Golden Land Developers Ltd, New Delhi V. ITO, Ward-10(2), New Delhi

ITA 2107/DEL/2022

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6799 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-05-2024
• Assessment Year: 2007-2008
• Appeal Filed On: 31-08-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Opportunity of being heard; Competent authority
• Section: 68; 40A(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘B’ BENCH, NEW DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No.2106/DEL/2022 [A.Y. 2006-07] ITA No.2107/DEL/2022 [A.Y. 2007-08] M/s Golden Land Developers Ltd Vs. The Income-tax Officer House No. 89, 1 st Floor, Pocket - 22 Ward – 10(2) Sector – 24, Near Best Mega Mall New Delhi PAN – AAOFP 1496 P (Applicant) (Respondent) Assessee By : Dr. Rakesh Gupta, Adv Shri Somil Agarwal, Adv Department By : Shri Vivek Kumar Upadhyay, Sr. DR Date of Hearing : 27.05.2024 Date of Pronouncement : 31.05.2024 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- The above captioned two separate appeals by the assessee are preferred against two separate orders of the NFAC, Delhi dated 23.08.2022 pertaining to A.Ys. 2006-07 and 2007-08. 2 2. Since both the appeals were heard together and involve common issues, they are disposed of by this common order for the sake of convenience and brevity. 3. Briefly stated, the facts of the case are that the assessee company has been engaged in the business of real estate and land developing. During the year under consideration, it carried out low cost housing project at Kendrapara, Orissa with the approval of Kendrapara regional Trust towards which, it received advance from more than 2000 customers ranging from Rs.2 ,000/- to Rs.5,00,000/- all in cash totaling to Rs .3,04,40,210/- in A.Y 2006-07 and Rs. 2,70,01,863/- in A.Y 2007-08. 4. During the original assessment proceeding, since the assessee failed to prove the genuineness of the advances so received, the entire amount of advances so received were treated as unconfirmed cash credit in terms of section 68 of the Act in both the assessment years. Besides, an amount of Rs. 46,31,453/- was disallowed u/s 40A(3) of the Act in A.Y 2007-08. 3 5. Thereafter, the assessee preferred an appeal before ld.CIT(A) challenging the findings of Assessing Officer. 6. The Ld.CIT(A)-XVIII, New Delhi vide his order dated 11.3.2013 modified the quantum of additions, wherein, a relief of RS.8,28,000/- was given for AY 2006-07.As a result, the balance addition of Rs.2 ,96,12,210/- was confirmed. The additions for AY 2007-08 was confirmed on both counts of section 68 and section 40A(3) of the Act. 7. Thereafter, the assessee filed an appeal before ITAT challenging the findings of CIT(A)-XVIII, New Delhi . While disposing off the appeal, ITAT set aside the issue to the Assessing Officer to decide the issue afresh after providing an opportunity of being heard to the assessee. Subsequently, the AO again added the amount of RS.2 ,96,12,210/-for AY 2006-07 and Rs 2,70,01,863/- for AY 2007-08 under section 68 of Act on the ground that the assessee failed to prove, identify and genuineness of the transaction which are the subject matter of impugned appeal . Also an amount of Rs. 46,31,453/- was disallowed u/s 40A(3) of the Act in A.Y 2007-08. 4 8. At the very outset of the opening of the hearing, the ld. counsel for the assessee submitted that this is a case where the Economic Offence Wing [EOW] and the Central Bureau of Investigation [CBI] were investigating the funds received from various persons. 9. The ld. counsel for the assessee furnished a copy of the letter of Additional Secretary to Government of Odisha to Competent Authority, Cuttack requesting for initiation of action of refund of deposit to the identified small depositors to support his argument that the depositors were identified and action is being taken to refund the amount taken from them and, therefore, addition made on that count u/s 68 of the Act by the Assessing Officer cannot be sustained. 10. The ld. counsel for the assessee placed reliance on the decision of the Hon'ble High Court of Orissa at Cuttack in WP(C) No. 14492 of 2021 order dated 01.09.2023 in the case of GLP Developers Ltd IA No. 13957 of 2023. The ld. counsel for the assessee drew our attention to Para 6 of the said order where the Hon'ble High Court is giving direction for identifying the investors and to make payments accordingly to the investors/depositors. 5 11. The ld. counsel for the assessee fairly submitted that as these documents and fate of the investigation being made by EOW and the CBI was not before the Assessing Officer, the issue may be restored to the file of the Assessing Officer for proper examination and determination. 12. Per contra, the ld. DR fairly conceded that the issue may be restored to the file of the Assessing Officer for fresh adjudication. 13. We have given thoughtful consideration to the rival submission and to the orders of the authorities below. We find that this is the second round of litigation before the ITAT. In the second round, as in the first round, the AO disbelieved the claim of assessee that the advances were received from various persons and held that the assessee has not proved the identity of the persons and genuineness of the transaction. The Assessing Officer this time has, however, has mentioned about the CBI and EOW inquiry to support his action of making addition u/s 68. The CIT(A), as in the first round, upheld the findings of the Assessing Officer in this round too. 6 14. Before us, the assessee has placed the documents of the Government of Odisha referring to the status report on the issue of identifying the depositors in the schemes of Golden Land Developers Ltd and GLP Developers Ltd and of refund of the deposits to them. The assessee has also placed before us the order of Orissa High Court taking cognizance of the issue of identification and return of deposits in the case of GLP Developers Ltd and Another. In view of the Orissa High Court cognizance of the matter and the Government of Odisha correspondence, we are of the considered opinion, that the details of depositors need further examination and verification in the context of the provision of section 68 of the IT Act. We, accordingly, restore this issue to the file of the Assessing Officer. The Assessing Officer is directed to examine and verify details of the depositors and decide the issue afresh after giving reasonable opportunity of being heard to the assessee. The assessee is also directed to furnish evidences/documents as required by the Assessing officer. 7 15. In the result, both the appeals of the assessee in ITA Nos. 2106 and 2107/DEL/2022 are allowed statistical purposes. The order is pronounced in the open court on 31.05.2024. Sd/- Sd/- [SAKTIJIT DEY] [NAVEEN CHANDRA] VICE PRESIDENT ACCOUNTANT MEMBER Dated: 31 st MAY, 2024. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 8 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.PS/PS Date on which the final order is uploaded on the website 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 Registrar for signature on the order Date of dispatch of the Order