Sh. Adarsh Kumar, New Delhi V. DCIT, New Delhi

CO 33/DEL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 8307 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 08-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: AMIT GOEL
• Keywords: Notional interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.5330/DEL./2015 (ASSESSMENT YEAR : 2011-12) DCIT, CENTRAL CIRCLE 19, VS. SHRI ADARSH KUMAR, NEW DELHI. 23, SUDHARSHAN APARTMENT, I.P. EXTENSION, NEW DELHI 110 092. (PAN : AAAPK6345G) CO NO.33/DEL/2016 (IN ITA NO.5330/DEL./2015) (ASSESSMENT YEAR : 2011-12) SHRI ADARSH KUMAR, VS. DCIT, CENTRAL CIRCLE 19, 23, SUDHARSHAN APARTMENT, NEW DELHI. I.P. EXTENSION, NEW DELHI 110 092. (PAN : AAAPK6345G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT GOEL, CA REVENUE BY : SHRI S.S. RANA, CIT DR DATE OF HEARING : 24.09.2018 DATE OF ORDER : 03.10.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE AFORESAID APPEAL FILED BY THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE BEING INTER-CONNEC TED IS BEING ITA NO.5330/DEL./2015 CO NO.33/DEL/2016 2 DISPOSED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUSSION. 2. THE APPELLANT, DEPUTY COMMISSIONER OF INCOME-TAX , CENTRAL CIRCLE 19, NEW DELHI (HEREINAFTER REFERRED TO AS T HE REVENUE) BY FILING THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER BOTH DATED 09.06.2015 PASSED BY LD. CIT (APPEALS)- XXVII, NEW DELHI QUA THE ASSESSMENT YEAR 2011-12 ON THE GROUND THAT :- THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE ADDITION OF RS.90,00,000/- MADE BY ASSESSING OFFICER. 3. THE OBJECTOR, SHRI ADARSH KUMAR, BY FILING THE P RESENT CROSS OBJECTIONS CHALLENGED THE ASSESSMENT ORDER DATED 25 .03.2014 PASSED BY THE ASSESSING OFFICER QUA THE ASSESSMENT YEAR 2011-12 ON THE GROUND ALIA THAT :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ADDITION RS.90,00,000/- ON ACCOUNT OF ALLEGED LIABILITY WRITTEN OFF IS BEYOND THE JURISDICTION OF PROVISIONS OF SECTION 153C OF INCOME TAX ACT, 1961. 4. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : ON THE BASIS OF SEARCH AN D SEIZURE OPERATION CONDUCTED BY INVESTIGATION WING ON 22.03. 2012 IN M/S. FOCUS ENERGY GROUP OF CASES AT THE BUSINESS PREMISE S OF M/S. GRANADA SERVICE PVT. LTD., M/S. IENERGIZER IT SERVI CES PVT. LTD., M/S. IENERGIZER INDIA PVT. LTD. AND ISERVICES INDIA PVT. LTD. AT A- ITA NO.5330/DEL./2015 CO NO.33/DEL/2016 3 37, SECTOR 60, NOIDA (UP), NOTICE UNDER SECTION 153 C OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) WAS ISSU ED ON THE ASSESSEE AFTER RECORDING SATISFACTION NOTE AND IN P URSUANT THERETO, ASSESSEE DECLARED INCOME OF RS.54,74,440/- ON 24.12 .2013. AO NOTICED THAT THE ASSESSEE HAS RECEIVED ADVANCE OF R S.90,00,000/- FROM M/S. GRANADA SERVICE PVT. LTD. IN AY 2009-10 W HICH WAS WRITTEN OFF BY M/S. GRANADA SERVICE PVT. LTD. AS BA D DEBT IN THE BOOKS OF ACCOUNT DURING AY 2011-12 BUT ADDED THE SA ME IN THE COMPUTATION OF INCOME. DECLINING THE CONTENTIONS R AISED BY ASSESSEE, AO PROCEEDED TO NOTE THAT SINCE M/S. GRAN ADA SERVICE PVT. LTD. HAS BEEN PAYING TAX UNDER MAT, THE ADDING BACK OF RS.90,00,000/- AFTER WRITING OFF THE SAME FROM THE BOOKS OF ACCOUNTS WOULD NOT MAKE ANY DIFFERENCE ON THE TAXAB ILITY OF M/S. GRANADA SERVICE PVT. LTD. AND THEREBY MADE AN ADDIT ION OF RS.90,00,000/- TO THE INCOME OF THE ASSESSEE. 5. ASSESSEE CARRIED THE MATTER BY WAY OF APPEAL BEF ORE THE LD. CIT (A) WHO HAS DELETED THE ADDITION OF RS.90,00,00 0/- BY PARTLY ALLOWING THE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT AP PEAL AND THE ASSESSEE IMPUGNED THE ASSESSMENT ORDER BY WAY OF CR OSS OBJECTIONS. ITA NO.5330/DEL./2015 CO NO.33/DEL/2016 4 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. UNDISPUTEDLY, THE ASSESSEE HAS AVAILED OFF THE A DVANCE / LOAN OF RS.90,00,000/- FROM M/S. GRANADA SERVICE PVT. LT D.. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE TOOK THE STAND BEF ORE THE AO THAT THE AMOUNT OF RS.90,00,000/- IS STILL LIABILITY OF THE ASSESSEE AND UNILATERALLY WRITING OFF OF THE AMOUNT BY THE COMPA NY CANNOT BE A GROUND FOR TREATING THE SAID AMOUNT AS INCOME OF TH E ASSESSEE. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE IS AN EMPLOYE E/DIRECTOR OF ONE OF THE GROUP COMPANIES, NAMELY, M/S. IENERGIZER IT SERVICES PVT. LTD.. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAD PAID NOTIONAL INTEREST ON THE LOAN AMOUNT. 8. LD. DR FOR THE REVENUE CHALLENGING THE IMPUGNED ORDER PASSED BY LD. CIT (A) RELIED UPON THE ORDER PASSED BY THE AO. HOWEVER, THE LD. AR FOR THE ASSESSEE SUPPORTING THE ORDER PASSED BY THE LD. CIT (A) ON MERITS FURTHER CONTENDED THAT IN AYS 2009- 10, 2010-11 AND 2011-12 IN THE APPEALS FILED BY THE ASSESSEE, INITIATION OF PROCEEDINGS U/S 153C HAS BEEN QUASHED BY THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NOS.5095, 5 096 & 5097/DEL/2015 ORDER DATED 15.11.2017 ON THE GROUND THAT THE ITA NO.5330/DEL./2015 CO NO.33/DEL/2016 5 SATISFACTION NOTE WAS NOT RECORDED BY THE AO IN THE CAPACITY OF AO OF SEARCHED PERSON. 9. BARE PERUSAL OF THE ORDER PASSED BY THE COORDINA TE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN THE APPEALS FILED BY THE ASSESSEE FOR AYS 2009-10, 2010-11 & 2011-12 GOES TO PROVE THAT THE INITIATION OF THE PROCEEDINGS U/S 153C IN ASSES SEES OWN CASE FOR WANT OF VALID SATISFACTION NOTE HAS BEEN QUASHE D. THIS FACTUAL POSITION HAS NOT BEEN CONTROVERTED BY THE LD. DR FO R THE REVENUE. SO, WE ARE OF THE CONSIDER VIEW THAT WHEN PROCEEDIN GS INITIATED U/S 153C OF THE ACT FOR WANT OF VALID SATISFACTION NOT E QUA SEIZED DOCUMENT BELONGING TO THE ASSESSEE HAS BEEN QUASHED VIDE ORDER (SUPRA), THE PRESENT APPEAL IS NOT MAINTAINABLE BEI NG THE CROSS APPEAL FILED BY THE ASSESSEE FOR AY 2011-12. SO, W ITHOUT ENTERING INTO THE MERITS OF THE CASE, PRESENT APPEAL FILED B Y THE REVENUE STANDS DISMISSED. CONSEQUENTLY, CROSS OBJECTIONS F ILED BY THE ASSESSEE ARE ALSO DISMISSED HAVING BEEN BECOME INFR UCTUOUS. ORDER PRONOUNCED IN OPEN COURT ON THIS 3 RD DAY OF OCTOBER, 2018. SD/- SD/- (PRASHANT MAHARISHI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 3 RD DAY OF OCTOBER, 2018 TS ITA NO.5330/DEL./2015 CO NO.33/DEL/2016 6 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.