ACIT, New Delhi V. M/s. Spectrum Coal & Power Ltd., New Delhi

ITA 5589/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3275 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 28-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SH
• Section: 153A; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA.NO.5589/DEL./2016 ASSESSMENT YEAR 2012-2013 ACIT, CENTRAL CIRCLE - 17 ROOM NO.103, 1 ST FLOOR, HALL NO.1, ARA CENTRE, E- 2, JHANDEWALAN, NEW DELHI. VS., M/S. SPECTRUM COAL & POWER LTD., 18, RAO TULA RAM MARG, VASANT ENCLAVE, NEW DELHI PIN 110 015. PAN AADCS9860J (APPELLANT) (RESPONDENT) C.O.NO.172/DEL./2017 ARISING OUT OF ITA.NO.5589/DEL./2016 - ASSESSMENT YEAR 2012-2013 M/S. SPECTRUM COAL & POWER LTD., 18, RAO TULA RAM MARG, VASANT ENCLAVE, NEW DELHI PIN 110 015. PAN AADCS9860J VS., ACIT, CENTRAL CIRCLE - 17 ROOM NO.103, 1 ST FLOOR, HALL NO.1, ARA CENTRE, E- 2, JHANDEWALAN, NEW DELHI. (CROSS - OBJECTOR) (RESPONDENT) FOR REVENUE : MS. RACHNA SINGH, CIT - D.R. FOR CROSS OBJECTOR : SHRI S.K. TULSIYAN, MS. NISHA RACHNA & SHRI KARAN ADVOCATES. DATE OF HEARING : 29.11.2017 DATE OF PRONOUNCEMENT : 30 .11.2017 2 ITA.NO.5589/DEL./2016 & CO.NO.172/DEL./2017 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI. ORDER PER BHAVNESH SAINI, J.M. THE DEPARTMENTAL APPEAL AS WELL AS CROSS OBJECTIO N BY ASSESSEE-COMPANY ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-27, NEW DELHI, DATED 08 TH AUGUST, 2016, FOR THE A.Y. 2012-2013. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT A SEARC H AND SEIZURE OPERATION AND SURVEY OPERATION UNDER SECTIO N 132/133A OF THE I.T. ACT, 1961 WERE CONDUCTED ON 12 TH APRIL, 2012 IN THE CASE OF THE ASSESSEE-COMPANY ALONG WITH OTHERS. IN THIS CASE, REFERENCE FOR EXCHANGE OF INFORMATION WAS MADE BY I NVESTIGATION WING. SUBSEQUENT TO THIS, NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED AND ASSESSEE-COMPANY FILED RETURN OF INC OME DECLARING INCOME OF RS.167,14,24,547. THE A.O. ISSU ED QUESTIONNAIRE AS WELL AS STATUTORY NOTICE. THE ASSE SSEE- COMPANY PRODUCED THE DOCUMENTS AND ACCOUNTS IN SUPP ORT OF THE SUBMISSIONS. 3 ITA.NO.5589/DEL./2016 & CO.NO.172/DEL./2017 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI. 2.1. THE A.O. NOTED THAT DURING THE COURSE OF SEAR CH PROCEEDINGS, ANNEXURE-AA-1 WAS SEIZED FROM THE OFFI CE PREMISES OF M/S. ACB (INDIA) LTD., GURGAON, PAGE-2 OF THIS ANNEXURE IS RELATED WITH THE ASSESSEE-COMPANY, WHER EIN IT WAS MENTIONED THAT THE ASSESSEE-COMPANY MADE ADJUSTMENT TO REDUCE THE EXCESS PROFIT OF RS.20 CRORES. THEREFORE , ASSESSEE- COMPANY WAS REQUIRED TO EXPLAIN THE SAME IN VIEW OF STATEMENT OF SHRI RUDRA SEN SINDHU FOR ADJUSTMENT IN TAXABLE PROFIT TO THE TUNE OF RS.20 CRORES IN THE ASSESSMENT YEAR UNDER A PPEAL IN VIEW OF THE EXCEPTIONAL PROFITS OF THE YEAR. IT IS STATED IN THE STATEMENT THAT ADJUSTMENT OF TAXABLE PROFIT OF RS.2 0 CRORES WHICH WAS NOT LIKELY TO BE DISCLOSED, IS BEING OFFE RED AS ADDITIONAL INCOME IN THE HANDS OF THE ASSESSEE-COMP ANY IN THE ASSESSMENT YEAR UNDER APPEAL. IT WAS SUBMITTED BEFO RE A.O. THAT THE PAPER CONTAINS NOTE DATED 5 TH APRIL, 2012, HOWEVER, LAST DATE FOR FILING OF INCOME TAX RETURN IS 30 TH SEPTEMBER, 2012. AS SUCH, THE COMPANY HAD DEPOSITED TAX ON THIS ADDITIO NAL INCOME AND FILED ITS RETURN IN DUE COURSE. SINCE THE ADDIT ION HAS ALREADY BEEN OFFERED FOR TAXATION, THEREFORE, IT WOULD AMOU NT TO DOUBLE 4 ITA.NO.5589/DEL./2016 & CO.NO.172/DEL./2017 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI. TAXATION. THE A.O. FURTHER ISSUED A SHOW CAUSE NOTI CE TO THE ASSESSEE-COMPANY TO EXPLAIN THEREIN THE CONTENTS OF THE SEIZED PAPER AND SOUGHT THE EXPLANATION OF ASSESSEE-COMPAN Y. THE ASSESSEE-COMPANY MORE OR LESS MADE SIMILAR ADDITION . THE A.O. HOWEVER, WAS NOT SATISFIED WITH THE EXPLANATION OF ASSESSEE- COMPANY AND NOTED THAT ASSESSEE-COMPANY HAS FILED R ETURN OF INCOME ON 16 TH MAY, 2014 AT THE TOTAL INCOME OF RS.167,14,24,547 WHEREAS THE ANNEXURE WAS SEIZED DU RING THE COURSE OF SEARCH, WHEREIN PROFIT PLAN AS PER ADVANC E TAX IS RS.140 CRORES AND THE ESTIMATED PROFIT FOR THE YEAR ENDED MARCH 31, 2012, IS RS.160 CRORES. THEREFORE, THE ASSESSEE -COMPANY REDUCED THE EXCESS PROFIT OF RS.20 CRORES. THE A.O. ALSO NOTED THAT ASSESSEES COMPANY TAX PAYMENT INDICATES THAT ASSESSEE- COMPANY PAID ADVANCE TAX OF RS.37,50,00,000 AND ALS O PAID SELF-ASSESSMENT TAX OF RS.16,50,00,000 WHICH REFLEC TS THE INTENTION OF THE ASSESSEE- COMPANY REGARDING REDUCT ION IN TAXABLE PROFITS AND ITS PROFITS COULD NOT BE CORREC TLY SHOWN. THE A.O. ACCORDINGLY, MADE ADDITION OF RS.20 CRORES AND COMPUTED THE INCOME OF THE ASSESSEE-COMPANY AT RS.187,14,24, 550. 5 ITA.NO.5589/DEL./2016 & CO.NO.172/DEL./2017 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI. 3. THE ASSESSEE-COMPANY CHALLENGED THE ADDITION BEFORE LD. CIT(A). THE WRITTEN SUBMISSIONS OF THE A SSESSEE- COMPANY ARE REPRODUCED IN THE APPELLATE ORDER IN WH ICH THE ASSESSEE-COMPANY REITERATED THE SUBMISSIONS MADE BE FORE A.O. AND IT WAS FURTHER SUBMITTED THAT ALLEGATION OF RED UCTION OF PROFIT IS NOT CORRECT. THE ASSESSEE-COMPANY HAS SHO WN THE INCOME CORRECTLY. THE DOCUMENT WAS NEVER ACTED UPON . IT WAS A MERE ESTIMATE. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE-COMPANY AND MATERIAL ON RECORD, FOU ND THAT THERE IS NOTHING ON RECORD TO SHOW ANY TRANSACTION REDUCING THE PROFIT BY RS.20 CRORES. THE ASSESSEE-COMPANY HAS AL READY FILED RETURN OF INCOME SHOWING INCOME OF RS.167 CRORES. T HEREFORE, THE ADDITION OF RS.20 CRORES WAS DELETED. 4. THE REVENUE IS IN APPEAL CHALLENGING THE DELETI ON OF ADDITION OF RS.20 CRORES. HOWEVER, THE ASSESSEE-COM PANY FILED THE CROSS-OBJECTION MAINLY IN SUPPORT OF THE FINDIN GS OF THE LD. CIT(A). 6 ITA.NO.5589/DEL./2016 & CO.NO.172/DEL./2017 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI. 5. THE LD. D.R. RELIED UPON THE ORDER OF THE A.O. AND SUBMITTED THAT SEIZED PAPER IS FILED AT PAGE 358 OF THE PAPER BOOK. THE STATEMENT OF SHRI RUDRA SEN SINDHU WAS RE CORDED UNDER SECTION 131 OF THE ACT ON 27 TH JULY, 2012 IN WHICH HE MADE THE SURRENDER OF THE AMOUNT IN QUESTION. THE A DDITION IS MADE ON ACCOUNT OF REDUCTION OF PROFIT. THE LD. D.R . SUBMITTED THAT IT IS THE DUTY OF THE PARTIES TO LEAD THEIR EV IDENCE AT THE STAGE WHEN THE MATTER IS IN CHARGE OF THE INCOME TA X OFFICER. THEREFORE, FAILING TO PRODUCE EVIDENCE WOULD GIVE P RESUMPTION AGAINST THE ASSESSEE-COMPANY. THE LD. D.R. RELIED U PON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F KESHAV MILLS LTD., VS. CIT, BOMBAY 56 ITR 365 AND ALSO REF ERRED TO SECTION 114 OF THE EVIDENCE ACT. THE LD. D.R. IN TH E ALTERNATIVE CONTENTION SUBMITTED THAT THE MATTER MAY BE REMANDE D TO LD. CIT(A) FOR APPRAISAL OF THE SEIZED DOCUMENT. 6 THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT DOCUMENT WAS NOT RECOVERED FROM THE POSSESSION OF THE 7 ITA.NO.5589/DEL./2016 & CO.NO.172/DEL./2017 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI. ASSESSEE-COMPANY BECAUSE IT WAS RECOVERED FROM M/S. ACB (INDIA) LTD. IT WAS SUBMITTED THAT AS PER THE SEIZE D DOCUMENT, THE ESTIMATED PROFIT OF YEAR ENDING WOULD BE RS.160 CRORES. HOWEVER, THE ASSESSEE-COMPANY HAS ALREADY DECLARED PROFIT OF RS.167 CRORE WHICH IS MUCH HIGHER. THEREFORE, NO AD DITION IS REQUIRED IN THE MATTER. HE HAS SUBMITTED THAT NO EV IDENCE OF MANIPULATION IN THE BOOKS OF ACCOUNT OF THE ASSESSE E-COMPANY WAS FOUND DURING THE COURSE OF SEARCH. IT IS NOT A CASE OF REDUCTION OF THE PROFIT AND ONLY ADHOC ADDITION WAS MADE WHICH HAVE BEEN CORRECTLY DELETED BY THE LD. CIT(A). 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THOUGH T HE DOCUMENT IN QUESTION WAS NOT RECOVERED FROM THE POS SESSION OF THE ASSESSEE-COMPANY, ANY HOW, IT WOULD NOT GIVE RI SE TO THE ADDITION IN QUESTION. THE A.O. HEAVILY RELIED UPON THE SEIZED DOCUMENT COPY OF WHICH IS FILED AT PAGE-358 OF THE PAPER BOOK AS WELL AS REPRODUCED IN THE ASSESSMENT ORDER. ACCO RDING TO IT, THE ESTIMATED PROFIT OF YEAR ENDING IN APPEAL WAS E STIMATED AT 8 ITA.NO.5589/DEL./2016 & CO.NO.172/DEL./2017 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI. RS.160 CRORES. THE ASSESSEE-COMPANY, AS PER THE SEI ZED DOCUMENT DECLARED RS.140 CRORES AS PROFIT PLAN AS P ER ADVANCE TAX. THEREFORE, IT WAS CONSIDERED A REDUCTION IN TH E PROFIT OF RS.20 CRORES. IT IS NOT IN DISPUTE THAT ULTIMATELY THE ASSESSEE- COMPANY DECLARED TAXABLE INCOME OF RS.160,14,24,547 . THE A.O. IN THE COMPUTATION OF INCOME HAS TAKEN THE SAM E FIGURE. THEREFORE, EVEN IF THE SEIZED DOCUMENT IS CONSIDERE D ADVERSE IN NATURE AGAINST THE ASSESSEE-COMPANY, ASSESSEE-COMPA NY HAS ALREADY DECLARED MORE TAXABLE INCOME IN THE RETURN SO FILED AFTER THE SEARCH. THEREFORE, THERE IS NO CASE OF REDUCTIO N OF THE PROFIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. FURTHER , A.O. HAS NOT BROUGHT ANY EVIDENCE ON RECORD THAT AS AGAINST THE DECLARED INCOME AT RS.167 CRORES, THERE IS ANY MANIPULATION OR REDUCTION OF THE PROFIT IN THE BOOKS OF ACCOUNT OF THE ASSESS EE-COMPANY. THEREFORE, THE A.O. HAS MISERABLY FAILED TO SUPPORT HIS FINDINGS FOR MAKING ADDITION OF RS.20 CRORES. LD. CIT(A) THE REFORE, CORRECTLY DELETED THE ADDITION. THE DEPARTMENTAL AP PEAL FAILS AND IS DISMISSED. 9 ITA.NO.5589/DEL./2016 & CO.NO.172/DEL./2017 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI. 8. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. 9. THE CROSS OBJECTION IS MERELY FILED IN SUPPORT OF THE ORDER OF THE LD. CIT(A) WHICH IS NOT MAINTAINABLE A ND IS ACCORDINGLY DISMISSED. 10. IN THE RESULT, CROSS-OBJECTION OF THE ASSESSEE - COMPANY IS DISMISSED. 11. TO SUM-UP, APPEAL OF THE DEPARTMENT AND CROSS- OBJECTION OF THE ASSESSEE-COMPANY ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRASHANT MAHARISHI) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 30 TH NOVEMBER, 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT B BENCH 6. GUARD FILE 10 ITA.NO.5589/DEL./2016 & CO.NO.172/DEL./2017 M/S. SPECTRUM COAL & POWER LTD., NEW DELHI. //BY ORDER// ASST. REGISTRAR : ITAT : DELHI BENCHES : DELHI.