M/s. Basant Projects Ltd., New Delhi V. DCIT, New Delhi

CO 41/DEL/2014

• Counselvise Citation: [2016] 119 COUNSELVISE.COM (IT) 3196 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 30 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-05-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 18-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 28-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Assessee Lawyers: V K JAIN
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A NEW DELHI BEFORE SHRI I.C.SUDHIR, J.M. AND SHRI J.SUDHAKAR REDDY, A .M. ITA NO. 4874 /DEL/201 3 AY : - 200 8 - 09 DCIT, C.C. 1 VS. BASANT PROJECTS LTD. ROOM NO.3 22 B 4, VIKAS APARTMENT ARA CENTER, JHANDEWALAN EXTN 34/1, EAST PUNJABI BAGH NEW DELHI NEW DELHI 110 026 CROSS OBJECTION NO. 41 /DEL/201 4 (IN ITA NO. 4874/DEL/2013) AY : - 2008 - 09 BASANT PROJECTS LTD. VS. DCIT, C.C.1 NEW DELHI NEW DELHI A N D ITA NO. 3301 /DEL/201 3 AY : - 2009 - 10 DCIT, C.C. 1 VS. BASANT PROJECTS LTD. NEW DELHI NEW DELHI (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI RAVI JAIN, CIT, D.R. ASSESSEE BY : S H. V.K.JAIN, C.A. O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THESE APPEALS ARE FILED BY THE REVENUE DIRECTED AGAINST SEPARATE ORDERS OF THE LD.CIT(A) - III, NEW DELHI DATED 3.6.2013 FOR THE A.Y. 2008 - 09 AND DT. 28.3.2013 FOR THE A.Y. 2009 - 10. THE ASSESSEE FILED A CROSS OBJECTION FOR THE A.Y. 2008 - 09. AS THE ISSUES ARISING IN ALL THESE APPEALS ARE ITA NO. 4874/DEL/2013 A.Y. 2008 - 09 C.O. 41/DEL/2014 (IN ITA 4874/DEL/13) A.Y. 2008 - 09 ITA 3301/DEL/2013 A.Y. 2009 - 10 2 COMMON, FOR THE SAKE OF CONVENIENCE THEY ARE HEARD TOGETHER AND ARE DIS POSED OF BY WAY OF THIS COMMON ORDER. 2. FACTS IN BRIEF : - THE ASSESSEE COMPANY WAS ENGAGED IN CONSTRUCTION AND DEVELOPMENT OF COMMERCIAL COMPLEXES UNDER THE NAME AND STYLE AGGARWAL ENTERTAINMENT MALL, AGGARWAL MILLENIUM TOWER - I AND AGGARWAL MILLENNIUM TO WER II FOR THE RELEVANT PERIODS. DURING THE COURSE OF SEARCH AND SURVEY OPERATION CONDUCTED AT THE VARIOUS PREMISES OF THE ASSESSEE, REGISTER , NUMBERED D - 1 ANNEXURE A - 1 AND A - 2 , WERE FOUND AND SEIZED. IN THE SAID REGISTERS THE FOLLOWING DISCREPANCIES W ERE OBSERVED: I. UNITS WITH LESSER AREA SHOWING HIGHER SALE PRICE; II. UNIT WITH SAME/EQUAL AREA HAVING DIFFERENT SALE PRICE; III. ARBITRARY AND NON UNIFORM ALLOWING OF DISCOUNT ON SALE PRICE; IV. DIFFERENCES IN ACTUAL PAYMENTS RECEIVED AND FINAL CONSIDERA TION REFLECTED IN THE BOOKS OF ACCOUNTS. DURING THE COURSE OF SEARCH OPERATION AS WELL AS IN THE POST SEARCH INVESTIGATION PERIOD BEFORE THE ADIT (INVESTIGATION), THE ASSESSEE WAS UNABLE TO EXPLAIN AND ESTABLISH THE DISCREPANCIES AND DIFFERENCES WHICH ARE APPARENT AND VISIBLE IN THE AFORESAID SEIZED DOCUMENTS RELATING TO THE ABOVE MENTIONED ISSUES. 2.1 . THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) COMPLETED ASSESSMENT DETERMINING THE TOTAL INCOME AT RS.2,25,89,370/ - BY MAKING ADDITIONS ON A N ALLEGATION THAT THE ASSESSEE HAS RECEIVED UNACCOUNTED SALE PROCEEDS. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE FIRST APPELLATE AUTHORITY OBSERVED THAT THE ADDITION WAS MADE MERELY BY COMPARING THE SALE PRICE OF ONE SHOP WITH THE SALE PR ICE OF ANOTHER SHOP ON THE BASIS OF IDENTICAL LOCATION ETC. BUT THERE WAS NO EVIDENCE WHATSOEVER FOUND DURING THE COURSE OF SEARCH THAT THE ASSESSEE COMPANY HAS ACTUALLY RECEIVED CONSIDERATION OVER AND ABOVE THE SALE PROCEEDS RECORDED IN THE REGULAR BOOKS OF THE ASSESSEE. HE FURTHER OBSERVED THAT THE A.O. HAS NOT BROUGHT ANY EVIDENCE ON RECORD WHICH COULD PROVE THAT THE ASSESSEE HAS ITA NO. 4874/DEL/2013 A.Y. 2008 - 09 C.O. 41/DEL/2014 (IN ITA 4874/DEL/13) A.Y. 2008 - 09 ITA 3301/DEL/2013 A.Y. 2009 - 10 3 RECEIVED CONSIDERATION OVER AND ABOVE THAT WHICH WAS RECORDED IN THE BOOKS OF ACCOUNTS. IN THE ABSENCE OF CORROBORATORY EVIDENCE IN SUPPORT OF THE ALLEGATIONS MADE BY THE A.O. THE ADDITIONS WERE DELETED. 3. AGGRIEVED THE REVENUE FILED THE APPEALS BEFORE US FOR THE A.Y. 2008 - 09 AND 2009 - 10. 3.1 . THE A SSESSEE HAS FILED A CROSS OBJECTION FOR THE A.Y. 2008 - 09. 4 . WE HAVE HEARD SHRI RAVI JAIN, THE LD. CIT, D.R. ON BEHALF OF THE REVENUE AND SHRI V.K.JAIN, THE LD.COUNSEL FOR THE ASSESSEE. 4.1 . ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ORDERS OF LOWER AUTHORITIES AND CASE LAWS CITED, WE HOLD AS FOLLOWS. 5. WE FIRST TAKE UP THE ASSESSEE S CROSS OBJECTION. THE GROUNDS OF C.O. 41/DEL/2014 (IN ITA 4874/DEL/12) FOR THE A.Y. 2008 - 09 ARE AS FOLLOWS. 1. THAT ON THE FACTS AND CIRCU MSTANCES OF THE CASE THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE RECOURSE TO THE PROVISION OF SECTION 153A OF THE INCOME TAX ACT TAKEN BY THE AO AND FAILING TO APPRECIATE THE FACT THAT THERE WAS NO SEARCH A ND SEIZURE ACTION INITIATED ON THE ASSESSEE THEREFORE THE ASSESSMENT ORDER PASSED BY THE LEARNED AO DESERVES TO BE ANNULLED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PROCEEDINGS INITIATED UNDER SECTION 153A OF I.T. ACT, AND ORDER PASSED BY THE LEARNED AO UNDER SECTION 153A/ 143(3) OF I.T. ACT, IS WITHOUT JURISDICTION. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE PROCEEDINGS INITIATED UNDER SECTION 153A OF I.T. ACT, WHICH IS BAD IN LAW IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE BEING ITA NO. 4874/DEL/2013 A.Y. 2008 - 09 C.O. 41/DEL/2014 (IN ITA 4874/DEL/13) A.Y. 2008 - 09 ITA 3301/DEL/2013 A.Y. 2009 - 10 4 FOUND DURING THE COURSE OF SEARCH. 4. THA T ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE VALIDATE OF IMPUGNED ASSESSMENT ORDER DATED 30.12.2011 U/S 153A OF I.T. ACT AS FRAMED BY THE ASSESSING OFFICER IN RE SPECT OF CLOSED ASSESSMENT FOR WHICH NO INCRIMINATING MATERIAL SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTION. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX /APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIR MING THE ACTION AND PROCEDURE FOLLOWED BY THE ASSESSING OFFICER DURING THE PROCEEDING U/S 153A OF THE I.T. ACT, WHICH IS INVALID IN EYES OF LAW BEING BASED ON INCORRECT POSTULATE THAT SEARCH ASSESSMENT U/S 153A IS DENOVO IN NATURE WHEREAS THE SAME IS TO BE BASED AND CONFINED TO INCRIMINATING MATERIAL UNEARTHED DURING SEARCH OPERATIONS. 6. AFTER HEARING RIVAL CONTENTIONS WE FIND THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON 30.9.2008 AND THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) . TIME FOR ISSUAL OF NOTICE U/S 143(2) WAS AVAILABLE UP TO 30.9.2009. IN THE MEANWHILE SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT ON 20.8.2009. IN OUR VIEW , AS TIME TO ISSUE NOTICE U/S 143(2) OF THE ACT FOR THE IMPUGNED ASSESSMENT ORDER FOR THE A.Y. 2008 - 09 WAS AVAILABLE TO THE A.O. AS ON THE DATE OF SEARCH, THE ASSESSMENT FRAMED U/S 153A R.W.S. 143(3) IS VALID AND THE A.O. HAS RIGHTLY TAKEN INTO CONSIDERATION ALL MATERIAL AVAILABLE WITH HIM. 6.1. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON S.234B OF THE ACT AND SUBMITTED THAT , THE PROCESSING OF RETURN U/S 143(1) OF THE ACT SHOULD BE TAKEN AS THE DATE OF COMPLETION OF ASSESSMENT AND HENCE THERE CAN BE NO ABATEMENT OF ASSESSMENT . IN OUR VIEW S.234B OF THE ACT LAYS DOWN THE MODE OF CALCULATING INTEREST, BUT DOES NOT LEAD US TO A CONCLUSION THAT THE DATE OF PROCESSING OF THE RETURN U/S 143(1) OF THE ACT WOULD BE THE DATE OF ASSESSMENT. IN FACT THE HON BLE SUPREME COURT IN THE CASE OF RAJESH JHAVERI ITA NO. 4874/DEL/2013 A.Y. 2008 - 09 C.O. 41/DEL/2014 (IN ITA 4874/DEL/13) A.Y. 2008 - 09 ITA 3301/DEL/2013 A.Y. 2009 - 10 5 STOCK BROK ERS HELD THAT PROCESSING OF RETURN U/S 143(1) OF THE ACT CANNOT BE TAKEN AS AN ASSESSMENT. THUS THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. 7. WE NOW TAKE UP THE REVENUE S APPEALS. 8. BOTH PARTIES HAD MADE WRITTEN SUBMISSIONS. THE LD.COUNSEL FO R THE ASSESSEE RELIED ON THE ORDER OF THE LD.CIT(A), WHEREAS THE LD.D.R. RELIED ON THE ORDER OF THE AO AND SUBMITTED THAT CERTAIN MATERIAL WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH AND IT WAS ONLY ON THE BASIS OF SUCH MATERIAL THAT THE A.O. HAS COME TO A CONCLUSION THAT THE ASSESSEE HAS ACTUALLY SUPPRESSED THE AMOUNT OF SALE CONSIDERATION RECEIVED ON SALE OF VARIOUS PROPERTIES DURING BOTH THE A.YS. HE REFERRED TO THE ORDER OF THE A.O. AND POINTED OUT THAT THERE W ERE CERTAIN RECORDINGS FOUND IN THE C OMPUTER AND MATERIAL IN THE FORM OF REGISTERS WHICH FORMED THE BASIS ON WHICH THE A.O. HAS COME TO CONCLUSION THAT THERE WAS SUPPRESSION OF SALE CONSIDERATION. HE ARGUED THAT THE A.O. HAS CORRECTLY INFERRED THAT THE ASSESSEE HAS SUPPRESSED THE SALE CON SIDERATION AND THAT IT WAS IN RECEIPT OF UNACCOUNTED SALE PROCEEDS. THE LD.COUNSEL FOR THE ASSESSEE ON THE OTHER HAND SUBMITTED THAT THERE IS NO EVIDENCE WHATSOEVER TO COME TO A CONCLUSION THAT THE ASSESSEE HAD SUPPRESSED SALE CONSIDERATION. 9 . ON HEARI NG RIVAL CONTENTIONS WE FIND THAT THE A.O. HAS NOT BROUGHT ON RECORD ANY EVIDENCE IN SUPPORT OF HIS CONTENTION THAT SALE CONSIDERATION, IN EXCESS OF THAT WHICH IS RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE , HAS BEEN RECEIVED BY THE ASSESSEE. NO SUC H EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH ALSO. THE ASSESSEE HAD FURNISHED VARIOUS DOCUMENTS IN THE FORM OF , BUILDERS AGREEMENT BETWEEN THE ASSESSEE AND THE BUYERS AS WELL AS CONFIRMATION FROM THE BUYERS/CUSTOMERS, TO REBUT TH IS PRESUMPTIONS OF THE A.O. THE ASSESSEE ALSO REQUESTED THE A.O. TO CROSS VERIFY THE TRANSACTIONS WITH THIRD PARTIES. THIS WAS NOT DONE. ON THESE SET OF FACTS THE LD.CIT(A) DELETED THE ADDITION. ITA NO. 4874/DEL/2013 A.Y. 2008 - 09 C.O. 41/DEL/2014 (IN ITA 4874/DEL/13) A.Y. 2008 - 09 ITA 3301/DEL/2013 A.Y. 2009 - 10 6 10 . WE DO NOT FIND ANY INFIRMITY IN THESE FACTUAL FINDINGS OF THE LD.CIT(A). IN THE RESULT WE UPHOLD THE ORDER OF THE LD.CIT(A) FOR BOTH THE A.YS AND DISMISS THESE APPEALS OF THE REVENUE. 11. IN THE RESULT, BOTH THE APPEALS BY THE REVENUE FOR THE A.Y. 2008 - 09 AND A.Y. 2009 - 10 ARE DISMISSED. 12. IN THE RESULT BOTH THE APPEALS OF THE REVENUE AS WELL AS THE CROSS OBJECTION BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MAY, 201 6 . SD/ - SD/ - [ I.C.SUDHIR ] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DT. T HE 27 TH MAY, 2016 * MANGA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES