ITA NO. 4064/DEL/09 ASSTT. YEAR 2006-07 4 M/S. JMD PROMOTERS WAS ORIGINATED FROM THE ACCOUNT OF SHRI KEDAR GUPTA. IT WAS PAID ON BEHALF OF M/S. ARG INTERNATIONAL LTD . TOWARDS THE CAPITAL CONTRIBUTION IN THE ASSESSEE FIRM I.E. M/S. NORTH EAST BUILDERS AND IT WAS PAID ON BEHALF OF THE ASSESSEE. HAD THIS AMOUNT WAS DIRECTLY PAID BY SHRI KEDAR GUPTA TO M/S. ARG INTERNATIONAL LIMITED AND T HEN IT IS CREDITED TO THE ACCOUNT OF ASSESSEE AND THEREAFTER IT IS CREDIT ED TO THE ACCOUNT OF M/S. JMD PROMOTERS THERE WOULD NOT BE ANY PROCEDURAL PRO BLEM BUT SINCE IT HAS BEEN PAID DIRECTLY TO M/S. JMD PROMOTORS ON BEHALF OF THE ASSESSEE SHRI ARG INTERNATIONAL. WHOLE CONFUSION HAS ARISEN. IN OUR OPINION LD. CIT(A) HAS APPRECIATED THE FACTS AND CIRCUMSTANCES IN RIGH T PERSPECTIVE AND HAS RIGHTLY DELETED THE ADDITION. WE DO NOT FIND ANY ME RIT IN THIS APPEAL. IT IS DISMISSED. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH NOVEMBER 2011. [K.G. BANSAL] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 4.11.2011 VEENA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT