Tanya Automobiles Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 1842/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6684 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 28-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit
• Section: 234B; 201; 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. N. K. CHOUDHARY, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 1842/DEL/2017 : ASSTT. YEAR : 201 1-12 M/S TANYA AUTOMOBILES PVT. LTD., C/O SANDEEP SAPRA, ADV., C-763, NEW FRIENDS COLONY, NEW DELHI-110025 VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-16(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AA ACT3639B ASSESSEE BY : SH. SANDEEP SAPRA, ADV. REVENUE BY : SH. ABHISHEK KUMAR, SR. DR DATE OF HEARING: 05 . 0 2 .2020 DATE OF PRONOUNCEMENT: 05 .02 .2020 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT(A)-9, NEW DELHI DATED 20.01.20 17. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT THE LD. CIT (A) HAS ERRED ON FACTS AND UND ER THE LAW IN CONFIRMING THE ADDITION OF RS.35,00,000/ - AS MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CREDIT RECEIVED FROM M/S INFRAHEIGHTS PVT. LTD. U/S 68 OF I.T. ACT ANY RATE, THE ADDITION AS MADE IS VERY EXCESSIVE. 2. THAT THE LEVY OF INTEREST U/S 234B AND U/S 234C IS ARBITRARY, UNJUST, ILLEGAL AND AT ANY RATE, WITHOUT PREJUDICE, VERY EXCESSIVE. 3. BRIEF FACTS RELEVANT TO THE CASE ARE THAT THE AS SESSEE RECEIVED AN AMOUNT OF RS.35,00,000/- AS LOAN FROM O NE ITA NO. 1842/DEL/2017 TANYA AUTOMOBILES PVT. LTD. 2 COMPANY NAMELY, M/S HERITAGE INFRAHEIGHTS PVT. LTD. (HIPL). THE ASSESSING OFFICER AFTER MAKING DUE ENQUIRIES HE LD THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS AND CREDIT WORTHINESS OF THE CREDITOR AND HENCE MADE ADDITION U/S 68 OF T HE INCOME TAX ACT, 1961. THE ENQUIRIES CONDUCTED BY THE REVEN UE AND THE RESULTS THEREOF ARE AS UNDER: I. THE PREMISES OF THE LENDER COMPANY FOUND TO BE RESIDENTIAL PREMISES AND THE TENANTS FEIGNED IGNORA NCE ABOUT EXISTENCE OF ANY SUCH COMPANY. II. THE RETURN OF INCOME IS ONLY RS.7,780/- AND EVERY D EBIT IS PRECEDED BY A CREDIT OF EXACTLY THE SAME AMOUNT AND APART FROM THAT THE BALANCE IN THE BANK WAS ALWAYS MINIMAL. III. THE CREDITWORTHINESS HAS NOT BEEN PROVED. IV. THERE IS NO SUSTAINABLE BUSINESS ACTIVITY OF THE CR EDITOR. 4. BASED ON THE ABOVE RESULTS, THE REVENUE HELD THA T THE EXPLANATION OF THE ASSESSEE REGARDING THE SOURCE OF THE MONEY IS NOT SATISFACTORY WHICH LED TO ADDITION OF THIS A MOUNT. 5. DURING THE ARGUMENTS BEFORE US, THE LD. AR ARGUE D THAT THE ASSESSEE HAS SUBMITTED REVISED ADDRESS AND ENQU IRIES HAVE BEEN MADE BY THE ASSESSING OFFICER WHICH HAVE NOT B EEN REFERRED BY THE LD. CIT (A) IN HIS ORDER. FURTHER, IT WAS ARGUED THAT NOT ONLY THE SOURCE BUT SOURCE OF SOURCE OF TH E AMOUNT OF RS.35,00,000/- HAS BEEN FURNISHED TO THE REVENUE AU THORITIES. THE AMOUNT OF RS.35,00,000/- HAS BEEN RECEIVED ON 20.12.2010 THROUGH RTGS FROM HIPL. THE AMOUNT OF RS.15,00,000/- HAS BEEN RETURNED THROUGH RTGS ON 10.01.2011 AND AN AMOUNT OF RS.20,00,000/- ON 07.02 .2011 AND THUS, THE TOTAL AMOUNT OF RS.35,00,000/- HAS BE EN ITA NO. 1842/DEL/2017 TANYA AUTOMOBILES PVT. LTD. 3 REFUNDED WITHIN A SPAN OF TWO MONTHS. IT WAS ARGUED THAT THIS FACT HAS NOT BEEN CONSIDERED BY THE REVENUE AUTHORI TIES. 6. REGARDING THE SOURCE OF SOURCE, IT WAS ARGUED TH AT THE AMOUNTS HAVE BEEN RECEIVED BY THE CREDITOR COMPANY HIPL ON 09.11.2010 FROM VATIKA NIRMAN PVT. LTD.(VNPL) THE L D. AR, THUS ARGUED THAT AFTER RECEIPT OF THE MONEY FROM VN PL IN THE MONTH OF NOVEMBER 2010 BY HIPL, THE AMOUNTS HAVE BE EN GIVEN AS LOAN TO THE ASSESSEE IN THE MONTH OF DECEM BER 2010. THE LD. AR FURTHER ARGUED THAT THE AMOUNTS HAVE BEE N RECEIVED FROM ONE CONCERN NAMELY, DEV PRIYA PRODUCTS LTD. BY VNPL. THE LD. AR ARGUED THAT THE COPY OF ITR, BANK STATEM ENT, CONFIRMATIONS HAVE BEEN FILED BY ALL THE THREE PART IES THUS PROVING SOURCE AND ALSO THE SOURCE OF SOURCE. IT WA S ALSO ARGUED THAT DURING THE REMAND PROCEEDINGS, SUMMONS U/S 131 HAVE BEEN ISSUED TO THE DIRECTORS OF THE LENDER COM PANY HIPL AND SH. BHARAT BHUSHAN GUPTA, THE DIRECTOR OF THE H IPL HAS DULY APPEARED AND GIVEN STATEMENT CONFIRMING THE FA CT OF ISSUING THE LOAN. IT WAS ALSO ARGUED THAT THE INSPE CTOR HAS ALSO INDEPENDENTLY GATHERED THE DOCUMENTS FROM THE LENDE R COMPANY, THUS THE ALLEGATION OF THE REVENUE THAT TH E LENDER COMPANY WAS NOT TRACEABLE AT THE GIVEN ADDRESS IS N OT ACCEPTABLE. 7. THE LD. DR, ON THE OTHER HAND, ARGUED THAT THE B USINESS OF THE LENDER COMPANY IS NOT SUBSTANTIATED, THE SOU RCES HAVE NOT BEEN PROVED. HE ALSO ARGUED THAT EVEN THE LENDE R COMPANYS SOURCE OF VATIKA NIRMAN PVT. LTD. IS ALSO QUESTIONABLE AS THE RETURN INCOME OF THAT COMPANY I S ONLY RS.1,46,291/- AND EVEN THE COMPANY DEV PRIYA PRODUC TS LTD. IS ITA NO. 1842/DEL/2017 TANYA AUTOMOBILES PVT. LTD. 4 ALSO AN ENTITY OF MEAGER MEANS. FURTHER, HE ARGUED THAT THE ADDRESS GIVEN BY THE ASSESSEE REGARDING THE LENDER FOUND OUT TO BE A PURELY RESIDENTIAL PREMISES AND HENCE IT CA NNOT BE ACCEPTED THAT A COMPANY IS EXISTING AND OPERATING F ROM THAT PREMISES. 8. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. 9. REGARDING THE PREMISES, WE FIND FROM THE RECORD THAT THE OWNER OF THE PREMISES HAS FILED A LETTER BEFORE THE DCIT ON 11.12.2014 THAT HE IS THE OWNER OF THE PREMISES AND HIS PREMISES HAVE BEEN GIVEN FOR USE AS THE REGISTERED OFFICE OF HIPL. THE INSPECTOR, SH. OMBIR SINGH HAS COLLECTED THE INFORMATION FROM HIPL DIRECTLY FROM THE OFFICE ADDR ESSED AT 308, MEERUT MALL, MEERUT. HE COULD ALSO SERVE NOTIC E TO SH. PRADEEP KUMAR AGARWAL, DIRECTOR OF THE COMPANY. FUR THER, SH. BHARAT BHUSHAN GUPTA, THE ANOTHER DIRECTOR OF THE L ENDER COMPANY HAS ALREADY DEPOSED BEFORE THE REVENUE AUTH ORITIES CONFIRMING THE LOAN WHICH THE REVENUE COULD NOT DIS PUTE OR FOUND TO BE INCORRECT. THE SOURCE OF THE AMOUNT LEN T IS ALSO PROVED AND ALSO THE SOURCE OF SOURCE TO THE EXTENT THAT THE ASSESSEE RECEIVED FROM HIPL WHO IN TURN RECEIVED FR OM VNPL, WHO IN TURN RECEIVED THE MONEY FROM DEV PRIYA PRODU CTS LTD. ALL THE PARTIES HAVE FILED THEIR CONFIRMATIONS REGA RDING THE FACT THAT THE AMOUNTS HAVE BEEN GIVEN AS LOAN. 10. THUS, KEEPING IN VIEW THAT FACT THAT SOURCES HA VE BEEN PROVED UPTO THREE STAGES BACKWARDS, THE IDENTITY, G ENUINENESS AND CREDITWORTHINESS HAS BEEN ESTABLISHED, THE REVE NUE COULD NOT PROVE THE CASE THAT ANY UNACCOUNTED MONEY HAS B EEN ITA NO. 1842/DEL/2017 TANYA AUTOMOBILES PVT. LTD. 5 INFUSED INTO THE SYSTEM, NO CASH DEPOSITS IN ANY BA NK ACCOUNTS OF ALL THE THREE PARTIES ADVANCING THE LOAN AND THE IR CATEGORICAL ADMISSION OF CONFIRMING THE LOAN DURING THE REMAND PROCEEDINGS, WE ARE OF THE CONSIDERED VIEW THAT THE LOAN RECEIVED BY THE ASSESSEE CANNOT BE CHARGED TO TAX U /S 68 OF THE ACT IN THE ABSENCE OF ANY CONTRARY EVIDENCE BRO UGHT BY THE REVENUE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/02/2020. SD/- SD/- (N. K. CHOUDHARY) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED: 05/02/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR