DCIT, New Delhi V. Smt. Manju Gupta, New Delhi

ITA 1505/DEL/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6477 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 19 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: misc
• Appeal Filed On: 12-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase; Accommodation entries; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 153A

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. 1505 /DEL/.2014 (ASSESSMENT YEAR: 2008 - 09 ) DCIT, CENTRAL CIRCLE - 10, JAHNDEWALAN, NEW DELHI VS. MANJU GUPTA, C - 3/28 - 29, SECTOR - 15, ROHINI, NEW DELHI PAN:AAJPG0447N (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJESH KUMAR, SR. DR REVENUE BY: NONE DATE OF HEARING 25/01/ 2017 DATE OF PRONOUNCEMENT 02 / 0 3 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED REVENUE AGAINST THE ORDER OF THE LD CIT(A) - XXXII, NEW DELHI DATED 16.12.2013 FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE COMMISSION INCOME EARNED BY PROVIDING ACCOMMODATION ENTRIES ON THE ENTIRETY. 2. THE DECISION OF CIT(A) IS BASED ON HER ORDER DATED 11.12.2013 IN APPEAL NO. 376/13 - 14 IN THE CASE OF SHRI RAKESH GUPTA WHICH HAS BEEN CONTESTED BY THE DEPARTMENT AND HAS NOT ATTAINED FINALITY. 3. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENA BLE IN LAW AND ON FACTS. 3. GROUND NO. 1 AND 2 OF THE APPEAL OF THE REVENUE ARE AGAINST THE DELETION OF THE COMMISSION INCOME EARNED BY PROVIDING ACCOMMODATION ENTRIES IN THE HANDS OF THE APPELLANT, WHICH WAS MADE BY THE LD. ASSESSING OFFICER ON PROTECTIV E BASIS. PAGE 2 OF 4 4. THE BRIEF FACTS OF THE CASE ARE THE INVESTIGATION WING ON 26.04.2010 IN CASE OF SHRI VISHESH GUPTA AND SHRI RAKESH GUPTA GROUP CONDUCTED THAT SEARCH U/S 132 OF THE ACT. THE BUSINESS PREMISES OF THE ASSESSEE WERE ALSO COVERED IN SEARCH. DURING THE SEARCH, IT WAS FOUND THAT THESE PERSONS ARE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES THROUGH BOGUS PURCHASE BASE FROM THE FIRMS OWNED AND CONTROLLED BY THEM. THIS FACT WAS ADMITTED BY SHRI VISHESH GUPTA AND RAKESH GUPTA IN THEIR STATEMENT RECORDED DURING THE COURSE OF SEARCH, POST SEARCH PROCEEDINGS AND DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE SMT MANJU GUPTA WHO IS PROPRIETOR OF M/S. SHRI GOBARDHAN INTERNATIONAL ALSO PROVIDED ACCOMMODATION ENTRY TO TWO DIFFERENT BENEFICIARIES. THE LD ASSESSING OFFICER DISCUSSED MODUS OPERANDI OF THE PARTIES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED BY THE ASSESSEE THAT THIS PROPRIETARY CONCERN IS MANAGED AND CONTROLLED BY SHRI RAKESH GUPTA. THE AFFIDAVIT ALSO SHOWED THAT ALL COMMISSION INCOME BASED ON THE TURNOVER OF THE ACCOMMODATION ENTRIES WERE OWNED BY SHRI RAKESH GUPTA. IN VIEW OF THIS THE LD ASSESSING OFFICER DETERMINED THE ACCOMMODATION ENTRIES AMOUNTING TO RS. 143790815/ - AND CALCULATED COMMISSION THERE ON @5.67% IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS AND IN THE HANDS OF SHRI RAKESH GUPTA ON SUSTENTATIVE BASIS. CONSEQUENTLY ON RETURN OF INCOME FILED U/S 153A OF THE ACT OF RS. 170690/ - THE LD ASSESSING OFFICER ADDED THE ACCOMMODATION ENTRY COMMIS SION OF RS. 7433985/ - IN THE HANDS OF THE ASSESSEE AND DETERMINED THE NET TAXABLE INCOME OF RS. 7604675/ - VIDE ORDER DATED 28.03.2013 PASSED U/S 153A OF THE INCOME TAX ACT. AGGRIEVED BY THE ORDER OF THE LD ASSESSING OFFICER THE ASSESSEE PREFERRED AN APPE AL BEFORE THE LD CIT(A), THE ABOVE ADDITION WAS DELETED HOLDING AS UNDER: - 5. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSION OF THE APPELLANT. THE ISSUE OF SUBSTANTIVE ADDITION ON ACCOUNT OF COMMISSION INCOME FROM PROVIDING ACCOMMODATION ENTRI ES IN THE HANDS OF THE APPELLANTS HUSBAND SH. RAKESH GUPTA WAS BEFORE ME. VIDE MY ORDER DATED 11.12.2013 IN APPEAL NO. 378/13 - 14 FOR ASSESSMENT YEAR 2008 - 09 IN THE CASE OF SH. RAKESH GUPTA I HAVE DIRECTED THE ASSESSING OFFICER TO CALCULATE THE COMMISSION INCOME AT THE RATE OF 2% ON THE AMOUNT OF TOTAL ACCOMMODATION ENTRIES PROVIDED BY THE APPELLANT TO THE VARIOUS PARTIES PAGE 3 OF 4 DURING THE YEAR UNDER CONSIDERATION. SINCE THE TOTAL AMOUNT OF ACCOMMODATION ENTRIES HAS BEEN CONSIDERED IN THE HANDS OF THE APPELLANTS HUSBAND SHR. RAKESH GUPTA AND INCOME THEREFROM HAS BEEN ASSESSED IN HIS HANDS, THERE IS NO QUESTION OF MAKING ANY ADDITION IN THE APPELLANTS HANDS ON PROTECTIVE BASIS. THEREFORE, THE ADDITION OF RS. 7433985/ - ON ACCOUNT T OF COMMISSION INCOME MADE IN THE HANDS OF THE APPELLANT ON PROTECTIVE BASIS IS HEREBY DELETED. 5. A GGRIEVED BY THE ORDER LD CIT(A), REVENUE IS IN APPEAL BEFORE US. M AIN CONTENTION OF THE LD DR IS THAT LD CIT(A) HAS DELETED THE PROTECTIVE ADDITION IN THE HANDS OF THE ASSESSEE MERELY ON THE BASIS OF HIS ORDER IN CASE OF SHRI RAKESH GUPTA. HE SUBMITTED THAT UNLESS THE SUBSTANTIVE ADDITION REACHES FINALITY THE ADDITION ON PROTECTIVE BASIS COULD NOT BE DELETED. 6. DESPITE NOTICE NONE APPEARED BEFORE US THE APPOINTED DATE OF HEARING. IN VIEW OF THIS ISSUE IS DECIDED ON THE MERITS ON THE BASIS OF FACTS AVAILABLE BEFORE US. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. THE BRIEF CONTROVERSY INVOLVED IN THIS APPEAL IS THAT IN THE HANDS OF THE ASSESSEE, PROTECTIVE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER AND SUBSTANTIVE ADDITION HAS BEEN MADE IN THE HANDS OF ONE SH. RAKESH GUPTA AT THE RATE OF 5.67 PERCENTAGE OF THE AMOUNT OF ACCOMMODATION ENTRY AS COMMISSION INCOME. ON APPEAL IN THE CASE OF SH. RAKESH GUPTA BY THE ASSESSEE, THE ADDITION HAS BEEN REDUCED BY REDUCING THE PERCENTAGE OF THE COMMISSION INCOME FROM 5.67 PERCENTAGES TO 2% BY THE LD. CIT (A IN THE HANDS OF RAKESH GUPTA. IT HAS NOT BEEN BROUGHT TO OUR NOTICE THAT IN CASE OF SH. RAKESH GUPTA WHETHER REVENUE HAS ACCEPTED THE ORD ER OF THE LD. CIT (A) OR CHALLENGED IT BEFORE THE HIGHER FORUM. THEREFORE, IT CANNOT BE ASCERTAINED THAT THIS MOMENT THAT THE SUBSTANTIVE ADDITION MADE IN THE HANDS OF THE CASE GUPTA HAS REACHED FINALITY. UNLESS THE ADDITION MADE IN THE HANDS OF SH. RAKESH GUPTA ON SUBSTANTIVE BASIS REACHES FINALITY, THE ADDITION MADE IN THE HANDS OF THE PRESENT ASSESSEE ON THE SUBSTANTIVE BASIS CANNOT BE DELETED, AS IT IS PREMATURE. IN VIEW OF THIS WE SET ASIDE THE ISSUE TO THE FILE OF THE LD. CIT (A) TO FIRST DETERMINE W HETHER THE ISSUE HAS REACHED A FINALITY IN THE HANDS OF SH. RAKESH GUPTA OR NOT AND THEN DECIDE THE ISSUE OF PROTECTIVE ADDITION OF THE PAGE 4 OF 4 SAME INCOME IN THE HANDS OF THE ASSESSEE. IN VIEW OF THIS GROUND NO. 1 AND 2 OF THE APPEAL OF THE REVENUE ARE ALLOWED WI TH ABOVE DIRECTION. 8. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 0 2 / 0 3 / 2017 . - S D / - - S D / - ( KULDIP SINGH ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 2 / 0 3 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI