ACIT, CC- 5, NEW DELHI V. NCML INDUSTRIES LTD., NEW DELHI

ITA 4276/DEL/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 1302 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 27-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Document seized; Documents seized; Set aside
• Section: 68; 143(3); 73

Judgement Text

Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”: NEW DELHI BEFORE SHRI G.S.PANNU, HON‟BLE PRESIDENT AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No. 4276 & 4277/Del/2017 (Assessment Year: 2009-10 & 2010-11) ACIT, Central Circle-5, New Delhi Vs. NCML Industries Ltd, 1818, Naya Bazar, New Delhi PAN: AAACN4248A (Appellant) (Respondent) Assessee by : None Revenue by: Shri N. C. Swain, CIT DR Date of Hearing 24/05/2022 Date of pronouncement 30/06/2022 O R D E R PER ANUBHAV SHARMA, J. M.: 1. These appeals have been preferred by the Revenue against the order dated 28.03.2017 of Ld Commissioner of Income Tax (Appeals)-25, New Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. „FAA‟) in appeal No. 73 for AY 2009-10 & appeal No. 74 for AY 2010-11, arising out of a appeals before it against the orders dated 31.03.2016 u/s 153 read with section 143(3) of the Income Tax Act, 1961 (hereinafter referred as „the Act‟) for respective AYs, passed by the ld. Assessing Officer, ACIT, Central Circle-5, New Delhi (hereinafter referred as the Ld. AO). 2. Facts are that during the course of Search, various Hard Disks were seized and the data was analyzed. On such analysis, an email received by Sh. Manish Jain from one Sh Ramit was also found where certain transactions including Cash transactions were mentioned in the attachment Page | 2 with the email. During Post-Search proceedings, the Assessee could tally only the Turnover figures and denied having any relation with any other figures mentioned in the file, which was held as not acceptable by the Assessing Officer, who observed that at the bottom of such Sheets, many transactions, mostly in Cash had been noted. It was held by Ld AO that the notings in these Sheets represent payments to the Broker in different years from Unaccounted Cash. Based on these sheets Ld AO observed that such payments in different years was Rs.20,00,000/- in FY 07-08 (AY 08-09), Rs.26,00,000/- in FY 08-09 (AY 09-10), Rs.46,62,940/- in FY 09-10 (AY 10-11) and Rs.37,50,000/- in FY 10-11 (AY 11-12). Accordingly, Rs. 1,65,00,000/- was added to the Income in AY 09-10 as deposits in Books of Account in Share Capital and Rs.26,00,000/- as Unaccounted Cash payment. Similarly for AY2010-11 Rs. 12,00,00,000/- was added to the Income in as deposits in Books of Account in Share Capital and Rs.46,62940/- as Unaccounted Cash payment. 3. The Assessee Company went in appeal against the additions of Share Capital & Premium added u/s 68 and on account of Unaccounted Cash payment before Ld CIT(A), which had allowed the appeals and now the Revenue has come in appeal raising grounds which are reproduced below from appeal for AY 2009-10 and except for different amounts involved similar are grounds in appeal for AY 2010-11. “1. That the order of the Ld. CIT (A) is not correct in law and on facts. 2. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of unexplained share capital amounting to Rs. 1,65,00,000/-. 3. On the facts and circumstances of the case, the CIT(A) has erred in ignoring the findings of inquiry conducted during search and assessment proceedings, wherein it was established that the investor companies were mere paper companies. 4. On the facts and circumstances of the case, the CIT(A) has erred in holding that the seized document which shows expenses related to share-capital is not relevant for this year. Page | 3 5. On the facts and. circumstances of the case, the CIT(A) has erred in reducing the amount of addition on account of unaccounted payment from Rs. 26,00,000/- to Rs. 2,65,507/-.” 4. When the cases were called for hearing on 24/5/2022, none appeared on behalf of the Assessee, in spite of notice being served. Ld. CIT DR has placed on record the Service Report. Having considered that as it appears that the Assessee is not interested to contest these appeals, therefore, the arguments for ld DR were heard to decide the appeal on merit. 5. On behalf of the revenue the ld DR submitted that the ld CIT(A) had fallen an error by passing a very sketchy order and discrediting the case built by the ld AO on the basis of incriminating evidence found during the search proceedings on the NCML group and of which the Assessee was a part. It was submitted that the statement of Shri Anand Sharma was ignored by the ld CIT(A) on flimsy grounds. It was submitted that the ld CIT(A) failed to hold that the seized documents reflected unexplained share capital being created through fictitious companies. 6. Giving thoughtful consideration to the matter on record it can be observed that it is not disputed that the Assessee is one of the group companies of NCML Group upon which search was made. It appears that the ld CIT(A) has led too much emphasis on the fact that the Assessee is part of NCML Group, but the Assessee was not beneficiary of four companies from which the funds for relevant year were allegedly infused by Shri Anand Sharma. The bench is of considered opinion that when the Assessee is part of NCML group and the search was conducted on the group as a whole then the onus was on the Assessee to establish that the share capital premium accounted in the books was from a valid source other than the companies operated by Shri Anand Sharma. The ld CIT(A) also failed to consider that the ld AO had rightly referred to incriminating documents recovered from hard disk which corroborated his findings that the share capital was created by accommodation entries. Also form other Page | 4 notes that payments to the Broker in different years was made from Unaccounted Cash. The tenor of findings of the ld CIT(A) indicates that he proceed into a presumption of innocence of the Assessee as to if the incriminating documents and the result of the enquiry of the ld AO were to establish the facts beyond reasonable doubt. 7. Thus, the grounds of appeal by the revenue are sustained. The appeal is allowed exparte and the orders of the ld CIT(A) for the relevant assessment years are set aside and that of Ld AO restored. Order pronounced in the open court on 30/06/2022. -Sd/- -Sd/- (G. S. PANNU) (ANUBHAV SHARMA) HON‟BLE PRESIDENT JUDICIAL MEMBER Dated: 30/06/2022 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi