Pramod Kumar, New Delhi V. DCIT, New Delhi

ITA 5351/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2879 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 09-08-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 01-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Keywords: Unexplained cash credit; Accommodation entries
• Section: 68; 69; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F NEW DELHI BEFORE SHRI G.D. AGRAWAL, PRESIDENT AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO: 5351/DEL/2014 ASSTT. YEAR : 2005-06 PRAMOD KUMAR VS. ASSTT. C OMMISSIONER OF INCOME TAX 13/34, WEA, CENTRAL CIRCLE-4, KAROL BAGH, NEW DELHI. NEW DELHI 110 005. (PAN ALJPK6448A) (APPELLANT) (RESP ONDENT) APPELLANT BY : SHRI ANUNAV KUMAR, ADVOCATE RESPONDENT BY :SMT. PARAMITA TRIPATHY, CIT(DR) O R D E R PER H.S. SIDHU, JM THE ASSESSEE HAS FILED THE APPEAL AGAINS T THE IMPUGNED ORDER DATED 23.6.2014 PASSED BY THE LD. CIT(A)-XXXIII, NEW DELHI R AISING THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE CIT(A) ERRED IN NOT APPRECIATING THAT SIN CE THE APPELLANT IS ADMITTEDLY PART OF TARUN GOYAL GROUP , WHICH GROUP HAS BEEN CARRYING ON THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES DURING THE RELEVANT YEAR AND THE AMOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT WAS REPRESENTING PART OF ABOVE BUSINESS AND, THEREFORE, ADDITION IN RESPECT THEREOF COULD NOT BE MADE UNDER SECTION 68 OF THE A CT AND THE CASE OF THE APPELLANT COULD NOT BE CONSIDERED INDEPENDENTLY. 2. THAT THE CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS. 34,65,000/- BEING THE CASH DEPOSITS IN THE BANK ACCOUNT OF THE APPELLANT COMPANY OBSERVING THAT THE APPELLANT HAS NOT GIVEN LIST OF BENEFICIARIES. HE FAILED TO APPRECIATE THAT AS PER THE ADMITTED POSITION DULY ACCEPTED BY MR. TARUN GOYAL WHO HAD APPEARED BEFORE THE AO, THE CASH DEPOSITS WERE PART OF BUSINESS CARRIED ON BY HIM OF PROVIDING ACCOMMODATION ENTRIES AND, THER EFORE, ONLY THE COMMISSION INCOME THEREON WAS TO BE ASSESSED AND TH E CIT(A) ALSO FAILED TO 2 APPRECIATE THAT IT WAS NOT POSSIBLE AT THIS STAGE T O GIVE LIST OF BENEFICIARIES OR THE PARTIES WITH WHOM THE BUSINESS WAS DONE. THAT T HE LD. CIT(A) ALSO FAILED TO APPRECIATE THAT AFTER DEPOSITS OF CASH IN THE B ANK ACCOUNT OF THE APPELLANT THE FUNDS HAD BEEN TRANSFERRED TO OTHER ACCOUNTS OF THE GROUP COMPANY FOR THE PURPOSE OF UTILIZING THE SAME FOR PROVIDING AC COMMODATION ENTRIES. 3. THAT THE CIT(A) ALSO FAILED TO APPRECIATE THAT CONS IDERING THE FINANCIAL STATUS OF THE APPELLANT THERE WAS NO POSSIBILITY TO EARN S UCH AN AMOUNT AS AN INCOME AND, THEREFORE, ADDITION ON ACCOUNT OF CASH DEPOSITS COULD NOT BE MADE AS UNDISCLOSED INCOME U/S. 68 OF THE ACT IN TH E CASE OF THE APPELLANT IN VIEW OF THE DECISIONS OF THE SUPREME COURT IN TH E CASES OF CIT VS. SMT. PK NOORJAHAN, 237 ITR 570 (SC) AND CIT VS. BHARAT ENGI NEERS & CONSTRUCTION CO. 83 ITR 187 (SC). 4. THAT THE CIT(A) ALSO ERRED IN NOT ADJUDICATING THE APPEAL FOLLOWING THE ORDER OF THIS TRIBUNAL DATED 18.10.2013 PASSED IN THE CAS ES OF TARUN GOYAL GROUP IN ACCORDANCE WITH WHICH HOLISTIC VIEW IS TO BE TAK EN CONSIDERING THE GROUP AS A WHOLE AND ONLY THE COMMISSION INCOME IS TO BE ASSESSED IN RESPECT OF CASH RECEIVED AND DEPOSITED IN BANK ACCOUNTS AS A P ART OF BUSINESS OF PROVIDING ACCOMMODATION ENTRIES BY THE GROUP AT THE RATE OF PERCENTAGE TO BE DETERMINED CONSIDERING THE PRECEDENCE AVAILABLE IN THIS REGARD. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. HE HAS FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 ON 29.7.2005 DECLARING TOTAL INCOME OF RS. 1,34,631/-. SUBSEQUENTLY SEARCH AND S EIZURE OPERATION PASSED U/S 132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED ON 15.9.20 08 AT THE GROUP CONCERN OF ONE MR. TARUN GOYAL. AS A RESULT OF SEARCH AND SEIZ URE OPERATION, IT WAS FOUND THAT BANK ACCOUNT NO. IB4005-111250-050 WITH INDUSIND BAN K LTD. BELONGS TO THE ASSESSEE. FROM THE BANK STATEMENT, IT WAS FOUND THA T A SUM OF RS. 34,65,500/- WAS DEPOSITED IN CASH ON VARIOUS DATES DURING THE FINA NCIAL YEAR 2004-05. CONSEQUENT THIS INFORMATION, THE ASSESSMENT PROCEEDINGS WERE R EOPENED BY ISSUING NOTICE U/S 148 OF THE I.T. ACT, 1961 ON 27 TH MARCH, 2012. 3. DURING THE COURSE OF REASSESSMENT PROCEED INGS, ASSESSEE WAS PUT ON NOTICE AS TO WHY SAID CASH DEPOSITED SHOULD NOT BE ADDED A S INCOME AND CASH DEPOSIT 3 SHOULD NOT BE BROUGHT TO TAX. IT WAS EXPLAINED TO TH E AO THAT THE ASSESSEE WAS ONLY EARNING COMMISSION UNDER SUCH CASH DEPOSITS AND NO OTHER EXPLANATION IS FURNISHED TO THE AO. THEREFORE, THE AO MADE ADDITION OF RS. 3 4,65,500/-. REASSESSMENT WAS COMPLETED VIDE ORDER DATED 25.03.2013. AGGRIEVED B Y THIS ORDER OF ASSESSMENT, THE ASSESSEE HAD PREFERRED AN APPEAL BEFORE THE COMMISS IONER OF INCOME TAX (APPEALS) XXXIII, NEW DELHI WHO VIDE ORDER DATED 23.06.2014 DIS MISSED THE APPEAL BY HOLDING THAT THE ASSESSEE NOT OFFERED AS SATISFACT ORY EXPLANATION FOR THE SOURCE OF THE CASH DEPOSITS IN BANK ACCOUNT. AGGRIEVED, THE P RESENT APPEAL WAS FILED BEFORE US. 4. IT WAS SUBMITTED ON BEHALF OF THE ASSESSE E THAT IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2004-05, THE ITAT VIDE ITS ORDER DATED 17.4.2015 PASSED IN ITA NO. 6126/DEL/2013 HAS RESTORED THE MATTER TO TH E FILE OF AO FOR FRESH ADJUDICATION, HENCE, HE REQUESTED THAT IN THE PRESE NT APPEAL ALSO THE MATTER MAY BE RESTORED BACK TO THE AO FOR FRESH ADJUDICATION BY F OLLOWING THE AFORESAID DECISION. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. WE FIND CONSIDERABLE COGENCY IN THE SUBMISSIONS OF THE ASS ESSEES COUNSEL THAT IN THE CASE OF ASSESSEE FOR THE ASSESSMENT YEAR 2004-05, THE IT AT VIDE ITS ORDER DATED 17.4.2015 PASSED IN ITA NO. 6126/DEL/2013 HAS RES TORED THE MATTER TO THE FILE OF AO FOR FRESH ADJUDICATION, ON THE SIMILAR AND IDEN TICAL ISSUES. FOR THE SAKE OF CONVENIENCE, WE ARE REPRODUCING THE OPERATIVE PORTI ON OF THE ORDER AS UNDER :- 4. IT WAS SUBMITTED ON BEHALF OF THE APPELLANT THAT IN THE SIMILAR CASES THIS HONBLE TRIBUNAL IN ITA NO. 4636 & 4637/ DEL/2012 4 HAS RESTORED THE MATTER TO THE FILE FOR FRESH ADJU DICATION. THE OPERATIVE PORTION OF THE ORDER IS AS UNDER:- 22. ADMITTEDLY CERTAIN ASSESSMENT OF SHRI TARUN G OYAL, THE KIN PIN ARE AT VARIOUS STAGES AND HAVE NOT REACHED THE TRIBUNAL. UNDER THESE CIRCUMSTANCES, IT WOULD NOT B E POSSIBLE TO HAVE IN OVER ALL VIEW OF THE MATTER AND ELIMINATE CHAIN / MULTIPLE TRANSACTION, FOR ARRIVIN G AT THE CORRECT ASSESSABLE AMOUNT. THUS WE HAVE NO OTHER ALTERNATIVE BUT TO SET ASIDE ALL THESE APPEALS TO T HE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LA W. 23. THE AO SHALL AFTER EXAMINING THE EVIDENCE SUBMI TTED BY THE ASSESSEE, CONSIDER ALL THE CASES TOGETHER AND; A) RESTRICT THE ADDITION U/S 68 TO ONLY THE PEAK UNEXPLAINED CREDIT IN EACH CASE AFTER ELIMINATION C IRCULAR TRANSACTION. B) TO ELIMINATE TAXATION OF THE SAME AMOUNT MULTIP LE TIMES, DUE TO THE CHAIN TRANSACTIONS WHICH RESULTED DUE TO LAYERING INDULGED BY THE ASSESSEE. C) CONSIDER THE MATERIAL ON RECORD AND THE PRECEDE NCE AVAILABLE ON THE ISSUE AND DETERMINE THE PERCENTAGE OF COMMISSION, WHICH THE ASSESSEES WOULD HAVE EARNED A ND BRING THE SAME TO TAX. 5. THEREFORE, IN THIS CASE ALSO SINCE THE CASE AL SO BELONGS TO THE SAME GROUP AND HAVING NEXUS WITH THE ASSESSMENT PRO CEEDINGS OF MR. TARUN GOYAL, WE RESTORE THE MATTER TO THE FI LE OF THE AO WITH A DIRECTION THAT TO CONSIDER THE EXPLANATION O FFERED, IF ANY, IN THE LIGHT OF PROVISION OF SECTION 69 OF THE INCO ME TAX ACT AND REDO THE ASSESSMENT. 7. RESPECTFULLY FOLLOWING THE AFORESAID PRECEDENT, WE RESTORE THE MATTER TO THE FILE OF THE AO WITH THE DIRECTION THAT TO CONSIDER THE EXPLANATION OFFERED, IF ANY, IN 5 THE LIGHT OF PROVISION OF SECTION 69 OF THE INCOME TAX ACT, 1961 AND REDO THE ASSESSMENT. 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 18/12/2017. SD/- SD/- (G.D. AGRAWAL) (H.S. SIDHU) PRESIDENT JUDICIAL MEMBER DATED: THE 18/12/2017 SR BHATNAGAR COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSTT. REGISTRAR, ITAT, NEW DELHI