Autoage Automobiles Pvt Ltd, New Delhi V. ITO WARD 3(4), New Delhi

ITA 2099/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5403 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 11-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARUL SINGH
• Keywords: Unexplained cash credit; Search and seizure; Opportunity of being heard; Accommodation entries; Documents seized; Set aside
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 2099/DEL/2019 [ASSESSMENT YEAR: 2009-10] M/S AUTOAGE AUTOMOBILES PVT. LTD. VS. ITO, WARD 3 (4), 103, 16A, UDAY PLAZA PARK, NEW DELHI DELHI (PAN: AAGCA7094M) [APPELLANT] [RESPONDENT] ASSESSEE BY: NONE REVENUE BY : MS. PARUL SINGH, SR. DR. ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX [APPEALS]-1, NEW DELHI D ATED 31.12.2018 PERTAINING TO ASSESSMENT YEAR 2009-10 ON THE FOLLOW ING GROUNDS:- 1. THAT THE ORDER OF LEARNED A.O, CONFIRMED BY THE CIT (A) ARE BAD IN LAW AND FACTS OF THE CASE. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE IN LAW THE LEARNED A.O. HAS ERRED IN MAKING THE ADDITION OF RS.20,OO,O OO AS NO SPECIFIC SHOW CAUSE NOTICE WAS SERVED OR ISSUED BEF ORE MAKING SUCH ADDITIONS. THE CONTENTION OF THE A.O REGARDING . A. INFORMATION RECEIVED FROM INVESTIGATION WING: TH E A.O HAS MERELY RELIED ON A LETTER RECEIVED FROM INVESTIGATI ON WING OF INCOME TAX DEPARTMENT OF MR. SURENDER KUMAR JAIN AN D SOME SO CALLED ACCOMMODATION ENTRIES. THE MERE FINDING O F DIARY ENTRIES IN A THIRD PERSON PREMISES CANNOT BE DEEMED TO AN INCISION ON ANOTHER ASSESSEE'S INTEGRITY. B. ANALYSIS OF INFORMATION RECEIVED: THE CONTENTION OF A.O IN THIS CASE IS HYPOTHETICAL AND AS AR AS BANKING TRA NSACTION IS CONCERNED THE SAME IS ALREADY ON RECORDS AND THIS H ARDLY CALLS FOR ANY ANALYSIS. C . REASONS FOR FORMATION OF BELIEF: THE WHOLE GAMBIT OF IMAGINATION AND DEDUCTION THERE FROM ARE BASED BY A .O AND ARE BASED ON DOCUMENTS SEIZED AT MR. SURENDER KUMAR JAIN PREMISE AND MR. VIRENDRA KUMAR JAIN PREMISES (HIS N AME HAS NOW APPPEARD IN A.O ORDER AND NOT EARLIER) THIS OUT COME OF THIS SEIZURE AND SEARCH CONDUCTED BY INCOME TAX DEP ARTMENT HAS NOT BEEN MENTIONED ANYWHERE IN THE ORDER AND ME RE 2 POSSESSION OF CERTAIN DOCUMENTS DOES NOT GIVE ANY C ONCLUSIVE EVIDENCE AGAINST THE ASSESSEE. D. INCOME CHARGEABLE TO TAX ESCAPING ASSESSMENT: ON CE AGAIN THE LEARNED A. O. HAS PRESUMPTIVE IDEAS AND INFERENCES WITHOUT ASCERTAINING FROM HIS OWN DEPARTMENT THE OUTCOME OF THE SEARCH AND SEIZURE PROCEEDINGS CONDUCTED AT THE PRE MISE OF THE PERSON S.K JAIN AND VIRENDER JAIN. IT IS ABUNDANTLY CLEAR THAT THERE WAS NO CASH TRANS ACTION AND THE ASSESSEE ONLY TOOK THE AMOUNT FROM THE INVESTOR S BY CHEQUE AND THERE CAN BE NO GOOD REASON TO ADD IT TO THE INCOME OF THE ASSESSE AS UNEXPLAINED CASH CREDIT AN D THE PROCEEDINGS IF ANY ARE ALREADY THERE ON THE PERSON/ COMPANY GIVING THIS AMOUNT TO US. THERE ARE A NUMBER OF CASES IN WHICH HIGHER COURTS HAVE HELD IN FAVOUR OF THE ASSESSEE IN THE CASE OF CIIT VS ORISSA CORP. LTD 159 ITR 78 HON'BLE SUPREME COURT HAS OBSERVED THAT IN THE CASE ASSESSE HAS GIVEN THE NAME AND ADDRESS AND PAN OF THE ALLEGED C REDITORS WHICH WAS IN THE KNOWLEDGE OF THE REVENUE, THE ASSE SSE CANNOT BE HELD RESPONSIBLE AS HE CANNOT DO ANYTHING MORE THAN THIS. SIMILAR VIEWS HAS BEEN EXPRESSED BY HIGHER COURTS I N - CIT VS FLEX PLASTIC & PACKAGING PRIVATE LIMITED 200 7-211 CTR 607 DELHI - CIT VS LALIT KUMAR PODDAR(2015) 231 TAXMAN 816 DEL HI. THE LEARNED A.O. HAS NOT EVEN BOTHERED TO ISSUE SUM MON U/S 133(6) TO THE CONCERNED PARTIES NAMELY VIRGIN CAPIT AL SERVICES PRIVATE LIMITED. VIP LEASING & FINANCE PRIVATE LIMI TED TO ASCERTAIN THEIR EXISTENCE AND CREDIT WORTHINESS AND HAS BASED HIS FINDINGS AND ANALYSIS ON THE BASIS OF THE INVES TIGATION REPORT OF SEARCH AND SEIZURE PROCEEDINGS OF MR. SUR ENDER KUMAR JAIN AND VIRENDER JAIN WHICH ARE STILL PENDING. THEIR COMPANIES ARE ACTIVE AND DO NOT INCLUDE T NAME OF SURRENDER JAIN AND VIRENDER JAIN AS DIRECTOR. 3. T HE FINDINGS OF THE CIT THAT WHY A PREMIUM WAS GIVEN BY T HE INVESTOR IS BASED ON MERE PRESUMPTION NOT ON FAC TS. IT IS SUBMITTED THAT THE COMPANY BEING A PROPOSED AUTO MO BILE DEALERSHIP CO. HAD PURCHASED LAND IN SOLAN (SHIMLA) FOR OBTAINING A DEALERSHIP OF HONDA CARS AND THIS BEING A LUCRATIVE BUS PROPOSAL. THE INVESTORS HAD WILLINGLY OPTED TO PAY THE PREMIUM. 4. THE SO CALLED S.K.JAIN GROUP NAMELY. MR. SURENDER K UMAR JAIN AND VIRENDER JAIN ARE NOT EVEN DIRECTORS, PROM OTER OR SHAREHOLDER OF THESE LENDING COMPANIES AND IN NO WA Y DIRECTLY CONNECTED TO THIS ENTRY OPERATING BUSINESS. 3 5. HENCE THE ADDITION IS THEREFORE PRAYED TO BE DEL ETED. 6.ANY OTHER GROUNDS OF APPEAL THAT MAY BE RELEVANT IN THE CASE. 2. IN THIS CASE, NOTICE OF HEARING TO THE ASSESSE E WAS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR ITS AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FI LED ANY APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE FACTS AND CIRCUM STANCES OF THE PRESENT CASE AND THE ISSUES INVOLVED IN THE PRESENT APPEAL, I AM OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND A GAIN TO THE ASSESSEE, THEREFORE, I AM DECIDING THE PRESENT APPEAL EXPART E QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 3. LD. DR RELIED UPON THE IMPUGNED ORDER. 4. I HAVE HEARD THE LD. DR AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I FIND THAT LD. CIT(A) HAS PASSED THE EXPARTE IMP UGNED ORDER WITHOUT PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. HENCE, IN M Y VIEW THE ISSUES IN DISPUTE MAY BE SET ASIDE TO THE LD. CIT(A) TO DECIDE THE SA ME AFRESH, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. I HOLD AND DIRECT ACCORDINGLY. 4.1 KEEPING IN VIEW OF THE NON-COOPERATION OF THE A SSESSEE, I AM DIRECTING THE ASSESSEE TO APPEAR BEFORE THE LD. CIT(A) ON 23.04.2020 AT 10.00 AM FOR HEARING. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED ON 19.02.2020. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATED:19-02-2020 SRB COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) ASST. REGISTRAR, 5. DR ITAT, NEW DELHI 4