M/s B.R. Associates Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 2431/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 5035 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 24-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KAPOOR
• Assessee Lawyers: SHYAM SUNDER ARS
• Keywords: Unexplained cash credit; Search and seizure; Set aside
• Section: 271(1)(c); 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS.2431 TO 2433/DEL/2017 ASSESSMENT YEARS: 2005-06 TO 2007-08 B.R. ASSOCIATES PVT. LTD., 10 ESSEL HOUSE, ASAF ALI ROAD, NEW DELHI. PAN: AAACB1067H VS ACIT, CENTRAL CIRCLE-16, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJIV SAXENA & SHRI SHYAM SUNDER, ARS REVENUE BY : SHRI SANJAY KAPOOR, SR. DR DATE OF HEARING : 20.11.2019 DATE OF PRONOUNCEMENT : 22.11.2019 ORDER PER R.K. PANDA, AM: THE ABOVE APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST THE SEPARATE ORDERS DATED 27 TH FEBRUARY, 2017 OF THE CIT(A)-27, NEW DELHI RELATIN G TO ASSESSMENT YEARS 2005-06, 2006-07 AND 2007-08 RESPE CTIVELY. 2. IN ALL THESE THREE APPEALS, THE ASSESSEE HAS CHA LLENGED THE ORDER OF THE CIT(A) IN CONFIRMING THE PENALTY OF RS.75,01,734 FO R ASSESSMENT YEAR 2005-06, ITA NOS.2431 TO 2433/DEL/2017 2 RS.29 LAKHS FOR ASSESSMENT YEAR 2006-07 AND RS.1,75 ,66,537/- FOR ASSESSMENT YEAR 2007-08 LEVIED BY THE ASSESSING OFFICER U/S 271(1)( C) OF THE IT ACT, 1961. FOR THE SAKE OF CONVENIENCE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF TRADING OF HARDWARE AND STILL GOODS. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT ACT WAS CARRIED OUT IN THE CASE OF THE ASSESSEE ON 26 TH MARCH, 2010. IN RESPONSE TO NOTICE U/S 153A, THE ASSESSEE FILED RETURN OF INCOME FOR THE ABOVE THREE YEARS. THE ASSESSING OF FICER, IN THE ORDER PASSED U/S 153A/143(3) OF THE ACT, APART FROM OTHER ADDITIONS, MADE ADDITION OF RS.2,05,00,742/- FOR ASSESSMENT YEAR 2005-06, RS.86 ,15,583/- FOR ASSESSMENT YEAR 2006-07 AND RS.5,21,88,167/- FOR ASSESSMENT YEAR 20 07-08 U/S 68 OF THE ACT TREATING THE CAPITAL GAIN SHOWN ON ACCOUNT OF SALE OF SHARES AS UNEXPLAINED CASH CREDIT. THE CIT(A) UPHELD THE ADDITION SO MADE BY THE ASSESSING OFFICER. THE ASSESSING OFFICER, THEREAFTER INITIATED PENALTY PRO CEEDINGS U/S 271(1)(C) OF THE ACT AND LEVIED PENALTY OF RS.75,01,734/- FOR ASSESSMENT YEAR 2005-06, RS.29 LAKHS FOR ASSESSMENT YEAR 2006-07 AND RS.1,75,66,573/- FOR AS SESSMENT YEAR 2007-08 U/S 271(1)(C). IN APPEAL, THE LD.CIT(A) CONFIRMED THE PENALTY SO LEVIED BY THE ASSESSING OFFICER. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NOS.2431 TO 2433/DEL/2017 3 5. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, FILED A COPY OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR S 2005-06, 2006-07 AND 2007- 08 IN ITA NOS.4964 TO 4966/DEL/2012, ORDER DATED 10 TH JANUARY, 2019 AND SUBMITTED THAT THE APPEALS OF THE ASSESSEE HAVE BEE N ALLOWED IN THE QUANTUM PROCEEDINGS AND THE ADDITION HAS BEEN DELETED ON LE GAL GROUNDS IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH. THEREFORE, THE PENALTY HAS NO LEGS TO STAND AND HAS TO BE DELETED. 6. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED O N THE ORDER OF THE CIT(A) AND FILED VARIOUS DECISIONS AND SUBMITTED THAT THE PENA LTY WAS RIGHTLY LEVIED BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A). 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THE T RIBUNAL IN ASSESSEES OWN CASE, VIDE ITA NOS.4964 TO 4966/DEL/2012, ORDER DATED 10 TH JANUARY, 2019, ALLOWED THE APPEALS FILED BY THE ASSESSEE FOR ABOVE THREE YEARS ON THE GROUND THAT THERE IS COMPLETE ABSENCE OF ANY REFERENCE TO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE RELEVANT CONCLUSION OF THE T RIBUNAL AT PAGE 44 AND 45 OF THE ORDER READS AS UNDER:- SINCE THE FACTS AND CIRCUMSTANCES INVOLVED IN THE PRESENT CASE ARE IDENTICAL TO THOSE INVOLVED IN THE AFORESAID DECISION OF CO-ORDI NATE BENCH, THE SAME STATEMENTS WERE TAKEN ADVERSE AGAINST THE ASSESSEE, THERE IS COMPLETE ABSENCE OF ANY REFERENCE TO INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH AND THERE BEING NO CONTRARY MATERIAL ON RECORD FROM THE SIDE OF REVENUE TO TAKE A DIFFERENT VIEW, WE RESPECTFULLY FOLLOW THE DECISION OF CO-ORDINATE BENCH AS REPRODUCED ABOVE. ACCORDINGLY, THE APPEALS OF THE A SSESSEE DESERVE TO BE ITA NOS.2431 TO 2433/DEL/2017 4 ALLOWED ON THE LEGAL ASPECT OF THE CASE IN THE SAME LINE AS DONE BY THE CO- ORDINATE BENCH. WE ACCORDINGLY, NEED NOT TO ENTER I NTO THE MERITS OF THE ADDITIONS MADE BY THE AUTHORITIES BELOW. 9. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSE SSEE ARE ALLOWED. 8. SINCE THE ADDITION HAS BEEN DELETED BY THE TRIBU NAL ON THE LEGAL ASPECT THAT THE SAME IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH, THEREFORE, THE PENALTY HAS NO LEGS TO STAND. ACCOR DINGLY, THE SAME IS DIRECTED TO BE DELETED. THE VARIOUS DECISIONS RELIED ON BY THE LD . DR WILL NOT HELP THE REVENUE SINCE THERE IS NO ADDITION AFTER THE ORDER OF THE T RIBUNAL. ACCORDINGLY, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE ASSESSING OFFICER I S DIRECTED TO CANCEL THE PENALTY. 9. IN THE RESULT, THE APPEALS FILED BY THE AS SESSEES ARE ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 2.11.2019. SD/- SD/- (H.S. SIDHU) (R.K. PANDA) JUDICIAL MEMBER ACCO UNTANT MEMBER DATED: 22 ND NOVEMBER, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI