DCIT, CENTRAL CIRCLE-31, NEW DELHI V. PYRAMID BUILDTECH PVT. LTD., DELHI

ITA 1312/DEL/2021

AI Insights

The case involves multiple appeals and cross objections related to the assessment year 2012-13 concerning M/s SRC Buildtech Pvt. Ltd, SRC Realtech Pvt. Ltd., and Pyramid Buildtech Pvt. Ltd. The primary issues revolved around the additions made by the Ld. AO following a search and seizure operation under Section 132 of the Income Tax Act, which led to the discovery of incriminating documents. The Ld. AO made substantial additions to the income of the companies based on these documents, which were later contested and deleted by the Ld. CIT(A). The Revenue's appeals challenged these deletions, but the Tribunal upheld the CIT(A)'s decisions, citing the lack of evidence linking the impugned transactions to any undisclosed income or unexplained expenses.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 38678 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Other Referred Cases: Kabul Chawla, Mita GutGutia
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: VED JAIN; AMAN GARG
• Keywords: Corroborative evidences; Income from undisclosed sources; Document seized; Documents seized; Tax effect; Search and seizure
• Section: 132; 153A; 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘C’: NEW DELHI) BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No:- 1307/Del/2021 (Assessment Year- 2012-13) Deputy Commissioner of Income Tax, Central Circle -31, New Delhi. Vs. M/s SRC Realtech Pvt. Ltd., B-3, Shakuntala Building 59, Nehru Place, New Delhi-110049. PAN No: AAMCS4800K APPELLANT RESPONDENT C.O.:- 141/Del/2022 (Arising out of ITA No.-1307/Del/2021) (Assessment Year- 2012-13) M/s SRC Realtech Pvt. Ltd., B-3, Shakuntala Building 59, Nehru Place, New Delhi-110049. Vs. Deputy Commissioner of Income Tax, Central Circle -31, New Delhi. PAN No: AAMCS4800K APPELLANT RESPONDENT ITA No:- 1312/Del/2021 (Assessment Year- 2012-13) Deputy Commissioner of Income Tax, Central Circle -31, New Delhi. Vs. M/s Pyramid Buildtech Pvt. Ltd., Mansarovar Building, Nehru Place, Delhi-110049. PAN No: AAECP8312P APPELLANT RESPONDENT ITA No.- 1307/Del/2021 and others appeals SRC Realtech Pvt. Ltd. And others. Page | 2 C.O.:- 144/Del/2022 (Arising out of ITA No.-1312/Del/2021) (Assessment Year- 2012-13) M/s Pyramid Buildtech Pvt. Ltd., Mansarovar Building, Nehru Place, Delhi-110049. Vs. Deputy Commissioner of Income Tax, Central Circle -31, New Delhi. PAN No: AAECP8312P APPELLANT RESPONDENT ITA No:- 1315/Del/2021 (Assessment Year- 2012-13) Deputy Commissioner of Income Tax, Central Circle -31, New Delhi. Vs. M/s SRC Buildtech Pvt. Ltd., Shop No. 2/276A, Upper Ground floor, Masjid Moth, South Extensions Part-I, Delhi. PAN No: AAKCS8790G APPELLANT RESPONDENT C.O.:- 148/Del/2022 (Arising out of ITA No.-1315/Del/2021) (Assessment Year- 2012-13) M/s SRC Buildtech Pvt. Ltd., Shop No. 2/276A, Upper Ground floor, Masjid Moth, South Extensions Part-I, Delhi. Vs. Deputy Commissioner of Income Tax, Central Circle -31, New Delhi. PAN No: AAECP8312P APPELLANT RESPONDENT Assessee by : Shri Ved Jain, Adv. & Shri Aman Garg, CA Revenue by : Shri Dayainder Singh Sidhu, CIT(DR) Date of Hearing : 04.03.2025 Date of Pronouncement : 07.03.2025 ITA No.- 1307/Del/2021 and others appeals SRC Realtech Pvt. Ltd. And others. Page | 3 ORDER PER AMITABH SHUKLA, AM: These appeals filed by Revenue (ITA No.- 1307/Del/ 2021, 1312/Del/2021 and 1315/Del/2021) and Cross Objections by assessee (141/Del/2022, 144/Del/2022 & 148/Del/2022). Since the issues involved in these appeals are interconnected, they are being disposed of by this consolidated order for the sake of convenience and brevity 2. The first issue raised by the Revenue in ITA No.- 1307/Del/ 2021, 1312/Del/2021 and 1315/Del/2021 through its grounds of appeal including revised grounds in the case of SRC Buildtech Pvt. Ltd., is regarding the addition of Rs. 2,74,40,000/- made by the Ld.AO, for A.Y. 2012-13, in respect of M/s SRC Buildtech Pvt. Ltd, SRC Realtech Pvt. Ltd. and Pyramid Buildtech Pvt. Ltd. It is imperative to briefly examine factual matrix of the issue at hand which is common to all the three appeals. The assessee company is a Private Limited Company belonging to the SRC group of company. For the purposes of facts and figures those pertaining to M/s SRC Buildtech Pvt. Ltd. have been taken for the purposes of this order. Search and seizure action U/s 132 was conducted on ITA No.- 1307/Del/2021 and others appeals SRC Realtech Pvt. Ltd. And others. Page | 4 14.09.2017, at the various business premises of SRC group of company. During the course of search, incriminating documents were found and seized. Consequent to the initiation of the proceedings U/s 153A, assessment was concluded vide order dated 31.12.2019. From the perusal of the seized documents being page 1 of annexure 4, the Ld. AO noted that an amount of Rs. 8,23,20,000/-, was written towards some expenses. Since the premise, from where the said document was seized being SCF -45, Sector-11D, Faridabad, was jointly owned by M/s SRC Buildtech Pvt. Ltd, SRC Realtech Pvt. Ltd. and Pyramid Buildtech Pvt. Ltd., the AO distributed Rs. 2,74,40,000/- each, as unaccounted income of the three companies. The AO has discussed the issue in detail on page no. 4-5 of his order. It was held that the transactions pertained to unexplained expenses incurred from undisclosed sources. 3. Aggrieved by the impugned addition, the assesse contested the matter before Ld. CIT(A), who vide its order dated 14.07.2021 deleted the impugned addition of Rs. 2,74,40,000/- each, in the cases of three companies. The Ld. CIT(A) has discussed the issue extensively in his order and specifically in para 9.1 at pages 44 to 49 of his impugned order. It was concluded that the impugned ITA No.- 1307/Del/2021 and others appeals SRC Realtech Pvt. Ltd. And others. Page | 5 expenses were pertaining to genuine business transactions and were recorded in the books of account. While arriving at his conclusion, he also placed reliance upon the remand report filed by the Ld. Assessing Officer dated 08.07.2021, as well as communications and submissions made by the PCIT (Central)-3, New Delhi, before the settlement commission. Pertinently, the Ld. AO had himself, in his remand report, concluded that the transactions did not reveal any negative inferences. For the purposes of clarity, the relevant part of the remand report is reproduced here under: “ ….. therefore, after taking into consideration, the details filed by the assesse with office of your good self, submissions made by Sh. Subhash Choudhary, during the course of verification and the report of the Principal Commissioner of Income Tax (Central)-3, New Delhi, as submitted to the Hon’ble Settlement Commissioner after due verification of the facts without drawing any negative inference regarding the above points, your good self is requested to take appropriate view in this regard…” 4. The Ld. Counsel for the assesse has vehemently argued in favour of the decision of Ld. CIT(A) stating that, in the remand proceedings, the Ld. AO had himself taken a stand alluding towards genuineness of the transactions and warranting no addition. It was thus submitted that revenue has no case in this matter. The Ld. DR would like to make us believe on the correctness of the order of the Ld. AO. ITA No.- 1307/Del/2021 and others appeals SRC Realtech Pvt. Ltd. And others. Page | 6 5. We have heard the rival submission in the light of material available on record. We have noted that Ld. CIT(A) has comprehensively analysed the entries found in the seized incriminating documents with the, agreements entered and books of account of the assesse. He has also considered the remand report of the Ld. AO as well as communication made by the PCIT (Central)-3, New Delhi, before the settlement commission, before concluding that no case of any addition of an unaccounted income is made out against the assesse. Thus, seen no blame of any erroneous decision, of deleting the addition of Rs. 2,74,40,000/- made by the Ld.AO, for A.Y. 2012-13, in respect of M/s SRC Buildtech Pvt. Ltd, SRC Realtech Pvt. Ltd. and Pyramid Buildtech Pvt. Ltd., can be placed upon the Ld. CIT(A). Accordingly, we are of the considered view that there is no case for any interference to be made to the order of Ld. CIT(A). Accordingly, the action of Ld. CIT(A) in deleting the addition of Rs. 2,74,40,000/- made by the Ld.AO, for A.Y. 2012-13, in respect of M/s SRC Buildtech Pvt. Ltd, SRC Realtech Pvt. Ltd. and Pyramid Buildtech Pvt. Ltd., challenged by the revenue vide ITA No.- 1307/Del , 1312/ and 1315/ is confirmed and the ground of appeal raised by the Revenue are dismissed. ITA No.- 1307/Del/2021 and others appeals SRC Realtech Pvt. Ltd. And others. Page | 7 6. The next issue raised by the Revenue is regarding an addition of Rs. 25 lakhs made by the Ld. AO in the case of M/s SRC Buildtech Pvt. Ltd. for A.Y. 2012-13 in ITA No.- 1315/Del/2021. The Ld. AO had in his order dated 30.12.2019, in para 3, noted that the assesse had received an unsecured loan of Rs. 25 lakhs from one Shri Udham Singh. The assesse had filed only a copy of confirmation without any further supporting evidence. The Ld. AO had queried the assesse about creditworthiness of the party which were not filed. The Ld. AO placing reliance upon a catena of judgments held the impugned unsecured loans as falling under the mischief of Section 68 and made the addition of Rs. 25 lakhs. Before the Ld. First Appellate Authority, the assesse contended that the impugned addition is inadmissible deserving deletion as appellant had provided bank statements, confirmations and identity particulars of Mrs. Guddi, sister-in-law of Shri Udham Singh. The appellant had also contended that under section 153A addition can only be made qua an incriminating document found and seized during the search. It was argued that the present year was unabated assessment year and the Ld. AO had not mentioned that the impugned loan transactions had any connection with any incriminating documents found and seized during the search and ITA No.- 1307/Del/2021 and others appeals SRC Realtech Pvt. Ltd. And others. Page | 8 therefore the addition per se was unwarranted. Consequently, the Ld. CIT(A) placing reliance on decision in the case of Kabul Chawla of Hon’ble Delhi High Court, 380 ITR 573, deleted the impugned addition. In the case Shri Kabul Chawla (supra), it has been held that completed assessment can only be interfered by an Assessing Officer under Section 153A only if any incriminating documents is found and seized during the search proceedings. The Ld. CIT(A) also relied upon the decision of Hon’ble Apex Court in the case of Mita GutGutia 96 taxman.com 468. 7. We have heard rival submission in the light of the material available on record. It a case of revenue that the decision in the case Shri Kabul Chawla of Hon’ble Delhi High Court, 380 ITR 573 (supra), has been contested by the Department before the Hon’ble Apex Court, though, it had to withdraw its SLP on account of low tax effect. The Ld. AR submitted that Hon’ble Apex Court has admitted an SLP in the case of Apar Industries, decided by Hon’ble Bombay High Court, and which has been tagged with more than 115 issues on identical controversy. The Ld. Counsel for the assesse reiterated its arguments taken before the Ld. CIT(A) and placed reliance upon the case of Kabul Chawla (supra). The arguments of the Revenue regarding non application ITA No.- 1307/Del/2021 and others appeals SRC Realtech Pvt. Ltd. And others. Page | 9 of decision in the case Shri Kabul Chawla of Hon’ble Delhi High Court has been considered and found to be untenable. At the outset, we have noted that the Ld.AO has not brought on record even an iota of evidence to suggest that the impugned unsecured loans had any connection with any seized documents. Thus, the decision in the case Shri Kabul Chawla of Hon’ble Delhi High Court becomes applicable in the case. Incapability of a litigant not to prosecute his case before a higher appellate Authority, no matter how justified the reason for non-prosecution be, would not make the decision of lower Apple Authority inoperable. Revenue had rights to assail the order of honourable Delhi High Court in Kabul chawla case before honourable Apex court through an SLP. It’s incapacity to not contest the same on account of instructions. prohibiting filing of SLP‘s in low tax effect cases cannot be a ground for not complying with impugned decision of the honourable jurisdictional High Court. A decision of superior judicial authority has a binding effect unless it has been over ruled or at least stayed by the next superior judicial authority. In the instant case, there is no such material on records. Accordingly, we are of the view that no interference is required to be made at this stage to the order of Ld. CIT(A), qua deletion of addition of Rs. 25 lakhs. The ITA No.- 1307/Del/2021 and others appeals SRC Realtech Pvt. Ltd. And others. Page | 10 order of Ld. CIT(A) is therefore confirmed and the grounds of appeal raised by the Revenue is dismissed. 8. In the result, appeals of the revenue in ITA No.- 1307/Del/ 2021, 1312/Del/2021 and 1315/Del/2021, are dismissed. Cross Objection of Assessees -141/Del/2022, 144/Del/2022 & 148/Del/2022. 9. Through the impugned C.Os. the appellant assesse has contested the order of the Ld. AO on legal grounds challenging the jurisdiction on account of absence of DIN and / or AO’s action of making addition u/s 153A without incriminating documents. We have dismissed the appeal of the revenue in ITA No.- 1307/Del/ 2021, 1312/Del/2021 and 1315/Del/2021 (supra) and therefore, the legal grounds raised by the assesse have become academic in nature and hence are left open. The challenge of the appellant assesse qua AO’s action of making addition u/s 153A without incriminating documents has also been answered in favour of the assesse and therefore the same does not requires any specific adjudication in these C.Os. 10. In the result, the C.Os of the assesse are held as infructuous. ITA No.- 1307/Del/2021 and others appeals SRC Realtech Pvt. Ltd. And others. Page | 11 Order pronounced in the Open Court on 07.03.2025 Sd/- Sd/- (ANUBHAV SHARMA) (AMITABH SHUKLA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 07/03/2025. Pooja/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA No.- 1307/Del/2021 and others appeals SRC Realtech Pvt. Ltd. And others. Page | 12 1. Date of dictation of Tribunal order 5.3.25 2. Date on which the typed draft Tribunal Order is placed before the Dictating Member 5.3.25 3. Date on which the typed draft Tribunal order is placed before the other Member 4. Date on which the approved draft Tribunal order comes to the Sr. PS/PS 5. Date on which the fair Tribunal order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr.PS/PS 7. Date on which the final Tribunal order is uploaded by the Sr.PS/PS on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal order 9 Date of killing off the disposed of files on the judisis Portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial) 11. The date on which the file goes to the Assistant Registrar for endorsement of the order 12. Date of Despatch of the order "