Geefcee Finance Ltd, V. ITO Ward- 12 (1),

ITA 535/DEL/2008

• Counselvise Citation: 53520114 RSA 2008
• Duration Of Justice: 3 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-01-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 13-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIS GILL
• Assessee Lawyers: V P GUPTA BASANT KUMAR
• Keywords: Accommodation entries
• Section: 14A; 68

Judgement Text

ITA NO.535/DEL/2008 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO.535/DEL/2008 ASSTT. YEAR: 2004-05 M/S GEEFCEE FINANCE LTD., VS INCOME TAX O FFICER, 13/34, W.E.A. 3 RD FLOOR, WARD 12(1), MAIN ARYA SAMAJ ROAD, NEW DELHI. KAROL BAGH, NEW DELHI-110005 (PAN NO. AAACG1103H) (APPELLANT) (RESPONDENT) APPELLANT BY: S/SHRI V.P. GUPTA, BASANT KUMAR RESPONDENT BY: SHRI R.I.S. GILL, CIT(DR) O R D E R PER G.D. AGRAWAL, VICE PRESIDENT IN THIS APPEAL FILED BY THE ASSESSEE, FOLLOWING GR OUNDS ARE RAISED: THAT THE CIT(A) ERRED IN UPHOLDING ADDITION OF RS.1,01,02,450/- MADE BY THE AO UNDER SECTION 68 OF THE INCOME TAX ACT WITHOUT CORRECTLY APPRECIATING THE F ACTS AND CIRCUMSTANCES OF THE CASE, THE DOCUMENTARY EVIDENCE AND ALSO THE SCOPE OF THE PROVISIONS OF SECTION 68 OF THE AC T. 2. THAT THE CIT(A) ERRED IN UPHOLDING ADDITION OF RS. 1,08,05,000/- MADE BY THE AO UNDER SECTION 68 OF TH E INCOME TAX ACT WITHOUT CORRECTLY APPRECIATING THE FACTS AN D CIRCUMSTANCES OF THE CASE, THE DOCUMENTARY EVIDENCE AND ALSO THE SCOPE OF THE PROVISIONS OF SECTION 68 OF THE AC T. 3. THAT THE CIT(A) ERRED IN NOT ADJUDICATING GROUND OF THE APPEAL REGARDING DISALLOWANCE OF RS.16,182/- MADE B Y THE AO ITA NO.535/DEL/2008 2 ON AD HOC BASIS U/S 14A OF THE INCOME TAX ACT EQUIV ALENT TO 20% OF DIVIDEND INCOME OF RS.80,912/-. 2. AT THE TIME OF HEARING BEFORE US, IT IS STATED B Y THE LEARNED COUNSEL THAT AFTER THE DATE OF IMPUGNED ASSESSMENT ORDER WH ICH IS 29.12.2006, THERE ARE VARIOUS DEVELOPMENTS WHICH WOULD REQUIRE A RE-L OOK INTO THE WHOLE MATTER. HE POINTED OUT THAT THERE HAD BEEN SUCCESS IVE SEARCH OPERATIONS AT HIS PREMISES ON 15 TH SEPTEMBER, 2008, 24 TH SEPTEMBER, 2009 AND 17 TH SEPTEMBER, 2010. THAT AFTER SUCH SEARCH OPERATIONS , THE REVENUE CONCLUDED THAT THE ASSESSEE WAS CARRYING ON THE BUSINESS OF P ROVIDING ACCOMMODATION ENTRIES TO VARIOUS PARTIES. THAT AS A RESULT OF SU CH SEARCH, ASSESSMENT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION WAS ALSO REOPENED U/S 153C IN WHICH ALSO THE AO RECORDED THE FINDING THAT THE ASS ESSEE WAS CARRYING OUT THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES. H E MADE THE ADDITION OF RS.41,21,538/-, BEING THE COMMISSION FROM PROVIDING OF ACCOMMODATION ENTRIES. HOWEVER, IN THE ORDER U/S 153C, THE AO CO NSIDERED THE ASSESSED INCOME IN THE IMPUGNED ASSESSMENT ORDER DATED 29 TH DECEMBER, 2006. THUS, THE ADDITION MADE IN THE IMPUGNED ASSESSMENT ORDER, WHICH IS SUBJECT MATTER OF THE PRESENT APPEAL, IS REPEATED IN THE ASSESSMEN T ORDER U/S 153C. THAT THE APPEAL AGAINST THE FRESH ASSESSMENT ORDER PASSED U/ S 153C IS PENDING BEFORE THE CIT(A). HE THEREFORE REQUESTED THAT THE ORDER OF THE CIT(A) UNDER ITA NO.535/DEL/2008 3 CONSIDERATION MAY BE SET ASIDE AND THE MATTER BE RE STORED BACK TO HIS FILE FOR READJUDICATION, ALONG WITH THE ASSESSEES APPEAL AG AINST THE ASSESSMENT ORDER DATED 24 TH DECEMBER, 2010 PASSED U/S 153C. HE STATED THAT TH IS WOULD AVOID THE MULTIPLICATION OF PROCEEDINGS. HE ALSO P OINTED OUT THAT IN THE IMPUGNED ASSESSMENT ORDER, THE AO HAS MADE HUGE ADD ITION OF MORE THAN RS. 2 CRORE ON ACCOUNT OF CASH DEPOSITED IN THE ASS ESSEES BANK ACCOUNT. THAT WHEN THE ASSESSEE IS TREATED AS CARRYING ON TH E BUSINESS OF PROVIDING ACCOMMODATION ENTRIES, IT IS A MATTER OF GENERAL KN OWLEDGE THAT IN SUCH CASES, THE AMOUNT IS GIVEN BY THE PERSON WHO TAKES THE ACCOMMODATION ENTRY AND AFTER DEPOSITING SUCH AMOUNT, THE ENTRY PROVIDE R ISSUES CHEQUE OR DRAFT IN FAVOUR OF THE PERSON WHO WANTS TO TAKE THE ENTRY . HE, THEREFORE, SUBMITTED THAT THE ENTIRE MATTER REQUIRES A RE-LOOK IN THE LI GHT OF FRESH DEVELOPMENT OF FACTS. 3. LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW AND HE STATED THAT IN THE PRESENT APPEAL, THE ASSESSEE IS UNABLE TO EXPLAIN THE SOURCE OF MONEY DEPOSITED IN HIS BANK A CCOUNT. THEREFORE, THE ADDITIONS MADE BY THE AO AND SUSTAINED BY THE CIT(A ) SHOULD BE UPHELD. ITA NO.535/DEL/2008 4 4. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. IN VIEW OF THE SUBSEQUENT DEVELOPMENTS AND THE FACTS, WE AGREE WITH THE ASSES SEE COUNSELS SUBMISSION THAT THE MATTER REQUIRES RECONSIDERATION AND BOTH T HE APPEALS, ARISING AGAINST DIFFERENT ASSESSMENT ORDERS FOR THE SAME ASSESSMENT YEAR I.E. AY 2004-05, NEED TO BE CONSIDERED TOGETHER. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A) UNDER CONSIDERATION AND RESTORE THE MATTER B ACK TO HIS FILE. WE DIRECT HIM TO CONSIDER AND ADJUDICATE APPEALS AGAIN ST BOTH THE ASSESSMENT ORDERS, I.E. THE ASSESSMENT ORDER DATED 29.12.2006 PASSED U/S 143(3), AND THE ASSESSMENT ORDER DATED 24.12.2010 PASSED U/S 153C, TOGETHER. NEEDLESS TO MENTION THAT THE CIT(A) WILL ALLOW ADEQUATE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE AS WELL AS THE AO. 5. IN THE RESULT, THE ASSESSEES APPEAL IS DEEMED T O BE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT DURING THE COUR SE OF HEARING ON 30.1.2012. SD/- SD/- ( A.D. JAIN ) ( G.D. AGRAWAL ) JUDICIAL MEMBER VICE PRESIDENT DT. 30TH JANUARY 2012 GS ITA NO.535/DEL/2008 5 COPY FORWARDED TO:- 1. M/S GEEFCEE FINANCE LTD., NEW DELHI. 2. ITO, WARD 12(1), NEW DELHI. 3. CIT(A)-V, NEW DELHI. 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR