CIT-I Vs. BHAGAT STEELANDFORGING PVT.LTD.

JUDGEMENT

(1.) THE matter was adjourned to enable the counsel for the appellant - Revenue to ascertain the factual matrix and produce original records, which have been produced.

(2.) THE Assessment Year in question is 2006 -07 and the respondent - assessee had filed return declaring loss of Rs. 3,67,316/ - on 31st March, 2007.

(3.) THE respondent -assessee filed an appeal and the Commissioner of Income Tax (Appeals) in his order dated 30th August, 2010 has observed that notice served by affixture on 28th November, 2007 does not specify the witnesses who were present. Further, the respondent -assessee by 28th November, 2007 had already filed their income tax return for the Assessment Year 2007 -08 on 12th November, 2007 indicating a different or new address. The Commissioner of Income Tax (Appeals) observed that the Assessing Officer should have verified the address from new return in view of the factual matrix, but he did not do so and even subsequent notices dated 31st January, 2008 and 9th July, 2008 were sent on the wrong or earlier address. Subsequently, notice dated 24th September, 2008 was sent for appearance on 29th September, 2008 by speed post, but the said notice could not be served on the respondent -assessee. However, Commissioner of Income Tax (Appeals) did not annul the assessment on this ground, but referred to the documents placed on record and the contention of the respondent -assessee that investment of Rs. 90,00,000/ - in the two sister concerns; Crown Developers of Rs. 50,00,000/ - and Crown Buildtech Private Limited of Rs. 40,00,000/ - could be easily explained. He observed that the payments were made by way of cheque or by bank transfer. The respondent -assessee had established sources in the form of secured loan from ICICI Bank of Rs. 10.77 lacs, unsecured loan of Rs. 12.25 lacs and advance of Rs. 2 crores for sale of land from Amazing Realter Limited, unrelated and a third party. Accordingly, the addition was deleted on merits holding that the investment of Rs. 90,00,000/ - stands explained.