Namah Shivaya Marketing (P) Ltd., New Delhi V. ITO, Ward- 17(3), New Delhi

ITA 2940/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 1991 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 03-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Accommodation entries
• Section: 68; 148; 69C; 143(1); 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “SMC” : DELHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA.No.2940/Del./2019 Assessment Year 2010-2011 Namah Shivaya Marketing Pvt. Ltd., 206, Hans Bhawan, 1 BSZ Marg, New Delhi – 110 002 PAN AABCN7435Q [vs. The Income Tax Officer, Ward 17 (3), Room No.225D, 2 nd Floor, CR Building, IP Estate New Delhi. (Appellant) (Respondent) For Assessee : -None- For Revenue : Sh. Om Prakash, Sr. D.R. Date of Hearing : 15.06.2022 Date of Pronouncement : 29.06.2022 ORDER This appeal by assessee has been directed against the order of the Ld. CIT(A)-36, dated 01.02.2019 relating to the A.Y. 2010-11. 2. The assessee is a company who filed its return of income for the A.Y. 2010-11 on 23.07.2010 declaring NIL income. The return of income was initially processed under 2 ITA.No.2940/Del./2019 Namah Shivaya Marketing Pvt. Ltd., 206, New Delhi section 143(1) of the I.T. Act, 1961 vide order dated 18.04.2011. Thereafter, the A.O. noticed that assessee had received accommodation entry to the extent of Rs.25 lakhs during the F.Y. 2009-10 from bogus paper companies of S.K. Jain group. The case was, therefore, reopened under section 147 and notice under section 148 dated 23.03.2017 was issued. Thereafter, assessment was framed under section 147/143(3) of the I.T. Act, 1961 vide order dated 07.12.2017 and the total income was determined at Rs.25,50,000/- by making addition of Rs.25 lakhs under section 68 of the I.T. Act, 1961 and Rs.50,000/- u/s 69C of the Act. 2.1. Aggrieved by the order of the A.O. assessee carried the matter before the Ld. CIT(A) who vide order dated 01.02.2019 vide Appeal No.110/18-19 dismissed the appeal of the assessee. 3. Aggrieved by the order of Ld. CIT(A) assessee is now in appeal before the Tribunal and has raised the following grounds : 3 ITA.No.2940/Del./2019 Namah Shivaya Marketing Pvt. Ltd., 206, New Delhi 1. The learned CIT(A) has erred on facts and in law in upholding the addition of Rs.25,00,000/- u/s.68 on account of share capital, treating the same as an accommodation entry. 2. The learned CIT(A) has erred on facts and in law in upholding the addition of Rs.50,000/- u/s 69C as alleged commission paid for obtaining accommodation entries. 3. The information has been collected behind the back of the assessee and the assessee was never confronted with the same nor an opportunity provided for cross-examination of Jain Brothers, alleged intermediary and the relevant seized material relied upon has not been provided to the assessee. 4. The Ld. CIT(A) has erred on facts and in law in upholding addition irrespective of the fact that assessee has discharged onus u/s 68. No independent enquiry conducted. 4 ITA.No.2940/Del./2019 Namah Shivaya Marketing Pvt. Ltd., 206, New Delhi 5. The learned CIT(A) has erred on facts and in law in upholding the impugned order of the learned assessing officer where initiation u/s 148 & consequent proceedings are contrary to law, passed without application of mind and without complying with the procedure and rules, is against equity and justice and facts of the assessee and material on record. 6. The learned CIT (A) has erred on facts and in law by not adjudicating ground of initiation of penalty proceedings u/s 271(l)(c) without any material on record. 4. The case file reveals that the matter was listed on 5 occasions in the past but every time it was adjourned as there was no appearance from the side of assessee. For the date of present hearing, the Department was directed to serve the notice for hearing. The A.O. vide email dated 3 rd June 2022 has placed on record the service of notice for hearing but the assessee did not appear on the date of present hearing also. In 5 ITA.No.2940/Del./2019 Namah Shivaya Marketing Pvt. Ltd., 206, New Delhi such circumstances, I, therefore, have no option, but, to decide the appeal on merits, after hearing the Ld. D.R. 5. Before me, the Ld. D.R. supported the order of A.O. and submitted that a search was conducted at the premises of S.K. Jain group of cases resulting in discovery of large number of incriminating documents. Enquiries were conducted during the post-search and it was noted by the A.O. that assessee has received a sum of Rs.25 lakhs from M/s. Attractive Finlease Pvt. Ltd., as unexplained credit in the books of the assessee company and, therefore, the A.O. added the same to the income of the assessee, as the assessee was failed to prove the creditworthiness of the Investor and genuineness of the transaction in the matter. The Ld. D.R. further submitted that in the instant case the assessee could not submit a paper trail of the documents and failed to controvert the adverse findings confronted to it by the A.O. The Ld. CIT(A) also threadbear examined the matter in issue and confirmed the additions made by the A.O. He, therefore, prayed that the orders of the 6 ITA.No.2940/Del./2019 Namah Shivaya Marketing Pvt. Ltd., 206, New Delhi lower authorities be confirmed. In support of his contentions, the Ld. D.R. relied upon decisions such as Commissioner of Income Tax vs., Nova Promoters and Finlease P Ltd., [2012] 342 ITR 169 (Del.); Commissioner of Income Tax-II vs., Jan Sampark Advertising & Marketing P. Ltd., 2015-TIOL-600-HC- Del.-IT; N R Portfolio P. Ltd., in ITA.No.1018 & 1019/2011 dated 22.11.2013; and the decision of Hon’ble Supreme Court in the case of PCIT vs.,. NRA Iron & Steel (P.) Ltd., [2019] 103 taxmann.com 48 (SC) on the proposition that if assessee failed to prove the creditworthiness of the creditors and genuineness of the transaction, the addition under section 68 is justified. 6. I have heard the Ld. D.R. and perused the material on record. I find that in the instant case the A.O. noted that assessee has received share capital/premium from M/s. Attrative Finlease P. Ltd., to the tune of Rs.25 lakhs which has been treated as unexplained credit and added the same to the income of the assessee under section 68 of the I.T. Act, 1961. The Ld. CIT(A) after examining the matter had confirmed the 7 ITA.No.2940/Del./2019 Namah Shivaya Marketing Pvt. Ltd., 206, New Delhi order of the A.O. I find that in the instant case the assessee has failed to meet the three ingredients of section 68 of the I.T. Act, 1961 i.e., identity of Investor/Creditor, creditworthiness and genuineness of the transaction in the matter. Therefore, considering the totality of the facts and circumstances of the case, it is clearly proved that assessee has not discharged its initial onus to prove the identity of the Investors, their creditworthiness and genuineness of the transaction in the matter. The Ld. CIT(A), therefore, rightly confirmed the order of the A.O. Even before the Tribunal the assessee did not take any steps to furnish any documentary evidences in respect of the amount received by it towards the alleged accommodation entry sum of Rs.25 lakhs during the F.Y. 2009-10 and the other addition made by AO. Since the assessee has not placed any material to controvert the findings of lower authorities nor has pointed out any fallacy in the findings of the lower authorities, I find no reason to interfere with the order of the Ld. CIT(A). I, therefore, dismiss the appeal of the assessee. 8 ITA.No.2940/Del./2019 Namah Shivaya Marketing Pvt. Ltd., 206, New Delhi 7. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 29.06.2022. Sd/- [ANIL CHATURVEDI] ACCOUNTANT MEMBER Delhi, Dated 29 th June, 2022 VBP/- Copy to 1. The appellant 2. The respondent 3. Ld. CIT(A) concerned 4. CIT concerned 5. DR ITAT “SMC” Bench, Delhi 6. Guard File //By Order// Assistant Registrar, ITAT, Delhi Benches, Delhi.