RAJDHANI REALCON PVT. LTD., NEW DELHI V. ITO, WARD- 21(1), NEW DELHI

ITA 5287/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1128 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 07-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: RAKESH JAIN
• Keywords: Accommodation entries; Reassessment proceedings
• Section: 143(1); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.5287/DEL/2018 ASSESSMENT YEAR: 2009-10 RAJDHANI REALCON PVT. LTD., 2612/13, 2 ND FLOOR, NAYA BAZAR, NEW DELHI. PAN: AADRC3963P VS. ITO, WARD-21(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAKESH JAIN, ADVOCATE & SHRI GURJEET SINGH, CA REVENUE BY : SHRI S.L. ANURAGI, SR.DR DATE OF HEARING : 20.02.2019 DATE OF PRONOUNCEMENT : 15.03.2019 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 1 ST JUNE, 2018 OF THE CIT(A)-7, NEW DELHI FOR ASSESSMENT YEAR 2009-10. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY AND FILED ITS RETURN OF INCOME ON 16 TH DECEMBER, 2009 DECLARING NIL INCOME. THE RETURN WA S PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, INFO RMATION WAS RECEIVED FROM THE INVESTIGATION WING, JHANDEWALAN EXTENSION, NEW DELH I, DATED 12 TH MARCH, 2013, MENTIONING THEREIN THAT DURING THE COURSE OF SEARCH OPERATION CARRIED OUT IN THE CASE OF SHRI SURENDRA KUMAR JAIN GROUP OF CASES IT WAS OBSE RVED THAT THE SAME GROUP IS ITA NO.5287/DEL/2018 2 INVOLVED IN PROVIDING ACCOMMODATION ENTRIES TO DIFF ERENT PERSONS WHO WERE NAMED IN THE REPORT. THE NAME OF THE ASSESSEE ALSO FIGURES IN THE LIST AS ONE OF THE BENEFICIARIES OF THE ACCOMMODATION ENTRIES. THE AO, AFTER RECORD ING REASONS AND AFTER OBTAINING THE APPROVAL OF THE ADDL. CIT AND THE PRINCIPAL CIT, IS SUED NOTICES U/S 148 OF THE IT ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.7 LAKHS FROM MEGA TOP PROM OTERS PVT. LTD. VIDE CHEQUE NO.99732 DATED 15 TH SEPTEMBER, 2009 THROUGH AXIS BANK. HE ASKED THE A SSESSEE TO SUBSTANTIATE THE IDENTITY AND CREDIT WORTHINESS OF THE SAID PARTY AND THE GENUINENESS OF THE TRANSACTION. SINCE THERE WAS NO PROPER COMPLIA NCE TO THE SAID QUERY, THE AO MADE ADDITION OF RS.7 LAKHS TO THE TOTAL INCOME OF THE A SSESSEE U/S 68 OF THE IT ACT. 3. IN APPEAL, THE LD.CIT(A) UPHELD THE ACTION OF TH E AO BOTH ON MERIT AS WELL AS ON THE VALIDITY OF THE REASSESSMENT PROCEEDINGS. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS7 00000 /- MADE BY THE AO BY IGNORING THE FACTS OF THE CASE, SUBMISSIONS MADE BY THE AR AND THE SETTLED LAW . 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) WAS ERRED IN IGNORING THE SETTLED PROPOSITIONS OF L AW REGARDING THE IMPORTANCE OF APPLICATION OF MIND WHILE RECORDED REASONS, APPROVA L OF THE REASONS AND ADDITIONS MADE BEYOND THE REASONS RECORDED BY THE A O AND UPHOLDING THE UNLAWFUL AND VOID AB INITIO ASSESSMENT ON THE BASIS OF REMAND REPORT SUBMITTED BY THE AO. 3. THAT THE REOPENING WAS BAD IN LAW AND VOID AB INIT IO AS NOTICE U/S 143(2) WAS NEVER SERVED ON THE ASSESSEE. ITA NO.5287/DEL/2018 3 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE REOPENING WAS BAD IN LAW AND VOID AB INITIO, AS THE REASONS LACK PROPER APPLICATION OF MIND BY THE LD AO AS THE REASONS ARE FACTUALLY INCORRECT. 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE REASSESSMENT PROCEEDINGS ARE VOID AB INITIO AS THE APPROVAL BY T HE HIGHER OFFICIALS WAS ACCORDED IN A MECHANICAL MANNER, WITHOUT APPRECIATI NG THE FACTS AND FIGURES AS THE FACT ITSELF REVEALS THE WRONGFULNESS IN THE REA SON RECORDED AND CAN BE NOTICED WITH A SMALL EYE TO THE REASONS. HOWEVER THE HIGHER AUTHORITIES FAILED TO DO SO WHILE ACCORDING APPROVAL. 6. THAT THE WHOLE ADDITION WAS MADE BY THE LD AO ON TH E BASIS OF PRECONCEIVED NOTIONS , IGNORING THE SUBMISSIONS AND EVIDENCES ,IGNORING THE LAW AND FACTS OF THE CASE, WITHOUT MAKING PROPER ENQUIR IES AND INVESTIGATIONS, WITHOUT PROVIDING REASONABLE OPPORTUNITY AND WITHOU T APPLICATION OF MIND. 7. THAT YOUR PETITIONER CRAVES LEAVE TO AMEND, MODI FY AND/OR ALTER GROUNDS AND/OR TO ADDUCE AND RELY UPON SUCH FURTHER EVIDENC E AND /OR TO ADDUCE AND RELY UPON SUCH FURTHER EVIDENCE AND /OR DOCUMENTS AS MAY BE REQUIRED AT ANY TIME BEFORE AND DURING THE TIME OF HEARING. 5. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. I FIND THE AO, IN THE INSTANT CASE, MADE ADDITION OF RS.7 LAKHS TO THE TO TAL INCOME OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS RECEIVED THE AMOUNT OF RS.7 LAKHS FROM M/S MEGA TOP PROMOTERS PVT. LTD., VIDE CHEQUE NO. NO.99732 DATED 15 TH SEPTEMBER, 2009. A PERUSAL OF THE REASONS RECORDED ALSO SHOW THE SAME THING. I FIND ALTHOUGH THE CASE WAS NOT REPRESENTED BEFORE THE AO BY THE ASSESSEE, HOWE VER, BEFORE THE CIT(A) IT WAS CATEGORICALLY STATED THAT THE SAID AMOUNT RELATES T O AY 2010-11 AND NOT 2009-10 SINCE THE CHEQUE IS DATED 15 TH SEPTEMBER, 2009. HOWEVER, A PERUSAL OF THE ORDER OF THE CIT(A) SHOWS THAT HE HAS CONFIRMED THE ADDITION ON THE GROUND THAT AN AMOUNT OF RS.7 LAKHS ISSUED ON 4 TH JUNE, 2008 VIDE CHEQUE NO.252429 FROM M/S SHALINI HOLDING LTD., ITA NO.5287/DEL/2018 4 IS THE SUBJECT MATTER OF ADDITION IN THE INSTANT CA SE. THE REASONS RECORDED BY THE AO, COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK DOE S NOT SHOW THAT THE ASSESSEE IN THE INSTANT CASE HAS RECEIVED ANY AMOUNT FROM M/S SHALI NI HOLDINGS LTD. THE APPROVING AUTHORITIES IN A MECHANICAL MANNER HAVE APPROVED TH E REASONS RECORDED BY THE AO THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.7 LAKHS F ROM M/S MEGA TOP PROMOTERS PVT. LTD., ON 15 TH SEPTEMBER, 2009. THEREFORE, THE VARIOUS DECISIONS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE TO THE EFFECT THAT WHEN TH E APPROVAL HAS BEEN GIVEN IN A MECHANICAL MANNER WITHOUT DUE APPLICATION OF MIND, SUCH REASSESSMENT PROCEEDINGS ARE VOID AB INITIO IS APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN ANY CASE, WHEN THE BASIS OF REOPENING OF THE ASSESSMENT WAS ON ACCOUNT OF RECEIPT OF ACCOMMODATION ENTRY OF RS.7 LAKHS FROM M/S MEGA TOP PROMOTERS PVT . LTD., VIDE CHEQUE NO.099732 DATED 15 TH SEPTEMBER, 2009 AND WHEN THE ABOVE AMOUNT HAS ALRE ADY BEEN ADDED IN THE AY 2010-11 AS THIS AMOUNT DOES NOT BELONG TO THE AY 2009-10 AND, THEREFORE, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) IS NOT JUSTIFIED. SO FAR AS THE FINDING GIVEN BY THE CIT(A) THAT ENTRY OF RS.7 LAKH S ON 4 TH JUNE, 2008 VIDE CHEQUE NO.252429 FROM M/S SHALINI HOLDING LTD., IS CONCERN ED, IT IS NOT UNDERSTOOD AS TO FROM WHERE HE HAS GOT THIS FIGURE SINCE THE REASON DOES NOT MENTION SO, NOR THE ASSESSMENT ORDER SPEAKS OF THE SAME. IN THIS VIEW OF THE MATTER, I AM OF THE CONSIDERED OPINION THAT THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) IS NOT JUSTIFIED. ACCORDINGLY, THE ADDITION IS DIRECT ED TO BE DELETED. ITA NO.5287/DEL/2018 5 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 5.03.2019. SD/- ( R.K. PANDA) ACCOUNTANT MEMFBE R DATED: 15 TH MARCH, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI