Shri Govind Kripa Builders and Promoters Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 304/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7497 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 17-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAI
• Keywords: Unexplained cash credit; Reassessment proceedings
• Section: 147; 68; 148

Judgement Text

ITA NO. 304/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C , NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. N O. 304 /DEL/2013 A.Y . : 200 8 - 0 9 SHRI GOVIND KRIPA BUILDERS AND PROMOTERS PVT.LTD., 9239, GALI NO. 7, WEST ROHTASH NAGAR, SHAHDARA DELHI 110 032 (PAN:AAICS4365H) VS. INCOME TAX OFFICER, WARD 8(3), C.R. BUILDING, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : S H. R.S. SINGHVI, CA DEPARTMENT BY : SH. VIKRAM SAHAI, SR. DR DATE OF HEARING : 1 7 - 12 - 2014 DATE OF ORDER : 19 - 12 - 2014 ORDER PER H.S. SIDHU : J M ASSESSEE HAS FILED THIS A PPEAL AGAINST THE IMPUGNED ORDER DATED 23 . 11 .201 2 PASSED BY THE LD. CIT(A) - X I , NEW DELHI RELEVANT TO ASSESSMENT YEAR 200 8 - 0 9 . 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED : - 1 (I) . THAT THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) WAS NOT JUSTIFIED IN PASSING APPELLATE ITA NO. 304/ DEL/ 2013 2 ORDER WITHOUT GIVING PROPER AND REASONABLE OPPORTUNITY OR PROPER APPRECIATION OF FACTS. 2(I) THAT FURTHER CIT(A) WAS NOT JUSTIFIED IN MAKING ENHANCEMENT IN TERMS OF PROCEEDINGS U/S. 148 WITHOUT COMPLIANCE TO PROVISIONS OF SEC. 251(I)(B) O THE I.T. ACT, 1961. (II) THAT FURTHER THE IMPUGNED ENHANCEMENT AMOUNTING TO RS. 26,00,000/ - IS NOT IN CONFORMITY WITH REASONS RECORDED BY AO FOR INITIATING PROCEEDINGS U/S. 148 AND AS SUCH THE CIT(A) HAS NO JURISDICTION TO CONTEMPLATE ANY SUCH ENHANCEMENT IN TOTAL DIS REGARD TO PROVISIONS OF SEC. 148 AND SCHEME OF THE ACT. (III) THE IMPUGNED ENHANCEMENT IS WITHOUT PROPER APPRECIATION OF FACTS AND APPLICATION OF MIND. 3. THAT REASSESSMENT PROCEEDINGS ARE ILLEGAL AND WITHOUT JURISDICTION IN THE ABSENCE OF ANY TANGIBLE EVIDENCE OR MATERIAL IN RESPECT OF ANY UNDISCLOSED INCOME AND RECORDING OF REQUISITE SATISFACTION IN RESPECT OF ANY SUCH UNDISCLOSED INCOME. 4(I) THAT EVEN ON MERITS THE LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING ADDITION OF RS. 15 LACS U/S. 68 IN RESP ECT OF SHARE CAPITAL RELATING TO M/S BHAVANI PORTFOLIO PVT. LTD. AND M/S TAURUS IRON AND STEEL CO. PVT. LTD. (II) THAT SIMILARLY CIT(A) IS NOT JUSTIFIED IN MAKING ENHANCEMENT OF RS. 26 LACS ON THE ALLEGED ITA NO. 304/ DEL/ 2013 3 GROUND OF UNEXPLAINED SHARE APPLICATION MONEY. ( III) THAT WHOLE BASIS OF ADDITION IS ILLEGAL, ARBITRARY AND WITHOUT PROPER APPRECIATION OF FACTS AND OPPORTUNITY TO THE ASSESSEE. (IV) THAT THESE ARE REASSESSMENT PROCEEDINGS AND IN THE ABSENCE OF ANY EVIDENCE IN POSSESSION OF LOWER AUTHORITIES AND OPP ORTUNITY TO THE ASSESSEE FOR CLARIFICATION, THERE COULD BE NO JUSTIFICATION FOR ANY SUCH ADDITION. 5. THAT ORDERS OF THE LOWER AUTHORITIES ARE NOT JUSTIFIED ON FACTS AND SAME ARE BAD IN LAW. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME IN THIS CASE WAS FILED ON 23.9.2008 DECLARING INCOME OF RS. 8867/ - . ASSESSMENT PROCEEDINGS WERE INITIATED BY THE AO BY ISSUE OF NOTICE U/S. 148 ON 30.3.2010 ON THE BASIS OF INFORMATION RECEIVED FROM THE DIT(INV.), NEW DELHI THAT THE ASSESSEE HAD RECEIVED ACCOMMODATION ENTRY OF RS. 24 LACS DURING THE YEAR. THE GENUINENESS OF THE TRANSACTION AND SOURCES OF THE SAME WERE REQUIRED TO BE EXAMINED. THEREAFTER AFTER RECEIVING THE REPLY AND DETAILS FROM THE ASSESSEE, ASSESSING OFFICER WAS OF THE VIEW THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE THE PRINCIPAL OFFICER OF THE SHARE APPLICANT COMPANIES AND ALSO ON ACCOUNT OF FAILURE OF SHARE APPLICANTS TO APPEAR PERSONALLY IN THIS OFFICE AND CONFIRM TRANSACTION MADE WITH THE ASSESSEE COMPANY, THE S HARE TRANSACTION CANNOT BE ITA NO. 304/ DEL/ 2013 4 TREATED AS GENUINE. THEREFORE, AN ADDITION OF RS. 15 LACS MADE U/S. 68 OF THE I.T. ACT, 1961 AS UNEXPLAINED CREDITS IN THE BOOKS OF THE ASSESSEE. 4. AGAINST THE ORDER OF THE LD. AO, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 23 . 11 .201 2 HAS DISMISSED THE APPEAL OF THE ASSESSEE. 5. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE US. 6 . AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE STATED THAT THE ISSUE IN DISPUTES IN THE PRESENT APPEAL HA S ALREADY BEEN ADJUDICATED AND DECIDED IN FAVOR OF THE ASSESSEE BY THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SIGNATURE HOTELS P. LTD. VS. ITO [2011] 338 ITR 51 (DELHI) . HE HAS FILED THE RELEVANT COP Y OF THE ORDERS OF THE HON BLE HIGH COURT AND REQUESTED THAT THE APPEAL FILED BY THE ASSESSEE MAY BE ALLOWED. LD. COUNSEL OF THE ASSESSEE HAS FILED PAPER BOOK HAVING PAGES 1 TO 152 CONTAINING THE RECORDS BEFORE THE AO AND THE LD. CIT(A). HE ALSO FILED ANOTH ER PAPER BOOK HAVING PAGES 1 TO 54 CONTAINING THE COPIES OF VARIOUS DECISIONS OF THE HIGH COURT AS WELL AS ITAT IN SUPPORT OF HIS CLAIM WHICH INCLUDES SIGNATURES HOTELS P LTD. VS. ITO (PAGES. 12 TO 17 OF PB). 6.1 ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER PASSED BY THE LOWER AUTHORITIES. ITA NO. 304/ DEL/ 2013 5 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS , SPECIALLY THE PAPER BOOKS FILED BY THE ASSESSEE, ORDERS OF THE REVENUE AUTHORITIES. AS REGARDS THE EFFECTIVE GROUND IN THIS APPEAL RELATING TO REAS SESSMENT PROCEEDINGS U/S. 148 OF THE I.T. ACT IS CONCERNED, THE ASSESSEE HAS REITERATED THAT REASSESSMENT PROCEEDINGS ARE ILLEGAL AND WITHOUT JURISDICTION IN THE ABSENCE OF ANY TANGIBLE EVIDENCE OR MATERIAL IN RESPECT OF ANY UNDISCLOSED INCOME AND RECORD ING OF REQUISITE SATISFACTION IN RESPECT OF ANY SUCH UNDISCLOSED INCOME. AFTER HEARING BOTH THE PARTIES ON THE ISSUE IN DISPUTE AS WELL AS AFTER GOING THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH ORDER DATED 21 . 7 .20 11 PASSED BY THE HO N BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SIGNATURE HOTELS P. LTD. VS. INCOME TAX OFFICER [2011] 338 ITR 0051 WHEREIN THE HON BLE HIGH COURT HAS HELD MATTER AS UNDER: - HELD, ALLOWING THE PETITION, THAT THE REASSESSMENT PROCEEDING WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS. 5 LACS DURING THE FINANCIAL YEAR 2002 - 03 AS STATED IN THE ANNEXURE. ACCORDING TO THE INFORMATION, THE AMOUNT RECE IVED FROM A COMPANY, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESEE WAS ITA NO. 304/ DEL/ 2013 6 THE BENEFICIARY. THE REASONS DID NOT SATISFY THE REQUIREMENTS OF SECTION 147 OF THE ACT. THERE WAS NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEPT THE ANNEXURE. THE AN NEXURE COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNEXURE WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, THE ASSESSING OFFICER DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATION. THERE WAS NO DISPUTE THAT THE COMPANY, S, HAD A PAID - UP CAPITAL OF RS. 90 LAKHS AND WAS INCORPORATED ON JANUARY 4, 1989, AND WAS ALSO ALLOTTED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER, 2001. THUS, IT COULD NOT BE HELD TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WERE NOT VALID AND WERE LLIABLE TO BE QUASHED. 7.1 IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT ABOVE ISSUE IS EXACTLY THE SIMILAR TO THE ISSUE INVOLVED IN THE PRESENT APPEAL AND SQUARELY COVERED BY THE AFORESAID DECISION OF THE HON BLE HIGH COURT OF DELHI . HENCE, RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT, WE DECIDE THE LEGAL ISSUE IN DISPUTE IN FAVOR OF THE ASSESSEE A ND AGAINST THE REVENUE AND ACCORDINGLY QUASH THE ITA NO. 304/ DEL/ 2013 7 REASSESSMENT PROCEEDINGS. THE OTHER ISSUES ARE NOT DEALT WITH AS THE SAME HAVE BECOME ACADEMIC IN NATURE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE O PEN C OURT ON 19 / 12 /20 1 4 . SD/ - SD/ - [ G.D. AGRAWAL ] [ H.S. SIDHU ] VICE PRESIDENT JUDICIAL MEMBER DATE 19 / 12 /201 4 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 304/ DEL/ 2013 8