M/s Gaindamal Chiranji Lal Ltd., Chandigarh V. DCIT, Chandigarh

ITA 625/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80835 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 30-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Unexplained cash credit; Principle of natural justice; Accommodation entries
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.730/CHD/2013 ASSESSMENT YEAR: 2004-05 M/S BSN CAPITAL SERVICES PVT. LTD. VS. THE DCIT, C ENTRAL CIRCLE-I, CHANDIGARH CHANDIGARH PAN NO. AAACB5912B ITA NO.731/CHD/2013 ASSESSMENT YEAR: 2007-08 M/S CLASSIC TRANSPORTATION PVT. LTD. VS. THE DCIT, CENTRAL CIRCLE-I, NEW DELHI CHANDIGARH PAN NO. AAACC4816B ITA NOS. 621 TO 623/CHD/2013 ASSESSMENT YEARS: 2008-09, 2009-10 & 2010-11 M/S VISION STEELS LTD. VS. THE DCIT, CENTRAL CIR CLE-I, CHANDIGARH CHANDIGARH PAN NO. AABCV8232B ITA NOS.624 & 625/CHD/2013 ASSESSMENT YEARS: 2004-05 & 2007-08 M/S GAINDAMAL CHIRANJI LAL LTD. VS. THE DCIT, CENT RAL CIRCLE-I, CHANDIGARH CHANDIGARH PAN NO. AABCG2439B ITA NOS. 626 TO 628/CHD/2013 ASSESSMENT YEARS: 2008-09, 2009-10 & 2010-11 M/S JASMINE STEEL TRADING COMPANY VS. THE DCIT, CE NTRAL CIRCLE-I, CHANDIGARH CHANDIGARH PAN NO. AABCJ2348C ITA NO.629/CHD/2013 ASSESSMENT YEAR: 2010-11 SMT. ARATI SINGHAL, VS. THE DCIT, CENTRAL CIRCLE -I, CHANDIGARH CHANDIGARH 2 PAN NO. AEFPS6299C ITA NO.630/CHD/2013 ASSESSMENT YEAR: 2007-08 M/S BHUSHAN INFORMATION TECHNOLOGIES LTD. VS. THE DCIT, CENTRAL CIRCLE-I, CHANDIGARH CHANDIGARH PAN NO. AACCB6589Q ITA NO.631/CHD/2013 ASSESSMENT YEAR: 2007-08 M/S KISHORI LAL CONSTRUCTION COMPANY, VS. THE DCIT, CENTRAL CIRCLE-I, NEW DELHI CHANDIGARH PAN NO. AAACC4816L ITA NOS. 632 & 633/CHD/2013 ASSESSMENT YEARS: 2005-06 & 2007-08 M/S RAILTRACK INDIA LTD, VS. THE DCIT, CENTRAL C IRCLE-I, NEW DELHI CHANDIGARH PAN NO. AACCR0043B ITA NO.634/CHD/2013 ASSESSMENT YEAR: 2007-08 M/S SHIVALIKVIEW STEEL TRADING LTD, VS. THE DCIT, CENTRAL CIRCLE-I, CHANDIGARH CHANDIGARH PAN NO. AAHCS1295B ITA NOS. 635 TO 637/CHD/2013 ASSESSMENT YEARS: 2008-09, 2009-10 & 2010-11 M/S DIVYAJYOTI STEELS LTD, VS. THE DCIT, CENTRAL CIRCLE-I, CHANDIGARH CHANDIGARH PAN NO. AABCD8983H ITA NOS. 638 TO 640/CHD/2013 ASSESSMENT YEARS: 2008-09, 2009-10 & 2010-11 M/S MARSH STEEL TRADING COMPANY LTD., VS. THE DCIT, CENTRAL CIRCLE-I, CHANDIGARH CHANDIGARH PAN NO. AADCJ7569E 3 & ITA NO.641/CHD/2013 ASSESSMENT YEAR: 2010-11 SHRI SANJAY SINGAL, VS. THE DCIT, CENTRAL CIRCLE -I, CHANDIGARH CHANDIGARH PAN NO. ANRPS7985C (APPELLANTS) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY : MRS JYOTI KUMARI, SHRI MANJIT SINGH & SHRI J.S.NAGAR DATE OF HEARING : 09.07.2014 DATE OF PRONOUNCEMENT : 05.08.2014 ORDER PER BENCH THIS BUNCH OF 23 APPEALS HAVE BEEN FILED BY DIFFERE NT ASSESSES FOR DIFFERENT ASSESSMENT YEARS RELATING TO IDENTICAL IS SUES AGAINST THE ORDER OF LD. CIT(A) (CENTRAL), GURGAON ALL DATED 25.3.2013. 2. SINCE THE ISSUES RAISED ARE IDENTICAL AND ALL TH E APPEALS WERE HEARD TOGETHER, THEREFORE, WE PROCEED TO DECIDE THE ISSUE S IN APPEAL IN ITA NO. 730/CHD/2013 FOR THE SAKE OF BREVITY. 3. IN ITA NO. 730/CHD/2013, FOLLOWING GROUNDS HAVE BEEN RAISED:- 1. THAT ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) (CENTR AL), GURGAON IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS THE LD. CIT(A) WAS NOT JUSTIFIED TO DISMISS THE APPEAL WITHOUT AFFORDING ANY REASONABLE OPPORTUNITY TO THE APPELLA NT. 4 2. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT ADJUDI CATING THE GROUND OF APPEAL RAISED ON MERIT. 3. THAT SHE WAS NOT JUSTIFIED TO ARBITRARILY UPHOLD AN ADDITION OF RS. 10.00 LAC MADE ON ACCOUNT OF ALLEGED UNEXPLAINE D CREDITS ON THE BASIS OF SOME STATEMENTS OF SH. S.K. GUPTA O N PROTECTIVE BASIS. 4. AFTER HEARING BOTH THE PARTIES WE FIND THAT A SE ARCH WAS CONDUCTED IN THE PREMISES OF M/S BHUSHAN POWER & STEEL LTD AND CERTA IN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. THESE DOCUMENTS WE RE PERTAINING TO M/S BSN CAPITAL SERVICES PVT. LTD I.E. THE ASSESSEE COMPANY ; THEREFORE, NOTICE U/S 153C WAS ISSUED TO THE ASSESSEE. IN FACT, A SURVEY WAS C ONDUCTED IN THE PREMISES OF ONE SHRI S.K. GUPTA, CA IN DELHI WHO WAS CONTROLLIN G VARIOUS COMPANIES AND DURING THE SURVEY IT WAS STATED BY HIM THAT HE HAS GIVEN VARIOUS ACCOMMODATION ENTRIES TO THE ASSESSEE COMPANY AND OTHER GROUP COM PANIES BY TAKING CASH AND ISSUING CHEQUES WHICH WERE SHOWN AS SHARE CAPITAL S UBSCRIPTION. THE AMOUNT RECEIVED BY THE ASSESSEE ON ACCOUNT OF SUCH ACCOMMO DATION ENTRIES WAS ASSESSED AS INCOME OF THE ASSESSEE ON PROTECTIVE BA SIS. IN THE MEANTIME, M/S BHUSHAN POWER & STEEL LTD HAVE GONE TO THE SETTLEME NT COMMISSION AND HAVE ALSO SURRENDERED CERTAIN AMOUNTS. 5. WHEN THE MATTER TRAVELLED TO THE FILE OF LD. CIT (A) IT WAS POINTED OUT THAT COMMISSIONER, CENTRAL CIRCLE, GURGAON IN HIS REPORT UNDER RULE 9 FURNISHED TO THE SETTLEMENT COMMISSION IN THE CASE OF M/S BHUSHA N POWER AND STEEL LTD IS PENDING FOR ADJUDICATION BEFORE THE SETTLEMENT COMM ISSION AND THEREFORE, APPEAL SHOULD BE KEPT PENDING. THE LD. CIT(A) DID N OT FIND FORCE IN THESE SUBMISSIONS AND DISMISSED THE APPEAL VIDE PARAS 3 & 4 OF HER ORDER. 6. BEFORE US, LD. COUNSEL FOR THE ASSESSEE CARRIED US THROUGH THE IMPUGNED ORDER AND POINTED OUT THAT LD. CIT(A) HAS DISPOSED OF THE APPEAL WITHOUT 5 CONSIDERING THE GROUNDS OR OBJECTIONS RAISED BY THE ASSESSEE. SINCE THE MATTER HAVE NOT BEEN ADJUDICATED ON MERITS, THEREFORE, THE SE ISSUE SHOULD BE REMANDED BACK TO THE FILE OF CIT(A). 7. ON THE OTHER HAND, THE LD. DR STRONGLY SUPPORTED THE IMPUGNED ORDER AND SUBMITTED THAT IF TRIBUNAL FINDS THIS A FIT CASE TO REMAND THE PROCEEDING BACK TO THE FILE OF CIT(A) THEN SUITABLE DIRECTIONS FOR SUB STANTIVE ADDITIONS SHOULD BE MADE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND THAT BEFORE LD. CIT(A) FOLLOWING GROUNDS WERE RAISED:- 1. THAT THE ASSESSMENT ORDER DATED 26.12.11 PASSED U/S 153 C R.W.S 153 A(1)(B) R.W.S 143(3) OF THE INCOME TAX ACT, 1961 BY THE LD. DY. COMMISSIONER OF INCOME TAX, CEN TRAL CIRCLE-I, CHANDIGARH IS AGAINST LAW AND FACTS IN AS MUCH AS HE WAS NOT JUSTIFIED TO MAKE AN ADDITION OF RS. 10, 00,000/- ON PROTECTIVE BASIS ON ACCOUNT OF ALLEGED UNEXPLAINED CREDITS ON THE BASIS OF THE PURPORTED STATEMENT OF SH. S.K. GU PTA AND LEDGER ACCOUNT OF SH. KEDIA IN THE LAPTOP OF SH. S. K. GUPTA BY HOLDING THE SAME TO BE IN THE NATURE OF ACCOMMODATI ON ENTRIES BY IGNORING THE SUBMISSIONS MADE, THE FACTU AL POSITION AND THE DOCUMENTARY EVIDENCE SUBMITTED ON THE BEHAL F OF THE APPELLANT. 2. THAT THE ASSESSMENT ORDER DATED 26.12.11 PASSED U/S 153C R.W.S 153 A(1) (B) R.W.S 143 (3) OF THE INCOME TAX ACT, 1961 BY THE LD. DY. COMMISSIONER OF INCOME TAX, CEN TRAL CIRCLE-I, CHANDIGARH IS AGAINST LAW AND FACTS IN AS MUCH AS THE PRINICIPLES OF NATURAL JUSTICE HAVE NOT BEEN FO LLOWED, SINCE THE ENTIRE PREMISE OF THE DEPARTMENT AND THE CONCLUSION DRAWN IS BASED ON THE STATEMENT OF SH. S .K. GUPTA WHICH WAS RECORDED AT THE BACK OF ASSESSEE AND FURT HER NO OPPORTUNITY WAS PROVIDED TO THE APPELLANT TO THE CR OSS 6 EXAMINE THE PERSON ON WHOSE STATEMENT RELIANCE HAS BEEN PLACED BY THE DEPARTMENT. 3. THAT THE ASSESSMENT MADE ON PROTECTIVE BASIS IS BAD IN LAW. 4. THAT THE ISSUE OF NOTICE U/S 153 C WAS BAD IN LA W. 9. THE LD. CIT(A) ADJUDICATED THE APPEAL VIDE PARAS 3 & 4 WHICH IS AS UNDER:- 3. THE BRIEF FACTS ARE THAT A SEARCH OPERATION U/S 132(1) WAS CONDUCTED ON M/S BHUSHAN GROUP OF CASES ON 04.0 3.2010. THE CONCERNED CASES OF THE GROUP HAVE PREFERRED AN APPLICATION BEFORE THE HONBLE ITSC. HOWEVER PROTEC TIVE ASSESSMENTS WERE PASSED BY THE ASSESSING OFFICER U/ S 153A(1)(B) R.W.S. 143(3) OF THE IT ACT, 1961. THE A PPEALS BEFORE ME ARE PERTAIN TO PROTECTIVE ADDITIONS MADE BY THE A.O. 4. I HAVE CAREFULLY GONE THROUGH THE PETITION OF TH E ASSESSEE. IT IS OBSERVED THAT RULE 9 REPORT HAS ALR EADY BEEN FILED BY CIT (CENTRAL) GURGAON BEFORE THE ITSC. THE REPORT HAS BEEN FILED IN RELATION TO THOSE ASSESSEE, WHERE IN SUBSTANTIVE ADDITION HAVE BEEN MADE. THE SAME IS LI KELY TO BE DISPOSED AT AN EARLY DATE. 10. FROM THE ABOVE, IT BECOMES CLEAR THAT LD. CIT(A ) HAS NOT DEALT WITH THE ISSUES RAISED BY THE ASSESSEE. IT IS ALSO SEEN THAT LD. CIT(A) HAS ALSO NOT EXAMINED THE OTHER RECORDS TO VERIFY THE SUBSTANTIV E ADDITIONS ETC., THEREFORE, WE SET ASIDE THE ORDER AND RESTORE THE MATTER BACK TO THE FILE OF LD. CIT(A) WITH A DIRECTION TO ADJUDICATE THE ISSUES AS RAISED BY T HE ASSESSEE IN ITS GROUNDS. THE LD. CIT(A) SHOULD ALSO LOOK INTO THE OUTCOME OF ORD ER OF SETTLEMENT COMMISSION AS WELL AS SUBSTANTIVE ADDITIONS AND THA N DECIDE THE SAME IN ACCORDANCE WITH LAW. 7 11. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 12. IN ALL OTHER APPEALS, IDENTICAL ISSUE HAVE BEE N RAISED, THEREFORE, FOLLOWING THE ABOVE ORDER THE SAME ARE ALSO RESTORE D TO THE FILE OF LD. CIT(A) WITH SIMILAR DIRECTIONS. 13. IN THE RESULT APPEAL IN ITA NOS.730 & 731/CHD/2 013 AND ALL THE APPEALS IN ITA NOS. 621 TO 640/CHD/2013 ARE ALSO ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 05.08.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 5 TH AUGUST, 2014 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR