Elite Realtech Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 2157/DEL/2015

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6714 (ITAT-DELHI)
• Duration Of Justice: 6 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 13-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA; JAGDISH SINGH
• Keywords: Search and seizure
• Section: 271(1)(c); 153A; 274; 153C; 132

Judgement Text

1 ITA NOS. 6295/DEL/2016 & 2157/DEL/2015 IN THE INCOME TAX APPELLAT E TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBE R AND MS SUCHITRA KAMBLE, JUDIC IAL MEMBER ITA NO. 2157/DEL/2016 ( A.Y 2011-12) AND ITA NO. 6295/DEL/2016 ( A.Y 2011-12) (THROUGH VIDEO CONFEREN CING) ELITE REALTECH PVT. LTD. M-11, MIDDLE CIRCLE CONNAUGH CIRCUS NEW DELHI PAN: AACCE2400P (APPELLANT) VS ACIT CENTRAL CIRCLE-32 NEW DELHI (RESPONDENT) APPELLANT BY SH. PIYUSH KAUSHIK, ADV, SH. AJAY BHAGWANI, FCA, RESPONDENT BY SH. JAGDISH SINGH, SR. DR & MS. NIDHI SRIVASTAVA, CIT, DR ORDER PER SUCHITRA KAMBLE, JM THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDER DATED 31/12/2014 PASSED BY CIT(A)-XXX, NEW DELHI AND OR DER DATED 29/09/2016 PASSED BY CIT(A)- 31, NEW DELHI FOR ASSESSMENT YEAR 2012-13. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- ITA NO. 2157/DEL/2016 1. THAT ON THE CIRCUMSTANCES OF THE CASE, THE ASSESSME NT MADE U/S 153A OF DATE OF HEARING 11.02.2021 DATE OF PRONOUNCEMENT 13.04.2021 2 ITA NOS. 6295/DEL/2016 & 2157/DEL/2015 THE ACT BY THE ASSESSING OFFICER, AND CONFIRMED BY THE CIT(A), IS BAD ON FACTS AND IN LAW ON THE GROUNDS THAT - I) AS PER PANCHNAMA NO MATERIAL WHATSOEVER, WAS SEIZED IN THE COURSE OF SEARCH U/S 132 OF THE ACT ON 07.12.2010 ON THE ASSE SSEE AND THEREFORE THE INCOME RETURNED OUGHT TO HAVE BEEN ACCEPTED, AND II) THE UTILIZATION OF THE MATERIAL SEIZED IN THE COURS E OF SEARCH ON 15.11.2007 ON M/S BPTP LTD (AND NOT ON THE ASSESSEE) WAS NOT P ERMISSIBLE IN THE PRESENT ASSESSMENT IN AS MUCH AS IT IS PROVED/EVIDENCED FRO M AOS OWN RECORD THAT NO MATERIAL WAS FOUND IN THE COURSE OF AFORESAID SE ARCH, WHICH BELONGED TO THE ASSESSEE, AND BECAUSE OF WHICH FACT NO ACTION W AS TAKEN U/S 153C IN THE HANDS OF THE ASSESSEE AND IT WOULD AMOUNT TO REVISI TING THE MATTER ON SAME FACTS, WHICH IS NOT PERMISSIBLE. 2. THAT WITHOUT PREJUDICE ON THE FACTS AND CIRCUMSTAN CES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IS NOT DELETING THE TOTAL ADDITION MADE BY THE A.O. ON ACCOUNT OF ALLEGED INTEREST PAID AS PDCS FROM UN DISCLOSED SOURCES. 3. THAT THE ORDERS PASSED BY THE ASSESSING OFFICER AN D COMMISSIONER OF INCOME TAX (APPEALS)-XXX, NEW DELHI ARE BAD IN LAW AND VOID AB INITIO ITA NO. 6295/DEL/2016 1. THAT THE ORDERS PASSED BY THE ASSESSING OFFICER AN D COMMISSIONER OF INCOME TAX (APPEALS)-31, NEW DELHI ARE BAD ON FACTS AND IN LAW AND ARE VOID AB INITIO. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 10,62,998/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE IT ACT, 1961 3. THAT THE CIT(A) ERRED IN CONFIRMING PENALTY IMPOSE D U/S 271(1)(C), DESPITE THE FACT THAT THE AO WHILE INITIATING AND IMPOSING THE PENALTY U/S 271(1)(C) HAS NOT SPECIFIED AGAINST WHICH DEFAULT FOR THE (I) CONCEALMENT OF PARTICULARS OF INCOME OR FOR (II) FURNISHING OF INACCURATE PARTICU LARS OF INCOME. 3 ITA NOS. 6295/DEL/2016 & 2157/DEL/2015 3. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF REAL ESTATE. A SEARCH AND SEIZURE ACTION U/S 132 WAS CONDUCTED ON 7/12/2010 IN THE BPTP GROUP OF CASES IN WHICH THE ASSESSEE WAS ALSO COVER ED. ACCORDINGLY PROCEEDINGS U/S 153A WERE INITIATED IN ASSESSEES C ASE. A NOTICE U/S 153A OF THE ACT WAS ISSUED REQUIRING THE ASSESSEE TO FURNIS H THE TRUE AND CORRECT RETURN OF INCOME. IN RESPONSE THERETO, THE RETURN OF INCOME WAS FILED DECLARING A TOTAL LOSS OF RS. 3,100/-. THE ASSESSMENT WAS CO MPLETED U/S 153A/143(3) FOR THE ASSESSMENT YEAR 2011-12 VIDE ORDER DATED 28 /3/2013 BY THE ASSESSING OFFICER AT INCOME OF RS. 1,31,28,977/- THEREBY MAK ING AN ADDITION OF RS. 1,31,32,077/- ON ACCOUNT OF INTEREST ON POST DATED CHEQUES (PDCS). AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE VI DE ORDER DATED 31/12/2014. IN THE MEANWHILE, THE PENALTY PROCEEDINGS U/S 271(1 )(C) OF THE ACT WERE INITIATED FOR THE PRESENT ASSESSMENT YEAR AND PENAL TY ORDER WAS PASSED ON 31/3/2016 THEREBY LEVYING PENALTY OF RS. 10,62,998/ -. BEING AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 29/9/20 16. 4. AS REGARDS MERITS OF THE QUANTUM APPEAL ARE CONC ERNED, THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER IN ITS ORDER R EFERRED ONLY THE SEIZED MATERIAL DURING THE SEARCH ON 15/11/2007 WHEN THE A SSESSEE COMPANY WAS NOT EVEN IN EXISTENCE. THE ASSESSEE COMPANY WAS IN CORPORATED ONLY ON 30/07/2009 AND ON DATE OF SEARCH I.E. 15/11/2007, T HE ASSESSEE COMPANY WAS NOT EXISTENT, THE MATERIAL SEIZED DURING THE CO URSE OF FIRST SEARCH HAS ABSOLUTELY NO CORRELATION WITH THE ASSESSEE COMPANY . THE SECOND SEARCH ON BPTP GROUP OF COMPANIES WAS FINALLY CONCLUDED ON 5/ 2/2011 AND EVEN DURING THE SECOND SEARCH NO ADVERSE MATERIAL OF ANY SORT P ERTAINING TO THE ASSESSEE COMPANY WAS RECOVERED WHICH CAN GIVE EVEN A SLIGHTE ST OF INDICATION THAT THE ASSESSEE COMPANY IS PAYING INTEREST ON PDCS BEYOND 6 MONTHS FROM THE SALE DEED OUT OF THE BOOKS. THE ASSESSING OFFICER IN I TS ORDER HAS NOT REFERRED/MENTIONED ANY SEIZED MATERIAL FOUND DURING THE COURSE OF SECOND 4 ITA NOS. 6295/DEL/2016 & 2157/DEL/2015 SEARCH CONCLUDED ON 5/2/2011 PERTAINING TO THE ASSE SSEE COMPANY WHICH CAN GIVE ANY CLUE EVEN IN A REMOTEST MANNER WITH RESPEC T TO PAYMENT OF INTEREST ON PDCS OUT OF BOOKS BEYOND 6 MONTHS FROM SALE DEED. THE LD. AR RELIED UPON THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUN AL IN CASE OF ONE OF THE GROUP COMPANY I.E. M/S IMPOWER INFRASTRUCTURE PVT. LTD. VS. ACIT IN ITA NO. 6637 & 6818/DEL/2014 ORDER DATED 18/5/2018 WHICH IS FACTUALLY SIMILAR TO THE ASSESSEES CASE. THE LD. AR FURTHER SUBMITTED THAT UNDER THESE SAME IDENTICAL CIRCUMSTANCES, THE ASSESSEES CASE IS ALS O SQUARELY COVERED BY THE ORDER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN C ASE OF ANOTHER GROUP COMPANY I.E. UTKARSH REAL TECH PVT. LTD. VS. ACIT ( 2019) 76 ITR(TRIBUNAL) 688 ITAT DELHI. THUS, IN VIEW OF THESE FACTS, SUBMISSI ONS AND LEGAL POSITIONS, THE LD. AR SUBMITTED THAT UNDER IDENTICAL FACTS AND CIR CUMSTANCES, THE ASSESSEES CASE IS SQUARELY COVERED FROM AFORESAID TWO DECISIO NS OF CO-ORDINATE BENCHES OF THE TRIBUNAL AND ADDITION MAY BE DELETED. 5. AS RELATES TO PENALTY APPEAL, THE LD. AR SUBMIT TED THAT THE PENALTY LEVIED IS BAD IN LAW ALSO ON ACCOUNT OF THE REASON THAT NOTICE U/S 274 READ WITH SECTION 271(1)(C) DID NOT SPECIFY THE SPECIFIC LIMB OF SECTION 271(1)(C) FOR WHICH PENALTY PROCEEDINGS HAVE BEEN INITIATED BY WAY OF S TRIKING OFF THE INAPPROPRIATE WORDS IN PENALTY NOTICE. THE LD. AR RELIED UPON TH E DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF PCIT VS. M/S SAHARA IND IA LIFE INSURANCE COMPANY LTD. ITA NO. 475/20 ORDER DATED 2/8/2019 AN D ALSO THE DECISION OF KARNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATH C OTTON & GINNI FACTORY 359 ITR 565 WHICH IS CONFIRMED BY THE HON'BLE SUPRE ME COURT IN CASE OF CIT VS. M/S SSAS EMERALD MEADOWS ORDER DATED 5/8/2016. THUS, THE LD. AR SUBMITTED THAT BOTH THE QUANTUM APPEAL AS WELL AS P ENALTY APPEAL OF THE ASSESSEE BE ALLOWED. 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE PENALTY ALONG WITH BOTH THE ORDERS OF CIT(A). 5 ITA NOS. 6295/DEL/2016 & 2157/DEL/2015 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE ASSESSEE COMPANY WAS NOT IN EXISTENCE WHEN THE FIRST SEARCH TOOK PLACE ON THE GROUP OF BP TP AND THE SEIZED MATERIAL THEREIN CLEARLY DOES NOT BELONG TO ASSESSEE COMPANY . SECONDLY, AT THE TIME OF THE SECOND SEARCH NO INCRIMINATING MATERIAL WAS FOU ND IN RESPECT OF THE ASSESSEE COMPANY. HENCE, THE ADDITION MADE ON PDC S BASED ON THE FIRST SEARCH DOES NOT HAVE ANY CORROBORATIVE EVIDENCE WH ICH HAS BEEN BROUGHT BY THE REVENUE ON RECORD. THE CIT(A) AS WELL AS THE A SSESSING OFFICER HAS FAILED TO ESTABLISH THAT THE ASSESSEE COMPANY WAS INVOLVED IN UNEXPLAINED/UNACCOUNTED MONEY TRANSACTIONS. THEREF ORE, THE ASSESSEE SUCCEEDS IN QUANTUM APPEAL. 8. AS REGARDS PENALTY ORDER, FIRSTLY, THE CORRECT LIMB WAS NOT STRUCK OFF OR RATHER INDICATED BY THE ASSESSING OFFICER IN THE NO TICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT AND HENCE THE DECISION OF THE JURISDICTIONAL HIGH COURT IN CASE OF M/S SAHARA INDIA LIFE INSURANCE LTD. (SUPRA ) IS SQUARELY APPLICABLE IN PRESENT CASE. BESIDES THIS, SINCE THE QUANTUM APPE AL HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND ADDITION HAS BEEN DELETE D, THE PENALTY ITSELF DOES NOT SURVIVE. HENCE, BOTH THE APPEALS OF THE ASSESSEE A RE ALLOWED. 9. IN RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13TH DA Y OF APRIL, 2021. SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED: 13/04/2021 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 6 ITA NOS. 6295/DEL/2016 & 2157/DEL/2015 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI