ITO, New Delhi v. M/s Expert Fabrics & Textile P. Ltd.,, New Delhi

ITA 4765/DEL/2009 | 2006-2007
Pronouncement Date: 23-04-2010 | Result: Dismissed

Appeal Details

RSA Number 476520114 RSA 2009
Assessee PAN AAACE0663J
Bench Delhi
Appeal Number ITA 4765/DEL/2009
Duration Of Justice 4 month(s) 7 day(s)
Appellant ITO, New Delhi
Respondent M/s Expert Fabrics & Textile P. Ltd.,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 23-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 23-04-2010
Date Of Final Hearing 21-04-2010
Next Hearing Date 21-04-2010
Assessment Year 2006-2007
Appeal Filed On 16-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI G.E.VEERABHADRAPPA VICE PRESIDENT AND SHRI H.S. SIDHU JUDICIAL MEMBER ITA NO.4765/DEL/2009 ASSESSMENT YEAR : 2001-02 INCOME-TAX OFFICER WARD-11(2) NEW DELHI. VS. M/S EXPERT FABRICS & TEXTILE P. LTD. COMMUNITY CENTRE NEW FRIENDS COLONY NEW DELHI. PAN: AAACE0663J (APPELLANT) (RESPONDENT) AND C.O.NO.33/DEL/2010 IN I.T.A.NO.4765/DEL/2009 ASSESSMENT YEAR 2001-02 M/S EXPERT FABRICS & TEXTILE P. LTD. VS. INCOME- TAX OFFICER COMMUNITY CENTRE WARD-11(2) NEW FRIENDS COLONY NEW DELHI. (CROSS-OBJECTOR) (APPELLANT IN APPEAL) ASSESSEE BY : SHRI R.S. SINGHVI C.A. DEPARTMENT BY : SMT.MAMTA KOCHAR D.R.. ORDER PER H.S.SIDHU JM : THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE CIT(A)-XIII NEW DELHI DATED 15.10.2009 FOR ASSESSMENT YEAR 2001 -02. THE CROSS-OBJECTION HAS BEEN FILED BY THE ASSESSEE. 2. REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE ORDER OF THE CIT(A) IS WRONG PERVERSE ILLEGAL AND AGAIN ST THE PROVISIONS OF LAW WHICH IS LIABLE TO BE SET ASIDE. ITA NO.4765/DEL/09 & CO NO.33./DEL/2010 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT (APPEALS) HAS ERRED IN DELETING ADDITION MADE OF RS .20 00 000/- U/S 68 OF THE IT ACT IGNORING:- A) THAT BEFORE THE ISSUANCE OF CHEQUES FROM THE BAN K ACCOUNTS OF THE SHARE APPLICANTS THERE WERE MANY ENTRIES OF CAS H DEPOSITS & IT IS SEEN THAT MONEY WAS WITHDRAWN ON THE SAME D ATE OR THE VERY NEXT DATE WHICH SHOWS THAT THE ALLEGED SFHARE APPLICANT IS AN ENTRY OPERATOR. B) THAT MERE SUBMISSION OF DOCUMENTS AND MATERIAL I S HELD TO BE INSUFFICIENT IN THE CASE OF HINDUSTAN TEA TRADING C O VS. CIT 263 ITR 289 C) THE DICTUM GIVEN BY THE HON'BLE SUPREME COURT IN CIT VS. DURGA PRASAD MORE 82 ITR 540 & SUMATI DAYAL VS. CIT 214 ITR 801 IN WHICH APEX COURT HAS LAID DOWN THE PROPO SITION THAT THE COURTS AND TRIBUNALS SHOULD SEE THE PREPO NDERANCE OF PROBABILITIES WHILE CONSIDERING THE EVIDENCE FURNIS HED BY THE ASSESSEE. D) THE FINDING OF FACTS RECORDED BY THE A.O. THAT T HE ASSESSEE INDULGED IN A NOTORIOUS PRACTICE OF RESORTING TO ACCOMMODATION ENTRIES IN ORDER TO EVADE PAYMENT OF LEGITIMATE TAX. E) THAT THE A.O. IS DUTY BOUND U/S 68 TO ENQUIRE IN TO THE CREDITWORTHINESS IDENTITY OF THE CREDITORS & GENUI NENESS OF THE TRANSACTIONS. THE CIT(A) HAS ERRED IN IGNORING SUCH FINDINGS RECORDED BY THE A.O. IN THE ASSESSMENT ORD ER. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN APPLYING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF M/S LOVELY EXPORTS P LTD TO THE FACTS OF THE CASE W HEREAS IN THAT CASE NO FINDING HAD BEEN REACHED BY ANY AUTHORITY THAT T HE SHARE APPLICATION TRANSACTIONS WERE SHAM AND A COVER FOR ACCOMMODATION ENTRIES RECEIVED BY THE ASSESSEE I.E. A GARB UNDER WHICH THE MONEY OF THE BENEFICIARY ASSESSEE COMPANY IS INTRODUCED IN T HE FORM OF SHARE APPLICATION FROM THE ENTRY PROVIDER. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN NOT CONSIDERING THE FACT THAT AFTER THE A.R. OF THE ASSESSEE HAD BEEN SHOWN ALL MATERIAL ON RECORD ON 5.11.2008 THERE WA S NO DEMAND FOR ITA NO.4765/DEL/09 & CO NO.33./DEL/2010 3 CROSS EXAMINATION AS IS EVIDENT FROM ITS SUBSEQUENT SUBMISSIONS DATED 10.11.2008. 3. ASSESSEE HAS RAISED THE FOLLOWING GROUND IN ITS CROSS-OBJECTION:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THERE IS NO LEGAL BASIS FOR ASSUMING JURISDICTION U/S 148 OF THE INCO ME-TAX ACT AS THERE IS NO CASE OF ANY INCOME ESCAPING ASSESSMENT OR REC ORDING OF SATISFACTION AS PER LAW. 2. THAT THE REASSESSMENT IS NOT JUSTIFIED ON FACTS AND SAME IS BAD IN LAW. 4. AT THE TIME OF HEARING LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED IN FAVOUR OF TH E ASSESSEE BY VARIOUS BENCHES OF THE ITAT NEW DELHI WHEREIN DECISIONS OF HON'BLE JU RISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. DIVINE LEASING & FINANCE LTD. ETC. 299 ITR 268 (DELHI) AND THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF LO VELY EXPORTS PVT. LTD. 172 TAXMANN 44 HAVE BEEN FOLLOWED. HE FURTHER PRAYED TH AT IN THE EVENT THE TRIBUNAL DISMISSES THE REVENUES APPEAL THE CROSS-OBJECTION OF THE ASSESSEE MAY BE TREATED AS WITHDRAWN. HE THEREFORE PRAYED THAT THE APPEAL OF THE REVENUE MAY BE DISMISSED. 5. ON THE OTHER HAND LD. D.R. RELIED ON THE ORDER PASSED BY THE ASSESSING OFFICER. 6. WE HAVE HEARD BOTH THE PARTIES PERUSED THE RELE VANT RECORD AVAILABLE WITH US ESPECIALLY THE IMPUGNED ORDER AS ALSO THE DECIS ION OF HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD. 172 TAXMANN 4 4. WE FIND THAT DELHI BENCHES OF THE ITAT ARE REGULARLY FOLLOWING THE DEC ISION OF HON'BLE SUPREME COURT IN THE CASE OF LOVELY EXPORTS PVT. LTD. (SUPR A). ONE SUCH CASE BEING I.T.A.NO.556/DEL/09 FOR THE ASSESSMENT YEAR 1999-20 00 IN THE CASE OF ITO NEW DELHI VS. M/S DUJANIA INVESTMENTS P. LTD. DELHI DE CIDED BY DELHI BENCH-F NEW ITA NO.4765/DEL/09 & CO NO.33./DEL/2010 4 DELHI DATED 30.4.2009. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES AND RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF HON'BLE JURISDI CTIONAL HIGH COURT OF DELHI AND THE DECISION OF HON'BLE SUPREME COURT AS ALSO THE D ECISION OF ITAT IN THE CASE OF M/S DUJANIA INVESTMENTS P. LTD. SUPRA WE FIND NO I NFIRMITY IN THE ORDER OF LD. FIRST APPELLATE AUTHORITY IN DELETING THE IMPUGNED ADDITI ON ON ACCOUNT OF SHARE CAPITAL. WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS T HE GROUNDS OF APPEAL TAKEN BY THE REVENUE. CROSS OBJECTION FILED BY THE ASSESSEE HAVING BECOME INFRUCTUOUS IS ALSO DISMISSED. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE A S WELL AS THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.4.2010. SD/- SD/- (G.E.VEERABHADRAPPA) (H.S.SIDHU) VICE PRESIDENT JUDICIAL MEMBER DATED : 23.04.2010. VSK COPY FORWARDED TO: - 1. APPELLANT-REVENUE 2. RESPONDENT-ASSESSEE 3. CIT 4. CIT(A) 5. DR ITAT DEPUTY REGISTRAR ITA NO.4765/DEL/09 & CO NO.33./DEL/2010 5