M/s. Best City Projects (india) Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 1754/DEL/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4082 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 25-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH A AA A : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1754/DEL/2014 1754/DEL/2014 1754/DEL/2014 1754/DEL/2014 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2008 2008 2008 2008 - -- - 09 0909 09 M/S BEST CITY PROJECT (INDIA) M/S BEST CITY PROJECT (INDIA) M/S BEST CITY PROJECT (INDIA) M/S BEST CITY PROJECT (INDIA) PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., PLOT NO.H PLOT NO.H PLOT NO.H PLOT NO.H- -- -8, 1 8, 1 8, 1 8, 1 ST STST ST FLOOR, FLOOR, FLOOR, FLOOR, BEST PLAZA, BEST PLAZA, BEST PLAZA, BEST PLAZA, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, NETAJI SUBHASH PLACE, PITAMPURA, PITAMPURA, PITAMPURA, PITAMPURA, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 034. 110 034. 110 034. 110 034. PAN : AACCB7635D. PAN : AACCB7635D. PAN : AACCB7635D. PAN : AACCB7635D. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF INCOME ASSISTANT COMMISSIONER OF INCOME ASSISTANT COMMISSIONER OF INCOME ASSISTANT COMMISSIONER OF INCOME TAX, TAX, TAX, TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -4, 4,4, 4, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VED JAIN, CA. RESPONDENT BY : SHRI RAVI JAIN, CIT - DR. DATE OF HEARING : 09.08.2016 09.08.2016 09.08.2016 09.08.2016 DATE OF PRONOUNCEMENT : 11.08.2016 11.08.2016 11.08.2016 11.08.2016 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: :- -- - THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-0 9 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXXIII , NEW DELHI DATED 11 TH NOVEMBER, 2013. 2. THE ONLY GROUND RAISED BY THE ASSESSEE READS AS UNDER:- THE LD.CIT(A) HAS ERRED IN LAW & FACTS OF THE CASE BY IGNORING THE SUBMISSIONS MADE BY THE ASSESSEE COMPANY AND IN CONFIRMING THE ADDITIONS OF RS.90,00,000/- AS UNEXPLAINED CREDIT U/S 68 OF THE ACT, WHICH IS NOT BA SED ON SEIZED MATERIAL AND IS MERELY BASED ON SURMISES, ESTIMATES AND IS HIGHLY ARBITRARY, UNJUSTIFIED, BAD IN LAW, UNCALLED FOR AND MERELY ON PRESUMPTION OF THE LD.A.O . ITA-1754/DEL/2014 2 3. AT THE TIME OF HEARING BEFORE US, IT IS STATED BY T HE LEARNED COUNSEL THAT DURING THE ACCOUNTING YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE ENTERED INTO AN AGREEM ENT TO SELL 10 ACRES OF LAND AT VILLAGE SHIMLA MAULANA, PANIPAT, HA RYANA FOR A SUM OF `20,96,32,500/- TO M/S GREENCITY BUILDTECH LIMITED. THE ASSESSEE HAD RECEIVED THE ADVANCE OF `90 LAKHS AGAINST THE AGREEM ENT TO SELL. HOWEVER, BY MISTAKE, THE SUM OF `90 LAKHS WAS SHOWN AS L OAN AND ADVANCE. THAT DURING THE ASSESSMENT PROCEEDINGS, THE A SSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE CONFIRMATION O F THE SAID PARTY. THAT THE SAID PARTY VIZ., M/S GREENCITY BUILD TECH LIMITED WAS AVOIDING THE PAYMENT OF BALANCE AMOUNT AND GETTING THE LAND REGISTERED IN ITS NAME AND, THEREFORE, IT AVOIDED THE ASSESSEE. THEREFORE, THE ASSESSEE COULD NOT FURNISH ANY CONFIRMATI ON FROM THE SAID PARTY. THAT DURING THE PROCEEDINGS BEFORE THE C IT(A), THE ASSESSEE SUBMITTED THE COPY OF AGREEMENT TO SELL BETWEEN THE ASSESSEE AND M/S GREENCITY BUILDTECH LIMITED. THE CIT(A ) ADMITTED THE SAME. HOWEVER, HE SUSTAINED THE ADDITION ON THE G ROUND THAT THE ASSESSEE HAS NOT SUBMITTED THE ORIGINAL AGREEMENT TO SELL AND IT IS HUMANLY IMPROBABLE THAT A PERSON WHO HAS GIVEN `90 LA KHS TO OTHER WILL BECOME UNTRACEABLE TO THE PERSON WHO HAS TO REPA Y THE SAME. HE STATED THAT PROBABLY AT THE RELEVANT TIME, M/S GREENC ITY BUILDTECH LIMITED WAS NOT IN A POSITION TO PAY `20 CRORES TO THE ASSESSEE AND, THEREFORE, THEY AVOIDED THE ASSESSEE. LEARNED CIT(A) I GNORED THIS IMPORTANT FACT AND HAS ONLY CONSIDERED THE ADVANCE PA ID BY M/S GREENCITY BUILDTECH LIMITED WHICH WAS EVEN LESS THAN 5 % OF THE TOTAL SALE CONSIDERATION. HE STATED THAT NOW THE ASSESSEE HAS BE EN ABLE TO TRACE M/S GREENCITY BUILDTECH LIMITED AND IF THE MAT TER IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER, THE ASSESSEE WILL BE A BLE TO FURNISH NOT ONLY THE CONFIRMATION BUT ALL OTHER EVIDENCES ON REC ORD. ITA-1754/DEL/2014 3 4. LEARNED DR, ON THE OTHER HAND, RELIED UPON THE O RDER OF THE LEARNED CIT(A) AND HE REITERATED THAT IT IS HIGHLY I MPROBABLE THAT A PERSON WHO HAS GIVEN THE SUM OF `90 LAKHS TO THE ASSESSEE W ILL BECOME UNTRACEABLE. IT IS ALWAYS POSSIBLE THAT A PERSO N WHO HAS RECEIVED THE MONEY WILL BECOME UNTRACEABLE BECAUSE H E HAS TO PAY BACK THE MONEY BUT IT CAN NEVER HAPPEN THAT A PERSON WHO HAS PAID THE MONEY WILL DISAPPEAR. HE ALSO STATED THAT SINCE AD EQUATE OPPORTUNITY HAS ALREADY BEEN ALLOWED BY THE ASSESSING OF FICER, THE ADDITION MADE BY THE ASSESSING OFFICER SHOULD BE SUSTAINED . 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PER USED THE ORDER OF THE ASSESSING OFFICER AND LEARNED CIT(A). WE FIND THAT LEARNED CIT(A) HAS ADMITTED THE AGREEMENT TO SELL BETWEEN THE ASSESSEE AND M/S GREENCITY BUILDTECH LIMITED AS ADDITIONAL EVIDEN CE. HOWEVER, AFTER ADMITTING THE SAME, LEARNED CIT(A) FAILED TO CONSIDER THE SAME IN ITS TOTALITY. ON ONE HAND, LEARNED CIT(A) ADMITTED THE SAME BUT, AT THE SAME TIME, HE DOUBTED THE AUTHENTICITY OF AGREEMENT TO SELL. HE ALSO FAILED TO NOTICE THE IMPORTANT FACT THAT AS PER AGRE EMENT TO SELL, THE ASSESSEE HAD AGREED TO SELL 10 ACRES OF LAND FOR A SUM OF `20,96,32,500/-. THOUGH M/S GREENCITY BUILDTECH LIM ITED HAD GIVEN THE ADVANCE OF `90 LAKHS BUT THEY HAD TO PAY MORE TH AN `20 CRORES TO THE ASSESSEE. THEREFORE, THE PRESUMPTION THAT THE ASSESSEE WAS TO PAY THE AMOUNT AND M/S GREENCITY BUILDTECH LIMITED W AS TO RECEIVE THE AMOUNT IS CONTRARY TO THE AGREEMENT TO SELL. IN OUR OPINION, IT WOULD MEET THE ENDS OF JUSTICE IF THE ORDERS OF LOWER AUTHORITIES ARE SET ASIDE AND MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER. WE ORDER ACCORDINGLY AND DIRECT THE ASSESSING OFFICER TO A LLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ALSO DIR ECT THE ASSESSEE TO PRODUCE ALL THE EVIDENCES BEFORE THE ASSESSING O FFICER IN SUPPORT OF ITS CONTENTION THAT THE SUM OF `90 LAKHS WAS RECEIVED AS ADVANCE FROM M/S GREENCITY BUILDTECH LIMITED. IT WI LL ALSO PRODUCE ITA-1754/DEL/2014 4 NECESSARY EVIDENCE TO ESTABLISH THE CREDITWORTHINESS OF M /S GREENCITY BUILDTECH LIMITED. THEREAFTER, THE ASSESSING OFFICER W ILL READJUDICATE THE ISSUE IN ACCORDANCE WITH LAW AFTER CONSIDERING ALL THE MATERIAL AS MAY BE PLACED BEFORE HIM BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 11.08.2016. SD/- SD/- (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE (SUCHITRA KAMBLE ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S BEST CITY PROJECT (INDIA) PVT. LTD., M/S BEST CITY PROJECT (INDIA) PVT.LTD., M/S BEST CITY PROJECT (INDIA) PVT.LTD., M/S BEST CITY PROJECT (INDIA) PVT.LTD., PLOT NO.H PLOT NO.H PLOT NO.H PLOT NO.H- -- -8, 1 8, 1 8, 1 8, 1 ST STST ST FLOOR, BEST PLAZA, FLOOR, BEST PLAZA, FLOOR, BEST PLAZA, FLOOR, BEST PLAZA, NETAJI SUBHASH PLACE, PITAMPURA, NETAJI SUBHASH PLACE, PITAMPURA, NETAJI SUBHASH PLACE, PITAMPURA, NETAJI SUBHASH PLACE, PITAMPURA, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 034. 110 034. 110 034. 110 034. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -4, NEW DELHI. 4, NEW DELHI. 4, NEW DELHI. 4, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR