ITO, New Delhi V. M/s Jansampark Advertising & Marketing Pvt. Ltd., New Delhi

ITA 4839/DEL/2009

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8308 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 29-03-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 23-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN GOTRU
• Keywords: Reopening of assessment; Unexplained cash credit; Gift; Accommodation entries
• Section: 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER , AND SHRI L.P. SAHU, ACCOUNTANT MEMBER, ITA NO. 4839 /DEL /20 0 9 [ A.Y : 200 4 - 0 5 ] THE I.T . O VS. M/S JANSAMPARK ADVERTISING & MARKETING WARD - 4(2) P] LTD NEW DELHI I 49, LAJPAT NAGAR - 1 NEW DELHI 110 024. PAN : AAACJ 01 15 G [APPELLANT] [RESPONDENT] DATE OF HEARING : 29 . 0 3 . 201 6 DATE OF PRONOUNCEMENT : 05 . 0 4 .201 6 APPELLANT BY : SHRI SHRAVAN GOTRU , SR - DR RESPONDENT BY : SHRI RAJEEV SAXENA , ADV ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) - VI I , NEW DELHI , DATED 29 / 1 0 /2 0 0 9 FOR A Y 200 4 - 0 5 . 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR AY 2004 - 05 ON 01.11.2004 DECLARING INCOME OF 3,180/ - . THE SAID ORIGINAL RETURN WAS ACCEPTED. IT IS STATED THAT SOME TIME IN 2007 THE ASSESSING OFFICER (AO) WAS IN RECEIPT OF INFORMATION 2 ITA NO. 4839 /DEL/200 9 2 FROM DIT (INVESTIGATI ON), NEW DELHI THAT THE ASSESSEE HAD BEEN IN RECEIPT OF ACCOMMODATION ENTRIES FROM THE ENTRY PROVIDERS. THE AO NOTICED THAT DURING THE COURSE OF THE ENQUIRIES CONDUCTED BY THE INVESTIGATION WING OF THE DEPARTMENT IT WAS CONCLUDED THAT MOST OF THE ENTRY OPE RATORS ARE CHARGING COMMISSION @ 2% FOR GIVING THIS ACCOMMODATION APPROACH TO ANOTHER PERSON AND HAND OVER THE CASH PLUS COMMISSION AND TAKE CHEQUES/DDS/POS. THE CASH IS DEPOSITED BY THE ENTRY OPERATOR IN A BANK ACCOUNT EITHER IN HIS OWN NAME OR IN THE NAM E OF THE RELATIVE/FRIENDS OR OTHER PERSON HIRED BY HIM FOR THE PURPOSE OF OPENING BANK ACCOUNT. THE OTHER PERSON (IN WHOSE NAME THE ACCOUNT IS OPENED) ONLY SIGNS THE BLANK CHEQUE BOOK AND HANDS OVER THE SAME TO MAIN ENTRY OPERATORS. THE ENTRY OPERATOR THEN ISSUES CHEQUES/DDS/POS IN THE NAME OF THE BENEFICIARY FROM THE SAME ACCOUNT IN WHICH THE FUNDS ARE TRANSFERRED THROUGH CLEARING IN TWO OR MORE STAGES. THE BENEFICIARY IN TURN DEPOSITS THESE INSTRUMENTS IN HIS BANK ACCOUNTS AND THE MONEY COMES TO HIS REGUL AR BOOKS OF ACCOUNTS IN THE FORMS OF GIFT, SHARE APPLICATION MONEY/SHARE CAPITAL/UNSECURED LOANS ETC. THROUGH BANKING CHANNEL. SINCE THE FUNDS HAVE COME THROUGH BANKING CHANNEL IN THE BOOKS OF BENEFICIARY THESE APPARENTLY LOOK GENUINE. HAVING REASONS TO BE LIEVE THAT INCOME HAD ESCAPED ASSESSMENT, THE AO RE - OPENED THE CASE FOR AY 2004 - 05 UNDER SECTION 3 ITA NO. 4839 /DEL/200 9 3 147 OF INCOME TAX ACT AND ISSUED NOTICE UNDER SECTION 1 48 ON 18.04.2007. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED A COPY OF THE RETURN THAT HAD BEEN SUBMITTED ON 01.11.2004. T HE ASSESSEE CONSEQUENT TO THE ASSESSING OFFICER'S QUERIES FURNISHED ALL THE RELEVANT DOCUMENTARY EVIDENCE BEFORE THE ASSESSING OFF ICER. 3. D URING THE ASSESSMENT PROCEEDINGS, THUS RE - OPENED, THE AO NOTICED THAT THE ASSESSEE HAD RAISED SHARE CAPITAL FROM 12 PARTIES AMOUNTING TO RS. 71 LAKHS. WHEN ASKED TO PRODUCE THE PARTIES FROM WHOM THE SHARE CAPITAL WAS RAISED, THE ASSESSEE COULD NOT DO SO. THE AO, THEREFORE, TREATED THE AMOUNT OF 71 LA KHS AS UNEXPLAINED CREDIT IN TERMS OF THE PROVISION CONTAINED IN SECTION 68 OF INCOME TAX ACT AND ADDED IT TO THE INCOME OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A) WHO DELETED THE ADDITIONS MADE BY THE AO, INTER ALIA, RELYING UPON CIT V. LOVELY EXPORTS PVT. LTD . , (2008) 216 CTR 195 (SC). AGAINST THIS DECISION OF THE LD. CIT(A) , T HE REVENUE P REFERRED APPEAL BEFORE THE TRIBUNAL IN ITA NO. 4839/DEL/2009 TO WHICH THE ASSESSEE HAD ALSO FILED COU NTER - OBJECTION NO. 10 3/DEL/2011, AND WAS UNSUCCESSFUL. AGAINST THIS ORDER OF THE TRIBUNAL, THE REVENUE WENT IN FURTHER APPEAL BEFORE THE HIGH COURT, WHO, IN TURN, SET ASIDE THE ORDER OF THE TRIBUNAL TO THE FILE OF THE LD. CIT(A) . 4 ITA NO. 4839 /DEL/200 9 4 4. AT THE VERY OUTSET OF THE HEARING OF THE APPEAL, WE FIND THAT THE LD. AR HAS PLACED ON RECORD A COPY OF THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT OF DELHI DATED 11.03.2015 IN THE CASE OF THE VERY ASSESSEE ITSELF WHICH IS REPORTED AT 56 TAXMANN 286 [DELHI WHEREIN THE HON'BLE HIGH COURT HAS AT PARA 43 AND 44 OF THE ORDER HAS HELD AS UNDER: 43. IN THE RESULT, THE QUESTIONS OF LAW STAND ANSWERED IN FAVOUR OF THE REVENUE THOUGH WITH A DIRECTION THAT THE MATTER OF ASSESSMENT ARISING OUT OF NOTICE UND ER SECTION 148 INCOME TAX ACT ISSUED ON 18.04.2007 FOR AY 2004 - 05 IN RESPECT OF THE ASSESSEE WOULD STAND REMITTED TO THE CIT (APPEALS) FOR FRESH CONSIDERATION/ADJUDICATION IN ACCORDANCE WITH LAW. 44. IN ABOVE VIEW, THE CONTENTIONS OF THE ASSESSEE RESPECTING THE VALIDITY OF THE ASSESSMENT, AS PRESERVED FOR CONSIDERATION BY THIS COURT BY ORDER DATED 29.08.2014 IN ITAT NO. 289/2014, WOULD ALSO BE EXAMINED BY THE CIT (APPEALS). GIVEN THE FACT THAT SUCH OBJECT IONS HAVE A BEARING ON THE ISSUE OF JURISDICTION, CONSIDERATION OF SUCH CONTENTIONS OF THE ASSESSEE MUST PRECEDE THE SCRUTINY OF THE QUESTIONED CREDIT ENTRIES FROM THE PERSPECTIVE OF SECTION 68. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE RELEVANT MATERIAL ON RECORD. THE LD. DR FAIRLY SUBMITTED THAT THE ENTIRE ISSUES VIZ VALIDITY AND REOPENING OF ASSESSMENT U/S 147/148 5 ITA NO. 4839 /DEL/200 9 5 OF THE ACT AS WELL AS ISSUES ON MERITS MAY BE RESTORED TO THE FILE OF THE AO AS PER ORDER OF THE HON'BLE HIGH COURT OF DELHI [SUPRA] AFTER CAREFULLY PERUSING THE TRIBUNAL ORDER AS WELL AS THE JUDGMENT OF THE HON'BLE HIGH COURT OF DELHI [SUPRA] WE FIND IT J UST AND APPROPRIATE TO RESTORE BOTH THE ISSUE TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION IN ACCORDANCE WITH THE DIRECTIONS GIVEN BY THE HON'BLE HIGH COURT AFTER AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 6. IN THE RESULT, THE APPE AL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PR ONOUNCE D IN THE OPEN COURT ON 0 5 . 0 4 .201 6 . SD/ - SD/ - ( L.P. SAHU ) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 0 5 T H A P R I L , 2016 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI