ACIT, New Delhi V. M/s. Sobhagyam Realtors Pvt. Ltd., Delhi

ITA 4865/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0892 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 24-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Keywords: Search and seizure
• Section: 143(3); 147; 139

Judgement Text

ITA NOS. 4864 TO 4866/DEL/205 SOBHAGYAM REALTORS PVT. LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: F, NEW DELHI BEFORE SHRI SMT. BEENA A PILLAI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NOS. 4864 TO 4866/DEL/2016 AYS. 2008-09 TO 2010-11 ACIT CIRCLE 24(1) ROOM NO.163, C.R. BUILDING, NEW DELHI. VS . SOBHAGYAM REALTORS PVT. LTD., C/O KAPIL GOEL, ADVOCATE, F-26/124, SECTOR-7, ROHINI, DELHI. AAJCS3352F (APPELLANT) (RESPONDENT) DEPARTMENT BY : SMT. SULEKHA VERMA, CIT(DR) ASSESSEE BY : SH. KAPIL GOEL, ADV. DATE OF HEARING : 01/11/2018 DATE OF PRONOUNCEMENT : 19/11/2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST O RDER DATED 29/05/15 PASSED BY LD. CIT (A)-8, DELHI FOR Y EARS UNDER CONSIDERATION WOULD ON FOLLOWING GROUNDS OF APPEAL: GROUNDS OF APPEAL IN ITA NO. 4864/DEL/2015 : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN LAW AND ON THE FACTS IN QUASHING THE ASSES SMENT ORDER PASSED UNDER SECTION 153C/143(3) OF THE INCOM E TAX ACT, 1961 IGNORING THE FACT THAT MATERIAL BELONGING TO THE ASSESSEE WAS FOUND DURING THE COURSE OF A SEARCH. ITA NOS. 4864 TO 4866/DEL/205 SOBHAGYAM REALTORS PVT. LTD. 2 2. THE APPELLANT CRAVES TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING T HE HEARING OF THIS APPEAL. GROUNDS OF APPEAL IN ITA NO. 4865/DEL/2015 : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN LAW AND ON THE FACTS IN QUASHING THE ASSES SMENT ORDER PASSED UNDER SECTION 153C/143(3) OF THE INCOM E TAX ACT, 1961 IGNORING THE FACT THAT MATERIAL BELONGING TO THE ASSESSEE WAS FOUND DURING THE COURSE OF A SEARCH. 2. THE APPELLANT CRAVES TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING T HE HEARING OF THIS APPEAL. GROUNDS OF APPEAL IN ITA NO.4866/DEL/2015 : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) ERRED IN LAW AND ON THE FACTS IN QUASHING THE ASSES SMENT ORDER PASSED UNDER SECTION 153C/143(3) OF THE INCOM E TAX ACT, 1961 IGNORING THE FACT THAT MATERIAL BELONGING TO THE ASSESSEE WAS FOUND DURING THE COURSE OF A SEARCH. 2. THE APPELLANT CRAVES TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING T HE HEARING OF THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: A SEARCH AND SEIZURE ACTION WAS CONDUCTED ON 25/03/ 11 IN SDS GROUP OF COMPANIES. AS PER APPRAISAL REPORT IN SDS GROUP CASES, ASSESSEE WAS HELD TO BE ASSOCIATED WITH THIS GROUP. LD.AO WAS INFORMED REGARDING SEIZED MATERIALS, PHOTOCOPIES SA TISFACTION NOTE FOR INITIATING PROCEEDINGS UNDER SECTION 153C OF TH E ACT WAS ISSUED TO JURISDICTIONAL AO OF ASSESSEE. LD.AO ACCO RDINGLY, ISSUED NOTICE UNDER SECTION 153C OF THE ACT ON 28/03/13. I N RESPONSE TO SAID NOTICE, ASSESSEE FILED ITS RETURN, WHICH WAS O RIGINALLY FILED UNDER SECTION 139 (1) OF THE ACT. NOTICE UNDER SECT ION 143 (2) WAS SUBSEQUENTLY ISSUED DURING PROCEEDINGS. 3. FOR A.Y: 2008-09 : LD.AO OBSERVED THAT ASSESSEE IS ENGAGED IN BUSINESS OF REAL ESTATE DEVELOPMENT. LD.AO MADE ADDITION OF ITA NOS. 4864 TO 4866/DEL/205 SOBHAGYAM REALTORS PVT. LTD. 3 UNSECURED LOANS AMOUNTING TO RS.16,20,000/- AND LOA NS RECEIVED BY ASSESSEE AMOUNTING TO RS.69,50,000/- APPEARING I N BALANCE SHEET AS ASSESSEE HAD NOT ESTABLISHED ITS GENUINENE SS, IDENTITY AND CREDITWORTHINESS OF THE TRANSACTION. FOR A.Y: 2009-10 : LD.AO MADE ADDITION OF UNSECURED LOANS AMOUNTING TO RS.84,80,000/- AND LOANS RECEIVED BY A SSESSEE AMOUNTING TO RS.1,00,000/- APPEARING IN THE BALANCE SHEET AS ASSESSEE HAD NOT ESTABLISHED IS GENUINENESS, IDENTI TY AND CREDITWORTHINESS OF THE TRANSACTION. 4. FOR A.Y: 2010-11 : LD.AO MADE ADDITION OF UNSECURED LOANS AMOUNTING TO RS.1,05,000/- AND BANK ACCOUNT DEPOSIT S AMOUNTING TO RS.1,15,28,580/- APPEARING IN BALANCE SHEET AS ASSESSEE HAD NOT ESTABLISHED ITS GENUINENESS, IDENT ITY AND CREDITWORTHINESS OF THE TRANSACTION. 5. AGGRIEVED BY ADDITIONS MADE BY LD.AO IN ALL THRE E ASSESSMENT YEARS, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) LD. CIT (A), WHO HELD ISSUANCE OF NOTICE UNDER SECTION 153C/153A OF THE ACT TO BE VOID AB INITIO AS IS SEIZED MATERIALS PERTAINED TO ASSESSMENT YEAR 2011-12. HE DREW SUPPORT FROM OBSER VATIONS OF LD.AO, WHO HAD INITIALLY INITIATED PROCEEDINGS UNDE R SECTION 147 READ WITH 143(3) OF THE ACT WHICH WERE SUBSEQUENTLY DROPPED WITHOUT MAKING ADDITION, VIDE ORDER DATED 08/03/201 5. AGGRIEVED BY ORDER OF LD. CIT(A), REVENUE IS IN APP EAL BEFORE US FOR ALL THREE YEARS UNDER CONSIDERATION. 6. LD.CIT DR SUBMITTED BY PLACING RELIANCE UPON ORD ER DATED 02/07/2014, UNDER SECTION 7 OF RTI ACT, THAT, THERE IS A SPECIFIC QUESTION RAISED BY ASSESSEE, REGARDING EXISTENCE OF ANY DOCUMENTS BELONGING TO ASSESSEE THAT WAS FOUND DURI NG COURSE OF ITA NOS. 4864 TO 4866/DEL/205 SOBHAGYAM REALTORS PVT. LTD. 4 SEARCH. SHE REFERRED TO ANSWER GIVEN BY AUTHORITY I N AFFIRMATIVE. SHE SUBMITTED THAT SEIZED MATERIALS BELONGED TO ASS ESSEE AND, THEREFORE, PROCEEDINGS INITIATED UNDER SECTION 153C OF THE ACT CANNOT BE HELD TO BE BAD IN LAW. SHE REFERRED TO CO PIES OF SEIZED MATERIAL PLACED IN PAPER BOOK, WHEREIN ASSESSEES N AME APPEARS AND ALSO REVEALS TRANSACTION BY WAY OF CHECK HAS BE EN MADE BY ASSESSEE. IT ALSO CONTAINS DEMAND DRAFT ISSUED BY A SSESSEE OF HUGE AMOUNTS. LD.CIT DR SUBMITTED THAT MATERIAL NO DOUBT BELONGED TO ASSESSEE AND, THEREFORE, LD.AO RIGHTLY ASSUMED JURISDICTION. 7. WE HAVE PERUSED RIVAL CONTENTIONS ADVANCED BY BO TH SIDES IN THE LIGHT OF RECORDS PLACED BEFORE US. 8. WE HAVE ALSO PERUSED ALLEGED SEIZED MATERIALS PL ACED IN PAPER BOOK FILED BEFORE US. ON A CAREFUL VERIFICATI ON OF SAME, IT APPEARS THAT, THESE DOCUMENTS WERE RELEVANT FOR ASS ESSMENT YEAR 2011-12. CHEQUE DATED 16/12/10 PERTAINS TO ASSESSME NT YEAR 2011-12, WAS DRAWN ON BANK OF RAJASTHAN, AMBAJI IND USTRIAL AREA ABU ROAD, SIROHI, RAJASTHAN. FURTHER THERE IS COVERING LETTER DATED IS 12/11/10 ALONG WITH CHEQUE, ADDRESSED TO A SSESSEE BY SENIOR REGIONAL MANAGER, WHEREIN, CANCELLATION OF A LLOTMENT OF COMMERCIAL PLOT HAS BEEN INTIMATED. THERE IS ALSO A SHOW CAUSE NOTICE ISSUED TO ASSESSEE FOR VIOLATION OF TERMS AN D CONDITION OF ALLOTMENT LETTER/LEASE DEED. APART FROM THESE DOCUM ENTS NO OTHER DOCUMENT HAS BEEN SEIZED, WHICH WERE FORWARDED TO L D.AO OF ASSESSEE THAT COULD BELONG TO ASSESSEE THAT PERTAIN S TO RELEVANT PERIODS UNDER CONSIDERATION. IN OUR OPINION, RATIO LAID DOWN BY CIT VS. SINHAGAD TECHNICAL EDUCATION SOCIETY REPORT ED IN [2017] 84 TAXMANN.COM 290. HONBLE SUPREME COURT HELD AS UNDER: ITA NOS. 4864 TO 4866/DEL/205 SOBHAGYAM REALTORS PVT. LTD. 5 15 . AT THE OUTSET, IT NEEDS TO BE HIGHLIGHTED THAT THE ASSESSMENT ORDER PASSED BY THE AO ON AUGUST 7, 2008 COVERED EIGHT ASSESSMENT YEARS I.E. ASSESSMENT YEAR 1999-2000 TO ASSESSMENT YEAR 2006-07. AS NOTED ABOV E, INSOFAR AS ASSESSMENT YEAR 1999-2000 IS CONCERNED, SAME WAS COVERED UNDER SECTION 147 OF THE ACT WHICH MEANS IN RESPECT OF THAT YEAR, THERE WERE RE-ASSESS MENT PROCEEDINGS. INSOFAR AS ASSESSMENT YEAR 2006-07 IS CONCERNED, IT WAS FRESH ASSESSMENT UNDER SECTION 14 3(3) OF THE ACT. THUS, INSOFAR AS ASSESSMENT UNDER SECTI ON 153C READ WITH SECTION 143(3) OF THE ACT IS CONCERN ED, IT WAS IN RESPECT OF ASSESSMENT YEARS 2000-01 TO 2005- 06. OUT OF THAT, PRESENT APPEALS RELATE TO FOUR ASSESSM ENT YEARS, NAMELY, 2000-01 TO 2003-04 COVERED BY NOTICE UNDER SECTION 153C OF THE ACT. THERE IS A SPECIFIC PURPOSE IN TAKING NOTE OF THIS ASPECT WHICH WOULD BE STATED BY US IN THE CONCLUDING PARAGRAPHS OF THE JUDGMENT. 22 . WE NOW ADVERT TO THE IMPLICATION OF THE FACT WHICH HAS BEEN EMPHASISED IN PARA 15. AS POINTED OUT IN THE S AID PARA, THE ASSESSMENT ORDER PASSED BY THE AO COVERS EIGHT ASSESSMENT YEARS. ASSESSMENT DONE IN SIX ASSESSMENT YEARS IS UNDER SECTION 153C OF THE ACT. ASSESSMENT ORDER IS SET ASIDE ONLY IN RESPECT OF FOUR SUCH ASSESSMEN T YEARS THAT TOO ON THE TECHNICAL GROUND, NOTED ABOVE. 9. IT IS PERTINENT TO NOTE THAT IN PRESENT FACTS OF CASE, IN ASSESSMENT ORDER, ADDITIONS MADE BY LD.AO IS NOT BA SED UPON SEIZED MATERIALS. FURTHER, WE ALSO OBSERVE THAT LD. CIT (A) ANALYSED EACH AND EVERY DOCUMENTS THAT WAS SEIZED B ELONGING TO ASSESSEE. HE HAS RECORDED A CLEAR FINDING OF THESE DOCUMENTS, THOUGH BELONGING TO ASSESSEE, PERTAINED TO ASSESSME NT YEAR 2011- 12. HE HAS ALSO OBSERVED THAT LD.AO INITIATED PROCE EDINGS UNDER SECTION 147 READ WITH 143 (3) OF THE ACT FOR AY 201 1-12 AND HAS DROPPED THE SAME WITHOUT MAKING ANY ADDITION. ITA NOS. 4864 TO 4866/DEL/205 SOBHAGYAM REALTORS PVT. LTD. 6 9.1 UNDER SUCH CIRCUMSTANCES, APPLYING RATIO LAID D OWN ON HONBLE SUPREME COURT IN THE CASE OF CIT VS. SINHAGAD TECHNICAL EDUCATION SOCIETY (SUPRA), WE DO NOT FIND ANY FORCE IN APPEALS FILED BY REVENUE FOR YEARS UNDER CONSIDERATION. ACCORDINGLY, GROUNDS RAISED BY REVENUE STANDS DISMI SSED IN ALL THE THREE ASSESSMENT YEARS UNDER CONSIDERATION. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/11/2018 SD/- SD/- (PRASHANT MAHARISHI) (BE ENA A PILLAI) ACCOUNTANT MEMBER JUDICIA L MEMBER DT. 19 TH NOVEMBER,2018 *KAVITA ARORA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA NOS. 4864 TO 4866/DEL/205 SOBHAGYAM REALTORS PVT. 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