Shree Chaturbhuj Portfolio Private Limited,, New Delhi v. ITO, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH G DELHI ] BEFORE SHRI A. D. JAIN JM SHRI K. D. RANJAN AM I. T. APPEAL NO. 4349 (DEL) OF 2009 ASSESSMENT YEAR : 2004-05. SHREE CHATURBHUJ PORTFOLIO PVT. LTD. THE INCOME-TAX OFFICER A - 632 SARITA VIHAR VS. W A R D : 8 ( 1) N E W D E L H I - 110 076. N E W D E L H I. P A N / G I R NO. AAB CS 6794 D. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI SAURABH MISHRA C. A.; DEPARTMENT BY : SHRI MUKESH VERMA SR. D. R.; O R D E R. PER K. D. RANJAN AM : THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 20 04-05 ARISES OUT OF ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XI NEW DELHI . 2. THE ONLY ISSUE FOR CONSIDERATION RELATE TO CONFI RMING THE ADDITION OF RS.2 00 000/- ON ACCOUNT OF SHARE APPLICATION MONEY ADDED UNDER SECT ION 68 OF THE ACT. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE RECEIVED RS.2 00 000/- FROM M/S. RAVIK EXPORTS LTD. THE ASSESSING OFFICER CALLED THE ENQUIRY AT THE GIVEN A DDRESS OF M/S. RAVIK EXPORTS LTD. BUT NO RESPONSE COULD BE RECEIVED FROM THE SAID PARTY. IT WAS SUBMITTED THAT DUE TO CHANGE IN 2 I. T. APPEAL NOS. 4349 (DEL) OF 2009 ADDRESS THE PARTY COULD NOT BE PRODUCED. FURTHER E NQUIRY COULD NOT LEAD TO ANY CONCLUSION AS MUCH AS THE PARTY COULD NOT BE TRACED AT THE GIVEN ADDRESS AND THE ASSESSING OFFICER ACCORDINGLY PROCEEDED TO ADD RS.2 00 000/- RECEIVED AS INVESTMENT FROM THE SAID CONCERN UNDER SECTION 68 OF THE ACT. THE LD. CIT (APPEALS) DURING THE COURSE OF APPELL ATE PROCEEDINGS ASKED THE COUNSEL FOR THE ASSESSEE TO GIVE PROPER ADDRESS OF THE COMP ANY M/S. RAVIK EXPORTS LTD. AND ITS DIRECTORS. IT WAS SUBMITTED THAT THE RESIDENTIAL A DDRESS OF THE DIRECTOR WAS NOT READILY AVAILABLE. HOWEVER HE HAD GIVEN ADDRESS OF M/S. R AVIK EXPORTS LTD. THE ASSESSEE GAVE THREE ADDRESSES BEFORE THE LD. CIT (APPEALS) AS MEN TIONED IN THE APPELLATE ORDER. ON A QUERY AS TO WHY THREE ADDRESSES WERE GIVEN IT WAS CLARIF IED TO THE LD. CIT (APPEALS) THAT THE THREE ADDRESSES COULD BE GATHERED BY THE ASSESSEE IN RESP ECT OF THE SAID PARTY. IT WAS ALSO CLARIFIED THAT SHOP NO. 20 KRISHNA MARKET BAWANA ROAD POOT H KHURD NEW DELHI WAS GIVEN IN THE 16TH AGM; RZ-41-A MOHAN NAGAR PANKHA ROAD NEW DE LHI WAS GIVEN IN IT RETURN FOR ASSESSMENT YEAR 2003-04 AND C-584 NEW FRIENDS COLO NY NEW DELHI ADDRESS WAS GIVEN IN THE DOCUMENT OF ROC. THE LD. CIT (APPEALS) IN ORDE R TO VERIFY THE IDENTITY AND AUTHENTICITY OF THE ASSESSEE BEING OCCUPANT OF SUCH ADDRESS ENQ UIRY WAS CONDUCTED THROUGH THE INCOME- TAX INSPECTOR IN ALL THE THREE CASES. IT WAS REPOR TED THAT SHOP NO. 20 KRISHNA MARKET BAWANA ROAD POOTH KHURD NEW DELHI WAS OWNED BY M RS. RAJ BALA. ON FURTHER ENQUIRY FROM THE CARE TAKER IT WAS FOUND THAT THERE WAS NO CONCERN NAMELY M/S. RAVIK EXPORTS LTD. AT THAT ADDRESS FOR LAST 10 YEARS. AS REGARDS RZ-4 1-A MOHAN NAGAR PANKHA ROAD IT WAS FOUND THAT THE SAID PREMISES WAS THE RESIDENCE OF M R. ATUL VERMA WHO STATED THAT NO SUCH COMPANY BY NAME M/S. RAVIK EXPORTS LTD. WAS EVER E XISTED AT THAT ADDRESS FOR THE LAST 10 YEARS. C-584 NEW FRIENDS COLONY IS THE RESIDENCE OF ONE SHRI H. L. MEHRA A RETIRED IRS OFFICER. HE ALSO CONFIRMED THAT HE HAD NOT HEARD T HE NAME OF ANY SUCH COMPANY AT THAT ADDRESS. THE REPORT OF THE INSPECTOR WAS FORWARDED TO THE ASSESSEE FOR HIS COMMENTS. THE DIRECTOR OF THE ASSESSEE COMPANY WAS SUMMONED UNDER SECTION 131 OF THE ACT AND HIS STATEMENT WAS RECORDED ON OATH. IT WAS STATED THAT THE ASSESSEE HAD TAKEN SHARE APPLICATION MONEY FROM M/S. RAVIK EXPORTS LTD. ON 24TH MARCH 2 004 AMOUNTING TO RS.2 00 000/- THROUGH CHEQUE NO. 257308 DRAWN ON CORPORATION BANK PASCHIM VIHAR NEW DELHI. SHARES WERE ALLOTTED TO THE SAME APPLICANT ON 25TH MARCH 2004 AND FORM NO. 2 WAS FILED BEFORE ROC AS PER COMPANIES ACT. IT WAS FURTHER SUBMITTED THAT HE COULD NOT SAY ANYTHING AS TO 3 I. T. APPEAL NOS. 4349 (DEL) OF 2009 WHY SUMMONS COULD NOT BE SERVED ON M/S. RAVIK EXPOR TS LTD. THE LD. CIT (APPEALS) THEREFORE CAME TO THE CONCLUSION THAT THE SAID CON CERN DID NOT EXIT AT ANY OF THE ADDRESSES GIVEN BY THE ASSESSEE. THE LD. CIT (APPEALS) AFTER DISCUSSING THE MATTER IN DETAIL HELD THAT ASSESSEE HAD NOT BEEN ABLE TO ESTABLISH THE IDENTIT Y THE CREDITWORTHINESS OF THE SUBSCRIBER AND GENUINENESS OF THE TRANSACTION. THEREFORE THE AMO UNT OF RS.2 00 000/- INTRODUCED IN THE BOOKS OF ACCOUNTS AS SHARE APPLICATION MONEY WAS LI ABLE TO BE ADDED UNDER SECTION 68 OF THE ACT. ACCORDINGLY THE AMOUNT OF RS.2 00 000/- WAS ADDED. 3. BEFORE US THE LD. AR OF THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAD FILED CONFIRMATIONS. THE ASSESSEE HAD FILED THE INFORMAT ION ABOUT THE IDENTITY OF THE SUBSCRIBER FROM WEBSITE OF THE COMPANY DEPTT. OF COMPANY AFFA IRS. THEREFORE THE SUBSCRIBER COMPANY WAS VERY MUCH IN EXISTENCE. HOWEVER HE CO ULD NOT SAY ANYTHING AS TO WHY THE PARTY COULD NOT BE PRODUCED BEFORE THE ASSESSING OF FICER OR BEFORE THE LD. CIT (APPEALS). HOWEVER HE STATED THAT THE ASSESSEE WOULD BE ABLE TO PRODUCE THE PRINCIPAL OFFICER OF THE CREDITOR COMPANY BEFORE THE ASSESSING OFFICER. ON THE OTHER HAND THE LD. SR. DR SUPPORTED THE ORDER OF THE LD. CIT (APPEALS). 4. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE FACTS NARRATED ABOVE IT IS CLEAR THAT THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE THE PARTY NEITHER BEFORE THE ASSESSING OFFICER NOR BEFO RE THE LD. CIT (APPEALS). IN FACT THE LD. CIT (APPEALS) HAD CARRIED OUT FURTHER ENQUIRIES ON THE BASIS OF WHICH HE CAME TO THE CONCLUSION THAT M/S. RAVIK EXPORTS LTD. WAS NOT IN EXISTENCE. IT IS UNBELIEVABLE THAT A COMPANY WHO HAD INVESTED RS.2 00 000/- IN ANOTHER COMPANY WOULD NOT BE TRACEABLE AT THE ADDRESS GIVEN. HOWEVER BEFORE US THE LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT THE ASSESSEE WOULD BE ABLE TO PRODUCE THE PRINCIPAL OFFICER OF THE CREDITOR CO MPANY BEFORE THE ASSESSING OFFICER. WE THEREFORE FEEL IT PROPER TO SET ASIDE THE MATTER T O THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTIONS TO DECIDE THE ISSUE AFRESH. IN CASE THE ASSESSEE IS NOT ABLE TO PRODUCE THE PRINCIPAL OFFICER OF THE CREDITOR COMPANY BEFORE THE ASSESSIN G OFFICER THE ASSESSING OFFICER WILL DECIDE THE ISSUE ON MERITS AFTER AFFORDING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESSING OFFICER WILL DECIDE THE ISSUE ON MERI TS AFTER MAKING NECESSARY INQUIRIS IN THE MATTER. 4 I. T. APPEAL NOS. 4349 (DEL) OF 2009 5. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON : 14TH JANUARY 2010. SD/- SD/- [ A. D. JAIN ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14TH JANUARY 2010. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT (APPEALS) 5. DR ITAT NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR ITAT. 5 I. T. APPEAL NOS. 4349 (DEL) OF 2009