M/s. Hitech Computech Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 3220/DEL/2012

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2718 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 11-12-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 21-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K SAROHA
• Keywords: Opportunity of being heard; Accommodation entries
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NOS. 3219 & 3220/DEL /2012 ASSESSMENT YEARS: 2004-05 & 2005-06 M/S HITECH COMPUTECH PVT. LTD., VS. A.C.I.T., H-108, CENTRAL CIRCLE-9, NEW ASIATIC BLDG. CONNAUGHT NEW DELHI PLACE, NEW DELHI (PAN:AABCH3905M) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. V. RAJA KUMAR, ADV. RESPONDENT BY: SH. A.K. SAROHA, CIT(DR) DATE OF HEARING: 11.12.2015 DATE OF PRONOUNCEMENT: 04.01.2016 ORDER PER H.S. SIDHU, J.M.: THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAIN ST THE RESPECTIVE IMPUGNED ORDERS PASSED BY THE LD. CIT(A)-XXXII, NEW DELHI RELATING TO ASSESSMENT YEARS 2004-05 & 2005-06 RESPECTIVELY. SI NCE THE ISSUES INVOLVED IN BOTH THE APPEALS ARE SIMILAR AND IDENTICAL, HENCE, WE ARE DISPOSING OF THESE APPEALS BY PASSING THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE, BY DEALING WITH ITA NO. 3219/DEL/2012 (AY 2004-05). 2. THE GROUNDS RAISED IN ITA NO. 3219/DEL/2012 (AY 2004-05) READ AS UNDER:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES AND IN T HE LAW THE AUTHORITIES BELOW ERRED IN: I. DETERMINING TAXABLE INCOME OF RS. 2,24,410/- AS AGA INST THE RETURNED INCOME OF RS. 2,604/- II. PASSING ORDER U/S 143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1961 RELYING ON THE ESTIMATES AND NOT ON THE BASIS OF SE IZED MATERIAL: 2 ITA NO. 3219-3220/DEL /2012 ASSESSMENT YEARS: 2004-05 & 2005-06 III. IN APPLYING PROVISIONS OF SECTION 145(3) OF THE ACT EVEN THOUGH BOOKS OF ACCOUNT WERE NEVER PRODUCED BEFORE THE AUT HORITY AND NO MATERIAL DEFECTS WERE POINTED OUT THEREIN; IV. IN ESTIMATING UNDISCLOSED INCOME OF SUM OF RS. 2,21 ,803/- BASED FIGURE APPEARING IN BALANCE SHEET DESPITE THE FACTS THAT SUCH BOOKS OF ACCOUNT WERE NEVER RELIED UPON; ALL THE ABOVE ACTIONS BEING MOST ARBITRARY, ERRONEO US, UNTENABLE AND UNLAWFUL, IT IS PRAYED THAT SAME MUST BE QUASHED. 3. THE GROUNDS RAISED IN ITA NO. 3220/DEL/2012 (AY 2005-06) READ AS UNDER:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES AND IN T HE LAW THE AUTHORITIES BELOW ERRED IN: I. DETERMINING TAXABLE INCOME OF RS. 9,81,463/- AS AGA INST THE RETURNED INCOME OF RS. 1,28,750/- II. PASSING ORDER U/S 143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1961 RELYING ON THE ESTIMATES AND NOT ON THE BASIS OF SE IZED MATERIAL: III. IN APPLYING PROVISIONS OF SECTION 145(3) OF THE ACT EVEN THOUGH BOOKS OF ACCOUNT WERE NEVER PRODUCED BEFORE THE AUT HORITY AND NO MATERIAL DEFECTS WERE POINTED OUT THEREIN; IV. IN ESTIMATING UNDISCLOSED INCOME OF SUM OF RS. 3,44 ,415/- AND RS. 5,08,300/- BASED FIGURE APPEARING IN BALANCE SH EET DESPITE THE FACTS THAT SUCH BOOKS OF ACCOUNT WERE NEVER RELIED UPON; ALL THE ABOVE ACTIONS BEING MOST ARBITRARY, ERRONEO US, UNTENABLE AND UNLAWFUL, IT IS PRAYED THAT SAME MUST BE QUASHED. 4. THE FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NOT DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF CONVENIENCE. 5. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE HAS STATED THAT THE ISSUES INVOLVED IN THE PRESENT APPEALS ARE SQUARELY COVERED BY THE FOLLOWING TRIBUNALS DECISIONS:- I. M/S KONICHIVA BUILDERS PVT. LTD. VS. ACIT, IN ITA N OS. 3213-3214 & 3856/DEL/2012 AND 1080/DEL/2013 FOR A.YS 2004-05, 2 005-06, 2007-08 & 2006-07, DATED 14.02.2014. II. M/S ERA ADVERTISING & MARKETING LTD. VS. ACIT, IN I TA NOS. 3046- 3049/DEL/2012 & 3069/DEL/2012, DATED 28.01.2015 3 ITA NO. 3219-3220/DEL /2012 ASSESSMENT YEARS: 2004-05 & 2005-06 III. M/S CAMSOFT INDIA PVT. LTD. VS. ACIT IN ITA NOS. 10 70 & 1074/DEL/2013, DATED 20.04.2015 IV. M/S SHARK COMMUNICATION PVT. LTD. VS. ACIT IN ITA N O. 3211/DEL/2012 (AY 2006-07), DATED 06.5.2015. 6. ON THE OTHER HAND, THE LEARNED DR PLACED RELIAN CE ON THE ORDER OF LEARNED CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. IN THE FACE OF THE ADMITTED FACTS WHEREI N THE ASSESSEE IS ONE OF THE GROUP COMPANIES FLOATED BY SH. SK GUPTA, CA WHEREIN HE HAS ACCEPTED THAT ACCOMMODATION ENTRIES HAS BEEN PROVIDED, FOLLOWING THE JUDICIAL PRECEDENTS, WE DEEM IT APPROPRIATE TO RESTORE THE ISSUE BACK TO TH E AO WITH THE DIRECTION TO ESTIMATE THE REASONABLE EXPENSES KEEPING THE GROUN D REALITIES IN MIND. NEEDLESS TO ADD THAT THE ASSESSEE SHALL BE AFFORDED A REASO NABLE OPPORTUNITY OF BEING HEARD. WHILE COMING TO THE SAID CONCLUSION WE HAVE TAKEN THE FACTS AVAILABLE ON RECORD INTO CONSIDERATION AS WELL AS THE ORDERS OF THE COORDINATE BENCH. FOR READY REFERENCE, WE REPRODUCE THE FACTS FROM THE OR DER DATED 28.1.2015 PASSED IN ERA ADVERTISING & MARKETING LTD. IN ITA NO. 3046-30 49/DEL/2012 WHERE ADDRESSING THE IDENTICAL GROUND FOLLOWING DIRECTION WAS GIVEN:- 9. 'IN THE AFORE-MENTIONED PECULIAR FACTS AND CIRCU MSTANCES ADDRESSING THE LIMITED PLEA OF THE ASSESSEE IN THE LIGHT OF THE ARGUMENTS ADVANCED BY THE PARTIES BEFORE US WHEREIN LD. AR HAS PLACED RELIANCE UPON THE ORDER OF THE DIVISION BENC H IN THE CASE OF KONICHIVA BUILDERS LTD. AND THE LD. CIT DR THOUGH N OT OPPOSING IT HAS INVITED OUR ATTENTION TO THE ORDER OF THE SMC B ENCH IN THE CASE OF CENTENARY SOFTWARE PVT. LTD. WE FIND ON CONSIDER ING THE ORDER IN CENTENARY SOFTWARE PVT. LTD. RELIED UPON BY THE REV ENUE THAT THE 4 ITA NO. 3219-3220/DEL /2012 ASSESSMENT YEARS: 2004-05 & 2005-06 LD. AR BEFORE THE SMC BENCH HAD NOT RAISED ANY PLE A IN REGARD TO ALLOWANCE OF EXPENDITURE AND HAD INSTEAD CANVASSED BEFORE THE SMC BENCH THAT AS PER JUDICIAL PRECEDENT THE ACCEPT ED INCOME SHOULD BE BETWEEN 0.25% TO 0.50%. THIS ARGUMENT IT IS SEEN WAS NOT ACCEPTED. THE CLAIM FOR ALLOWABILITY OF ESTIMAT ING THE EXPENSES IT IS SEEN WAS NOT CANVASSED BEFORE THE SMC BENCH. ACCORDINGLY THE SAID ORDER IN THE CIRCUMSTANCES HAD NO OCCASION TO CONSIDER THE PLEA. IN THE FACTS BEFORE US, LD. AR HAS DRAWN SPEC IFIC ATTENTION TO QUESTION NO.-2 WHICH HAS BEEN EXTRACTED IN THE CASE OF KONICHIVA BUILDERS LTD. ALSO IN PARA 8 OF THEIR ORDER WHICH IS ALSO CONSIDERED AT PAGE 18 OF THE ASSESSMENT ORDER IN THE YEAR UNDE R CONSIDERATION. IN VIEW OF THE ABOVE THERE BEING NO CHANGE IN FACTS AND CIRCUMSTANCES OF THESE CASES RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN KONICHIVA BUILDERS LTD. THE ISSUE OF AL LOWABILITY OF EXPENSES IN SIMILAR LINES IS RESTORED TO THE AD HER EIN ALSO REQUIRING THE ASSESSEE TO PROVE ITS CLAIM WITH COGENT MATERIA L THE LIMITED PLEA OF THE ASSESSEE IS ACCEPTED. THE OTHER GROUNDS RAIS ED WERE NOT ARGUED AS SUCH THE SAME ARE DISMISSED FOLLOWING THE JUDICIAL PRECEDENT IN KONICHIVA BUILDERS LTD. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES.' 7.1 WE ALSO FIND THAT SIMILAR VIEW WAS ADOPTED BY THE TRIBUNAL IN ITS ORDER DATED 20.4.2015 IN THE CASE OF CAMSOFT INDIA PVT. L TD. (SUPRA) AND ALSO IN ORDER DATED 6.5.2015 IN THE CASE OF SHARK COMMUNICATION P VT. LTD. (SUPRA). 7.2 ACCORDINGLY, FOLLOWING THE JUDICIAL PRECEDENT O F THE CO-ORDINATE BENCH IN THE CASE OF M/S KONICHIVA BUILDERS PVT. LTD.; M/S E RA ADVERTISING & MARKETING LTD; M/S CAMSOFT INDIA PVT LTD. AND M/S SHARK COMMU NICATION PVT. LTD., AS 5 ITA NO. 3219-3220/DEL /2012 ASSESSMENT YEARS: 2004-05 & 2005-06 AFORESAID, WE RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DE NOVO ASSESSMENT TO EXAMINE THE ISSUE OF ALLOWABILITY OF EXPENDITURE IN THE LIGHT OF THE ORDERS CITED SUPRA BY AFFORDING ADEQUATE OPPORTUNIT Y TO THE ASSESSEE OF BEING HEARD. 8. SINCE THE FACTS AND CIRCUMSTANCES IN BOTH THE Y EARS ARE STATED TO BE IDENTICAL, THE SAME IS ALSO RESTORED WITH IDENTICAL DIRECTIONS. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 0 4-1-2016. SD/- SD/- (O.P. KANT) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DA TED: 04-1-2016 SRBHATNAGAR COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI