Subhshree Investment Management P.Ltd, New Delhi V. ACIT, Central circle-8, New Delhi

ITA 2208/DEL/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0117 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 03-10-2022
• Assessment Year: 2013-2014
• Appeal Filed On: 12-03-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Search and seizure
• Section: 37; 132; 139; 143(3); 153A; 139(1); 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “G” : DELHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA.No.2208/Del./2019 Assessment Year 2013-2014 M/s. Subhshree Investment Management Pvt. Ltd., 2 nd Floor, 19 Local Shopping Complex, Near Pushpa Bhawan, Madangir, New Delhi – 110 062. PAN AAMCS4230P vs. The ACIT, Central Circle- 8, Room No.333, 2 nd Floor, E-2, ARA Centre, Jhandewalan Extn., Delhi – 110 055. (Appellant) (Respondent) For Assessee : -None- For Revenue : Shri Abhishek Kumar, Sr. DR Date of Hearing : 14.10.2022 Date of Pronouncement : 20.10.2022 ORDER PER ANIL CHATURVEDI, A.M. : This appeal filed by the Assessee is directed against the Order of the Ld. CIT(A)-24, New Delhi, dated 07.01.2019 in Appeal No.238/2017-18 relating to the A.Y. 2013-14. 2 ITA.No.2208/Del./2018 M/s. Subhshree Investment Management Pvt. Ltd., New Delhi. 2. Briefly stated facts of the case are that the assessee company had originally electronically filed it’s return of income for the A.Y. 2013-14 under section 139 of the I.T. Act, 1961 on 20.10.2013 declaring total income of Rs.1530/-. The A.O. has noted that a search and seizure operation under section 132 of the I.T. Act, 1961 was conducted in the case of Priyagold Group of assessees on 16.12.2014 by Investigation Wing, Delhi. Consequent to the search, proceedings under section 153C read with Section 153A of the I.T. Act, 1961 was initiated in the case of the assessee. The A.O, thereafter, has noted that information was received from Investigation Wing, Kolkata that a search and seizure operation under section 132 of the I.T. Act, 1961 was conducted upon the assessee on 19.11.2015. Hence, the proceedings initiated under section 153C r.w.s. 153A of the I.T. Act, 1961 in consequence to the search operation conducted on the assessee on 16.12.2014 were abated as per the provisions of Section 153A of the I.T. Act, 1961. Consequent to the search operation conducted on the assessee on 19.11.2015 for the A.Y. 2013-14, scrutiny 3 ITA.No.2208/Del./2018 M/s. Subhshree Investment Management Pvt. Ltd., New Delhi. assessment under section 153A was initiated and notice was issued to the assessee to file the return of income. In response to the said notice under section 153A, the assessee vide letter dated 14.06.2017 submitted that the return filed by the assessee under section 139(1) of the I.T. Act, 1961 be treated as return of income filed under section 153A of the I.T. Act, 1961. Thereafter, assessment was framed under section 153A r.w.s. 143(3) of the I.T. Act, 1961 vide order dated 28.12.2017 and the total income of the assessee company was determined at Rs.16,01,57,780/- by inter alia making addition of Rs.15,62,50,000/- on protective basis and addition of Rs.39,06,250/- being unexplained expenditure. 2.1. Aggrieved by the order of the A.O, the assessee carried the matter in appeal before the Ld. CIT(A) who vide order dated 07.01.2019 in Appeal No.238/2017-18 granted partial relief to the assessee. 3. Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal and has raised the following effective ground : 4 ITA.No.2208/Del./2018 M/s. Subhshree Investment Management Pvt. Ltd., New Delhi. “That on facts and circumstances of the case and in law, the Commissioner of Income Tax (Appeals)-XXIV, New Delhi [‘the Ld. CIT(A)’], has erred in upholding the order of the Assistant Commission of Income tax, Central Circle-08, New Delhi (‘the Ld. Assessing Officer’) in upholding the addition of Rs. 39,06,250 made u/s 37 of the Act on account of alleged unexplained expenditure on commission”. 4. On the date of hearing none appeared on behalf of the assessee nor any adjournment application was filed despite the fact that the notice of hearing was issued to the assessee through speed post which has been returned by the postal authorities with the remarks “no such person in this address”. Preferring an appeal does not mean merely only formally filing it, but, also taking all the steps to effectively pursue the appeal. We are of the view that it is the duty of the assessee to furnish new/change of address, if any, by filing the revised Form No.36 in the Registry of the Tribunal so that the notice could be sent to the correct address. Since the assessee has failed to furnish 5 ITA.No.2208/Del./2018 M/s. Subhshree Investment Management Pvt. Ltd., New Delhi. new/change of address, therefore, we had no option, except to dispose of the appeal ex-parte qua the assessee, after hearing the Ld. D.R. We, therefore, proceed to dispose of the appeal ex parte qua the assessee, after considering the submissions of Learned DR and the material on record. 5. The brief facts pertaining to the ground of appeal raised by the assessee before the Tribunal are that, the A.O. on perusal of the Balance-Sheet of the Assessee-Company has noted that it had made investments in the equity shares of M/s. Surya Processed Food Pvt. Ltd., for an amount of Rs.15,62,50,000/-. The A.O. for the reasons noted in the assessment order and after considering the pre-search and post-search enquiries conducted, concluded that assessee was a paper company utilised by the Priya Gold group for rotating its own unaccounted fund as share capital/share premium. The A.O. noted that Priya Gold group has obtained accommodation entry in the form of share capital from the assessee-company by following the modus operandi noted by the A.O. The A.O. after examining the documents and after conducting the enquiries, concluded that assessee 6 ITA.No.2208/Del./2018 M/s. Subhshree Investment Management Pvt. Ltd., New Delhi. was a paper company and the source of credits in the hands of assessee was not explained and the credits were immediately transferred to M/s. Surya Processed Food Pvt. Ltd., who was the ultimate beneficiary of the credits. A.O. noted that substantive addition was made in the hands of ultimate beneficiary while protective addition of Rs.15,60,50,000/- was made in the hands of assessee- company. The A.O. noted that assessee-company was used for channelizing the unaccounted funds of M/s. Surya Agrotech Infrastructure Pvt. Ltd., and the entry operators generally charge 2-3% of total entry value as commission. A.O. held that since assessee-company had given entry of Rs.15,62,50,000/- during the assessment year under consideration, for which, he worked-out commission @ 2.5% at Rs.39,06,250/- and made the addition. 6. Aggrieved by the order of the A.O, the assessee carried the matter in appeal before the Ld. CIT(A) and the Ld. CIT(A) upheld the addition made by the A.O. 7. Aggrieved by the order of the Ld. CIT(A) assessee is now in appeal before the Tribunal. 7 ITA.No.2208/Del./2018 M/s. Subhshree Investment Management Pvt. Ltd., New Delhi. 8. Before us, the Ld. D.R. took-us through the findings of A.O. and supported the order of Ld. CIT(A). 9. We have heard the Ld. D.R, perused the orders of the authorities below and the material available on record. The issue in the present appeal is with respect to upholding the addition made by the A.O. on account of unexplained income of Rs.39,06,250/- being the commission earned for giving accommodation entry of Rs.15.62 crores and which was upheld by the Ld. CIT(A). We find that the A.O. after examining the records and for the detailed reasons given in the assessment order has made the addition and the same was upheld by the Ld. CIT(A). When appeal is filed before the Tribunal by the assessee against the order of lower authorities, it is expected that the assessee may put-forth some documentary evidences in support of his contentions to decide the appeal as it is the duty of the assessee to lead evidence in support of it’s claim and for the adjudicating authority to decide upon the sustainability of the claim or the basis of the evidence led by the parties before it. In the instant case, at the time of hearing, the assessee neither 8 ITA.No.2208/Del./2018 M/s. Subhshree Investment Management Pvt. Ltd., New Delhi. appeared nor brought on record any material to substantiate it’s claim. We, therefore, find no fallacy in the findings of Ld. CIT(A) and accordingly, the order of the Ld. CIT(A) is upheld. Resultantly, the ground of appeal raised by the assessee before the Tribunal is dismissed. 10. In the result, appeal of the assessee is dismissed. Order pronounced in the open Court on 20.10.2022. Sd/- Sd/- (ANUBHAV SHARMA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi, Dated 20 th October, 2022 VBP/- Copy to 1. The appellant 2. The respondent 3. CIT(A) concerned 4. CIT concerned 5. D.R. ITAT ‘G’ Bench, Delhi 6. Guard File. // By Order // Assistant Registrar : ITAT Delhi Benches : Delhi.