DCIT, New Delhi V. M/s. True Blue Finlease Ltd., New Delhi

ITA 4576/DEL/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6824 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 23-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 02-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y S KAKKAR
• Assessee Lawyers: AKASH CHUGH
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Opportunity of being heard
• Section: 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER I.T.A. NO. 4576/DEL/2013 (ASSESSMENT YEAR 2007-08) A N D I.T.A. NO. 4732/DEL/2013 (ASSESSMENT YEAR 2008-09) APPELLANT BY : MS. Y. S. KAKKAR, CIT, DR. RESPONDENT BY : SH. AKASH CHUGH, CA DATE OF HEARING : 23.01.2017 DATE OF PRONOUNCEMENT: 14.02.2017 ORDER PER BEENA A. PILLAI, JM: 1. THESE ARE APPEALS FILED BY ASSESSEE AS WELL AS REVE NUE AGAINST ORDER DATED 01.04.2013 PASSED BY LD. CIT (A ) XXXIII, D C IT CENTRAL CIRCLE-(4), ROOM NO. 318, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI (APPELLANT) VS. TRUE BLUE FINLEASE LTD. B-53, B-1, COMMUNITY CENTRE, JANAKPURI, NEW DELHI GIR/PAN : AAACT4280C (RESPONDENT) TRUE BLUE FINLEASE LTD. B-53, B-1, COMMUNITY CENTRE, JANAKPURI, NEW DELHI GIR/PAN : AAACT4280C (APPELLANT) VS. D C IT CENTRAL CIRCLE-(4), ROOM NO. 318,ARA ENTRE, JHANDEWALAN EXTENSION, NEW DELHI (RESPONDENT) ITA NO. 4576 & 4732/DEL/2013 (AY 2007-08 & 2008-09) PAGE 2 OF 6 NEW DELHI FOR ASSESSMENT YEAR 2007-08 AND 2008-09 O N THE FOLLOWING GROUNDS OF APPEAL: ITA NO. 4576/DEL/2013 FOR A.Y 2007-08 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT SHARE CAPITAL CONTRIBUTED BY THE PROMOTER'S FAMILY MEMBERS IS GENUINE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (A) HAS ERRED IN NOT APPRECIATING THE FACTS OF THE CASE THAT THE ADDITIONS WERE MADE IN THE HANDS OF A LL THE FAMILY MEMBERS ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES, AS THE SAME COULD NOT BE VERIF IED BY THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDIN GS U/S 153A OF THE INCOME TAX ACT, 1961, 3. THE ORDER OF THE CIT (A) IS ERRONEOUS AND IS N OT TENABLE ON FACTS AND IN LAW, 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AM END ANY/ ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. ITA NO. 4732/DEL/2013 FOR A.Y 2008-09 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. FIRST APPELLATE AUTHORITY HAS GROSSLY ERRED IN DIRECTING THE LD. ASSESSING AUTHORITY TO VERIFY THE LIST OF SHAREHOLDERS AND SHARE APPLICANTS DURING THE YEAR UNDER CONSIDERATION IN RESPECT OF INVESTMENT OF RS. 69,47,000/- IN SHAREHOLDER'S FUND OF APPELLANT COMPANY MADE BY M/S HBN DAIRIES & ALLIED LIMITED, INSTEAD OF DIRECTLY DELETING THE ADDITIONS OF AFORE SAID AMOUNT OF RS. 69,47,000/-, WHEN IT WAS CLEARLY EVID ENT ITA NO. 4576 & 4732/DEL/2013 (AY 2007-08 & 2008-09) PAGE 3 OF 6 FROM THE RECORDS AVAILABLE BEFORE HIM THAT THE FUND S FOR THE AFORESAID AMOUNT HAD FLOWN FROM M/S HBN DAIRIES & ALLIED LIMITED OUT OF ITS DULY EXPLAINED SOURCES AND IS DULY RECORDED IN ITS BOOKS OF ACCOUNTS AS INVESTMENTS IN HBN DAIRIES & ALLIED LTD. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. FIRST APPELLATE AUTHORITY HAS GROSSLY ERRED IN AFFIRMING THE ADDITION OF BALANCE AMOUNT OF 20,53,000/- MADE BY THE LD. ASSESSING AUTHORITY ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHAREHOLDER'S FUNDS, WHICH IS GROSSLY INJUDICIOUS, AGAINST THE FA CTS AND BAD AT LAW. 3. THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ANY GROUNDS OF APPEAL. 2. ON PERUSAL OF ASSESSMENT ORDER PASSED FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION IT IS OBSERVED THAT A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF T HE ACT WAS CARRIED OUT ON HBN GROUP. DURING THE COURSE OF SEAR CH AND SEIZURE OPERATION AT VARIOUS PREMISES OF GROUP, LOO SE PAPERS AND OTHER DOCUMENTS WERE FOUND AND SEIZED. DURING T HE YEARS UNDER CONSIDERATION, IT WAS OBSERVED THAT THE GROUP WAS INVOLVED IN OBTAINING ENTRIES OF SHARE CAPITAL IN V ARIOUS GROUP COMPANIES NAMELY M/S COMPLETE NEWS AND ENTERTAINMEN T BROADCASTING PVT. LTD, M/S.HBN ENTERTAINMENT AND BROADCASTING PVT. LTD., M/S HBN HOUSING AND FINANCE PVT. LTD., ALONG WITH ASSESSEE, AND PAPERS RELATING TO T HEM WERE FOUND AND SEIZED. LD.AO REJECTED THE SUBMISSIONS AN D THE CONTENTIONS ADVANCED BY ASSESSEE AND ADDED ENTIRE S HARE ITA NO. 4576 & 4732/DEL/2013 (AY 2007-08 & 2008-09) PAGE 4 OF 6 PREMIUM AMOUNT TO THE INCOME OF ASSESSEE AS INCOME FROM UNDISCLOSED SOURCES, UNDER PROVISIONS OF SECTION 68 OF THE ACT. 3. AGGRIEVED BY THE ORDER OF LD. AO ASSESSEE PREFERRE D APPEALS BEFORE LD.CIT (A). ON PERUSAL OF ORDER PASS ED BY LD. CIT(A), IT IS OBSERVED THAT LD.CIT(A) HAS RESTORED THE ISSUE BACK TO THE FILE OF LD. AO TO VERIFY THE CLAIM OF S HARE APPLICANT/HOLDERS, BEING THE FAMILY MEMBERS. HE HOW EVER CONFIRMED THE ADDITION MADE BY ASSESSING OFFICER, O N ACCOUNT OF SHARE CAPITAL AND FIXED DEPOSIT EXCEPT FOR INVES TMENTS MADE BY FAMILY MEMBERS AS SHARE CAPITAL. 4. AGGRIEVED BY ORDER OF LD. CIT (A) FOR BOTH ASSESSM ENT YEARS UNDER CONSIDERATION, ASSESSEE AS WELL AS REVE NUE PREFERRED AN APPEAL BEFORE THIS TRIBUNAL. 5. AT THE OUTSET LD.AR SUBMITTED THAT SIMILAR ISSUE H AS BEEN CONSIDERED IN ONE OF THE GROUP COMPANIES OF AS SESSEE, IN CASE OF M/S. COMPLETE NEWS AND ENTERTAINMENT BROADC ASTING PVT. LTD., FOR ASSESSMENT YEAR 2007-08 IN ITA NO. 4731/DEL/2013, WHEREIN THIS TRIBUNAL VIDE ORDER DAT ED HAS DECIDED AS UNDER: LD. CIT(A) INSTEAD OF OBTAINING A REMAND REPORT FRO M THE AO AS PER THE STATUTORY MANDATE IN ORDER TO CONCLUSIVELY DECIDE THE ISSUE INSTEAD RESTORED THE ISSUE TO THE AO CONTRARY TO THE STATUTORY MANDATE. IN VIEW OF THIS OBVIOUS STATUTORY VIOLATION, THE IMPUG NED ORDER CANNOT BE UPHELD. THE ISSUES RAISED ARE INTER - LINKED AND THE FINDING ARRIVED AT IT IS SEEN IS WIT HOUT ITA NO. 4576 & 4732/DEL/2013 (AY 2007-08 & 2008-09) PAGE 5 OF 6 CONSIDERING THE RELEVANT MATERIAL ON RECORD. ACCORDINGLY, IN VIEW OF THE AFOREMENTIONED FACTUAL POSITION; LEGAL MANDATE AND CONSIDERING THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH, WE DEE M IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ISSUES BACK TO THE FILE OF THE LD. CIT( A) WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANC E WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 6. RESPECTFULLY FOLLOWING THE SAME WE DEEM IT APPROPR IATE TO SET ASIDE THE IMPUGNED ORDER BACK TO THE FILE OF LD . CIT (A) WITH A DIRECTION TO PASS A SPEAKING ORDER IN ACCORD ANCE WITH LAW AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. IN THE RESULT THE GROUNDS RAISED BY ASSESSEE AS WEL L AS REVENUE IN THE RESPECTIVE APPEALS FOR THE ASSESSMEN T YEARS UNDER CONSIDERATION STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH FEBRUARY, 2017. SD/- SD/- (R. K.PANDA) (BEENA A. PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 14.02.2017 @M!T COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI.