DCIT, New Delhi V. M/s. RPS Infrastructure Ltd., New Delhi

ITA 3200/DEL/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69303 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 29-07-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 28-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS VEENA JOSHI
• Assessee Lawyers: VED JAIN; RANO JAIN CAS
• Keywords: Bogus Share capital; Depreciation; Assessment record; Capital receipt; Revised return
• Section: 131; 68; 132; 144; 139; 143(3); 142(1); 153A; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NOS.3200 TO 3202/DEL/2010 (ASSESSMENT YEARS : 2006-07 TO 2008-09) DCIT, CIRCLE 15 (1), VS. M/S. RPS INFRASTRUCTURE L TD., NEW DELHI. A-193, IST FLOOR, OKHLA INDL. AREA, PHASE I, NEW DELHI. (PAN NO.AADCR1288F) CO NOS.257 TO 259/DEL/2010 (IN ITA NOS.3200 TO 3202/DEL/2010) (ASSESSMENT YEARS : 2006-07 TO 2008-09) M/S. RPS INFRASTRUCTURE LTD., VS. DCIT, CIRCLE 15 (1), A-193, IST FLOOR, OKHLA INDL. AREA, NEW DELHI. PHASE I, NEW DELHI. (PAN NO.AADCR1288F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN & MS. RANO JAIN, CAS REVENUE BY : MRS. VEENA JOSHI, CIT DR ORDER PER BENCH : ALL THESE THREE APPEALS FILED BY THE REVENUE EMANA TE FROM THE THREE ORDERS OF CIT (A)-XVIII, NEW DELHI FOR THE RESPECTI VE ASSESSMENT YEARS ALL DATED 26.03.2010. THE ASSESSEE HAD FIELD CORRESPOND ING CROSS OBJECTIONS. ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 2 SINCE THE ISSUE INVOLVED IN ALL THESE THREE APPEALS ARE COMMON, THEREFORE, ALL THESE APPEALS AND CROSS OBJECTIONS ARE DISPOSED OFF BY THIS COMMON ORDER. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LAND DEVELOPMENT AND PROMOTERS. THE SEARCH OPERATION WAS CARRIED OUT ON 15.02.2008 AT THE VARIOUS PREMISES OF THE ASSESSEE AND ITS DIRECTORS. 3. THE GROUNDS OF APPEAL ARE COMMON EXCEPT THE DIFF ERENCE IN THE AMOUNT OF ADDITION. THE GROUNDS OF APPEAL IN ITA NO.3200/D EL/2010 READ AS UNDER :- 1. CIT (A) HAS ERRED IN DELETING THE ADDITION OF R S.18.59 CRORES MADE ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL /SHARE APPLICATION MONEY. 2. THE APPELLANT CRAVES TO BE ALLOWED TO ADD, DELET E OR AMEND ANY OTHER GROUNDS OF APPEAL. THE GROUNDS OF CROSS OBJECTION NOS.257 & 258/DEL/20 10 ARE COMMON WHICH READ AS UNDER :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE ORDER PASSED BY LD AO UNDER SECTI ON 153A/143(3) IS BAD AND LIABLE TO BE QUASHED AS THE SAME HAS BEEN PASSED WITHOUT SERVING STATUTORY NOTICE UNDER SECTION 153A OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE ORDER PASSED BY LD AO IS BAD IN L AW AND LIABLE TO BE QUASHED AS THE SAME HAS BEEN PASSED WITHOUT I SSUING STATUTORY NOTICE UNDER SECTION 143(2) OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE ADDITION MADE BY AO IS NOT SUSTAI NABLE AS THE ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 3 SAME HAS BEEN MADE WITHOUT THERE BEING ANY INCRIMIN ATION MATERIAL FOUND DURING THE COURSE OF SEARCH. 4. THE ASSESSEE CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF CROSS OBJECTION. THE GROUNDS IN CROSS OBJECTION NO.259/DEL/2010 ARE ALSO SIMILAR TO THE GROUNDS EXCEPT THE GROUND NO.1 IN CROSS OBJECTION N OS.257 & 258/DEL/2010. 4. THE CROSS OBJECTIONS FILED BY THE ASSESSEE WERE HEARD FIRST. WHILE PLEADING ON BEHALF OF THE ASSESSEE LD. AR SUBMITTED THAT THERE WAS NO FORMAL NOTICE U/S 153A WAS ISSUED TO THE ASSESSEE. THEREFO RE, THE PROCEEDINGS U/S 153/143(3) IS BAD IN LAW AND LIABLE TO BE QUASHED. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT ASSESSEE HAS BEEN ISSUED NOTI CE U/S 142(1) ALONG WITH THE ANNEXURES. SINCE THERE IS NO FORMAL NOTICE PRES CRIBED BY THE RULE UNDER 153A THE NOTICE U/S 142(1) IS A NOTICE U/S 153A. TH EREFORE, THERE WAS NO IRREGULARITY AND INVALIDITY IN THE ASSESSMENT. 5. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE FI ND THAT THE ASSESSING OFFICER HAS ISSUED NOTICE U/S 142(1) READ WITH SECT ION 153A OF THE INCOME-TAX ACT, 1961 ON 18.11.2009 ASKING THE ASSESSEE TO FILE THE RETURN OF INCOME FOR THE SIX ASSESSMENT YEARS 2002-03 TO 2007-08. THIS N OTICE WAS IN THE FORMAT U/S 142(1) AND THE ASSESSEE HAS FILED ITS REPLY ON 25.11.2009 WHEREIN A COPY OF THE RETURN FOR ASSESSMENT YEAR 2006-07 FILED ON EARLIER DATE, I.E. 29.11.2006 WAS ENCLOSED AND IT WAS STATED THAT THIS RETURN MAY BE CONSIDERED AS RETURN FILED IN RESPONSE TO NOTICE U/S 153A OF T HE ACT. AS PER THE STATUTORY ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 4 PROVISIONS OF THE ACT, ASSESSEE FILED RETURN FOR SI X ASSESSMENT YEARS PRECEDING TO PERIOD IN WHICH SEARCH TOOK PLACE. AS SESSING OFFICER HAS ISSUED A NOTICE U/S 142(1) READ WITH SECTION 153A AND THER E IS NO SEPARATE NOTICE PRESCRIBED IN THE INCOME-TAX RULE U/S 153A OF THE I NCOME-TAX ACT, 1961, THEREFORE, IN OUR CONSIDERED VIEW, NOTICE ISSUED U/ S 142(1) READ WITH SECTION 153A OF THE ACT WAS SUFFICIENT TO COMPLY THE LEGAL REQUIREMENT OF NOTICE TO BE ISSUED U/S 153A OF THE ACT. MOREOVER, THE ASSESSEE HIMSELF HAS REPLIED TO THE ASSESSING OFFICER THAT THE RETURN FILED ON EARLIER DATE MAY BE TAKEN AS RETURN FILED IN RESPONSE TO THE NOTICE U/S 153A. THEREFORE , WE FIND NO IRREGULARITY AND ILLEGALITY IN ISSUING NOTICE FOR FILING RETURN OF I NCOME U/S 153A OF THE ACT. THEREFORE, WE SUSTAIN THE ORDER OF CIT (A) ON THIS ISSUE. 6. THE SECOND ISSUE RAISED BY THE ASSESSEE IN THE C ROSS OBJECTIONS IS REGARDING NOT ISSUING NOTICE U/S 143(2) OF THE INCO ME-TAX ACT, 1961. THE LD. AR SUBMITTED THAT IN THE ABSENCE OF NOTICE U/S 143( 2), THE ASSESSMENT PROCEEDINGS TAKEN BY THE ASSESSING OFFICER ARE BAD IN LAW AND LIABLE TO BE QUASHED. HE SUBMITTED THAT COMPANY WAS INCORPORATED ON 15 TH SEPTEMBER, 2005. THE FINANCIAL YEAR 2005-06 WAS THE FIRST YEAR OF OPERATION AND THE RELEVANT ASSESSMENT YEAR WAS 2006-07. THE RETURN OF INCOME FOR 2006-07 WAS FILED ON 29.11.2006 AND THE SAME WAS PROCESSED U/S 143(1) ON 29.01.2008. NO NOTICE U/S 143(2) WAS ISSUED. SIMILA RLY, THE RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 WAS FILED ON 31.10.2007 AND THE SAME WAS ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 5 PROCESSED U/S 143(1) OF THE ACT ON 11.02.2009. THE RETURN FOR ASSESSMENT YEAR 2008-09 WAS FILED ON 27.09.29008 AND MEANWHILE THE SEARCH OPERATION WAS CARRIED OUT ON 15.02.2008. NO INCRIMINATING DOC UMENT WAS FOUND AND SEIZED WITH REGARD TO ASSESSEE DURING THE SEARCH OP ERATION. THE ASSESSING OFFICER ISSUED NOTICE U/S 142(1) AND 143(2) ON 18.1 1.2009 AND ASSESSEE WAS ASKED TO FILE THE RETURN OF INCOME FOR THE ASSESSME NT YEARS 2002-03 TO 2007- 08. THE ASSESSEE FILED RETURN ON 25.11.2009 IN RESP ONSE TO THAT NOTICE. THEREAFTER THE ASSESSING OFFICER HAS NOT ISSUED ANY NOTICE U/S 143(2) FOR ANY OF THE ASSESSMENT YEAR. THUS, NO NOTICE WAS ISSUED TO ASSESSEE AFTER FILING RETURN OF INCOME. IN VIEW OF THESE FACTS, THE ASSE SSMENT MADE BY THE ASSESSING OFFICER WITHOUT ISSUING NOTICE U/S 143(2) IS BAD IN LAW. 7. WHILE PLEADING ON BEHALF OF THE REVENUE, LD. DR RELIED ON THE ORDER OF THE ITAT, DELHI BENCH B IN THE CASE OF M/S. DANGS ON HOTEL & RESTAURANTS IN ITA NOS.2943 TO 2948/DEL/2008 & ITA NOS.3040 TO 3045/DEL/2008 ORDER DATED 30.04.2010 WHEREIN THE ITAT HAS HELD ON THIS ISSUE AS UNDER :- 9. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORD CAREFULLY. ON AN ANALYSIS OF THE FACTS WE AR E OF THE OPINION THAT WE NEED NOT TO GO INTO THE ISSUE WHETHER A NOTICE U/S 143(2) OF THE INCOME-TAX ACT IS REQUIRED TO BE ISSUED IN AN ASSESSMENT FRAME D U/S 153(A) OF THE ACT OR NOT, BECAUSE IN THE PRESENT CASE NOTICE U/S 153A WAS ISSUED UPON, THE ASSESSEE ON 14.10.2006. IT WAS REQUIRED TO FILE THE RETURN IN RESPONSE TO THIS NOTICE BUT IT COULD NOT BE FILE THE RETURN FOR MORE THAN ONE YEAR. THE A.O. CANNOT AT THE MERCY OF THE ASSESSEE FOR COMMENCING THE ASSESSMENT PROCEEDING I.E. THE ASSESSEE WOULD LIKE THE RETURN THEN HE WILL ISSUE NOTICE U/S 143(2) AND THEN HE WILL COMPLETE THE ASSESSMENT . SECTION 144 OF THE INCOME TAX ACT, PROVIDE A MECHANISM IN A CASE, WHER E AN ASSESSEE FAILS TO FILE THE RETURN IN RESPONSE TO THE NOTICE U/S 142 O R FAIL TO MAKE THE RETURN REQUIRED IN SUB SECTION 1 OF SECTION 139 AND HAS NO T MADE THE RETURN OR A REVISED RETURN U/S SUB SECTION 4 AND SUB SECTION 5 OR SECTION 139. ACCORDING ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 6 TO THE PROCEDURE PROVIDED IN SECTION 144 THE A.O. W ILL COMMENCE THE ASSESSMENT PROCEEDING AND DETERMINE THE INCOME OF A N ASSESSEE ON THE BASIS OF MATERIAL AVAILABLE TO HIM, ACCORDING TO HI S BEST JUDGMENT. THE A.O. HAS SET THE MACHINERY OF THE ASSESSMENT PROCEEDING ON MOTION WELL IN TIME BY ISSUANCE OF NOTICE U/S 143(2) AS WELL AS 142 OF THE INCOME TAX ACT. THE ASSESSEE IS NOT DISPUTING THESE FACTS. DURING THE C OURSE OF HEARING WE PUT IT TO THE LD. COUNSEL FOR THE ASSESSEE THAT SUPPOSE TH E ASSESSEE FILES THE RETURN ON 30 TH DECEMBER, 2007 AND THE ASSTT. ORDER IS GOING TO BE TIME BARRED ON 31 ST DECEMBER, 2007, HOW A.O. COULD HAVE COMPLY WITH TH E PROVISION CONTENDED BY HIM. HE WAS UNABLE TO EXPLAIN THE SITU ATION BUT CONTENDED THAT IN THAT CASE A.O. OUGHT TO HAVE NOT TAKEN COGN IZANCE OF THE RETURN SUBMITTED BY THE ASSESSEE. HE COULD HAVE PASS THE A SSESSMENT UNDER SOME OTHER PROVISION BUT NOT U/S 143(3) READ WITH SECTIO N 153A OF THE ACT. IN OUR UNDERSTANDING IF WE ACCEPT THE LOGIC CANVASSED BY T HE LD. COUNSEL FOR THE ASSESSEE THEN EVERY ASSESSEE WOULD FIRST IGNORE THE NOTICE RECEIVED U/S 153A, THEY WILL NOT FILE THE RETURN AS REQUIRED BY THE A.O. WHEN THE ASSTT. PROCEEDING REACHED AT THE FAG END THEN THEY WILL FI LE THE RETURN AND PLEAD TO ISSUE NOTICE U/S 143(2) OF THE ACT OR ASSTT. ORDER IS TO BE BRANDED AS VOID AB INITIO, BECAUSE OF NON-COMPLIANCE OF THE PROVISION CAN SUCH TYPE OF SITUATION PERMISSIBLE IN THE LAW, OUR REPLY IS SIMP LE NO. 10. IT IS TRUE THAT IF AN ASSESSEE FILED A REGULAR RETURN U/S 139 AND A.O. WANTS TO SCRUTINIZE THAT RETURN THEN HE HAS TO ISSU E NOTICE U/S 143(2) OF THE ACT WITHIN THE TIME FRAME PROVIDED IN THE PROVISO A PPENDED TO SECTION 143(2) OF THE ACT. BUT HERE THE CIRCUMSTANCES ARE A LL TOGETHER DIFFERENT. THE ASSESSEE COMMITTED A DEFAULT ITSELF. IT IGNORED THE NOTICE ISSUED BY THE A.O. U/S 153A. THE A.O. HAS TAKEN UP THE PROCEEDING WELL IN TIME BY ISSUE OF NOTICE U/S 142(1) AND 143(2) OF I.T. ACT. TE ALLEGE D RETURN FILED BY THE ASSESSEE ON 7.11.2007 AT THE MOST CAN BE TAKEN AS A CORROBORATIVE PIECE OF INFORMATION FOR DETERMINING THE TAXABLE INCOME OF T HE ASSESSEE, OTHERWISE AVAILABLE WITH HIM AND COLLECTED DURING THE COURSE OF SEARCH. IN VIEW OF THE ABOVE DISCUSSION WE ARE OF THE OPINION THAT CASE LA W REFERRED BY THE LD. COUNSEL FOR THE ASSESSEE ARE QUITE DISTINGUISHABLE ON FACTS. THE ISSUE BEFORE US IS NOT THAT 143(2) NOTICE OUGHT TO HAVE BEEN ISS UED OR NOT. WE ARE SATISFIED IN THE PRESENT CASE THAT A.O. HAS COMMENC ED THE ASSESSMENT PROCEEDINGS LEGALLY HE HAS ISSUED NOTICE U/S 143(2) AND 142(1) OF THE INCOME TAX ACT. TE ASSESSEE CANNOT BE ALLOWED TO CA PITALIZE THE INACTION AT ITS END IN FAVOUR OF IT. IT I THE ASSESSEE WHO MADE THE COMPLIANCE OF THE PROCEDURE IMPRACTICAL. THEREFORE WE DO NOT SEE ANY MERIT IN THE GROUNDS RAISED BY THE ASSESSEE IN THIS REGARD. LD. DR ALSO RELIED ON THE DECISION OF ITAT, DELHI B ENCH A, NEW DELHI IN THE CASE OF ITO VS. SHRI ASHOK CHADHA IN ITA NOS.14 55/DEL/2009 & 1458 TO 1460/DEL/2009 ORDER DATED 17.09.2010 WHEREIN THE IT AT HAS DECIDED THE ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 7 ISSUE IN FAVOUR OF THE REVENUE BY CONSIDERING THE D ECISION OF RAJMANI DEVI VS. CIT REPORTED IN (1937) 5 ITR 631 (ALL.). THE IT AT HAS ALSO ANALYSISED LANGUAGE OF SECTION 143(2) OF THE INCOME-TAX ACT, 1 961 IN COMPARISON TO THE POSITION OF LAW UNDER 1992 ACT. LD. DR ALSO PLEADED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY VARIOUS DECISIONS OF IT AT BENCHES. IN VIEW OF THAT, THE CIT (A) HAS RIGHTLY REJECTED THE CONTENTI ON OF THE ASSESSEE ON THIS ISSUE. LD. DR PLEADED TO DISMISS THIS GROUND OF CRO SS OBJECTION. 8. WE HAVE ALSO HEARD BOTH THE SIDES ON THE ISSUE. WE HAVE ALSO GONE THROUGH THE CASE LAWS RELIED UPON BY BOTH THE SIDES . THE ASSESSING OFFICER ISSUED NOTICE U/S 142(1) OF THE INCOME-TAX ACT, 196 1 AND NOTICE U/S 143(2) ON 18.11.2009. THE ASSESSEE WAS ASKED TO FILE THE RETU RN OF INCOME FOR ASSESSMENT YEARS 2002-03 TO 2007-08. THE ASSESSEE F ILED COPY OF RETURN ON 25.11.2009 IN RESPONSE TO THE NOTICE U/S 142(1) OF THE ACT. THEREAFTER NO NOTICE U/S 143(2) WAS ISSUED IN THE PRINTED PROFORM A. HOWEVER, THE NOTING IN THE ORDER SHEET DATED 25.11.2009 SHOWS THAT SHRI NI KHIL KABRA, CA APPEARED BEFORE THE ASSESSING OFFICER AND FILED THE COPY OF RETURN WHICH WAS FILED EARLIER HE WAS ASKED BY THE ASSESSING OFFICER TO FU RNISH THE BALANCE SHEET, PROFIT & LOSS ACCOUNT AND RETURNS OF RELEVANT YEARS COVERED UNDER THE BLOCK FOR ASSESSMENT YEAR 2006-07 AND THE CASE WAS ADJOURNED ON 26.11.2009. ON 26.11.2009, SHRI NIKHIL KABRA APPEARED BEFORE THE A SSESSING OFFICER AND THE CASE WAS ADJOURNED TO 30.11.2009. ON 30.11.2009, A QUESTIONNAIRE WAS ISSUED ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 8 FOR THE ASSESSMENT YEAR 2006-07, COPY OF THE HANDWR ITTEN QUESTIONNAIRE IS ALSO PLACED ON RECORDS WHEREIN 13 DETAILS WERE ASKE D BY THE ASSESSING OFFICER WHICH ALSO INCLUDES DETAILED NOTE ON THE NATURE OF BUSINESS, DETAILS OF INCREASE IN OF THE SHARE CAPITAL AND SHARE APPLICATION MONEY RECEIVED ALONG WITH CONFIRMATION OF ITR, COPY OF ACCOUNTS AND BANK STAT EMENTS, DETAILS OF BANK ACCOUNTS OF THE INVESTORS, DETAILS OF WORK-IN-PROGR ESS, DETAILS OF FDR WITH BANK STATEMENT, DETAILS OF ADVANCE FOR LAND, AGREEM ENT COPY AND BANK STATEMENT, DETAILS OF ADVANCE AGAINST COLLABORATION AGREEMENT AND BANK STATEMENT SHOWING THE AMOUNT OF TRANSACTION, DETAIL S OF ADVANCE RECOVERABLE, DETAILS OF ADVANCE AGAINST FSI, COPY OF AGREEMENT A ND BANK ACCOUNT STATEMENT, DETAILS OF ADVANCE AGAINST BOOKINGS, PAR TY WISE WITH ADDRESS, PAN AND AGREEMENT COPY, DETAILS OF SALES PARTY WISE AND DETAILS OF SHARE HOLDING PATTERN. AS HELD BY THE ITAT IN THE CASE OF ITO VS. ASHOK CHADHA IN ITA NO.1455/DEL/2009 & OTHERS, THE ISSUE IS COVERED IN FAVOUR OF THE REVENUE. THE ITAT HAS ANALYSED THE PROVISIONS OF SECTION 143 (2) OF THE ACT IN DETAIL. THE RELEVANT PORTION OF THIS ORDER IS REPRODUCED BE LOW :- 5. HAVING CONSIDERED THE SUBMISSIONS OF THE PART IES, WE THINK IT FIT TO DWELVE UPON THE PROVISION CONTAI NED IN SECTION 143(2)(II), APPLICABLE TO THE FACTS OF THIS CASE . FOR MAKING SCRUTINY ASSESSMENT, THE REQUIREMENT MENTIONED IN THIS PROVISION IS THAT THE AO SHALL SERVE ON THE ASSE SSEE A NOTICE REQUIRING HIM, ON THE DATE TO BE SPECIFIED THE REIN, EITHER,- (I) TO ATTEND HIS OFFICE; OR ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 9 (II) TO PRODUCE ANY EVIDENCE ON WHICH THE ASSES SEE MAY RELY IN SUPPORT OF THE RETURN; OR (III) CAUSE TO BE PRODUCED ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN. 5.1 FIRSTLY, THERE IS SOME CONTROVERSY AS TO WHETHE R A GENERAL NOTICE WOULD SUFFICE OR IT HAD TO BE A SPECIFIC NOTICE. THE GENERALLY ACCEPTED POSITION OF THE LAW IS THAT A GENERAL NOTICE CALLING UPON THE ASSESSEE TO APPEAR OR T O PRODUCE EVIDENCE OR CAUSE THE EVIDENCE TO BE PRODUCED I S SUFFICIENT. HOWEVER, IN THE CASE OF NIRMAL V SECRETARY OF STAT E, 2 ITC 20, IT HAS BEEN HELD THAT THE NOTICE SHOULD ORDI NARILY SPECIFY THE POINT ON WHICH THE ASSESSEE HAS TO PRODUCE T HE EVIDENCE ALTHOUGH A DISSENTING JUDGMENT WAS WRITTEN BY G REAVES J. THUS, WHAT CAN BE SAID IS THAT A SPECIFIC NOT ICE STANDS ON BETTER FOOTINGS THAN A GENERAL NOTICE. THEREFORE , THE POSITION OF LAW IN THIS REGARD IS THAT IF THE ASSESSEE HA S BEEN GIVEN AN OPPORTUNITY TO DO ANY OF THE THREE ALTERNATIVES, AS THE CONJUNCTION USED IS OR, AND THE DATE AND PLA CE OF COMPLIANCE ARE MENTIONED, IT WILL BE A VALID NO TICE U/S 143(2). ALTHOUGH THE ISSUE WAS DECIDED AGAINST THE REVENUE IN THE CASE OF RAJMANI DEVI, BUT THAT WAS ON AC COUNT OF THE FACT THAT THE ASSESSEE WAS PRECLUDED FROM EXERC ISING TWO OF THE ALTERNATIVES. IT ALSO APPEARS THAT THE POSITION OF LAW UNDER THE 1922 ACT WAS SOMEWHAT DIFFERENT AS T HE CONJUNCTION AND WAS USED BETWEEN SECOND AN D THIRD ALTERNATIVES. IN THE INSTANT CASE, THE STATUTOR Y PROVISION IS CLEAR AS THE CONJUNCTION USED IS OR UNIFORMALLY . THEREFORE, FURNISHING OF ANY OF THE THREE ALTERNATIVES TO TH E ASSESSEE WOULD SUFFICE THE CONDITION OF A VALID NOTICE, I F DATE AND PLACE ARE ALSO MENTIONED IN THE NOTICE. IN THE QU ESTIONNAIRE DATED 7.12.2007, THE PLACE HAS BEEN MENTIONED AN D THE DATE OF COMPLIANCE HAS ALSO BEEN MENTIONED. FURTHER, IT HAS BEEN MENTIONED THAT THE COMPLIANCE TO THE POINTS RAISE D MAY BE MADE IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE . THUS, ACCORDING TO US, OPPORTUNITIES AS PER SECOND AND TH IRD ALTERNATIVES HAVE BEEN GRANTED TO THE ASSESSEE. AS MENTIONED EARLIER, THE WIDELY ACCEPTED PROPOSITION OF L AW IS THAT A GENERAL NOTICE WOULD SUFFICE. HOWEVER, A DIFF ERENT VIEW WAS TAKEN IN THE CASE OF NIRMAL V SECRETARY OF ST ATE, IN WHICH IT WAS HELD THAT THE NOTICE SHOULD ORDINARILY SPE CIFY THE ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 10 POINTS IN RESPECT OF WHICH THE ASSESSEE HAS TO PR ODUCE EVIDENCE. THE OBJECTION IN THIS CASE WAS THAT THE NOTICE WAS GENERAL IN NATURE. OBVIOUSLY, SUCH AN OBJECTION CANNOT BE TAKEN IN THIS CASE AS THE AO SPECIFIED THE PO INTS IN RESPECT OF WHICH EVIDENCE WAS TO BE PRODUCED OR WAS CAUSED TO BE PRODUCED. THEREFORE, WE ARE OF THE VIEW THAT THIS NOTICE AMOUNTS TO COMPLIANCE OF THE MANDATORY REQUIREMENT OF THE PROVISION CONTAINED IN SECTION 1 43(2)(II). AS THE NOTICES HAVE BEEN SERVED AFTER THE FILING THE RETURN, MAKING A REFERENCE TO IT IN THE NOTICES WOULD AM OUNT TO STATING THE OBVIOUS FACT, WHICH IS NOT NECESSARY ACCORDING TO US. 5.2 THE LD. DR HAS RAISED A FRESH PLEA IN DEF ENCE OF THE ORDER OF THE LD. CIT(A) THAT SINCE THE RETURN HAS NOT BEEN FILED WITHIN THE PRESCRIBED TIME, IT IS NON-EST AND, THE REFORE, THE ASSESSMENT IS MADE U/S 144 READ WITH SECTION 1 53A. THE CASE OF THE LD. COUNSEL IS THAT NO SUCH FINDING HA S BEEN GIVEN BY ANY OF THE LOWER AUTHORITY AND, THUS, THE ARG UMENT IS A LEAP IN THE DARK. WE REALLY DO NOT AGREE WITH HER IN THIS REGARD. THE REVENUE IS A DEFENDANT IN THIS CASE , AND IT CAN TAKE UP ANY LEGAL PLEA TO DEFEND THE ORDER OF TH E LD. CIT(A) PROVIDED THAT NO FRESH FACT IS REQUIRED TO BE FO UND TO FURNISH A DECISION IN RESPECT OF THE PLEA. THIS FOLLOWS CLEARLY FROM THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF B.R.BAMSI VS. CIT (1972) 83 ITR 223. THIS ALSO FOLLOWS FROM THE DECISION OF HONBLE SUPREME COURT IN TH E CASE OF HUKUM CHAND MILLS LTD. VS. CIT, 63 ITR 232, IN W HICH THE DEFENDANT REVENUE WAS NOT ONLY ALLOWED TO RAIS E THE ADDITIONAL PLEA BUT THE AO WAS ALSO DIRECTED TO FIND FACTS REGARDING THE CLAIM OF DEPRECIATION. AS THE FA CTS REGARDING THE DATE OF NOTICE AND FILING OF THE RETURN ARE ON RECORD, THEREFORE, THE ARGUMENT OF THE LD. DR IS NOT A LEAP IN THE DARK BUT A PLEA BASED ON FACTS. THEREFORE, HE IS ENTITLED TO TAKE SUCH A PLEA. HOWEVER, WE NEED NOT GO INTO THE MERITS OF THIS ISSUE FOR THE REASON THAT WE HAVE ALREA DY HELD THAT REQUIREMENTS OF SECTION 143(2) HAVE BEEN MET IN TH IS CASE. 5.3 BEFORE PARTING, WE MAY MENTION HERE THAT OUR CONCLUSION REGARDING COMPLIANCE OF THE PROVISION C ONTAINED IN SECTION 143(2) CAN BE ARRIVED INDEPENDENT OF TH E REFERENCES ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 11 TO THE COMMENTARY AND THE DECISION IN THE CASE OF RAJMANI DEVI ON PLAIN READING OF THE PROVISION. 5.4 THE RESULT OF AFORESAID DISCUSSION IS THAT TH IS GROUND ARISING IN VARIOUS YEARS, TAKEN UP BY THE ASSES SEE, IS DISMISSED. THE FACTS OF THIS CASE CLEARLY SHOW THAT THE ASSESS ING OFFICER HAS SERVED ON THE ASSESSEE A NOTICE REQUIRING HIM TO PRODUCE EVID ENCES ON WHICH THE ASSESSEE RELIED IN SUPPORT OF THE RETURN. THE NOTE SHEET PROCEEDINGS AS WELL AS THE ISSUANCE OF THE QUESTIONNAIRE CLEARLY SHOW THAT THE ASSESSING OFFICER HAS FULFILLED THE REQUIREMENT OF SECTION 143(2) OF THE INCOME-TAX ACT, 1961. THE DECISION OF ITAT HAS BEEN AFFIRMED BY THE HON'BLE J URISDICTIONAL HIGH COURT IN THE CASE OF ASHOK CHADDHA VS. ITO REPORTED IN 33 7 ITR 399 AND THE HELD PORTION IS AS UNDER :- THERE IS NO SPECIFIC PROVISION IN THE ACT REQUIRIN G THE ASSESSMENT MADE UNDER S. 153A TO BE AFTER ISSUE OF NOTICE UNDER S. 143(2). IT IS ALSO TO BE NOTED THAT S. 153 A PROVIDES FOR THE PROCEDURE FOR ASSESSMENT IN CASE OF SEARCH OR R EQUISITION. SUB-SO (1) STARTS WITH NON-OBSTANTE CLAUSE STATING THAT IT WAS 'NOTWITHSTANDING' ANYTHING CONTAINED IN SS. 147, 14 8 AND 149, ETC. CLAUSE (A) THEREOF PROVIDES FOR ISSUANCE OF NO TICE TO THE PERSON SEARCHED UNDER S. 132 OR WHERE DOCUMENTS ETC ARE REQUISITIONED UNDER S. 132(A), TO FURNISH A RETURN OF INCOME. THIS CLAUSE NOWHERE PRESCRIBES FOR ISSUANCE OF NOTI CE UNDER S. 143(2). THE WORDS 'SO FAR AS MAY BE' IN C1. (A) OF SUB S. (1) OF S. 153A COULD NOT BE INTERPRETED THAT THE ISSUE OF NOTICE UNDER S. 143(2) WAS MANDATORY IN CASE OF ASSESSMENT UNDER S. 153A. THE USE OF THE WORDS, 'SO FAR AS MAY BE' CANNOT BE STRETCHED TO THE EXTENT OF MANDATORY ISSUE OF NOTICE UNDER S. 14 3(2). AS IS NOTED, A SPECIFIC NOTICE WAS REQUIRED TO BE ISSUED UNDER C1. (A) OF SUB-SO (1) OF S. 153A CALLING UPON THE PERSONS S EARCHED OR REQUISITIONED TO FILE RETURN. THAT BEING SO, NO FUR THER NOTICE UNDER S. 143(2) COULD BE CONTEMPLATED FOR ASSESSMEN T UNDER S. ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 12 153A. IN ADDITION, THE TWO QUESTIONNAIRES ISSUED TO THE ASSESSEE WERE SUFFICIENT SO AS TO GIVE NOTICE TO TH E ASSESSEE, ASKING HIM TO ATTEND THE OFFICE OF THE AO IN PERSON OR THROUGH A REPRESENTATIVE DULY AUTHORIZED IN WRITING OR PROD UCE OR CAUSE TO BE PRODUCED AT THE GIVEN TIME ANY DOCUMENTS, ACC OUNTS, AND ANY OTHER EVIDENCE ON WHICH HE MAY RELY IN SUPPORT OF THE RETURN FILED BY HIM. KEEPING IN VIEW THE DECISION OF HON'BLE JURISDICTIO NAL HIGH COURT, THIS GROUND OF ASSESSEES CROSS OBJECTION HAS NO MERITS AND THE SAME DESERVES TO BE DISMISSED AND WE ORDER ACCORDINGLY. 9. THE THIRD GROUND OF ASSESSEES CROSS OBJECTION I S THAT THE CIT (A) HAS ERRED IN LAW IN REJECTING THE CONTENTION OF THE ASS ESSEE THAT THE ADDITION MADE BY ASSESSING OFFICER IS NOT SUSTAINABLE AS THE SAME HAS BEEN MADE WITHOUT THERE BEING ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 1O. LD. AR SUBMITTED THAT NO INCRIMINATING DOCUMENT S WERE FOUND AND SEIZED IN THE COURSE OF SEARCH OPERATION. THEREFORE , THE ASSESSING OFFICER WAS DUTY BOUND TO CLOSE THE ASSESSMENT. THERE WAS NO AD VERSE STATEMENT MADE DURING THE SEARCH OPERATION. THIS ISSUE IS ALSO CON NECTED TO THE DELETION OF THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED SHARE CAPIT AL/SHARE APPLICATION MONEY ON WHICH THE REVENUE IS IN APPEAL BEFORE US. 11. LD. DR PLEADED THAT THE ASSESSEE CONCERN IS CLO SELY RELATED TO M/S. RPS ASSOCIATES WHICH WAS COVERED UNDER THE SEARCH OPERA TION ON 15.02.2008. AS PER THE APPRAISAL REPORT RECEIVED BY THE ASSESSING OFFICER FROM THE ADIT (INVESTIGATION), MEERUT, THERE WERE TOTAL DEPOSITS OF RS.26.65 CRORES IN THE ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 13 BANK ACCOUNT OF THE ASSESSEE AND M/S. RPS ASSOCIATE S. THE ASSESSEE DID NOT FURNISH ANY EXPLANATION BEFORE THE INVESTIGATION WI NG AT GHAZIABAD. IN THE COURSE OF ASSESSMENT, THE ASSESSING OFFICER NOTICED THAT IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2006-07, THE ASSESSEE R ECEIVED SHARE CAPITAL OF RS.18.03 CRORES AND SHARE APPLICATION MONEY OF RS.6 5 LACS. THE ASSESSING OFFICER FOUND THAT THE DETAILS OF ALL THE COMPANIES FROM WHOM THE SHARE CAPITAL WAS SHOWN AS RECEIVED WERE FOUND IN THE OFF ICE OF THE ASSESSEE ITSELF AT 193, OKHAL INDUSTRIAL AREA, NEW DELHI. THE RUBBER S TAMPS OF ALL THESE COMPANIES WERE ALSO AVAILABLE IN THAT OFFICE OF THE ASSESSEE. THE DETAILS SUBMITTED BY THE ASSESSEE SHOW THAT FIVE OF THE SEV EN COMPANIES, THE INCOME IS BELOW RS.12,840/-. THE INCOME OF THE TWO COMPANI ES, NAMELY, M/S. SANWARIA BANQUET AND M/S. DELHI VENTURES PVT. LTD. HAS BEEN SHOWN AT NIL. THE RECEIPTS OF THESE COMPANIES WERE ALSO MEAGER. THE RECEIPTS OF M/S. GOODWILL PVT. LTD. AND M/S. UNITED INFRACON PVT. LT D. WAS LESS THAN RS.50,000/-. ONE SHRI RAKESH CHAND GUPTA WAS THE CO MMON DIRECTOR IN FIVE COMPANIES. THERE IS COMMON DIRECTOR IN FIVE COMPANI ES. ALL THESE FACTS COUPLED WITH RUBBER STAMPS IN THESE COMPANIES FOUND DURING THE SEARCH AT THE ASSESSEE PREMISES ESTABLISH THAT THE SHARE APPLICAT ION MONEY RECEIVED FROM THESE COMPANIES ARE NOT GENUINE. THE ASSESSEE HAS T O ESTABLISH THE GENUINENESS OF THE SHARE CAPITAL AND SHARE APPLICAT ION MONEY. THE ASSESSEE HAS FURNISHED THE COPY OF DOCUMENTS FILED WITH THE REGISTRAR OF COMPANIES, ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 14 COPY OF UNAUDITED CONFIRMATIONS AND COPY OF AFFIDAV ITS, HOWEVER, NO ORIGINAL CONFIRMATIONS OF SHARE CAPITAL AND SHARE APPLICATIO N FROM THESE PARTIES WERE FURNISHED. THE DIRECTORS OF THE COMPANIES WERE NOT PRODUCED. THE BANK ACCOUNTS OF THE COMPANIES WERE NOT PRODUCED. THE ON US ON THE REVENUE CAN BE SHIFTED ONLY WHEN THE ASSESSEE PRODUCES THE DIRE CTORS AND BANK ACCOUNTS AND ORIGINAL CONFIRMATIONS. NOT PRODUCING THE DIREC TORS SHOWS THAT THE IDENTITY AND CREDITWORTHINESS OF THESE COMPANIES HA VE NOT BEEN ESTABLISHED. THE CIT (A) IGNORED THESE FACTS AND DELETED THE ADD ITION. 12. IN REPLY TO THAT, THE LD. AR SUBMITTED THAT ALL THE SHARE CAPITAL HAS BEEN RECEIVED FROM THE GROUP COMPANIES AS EVIDENT FROM P AGE 2 OF THE ASSESSMENT ORDER ITSELF. THE CHART GIVEN AT PAGE 2 OF ASSESSME NT ORDER GIVES THE NAMES OF THE COMPANY, FULL ADDRESS OF THE COMPANY, NAME OF T HE DIRECTORS, PERMANENT ACCOUNT NUMBERS AND ALSO DETAILS REGARDING THE UNSE CURED LOANS IN THE BALANCE SHEET AND AMOUNT PAID FOR THE SHARES OF THE ASSESSEE COMPANY. THE DIRECTORS ARE COMMON IN THESE COMPANIES AND ALL THE COMPANIES ARE IDENTIFIABLE AND ASSESSED TO INCOME-TAX. THERE IS N O ADVERSE MATERIAL FOUND DURING THE SEARCH OPERATION. THERE IS NO ADVERSE ST ATEMENT OF ANYBODY DURING THE SEARCH OPERATION AND AFTER THE SEARCH OPERATION IN THIS REGARD. THERE IS NO ALLEGATION THAT ASSESSEE HAS RECEIVED ANY ACCOMMODA TION ENTRY. THE ARBITRARY ADDITION MADE BY THE ASSESSING OFFICER WAS RIGHTLY DELETED BY THE CIT (A). WHILE DELETING THE ADDITION THE CIT (A) HAS HELD TH AT NOWHERE DURING THE ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 15 ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS R AISED ANY DOUBT REGARDING THE AUTHENTICITY OF THE DETAILS AND DOCUMENTS FILED BY THE ASSESSEE. THE ASSESSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY ON THIS NOTE. THE ASSESSING OFFICER HAS NOT ISSUED NOTICE U/S 133(6) OF THE INC OME-TAX ACT, 1961 FOR CONFIRMATIONS OR SUMMONS U/S 131 OF THE ACT FOR PRE SENCE OF ANY DIRECTORS OF THESE COMPANIES. THE ASSESSING OFFICER MADE HUGE AD DITION WITHOUT ANY BASIS. THE DETAILS FOR THE ASSESSING OFFICERS ORDE R ITSELF SHOWS THAT THE INVESTOR COMPANIES WERE SISTER CONCERNS OF THE ASSE SSEE AS THESE WERE HAVING THE SAME ADDRESS AND COMMON DIRECTORS. THE PERMANEN T ACCOUNT NUMBER AND OTHER DETAILS WERE ALSO PROVIDED TO THE ASSESSI NG OFFICER. THE CIT (A) HAS ALSO HELD THAT MERELY BECAUSE THE BALANCE SHEET S OF THESE COMPANIES SHOW THAT UNSECURED LOANS CANNOT BE A GROUND TO DILUTE T HE ASSESSEES POSITION THAT THE AMOUNTS HAVE BEEN RECEIVED FROM THE EXISTING CO MPANIES AND THE NECESSARY DETAILS RELATING TO THE IDENTITY, SOURCE AND GENUINENESS HAVE BEEN PROVIDED. THE ASSESSING OFFICER HAS NOT PINPOINTED ANY SPECIFIC DEFECT IN THE DETAILS FURNISHED BY THE ASSESSEE. THERE WAS NO ALL EGATION OF ANY ACCOMMODATION ENTRY AND THERE IS NO STATEMENT OR AD VERSE MATERIAL ABOUT THE SHAREHOLDERS GATHERED FROM THE SEARCH OPERATION. TH E ASSESSEE HAS SUBMITTED ALL THE RELEVANT DOCUMENTS AND EVIDENCES. NO ADVERS E COMMENTS HAVE BEEN MADE BY THE ASSESSING OFFICER ON THE DOCUMENTS SUBM ITTED. SINCE THE ASSESSING OFFICER HAS FAILED TO CARRY OUT ANY INVES TIGATION, THEREFORE, THE CIT ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 16 (A) WAS JUSTIFIED IN DELETING THE ADDITION. THE LD. AR ALSO SUBMITTED THAT THIS ISSUE IS COVERED BY THE FOLLOWING DECISIONS :- I. CIT VS. SOPHIA FINANCE LTD. 205 ITR 98 (DEL.) II. CIT VS. ACHAL INVESTMENT LTD. 268 ITR 211 (DEL .) III. CIT VS STELLAR INVESTMENTS LTD 192 ITR 298(D EL) IV. CIT VS STELLAR INVESTMENTS LTD 251 ITR 263 (S C) V. CIT VS DIVINE LEASING & FINANCE LTD 299 ITR 26 8(DEL) VI. CIT VS VALUE CAPITAL SERVICES P LTD 307 ITR 3 34 (DEL) VII. CIT VS LOVELY EXPORTS P LTD 319 ITR 5 (SC) VIII. CIT VS OASIS HOSPITALITIES P LTD 333 ITR 119 (DEL) IX. CIT VS KAMDHENU STEELS AND ALLOY LTD 248 CTR 33 (DE X. CIT VS K C FIBRES LTD 332 ITR 481 (DEL) XI. CIT VS WINSTRAL PETROCHEMICALS LTD 330 ITR 60 3 (DEL) XII. CIT VS DWARKADHISH INVESTMENT P LTD 330 ITR 298 (DEL) XIII. CIT VS ANTARTICA INVESTMENTS P LTD 262 ITR 493 (DEL ) XIV. CIT VS MAKHANI & TYAGI P LTD 267 ITR 433 (DEL) XV. CIT VS DOLPHIN CANPACK LTD 283 ITR 190 (DEL) HE FURTHER PLEADED THAT HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTORS AND FINLEASE P. LTD. REPORTED IN 342 ITR 169 (DEL.) IS NOT APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. THE HON'BLE HIGH COURT IN ITS ORDER ITSELF HAS DISTINGUISHED THE FACTS IN PARA 39 WHEREIN THE HON'BLE HIGH COURT HAS HELD AS UNDER :- '39. THE CASE OF ORISSA CORPORATION (1986) 159 ITR EXEMPLIFIES THE CATEGORY OF CASES WHERE NO ACTION I S TAKEN BY THE ASSESSING OFFICER TO VERIFY OR CONDUCT AN ENQUIRY I NTO THE PARTICULARS ABOUT THE CREDITORS FURNISHED BY THE AS SESSEE, INCLUDING THEIR INCOME-TAX FILE NUMBERS. IN THE SAM E CATEGORY FALL CASES DECIDED BY THIS COURT IN DOLPHIN CANPACK (2006) 283 ITR 190, CIT V MAKHNI AND TYAGI P. LTD. (2004) 267 ITR 433, CIT V ANTARTICA INVESTMENT P. LTD. (2003) 262 ITR 4 93 AND CIT V ACHAL INVESTMENT LTD. (2004) 268 ITR 211. TO PUT IT SIMPLY, IN THESE CASES THE DECISION WAS BASED ON THE FUNDAM ENTAL RULE OF LAW THAT EVIDENCE OR MATERIAL ADDUCED BY THE ASSESS EE CANNOT BE THROWN OUT WITHOUT ANY ENQUIRY. THE RATIO DOES NOT EXTEND ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 17 BEYOND THAT. THE BOUNDARIES OF THE RATIO CANNOT BE, AND SHOULD NOT BE, WIDENED TO INCLUDE THEREIN CASES WHERE THER E EXISTS MATERIAL TO IMPLICATE THE ASSESSEE IN A COLLUSIVE A RRANGEMENT WITH PERSONS WHO ARE SELF-CONFESSED 'ACCOMMODATION ENTRY PROVIDERS'. THE ASSESSEES CASE IS COVERED BY THIS PARA OF THE DECISION OF HON'BLE DELHI HIGH COURT. IN THE ASSESSEES CASE, THE EVIDENCES A ND MATERIAL ADDUCED TO THE ASSESSING OFFICER HAS BEEN THROWN OUT WITHOUT ANY E NQUIRY. THERE WAS NO MATERIAL AGAINST THE ASSESSEE AND NO ALLEGATION TO IMPLICATE THE ASSESSEE IN ANY COLLUSIVE ARRANGEMENT. THIS POSITION HAS BEEN ACCEP TED BY HON'BLE HIGH COURT IN THE CASE OF NOVA PROMOTERS, CITED SUPRA. L D. AR ALSO RELIED ON THE DECISIONS IN THE CASES OF CIT VS. FAIR FINVEST LTD. IN ITA NO.232/2012 DATED 22.11.2012, CANERON CONCRETE INDUSTRY P. LTD. VS. A CIT IN ITA NO.4114/DEL/11 DATED 03.05.2013, CIT VS. GOEL SONS GOLDEN ESTATE P. LTD. IN ITA NO.212/2012 DATED 11.04.2012, CIT VS. GANGES HWARI METAL PVT. LTD. IN ITA NO.597/2012 DATED 21.01.2013, ACIT VS. PANCH ANAN INTERNATIONAL P. LTD. IN ITA NO.50/DEL/2011 DATED 23.11.2012 AND CIT VS. EXPO GLOBAL INDUSTRIAL LTD. IN ITA NO.1257/2011 DATED 20.07.201 2 WHEREIN THE NOVA PROMOTERS, CITED SUPRA, HAS BEEN DISTINGUISHED. REL YING ON THE DECISION OF GOEL SONS GOLDEN LIMITED, CITED SUPRA, THE DELHI BE NCH OF ITAT IN THE CASE OF ITO VS. INDIA TEXTAB MARKETING LTD. IN ITA NO.11 77/D/2012 DATED 05.10.2012 HAS DELETED THE ADDITION. SIMILAR VIEW H AS ALSO BEEN TAKEN BY THE DELHI BENCH OF THE ITAT IN THE CASE OF ABHIK JAIN V S. ITO IN ITA ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 18 NO.2029/DEL/2011 DATED 18.05.2012. A SIMILAR VIEW H AS ALSO COME UP IN THE CASE OF ITO VS. EMPIRE BUILDTECH PVT. LTD. IN ITA N O.4656/DEL/2009 DATED 30.04/2013 WHEREIN THE DELETION OF THE ADDITION BY THE CIT (A) WAS UPHELD. THE LD. AR ALSO SUBMITTED THAT THE GROUNDS IN APPEA L IN ASSESSEES CROSS OBJECTION NO.258/DEL/2010 IN ITA NO.3201/DEL/2010 F OR ASSESSMENT YEAR 2007-08 AND THE FACTS IN REVENUES APPEAL IN ITA NO .3201/DEL/2010 ARE EXACTLY THE SAME, THEREFORE, THE SAME PLEADINGS MAY BE TAKEN FOR THE ASSESSMENT YEAR 2007-08 ALSO. 13. THE LD. AR ALSO SUBMITTED THAT THE GROUNDS IN C ROSS OBJECTION FOR ASSESSMENT YEAR 2008-09 IN CO NO.257/DEL/2010 ARE A LSO THE SAME AS OF GROUND NOS.2, 3 & 4 IN CROSS OBJECTIONS FOR ASSESSM ENT YEARS 2006-07 & 2007-08, THEREFORE, THIS ISSUE IS ALSO DECIDED ACCO RDINGLY. 14. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE H AVE PERUSED THE CASE LAWS RELIED UPON BY BOTH THE SIDES. THE ASSESSEE HA S RECEIVED FROM ITS PROMOTERS AND VARIOUS GROUP COMPANIES OF THE FOLLOW ING AMOUNT :- NAME AMOUNT PROMOTERS CAPITAL RAKESH CHAND GUPTA 100000 SHANTI PRAKASH GUPTA 100000 SUSHMA GUPTA 100000 SANWAR MAL AGARWAL 100000 SUNITA GUPTA (W/O RAKESH GUPTA) 100000 SUNITAL GUPTA(W/O SHANTI P GUPTA) 100000 PRAMOD GUPTA 100000 SHARE CAPITAL FROM GROUP COMPANIES GOODWILL BUILDWELL PVT. LTD. 10000000 UNITED INFRACON PVT LTD 10000000 NUM LEASING AND FINANCE PVT. LTD. 10000000 ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 19 SANWARIA BANQUETS 10000000 S S FINCAP PVT. LTD. 10000000 DELHI VENTURES PVT. LTD. 14500000 RPS ASSOCIATES LIMITED 85000000 SANWAR MAL AGARWAL 100000 SHARE APPLICATION MONEY JOSHITA EXIM PVT. LTD. 1500000 M S MERCHANDISERS PVT. LTD. 2300000 NEW HEIGHTS PVT. LTD. 1800000 THE ASSESSEE SUBMITTED THE FOLLOWING DOCUMENTS TO T HE ASSESSING OFFICER :- ACKNOWLEDGEMENT OF RETURN OF INCOME, BALANCE SHEET & PROFIT AND LOSS A/C, BANK STATEMENT, MEMORANDUM AND ARTICLES O F ASSOCIATION, AFFIDAVIT FROM THE DIRECTORS, CONFIRMATION, BOARD R ESOLUTION, PAN DETAILS, COMPUTATION OF INCOME AND CIN DETAILS ETC. THE HEARING OF THE CASE BEFORE THE ASSESSING OFFICE R TOOK PLACE ON 12 DATES. DURING THE HEARING, THE ASSESSING OFFICER HAS NOT R AISED ANY DOUBT FOR THE AUTHENTICITY OF THE ABOVE DETAILS AND DOCUMENTS FIL ED BY THE ASSESSEE. THE ASSESSING OFFICER HAS ALSO NOT MADE ANY ENQUIRY FOR ISSUING NOTICE U/S 133(6) OR SUMMONS U/S 131 OF THE INCOME-TAX ACT, 1961. THE RE WAS NO SEIZED MATERIAL. THE ADDRESS OF THE INVESTOR COMPANIES WAS THE SAME AS OF THE ASSESSEE AND THEIR RUBBER STAMPS WERE ALSO FOUND FR OM THE PREMISES OF THE ASSESSEE. SOME OF THE DIRECTORS OF THESE COMPANIES WERE COMMON AS OF ASSESSEES DIRECTORS AS SHRI RAKESH CHAND GUPTA AND SHRI SHANTI PRAKASH GUPTA WERE ALSO THE DIRECTORS IN GOODWILL BUILDWELL PVT. LTD., UNITED INFRACON PVT. LTD. AND DELHI VENTURES PVT. LTD. THE SE PERSONS WERE ALSO PARTNER IN RPS ASSOCIATES, PARTNERSHIP FIRM. SHRI R AKESH CHAND GUPTA WAS DIRECTOR IN RPS ASSOCIATES LIMITED. SHRI SHANTI PRA KASH GUPTA WAS DIRECTOR ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 20 IN M/S. S.S. FINCAP PVT LTD. ALONG WITH SMT. SUNITA GUPTA. SHRI NARESH CHAND GUPTA AND UMESH CHAND GUPTA WERE DIRECTORS IN NUM L EASING & FINANCE PVT. LTD. IT IS ALSO A FACT THAT NO INCRIMINATING D OCUMENTS WERE FOUND AND SEIZED DURING THE SEARCH OPERATION. NO ONE HAS STAT ED ANYTHING ADVERSE IN THE STATEMENT RECORDED DURING THE SEARCH OPERATION AND AFTER THE SEARCH OPERATION WITH REGARD TO THESE SHARE CAPITAL RECEIPTS FROM TH ESE PERSONS. THE ASSESSEE GAVE THE NAMES AND ADDRESSES OF THESE PERSONS AND T HEIR PAN WAS ALSO GIVEN. THE ASSESSING OFFICER HAS NOT ISSUED ANY SUMMONS U/ S 131 OF THE ACT TO THESE COMPANIES. THE ASSESSING OFFICER HAS ALSO NOT CONDU CTED ANY ENQUIRY INTO THE PARTICULARS/DETAILS SUBMITTED BY THE ASSESSEE WITH REGARD TO THESE SHAREHOLDERS. IN OUR CONSIDERED VIEW AND IN VIEW OF THE DECISIONS OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION REP ORTED IN 159 ITR 78, THE EVIDENCES SUBMITTED BY THE ASSESSEE CANNOT BE THROW N OUT WITHOUT ANY ENQUIRY SPECIALLY WHEN THERE IS NO MATERIAL TO IMPL ICATE THE ASSESSEE IN A COLLUSIVE ARRANGEMENT. THE DETAILS SUBMITTED ALSO S HOW THAT THESE INVESTORS COMPANIES WERE SISTER CONCERNS OF THE ASSESSEE AND HAVING THE SAME ADDRESS AND COMMON DIRECTORS. THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SPECIFIC DEFECTS IN THE DETAILS SUBMITTED BY THE ASSESSEE. C ONSIDERING ALL THESE FACTUAL ASPECT, WE HOLD THAT CIT (A) WAS JUSTIFIED IN DELET ING THE ADDITION. 15. IN ITA NO.3202/DEL.2010 FOR ASSESSMENT YEAR 200 8-09, THE ISSUE RAISED IS AGAINST DELETION OF ADDITION OF RS.22.37 CRORES OF UNSECURED LOANS ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 21 RECEIVED FROM SHRI SHANTI PRAKASH GUPTA AND SHRI RA KESH CHAND GUPTA, DIRECTORS OF THE COMPANY. 16. WHILE PLEADING ON BEHALF OF THE REVENUE LD. DR SUBMITTED THAT CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE ON ACCOUNT OF UNSECURED LOANS. THE ASSESSING OFFICER FOUND THAT ON THE PERUSAL OF DETAILS AND BANK STATEMENT OF THE ASSESSEE THAT UNACCOUNTED MONEY IS ROUTED BY WAY OF UNSECURED LOANS. THE CIT (A) HAS DELETED THE ADDITION WITHOUT EXAMIN ING AND WITHOUT GIVING ANY FINDING IN RESPECT OF THE BANK ACCOUNT FROM WHE RE UNSECURED LOANS HAVE COME. 17 ON THE OTHER HAND, THE LD. AR SUBMITTED THAT ASS ESSING OFFICER HAS MADE THE ADDITION OF RS.22.37 CRORES BEING UNSECURE D LOAN RECEIVED DURING THE YEAR. THE ASSESSING OFFICER HAS NOT EVEN MENTIO NED THE NAMES OF THE PERSONS FROM WHOM THE LOAN HAS BEEN TAKEN BY THE AS SESSEE. THIS ADDITION HAS BEEN MADE IN THE MOST ARBITRARY MANNER. THE ADDITIO N HAS BEEN MADE BY THE ASSESSING OFFICER BY STATING IN A SINGLE SENTENCE A S UNDER :- DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HA S SUBMITTED THE DETAILS RELATING TO THE UNSECURED LOANS RECEIVED DU RING THE YEAR AMOUNTING TO RS.223733874/-. ON PERUSAL OF THE DETAILS AND BA NK STATEMENTS IT IS ESTABLISHED THAT THE UNACCOUNTED MONEY IS ROUTED BY THE WAY OF UNSECURED LOANS. HENCE, THE AMOUNT OF RS.223733874/ - IS BEING ADDED BACK TO THE INCOME OF THE ASSESSEE. THE ASSESSEE HAS TAKEN THE LOAN FROM ITS DIRECTORS, SHRI SHANTI PRAKASH GUPTA AND SHRI RAKESH CHAND GUPTA OF RS.13,74,16,937/- AN D RS.9,63,16,937/- RESPECTIVELY. BOTH THE DIRECTORS ARE ASSESSED TO IN COME-TAX. THE CIT (A) HAS ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 22 CATEGORICALLY RECORDED THE FINDING THAT ASSESSEE SU BMITTED THE DETAILS GIVING NAME AND ADDRESS ALONG WITH THE COPY OF LEDGER ACCO UNT OF UNSECURED LOANS. COPY OF BANK STATEMENT THROUGH WHICH THE MONEY WAS RECEIVED WAS ALSO FURNISHED. COPY OF LEDGER ACCOUNT OF BOTH THE DIREC TORS IN WHICH THE TRANSACTIONS WERE RECORDED WAS ALSO SUBMITTED. COPY OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT DEPICTING THE LOAN WAS ALSO S UBMITTED. THE ACKNOWLEDGEMENT OF THE RETURN OF INCOME, CONFIRMATI ON AND COMPUTATION OF INCOME AND PAN OF BOTH THE DIRECTORS WERE ALSO SUBM ITTED. THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY AND HAS ALSO NOT A BLE TO POINT OUT ANY DEFECT IN THE DOCUMENTS SUBMITTED BY THE ASSESSEE. THE CIT (A) HAS VERIFIED THE ASSESSMENT RECORDS AND HAD ALSO TAKEN NOTE OF THE F ACT THAT ASSESSEE HAS APPEARED ON VARIOUS DATES AND FILED THE DETAILS AND IN NONE OF THE HEARING, THIS ISSUE OF LOAN WAS RAISED. SHRI SHANTI PRAKASH GUPTA , WHO WAS THE DIRECTOR OF THE ASSESSEE COMPANY, HAS DECLARED THE TAXABLE INCO ME FOR THE YEAR AT RS.1,77,43,620/-. THE COMPUTATION OF THE INCOME IS PLACED AT PAGE 22 OF THE PAPER BOOK. SHRI SHANTI PRAKASH GUPTA, DIRECTOR OF THE COMPANY FROM WHOM THE LOAN WAS RECEIVED WAS ALSO HAVING EXEMPTED INCO ME U/S 10 TO THE TUNE OF RS.1,94,84,640/-. SIMILARLY, THE OTHER DIRECTOR, SH RI RAKESH CHAND GUPTA ALSO DECLARED INCOME FOR THE YEAR AT RS.1,22,65,220/-. T HE COMPUTATION OF INCOME IS PLACED AT PAGE 31 OF THE PAPER BOOK. SINCE BOTH THE PERSONS FROM WHOM THE LOAN WAS RECEIVED WERE DIRECTORS OF THE COMPANY AND THEY DECLARED ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 23 SUBSTANTIAL TAXABLE INCOME IN THEIR RETURN OF INCOM E AND LOAN HAS BEEN RECEIVED FROM THEIR BANK ACCOUNT ESTABLISHES ALL TH E THREE INGREDIENTS AS REQUIRED UNDER SECTION 68 OF THE INCOME-TAX ACT, 19 61, I.E. THE IDENTITY IS ESTABLISHED BEYOND ANY DOUBT, BOTH THE PERSONS WERE DIRECTORS OF THE ASSESSEE COMPANY, BOTH THE DIRECTORS WERE DECLARING TAXABLE INCOME IN CRORES WHICH PROVES THE CREDITWORTHINESS OF THESE PERSONS AND TH E TRANSACTIONS WERE THROUGH BANKING CHANNELS AND NECESSARY CONFIRMATION S WERE FILED ESTABLISHES THE GENUINENESS OF THE TRANSACTION. LD. AR PLEADED TO SUSTAIN THE ORDER OF THE CIT (A). 18. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. THE ASSESSING OFFICER HAS MADE THE ISSUE BY SIMPLY STATING THAT ON THE PERUSA L OF DETAILS AND BANK STATEMENT, IT IS ESTABLISHED THAT THE UNACCOUNTED M ONEY IS ROUTED THROUGH UNSECURED LOANS. THE ASSESSING OFFICER HAS NOT EVEN WRITTEN THE NAMES OF THE PERSON FROM WHOM THE MONEY WAS RECEIVED. THE DETAIL S FILED BY THE ASSESSEE IS THAT THE AMOUNT IS RECEIVED FROM DIRECTORS, I.E. RS.13,74,16,937/- FROM SHRI SHANTI PRAKASH GUPTA AND RS.8,63,16,937/- FROM SHRI RAKESH CHAND GUPTA. BOTH THE DIRECTORS WERE IDENTIFIABLE PERSON AND ASS ESSED TO INCOME-TAX. THE ASSESSEE SUBMITTED THE DETAILS INCLUDING THE ADDRES S OF THE DIRECTORS AND CREDITORS AND ALSO THE LEDGER ACCOUNTS OF THESE PER SONS. THE COPY OF THE BANK STATEMENT FROM WHERE THE MONEY WAS RECEIVED WAS ALS O FURNISHED. THE ACKNOWLEDGEMENT OF RETURN OF INCOME, COMPUTATION OF INCOME AND PAN OF ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 24 BOTH THE DIRECTORS/CREDITORS WERE ALSO SUBMITTED. T HE ASSESSING OFFICER HAS NOT MADE ANY FURTHER ENQUIRY IN THIS REGARD. ASSESS ING OFFICER HAS NOT POINTED OUT ANY DEFECT IN THE DOCUMENTS SUBMITTED BY THE AS SESSEE. THE TAXABLE INCOME OF SHRI SHANTI PRAKASH GUPTA FOR THE YEAR WA S RS.1,77,43,620/- AND TAXABLE INCOME OF SHRI RAKESH CHAND GUPTA WAS OF RS .1,22,65,220/-. THE COMPUTATION OF INCOME OF THESE TWO DIRECTORS WAS AL SO FILED WHICH IS PLACE AT PAGES 22 & 31 OF THE PAPER BOOK RESPECTIVELY. THE S UBSTANTIAL INCOME DECLARED IN THE RETURN OF INCOME SHOWS THAT THESE W ERE PERSONS OF MEANS, THEREFORE, THE CREDITWORTHINESS CANNOT BE DOUBTED. SINCE THE TRANSACTIONS WERE CARRIED OUT THROUGH BANKING CHANNELS AND NECESSARY CONFIRMATIONS WERE ALSO FILED, THEREFORE, THE GENUINENESS OF THE TRANSACTIO N CAN ALSO BE NOT DOUBTED. THE IDENTITY OF THESE PERSONS WAS BEYOND DOUBT. THE RE WAS NO INCRIMINATING DOCUMENT FOUND AND SEIZED DURING THE SEARCH OPERATI ON WITH REGARD TO THE LOANS TAKEN FROM THE DIRECTORS/CREDITORS. IN VIEW O F THESE FACTS, WE SUSTAIN THE ORDER OF THE CIT (A) ON THIS ISSUE AND DELETE THE A DDITION. 19. IN THE RESULT, THE APPEAL OF THE REVENUE AND CR OSS OBJECTIONS FILED BY THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 1 ST DAY OF OCTOBER, 2013. SD/- SD/- (DIVA SINGH) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 1 ST DAY OF OCTOBER, 2013/TS ITA NOS.3200 TO 3202/DEL/2010 CO NOS.257 TO 259/DEL/2010 25 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXIII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI. DATE OF DICTATION.. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COME TO SR.PS/PS DATE ON WHICH FAIR ORDER SENT TO MEMBER FOR SIGNATU RE DATE ON WHICH THE FAIR ORDER COMES BACK AFTER PRONO UNCEMENT TO THE SR.PS/PS DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE AR FOR SIGNA TURE ON THE ORDER DATE OF DESPATCH OF THE ORDER