M/s Goodview Trading P Ltd., New Delhi V. ACIT, New Delhi

CO 43/DEL/2015

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 1891 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 15-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 17-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K SAROHA
• Section: 143(3); 142(1); 68

Judgement Text

ITA NO.4644/DEL/2013 & CO NO. 43/DEL/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 4644/DEL/2013 A.Y. : 2006-07 ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-25, ROOM NO. 331, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. M/S GOODVIEW TRADING (P) LTD., 101, RATAN JYOTI BUILDING, 18, RAJENDRA PLACE, NEW DELHI 110 008 (PAN: AABCG0413H) (APPELLANT) (RESPONDENT) AND C.O. NO. 43/DEL/2015 (IN ITA NO. 4644/DEL/2013) A.Y. : 2006-07 M/S GOODVIEW TRADING (P) LTD., 101, RATAN JYOTI BUILDING, 18, RAJENDRA PLACE, NEW DELHI 110 008 (PAN: AABCG0413H VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-25, ROOM NO. 331, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. A.K. SAROHA, CIT(DR) ASSESSEE BY : SH. VED JAIN, ADV. DATE OF HEARING : 17-12-2015 DATE OF ORDER : 15-1-2016 ORDER PER H.S. SIDHU : JM THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSION ER OF INCOME TAX (APPEALS)-I, NEW DELHI DATED 24.5.2013 PERTAINING TO ASSESSMENT YEAR 2006- 07. ITA NO.4644/DEL/2013 & CO NO. 43/DEL/2015 2 2. THE GROUNDS RAISED IN THE REVENUES APPEAL READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN:- 1. THE ORDER OF THE CIT(A) IS NOT CORRECT IN LAW AND F ACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CSE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 25,00,96, 500/- MADE BY AO U/S. 68 OF THE I.T. ACT. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND A NY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURS E OF THE HEARING OF THE APPEAL. 3. THE GROUNDS RAISED IN THE ASSESSEES CROSS OBJEC TION READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD C OMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT TH E PROCEEDINGS INITIATED UNDER SECTION 153C AND ORDER PASSED BY TH E LEARNED ASSESSING OFFICER (AO) UNDER SECTION 153C/143(3) IS WITHOUT JURISDICTION. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD C OMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT TH E ORDER PASSED BY THE LEARNED AO UNDER SECTION 153C IS BAD AND LIA BLE TO BE QUASHED AS THE SAME HAS BEEN FRAMED CONSEQUENT TO A SEARCH WHICH ITSELF WAS UNLAWFUL AND INVALID IN. THE EYE O F LAW. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD C OMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT TH E PROCEEDINGS INITIATED UNDER SECTION 153C ARE BAD IN LAW IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSE E BEING FOUND DURING THE COURSE OF THE SEARCH. ITA NO.4644/DEL/2013 & CO NO. 43/DEL/2015 3 4. ON .HE FACTS AND CIRCUMSTANCES OF THE CASE, LD C OMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT TH E PROCEEDINGS INITIATED UNDER SECTION 153C AND THE ASSESSMENT FRA MED UNDER SECTION 153C IS BAD AND LIABLE TO BE QUASHED IN THE ABSENCE OF ANY SATISFACTION BEING RECORDED BY THE AO OF THE SE ARCHED PERSON THAT THE INCRIMINATINQ MATERIAL BELONGING TO THE ASSESSEE WAS FOUND DURING THE COURSE OF THE SEARCH. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD C OMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT TH E ASSESSMENT FRAMED UNDER SECTION 153C IS BAD AND LIABLE TO BE Q UASHED AS NO VALID NOTICE UNDER SECTION 153C AS REQUIRED UNDE R THE LAW HAS BEEN ISSUED AND SERVED ON THE ASSESSEE. THE RESPONDENT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF CROSS OBJECTION. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS ENGAGED IN THE BUSINESS OF INVESTMENTS IN CAPITAL MARKET. A SEARC H WAS INITIATED ON THE JAKSON GROUP AND ITS ASSOCIATES ON 10.2.2010. NOTI CE U/S. 153C WAS ISSUED ON 2.6.2011, IN RESPONSE TO WHICH THE ASSESS EE FILED A RETURN ON 1.7.2011 DECLARING INCOME OF RS. 17,640/-. NOTICES U/S. 143(2) AND 142(1) ALONGWITH QUESTIONNAIRE WERE ISSUED ON 16.8.2011. THESE NOTICES WERE COMPLIED WITH AND THE INCOME OF THE ASSESSEE WAS AS SESSED AT RS. 25,01,13,960/-, WHICH INCLUDED AN ADDITION OF RS. 2 5,00,95,500/- U/S. 68 OF THE I.T. ACT, 1961 VIDE ORDER DATED 29.12.2011 PASSED U/S. 143(3) R.W.S. 153C OF THE I.T. ACT. 5. AGAINST THE AFORESAID ASSESSMENT ORDER, THE ASSE SSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 24.5 .2013 PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION IN DISPUTE. ITA NO.4644/DEL/2013 & CO NO. 43/DEL/2015 4 6. AGGRIEVED WITH THE IMPUGNED ORDER, THE REVENUE I S IN APPEAL BEFORE THE TRIBUNAL. 7. LD. DR RELIED UPON THE ORDER OF THE AO AND REITE RATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 8. ON THE CONTRARY, LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT THE ORDER OF THE LD. CIT(A) IS A WELL REASONED ORDER AND THEREFORE, THE SAME MAY BE UPHELD AND REVENUES APPEAL MAY BE DISMISSED ACCORDINGLY. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E RELEVANT RECORDS, ESPECIALLY THE ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAW CITED BY THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE. WE FIND THAT LD. FIRST APPELLATE AUTHORITY HAS ELABORATELY DISCUSSED THE ISSUE IN DISPUTE BY CONSIDERING THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE AND ADJUDICATED THE ISSUE IN DISPUTE AS UNDER VIDE PARA 4.3 AT PAGE 26 TO 27 OF HIS IMPUGNED ORDER. 4.3 I HAVE CONSIDERED THE ASSESSMENT ORDER AND SU BMISSIONS OF THE APPELLANT. IT IS SETTLED LAW THAT THE ONUS OF PROVI NG A CLAIM IS INITIALLY ON THE ASSESSEE BUT THIS IS A SHIFTING BU RDEN AND ONCE AN ASSESSEE DISCHARGES ITS PRIMARY ONUS, THE BURDEN SH INS ON THE REVENUE. IN THE PRESENT CASE THE APPELLANT HAD DULY DISCHARGED ITS ONUS BY SUBMITTING NECESSARY EVIDENCE AVAILABLE TO ESTABLISH THE BONA FIDE OF THE TRANSACTIONS. THEREAFTER, THE ONUS SHIFTED ON THE REVENUE TO PROVE THAT THE CLAIM OF THE APPELLAN T WAS FACTUALLY INCORRECT. SIMPLY BY POINTING OUT THAT THE APPLICAN T COMPANIES DID NOT HAVE SUFFICIENT INCOME OR THAT THE BANK ACCOUNT S INDICATED CREDITS AND DEBITS IN RAPID SUCCESSION LEAVING LITT LE BALANCE DOES ITA NO.4644/DEL/2013 & CO NO. 43/DEL/2015 5 NOT DISCHARGE THE BURDEN CAST UPON THE REVENUE TO T AKE AN ADVERSE VIEW IN THE MATTER. FURTHER, IF THERE WAS S TATEMENT OF A PERSON OR ANY OTHER MATERIAL INDICATING TAX EVASION BY THE APPELLANT, OR PERSONS IN CONTROL OF ITS MANAGEMENT, THE MATERIAL RELIED UPON SHOULD HAVE BEEN MADE AVAILABLE TO THE APPELLANT IN ITS ENTIRETY. FROM THE RECORDS, IT APPEARS THAT THI S WAS NOT DONE. IT HAS BEEN HELD BY THE HONBLE APEX COURT THAT TAXIN G AUTHORITIES EXERCISE QUASI-JUDICIAL POWERS AND IN DOING SO THEY MUST ACT IN A FAIR AND NOT A PARTISAN MANNER. ALTHOUGH IT IS PART OF THEIR DUTY TO ENSURE THAT NO TAX WHICH IS LEGITIMATELY DUE FROM T HE ASSESSEE SHOULD REMAIN UNRECOVERED, THEY MUST ALSO AT THE SA ME TIME NOT ACT IN A MANNER AS MIUHT INDICATE THAT SCALES ARE W CISHTCD AGAINST THE ASSESSEE. IT IS IMPOSSIBLE TO SUBSCRIBE TO THE VIEW THAT UNLESS THOSE AUTHORITIES EXERCISE THE POWER IN A MANNER MOST BENEFICIAL TO THE REVENUE AND CONSEQUENTLY MOST ADV ERSE TO TILE ASSESSEE. THEY SHOULD BE DEEMED TO HAVE EXERCISED I T IN A PROPER AND JUDICIOUS MANNER {CIT V. SIMON CARVES LTD. 1]97 61 105 ITR 212 (SC)}. IN MY CONSIDERED OPINION, THIS IS NOT TH E CASE WHERE ADDITION SHOULD HAVE BEEN MADE U/S. 153C, BUT U/S. 147/ 143(3) AFTER MAKING PROPER ENQUIRIES. IN THE PRESENT FACT S OF THE CASE, THE ADDITION IS NOT LEGALLY SUSTAINABLE AND IS DELE TED. APPELLANT GETS RELIEF OF RS. 25,00,96,500/-. 9.1 ON GOING THROUGH THE AFORESAID FINDING OF THE L D. CIT(A) ON THE ISSUE IN DISPUTE AND THE CASE LAWS CITED IN THE IMPUGNE D ORDER, WE ARE OF THE VIEW THAT THE ASSESSEE DURING THE COURSE OF PROCEED INGS HAS DISCHARGED ITS ITA NO.4644/DEL/2013 & CO NO. 43/DEL/2015 6 BY SUBMITTING NECESSARY EVIDENCE AVAILABLE TO ESTAB LISH THE BONA FIDE OF THE TRANSACTIONS. THEREAFTER, THE ONUS SHIFTED ON THE R EVENUE TO PROVE THAT THE CLAIM OF THE ASSESSEE WAS FACTUALLY INCORRECT. SIMP LY BY POINTING OUT THAT THE APPLICANT COMPANIES DID NOT HAVE SUFFICIENT INCOME OR THAT THE BANK ACCOUNTS INDICATED CREDITS AND DEBITS IN RAPID SUCC ESSION LEAVING LITTLE BALANCE DOES NOT DISCHARGE THE BURDEN CAST UPON THE REVENUE TO TAKE AN ADVERSE VIEW IN THE MATTER. MOREOVER, IF THERE WAS STATEMENT OF A PERSON OR ANY OTHER MATERIAL INDICATING TAX EVASION BY THE AS SESSEE, OR PERSONS IN CONTROL OF ITS MANAGEMENT, THE MATERIAL RELIED UPON SHOULD HAVE BEEN MADE AVAILABLE TO THE ASSESSEE IN ITS ENTIRETY. WE FIND THAT THIS WAS NOT DONE. HOWEVER, IT HAS BEEN HELD BY THE HONBLE APEX COUR T THAT TAXING AUTHORITIES EXERCISE QUASI-JUDICIAL POWERS AND IN DOING SO THEY MUST ACT IN A FAIR AND NOT A PARTISAN MANNER. ALTHOUGH IT IS PART OF THEIR DUTY TO ENSURE THAT NO TAX WHICH IS LEGITIMATELY DUE FROM THE ASSESSEE SHOULD REMAIN UNRECOVERED, THEY MUST ALSO AT THE SAME TIME NOT ACT IN A MANNER AS M IGHT INDICATE THAT SCALES ARE WEIGHTED AGAINST THE ASSESSEE. IT IS IMP OSSIBLE TO SUBSCRIBE TO THE VIEW THAT UNLESS THOSE AUTHORITIES EXERCISE THE POW ER IN A MANNER MOST BENEFICIAL TO THE REVENUE AND CONSEQUENTLY MOST ADV ERSE TO TILE ASSESSEE. THEY SHOULD BE DEEMED TO HAVE EXERCISED IT IN A PRO PER AND JUDICIOUS MANNER {CIT V. SIMON CARVES LTD. 1]9761 105 ITR 212 (SC)}. THEREFORE, WE ARE IN AGREEMENT WITH THE LD. CIT(A) FINDING THAT THIS IS NOT THE CASE WHERE ADDITION SHOULD HAVE BEEN MADE U/S. 153C, BUT U/S. 147/ 143(3) AFTER MAKING PROPER ENQUIRIES. IN THE PRESENT FACTS OF T HE CASE, THE ADDITION IS NOT LEGALLY SUSTAINABLE AND THEREFORE, WAS RIGHTLY DELE TED BY THE LD. CIT(A), WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, H ENCE, WE UPHOLD THE SAME AND DECIDE THE ISSUE AGAISNT THE REVENUE. OUR VIEW IS FORTIFIED BY THE FOLLOWING JUDGMENTS:- I) CIT VS. VRINDAVAN FARMS (P) LTD. DECIDED IN ITA NO. 71&72/2015 AND 84/2015 VIDE ORDER DATED 12.8.2015. II) PR. CIT VS. RAKAM MONEY MATTERS PVT. LTD. DECID ED IN ITA NO. 778/2015 ON 13.10.2015. ITA NO.4644/DEL/2013 & CO NO. 43/DEL/2015 7 10. THE CROSS OBJECTION FILED BY THE ASSESSEE, WHIC H IS IN SUPPORT OF THE IMPUGNED ORDER, IS ALSO DISMISSED AS INFRUCTUOUS. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/1/2016. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 15/1/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO.4644/DEL/2013 & CO NO. 43/DEL/2015 8