ACIT, CC- 19, NEW DELHI V. NILKANTH CONCAST PVT. LTD., KUTCH

ITA 4407/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6323 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 03-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV PUNDIR
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Bogus loan
• Section: 271(1)(c); 69C; 40A(3); 143(3); 153A; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DLEHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO. 4407/DEL/2017 ASSESSMENT YEAR: 2005-06 ACIT, CENTRAL CIRCLE-19, VS. NILKANTH CONCAST PVT. LTD., NEW DELHI. C/O CARGO CONVERYARS, BBZ-N-66 ZANDA CHOWK, GANDHI DHAM, KUTCH. PAN : AABCN8500N (APPELLANT) (RESPONDENT) APPELLANT BY : SH. GAURAV PUNDIR, SR. DR RESPONDENT BY: NONE DATE OF HEARING: 17/08/2021 DATE OF ORDER : 17/08/2021 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 29.03.2017 PASSED BY T HE COMMISSIONER OF INCOME TAX (APPEALS)-25, NEW DELHI ('LD. CIT(A)') FOR THE ASSESSMENT YEAR 2005-06 IN THE CASE OF NILKANTH CON CAST PVT. LTD.,(THE ASSESSEE), REVENUE PREFERRED THIS APPEAL, CHALLENG ING THE DELETION OF PENALTY IMPOSED U/S. 271(1)(C) OF THE INCOME-TAX AC T, 1961(THE ACT FOR SHORT). 2. BRIEF FACTS, RELEVANT TO DISPOSAL OF THIS APPEAL , ARE THAT FOR THE ASSESSMENT YEAR 2005-06, ASSESSMENT OF THE ASSESSEE WAS COMPLETED U/S. 153A READ WITH SECTION 143(3) OF THE ACT BY ORDER D ATED 03.08.2007 AT AN 2 INCOME OF RS.1,90,02,249/- BY MAKING SEVERAL ADDITI ONS AS AGAINST NIL INCOME DECLARED BY ASSESSEE. SUCH ADDITIONS WERE MA DE ON ACCOUNT OF UNEXPLAINED CASH CREDITS U/S. 68 IN THE CASE OF M/S . BABA KISHORE ENTERPRISES AND OTHERS, UNEXPLAINED EXPENDITURE U/S . 69C OF THE ACT, BOGUS LOANS IN CASE OF SH. RAJPAL, DISALLOWANCE U/S . 40A(3), UNEXPLAINED INVESTMENT IN FACTORY AT VILLAGE VADALA, UNEXPLAINE D COST OF CONSTRUCTION OF FACTORY BUILDING AND UNEXPLAINED CASH IN SAVING BAN K ACCOUNT AT DELHI. IN QUANTUM APPEAL PREFERRED BY THE ASSESSEE, LD. CIT(A ) DELETED THE ADDITIONS MADE ON ACCOUNT OF BOGUS LOANS IN THE CAS E OF SHRI RAJ PAL AND UNEXPLAINED EXPENDITURE U/S. 69C AND PARTIALLY DELE TED THE ADDITIONS MADE ON ACCOUNT OF DISALLOWANCE U/S. 40A(3) AND INV ESTMENT IN THE FACTORY PREMISES AT VILLAGE VADALA. REMAINING ADDIT IONS WERE SUSTAINED BY THE LD. CIT(A). BASED ON SUCH ADDITIONS, THE ASSESS ING OFFICER INITIATED PENALTY PROCEEDINGS IMPOSING A PENALTY OF RS.3,76,0 9,923/- U/S. 271(1)(C) OF THE ACT. 3. ASSESSEE PREFERRED APPEAL AGAINST THE PENALTY OR DER BEFORE THE LD. CIT(A), WHO DELETED THE PENALTY IMPOSED, BY RELYING ON THE ORDER OF ITAT, DELHI BENCHES IN THE QUANTUM APPEAL OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR, WHEREBY THE ASSESSMENT AND ADDITIO NS MADE BY ASSESSING OFFICER STOOD QUASHED. 4. LEARNED DR, THOUGH RELIED ON THE PENALTY ORDER, BUT COULD NOT CONTROVERT THE FINDINGS OF THE LD. CIT(A) THAT ONCE THE ASSESSMENT ORDER ITSELF DOES NOT SURVIVE, THE IMPOSITION OF PENALTY ON THE BASIS OF THE CALCULATION OF TAX SOUGHT TO BE EVADED DETERMINED A S PER THE ASSESSMENT ORDER CANNOT BE SUSTAINED. 3 5. NONE IS PRESENT ON BEHALF OF THE ASSESSEE. IT CO ULD BE SEEN FROM THE RECORD THAT THE NOTICE WAS SENT TO THE ASSESSEE AT THE ADDRESS GIVEN IN MEMORANDUM OF APPEAL. IF THE ASSESSEE IS AVAILABLE IN SUCH ADDRESS, SUCH NOTICE SHOULD HAVE BEEN SERVED ON THE ASSESSEE. IF FOR ANY REASON, THE ASSESSEE IS NOT AVAILABLE THERE, IT IS FOR THE ASSE SSEE TO MAKE ARRANGEMENTS FOR SERVICE OF SUCH NOTICE BY FURNISHING THE ADDRES S WHERE THE ASSESSEE WOULD BE AVAILABLE, OR TO DELIVER IT TO SOME AUTHOR ISED PERSON, OR BY MAKING REQUEST TO THE POSTAL DEPARTMENT TO DETAIN T HE MAIL TILL THE ASSESSEE CLAIMS THE SAME. SINCE THE ASSESSEE DOES N OT SEEM TO HAVE ADOPTED ANY OF THESE METHODS, WE HAVE NO ALTERNATE BUT TO DECIDE THE APPEAL ON MERITS BASED ON THE MATERIAL AVAILABLE ON RECORD. 6. IT IS NOT IN DISPUTE THAT THE ASSESSMENT ORDER F OR THE IMPUGNED ASSESSMENT YEAR STOOD QUASHED BY THIS BENCH OF TRIB UNAL IN QUANTUM APPEAL NO. 2237/DEL/2012, FILED BY ASSESSEE, BY ORD ER DATED 14.10.2015 AND THE ADDITIONS SUSTAINED BY THE LD. CIT(A) IN QU ANTUM APPEAL STOOD DELETED. ONCE, THE ADDITIONS ON THE BASIS OF WHICH THE IMPUGNED PENALTY IS IMPOSED ARE DELETED BY THE TRIBUNAL, THE VERY BASIS OF IMPOSITION OF SUCH PENALTY STANDS COLLAPSED AND THERE REMAINS NO JUSTI FICATION TO SUSTAIN ANY PENALTY, AS DONE BY THE LD. CIT(A) IN THE IMPUGNED ORDER. WE, THEREFORE, FIND NO ILLEGALITY OR IRREGULARITY IN THE ORDER OF LD. CIT(A). CONSEQUENTLY, THE APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF MERITS. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 17 TH DAY OF AUGUST, 2021 JUST AFTER CONCLUSION OF HEARING ON VIRTUAL MO DE. SD/- SD/- (O.P. KANT) (K. NARSIMHA CHARY ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17/08/2021