Green Park Estate Pvt. Ltd., New Delhi V. ACIT, Central Circle- 32, New Delhi

ITA 290/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3286 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 10-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure; Document seized; Documents seized; Set aside
• Section: 271(1)(c); 147; 131; 148; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: C NEW DELHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.290/DEL/2018 ASSESSMENT YEAR: 2006-07 M/S. GREEN PARK ESTATE PVT. LTD., M-11, MIDDLE CIRCLE, CONNAUGHT CIRCUS, NEW DELHI VS. ACIT, CENTRAL CIRCLE-32, NEW DELHI PAN :AAACG4040P (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THE PRESENT APPEAL BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER DATED 21.11.2017 WHEREBY THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS)-30, NEW DELHI [IN SHORT THE L EARNED CIT(A)] HAS CONFIRMED THE PENALTY IMPOSED U/S 271(1)(C) OF THE INCOME- TAX ACT, 1961 (IN SHORT THE ACT) BY THE ASSESSING OFFICER. 2. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSE E SUBMITTED THAT IN THIS CASE, THE QUANTUM ADDITION, AGAINST WHICH THE PENALTY HAS BEEN IMPOSED UNDER SECTION 271(1)(C ) OF THE ACT APPELLANT BY SH. AJAY BHAGWAN, CA RESPONDENT BY MS. ANIMA BARNWAL, SR.DR DATE OF HEARING 29.09.2021 DATE OF PRONOUNCEMENT 21.10.2021 2 ITA NO.290/DEL/2018 BY THE ASSESSING OFFICER, HAS BEEN DELETED BY THE I TAT, DELHI BENCH, IN ITA NO. 1743/DEL/2013 FOR ASSESSMENT YEAR 2006-07. THUS, IT IS SUBMITTED THAT AS THE QUANTUM APPEAL IS ALLOWED, THE APPEAL IN RESPECT OF PENALTY LEVIED U/S 271(1)(C) D OES NOT SURVIVE AND NEEDS TO BE DISMISSED. 3. ON THE OTHER HAND, THE LEARNED DR DID NOT CONTROVE RT THE ABOVE FACTS. 4. WE HAVE HEARD BOTH THE PARTIES THROUGH VIDEO CONFER ENCING AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECO RD. WE FIND THAT THE QUANTUM APPEAL, AGAINST WHICH THE PENALTY WAS LEVIED, WAS ALLOWED BY THE ITAT, DELHI BENCH, VIDE ORDER DA TED 13.09.2021 IN ITA NO. 1743/DEL/2013 FOR ASSESSMENT YEAR 2006- 07 BY QUASHING THE ASSESSMENT COMPLETED U/S 147/143 (3) OF THE ACT. THE RELEVANT PARA OF THE ORDER OF THE TRIBUNAL IS REPRODUCED AS UNDER: 6.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE A LSO GONE THROUGH THE RECORDS. WE HAVE ALSO PERUSED THE REASO NS RECORDED IN THE CASE OF GREEN VALLEY TOWER PVT. LTD. FOR ASSESS MENT YEAR 2006- 07 WHICH ARE BEING REPRODUCED HEREIN UNDER FOR A RE ADY REFERENCE: REASONS FOR REOPENING THE CASE U/S 147 READ WITH S ECTION 148 RETURN DECLARING AN INCOME OF RS.4,03,150/- WAS F ILED ON 15.11.2006. THE CASE WAS PROCESSED U/S 143(1). A SEARCH AND SEIZURE ACTION WAS CONDUCTED ON BPTP A ND ITS GROUP COMPANIES ON 15.11.2007. CERTAIN DOCUMENTS SE IZED IN THE SEARCH ACTION (DETAILS ENCLOSED AS PER ANNEXURE -A) ON THE GROUP AND THE POST-SEARCH ENQUIRIES MADE REVEALED T HAT THE GROUP WAS FOLLOWING A BUSINESS MODEL AS A PART OF W HICH ONLY PART PAYMENTS OF THE SALE CONSIDERATION IN RESPECT OF THE LAND PURCHASED WERE PAID AT THE TIME OF EXECUTION OF THE SALE-DEED AND THE PAYMENT OF BALANCE SALE CONSIDERATION WAS I NVARIABLY MADE THROUGH POST DATED CHEQUES (PDCS) AND FOR THE INTERVENING PERIOD I.E. PERIOD BETWEEN THE DATE OF SALE-DEED AND THE DATE OF ENCASHMENT OF PDCS INTEREST WAS PAI D IN CASH TO THE VENDORS OF THE LAND BY THE VENDEE COMPANY ON MONTHLY BASIS @ 1.25% P.M. ON THE AMOUNT OF PDCS. DURING TH E COURSE 3 ITA NO.290/DEL/2018 OF POST SEARCH ENQUIRIES, IT WAS ALSO NOTICED THAT THE SAID PAYMENT OF INTEREST BY THE VENDEE COMPANY IN CASH H AS NOT BEEN ACCOUNTED FOR BY IT IN ITS BOOKS OF ACCOUNT. T HE ASSESSEE COMPANY HAS ALSO PURCHASED A LARGE CHUNK OF LAND AN D FOLLOWED THE SAME MODUS OPERANDI OF MAKING PAYMENT THROUGH PDCS AND HAS MADE PAYMENT OFINTEREST OF RS. 24,78,080/- IN CASH OUT OF BOOKS OF ACCOUNT. THE IN COME OF THE ASSESSEE TO THE TUNE OF RS.24,78,080/- ON ACCOUNT O F INTEREST PAID IN CASH OUT OF THE BOOKS OF ACCOUNT HAS, THUS, ESCAPED ASSESSMENT. 2. DURING THE COURSE OF SEARCH ON BPTP AND ITS GROU P COMPANIES A DOCUMENT WAS FOUND AND SEIZED (PAGES 1 TO 11 OF ANNEXURE-A-1 OF PARTY BO-I) FROM THE PREMISES 5T H & 6TH FLOOR, DCM BUILDING, BARAKHARNBA ROAD, NEW DELHI WH ICH REVEALED THAT THE ASSESSEE COMPANY HAD MADE ADDITIO NAL PAYMENTS 'AGGREGATING TO RS.9,52,625/- AGAINST THE PURCHASE OF LAND TO VARIOUS LAND OWNER'S. THE POST SEARCH IN VESTIGATIONS / ENQUIRIES WERE ALSO MADE TO VERIFY THE GENUINENES S OF THE ADDITIONAL PAYMENTS ACTUALLY HAVING BEEN MADE END SUMMONS U/S 131 WERE ISSUED TO SEVERAL FARMERS FROM WHOM THE LAND WAS ACQUIRED. THE ENQUIRIES MADE REVEALED THAT THE ADDITIONAL PAYMENTS MADE WERE NOT GENUINE. MOREOVER , THE ADDITIONAL PAYMENTS WERE MADE IN VIOLATION OF THE S ECTION 24 OF THE STAMP DUTY ACT AND AS SUCH THE SAME ARE NOT ADMISSIBLE AS EXPENDITURE AS PER EXPLANATION TO U/S 37 (I) OF THE I.T. ACT. THE INCOME HAS, THUS, BEEN UNDER ASSE SSED TO THE EXTENT OF RE.9,52,625/- ON ACCOUNT OF ADDITIONAL PA YMENTS AGAINST THE PURCHASE OF LAND. I HAVE, THEREFORE REASONS TO BELIEVE THAT INCOME C HARGEABLE TO TAX AMOUNTING TO RS.34,30,705/- (RS.24,78,080+RS.9, 52,625) HAS ESCAPED ASSESSMENT WITHIN MEANING OF SECTION 14 7. NOTICE U/S 148 IS ISSUED. 6.1 A PERUSAL OF THE REASONS RECORDED IN THE CASE O F THE ASSESSEE AS WELL AS IN THE CASE OF M/S GREEN VALLEY TOWER LTD. ARE IDENTICAL ON THE ISSUE OF ALLEGED INTEREST PAID ON POST DATED CH EUQES. WE HAVE ALSO GONE THROUGH THE PAPER BOOK CONTAINING THE COP IES OF SEIZED DOCUMENTS AND THE SUMMARY OF THESE SEIZED DOCUMENTS . IT IS THE ASSESSEE CONTENTION THAT THERE WAS NO SEIZED DOCUME NTS WHICH WERE REFERRED TO IN THE ASSESSMENT ORDER WHICH COUL D THE SAID TO BE BELONGING TO THE ASSESSEE. THE LD. SR. DR HAS ALSO FAILED TO BRING TO ANYTHING ON RECORD TO ESTABLISH THAT ANY SEIZED DOC UMENTS WERE FOUND DURING THE COURSE OF SEARCH BELONGING TO THE ASSESSEE. THERE IS A CLEAR FINDING RECORDED BY THE LD. CIT(A) IN TH E IMPUGNED ORDER IN PARA. 4.3 & 4.4 OF HIS ORDER THAT NONE OF THE SEIZE D DOCUMENTS BELONGED TO THE ASSESSEE. THE LD. SR. DR WAS UNABLE TO CONTROVERT THIS CATEGORICAL FINDING RECORDED BY THE LD. CIT(A) . THUS, UNDISPUTEDLY, IN THE PRESENT CASE, NO DOCUMENTS BEL ONGING TO THE 4 ITA NO.290/DEL/2018 ASSESSEE WERE FOUND DURING THE COURSE OF SEARCH. WE ALSO NOTE THAT THIS ISSUE HAS BEEN DEALT WITH IN DETAIL IN THE CAS E OF M/S GREEN VALLEY TOWER PVT. LTD. IN ITA NO.1735/DEL/2013 FOR ASSESSMENT YEAR 2006-07 VIDE ORDER DATED 15.01.2021. THE RELEV ANT FINDINGS OF THE CO-ORDINATE BENCH OF THE TRIBUNAL ARE CONTAINED IN PARAGRAPHS 7.3, 7.4 AND 8 OF THE SAID ORDER AND THE SAME IS BE ING REPRODUCED HEREIN UNDER FOR A READY REFERENCE: 7.3 IN OUR CONSIDERED VIEW, EACH AND EVERY ASSESSE E IS A SEPARATE AND DISTINCT ASSESSEE. IT IS A FACT ON REC ORD THAT NO SEIZED MATERIAL BELONGING TO THE ASSESSEE WAS FOUND DURING THE COURSE OF SEARCH ON BPTP LTD. AND SOME OF ITS G ROUP COMPANIES. NONE OF THE VENDORS OF LAND WHO SOLD LAN D TO ASSESSEE WERE CALLED AND EXAMINED BY THE AO. THERE IS NOTHING ADVERSE BROUGHT ON RECORD BY THE AO IN FORM OF ANY MATERIAL OR ANY STATEMENT THAT INTEREST OUTSIDE THE BOOKS WAS PAID IN CASH BY THE ASSESSEE. THE REASONS WERE RECO RDED BY THE AO BY RELYING ON SEIZED DOCUMENTS WHICH BELONGE D TO SOME OTHER ASSESSEE DURING THE COURSE OF SEARCH ON BPTP LTD. AND SOME OF ITS COMPANIES. CONSIDERING THE RULES OF PRECEDENCE AND CONSISTENCY AND IN ABSENCE OF ANY MA TERIAL, DOCUMENT, EVIDENCE OR STATEMENT WHICH COULD IMPLICA TE THE ASSESSEE, IN OUR VIEW, THE IMPUGNED ASSESSMENT COUL D NOT HAVE BEEN REOPENED. IN VIEW OF THESE SPECIFIC FACTS , THE ACTION TAKEN BY THE AO OF REOPENING OF THE ASSESSMENT U/S 147 OF ASSESSE IS NOT SUSTAINABLE AND THE SAME IS QUASHED AS BEING VOID AB-INITIO AS BEING BASED ON SEIZED DOCUMENTS O F OTHER ASSESSEE AND BASED ON PRESUMPTIONS, ASSUMPTIONS AND INCORRECT INTERPRETATION OF LAW. 7.4 AS WE HAVE HELD THE RE-ASSESSMENT AS BEING VOID ABINITIO, THE GROUNDS RAISED BY THE ASSESSEE ON THE MERITS OF THE ADDITIONS BECOME ACADEMIC IN NATURE AND ARE NOT BEI NG ADJUDICATED UPON. 8.0 IN THE RESULT, ITA 1735/DEL/2013 FILED BY THE A SSESSEE IS ALLOWED.' 6.2 WE ALSO NOTE THAT SIMILAR ISSUE WAS ALSO CONSID ERED BY THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S WESTLAND DEVELOPERS PVT. LTD. VIDE ORDER DATED 22.11.2015 IN ITA NO.1757/DEL/2013 FOR ASSESSMENT YEAR 2006-07 WHEREI N AT PARA7 OF THE SAID ORDER THE FOLLOWING WAS HELD: 7. NOW ADVERTING TO THE SECOND LIMB OF ASSESSEES STAND, I.E., WHETHER THE REASONS RECORDED FOR FORMING THE BELIEF OF ESCAPEMENT OF INCOME ON THE BASIS OF MATERIAL SEIZE D ARE JUSTIFIED OR VAGUE TO TAKE RECOURSE OF SECTION 147. IN THIS CONTEXT, ON PERUSAL OF THE ORDERS OF AUTHORITIES BE LOW, WE FIND 5 ITA NO.290/DEL/2018 THAT THE ASSESSEE HAS CATEGORICALLY DENIED THAT ANY OF THE SEIZED DOCUMENTS, DISCUSSED IN THE IMPUGNED ORDER, BELONGED TO THE ASSESSEE. WE ALSO FIND THAT THE ASSESSMENT O RDER ALSO NOWHERE RECORDS ANY FINDING THAT ANY OF THE DOCUMEN TS SEIZED BELONG TO THE ASSESSEE. EVEN THE LD. CIT(A) AT PARA 4.3 HAS CATEGORICALLY STATED THAT THE ASSESSMENT ORDER NOWH ERE MENTIONS THAT ANY PART OF THE SEIZED MATERIAL BELON G TO THE APPELLANT COMPANY. THE ASSESSEE HAS BEEN DENYING TO HAVE PAID ANY INTEREST ON PDCS. NO COGENT MATERIAL WAS F OUND DURING THE COURSE OF SEARCH WHICH COULD REPEL THIS CONTENTION OF ASSESSEE. THE REASONS HAVE BEEN RECORDED BY THE AO AFTER DRAWING THE INFERENCE FROM THE SEIZED DOCUMENTS THA T TREND OF PAYMENT OF INTEREST ON PDCS BY THE GROUP COMPANIES STOOD DEPICTED AND THE ASSESSEE BEING A GROUP COMPANY OF BPTP LTD., MIGHT HAVE ALSO PAID INTEREST ON SUCH PDCS. T HIS APPROACH OF THE AUTHORITIES BELOW, TO OUR MIND, IS NOT TENABLE AT ALL BEING BASED ON FAKE INFERENCES DRAWN. THE AS SESSEE IS A SEPARATE AND DISTINCT ASSESSEE UNDER THE ACT AND IS TO BE ASSESSED ON THE BASIS OF MATERIAL WHICH BELONGS TO IT OR SPECIFICALLY RELEVANT FOR ITS ASSESSMENT. IN THE IN STANT CASE NO SPECIFIC DOCUMENT IS POINTED OUT BELONGING TO THE A SSESSEE NOR ANY EVIDENCE OR MATERIAL,WHATSOEVER, HAS BEEN DEMON STRATED BY THE AUTHORITIES BELOW TO SHOW THAT THE ASSESSEE HAD PAID INTEREST ON PDCS. THEREFORE, THERE BEING NO DEFINIT E MATERIAL BELONGING TO THE ASSESSEE, IN OUR 17 ITA NO.1743/DE L/2013 M/S GREEN PARK ESTATE (P) LTD. VS. ACIT OPINION, TH E REASONS RECORDED FOR INITIATION OF PROCEEDINGS U/S. 147 AGA INST THE ASSESSEE, ARE NOT IN CONSONANCE WITH LAW, HAVING BE EN BASED ON MERE SUPPOSITIONS AND SURMISES AND EXTRAPOLATION OF MATERIAL SEIZED. THE FACT THAT THE ASSESSEE IS A GR OUP COMPANY OF BPTP LTD. AND OVERALL MANAGEMENT IS CONT ROLLED BY ONE PERSON CANNOT BE EQUATED WITH THE EXISTENCE OF INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE FO R DRAWING THE ADVERSE INFERENCE. WE, THEREFORE, FIND CONSIDER ABLE FORCE IN THE CONTENTION OF THE ASSESSEE THAT ASSESSMENT IS B ASED ON ALIEN MATERIAL HAVING NO SPECIFIC NEXUS WITH THE AS SESSEE AND THAT THERE IS NO CORROBORATING AND INDEPENDENT EVID ENCE TO JUSTIFY THAT THE ASSESSEE HAD PAID INTEREST OF PDCS , AS ALLEGED BY THE AUTHORITIES BELOW. THE ACTION TAKEN U/S. 147 BY THE AO IS, THEREFORE, VOID AB INITIO AND NOT SUSTAINABLE, HAVING BEEN RESORTED TO ON VAGUE REASONS. 8. ONCE, AS OBSERVED ABOVE, WE HAVE HELD THE PROCEE DINGS U/S. 147 AS VOID, WE NEED NOT TO ENTER INTO THE MER ITS OF ADDITIONS CHALLENGED BY ASSESSEE BY WAY OF OTHER GR OUNDS AND ALSO BY THE REVENUE IN ITS APPEAL. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS LIABLE TO BE ALLOWED AND THAT OF REVENUE TO BE DISMISSED. 6 ITA NO.290/DEL/2018 6.3 IN VIEW OF THE ORDERS OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF GROUP COMPANIES ON IDENTICAL REASONS RE CORDED AND ON IDENTICAL FACTS AND AFTER DULY CONSIDERING THE RULE S OF CONSISTENCY AND IN ABSENCE OF ANY MATERIAL, DOCUMENTS, EVIDENCE OR STATEMENT WHICH COULD IMPLICATE THE ASSESSEE, IT IS OUR CONSI DERED VIEW THAT THE IMPUGNED ASSESSMENT COULD NOT HAVE BEEN REOPENE D. THEREFORE, ON SPECIFIC FACTS OF THE CASE AND RESPECTFULLY FOLL OWING THE ORDERS OF THE CO-ORDINATE BENCHES AS AFORESAID IN THE CASE OF COMPANIES BELONGING TO THE SAME GROUP AND AFTER DULY GIVING C REDENCE OF THE FACT THAT IDENTICAL REASONS WERE RECORDED, WE HOLD THAT THE ACTION TAKEN BY THE ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT U/S 147 OF THE ACT IS NOT SUSTAINABLE AND THE SAME IS H EREBY QUASHED AS BEING BASED ON SEIZED DOCUMENTS OF OTHER ASSESSEES AND BEING ENTIRELY BASED ON PRESUMPTION AND ASSUMPTIONS AND I NCORRECT INTERPRETATION OF LAW. ACCORDINGLY, WE SET ASIDE TH E RE-ASSESSMENT. 6.4 AS WE HAVE HELD THE REASSESSMENT AS BEING VOID ABINITIO, THE GROUNDS RAISED BY THE ASSESSEE ON MERITS OF THE CAS E ARE NOT BEING CONSIDERED FOR ADJUDICATION AS THEY HAVE BECOME ACA DEMIC IN NATURE. 5. HENCE, AS THE QUANTUM ADDITION HAS ALREADY BEEN DE LETED, THE APPEAL FOR PENALTY DOES NOT SURVIVE. ACCORDINGL Y, THE APPEAL IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST OCTOBER, 2021 SD/- SD/- (KULDIP SINGH) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21 ST OCTOBER, 2021. RK/- (DTDC) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI