M/s. Best City Estate Management Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 1755/DEL/2014

• Counselvise Citation: 175520114 RSA 2014
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 12-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: RAJESH ARORA
• Keywords: Unexplained expenditure; Document seized; Opportunity of being heard; Documents seized
• Section: 69; 132; 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC - I NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 1755/ DEL/201 4 (ASSESSMENT YEAR - 200 9 - 10 ) BEST CITY ESTATE MANAGEMENT PVT.LTD., PLOT NO. - H - 8, 1 ST FLOOR, BEST PLAZA, NETAJI SUBHASH PLACE, PITAMPURA, NEW DELHI - 110034. PAN - AA CCB7635D (APPELLANT ) VS ACIT, CENTRAL CIRCLE - 4, NEW DELHI (RESPONDENT ) APPELLANT BY SH.RAJESH ARORA, CA RESPONDENT BY SH.P.DAM KANUNJNA, SR. DR ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 11.11.2013 OF CIT(A) - XXXIII, NEW DELHI PERTAINING TO 2009 - 10 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: - 1. THE LD/ - CIT(A) HAS ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS.L,53,708/ - ON ACCOUNT OF MAINTENANCE CHARGES, WHICH IS ARBITRARY, BASELESS, UNJUSTIFIED, BAD IN LAW AND MERELY ON PRESUMPTION & SURMISES. 2. THE LD/ - CIT(A) HAS ERRED IN LAW AND FACTS OF THE CASE, IN IGNORING THE DETAILS OF THE ASSESSEE AND CONFIRMING THE DISALLOWANCE OF ADMINISTRATIVE EXPENSES AMOUNTING TO RS.4,03,50O/ - INCURRED BY THE ASSESSEE COMPANY DURING THE YEAR UNDER REF ERENCE, WHICH IS ARBITRARY, BASELESS, UNJUSTIFIED, BAD IN LAW AND MERELY ON PRESUMPTION & SURMISES. 3. THE ASSESSEE CRAVES THE RIGHT TO ADD, AMEND OR MODIFY ANY GROUND OF APPEAL. 2. THE ASSESSEE IN THE PRESENT PROCEEDINGS HAD ALSO FILED A PETITION UNDER RULE 29 SEEKING PERMISSION TO FILE FRESH EVIDENCES. HOWEVER , THE LD. AR INVITING ATTENTION TO THE IMPUGNED ORDER SUBMITTED THAT ON FACTS EVEN OTHERWISE THE ISSUE NEED S TO BE SENT BACK TO THE AO AS RELEVANT FACTS HAVE NOT BEEN TAKEN DATE OF HEARING 12.10 .2015 DATE OF PRONOUNCEMENT 11 .12 .2015 I.T.A .NO. - 1755/ DEL/201 4 PAGE 2 OF 5 INTO CONSIDERATION. BEFORE ADDRESSING THE ARGUMENTS ON BEHALF OF THE ASSESSEE, IT WOULD BE APPROPRIATE TO FIRST ADDRESS THE RELEVANT FACTS OF THE CASE. THE RECORD SHOWS THAT THE BUSINESS PREMISES OF THE ASS ESSEE AT H - 8, 1 ST FLOOR, BEST PLAZA, NETAJI SUBHASH PLACE, PITAMPURA, NEW DELHI OF BEST GROUP W ERE SEARCHED U/S 132 OF THE INCOME TAX ACT, 1961 ON 15.09.2008. AS PER RECORD THE GROUP WAS CARRYING ON ACTIVITIES OF REAL ESTATE DEVELOPMENT AND RELATED SER VICE S. THE GROUP WAS MANAGED BY SH. HARJEET SINGH, SH. ANU AGARWAL AND OTHERS AND THE ASSESSEE IS ONE OF THE COMPANY OF THIS GROUP. DURING THE SEARCH, PAPERS AND OTHER ASSETS WERE FOUND. 3. THE RETURN FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE AS SESSEE ON 29.09.2009 DECALING A TOTAL INCOME OF RS.1,67,715/ - . THE AO CONSIDERING THE FACTS AND AFTER HEARING THE ASSESSEE MADE THE ADDITION OF RS.1,53,708/ - VIDE HIS ORDER U/S 143(3) R.W.S. 153A ON THE BASIS OF ANNEXURE A - 6 (PAGE - 53) ATTACHED AS AN ANNEX URE TO THE ASSESSMENT ORDER FOR THE REASONS SET OUT IN PARA 4 TO PARA 4.4 DISCARDING THE EXPLANATION DATED 04.09.2010 & 29.10.2010. THE SAME IS REPRODUCED HEREUNDER FOR READY - REFERENCE: - 4. ANNEXURE A - 6 (PAGE NO 53) 4.1 . AS PER SEIZED MATERIAL ANNEXU RE A - 6 (PAGE NO 53) FOUND FROM BUSINESS PREMISES AT H - 8. BEST PLAZA, NETAJI SUBHASH PLACE, PITAMPURA, NEW DELHI OF 'BEST GROUP', THIS PAPER IS A BILL AMOUNT ING TO RS, 81,854/ - ISSUED BY M/ S ANAND SECURITIES SERVICES DATED 01 - 09 - 2008 ISSUED TO M /S BEST CITY. IT CONTAINS DETAILS OF MAINTENANCE CHARGES / SECURITY CHARGES FOR F.Y. 2008 - 09 RELEVANT TO A.Y. 2009 - 10. THE SAME ARE ANNEXED WITH THE ASSESSMENT ORDER AS PER ANNEXURE - 1. THE SUMMARIZED DETAIL IS ASUNDER: - RECEIPT NO. & DATE UNIT NO. & PERIOD OF MAINTENANCE CHARGES NAME OF CONCERNED PARTY DETAILS OF SECURITY CHARGES REMARKS S.NO.91 01.09.08 H - 8, NS P , PITAMPURA, N.D. SECURITY SERVICES FOR THE MONTH OF AUG. 2008 M/S BEST CITY ESTATE MANAGEMENT (P.) LTD. & M/S ANAND SECURITIES SERVICES RS.81,854/ - (76854+5000) PAYMENT RS.73,400/ - REFLECTED AND NO DETAILS OF BALANCE PAYMENT AMOUNT. PERUSAL OF THIS PAPER - BILL S. NO. 91 DATED 01 - 09 - 2008 SHOWS THAT TOTAL AMOUNT OF RS.81,854/ - WAS CHARGED FOR SECURITY SERVICES OF THE ABOVE MENTIONED SITE FROM THE ASSE SSEE COMPANY FOR THE MONTH OF AUG, 2008 AND ALSO BALANCE PAYMENT OF RS 5000/ - WAS CHARGED FOR THE MONTH OF JU LY, 2008. THE ASSESSEE WAS SPECIFICALLY ASKED VIDE NOTICE DATED 03 - 09 - 2010 TO VERIFY THIS BILL ISSUED BY M / S ANAND SECURITIES SERVICES IN ITS BOOKS OF ACCOUNT. FURTHER VIDE NOTICE DATED 08 - 10 - 2010 AND ORDER SHEET ENTRY DATED 11 - 11 - 2010, ASSESSEE WAS GIVEN OPPORTUNITY TO SHOW CAUSE WHY THESE I.T.A .NO. - 1755/ DEL/201 4 PAGE 3 OF 5 TRANSACTIONS MAY NOT BE TREATED AS UNACCOUNTED EXPENDITURE PAID IN CASH BY THE ASSESSEE COMPANY. 4.2 . THE ASSESSEE VIDE ITS WRITTEN REPLY DATED 04 - 09 - 2010 IS STATED AS UNDER: - 'ANNEXURE A - 6 - PAGE 53A: - THIS IS A COPY OF DRAFT UNDERTAKING RECEIVED BY BEST INFRASTRUCTURE INDIA P VT. LTD. FROM THERE CUSTOMER AT THE LIME OF ALLOTMENT OF UNIT. THIS DOCUMENT DOE S NOT CONTAIN ANY TRANSACTION ENTERED BY THE ASSESSEE COMPANY' . THE REPLY SUBMITTED BY THE ASSESSEE IS IN RESPECT OF PAGE NO. 53A OF ANNEXURE A - 6 AND NOT IN RESPECT OF PAGE NO. 53 OF ANNEXURE A - 6 , WHICH WAS SPECIFICALLY ASKED VIDE NOTICES SUPRA - ABOVE. THUS, THERE IS NO REPLY ON THIS ISSUE I.E . ANNEXURE A - 6 PAGE NO. 53 AS PER EXPLANATION SUBMITTED ON 29 - 10 - 2010. 4.3 . THE ASSESSEE WAS CONFRONTED AGAIN VIDE ORDER SHEET ENTRY DATED 19 - 1 1 - 2010. IN RESPONSE TO THIS QUERY, NO FURTHER WRITTEN SUBMISSION WAS FILED BY THE ASSESSEE AND IT WAS VERBALLY STATED BY THE AUTHORIZED R EPRESENTATIVE THAT WRITTEN REPLY DATED 28 - 10 - 2010 MAY BE TREATED AS FINAL SUBMISSION. THAT MEANS THE ASSESSEE HAS REPEATED THE EARLIER VERSION. 4.4. THE SUBMISSION OF THE ASSESSEE VIDE WRITTEN REPLY DATED 04 - 09 - 2010, 29 - 10 - 2010 IS NOT PROPER AND DOES NOT RECONCILE THE MENTIONED IN THE SEIZED DOCUMENTS AS MENTIONED ABOVE. FURTHER, MAINTENANCE CHARGES - SECURITY CHARGES ACCOUNT HAS BEEN FILED BY THE ASSESSEE WHICH ALSO DOES NOT RECONCILE T HE ABOVE STATED ENTRIES. IT IS PERTINENT TO MENTION HERE THAT LEDGER ACCOUNT OF M/S ANAND SECURITY GROUP FOR THE PERIOD 01 - 04 - 2008 TO 31 - 03 - 2009 IN THE ASSESSEE BOOKS OF ACCOUNT REFLECTED W.E.F 01 - 11 - 2008 ONWARD. IT CLEARLY INDICATES THAT PAYMENT OF RS.1,5 3,708/ - (76,854/ - X 2) WAS MADE TO M/S ANAND SECURITY GROUP FOR THE PERIOD OF JULY AND AUGUST 2008. THERE IS NO DETAIL PAYMENT MADE AND BALANCE AMOUNT IN ASSESSEE'S LEDGER ACCOUNT (ANNEXED ANNEXURE - 2 OF THIS ASSESSMENT ORDER). DESPITE PROVIDING ADEQUATE OPP ORTUNITY TO THE ASSESSEE, NO PROPER EXPLANATION BEEN RECEIVED FROM THE ASSESSEE COMPANY TO SUBSTANTIATE ITS CLAIM. THE AMOUNT OF CASH PAYMENT ON ACCOUNT OF SECURITY CHARGES TOTALING TO RS.1,53,708/ - IS BEING TREATED AS UNACCOUNTED CASH EXPENDITURE NOT RECO RDED IN THE BOOKS OF ACCOUNT BY THE ASSESSEE COMPANY U/S 69 OF THE INCOME TAX ACT, 1961. PENALTY PROCEEDING U/S 271AAA OF THE INCOME TAX ACT, 1961 IS BEING INITIATED FOR CONCEALING THE PARTICULARS OF INCOME. (ADDITION - RS.1,53,708/ - ) 3.1. IN APPEAL BEFO RE THE FIRST APPELLATE AUTHORITY THE ARGUMENTS MADE BEFORE THE AO WERE RE - ITERATED WHEREIN IT WAS AGAIN SUBMITTED THAT THE SEIZED DOCUMENT IS A COPY OF THE FORMAT PROVIDED TO THE ASSESSEE BY M/S ANAND SECURITY SERVICES TO SHOW HOW THE BILL SHOULD BE RAISED . S UBMISSIONS TO THIS EXTENT ARE FOUND RECORDED AT PAGE 9 TO 13 OF THE IMPUGNED ORDER HOWEVER THE LD. CIT(A) DID NOT ACCEPT THE SAME. I.T.A .NO. - 1755/ DEL/201 4 PAGE 4 OF 5 4. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. IN THE ABOVE BACKGROUND, THE LD. AR AGAIN ADDRESSING THE ANNEXURE REITERATED THAT ANAND SECURITY SERVICES HAD PROVIDED A FORMAT IN WHICH F O R M THE BILLS WERE REQUIRED TO BE RAISED. A PE RUSAL OF THE SAID ANNEXURE IT WAS SUBMITTED WOULD SHOW THAT THE NAME OF M/S PEALRS BEST HEIGHTS - II WITH ADDRESS PLOT NO. - 09, NETAJI SUBHASH PLACE, NEW DELHI HAS BEEN CUT OFF AND AS A FORMAT IT WAS SHOWN THAT THEREIN THE ASSESSEE S NAME WAS TO BE REFLECTED . THE SEIZED DOCUMENT WAS A FORMAT/EXAMPLE PROVIDED AND FOR THE SAME THE PAYMENT WOULD HAVE BEEN MADE BY M/S PEARLS BEST HEIGHTS - II OF NETAJI SUBHASH PLACE AND WAS DEFINITELY NEVER MADE BY THE ASSESSEE . IT WAS HIS SUBMISSION THAT IF THE ASSESSEE S ARGUM ENT ARE NOT BEING ACCEPTED BY THE TAX AUTHORITIES THEN THEY SHOULD ATLEAST VERIFY THE CORRECTNESS OF THE SUBMISSIONS AND CANNOT OUTRIGHTLY DISAGREE MERELY BECAUSE THERE HAS BEEN A SEARCH. THE SAID SUBMISSION W AS NOT OPPOSED BY THE LD. SR. DR. 6 . CONSIDERING THE SUBMISSIONS READ ALONG WITH THE OBSERVATION S MADE IN THE ASSESSMENT ORDER AT PARA 4.4, I FIND THAT IN ORDER TO ADJUDICATE UPON THE ISSUE, IT IS NECESSARY THAT THE REVENUE INSTEAD OF PROCEEDING ON DOUBT S SHOULD VERIFY THE ACTUAL POSITION FR OM M/S ANAND SECURITY SERVICES. IN THE FACTS OF THE PRESENT CASE IT IS SEEN THAT THE SPECIFIC DOCUMENTS WERE FOUND FROM THE ASSESSEE AND THE PURPOSE WHY IT WAS FOUND HAS BEEN EXPLAINED AS A FORMAT. THE ASSESSEE HAS CONSISTENTLY DENIED THE PAYMENT ON THI S ACCOUNT WHICH HAS ALSO BEEN DULY SUPPORTED BY THE LEDGER ACCOUNT OF THE ASSESSEE. IN THESE CIRCUMSTANCES, IF THE REVENUE WANTS TO OPPOSE THE SAID CLAIM IT NEED S TO VERIFY THE POSITION FROM ANAND SECURITY SERVICES . A CCORDINGLY FOR NECESSARY INQUIRY THE ISSUE IS RESTORED BACK TO THE FILE OF AO. 7 . ADDRESSING THE SECOND GROUND RAISED BY THE ASSESSEE, THE LD. AR HAS SUBMITTED THAT ADHOC ADDITION @10% OF ADMINISTRATIVE EXPENSES CLAIMED HAVE BEEN MADE BY THE AO. THE ISSUE CHALLENGED BEFORE THE CIT(A WAS REJE CTED HOLDING THAT LEDGERS OF EXPENSES CLAIMED IS NOT SUFFICIENT PROOF. IN THE SAID BACKGROUND IT WAS HIS CLAIM THAT THE AO IN THE COURSE OF THE ASSESSMENT PROCEEDINGS NEVER REQUIRED THE ASSESSEE TO PRODUCE THE COPY OF THE BILLS AND IN THE EV ENTUALITY THA T PRODUCTION OF THE SAME WAS CONSIDERED TO BE NECESSARY BY THE CIT(A) THEN THE CIT(A) SHOULD HAVE PROVIDED AN OPPORTUNITY TO DO SO . IN THESE PECULIAR FACTS AND CIRCUMSTANCES IT WAS THE LIMITED REQUEST OF THE LD. AR I.T.A .NO. - 1755/ DEL/201 4 PAGE 5 OF 5 THAT THE ISSUE MAY BE RESTORED TO THE AO PERMITTING THE ASSESSEE TO PRODUCE THE NECESSARY BILLS AND VOUCHERS AS IT WAS NEVER THE CLAIM OF THE ASSESSEE THAT THE BILLS COULD NOT BE PRODUCED. THE SAID PRAYER WAS NOT OBJECTED TO BY THE LD. SR. DR. 8. ACCORD INGLY IN THE LIGHT OF THE SUBMISSIONS ADVANCED BY THE PARTIES BEFORE THE BENCH, I AM OF THE VIEW THAT IN THE INTERESTS OF SUBSTANTIAL JUSTICE, IT WOULD BE APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER ON THIS COUNT ALSO AND RESTORE THE ISSUE BACK TO THE FILE O F THE AO PERMITTING THE ASSESSEE TO PRODUCE THE RELEVANT BILLS AND VOUCHERS. THE LD.AO CONSIDERING THE SAME SHALL P ASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. THE SAID ORDER WAS PRONOUN CED ON THE DATE OF HEARING ITSELF IN THE OPEN COURT. 9 . IN THE RESULT, THE APPE AL OF THE ASSESSEE IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 1 T H OF DECE MBER, 2015. S D / - (DIVA SINGH) JUDICIAL MEMBER DATED: 1 1 /1 2 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI