M/s. Topchem (India) Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 6048/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97540 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-09-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 05-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJA
• Assessee Lawyers: DEEPAK OSTWAL
• Keywords: Gift; Accommodation entries
• Section: 143(3); 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : H NEW DELHI BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDI CIAL MEMBER ITA NO: 6048/DEL/2012 AY : - 2002-03 TOPCHEM (INDIA) PVT. LTD. VS. ITO 39/2068, NAIWALA, WARD-16(3) 315, DAKHA CHAMBER, NE W DELHI KAROL BAGH, NEW DELHI 110 005. (PAN AAACT5718R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEEPAK OSTWAL, CA RESPONDENT BY : SHRI P.DAM KANUNJA SR DR DATE OF HEARING : 23.9.2015 DATE OF PRONOUNCEMENT : 3 0.9.2015 O R D E R PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THIS ASSESSEES APPEAL IS DIRECTED AGAINST THE ORDER DATED 8.10.2012 PASSED BY THE LD. CIT(A) -19, NEW DELHI. THE BRIEF FACTS O F THE CASE AS BORNE OUT FROM THE RECORDS ARE THAT INFORMATION WAS RECEIVED FROM DIRE CTOR OF INCOME TAX(INVESTIGATION), NEW DELHI IN RESPECT OF BENEFIC IARIES WHO HAVE TAKEN ACCOMMODATION ENTRIES IN THE FORM OF GIFTS, SHARE A PPLICATION, LOANS ETC. PERUSAL OF THIS INFORMATION REVEALED THAT THERE WERE ENTRIES I N THE BOOKS OF ACCOUNTS OF THE ASSESSEE IN ITS ACCOUNTS MAINTAINED WITH ANZ GRINDL AYS BANK AND STANDARD CHARTERED BANK FROM M/S. ARPIT SALES CORPN. AND MR. VISHAL AGGARWAL. THE TOTAL ITA NO.6048/DEL/2012 M/S. TOPC HEM (INDIA) VS. ITO 2 AMOUNT OF THE ENTRIES WORKED OUT TO RS. 5 LACS TAKE N IN THE MONTH OF FEBRUARY, 2002. ON THE BASIS OF THIS INFORMATION / DETAILS, T HE AO RECORDED REASONS AND BELIEF FOR ESCAPED INCOME AND AFTER OBTAINING PRIOR APPROV AL FROM THE CONCERNED AUTHORITY ISSUED NOTICE U/S 148 OF THE ACT. IN COMPLIANCE TO THE SAID NOTICE, THE ASSESSEE SUBMITTED THAT THE ORIGINAL RETURN FILED VIDE ACKNO WLEDGMENT NO. 1975 DATED 31.10.2002 MAY BE CONSIDERED AS RETURN FILED IN RES PONSE TO THE NOTICE U/S 148 OF THE ACT. IT IS ALSO SEEN FROM THE RECORDS THAT ASSE SSMENT U/S 143(3) OF THE ACT FOR THE YEAR UNDER CONSIDERATION WAS COMPLETED VIDE ORD ER DATED 30.11.2004 IN WHICH THE RETURNED INCOME OF THE ASSESEE WAS ACCEPTED. 2. DURING THE COURSE OF PROCEEDINGS U/S 148 OF THE ACT, SUMMONS U/S 131 OF THE ACT WERE ISSUED TO SMT. MANJU AGGARWAL, PROP M/ S. ARPIT SALES AND SHRI VISHAL AGGARWAL FOR THEIR PERSONAL DEPOSITION. HOWEVER ONL Y LETTERS OF CONFIRMATION WERE RECEIVED BY POST BUT NEITHER SMT. MANJU AGGARWAL NO R SHRI VISHAL AGGARWAL DEPOSED BEFORE THE AO. IT IS IN THIS BACKGROUND THAT THE AO HELD THAT THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS PLACED ON HIM BY THE ACT AND ACCORDINGLY A SUM OF RS. 5 LACS WAS ADDED BACK TO THE INCOME OF THE ASSESS U/S 68 O F THE ACT. IN THE APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE RAISED AS MANY AS 12 G ROUNDS OF APPEAL. HOWEVER THE LD. CIT(A) RELYING ON VARIOUS CASE LAWS INCLUDING T HAT OF THE HONBLE DELHI HIGH COURT IN CIT VS. NOVA PROMOTERS & FINLEASE (P) LTD. 342 ITR 169 (DEL.) DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE ADDITI ON OF RS. 5 LACS U/S 68 OF THE INCOME TAX ACT. 3. IN THE APPEAL BEFORE US, THE LD. AR FOR TH E ASSESSEE HAS REITERATED THAT THE ORIGINAL ASSESSMENT OF THE ASSESSEE WAS COMPLETED U /S 143(3) OF THE ACT ON ITA NO.6048/DEL/2012 M/S. TOPC HEM (INDIA) VS. ITO 3 30.11.2004. HE SUBMITTED THAT THE ASSESSEE HAD SUBM ITTED DETAILS OF SHARE APPLICATION MONEY COPIES OF CONFIRMATION ITRS AND B ALANCE SHEETS OF THE PERSONS MAKING INVESTMENTS OF SHARE APPLICATION MONEY DURIN G THE YEAR AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS ITSELF. HE DREW OUR ATTENTION TO PAGES 69 TO 86 OF THE PAPER BOOK FILED BY THE ASSESEE IN SUPPORT OF H IS CLAIM. HE DREW OUR ATTENTION TO PAGES 69 TO 72 WHICH ARE COPIES OF THE ORDER SHEET AND QUESTIONNAIRE OF THE AO REQUIRING DETAILS OF SHARE APPLICATION MONEY RECEIV ED DURING THE YEAR. PAGES 73 TO 86 ARE COPIES OF VARIOUS DOCUMENTS SUBMITTED BEFORE TH E AO IN RESPONSE TO HIS QUESTIONNAIRE REGARDING SHARE APPLICATION MONEY REC EIVED DURING THE YEAR. IT IS THE ARS CONTENTION THAT THE RECEIPTS OF RS. 5 LACS WER E DULY EXAMINED BY THE AO BY MAKING SPECIFIC INQUIRIES AND VERIFYING VARIOUS DOC UMENTS AND EVIDENCES FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3). TH E LD. AR FURTHER SUBMITTED THAT THE ASSESSMENT ORDER WAS PASSED AFTER EXAMINATION O F THE EVIDENCES BY THE AO AND AS SUCH THERE WAS NO FAILURE ON THE PART OF THE ASS ESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR ASSESSMENT AND THA T THE AO HAD ACCEPTED THE ASSESSES CLAIM AFTER DUE DELIBERATION. LD. AO FURT HER SUBMITTED THAT SUBSEQUENT ISSUANCE OF NOTICE U/S 148 HAS BEEN ISSUED AFTER CH ANGE OF OPINION FORMED EARLIER AND THESE ADDITIONS HAVE BEEN MADE WITHOUT DISPROVI NG THE CLAIM OF THE ASSESSEE AND WITHOUT ADDUCING ANYTHING WHICH WOULD IMPLICATE THE ASSESSEE NEGATIVELY. 4. LD. DR ON THE OTHER HAND SUPPORTED THE ACT ION OF THE AO AND THAT OF THE LD. CIT (A). 5. WE HAVE GONE THROUGH THE FACTS OF THE CASE AND THE MATERIAL AVAILABLE BEFORE US AND IT IS UNDISPUTED THAT THE ASSESSMENT WAS REO PENED ON THE BASIS OF ITA NO.6048/DEL/2012 M/S. TOPC HEM (INDIA) VS. ITO 4 INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT ABOUT THE EXISTENCE OF ACCOMMODATION ENTRY PROVIDERS AND THEI R MODUS OPERANDI AND THE ASSESSEES NAME HAS ALSO FIGURED IN THE LIST OF BEN EFICIARIES. ALTHOUGH THE ASSESSEE HAD FILED DOCUMENTS RELATING TO THE TRANSACTIONS AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS, IT IS AGAIN AN UNDISPUTED FACT THAT TH E PERSONS WHO WERE SUMMONED U/S 131 OF THE ACT TO DEPOSE BEFORE THE AO FAILED T O DO SO. THE LD. AR HAD NOTHING TO SAY AS TO WHY THE PERSONS COULD NOT PRESENT THEM SELVES BEFORE THE AO. THE FACT THAT THE SHARE APPLICATION MONEY HAD BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUES IS, AT BEST, NEUTRAL. SECTION 68 PERMITS THE AO TO ADD THE CREDIT APPEARING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE IF THE LATTER OFF ERS NO EXPLANATION REGARDING THE NATURE AND SOURCE OF CREDIT OR IF THE EXPLANATION O FFERED BY HIM IS NOT SATISFACTORY. THE FAILURE ON THE PART OF THE ASSESSEE IN PRODUCIN G THE SHARE APPLICANTS FOR DEPOSITION BEFORE THE AO LENDS CREDENCE TO THE THEO RY THAT THE MONIES EMANATED FROM THE COFFERS OF THE ASSESSEE COMPANY. RELIANCE IS PLACED ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOV A PROMOTERS AND FINLEASE (P) LTD. (SUPRA) WHEREIN THE HONBLE DELHI HIGH COURT HAS HE LD THAT WHERE SUMS WERE SHOWN AS SHARE APPLICATION MONEYS AND INFORMATION HAD BEE N RECEIVED FROM INVESTIGATION WING ABOUT THE ASSESSEE BEING A BENEFICIARY OF ACCO MMODATION ENTRIES, FAILURE ON THE PART OF THE SHARE APPLICANTS TO RESPOND TO SUMM ONS WOULD ABSOLVE THE AO FROM THE DUTY OF PROVING THAT THE MONIES EMANATED FROM T HE COFFERS OF THE ASSESSEE. ON THE FACTS OF THE CASE AND RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HONBLE DELHI ITA NO.6048/DEL/2012 M/S. TOPC HEM (INDIA) VS. ITO 5 HIGH COURT IN CIT VS NOVA PROMOTERS AND FINLEASE (P ) LTD. (SUPRA), WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A ) AND WE UPHOLD THE SAME. IN THE RESULT THE APPEAL OF THE ASSESSEE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2015. SD/- SD/- (INTURI RAMA RAO) (SUD HANSHU SRIVASTAVA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 9. 2015 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 29.9.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 30.9.2 015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER ITA NO.6048/DEL/2012 M/S. TOPC HEM (INDIA) VS. ITO 6