M/s. Shankar Gas & Mfg. Co. Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1834/DEL/2014

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2891 (ITAT-DELHI)
• Duration Of Justice: 10 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 31-03-2024
• Assessment Year: 2003-2004
• Appeal Filed On: 27-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice; Accommodation entries; Reassessment proceedings
• Section: 147; 68; 148; 40A(3); 143(3); 143(1)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No. 1834/Del/2014 Asstt. Year: 2003-04 Shankar Gas & Mfg. Co. Pvt. Ltd. M/s. D. Ostwal & Associates, FCA 303-304, Dhaka Chambers 2068/38, Naiwala, Karol Bagh, New Delhi – 110 005 PAN AABCN5053E Vs. ITO, Ward No. 6(3) New Delhi. (Appellant) (Respondent) O R D E R PER ASTHA CHANDRA, JM The appeal filed by the assessee is directed against the order dated 23.01.2014 of the Ld. Commissioner of Income Tax (Appeals)-IX, New Delhi (“CIT(A)”) pertaining to Assessment Year (“AY”) 2003-04. 2. The assessee has raised the following concise grounds of appeal:- “1. The CIT(A) has erred, in upholding the illegal action without jurisdiction and without following the procedure laid down in section 147 to 151 by the ITO hence order is void ab intio liable to be quashed. 2. The Re-assessment proceedings without issue/service of the Notice u/s 148 are void ab initio, illegal and unauthorized by law. 3. Impugned assessment order without removing the objection raised by the appellant regarding illegal assumption of jurisdiction by Ld. A.O. by passing a speaking order. Assessee by: None Department by: Shri Anuj Garg, Sr. DR Date of Hearing: 01.04.2024 Date of pronouncement: 22.04.2024 ITA No. 1834/Del/2014 2 4. The impugned order passed by obtaining behind the back of the appellant some alleged statements /information none of which had been made available to the appellant nor any opportunity provided to rebut the same and there was not even a show cause notice specifically proposing to make any addition nor any effective opportunity of hearing and hence, the impugned order passed in violation of natural justice is liable to be quashed. 5. The illegal addition of Rs. 63, 00,000/- as unexplained cash credit u/s 68 perversely made by the ITO. 6. The illegal addition of Rs. 50, 00,000/- as unexplained credit u/s 68 perversely made by the ITO. 7. The illegal addition of Rs. 58, 40,000/- as unexplained credit u/s 68 perversely made by the ITO. 8. The illegal addition of Rs.5, 172/ on account of payment made u/s 40A (3) made by the ITO.” 3. Vide application dated 25.02.2019 the assessee prayed for admission of the following additional ground: "On the facts and circumstances of the case the authority in below have erred both on facts and in law that notices under sections 143 (2) of the Income Tax Act, which is mandatory and essential for any valid assessment /re- assessment had not been issued and served on the assessee and hence the impugned orders of assessment as well as revision cannot be sustained and hence the same are liable to be vacated as non-east in law." 4. It is an old appeal. Hearing was fixed recently on 23.10.2023, 10.01.2024 and 01.04.2024 but none attended for and/or on behalf of the assessee. Power of attorney is also not available in the records of the Tribunal. We, therefore, proceed to decide the appeal exparte after hearing the Ld. DR who was present on all the above date(s) of hearing. 5. We first take up the additional ground for consideration. The Ld. DR submitted that no doubt the issue raised is legal but it would require verification from the records. No such plea/ground was taken before the Ld. CIT(A). ITA No. 1834/Del/2014 3 6. We agree with the submission of the Ld. DR. The issue involves investigation into the facts. We, therefore, decline to admit the additional ground. 7. Now we take up the concise grounds for adjudication. 8. The facts in brief are that the amalgamating company i.e. M/s. Maverick Sweets & Foods Limited was engaged in the business of sale and purchase of shares. It filed its return for AY 2003-04 declaring income of Rs. 1661/- on 02.12.2003. The return was processed under section 143(1) of the Income Tax Act, 1961 (the “Act”) on 26.02.2004. On receipt of information from the DDI(Inv.) New Delhi that during the year the assessee was in receipt of accommodation entries totalling to Rs. 1,45,05,000/-, the case was re-opened by issue of notice dated 26.03.2010 under section 148 of the Act. During reassessment proceedings, it was submitted that out of 28 entries, 2 entries involving a sum of 10 lakhs related to subsequent year. Hence total credit received was Rs. 74,05,000/- only out of which entries relating to Rs. 11,05,000/- related to two parties viz. KVF Securities Pvt. Ltd. and Kanodia Pharmaceutical Pvt. Ltd. and represented share application refund paid earlier by the company. This was accepted. For the remaining Rs. 63 lakhs the Ld. Assessing Officer (“AO”) held that the explanation of the assessee that the said amount was relating to share application money was not substantiated which he added to the income of the assessee under section 68 of the Act. The Ld. AO further added sum aggregating to Rs. 50 lakhs in the name of 4 parties and another sum of Rs. 58,40,000/- in the name 14 parties to the income of the assessee under section 68 of the Act. An amount of Rs. 5,172/- was also added under section 40A(3) of the Act. Thus, the assessment was completed on total income of Rs. 1,71,46,830/- vide assessment order dated 24.12.2010 under section 143(3) r.w. section 147 of the Act. ITA No. 1834/Del/2014 4 9. The assessee challenged the validity of the re-opening of the assessment as also the aforementioned additions before the Ld. CIT(A) who vide his appellate order dated 23.01.2014 dismissed the appeal of the assessee upholding the validity of re-opening as also the impugned additions. This has brought the assessee before the Tribunal and all the grounds relate thereto. 10. As stated earlier, there was no representation before us by the side of the assessee. The Ld. DR submitted that he supports the order of the Ld. AO/CIT(A) in toto. 11. We have considered the submission of the Ld. DR and perused the records. We have gone through the orders of the Ld. AO/CIT(A). We observe that the Ld. AO has re-opened the assessment of the assessee after adhering to the legal formalities and framed the reassessment after giving reasonable opportunity to the assessee and after due verification. The Ld. CIT(A) has also dealt with each ground taken before him very exhaustively and assigning cogent reasons in support of each and every finding recorded by him. We, therefore have no reason to interfere with his findings. Consequently, we reject all the grounds taken by the assessee before us. 12. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 22 nd April, 2024. sd/- sd/- (G.S. PANNU) (ASTHA CHANDRA) VICE PRESIDENT JUDICIAL MEMBER Dated: /04/2024 Veena Copy forwarded to - 1. Applicant ITA No. 1834/Del/2014 5 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr. PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order