Independent Media Pvt. Ltd, New Delhi V. DCIT, New Delhi

ITA 352/DEL/2009

• Counselvise Citation: 35220114 RSA 2009
• Duration Of Justice: 5 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-08-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 30-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: SURESH ANANTHARAMAN
• Keywords: Accommodation entries; Reassessment proceedings
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : C : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI H.S. SIDHU, JM ITA NO.352/DEL/2009 ASSESSMENT YEAR : 2004-05 INDEPENDENT MEDIA PVT. LTD., 75, AMRIT NAGAR, 3 RD FLOOR, SOUTH EXTENSION PART-I, NEW DELHI. PAN: AAAC12225C VS. DCIT, COMPANY CIRCLE 11(1), NEW DELHI. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI SURESH ANANTHARAMAN, CA DEPARTMENT BY : S HRI SATPAL SINGH, SR. DR ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R PASSED BY THE CIT (A) ON 14.11.2008 IN RELATION TO THE ASS ESSMENT YEAR 2004-05. ITA NO.352/DEL/2009 2 2. IT IS A RECALLED MATTER INASMUCH AS THE EARLIER EX PARTE ORDER PASSED BY THE TRIBUNAL WAS RECALLED VIDE ITS LATER ORDER DATED 06.06.2014. 3. THE ONLY ISSUE RAISED BY THE ASSESSEE THROUGH VA RIOUS GROUNDS IS AGAINST UPHOLDING THE INITIATION OF REAS SESSMENT PROCEEDINGS. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN ON 01.11.2004 WHICH WAS P ROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALS O CALLED THE ACT) ON 23.02.05. NOTICE U/S 148 WAS ISSUED ON 20 .03.2007 REQUIRING THE ASSESSEE TO FILE ITS RETURN. THE ASS ESSEE VIDE ITS LETTER DATED 20.04.07 SUBMITTED THAT THE ORIGINAL R ETURN FILED MAY BE TREATED AS RETURN FILED PURSUANT TO NOTICE U/S 1 48. THE AO MENTIONED IN THE ASSESSMENT ORDER TO HAVE RECEIVED SOME INFORMATION FROM THE INVESTIGATION WING, NEW DELHI ABOUT THE INVOLVEMENT OF THE ASSESSEE IN GIVING AND TAKING AC COMMODATION ENTRIES. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIVED SHA RE CAPITAL TO THE TUNE OF ` 2.20 CRORE. ON BEING CALLED UPON TO F URNISH THE DETAILS OF THE PERSONS FROM WHOM SUCH SHARE CAPITAL WAS RECEIVED ITA NO.352/DEL/2009 3 AND ALSO TO PROVE THE GENUINENESS AND CREDIT WORTHI NESS OF THE SAID PERSONS, THE ASSESSEE FURNISHED THE NECESSARY DETAILS. NOT CONVINCED WITH THE ASSESSEES SUBMISSIONS, THE AO M ADE ADDITION OF ` 2.20 CRORE TREATING THE SO-CALLED SHARE APPLIC ATION MONEY RECEIVED BY THE ASSESSEE AS UNEXPLAINED INCOME. AP ART FROM THAT, A FURTHER ADDITION OF ` 4.40 LAC WAS MADE BY PRESUMING THAT THE ASSESSEE EARNED COMMISSION @ 2% ON SUCH ACCOMMO DATION ENTRIES. THE ASSESSEE CHALLENGED THE INITIATION OF RE-ASSESSMENT PROCEEDINGS BEFORE THE LD. CIT(A), BUT WITHOUT ANY SUCCESS. IN THE PRESENT APPEAL, THE ASSESSEE IS AGGRIEVED AGAINST T HE UPHOLDING OF THE INITIATION OF REASSESSMENT PROCEEDINGS. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. BEFORE PROCEEDING TO A DJUDICATE THE VALIDITY OR OTHERWISE OF INITIATION OF RE-ASSESSMEN T PROCEEDINGS, IT IS SINE QUA NON TO HAVE A LOOK AT THE REASONS RECORDED BY THE AO WHICH LED TO THE INITIATION OF RE-ASSESSMENT PROCEE DINGS. SUCH REASONS ARE AVAILABLE ON PAGE 12 OF THE PAPER BOOK, WHICH READ AS UNDER:- ITA NO.352/DEL/2009 4 M/S INDEPENDENT MEDIA (P) LTD. ASSTT. YEAR 2004-05 IT HAS BEEN INFORMED BY THE DIRECTOR OF INCOME-TAX (INV.), NEW DELHI VIDE LETTER DATED 16.6.2006 THAT THE ABOVE NAMED COMPANY WAS INVOLVED IN GIVING AND TAKING BOGUS ENTRIES/TRANSACTIONS DURING THE F.Y. 2 003- 04. FROM THE INFORMATION GATHER BY THE DIT (INV.)-I, NE W DELHI THAT THE ASSESSEE WAS INVOLVED IN GIVING AND TAKING ACCOMMODATION ENTRIES ONLY AND REPRESENTED UNSECURED MONEY OF THE ASSESSEE COMPANY IS ACTUALLY UNEXPLAINED INCOME OF THE ASSESSEE COMPANY. THE ASSESSEE COMPANY HAS FAILED TO DISCLOSE FULLY AND T RULY ALL THE MATERIAL FACTS AND SOURCE OF THESE FUNDS RO UTED THROUGH BANK ACCOUNTS OF THE ASSESSEE COMPANY. I, THEREFORE, HAVE REASONS TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 14 7 OF THE IT ACT, 1961 FOR THE ASSTT. YEAR REFERRED AB OVE. HENCE NOTICE U/S 148 IS ISSUED SD/- DCIT, CIR.11(1), N. DELHI. 5. A BARE PERUSAL OF THE ABOVE REASONS INDICATES TH AT THESE ARE GENERAL IN NATURE NOT DEALING WITH ANY SPECIFIC GIV ING OR TAKING OF ANY ACCOMMODATION ENTRY REPRESENTING UNSECURED MONE Y OF THE ASSESSEE. IT MAY BE SEEN FROM THE ABOVE EXTRACTED REASONS THAT THE PROCEEDINGS BY MEANS OF ISSUANCE OF NOTICE U/S 148 WERE TRIGGERED PURSUANT TO INFORMATION RECEIVED BY THE A O FROM ITA NO.352/DEL/2009 5 DIRECTOR OF INCOME-TAX (INV.), NEW DELHI, VIDE THE LATTERS LETTER DATED 16.6.06. THE LD. AR HAS PLACED ON RECORD A C OPY OF THE TRIBUNAL ORDER IN IDENTICAL CIRCUMSTANCES, PASSED I N THE CASE OF INDIA TERMINAL CONNECTOR SYSTEMS LTD. VS. DCIT (ITA NO.4863/DEL/2010). VIDE ITS ORDER DATED 15.11.11., THE TRIBUNAL WAS PLEASED TO HOLD THAT THE REASSESSMENT PROCEEDIN GS WERE WITHOUT JURISDICTION. IT IS PERTINENT TO MENTION T HAT THE REASONS RECORDED BY THE AO IN THE PRESENT CASE ARE IDENTICA L TO THOSE RECORDED IN THE CASE OF INDIA TERMINAL CONNECTOR SYSTEMS LTD. (SUPRA) WHICH HAVE BEEN REPRODUCED IN PARA 10 OF THE TRIBU NALS ORDER. THE BASIS FOR INITIATION OF RE-ASSESSMENT I N BOTH THE CASES IS THE INFORMATION RECEIVED FROM THE DIRECTOR OF IN COME-TAX (INV.), NEW DELHI, VIDE HIS LETTER DATED 16.6.06. IT IS FUR THER RELEVANT TO NOTE THAT THE TRIBUNAL IN ANOTHER CASE, IN IDENTICA L CIRCUMSTANCES, DECIDED THE QUESTION OF INITIATION OF REASSESSMENT PROCEEDINGS IN FAVOUR OF THE ASSESSEE VIDE ITS ORDER IN THE CASE O F INSECTICIDES (INDIA) LTD. THE REVENUE CHALLENGED THE SAID TRIBUNAL ORDER BEFORE THE HONBLE DELHI HIGH COURT. THEIR LORDSHI PS IN CIT VS. INSECTICIDES (INDIA) LTD. [(2013) 357 ITR 330 (DEL) ] HAVE UPHELD THE QUASHING OF THE INITIATION OF RE-ASSESSMENT PRO CEEDINGS BY THE ITA NO.352/DEL/2009 6 TRIBUNAL. THE REASONS WHICH CONSTITUTED THE BASIS FOR THE INITIATION OF RE-ASSESSMENT PROCEEDINGS IN THE CASE OF INSECTICIDES (INDIA) LTD. (SUPRA) HAVE BEEN REPRODUCED BY THE HONBLE DELHI HIGH COURT IN ITS JUDGMENT, WHICH ARE AGAIN IDENTICAL TO THOSE IN THE PRESENT CASE. THE LD. DR WAS FAIR ENOUGH TO CONCED E THAT THERE IS NO ORDER BY ANY HIGHER JUDICIAL FORUM IN REVENUES FAVOUR UPHOLDING THE INITIATION OF REASSESSMENT PROCEEDING S IN THE CIRCUMSTANCES AS ARE PRESENTLY PREVAILING. RESPEC TFULLY FOLLOWING THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COU RT AND THE TRIBUNAL ORDER AS NOTICED ABOVE, WE OVERTURN THE IM PUGNED ORDER ON THIS ISSUE AND HOLD THAT THE AO WAS NOT JUSTIFIE D IN INITIATING THE INSTANT REASSESSMENT PROCEEDINGS. 6. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 19.08.201 4. SD/- SD/- [ H.S. SIDHU ] [ R.S. SYAL ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED,19 TH AUGUST, 2014. DK ITA NO.352/DEL/2009 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.