Shokeen Realtors Pvt. Ltd., New Delhi V. ITO ward 23(2), New Delhi

ITA 4420/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0087 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 15-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AMANPREET
• Keywords: Reopening of assessment; Tangible material; Accommodation entries; Competent authority; Reassessment proceedings; TDS
• Section: 69C; 143(3); 142(1); 143(1); 143(2); 139(1); 147; 69; 148; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI [THROUGH VIDEO CONFERENCING] BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.4420/DEL/2019 ASSESSMENT YEAR: 2008-09 M/S SHOKEEN REALTORS PVT. LTD., INCOME TAX OFFICER, C8/1A, VASANTVIHAR, VS. WARD-23(2), NEW DELHI NEW DELHI-110009 PAN-AAHCS0999J (ASSESSEE) (RESPONDENT) REVENUE BY : SH. SATYAJEET GOEL, C.A. ASSESSEE BY : MS. AMAN PREET, SR. DR ORDER PER H.S. SIDHU, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 25.03.2019 PASSED BY THE LD. CIT(A)-31, NEW DELHI RELATING TO ASSESSMENT YEAR 2008-09ON THE FOLLOWING GROUNDS:- 1(I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE RE-ASSESSMENT PROCEEDINGS U/S 147 EVEN THOUGH THE REASONS ARE VAGUE, UNSUBSTANTIATED AND NOT BASED ON ANY TANGIBLE MATERIAL AND REQUISITE APPROVAL IN TERMS OF SECTION 151 OF INCOME TAX ACT, 1961. (II) THAT THE REASONS TO BELIEF ARE MERELY ON THE BASIS OF INFORMATION FROM INVESTIGATION WING AND IN ABSENCE OF ANY INDEPENDENT APPLICATION OF MIND OR LIVE NEXUS WITH ANY ADVERSE TANGIBLE MATERIAL, THE NOTICE U/S 148 IS ILLEGAL AND BAD IN LAW. 2 (III) THAT THE REASONS ARE FACTUALLY INCORRECT AND CONTAINS DUPLICATE ENTRIES AND HAVING BEEN RECORDED WITHOUT PROPER APPLICATION OF MIND, THE SAME ARE INVALID AND FAILS TO PROVIDE VALID JURISDICTION U/S 148 OF THE INCOME TAX ACT, 1961. (IV) THAT IN ANY CASE, IN ABSENCE OF DISPOSAL OF OBJECTIONS TO NOTICE U/S 148 THROUGH SPEAKING ORDER, THE ENTIRE REASSESSMENT PROCEEDINGS IS IN DISREGARD TO PRINCIPLE LAID DOWN SUPREME COURT IN THE CASE OF G.K.N. DRIVESHAFTS 259 ITR 19AND NOT SUSTAINABLE UNDER THE LAW. 2. THAT THE ASSESSING OFFICER HAVING FAILED TO ISSUE AND SERVE MANDATORY NOTICE U/S 143(2) OF THE ACT, THE REASSESSMENT PROCEEDINGS U/S 147 SUFFERS FROM INCURABLE JURISDICTIONAL DEFECT AND ARE ILLEGAL AND VOID-AB-INITIO. 3(I) THAT IN ANY CASE, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION OF RS.45,34,228/- U/S 69C OF THE ACT BEING PURCHASES MADE BY THE APPELLANT EVEN THOUGH SAME IS SUPPORTED FROM RELEVANT DOCUMENTS. (II) THAT THE SOURCE OF EXPENSES BEING NOT IN DISPUTE, THE INVOCATION OF SECTION 69C AND CONSEQUENTIAL ADDITION IS ILLEGAL, IRRATIONAL AND NOT SUSTAINABLE UNDER THE PROVISIONS OF THE ACT. (III) THAT IN ANY CASE, THE ASSESSING OFFICER HAVING NOT DISPUTE THE NECESSITY OF THE CLAIM OF EXPENDITURE, THE IMPUGNED ADDITION IS ON ARBITRARY AND MECHANICAL BASIS. 4. THAT THE ORDERS OF THE LOWER AUTHORITIES ARE NOT JUSTIFIED ON FACTS AND THE SAME ARE BAD IN LAW. 5. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER OR FORGO ANY OR ALL OF THE GROUNDS AS MAY BE NECESSARY AND IN THE INTEREST OF JUSTICE. 2. ASSESSEE FILED ITS RETURN OF INCOME DECLARING AN INCOME AT RS. 6,00,988/- ON 03.09.2008. THE CASE OF THE ASSESSEE WAS REOPENED UNDER 3 SECTION 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT). ON THE INFORMATION FROM THE OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-11, JHANDEWALAN EXTENSION, NEW DELHI DATED 1.11.2013. IT WAS INFORMED THAT THE ASSESSEE HAD INVOLVED TO PROVIDING / RECEIVING ACCOMMODATION ENTRIES TO / FROM AMR CONSTRUCTION LTD. RS. 90,08,782/- AND PRAKARTIK HOTELS PVT. LTD., RS. 8,00,225/-. AFTER COMPLETING THE FORMALITIES AS PER LAW THE ASSESSING OFFICER ISSUED A NOTICE UNDER SECTION 148 OF THE I.T. ACT TO THE ASSESSEE ON 27.03.2015. IN COMPLIANCE OF THE SAME, ASSESSEE FILED A LETTER DATED 29.04.2015 STATING THAT ORIGINAL RETURN WAS FILED UNDER SECTION 139(1) OF THE ACT DATED 03.09.2008 DECLARING INCOME OF RS. 6,988/-, BE TREATED AS INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. THE AO ALSO ISSUED NOTICE UNDER SECTION 143(1) OF INCOME TAX ACT ON 1.9.2015 IN RESPONSE TO THE SAME AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FILED HIS REPLY AND FURNISHED THE NECESSARY DETAILS. ASSESSEE VIDE LETTER DATED 9.2.2016 DENIED ANY TRANSACTION AS ALLEGED IN THE NOTICE ISSUED UNDER SECTION 148 OF THE I.T. ACT AND ALSO REQUESTED TO FILE AUDITED BOOKS OF ACCOUNTS SHOWING COMPANY AS BOOKED EXPENSES AMOUNTING TO RS. 37,34,003/- EXCLUDING TDS AS PER THE DETAILS GIVEN ALONGWITH DOCUMENTARY EVIDENCE WHICH INCLUDES LEDGER ACCOUNT, BILLS AND BANK STATEMENT AND SPECIFICALLY STATED IN THE REPLY THAT THE ACTUAL AMOUNT OF EXPENDITURE CLAIMED DURING THE YEAR IS ONLY RS. 38,02,225/- INSTEAD OF RS. 98,09,007/- ONLY. 3. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED BEFORE THE ASSESSING OFFICER THAT THERE ARE SOME CHEQUES WERE ISSUED BY THE ASSESSEE TO THE PARTY NAMELY M/S AMR CONSTRUCTION LIMITED AMOUNTING TO RS. 8,00,225/-, RS. 13,93,002/- AND RS. 15,40,776/- TOTAL AMOUNTING TO RS. 37,34,003/- PROOF OF THE SAME ASSESSEE HAS FILED BEFORE THE ASSESSING OFFICER WHICH THE ASSESSING OFFICER HAS REPRODUCED IN THE ASSESSMENT ORDER. ASSESSEE HAS ALSO FILED THE 4 STATEMENT OF ASSESSEE MAINTAINED WITH STANDARD CHARTERED BANK, GREATER KAILASH, NEW DELHI IN SUPPORT OF HIS CONTENTION AND LASTLY REQUESTED THE ASSESSING OFFICER TO DECIDE THE OBJECTION RAISED BY THE ASSESSEE AND DROP THE PROCEEDINGS UNDER SECTION 148 OF THE I.T. ACT AND ASSESSED THE INCOME AS PER RETURN. 4. AFTER CONSIDERING THE RETURN, REPLY, OBJECTION AND DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE, THE ASSESSING OFFICER DID NOT AGREE WITH THE SAME AND MADE THE ADDITION OF RS. 37,34,003/- DOUBTING THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE BY HOLDING THAT THERE WAS NO ACTUAL PURCHASES HAPPENED IN THE YEAR UNDER CONSIDERATION AND HIS TRANSACTION IS A BOGUS AND ADDED BACK IN THE INCOME OF THE ASSESSEE AS PER THE PROVISION UNDER SECTION 69(C) OF THE I.T. ACT AND ALSO ADDED RS. 8,00,225/- ON ACCOUNT OF PAYMENT AGAINST BILLS ISSUED BY PRAKARTIK HOTELS PVT. LTD. TO THE ASSESSEE FOR SUPPLY OF PLANT AND FLOWERS ETC., AND ALSO TREATED THE SAME AS BOGUS AND ADDED BACK IN THE INCOME OF THE ASSESSEE UNDER SECTION 69 OF THE ACT AND COMPLETED THE ASSESSMENT OF TOTAL INCOME OF RS. 51,35,216/- VIDE ORDER DATED 29.03.2016 PASSED UNDER SECTION 147 READ WITH SECTION 143(3) OF THE I.T. ACT, 1961. 5. AGGRIEVED BY THE SAME, ASSESSEE FILED THE APPEAL BEFORE THE LEARNED FIRST APPELLATE AUTHORITY WHO VIDE IMPUGNED ORDER DATED 25.03.2019 DISMISSED THE APPEAL FILED BY THE ASSESSEE. 6. NOW THE ASSESSEE IS AGGRIEVED AGAINST THE IMPUGNED ORDER DATED 25.03.2019 PASSED BY THE LEARNED CIT(A) FILED PRESENT APPEAL BEFORE THE TRIBUNAL. 7. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSE DREW OUR ATTENTION TOWARDS THE PAPER BOOK FILED BY THE ASSESSEE CONTAINING PAGE 1 TO 83 IN WHICH THE ASSESSEE HAS ATTACHED VARIOUS DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE ALONGWITH SOME CASE LAWS SUPPORTING THE CLAIM OF THE ASSESSEE AND 5 HE RELIED UPON THE SAME AND REQUESTED THAT THE ADDITION IN DISPUTE MAY BE DELETED BY DECLARING ASSESSMENT NULL AND VOID ON THE GROUNDS MENTIONED BY THE ASSESSEE WITH SUPPORT OF DOCUMENTARY EVIDENCE AS WELL AS THE CASE LAWS FILED BY THE ASSESSEE IN THE SHAPE OF PAPER BOOK. 8. LEARNED DR RELIED UPON THE ORDER PASSED BY THE REVENUE AUTHORITIES AND STATED THAT THE ASSESSING OFFICER HAS ISSUED A NOTICE UNDER SECTION 148 OF THE I.T. ACT ON THE BASIS OF SOME DOCUMENTARY EVIDENCE AND COMPLETED THE ASSESSMENT AFTER MAKING A DEEP ENQUIRY AND FOUND THAT THE TRANSACTION OF THE ASSESSEE IS BOGUS THEREFORE THE APPEAL FILED BY THE ASSESSEE MAY BE DISMISSED. 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES INCLUDING THE DOCUMENTARY EVIDENCE FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THE SHAPE OF PAPER BOOK CONTAINING PAGE 1 TO 83 IN WHICH THE ASSESSEE HAS ATTACHED A COPY OF NOTICE UNDER SECTION 148 OF THE I.T. ACT, COPY OF REASONS RECORDED BY THE ASSESSING OFFICER BEFORE ISSUING NOTICE UNDER SECTION 148 OF THE I.T. ACT, COPY OF APPROVAL OBTAINED UNDER SECTION 151 OF THE I.T. ACT, COPY OF REMAND REPORT DATED 27.08.2018 ALONGWITH COPY OF ORDERSHEET AND REJOINDER FILED THEREON, COPY OF OBJECTION FILED DATED 12.08.2015, COPY OF LETTER FILED BEFORE THE AO DATED 13.01.2016, DOCUMENT IN SUPPORT OF M/S AMR CONSTRUCTIONS LIMITED I.E. LEDGER ACCOUNT IN THE BOOKS OF THE APPELLANT, GENERAL VOUCHER IN THE BOOKS OF THE APPELLANT AND COPY OF BILLS. ASSESSEE HAS ALSO ATTACHED DOCUMENTS IN RESPECT OF M/S PRAKARTIK HOTEL PRIVATE LIMITED THAT LEDGER ACCOUNT AND THE BOOK OF THE APPELLANT. ASSESSEE HAS ALSO ATTACHED A COPY OF EXTRACT OF BANK STATEMENT AND SOME CASE LAWS SUPPORTING THE CASE OF THE ASSESSEE. 11.WE HAVE GONE THROUGH THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE ALONGWITH THE CASE LAWS AND WE ARE OF THE VIEW THAT ASSESSING OFFICER ISSUED 6 A NOTICE DATED 27.03.2015 TO THE ASSESSEE UNDER SECTION 148 OF THE I.T. ACT, 1961, IN WHICH THE AO HAS STATED THAT INCOME OF RS. 98,09,007/- IN RESPECT OF WHICH ASSESSEE ARE ASSESSABLE / CHARGEABLE TO TAX FOR THE ASSESSMENT YEAR 2008-09 AS ESCAPE ASSESSMENT WITHIN THE MEANING OF UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 AND DIRECTED THE ASSESSEE TO FILE ITS REPLY WITHIN 30 DAYS FROM THE SERVICE OF THIS NOTICE. WE HAVE ALSO PERUSED THE REASONS RECORDED BY THE ASSESSING OFFICER FOR ISSUING NOTICE UNDER SECTION 148 OF THE I.T. ACT IN WHICH THE AO HAS STATED THAT THE ASSESSEE HAS TAKEN AN ACCOMMODATION ENTRIES FROM EIGHT COMPANIES AMOUNTING TO RS. 98,09,007/-. THE ASSESSING OFFICER HAS ALSO SOUGHT THE APPROVAL DATED 28.03.2015 FROM THE JOINT COMMISSIONER OF INCOME TAX, RANGE-23, NEW DELHI HAS STATED YES I AM SATISFIED THAT IT IS A FIT CASE FOR ISSUE OF NOTICE UNDER SECTION 148 OF I.T. ACT, 1961. WE HAVE ALSO PERUSED THE ORDERSHEET OF THE ASSESSING OFFICER DATED 12.08.2015 IN WHICH THE ASSESSING OFFICER HAS STATED THAT THE ASSESSEES COUNSEL APPEARED AND FILED HIS OBJECTION LETTER ON REOPENING OF ASSESSMENT UNDER SECTION 147 FOR THE ASSESSMENT YEAR 2008-09. THE AO HAS ALSO ISSUED NOTICE UNDER SECTION 142(1) FOR 03.12.2015 VIDE ORDERSHEET DATED 20.11.2015. ON 03.12.2015, THE REPRESENTATIVE OF THE ASSESSEE APPEARED AND AO STATED THAT THE ASSESSEES REPRESENTATIVE HAS ALREADY FILED OBJECTION WHERE HE SOUGHT RECORDED STATEMENT OF THE ENTRY PROVIDER ALONGWITH THEIR BALANCE-SHEET, COPY OF ACCOUNT ITR ETC., AS THIS OFFICE ONLY RECEIVED COPY OF RECORD OF STATEMENT SAME IS HANDED OVER TO THE AR FOR PERUSAL AND FURTHER OBJECTION IF ANY COPY OF RECORDED REASONS AND APPROVAL OF THE HIGHER AUTHORITIES ARE ALREADY HANDED OVER THROUGH THE ASSESSEE. THE OBJECTION FILED BY THE ASSESSEE ARE ALREADY DISPOSED AND THE CASE IS ADJOURNED FOR 17.12.2015 BUT ON 17.12.2015 NONE APPEARED FOR THE PARTIES AND AO ISSUED SHOW CAUSE NOTICE UNDER SECTION 271(1)(B) FOR 7.1.2016 AND ON 7.1.2016 THE 7 AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FILED REPLY OF NOTICE AGAIN CHALLENGED THE REOPENING OF THE ASSESSMENT UNDER SECTION 148 OF THE I.T. ACT BY CITING VARIOUS COURT JUDGMENTS. LEARNED ASSESSING OFFICER VIDE HIS ORDERSHEET ENTRY DATED 07.1.2016 CONSIDERED THE SUBMISSION OF THE ASSESSEE AND HAS HELD THAT OBJECTION IN REGARD TO THE REOPENING OF ASSESSMENT HAS ALREADY BEEN REJECTED WHILE DISPOSING HIS EARLIER OBJECTION VIDE ORDERSHEET ENTRY DATED 03.12.2015. FOR THE SAKE OF CONVENIENCE, THE ORDERSHEET ENTRY DATED 03.12.2015 BY THE ASSESSING OFFICER IS REPRODUCED AS UNDER:- 8 12. WE HAVE GONE THROUGH THE ORDER DATED 03.12.2015 QUOTED ABOVE AND WE ARE OF THE CONSIDERED VIEW THAT OBJECTION FILED BY THE ASSESSEE HAS NOT BEEN DISPOSED OF BY PASSING SPEAKING ORDER BY THE ASSESSING OFFICER WHICH IS CONTRARY TO THE PROVISION OF LAW AS WELL AS VARIOUS JUDGMENT OF THE HONBLE HIGH COURTS ESPECIALLY THE SUPREME COURT OF INDIA PASSED IN THE CASE OF G.K.N. VS. DRIVESHAFTS (INDIA) LTD. VS. INCOME TAX OFFICER AND OTHERS 259 ITR 19 (SC) IN WHICH IT WAS HELD THAT THE AO HAD TO DISPOSE OF THE OBJECTIONS, IF FILED, BY PASSING A SPEAKING ORDER BEFORE PROCEEDING WITH THE ASSESSMENTS FOR THOSE YEARS. FAILURE TO PASS SUCH AN ORDER HAS VITIATED THE IMPUGNED REASSESSMENT ORDER U/S 147 / 148 OF THE I.T. ACT WHICH DESERVES TO BE ANNULLED / QUASHED. 13. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF THE CONSIDERED VIEW THAT IN ABSENCE OF DISPOSAL OF OBJECTION FILED TO THE NOTICE UNDER SECTION 148 OF THE ACT THROUGH SPEAKING ORDER, THE ENTIRE REASSESSMENT PROCEEDINGS IS IN DISREGARD TO THE PRINCIPLE LAID DOWN BY HONBLE SUPREME COURT OF INDIA IN THE CASE OF G.K.N. VS. DRIVESHAFTS (INDIA) AS REPRODUCED ABOVE. THEREFORE, WE DECLARE THE NOTICE UNDER SECTION 148 OF THE ACT IS CONTRARY TO THE LAW, NULL AND VOID AND ASSESSMENT SUBSEQUENTLY FRAMED IS ALSO CANCELLED SIMILARLY THE IMPUGNED ORDER PASSED BY THE LEARNED FIRST APPELLATE AUTHORITY IS ALSO SUSTAINABLE IN THE EYES OF LAW, WE CANCEL THE ORDERS PASSED BY THE REVENUE AUTHORITIES BY DELETING THE ADDITION IN DISPUTE AND ACCEPTING THE APPEAL FILED BY THE ASSESSEE. 14. AS REGARDS TO THE REQUEST OF APPROVAL IN TERMS OF SECTION 151 OF THE ACT, WE HAVE ALSO PERUSED THAT THE NOTICE UNDER SECTION 148 OF THE ACT IS DATED 27.03.2015 WHEREAS THE JOINT COMMISSIONER OF INCOME TAX, RANGE-23, NEW 9 DELHI HAS GIVEN THE APPROVAL ON 28.03.2015 AS PER PAGE 5 OF THE PAPER BOOK. WE DECLARE THIS APPROVAL IS ALSO NOT AS PER LAW AND THE AO ISSUED NOTICE UNDER SECTION 148 OF THE ACT PRIOR TO THE APPROVAL BY THE COMPETENT AUTHORITY, SAME IS ALSO NOT VALID. NO DOUBT THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO ARGUED ON MERIT ON THE ADDITION OF RS. 45,34,228/- UNDER SECTION 69 OF THE ACT BEING PURCHASES MADE BY THE ASSESSEE EVEN THOUGH SAME IS QUOTED FROM RELEVANT DOCUMENTS WHICH THE ASSESSEE HAS PRODUCED IN THE SHAPE OF PAPER BOOK AND HAS ALSO ALL THE NECESSARY DOCUMENTARY EVIDENCE BEFORE THE ASSESSING OFFICER INCLUDING LEDGER ACCOUNT, BILL AND BANK STATEMENT AND PAYMENT MADE BY CHEQUE REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ASSESSING OFFICER ON THE SAME HAS NOT BROUGHT ON RECORD ANY NEGATIVE EVIDENCE AND WRONGLY SAID THAT THE BOGUS TRANSACTION WHICH IS CONTRARY TO THE EVIDENCE FILED BY THE ASSESSEE AND THE ADDITION IN DISPUTE IS ALSO LIABLE TO BE CANCELLED AND WE CANCEL THE SAME. IN THE END, AFTER CONSIDERING THE LEGAL ISSUE AS WELL AS THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE ON MERIT ALSO, WE ARE OF THE VIEW THAT ASSESSEE SUCCEEDED ON LEGAL ISSUES AS WELL AS ON MERIT ALSO THEREFORE, WE CANCEL THE IMPUGNED ORDER PASSED BY THE LEARNED FIRST APPELLATE AUTHORITY AS DISCUSSED ABOVE BY ALLOWING THE APPEAL FILED BY THE ASSESSEE. 15. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 31/12/2020. SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 31/12/2020 SH 10 COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES