ITO, New Delhi V. Mrs. Maya Gupta, Delhi

ITA 3435/DEL/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4786 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 30-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Gift; Accommodation entries; Reassessment proceedings
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .3435/DEL/2013 3435/DEL/2013 3435/DEL/2013 3435/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2003 2003 2003 2003- -- -04 0404 04 INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -25(1), 25(1), 25(1), 25(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. MRS. MAYA GUPT MRS. MAYA GUPT MRS. MAYA GUPT MRS. MAYA GUPTA, A,A, A, B BB B- -- -325, SARASWATI VIHAR, 325, SARASWATI VIHAR, 325, SARASWATI VIHAR, 325, SARASWATI VIHAR, PITAMPURA, PITAMPURA, PITAMPURA, PITAMPURA, DELHI DELHI DELHI DELHI 110 034. 110 034. 110 034. 110 034. PAN : PAN : PAN : PAN : AFKPG1760L. AFKPG1760L. AFKPG1760L. AFKPG1760L. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KEYUR PATEL, SR.DR. RESPONDENT BY : SHRI R.S. SINGHVI, CA. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF LEARNED CIT(A)-XXIV, NEW DELHI DATED 22 ND MARCH, 2013 FOR THE AY 2003-04. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW CIT(A) ERRED IN- 1. INVALIDATING THE REOPENING OF THE ASSESSMENT AND ASSUMPTION OF JURISDICTION BY THE AO U/S 147/148 OF TH E IT ACT IN THE CASE BY TREATING THE SAME AS BAD IN LAW. 2. QUASHING THE ASSESSMENT ORDER PASSED BY AO WHEREIN AN ADDITION OF RS.35,77,293/- ON ACCOUNT OF INCOME FROM UNEXPLAINED SOURCES U/S 68 OF THE INCOME T AX ACT. ITA-3435/DEL/2013 2 3. THE APPELLANT CRAVES THE RIGHT TO ADD, ALTER OR A MEND ANY GROUND OF APPEAL. 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERI AL PLACED BEFORE US WITH REGARD TO GROUND NO.1 OF THE REVENUE S APPEAL. THE REASONS FOR REOPENING OF ASSESSMENT ARE REPRODUCED BY THE ASSESSING OFFICER AT PAGES 1 & 2 OF HIS ORDER. THE SAME IS REPRO DUCED BELOW FOR READY REFERENCE:- THE INVESTIGATION WING, DELHI CONDUCTED LARGE SCALE INVESTIGATION TO UNEARTH A HUGE RACKET INVOLVING ACCOMMODATION ENTRY PROVIDERS. SUCH ENTRY PROVIDERS WERE FOUND TO BE INVOLVED IN GIVING ACCOMMODATION E NTRIES IN FORM OF BOGUS GIFTS/LOANS/SHARE APPLICATION MONEY/CAPITAL GAIN ETC. BY CHEQUES/DDS IN LIEU OF CAS H RECEIVED FROM INTENDING BENEFICIARIES. THE ENTRY PR OVIDERS OPERATED LARGE NUMBER OF BANK ACCOUNTS IN THEIR OWN NAMES AND ALSO IN FICTITIOUS NAMES. THE LIST OF BENEFIC IARIES WHO HAD TAKEN ACCOMMODATION ENTRY FROM SUCH PERSONS/FIRMS INCLUDED THE NAME OF BIMLA DEVI. THE DETAIL OF ACCOMMODATION ENTRIES TAKEN BY THE ASSESSE E AND PARTICULARS OF ENTRY PROVIDERS IS AS UNDER:- BENEFICIARY BANK NAME BENEFICIARY BANK BRANCH ACCOUNT NO. OF BENEFICIARY VALUE OF ENTRY TAKEN INSTRUMENT NO. BY WHICH ENTRY TAKEN DATE ON WHICH ENTRY TAKEN NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT BANK FROM WHICH ENTRY GIVEN BRANCH OF ENTRY GIVING BANK A/C NO. LORD KRISHNA BANK KOHAT ENCLAVE PITAMPURA 250000 15- FEB- 03 BIMLA DEVI SBBJ NRR 15487 IN VIEW OF THE PRECISE INFORMATION, AS DISCUSSED ABOVE, I HAVE REASONS TO BELIEVE THAT ASSESSEE HAD OBTAINED ACCOMMODATION ENTRIES WORTH RS.2,50,000/- FROM THE ABOVE MENTIONED PERSON(S) WHO IS/ARE INVOLVED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES. SUCH AMOUNT REPRESENTS UNDISCLOSED INCOME OF THE ASSESSEE, WHICH HAS ESCAPED ASSESSMENT. ITA-3435/DEL/2013 3 A LETTER WAS ISSUED TO THE ASSESSEE ON 11.03.2010 TO FIND OUT IF RETURN FOR A.Y. 2003-04 WAS FILED AND WHETHER THE SAME WAS SCRUTINIZED U/S 143(3). SUCH LETTER WAS SERVED UPON THE ASSESSEE, BUT ASSESSEE FAILED TO RESPOND. THEREFORE, IT IS BEING ASSUMED THAT RETURN FOR A.Y. 20 03-04 HAS NOT BEEN SCRUTINIZED. THERE IS NO INFORMATION REGARDING RETURN FILED BY SUCH ASSESSEE, ON THE AST SOFTWARE. JURISDICTION IS BEING ASSUMED ON THE BASIS OF ADDRESS AVAILABLE IN THE DATABASE. KEEPING IN VIEW THE ABOVE FACTS, IT IS REQUESTED THAT NECESSARY APPROVAL U/S 151(2) MAY KINDLY BE ACCORDED F OR INITIATING PROCEEDINGS U/S 148 OF THE I.T. ACT IN ORD ER TO BOOK INCOME WHICH HAD ESCAPED ASSESSMENT. 4. LEARNED CIT(A) HAS HELD THE REOPENING OF ASSESSMENT TO BE INVALID FOLLOWING THE DECISION OF HON'BLE JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT VS. SUPREME POLYPROPOLENE (P) LTD. ITA NO.266/2011 DATED 30 TH OCTOBER, 2012. 5. THE LEARNED DR, AT THE TIME OF HEARING BEFORE US, HAS RELIED UPON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTERS & FINLEASE (P) LTD. [2012] 342 ITR 1 69 (DELHI). 6. THEREFORE, NOW THE QUESTION REMAINS IS, THAT ON TH E FACTS OF THE ASSESSEES CASE, WHICH DECISION OF HON'BLE JURISDICTIONAL H IGH COURT IS APPLICABLE. IN THE CASE OF SIGNATURE HOTELS P.LTD. V S. ITO [2011] 338 ITR 0051, HON'BLE JURISDICTIONAL HIGH COURT HELD AS U NDER:- HELD, ALLOWING THE PETITION, THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME-TAX (INVESTIGAT ION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS.5 LAKHS DURING FINANCIAL YEAR 2002-03 AS STATED IN T HE ANNEXURE. ACCORDING TO THE INFORMATION, THE AMOUNT RECEIVED FROM A COMPANY, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE ITA-3435/DEL/2013 4 BENEFICIARY. THE REASONS DID NOT SATISFY THE REQUIREME NTS OF SECTION 147 OF THE ACT. THERE WAS NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEPT THE ANNEXURE. THE ANNEXURE COULD NOT BE REGARDED AS A MATERIAL OR EVID ENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WH ICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNEXURE WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, THE ASSESSING OFFICER DID NOT APPLY HIS MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATION. THERE WAS NO DISPUTE THAT THE COMPANY, S, HAD A PAID-UP CAPITAL OF RS.90 LAKHS AND WAS INCORPO RATED ON JANUARY 4, 1989, AND WAS ALSO ALLOTTED A PERMANEN T ACCOUNT NUMBER IN SEPTEMBER, 2001. THUS, IT COULD N OT BE HELD TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WERE NOT VALID AND WERE LIABLE TO BE QUA SHED. 7. SIMILAR VIEW IS REITERATED BY THE HON'BLE JURISDIC TIONAL HIGH COURT IN THE SUBSEQUENT DECISION IN THE CASE OF CIT VS. INSEC TICIDES (INDIA) LTD. [2013] 357 ITR 330 (DELHI), WHEREIN THEIR LO RDSHIPS HELD AS UNDER:- THE INFORMATION ON THE BASIS OF WHICH THE ASSESSING OFFICER H AD INITIATED PROCEEDINGS UNDER SECTION 147 OF THE INCOME-TAX ACT, 1961, WAS VAGUE AND UNCERTAIN AND CO ULD NOT BE CONSTRUED TO BE SUFFICIENT AND RELEVANT MATERI AL ON THE BASIS OF WHICH A REASONABLE PERSON COULD HAVE FORME D A BELIEF THAT INCOME HAD ESCAPED ASSESSMENT. THE NOTICE OF REASSESSMENT WAS NOT VALID AND WAS LIABLE TO BE QUASHED. 8. THAT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) L TD. (SUPRA), THE ISSUE OF REOPENING OF ASSESSMENT WAS NOT BEFORE THE HO N'BLE JURISDICTIONAL HIGH COURT. IN FACT, IN THAT CASE, TH E CIT(A) AS WELL AS ITAT BOTH HAVE UPHELD THE REOPENING OF ASSESSMENT BUT H AD DELETED THE ADDITION MADE UNDER SECTION 68 OF THE INCOME-TA X ACT. ONLY THE REVENUE WAS IN APPEAL BEFORE THE HON'BLE JURISDICTION AL HIGH COURT WHICH WOULD BE EVIDENT FROM THE FOLLOWING SUBSTANTIA L QUESTIONS OF LAW WHICH AROSE IN THIS APPEAL :- ITA-3435/DEL/2013 5 (1) WHETHER THE TRIBUNAL WAS RIGHT IN LAW IN CONFIR MING THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) DELETING THE ADDITIONS OF RS.1,18,50,000 AND RS.2,96,2 50 BOTH MADE UNDER SECTION 68 OF THE ACT, ON THE GROUN D THAT THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICA NTS AS WELL AS THE GENUINENESS OF THE TRANSACTIONS WERE PROVED? (2) WHETHER THE ORDER OF THE TRIBUNAL CONFIRMING TH E DELETION OF THE ADDITION OF THE AFORESAID TWO AMOUNT S WAS PERVERSE HAVING REGARD TO THE EVIDENCE AND THE MATER IAL ON RECORD? 9. NOW REVERTING TO THE REASONS RECORDED, WE FIND THA T THE INVESTIGATION WING INFORMED THE ASSESSING OFFICER OF TH E ASSESSEE THAT THEY HAVE CARRIED OUT LARGE SCALE INVESTIGATION TO UN EARTH A HUGE RACKET INCLUDING ACCOMMODATION ENTRY PROVIDERS. SUC H ENTRY PROVIDERS FOUND TO BE INVOLVED IN GIVING ACCOMMODATION ENTRIE S IN THE FORM OF BOGUS GIFTS/LOANS/SHARE CAPITAL MONEY ETC. BY CHEQUES/DD S IN LIEU OF CASH RECEIVED FROM THE BENEFICIARIES. THE LIST OF BEN EFICIARIES WHO HAVE TAKEN ACCOMMODATION ENTRIES FROM SUCH PERSON/FIRM INCLUDING THE NAME OF BIMLA DEVI. NOW, THE PRESENT ASSESSEE IS M AYA GUPTA AND NOT BIMLA DEVI. THEN, IN THE CHART, ONLY THE VALUE OF ENTRY TAKEN IS MENTIONED BUT THE NATURE OF ENTRY WHETHER IT IS A BO GUS GIFT, LOAN OR SHARE CAPITAL MONEY IS NOT MENTIONED. MOREOVER, ON W HAT BASIS THE ABOVE PRESUMPTION IS DRAWN THAT THE ASSESSEE HAS TAKEN AN Y ACCOMMODATION ENTRY IS ALSO NOT MENTIONED. NO REFERE NCE IS MADE TO ANY STATEMENT GIVEN BY ANY ACCOMMODATION ENTRY PROVI DER OR ANY DOCUMENTARY EVIDENCE FOUND FROM THEIR PREMISES WHICH INDICATED ANY ACCOMMODATION ENTRY BEING TAKEN BY THE ASSESSEE. THERE FORE, ON THESE FACTS, IN OUR OPINION, THE DECISION OF HON'BLE J URISDICTIONAL HIGH COURT IN THE CASE OF SIGNATURE HOTELS P.LTD. (SUPRA) AND INSECTICIDES (INDIA) LTD. (SUPRA) WOULD BE SQUARELY APPLICABLE BE CAUSE THE INFORMATION ON THE BASIS OF WHICH THE ASSESSING OFFICER H AD INITIATED ITA-3435/DEL/2013 6 PROCEEDINGS UNDER SECTION 147 WAS VAGUE AND UNCERTAIN . THEREFORE, WE ARE OF THE OPINION THAT THE LEARNED CIT(A) RIGHT LY HELD THAT THE REOPENING OF ASSESSMENT WAS NOT VALID. ACCORDINGLY, THE REVENUES APPEAL IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. DECISION PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2013. SD/- SD/- ( (( (A.D. JAIN A.D. JAIN A.D. JAIN A.D. JAIN) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 13.12.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -25(1), 25(1), 25(1), 25(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. 2. RESPONDENT : MRS. MAYA GUPTA, MRS. MAYA GUPTA, MRS. MAYA GUPTA, MRS. MAYA GUPTA, B BB B- -- -325, SARASWATI VIHAR, 325, SARASWATI VIHAR, 325, SARASWATI VIHAR, 325, SARASWATI VIHAR, PITAMPURA, DELHI PITAMPURA, DELHI PITAMPURA, DELHI PITAMPURA, DELHI 110 034. 110 034. 110 034. 110 034. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR