IN INCOME TAX APPELLATE TRIBUNAL, DELHI B BENCH, NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER, AND SHRI SUCHITRA KAMBLE, JUDICIAL MEMBER, ITA No.3469/DEL/2019 [Assessment Year: 2014-15] M/s Ekdant India Ltd. ITO, B-1,-46, New Ashok Nagar, Ward-8(1), Room No.143, New Delhi-110096 C.R Building, New Delhi PAN-AABCT8767F Appellant Respondent Appellant by Shri Deepak Kapoor Respondent by Ms. Nidhi Srivastava CIT-DR Date of Hearing 19/08/2019 Date of Pronouncement 20 /08/2019 ORDER PER SUCHITRA KAMBLE, JUDICIAL MEMBER This appeal is filed by assessee against order of Ld. CIT(A)-34, New Delhi, dated 12/03/2019 for Assessment Year 2014-15. 2. Grounds of appeal are as under:- 1. BECAUSE on facts and in law Ld. CIT(A) ought to have admitted additional evidence in form of flow chart showing trail of funds out of bank loan to associate companies to account of appellant as share application money under Rule 46A(l)(c) or 46A(l)(d). 2. BECAUSE appellant was prevented by sufficient cause from producing before Assessing Officer evidence which is relevant to grounds of appeal relating to unexplained cash credit under Section 68 on account of share capital. 3. BECAUSE Ld. C1T(A) has erred in not admitting additional evidence. facts of case clearly prove that additional evidence ought to be admitted in interest of justice and fair play. Ld. C1T (A) did not take into consideration all facts brought to her knowledge and gross injustice has been done to appellant. 4. BECAUSE Assessing Officer made order dt. 28/12/2016 appeal against without giving sufficient opportunity to appellant to adduce evidence relevant to ground of appeal relating to addition under Section 68 on account of share capital. 2 5. BECAUSE appellant informed new addresses of three shareholders and notice under Section 133(6) where served on addresses given as is evident from order sheet entry on 14-12-2016. Therefore, grounds taken by Ld. AO/CIT(A) that correct address of all above shareholders was not communicated to department is factually wrong and unjustified. 6. BECAUSE appellant vide written submissions dt.14/12/2016 and dt.22/12/2016 requested Ld. AO to issue summon under Section 131 to shareholders. Ld. AO did not allow request of appellant and no summon under Section 131 were issued by department in complete contravention of ratio of judgment. CIT vs Durga Prasad More, [1971] 82 1TR 540 (SC), Pee Aar Securities Ltd. vs DCIT (2018) taxman.coin 602 (Delhi). CIT vs Navodaya Castle Pvt. Ltd.. Delhi High Conn. 2014, j2014] 51) iaxinan.com 110 (Delhi). 7. BECAUSE on facts and in law and on grounds taken and basis adopted addition of Rs. 10,31.54,300/- on account of share capital raise by appellant during year is unjustified and illegal, Ld. AO as well as Ld. CIT(A) failed to take into consideration facts and supporting documents filed by appellant and also other material available on record. Due to demonetization in month of November/December. 2016 appellant was prevented by sufficient cause from producing bank loan accounts of associate companies from which share capital was introduced by transferring funds to accounts of shareholders. Annexure- A4 of appeal paper book before CIT(A) clearly established and proved beyond doubt trail of funds out of bank loan accounts of associate companies to account of appellant as share application money. addition of Rs. 10,31,54,300/- is therefore unjustified, illegal and unwarranted. same deserves to be deleted in toto. 8. BECAUSE Impugned order is perverse and contrary to principle of natural justice. Ld. CIT(A) did not take into consideration fact that in light of additional evidence source of source of share application money was duly established. Ld. OT(A) did not take into consideration submissions made in appeal by appellant and also facts stated in application under Rule 46A and also reply to remand report dt. 28/02/2019. 9. BECAUSE case law relied upon by Ld. CIT(A) are distinguishable on facts and Ld. C1T(A) did not take into consideration facts stated submitted by appellant. 3. assessee is engaged in business of sale of Bio-Briquettes. assessee filed income tax return declaring total income at Nil and book profits of Rs.6,95,412/- u/s 115J of Income Tax Act, 1961(hereinafter Act ). assessment was completed vide order dated 28/12/2016 after making additions of Rs.10,31,54,300/- u/s 68 of Act on account of unexplained share capital, Rs.17,85,872/- on account of trade payables, 3 Rs.6,09,000/- of prepaid rent, Rs.15,000/- on account of unexplained expenses and Rs.6,32,500/- on account of increase in share capital. Thus, total addition of Rs.10,61,96,672/- was made by Assessing Officer. 4. Being aggrieved by assessment order, assessee filed appeal before CIT(A). CIT(A) partly allowed appeal of assessee. 5. Ld. AR submitted that during relevant previous year, assessee raised share capital from three shareholders. On 05/12/2016, assessee provided new address of three shareholders. Assessing Officer mentioned in ordersheet entry dated 14/12/2016 that notices issued u/s 133(6) have been served to parties and reply from parties were pending. assessee requested Assessing Officer to issue summons u/s 131 to shareholders, but Assessing Officer did not issue summons and only allow two days time to assessee to make compliance of show cause notice in clear violation of principles of natural justice. Ld. AR submitted that demonetization of currency at relevant time in December, 2016, assessee was prevented by sufficient cause to file documents proving source of source. Assessing Officer has not taken cognizance of any of evidence or not provided any opportunity to assessee to file sufficient evidence to support assessee s case. During first appeal, before CIT(A), assessee filed application under Rule 46A of Income Tax Rules, 1962 4 (hereinafter Rules ) for admitting additional evidence in form of Annexure-A-4 being bank loans accounts of Alpine Realtch Pvt. Ltd. and EkdantInfrabuild Pvt. Ltd. along with chart showing trail of funds out of bank loan to Ekdant and Alpine to account of assessee as shear application money. ld. AR submitted that with help of additional evidences assessee duly proved source of source right up to withdrawal of money out of bank loans i.e. loan from Corporation Bank and Punjab & Sind Bank. CIT(A) directed Assessing Officer to file remand report but Assessing officer vide remand report dated 07/02/2019 did not raise any objections to chart showing source of source and bank loan accounts of Alpine and Ekdant. Thus, Assessing Officer never analyzed documentary evidence filed to application under Rule-46A and CIT(A) simipliciter rejected admissions. 6. Ld. DR submitted that CIT(A) has rightly rejected application under Rule-46A as assessee was given ample opportunity before Assessing Officer for giving details at time of assessment proceedings. Ld. DR relied up on order of CIT(A) and Assessing Officer. 7. We have heard both parties and perused relevant material available on record. It is pertinent to note that Assessing Officer has not issued summons u/s 131 to shareholders, which amounts to non- 5 verification of authenticity of transactions despite having proper address. Assessing Officer, without verifying factual aspect has arrived at conclusion by making addition without any supporting documents. CIT(A) despite calling for remand report has simpliciter rejected evidence produced by assessee and has not looked in to merit of documents. Thus, Assessing Officer as well as CIT(A) has totally ignored evidence produced during course of appellate proceedings by assessee. Therefore, it will be appropriate to remand back this issue to file of Assessing Officer by taking cognizance of evidences produced before First Appellate Authority by assessee. Needless to say assessee be given opportunity of hearing by following principle of natural justice. appeal of assessee partly allowed for statistical purposes. 8. In result, appeal of assessee is partly allowed for statistical purposes. Order pronounced in open court on 20/08/2019. Sd/- Sd/-/- Sd/- [R.K. PANDA] [SUCHITRA KAMBLE] ACCOUNTANT MEMBER JUDICIAL MEMBER Delhi; Dated: 20/08/2019. f{x {t ? f P.S Ekdant India Ltd. v. ITO, Ward- 8(1), New Delhi