DCIT, New Delhi v. M/s. Unibuild Engineering & Construction Co. Pvt. Ltd., New Delhi

ITA 73/DEL/2009 | 2005-2006
Pronouncement Date: 24-05-2010 | Result: Allowed

Appeal Details

RSA Number 7320114 RSA 2009
Assessee PAN AAACU0465A
Bench Delhi
Appeal Number ITA 73/DEL/2009
Duration Of Justice 1 year(s) 4 month(s) 15 day(s)
Appellant DCIT, New Delhi
Respondent M/s. Unibuild Engineering & Construction Co. Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 24-05-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted H
Tribunal Order Date 24-05-2010
Date Of Final Hearing 24-05-2010
Next Hearing Date 24-05-2010
Assessment Year 2005-2006
Appeal Filed On 09-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER AND SHRI R. C. SHARMA ACCOUNTANT MEMBER I.T.A. NO.73/D/2009 ASSESSMENT YEAR : 2005-06 D.C.I.T. VS. M/S UNIBUILD ENGINEERING & CONS. CIRCLE-18(1) CO. PVT. LTD. A-67 LAJPAT NAGAR-II NEW DELHI NEW DELHI-24 AND I.T.A. NO.3671/D/2008 ASSESSMENT YEAR : 2007-08 M/S UNIBUILD ENGINEERING & CONS. VS. D.C.I.T. CO. PVT. LTD. A-67 LAJPAT NAGAR-II CIRCLE-18(1) NEW DELHI NEW DELHI PAN NO.AAACU 0465A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJESH ARORA CA RESPONDENT BY : SHRI N.K. CHAND SR. DR ORDER PER R.C. SHARMA: AM: THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE A ND THE REVENUE AGAINST THE ORDER DATED 15.10.2008 OF CIT(A )-XXI NEW DELHI FOR ASSESSMENT YEAR 2005-06 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE ACT. 2 2. IN THE APPEAL FILED BY THE ASSESSEE THE CAPITAL GAIN ACCRUE TO THE ASSESSEE ON SALE OF SHARE WAS SUBJECTED TO CAPI TAL GAINS BY THE ASSESSING OFFICER. AS PER ASSESSEE THE GAINS SO AC CRUED WAS EXEMPT U/S 10(38) OF THE I.T. ACT. IN THE APPEAL F ILED BY THE REVENUE REVENUE IS AGGRIEVED FOR DELETION OF ADDITION OF RS .98 40 000/- ON ACCOUNT OF BOGUS PURCHASES. THE REVENUE IS ALSO AG GRIEVED FOR DELETING THE DISALLOWANCE OF DEPRECIATION OF RS.1 9 5 125/- ATTRIBUTABLE TO PURCHASES OF FIXED ASSETS WHICH WERE HELD BY ASS ESSING OFFICER AS FICTITIOUS. 2.1 RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PE RUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN BUSINE SS OF CIVIL CONSTRUCTION. DURING THE COURSE OF ASSESSMENT PROCE EDINGS DETAILS WERE CALLED FOR AND EXAMINED. FOR VERIFICATION OF PURCHASES/EXPENSES DEBITED IN THE PROFIT AND LOSS A /C AND CLAIMED IN THE RETURN OF INCOME NOTICES/LETTERS U/S 133(6) WE RE ISSUED IN CERTAIN CASES. IN 16 NUMBER OF CASES THE AFORESAID NOTICES U/S 133(6) WERE RETURNED BACK UN-SERVED. FURTHER IN CERTAIN CASES NOTICES WERE NOT REPLIED. ACCORDINGLY ASSESSEE COMPANY VIDE LETTER DATED 11.12.2007 WAS INFORMED OF THE SAME REQUIRING IT TO EXPLAIN AS TO WHY ADVERSE INFERENCE MAY NOT BE DRAWN. HOWEVER THE ASSESSEE MADE EFFORTS 3 BUT COULD OBTAIN CONFIRMATIONS FROM 9 OUT OF 16 CAS ES WHERE LETTERS HAD REMAINED UNSERVED. IN THE REMAINING 7 CASES NO CONFIRMATIONS COULD BE FILED BY THE ASSESSEE COMPANY. 2.2 IN VIEW OF THE ABOVE THE ASSESSING OFFICER OBS ERVED THAT ASSESSEE COULD NOT ADDUCE CREDIBLE EVIDENCE OF THE PURCHASES. ACCORDINGLY AN ADDITION OF RS.1 01 35 125/- WAS MAD E IN THE RETURN INCOME OF THE ASSESSEE. BEFORE THE CIT(A) THE ASS ESSEE PRODUCED FOLLOWING DOCUMENTS ALONG WITH REQUEST U/R 46A:- I) THE CONFIRMATION FROM THE PARTIES II) CONFIRMED THE COPY OF ACCOUNT III) THE BANK STATEMENT OF THE SAID CONCERN IS ALSO BEING SUBMITTED IN WHICH CREDIT ENTRY WHICH CLEARLY DEPIC TS THAT PAYMENT HAS BEEN RECEIVED FROM THE ASSESSEE COMPANY . IV) PAN DETAILS ALONG WITH COPY OF PAN CARD V) COPY OF RATION CARD ALONG WITH COPY OF DRIVING L ICENSE VI) COPY OF BILLS FOR PURCHASES BEING MADE VII) THE COPY OF MRN REFLECTING THE CHALLAN WISE DE TAIL OF RECEIVING OF THE MATERIALS. 2.3 ABOVE DOCUMENTS WERE SENT BY THE CIT(A) TO THE ASSESSING OFFICER FOR HIS REMAND REPORT WHO VIDE HIS LETTER DATED 23.07.2008 4 DECLINED TO ACCEPT THE ADDITIONAL EVIDENCE ON THE P LEAS THAT ASSESSEE WAS GIVEN AMPLE OPPORTUNITY TO PROVE THE PURCHASES DURING COURSE OF ASSESSMENT PROCEEDINGS BUT HE COULD NOT PROVE THE S AME AND NOW BY JUST FILING THE DOCUMENTS BEFORE CIT(A) DOES NO T PROVE THE POINT OF THE ASSESSEE. IT WAS ALSO OBSERVED THAT ALL THE EV IDENCES HAVE TO GO THROUGH THE ACID TEST AGAIN WHICH WAS APPLIED DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS. HOWEVER THE CIT(A) QUOTED THE SUBMISSION MADE BY THE ASSESSEE WITH REGARD TO THE ADDITIONAL EVIDENCE AND DELETED THE ADDITION MADE ON ACCOUNT OF BOGUS PURCHASE BY THAT ASSESSEE BY OBSERVING THAT ASSESSE E HAS FURNISHED SUBSTANTIAL MATTER TO SUBSTANTIATE THE FACT THAT TH E PURCHASES MADE ARE GENUINE. AGAINST THIS ORDER OF CIT(A) THE REV ENUE IS IN FURTHER APPEAL BEFORE US. 2.4 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND THE REMAND REPO RT PLACED IN THE RECORD. WE FIND THAT DURING COURSE OF ORIGINAL ASS ESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS MADE FULL IN QUIRIES WITH REGARD TO THE PURCHASES MADE BY THE ASSESSEE NOTIC ES WERE ALSO ISSUED FOR VERIFICATION OF EXPENSES IN CASE OF 16 PARTIES THE NOTICES ISSUED U/S 133(6) WERE UNSERVED AND IN OTHER CASES NOTICES WERE NOT 5 REPLIED. IN RESPECT OF 7 PARTIES THE ASSESSEE COU LD NOT EVEN FURNISH THE CONFIRMATION REGARDING PURCHASES SO MADE. HOWE VER DURING REMAND PROCEEDINGS THE ASSESSING OFFICER HAS NOT MA DE ANY INQUIRY AND JUST STATED THAT THE ADDITIONAL DOCUMENTS SO FU RNISHED DURING REMAND PROCEEDINGS SHOULD HAVE BEEN FURNISHED BY TH E ASSESSEE AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS WHEN AM PLE OPPORTUNITY WAS GRANTED TO ASSESSEE. WITH REGARD TO MERIT OF A DDITION THE ASSESSING OFFICER STATED IN THE REMAND REPORT THAT ALL THE EVIDENCES HAS TO GO TO ACID TEST AS APPLIED BY THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. IT IS C LEAR FROM THE REMAND REPORT THAT ASSESSING OFFICER HAS NOT GIVEN ANY VERDICT ON THE MERIT OF THE ADDITIONAL EVIDENCE AND THE ADDITION M ADE CONSEQUENT THERETO. NO INQUIRY WAS MADE BY THE ASSESSING OFFI CER AND THE ADDITIONAL EVIDENCE FURNISHED WAS STATED TO BE IN C ONTRAVENTION OF RULE 46A OF THE INCOME TAX ACT . WHEN THE ASSESSIN G OFFICER HAS NOT STATED ON THE MERIT OF THE ADDITIONAL EVIDENCE IN THE REMAND REPORT THE CIT(A) HAS GOT CO-TERMINUS POWER TO EXA MINE THE ADDITIONAL EVIDENCE AND TO GIVE HIS OWN FINDING WIT H REGARD TO THE ADDITIONS SO MADE VIS--VIS THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM. HOWEVER IN THE INSTANT CASE BEFORE 6 US THE CIT(A) HAS NOT MADE ANY INQUIRY WITH REGARD TO THE ADDITIONAL EVIDENCE FURNISHED BY ASSESSEE NOR GIVE ANY FINDING TO SUBSTANTIATE THE SAME THEREFORE ADDITIONS DELETED BY CIT(A) JU ST BY OBSERVING THAT ASSESSEE HAS FURNISHED SUBSTANTIAL MATERIAL TO SUBSTANTIATE THE FACT THAT PURCHASES MADE WERE GENUINE AND ASSESSING OFFICER HAS MADE AN ADDITION WITHOUT ANY RELIABLE MATERIAL IS N OT SUSTAINABLE IN LAW. THE CIT(A) HAS GOT CO-TERMINUS POWER AND WHAT THE ASSESSING OFFICER HAS FAILED TO DO HE MAY DO THE SAME. MERE LY BY FINDING FAULT IN ASSESSING OFFICERS ORDER HE CANNOT REVERSE THE ORDER OF ASSESSING OFFICER. WITHOUT GIVING HIS FINDING ON T HE EVIDENCE FURNISHED BEFORE HIM WHICH WERE NOT FURNISHED BEFO RE THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDI NGS THE CIT(A) CANNOT REVERSE THE FINDINGS OF ASSESSING OFFICER WI THOUT GIVING HIM OPPORTUNITY TO EXAMINE THOSE ADDITIONAL EVIDENCES. SINCE THE CIT(A) IN THE INSTANT CASE HAS NOT GIVEN ANY OF HIS FINDIN G WITH REGARD TO VERIFICATION OF VARIOUS DOCUMENTS FILED BY THE ASSE SSEE TO SUBSTANTIATE THE GENUINENESS OF PURCHASES SO MADE WE DO NOT FIND ANY MERIT IN THE ORDER OF CIT(A) FOR DELETING THE S AME. IN THE INTEREST OF JUSTICE AND FAIR PLAY WE RESTORE THIS GROUND BA CK TO THE FILE OF THE ASSESSING OFFICER AND THE ASSESSEE IS DIRECTED TO P RODUCE ALL THE 7 EVIDENCES BEFORE THE ASSESSING OFFICER AND THE ASS ESSING OFFICER IS TO DECIDE THE ISSUE AFRESH AFTER GIVING DUE OPPORTU NITY TO THE ASSESSEE. WE DIRECT ACCORDINGLY. 2.5 SIMILARLY THE ISSUE WITH REGARD TO CLAIM OF DE PRECIATION ON THE FIXED ASSETS SO PURCHASED WHICH WAS HELD BY THE AS SESSING OFFICER TO BE FICTITIOUS IS ALSO RESTORED BACK TO THE FILE OF ASSESSING OFFICER IN TERMS OF OUR DISCUSSION MADE HEREINABOVE. 3. IN ASSESSEES APPEAL LONG TERM CAPITAL GAIN ON S ALE OF SHARES WERE ALLEGED TO BE EXEMPT U/S 10(38) HOWEVER DUE TO INADVERTENT MISTAKE THE SAME WERE INCLUDED IN THE INCOME AS TAX ABLE AT 20%. HOWEVER THE ASSESSING OFFICER DID NOT GIVE BENEFIT OF EXEMPTION AND INCLUDED THE SAME IN TAXABLE INCOME. BY THE IMPUGN ED ORDER THE CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER BY OBSERVING THAT ASSESSEE HAS FAILED TO PROVE THAT SHARE IN QUESTION WAS THE CAPITAL ASSET AND THE SAME WERE HELD AS INVESTMENT. AS PER CIT(A) THE ASSESSEE HAS FAILED TO ESTABLISH THAT SALE PROCEEDS OF SHARES WERE IN TRADING ACCOUNT OR OTHERWISE. 8 3.1 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FO UND FROM THE RECORD THAT ASSESSEE HAS EARNED INCOME FROM SALE OF SHARES WHICH WAS ALLEGED TO BE HELD FOR MORE THAN ONE YEAR AND T HE TRANSACTION TAX WAS ALSO CLAIMED TO BE PAID THEREON. AS PER LEARNE D AR ASSESSEE WAS ENTITLED TO CLAIM EXEMPTION U/S 10(38) BUT INA DVERTENTLY SAME WAS OFFERED AS TAXABLE INCOME AND ASSESSING OFFICER HAS ALSO INCLUDED THE SAME IN ASSESSEES INCOME. THE CAPITA L GAIN WHICH IS CLAIMED AS EXEMPT U/S 10(38) IS NOT TO BE INCLUDED IN THE INCOME OF THE ASSESSEE. BEFORE ALLOWING THE EXEMPTION THE AS SESSING OFFICER IS REQUIRED TO EXAMINE VARIOUS CONDITIONS ON FULFILLME NT OF WHICH EXEMPTION CAN BE ALLOWED U/S 10(38). HOWEVER IF D UE TO IGNORANCE THE ASSESSEE HAS WRONGLY INCLUDED SUCH GAIN IN THE TAXABLE INCOME AND THE SAME HAS BEEN POINTED OUT DURING THE COURSE OF ASSESSMENT THE ASSESSING OFFICER IS DUTY BOUND TO VERIFY THE A SSESSEES CLAIM AND TO ALLOW THE SAME IF SAME IS AS PER LAW. MERE WRONG OFFER OF INCOME WHICH IS POINTED OUT DURING ASSESSMENT PROCE EDINGS CANNOT BE SUBJECT MATTER OF ADDITION. IN THE INTEREST OF JUSTICE AND FAIR PLAY THIS GROUND OF APPEAL IS ALSO RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRESH AS PER LAW AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. WE DIRECT ACCORDINGLY. 9 4. IN RESULT BOTH THE APPEALS OF THE ASSESSEE AND THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. ORDER PRONOUNCED IN OPEN COURT ON 24.05.2010 SOO N AFTER THE HEARING WAS OVER. SD/- SD/- ( C.L. SETHI ) ( R.C. SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 24.05.2010. NS COPY FORWARDED TO:- 1. M/S UNIBUILD ENGINEERING & CONSTRUCTION CO. PVT. LTD. A-67 LAJPAT NAGAR-II NEW DELHI-24 2. D.C.I.T. CIRCLE 18(1) NEW DELHI. 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY. BY ORDER (ITAT NEW DELHI).