ACIT, New Delhi V. M/s Vipul Motors Pvt. Ltd., Kolkata

ITA 2675/DEL/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69207 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 20-05-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 03-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K MISHRA
• Assessee Lawyers: RAJESH ARORA
• Keywords: Unexplained cash credit; Search and seizure; Accommodation entries
• Section: 153A; 68; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H: NEW DELHI) BEFORE SHRI J. S. REDDY, ACCOUNTANT MEMBER AND SHRI C. M. GARG, JUDICIAL MEMBER ITA NOS.2675 & 2676/DEL/ 2010 (ASSESSMENT YEARS: 2001-02 & 2003-04) ACIT VS. VIPUL MOTORS PVT. LTD. CENTRAL CIRCLE-2, FLAT NO.6, 2 ND FLOOR, ROOM NO.323, E-2, 16/2, LORD SINHA ROAD, ARA CENTRE, JHANDEWALAN EXTN. NEW DELHI, KOLKATA PAN: AABCV0931B. ASSESSEE BY : SHRI RAJESH ARORA, CA. REVENUE BY :SHRI A. K. MISHRA, CIT. DR. ORDER PER C. M. GARG, J M: THESE APPEALS HAVE BEEN PREFERRED BY THE REVENUE AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III NEW DELHI BOTH DATED 10.03.2010 IN APPEAL NO- 392/2008-09 AND 394/08-09 FOR THE ASSESSMENT YEARS 2001-02 & 2003-04. GROUNDS NO. 7 AND 8 OF BOT H THE APPEALS ARE GENERAL IN NATURE. WHICH NEEDS NO ADJUDICATION, REM AINING GROUNDS OF THE REVENUE ARE READ AS UNDER: GROUNDS OF ITA NO. 2675(ASSESSMENT YEAR 2001-02) 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS.5,00,000/- MADE BY THE ASSESSING OFFICER ON ITA NOS.2675 & 2676/DEL/2010 2 ACCOUNT OF UNEXPLAINED CASH CREDIT BY HOLDING THAT THE SAME WAS NOT BASED ON ANY DOCUMENT/ MATERIAL FOUND DURIN G THE SEARCH? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS.5,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF INTEREST PAID ON UNSECUR ED LOAN BY HOLDING THAT THE SAME WAS NOT BASED ON ANY DOCUMENT / MATERIAL FOUND DURING THE SEARCH. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN INTERPRETING SEC TION 153A OF THE I.T. ACT? 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN PLACING RELIANCE ON SECOND PROVISO TO SECTION 153A(1) IGNORING THE MAIN SECTIO N AND THE FIRST PROVISO. 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW IN NOT FOLLO WING THE CIRCULAR NO.7 OF 2003 DATED 05.09.2003 ISSUED BY TH E CBDT. 6. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW BY NOT APPRE CIATING THE FACT THAT THERE IS NO PRECONDITION THAT DOCUMENTS P ERTAINING TO EACH OF THE ASSESSMENT YEAR FALLING UNDER THE PROVI SIONS OF SECTION 153C/153A SHOULD BE FOUND ? GROUNDS OF ITA NO. 2676(ASSESSMENT YEAR 2003-04) 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS.12,00,000/- MADE BY THE ASSESSIN G OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT BY HOLDING TH AT THE SAME WAS NOT BASED ON ANY DOCUMENT/ MATERIAL FOUND DURIN G THE SEARCH? ITA NOS.2675 & 2676/DEL/2010 3 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW AND IN FACTS IN DELETING THE ADDITION OF RS.15,534/- MADE BY THE ASSESSING O FFICER ON ACCOUNT OF DISALLOWANCE OF INTEREST PAID ON UNSECUR ED LOAN BY HOLDING THAT THE SAME WAS NOT BASED ON ANY DOCUMENT / MATERIAL FOUND DURING THE SEARCH. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN INTERPRETING SEC TION 153A OF THE I.T. ACT? 4. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN PLACING RELIANCE ON SECOND PROVISO TO SECTION 153A(1) IGNORING THE MAIN SECTIO N AND THE FIRST PROVISO. 5. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW IN NOT FOLLO WING THE CIRCULAR NO.7 OF 2003 DATED 05.09.2003 ISSUED BY TH E CBDT. 6. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW BY NOT APPRE CIATING THE FACT THAT THERE IS NO PRECONDITION THAT DOCUMENTS P ERTAINING TO EACH OF THE ASSESSMENT YEAR FALLING UNDER THE PROVI SIONS OF SECTION 153C/153A SHOULD BE FOUND ? 2. BRIEFLY STATED TO THE FACTS GIVING RISE TO THESE APPEALS ARE THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON THE ASSESS EE ON 01.06.2006. CONSEQUENT UPON THE SEARCH NOTICE U/S 153A OF THE I NCOME TAX ACT (FOR SHORT THE ACT) WERE ISSUED AND SERVED ON THE ASSESS EE ON 29.04.2008 AND ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS COM PLETED U/S 143(3)/ 153A OF THE ACT ON 24.12.2008. ITA NOS.2675 & 2676/DEL/2010 4 3. THE ASSESSING OFFICER OBSERVED THAT INFORMATION WAS RECEIVED FROM DIRECTOR OF INCOME TAX (INV.-I), NEW DELHI VIDE LET TER DATED 16.06.2006 THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION ENTR Y OF LOAN OF RS.5,00,000/- RECEIVED FROM M/S SEHGAL TELEVISION P VT. LTD. ON 6 TH APRIL, 2000 DURING THE ASSESSMENT YEAR 2001-02 AND ASSESSE E IS ALSO A BENEFICIARY OF ACCOMMODATION ENTRY OF LOAN OF RS.12,00,000/- RE CEIVED FROM M/S K.V. F. SECURITIES PVT. LTD. DURING THE ASSESSMENT YEAR 2003-04. THE ASSESSING OFFICER HELD THAT THE SO CALLED LOAN AMOUNTS WERE I N THE NATURE OF ACCOMMODATION ENTRIES AND THE ASSESSING OFFICER HEL D THAT THE AMOUNT OF LOAN TAKEN DURING ASSESSMENT YEAR 2001-02 AMOUNTING TO RS.5,00,000/- AND ANOTHER LOAN AMOUNT OF RS.12,00,000/- TAKEN DURING ASSESSMENT YEAR 2003- 04 ARE UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AN D THE ASSESSING OFFICER MADE ADDITIONS IN THIS REGARD IN THE RESPECTIVE ASS ESSMENT YEARS. 4. AGGRIEVED, ASSESSEE FILED SEPARATE APPEALS BEFOR E CIT (A) WHICH WERE DISPOSED OF WITH COMMON FINDINGS BY ALLOWING APPEAL OF THE ASSESSEE. THE OBSERVATIONS AND FINDINGS OF THE CIT (A) IN BOTH TH E APPEALS READ AS UNDER: ADVERTING BACK TO THE FACTS OF THE CASE, IT IS OBS ERVED THAT DURING THE SEARCH NOT A SINGLE PIECE OF EVIDENCE WA S FOUND WHICH DEPICTS THAT ANY INCOME WHICH HAS BEEN EARNED BY THE APPELLANT HAS NOT BEEN DISCLOSED. THERE IS NO REFER ENCE TO ANY MATERIAL SO FOUND WHILE COMPUTING THE INCOME U/S 15 3A OF THE ACT. MERELY BECAUSE SEARCH IS CONDUCTED, THE ASSESS MENT WHICH HAS BECOME FINAL CANNOT BE RE-AGITATED ON A DIFFERE NCE OF OPINION. AS PER THE FIRST PROVISO TO SECTION 153A, THOUGH THE ITA NOS.2675 & 2676/DEL/2010 5 ASSESSING OFFICER CAN ASSESS OR REASSESS TOTAL INCO ME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED, AS PER SECOND PROVISO, THE ORIGINAL ASSESSMENTS WHI CH WERE NOT PENDING SHALL NOT ABATE. THE POWER U/S 153A OF THE ACT SHOULD, THEREFORE, BE WITH REFERENCE TO ASSESSMENT OR REASS ESSMENT OF PENDING ASSESSMENTS OR QUA THE MATERIAL FOUND DURIN G THE COURSE OF THE SEARCH. FROM THE AFORESAID ANALYSIS O F JUDICIAL PRECEDENTS, I AM OF THE CONSIDERED VIEW THAT SINCE THE REGULAR RETURN OF INCOME WAS FILED ON 31.10.2001. THIS WAS PROCESSED U/S 143(1) (A) OF THE ACT. NO NOTICES U/S 143(2) OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER AND AS SUCH THE ASS ESSMENT WAS NOT PENDING ON THE DATE OF INITIATION OF PROCEEDING S U/S 132 OF THE ACT. THE CIRCULAR NO.007OF 2003 DATED 15.09.2003 OF THE CBDT MAKES IT CLEAR THAT ONLY THE ASSESSMENT OR RE-ASSE SSMENT WHICH IS PENDING BEFORE THE ASSESSING OFFICER ON TH E DATE OF INITIATION OF SEARCH SHALL ABATE. SINCE THE ORIGINA L ASSESSMENT WAS NOT PENDING AS ON THE DATE OF INITIATION OF SEA RCH THE SAME HAS NOT ABATED AND ADMITTEDLY NOTHING WAS FOUND DUR ING THE SEARCH TO SUGGEST THAT ANY INCOME HAS ESCAPED THE A SSESSMENT, AND NO BOOKS OF ACCOUNTS, DOCUMENTS OR OTHER ASSETS BEING FOUND OR SEIZED IN THE SEARCH, THEREAFTER, NO ADDIT ION CAN BE MADE TO THE INCOME OF THE APPELLANT U/S 153A OF THE ACT WHICH IS NOT BASED ON THE BOOKS OF ACCOUNTS, DOCUMENTS OR OTHER ASSETS FOUND AND SEIZED DURING THE SEARCH. 5. WE HAVE CAREFULLY HEARD RIVAL ARGUMENT OF BOTH T HE PARTIES AND PERUSED THE RECORD, PLACED BEFORE US. 6. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GRA NTED THE RELIEF TO THE ASSESSEE, ON THE GROUND THAT NO MATERIAL WAS FO UND AND SEIZED IN CONSEQUENCE TO SEARCH OPERATION CARRIED OUT UPON TH E ASSESSEE ON 01.06.2006. THE CIT (A) HAS ALSO CONSIDERED THE ISS UE OF ABATEMENT OF PENDING ASSESSMENTS, WHICH WERE PENDING ON THE DATE OF SEARCH THAT WAS ON ITA NOS.2675 & 2676/DEL/2010 6 01.06.2006. THE CIT (A) HAS ALSO RELIED ON THE CIRC ULAR NO. 7 OF 2003 DATED 15.09.2003. FURTHER THE CIT (A) HAS ALSO CONSIDERED THE FACT THAT NO ORIGINAL ASSESSMENT PERTAINING TO THE ASSESSMENT YEAR UNDER CONSIDERATION IN THESE APPEALS WERE PENDING ON THE DATE OF SEARCH AND CI T (A) HELD THAT NO PROCEEDINGS WERE ABATED AS PER SECOND PROVISO TO SE CTION 153A OF THE ACT. 7. FROM THE IMPUGNED ORDER, WE ALSO OBSERVE THAT TH E CIT (A) ALSO NOTED THAT NOTHING WAS FOUND AND SEIZED DURING THE SEARCH AND SEIZURE OPERATION IN THE FORM OF BOOKS OF ACCOUNTS, DOCUMENTS AND BILL O F ASSETS AND THE CIT (A) FURTHER HELD THAT IN THIS SITUATION NO ADDITION CAN BE MADE. 8. HOWEVER, THE CIT (A) HAS NOT CONSIDERED THE FACT THAT THE ASSESSING OFFICER RECEIVED INFORMATION FROM DIRECTOR OF INCOM E TAX (INV.I), NEW DELHI THROUGH VIDE ITS LETTER DATED 16.06.2006 THAT THE ASSESSES WAS ALLEGED TO BE A BENEFICIARY OF ACCOMMODATION ENTRY FROM M/S SEHGAL TELEVISION PVT. LTD. DURING ASSESSMENT YEAR 2001-02 AND FROM M/S K. V. F. SECURITIES PVT. LTD. DURING THE ASSESSMENT YEAR 2003-04. THE ASSESS ING OFFICER GOT THE JURISDICTION U/S 153A OF THE ACT ON ACCOUNT OF SEAR CH CONDUCTED U/S 132 OF THE ACT AT THE PREMISES OF THE ASSESSEE. IN VIEW O F THE ABOVE, THE ASSESSING OFFICER HAVING JURISDICTION TO ISSUE NOTICE U/S 153 A OF THE ACT. THE SECTION 153A STARTS WITH OBSTANTIVE CLAUSE WHICH READ AS UN DER: 153A (1) NOTWITHSTANDING ANYTHING CONTAINED IN SEC TION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION ITA NOS.2675 & 2676/DEL/2010 7 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INIT IATED U/S 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED U/S 132A AFTER THE 31 ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL- I) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FUR NISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTI CE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLIN G WITHIN SIX ASSESSMSENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETT ING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDIN GLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED U/S 1 39; (II) ASSESSE OR REASSESS THE TOTAL INCOME OF SIX AS SESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FAL LING WITHIN SUCH SIX ASSESSMENT YEARS REFERRED TO IN THIS (SUB- SECTION) PENDING ON THE DATE OF INITIATION OF THE SEARCH U/S 132 OR MAKING OF REQUISITION U/S 132A, AS THE CASE MAY BE, SHALL ABATE: 9. AS PER STATUTORY SCHEME AND PROVISIONS OF THE AC T DURING THE PENDENCY OF PROCEEDINGS U/S 153A OF THE ACT, THE AS SESSING OFFICER IS NOT EMPOWERED TO ISSUE NOTICE U/S 147/148 OF THE ACT. I N THESE CASES BEFORE US FROM THE BARE GLANCE ON THE IMPUGNED ORDER WE CLEAR LY OBSERVE THAT THE CIT (A) HAS COMPLETELY IGNORED THE FACT THAT THE ASSESS ING OFFICER HAS RECEIVED INFORMATION FROM INVESTIGATION WING OF THE DEPARTME NT THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION ENTRIES. THERE IS NO F INDING OF CIT (A) ON THIS ISSUE IN THE IMPUGNED ORDERS. IN VIEW OF THE ABOVE , WE FIND IT APPROPRIATE TO ITA NOS.2675 & 2676/DEL/2010 8 RESTORE THE ISSUE TO THE FILE OF CIT (A) FOR READJU DICATION OF THE APPEALS ON THIS ISSUE DE NOVO. THE CIT (A) SHALL GRANT DUE OPP ORTUNITY OF HEARING TO THE ASSESSEE. 10. ACCORDINGLY BOTH THE APPEALS OF THE REVENUE ARE DISPOSED OF IN THE MANNER AS INDICATED ABOVE AND BY SETTING ASIDE THE IMPUGNED ORDER AND BY RESTORING WHOLE CONTROVERSY AND ALL THE ISSUES TO T HE FILE OF CIT (A). THE CIT (A) SHALL DECIDE ALL THE ISSUES WITHOUT BEING PREJU DICED FROM OBSERVATIONS MADE IN THIS ORDER AND IN THE IMPUGNED ORDER. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISPOSED AS DIRECTED ABOVE OF AND MAY BE TREATED AS ALLOWED FOR STATISTI CAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 08 TH /08/ 2013. SD/- SD/- (J. S. REDDY) (C. M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 08 TH DAY OF AUGUST, 2013 S.SINHA COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT(ITAT), NEW DELHI. AR,ITAT NEW DELHI.