M/s. Varad Builders Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 1531/DEL/2014

• Counselvise Citation: 153120114 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 30-06-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 13-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAGAN SOOD
• Keywords: Bogus Share capital; Document seized; Opportunity of being heard; Accommodation entries; Non passing of speaking order; Documents seized
• Section: 132; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 1531 /DEL/201 4 (ASSESSMENT YEAR - 200 1 - 02 ) VARAD BUILDERS PVT.LTD., 17/2868, BEADON PURA, KAROL BAGH, NEW DELHI - 110005. PAN - AAACV0438L (APPELLANT) VS DCIT, CENTRAL CIRCLE - 19, NEW DELHI (RESPONDENT ) APPELLANT BY NONE RESPONDENT BY SH.GAGAN SOOD, SR.DR ORDER BY THE PRESENT APPEAL THE ASSESSEE ASSAILS THE CORRECTNESS OF THE ORDER DATED 06.12.2013 OF CIT - 12, NEW DELHI PERTAINING TO 2001 - 02 ASSESSMENT YEAR ON VARIOUS GROUNDS INCLUDING GROUND NO. - 3 WHICH READS AS UNDER: - 3. DISPOSING APPEAL AND ALSO DISMISSING THE SAME BY WAY OF NON SPEAKING ORDER. 2. AT THE TIME OF HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE HOWEVER CONSIDERING THE MATERIAL AVAILABLE ON RECORD QUA THE GROUND RAISED AND AFTER HEARING THE LD. SR. DR , IT IS CONSIDERED APPROPRIATE TO PROCEED WITH THE PRESENT APPEAL EX - PARTE QUA THE ASSESSEE APPELLANT ON MERIT. 3. THE RELEVANT FACTS OF THE CASE AS APPEARING ON RECORD ARE THAT THE ACTION U/S 132 WAS TAKEN ON 15.12.2004 IN B.M.GUPTA GROUP OF CASES WHICH INCLUDED THE CASE OF THE ASSESSEE. DURING THE COURSE OF SEARCH AS PER THE ASSESSMENT ORDER, VARIOUS DOCUMENTS WERE FOUND AND SEIZED. APART FROM THAT OUT OF CASH OF RS.5,93,000/ - , RS.5,70,000/ - WAS SEIZED. 3.1. AS A RESULT OF THIS NOTICE U/S 153A OF THE INCOME TAX ACT, 1961 WAS ISSUED ON 13.06.2006 REQUIRING THE ASSESSEE TO FURNISH RETURN OF INCOME. IN DATE OF HEARING 30 .0 6 .2015 DATE OF PRONOUNCEMENT 24 . 0 7 .2015 I.T.A .NO. - 1531/ DEL/2014 PAGE 2 OF 3 VIEW OF THE FACT THAT NO RETURN WAS FILED I NITIALLY , NOTICES WERE AGAIN ISSUED TO THE ASSESSEE. I N RESPONSE THERETO THE ASSESSEE SUBMITTED THAT THE RETURN FILED EARLIER MAY BE TREATED TO HAVE BEEN FILE D IN RESPONSE TO NOTICE U/S 153A . T HE ASSESSEE ALSO TOOK THE POSITION THAT THERE W AS NO SEARCH OF VARAD BUILDERS PVT., 13/13, WEA PADAM SINGH ROAD, K AROL BAGH, NEW DELHI. THE SAID OBJECTION WAS NOT ACCEPTED BY THE AO WHO REFERRING TO THE PANCHNAMA AND THE DOCUMENTS ANNEXED THERETO CONCLUDED THAT THE SEIZED DOCUMENTS FROM THE RESIDENCE OF SH. B.M.GUPTA VARIOUS PRIVATE LIMITED COMPANIES HA D BEEN FLOATED BY THE SAID GROUP WHICH HA D TAKEN ACCOMMODATION ENTRIES FROM PROFESSIONAL ENTRY OPERATORS AND ACCOMMODATED ENTRIES HAD BEEN PROVIDED TO VARIOUS P A R T I E S FOUND MENTIONED IN PARA 3 & 3.1 OF THE ASSESSMENT ORDER. S TATEMENT OF SH. M AHESH G ARG WHO WAS ONE OF THE ENTRY OPERATORS RECORDED B Y THE INVESTIGATION WING ON 10.09.2008 AND 29.09.2003 WAS RELIED UPON AND CONFRONTED TO THE ASSESSEE ALON G WITH COPY O F THE SATISFACTION NOTE PREPARED. WHICH HAS BEEN EXTRACTED IN THE ASSESSMENT ORDER ITSELF CONSIDERING THE REPLY OF THE ASSESSEE . ACCORDI NGLY, IT WAS CONCLUDED AFTER REPRODUCING THE RELEVANT EXTRACTS FROM THE STATEMENT OF SH.MAHESH GARG THAT THE UNSECURED LOANS F ROM THE FOLLOWING THREE COMPANIES W A S ACTUALLY ASSESSEE S OWN MONEY WHICH WAS GIVEN IN CASH TO SH.MAHESH GARG AND RECEIVED BACK BY CHEQUE: - 1. M/S ROYAL FINVEST PVT.LTD. RS.5,00,000 2. M/S TECHNOCOM ASSOCIATES PVT.LTD. RS.3,00,000 3. M/S PARTICULAR MANAGE FINLEASE (I) PVT.LTD. RS.5,00,000 RS.13,00,000 4 . AGGRIEVED BY THIS ADDITION , THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) RAISING VARIOUS GROUND WHICH ARE FOUND MENTIONED IN PAGE 2 OF THE IMPUGNED ORDER. CONSIDERING THESE GROUND, THE CIT(A) CAME TO THE FOLLOWING CONCLUSION : - 1.1. I HAVE CONSIDERED THE GROUNDS RAISED IN APPEAL AND THE FACTS OF THE CASE. I HAVE ALSO CONSIDERED THE SUBMISSION FILED BY THE AR OF THE APPELLANT. 1.2. ON ADDITION OF RS.13,00,000/ - AS UNEXPLAINED EQUITY SHARE CAPITAL, IT IS SEEN THAT THE APPELLANT HAS INTRODUCED THE SAID AMOUNT AS SHARE CAPITAL FROM BOGUS COMP ANIES WHICH IS NOTHING BUT THE APPELLANT S OWN MONEY WHICH WAS GIVEN TO MR. MAHESH G ARG AND HIS ASSOCIATES IN CASH AND THEN TAKEN BACK IN CHEQUE. THERE IS CONCLUSIVE PROOF IN THE FORM OF BANK ACCOUNT ENTRIES AND IN THE FORM OF STATEMENTS RECORDED ON OATH OF S H RI MAHESH GARG TO CONFIRM THE FACT THAT THE AMOUNT IS NOTHING BUT THE OWN MONEY OF THE APPELLANT GIVEN TO SHRI MAHESH GARG IN CASH AND TAKEN BACK IN CHEQUE AND INTRODUCED AS EQUITY SHARE CAPITAL. I.T.A .NO. - 1531/ DEL/2014 PAGE 3 OF 3 THE ASSESSING OFFICER HAS RELIED UPON A NUMBER OF CASE LAWS TO PROVE THAT. THE STATEMENT OF SHRI MAHESH GARG AND LIST OF HIS BOGUS COMPANIES FILED B Y HIM, FORM ENCLOSURE AND PART OF THE ORDER OF ASSESSMENT, BEING STRONG EVIDENCE IN SUPPORT OF THE ADDITION MADE BY THE ASSESSING OFFICER. I HAVE NO REASON TO I NTERFERE WITH THE ORDER OF ASSESSMENT. THE ADDITION OF RS.13,00,000/ - ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL IS CONFIRMED IN APPEAL. ALL GROUNDS RAISED IN APPEAL ARE DISMISSED. (EMPHASIS PROVIDED) 5 . A PERUSAL OF THE ABOVE IN THE CONTEXT OF GROUNDS RAISED BY THE ASSESSEE SHOWS THAT THE LD. CIT(A) HAS NOT CARED TO RECORD THE ARGUMENTS ADVANCED IN SUPPORT OF THE GROUNDS RAISED. IN THE ABSENCE OF ANY RECORDING OF THE ARGUMENTS, THE INDEPENDENT REASONING OF THE CIT(A ) IN UPHOLDING THE ACTION OF THE AO OBVIOUSLY IS NOT AVAILABLE FOR JUDICIAL SCRUTINY. IN THE ABSENCE OF THE SAME, THE CONCLUSION ARRIVED AT IS OPEN TO THE CHALLENGE THAT THE LD. CIT(A) H AS DECIDED THE APPEAL WITH THE PRE - CONCEIVED NOTION THAT THE GROUNDS NECESSARILY HAVE TO BE DISMISSED. I N THE ABSENCE OF ANY DISCUSSION ON THE ARGUMENTS ADVANCED BY THE ASSESSEE , GROUND NO - 3 RAISED BY THE ASSESSEE DESERVES TO BE ALLOWED. THE IMPUGNED ORDER ACCORDINGLY IS SET ASIDE BACK TO THE FILE OF THE CIT(A ) WITH THE DIRECTION TO DECIDE THE SAME IN ACCOR DANCE WITH LAW BY WAY OF A SPEAKING ORDER AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 4 T H OF JULY , 2015. S D / - (DIVA SINGH) JUDICIAL MEMBER DATED: 2 4 /07 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI