Addl. CIT, New Delhi V. M/s. Unitech Machines Ltd., Gurgaon

ITA 102/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 9622 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 06-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAKASH DUBEY
• Keywords: Search and seizure
• Section: 201(1); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 102/DEL/2017 : ASSTT. YEAR : 2008-09 ADDL. CIT, CIRCLE-78(1), NEW DELHI VS UNITECH MACHINES LTD., UM HOUSE, PLOT NO. 35P, SECTOR-44, GURGAON-122002 (APPELLANT) (RESPONDENT) PAN NO. A AACU3013P ASSESSEE BY : NONE REVENUE BY : SH. PRAKASH DUBEY, SR. DR DATE OF HEAR ING: 10 . 0 3 .20 2 1 DATE OF PRONOUNCEMENT: 10 .03 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER OF THE LD. CIT(A)-41, NEW DELHI DATED 24. 10.2016. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENU E: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM THE UNACCOUNTED SALARY (IN CASH) PAID TO VARIOUS PERSONS PARTICULARLY WHEN THE SEIZE D DOCUMENTS MARKED AS PAGE NO. 12 OF ANNEXURE A-6 (PAGE NO.20 AND 21 OF THE HON'BLE ITSC'S ORDER) AND PAGE NO.89 OF ANNEXURE A-17 (PAGE NO.1 OF THE ASSESSING OFFICER'S ORDER) SHOWED CASH PAYMENT OF SALARY ? 1.1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN ITA NO. 102/DEL/2017 UNITECH MACHINES LTD. 2 HOLDING THAT THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM THE UNACCOUNTED SALARY (IN CASH) PAID TO VARIOUS PERSONS PARTICULARLY WHEN IT CANNOT BE RULED OUT THAT SUCH UNACCOUNTED SALARY IS NOT EMBEDDED IN UNACCOUNTED EXPENSES CLAIMED AGAINST THE INCOME OF RS.106.92 LAKHS OFFERED BY THE ASSESSE IN ITS SETTLEMENT APPLICATION FILED U/S 245D(1) OF THE INCOME TAX ACT ? 1.2 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM THE UNACCOUNTED SALARY (IN CASH) PAID TO VARIOUS PERSONS PARTICULARLY WHEN THE INCOM E ON THIS SCORE OFFERED DURING TINE SEARCH PROCEEDING S HAD NEVER BEEN RETRACTED ? 1.3 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM THE UNACCOUNTED SALARY (IN CASH) PAID TO VARIOUS PERSONS PARTICULARLY WHEN THE INCOM E IS SETTLED AFTER CONSIDERING ALL ISSUES RELATING TO INCOMINGS AND OUTGOINGS OF MONEY IN ENTIRETY BY THE HON'BLE INCOME TAX SETTLEMENT COMMISSION AND CONSEQUENTIALLY NOT MAKING ANY ADDITION FOR OUTGOIN G (UNACCOUNTED SALARY) IF INCOMING PRECEDING TO SUCH OUTGOING IS MORE? 1.4 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN HOLDING THAT THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM THE UNACCOUNTED SALARY (IN CASH) PAID TO VARIOUS PERSONS PARTICULARLY WHEN THE ENTIR E ISSUES DECIDED BY THE HON'BLE INCOME TAX SETTLEMENT COMMISSION WERE NOT CONSIDERED IN THE IMPUGNED ORDER IN ENTIRETY BEFORE DELETING THE DEMAND RAISED U/S 201 R.W.S. 201(1A) OF THE I.T. ACT? ITA NO. 102/DEL/2017 UNITECH MACHINES LTD. 3 3. BRIEF FACTS OF THE CASE AS PER THE ORDER OF THE LD. CIT (A) ARE THAT A SEARCH AND SEIZURE ACTION WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE COMPANY ON 18.02. 2013. DURING THE COURSE OF THE SEARCH INCRIMINATING DOCUM ENTS WERE FOUND AND SEIZED, WHICH INTER ALIA, SHOWED EVIDENCE OF PAYMENT OF SALARY IN CASH BY THE ASSESSEE' COMPANY TO SOME EMPLOYEES, WHICH WERE NOT RECORDED IN THE REGULAR BOOKS. THE E VIDENCE FOUND DURING THE COURSE OF SEARCH PERTAINED TO THE PERIOD OF FIVE MONTHS FROM SEPTEMBER 2012 TO JANUARY 2013 IN F.Y. 2012- 2013. BASED ON SUCH EVIDENCE, THE A.O. PROCEEDED TO PASS ORDER U/S 201(1)/201(1A) FOR OTHER YEARS INCLUDING THE YEAR UNDER REFERENCE. BASED ON THE CASH SALARY COMPONENT FOUND IN THE SEIZED PAPERS, SUCH UNDISCLOSED SALARY WAS ESTI MATED FOR THE YEAR UNDER REFERENCE. THE A.O. HELD THE ASSESSE E COMPANY TO BE AN ASSESSEE-IN-DEFAULT IN RESPECT OF PAYMENT OF SUCH CASH SALARY AND COMPUTED TAX AND INTEREST LIABILITY U/S 201(1)/201(1A). 4. THE ASSESSEE HAS CONTENDED THAT NO CASH SALARY W AS PAID FOR THE RELEVANT PERIOD AND NO INCRIMINATING DOCUME NTS HAVE BEEN FOUND DURING THE SEARCH IN RELATION TO THE SAM E. 5. THE ASSESSEE COMPANY HAD FILED AN APPLICATION BE FORE THE HONBLE INCOME TAX SETTLEMENT COMMISSION AND ORDER U/S 245D(4) HAS BEEN PASSED BY THE HONBLE PRINCIPAL BE NCH ON 22.08.2016. THE HONBLE ITSC, IN PARA 4.6.3 OF ITS ORDER HAS HELD THAT NO EXTRAPOLATION WOULD BE JUSTIFIED SINCE NO EVIDENCE OF CASH SALARY WAS FOUND FOR EARLIER YEARS. 6. THE LD. CIT (A), FOLLOWING THE DECISION OF THE H ONBLE ITSC PRINCIPAL BENCH, WAS OF THE CONSIDERED VIEW THAT TH E ASSESSEE ITA NO. 102/DEL/2017 UNITECH MACHINES LTD. 4 CANNOT BE HELD AS ASSESSEE-IN-DEFAULT FOR NON DEDUC TION OF TAX FOR CASH SALARY PAYMENT IN THE RELEVANT YEAR, PARTI CULARLY, WHEN NO INCRIMINATING DOCUMENT HAS BEEN FOUND IN THE COU RSE OF SEARCH TO PROVE THAT ANY CASH COMPONENT HAS BEEN PA ID AND THE SALARY AMOUNT HAS BEEN CALCULATED PURELY BY ESTIMAT ION AND HENCE, THE DEMAND RAISED U/S 201(1)/201(1A) BY THE A.O. WAS DELETED. 7. WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD . 8. THE ORDER U/S 201(1) WAS MERELY BASED ON ESTIMAT ION, HENCE WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT (A) AS NO CASH PAYMENT PROVED TO HAVE BEEN MADE BY THE ASSESSEE. 9. AS A RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/03/2021. SD/- SD/- (BHAVNESH SAINI) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 10/03/2021 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR