Income Tax Appellate Tribunal - Delhi
M/S Rajan Suri (Huf), New Delhi vs Acit, New Delhi on 22 August, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL :
DELHI BENCHES : SMC : DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
ITA. No.6482/Del./2015
Assessment Year 2011-2012
M/s. Rajan Suri (HUF),
M-12, Jangpura Extension, vs. The ACIT, Circle-32(1)
New Delhi - 110 014. New Delhi.
PAN AAJHR1971G
(Appellant) (Respondent)
For Assessee : Shri B.S. Sistani, C.A.
For Revenue : Shri T. Vasanthan, Sr. D.R.
Date of Hearing : 07.08.2017
Date of Pronouncement : 22.08.2017
ORDER
This appeal by assessee has been directed against the order of the Ld. CIT(A)-18, New Delhi, dated 12th October, 2015 for A.Y. 2011-2012, challenging the addition of Rs.10 lakhs under section 68 of the I.T. Act. Earlier, the appeal of the assessee was dismissed vide order dated 21.09.2016. On the miscellaneous application filed by the assessee, the Tribunal recalled the ex- parte order dated 21.09.2016 and directed the Registry to fix the appeal for hearing on 07.08.2017.
2
2. Briefly, the facts of the case are that Assessee-HUF filed the return of income declaring total income at Rs.6,56,880. The A.O. found that an amount of Rs.30 lakhs has been advanced to Shakuntala Education and Welfare Society and the source was explained to be various amount received from Mr. Rajan Suri, M/s. Ankur Carpet and M/s. Kamboj Consultancy Pvt. Ltd., etc., The A.O. examined the credit from M/s. Kamboj Consultancy Pvt. Ltd., of Rs.10 lakh and after enquiry, made the addition of Rs. 10,00,000 for an unexplained deposit in the bank account.
3. The assessee challenged the addition before the Ld. CIT(A) and written submissions of assessee is reproduced in the appellate order in which it was explained that there was a search and seizure operation carried out on Shakuntala Education and Welfare Society on 17th September, 2010. On the basis of post search investigation, the case of the assessee was reopened in which it was found that assessee has received loan of Rs.10 lakhs from M/s. Kamboj Consultancy Pvt. Ltd. The A.O. rejected the contention of assessee of receipt of genuine loan on the reasons that the gross total income of the company is only Rs.1,09,451, 3 credit in the bank statement has not been explained. On the basis of enquiries of the Inspector, it was known that registered office of creditor is actually a residential premises and no work or employees of the company could be seen in the premises. It was also known that Shri Parikshit Mehta, C.A. is the Director of the Company who has arranged the loan for the assessee and known to Mr. Rajan Suri. The A.O. therefore, questioned the creditworthiness of the creditor company. The assessee further explained that assessee provided confirmation on the creditor, copy of the bank statement and copy of the income tax return of the creditor company. The company has also replied to the A.O. in response to the notice under section 133(6) of the I.T. Act. The A.O. deputed her Inspector to get the address of the company and physically verified also. How the residential address of one of the Director cannot be registered office of the company, presence of the employees at the visit of the Inspector is not necessary. Why C.A. of the assessee who is a family friend of assessee cannot help the assessee.
4. . The Ld. CIT(A), however, did not accept the contention of assessee and relying upon several decisions, dismissed the appeal 4 of assessee on this ground. The Ld.CIT(A) confirmed the finding of the A.O. as noted above and also onoted in his findings that assessee could not produce the profit and loss account of the company etc., and chose to produce the incomplete balance sheet from the Registrar of Companies site. It claimed the amount or advance as loan but credit was not appearing in the balance sheet. Ld.CIT(A) therefore, noted that burden is upon the assessee to prove the genuine credit, has not been discharged and accordingly, dismissed the appeal of assessee.
5. I have heard Learned Representatives of both the parties. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and filed application under Rule-29 of the Appellate Tribunal Rules for admission of the additional evidence i.e., audited accounts of M/s. Kamboj Consultancy Pvt. Ltd., HDFC bank statement for F.Y. November 2015 to show loan amount have been repaid through banking channel, confirmation of accounts of assessee with M/s. Kamboj Consultancy Pvt. Ltd., ending 31st March, 2016 and confirmation account of Debashree Enterprises Pvt. Ltd., in the 5 books of M/s. Kamboj Consultancy Pvt. Ltd. Learned Counsel for the Assessee submitted that these documents have been obtained now recently which goes to the root of the matter and prove that assessee also returned the amount in question through banking channel. Therefore, burden upon assessee have been discharged to prove the genuineness of the credit. He has submitted that the matter could be restored back to the A.O. for re-consideration on admission of additional evidences.
6. On the other hand, Ld. D.R. relied upon the orders of the authorities below.
7. After considering the rival contentions, I am of the view that additional evidences since relevant and goes to the root of the matter, therefore, they should be admitted for the purpose of disposal of the appeal. It is an admitted fact that assessee filed confirmation from the creditor, its copy of the bank statement and acknowledgment of the income tax return before A.O. The creditor also filed reply directly to the A.O. in response to letter under section 133(6) of the I.T. Act. The Ld. CIT(A) did not accept the genuine credit in the matter because the residential address of the 6 Director is the Registered Office of the company and that the Director of the creditor is the C.A. of Mr. Rajan Suri who has arranged the loan for the assessee. This may not be a relevant criteria for the purpose of deciding the genuine credit in the matter because assessee has only to satisfy conditions of Section 68 of I.T Act i.e. identity, creditworthiness of creditor and genuineness of transaction. The Ld. CIT(A) confirmed the order of the A.O. because the assessee did not produce the P & L A/c etc., of creditor company. The assessee has now obtained the audited account of the creditor which shows that they have sufficient income and that credit has been shown in their account in the name of the assessee. The loan amount is refunded to the creditor later on which has been supported by copy of the bank statement of the creditor and their confirmations. Therefore, these additional evidences are relevant to the matter in issue and goes to the root of the matter. Therefore, these additional evidences are admitted for hearing. Since these additional evidences were not before the A.O and A.O had no opportunity to examine the same at the assessment stage, therefore, the matter requires re-consideration at the level of the A.O. I, accordingly, set aside the orders of the 7 authorities below and restore the appeal of assessee to the file of A.O. with a direction to re-decide the matter in issue, by giving reasonable, sufficient opportunity of being heard to the assessee. Assessee is directed to file copies of the additional evidences so admitted, before A.O. for disposal of the matter.
8. In the result, appeal of assessee is allowed for statistical purposes.
Order pronounced in the open Court.
Sd/-
(BHAVNESH SAINI) JUDICIAL MEMBER Delhi, Dated 22nd August, 2017 VBP/-
Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT "SMC" Bench, Delhi.
6. Guard File.
//By Order// ASST. REGISTRAR : ITAT DELHI BEHCHES :
DELHI.