I.G.B. Infrastructure Ltd., New Delhi vs Assessee

ITO, Vs. IGB Infrastructure Ltd., Ward-11(3), 10th Milestone, New Delhi. Mathura Road, Ishwar Nagar, New Delhi.

PAN: AABCI3469B

CO No.99/Del/2013 (ITA No.1984/Del/2013) Assessment Year : 2007-08

IGB Infrastructure Ltd., Vs. ITO, 10th Milestone, Ward-11(3), Mathura Road, Ishwar Nagar, New Delhi. New Delhi. PAN: AABCI3469B (Appellant) (Respondent)

Assessee By : Shri Rajan Bhatia, Advocate Department By : Shri T. Vasanthan, Sr. DR

Date of Hearing : 19.03.2015 Date of Pronouncement : .03.2015 ITA No.1984/Del/2011. CO No.99/Del/2013.

ORDER PER R.S. SYAL, AM:

This appeal by the Revenue and the Cross Objection by the

assessee arise out of the order passed by the CIT(A) on 9.2.2011 in

relation to the assessment year 2007-08.

2. The only issue raised by the Revenue is against the deletion of

addition of Rs.2,06,91,000/-.

3. Briefly stated, the facts of the case are that the assessee, is engaged

in the business of real estate. During the course of assessment

proceedings, it was noticed that there was a credit to the tune of

Rs.2,06,91,000/- in the name of Shri Narender Kumar. Vide order sheet

entry dated 4.12.2009, the assessee was asked to furnish confirmation

from the said party, which was not complied with. The assessee

submitted that the said liability was discharged in the subsequent year.

In the absence of any documentary evidence substantiating the

genuineness of the credit, the AO made addition of Rs.2,06,91,000/- as

unexplained credit, impliedly u/s 68 of the Income-tax Act, 1961

2 ITA No.1984/Del/2011. CO No.99/Del/2013.

(hereinafter also called `the Act'). The assessee argued before the ld.

CIT(A) that some land was purchased by the assessee from Shri

Narender Kumar for a sum of Rs.18,74,07,000/- which appeared as

stock in its balance sheet under the head 'Inventories.' It was explained

that the said purchase was made in the immediately preceding year

ending 31.3.2006 and the balance of Rs.2,06,91,000/- was payable to

Shri Narender Kumar against the said transaction of purchase of land.

The assessee also submitted that as on 31.3.2006 the amount payable to

Shri Narender Kumar was 3,36,91,000/- and after making payment of

Rs.1.30 crore during the year in question, the outstanding balance stood

reduced to Rs.2,06,91,000/-. The assessee submitted that confirmation

could not be obtained from Shri Narender Kumar as the time given by

the AO was too short. Considering these facts, the ld. CIT(A) deleted

the addition. The Revenue is aggrieved against the deletion of this

addition.

4. We have heard the rival submissions and perused the relevant

material on record. In principle, there can be no dispute on the

3 ITA No.1984/Del/2011. CO No.99/Del/2013.

proposition that an addition u/s 68 of the Act can be made only if there is

a fresh credit in the books of account of the assessee arising in the

previous year relevant to the assessment year under consideration. If the

balance is outstanding from earlier year, then, it cannot be a case of

making addition u/s 68 in a later year. The case of the ld. AR before the

ld. CIT(A) remained that the land worth Rs.18.74 crore was purchased

from Shri Narender Kumar and, after making the payment, the closing

balance payable to him as on 31.3.2006 stood at Rs.3.36 crore, out of

which a sum of Rs.1.30 crore was paid during the year, leaving the

remaining closing balance at Rs.2.06/- crore. If this position is correct,

then, of course, there can be no addition of Rs.2.06 crore and odd in the

instant year for the reason that it emerged as a part of the opening

balance. On a specific query from the Bench, the ld. AR could not draw

our attention to any material filed before the AO stating these facts that

the said amount of Rs.2.06 crore was from the brought forward balance.

The balance sheet filed by the assessee, though show the balances at the

level stated, but the names of the parties are not given. The explanation

4 ITA No.1984/Del/2011. CO No.99/Del/2013.

tendered before the ld. CIT(A) was not given to the AO, enabling him to

examine its veracity w.r.t. the books of accounts. Under such

circumstances, we set aside the impugned order on this score and remit

the matter to the file of the AO for examining the assessee's claim on the

above lines. If it is found that the amount of credit in the name of Shri

Narender Kumar at the beginning of the year stood at Rs.3,36,91,000/-

and the closing balance at Rs.2,06,91,000 pertained to Sh. Narinder

Kumar out of such opening balance, then, of course, there can be no

question of making any addition for this sum in the current year. If the

position turns out to be otherwise, then the AO may proceed as per law.

Needless to say, the assessee will be allowed a reasonable opportunity of

being heard in such fresh proceedings, in which it will be at liberty to

file any fresh evidence in support of its claim. Ground no. 1 taken by

the assessee in its cross objection against the ld. CIT(A) not specifically

adjudicating its case that the addition of Rs.2,06,91,000 did not relate to

the year under consideration etc., has therefore, become infructuous in

view of our above finding.

5 ITA No.1984/Del/2011.

CO No.99/Del/2013.

5. Ground No.2 of the assessee's cross objection is against the

diminution in the value of investment amounting to Rs.3,67,395/- which

was already taxed in the immediately preceding year.

6. We have heard the rival submissions and perused the relevant

material on record. This issue does not arise out of the assessment order,

because the assessee wrote back this amount and offered it for taxation

and as such there was no controversy. The assessee took up a ground

before the ld. CIT(A) challenging the non-taxability of this sum on the

ground that the same amount was disallowed by the AO in the preceding

year and hence on its reversal, it should not be taxed once again in this

year. However, this ground remained undisposed of at the end of the ld.

CIT(A). The case of the assessee is that the said sum of Rs.3,67,395/-

was claimed as deduction in the preceding year which was disallowed by

the AO and the reversal by means of write back of this amount in the

current year could not be charged to tax as it would result in to double

taxation of the same amount. In principle, we agree with the contention

urged on behalf of the assessee, but there is no material to support the

6 ITA No.1984/Del/2011. CO No.99/Del/2013.

contention made before us. Since necessary details in this regard are not

available and the impugned order is silent on this aspect, we remit this

matter to the file of the AO for examining the veracity of the assessee's

contention. If it is found that the addition made to the tune of Rs.3.67

lac in the preceding year on this account has attained finality inasmuch

as the assessee has not challenged it in the appellate proceedings, then,

the amount of Rs.3.67 lac, representing the write back of the same

amount, should not be taxed in the assessment of the current year.

7. Ground no.3 of the CO was not pressed. The same is, therefore,

dismissed.

8. In the result, the appeal of the Revenue and the CO of the assessee

are allowed for statistical purposes.

The order pronounced in the open court on 20.03.2015.

Sd/- Sd/- [C.M. GARG] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated, 20th March, 2015.

7 ITA No.1984/Del/2011. CO No.99/Del/2013.

dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR, ITAT

AR, ITAT, NEW DELHI.

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