Adhishwar Nivesh P.Ltd, New Delhi V. ACIT, Central circle-13, New Delhi

ITA 568/DEL/2019

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7307 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-03-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 27-01-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Bogus
• Section: 143(3); 119

Judgement Text

Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No. 568/Del/2019 (Assessment Year: 2015-16) M/s. Adhishwar Nivesh Pvt. Ltd, 1, Zamrudpur Community Centre, Kailash Colony, New Delhi Vs. ACIT, Central Circle-13, New Delhi (Appellant) (Respondent) PAN: AADCA6451H Assessee by : None Revenue by: Shri Kanv Bali, Sr. DR Date of Hearing 04/03/2024 Date of pronouncement 09/05/2024 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.568/Del/2019 for AY 2015-16, arises out of the order of the Commissioner of Income Tax (Appeals)-XXVI, New Delhi [hereinafter referred to as „ld. CIT(A)‟, in short] in Appeal No. 10425/17-18 dated 19.11.2018 against the order of assessment passed u/s 143(3) of the Income- tax Act, 1961 (hereinafter referred to as „the Act‟) dated 29.12.2017 by the Assessing Officer, ACIT, Central Circle-13, New Delhi (hereinafter referred to as „ld. AO‟). 2. None appeared on behalf of the assessee despite issuance of notice to the assessee. Infact on earlier occasions, there was representation from the side of the assessee and on one occasion, the ld. AR was also directed to certify the paper book in this appeal. Even after taking note of the subsequent date of hearings, there was no representation from the side of the assessee. Hence the ITA No. 568/Del/2019 M/s. Adhishwar Nivesh Pvt. Ltd Page | 2 Bench felt it appropriate to proceed with the disposal of this appeal on hearing the ld. DR and based on materials available on record. 3. The assessee has raised the following grounds of appeal before us:- “1. That on the facts and in the circumstances of the case the action of the Ld.CIT(A) to confirm the addition made by the A.O, of Rs.65,19,810/- as unexplained investments on the reason that the Sundry Debtors are fictitious is contrary to the settled principles of law and the addition is arbitrary, excessive and illegal. 2. That on the facts and in the circumstances of the case the action of the Ld.CIT(A) to confirm the addition of Rs.65,19,810/- made by the A.O. as unexplained investments by partly treating the bogus Sundry Debtors of A.Y. 2014-15 is against the settled principles of law and the addition is arbitrary, excessive and illegal. 3.. That on the facts and in the circumstances of the case the action of the Ld. CIT(A) to hold that the sales for AY 2014-15 & 2015-16 were not genuine on the basis of expenses debited in the Profit & Loss Account is contrary to the material evidences on record and contrary to the expenses claimed and debited in the Profit & Loss Account and therefore, the addition confirmed by the Ld CIT(A) of Rs.65,19,810/- is illegal and bad in law. 4. That on the facts and in the circumstances of the case the action Ld CIT(A) to confirm the assessment made by the AO by rejecting the scope of limited scrutiny having being expanded by the AO without prior permission is in violation of the provisions u/s 119 of the Act and the assessments is illegal and bad in law. 5. That the assessment framed by the AO and confirmed by the Ld.CIT(A) is unjust, illegal, arbitrary and excessive. 6. That the above grounds of appeal will be argued in detail at the time of hearing and the appellant crave leave to submit additional grounds of appeal, if any, and/or alter, verify, modify or rectify any grounds of appeal at or before the time of hearing.” 4. We have heard the ld. DR and perused the materials available on record. Since the paper book filed by the assessee is not certified by the assessee or by its authorized representative, the same is not taken into cognizance and is hereby ignored. The return of income for the Asst Year 2015-16 was electronically filed by the assessee company on 24.09.2015 declaring total income of Rs 7,983/-. The ld. AO had noted in para 3 of his order that during the year under consideration, the assessee claimed to have earned income from sale of cotton knitted fabrics and sale of shares. The ld. AO noted that in the ITA No. 568/Del/2019 M/s. Adhishwar Nivesh Pvt. Ltd Page | 3 assessment order framed for the Asst Year 2014-15 u/s 143(3) of the Act, the assessee was treated as a mere name lender and acting as a conduit for parties / beneficiaries behind the company and as such the assessee company had not done any actual sale or actual purchase. Accordingly, the sundry debtors of Rs 26,05,460/- created from fictitious sale made during the Asst Year 2014-15 has no worth and only book entry. Based on this conclusion drawn in Asst Year 2014-15, the ld. AO similarly treated the sundry debtors of Rs 39,14,350/- relating to current year as also fictitious and as such investment made during the year by the assessee company to the extent of aggregate of sundry debtors of Asst Year 2014-15 and 2015-16 of Rs 65,19,810/- was treated as not genuine and added to the total income of the assessee. 5. The aforesaid action of the ld. AO was upheld by the ld. CIT(A) by observing as under:- “5. Findings I have considered the facts of the case, the basis of addition made by the AO and the arguments of the AR during assessment as well as appellaté proceedings. A. This matter has been examined. The AO has put the reasons for picking up the case for scrutiny. The AO has sought all the replies pertaining only to the issues as per criteria for scrutiny selection. This ground is not tenable. This ground is dismissed. It must be understood that in matter involving a corporate entity having engaged in complex transactions, it is but required to raise and seek replies to some queries in order to reach a reasonable and lawful conclusion. Similar issue has been decided in the cases pertaining to the group. This ground is therefore, dismissed. B. Grounds 2 & 3- a. The AO had concluded while framing assessment for AY 2014-15 that the assessee was not doing any actual purchase or sale and are the mere name lender. The AO sought to follow the same in this period also. The appellant has just stated that - "All the purchases and sale were genuine. It was submitted that the sale was out of the opening stock and there was no fresh purchase during the year. Therefore the entire transaction was genuine." ITA No. 568/Del/2019 M/s. Adhishwar Nivesh Pvt. Ltd Page | 4 b. The A.O. rejected the same as it was found to be a case of collusive transactions because - ➤ the sale and purchase involved only a select set of selected parties, ➤ the expenses did not commensurate with the business and ➤ there was no transportation cost despite sales during the year. c. The AO, accordingly, concluded basis above factors that since Sundry Debtors of A.Y. 2014- 15 of Rs. 26,05,460/- has already been found to be fictitious and the current year's sale are also not genuine and therefore the Sundry Debtors for Rs.39,14,350/- of the current year is also not genuine and as such the A.O. has made addition of Rs.65,19,810/- under the head of investments made during the year on account of bogus Sundry Debtors for A.Y. 2014-15 & 2015-16 d. The action of AO is quite agreeable in view of peculiar facts where very basic features of any commercial activity are simply missing and the appellant has no justification for the same. The AO need not go into other features of basic accounts as such all transactions are prima facie sham. The rejection of the accounts is plain and simple implicit and it is clearly writ large on the entire factual matrix built up by the AO. The action of the AO is upheld accordingly. In the result the appeal is dismissed.” 6. We find that the ld. CIT(A) had elaborately addressed the issues in dispute in his order by giving certain categorical findings thereon. None of the aforesaid factual findings given by the ld. CIT(A) were controverted by the assessee before us. Hence we do not deem it fit to interfere with the said order of the ld. CIT(A). Accordingly, the grounds raised by the assessee are dismissed. 7. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 09/05/2024. -Sd/- -Sd/- (ANUBHAV SHARMA) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:09/05/2024 A K Keot Copy forwarded to ITA No. 568/Del/2019 M/s. Adhishwar Nivesh Pvt. Ltd Page | 5 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi