Anack Sales Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 5771/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3826 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 28-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: R S AHUJA
• Keywords: Unexplained cash credit; Cost of acquisition
• Section: 143(3); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A , NEW DELHI BEFORE SH. AMIT SHUKLA , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO. 5771 /DE L/ 2014 ASSESSMENT YEAR : 2007 - 08 M/S. ANACK SALES PVT. LTD., D - 122, DEFENCE COLONY, NEW DELHI VS. ACIT, CIRCL E - 1(1), NEW DELHI PAN : AAGCA1214M (APPELLANT) (RESPONDENT) APPELLANT BY SH. R.S. AHUJA, CA RESPONDENT BY SH. SANDIP KUMAR MISHRA, SR.DR DATE OF HEARING 09.10.2017 DATE OF PRONOUNCEMENT 26.10.2017 ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 14/08/2014 PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) - IV, NEW DELHI [ IN SHORT THE CIT - (A) ] FOR ASSESSMENT YEAR 2007 - 08 , RAISING FOLLOWING GROUNDS: (A) THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE THE INCOME TAX OFFICER & THE CIT(A) ERRED IN: 1) MAKING AN ADDITION OF RS.77,00,000/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT. 2) NOT ACCEPTING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION OF RS.77,00,000/ - PARTICULARLY WHEN THE SAME HAS BEEN ACCEPTED BY AN INVESTIGATING AGENCY SUCH AS THE 2 ITA NO . 5771/DEL/2014 ECONOMIC OFFENCES WING AND WHICH IS BACKED BY THE BANK I.E. CITIBANK. ( B) THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND THE GROUNDS OF APPEAL AT AND BEFORE THE HEARING. 2. THE FACTS IN BRIEF OF THE CASE ARE THAT THE ASSESSEE COMPANY FILED RETURN OF INCOME ON 03/11/2007, DECLARING INCOME FRO M LONG - TERM CAPITAL GAIN OF RS .4,71,19, 977/ - . THIS RETURN WAS PROCESS ED UNDER SECTION 143(1) OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT ). SUBSEQUENTLY, PROCEEDINGS UNDER SECTION 147 OF THE ACT WERE INITIATED BY WAY OF ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT DATED 23/03/2012. THE ASSESSMENT UNDER SECTION 147 READ WITH SECTION 143(3) OF THE ACT WAS COMPLETED ON 30/03/2013 AFTER MAKING ADDITION OF RS.77,00, 000/ - AS UNEXPLAINED CREDIT UNDER SECTION 68 OF THE ACT. THE LD. CIT - ( A ) UPHELD THE ADDITION. AGGRIEVED , THE ASSESSEE IS BEFORE THE TRIBUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. IN THE GROUNDS RAISED, THE ASSESSEE HAS ONLY CHA LLENGED MERIT OF THE ADDITION OF RS.77,00,000/ - . 4. THE L D. COUNSEL OF THE ASSESSEE FILED THE PAPER BOOK CONTAINING PAGES 1 TO 23 AND SUBMITTED THAT THE ASSESSEE HAS DISCHARGED THE ONUS UNDER SECTION 68 OF THE ACT. THE LEARNE D COUNSEL SUBMITTED THAT : ( I ) TH E ASSESSEE RECEIVED AN ADVANCE OF RS.77,00, 000/ - FOR SALE OF LAND FROM SRI PARVESH KUMAR THROUGH AN ACCOUNT PAYEE CHEQUE NO. 615442 DATE D 28/07/2006 DRAWN ON ABN AMRO B ANK, MG ROAD, GURGAON. ( II ) THE TRANSACTION WAS SUPPOSED TO BE COMPLETED ON 17/08/2006 AND BALANCE AMOUNT WAS TO BE RECEIVED BY THE ASSESSEE COMPANY, HOWEVER , MR PARVESH KUMAR DID NOT HONOUR HIS PART OF THE DEAL. 3 ITA NO . 5771/DEL/2014 ( III ) T HE ASSESSEE HA S FILED AN AFFIDAVIT THAT HE WAS PRESENT BEFORE THE TEHSILDAR TO EXECUTE THE REGISTRATION OF SALE DEED BUT NOBODY APP EARED ON BEHALF OF THE BUYER. ( IV ) MR. PARVESH KUMAR HAD A TIME - FRAME OF SEVEN YEARS TO LEGALLY CLAIM HIS DEPOSIT BACK AND , THEREFORE , IT WAS REFLECTED IN THE ASSESSESS S BALANCE SHEET SINCE ASSESSMENT YEAR 2007 - 08. ( V ) T HE ASSESSEE RECEIVED A NOTICE FROM THE OFFICE OF THE ADDITIONAL COMMISSIONER OF POLICE, ECONOMIC OFFENCES WING, NEW DELHI ASKI NG TO CONFIRM THE AMOUNT OF RS. 77,00,000/ - V IDE CHEQUE NO. 615442 DATED 28/07/2006 ISSUED FROM THE ACCOUNT OF MR. PARVESH KUMAR. THE FACT OF INVESTIGATION AGAINST SH . PARVESH KUMAR BY T HE DELHI P OLICE CONFIRMED THE EXISTENCE OF SH . PARVESH KUMAR AND HIS BANK ACCOUNT AND THUS , THE ONUS OF THE ASSESSEE OF ESTABLISHING IDENTITY, CREDITWORTHINESS AND GENUINENESS WAS ESTABLISHED AND THEREF ORE NO ADDITION COULD BE MADE UNDER SECTION 68 OF THE ACT IN THE YEAR UNDER CONSIDERATION. ( VI ) THE AMOUNT MIGHT BE CONSIDERED INCOME IN THE HANDS OF THE ASSESSEE AFTER EXPIRY OF PERIOD OF SEVEN YEARS . ( VII ) ALTERNATIVELY CLAIMED THAT THE LAND WAS SOLD TO OTHER BUYE R DURING THE YEAR UNDER CONSIDERATION AND THEREFORE AMOUNT OF THE ADVANCE RECEIVED FROM SRI PARVESH KUMAR MIGHT BE DEDUCTED FROM THE COST FOR WHICH THE ASSET WAS ACQUIRED , IN COMPUTING THE LONG - TERM CAPITAL GAIN ON THE PROPERTY SOLD, IN TERMS OF SECTION 51 OF THE ACT. 5. ON THE OTHER HAND, LD. SR. DR SUBMITTED THAT ASSESSEE HAS NEITHER FURNISHED ANY PERMANENT ACCOUNT NUMBER (PAN) OF THE CREDITOR SH . PARVESH KUMAR NOR FURNISHED ANY CONFIRMATION LETTER FROM THE SAID 4 ITA NO . 5771/DEL/2014 CREDITOR. HE ALSO SUBMITTED THAT ASSESS EE HAS NOT FILED ANY COPY OF THE AGREEMENT FOR SALE OF LAND ENTERED INTO WITH SH PARVESH KUMAR EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE LD. CIT - ( A ) . ACCORDING TO THE LD. SR. DR, IN VIEW OF THE FACTS , THE ADDITION HAS BEEN CORRECTLY SUSTAINED BY TH E LEARNED CIT - ( A ) IN THE YEAR UNDER CONSIDERATION. 6. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNE D CIT - ( A ) HAS ADJUDICATED THE ISSUE IN DISPUTE AS UNDER: 4.2 DURING THE APPELLATE PROCEEDINGS, THE ID. AR HAS REITERATED THE ABOVE SUBMISSION MADE BEFORE THE AO. THE LD. AR WAS ASKED TO SUBMIT THE COPY OF THE AGREEMENT IN RESPECT OF THE LAND DEAL FOR WHICH ADVANCE WAS GIVEN. HOWEVER, THE LD. AR COULD NOT SUBMIT THE AGREEMENT. THE APPELLANT ALSO COULD NOT SUBMIT T HE PARTICULARS OF THE CREDITOR LIKE CONFIRMATION LETTER, ACKNOWLEDGEMENT OF INCOME TAX RETURN FILED BY HIM AND CONFIRMATION LETTER FROM THE CREDITOR WHO HAS GIVEN ADVANCE OF RS.77,00,000/ - . 4.2.1 ON CAREFUL EXAMINATION OF THE MATTER, I FIND THAT AS PER THE PROVISIONS OF SECTION 68 OF THE ACT, IF ANY AMOUNT IS CREDITED IN THE BOOKS OF THE ASSESSEE, AND THE ASSESSEE IS NOT ABLE TO PROVE THE IDENTITY OF THE CREDITOR, CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION, THE AMOUNTS SO CREDITE D SHALL BE ADDED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. THE THREE CONDITIONS OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION ARE REQUIRED TO BE PROVED CUMULATIVELY AND NOT ALTERNATIVELY. IN THE CASE UNDER CONSIDERATION, THE APPELLAN T FAILED TO SUBMIT EVEN PAN NUMBER OF THE CREDITOR WHO HAS GIVEN ADVANCE OF RS.77,00,000/ - . THE BASIC DETAILS LIKE CONFIRMATION LETTER FROM THE CREDITOR, COPY OF THE AGREEMENT WHICH FORMED THE BASIS FOR THE ADVANCE WERE NOT PRODUCED EITHER BEFORE THE AO OR BEFORE ME DURING THE APPELLATE PROCEEDINGS. NO INCOME TAX DETAILS OF THE CREDITOR WERE SUBMITTED. THE APPELLANT COULD NOT PROVE THAT THE AMOUNT OF RS. 77,00,000/ - WAS RECEIVED AS ADVANCE FOE SALE OF LAND. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, I HOLD THAT THE AO WAS FULLY JUSTIFIED IN MAKING THE ADDITION OF RS.77,00,000/ - U/S 68 OF THE ACT. THE SAME IS UPHELD. THIS GROUND OF APPEAL IS REJECTED. 5 ITA NO . 5771/DEL/2014 7. WE FIND THAT THE ASSESSEE HAS NOT FILED EITHER ANY CONFIRMATION LETTER OF THE CREDITOR OR PAN . THE ASSESSEE HAS ALSO NOT FILED ANY AGREEMENT WITH THE SAID CREDITOR, IN SUPPORT OF ITS CONTENTION OF ADVANCE RECEIVED AGAINST SALE OF LAND. NO OTHER EVIDENCE WAS FILED TO PROVE THAT THE SAID AMOUNT WAS RECEIVED AS ADVANCE. MERELY RECEIPT OF A SUM THROUG H BANKING TRANSACTION CAN NOT MAKE IT SACROSANCT AND THUS, GENUINENESS OF THE TRANSACTION IS NOT ESTABLISHED . THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS OF OFFERING EXPLANATION ABOUT THE NATURE AND SOURCE OF THE CREDIT. A COPY OF NOTICE ISSUED BY THE EC ONOMIC OFFICE WING, DELHI P OLICE CANNOT PROVE CONCLUSIVELY THE IDENTITY AND CREDITWORTHINESS OF THE CREDITOR AS WELL AS G ENUINENESS OF THE TRANSACTION. IN SUCH FACTS AND CIRCUMSTANCES, IN OUR OPINION, THE FINDING OF THE LD. CIT - ( A ) ON THE ISSUE IN DISPUTE IS WELL REASONED AND WE DO NOT FIND ANY INFIRMITY IN CONFIRMING THE ADDITION IN TERMS OF SECTION 68 OF THE ACT. 8. THE CONTENTION OF THE LD. COUNSEL TO TREAT THE SAID AMOUNT AS INCOME, IN A YEAR AFTER SEVEN YEARS OF DEPOSIT, CANNOT BE ACCEPTED AS ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS UNDER SECTION 68 OF THE ACT IN THE YEAR UNDER CONSIDERATION. 9. FURTHER , THE LD. COUNSEL SUBMITTED ALTERNATIVE ARG UMENT THAT THE PROPERTY WAS SOLD DURING THE YEAR UNDER CONSIDERATION AND THEREFORE , THE AMOUNT OF RS . 77,00,000/ - SHOULD BE DEDUCED FROM THE COST OF ACQUISITION BEING ADVANCE RECEIVED ON THE PREVIOUS OCCASION OF NEGOTIATION FOR ITS TRANSFER. THIS CONTENTION OF THE LEARNE D COUNSEL IS ALSO CANNOT BE ACCEPTED AS NO DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM OF THE ADVANCE BEING IN THE NATURE OF ADVANCE RECEIVED IN THE PROCESS OF NEGOTIATION FOR ITS TRANSFER ON PREVIOUS OCCASION. THE ASSESSEE HAS FAILED T O FUR NISH ANY AGREEMENT WITH SH . PARVESH KUMAR FOR SALE OF LAND EITHER 6 ITA NO . 5771/DEL/2014 IN THE ASSESSMENT PROCEEDING OR DURING THE FIRST APPELLATE PROCEEDING. EVEN BEFORE US, NO SUCH COPY OF ANY AGREEMENT BETWEEN THE ASSESSEE AND SH . PARVESH KUMAR HAS BEEN FILED. 10. IN VIEW O F THE FACTS , THE ALTERNATIVE ARGUMENTS OF THE ASSESSEE TO CONSIDER THE ADVANCE MONEY RECEIVED AS PART OF THE COST OF ACQUISITION IN TERMS OF SECTION 51 OF THE ACT ALSO CANNOT BE ACCEPTED. 11. IN VIEW OF OUR DISCUSSION , THE GROUND NO. ( A ) OF THE APPEAL IS DISMISSED. 12. THE GROUND NO. ( B ) , BEING GENERAL IN NATURE , IS NOT REQUIRED TO ADJUDICATE SPECIFICALLY, AND THUS , THE SAME IS DISMISSED AS INFRUCTUOUS. 13. IN THE RESULT , APPEAL OF THE ASSESSEE IS DISMISSED . THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 2 6 T H OCT . , 201 7 . S D / - S D / - ( AMIT SHUKLA ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 6 T H OCTOBER , 201 7 . RK / - (D.T.D) COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI