9911796707
TMI Blog2012 (2) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... os.856 & 857/Del/2011, ITA no.1013/Del/2011 - - - Dated:- 3-1-2012 - SHRI R.P. TOLANI, SHRI A.N. PAHUJA, JJ. Assessee by Shri Ajay Wadhwa, Advocate Revenue by Shri Sali l Mishra, Sr. DR O R D E R Per Bench:- These appeals filed on 11.2.2011 by the Revenue for the AYs 2005-06 2007-08 and the appeal filed on 24.2.2011 by assessee for the AY2007-08 against two separate orders dated 26.11.2010 of the ld. CIT(A)- Ghaziabad, raise the following grounds:- 1 On the facts and in the circumstances of the case, the learned CIT(A) has erred in law as relief given by CIT(A) is based on some additional evidences on which comments of Assessing Officer were not taken and hence the requirement of Rule 46A were not fulfilled. 2. That the order of the learned CIT(A) being erroneous in law and on the facts deserves to be set-aside and the order of the Assessing Officer be restored. 1.The order of the learned CIT(A) dated 26.11.2010 is bad in law and on facts. 2. That on the facts and in the circumstances of the case, the learned CIT(A) has erred in confirming the trading addition of Rs.3,83,761/- without appreciating the fact that addition was made without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails towards genuineness of such transactions at any point of time and hence the transfer of non-genuine share application money into general account cannot be held as receipt of genuine share application money and hence further transfer of such non genuine liability into general account would amount to cessation of liability . 3. On the facts and in the circumstances of the case, the learned CIT(A) has erred in law as relief given by CIT(A) is based on some additional evidences on which comments of Assessing Officer were not taken and hence the requirements of Rule 46A were not fulfilled. 4. That the order of the learned CIT(A) being erroneous in law and on the facts deserves to be set aside and the order of the Assessing Officer be restored. 2. Adverting first to ground no.1 in the appeal of the Revenue and ground nos. 2 to 6 in the appeal of the assessee, for the AY 2005-06, facts, in brief, as per relevant orders are that return declaring loss of Rs.7,13,004/- filed on 31.3.2006 by the assessee, manufacturing scanners plotters , was selected for scrutiny with the service of a notice u/s 143(2) of the Income-tax Act, 1961 (hereinafter referred to as the Act) issued o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors and considering the volume of sales, the AO allowed only 30% of the creditors and disallowed the remaining amount of Rs.5,89,84,343/-. 2.7 In the absence of any evidence in support of claim for deduction u/s 10A of the Act, the AO disallowed the same. 2.8 In view of the foregoing, assessment was completed on an income of Rs.12,10,720/- after set off of brought forward loss of Rs.6,80,28,693/- 3. On appeal, the assessee filed written submissions as mentioned in para 4 of the impugned order. Accordingly, the ld. CIT(A) sought remand report from the AO vide letter dated 19th October, 2010 in the following terms:- Considering the affidavit explaining the circumstances in which there was no compliance resulting into assessment u/s 144; I tend to take a view that the assessee deserves another chance to furnish submission/details/evidences. During appellate proceedings the appellant has filed various documentary evidence and details in duplicate; one copy of the same is being forwarded to you as per Rule 46A. Kindly peruse the above details/evidences carefully and send your comments latest by 8th November, 2010. You are permitted to conduct enquiries for this purpose. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance of various expenses to 15% while the learned AR contended that the ld. CIT(A) was not justified in upholding the various additions . After discussion, both the parties agreed that the matter required reconsideration by the AO especially when the assessee did not have sufficient opportunity to produce relevant books of accounts and vouchers as also the necessary evidence before the AO nor the latter submitted any remand report before the ld. CIT(A). 6. We have heard both the parties and gone through the facts of the case. Indisputably assessment in this case assessment was completed u/s 144 of the Act, the assessee having failed to comply with any of the aforesaid notices dated., 26.10.2006, 17.01.2007, 27.06.2007, 29.10.2007 and 21.11.2007 issued u/s 143(2)/142(1) of the Act nor produced the relevant books of accounts and vouchers before him. The ld. CIT(A),on the basis of affidavit filed by the director of the company observed that the assessee deserved another opportunity. Despite sufficient opportunity given by the ld. CIT(A), the AO did not submit any remand report .Moreover, there is nothing to suggest as to why relevant books of accounts and vouchers were not pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the direct ions to complete the assessment denovo, in accordance wi th law, af ter allowing suf f icient opportunity to the assessee to produce relevant books of accounts and vouchers as also necessary evidence. The assessee is also directed to place all the relevant facts and evidence before the AO and cooperate in expeditious completion of assessment. The AO is free to undertake any independent enquires, if found necessary . With these observations, ground no. 1 in the appeal of the Revenue and ground nos. 2 to 6 in the appeal of the assessee are disposed of. 7. Adverting now to ground nos..1 to 3 in the appeal of the Revenue for assessment year 2007-08. The AO noticed during the course of assessment proceedings that the assessee disclosed loss since 1997-98 and accumulated loss as on 31.03.2007 was Rs.8,15,14,476 while M/s Widecom Group INC, holding company of the assessee, was shown as sundry creditor for Rs.8,74,43,228/-. The holding company and its nominees were the purchaser of the products manufactured by assessee company @3,000/- per piece as decided in the year 2001. According to the AO this price was suppressed. The AO further observed that as per account provided by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal, the learned CIT(A) deleted the aforesaid addition in the following terms:- 5. The matter was remanded to Assessing Officer also but in spite of several reminders no report has come. In any case there is no case of additional evidence and hence remand report is not so relevant in this case. 5.1 Therefore, matter is decided on merits on the basis of facts and evidences on record. 6. After having carefully considered all relevant facts and circumstances of the case, my conclusions/observations are as under:- 1) The appellant s contention regarding ground of appeal No.1, is accepted. From the details of evidences, especially confirmation/affidavit of Sh. L.S. Tuli furnished which is relevant for both A.Y. 2005-06 and r2007-08; this is observed and held that the liability towards M/s Widecom Group INC (which is holding company by assessee) is confirmed. During the present F.Y., there is no transaction except that `₹ 1 crore has been transferred from share application money account to general account. Even AO admits that this amount had been received in 1999-2000. Such transaction cannot be catognised as cessation of liability . Otherwise also, section 41 is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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