Aash Trading Company Pvt. Ltd, Delhi V. ITO ward-1(2), New Delhi

ITA 4797/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2835 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Accommodation entries
• Section: 147; 68; 148

Judgement Text

ITA NO. 4797/DEL/2019 AY 2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-I, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCE) ITA NO. 4797/DEL/2019 A.Y. : 2011-12 M/S AASH TRADING COMPANY PVT. LTD., C/O SH. KAPIL GOEL, ADVOCATE, F-26/124, SECTOR-7, ROHINI, DELHI 110 085 (PAN: AAICA3739M) VS. ITO, WARD 1(2), NEW DELHI ROOM NO. 380A, C.R. BUILDING, NEW DELHI (APPELLANT) (RESPONDENT) ORDER PER H.S. SIDHU, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 30.04.2019 PASSED BY THE LD. CIT(A)-1, NEW DELHI IN RELATION TO ASSESSMENT YEA R 2011-12. ASSESSEE BY SH. KAPIL GOEL, ADVOCATE DEPARTMENT BY SH. GAYASUDDIN ANSARI, SR. DR. ITA NO. 4797/DEL/2019 AY 2011-12 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS RETURN OF INCOME DECLARING NIL INCOME ON 30.3.2012. THE CASE OF THE ASSESSEE WAS REOPENED U/S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS ACT) BY ISSUING NOTIC E U/S. 148 OF THE ACT ON 31.3.2018 WITH THE PRIOR APPROVAL OF THE C OMPETENT AUTHORITY. THE ASSESSMENT IN THIS CASE WAS COMPLETE D UNDER SECTION 148 OF THE ACT ON 17.12.2018 AT RS. 15,00,000 /-. IN THE ASSESSMENT ORDER AO MADE ADDITION U/S. 68 OF THE ACT AMOUNTING TO RS. 15,00,000/-. AGAINST THE ASSESSMENT ORDER, ASSESSEE APPEALED BEFORE THE LD. CIT(A) WHO VIDE HI S IMPUGNED ORDER 30.4.2019 HAS DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE IMPUGNED ORDER DATED 30.4.2019, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSES SEE DRAW OUR ATTENTION TOWARDS VARIOUS GROUNDS RAISED BY THE ASSESSEE, BUT HE MAINLY ARGUED THAT THE AO HAS NOT APPLIED HI S MIND AND MADE THE ADDITION IN DISPUTE. HE STATED THAT IN THE REASONS RECORDED AO HAS MENTIONED THAT RS. 75 LACS ON ACCO UNT OF ACCOMMODATION ENTRY HAS BEEN ESCAPED AND ISSUED NOT ICED U/S. 148 OF THE ACT TO THE ASSESEE. IN RESPONSE TO T HE SAME, ITA NO. 4797/DEL/2019 AY 2011-12 3 ASSESSEE FILED THE OBJECTION WHICH WAS DECIDED IN A SUMMARY MANNER. HE FURTHER STATED THAT AFTER CONSIDERING TH E REPLY FILED BY THE ASSESSEE AS WELL AS DOCUMENTARY EVIDENCES, TH E AO HAS MADE THE ADDITION OF RS. 15 LACS U/S. 68 OF THE ACT WHEREAS HE HAS ISSUED THE NOTICE U/S. 148 OF THE ACT FOR ESCAPE MENT OF INCOME OF RS. 75 LACS. HE FURTHER STATED THAT WHILE ISSUING THE NOTICE U/S. 148 OF THE ACT, AO HAS NOT APPLIED HIS M IND, THEREFORE, ASSESSMENT IN DISPUTE FRAMED BY THE AO IS BAD IN LAW AND DESERVE TO BE QUASHED. HE FURTHER STATED THAT EXACTLY UNDER THE SIMILAR FACTS AND CIRCUMSTANCES T HERE ARE VARIOUS CASES IN WHICH SIMILAR ISSUE HAS BEEN ADJU DICATED AND DECIDED IN FAVOUR OF THE ASSESEE WHEREIN THE ASSESS MENT HAS BEEN QUASHED. HE DRAW OUR ATTENTION TOWARDS THE WRIT TEN SUBMISSIONS FILED BY THE ASSESSEE IN WHICH HE HAS M ENTIONED VARIOUS CASES TO SUPPORT THE ISSUES IN DISPUTE RAI SED BY THE ASSESSEE IN THE GROUNDS OF APPEAL, BUT MAINLY HE D RAW OUR ATTENTION TOWARDS THE ISSUE ARGUED AS MENTIONED ABO VE. HE ESPECIALLY DRAW OUR ATTENTION THE CASE OF SMT. MEEN A GUPTA PASSED IN ITA NO. 7372/DEL/2012 (AY 2011-12) DECIDED VIDE ORDER DATED 10.09.2020, ITAT, DELHI SMC-I BENCH IN W HICH ON SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, THE AS SESSMENT ITA NO. 4797/DEL/2019 AY 2011-12 4 WAS QUASHED BY THE TRIBUNAL. THEREFORE, HE REQUEST ED TO QUASH THE ASSESSMENT IN THIS INSTANT CASE ALSO BY F OLLOWING THE AFORESAID RATIO. 4. ON THE CONTRARY LD. DR RELIED UPON THE ORDERS PAS SED BY THE REVENUE AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE OR DERS PASSED BY THE REVENUE AUTHORITIES AS WELL AS THE WR ITTEN SUBMISSIONS FILED BY THE LD. COUNSEL FOR THE ASSESS EE AND THE CASE LAWS RELIED UPON THEREIN. WE FIND THAT AO IN THE REASONS RECORDED HAS MENTIONED THAT RS. 75 LACS ON ACCOUNT OF ACCOMMODATION ENTRY HAS BEEN ESCAPED, HOWEVER, HE HAD ISSUED NOTICED U/S. 148 OF THE ACT TO THE ASSESEE. I N RESPONSE TO THE SAME, ASSESSEE FILED THE OBJECTION WHICH WAS DECIDED IN A SUMMARY MANNER. WE FURTHER FIND THAT AFTER CONSIDE RING THE REPLY FILED BY THE ASSESSEE AS WELL AS DOCUMENTARY EVIDENCES, THE AO HAS MADE THE ADDITION OF RS. 15 LACS U/S. 68 OF THE ACT WHEREAS AO HAS ISSUED THE NOTICE U/S. 148 OF THE ACT FOR ESCAPEMENT OF INCOME OF RS. 75 LACS WHICH IS CONTRA RY IN LAW AND SHOWS THE NON-APPLICATION OF MIND ON THE PART O F THE ASSESSEE. HENCE, ON THIS ACCOUNT, THE ASSESSMENT I N DISPUTE ITA NO. 4797/DEL/2019 AY 2011-12 5 FRAMED BY THE AO IS BAD IN LAW AND DESERVE TO BE QU ASHED. WE FURTHER FIND THAT EXACTLY UNDER THE SIMILAR FACT S AND CIRCUMSTANCES THERE ARE VARIOUS CASES, AS RELIED BY THE LD. COUNSEL FOR THE ASSESSEE, IN WHICH SIMILAR ISSUE HAS BEEN ADJUDICATED AND DECIDED IN FAVOUR OF THE ASSESEE WH EREIN THE ASSESSMENT HAS BEEN QUASHED, ESPECIALLY THE RECENT ITAT, DELHI SMC-I BENCH DECISION DATED 10.09.2020, PASSED IN THE CASE OF SMT. MEENA GUPTA PASSED IN ITA NO. 7372/DEL /2012 (AY 2011-12). THE RELEVANT PARA NO. 8.1 OF THE AFORE SAID RECENT DECISION DATED 10.09.2020 IS REPRODUCED AS U NDER:- 8.1 THE ABOVE REASONS CLEARLY SHOW THAT INFORMATION WAS SUPPLIED BY THE INVESTIGATION WING TO THE AO THAT ASSESSEE IS BENEFICIARY OF ACCOMMODATION ENTRIES RECEIVED ENTRIES RECEIVED FROM SHRI PRAMOD KUMAR JINDAL IN WHOSE CASE SEARCH WAS CARRIED-OUT ON 18.11.2015. THE A.O. RELIED UPON THE MATERIALS SUPPLIED BY THE INVESTIGATION WING TO HIM AND STATEMENTS RECORDED BY THE INVESTIGATION WING DURING ITA NO. 4797/DEL/2019 AY 2011-12 6 THE COURSE OF SEARCH. THE A.O. FORMED HIS OPINION THAT ASSESSEE RECEIVED ACCOMMODATION ENTRIES OF RS.15 LAKHS FROM M/S. TIMON INFRASTRUCTURE PVT. LTD. HOWEVER, LATER ON, IT TRANSPIRED THAT ASSESSEE HAS RECEIVED ONLY ACCOMMODATION ENTRY OF RS.5 LAKHS. THUS, THERE IS A FACTUAL ERROR IN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT. THE REASONS ARE BASED ON INCORRECT AND NON-EXISTING MATERIAL. IN THE PRESENT CASE, THE FACTS NOTED ABOVE CLEARLY SHOW THAT A.O. DID NOT VERIFY THE REPORT OF THE INVESTIGATION WING AND ACCEPTED THE SAME AS IT IS THAT ASSESSEE HAS RECEIVED ACCOMMODATION ENTRIES OF RS.15 LAKHS DESPITE IT WAS A WRONG AND INCORRECT FACT WHICH WOULD SHOW THAT A.O. DID NOT APPLY HIS MIND TO THE INFORMATION AND MATERIAL SUPPLIED BY THE INVESTIGATION, WING. THUS, THE REOPENING OF THE ASSESSMENT HAVE BEEN DONE TOTALLY WITHOUT ITA NO. 4797/DEL/2019 AY 2011-12 7 APPLICATION OF MIND AND WITHOUT ANY JUSTIFICATION. SIMILARLY, IN THE CASE OF ASSESSEE SHRI NARENDER KUMAR GUPTA, A.O. RECORDED IN THE REASONS THAT ASSESSEE RECEIVED ACCOMMODATION ENTRY OF RS.15 LAKHS, BUT, ULTIMATELY, IT WAS FOUND TO BE ACCOMMODATION ENTRY OF RS.10 LAKHS. IN THE CASE OF ASSESSEE SMT. MEENA GUPTA AND SHRI SOURAV JINDAL THE A.O. RECORDED IN THE REASONS THAT ASSESSEE RECEIVED BOGUS ENTRIES OF THE PURCHASES, BUT, LATER ON IT WAS FOUND TO BE LOAN. THUS, THESE FACTS CLEARLY SHOW THAT A.O. WITHOUT VERIFYING THE INFORMATION RECEIVED FROM THE INVESTIGATION WING, RECORDED THE REASONS FOR REOPENING OF THE ASSESSMENT BASED ON WRONG AND NON-EXISTING, INCORRECT FACTS. THUS, THERE WAS NO JUSTIFICATION FOR THE AUTHORITIES BELOW TO REOPEN THE ASSESSMENT IN THESE FOUR CASES. ITA NO. 4797/DEL/2019 AY 2011-12 8 5.1 RESPECTFULLY FOLLOWING THE AFORESAID PRECEDENT, THE ASSESSMENT FRAMED IN THE PRESENT CASE IS HEREBY QUA SHED. SINCE WE HAVE QUASHED THE ASSESSMENT, HENCE, THE OTHE R GROUNDS HAVE BECOME ACADEMIC AND NEED NOT BE ADJUDI CATED. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. THE DECISION IS PRONOUNCED ON 25.11.2020. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER SRB COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI