Tuner Recreations (P) Ltd., Meerut vs Assessee

Assessee by : Sh. V.K. Goel, Adv. & Mrs. Swati Jindal, CA Department by : Sh. J.P. Chandrekar, Sr. DR

Date of Hearing : 18-06-2015 Date of Order : 19-06-2015 ORDER

PER H.S. SIDHU : JM This appeal by the Assessee is directed against the Order of

the Ld. Commissioner of Income Tax (Appeals)-19, New Delhi dated

17.12.2012 pertaining to assessment year 2004-05.

2. The case was earlier fixed on 16.6.2015 and on that date the

Bench directed the assessee to give concise grounds of appeal and

adjourned the case for 18.6.2015. On 18.6.2015 the assessee has

filed the Revised Grounds of Appeal which read as under:-

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ITA NO.2057/Del/2013

"1. That Ld. A.O. is in error in making addition of Rs. 16 Lacs,

details of which, given below:

(i) Share allotted to Mls. Kuberco Sales Pvt. Ltd. Rs. 6,00,000/-

(ii) Share allotted to M/s. Sparow Marketing Pvt. Ltd. Rs.

10,00,000/-

The payment received through account payee cheque on the basis

of notice U/s 133(6) received back. Ld. CIT(A) has not justified in

conforming the order passed by AO.

2. That the assessee is liable to establish identity of the

shareholders and genuineness of the transaction. Identity of

shareholders is proved by ROC Record of the company and the

genuineness of transaction proved on the basis of bank statement,

in which account payee cheque are credited. Therefore, A.O. has not

justified in making addition.

3. That the Ld. A.O. disallow the loss of Rs. 1,71,794/- without any

basis because Ld. A.O. has not raised any query to disallow the loss

claimed by the assessee in the Return of Income. Ld. CIT(A) has not

given any finding.

4. That the assessee has right to add, delete or modify any

grounds during the appeal proceeding."

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3. The brief facts of the case are that the assessee filed its

income tax return declaring loss of Rs. 1,71,794/- and the

assessment was completed on the total income of Rs. 16 lacs by the

AO by making the addition of Rs. 16 lacs on account of Sale of

Share Application Money from Mls. Kuberco Sales Pvt. Ltd. and M/s.

Sparow Marketing Pvt. Ltd. The AO ignored the various case laws

and ignored the loss while computing the total income of the

assessee. The assessee has also filed Application u/s. 154 of the

I.T. Act to rectify the mistake, but without considering the evidence

filed by the assessee and the Application u/s. 154 of the Act, the AO

has completed the assessment vide order dated 07.12.2011 u/s.

143(3)/147 of the I.T. Act, 1961. Similarly, the Ld. CIT(A) has also

upheld the addition made by the AO without giving proper

opportunity to the assessee.

4. Ld. Counsel for the assessee further submitted that the Ld.

CIT(A) has dismissed the appeal filed by the assessee by relying

upon the various case laws which has not been cited by any party

meaning thereby he himself quoted all these cases in the impugned

order without confronting the same to the assessee's counsel. He

further stated that Late Sh. Ravi Kiran Jindal, Advocate was looking

after the entire income tax matters of the assessee company who

passed away on 19.2.2011. Due to death of Sh. Ravi Kiran Jindal,

Advocate the proceedings in the case of the assessee before the AO

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as well as before the Ld. CIT(A) could not be properly pursued by

the employee of Late Sh. Ravi Kiran Jindal, Advocate. Therefore, he

requested that the issue in dispute may be set aside to the AO to

decide the same afresh under the law, after giving adequate

opportunity of being heard to the assessee, after producing all

relevant evidence supporting the claim of the assessee. In support

of his arguments, Ld. Counsel of the assessee also filed affidavits of

Smt. Sunita Jindal, W/o Late Shri Ravi Kiran Jindal and Smt. Swati

Jindal, CA, Daughter in law of Late Shri Ravi Kiran Jindal, Advocate.

5. On the contrary, Ld. DR relied upon the order passed by the revenue authorities and stated that the assessee has not produced any evidence before the AO as well as before the Ld. CIT(A) and he opposed the request of the assessee for setting aside the issue before the AO. He further stated that these two companies namely M/s. Kuberco Sales Pvt. Ltd. and M/s. Sparow Marketing Pvt. Ltd. are the purchasers of the shares and these companies have already declared non-existence in the various cases including one case decided by the Hon'ble Delhi High Court in the case of Commissioner of Income Tax vs. Navodaya Castels (P) Ltd. [2014] 50 taxmann.com 110 (Delhi). This judgment of the Hon'ble High Court has already been upheld by the Hon'ble Supreme Court in the case of Navodaya Castle (P) Ltd. vs. Commissioner of Income Tax [2015] 56 taxmann.com 18 (SC).

6. We have heard both the parties and perused the records, especially the orders of the revenue authorities on the issue in dispute. We have also perused the Paper Book filed by the Ld. Counsel for the assessee containing pages 1 to 115 containing

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written submissions; photocopy of Return of allotment of shares; photocopy of Bank Statement 1.4.13 to 31.3.14; Photocopy of letter filed before AO, dated 14.10.2011 and 25.10.2011; photocopy of ROC certificated of Kuberco Sales (P) Ltd. and Sparrow Marketing (P) Ltd.; Photocopy of ROC Return of Kuberco Sales (P) Ltd. and Sparrow Marketing (P) Ltd; Photocopy of Audited Balance Sheet of Kuberco Sales (P) Ltd.; photocopy of TAN and PAN of Sparrow Marketing (P) Ltd; and photocopy of Case Laws quoted by the assessee.

7. We have also perused the contention raised by Smt. Sunita Jindal, W/o Late Sh. Ravi Kiran Jindal and Smt. Swati Jindal, Chartered Accountant, Daughter in Law of Late Shri Ravi Kirna Jindal made in their respective affidavits. The contentions of both the affidavits are reproduced hereunder:-

CONTENTS OF AFFIDAVIT OF SMT. SUNITA JINDAL

"I Sunita Jindal W/o Late Shri Ravi Kiran Jindal, R/o R-2/240 Raj

Nagar, Ghaziabad (U.P.) do hereby state on oath as under:-

1. That I am Director of M/s Turner Recreation Pvt. Ltd.

having its registered office at N-101B, Munshi Lal Building,

Connaught Circus, New Delhi - 110 001.

2. That in the above case my husband late Shri Ravi Kiran

Jindal, Advocate was looking after the entire income tax

matters of the company.

3. That my husband passed away on 19th February 2011,

thereafter all family members were disturbed and Smt.

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Swati Jindal (Daughter in Law) had no exposure to the

Income tax hearings so was unable to argue the case.

4. That all the proceedings before the AO was done by Kshitija

Narwane Advocate who was the existing employee of late

Shri. Ravi Kiran Jindal and during that time she was dealing

in Sales Tax matters only.

5. That Mrs. Kshitija appeared before AO, but due to lack of

sufficient knowledge relating to income tax matters she was

unable to pursue the proceedings efficiently.

6. That the company will feel obliged if your hnonor will allow

the appeal considering the facts and law quoted by the

assessee.

I, Sunita Jindal, Director of M/s Turner Recreations Private Limited do hereby certify that all the information provided above are true to best of my knowledge and belief. This affidavit is made on the 17th day of June, 2015."

CONTENTS OF AFFIDAVIT OF SMT. SWATI JINDAL

"I Swati Jindal (Chartered Accountant) W/o Sh. Abhishek Jindal

(Director M/s Turner Recreations Private Limited) R/o R-2/240 Raj

Nagar, Ghaziabad (U.P.) do hereby state on oath as under:-

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ITA NO.2057/Del/2013

1. That in the above case my Father in Law Late Shri Ravi Kiran

Jindal Advocate was looking after the entire Income Tax

matters of the company.

2. That my Father in law passed away on 19th February 2011,

thereafter all family members were disturbed and I had no

exposure to the Income tax hearings so was unable to argue

the case.

3. That all the proceedings before the AO was done by Kshitija

Narwane Advocate who was the existing employee of late Shri.

Ravi Kiran Jindal and during that time she was dealing in Sales

Tax matters only.

4. That Mrs. Kshitija appeared before AO, but due to lack of

sufficient knowledge relating to income tax matters she was

unable to pursue the proceedings efficiently.

5. That after the death of my Father-in-Law now I am dealing

with all the income tax matters.

6. That at the time of assessment before AO no proper

opportunity of being heard is given to the assessee which is

against natural-justice.

7. That to meet justice it is required to give another

opportunity of being heard before AO.

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ITA NO.2057/Del/2013

8. That the assessee will feel obliged if the case will set aside

to the A.O. to produce evidence desired by AO.

Swati Jindal (Chartered Accountant) W/o Abhishek Jindal do hereby certify that all the information provided above are true to best of my knowledge and belief. This affidavit is made on the 17th day of June, 2015."

8. No doubt the assessee remained non-cooperative before the

AO as well as Ld. CIT(A), but after the reading of the affidavits filed

by Smt. Sunita Jindal, W/o Late Shri Ravi Kiran Jindal and Smt. Swati

Jindal, CA, Daughter in Law of Late Shri Ravi Kiran Jindal, Advocate

in which they have stated that after the death of Late Sh. Ravi Kiran

Jindal, Advocate, the employee of Late Sh. Ravi Kiran Jindal, has not

properly pursued the matter before the AO as well as before the Ld.

CIT(A) and they have decided the issue in dispute against the

assessee in spite of the fact of the relevant evidence are available

with the record. We are of the considered view that due to failure of

the assessee's counsel and due to unavoidable circumstances for

non-producing the relevant evidence and non-appearance before

the Revenue Authorities, assessee should not be suffered.

Therefore, in the interest of justice, the issue in dispute is set aside

De novo to the AO to decide the same afresh, under the law, after

giving full opportunity to the assessee of being heard for

substantiating its claim.

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ITA NO.2057/Del/2013

9. In the result, the Appeal filed by the Assessee stands allowed

for statistical purposes.

Order pronounced in the Open Court on 19/6/2015.

Sd/- Sd/-

[J.S. REDDY] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER

Date 19/6/2015 "SRBHATNAGAR" Copy forwarded to: - 1. Appellant - 2. Respondent - 3. CIT 4. CIT (A) 5. DR, ITAT

TRUE COPY By Order,

Assistant Registrar, ITAT, Delhi Benches

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