Ibex Infotech Pvt. Ltd, New Delhi vs Department Of Income Tax

This appeal by the Revenue is directed against the order passed by

the CIT(A) on 29.03.2010 in relation to the assessment year 2001-02. ITA No.2400/Del/2010

2. The only issue raised through various grounds is against the

deletion of addition of Rs.21,57,000/- made by the AO u/s 68 of the Act.

3. Briefly stated, the facts of the case are that a notice u/s 148 was

issued on the basis of information received from DIT (Inv.) that the

assessee company had received accommodation entries to the tune of

Rs.9.50 lac through different parties in its bank account detailed as

under:-

Cheque Dt. Of Name of the Party Amount No. Cheque 915525 17.02.2001 M.V. Mkt. (P) Ltd. 1,50,000/- 172180 26.02.2001 Mastro Mkt. & Adv. 2,00,000/- 111025 03.03.2001 Baldev Harish Electrical 2,00,000/- 534780 13.02.2001 FNS Consultancy 2,50,000/- 84914 03.03.2001 Santvant Sodhi (P) Ltd. 1,50,000/-

4. The AO observed during the course of assessment proceedings that

the assessee had shown share capital of Rs.21.57 lac in its balance sheet,

out of which a sum of Rs.21.55 lac was pending allotment for which no

explanation was offered by the assessee. Despite several opportunities

and reminders, the assessee did not appear before the AO to prove the

genuineness of the share application/capital. In the order passed u/s 144,

2 ITA No.2400/Del/2010

the AO made addition of Rs.21.57 lac. The assessee, filed additional

evidence before the ld. CIT(A) on which remand report was called for

from the AO. In the remand report, the AO objected to the admission of

additional evidence for the reason that the assessee was allowed

sufficient opportunity at the stage of assessment, which was not availed.

Concurring with the submission advanced before him by the assessee,

the ld. CIT(A) preferred to delete the addition of Rs.21.57 lac.

5. We have heard the ld. DR and perused the relevant material on

record. There is no appearance from the side of the assessee despite

notice. We are, therefore, proceeding to dispose of this appeal ex parte

qua the assessee. The Hon'ble Delhi High Court in the case of CIT vs.

Nova Promoters and Fin Lease (P) Ltd. (2012) 342 ITR169 (Del), has

held that if the assessee fails to prove the receipt of share application

money to the satisfaction of the AO, then, addition has to be rightly

sustained u/s 68. Similarly, in the case of CIT vs. Empire Build Tech

Pvt. Ltd., (2014) 366 ITR 110 (Del), the Hon'ble jurisdictional High

Court has held that merely because the assessee had disclosed the

3 ITA No.2400/Del/2010

identity of the investors, it cannot be said that the burden imposed upon

it u/s 68 stood discharged.

6. Adverting to the facts of the instant case, we find that the AO gave

ample opportunities to the assessee for establishing the genuineness of

the amount credited as share capital in the books of account, which were

not availed. The ld. CIT(A), entertaining the additional evidence,

preferred to delete the addition brushing aside the objections raised by

the AO against the admission of additional evidence. The AO, in his

remand report, strongly objected to the admission of additional evidence

without commenting on the merits of the additional evidence. We want

to make it clear that the first appellate proceedings are not in substitution

of the assessment proceedings. Basically, it is the duty of the AO to

frame assessment and the assessee has no choice to skip this level and

prefer to be assessed by the ld. CIT(A). In our considered opinion, the

ld. CIT(A) erred in deleting the addition in violation of Rule 46A,

knowingly fully well that the assessee did not extend any co-operation to

the AO during the course of assessment proceedings, which, eventually,

4 ITA No.2400/Del/2010

led to the passing of the order u/s 144 of the Act. Since the assessee

preferred some evidence before the ld. CIT(A) for the first time in

support of the genuineness of the credits, we are of the considered

opinion that the ends of justice would meet adequately if the impugned

order is set aside and the matter is restored to the file of AO. We order

accordingly and direct him to decide this issue afresh as per law, after

allowing a reasonable opportunity of being heard to the assessee.

Needless to say, the assessee will extend full co-operation to the AO

during the fresh proceedings.

7. In the result, the appeal is allowed for statistical purposes.

The order pronounced in the open court on 24.03.2015.

Sd/- Sd/-

[I.C. SUDHIR] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated, 24th March, 2015. dk

5 ITA No.2400/Del/2010

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

AR, ITAT, NEW DELHI.

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