ITO, New Delhi V. M/s Radha Ballabh Nest Build Pvt. Ltd., New Delhi

ITA 2044/DEL/2011

• Counselvise Citation: 204420114 RSA 2011
• Duration Of Justice: 3 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 09-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: SUMANGCA SAXENA
• Keywords: Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI I.C. SUDHIR , JUDICIAL MEMBER AND SHRI T.S.KAPOOR , ACCOUNTANT MEMBER ITA NO. 2044 /DEL/20 1 1 ASSESSMENT YEAR : 2008 - 09 ITO WARD - 15(1) NEW DELHI VS. RADHA BALLABH NEST BUILD PVT. LTD. H - 69, DDA FLATS, ASHOK VIHAR, PHASE - 1 NEW DELHI AADCR1979H (APPELLANT) (RESPONDENT) APPELLANT BY : SH SATPAL SINGH, SR. D.R. RESPONDENT BY : MS. SUMANGCA SAXENA , ADV. O R D E R PER I.C. SUDHIR, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) X VI II, NEW DELHI DATED 28 . 02 .201 1 AND PERTAINS TO ASSESSMENT YEAR 2008 - 09 . 2. THE REVENUE HAS QUESTIONED FIRST APPE LLATE ORDER ON THE FOLLOWING GROUND S - : 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DIRECTING THE A.O. TO COMPUTE THE INCOME OF ITA NO. 2044 /D/20 1 1 2 THE ASSESSEE BY APPLYING NET RATE OF 2.24% ON THE GROSS RECEIPTS OF RS. 1,89 ,10,000/ - WHICH WAS RECEIVED FROM M/S PACL INDIA LTD IN THE GARB OF LAND DEVELOPMENT EXPENSES. THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF 4% COMMISSION ON DEBIT AND CREDIT ENTRIES OF RS. 4,04,98,631/ - I.E. 16,99,945/ - REGARDING PROVI DING ACCOMMODATION ENTRIES TO THE ABOVE SAID COMPANY. 2. THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 4,28,501/ - MADE IN RESPECT OF TDS AMOUNT CLAIMED FROM M/S PACL INDIA LTD. 3 . AT THE OUTSET OF HEARING THE LD. AR POINTED OUT THAT THE ISSUES RAISED IN THE GROUNDS ARE FULLY COVERED BY THE ORDER DATED 18.4.2013 OF THE T RIBUNAL IN THE CASE OF ASSESSEE GROUP RADHA BALLABH BUILDERS PVT. LTD. FOR THE ASSESSMENT YEAR 2008 - 09 IN ITA NO . 2042 AND 2043/ DEL/2011. SHE ALSO POINTED OUT THAT THE ISSUES ARE ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE ASSESSEE GROUP CASES IN RISHIKESH PROPERTIES PVT. LTD. F OR THE ASSESSMENT YEAR 2006 - 07 IN ITA NO. 2061/DEL/20 09 DATED 18.12.2009 AND IN CASE OF RISHIKESH BUILDCON PVT. LTD. AND RUPA PROMOTERS PVT. LTD. FOR THE ASSESSMENT YEAR 2006 - 07. 4 . THE LD. DR, HOWEVER, PLACED RELIANCE ON THE ASSESSMENT ORDER WHILE SUPPORTING THE GROUNDS OF THE APPEAL. 5 . HAVING GONE THROUGH THE ABOVE CITATION IN THE CASE S OF ASSESSEE GROUPS FOR THE ASSESSMENT YEAR 2008 - 09, WE FIND THAT UNDER ALMOST SIMILAR FACTS IDENTICAL ISSUES HAVE BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE PRESENT ASSESSEE. IN THE PRESENT YEAR , ALSO IN TH E CASE OF THE ASSESSEE, THE ASSESSING OFFICER HAS MADE ADDITION S OF RS. 4,28,501/ - AND RS. 16,99,945/ - ON ACCOUNT OF TDS AMOUNT CLAIMED FROM PACL INDIA LTD. AND ITA NO. 2044 /D/20 1 1 3 4% COMMISSION ON THE CREDIT ENTRIES IN THE BANK ACCOUNT. THE LD. CIT(A) HAS DEALT WITH THE ISS UES IN DETAIL AND AFTER CONSIDERING THE CASES OF THE PARTIES ON THE ISSUES HE HAS COME TO THE FOLLOWING CONCLUSION - : 5.1 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS MADE BY THE LD. AR AS PER THE ASSESSMENT ORDER, THE AO HAS HELD THAT THE WORK DONE BY THE APPELLANT COMPANY FOR M/S PACL INDIA LTD. IS NOT GENUINE. THE AO IS OF THE VIEW THAT THE TDS OF RS. 4,16,038/ - DEDUCTED BY ABOVE COMPANY IS THE ONLY ACTUAL INCOME OF THE APPELLANT. THE AO HAS ACCORDINGLY, ADDED THE ABOVE AMO UNT. THE AO HAS, FURTHER, ADDED AN AMOUNT OF RS. 21,38,280/ - BEING COMMISSION AT THE RATE OF 4% IN RESPECT OF THE CREDITS AND DEBITS IN THE BANK ACCOUNT WHICH ARE ALLEGEDLY ACCOMMODATION ENTRIES. IN THIS REGARD, THE LD. AR, APART FROM MAKING THE ABOVE SUBM ISSION, HAS SUBMITTED COPY OF PREDECESSOR AO S ORDER WHEREIN HE HAS ACCEPTED THE RESULTS SHOWN BY THE ASSESSEE COMPANY EXCEPT FOR THE VOUCHERS WHICH WERE NOT MADE READILY AVAILABLE TO THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS FOR THE AY 2007 - 08. THE LD. AR HAS ALSO SUBMITTED ASSESSMENT ORDERS OF THE OTHER GROUP COMPANIES FOR THE AY 2008 - 09 NAMELY M/S BEST INFRACON PVT. LTD AND M/S BEST PROPMART PVT. LTD. WHEREIN THE AO HAS ACCEPTED THE RESULTS SHOWN BY THESE ASSESSEE COMPANIES AND MADE ADDITIONS ONLY FOR THE VOUCHERS NOT READILY AVAILABLE. THE LD. AR HAS ALSO SUBMITTED COPY OF THE APPELLATE ORDER INT EH CASE OF THE GROUP COMPANY M/S RISHIKESH PROPERTIES PVT. LTD. FOR THE EARLIER YEAR (A.Y. 2006 - 07) PASSED BY THE LD. PREDECESSOR CIT(A) XVIII, NEW DELHI I N APPEAL NO. 93/08 - 09 VIDE ORDER DATED 27.02.2009 AND BY THE HON BLE ITAT, DELHI VIDE ORDER IN ITA NO. 2061/B/2009 DATED 18.12.2009 AND IN THE CASE OF OTHER GROUP COMPANIES, VIZ. M/S P.P BUILDMART (P) LTD. A.Y. 2006 - 07 PASSED BY CIT(A) XVII, NEW DELHI VI DE ORDER IN APPEAL NO. 10/CIT(A) - XVII /DEL/09 - 10 DATED 27.04.2010 AND M/S JATADHARI BUILDERS PVT. LTD. A.Y. 2007 - 08 PASSED BY LD. CIT(A) - VII, NEW DELHI VIDE ORDER DATED 27.05.2010 IN APPEAL NO. 123/2009 - 10 ON IDENTICAL ISSUES. IT IS POINTED OUT BY THE LD. A R THAT ON IDENTICAL ISSUE IN THE CASE OF THE M/S RISHIKESH PROPERTIES PVT. LTD., M/S RISHIKESH BUILDCON PVT. LTD. AND M/S RUPA PROMOTERS PVT. LTD. ETC. IN THE EARLIER YEAR, THE ADDITIONS MADE WERE DELETED BY THE LD. CIT(A) AND THE APPEAL FILED BY REVENUE H AS BEEN DISMISSED BY THE HON BLE ITAT IN THE CASE OF M/S RISHIKESH BUILDCON PVT. LTD. AND M/S RUPA PROMOTERS PVT. LTD. FOR A.Y. 2006 - 07 WHILE IN THE CASE OF THE M/S RISHIKESH PROPERTIES PVT. LTD., WHERE THE LD. CIT(A) HAS REDUCED THE ADDITION TO 0.5% OF GR OSS RECEIPTS, THE ITA NO. 2044 /D/20 1 1 4 HON BLE ITAT HAS REMANDED THE MATTER TO THE AO FOR CONSIDERING THE G.P. OF COMPANIES C ARRYING SIMILAR WORKS. IN THE CASE OF M/S JATADHARI BUILDERS PVT. LTD. A.Y. 2007 - 08, THE LD. CIT(A) HAS RESTRICTED THE ADDITION TO 0.5% AND IN THE CASE O F M/S P.P.BUILDMART PVT. LTD. A.Y. 2006 - 07, THE LD. CIT(A) HAS RESTRICTED THE ADDITION TO 2.24%. FURTHER, FOR AY 2007 - 08 ON IDENTICAL ISSUES IN THE CASE M/S RISHIKESH BUILDCON PVT. LTD, M/S RISHIKESH PROPERTIES PVT. LTD. , M/S RUPA PROMOTERS PVT. LTD. AND M/S RSM CONSTRUCTIONS PVT. LTD. WERE DELETED BY THE LD. CIT(A) AND THE ADDITION WAS RESTRICTED TO 2.24% OF THE GROSS RECEIPTS SHOWN IN THE PROFIT AND LOSS ACCOUNT FROM M/S PACL INDIA LTD. AND ORS., TOWARDS COMMISSION. 5.2 CONSIDERING THE ABOVE, THE AD DITION OF RS. 4,28,501/ - CAN NOT BE SUSTAINED. THE AO IS ALSO DIRECTED TO DELETE THE ADDITION OF RS. 16,99,945/ - ON ACCOUNT OF ESTIMATED COMMISSION ON DEBIT/CREDIT ENTIRES IN BANK STATEMENT. INSTEAD, THE AO IS DIRECTED TO DISALLOW 2.24% OF THE GROSS RECEI PTS FROM M/S PACL INDIA LTD, AS SHOWN IN THE PROFIT AND LOSS ACCOUNT, AS PER SIMILAR PRECEDENCE IN THE CASE OF OTHER GROUP COMPANIES AS DISCUSSED ABOVE. BESIDES, SINCE AS PER THE FINDING OF THE AO IN THE ASSESSMENT ORDER THE INCOME SHOWN BY THE APPELLANT F ROM ITS GROUP COMPANIES IS NOT GENUINE, THE CORRESPONDING EXPENDITURE CLAIMED BY M/S PACL INDIA LTD. WOULD ALSO BE NOT GENUINE. THE AO MAY ACCORDINGLY VERIFY THIS MATTER AND TAKE SUITABLE ACTION AS PER LAW TO DISALLOW ANY SUCH NON - GENUINE EXPENDITURE AS MA Y HAVE BEEN CLAIME D BY THE ABOVE GROUP COMPANIES. 6. SINCE, THE ISSUES RAISED IN THE GROUNDS ARE COVERED BY EARLIER DECISION OF THE TRIBUNAL IN THE GROUP CASE OF THE ASSESSEE AS WELL AS THE RECENT ORDER OF THE TRIBUNAL FOR THE SIMILAR ASSESSMENT YEAR 2008 - 09 IN ITA NO. 2042 AND 2043/D/2011 (SUPRA) WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER . IN THAT CASE ALSO THE TRIBUNAL HAS UPHELD THE FIRST APPELLATE ORDER ON IDENTICAL ISSUES. ADDITION MADE BY THE AO ON ACCOUNT OF TDS TREATING THE AMOUNT CLAIMED FROM PACL INDIA LTD. AND PGF INDIA LTD. AS REAL INCOME OF THE ASSESSEE DELETED BY THE LD. CIT(A) HAS BEEN UPHELD. THE TRIBUNAL HAS ALSO UPHELD THE ACTION OF THE 1 ST APPELLATE AUTHORITY IN RESTRICTING THE ADDITION MADE ON ACCOUNT OF 4% COMMISSION ON DEBIT AND CREDIT ENTRIES ITA NO. 2044 /D/20 1 1 5 REGARDING PROVIDING OF ACCOMMODATION ENTRIES TO THE SAID COMPANIES TO 2.4% OF THE GROSS RECEIPT SHOWN IN THE PROFIT AND LOSS ACCOUNT FROM THE ABOVE COMPANIES. 7. UNDER THE ABOVE BACKGROUND, WE DO NOT FIND REASON TO INTERFE RE TO THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. THE GROUNDS ARE ACCORDINGLY REJECTED. 8. IN THE RESULT APPEAL IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30/09/2014. SD/ - SD/ - ( T.S.KAPOOR ) ACCOUNTANT MEM BER ( I.C. SUDHIR ) JUDICIAL MEMBER DATED: 30/9/14 BINITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. BY ORDER DEPUTY REGISTRAR ITAT, NEW DELHI