M/s TPK Buildcon Pvt. Ltd, New Delhi V. ACIT, New Delhi

CO 324/DEL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3703 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 08-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MEENA SINGH
• Keywords: Unexplained cash credit; Search and seizure
• Section: 153A; 68; 132

Judgement Text

ITA NOS: 541/D/2016, CO NO. 232/D/2016 542/D/2016, CO NO.324/D/2016 544/D/2016 ASST YEARS: 2007 - 08 & 2011 - 12 1 OF 10 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI R. K. PANDA , ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI , JUDICIAL MEMBER ITA NO . 541/DEL / 2016 A Y 2007 - 08 CROSS OBJECTION NO.323/D/2016 (IN ITA NO.541/DEL/2016 ) A Y 2007 - 08 ITA NO.542/DEL/2016 A Y 2007 - 08 ACIT CENTR AL CIRCLE 2, NEW DELHI VS M/S. RAJ BUILDWORTH PVT. LTD.1497, BHARDWAJ BHAWAN, WAZIRNAGAR, KOTLA MUBARAKPUR, NEW DELHI (APPELLANT) (RESPONDENT) M/S. RAJ BUILDWORTH PVT. LTD.1497, BHARDWAJ BHAWAN, WAZIRNAGAR, KOTLA MUBARAKPUR, NEW DELHI VS ACIT CENTRAL CIRCLE 2, NEW DELHI (APPELLANT) (RESPONDENT) ACIT CENTRAL CIRCLE 2, NEW DELHI VS M/S. TPK BUILDCON PVT. LTD. 1497, BHARDWAJ BHAWAN, WAZIPUR, KOTLA MUBARKAPUR, NEW DELHI ITA NOS: 541/D/2016, CO NO. 232/D/2016 542/D/2016, CO NO.324/D/2016 544/D/2016 ASST YEARS: 2007 - 08 & 2011 - 12 2 OF 10 CROSS OBJECTION NO.32 4 /D/2016 (IN ITA NO.54 2 /DEL/2016) A Y 2007 - 08 ITA NO.544/DEL/2016 A Y 2011 - 12 APPELLANT BY : SMT. MEENA SINGH, CIT (DR) RESPONDENT BY: SH. KAPIL GOEL, ADVOCATE DATE OF HEARING 05 / 0 4 /2018 DATE OF PRONOUNCEMENT 09 /04 /2018 (APPELLANT) (RESPONDENT) M/S. TPK BUILDCON PVT. LTD. 1497, BHARDWAJ BHAWAN, WAZIPUR, KOTLA MUBARKAPUR, NEW DELHI VS ACIT CENTRAL CIRCLE 2, NEW DELHI (APPELLANT) (RESPONDENT) ACIT CENTRAL CIRCLE 2, NEW DELHI VS M/S. NEXUS INFRACON PVT. LTD., 1497, BHARDWAJ BHAWAN, WAZIRNAGAR, KOTLA MUBARAKPUR NEW DELHI - 110003 (APPELLANT) (RESPONDENT) ITA NOS: 541/D/2016, CO NO. 232/D/2016 542/D/2016, CO NO.324/D/2016 544/D/2016 ASST YEARS: 2007 - 08 & 2011 - 12 3 OF 10 O R D E R 1. THE PRESENT APPEALS AND CROSS APPEALS HAS BEEN FILED BY REVENUE AS WELL AS ASSESSEE AGAINST ORDER PASSED BY LD. CIT (A) - 23, NEW DELHI THE DETAILS OF WHICH ARE AS UNDER: S.NO. NAME OF ASSESSEE ASST. YEAR DATE OF IMPUGNED ORDER 1. RAJ BUILDWORTH PVT. LTD 2007 - 08 10/11/15 2. TPK BUILDCON PVT. LTD 2007 - 08 10/11/15 3. NEXES INFRACON PVT. LTD 2011 - 12 12/12/15 G ROUNDS RAISED BY ASSESSEE AS WELL AS REVENUE IN CASE OF RAJ BUILDWORTH PVT. LTD IS REPRODUCED HEREIN BELOW: ITA NO 541/D/ 2016 1 . THE ORDER OF LD. CIT(A) IS NOT CORRECT IN LAW AND ON FACTS. 2 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 6,50,00,000/ - ON ACCOUNT OF 'UNEXPLAINED CR EDIT U/S. 68 OF THE ACT OUT OF WHICH OF RS. 5,00,00,000/ - RECEIVED FROM M/S. KOCHAR FINANCE & INVESTMENT PVT. LTD. AND RS. 1,50,00,000/ - RECEIVED FROM M/S. MASS PROPERTIES PVT. LTD. 3 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN NOT SUSTAINING THE ASSESSMENT ORDER FRAMED ITA NOS: 541/D/2016, CO NO. 232/D/2016 542/D/2016, CO NO.324/D/2016 544/D/2016 ASST YEARS: 2007 - 08 & 2011 - 12 4 OF 10 U/S. 153C OF THE INCOME - TAX ACT, 1961. 4 . THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ALL THE GROUND OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. CO NO. 323/D/16 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE WORTH Y CIT (A) IN APPEAL NO. 42/15 - 16 DATED 10.11.2015 HAS ERRED IN PASSING THAT ORDER IN CONTRAVENTION O F THE PROVISIONS OF SECTION 250(6) OF THE INCOME TAX ACT, 1961, TO THE EXTENT OF NOT ALLOWING SOME OF THE GR OUNDS RAISED BY THE APPELLANT. 2 . THAT ON LAW, FACTS AND CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE IMPUGNED ASSESSMENT FRAMED BY LD. AO U/S 153C WAS A NULLITY AND DESERVED TO BE QUASHED ON MULTIPLE TANGENTS. THE WORTHY CIT(A) HAS QUASHED THIS ASSESSM ENT BY CONSIDERING ONLY ONE TANGENT. THE ASSESSMENT DESERVES TO BE DECLARED A NULLITY ON OTHER TANGENTS OF SEC 153C ALSO. 3 . THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, WORTHY CIT( A) HAS QUASHED THE IMPUGNED ASSESSMENT FRAMED U/S 153C ON CHALLENGE TO LEGALITY WITHOUT ADJUDICATING THE ISSUE ON MERITS. IF THE APPEAL OF REVENUE IS ALLOWED THERE AGAINST, THE MATTER DESERVES TO BE SENT BACK TO WORTHY CIT(A) FOR ADJUDICATION OF ISSUES ON MERITS. 4 . THAT THE RESPONDENT CRAVES LEAVE FOR ANY ADDITION, DELETION OR AMENDMENT IN THE GROUNDS OF CROSS - OBJECTIONS ON OR BEFORE THE SAME IS HEARD OR DISPOSED OFF. IT HAS BEEN SUBMITTED BY LD.SR.DR THAT ALL APPEALS PERTAINS TO SAME GROUP. ON PER USAL OF TH E ORDER PASSED BY LD. AO IT IS OBSERVED ITA NOS: 541/D/2016, CO NO. 232/D/2016 542/D/2016, CO NO.324/D/2016 544/D/2016 ASST YEARS: 2007 - 08 & 2011 - 12 5 OF 10 THAT SEARCH AND SEIZURE OPERATION UNDER SECTION 132 WAS CARRIED OUT ON 8/02/2013 ON KANWAR SINGH TANWAR GROUP IN WHICH ASSESSEES UNDER CONSIDERATION ARE ONE OF THE ENTITIES. THE LD. AO MADE ADDITION UNDER SECTION 68 ON ACCOUNT OF UNSATISFACTORY EXPLANATION OF ADVANCES RECEIVED FROM VARIOUS PARTIES BY THE ASSESSEE UNDER CONSIDERATION. AGGRIEVED BY THE ORDER OF LD. AO, ASSESSEE PREFE RRED APPEAL BEFORE LD. CIT (A). B EFORE LD. CIT (A) ASSESSEE RA ISED ADDITIONAL GROUND OF LEGAL ISSUE BEING, VALIDATING OF ASSESSMENT COMPLETED BY LD.AO UNDER SECTION 153A/153C (AS THE CASE MAY BE) , WHEN NO INCRIMINATING DOCUMENTS/INFORMATIONS, BELONGING TO ASSESSEE WAS FOUND FROM THE PREMISES OF SEARCHED PERSON. LD. CIT (A) ALLOWED LEGAL GRO UND OF ASSESSEE, WITHOUT GOING INTO MERITS OF ADDITION. AGGRIEVED BY THE ORDER OF LD.CIT (A), REVENUE AS WELL AS ASSESSEE ARE IN APPEAL BEFORE US. REV ENUE BEFORE US HAS C ONTESTED ADDITION BEING DELETED BY LD.CIT (A) ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. REVENUE HAS ALSO CHALLENGED LEGAL ISSUE ALLOWED BY LD.CIT (A) BY SUBMITTI NG THAT THE OBSERVATIONS OF LD. CIT (A ) ARE DEVOID OF FACTS AS IN COURS E OF S EARCH UNDER SECTION 132 OF THE A CT AT , 1497, BHARDWAJ BHAWAN, WAZIRNAGAR, KOTLA MUBARAKPUR,, NEW DELHI WHICH IS REGISTERED ADDRESS OF ALL THE ASSESSEES UNDER CONSIDERATION BEFORE US AND ALL THE COMPANIES OF KANWAR SINGH TANWAR GROUP. IT IS SUBMITTED THAT THERE WERE MATERIALS THAT WERE FOUND DURING THE COURSE OF THE SEARCH THAT BELONGED TO ALL THE ASSESSEE AND UNDER ITA NOS: 541/D/2016, CO NO. 232/D/2016 542/D/2016, CO NO.324/D/2016 544/D/2016 ASST YEARS: 2007 - 08 & 2011 - 12 6 OF 10 THE CIRCUMSTANCES NOTICE ISSUED TO ASSESSEES CANNOT BE INVALIDATED. SHE VEHEMENTLY SUPPORTED THE OBSERVATIONS OF LD. AO IN RESPECT OF HER ARGUMENTS BEFORE US. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH THE SIDES IN THE LIGHT OF RECORDS PLACED BEFORE US. BRIEF FACTS AS OBSERVED IN HEREINABOVE ARE SIMILAR IN THE CASE OF RAJ BUILDWORTH PVT.LTD AND TPK BUILDCON PVT.LTD. IN BOTH THESE CASES ASSESSMENT YEAR BEING 2007 - 08, LD.AO INITIATED PROCEEDINGS UNDER SECTION 153C OF THE A CT ON 11/02/15. LD.CIT (A) OBSERVED THAT NOTICE UNDER SECTION 153C IS INVALID FOR THE YEAR UNDER CONSIDERATION AS SATISFACTION RECORDED BY LD.AO FOR INITIATING THE PROCE EDINGS WAS ON 02/02/2015. AND ACCORDINGLY AS PER THE LAW THAT EXISTED DURING THE YEAR UNDER CONSIDERATION NOTICE COULD HAVE BEEN ISSUED FOR ASSESSMENT YEARS 2009 - 10 TO 2014 - 15. LD.CIT (A) THUS H E LD THAT YEAR UNDER CONSIDERATION (BEING 2007 - 08) IS NOT COVERE D UNDER SECTION 153C . . IN THE CROSS OBJECTIONS ASSESSEE HAS RAISED THE ISSUE REGARDING NON - DISPOSAL OF GROUNDS ON MERITS BY LD.CIT (A). IN OUR CONSIDERED OPINION WE CANNOT FIND ANY FAULT WITH REASONING GIVEN IN PARA 4.2.4 OF LD. CIT (A) ORDER ON LEGAL ISS UE, WHICH READS AS UNDER: 4.2.4. FURTHERMORE, THE AO RECORDED SATISFACTION UNDER SECTION 153C OF THE ACT ON 02.02.2015 (THE CONTENTS OF THE SATISFACTION NOR COMMON AND THE SAME FOR M/S TPK BUILDCON PVT.LTD., AND M/S RAJ ITA NOS: 541/D/2016, CO NO. 232/D/2016 542/D/2016, CO NO.324/D/2016 544/D/2016 ASST YEARS: 2007 - 08 & 2011 - 12 7 OF 10 BUILDWORTH PVT.LTD., BOTH ASSESSMEN T YEAR 2007 - 08 AND FOR M/S RAJ INFRATECH PVT.LTD., FOR ASSESSMENT YEAR 2008 - 09, 2009 - 10 AND 2010 - 11) AND ISSUED NOTICE UNDER SECTION 153C OF THE ACT ON 11/02/15. THEREFORE, IN TERMS OF THE ABOVE - MENTIONED DECISION OF HON BLE DELHI HIGH COURT, AND NOTICES U NDER SECTION 153A OF THE ACT COULD HAVE ISSUED FOR ASSESSMENT YEAR 2009 - 10 TO 2014 - 15 AND THEREFORE, EVEN OTHERWISE THE NOTICE UNDER SECTION 153C OF THE ACT ISSUED CANNOT BE HELD TO BE LEGALLY VALID AND THE ASSESSMENT UNDER SECTION 153C OF THE ACT IN THIS ASSESSMENT YEAR IS AB INITIO VOID AS WELL. ON THIS ACCOUNT LD.CIT (A) WAS RIGHT IN HOLDING THE PROCEEDINGS UNDER SECTION 153C TO BE VOID AB INITIO AS ASSESSMENT YEAR 2007 - 08 IS OUT OF THE PERVIEW OF SEARCH PERIOD . IN CASE OF NEXES INFRACON PVT.LTD., ASSE SSMENT WAS FRAMED UNDER SECTION 153A OF THE ACT AND ASSESSMENT YEAR UNDER CONSIDERATION IS 2011 - 12. NOTICE UNDER SECTION 153A WAS ISSUED ON 06/06/14. IT HAS BEEN OBSERVED BY LD.CIT(A) THAT THERE WAS NO INCRIMINATING MATERIAL THAT WAS FOUND DURING THE COURS E OF SEARCH AND SINCE THE ASSESSMENT HAD NOT ABATED LD. AO COULD NOT HAVE MADE ANY ADDITION WITHOUT THERE BEING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE LD. CIT (A) BY PLACING RELIANCE UPON THE DECISION OF A HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA REPORTED IN (2015) 51 TAXMNN.COM 412, ALLOWED THE GROUND OF ASSESSEE AND HELD ASSESSMENT FRAMED UNDER SECTION 153A TO BE BAD IN LAW. ITA NOS: 541/D/2016, CO NO. 232/D/2016 542/D/2016, CO NO.324/D/2016 544/D/2016 ASST YEARS: 2007 - 08 & 2011 - 12 8 OF 10 WE DO NOT FIND ANY INFIRMITY IN THE ABOVE OBSERVATION OF LD.CIT (A) AS LD.AO GATHERED ALL INFORMATION REGARDING ADVANCES RECEIVED FROM PROJECTS , FROM THE RECORD PLACED BEFORE HIM. THE ADDITION WAS MADE IN THE HANDS OF ASSESSEE IN RESPECT OF THIS ONE PARTY NAMELY MUNI RAM, AS ASSESSEE FAILED TO FURNISH DETAILS REGARDING GENUINENESS IDEN TITY AND CREDITWORTHI NESS OF TRANSACTION. NO ADDITION IS BASED ON THE ANY INCRIMINATING MATERIALS THAT WERE FOUND IN THE COURSE OF SEARCH. AS THE LEGAL ISSUE IS DECIDED IN FAVOUR OF ASSESSEE, AND THE ASSESSMENT PROCEEDINGS ITSELF IS QUASHED, WE DO NOT FIND IT NECESSARY TO DECI DE THE ADDITION ON MERITS. ACCORDINGLY WE ARE OF THE CONSIDERED OPINION THAT LD. CIT (A) HAS RIGHTLY ALLOWED THE CLAIM OF ASSESSEE ON THE LEGAL ISSUE. AS WE HAVE DISMISSED REVENUES APPEAL , IN ALL 3 ASSESSEE S BEFORE US, CROSS OBJECTION RAISED BY ASSESSEE STANDS DISMISSED. IN THE RESULT APPEALS AS WELL AS CROSS OBJECTION FILED BY REVENUE AND ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.04.2018 S D / - S D / - ( R. K. PANDA) (BEENA A. P I LLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DA TED: 09 /04/2018 *NEHA* ITA NOS: 541/D/2016, CO NO. 232/D/2016 542/D/2016, CO NO.324/D/2016 544/D/2016 ASST YEARS: 2007 - 08 & 2011 - 12 9 OF 10 COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI ITA NOS: 541/D/2016, CO NO. 232/D/2016 542/D/2016, CO NO.324/D/2016 544/D/2016 ASST YEARS: 2007 - 08 & 2011 - 12 10 OF 10 1. DRAFT DICTATED ON 05 .0 4 .2018 PS 2. DRAFT PLACED BEFORE AUTHOR 06 .0 4 .2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.