M/s. United Refrigeration & Industries, New Delhi V. ACIT, New Delhi

ITA 1960/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5450 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2007-2008
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: ANKITA GUPTA
• Keywords: Opportunity of being heard; Wholly owned subsidiary
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-1960/DEL/2015 ( ASSESSMENT YEAR : 2007-08) UNITED REFRIGERATION & INDUSTRIES 21/73, OLD RAJINDER NAGAR, NEW DELHI PAN NO. AAAFC2025R VS ACIT CENTRAL CIRCLE 1 NEW DELHI. ASSESSEE BY SH. ANKITA GUPTA, ADV. REVENUE BY SMT. APARNA KARAN, CIT (DR) ORDER PER SHRI K.N. CHARY, J.M. AGGRIEVED BY THE ORDER DATED 12.01.2015 IN APPEAL NO. 505/14-15 & 506/14-15 PASSED BY THE LD. COMMISSIONE R OF INCOME TAX (APPEALS)-VI, NEW DELHI. ASSESSEE PREFE RRED THIS APPEAL. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE CLAIMS TO H AVE BEEN DEALING WITH THE ELECTRICAL AND ELECTRONIC PRODUCTS , REFRIGERATION AND AIR CONDITIONING PLANTS. IN THE SEARCH AND SEI ZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER RE FERRED TO AS THE DATE OF HEARING 02.05.2018 DATE OF PRONOUNCEMENT 02.05.2018 2 ITA NO. 1960/DEL/2015 ACT) CARRIED ON 24.01.2007 IT WAS FOUND THAT THE ASSESSEE IS A 100% WHOLLY OWNED SUBSIDIARY OF TRANS WORLD ICT BRI TISH VIRGIN ISLANDS THAT WAS A GROUP COMPANY OF FIRST CURACAO I NTERNATIONAL BERMUDA. ACCORDING TO THE ASSESSEE AN INTERNET BAN KING ACCOUNT WAS FRAUDULENTLY OPENED ON THEIR NAME IN THE BANK O UTSIDE INDIA AND OPERATED THROUGH TRANS WORLD ITC SOLUTIONS LTD. BANGALORE WHICH HAS COME TO THE KNOWLEDGE IN THE SEARCH OPERA TIONS. THE ACCOUNT WAS OPENED IN CONTRAVENTION WITH THE PARTNE RSHIP DEED AND THAT THE SIGNATURE ON THE ACCOUNT OPENED WERE F OUND TO BE FORGED. FURTHER, THE PROMOTER OF THE SAID BANK AND THE TRANS WORLD ITC SOLUTIONS LTD. BANGALORE WERE FACING A NU MBER OF CASES OF FRAUD. NEITHER THE BANK OFFICIALS NOR THE OFFIC IALS OF TRANS WORLD ITC SOLUTIONS LTD. BANGALORE WERE PRODUCED FOR CROS S EXAMINATION DESPITE THE REQUEST FOR IT. IN THE CIRCUMSTANCES, ADDITION WAS MADE TO THE INCOME OF THE ASSESSEE. SIMULTANEOUSLY , PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED AND BY WAY OF ORDER DATED 28.03.2012. LD. ASSESSING OFFICER LEVIED A PENALTY OF RS. 6,61,44,600/- WHICH THE LD. COMMISSIONER OF INCOME TAX CONFIRMED IN APPEAL. HENCE, THE APPEAL BEFORE US I N THIS APPEAL, CHALLENGING THE SAID CONFIRMATION. 3. AT THE OUTSET, IT IS BROUGHT TO OUR NOTICE BY TH E LD.AR THAT IN THE APPEAL AGAINST THE QUANTUM ADDITION, A COORDINA TE BENCH OF THIS TRIBUNAL IN ITA NO. 431/DEL/2011 FOR THE AY 20 07-08 SET ASIDE THE MATTER TO THE FILE OF THE LD. AO FOR ADJU DICATION AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONA BLE 3 ITA NO. 1960/DEL/2015 OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. REVENU E DOES NOT CONTRADICT THIS FACT PLEADED BY THE ASSESSEE. 3.1 WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE ARGUMENTS ADVANCED BEFORE US BY THE PARTIES. WE HA VE PERUSED THE COMMON ORDER DATED 22.03.2017 IN ITA NO. 430/DE L/2011 AND 431/DEL/2011 FOR THE ASSESSMENT YEARS 2006-07 & 200 7-08. VIDE PARAGRAPH NO. 12, A COORDINATE BENCH OF THIS TRIBUN AL SET ASIDE THE CASE FOR BOTH THE ASSESSMENT YEARS AND REMANDED TO THE FILE OF THE AO FOR AFRESH ADJUDICATION. IN THE CIRCUMSTANC ES INASMUCH AS THE QUANTUM IS NOT ENFORCEABLE, THE PENALTY DOES NO T SURVIVE TILL THE FRESH ADJUDICATION TAKES PLACE. WE, THEREFORE, SET ASIDE THE MATTER TO THE FILE OF THE AO FOR CONSIDERATION OF T HE ASPECT OF PENALTY WHICH SHALL ABIDE BY THE RESULT IN THE REMA NDED MATTER. WITH THIS VIEW, WE SET ASIDE THE ISSUE TO THE FILE OF THE LD. AO TO TAKE A FRESH DECISION AFTER THE ASSESSMENT IS COMPL ETED PURSUANT TO THE ORDERS 430 & 431/DEL/2011. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 02.05.2018 SD/- SD/- (G.D. AGRAWAL) (K. NARSIMHA C HARY) PRESIDENT JUDICIAL MEMB ER DATED: 02.05.2018 *KAVITA ARORA 4 ITA NO. 1960/DEL/2015 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DRAFT DICTATED ON 02.05.2017 DRAFT PLACED BEFORE AUTHOR DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 02.05.18 KEPT FOR PRONOUNCEMENT ON 02.05.18 FILE SENT TO THE BENCH CLERK 03.05.18 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.