DCIT, New Delhi V. M/s Sehgal Investments (P) Ltd., Noida

ITA 1553/DEL/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6687 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 19-04-2017
• Assessment Year: 1996-1997
• Appeal Filed On: 15-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Keywords: Unexplained investment; Additional evidence
• Section: 69; 144

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI BEFORE SHRI MS SUCHITRA KAMBLE , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 1551 & 1553 /DEL/2013 (ASSESSMENT YEAR: 1996 - 97 ) DCIT, CIRCLE - 8(1), NEW DELHI VS. SEHGAL INVESTMENTS (P) LTD, C/O. SH. PN SEHGAL, L - 7, 1 ST FLOOR, SECTOR - 12, NOIDA PAN: AABCS6168M (APPELLANT) (RESPONDENT) REVENUE BY : SHRI S.R. SENAPATI, SR. DR ASSESSEE BY: SHRI RAJ KUMAR, CA DATE OF HEARING 07/06/ 2018 DATE OF PRONOUNCEMENT 3 0 / 07 / 2018 O R D E R PER PRASHANT MAHARISHI , A. M. 1 . TH ESE ARE THE TWO APPEAL S FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - XI, NEW DELHI DATED 31.12.2012 FOR THE ASSESSMENT YEAR 1996 - 97. FIRST APPEAL IS AGAINST THE DELETION OF THE ADDITION MADE BY THE LD. CIT A ON ACCOUNT OF INVESTMENT IN SHARES OF M/S KUBER FLORITECH PVT LTD AND 2 ND AGAINST THE DELETION OF THE PENALTY UNDER SECTION 271 (1) (C) OF THE ACT ON THE SAME ADDITION LEVIED BY THE LD. ASSESSING OFFICER. THEREFORE, BOTH THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER. 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 1551/DEL/2013 : - 1. THE LD CIT(A) ERRED IN DELETING THE ADDITION OF RS. 17184100/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INVESTMENT IN SHARES OF M/S. KUBER FLORITECH LTD. PAGE | 2 3 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 1553/DEL/2013: - 1. THE LD C IT(A) IN DELETING THE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 AMOUNTING TO RS. 6873640/ - . 4 . THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A COMPANY WHO FILED ITS RETURN OF I NCOME DECLARING A LOSS OF RS. 1 44250/ ON 01/12/1997. THE ORIGINAL ASSESSMENT IN THE CASE WAS COMPLETED UNDER SECTION 143 (3) ON 31/3/1999 AT AN INCOME OF RS. 1 8386507/ . THE ASSESSMENT ORDER WAS CHALLENGED BEFORE THE COORDINATE BENCH WHO HAS SET ASIDE THE ISSUE ON WHICH THE ADDITION OF RS. 17184100/ WAS MADE ON ACCOUNT OF INVESTMENT IN THE SHARES OF THE ABOVE COMPANY AND RESTORED THIS ISSUE TO THE FILE OF THE LD. ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER EXAMINING AND VERIFYING ALL RELEVANT PARTICULARS AND DETAILS CONNECTED TO THE ISSUE. PURSUANCE TO THE ORDER OF THE COORDINATE BENCH THE LD. AO ISSUED NOTICE TO THE ASSESSEE HOWEVER NONE ATTENDED BEFORE HIM AND THEREFORE HE REPEATED THE ADDITION OF RS. 1 838 6507/ AND ORDER DATED 30/12/2009 WAS PASSED UNDER SECTION 144 READ WITH SE CTION 143 (3) READ WITH SECTION 254 OF THE INCOME TAX ACT. THE ASSESSEE CHALLENGED THE ABOVE ADDITION BEFORE THE LD. CIT A. THE ASSESSEE CONTENDED BEFORE THE LD. CIT A THAT THE INVESTMENT IN THE S HARES OF THE ABOVE COMPANY WERE DULY APPEARING IN THE A UDITED BALANCE SHEET OF THE ASSESSEE AS ON 31/3/1996. THEREFORE WHEN THE INVESTMENT IS APPEARING IN THE AUDITED ACCOUNTS THE SOURCE OF THE INVESTMENT IS AUTOMATICALLY STANDS PROVED BEING RECORDED IN PAGE | 3 THE BOOKS. IT WAS FURTHER SUBMITTED THAT IT IS NOT THE CASE WHERE THE INVESTMENT IS NOT APPEARING IN THE BALANCE SHEET. IT WAS FURTHER CONTENDED THAT PROVISIONS OF SECTION 69 IS NOT APPLICABLE SINCE THE SAID SECTION IS APPLICABLE ONLY WHERE THE INVESTMENTS ARE NOT RECORDED IN THE BOOKS OF ACCOUNTS. THE ASSESSE E FURTHER EXPLAINED THAT THE COMPLETE INVESTMENT WAS MADE THROUGH ACCOUNT PAYEE CHEQUES FROM THE REGULAR BANK ACCOUNT OF THE ASSESSEE NAMELY ORIENTAL BANK OF COMMERCE NEW DELHI AND COMPLETE DETAILS WERE PROVIDED FOR. THE LD. CIT A CALLED FOR THE REMAND R EPORT FROM THE ASSESSING OFFICER SINCE THE ASSESSEE HAS MADE AN APPLICATION UNDER RULE 46A OF THE INCOME TAX RULES 1962. THE LD. ASSESSING OFFICER SUBMITTED A REPORT WHICH WAS GIVEN TO THE ASSESSEE FOR SUBMITTING REJOINDER. THE ASSESSEE SUBMITTED A REJOIND ER AND FURTHER REITERATED THE FUND FLOW STATEMENT SUBMITTED. THE LD. CIT A NOTED THAT THE AO HAS NOT GIVEN ANY COMMENT ON THE SPECIFIC ISSUE WHICH WAS TO EXAMINE THE FUND FLOW STATEMENT OF THE DATES ON WHICH THE INVESTMENTS WERE MADE THEREFORE IT WAS NOTE D BY HIM THAT THE COORDINATE BENCHES ALSO STATED THAT THE ASSESSEE HAD SHOWN LOAN OBTAINED BY THE BANK DURING THE YEAR IN WHICH INVESTMENT IN SHARES OF THE ABOVE COMPAN Y WERE MADE. IN VIEW THEREOF HE FIND NO REASON TO DISBELIEVE THAT THE APPELLANT HAS NOT MADE THE INVESTMENT OF RS. 1 718 4100 IN S HARES OF K UBER FLORI TECH P LTD . HE THEREFORE DELETED THE ADDITION. THEREFORE, AGAINST THE ORDER OF THE FIRST APPELLATE AUTHORITY REVENUE IS IN APPEAL BEFORE US. 5 . THE LD. DEPARTMENTAL REPRESENTATIVE 1 ST APPLIED FOR THE ADJOURNMENT, WHICH WAS REJECTED AS THERE WAS NO SPECIFIC REASON SHOWN BUT ONLY MENTIONED THAT THAT THE RECORDS ARE REQUIRED TO BE VERIFIED . THEREAFTER PAGE | 4 THE LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY RELIED UPON THE ORDER OF THE LD. ASSESSING OFFICER AN D SUBMITTED THAT WHEN THE ASSESSEE HAS NOT SUBMITTED ANY DETAILS BEFORE THE ASSESSING OFFICER THERE IS NO REASON TO DELETE THE ABOVE ADDITION. HE FURTHER SUBMITTED THAT MERELY BECAUSE THE INVESTMENTS HAVE BEEN RECORDED IN THE BOOKS OF ACCOUNTS AND THE AUD ITED BALANCE SHEET WITHOUT VERIFICATION OF THE BOOKS OF ACCOUNTS IT CANNOT BE SAID THAT THE ADDITION CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. 6 . THE LD. AUTHORIZED REPRESENTATIVE RELIED UPON THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX A STATING THAT WHEN THE ASSESSEE HAS SHOWN THE FUND FLO W STATEMENT AS WELL AS DISCLOSED THE INVESTMENT IN THE BALANCE SHEET THERE IS NO REASON TO HOLD THAT SUCH INVESTMENTS ARE NOT RECORDED IN THE BOOKS OF ACCOUNTS. HE SUBMITTED THAT THE LD. CIT A HAS RECORDED THE PRO PER REASONS FOR ADMISSION OF THE ADDITIONAL EVIDENCE AS WELL AS CALLED FOR THE REMAND REPORT OF THE ASSESSING OFFICER AND REJOINDER TO THE ASSESSEE. HE SUBMITTED THAT THERE IS NO REASON TO SUSPECT THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS THEY ARE AUDITED A ND A PROPER FUND FLOW WAS SUBMITTED. IN VIEW OF THIS HE SUBMITTED THAT THE ADDITION HAS BEEN RIGHTLY DELETED BY THE LD. CIT A. 7 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND PER USED THE ORDERS OF THE LOWER AUTHORITIES. THE LD. CIT A HAS DELETED T HE WHOLE ADDITION HOLDING ASSESSEE HAS SHOWN THE INVESTMENT IN THE BALANCE SHEET. FURTHER, THE FUND FLOW STATEMENT WAS ALOS PROVIDED SHOWING THE SOURCES OF THE FUNDS FOR MAKING INVESTMENT IN THOSE SHARES. THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY A RE AUDITED. FURTHER THE INVESTMENTS ARE ALSO ROUTED THROUGH THE BANK ACCOUNT OF THE ASSESSEE WHICH IS ALSO PAGE | 5 SHOWN IN THE BOOKS OF ACCOUNTS. THERFORE THERE IS NO REASON TO SAY THAT THESE ARE UNACCOUNTED INVESTMENTS OF THE ASSESSEE. LD. DEPARTMENTAL REPRE SENTATIVE COULD NOT FIND OUT ANY INFIRMITY IN THE ORDER OF THE LD. CIT A. FURTHER THE LD. CIT A HAS DELETED THE WHOLE ADDITION AS THE INVESTMENT HAS BEEN RECORDED IN THE BOOKS OF ACCOUNTS AND THE ASSESSEE HAS SUBMITTED A COMPLETE FUND FLOW STATEMENT TH ERE FROM THE MONEY HAS COME AND THE SOURCE OF INVESTMENT MADE IN THE ABOVE COMPANY FOR SHARES. FURTHER, THE TRANSACTIONS HAVE BEEN ENTERED INTO BY THE ASSESSEE THROUGH ORIENTAL BANK OF COMMERCE, NEW DELHI BRANCH THAT IS ALSO IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT A IN DELETING THE ADDITION OF RS. 1 718 4100/ MADE BY THE LD. ASSESSING OFFICER ON ACCOUNT OF INVESTMENT IN SHARES OF M/S KUBER F LORITECH P LTD . IN THE RESULT, THE SOLITARY GROUND OF THE APPEAL OF THE REVENUE DOES NOT SURVIVE AND HENCE DISMISSED. 8 . IN THE RESULT ITA NO. 1551/DEL/2013 FOR ASSESSMENT YEAR 96 97 FILED BY THE REVENUE IS DISMISSED. 9 . THE ITA NO. 1553/DEL/2013 FILED BY THE LD. ASSESSING OFFICER IS WITH RESPECT TO THE DELETION OF THE PENALTY LEVIED UNDER SECTION 271 (1) ( C) OF THE INCOME T AX ACT, 1961 AMOUNTING TO RS. 6 8,73,640 ON THE ADDITION MADE BY THE LD. ASSESSING OFFIC ER IN INVESTMENT OF SHARES OF KUBER FLORTICH P LTD . AS WEVE ALREAD CONFIRMED THE DELETION OF ADDITION BY THE LD. CIT APPEAL OF UNACCOUNTED INVESTMENT IN SHARES OF THE ABOVE COMPANY, THE APPEAL OF THE REVENUE AGAINST THE DELETION OF THE PENALTY BY THE LD. CIT A DOES NOT SURVIVE AS THE ADDITION ITSELF HAS BEEN DELETED. PAGE | 6 IN THE RESULT, THE SOLITARY GR OUND OF APPEAL IN ITA NO. 1553/D EL/2013 IS DISMISSED. 10 . IN THE RESULT ITA NO. 1553/DEL/2013 FOR ASSESSMENT YEAR 1996 97 FILED BY THE LD. ASSESSING OFFICER IS DISMISSED. 11 . ACCORDINGLY BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 0 / 07 / 2018 . - S D / - - S D / - ( SUCHITRA KAMBLE ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 0 / 07 / 2018 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI