Anil Kumar Malhotra, New Delhi V. ACIT Circle-55(1), New Delhi

ITA 5357/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8437 (ITAT-DELHI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 12-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Keywords: Income from undisclosed sources; Search and seizure; Document seized; Source of fund; Documents seized
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT & SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO.5357/DEL/2019 ASSESSMENT YEAR 2007-08 PUSHPAK INFRATECH PVT. LTD., 61-C, BASEMENT, BER SARAI, OPP. JNU CAMPUS, NEW DELHI. V. DCIT, CENTRAL CIRCLE-11, NEW DELHI. TAN/PAN: AAECP 0091R (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SMT. SULEKHA VERMA, CIT-DR DATE OF HEARING: 16 10 2019 DATE OF PRONOUNCEMENT: 13 01 2020 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 31.07.2014, PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXI, NEW DELH I FOR THE QUANTUM OF ASSESSMENT PASSED U/S.153A FOR THE ASSESSMENT YEAR 2007-08. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS CHALLENGED THE PROTECTIVE ADDITION OF RS.20 LACS ON ACCOUNT OF SHARE APPLICATION MONEY CONVERTED INT O UNSECURED LOAN. 2. THE FACTS IN BRIEF ARE THAT A SEARCH AND SEIZURE OPERATION U/S.132 WAS CARRIED OUT IN THE BUSINESS PREMISES OF M/S. SHIV VANI GROUP AS WELL AS THE RESIDENTIAL PREMISES OF THE I.T.A. NO.5357/DEL/2014 2 DIRECTORS. THE ASSESSEE-COMPANY WAS ALSO COVERED UN DER SEARCH ACTION BEING A PART OF GROUP COMPANIES OF M/ S. SHIV VANI GROUP. A NOTICE U/S.153A WAS ISSUED ON 10.01.2 012 AND IN RESPONSE TO WHICH, RETURN OF INCOME WAS FILE D AT NIL INCOME. THE LD. ASSESSING OFFICER HAS NOTED THAT DU RING THE COURSE OF SEARCH OPERATION VARIOUS DOCUMENTS WERE F OUND ON VARIOUS PREMISES OF M/S. SHIV VANI GROUP WHEREIN TH ERE WERE CERTAIN TRANSACTIONS MENTIONED IN ANNEXURE A-14 AT PAGE NO.56 WHICH WAS SOME KIND OF A WORKING OR SUMMARY O F INTER- CORPORATE LOANS AND AMOUNT RECEIVED ON SALE OF STOC K IN INVESTMENT. FROM THE PERUSAL OF OTHER SEIZED DOCUME NTS, THE ASSESSING OFFICER HAS NOTED FOLLOWING FACTS: I. PAGE NO 70 OF ANNEXURE A-4, SEIZED FROM OFFICE OF SHIV VANI GROUP AT NBC PLAZA, SAKET, CONTAINS THE SUMMARY ACC OUNT OF SH. N K JAIN WHEREIN DETAILS OF PAYMENT RECEIVED AN D TRANSFERRED BY N K JAIN HAS BEEN MENTIONED. ON THE BASIS OF NOTING A SUM OF RS. 14.83 CRORES HAS BEEN SURRENDER ED AS ADDITIONAL INCOME IN THE HANDS OF ASSESSEE IN THE A SSESSMENT YEAR 2009-10. II. PAGE NO 6 OF ANNEXURE A-1, SEIZED FROM RESIDENC E OF SH. R K SOMANI & EMPLOYEE IN GROUP WHEREIN IT IS MENTIO NED THAT N. K. JAIN CAL, AND ALSO SHOWS CASH SENT ON 09-01- 2008. ON THIS TRANSACTION SH. R K SOMANI HAS SURRENDERED COM MISSION OF RS. 300000/- AGAINST NOTING OF 4.5 MENTIONED ON THE PAGE. III. PAGE NO 26 OF ANNEXURE A-18 CONTAINS CAPITAL AND LOAN SYNDICATION BY SH. N K JAIN WITH MR. HIRALAL RATHI & SH. R K SOMANI FOR THE PERIOD BEFORE 2001. THE COMMISSION O N TRANSACTION HAS BEEN OFFERED FOR TAXATION BY SH. R K SOMANI & I.T.A. NO.5357/DEL/2014 3 SH. HIRALAL RATHI IN THEIR HANDS IN THE RELEVANT AS SESSMENT YEAR. IV. THE DESCRIPTION ON PAGE NO 26 OF ANNEXURE A-18, SHOWS NOTING AS 'ACCOUNT OF NK JAIN' AND COMMISSION HAS B EEN MENTIONED @ 5.5% ON CAPITAL, @ 3.5% ON ENTRY AND (5 ) 5% ON BILLS. SUCH A HIGH RATE OF COMMISSION IS NOT POSSIB LE IN NORMAL COURSE OF BUSINESS WHICH ALSO INDICATES THE INVOLVE MENT OF SH. N K JAIN FOR PROVIDING OF ACCOMMODATION ENTRY. V. THE SUBSTANTIAL CASH PAYMENT BY THE ASSESSEE ON ACCOUNT OF COMMISSION TO VARIOUS BROKERS/ENTRY OPER ATORS IS ALSO APPEARING IN THE SEIZED DOCUMENTS AND SURRENDE RED DURING ASSESSMENT/SEARCH. 3. THUS, ASSESSING OFFICER HELD THAT THE TRANSACTIO NS MENTIONED SPECIFICALLY AT PAGE 56 OF ANNEXURE A-14 CLEARLY SHOW THAT THIS TRANSACTION HAS BEEN DONE THROUGH SH RI N.K. JAIN, ENTRY OPERATOR AND IS IN THE NATURE OF ACCOMO DATION ENTRY TRANSACTION FINANCED THROUGH M/S. SHIV VANI O UT OF UNDISCLOSED SOURCES OF INCOME. THE SOURCE OF FUND F OR ALL THESE TRANSACTIONS THROUGH MR. JAIN BELONGED TO M/S . SHIV VANI OIL AND GAS EXPLORATION SERVICES LTD., THE FLA GSHIP COMPANY OF THE GROUP WHEREIN SUBSTANTIVE ADDITION H AS ALREADY BEEN MADE. HOWEVER, ASSESSING OFFICER HAS A GAIN MADE PROTECTIVE ADDITION OF RS.25,00,000/- IN THE H ANDS OF THE ASSESSEE U/S.68. 4. LD. CIT (A) HAS CONFIRMED THE PROTECTIVE ADDITIO N TO THE EXTENT OF RS.20 LACS, AFTER OBSERVING AND HOLDING A S UNDER: I.T.A. NO.5357/DEL/2014 4 4.4 HOWEVER, IT IS FURTHER NOTED THAT THE ASSESSEE HAS NOT PAID ANY INTEREST ON THESE AMOUNTS. HENCE, THE ASSE SSEES SUBMISSIONS THAT IT WAS A GENUINE TRANSACTION CANNO T BE ACCEPTED. IF THE PARTIES HAD MADE APPLICATION FOR A LLOTMENT OF SHARES, THERE ARE NO EVIDENCES TO SHOW THAT THEY AG REED TO GET THE SAME CONVERTED INTO LOAN. AND THERE ARE ALSO NO EVIDENCE TO SHOW THAT THEY EVEN AGREED NOT TO RECEIVE ANY IN TEREST ON THE AMOUNTS LYING WITH THE APPELLANT. NO ONE WILL F ORGO INTEREST JUST LIKE THAT AND IF AT ALL THE INTEREST HAS BEEN FORGONE, IT WAS FOR THE ASSESSEE TO HAVE LED REASONABLE GROUNDS FOR THE SAME. IT IS HOWEVER NOTED THAT ONE OF THE CONCERNS NAMELY LYTON CONSULTANCY PVT. LTD. (WHO HAS GIVEN RS. 5 LACS) IS A GROUP CONCERN OF THE APPELLANT AND THE GENUINENESS OF THE TRANSACTION WITH THE SAID PARTY CANNOT BE IN DOUBT. IN VIEW OF THIS, I DO NOT CONSIDER THAT THE APPELLANT HAS BEEN ABLE TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS INVOL VING THE SAID AMOUNT OF RS. 20 LACS. CONSIDERING ALL THESE F ACTORS I HOLD THAT THERE IS MERIT IN AOS ACTION IN MAKING ADDITI ON TO THE EXTENT OF RS. 20 LACS INVOLVING RAJESH VANIJYA PVT. LTD. AND AMIT GOODS & SUPPLIERS PVT. LTD. THEREFORE, ADDITIO N OF RS. 20 LEAS MADE ON PROTECTIVE BASIS IS HEREBY CONFIRMED A ND THE BALANCE SUM OF RS. 5 LACS IS DELETED. 5. ON BEHALF OF THE ASSESSEE, WRITTEN SUBMISSION HA S BEEN FILED WHEREIN THE ASSESSEE HAS GIVEN ITS SUBMISSION , MAINLY ON MERITS STATING THAT THE ASSESSEE HAD SUBMITTED A LL THE DETAILS RELATING TO MONEY RECEIVED BY IT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE ENTIRE ONUS U/S.68 H AD BEEN DISCHARGED WITH REGARD TO THE SHARE APPLICATION MON EY I.T.A. NO.5357/DEL/2014 5 RECEIVED FROM FOLLOWING TWO PARTIES FOR SUMS AGGREG ATING TO RS.20 LACS:- NAME ADDRESS PAN AMOUNT AMIT GOODS & SUPPLIERS PVT. LTD. 41, SHIBTOLLA STREET, KOLKATA AACCA1198E 10,00,000/- RAJESH VANIJA PVT. LTD. 21, STRAND ROAD, KOLKATA. AABCR 6316C 10,00,000/- TOTAL 20,00,000/- 6. IT HAS BEEN FURTHER STATED THAT MONEY HAS BEEN R ECEIVED THROUGH BANKING CHANNELS AND ALL THE DETAILS RELATI NG TO THESE ENTITIES WERE FURNISHED. THE ASSESSING OFFICER WITH OUT MAKING ANY FURTHER INQUIRY HAS SIMPLY MADE THE ADDITION. W HEN IDENTITY OF THE CREDITORS ALONG WITH INCOME TAX PAR TICULARS AND OTHER DETAILS WERE AVAILABLE THEN ONUS CAST UPON TH E ASSESSEE STOOD DISCHARGED. IN SUPPORT, VARIOUS JUDGMENTS HAVE ALSO BEEN RELIED UPON. 7. ON THE OTHER HAND, LD. DR ALSO HAS RELIED UPON T HE JUDGMENT OF HONBLE DELHI HIGH COURT ON MERITS OF TH E ADDITIONS, IN THE CASES OF PCIT VS. NDR PROMOTERS PVT. LTD., IN ITA NO.49/2018 ORDER DATED 17.01.2019 AND PCIT V S. NRA IRON STEEL PVT. LTD. IN SLP (CIVIL) NO. 29855/2 018 ORDER DATED 05.03.2019 . 8. FROM THE PERUSAL OF THE IMPUGNED ORDERS, WE FIND THAT ASSESSING OFFICER HAS MADE ADDITION OF RS.25 LACS O N PROTECTIVE BASIS AND SUBSTANTIVE ADDITION HAS BEEN MADE IN THE HANDS OF M/S. SHIV VANI OIL & GAS EXPLORATION S ERVICES LTD. LD. CIT (A) TOO WITHOUT ASCERTAINING THE FATE OF I.T.A. NO.5357/DEL/2014 6 SUBSTANTIVE ADDITION MADE IN THE CASE OF M/S. SHIV VANI OIL & GAS EXPLORATION SERVICES LTD. HAS CONFIRMED THE PRO TECTIVE ADDITION TO THE EXTENT OF RS.20 LACS. THERE IS NO R EFERENCE OR WHISPER ABOUT SUBSTANTIVE ADDITION IN THE ORDER OF THE LD. CIT (A). CERTAINLY PROTECTIVE ADDITION CANNOT BE SUSTAI NED AT THE APPELLATE STAGE. UNDER THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE LD. CIT (A), TO ASCERTAIN THE FATE OF SUBSTANTIVE A DDITION MADE IN THE HANDS OF M/S. SHIV VANI OIL AND GAS EXPLORAT ION SERVICES LTD. AND IF SUCH AN ADDITION HAS ATTAINED FINALITY IN THAT CASE, THEN NO ADDITION SHOULD BE MADE IN THE C ASE OF THE ASSESSEE. LD. CIT (A) WILL PROVIDE DUE AND EFFECTIV E OPPORTUNITY OF HEARING TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JANUARY, 2020. SD/- SD/- [G.S. PANNU] [AMIT SHUKLA] VICE PRESIDENT JUDICIAL MEMBER DATED: 13 TH JANUARY, 2020 PKK: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR