M/s. Heritage Infracon Pvt. Ltd., New Delhi V. ACIT, Haryana

ITA 1919/DEL/2015

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2258 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHUVNESH KUL SHRESTHACIT
• Assessee Lawyers: R C RAI
• Keywords: Search and seizure; Accommodation entries
• Section: 153A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI C BEN CH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE, JUDICIAL M EMBER ITA NO. 1919/DEL/2015 [A.Y 2006-07] HERITAGE INFRACON PVT LTD VS. THE A.C.I.T UNIT NO. 502, BUILDING D. MALL CENTRAL CIRCLE NETAJI SUBHASH PALACE, PITAMPURA KARNAL NEW DELHI PAN: AABCH 6527 K (APPLICANT) ( RESPONDENT) ASSESSEE BY : SHRI R.C. RAI , CA DEPARTMENT BY : SHRI BHUVNESH KUL SHRESTHA,CIT- DR DATE OF HEARING : 03.12.2019 DATE OF PRONOUNCEMENT : 04.12.2019 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] - 3, GURGAON D ATED 27.01.2015 PERTAINING TO ASSESSMENT YEAR 2006-07. 2 2. VIDE GROUND NO. 1, THE ASSESSEE HAS CHALLENGED T HE VALIDITY OF THE ORDER FRAMED U/S 153A OF THE INCOME TAX ACT, 19 61 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] DATED 25.03.201 3 CLAIMING THAT THE ENTIRE ADDITIONS HAVE BEEN MADE WITHOUT ANY REFEREN CE TO ANY INCRIMINATING MATERIAL/EVIDENCE FOUND DURING THE CO URSE OF SEARCH AND SEIZURE PROCEEDINGS. 3. ALL OTHER GROUNDS ARE ON MERITS OF THE ADDITIONS . 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT B Y VIRTUE OF THE AUTHORIZATION OF THE DIRECTOR OF INCOME TAX [INVEST IGATION], CHANDIGARH, BUSINESS AS WELL AS RESIDENTIAL PREMISES OF M/S BES T FOOD GROUP OF CASES, KARNAL WERE SUBJECTED TO SEARCH AND SEIZURE OPERATIONS ON 23.11.2010. ACCORDINGLY, NOTICES U/S 153A OF THE A CT WERE ISSUED AND SERVED UPON THE ASSESSEE. 5. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER FORMED A BELIEF THAT M/S BEST FOO D GROUP OF KARNAL HAVE INTRODUCED THEIR OWN UNACCOUNTED MONEY IN THE FORM OF SHARE CAPITAL AND SHARE PREMIUM FROM NON-EXISTENT COMPANI ES AND CONCERNS. TAKING A LEAF OUT OF THE SEARCH PROCEEDINGS CONDUCT ED AT THE RESIDENCE 3 AND OFFICE OF SHRI SURENDRA KUMAR JAIN AND SHRI VIR ENDRA JAIN, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE JAIN BROTHERS WERE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES AND THE ASSESSEE IS ONE OF THE BENEFICIARIES OF SUCH ACCOMM ODATION ENTRIES. THE ASSESSING OFFICER COMPLETED ASSESSMENT BY MAKIN G ADDITION OF RS. 1.35 CRORES. 6. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. 6. BEFORE THE FIRST APPELLATE AUTHORITY ALSO, THE A SSESSEE HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT ON THE GR OUND THAT THE ENTIRE ADDITIONS HAVE BEEN MADE WITHOUT ANY REFERENCE TO A NY INCRIMINATING MATERIAL. HOWEVER, THE ASSESSEE COULD NOT SUCCEED BEFORE THE LD. CIT(A). 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHE MENTLY RELIED UPON THE DECISION OF THE HON'BLE HIGH COURT OF DELH I IN THE CASE OF KABUL CHAWLA 380 ITR 573 AND MEETA GUTGUTIA 395 ITR 526. THE LD. COUNSEL FOR THE ASSESSEE FURTHER RELIED UPON THE DE CISION OF THE 4 TRIBUNAL IN ONE OF THE GROUP CONCERNS OF BEST FOOD IN ITA NO. 1184/DEL/2014. 8. PER CONTRA, THE LD. DR STRONGLY SUPPORTED THE FI NDINGS OF THE ASSESSING OFFICER AND PLACED RELIANCE ON THE DECISI ON OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF E.N. GOPAKUMAR 390 ITR 131 AND DECISION OF THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF ANIL KUMAR BHATIA 552 ITR 493. 9. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE OR DERS OF THE AUTHORITIES BELOW AND HAVE CAREFULLY PERUSED THE DE CISIONS RELIED UPON BY THE LD. REPRESENTATIVES. IT IS TRUE THAT THE EN TIRE ASSESSMENT IS DEVOID OF ANY REFERENCE TO ANY INCRIMINATING MATERI AL OR EVIDENCE FOUND DURING THE COURSE OF SEARCH AND SEIZURE PROCE EDINGS. WE FIND THAT THE ASSESSING OFFICER HAS TAKEN A LEAF FROM TH E SEARCH OPERATIONS CONDUCTED AT THE PREMISES OF JAIN BROTHERS AND FORM ED A BELIEF THAT THE ASSESSEE IS ONE OF THE BENEFICIARIES OF THE ACC OMMODATION ENTRIES PROVIDED BY THE JAIN BROTHERS. HOWEVER, THE PREMIS ES OF THE ASSESSEE WERE ALSO SEARCHED AND IN THE SEARCH PROCEEDINGS, N O INCRIMINATING MATERIAL OR EVIDENCE WAS FOUND BY THE SEARCH PARTY. 5 10. SHARE APPLICATION MONEY/PREMIUM RECEIVED BY THE ASSESSEE HAS ALREADY BEEN RECORDED IN ITS BOOKS OF ACCOUNT AND R ETURN OF INCOME WAS ALREADY FILED ON 30.03.2007. NO NOTICE U/S 143 (2) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE AND BY NECESSAR Y IMPLICATION, RETURN OF INCOME WAS ACCEPTED. THE RATIO LAID DOWN BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA SQUARE LY APPLIES ON THE FACTS OF THE CASE IN HAND WHEREIN THE HON'BLE HIGH COURT HAS HELD THAT COMPLETED ASSESSMENT CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING ASSESSMENT U/S 153A OF THE ACT ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH. 11. WHILE LAYING DOWN THE AFORESAID RATIO, THE HON' BLE HIGH COURT HAS CONSIDERED THE DECISION IN THE CASE OF ANIL BHATIA 352 ITR 493, ALSO OF THE HON'BLE HIGH COURT OF DELHI. THE DECISION RELI ED UPON BY THE LD. DR IN THE CASE OF E.N. GOPAKUMAR [SUPRA] IS OF THE HON 'BLE KERALA HIGH COURT AND SINCE WE ARE GOVERNED BY THE HON'BLE JURI SDICTIONAL HIGH COURT OF DELHI, WITH OUR UTMOST RESPECT TO THE HON' BLE HIGH COURT OF KERALA, WE ARE FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE HIGH COURT OF DELHI. RESPECTFULLY FOLLOWING THE DECISION OF TH E HON'BLE JURISDICTIONAL HIGH COURT, GROUND NO. 1 IS ALLOWED AND THE ASSESSMENT ORDER IS HELD TO BE BAD IN LAW AND, ACCORDINGLY, QU ASHED. 6 12. SINCE WE HAVE QUASHED THE ASSESSMENT ORDER, WE DO NOT FIND IT NECESSARY TO DWELL INTO THE MERITS OF THE ADDITIONS . 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO. 1919/DEL/2015 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 04.12 .2019. SD/- SD/- [ SUCHITRA KAMBLE ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 04 TH DECEMBER, 2019 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 7 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.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE 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 RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER