M/s. Vivid Builders Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 3842/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8113 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 11-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAMITA M BISWAS
• Assessee Lawyers: R S AHUJA
• Keywords: Unexplained cash credit; Search and seizure; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.3842/DEL./2015 (ASSESSMENT YEAR : 2006-07) M/S. VIVID BUILDERS PVT. LTD., VS. DCIT, CENTRAL C IRCLE 4, D 22, IIND FLOOR, DEFENCE COLONY, NEW DELHI. NEW DELHI 110 024. (PAN : AACCV0926F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. AHUJA, ADVOCATE REVENUE BY : MS. PRAMITA M. BISWAS, CIT DR DATE OF HEARING : 09.04.2019 DATE OF ORDER : 15.04.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, M/S. VIVID BUILDERS PVT. LTD. (HERE INAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 09.04.2015 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-XXVI, NEW DELH I, QUA THE ASSESSMENT YEAR 2006-07 ON THE GROUNDS INTER ALIA T HAT :- 1.1 THE ORDER OF THE LEARNED COMMISSIONER OF INCO ME TAX (A) IS ARBITRARY, AGAINST LAW AND FACTS ON RECORD. 1.2 THE LEARNED COMMISSIONER OF INCOME TAX (A) WHI LE PASSING THE ORDER HAS NOT CONSIDERED THAT THE FACT THAT THE CASE HAS BEEN REOPENED U/S 148 OF THE INCOME TAX ACT ON THE BASIS OF ITA NO.3842/DEL./2015 2 GENERAL ALLEGATION WITHOUT ANY INCRIMINATING MATERI AL AGAINST THE ASSESSEE. 1.3 THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ALSO ERRED IN NOT CONSIDERING THE FACT THAT THE ADDITION ON ACCOUNT OF SHARE CAPITAL HAVE ALSO BEEN MADE DURING THE COURSE OF ORIGINAL ASSESSMENT AND THE ASSESSEE HAVE GOT THE RELIEF IN RESPECT OF THE SAME FROM HONBLE HIGH COURT OF DELHI. 1.4 THE LEARNED COMMISSIONER OF INCOME TAX (A) WHI LE CONFIRMING THE ADDITION IN RESPECT OF SHARE CAPITAL HAS NOT CONSIDERED THE FACT THAT THE IDENTITY, CREDITWORTHI NESS AS WELL GENUINENESS OF AMOUNT OF SHARE CAPITAL RECEIVED DUR ING THE YEAR HAS BEEN PROVED DURING THE COURSE OF ASSESSMENT PRO CEEDING. 1.5 THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS NOT CONSIDERED THAT THE ADDITION MADE BY INVOKING THE P ROVISIONS OF SECTION 68 OF THE INCOME TAX ACT IN THE HANDS OF TH E RECIPIENT IS BAD IN LAW AND HENCE LIABLE TO BE DELETED 1.6 THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS ALSO ERRED IN CONFIRMING THE ADDITION OF RS.3,05,000/- W HICH HAVE BEEN MADE BY THE ASSESSING OFFICER BY ASSUMING THAT THE ASSESSEE HAS PAID COMMISSION @0.5% ON THE AMOUNT OF SHARE CA PITAL RAISED DURING THE YEAR. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS INTO THE REAL ESTATE DEALINGS. DURING SEARCH AND SEIZURE OPERATION CONDUCTED IN M/ S. CONSORTIUM GROUP OF CASES ON 28.07.2011, CERTAIN DOCUMENTS WER E FOUND AND SEIZED RELATING TO THE ASSESSEE VIZ. PAGE 14 TO 36 OF ANNEXURE A-8 AND PAGE NOS.94 TO 139 OF ANNEXURE A-11. AO INITIA TED THE PROCEEDINGS UNDER SECTION 153C OF THE INCOME-TAX AC T, 1961 (FOR SHORT THE ACT) AND THIS CASE WAS ALSO SUBJECTED T O PROCEEDINGS U/S 147 R.W.S. 148 OF THE ACT ON THE BASIS OF INFORMATI ON RECEIVED FROM INVESTIGATION WING REGARDING RECEIPTS OF ACCOMMODAT ION ENTRIES BY ITA NO.3842/DEL./2015 3 THE ASSESSEE COMPANY. ASSESSEE DECLARED AN INCOME O F RS.23,710/- BY FILING RETURN OF INCOME WHICH WAS ASSESSED U/S 1 43 (3) OF THE ACT AT AN INCOME OF RS.6,10,23,710/-. DECLINING TH E CONTENTIONS RAISED BY THE ASSESSEE, AO MADE ADDITION OF RS.6,10 ,00,000/- AS UNDISCLOSED INCOME HAVING BEEN INTRODUCED IN THE FO RM OF SHARE CAPITAL AND SHARE PREMIUM THROUGH NON-DESCRIPT ENTI TIES AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. AO ALSO MADE ADDITION OF RS.3,05,000/- ON ACCOUNT OF COMMISSION @ 0.5% ON AN AMOUNT OF RS.6,10,00,000/- AND THEREBY ASSESSED THE INCOME AT RS.6,13,28,711/- U/S 153C/147 READ WITH SECTION 148 OF THE ACT. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS DISMISSED THE APPEAL EX-PARTE A ND THEREBY CONFIRMED THE ADDITION MADE BY THE AO. FEELING AGG RIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. LD. AR FOR THE ASSESSEE CONTENDED THAT OPPORTUNI TY OF BEING HEARD IS NOT PROVIDED BY THE LD. CIT (A) TO THE ASS ESSEE AND NONE OF THE NOTICE ISSUED TO THE ASSESSEE HAS BEEN RECEIVED AND REQUESTED ITA NO.3842/DEL./2015 4 FOR PROVIDING AN OPPORTUNITY AT THE STAGE OF FIRST APPELLATE FORUM. HOWEVER, ON THE OTHER HAND, LD. DR FOR THE REVENUE IN ORDER TO REPEL THE ARGUMENTS ADDRESSED BY THE LD. AR FOR THE ASSESSEE CONTENDED THAT SINCE THE ASSESSEE HAS FAILED TO APP EAR DESPITE ISSUANCE OF THREE NOTICES AND THE LD. CIT (A) HAS D ECIDED THE APPEAL ON MERIT, THE APPEAL FILED BY THE ASSESSEE IS LIABL E TO BE DISMISSED AND RELIED UPON THE ORDER PASSED BY THE AO AS WELL AS LD. CIT (A). 6. BARE PERUSAL OF PARA 3 OF THE IMPUGNED ORDER PAS SED BY THE LD. CIT (A) GOES TO PROVE THAT IN RESPONSE TO THE N OTICE ISSUED FOR 19.09.2014, NONE APPEARED BUT ON 22.09.2014 A LETTE R WAS FILED ON BEHALF OF THE ASSESSEE SEEKING ADJOURNMENT TO COLLE CT AND COMPILE THE RELEVANT INFORMATION. THEREAFTER, LD. CIT (A) ISSUED NOTICE FOR 13.11.2014, 22.12.2014 AND 17.02.2015 IN RESPONSE T O WHICH ASSESSEE HAS AGAIN SOUGHT SOME MORE TIME FOR THE RE ASON THAT ITS ENTIRE STAFF IS BUSY IN THE TIME BARRING ASSESSMENT . HOWEVER, NO TIME WAS GRANTED AND THE LD. CIT (A) PROCEEDED TO P ASS THE EX- PARTE ORDER ON 09.04.2015. CHRONOLOGY OF THE DATES OF ADJOURNMENT RECORDED BY THE LD. CIT (A) GOES TO PRO VE THAT THE ENTIRE EXERCISE OF PASSING THE IMPUGNED ORDER BY TH E LD. CIT (A) HAS BEEN COMPLETED WITHIN THREE MONTHS BY DECLINING THE REQUEST OF THE ASSESSEE. SINCE THE VOLUMINOUS RECORD PERTAINI NG TO NUMEROUS COMPANIES IN WHICH ASSESSEE ALLEGED TO HAVE INTRODU CED SHARE ITA NO.3842/DEL./2015 5 CAPITAL AND SHARE PREMIUM WHICH ARE HELD TO BE NON- DESCRIPT ENTITIES IS INVOLVED, WE ARE OF THE CONSIDERED VIEW THAT ADEQUATE OPPORTUNITY OF BEING HEARD HAS NOT BEEN PROVIDED TO THE ASSESSEE RATHER LD. CIT (A) HAS PASSED THE ORDER IN HASTE AN D THEREBY VIOLATED THE PRINCIPLES OF NATURAL JUSTICE. SO, TH E ASSESSEE IS REQUIRED TO BE HEARD BY LD. CIT (A) BY PROVIDING AD EQUATE OPPORTUNITY. 7. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, THE IM PUGNED ORDER PASSED BY THE LD. CIT (A) IS SET ASIDE AND TH E FILE IS REMANDED TO THE LD. CIT (A) WHO SHALL DECIDE AFRESH AFTER PR OVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. HOWEVE R, IT IS MADE CLEAR THAT THE ASSESSEE SHALL APPEAR BEFORE THE LD. CIT (A) WITHIN 15 DAYS FROM THE RECEIPT OF ORDER AND THEREAFTER LD. C IT (A) SHALL DECIDE THE APPEAL WITHIN SIX MONTHS IN VIEW OF THE LAW LAID DOWN BY HONBLE SUPREME COURT ON THE ISSUE IN QUESTION. CONSEQUENTLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 15 TH DAY OF APRIL, 2019. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 15 TH DAY OF APRIL, 2019 TS ITA NO.3842/DEL./2015 6 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.