ACIT, New Delhi V. M/s. Cliff Construction (P) Ltd., Delhi

ITA 6258/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3575 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 29-05-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 25-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SURESH KR GUPTA
• Keywords: Unexplained cash credit; Gift; Opportunity of being heard; Tangible material; Accommodation entries
• Section: 143(3); 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER ITA NO.6258/DEL/2013 ASSESSMENT YEAR : 2003-04 ACIT, CENTRAL CIRCLE- 3, NEW DELHI. VS. CLIFF CONSTRUCTION (P) LTD., BA- 17A, ASHOK VIHAR, PHASE- 1, DELHI. PAN : AAACC0332L (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI AMIT JAIN, SR.DR ASSESSEE BY : SHRI SURESH KR. GUPTA, CA DATE OF HEARING : 26-10-2017 DATE OF PRONOUNCEMENT : 08-11-2017 O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 06.09.2013 OF CIT(A)-1, NEW DELHI RELATING TO ASSES SMENT YEAR 2003-04. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY AND FILED ITS ORIGINAL RETURN OF INCOME ON 30.11.2006 DECLARING L OSS OF RS.7,850/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 17 TH DECEMBER, 2008 ACCEPTING THE RETURNED LOSS. SUBSEQUENTLY, ON THE BASIS OF RECEI PT OF REPORT OF THE DIRECTORATE OF INCOME TAX (INVESTIGATION), NEW DELHI THAT THE A SSESSEE HAS RECEIVED A SUM OF RS.41,00,000/- FROM VARIOUS ACCOMMODATION ENTRIE S PROVIDERS, THE ASSESSING OFFICER REOPENED THE ASSESSMENT BY ISSUING NOTICE U /S 148. IN RESPONSE TO THE 2 ITA NO.6258/DEL/2013 SAID NOTICE, THE ASSESSEE FILED ITS RETURN OF INCOM E ON 19.07.2010 DECLARING LOSS OF RS.10,658/-. THE ASSESSING OFFICER CONFRONTED T HE VARIOUS ENTRIES APPEARING IN THE BANK ACCOUNT OF THE ASSESSEE. IN RESPECT OF THE ACCOMMODATION ENTRY PROVIDERS ON VARIOUS DATES TO THE TUNE OF RS.41,00, 000/-, HE ASKED THE ASSESSEE TO FURNISH COMPLETE DETAILS OF SHARE APPLICATION MO NEY GIVING NAME, ADDRESS AND AMOUNT RECEIVED AND ALSO ESTABLISH THE IDENTITY OF THE PERSONS FROM WHOM THE SHARE APPLICATION MONEY WAS RECEIVED. HE ALSO ASKE D THE ASSESSEE TO SUBSTANTIATE THEIR CREDITWORTHINESS AND THE GENUINE NESS OF THE TRANSACTION. 3. THE ASSESSEE FILED UNDATED PHOTOCOPIES OF THE CO NFIRMATIONS IN RESPECT OF THE SHARE APPLICATION MONEY RECEIVED. THE ASSESSEE ALSO FILED IN SOME OF THE CASES A PRINT OUT OF THE MASTER DATA DOWNLOADED FRO M THE WEBSITE WHICH ACCORDING TO THE ASSESSING OFFICER CAN BE DOWNLOADE D BY ANY PERSON. HOWEVER, DESPITE BEING CONFRONTED TO PRODUCE THE PA RTIES I.E. THE PRINCIPAL OFFICERS OF THE COMPANIES FROM WHOM THE ASSESSEE HA S RECEIVED SHARE APPLICATION MONEY, THE ASSESSEE FAILED TO PRODUCE T HESE PERSONS. IN VIEW OF THE ABOVE, REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND INVOKING THE PROVISIONS OF SECTION 68, THE ASSESSING OFFICER MAD E ADDITION OF RS.41,00,000/- TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEFORE THE LD. CIT(A), THE ASSESSEE CHALLENGED T HE VALIDITY OF THE RE- ASSESSMENT PROCEEDINGS ON THE GROUND THAT THE ASSES SING OFFICER HAD NOT 3 ITA NO.6258/DEL/2013 DISPOSED OF THE OBJECTION AGAINST THE RE-ASSESSMENT PROCEEDINGS. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, THE ASSESSEE SUBMIT TED THAT THE ASSESSEE HAS DISCHARGED THE ONUS CAST ON IT BY GIVING FULL DETAI LS REGARDING THE IDENTITY AND CREDITWORTHINESS OF THE COMPANIES AND GENUINENESS O F THE TRANSACTIONS. SO FAR AS THE NON-PRODUCTION OF THE PERSONS IS CONCERNED, IT WAS ARGUED THAT AFTER LAPSE OF MORE THAN SIX YEARS FROM THE FINAL INVESTIGATION TO FINAL RE-ASSESSMENT IT WAS NOT POSSIBLE TO PRODUCE THOSE PERSONS. FURTHER, TH E ASSESSING OFFICER HAD NOT GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO PRO DUCE THE SAID PERSONS. RELYING ON VARIOUS DECISIONS, IT WAS ARGUED THAT TH E ADDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED. 5. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE, THE LD. CIT(A) DELETED THE ADDITION OF RS.41,00,000/- MADE BY THE ASSESSIN G OFFICER U/S 68 OF THE I.T. ACT. SO FAR AS THE LEGAL GROUND IS CONCERNED, LD. CIT(A) DISMISSED THE SAME FOR WANT OF NON-PURSUANCE BY THE ASSESSEE. 6. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 1. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N LAW AND ON FACTS IN DELETING THE ADDITION OF RS.41,00,000/- MADE BY THE AO AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 2. (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF TH E HEARING OF THE APPEAL. 4 ITA NO.6258/DEL/2013 7. LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEAR ING FILED AN APPLICATION UNDER RULE 27 OF THE APPELLATE TRIBUNAL RULES, 1963 BY RAISING THE FOLLOWING GROUNDS :- 1. THERE WAS LACK OF INDEPENDENT APPLICATION OF MI ND BY THE AO WHILE INITIATING ACTION U/S 147 OF THE ACT WHICH DRAWS SUPPORT FROM THE FOLLOWING FACTS: A. THE REASSESSMENT IS REOPENED ON THE BASIS OF REP ORT OF DIRECTORATE OF INCOME TAX (INV) NEW DELHI ALONE WITHOUT HAVING BEN EFIT OF ANY MATERIAL IN SUPPORT OF ALLEGATION CONTAINED THEREIN AND THE SAID REPORT INDISPUTABLY IS THE BASIS OF THE ACTION U/S 147: B. THE DETAIL OF BANK ACCOUNT IS WRONGLY MENTIONED IN THE REASON; C. THERE IS NO MENTION IN THE REASON OF THE MATERIA L OR EVIDENCE EXCEPT THE FACT OF INVESTIGATION DONE BY THE DIT (INV) NEW DELHI AND THERE WAS NO MATERIAL FORWARDED TO THE AO TO ENABLE AO TO APP LY HIS MIND TO THE REPORT; D. THE AO HAS NOT REFERRED IN THE REASON RECORDED T HE FACT OF THE RETURN OF INCOME FILED BY THE RESPONDENT ASSESSEE, AMOUNT OF INCOME DISCLOSED THEREIN AND FINAL ACCOUNTS ENCLOSED WITH THE RETURN OF INCOME; E. THE ALLEGATION AS PER THE REASON RECORDED IS THE ACCOMMODATION ENTRIES OF RS 41,00,000/- BUT THE REASON DOES NOT D EAL WITH THE EXACT NATURE OF ACCOMMODATION ENTRIES AVAILED BY THE ASSE SSEE ALTHOUGH THE AO DOES MENTION IN THE REASON TYPES OF ACCOMMOD ATION ENTRIES SUCH AS GIFTS, SHARE APPLICATION MONEY, LOANS ETC T HROUGH BANKING CHANNELS BUT WHAT KIND OF ACCOMMODATION ENTRIES AVA ILED BY THE ASSESSEE SHOWS NON APPLICATION OF MIND IN THE ABSEN CE OF BALANCE SHEET, RETURN OF INCOME AND THE CORROBORATING MATER IAL. 2. THERE IN NON APPLICATION OF THE MIND BY THE AUTH ORITY TOO RECORDING SATISFACTION U/S 151 (2) OF THE ACT WHICH IS EVIDEN T FROM THE LETTER DATED 23.03.2010 WHEREIN LIKE IN THE REASON RECORDED THER E IS NO MENTION OF THE MATERIAL ON THE BASIS OF WHICH THE SATISFACTION WAS RECORDED BY THE AUTHORITY U/S 151. 8. HE SUBMITTED THAT ALTHOUGH THE LD. CIT(A) HAS DE LETED THE ADDITION OF RS.41,00,000/- MADE BY THE ASSESSING OFFICER U/S 68 OF THE I.T. ACT, HOWEVER, HE HAS NOT ALLOWED THE RELIEF ON THE LEGAL GROUND R AISED BEFORE HIM. REFERRING TO PARA 10-11 AT PAGE 15-16 OF THE ORDER OF THE LD. CI T(A) OF THE ASSESSEES 5 ITA NO.6258/DEL/2013 SUBMISSIONS WHICH HAS BEEN REPRODUCED BY HIM AT PAG E 15-16 OF THE ORDER, HE DREW THE ATTENTION OF THE BENCH TO THE ARGUMENTS AD VANCED BEFORE THE LD. CIT(A) REGARDING NON-APPLICATION OF MIND BY THE ASS ESSING OFFICER WHILE INVOKING PROVISIONS OF SECTION 147 OF THE I.T. ACT, IN ABSENCE OF ANY TANGIBLE MATERIAL AND HAS CHALLENGED THE VALIDITY OF THE RE- ASSESSMENT PROCEEDINGS. SINCE LD. CIT(A) HAS NOT ADJUDICATED THE LEGAL GROU NDS INCLUDING THE GROUNDS RAISED AS PER RULE 27 OF THE APPELLATE TRIBUNAL RUL ES, 1963, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO ADJUDICATE THE L EGAL GROUNDS. 9. LD. DR ON THE OTHER HAND WHILE SUPPORTING THE OR DER OF THE ASSESSING OFFICER SUBMITTED THAT HE HAS ALSO NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO ADJUDICA TE THE LEGAL GROUNDS. 10. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE LD. CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. SINCE THE LD. CIT(A) HAS N OT ADJUDICATE THE LEGAL GROUNDS RAISED BEFORE HIM AS WELL AS THE GROUNDS NOW RAISED BY THE ASSESSEE UNDER RULE 27 OF THE APPELLATE TRIBUNAL RULES, 1963, I DEEM IT PROPER TO RESTORE THE LEGAL GROUNDS TO THE FILE OF THE LD. CIT(A) FOR ADJUDICAT ION. SINCE THE MATTER IS BEING RESTORED TO THE FILE OF THE LD. CIT(A), THE ISSUE O N MERIT IS NOT BEING DECIDED. SINCE NO ARGUMENT WAS ADVANCED BY EITHER SIDE REGAR DING MERIT OF THE CASE. LD. 6 ITA NO.6258/DEL/2013 CIT(A) SHALL DECIDE THE ISSUE AFRESH AND IN ACCORDA NCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOLD AND DIRECT ACCORDINGLY. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08 TH DAY OF NOVEMBER, 2017. SD/- (R. K. PANDA) ACCOUNTANT MEMBER DATED: 08-11-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI