ACIT, Central Circle-2, Faridabad V. Cogent Realtors Pvt.Ltd., Gurgaon

ITA 490/DEL/2020

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) which pertained to the assessment year 2014-15. The core issue arose from a search and seizure operation conducted under Section 132 of the Income Tax Act at the premises associated with M3M Group, which allegedly led to the discovery of documents related to the assessee, Cogent Realtors Pvt. Ltd. The Assessing Officer, based on these documents, made additions to the income of the assessee under Section 153C read with Section 153A of the Act. However, the CIT(A) reversed this decision, leading to the Revenue's appeal. The Tribunal found that the documents in question were not incriminating and did not pertain to the assessment year under consideration, thus upholding the CIT(A)'s decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121535 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-05-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 26-01-2020
• Other Referred Cases: CIT vs Singhhad Technical Education Society, CIT vs Mukundray R. Shah, BPTP Ltd. vs PCIT, Splender Land Bus Ltd. vs Additional CIT, Spaze Tower Pvt. Ltd. vs ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 201; 43; 48; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.490/DEL/2020 Assessment Year 2014-15 ACIT, Central Circle-2 Faridabad. Vs. Cogent Realtors Pvt. Ltd., GF-1, Vipul Plaza, Village-Haiderpur Viran, Sector-54, Gurgaon. TAN/PAN: AACCC9392E (Appellant) (Respondent) Appellant by: Shri Gautam Jain, Adv. Respondent by: Shri T. James Singson, CIT-DR Date of hearing: 08 05 2023 Date of pronouncement: 12 05 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he ca p t i o n e d a p p e al ha s be e n fi l e d b y t h e R e v en ue a g ai ns t t he or d e r o f t he l d . Co m m i ss i o ne r o f I n c o me T a x (A ppe al s) -II I, G ur ga on (‘ P r. C I T ’ i n s h or t ) d at e d 2 0. 1 1. 2 0 1 9 a r i si ng f ro m t he a ss es s m e n t or d e r d a te d 13. 1 2. 2 0 1 7 pa sse d b y t h e A s se s s i ng O ffi c e r (A O ) un d er S e c t i o n 1 43 ( 3) o f t h e I n c o m e T a x A c t , 196 1 (t h e A c t ) c on c e rn i n g A Y 201 5- 1 6. 2. B ri e f l y st a t e d, a s ea r ch a n d se i z u r e o pe ra t i o n un d e r S e c t i o n 13 2 o f t he A c t w a s ca r ri ed o ut on 2 1 . 0 7. 2 0 1 6 a t t he re s i d e n t i a l / bu si n e s s p re mi se s o f t h e p e r s on s a ss oc ia t e d w i t h M 3M G ro u p. A sa t i s fa c t i on w a s dr a w n b y t h e A ss e s si ng O ff ic e r on t he se a r c h pe r s o n u n d e r t h e p r o vi si on s o f su b se c t i on (1 ) o f s e c t io n I.T.A. No.490/Del/2020 2 15 3 C t h a t ce rt a i n do c u me n t s s e i z e d r el a t e s t o t he thi r d p ar t y, i . e. , a ss es se e a n d w i l l h a ve b e a r i ng o n t h e d e t e r m i na t i o n o f t o t al i n c o me fo r A Y s 2 01 1- 12 t o 2 01 7 - 18 o f t h e a s s e ss ee he re i n. I n c o n so na n c e o f sa t i s f a c t i o n, t he pro vi si on s o f S e c t i o n 1 5 3 C w e r e inv ok e d b y A sse s si n g O ffi c e r o f t h e a s se sse e a n d t he a ss e s s me nt w as fr a me d un d e r S e c t i on 1 53 C o f t h e A c t r . w . S e c t i o n 1 5 3A o f t h e A c t . T he A sse s si n g O ffi c e r w hi le fr a m i n g t he a sse ss m e n t un der S e c t i o n 15 3 C o f t he A c t i n t e r a l i a m a d e d i s a l l o w a n ce o f R s. 5, 1 5 , 65, 8 0 0/ - fo r t he A sse s s me nt Y e ar 2 01 4-1 5 i n qu est i o n o n t he g r o un d th a t e xp en di t u re t ow a r ds E D C c ha rg e s a mo un t i ng t o R s . 1 7, 1 8, 86 , 1 00 /- p a i d t o H U D A ha s n ot b e e n su b je c t e d t o T D S pr o vi si on s. Co n se qu ent l y , t h e A sse s si n g O f fi c e r i nv o ke d t h e pr o v i s i on o f S e c t i on 4 0 ( a ) (i a ) o f t h e A ct a n d 3 0 % o f ED C c ha r g e s p a i d t o H U D A a mo u n t i n g to Rs. 5, 1 5, 6 5 , 80 0 / - w a s d i sa l l ow e d. 3. A g gri e v e d, t he a ss e ss e e p r e f e r re d a p pe a l b e f or e th e CI T( A ). Th e C I T ( A ) i n a c o mb in e d o r de r fo r v a ri ou s a ss e s se es i n c l u di ng t h e do c u me n t s r e fe rr ed t o i n t he s a t i s f a c t i on n o t e i s not i n t h e n a t u re o f i nc ri mi n a t i ng m a t e r ia l a n d a c co rd i n g l y t h e pr ov i s i on s o f S e c t io n 15 3 C i s n ot ap pl i c a bl e a t th e f i r st i n st a nc e. T he re l e va nt o p e r a t i v e pa r a g r a p h o f t he o r d er o f t h e C I T (A ) r ea d s a s u n d e r: “ P a r a g 7 . 1 . 8 ( v i ) C o g e n t R e a l t o r s P v t . A Y 2 0 1 4 - 1 5 T h e d o c u m e n t r e f e r r e d t o i n t h e sa t i s f a c t i o n n o t e of t h e a p p e l l a n t r e f e r s t o A n n e x u r e A - 2 s e i z e d f r o m t h e p r e m i s e s o f M 3 M G r ou p . T h i s d o c u m e n t i n t h e t r i a l b a l a n c e o f t h e a p p e l l a n t c o m p a n y f r o m 0 1 . 0 4 . 2 0 1 1 t o 3 1 . 3 .2 0 1 2 . T h i s r e f e r r e d d o c u m e n t d o e s n o t r e l a t e t o t h e y e a r c o n s i d e ra t i o n , n o r i t c a n b e t e r m e d a s i n c ri m i n a t i n g m a t e r i a l o n t h e b a s is o f w h i c h a d d i t i o n h a s b e e n m a d e a s p e r p r o v i s i o n s o f S e c t i o n 4 0 ( a ) ( i a) o f t h e A c t . K e e p i n g i n v i e w t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e ( s ) a s d i s c u s se d a b o v e a n d r e s p e c t f u l l y f o l l o w i n g t h e d e c i s i o n o f H on ' b l e C o u r ts a s d i s c u s s e d i n t h i s a p p e l l a t e o r d e r i n c l u d i n g d e c i s i on o f H o n ' b l e S u p r e m e C o u r t i n t h e c a s e o f C I T v / s S i n g h a d T e c h n i c a l E d u ca t i o n S o c i e t y , w h e r e i n i t w a s h e l d t h a t w i t h r e g a r d t o t h e i n c r i m in a t i n g d o c u m e n t I.T.A. No.490/Del/2020 3 s e i z e d s h o u l d b e l o n g / r e l a t e i n t h e c a s e t o a p e r son o t h e r t h a n p e r so n r e f e r r e d t o i n s e c t i o n 1 5 3 4 o f t h e A c t , t h e a s s u m p ti o n o f j u r i s d i c t i o n u / s 1 5 3 C o f t h e A c t i n a b s e n c e o f a n y i n c r i m i n a t i n g m a te r i a l r e l a t e d t o t h e y e a r u n d e r c o n s i d e r a t i o n w a s n o t i n a c c o r d a n c e w i t h l a w a n d h e n c e h e l d t o b e e r r o n e o u s . 7 . 1 .9 T h e A O h a s r e l i e d o n t h e j u d g m e n t o f H o n ' b l e S u p r e m e C o u r t i n t h e c a s e o f C I T v s M u k u n d ra y R . S h a h f a c t s o f t h e ap p e l l a n t ' s c a s e a r e d i f f e r e n t o n f a c t s a n d h e n c e c a n n o t b e r e l i e d u p o n i n t h e s e c a se s a s d i s c u s s e d h e r e u n d e r : - T h e a d d i t i o n m a d e b y t h e A 0 u / s 4 0 a ( i a ) o f t h e A c t b y d i s a l l o w in g t h e a m o u n t w h i c h w a s n e v e r c l a i m e d b y t h e a p p e l l a n t c o m p a n y a s a n e x p e n s e a n d t h e r e a f t e r a d d i n g b a c k 3 0 % o f t h e E DC p a i d , d id n o t e m a n a t e f r o m t h e d o c u m e n t r e f e r r e d t o i n t h e s at i s f a c t i o n n o t e , a s a r e s u l t o f s e a r c h . 7 . 1 .1 0 I n v i e w o f t h e f a c t s o f t h e c a s e u n d e r c o n s id e r a t i o n a n d t h e j u d i c i a l p r o n o u n c e m e n t s d i s c u s s e d i t i s c l e a r t h a t :- ( a ) I n t h e c a s e s u n d e r c o n s i d e ra t i o n , t h e a d d i t i o n (s ) m a d e a r e n o t e m a n a t i n g o u t o f a n y i n c r i m i n a t i n g m a t e r i a l f o u n d du r i n g t h e s e a rc h p r o c e e d i n g s n o r a n y p r o c e e d i n g s , w e r e p e n d i n g o r a ba t e d o n t h e d a t e o f s e a r c h . ( b ) H e n c e t h e a d d i t i o n ( s ) m a d e u / s 4 0 (a ) ( i a ) o f t h e A c t c a n n o t b e s u s t a i n e d a n d h e n c e d e l e t e d l o o k i n g i n t o t h e p o s i t io n o f l a w a n d f a c t s o f t h e c a s e . 8 . S i n c e , t h e i s s u e h a s b e e n d e c i d e d o n t h e l e g a l gr o u n d r e g a r d in g j u r i s d i c t i o n o f t h e A 0 t o m a k e s u c h a d d i t i o n i n a s se s s m e n t m a d e u n d e r S e c t i o n 1 5 3 4 r . w . s . 1 5 3 C o f t h e A c t , w h e n n o i n c r i mi n a t i n g d o c u m e n t s / m a t e r i a l o r u n d i s c l o s e d i n c o m e b e l o n g t o t h e a p p e l l a n t c o m p a n i e s w a s f o u n d d u r i n g s e a r c h o p e ra t i o n s f o r t he y e a r u n d e r c o n s i d e r a t i o n , a s a p p a r e n t f r o m t h e s a t i s f a c t i o n n ot e ( s ) c a n n o t b e s u s t a i n e d . T h e r e f o r e t h e o t h e r g r o u n d o f a p p e a l r e la t i n g t o t h e m e r i t o f t h e s e c a s e s a r e n o t b e e n c o n s i d e r e d . ” 4. T he l d. D R f or t h e Re ve nu e r ei t e r a t e d t h e o b se rvat i o n s ma de by t h e A sse ss i n g O f fi c e r an d r e l i ed u p o n t h e a s se ssm e nt o r de r. 5. T he l d. c o u n se l for t h e a ss es se e s t at e d t ha t t he on l y ma t er i a l fo u nd i n t h e c our se o f se a rc h w as so me T ri a l B a l a nce a nd t h e a dd i t i o ns ma de ar e w ho l l y un re l at e d t o t he m a t e r i a l f o un d i n t he c ou r s e o f se ar c h . C o n se q u e n t l y , t he p r ovi si on s o f Se c t i o n 1 5 3C h a s no a p p l ic a t io n a s r i gh tl y he ld by t he CI T (A ). T h e ld. c o un sel a l s o po i n t e d o ut th a t t he su b je c t m a t t e r o f d i s a l l o w an ce ha s b e e n a dj ud g e d i n f a vo u r o f a s se ss e e i n A ss e ss m e n t Y ea r 20 1 2 - 13 i n I TA I.T.A. No.490/Del/2020 4 N o. 48 9/ D e l/ 20 20 o r de r d a t e d 2 1. 0 9 . 20 2 2. 6. I n t he l i gh t o f t he a ss e r t i on s m a d e o n be ha l f o f t he a s se sse e, w e t ak e no t e o f t h e obs e r va ti o ns m a de by t he C o- o r di n a t e Be n c h i n A sse s s me nt Y e ar 2 01 2- 1 3 w h ic h r ea d a s un de r: “ 6 . H a v i n g c a r e f u l l y g o n e t h r o u g h t h e d e c i s i o n o f Ho n ' b l e D e l h i H i g h C o u r t i n c a s e o f B P T P L t d . v s . P C I T (s u p r a ) , w e f i nd t h a t w h i l e d e a l i n g w i t h a n i d e n t i c a l i s s u e o f n o n - d e d u c t i o n o f T D S a n d E D C p a i d t o H U D A , t h e H o n ' b l e H i g h C o u r t h a s o b s e r v e d t h a t Re v e n u e w a s u n a b l e t o p o i n t o u t a n y s p e c i f i c p r o v i s i o n w h i c h d ea l s w i t h E D C . I n o t h e r w o rd s , t h e H o n ' b l e C o u r t h e l d t h a t p a y m e n t o f E D C w a s n o t c o v e r e d u n d e r a n y o f t h e T D S p r o v i s i o n s . I n c a s e o f M / s . S p l e n d e r L a n d B u s L t d . v s . A d d i t i o n a l C I T (s u p r a ) , t h e c o - o rd i n a t e B e n c h , a f t e r f o l l o w i n g t h e d e c i s i o n o f a n o t h e r c o - o rd i n a t e B e n c h i n c a s e o f S p a z e T o w e r P v t . L t d . v s . A C I T - I T A N o . 5 8 4 2 / D e l / 2 0 1 9 d at e d 2 6 .0 5 . 2 0 2 2 , h a s h e l d t h a t b y n o t d e d u c t i n g t a x o n p a y m e n t m a d e t o H U D A t o w a rd s E D C , n o v i o l a t i o n o f T D S p ro v i s i o n w a s m a d e . T h u s , w i t h d u e o b e d i e n c e t o t h e ra t i o l a i d d o w n i n t h e j u d i c i a l p re c e d e n t s c i t e d b e f o r e u s , w e h o l d t h a t t h e r e w a s n o l e g a l r e q u i r e me n t o n a s s e s s e e t o d e d u c t t a x a t s o u r c e w h i l e m a k i n g p a y m e n t o f E D C t o H U D A . T h e r e f o r e , t h e d i s a l l o w a n c e m a d e u n d e r S e c t i o n 4 0 ( a) ( i a ) o f t h e A c t i s u n s u s t a in a b l e o n m e r i t s . A c c o r d i n g l y , w e d o n o t f i nd a n y r e a s o n t o i n t e r f e r e w i t h t h e d e c i s i o n o f l e a r n e d C o m m i s s i o n e r ( A p p e a l s ) t h o u g h , b a s e d o n o r o w n r e a s o n i n g . ” 7. H a vi n g r e g a r d t o t h e v i e w e xpr es s e d i n A Y 2 012 -13 b y t he Co - or d i n a t e Be nc h, t he re i s ha r dl y a n y m e ri t i n t h e d isa l l o w a n c e c ar ri e d ou t b y t h e A s s e ss i ng O f fi c e r a s h e l d b y C I T ( A ). Be si d e s, w e f in d me r it in t h e fi n d i ng s re n d e r e d by t he C IT (A ) f o r l ac k o f j u ri sd i c t i o n un d e r S e c t i o n 1 5 3 C ow i n g t o a b se nc e o f a n y i n cr i m i na t i n g ma t e ri al . We t h u s n o p er c e p ti bl e r e a s o n t o in t er fe re w i t h t h e o r d er o f t h e CI T ( A ). 8. I n t h e re s ul t , th e a p p e a l o f th e R e v e n u e i s di s mi ss e d. Order pronounced in the open Court on 12/05/2023 Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /05/2023 prabhat