Shri Govind Kripa Builders and Promoters Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 4232/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91235 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 25-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 11-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY CHADDHA
• Keywords: Unexplained cash credit; Reassessment proceedings
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.4232/DEL./2013 (ASSESSMENT YEAR : 2008-09) SHRI GOVIND KRIPA BUILDERS AND PROMOTERS VS. ITO, W ARD 8 (3), PVT. LTD., NEW DELHI. 9239, GALI NO.7, WEST ROHTASH NAGAR, SHAHDARA, DELHI 110 032. (PAN : AAICS4365H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.S. SINGHVI, ADVOCATE REVENUE BY : SHRI VIJAY CHADDHA, ADDL. CIT DR DATE OF HEARING : 25.06.2015 DATE OF PRONOUNCEMENT : 25.06.2015 O R D E R PER GEORGE GEORGE K., JUDICIAL MEMBER : THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DI RECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I X, NEW DELHI DATED 29.05.2013. THE RELEVANT ASSESSMENT YEAR IS 2008-09 . 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS FOLLO WS :- L. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, CIT (A) WAS NOT JUSTIFIED IN PASSING APPELLAT E ORDER WITHOUT GIVING PROPER AND REASONABLE OPPORTUNITY OR PROPER APPRECIATION OF FACTS. ITA NOS.4232/DEL./2013 2 2(I). THAT FURTHER CIT (A) WAS NOT JUSTIFIED IN CON FIRMING PENALTY ORDER PASSED U/S 271(1)(C) ON ACCOUNT OF AD DITION MADE U/S 68 OF THE INCOME-TAX ACT, 1961. 2(II). THAT THERE IS NO CASE OF ANY CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS AND MERELY ON ACCOUNT OF ADDITION MADE BY THE ASSESSING OFFICER, THERE CANNOT BE ANY CASE OF PENALTY U/S 271(1)(C). 3. THAT EVEN OTHERWISE THERE IS NO JUSTIFICATION FO R ANY ADDITION EVEN ON MERITS AND APPEAL OF THE ASSESSEE IS PENDING BEFORE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI. 4. THAT ORDERS OF THE LOWER AUTHORITIES ARE NOT JUS TIFIED ON FACTS AND SAME ARE BAD IN LAW. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS FOL LOWS. THE RETURN OF INCOME WAS FILED ON 23.09.2008 DECLAR ING INCOME OF RS.8,867/-. ASSESSMENT PROCEEDINGS WERE INITIATED BY THE ASSESSING OFFICER BY ISSUING NOTICE U/S 148 OF THE ACT ON 30. 03.2010 ON THE BASIS OF INFORMATION RECEIVED FROM THE DIT (INV.), NEW DELHI THAT THE ASSESSEE HAD RECEIVED ACCOMMODATION ENTRY OF RS.24 LACS DURING T HE YEAR. THE ASSESSING OFFICER OBSERVED THAT THE GENUINENESS OF THE TRANSACTION AND SOURCES OF THE SAME WERE REQUIRED TO BE EXAMINED. A CCORDINGLY, AFTER GOING THROUGH THE REPLY AND DETAILS SUBMITTED BY TH E ASSESSEE, ASSESSING OFFICER WAS OF THE VIEW THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE THE PRINCIPAL OFFICER OF THE SHARE APPLI CANT COMPANIES AND ALSO ON ACCOUNT OF FAILURE OF SHARE APPLICANTS TO APPEAR PERSONALLY AND CONFIRM TRANSACTION MADE WITH THE ASSESSEE COMPANY, THE SHA RE TRANSACTION CANNOT ITA NOS.4232/DEL./2013 3 BE TREATED AS GENUINE. THEREFORE, AN ADDITION OF RS .15 LACS MADE U/S 68 OF THE ACT AS UNEXPLAINED CREDITS IN THE BOOKS OF THE ASSESSEE. AGAINST THE ORDER OF THE ASSESSING OFFICER, ASSESSEE APPEALED B EFORE THE CIT (A), WHO VIDE IMPUGNED ORDER DATED 23.11.2012 HAD DISMISSED THE APPEAL OF THE ASSESSEE. 4. THE ASSESSING OFFICER INITIATED THE PENALTY PROC EEDINGS U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF ITS INCOME WITH A VIEW TO CONCEALMENT OF INCOME AND MADE A PENALTY OF RS.12,6 9,639/-. THE CIT (A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. AT THE OUTSET OF THE HEARING, THE LEARNED AR SUB MITTED THAT THE ASSESSING OFFICER MADE AN ADDITION OF RS.15 LACS AS UNEXPLAINED CREDITS IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE QUANTUM APPEAL WENT UP TO THE ITAT AND THE ITAT HAS QUASHED THE REASSESSMENT PROC EEDINGS U/S 148 OF THE ACT. IN VIEW OF THIS FACT, HE PLEADED THAT THE ASSESSEE SHOULD NOT BE VISITED BY PENALTY U/S 271(1)(C) OF THE ACT AND NO PENALTY CAN BE SUSTAINED. 6. ON THE OTHER HAND, LEARNED DR RELIED ON THE ORDE RS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH THE SIDES. WE FIND THAT THE TRIBUNAL HAD QUASHED THE REASSESSMENT PROCEEDINGS U/S 148 OF THE ACT IN THE QUANTUM ASSESSMENT IN ITA NO.304/DEL/2013 ORDER DATED19.12. 2014. THE RELEVANT FINDING OF THE TRIBUNALS AFORESAID ORDER READS AS FOLLOWS : ITA NOS.4232/DEL./2013 4 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS, SPECIALLY THE PAPER BOOKS FILED BY THE ASS ESSEE, ORDERS OF THE REVENUE AUTHORITIES. AS REGARDS THE E FFECTIVE GROUND IN THIS APPEAL RELATING TO REASSESSMENT PROC EEDINGS U/S. 148 OF THE I.T. ACT IS CONCERNED, THE ASSESSEE HAS REITERATED THAT REASSESSMENT PROCEEDINGS ARE ILLEGA L AND WITHOUT JURISDICTION IN THE ABSENCE OF ANY TANGIBLE EVIDENCE OR MATERIAL IN RESPECT OF ANY UNDISCLOSED INCOME AN D RECORDING OF REQUISITE SATISFACTION IN RESPECT OF A NY SUCH UNDISCLOSED INCOME. AFTER HEARING BOTH THE PARTIES ON THE ISSUE IN DISPUTE AS WELL AS AFTER GOING THROUGH THE ORDERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH ORDER D ATED 21.7.2011 PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SIGNATURE HOTELS P. LTD. VS. INCOME TAX OFFICER [2011] 338 ITR 0051 WHEREIN THE HONBLE HIG H COURT HAS HELD MATTER AS UNDER:- HELD, ALLOWING THE PETITION, THAT THE REASSESSMENT PROCEEDING WERE INITIATED ON THE BASIS OF INFORMATI ON RECEIVED FROM THE DIRECTOR OF INCOME TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS. 5 LACS DURING THE FINANCIAL YEAR 2002-03 AS STATED IN THE ANNEXURE. ACCORDING T O THE INFORMATION, THE AMOUNT RECEIVED FROM A COMPANY, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. THE REASONS DID NOT SATISFY THE REQUIREMENTS 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 EVIDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNEXURE WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, THE ASSESSING OFFICE R DID NOT APPLY HIS OWN 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 INCORPORATE D ON JANUARY 4, 1989, AND WAS ALSO ALLOTTED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER, 2001. THUS, IT COULD NOT BE HELD TO BE A FICTITIOUS PERSO N. THE REASSESSMENT PROCEEDINGS WERE NOT VALID AND WERE LIABLE TO BE QUASHED. ITA NOS.4232/DEL./2013 5 7.1 IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT ABOVE ISSUE IS EXACTLY THE SIMILAR TO THE ISSUE INV OLVED IN THE PRESENT APPEAL AND SQUARELY COVERED BY THE AFORESAI D DECISION OF THE HONBLE HIGH COURT OF DELHI. HENCE, RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT, WE DECI DE THE LEGAL ISSUE IN DISPUTE IN FAVOR OF THE ASSESSEE AND AGAINST THE REVENUE AND ACCORDINGLY QUASH THE REASSESSMENT PROCEEDINGS. THE OTHER ISSUES ARE NOT DEALT WITH AS THE SAME HAVE BECOME ACADEMIC IN NATURE. SINCE THE TRIBUNAL HAS QUASHED THE QUANTUM ASSESSME NT, THE PENALTY IMPOSED ON THE SAME HAS LOST IT SUBSTRATUM AND PENA LTY IS, THEREFORE, DELETED. IT IS ORDERED ACCORDINGLY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 25 TH DAY OF JUNE, 2015. SD/- SD/- (N.K. SAINI) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 25 TH DAY OF JUNE, 2015 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-IX, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.