Ujala Sales Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 4701/DEL/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8188 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 28-01-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 27-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJIV RANKA
• Keywords: Accommodation entries
• Section: 133(6); 147; 68; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 4701/DEL/2011 AY: 20 03-04 UJALA SALES PVT. LTD., VS INCOME TAX OFFIC ER, C-127, PREET VIHAR, WARD 18(2), NEW DELHI. NEW DELHI. (PAN: AAACU0476F) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.S. ANAND, CA RESPONDENT BY : SHRI RAJIV RANKA, SR. DR DATE OF HEARING: 28.01.2016 DATE OF PRONOUNCEMENT: 18.04.2016 ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THE PRESENT APPEAL IS PREFERRED BY THE ASSESSEE AGA INST THE IMPUGNED ORDER PASSED BY THE LD.CIT(A)-XXI, NEW DEL HI FOR ASSESSMENT YEAR 2003-04 WHEREIN, BY ORDER DATED 23. 8.2011, THE FIRST APPELLATE AUTHORITY HAS UPHELD THE ADDITION O F RS. 5.00 LACS U/S 68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CAL LED THE ACT). 2. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE COMPANY HAD FILED ITS RETURN OF INCOME DECLARING A TOTAL INCOME OF RS. 4,02,170/-. THE RETURN WAS DULY PROCESSED U/S 143(1) OF THE ACT ON 23.03.2004. LATER ON, A NOTICE U/S 148 OF T HE ACT DATED I.T.A. NO. 4701/DEL/2011 ASSESSMENT YEAR: 2003-04 2 5.3.2010 WAS ISSUED. REASONS FOR REOPENING THE CAS E U/S 147 OF THE ACT WERE RECORDED AS UNDER:- A SPECIAL REPORT FROM INVESTIGATION WING, NEW DE LHI HAS BEEN RECEIVED THROUGH CIT DELHI VI, NEW DELHI. AS P ER INFORMATION THE ASSESSEE COMPANY, M/S UJALA SALES ( P) LTD NEW DELHI HAS BEEN BENEFICIARY OF ACCOMMODATION ENTRIES BEING PROVIDED BY THE CERTAIN ENTRY OPERATO RS. ON THE BASIS OF THE INFORMATION CHART FORWARDED BY THE DIT (INV), NEW DELHI IT IS SEEN THAT THE ASSESSEE IS IN VOLVED IN THE FOLLOWING, BOGUS TRANSACTIONS DETAILED IN TH E CHART FORWARD BY THE DIT (INV), NEW DELHI. BENEFICIARY NAME M/S UJALA SALES (P) LTD. BENEFICIARY BANK NAME STATE BANK OF INDIA BENEFICIARY BANK BRANCH KRISHNA NAGAR VALUE OF ENTRY TAKEN RS. 5,00,000/ - INSTRUMENT NO. BY WHICH ENTRY TAKEN 022652 (CH.NO.) DATE ON ENTRY WAS TAKEN 22.11.2002 NAME OF THE A/C HOLDER OF ENTRY GIVING A/C M/S SUNRISE DEVELOPERS (P) LTD. BANK OF ENTRY GIVEN BANK IDBI BANK A/C NO. ENTRY GIVING ACCOUNT 3513 3. THE ASSESSING OFFICER WAS OF THE OPINION THAT TH E AMOUNT OF RS. 5.00 LACS RECEIVED FROM M/S SUNRISE DEVELOPERS (P) LTD. WAS AN ACCOMMODATION ENTRY BECAUSE THE ACCOUNT FROM WHI CH THE AMOUNT WAS TRANSFERRED WAS OPENED ON 29.07.2002 AND WAS CLOSED ON 17.12.2003. THE ASSESSING OFFICER ALSO O BSERVED THAT THE DAILY CLOSING BALANCE OF THE ACCOUNT HAD MOSTLY REMAINED BELOW RS. 1000/- ONLY. IT IS ALSO SEEN FROM THE ASS ESSMENT ORDER THAT INFORMATION U/S 133(6) OF THE ACT WAS CALLED F ROM M/S I.T.A. NO. 4701/DEL/2011 ASSESSMENT YEAR: 2003-04 3 SUNRISE DEVELOPERS (P) LTD. I.E. THE DEPOSITOR CO MPANY BUT THE LETTER CALLING FOR INFORMATION WAS RETURNED UN-SERV ED WITH THE REMARK LEFT. IT IS ALSO SEEN FROM THE ASSESSMENT ORDER THAT THE ASSESSEE WAS REQUIRED BY THE ASSESSING OFFICER TO P RODUCE THE DIRECTOR/S OF M/S SUNRISE DEVELOPERS (P) LTD. ALONG WITH RELEVANT BOOKS OF ACCOUNT AND DOCUMENTS FOR EXAMINATION ON O ATH. HOWEVER, SINCE NONE COULD BE PRODUCED, THE ASSESSIN G OFFICER PROCEEDED TO CONCLUDE THAT THE DEPOSITOR COMPANY WA S GIVEN THIS AMOUNT BY THE ASSESSEE COMPANY TO CAMOUFLAGE THE TR ANSACTION AS A RECEIPT AGAINST ALLOTMENT OF SHARES AND THAT T HE GENUINENESS OF THE TRANSACTION COULD NOT BE PROVED. ACCORDINGLY, THE ASSESSING OFFICER TREATED THE AMOU NT AS UNEXPLAINED AND ADDED IT BACK U/S 68 OF THE ACT. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE FIRST APPELLATE AUTHORITY WHICH WAS DISMISSED ON THE PREM ISE THAT THE CREDITWORTHINESS OF THE DEPOSITOR COULD NOT BE PROV ED. 5. NOW, THE ASSESSEE IS IN APPEAL BEFORE US AND HA S RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE REASSESSMENT ORDER PASSED U/S 143(3)/148 ON 30.11.2010 DESERVES TO BE QUASHED ON VARIOUS FACTUAL & LEGAL GROUNDS, INCLUDING THE ISSU ES RELATING TO ILLEGALITY IN INITIATION OF PROCEEDINGS U/S 147 AND LIMITATION. I.T.A. NO. 4701/DEL/2011 ASSESSMENT YEAR: 2003-04 4 2. THAT THE ADDITION OF RS. 5,00,000/- U/S 68 OF T HE I.T. ACT 1961, ON A/C OF SHARE APPLICATION MONEY RECEIVED FROM M/S SUNRISE DEVELOPERS (P) LTD., [NEW NAME BEING TARANGI CONTRACTORS & DEVELOPERS PVT.LTD] THROUGH BANKING CHANNEL, VIDE RE-ASSESSMENT ORDER PASSED U/S 143(3)/148 OF THE I.T. ACT 1961, O N 30.11.2010, IS ARBITRARY, UNJUST & ILLEGAL ON VARIO US FACTUAL / LEGAL GROUNDS. 3. THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.5,00,000/-, AS MADE BY THE ID. A.O. U/S 68 OF THE I.T. ACT 1961, ON A/C OF SHARE APPLICATIO N MONEY RECEIVED BY THE ASSESSEE FROM M/S SUNRISE DEVELOPERS (P) LTD. [NEW NAME BEING TARANGI CONTRACTORS & DEVELOPERS PVT LTD], THE LD. A.O. HAD MADE SUCH ADDITION ON THE GROUND THAT 'THE GENUINENESS OF THE TRANSACTION OF THE CRE DITOR HAS NOT BEEN PROVED ', BY IGNORING THE DOCUMENTARY EVIDENCES. ON THE OTHER HAND THE LD. CIT(A) HAS CONFIRMED SUCH ADDITION BY STATING THAT ' CREDITWORTHINESS OF THE SHARE-HOLDER HAS NOT BEEN PROVED AND A.O. AFTER ANALYZING THE BANK STATEMENT OF THE SHAREHOLDER HAS RIGHTLY HELD THAT THE CREDITWORTHINESS OF THE CREDITOR WAS NOT PROVED', WHILE IT WAS NOT THE CASE OF THE LD. A.O. 4. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW , CHARGING OF INTEREST U/S 234-B OF THE I.T. ACT 1961 , WAS UNJUSTIFIED AND ILLEGAL. 5. THAT THE LD. CIT(A) HAS NOT DECIDED THE ISSUE RELATING TO INTEREST U/S 234-D OF THE INCOME TAX ACT, 1961. 6. AT THE OUTSET, THE LD. AR SUBMITTED THAT GROUND NO. 1 CHALLENGING THE INITIATION OF REASSESSMENT PROCEEDI NGS WAS NOT BEING PRESSED. HENCE, THIS GROUND IS DISMISSED AS NOT PRESSED. 7. THE LD. AR SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF, THE ASSESSEE HAD FURNISHED THE PARTICULARS OF THE DEPOSITOR M/S SUNRISE DEVELOPERS (P) LTD. AND V ARIOUS I.T.A. NO. 4701/DEL/2011 ASSESSMENT YEAR: 2003-04 5 DOCUMENTARY EVIDENCES TO SUPPORT ITS CLAIM OF HAVIN G RECEIVED RS. 5.00 LACS TOWARDS SHARE CAPITAL. THE LD. AR AV ERRED THAT ON THE RECEIPT OF INFORMATION FROM THE ASSESSING OFFIC ER THAT THE DEPOSITOR HAD NOT COMPLIED WITH THE INFORMATION SOU GHT UNDER SECTION 133(6) OF THE ACT, THE ASSESSEE HAD CONTACT ED THE DEPOSITOR COMPANY AND IT WAS REVEALED THAT THE NOTI CE U/S 133(6) HAD NOT BEEN RECEIVED BY THE DEPOSITOR COMPA NY. THE LD. AR ALSO SUBMITTED THAT THE APPARENT REASON FOR THE NON-SERVICE OF THE NOTICE WAS THAT THE NAME HAD BEEN WRONGLY ME NTIONED ON THE NOTICE AS M/S SUNRISE DEVELOPMENT PVT. LTD. I NSTEAD OF THE CORRECT NAME M/S SUNRISE DEVELOPERS (P) LTD. THE LD. AR FURTHER SUBMITTED THAT THE ASSESSING OFFICER WAS AL SO DULY INFORMED THAT THE DIRECTORS OF THE DEPOSITOR COMPAN Y WERE OUT OF STATION AND HENCE COULD NOT ATTEND. HOWEVER, THE A SSESSING OFFICER DID NOT ENFORCE THE ATTENDANCE OF THE DIREC TORS ON ANY OTHER FUTURE DATE AND PASSED THE ASSESSMENT ORDER S TRAIGHTAWAY BY HOLDING THAT THE GENUINENESS OF THE TRANSACTION COULD NOT BE PROVED. THE LD. AR SUBMITTED THAT THE FOLLOWING IN FORMATION HAD BEEN PROVIDED BY THE DEPOSITOR COMPANY TO THE ASSES SING OFFICER VIDE LETTER DATED 25.11.2010 WHICH WAS NOT CONSIDER ED BY THE ASSESSING OFFICER AT ALL:- I.T.A. NO. 4701/DEL/2011 ASSESSMENT YEAR: 2003-04 6 A) COPY OF COMPANY SECRETARY REPORT CONFIRMING VID E PARA 28 CHANGE IN NAME FROM SUNRISE DEVELOPERS PVT. LTD. TO TARANGINI CONTRACTORS & DEVELOPERS PVT. LTD FOR WHI CH FORM 1A WAS FILED ON 23 7.2009 WITH ROC. B) COPY OF ANNUAL RETURN FILED VIDE R.NO.498727 WIT H ROC DELHI FOR BALANCE SHEET AS ON 31.03.2003. C) COPY OF AUDITED BALANCE SHEET AND PROFIT & LOSS A/C AS ON 31.03.2003. D) COPY OF EXTRACT FROM SITE OF ROC CONFIRMING EXI STENCE OF TARANGINI CONTRACTORS & DEVELOPERS PVT. LTD. (CIN N O.- U74899DLL989PTC035078) E) COPIES OF LEDGER ACCOUNTS IN OUR ACCOUNT BOOKS CONFIRMING ISSUE OF CH.NO.- 022652 DT. 21.11.2002 DRAWN ON IDB I BANK AS APPLICATION MONEY FOR ISSUE OF SHARES BY UJALA S ALES PVT. LTD. AND FURTHER ISSUE OF 50,000 NOS. SHARES OF RS 10 EACH FULLY PAID ON 03.12.2002 FOR TOTAL RS. 500000/-. F) OUR CONFIRMATION AS REGARDS ISSUE OF 50,000 SHA RES OF RS. 10 EACH BY UJALA SALES PVT. LTD. G) PHOTOCOPY OF RELEVANT PORTION OF BANK ACCOUNT W ITH IDBI BANK EXPLAINING SOURCE OF RS.5,00,000/- AND ISSUE O F CH.NO.022652 DT. 21.11.20D2 FOR RS. 5,00,000/- IN F AVOUR OF UJALA SALES PVT.LTD. H) PHOTOCOPY OF ACKNOWLEDGEMENT IN FORM NO-1 OF IN COME TAX RETURN FOR A.Y 2003-04 FILED ON 02.12.2003. 8. IT WAS FURTHER STATED THAT THE LD. CIT (A) HAD D ISMISSED THE ASSESSEES APPEAL BY HOLDING THAT THE CREDITWOR THINESS OF I.T.A. NO. 4701/DEL/2011 ASSESSMENT YEAR: 2003-04 7 THE DEPOSITOR COULD NOT BE PROVED WITHOUT ALLOWING ANY OPPORTUNITY TO THE ASSESSEE ON THIS ALTOGETHER NEW GROUND. THE LD. AR SUBMITTED THAT THE ADDITION DESERVES TO BE DELETED. 9. THE LD. DR SUBMITTED THAT BOTH THE ASSESSING O FFICER AND THE LD. CIT (A) HAVE PASSED WELL-REASONED ORDER S AND NO INTERFERENCE WAS CALLED FOR. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALSO PERUSED THE RECORDS. THE LD. AR HAS DRAWN OUR ATTE NTION TO THE PAPER BOOK WHEREIN THE VARIOUS DOCUMENTS FORWAR DED BY THE DEPOSITOR COMPANY TO THE ASSESSING OFFICER OF T HE ASSESSEE HAVE BEEN PLACED AT PAGES 1 TO 10. IT IS SEEN THAT THE DEPOSITOR COMPANY HAS GIVEN A CONFIRMATION OF T HE INVESTMENT IN SHARES ALONG WITH A COPY OF THE BANK ACCOUNT, COPY OF THE INCOME TAX RETURN ALONG WITH AUDITED BA LANCE SHEET. A LEDGER ACCOUNT OF THE ASSESSEE COMPANY IN THE BOOKS OF ACCOUNT OF THE DEPOSITOR COMPANY HAS ALSO BEEN PROVIDED WHICH ACKNOWLEDGES THAT SHARES HAD BEEN AL LOTTED AGAINST THE DEPOSIT ON 3.12.2002. IT IS SEEN THAT THE LD. CIT (A) HAS NOWHERE CONSIDERED THESE EVIDENCES ALTHOUGH THE ASSESSEE HAD MADE THE SUBMISSION REGARDING THE SAME BEFORE I.T.A. NO. 4701/DEL/2011 ASSESSMENT YEAR: 2003-04 8 HIM ALSO AS IS VERY MUCH EVIDENT FROM THE REPRODUCT ION OF THE ASSESSEES SUBMISSIONS IN THE IMPUGNED ORDER. 11. IT IS ALSO SEEN THAT THE AO HAS NOT VERIFIED T HE DETAILS FURNISHED BY THE ASSESSEE AND THE INCOME TAX RECORD S OF THE INVESTING COMPANY. ACCORDINGLY, WE DEEM IT FIT TO R ESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR PRO PER VERIFICATION OF THESE DETAILS AFTER GIVING THE ASSESSEE DUE OPPORTU NITY TO PRESENT ITS CASE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 18.04. 2016. SD/- SD/- (R.S. SYAL) (SUDHANSHU SRIVASTAVA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 18 TH APRIL, 2016 GS COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER ASSTT. REGISTRAR