ACIT, Meerut V. M/s. Godwin Construction Pvt. Ltd., Meerut

ITA 3203/DEL/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0628 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 01-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SAROHA
• Section: 153A; 13; 68

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI C BEN CH, NEW DELHI BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER SHRI N.K. BILLAIYA, ACCOUNTANT MEMBE R ITA NO. 3203/DEL/2016 [A.Y 2009-10] THE A.C.I.T VS. M/S GODWIN CONSTRUCTION PVT LTD CENTRAL CIRCLE A 151, DEFENCE COLONY MEERUT MEERUT PAN: AAEFG 1843 R (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI SANDEEP SAPRA, ADV DEPARTMENT BY : SHRI A.K. SAROHA, CIT- DR DATE OF HEARING : 16.12.2019 DATE OF PRONOUNCEMENT : 18.12.2019 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] - IV, KANPUR D ATED 03.03.2016 PERTAINING TO ASSESSMENT YEAR 2009-10. 2 2. THE GRIEVANCES OF THE ASSESSEE READ AS UNDER: 1. WHETHER ON THE FACT AND CIRCUMSTANCE, THE LD. CI T(A) WAS CORRECT IN DELETING THE ADDITION OF RS. 4,28,47,279/ -, WHICH WAS MADE ON THE BASIS OF DOCUMENTS/DATA ON LA PTOP FOUND AND SEIZED FROM THE PREMISES OF GODWIN GROUP. 2. WHETHER ON THE FACT AND CIRCUMSTANCE, THE LD. CIT (A) WAS CORRECT IN DELETING THE ADDITION OF RS. 15,00,000/ -, WHICH WAS MADE ON THE BASIS OF DOCUMENTS. 3. THAT THE ORDER OF THE LD. CIT(A) BEING ERRONEOUS IN LAW AND ON FACTS WHICH NEEDS TO BE VACATED AND THE ORDE R OF THE AO BE RESTORED. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH OPERATION WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE. N OTICE U/S 153A OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO A S 'THE ACT' FOR SHORT] WAS ISSUED AND SERVED UPON THE ASSESSEE. PURSUANT TO THE NOTICE, THE ASSESSEE FILED RETURN DECLARING TOTAL INCOME OF RS. 22.18 LAKHS. STATUTORY NOTICES WERE ISSUED AND SERVED UPON THE A SSESSEE. 3 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS AND ON PERUSAL OF THE SEIZED MATERIAL, THE ASSESSING OFFIC ER COMPARED THE PRINT OUTS OF IBM LAPTOP WITH CLOSING BALANCE OF CA SH AS PER BALANCE SHEET FILED BY THE ASSESSEE AND THE SAME IS AS UNDE R: A.Y. CASH BOOK AS PER IBM LAPTOP PRINTOUT CLOSING BAL OF CASH AS PER BALANCE SHEET FILED IN THE DEPARTMENT UNDER REPORTED CASH OPENING BAL CLOSING BAL 05 - 06 3,65,631.40 1,92,173.26 1,16,838 75,335.26 06 - 07 1,92,173.26 43,12,170.34 2,39,814 40,72,356.34 07 - 08 43,12,170.34 3,42,51,775.34 2,84,564 3,39,67,211.34 08 - 09 3,42,51,775.34 6,30,41,317.58 2,34,043 6,28,07,274.58 09 - 10 6,30,41,317.58 10,65,91,190.09 9,36,637 10,56,54,553.04 10 - 11 10,65,91,190.09 10,63,08,534.06 8,04,406 10,55,04,128.06 5. THE ASSESSING OFFICER WAS OF THE OPINION THAT TH E CLOSING BALANCE OF THE COMPANY AS PER BALANCE FOUND IN THE IBM LAPT OP FOR THE SIX YEARS IS DIFFERENT FROM THE CLOSING CASH BALANCE AS PER THE BALANCE SHEET FILED BY THE ASSESSEE. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY THE UNDER REPORTED CASH SHOULD NOT BE ADDED TO THE INCOME OF THE ASSESSEE IN THE RESPECTIVE A.YS. 4 6. IN ITS REPLY, THE ASSESSEE FILED A RECONCILIATIO N STATEMENT AND CLAIMED THAT EXPENSES PAID IN CASH HAVE NOT BEEN DE DUCTED FROM THE CASH BOOK AS PER IBM LAPTOP. 7. THE ASSESSING OFFICER SIMPLY RUBBISHED THE CONTE NTION OF THE ASSESSEE AND WAS OF THE FIRM BELIEF THAT THE ASSESS EE FAILED TO GIVE A SATISFACTORY EXPLANATION FOR THE DIFFERENCE OCCURRI NG IN THE BALANCE SHEET PRODUCED BEFORE THE DEPARTMENT AND THE DATA R EFLECTING IN THE LAPTOP. ACCORDINGLY, THE ASSESSING OFFICER MADE AN ADDITION OF RS. 4,28,47,279/-. 8. THE ASSESSEE AGITATED THE MATTER BEFORE THE LD. CIT(A) AND VEHEMENTLY CONTENDED THAT ADDITIONS ON SIMILAR FACT S HAVE BEEN DELETED BY THE LD. CIT(A) IN A.YS 2005-06 TO 2008-0 9. 9. ON PERUSAL OF THE APPELLATE ORDER, THE LD. CIT(A ) FOUND THAT IN A.YS 2005-06 TO 2008-09, THE FIRST APPELLATE AUTHOR ITY HAS DELETED THE ADDITIONS ON SIMILAR SET OF FACTS AND FOLLOWING THE SAME, THE LD. CIT(A) DELETED THE ADDITION OF RS. 4,28,47,279/-. 5 10. BEFORE US, THE LD. DR STRONGLY CONTENDED THAT T HE FACTS OF EARLIER YEARS ARE TOTALLY DISTINGUISHABLE FROM THE FACTS OF THE CASE UNDER CONSIDERATION. IT IS THE SAY OF THE LD. DR THAT PR OVISIONS OF SECTION 292C OF THE ACT SQUARELY APPLY ON THE FACTS OF THE CASE IN HAND. IT IS THE SAY OF THE LD. DR THAT SECTION 292C OF THE ACT SPECIFICALLY PROVIDES THAT WHERE ANY BOOKS OF ACCOUNT/OTHER DOCUMENTS ARE FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE O F SEARCH OPERATION, THEN IT MAY BE PRESUMED THAT SUCH BOOKS OF ACCOUNT/ OTHER DOCUMENTS AND CONTENTS THEREIN BELONGED TO THE PERSON FROM WH OSE PREMISES IT HAS BEEN FOUND DURING THE COURSE OF SEARCH OPERATIO N. THE LD. DR FURTHER STATED THAT THE ASSESSEE HAS FAILED TO EXPL AIN THE CONTENTS OF THE PRINT OUTS OF IBM LAPTOP VIS A VIS CLOSING CASH BALANCE AS PER THE BALANCE SHEET FILED WITH THE RETURN OF INCOME. 11. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE ST ATED THAT THE IMPUGNED ISSUE IS FULLY COVERED IN FAVOUR OF THE AS SESSEE AS PER THE CONSOLIDATED ORDER OF THE TRIBUNAL DATED 08.06.2018 FOR A.YS 2005-06 TO 2008-09 IN ASSESSEES OWN CASE. THE LD. COUNSEL FOR THE ASSESSEE FURNISHED COPY OF THE ORDER OF THE TRIBUNAL WHICH I S PLACED AT PAGES 258 TO 275 OF THE PAPER BOOK. 6 12. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE O RDERS OF THE AUTHORITIES BELOW. IT IS TRUE THAT SIMILAR ADDITIO NS WERE MADE IN EARLIER YEARS AND HAVE BEEN DELETED BY THE FIRST APPELLATE AUTHORITY, WHICH ORDER HAS BEEN UPHELD BY THE CO-ORDINATE BENCH. 13. EXHIBIT 200 IS COPY OF THE PROFIT AND LOSS ACCO UNT EXTRACTED FROM THE IBM LAPTOP. A PERUSAL OF THE SAME NEITHER SHOW S ANY OPENING STOCK NOR ANY CLOSING STOCK. GROSS LOSS IS SHOWN A T RS. 15.35 CRORES AND NET LOSS IS AT RS. 17.02 CRORES. IF THE SAME IS CO MPARED WITH THE PROFIT AND LOSS ACCOUNT FILED WITH THE RETURN OF INCOME WH ICH IS PLACED AT PAGE 130 OF THE PAPER BOOK, WE FIND THAT THERE IS A OPENING STOCK OF RS. 4.59 CRORES AND CLOSING STOCK OF RS. 2.26 CRORE S AND THE NET PROFIT IS AT RS. 69.94 LAKHS. AS MENTIONED ELSEWHERE, THE AS SESSEE HAS RETURNED NET PROFIT OF RS. 22.18 LAKHS, WHICH HAS BEEN ACCEP TED BY THE ASSESSING OFFICER. 14. IN OUR CONSIDERED OPINION, THE DOCUMENTS FOUND IN IBM LAPTOP ARE NOT COMPLETE DOCUMENTS IN AS MUCH AS NEITHER THE PR OFIT AND LOSS ACCOUNT IS COMPLETE AS MENTIONED HEREINABOVE NOR TH E BALANCE SHEET IS COMPLETE. 7 15. WE FURTHER FIND THAT DURING THE COURSE OF SCRUT INY ASSESSMENT PROCEEDINGS ITSELF THE ASSESSEE HAS FURNISHED A YEA R-WISE RECONCILIATION OF BALANCE AS PER PRINT OUT OF IBM LAPTOP AND AS PE R ITS BOOKS OF ACCOUNT. THIS REPLY OF THE ASSESSEE IS PLACED AT P AGES 114 TO 116 OF THE PAPER BOOK. WE FIND THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THIS REPLY AND RECONCILIATION THEREIN. 16. IN OUR HUMBLE OPINION, THERE ARE SEVERAL DISCRE PANCIES FOUND IN THE PRINT OUTS OF IBM LAPTOP AND THE SAME CANNOT BE CONSIDERED AS COMPLETE DOCUMENTS EXHIBITING TRUE PICTURE OF THE B USINESS OF THE ASSESSEE. SUCH DOCUMENTS, WHICH GIVE INCONCLUSIVE INFORMATION, CANNOT BE RELIED UPON. 17. FINANCIAL STATEMENTS FILED WITH THE RETURN OF I NCOME ARE AUDITED AND DEPICT TRUE AND FAIR VIEW OF THE BUSINESS OF TH E ASSESSEE AND THE ASSESSING OFFICER HAS NOT POINTED OUT ANY SPECIFIC DEFECT IN THESE FINANCIAL STATEMENTS. 18. SURPRISINGLY, THE ASSESSING OFFICER HAS CONCENT RATED HIS FINDINGS ONLY ON ONE ITEM FROM THE PRINT OUTS OF IBM LAPTOP I.E. CASH BALANCE, BUT DID NOT MAKE ANY EFFORT TO EXAMINE/VERIFY THE D ISCREPANCIES WHEN 8 THE ASSESSEE HAS FURNISHED COMPLETE RECONCILIATION STATEMENT DURING THE ASSESSMENT PROCEEDINGS ITSELF. WE ARE OF THE C ONSIDERED VIEW THAT THE ADDITIONS BASED UPON SUCH INCOMPLETE INFORMATIO N CANNOT BE SUSTAINED AND THE LD. CIT(A) HAS RIGHTLY DELETED TH E SAME, WHICH CALLS FOR NO INTERFERENCE. 19. FOR THE SAKE OF COMPLETENESS AND AS MENTIONED E LSEWHERE, ADDITIONS ON SAME SET OF FACTS BASED UPON SAME DOCU MENTS WERE DELETED BY THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE IN ITA NO. 3226/DEL/2015 AND ORS FOR A.YS 2005-06 TO 2008-09. RESPECTFULLY FOLLOWING THE SAME, WE DECLINE TO INTERFERE WITH TH E FINDINGS OF THE LD. CIT(A). GROUND NO. 1, ACCORDINGLY, STANDS DISMISSE D. 20. FACTS RELATING TO GROUND NO. 2 SHOW THAT SOME D OCUMENT WAS IMPOUNDED FROM THE SITE OF GODWIN HOTEL WHICH CONTA INS DETAILS OF PAYMENT RECEIVED BY M/S ASCENT CONSTRUCTION PVT LTD FROM M/S GODWIN CONSTRUCTION PVT LTD. AS PER DETAILS MENTIONED THE REIN, AN AMOUNT OF RS. 5,12,92,685/- WAS RECEIVED DURING THE PERIOD 01 .07.2008 TO 19.05.2010, DETAILS OF WHICH ARE AS UNDER: 9 DATE AMOUNT 16/1/2009 950000 17/2/2009 50000 31/2/2009 500000 18/5/2009 1000000 11/6/2009 1000000 22/6/2009 500000 3/7/2009 1000000 ! 27/7/2009 1000000 5/10/2009 500000 24/11/2009 500000 20/1/2010 1000000 13/2/2010 500000 6/4/2010 300000 15/5/2010 300000 '3/6/2010 600000 TOTAL 9700000 21. SINCE RS. 15 LAKHS PERTAINED TO A.Y 2009-10, TH E ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF THE MODE OF PAYMENT OF RS. 15 LAKHS. IN ITS REPLY, THE ASSESSEE STRONGLY CONTENDED THAT THE SAID PAPER DOES NOT BELONG TO IT AND THE SAME IS RELATED WITH M/S ASCEN T CONSTRUCTION PVT LTD. IT WAS EXPLAINED THAT NO CASH TRANSACTIONS HA VE BEEN DONE WITH M/S ASCENT CONSTRUCTION PVT LTD. 22. THE REPLY OF THE ASSESSEE DID NOT FIND ANY FAVO UR WITH THE ASSESSING OFFICER WHO WAS OF THE FIRM BELIEF THAT T HE ASSESSEE HAS REGULAR BUSINESS TRANSACTIONS WITH M/S ASCENT CONST RUCTION PVT LTD. THE ASSESSING OFFICER WAS OF THE OPINION THAT ONCE THE ASSESSEE HAS ACCEPTED THE TRANSACTIONS MADE THROUGH CHEQUES, THE SAME IS EQUALLY TRUE IN CASH TRANSACTIONS. THE ASSESSING OFFICER C ONCLUDED BY HOLDING 10 THAT THE ASSESSEE HAS DONE TRANSACTIONS OUTSIDE THE BOOKS OF ACCOUNT AND THESE TRANSACTIONS WERE NOT SHOWN IN THE BOOKS OF ACCOUNT, THE SAME WERE ADDED U/S 68 OF THE ACT. 23. THE ASSESSEE STRONGLY AGITATED THE MATTER BEFOR E THE LD. CIT(A) AND ONCE AGAIN THE LD. CIT(A) FOUND THAT SIMILAR AD DITION ON SAME SET OF FACTS HAS BEEN DELETED IN A.Y 2011-12 AND FOLLOW ING THE DECISION IN A.Y 2011-12, THE LD. CIT(A) DELETED THE ADDITION OF RS. 15 LAKHS. 24. BEFORE US, THE LD. DR STRONGLY SUPPORTED THE FI NDINGS OF THE ASSESSING OFFICER, ONCE AGAIN STATING THAT IF THE C HEQUE TRANSACTIONS BELONGED TO THE ASSESSEE, THEN IN THE SAME DOCUMENT , CASH TRANSACTIONS WERE ALSO BELONGING TO THE ASSESSEE AN D THE ASSESSEE HAS FAILED TO EXPLAIN THE SAME. 25. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE VE HEMENTLY STATED THAT THE DOCUMENTS RELIED UPON BY THE ASSESSEE ASSE SSING OFFICER IS NOTHING BUT A DUMB DOCUMENT WHICH CONTAINS NO DETAI LS RELATING TO THE PAYER AND THE PAYEE AND ON THE BASIS OF AMOUNT MENT IONED THEREIN, NO LOGICAL INFERENCE CAN BE DRAWN. 11 26. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE O RDERS OF THE AUTHORITIES BELOW. EXHIBIT 163 OF THE PAPER BOOK C ONTAINS DETAILS OF PAYMENT RECEIVED FROM GODWIN CONSTRUCTION PVT LTD B Y ASCENT CONSTRUCTION. THE TRANSACTIONS MENTIONED IN THE SH EET HAVE BEEN DONE THROUGH REGULAR BANKING CHANNEL AND NO ADVERSE INFE RENCE HAS BEEN DRAWN. EXHIBIT 164 CONTAINS A BALANCE OF RS. 48,89 ,600/- AND NO ADVERSE INFERENCE HAS BEEN DRAWN IN SO FAR AS THIS AMOUNT IS CONCERNED. 27. THE BONE OF CONTENTION IS THE FOLLOWING EXTRACT OF DOCUMENT: DATE AMOUNT 16.01.09 950000 17.01.09 50000 31.01.09 500000 18. 05 09 1000000 100000 22.06.09 500000 03.07.09 1000000 27.07.09 1000000 05.10.09 500000 24.11.09 500000 20.01.10 1000000 13.02.10 500000 06.04 10 300000 15.05.10 300000 03.0.06.10 600000 9700000 12 28. IT CAN BE SEEN FROM THE ABOVE EXHIBIT THAT ONLY DATE AND AMOUNT HAS BEEN MENTIONED AND IT IS NOT KNOWN WHETHER THE PAYMENTS HAVE BEEN MADE BY THE ASSESSEE OR THE AMOUNTS HAVE BEEN RECEIVED BY THE ASSESSEE. MOST IMPORTANTLY, THE SAID DOCUMENT WAS NOT FOUND FROM THE PREMISES OF THE ASSESSEE BUT FROM THE SITE OFFICE O F ASCENT CONSTRUCTION PVT LTD. THOUGH THE ADDITION HAS BEEN MADE U/S 68 OF THE ACT IN THE HANDS OF THE ASSESSEE COMPANY, THE A SSESSING OFFICER DID NOT MAKE ANY ENQUIRY/INVESTIGATION FROM ASCENT CONS TRUCTION PVT. LTD. 29. AS MENTIONED ELSEWHERE, IT CANNOT BE SAID THAT THE AMOUNTS MENTIONED IN THE SAID DOCUMENTS WERE RECEIVED BY TH E ASSESSEE. EXHIBIT 163 MENTIONED ELSEWHERE CONTAINS DETAILS OF PAYMENT RECEIVED BY ASCENT CONSTRUCTION PVT. LTD FROM THE ASSESSEE. ASSUMING, YET NOT ACCEPTING THAT THE CONTENTS OF EXHIBIT 164 ARE TRUE , THEN BY THE SAME ANALOGY, RS. 15 LAKHS MUST HAVE BEEN PAID BY THE AS SESSEE TO M/S ASCENT CONSTRUCTION PVT. LTD. BY ANY STRETCH OF IM AGINATION, PAYMENT CANNOT BECOME INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 30. BE THAT AS IT MAY, IN OUR CONSIDERED OPINION, T HE SAID DOCUMENT IS NOTHING BUT A DUMB DOCUMENT AND NO LOGICAL INFERENC E CAN BE DRAWN FROM THE SAID DOCUMENT AND NO ADDITION CAN BE SUSTA INED MADE ON THE 13 BASIS OF A DUMB DOCUMENT. WE DO NOT FIND ANY REASO N TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). ACCORDINGLY, GROUND NO. 2 STANDS DISMISSED. 31. IN THE RESULT, THE APPEAL OF THE REVENUE IN IT A NO. 3203/DEL/2016 IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 18.12. 2019. SD/- SD/- [SUSHMA CHOWLA ] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18 TH DECEMBER, 2019 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 14 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 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 ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER