DCIT, New Delhi V. M/s Mahamaya General Finance Com. Ltd., New Delhi

ITA 3237/DEL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7478 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 19-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPIKA MITTAL
• Keywords: Retraction
• Section: 142(1); 153A; 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADI N. MISHRA, ACCOUNTANT MEMBER ITA NO.3237/DEL/2013 A.Y. : 2009-10 DCIT, CENTRAL CIRCLE-14, NEW DELHI ROOM NO. 320, 3 RD FLOOR, E-2, JHANDEWALAN EXTN., ARA CENTRE, NEW DELHI VS. M/S MAHAMAYA GENERAL FINANCE COM. LTD., 4/4, A, STOCK EXCHANGE BUILDING, ASAF ALI ROAD, NEW DELHI 110 002 (PAN: AAACM0004D) (APPELLANT) (RESPONDENT) DEPARTMENT BY : MS. DEEPIKA MITTAL, CIT(DR) ASSESSEE BY : SH. RAJESH JAIN, CA DATE OF HEARING : 25-07-2016 DATE OF ORDER : 01-08-2016 ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 20/2/2013 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS-XXXIII), NEW DE LHI ON THE FOLLOWING GROUNDS:- ITA NO. 3237/DEL/2013 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,0 0,00,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SURREND ER MADE BY THE ASSESSEE UNDER SECTION 132(4) OF THE INCOME TAX ACT, 1961 DURING THE COURSE OF SEARCH ON 31.07.2009 AS W ELL AS DURING POST SEARCH PROCEEDINGS ON 17.09.2009 UNDER SECTION 131 OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT (A) HAS ERRED IN DELETING THIS ADDITION WITHOUT APP RECIATING THE FACTS OF THE CASE THAT DESPITE THE SURRENDER WAS MA DE BY THE ASSESSEE ITSELF UNDER SECTION 132(4) OF THE INCOME TAX ACT, HOWEVER, THE SAME WAS NOT DISCLOSED IN THE RETURN OF INCOME FILED UNDER SECTION 153A OF THE INCOME TAX ACT, 196 1, AND NO TAX WAS PAID ON IT ACCORDINGLY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAS ERRED IN DELETING THIS ADDITION WITHOUT APPRECIATING THE FACT THAT THE RETRACTION MADE BY THE ASSESSEE W AS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE, AS IT HAS BE EN HELD BY VARIOUS JUDICIAL AUTHORITIES THAT FOR ANY RETRAC TION TO BE SUCCESSFUL IN THE EYES OF LAW THE MAKER HAS TO SHOW AS TO HOW THE EARLIER RECORDED STATEMENT DOES NOT STATE THE T RUE FACTS OR THAT THERE WAS COERCION, INDUCEMENT OR THREAT WHILE RECORDING HIS EARLIER STATEMENT. ITA NO. 3237/DEL/2013 3 4. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN DELETING THIS ADDITION WITHOUT APPRECIATING THE FACT THAT DURING THE COURSE OF SEARCH, 15 LETTE R HEADS OF DIFFERENT CONTRACTORS WERE SEIZED, OUT OF WHICH SOM E WERE BLANK AND SIGNED, ON THE BASIS OF WHICH, M/S RAMPRA STHA BUILDERS PVT. LTD. A SISTER CONCERN OF ASSESSEE HAD ITSELF ACCEPTED THE FACTS AND HAD SURRENDERED AN AMOUNT O F RS. 4.0 CRORES IN THE ASSESSMENT YEAR 2009-10 ON ACCOUNT O F WIP AND DECLARED IN THE RETURN OF INCOME ACCORDINGLY. 5. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 2. THE FACTS IN BRIEF ARE THAT A SEARCH AND SEI ZURE ACTION U/S. 132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE A CT) WAS CONDUCTED BY THE DEPARTMENT ON 30.7.2009 IN RAMPRASTHA GROUP OF CASES. THE ASSESSEE COMPANY M/S MAHAMAYA GENERAL FINANCE CO (P ) LTD., BUSINESS PREMISES OF 4/4A, STOCK EXCHANGE BUILDING, ASAF ALI ROAD, NEW DELHI 110 002 WHICH WAS ALSO COVERED U/S. 132(1) OF THE I NCOME TAX ACT, 1961. THE CASE WAS CENTRALIZED WITH THIS CIRCLE BY ORDER U/S. 127 OF THE ACT AND ACCORDINGLY NOTICE U/S. 153A OF THE ACT WAS ISSUED TO THE ASSESSEE ON 5.1.2010. IN RESPONSE TO THE SAME, RETURN DECLARIN G AN INCOME OF RS. ITA NO. 3237/DEL/2013 4 17,60,947/- WAS FILED ON 31.5.2010. NOTICE U/S 143( 2) AND 142(1) OF THE ACT, 1961 WERE ISSUED ALONGWITH A QUESTIONNAIRE DAT ED 14.9.2010. DUE TO CHANGE OF OFFICER, FRESH NOTICE AGAIN ISSUED ON 26.6.2011 FOR 8.7.2011. IN RESPONSE TO VARIOUS STATUTORY NOTICES , AUTHORISED REPRESENTATIVE OF THE ASSESSEE ATTENDED THE PROCEED INGS FROM TIME TO TIME AND FURNISHED NECESSARY DETAILS, INFORMATION A ND DOCUMENTS. AFTER CONSIDERING THE DOCUMENTS/ MATERIAL FILED BY THE ASSESSEE, AO OBSERVED THAT AT THE TIME OF SEARCH SH. BALWANT SINGH, CHAIR MAN OF RAMPRASTHA GROUP OF COMPANIES SURRENDERED AN AMOUNT OF RS. 1 CRORE U/S. 132(4) OF THE I.T. ACT IN THE CASE OF THE ASSESSEE FOR AY 200 9-10. AO FURTHER OBSERVED THAT ON PERUSAL OF THE RETURN REVEALS THAT THE ASSESSEE HAS NOT DISCLOSED THIS AMOUNT IN THE RETURN OF THE INCOME F OR THE AY 2009-10 FILED ON 31.5.2010. HENCE, AO MADE THE ADDITION FO RS, 1, 00,00,000/- AND COMPLETED THE ASSESSMENT AT A TOTAL INCOME OF RS. 1 ,17,60,947/- VIDE HIS ORDER DATED 30.12.2011 PASSED U/S. 153A/143(3) OF T HE I.T. ACT, 1961. 3. BEING AGGRIEVED WITH THE AFORESAID ASSESSMENT O RDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED O RDER DATED 20.2.2013 HAS DELETED THE ADDITION AND PARTLY ALLOW ED THE APPEAL OF THE ASSESSEE. 4. NOW THE REVENUE IS AGGRIEVED AGAINST THE IMPUGNE D ORDER AND FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. ITA NO. 3237/DEL/2013 5 5. AT THE TIME OF HEARING LD. DR RELIED UPON THE OR DER OF THE AO AND REITERATED THE CONTENTIONS RAISED BY THE REVENUE IN THE GROUNDS AND REQUESTED THAT ADDITION MADE BY THE AO MAY BE UPHEL D. 6. ON THE CONTRARY, LD. A.R. OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT THE SAME MAY BE UPH ELD AND APPEAL OF THE REVENUE MAY BE DISMISSED. HE ALSO DRAW OUR ATTENTIO N TOWARDS THE ITAT DELHI BENCH F ORDER DATED 16.2.2016 PASSED IN TH E CASE OF DCIT VS. RAMAPRASTHA BUILDERS PVT. LTD.; DCIT VS. RAMPRASTHA GREENS (P) LTD. AND DCIT VS. RAMPARASTHAN PROMOTERS & DEVELOPERS PVT. L TD. PASSED IN ITA NO. 3238/DEL/2013 (AY 2010-11); 3239/DEL/2013; 3240 & 4341/DEL/2013 (AY 2010-11 & 2009-10) RESPECTIVELY A ND STATED THAT IN THE RELATED GROUP OF CASES SIMILAR ISSUE HAS BEEN D EALT BY THE TRIBUNAL AND THE ADDITION IN DISPUTE HAS BEEN DELETED. ACCO RDINGLY, HE REQUESTED THAT BY FOLLOWING THE ITAT ORDER AND BY UPHOLDIN G THE LD. CIT(A)S ORDER, APPEAL OF THE REVENUE MAY BE DISMISSED. 7. WE HAVE HEARD THE BOTH PARTIES AND PERUSED AND C ONSIDERED THE RELEVANT RECORDS AVAILABLE WITH US ESPECIALLY THE I MPUGNED ORDER PASSED BY THE LD. CIT(A). WE FIND THAT LD. FIRST APPELLA TE AUTHORITY HAS ELABORATELY DISCUSSED THE ISSUE IN DISPUTE BY CONSI DERING THE SUBMISSIONS OF THE ASSESSEE AND ADJUDICATED THE ISSUE IN DISP UTE AT PAGES 31 TO 32 IN HIS IMPUGNED ORDER. THE SAID RELEVANT PARAS OF T HE IMPUGNED ORDER ARE REPRODUCED AS UNDER:- ITA NO. 3237/DEL/2013 6 I HAVE CONSIDERED THE ENTIRE FACTS AND ARGUMENTS O F LD AR. NEITHER THE INVESTIGATION WING NOR THE ASSESSING OF FICER HAS CORRELATED ANY SEIZED DOCUMENT WITH THE SURRENDER O F UNACCOUNTED RECEIPT. AT THE TIME OF PUTTING QUESTIO N LEADING TO SURRENDER OF INCOME SOME SEIZED DOCUMENT WAS REF ERRED, NAMELY, B-2 TO B-27. EXACT INCRIMINATING OR NATURE OF DOCUMENT WAS NEVER CONFRONTED EITHER BY INVESTIGATI ON WING OR THE ASSESSING OFFICER TO SH. BALWANT SINGH. ONLY SEIZED DOCUMENT DISCUSSED BY THE ASSESSING OFFICER IS SIGN ED BLANK LETTER HEAD OF CONTRACTOR IN SUPPORT OF UNACCOUNTED WORK-IN- PROGRESS. THIS BLANK LETTER HEAD IN NO WAY PROVES UNACCOUNTED PAYMENT TO THE CONTRACTOR SPECIALLY UND ER THE CIRCUMSTANCES THAT VARIOUS CONTRACTOR OF RAMPRASTHA GROUP WERE SURVEYED SIMULTANEOUSLY AND NO DOCUMENT OF UNRECORDED RECEIPTS WERE FOUND AND NO ADDITION WAS MADE IN THE HANDS OF CONTRACTORS ON THIS ISSUE. THIS FACTOR IS VERY IMPORTANT WHEN ENTIRE CONSTRUCTION IS DONE THROUGH CONTRACTORS. THEREFORE, I AGREE WITH THE LD. AR THA T ENTIRE ADDITION IS MADE ON THE BASIS OF STATEMENT ULS 132( 4) OF SH. BALWANT SINGH. I HAVE CONSIDERED THE CONTENTS OF STATEMENT UNDER SECTION 132(4) OF SH. BALWANT SINGH. HE HAS MADE DI SCLOSURE OF ADDITIONAL INCOME ON BEHALF OF VARIOUS COMPANIES OF RAMPRASTHA GROUP AND OTHER PERSONS. THE SUBSTANTIVE PART OF ITA NO. 3237/DEL/2013 7 ANSWER, SH. BALWANT SINGH HAS STATED THAT MOSTLY TH E TRANSACTIONS ARE RECORDED IN BOOKS OF ACCOUNTS AND SOME PARTS ARE UNACCOUNTED. LD AR HAS ARGUED THAT ENTIRE SEIZED DOCUMENT WAS EXAMINED DURING POST SEARCH AND ASSESS MENT PROCEEDING AND NO INCRIMINATING MATERIAL WAS FOUND. SUBSEQUENT STATEMENTS WERE RECORDED IN THE INVESTIG ATION WINGS AS MENTIONED IN THE ASSESSMENT ORDER. HOWEVER NO QUESTION WAS ASKED IN FURTHERANCE OF THE STATEMENT REGARDING THE CONTENTS OF SEIZED DOCUMENT. DURING ORIGINAL ST ATEMENT ALSO SUBSEQUENT DETAILS OF WORK-IN-PROGRESS, SUCH A S ADDRESS, QUANTUM OF WORK DONE, ACCOUNTED WORK-IN- PROGRESS A ND UNDISCLOSED WORK IN PROGRESS WERE NOT ASKED FOR. TH E APPELLANT COMPANY DURING POST SEARCH PROCEEDING HAS TWICE INFORMED THE INVESTIGATION WING THAT THE SURRENDER OF WORK- IN-PROGRESS IS MADE WITHOUT PINPOINTING ANY SEIZED MATERIAL. NO ACTION WAS APPARENTLY TAKEN EVEN BY THE ASSESSIN G OFFICER, WHEN EFFECTIVELY THE STATEMENT GOT RETRACTED. LD AR PROVED THAT PARTLY THE SURRENDER WAS ON MISTAKEN FACTS AS THE SH. BALWANT SINGH HAS STATED THAT CASH PAYMENT FOR ACQU IRING THE LAND WAS DEBITED IN THE BOOKS OF ACCOUNTS AND, THE REFORE, DEDUCTION WAS NOT AVAILABLE FOR DISALLOWANCE U/S. 4 0A(3). THIS IS AN APPARENT MISTAKE OF FACTS. RAMPRASTHA GROUP O F COMPANIES HAS NEVER MADE CASH PAYMENT FOR ACQUIRING LAND. IT HAS PAID ONLY ACCOUNT PAYEE CHEQUE TO DHARAM RAJ ITA NO. 3237/DEL/2013 8 CONSTRUCTION AND INFRASTRUCTURE (P) LTD. WHO IN TUR N HAS MADE CASH PAYMENT TO THE SELLER OF THE LAND. AFTER CONSIDERING ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE AND JUDICIAL PRONOUNCEMENT RELIED UPON BY THE LD. AR, IN MY VIEW, THE ADDITION BASED ON STATEMENT ALONE THAT TOO BASED ON MISTAKEN FACTS AND RETRACTED CANNOT BE SUS TAINED. ACCORDINGLY, THE ADDITION MADE ON ACCOUNT OF UNACCO UNTED RECEIPTS IS HEREBY DELETED. THIS GROUND OF APPEAL IS ALLOWED. 7.1 WE FIND CONSIDERABLE COGENCY IN THE ASSESSEES AR CONTENTION THAT THE ISSUE IN DISPUTE IS ALSO COVERED BY THE ITAT DE LHI BENCH F ORDER DATED 16.2.2016 IN THE GROUP CASES OF DCIT VS. RAM APRASTHA BUILDERS PVT. LTD.; DCIT VS. RAMPRASTHA GREENS (P) LTD. AND DCIT VS. RAMPARASTHAN PROMOTERS & DEVELOPERS PVT. LTD. PASSE D IN ITA NO. 3238/DEL/2013 (AY 2010-11); 3239/DEL/2013; 3240 & 4 341/DEL/2013 (AY 2010-11 & 2009-10) RESPECTIVELY IN IDENTICAL FA CTS. 7.2 AFTER GOING THROUGH THE FINDINGS OF THE LD. CIT (A) AS MENTIONED IN PARA NO. 7 AS AFORESAID, AS WELL AS RESPECTFULLY FO LLOWING THE FINDINGS OF THE ITAT ORDER, AS MENTIONED IN PARA 7.1 ABOVE ON T HE ISSUE IN DISPUTE, WE ARE OF THE VIEW THAT THE NEITHER THE INVESTIGATION WING NOR THE ASSESSING OFFICER HAS CORRELATED ANY SEIZED DOCUMEN T WITH THE SURRENDER OF UNACCOUNTED RECEIPT. AFTER CONSIDERING ENTIRE F ACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOW THE JUDICIAL PR ONOUNCEMENTS, AS DISCUSSED IN ITAT ORDER DATED 16.2.2016 IN THE GROUP CASES OF DCIT VS. ITA NO. 3237/DEL/2013 9 RAMPRASTHA BUILDERS PVT. LTD. & ORS. CASE, WE UPHOLD THE ORDER OF THE L D. CIT(A) ON THE ISSUE IN DISPUTE AND DISMISS THE APPE AL FILED BY THE REVENUE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/08/2016. SD/- SD/- [ANADI N. MISHRA] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 01/08/2016 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