IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCHES : “C” NEW DELHI

 BEFORE  SHRI G.C. GUPTA, VICE PRESIDENT

AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER

          ITA  No: 537/Del/2012

Asstt. Year : - 2006-07

ITO                                 vs.          M/s. Gainwell Consultants (P) Ltd. 

Ward-12(1)                                   WZ-483/1, MS Block, Gali No. 8,

New Delhi.                                    Road No. 1, IInd floor, Hari Nagar,

                                                          New Delhi.

                                                                   (PAN AAACG0431G)

                       (Appellant)                                       (Respondent)

                                 Appellant by        : Shri Gaurav Dudeja, Sr. DR

                                 Respondent by     :Shri Sandeep Jain, CA

                               Date of Hearing      : 5.5.2015

                      Date of pronouncement    : 10.6.2015

   O R D E R

PER G.C. GUPTA, VICE PRESIDENT

         This appeal by the revenue for the assessment year 2006-07 is directed against the order of CIT(A). The only ground of the appeal of the revenue is as under :-

1. 1.     On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.55,00,000/- made by the AO on account of unexplained cash credit u/s 68 of the Income Tax Act, 1961.

2.   Ld. DR submitted that there is a violation of the provision of Rule 46A in this case as the CIT(A) has accepted the additional evidence filed by the assessee in support of the cash credit before him which was admitted by the CIT(A) without asking for the comments of the AO regarding the merits of the additional evidence filed by the assessee and the AO was not allowed any opportunity to verify these documents. He submitted that the CIT(A) has asked for the comments of the AO, but the AO did not offer any comments on the merits of the additional evidence and objected to the admission of the additional evidence filed by the CIT(A). He submitted that in accordance with the ratio of the decision of Hon’ble Delhi High Court in  Director of Income Tax vs. Modern Charitable Foundation (2011)  335 ITR 105 (Delhi) and CIT vs. Manish Build Well (P) Ltd. 245 CTR 397 (Delhi), the CIT(A) was bound to allow one more opportunity to the AO to verify the documents filed as additional evidence by the assessee and since the CIT(A) has failed to do so, the issue in the ground of the appeal of the revenue may be restored to the file of the CIT(A). The Ld. DR submitted that the assessee has failed to give any details of the bank accounts of the depositors parties. He referred to the relevant portion of the assessment order in support of the case of the revenue.

3.     Ld. Counsel for the assessee has opposed the submission of the Ld. DR. He submitted that there were total of nine creditors out of which the two creditors parties namely M/s. Raunaq Travels Pvt. Ltd. New Delhi and M/s. Elba    Communication Ltd.,  Delhi has no concern  with the so called information received from the investigation wing of the department. With regard to the balance seven parties, the AO issued summons to seven parties out of which summons issued to M/s. BIC Consultants Pvt. Ltd. Delhi was duly served on them by postal authorities. He submitted that the necessary evidence in the form of their confirmation, permanent account number etc. were filed before the revenue authorities. He submitted that the AO has failed to offer any comments on the merits of the additional evidence filed by the assessee and the additional evidence was rightly admitted by the CIT(A) in accordance with the relevant rules. He submitted in  case of doubt the AO should have verify the assessment records of these six creditors parties. He submitted that the assessee was never confronted with the statement recorded by investigation wing of the department of some third party and no opportunity to cross examine was allowed to the assessee and therefore no sufficient opportunity was allowed to the assessee.  He relied on the order of the CIT(A).

4.       We have considered the rival submissions carefully and have perused the order of the AO and CIT(A). The main grievance of the revenue is that the AO was not allowed opportunity to verify the documents filed by the assessee as additional evidence before the CIT(A). We find that the ratio of the decisions of the Hon’’ble Delhi High Court cited by the Ld. DR applies to the case of the assessee.  The assessee has also a grievance that the copy of the statement of the third party recorded by the investigation wing  of the department was never confronted to it nor any opportunity to cross examine the deponent was allowed to the assessee and therefore no sufficient opportunity was allowed to the assessee in this case.  We find that there was a violation  of the principle of natural justice and the IT rules in this case. We find that the credit entries with regard to M/s Raunaq Travels Pvt. Ltd., New Delhi and M/s Elba Communication Ltd., Delhi have been sufficiently explained by the assessee and there was no adverse material in the form of any information from the investigation wing of the department or otherwise to  make any addition with regard to the credit entries pertaining to these two parties amounting to Rs. 5 lacs each and accordingly we confirm the order of the CIT(A) with regard to his order pertaining to these two creditor parties. With regard to credit entries of Rs. 8 lacs pertaining to M/s BIC Consultants Pvt. Ltd. we find that the assessee has filed     evidence in this case and the summons issued by the AO through postal authorities were served on the creditors parties. Accordingly, we hold that no interference in the order of the CIT(A) with regard to the deletion of addition of Rs. 8 lacs pertaining to this creditor party is required, which is confirmed. However, with regard to the credit entries pertaining to the other six parties detailed by CIT(A) on page 2 of his appellate order, we are of the considered view that it shall be in the interest of justice to restore the issue to the file of the AO with the direction to decide the same  denovo in accordance with law on merits after allowing due opportunity of hearing to the assessee. The AO is directed to confront the evidence /information received from the investigation wing of the department to the assesseee. The assessee shall be at liberty to file any evidence in support of his case to prove the genuineness of the credit entries pertaining to these six creditor parties at serial No. 1 to 6 of the detailed by the CIT(A) on page 2 of the appellate order. We direct accordingly.

5.       In the result, the appeal filed by the revenue is partly allowed for statistical purposes.

         Order pronounced in the open court on  10^th June, 2015.       

                          sd/-                                              sd/-

             (INTURI RAMA RAO)                        (G.C. GUPTA)                           

        ACCOUNTANT  MEMBER                      VICE PRESIDENT                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Dated: the 10^th June, 2015

‘veena’

Copy of  the Order forwarded to:

 1.      Appellant

 2.     Respondent 

 3.     CIT

 4.     CIT(A)

 5.     DR

 6.     Guard File                                 By order

                                                                     Dy. Registrar