ACIT, New Delhi V. M/s. Sea Point Trading & Builders Pvt. Ltd., New Delhi

ITA 1731/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7068 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 01-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRANITA M BISWAS
• Keywords: Unexplained cash credit; Search and seizure
• Section: 133(6); 68; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1731/DEL/2016 ASSESSMENT YEAR: 2012-13 ACIT, CENTRAL CIRCLE-2, E-2, ARA CENTRE, JHANDEWALAN, EXTN., NEW DELHI. VS SEA POINT TRADING & BUILDERS PVT. LTD., R/O B-4/43, 2 ND FLOOR, SAFDARJUNG ENCLAVE, NEW DELHI. PAN: AABCS0741C (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : MS PRANITA M. BISWAS, CIT, DR DATE OF HEARING : 12.03.2019 DATE OF PRONOUNCEMENT : 30.04.2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 29 TH JANUARY, 2016 OF THE CIT(A)-23, NEW DELHI, RELATING TO ASSESSMENT YEAR 2012-13. 2. THIS APPEAL WAS FIXED FOR A NUMBER OF TIMES. HO WEVER, DUE TO NON-APPEARANCE ON THE PART OF THE ASSESSEE, THE CASE WAS GETTING A DJOURNED FROM TIME TO TIME. SINCE, ON THE LAST OCCASION ALSO NOBODY APPEARED, THEREFOR E, THE CASE WAS ADJOURNED FOR HEARING TO 12 TH MARCH, 2019. HOWEVER, TODAY, WHEN THE NAME OF THE ASSESSEE WAS ITA NO.1731/DEL/2016 2 CALLED, NOBODY APPEARED ON BEHALF OF THE ASSESSEE. THEREFORE, THIS APPEAL IS BEING DISPOSED OF ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY INCORPORATED ON 13 TH SEPTEMBER, 1995 AND IS ENGAGED IN THE BUSINESS OF REAL-ESTATE DEVELOPMENT. THE ORIGINAL RETURN OF INCOME U/S 139 WAS FILED ON 27 TH SEPTEMBER, 2011 DECLARING A LOSS OF RS.4,237/-. ON THE BASIS OF A SEARCH AND SEIZURE O PERATION IN THE CASE OF SS GROUP OF CASES ON 8 TH FEBRUARY, 2013, THE CASE OF THE ASSESSEE WAS REOPE NED AFTER RECORDING REASONS. THE ASSESSEE, IN ITS RESPONSE TO THE NOTIC E U/S 148, SUBMITTED THAT THE ORIGINAL RETURN FILED U/S 139 OF THE ACT MAY BE TREATED AS R ETURN FILED IN RESPONSE TO NOTICE U/S 148. THE ASSESSING OFFICER, THEREAFTER, ISSUED STAT UTORY NOTICES U/S 143(2) AND 142(1). DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HE OBS ERVED THAT THE ASSESSEE HAS RECEIVED NON-CURRENT LIABILITY AMOUNTING TO RS.6, 35,00,000/- FROM M/S MANAN MERCHANDISE PVT. LTD. DURING THE YEAR. HE ASKED THE ASSESSEE TO FURNISH THE COPY OF RETURN, AUDIT REPORT, BALANCE SHEET AND BANK ACCOUN T STATEMENT REFLECTING THE ABOVE TRANSACTION AND JUSTIFY THE AMOUNT RECEIVED. FROM VARIOUS DETAILS FILED BY THE ASSESSEE REGARDING M/S MANAN MERCHANDISE PVT. LTD., THE ASSE SSING OFFICER NOTED THAT THE COMPANY IS HAVING NIL INCOME FOR THE ASSESSMENT YEA R 2012-13. FURTHER, THE BALANCE SHEET REVEALED THAT THE ASSESSEE WAS NOT ENGAGED IN ANY REGULAR PROFIT GENERATING ACTIVITY. THE BANK ACCOUNT STATEMENT OF M/S MANAN MERCHANDISE PVT. LTD. REFLECTS THAT IT HAS BEEN USED SIMPLY FOR TRANSFERRING THE A MOUNTS TO THE ACCOUNTS OF THE ITA NO.1731/DEL/2016 3 ASSESSEE COMPANY. THE ASSESSING OFFICER ISSUED NOT ICE U/S 133(6) OF THE ACT TO THE COMPANIES FROM WHOM MANAN MERCHANDISE PVT. LTD. HAS RECEIVED MONEY WHICH WAS, IN TURN, TRANSFERRED TO THE ASSESSEE COMPANY. HOWE VER, ALL THESE NOTICES WERE RETURNED UNSERVED WITH THE REMARKS NOT KNOWN/INSUFFICIENT A DDRESS. THE ASSESSING OFFICER, THEREAFTER, ANALYSED THE SEQUENCE OF EVENTS AND NOT ED THAT ALL THESE FIVE COMPANIES ARE KOLKATA BASED PAPER COMPANIES AND THEY DO NOT HAVE THE SOURCE TO GIVE SUCH HUGE AMOUNT TO MANAN MECHANDISE PVT. LTD., WHO, IN TURN, HAS TRANSFERRED THE MONEY TO THE ASSESSEE COMPANY. REJECTING THE VARIOUS EXPLANATIO NS AND INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT, THE ASSESSING OFFICER MADE A N ADDITION OF RS.6,35,00,000/- TO THE TOTAL INCOME OF THE ASSESSEE. IN APPEAL, THE LD .CIT(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REV ENUE IS IN APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING GROUNDS:- 1. THE ORDER OF LD.CIT(A) IS NOT CORRECT IN LAW AN D ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.6,35,00,000/- MA DE BY THE A.O. ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT RECEIVED FROM M/S MANAN MERCHANDISE PVT. LTD. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ALL THE GROUND OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF THE APPEA L. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE FIND THE ASSESSEE, IN THE INSTANT CASE, HAS RECEIVE D AN AMOUNT OF RS.6.35 CRORES FROM M/S MANAN MERCHANDISE PVT. LTD., A GROUP COMPANY, W HICH , IN TURN, HAS RECEIVED THE ITA NO.1731/DEL/2016 4 MONEY FROM KOLKATA BASED PAPER COMPANIES. NEITHER M/S MANAN MERCHANDISE NOR THE KOLKATA BASED COMPANIES FROM WHOM M/S MANAN MER CHANDISE PVT. LTD. HAS RECEIVED MONEY ARE DOING ANY REAL BUSINESS AND ALL THESE COMPANIES ARE PAPER COMPANIES. 6. WE FIND, RECENTLY, THE HON'BLE SUPREME COURT IN THE CASE OF NRA ISPAT (P) LTD. ARISING OUT OF SLP (CIVIL) NO.29855 OF 2018 HAD AN OCCASION TO DECIDE AN IDENTICAL ISSUE WHERE THE DECISION OF THE HON'BLE DELHI HIGH COURT WAS REVERSED ON THE GROUND THAT THE SHARE APPLICANTS ARE PAPER COMPANIES WITHO UT DOING ANY REAL BUSINESS AND HAD NO CAPACITY TO INVEST SUCH AMOUNTS WHEN THEIR RETUR NED INCOME WAS VERY NEGLIGIBLE. 7. SIMILARLY, THE HON'BLE DELHI HIGH COURT IN THE C ASE OF NDR PROMOTERS PVT. LTD., VIDE ITA NO.49/2018, ORDER DATED 17.01.2019 HAS UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER U/S 68 ON ACCOUNT OF SHARE CAPITA L AND SHARE PREMIUM HOLDING THAT THE TRANSACTIONS IN QUESTION WERE CLEARLY SHAM AND MAKE BELIEVE WITH EXCELLENT PAPER WORK TO CAMOUFLAGE THEIR BOGUS NATURE. 8. IN VIEW OF THE ABOVE DECISIONS WHICH WERE RENDER ED SUBSEQUENT TO THE DATE OF HEARING OF THE APPEAL, WE DEEM IT PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE CIT(A) WITH A DIRECTION TO ADJUDICATE THE ISSUE AFRESH IN THE LIGHT OF THE ABOVE DECISIONS. NEEDLESS TO SAY, THE LD.CIT(A) SHALL GIVE DUE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDE THE ISSUE AS PER FACT AND LAW. WE HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1731/DEL/2016 5 9. IN THE RESULT, THE APPEAL FILED BY THE REV ENUE IS ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 3 0.04.2019. SD/- SD/- (KULDIP SINGH) (R.K. PANDA) JUDICIAL MEMBER ACCO UNTANT MEMFBER DATED: 30 TH APRIL, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI