Krish Packaging Pvt Ltd, New Delhi V. DCIT Central Circle, Noida

ITA 3942/DEL/2019

AI Insights

Krish Packaging Pvt. Ltd. appealed against the order of the Commissioner of Income Tax (Appeals)-IV, New Delhi, which had confirmed the additions made by the A.O. regarding unexplained investments in land purchases. The case stemmed from a search and seizure operation under Section 132 of the Income Tax Act, 1961, which uncovered incriminating documents related to the assessee. These documents indicated substantial cash transactions for land purchases, which the assessee claimed were not theirs but belonged to Shri Anil Mittal, who had allegedly surrendered the cash and had it taxed in his hands. The Tribunal found no merit in the assessee's arguments and upheld the lower authorities' decisions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131015 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 18-09-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 02-05-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Loose papers
• Section: 69; 132; 142(1); 143(2); 153C

Judgement Text

Page 1 of 9 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’: NEW DELHI BEFORE, SHRI G.S.PANNU, PRESIDENT AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No.3942/Del/2019 (ASSESSMENT YEAR 2011-12) Krish Packaging Pvt. Ltd. F-11, Basement Green Park Extension New Delhi-110 016 PAN-AACCK 8980A Vs. Dy.CIT Central Circle Noida (Appellant) (Respondent) Appellant by None Respondent by Ms. Sapna Bhatia, CIT-DR Date of Hearing 19/09/2023 Date of Pronouncement 27/09/2023 ORDER PER YOGESH KUMAR U.S., JM: This appeal filed by Assessee against the order of the Learned Commissioner of Income Tax (Appeals)-IV New Delhi [“Ld. CIT(A)”, for short], dated 28/02/2019 for Assessment Year 2011-12. 2. Grounds taken in this appeal are as under: “1. That the order of the learned Commissioner of Income Tax (A) is arbitrary, against law and facts on record. 2. That on the facts and circumstances of the case and in law the issuance of notices u/s 153C/142(1)/143(2) of the Income Tax ITA No.3942/Del/2019 Krish Packaging Pvt. Ltd. vs. DCIT Page 2 of 9 Act, 1961 and the proceedings conducted there under are against the provisions contained in the Income Tax Act, 1961 and is bad in law and hence liable to be quashed. 3. That on the facts and circumstances of the case and in law the learned Commissioner of Income Tax (A) erred in confirming addition of Rs.95,60,000/- u/s 69 of the Income Tax Act without going through the facts of the case, statutory provisions as well as explanation filed during the course of appellate proceeding. 4. That on the facts and circumstances of the case and in law the learned Commissioner of Income Tax (A) erred in not admitting that alleged cash of Rs.88,60,000/- have already been taxed in the hands of Shri Anil Mittal. 5. The learned Assessing officer erred in making the addition simply on the basis of suspicion, assumption, surmises, & conjectures and order so passed shows lack of application of mind. 6. The appellant herein craves its right to alter, amend, add and/or withdraw any grounds of appeal and/or to take any additional grounds of appeal.” 3. None appeared for the assessee. Several notices were issued to the registered address of the assessee by the Registry, the notices issued by the registry were returned with an endorsement ‘no such person in the address’. Notices were also issued to the assessee to its e-mail id and a representative of the assessee appeared on 05/12/2022 and sought for adjournment, thereafter neither the assessee nor the representative of the assessee have appeared before the Tribunal, therefore, we are compel to decide the Appeal after hearing the Ld. Departmental Representative and on perusal of the material available on record. ITA No.3942/Del/2019 Krish Packaging Pvt. Ltd. vs. DCIT Page 3 of 9 4. Brief facts of the case are that, a search and seizure operation u/s 132 was conducted on 12.11.2013 in the case of Eminent Group of cases, wherein, certain incriminating documents were found & seized relating to the assessee. Thereafter, notice u/s 153C was issued. In response, assessee filed its return showing of nil income. Subsequently, notices u/s 143(2) and 142(1) of the Act were issued and A.O. completed assessment on 18/03/2016 by making addition of Rs. 95,60,000/- on account of unexplained investment u/s. 69 of the Act, 1961 (‘Act’ for short). 5. As against the assessment order dated 18/03/2016, the assessee preferred an Appeal before the CIT(A), the Ld. CIT(A) vide order dated 28/02/2019 dismissed the Appeal filed by the assessee. Aggrieved by the order of the CIT(A) dated 28/02/2019, the assessee preferred the present Appeal on the grounds mentioned above. 6. Ground No. 1, 5 & 6 are general in nature which requires no adjudication. The Ground No. 2 regarding issuance of Notice u/s 153C/142(1)/ 143(2) of the Act. The Ld. Departmental Representative relying on the order of the A.O. and CIT(A) submitted that, while purchasing the lands by the assessee Company there was an involvement of cash. The said cash was nothing but an unexplained investment of the assessee company, therefore, the addition made by the A.O. and the order of the CIT(A) is deserves to be confirmed. ITA No.3942/Del/2019 Krish Packaging Pvt. Ltd. vs. DCIT Page 4 of 9 7. Heard the Ld. DR and perused the material. It is seen from the assessment order that, during the action u/s 132 of the Act, certain incriminating document found and seized relating to the assessee which had certain details of investment in purchase of agricultural land for Rs. 1,14,90,000/- and as per the details mentioned in the said document, Rs. 26,30,000/- was paid through cheque and remaining Rs. 88,60,000/- was paid in cash. Thus, the A.O. rightly assumed jurisdiction as the twin pre- conditions mentioned in Section 153C of the Act was satisfied i.e. existence of seized document belonging to the assessee and such seized document having bearing on the determination of the total income of the assessee. Therefore, in our considered opinion issuance of notice u/s 153C/142(1)/143(2) of the Act by the A.O. is justified. Thus, we find no merit in Ground No. 2 of the assessee, accordingly the Ground No. 2 of the assessee is dismissed. 8. Ground No. 3 is regarding confirmation of addition of Rs. 95,60,000/- u/s 69 of the Act. As per Ground No. 3 of Appeal of the assessee, it is contended that the Lower Authorities without going through the facts of the case, statutory provisions as well as explanation filed during the course of the Appellate Proceedings, erroneously confirmed the addition. 9. The Ld. Departmental Representative relied on the observations and the conclusion of the CIT(A) on the above issue. ITA No.3942/Del/2019 Krish Packaging Pvt. Ltd. vs. DCIT Page 5 of 9 10. We have heard the Ld. Departmental Representative and perused the material available on record. During the assessment proceedings, in response to notice issued by the A.O., the assessee replied that amount of Rs. 26,30,000/- paid through cheque while purchasing the property is part of its books of accounts, whereas cash amount of Rs. 88,60,000/-has been surrendered by Sh. Anil Mittal. The A.O. took view that land were purchased in the name of the assessee company and the cheque amounts have admittedly accepted by the assessee, but denied the ownership of cash amount by stating that the cash has been owned by some other person. The A.O. did not accept the submission of the assessee and made addition of Rs. 88,60,000/- in the hands of the Company. The assessee during the First Appellate Proceedings by way of written submission and also oral arguments contended as under:- “i) At page 83 of LP-15, no where it has been mentioned that any cash amount has been paid in purchase of lands. ii) The cash amount of Rs. 88,60,000/- was surrendered by one Shri Anil Mittal with his other surrender income in respect of loose papers found during the search, hence addition should not be made in the hands of appellant company. For the sake of clarity in the issue page-83 of LP- 15, is reproduced as under: ITA No.3942/Del/2019 Krish Packaging Pvt. Ltd. vs. DCIT Page 6 of 9 ” 11. The above said submission of the assessee has not been accepted by the CIT(A) and confirmed the addition made by the A.O. in following manners:- “It may be seen from the above page that it has details purchase of four lands situated at Agra by the appellant company, during the period from 16/09/2010 to 28/01/2011. Details mentioned on page gives information of land, size, total cost, Amount paid through cheque, circle rate date of registry and rate of purchase of land per Bigha. In this paper, total cost of land is at Rs. 1,14,90,000/- and amount paid through cheque is Rs. 26,30,000/-. Since, all details are co-related & correct, and registry of lands also made then it is self explained that balance amount of total cost and cheque amount was paid through cash which amount to Rs. 88,60,000/-. Further, appellant company admitted at AO level that cheque amount is the part of companys. Books of Account and cash amount was owned by some other person. This fact also makes it clear that cash component was there. Thus, argument of Ld. A.R. looses its stand and is hereby rejected.” ITA No.3942/Del/2019 Krish Packaging Pvt. Ltd. vs. DCIT Page 7 of 9 12. It is observed that the assessee company had purchased four lands situated at Agra during the period from 16/09/2010 to 28/01/2011. The total cost of land was at Rs. 11,14,90,000/- and the amount paid through cheque was Rs. 26,30,000/-, thus, it is found by the A.O. that the amount of Rs. 88,60,000/- was paid through cash. Apart from the same, the assessee Company admitted at the Assessment level that cheque amount is a part of the Company’s books of account and cash amount was owned by some other person. The said fact also makes it clear that there was a cash component. Further, in so far as addition of Rs. 7,00,000/- is concerned. During the course of the assessment proceedings, one registry of purchase of agriculture land during the Assessment Year 2011-12 was provided by the Assessee which was a part from the agriculture land as mentioned in the seized paper. The said agriculture land bearing Khata No. 630 having area of 0.2075 hectare in Raibha Tehsil Karavh, for the purpose of purchasing the said land payment of Rs.1,50,000/- had been made through DD and as mentioned in the seized paper, cash payment of Rs. 7,00,000/- has been made by the Assessee which has been compared by the A.O. on the basis of the ratio of cheque and cash in the registries mentioned in the seized paper. Since the above investments have been made by the Company which has not been disclosed in the books of accounts of the and the A.O. rightly treated the said amount as undisclosed income of the Assessee Company. Thus, we find no error or infirmity in the order of the Lower Authorities, accordingly, the Ground No. 3 of the Assessee is dismissed. ITA No.3942/Del/2019 Krish Packaging Pvt. Ltd. vs. DCIT Page 8 of 9 13. In the Ground No. 4, the Assessee contended that learned Commissioner of Income Tax (A) erred in not admitting that alleged cash of Rs.88,60,000/- have already been taxed in the hands of Shri Anil Mittal. During the assessment proceedings, the assessee was asked to produce documentary evidence to substantiate the claim that the cash of Rs. 88,60,000/- have been already taxed in the hands of Sh. Anil Mittal. The assessee/AR could not produce any evidence like copy of statement u/s 132(4) of the Act claim to have been given by Sh. Anil Mittal or other Directors which may show that said cash was owned by Sh. Anil Mittal. Further, the CIT(A) has also perused the assessment order in the case of Sh. Anil Mittal and found that nowhere in Page No. 83 of LP 15, discussed by the A.O. and even in the calculation of peak credit also, said page was not taken into consideration. Thus, the entries found in the seized document relating to the assessee were not owned up by Sh. Anil Mittal and also the assessee has not produced any document to show that the amount in dispute have already been taxed in the hands of Sh. Anil Mittal. Therefore, we finding no merit in the Ground No. 4 of the assessee, accordingly, we dismiss Ground No. 4 of the Assessee. 14. In the result, Appeal filed by the assessee is dismissed. Order pronounced in open Court on 27 th September, 2023 Sd/- Sd/- (G.S.PANNU) (YOGESH KUMAR U.S.) PRESIDENT JUDICIAL MEMBER Dated: 27/09/2023 ITA No.3942/Del/2019 Krish Packaging Pvt. Ltd. vs. DCIT Page 9 of 9 Pk/R.N, Sr ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI