ITO, Rohtak V. Smt. Jyoti Prop. M/s. Jyoti Builders, Rohtak

ITA 2133/DEL/2012

• Counselvise Citation: 213320114 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 19-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 04-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIVEK KUMAR
• Keywords: Additional evidence; Sham transactions
• Section: 148; 44AD; 153A

Judgement Text

IN THE INCOME TAX APPELLA TE TRIBUNAL (DELHI BENCH D: NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI B. C. MEENA, ACCOUNTANT MEMBER ITA NO.2133/DEL/ 2012 (ASSESSMENT YEAR: 2006-07) ITO VS. JYOTI PROP. M/S JYOTI BUILDERS WARD-2, ROOM NO. 6, 85/11, AAYAKAR BHAWAN CHAWLA COLONY ROHTAK ROHTAK AGOPJ8032B (APPELLANT) (RESPONDENT) ASSESSEE BY :SHRI VIVEK K UMAR, DR REVENUE BY : NONE ORDER PER DIVA SINGH, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28/2/2012 OF CIT(A) ROHTAK PERTAINING TO 2006-07 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS BY DELETING THE ADDITIONS MADE BY AO IN THE HANDS OF THE ASSESSEE ON THE PROTECTIVE BASIS, WHIL E THE SUBSTANTIVE ADDITIONS MADE IN THE HANDS OF M/S PACL INDIA LTD, NEW DELHI FOR ASSESSMENT YEAR 2006-07 IS STILL PENDING AT THE APP ELLATE STAGE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS BY RELYING ON THE ORDERS OF HIS PREDECESSOR IN SIMILAR CASES WHEREIN IT WAS HELD THAT THE PROFIT O F THE ASSESSEE SHOULD BE RESTRICTED TO 8% OF THE RECEIPTS FROM PACL INDIA LTD. NEW DELHI WHEREAS THE INCOME RECEIVED BY THE ASSESSEE IS NOT RELATED TO CONTRACT RECEIPTS AND THE ENTIRE RECEIPTS ARE LIABLE TO BE T AXED. ITA NO.2133/DEL/2012 2 3. THE APPELLANT CRAVES LEAVE TO ADD, DELETE OR AMEND ANY GROUND OR GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. AT THE TIME OF HEARING NO ONE WAS PRESENT ON BEH ALF OF THE ASSESSEE. ACCORDINGLY THE DEPARTMENTAL APPEAL WAS PASSED OVER DESPITE THIS FACT IN THE SECOND ROUND ALSO NO ONE WAS PRESENT ON ASSESSEES BEHALF NOR ANY REQUEST FOR ADJOURNMENT WAS PLACED BEFORE THE BENCH. HOWEVER CONSIDERING T HE MATERIAL AVAILABLE ON RECORD AND TAKING INTO CONSIDERATION THAT THE CIT (A) HAS FOLLOWED ORDERS OF THE TRIBUNAL, IT WAS CONSIDERED APPROPRIATE TO PROCEED WITH THE HEAR ING EX-PARTE QUA THE ASSESSEE RESPONDENT ON MERIT. ON THE GROUND TAKEN BY THE D EPARTMENT AFTER HEARING THE LD. SR. D.R. 3. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE DECLARED AN INCOME OF RS.2,36,160/- UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION. THE A.O OBSERVED THAT AS PER THE TDS CERTIFICATE ATTACHED T HE ASSESSEE RECEIVED GROSS RECEIPTS OF 29,52,000/- OF CONTRACT RECEIPTS FROM THE PACL I NDIA LTD. B1/3, PASCHIM VIHAR, NEW DELHI. IN VIEW OF THE FACT THAT THERE WAS A DIS CREPANCY AND INCONSISTENCY IN THE CLAIM OF REFUNDS BY SOME ASSESSESES ON THE BASIS OF TDS CERTIFICATE ISSUED BY THE PACL INDIA LTD, NOTICE U/S 148 OF THE INCOME-TAX W AS ISSUED TO THE ASSESSEE ALSO. INITIALLY THE ASSSESSEE APPEARED BEFORE THE AO, HOW EVER, SINCE RELEVANT INFORMATION WAS NOT GIVEN THE ASSESSMENT WAS COMPLETED U/S 144/ 147. THE A.O CONSIDERING THE TOTAL DEPOSITS IN THE PUNJAB NATIONAL BANK ROHTAK I N THE ACCOUNT NO. 01214619 CALLED FOR U/S 133 (6) OF THE ACT WHEREIN THE ASSES SEE HAD DEPOSITED AN AMOUNT OF RS.34,20,760/- MADE AN ADDITION OF RS.29,52,000/- C LAIMED AS RECEIPTS OF THE ASSESSEE FROM THE PACL AND 4,68,760/- APPLYING RATE OF 8% U/S 44AD WHICH THE ASSESSEE HAD APPLIED TO THE TOTAL RECEIPTS FROM PAC L RESULTING IN THE TOTAL ADDITION OF RS.34, 20,760/-. ITA NO.2133/DEL/2012 3 3.1 AGGRIEVED BY THIS THE ASSESSEE WENT IN AP PEAL BEFORE THE LD. CIT(A) ON THE FOLLOWING GROUNDS CALLED OUT FROM PARA 2 OF THE CIT (A)S ORDER:- 2. THE EFFECTIVE GROUNDS OF APPEAL IN THE APPEAL ARE (I) MAKING ASSESSMENT ON PROTECTIVE BASIS WHEN THE SUBSTANTIVE ASSESSMENT HAS BEEN MADE IN THE HANDS OF M/S PACL (II) ASSESSING THE INCOME UND ER THE HEAD INCOME FROM OTHER SOURCES WHEN THE APPELLANT HAS DECLARED THE INCOME UNDER THE HEAD INCOME FROM BUSINESS (III) ASSESSING THE E NTIRE RECEIPTS AS INCOME IGNORING THE PROVISIONS OF SECTION 44AD OF T HE IT ACT, (IV) ADDING RS.4,68,760/- TOWARDS THE CONTRACT RECEIPTS AND THEREBY TO THE TOTAL INCOME AND (V) DENYING CREDIT OF TDS. 3.2. BEFORE THE LD. CIT (A) THE ASSESSEE ADVANCED THE FOLLOWING SUBMISSIONS:- 4. BRIEF FACTS ARE THAT THE AO FOUND THAT THERE WA S CERTAIN DISCREPANCIES/INCONSISTENCIES IN THE CASE OF CLAIM OF REFUNDS ON THE BASIS OF TDS CERTIFICATE ISSUED BY M/S PACL INDIA L TD. FURTHER THERE WERE 128 SUCH CASES FROM ROHTAK WHO HAD UNDERTAKEN CONTRACT WORK FOR PACL LTD. AMOUNTING TO OVER RS.36.47 CRORES. T HOSE PERSONS HAVE FILED THEIR INCOME-TAX RETURNS WITH DIFFERENT AO A T ROHTAK. THEY HAVE CLAIMED TO HAVE RECEIVED CONTRACT RECEIPTS AND THE SAME WAS OFFERED FOR TAX U/S 44AD OF THE ACT WHICH WORKED OUT TO 8% OF T HE GROSS RECEIPTS AND SIMULTANEOUSLY CLAIMED CREDIT FOR TDS. THE AO PROVIDED SEVERAL OPPORTUNITIES TO THOSE CLAIMANTS TO THE TDS. THE A O PROVIDED SEVERAL OPPORTUNITIES TO THOSE CLAIMANTS OF THE TDS WHO FAI LED TO SUBSTANTIATE THEIR CLAIM FOR HAVING DONE THE WORK. THE AO HELD THAT THERE IS NO DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM OF DOI NG CONTRACT WORK FOR PACL INDIA LTD. THE AO ALSO OBSERVED THAT THER E WERE TWO BANK ACCOUNTS, ONE ACCOUNT WAS OPENED TO DEPOSIT THE CHE QUES RECEIVED FROM PACL INDIA LTD, AND ANOTHER BANK ACCOUNT WAS OPENED TO DEPOSIT INCOME RECEIVED FROM REFUND. THE ENQUIRY AND THE S TATEMENT OF THE CONTACTORS LED HIM TO BELIEVE THAT NO WORK WAS EXEC UTED FOR PACL INDIA LTD. AND ALL THESE ASSESSEES WERE MERELY A CONDUIT FOR CREATING A SERIES OF SHAM TRANSACTIONS ONLY ON PAPER WITH A VIEW TO I NFLATE THE EXPENSES OF PACL INDIA LTD. THE AO HELD THAT THE ENTIRE REC EIPTS FROM PACL WERE INCOME FROM OTHER SOURCES ON PROTECTIVE BASIS AND WAS ACCORDINGLY ADDED. IT MAY BE MENTIONED THAT THE SU BSTANTIVE ADDITION WAS MADE IN THE HANDS OF PACL FOR A.Y 2006-07. ITA NO.2133/DEL/2012 4 5. THE AR OF THE APPELLANTS HAS MADE SUBMISSIONS ON SIMILAR LINES AS IN APPEAL NOS. 426 TO 434/RTK/08-09, 489 & 492/RTK/08- 09, 475 TO 488, 490 & 491/RTK/08-09 AND 439 TO 442, 457 TO 460 /RTK/09-10. 3.3 CONSIDERING THE ARGUMENTS THE LD. CIT (A) PROCEEDED TO DELETE THE ADDITION HOLDING AS UNDER:- 6. THE FACTS AND CIRCUMSTANCES HAVE BEEN DISCUSS ED IN DETAIL BY THE AO IN THE ASSESSMENT ORDER PASSED ON PROTECTIVE BASIS. SUBSTANTIVE ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER OF M/S PACL INDIA LTD. IN THE ORDER PASSED U/S 153A (B)/14 3(3) OF THE IT ACT ON 31/12/2008. THE APPELLANT IN THE APPEAL UND ER CONSIDERATION HAS SHOWN HIMSELF AS SUBCONTRACTOR OF M/S PACL INDI A LTD. THE AO HAS FOLLOWED THE ASSESSMENT ORDERS PASSED BY HIS PR EDECESSOR IN OTHER CASES WHO HAVE ALSO SHOWN THEMSELVES AS SUBCO NTRACTORS OF M/S PACL INDIA LTD. THESE APPEALS HAVE BEEN DECIDE D BY MY PREDECESSOR IN FOUR CONSOLIDATED ORDERS; TWO DATED 18/11/2009 IN APPEAL NOS. 426 TO 434/RTK/08-09 AND 489 & 492/RTK/ 08-09; ONE DATED 6/11/2009 IN APPEALS NO. 475 TO 488, 490 & 49 1.RTK/08-09 AND ONE DATED 4/5/2010 IN APPEALS NO. 439 TO 442,45 7 TO 460/RTK/09-10. THE ISSUES HAVE BEEN DISCUSSED IN D ETAIL FROM ALL ANGLES IN THE AFORESAID APPEAL ORDERS. 6.1. THE DEPARTMENT HAS FILED APPEALS BEFORE THE HO NBLE ITAT AND THE HONBLE ITAT, DELHI BENCH, NEW DELHI HAS DECIDED TH E APPEALS IN TWELVE CASES NAMELY SMT. KAMLESH, SH. LUXMI CHAND A ND SH. VIKRAM VIDE ORDER DATED 31/3/2010 IN ITA NOS. 225, 230 AND 231/DEL/2010, MS. DAIZY SHARMA VIDE ORDER DATED 14/ 3/2010 IN ITA NO. 2271/DEL/2010, SHRI KRISHAN KANT VIDE ORDER DAT ED 31/5/2010 VIDE ITA NO. 366 (DEL)/2010, UMA D/O SHRI PRAKASH C HAND, SHRI VIPIN SHARMA ORDER DATED 14/5/2010 VIDE ITA NOS. 22 0 & 221/DEL/2010, SMT. MEENU ARORA VIDE ORDER DATED 13 /5/2010 VIDE ITA NO. 370/DEL/2010 AND SURINDER KAPOOR, SH. SANJA Y KUMAR, SMT. SUDESH RANI AND SH. SOM NATH VIDE ORDER DATED 24/6/2010 VIDE ITA NOS. 369, 374 TO 376/DEL/2010 IN WHICH THE VIE W TAKEN BY MY PREDECESSOR, INCLUDING THAT OF GIVING CREDIT FOR TD S, HAS BEEN CONFIRMED AND THE APPEALS OF THE DEPARTMENT HAVE BE EN DISMISSED. ITA NO.2133/DEL/2012 5 6.2 IN THE APPEAL UNDER CONSIDERATION, SINCE THE FA CTS AND CIRCUMSTANCES ARE SIMILAR AND THE ISSUES RAISED BY THE APPELLANT IS ALSO SIMILAR, THE APPEAL IS DISPOSED OFF ON THE SAME LINES AS THE ABO VE MENTIONED ORDERS DATED 6/11/2009, 18/11/2009 AND 4/5/2010. 7. IN GROUND NO. 5 OF APPEAL, THE APPELLANT CONTESTED THE ACTION OF THE AO IN WRONGLY ADDING RS.4,68,760-/- TO THE I NCOME OF THE APPELLANT. IT WAS SUBMITTED BEFORE ME BY THE AR TH AT THE APPELLANT RECEIVED GROSS CONTRACT RECEIPTS OF RS.29,52,000/- AND RS.5.00 LACS AS LOAN FROM M/S NAVEEN BUILDERS AND DEPOSITED CAS H OF RS.20,000/- FROM WITHDRAWALS OF CURRENT YEAR AND RS .5,000/- FROM PERSONAL CAPITAL FOR OPENING THE BANK A/C. THE AO WITHOUT VERIFYING THE RECORDS, ADDED RS.4,68,760/- TO THE INCOME OF T HE APPELLANT. IN SUPPORT OF THE CONTENTION THE AR FILED CONFIRMATION OF M/S NAVEEN BIILDERS ALONG WITH COPY OF IT RETURN AND BANK STAT EMENT AND SOUGHT IT TO THE ADMITTED AS ADDITIONAL EVIDENCE U/S 46A O F THE IT RULES. THE ADDITIONAL EVIDENCE HAS BEEN ADMITTED IN TERMS OF THE PROVISIONS OF RULE 46A AND REMANDED TO THE A.O FOR ENQUIRY AND REPORT. THE A.O IN HIS REMAND REPORT DATED 24/11/2011 AGREED WI TH THE CONTENTION OF THE A.R. IN VIEW OF HE ABOVE, ADDITI ON MADE BY THE A.O TO THIS EXTENT IS DELETED AND THE GROUND OF APP EAL IS ALLOWED. 4. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFO RE THE TRIBUNAL. THE LD. SR. D.R RELIES UPON THE ASSESSMENT ORDER, HOWEVER T HE ORDERS OF THE TRIBUNAL RELIED UPON BY THE LD. CIT (A) AND THE FINDINGS OF THE FAC T RECORDED IN THE IMPUGNED ORDER WERE NOT ASSAILED TO THE WRONG. IN THE AFOREMENTION ED PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER WHICH HAS RELIED UPON THE VARIOUS ORDERS OF THE TRIBUNAL ON I DENTICAL FACTS AND CIRCUMSTANCES AS SUCH WE FIND NO GOOD REASON TO INTERFERE WITH THE R EASONING AND FINDING OF DELETING ADDITION OF RS.29,52,000/-. IT IS NOT DISPUTED BY THE DEPARTMENT THAT THE FACTS AND CIRCUMSTANCES REMAIN ITS SAME AS IN THE ORDERS RELI ED UPON BY THE CIT(A).QUA THE ADDITION OF RS.4,68,760/-. IT IS SEEN THAT FRESH E VIDENCES HAVE BEEN ADMITTED BY THE LD. CIT (A) WHICH HAVE BEEN CONFRONTED TO THE AO W HO AS PER THE IMPUGNED ORDER HAS ARGUED WITH THE CONTENTIONS OF THE ASSESSEE. NO ARGUMENTS WERE ADVANCED BY THE SR. D.R ASSAILING THE EVIDENCE TAKEN INTO CONSI DERATION. ACCORDINGLY, IN THE ITA NO.2133/DEL/2012 6 AFOREMENTIONED FACTS AND CIRCUMSTANCES WE FIND NO M ERIT IN THE GROUND RAISED BY THE REVENUE BEING SATISFIED BY THE REASONING AND FINDIN G ARRIVED AT IN THE IMPUGNED ORDER THE DEPARTMENTAL GROUND IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 /8/ 2013. SD/- SD/- (B. C. MEENA ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 30 TH DAY OF AUGUST, 2013 R. NAHEED COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT(ITAT), NEW DELHI. AR,ITAT NEW DELHI.