ITO, New Delhi V. M/s. Monisha Impex Pvt. Ltd., New Delhi

ITA 1114/DEL/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6461 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 25-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 26-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence; Accommodation entries
• Section: 133(6); 144

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E : NEW DELHI BEFORE SHRI KULDIP SINGH , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1114/DEL/2014 (ASSESSMENT YEAR: 2007 - 08 ) ITO, WARD - 54), NEW DELHI VS. MONISHA IMPEX PVT. LTD, C/O. SH YASH PAL GUPTA, CA, 101(3 RD FLOOR), COMMERCIAL FLAT, OLD RAJINDER NAGAR MARKET, NEW DELHI PAN: AAFCM0694J (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJESH KUMAR, SR. DR REVENUE BY: NONE DATE OF HEARING 25/01/ 2017 DATE OF PRONOUNCEMENT 02 / 03 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT ( A) - IX, NEW DELHI DATED 20.12.2013 FOR THE ASSESSMENT YEAR 2007 - 08. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. WHETHER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN ACCEPTING THE ADDITIONAL EVIDENCE WITHOUT RECORDING THE REASON FOR ITS ADMISSION AND ALSO WITHOUT GIVING AN OPPORTUNITY TO AO WHICH IS IN VIOLATION OF RULE 46A OF IT RULES? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN DELETING THE ADDITIONS OF RS. 141697227/ - MADE BY THE AO ON ACCOUNT OF BANK DEPOSIT. PAGE 2 OF 5 3. THAT THE ORDER OF THE LD CIT(A) IS ERRONEOUS AND IN NOT TENABLE OF FACTS AND IN LAW. 4. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 3. THE REVENUE HAS RAISED THE FIRST GROUND OF APPEAL AGAINST VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962. 4. THE BRIEF FACTS OF THE CASE IS THAT THE ASSESSEE IS A CO MPANY FILED ITS RETURN OF INCOME ON 05.08.2008 DECLARING NIL INCOME AND SUBSEQUENTLY, NOTICE U/S 143(2) WAS SERVED ON 24.09.2008 ON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE LD ASSESSING OFFICER OBTAINED THE BANK STATEMENT OF ASSESSEE W ITH BANK OF RAJASTHAN LTD, VIKASPURI, NEW DELHI U/S 133(6) OF THE INCOME TAX ACT. ON THE BASIS OF THIS IT WAS NOTED THAT THERE WAS TOTAL DEPOSIT OF RS. 139214890/ - AND WITHDRAWAL FROM THAT BANK ACCOUNT OF RS. 139198838/ - IT WAS ALSO NOTED THAT THE ASSESSEE HAS ALSO OBTAINED FIXED DEPOSIT RECEIPTS OF RS. 90 LAKHS ON 31.03.2007. AS THE ASSESSEE BEFORE THE ASSESSING OFFICER PROVIDED NO EXPLANATION THE TOTAL INCOME WAS ASSESSED AT RS. 148198840/ - VIDE ORDER DATED 22.12.2009 U/S 144 OF THE INCOME TAX ACT. THE AS SESSEE PREFERRED AN APPEAL BEFORE THE LD CIT(A) WHO PASSED AN ORDER 20.12.2013 HOLDING THAT OUT OF TOTAL DEPOSIT OF RS. 148198840/ - ONLY RS. 133440863/ - ARE IN THE NATURE OF ACCOMMODATION ENTRIES AND THEREFORE ONLY COMMISSION INCOME @1.5 % IS UNEXPLAINED I NCOME OF THE ASSESSEE. THEREFORE HE REDUCED THE ADDITION OF RS. 148198840/ - TO RS. 2001613/ - . AGGRIEVED BY THE ORDER OF THE CIT(A) REVENUE HAS FILED THIS APPEAL. 5. IN GROUND NO. 1 AND 2 THE LD SR. DR SUBMITTED THAT THE LD CIT(A) HAS ON THE BASIS OF REPRESENTATION BEFORE HIM HAS REDUCED THE ADDITION FROM RS. 148198840/ - TO RS. 2001613/ - WITHOUT GIVING ANY OPPORTUNITY TO THE LD ASSESSING OFFICER OF EXAMINING ABOUT THE AMOUNT DEPOSITED AND AMOUNT WITHDRAWN BY THE APPELLANT. PAGE 3 OF 5 FURTHER, WITH OUT ANY BASIS LD CIT(A) HAS HELD THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRY AND THEN REDUCED IT TO RS. 2001613/ - BY ESTIMATING COMMISSION INCOME @1.5%. HE FURTHER VEHEMENTLY OBJECTED THAT THE LD CIT(A) HAS NOT SEEN WHO ARE TH E BENEFICIARIES OF THE ABOVE ACCOMMODATION ENTRIES AND MERELY BELIEVED THAT THE WRITTEN SUBMISSION FILED BY THE ASSESSEE WHEN THE ORDER OF THE ASSESSING OFFICER WAS PASSED U/S 144 OF THE ACT. HE THEREFORE STATED THAT THERE IS A CLEAR - CUT VIOLATION RULE 46A OF THE INCOME TAX RULES, 1962 AND ERROR IN THE ORDER OF THE LD CIT(A) IN REDUCING THE ADDITION WITHOUT ANY EVIDENCE. HE THEREFORE, PRESS THAT ORDER OF THE LD CIT(A) MAY BE VACATED. 6. DESPITE NOTICE NONE APPEARED BEFORE US ON BEHALF OF THE ASSESSEE AND THER EFORE, THE MATTER IS DECIDED ON MERITS AS PER FACTS AVAILABLE BEFORE US ON RECORD. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS . THE ASSESSEE DID NOT APPEAR OR SUBMIT ANY EXPLANATION OF THE VARIOUS NOTICES ISSUED BY THE LD ASSESSING OFFICER WITH RES PECT TO THE EXPLANATION FOR TOTAL DEPOSIT OF RS. 139214890/ - IN BANK OF RAJASTHAN LT D, VIKASPURI, DELHI. THE LD CIT(A) ADMITTED THE CLAIMS OF THE ASSESSEE OF CREDIT FOR FDR OF RS. 90 LAKHS AS WELL AS RETURN REJECTED TRANSACTION OF RS. 52.50 LAKHS AND PAY O RDER NOT EN - CASHED OF RS. 4.99 LAKHS. THEREFORE HE REDUCED THE ACTUAL CREDIT OF RS. 14.81 CRORES TO RS. 13.33 CRORES. HE FURTHER WITHOUT ANY BASIS BELIEVED THAT ASSESSEE IS AN ACCOMMODATION ENTRY PROVIDER BASED ON THE SUBMISSION MADE BEFORE HIM. ACCORDING TO RULE 46A NO EVIDENCE WHETHER ORAL OR DOCUMENTARY OTHER THAN EVIDENCE PRODUCED BEFORE AO CAN BE ADMITTED BY THE LD CIT(A) UNLESS IT FALLS IN THE SPECIFIED EXCEPTIONS. WE DO NOT FIND ANY SUCH APPLICATION MADE BY THE ASSESSEE OR DECISION OF THE LD PAGE 4 OF 5 CIT(A) ON THAT BY APPLICATION OF MIND. IN VIEW OF THIS THE LD CIT(A) HAS CLEARLY DECIDED THE ISSUE IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962. IN VIEWS OF THIS GROUND NO.1 OF THE APPEAL OF THE REVENUE IS ALLOW ED. 8. GROUND NO. 2 OF THE APPEAL OF THE REVENUE IS RELATES TO REDUCTION IN THE ADDITION FROM RS. 41.81 CRORES TO RS. 20.01 LAKHS ON MERITS. THE LD CIT(A) HAS GROSSLY ERRED IN BELIEVING THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES WITHOUT BRINGING ON RECORD THE REAL BENEFICIARIES OF SUCH TRANSACTION. THERE CANNOT BE ANY ACCOMMODATION ENTRY WITHOUT REAL BENEFICIARIES OF SUCH TRANSACTIONS. FURTHER, THE LD CIT(A) ALSO FOLLOWED THE DECISION OF SANJAY KR. GARG VS. ACIT 12 TAXMANN .COM 294 (DEL) AND ESTIMATED THE ACCOMMODATION ENTRY COMMISSION @1.5% . IN THAT CASE THE ACCOMMODATION ENTRIES WERE IN THE NATURE OF FICTITIOUS SALES BILLS. IN THE PRESENT CASE THERE IS NO IDENTIFICATION ABOUT WHAT KIND OF ACCOMMODATION ENTRY ASSESSEE H AS PROVIDED. WE ALSO DO NOT APPROVE THIS ARBITRARY RATE DECIDED BY THE LD CIT(A) WHEREIN IT IS NOT CERTAIN WHAT KIND OF ACCOMMODATION ENTRIES THE ASSESSEE HAS PROVIDED TO THE BENEFICIARIES. WITHOUT IDENTIFYING THE NATURE OF ACCOMMODATION ENTRIES AND THE BE NEFICIARIES THE COMMISSION INCOME ESTIMATED BY THE LD CIT(A) IS NOT IN ACCORDANCE WITH THE LAW. IN VIEW OF THIS , WE SET ASIDE THE WHOLE APPEAL BACK TO THE FILE OF THE LD CIT(A) WITH A DIRECTION TO FIRST EXAMINE THE APPLICABILITY OF RULE 46A OF THE IT RULES 1962 AND THEN GRANT AN OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER ON THE ISSUES RAISED BY THE APPELLANT, CONDUCT ENQUIRY THROUGH HIMSELF OR THROUGH ASSESSING OFFICER TO EXAMINE THE TRANSACTION AS WELL AS THE BENEFICIARIES OF THE ACCOMMODATION ENTRIES AND THE NATURE OF SUCH TRANSACTIONS ON THE BASIS OF VAST POWER PROVIDED UNDER THE ACT AND ALOS OBTAINING INFORMATION PAGE 5 OF 5 FROM OTHER APPLICABLE LAWS AND THEN DECIDE THE ISSUE ON MERITS. N EEDLESS TO SAY THAT PROPER OPPORTUNITY OF HEARING MAY BE GRANTED TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM . IN THE RESULT , GROUND NO 2 OF THE APPEAL OF THE REVENUE IS ALLOWED WITH ABOVE DIRECTION. 9. APPEAL OF THE REVENUE IS ALLOWED WITH STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 0 2 / 03 / 2017 . - S D / - - S D / - ( KULDIP SINGH ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 2 / 03 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI