End Of Picture Text -----<Br> v. Deputy Commissioner Of Income Tax

$~S-20 *IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 148/2021 & CM APPL. 33270-271/2021PARAMOUNT RESIDENCY PRIVATELIMITED..... AppellantThrough:Dr. Rakesh Gupta, Advocate withMr.Somil Agarwal and Mr. AnshulMittal, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX & ANR...... RespondentsThrough:Mr. Sunil Agarwal, Advocate withMr.Tushar Gupta and Mr.SamarthChaudhari, Advocates.%Date of Decision: 27[th]September, 2021 CORAM:HON'BLE MR. JUSTICE MANMOHANHON'BLE MR. JUSTICE NAVIN CHAWLAJ U D G M E N T MANMOHAN, J: (Oral) 1.The appeal has been heard by way of video conferencing. 2.Present appeal has been filed challenging the order dated 11[th]December, 2020 passed by Income Tax Appellate Tribunal (hereinafterreferred to as ‘ITAT’) in ITA No. 6150/Del/2014 for the Assessment Year2011-12, whereby the appeal of the respondent/revenue was allowed. 3.After some arguments, learned counsel for the appellant states that hedoes not wish to contest the finding of the Tribunal that the Commissioner,Income Tax (Appeal) [hereinafter referred to as ‘CIT(A)’] had erroneouslyheld that the same amount could not have been taxed twice in the same yearin hands of different tax entities. He, however, emphasises that neither theCommissioner, Income Tax (Appeal) nor the ITAT adjudicated upon the merits of the case. 4.Issue notice. Mr. Sunil Agarwal, Advocate accepts notice on behalfof the respondents.He states that in view of the limited submissionadvanced by learned counsel for the appellant, he would not like to file anywritten reply or documents.He, however, submits that in view of thejudgment of the Supreme Court in Principle Commissioner of Income Tax(Central-I) vs. NRA Iron & Steel Pvt. Ltd., (2019) 15 SCC 529 the onuswas on the respondent/assessee under Section 68 of the Act to prove theidentity and creditworthiness of the lenders and genuineness of the loans. 5.A perusal of the paper book reveals that neither CIT(A) nor ITAT hadconsidered the appellant’s defence with regard to the issue of identity andcreditworthiness of the lenders and genuineness of the loans as stipulatedunder Section 68 of the Act. 6.Consequently, the following question of law is framed in the presentappeal:- “Whether, on the facts and in the circumstances of the case, theTribunal was wrong in reversing the decision of CIT(A) withoutremanding the case to the CIT(A) for adjudication of the case onmerits” 7.The Supreme Court in Principle Commissioner of Income Tax (Central-I) vs. NRA Iron & Steel Pvt. Ltd.(supra) has held as under:- “13.1. The assessee is under a legal obligation to prove thegenuineness of the transaction, the identity of the creditors, andcredit-worthiness of the investors who should have the financialcapacity to make the investment in question, to the satisfaction ofthe AO, so as to discharge the primary onus. 13.2. The Assessing Officer is duty-bound to investigate the credit-worthiness of the creditor/ subscriber, verify the identity of thesubscribers, and ascertain whether the transaction is genuine, orthese are bogus entries of name-lenders. 13.3. If the enquiries and investigations reveal that the identity ofthe creditors to be dubious or doubtful, or lack credit-worthiness,then the genuineness of the transaction would not be established.In such a case, the assessee would not have discharged theprimary onus contemplated by Section 68 of the Act.” 8.Keeping in view the fact that CIT(A) had not considered theappellant’s defence with regard to identity and creditworthiness of lendersand genuineness of the loans in question, this Court remands the matter tothe CIT(A) to consider the appellant’s said defence under Section 68 of theAct. At the cost of repetition, it is emphasised that the finding given by theCIT(A) in the impugned order dated 8[th]August, 2014 is set aside 9.Withtheaforesaiddirection,theappealalongwithpendingapplications stands disposed of. 10.The order be uploaded on the website forthwith. Copy of the order bealso forwarded to the learned counsel through e-mail. 8.Keeping in view the fact that CIT(A) had not considered theappellant’s defence with regard to identity and creditworthiness of lendersand genuineness of the loans in question, this Court remands the matter tothe CIT(A) to consider the appellant’s said defence under Section 68 of theAct. At the cost of repetition, it is emphasised that the finding given by theCIT(A) in the impugned order dated 8[th]August, 2014 is set aside 9.Withtheaforesaiddirection,theappealalongwithpendingapplications stands disposed of. 10.The order be uploaded on the website forthwith. Copy of the order bealso forwarded to the learned counsel through e-mail. MANMOHAN, J SEPTEMBER 27, 2021/TS NAVIN CHAWLA, J