SMV Agencies Pvt. Ltd., New Delhi V. DCIT Central Circle-07, New Delhi

ITA 3259/DEL/2019

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 0333 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 14-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Set aside
• Section: 147; 139; 142(1); 143(1); 250; 153C

Judgement Text

Page 1 of 12 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE, SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No.3259/Del/2019 (ASSESSMENT YEAR 2005-06) M/s SMV Agencies Pvt. Ltd. S-25, First Floor Main Market, Green Park New Delhi-110 016 PAN-AAACS 3405J Vs. Deputy Commissioner of Income Tax Central Circle-7 New Delhi-110 005 (Appellant) (Respondent) Appellant by Ms. Kanika Jain, Advocate Respondent by Sh. R.S. Yadav, Senior Departmental Representative (“Sr. DR” for short) ORDER PER ANADEE NATH MISSHRA, AM (A) This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals)-24, New Delhi [“Ld. CIT(A)”, for short], dated 18/02/2019 for Assessment Year 2005-06. Grounds taken in this appeal are as under: “1. The order of CIT (A) is bad in law and on facts. 2. The CIT(A) Ld CIT(A) has erred in affirming the jurisdiction of the AO under section 147 of the Income Tax Act, 1961 (Act), ignoring that order of the AO is without jurisdiction. ITA No.3259/Del/2019 M/s SMV Agencies Pvt. Ltd. vs. DCIT Page 2 of 12 3. The order AO as affirmed by the CIT(A) is void ab initio as the same has been passed without following the mandate of Hon’ble Apex Court in the case of GKN Drive shaft , which provides that AO should dispose the objection of assessee before framing final assessment. 4. Without prejudice to the above, the order of AO as affirmed by the CIT(A) is also nullity as no approval as required under section 151 of the Act has ever been taken by the AO before assuming jurisdiction of section 147 of the Act. 5. The order of AO u/s 147/143(3) of the Act, as affirmed by the CIT(A), is void ab initio, since the jurisdiction of 147 has been assumed for conducting fishing and roving enquiries, as is evident from the reasons recorded itself. 6. The CIT (A) has erred in affirming the jurisdiction of AO under section 147, ignoring the section 147, which provides that there should be live nexus between the reasons recorded and belief entertained by the AO that income has escaped assessment. 7. The Ld CIT (A) has failed to appreciate that the material which came into the possession of the AO was vague in as much there is no reference to any instrument number/bank details via which alleged accommodation entry has been taken by the assessee. 8. The CJT (A) has failed to appreciate that it is a case of borrowed satisfaction, in as much as the AO has solely relied on the findings of the investigation wing and has not applied his mind independently to the information received from investigation wing as is evident from the reasons recorded where the AO has used the expression accommodation entry, without specifying the manner of such alleged entry. On Merits 9. The Ld CIT(A) has erred in sustaining the addition of 2,62,00,000/- to the returned income of the assessee made by AO and rejecting the additional evidences filed by assessee to support the receipt of Rs 2,62,00,000/-. 10. The Ld CIT(A) has further erred in rejecting the application of assessee vis-s-vis the additional evidences filed by the assessee in first ITA No.3259/Del/2019 M/s SMV Agencies Pvt. Ltd. vs. DCIT Page 3 of 12 round of litigation, ignoring the directions of Hon’ble ITAT in the first round of litigation. 11. The CIT(A) has erred in ignoring the provisions of section 250 and rule 46A , which provisions stipulate that once the CIT(A) has called for remand report then the CIT(A) become functous office to decide the admissibility of additional evidence and hence bound to decide the same on merits. 12. The Ld CIT(A) , while rejecting the admissibility of additional evidences further erred in not appreciating that this is a clear case of denial of proper opportunity by the AO, as is evident from the fact that effective hearing in this case started on 21.03.2013 and the AO has passed the order on 28.03.2013, without raising any further query from the assessee in respect of the issue in dispute. 13. The Ld CIT (A) has further failed to appreciate that even after search nothing has been unearthed during search which would prove that alleged receipt of 2,62,00,000/- is actually unaccounted income of assessee, had it been so the revenue could have taken action under section 153C instead of 148 of the Act. 14. The CIT(A) has erred in not appreciating that despite search, neither any cash amounting to Rs. 2,62,00,000/- nor any asset corroborating such alleged receipt has been found in search, and the AO has made the addition on the basis of surmises and conjectures. 15. That on the facts and under the circumstances of the case the CIT (A) has failed to appreciate that the impugned assessment has been framed with predetermined mind set, as the same has been framed, without refuting the documentary evidences, without confronting the material used against the assessee, without providing an opportunity to cross examine to the assessee, without referring to any material found in search to establish the fact the assessee has any connection with so called alleged land deals or in fact received any unaccounted money much a less on money in the deal of alleged land. 16. The Id CIT(A) has erred in ignoring the certificate filed during the course of assessment proceedings from M/s Jaipuria Infrastructures Developers Pvt. Ltd, clarifying the transactions of Rs.2,62,00,000/- with their projects of Gaziabad. 17. The assessee craves leave to add alter modify and ground of appeal at the time of hearing of the appeal.” ITA No.3259/Del/2019 M/s SMV Agencies Pvt. Ltd. vs. DCIT Page 4 of 12 (B) In this case, assessment order dated 28/03/2013 was passed by the Assessing Officer under section 147/143(3) of Income Tax Act, wherein an addition of Rs.2,62,00,000/- was made; and the total income of the assessee was assessed at Rs.3,12,34,460/- as against the returned income of Rs.50,34,460/. The assessee filed appeal in the office of the Ld. CIT(A). Vide appellate order dated 12.07.2013, the Ld. CIT(A) deleted the aforesaid addition of Rs.2,62,00,000/- and allowed the assessee’s appeal. Revenue filed appeal in Income Tax Appellate Tribunal against the aforesaid appellate order dated 12.07.2013 of the Ld. CIT(A) vide ITA No.5460/Del/2013. Vide order dated 15/01/2017 of Co-ordinate Bench of Income Tax Appellate Tribunal, Delhi, in aforesaid appeal of Revenue; the matter was restored to the file of the Ld. CIT(A) to decide the issue afresh and the Ld. CIT(A) was given the direction to consider the documents, which were not produced before the Assessing Officer but filed by the assessee before him, in accordance with Rule 46A of the Income Tax Rules, 1962 and accordingly, to decide the issue of addition of Rs.2.62 cores in ITA No.3259/Del/2019 M/s SMV Agencies Pvt. Ltd. vs. DCIT Page 5 of 12 accordance with law. The Ld. CIT(A) passed consequential order dated 18/02/2019, which is the impugned order in the present appeal before us. In the aforesaid impugned order dated 18/02/2019, Ld. CIT(A) declined to admit additional evidences and confirmed the aforesaid addition of Rs. Rs.2,62,00,000/- ; thereby dismissing the assessee’s appeal. The present appeal before us has been filed by the assessee against the aforesaid impugned appellate order dated 18/02/2019 of the Ld. CIT(A). In the present appeal, during the course of appellate proceedings in Income Tax Appellate Tribunal, a paper book was filed from the assessee’s side containing the following particulars: Sr. No. Particulars 1. Annexure-1: Copy of the paper book filed before the CIT(A) on 27/06/2013 during the first round of appellate proceedings Copy of audited Balance Sheet and Profit & Loss Account for the year ended 31/3/2005 relevant to the Assessment Year 2005-05. Copy of return of income along with computation of total income for Assessment Year 20005-06. Copy of Tax Audit report in Form 3CA and 3CD for the Assessment Year 2005-2006. Copy of intimation u/s 143(1) dated 01.05.2006 in respect of Assessment Year 2005-06. Copy of notice dated 29 03 2012 issued by ACIT Circle 9(1), New Delhi for re-opening the assessment u/s 148 of the Income Tax Act for the Assessment Year 2005-2006. Copy of letter dated 26/04/2012 filed before Ld AO with the following explanations: ITA No.3259/Del/2019 M/s SMV Agencies Pvt. Ltd. vs. DCIT Page 6 of 12 (a) Raised objection that notice u/s 148 is defective and that in the original return of income duly filed on 29.10.2005 all material facts were truly and completely disclosed. (b) That the original return filed on 29 10.2005 u/s 139 be considered as return furnished pursuant to notice under section 148. (c) Asked the Ld. AO to furnish reasons recorded for re-opening assessment. Letter No. ACIT/Cir-9(1)/2012-13 dated 17.10.2012 along with copy of reasons for opening assessment u/s 148 provided by the Ld. AO alongwith Annexure ‘A’ and Annexure ‘B’ to the appellant on 17.10.2012. Copy of detailed questionnaire dated 12.02.2013 issued by Ld AO Central Circle 12, New Delhi calling for details u/s 142(1). Copy of letter dated 11.03.2013 issued by AO calling for details u/s 142(1) of the Income Tax Act. Copy of letter dated 21.03.2013 filed before the Ld AO along with the following documents and explanation: a. Explanation that the document Annexure-B on the basis of which notice u/s 148 has been issued has no connection with the assessee and pertains to M/s Jaipuria Infrastructure Developers Pvt Ltd. b. Copy of certificate from Jaipuria Infrastructure Developers Pvt Ltd confirming that the document Annexure-B is in respect of its project called Jaipuria Sunrise at Indirapuram, Ghaziabad. This project related to Jaipuria Infrastructure (P) Ltd. and no part of this project have any connection with M/s. SMV Agencies Pvt. Ltd c. Details of property purchased and sold by the appellant company during the year under consideration which has no correlation whatsoever with the documents on the basis of which case opened u/s 148 of the Income Tax Act. ITA No.3259/Del/2019 M/s SMV Agencies Pvt. Ltd. vs. DCIT Page 7 of 12 Copy of letter dated 25.03.2013 filed before the Ld AO duly specifying the details of opening stock and closing stock of land and also stating the fact that the appellant company has not sold any residential / commercial unit in Ghaziabad during the year. Copy of floor plans filed duly certified by Jaipuria Infrastructure Developers (P) Ltd. evidencing project for residential and commercial space at 12A, Ahinsa Khand, Indrapuram, Ghaziabad is their project. Extracts of letter dated 24 07.2011 filed before Assistant Director of Income Tax, (Inv.) Unit- V(3), New Delhi in compliance of Summons u/s 131(1 A) of the Income Tax Act 1961 during post search proceedings wherein it has been clarified that the transaction recorded in alleged documents i.e. Page 45-46 of Annexure B-2 seized from Nagpur which have been relied upon by the Ld. AO for opening the proceedings u/s 148 of the Income Tax Act are related to Project Jaipuria Sunrise at Indirapuram. a project of Jaipuria Infrastructure Developers Pvt. Ltd. and the said pages relates to period prior to 01.04.200 Details of land purchased by the appellant company during Financial Year 2004-05 alongwith copy of Registered Deeds in relation to allotment of plots at K-Home Abhay Khand-ll, Indira Puram, Ghaziabad, UP by Ghaziabad Development Authority in favour of the appellant company. Details of land sold during the year by the appellant company alongwith copy of Sale Deed dated 24.09 2004 made between SMV Agencies Pvt Ltd (Appellant) and Gaursons India Ltd in relation to sale of Plot K- Home Abhay Khand-ll, India Puram, Ghaziabad Details of flats/shops/plots in respect of which additions made by the AO in the order u/s 147/143(3) alongwith copy of allotment letters etc evidencing the fact that such flats have been sold by M/s Jaipuria Infrastructure Developers Pvt Ltd. and not by the appellant company. ITA No.3259/Del/2019 M/s SMV Agencies Pvt. Ltd. vs. DCIT Page 8 of 12 2. Annexure-2: Copy of the documents filed before the CIT(A) in the remand proceedings. Copy of certificate from Jaipuria Infrastructure Developers Pvt Ltd I confirming that the document Annexure-B is in respect of its | project called Jaipuria Sunrise at Indirapuram, Ghaziabad This project related to Jaipuria Infrastructure (P) Ltd. and no part of this project have any connection with M/s. SMV Agencies Pvt. Ltd Copy of floor plans filed duly certified by Jaipuria Infrastructure Developers (P) Ltd. evidencing project for residential and commercial space at 12A, Ahinsa Khand, Indrapuram, Ghaziabad is their project Details of property purchased and sold by the appellant company during the year under consideration which has no correlation whatsoever with the documents on the basis of which case opened u/s 148 of the Income Tax Act. Details of land purchased by the appellant company during Financial Year 2004-05 alongwith copy of Registered Deeds in relation to allotment of plots at K-Home Abhay Khand-ll, Indira Puram, Ghaziabad, UP by Ghaziabad Development Authority in favour of the appellant company. Details of land sold during the year by the appellant company | alongwith copy of Sale Deed dated 24.09 2004 made between I SMV Agencies Pvt Ltd (Appellant) and Gaursons India Ltd in relation to sale of Plot K- Home AbhayKhand-ll, India Puram, 3. Annexure-3: Copy of submissions filed before the CIT(A) in the remand proceedings. ---- 4. Copies of judicial pronouncement Resolution Commercial Management P. Ltd. vs. DCIT, in ITA No.6624/Del/2013 order dated 11/03/2016 Sh. Rajesh Kumar vs. ITO, in ITA No.333/Asr/2014 order dated 08/01/2016 Shahrukh Khan vs. DCIT order dated 20/07/2006 ITA No.3259/Del/2019 M/s SMV Agencies Pvt. Ltd. vs. DCIT Page 9 of 12 (C) At the time of hearing before us, the Ld. Counsel for the assessee drew our attention to paragraph 5.2.4 of impugned appellate order dated 18/02/2019 of the Ld. CIT(A) wherein the assessee’s submissions regarding prayer for admission of additional evidences have been specifically recorded. In particular, the Ld. Counsel for the assessee drew our attention to the fact that in this case effective hearing during assessment proceedings before the Assessing Officer had commenced on 04/03/2013, for which the appellant had filed replies on 21 st March, 2013 before the AO and thereafter, there was no further opportunity to the appellant and the matter has been disposed off vide assessment order on 28/03/2013, ex-parte. The Ld. Counsel for the assessee submitted further, that it was a case where no proper opportunity has been granted to the assessee; and also, that sufficient cause was advanced by the assessee for admission of additional evidence. The Ld. Counsel for appellant assessee also submitted that the Ld. CIT(A) should be directed to admit additional evidences already filed in the office of the Ld. CIT(A), and to pass a fresh appellate order after providing reasonable opportunity to the assessee. ITA No.3259/Del/2019 M/s SMV Agencies Pvt. Ltd. vs. DCIT Page 10 of 12 (C.1) Ld. Sr. DR for Revenue was in agreement with the submission of the Ld. CIT(A) for the assessee. He was also in agreement with the submissions of the Ld. Counsel for the assessee, that the Ld. CIT(A) may be directed to admit additional evidences already filed in the office of the Ld. CIT(A), and to pass a fresh appellate order after providing reasonable opportunity to the assessee. (C.2) We have heard both sides. There was no material dispute between representatives of both sides (Ld. Counsel for assessee and Ld. Sr. DR for Revenue) at the time of hearing before us. It is not in dispute that during assessment proceedings, effective hearing commenced on 04/03/2013 for which the assessee filed replies on 21/03/2013 to the Assessing Officer. It is also not in dispute that the Assessing Officer did not provide any further opportunity, and completed the assessment on 28/03/2013. There is nothing on record to show that Assessing Officer expressed any further requirements on or after aforesaid 21/03/2013 to the assessee requiring the assessee to support its claim by further evidence/materials. In view of the foregoing, we are of the view that ITA No.3259/Del/2019 M/s SMV Agencies Pvt. Ltd. vs. DCIT Page 11 of 12 the additional evidences filed by the assessee in the office of Ld. CIT(A) deserved to be admitted by Ld. CIT(A). Both sides were also in agreement at the time of hearing before us, that the Ld. CIT(A) may be directed to admit additional evidences already filed in the office of the Ld. CIT(A), and to pass a fresh appellate order after providing reasonable opportunity to the assessee. (C.2.1) Having regard to the foregoing, and as representatives of both sides are in agreement with this, we set aside the impugned appellate order dated 18/02/2019 of the Ld. CIT(A); and we direct the Ld. CIT(A) to admit additional evidences already filed in the office of the Ld. CIT(A), and we further direct the Ld. CIT(A) to pass a fresh appellate order after providing reasonable opportunity to the assessee. Accordingly, grounds 10 and 12 are treated as disposed off in accordance with our aforesaid directions. These grounds of appeal are treated as allowed for statistical purposes. (D) Ld. Counsel for the assessee submitted at the time of hearing that, rest of the grounds of appeal, other than grounds 10 and 12, ITA No.3259/Del/2019 M/s SMV Agencies Pvt. Ltd. vs. DCIT Page 12 of 12 were not being pressed. Accordingly, the other grounds of appeal, other than grounds 10 and 12 are dismissed, being not pressed. (E) For statistical purposes, this appeal filed by assessee is partly allowed. This order was already pronounced orally on 3 rd August, 2022 in Open Court, in the presence of representatives of both sides. Now, this order in writing is signed today on 05/08/2022. Sd/- Sd/- (SAKTIJIT DEY) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 05/08/2022 Pk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW, DELHI