M/s. Today Hotels (Andhra) Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 3543/DEL/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9721 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2009-2010
• Appeal Filed On: 02-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY GOYAL
• Keywords: Unexplained cash credit; Search and seizure; Opportunity of being heard; Set aside
• Section: 153A; 68

Judgement Text

TODAY HOTELS (ANDHRA) PVT. LTD. VS. DCIT / I.T.A.NO .3543/DEL/2015/A.Y.2009-10 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER . . /. I.T.A NO.3543/DEL/2015 / ASSESSMENT YEAR:2009-10 TODAY HOTELS (ANDHRA) PVT. LTD. 8 TH FLOOR, STATESMAN HOUSE, BARAKHAMBA ROAD, NEW DELHI. VS. DCIT CENT. CIRCLE 23, NEW DELHI. PAN NO. AACCT4697D APPELLANT / RESPONDENT /ASSESSEE BY NONE /REVENUE BY SHRI SANJAY GOYAL, CIT DR / DATE OF HEARING: 02.0 1.20 20 /PRONOUNCEMENT ON 0 6 .0 1.20 20 /O R D E R PER BHAVNESH SAINI, J.M. 1. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST T HE ORDER OF LD. CIT(APPEALS)-18, NEW DELHI DATED 26.03.2015 FOR ASS ESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS : - 1) THAT THE CIT(APPEALS) ERRED ON FACTS AND IN LAW IN UPHOLDING THE IMPUGNED ASSESSMENT ORDER PASSED UNDER SECTION 153C WHICH IS WITHOUT JURISDICTION, ILLEGAL AND BAD IN L AW SINCE THE PREREQUISITE CONDITIONS FOR INITIATING PROCEEDINGS UNDER SECTION 153C OF THE ACT WERE NOT FULFILLED IN THE PRESENT C ASE. 2) THAT THE CIT(APPEALS) ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITION OF RS. 50 LACS RECEIVED FROM THE FOLLO WING FIVE TODAY HOTELS (ANDHRA) PVT. LTD. VS. DCIT / I.T.A.NO .3543/DEL/2015/A.Y.2009-10 PAGE 2 OF 6 CONCERNS AS ALLEGED UNEXPLAINED CASH CREDITS UNDER SECTION 68 OF THE INCOME TAX ACT, 1961: SR. NO. COMPANY NAMES AMOUNT (RS.) A) SHALINI HOLDING LTD. 10,00,000/- B) AD-FIN CAPITAL SERVICES P. LTD. 10,00,000/ - C) VIRGIN CAPITAL SERVICES P. LTD. 10,00,000/ - D) VIP LEASING & FINANCE P. LTD. 10,00,000/- E) EURO ASIA MERCANTILE P. LTD. 10,00,000 /- TOTAL 50,00,000 /- 3) THAT THE CIT(APPEALS) ERRED ON FACTS AND IN LAW IN UPHOLDING THE AFORESAID ADDITION OF RS. 50 LACS ON THE BASIS OF EX-PARTE STATEMENT WITHOUT APPRECIATING THAT EX-PARTE STATEM ENT NOT TESTED BY CROSS-EXAMINATION, HAD NO EVIDENTIARY VAL UE. 4) THAT THE CIT(APPEALS) ERRED ON FACTS AND IN LAW IN UPHOLDING THE AFORESAID ADDITION OF RS. 50 LACS WITHOUT APPRE CIATING THAT THE APPELLANT HAD DISCHARGED ITS ONUS IN TERMS OF S ECTION 68 OF THE INCOME TAX ACT, 1961. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR VARY FROM THE AFORESAID GROUNDS OF APPEAL BEFORE OR AT THE TIME O F HEARING. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT SEARCH AND S EIZURE OPERATION WAS CARRIED OUT AT THE VARIOUS PREMISES OF M/S TODA Y HOMES AND INFRASTRUCTURE PVT. LTD. AND ITS GROUP CONCERNS AND ASSOCIATED PERSONS ON 26.11.2009 AND WAS FINALLY CONCLUDED ON 25.01.2010. THE ASSESSEE COMPANY IS ONE OF THE ASSOCIATED/GROUP CONCERNS OF TODAY GROUP OF CASES. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION A T VARIOUS PREMISES OF TODAY GROUP OF CASES MANY BOOKS OF ACCOUNTS OR DOCU MENTS BELONGING TO THE ASSESSEE COMPANY WERE FOUND AND SEIZED AND HENC E PREREQUISITE CONDITION TO INITIATE PROCEEDINGS U/S 153C OF THE I NCOME TAX ACT, 1961 WAS TODAY HOTELS (ANDHRA) PVT. LTD. VS. DCIT / I.T.A.NO .3543/DEL/2015/A.Y.2009-10 PAGE 3 OF 6 FULFILLED. THEREFORE, AFTER RECORDING THE NECESSAR Y SATISFACTION FOR INITIATION OF PROCEEDINGS U/S 153C OF THE ACT, NOTI CE U/S 153C/153A OF THE ACT WAS ISSUED ON 02.09.2011 DIRECTING THE ASSESSEE TO FILE ITS RETURN OF INCOME. THE ASSESSEE FILED RETURN OF INCOME DECLAR ING TOTAL INCOME AT RS. 21,165/-. THE AO ISSUED STATUTORY NOTICES TO THE A SSESSEE FOR COMPLETION OF THE ASSESSMENT. THE ASSESSEE FILED OBJECTIONS T O THE INITIATION OF THE PROCEEDINGS U/S 153C/153A OF THE ACT WHICH WAS, HOW EVER, REJECTED. THE AO, THEREAFTER, CONSIDERED THE ISSUE OF ACCOMMODATI ON ENTRY RECEIVED BY VARIOUS PERSONS/COMPANIES ON ACCOUNT OF SHARE CAPIT AL/SHARE PREMIUM, ETC. FROM ENTRY PROVIDERS. THE DETAILED SUBMISSION OF THE ASSESSEE WAS RECORDED AND ULTIMATELY THE AO MADE ADDITION OF RS. 50 LACS ON ACCOUNT OF UNEXPLAINED CREDIT IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE U/S 68 OF THE ACT ON ACCOUNT OF THE AMOUNT RECEIVED FROM FIVE COM PANIES AS MENTIONED IN THE GROUNDS OF APPEAL. THE ASSESSMENT WAS COMPL ETED VIDE ORDER DATED 26.12.2011 U/S 143(3)/153C/153A OF THE ACT. 3. THE ASSESSEE CHALLENGED THE JURISDICTION TO FRAME A SSESSMENT U/S 153C OF THE ACT AND ADDITION OF RS. 50 LACS BEFORE LD. CIT(A). THE SUBMISSIONS OF THE ASSESSEE ARE RECORDED AND REPROD UCED IN THE APPELLATE ORDER FROM PAGES 3 TO 56 OF THE ORDER IN WHICH THE ASSESSEE CHALLENGED THE INITIATION OF THE PROCEEDINGS U/S 153C OF THE ACT A ND STATED THAT IT IS WITHOUT JURISDICTION, ILLEGAL AND BAD IN LAW. THER EFORE, AO HAS NO JURISDICTION TO FRAME SUCH ASSESSMENT AGAINST THE A SSESSEE. THE ASSESSEE RELIED UPON SEVERAL DECISIONS OF VARIOUS HIGH COURT S IN ITS SUBMISSION, IT TODAY HOTELS (ANDHRA) PVT. LTD. VS. DCIT / I.T.A.NO .3543/DEL/2015/A.Y.2009-10 PAGE 4 OF 6 WAS ALSO CONTENDED THAT CERTAIN STATEMENTS WERE REC ORDED IN ABSENCE OF ASSESSEE WHICH WERE NOT CONFRONTED AT THE ASSESSMEN T. THE ADDITION ON MERIT WAS ALSO CHALLENGED SUPPORTED BY VARIOUS DECI SIONS OF DIFFERENT HIGH COURTS AND THE TRIBUNAL. THE ASSESSEE CONTENDED TH AT ADDITION ON MERIT IS UNJUSTIFIED BECAUSE THE ASSESSEE PROVED GENUINENESS OF THE AMOUNTS CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. 4. THE LD. CIT(A), HOWEVER, AT PAGES 56 TO 58 OF THE I MPUGNED ORDER REJECTED THE SUBMISSIONS OF THE ASSESSEE AND DISMIS SED THE APPEAL OF ASSESSEE. THE FINDINGS OF THE LD. CIT(A) ARE REPRO DUCED AS UNDER: 1. GROUND NO. 1 & 2 ARE TOGETHER : 1.1 I HAVE CONSIDERED THE GROUNDS RAISED IN APPEAL AND THE FACTS OF THE CASE. I HAVE ALSO CONSIDERED THE SUBM ISSION FILED BY THE AR OF THE APPELLANT. 1.2 THE APPELLANT HAS RAISED GROUND AGAINST THE ISSUE O F NOTICE U/S 153A, THAT THIS BAD IN LAW. 1.3 IT IS NOTICED FROM THE ORDER OF ASSESSMENT THAT THE NOTICE U/S 153A WAS ISSUED AND SERVED ON ASSESSEE A S PER THE PRESCRIBED STATUTORY PROCEDURE. THERE IS N O BASIS IN RAISING THESE GROUNDS. ACCORDINGLY, GROUN DS ARE DISMISSED. 2. GROUND NO. 3 & 4 : 2.1 I HAVE CONSIDERED THE GROUNDS RAISED IN APPEAL AND THE FACTS OF THE CASE. I HAVE ALSO CONSIDERED THE SUBM ISSION FILED BY THE AR OF THE APPELLANT. 2.2 THE APPELLANT HAS RAISED GROUND AGAINST THE ADDITIO N OF RS. 50,00,000/- RECEIVED FROM THE FOLLOWING FIVE CONCERNS AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT. S.NO. NAME AMOUNT RECEIVED FY 2008-09 (IN RS.) 1. SHALINI HOLDINGS LTD. 10,00,000 2. AD - FIN CAPITAL SERVICES PVT. LTD. 10,00,000 3. VIRGIN CAPITAL SERVICES PVT. LTD. 10,00,000 4. VIP LEASING & FINANCES PVT. LTD. 10,00,000 5. EURO ASIA MERCANTILE PVT. LTD. 10,00,000 TODAY HOTELS (ANDHRA) PVT. LTD. VS. DCIT / I.T.A.NO .3543/DEL/2015/A.Y.2009-10 PAGE 5 OF 6 GRAND TOTAL 50,00,000 2.3 IT IS SEEN FROM THE ORDER OF ASSESSMENT THAT RS. 50 ,00,000/ - IS FOUND CREDITED IN THE BOOKS OF ACCOUNT OF THE AS SESSEE. THE ASSESSING OFFICER HELD THAT THE TRANSACTIONS WE RE OUT OF UNACCOUNTED MONEY AS THE ASSESSEE FAILED TO PASS TH E TEST OF GENUINENESS WITHIN THE MEANING OF THE 68 OF THE ACT . I AM NOT INCLINED TO AGREE WITH THE EXPLANATIONS GIVEN B Y THE APPELLANT DURING APPEAL PROCEEDINGS AS THERE IS ENO UGH REASON TO AGREE WITH THE ASSESSING OFFICER. GROUND S RAISED IN APPEAL ARE DISMISSED. 5. THE RECORD REVEALED THAT ON EARLIER DATES OF HEARIN G THE APPEAL WAS ADJOURNED MANY TIMES ON THE REQUEST OF THE COUNSEL FOR THE ASSESSEE. THE ASSESSEE HAS BEEN NOTIFIED THE DATE OF HEARING FOR 02.01.2020 THROUGH REGISTERED POST. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE. 6. WE HAVE HEARD LD. DR AND PERUSED THE FINDINGS OF TH E AUTHORITIES BELOW. 7. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. DR, WE ARE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEV EL OF THE LD. CIT(A). IT IS CLEAR FROM THE IMPUGNED ORDER THAT ASSESSEE MADE DETAILED WRITTEN SUBMISSIONS BEFORE LD. CIT(A) WHICH ARE REPRODUCED FROM PAGE 3 TO 56 OF THE APPELLATE ORDER AND THE LD. CIT(A) DID NOT DISC USS ANY OF THE SUBMISSION OF THE ASSESSEE AND CASE LAW IN HIS FIND INGS. THE LD. CIT(A) WITHOUT GIVING REASONS FOR DECISION DISMISS THE APP EAL OF THE ASSESSEE. THUS, THE ORDER OF THE LD. CIT(A) IS VIOLATIVE OF S ECTION 250(6) OF THE ACT AND CANNOT BE SUSTAINED IN LAW. THE SEARCH IN THIS CASE WAS CONDUCTED ON 26.11.2009 I.E. AFTER CLOSE OF THE FINANCIAL YEAR. THE ENTRIES IN THE BOOKS TODAY HOTELS (ANDHRA) PVT. LTD. VS. DCIT / I.T.A.NO .3543/DEL/2015/A.Y.2009-10 PAGE 6 OF 6 OF ACCOUNTS ARE CONSIDERED FOR MAKING ADDITION U/S 68 OF THE ACT. THE LD. CIT(A) DID NOT DISCUSS ANYTHING, IF ANY, INCRIMINAT ING MATERIAL WAS FOUND IN RESPECT OF THE ADDITION SO MADE U/S 68 OF THE ACT D URING THE COURSE OF PERSONS SEARCHED. THEREFORE, THE MATTER SHALL HAVE TO BE RE-EXAMINED ALSO IN THE LIGHT OF JUDGMENT OF THE HONBLE SUPREM E COURT IN THE CASE OF CIT VS. SINGHAD TECHNICAL EDUCATION SOCIETY 397 ITR 344. LD. DR IN VIEW OF THE ABOVE ALSO SUGGESTED THAT MATTER MAY BE REMANDE D BACK TO THE LD. CIT(A). IN THIS VIEW OF THE MATTER, WE SET ASIDE T HE IMPUGNED ORDER AND RESTORE THE APPEAL OF ASSESSEE TO THE FILE OF LD. C IT(A) WITH DIRECTION TO RE- DECIDE THE APPEAL OF THE ASSESSEE STRICTLY IN ACCOR DANCE WITH LAW BY GIVING REASONS FOR DECISIONS IN APPELLATE ORDER, BY GIVING REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (N.K. BILLAIYA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6 TH JANUARY, 2020 * KAVITA ARORA, SR. P.S. COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) / ITAT (DR)/GUARD FILE OF ITAT. BY ORDER ASSISTANT REGISTRAR, ITAT: DELHI BENCHES-DELHI