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

ITA 6271/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3530 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 06-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBANI CHAUDHURI
• Assessee Lawyers: K P GANGULI
• Keywords: Deemed to accrue or arise in india; Reassessment proceedings
• Section: 147; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ITA NO.6271/DEL/2016 ASSESSMENT YEAR 2007-08 RAAHAT LATEX (INDIA) PVT. LTD., 20, TRIVENI APARTMENTS, A-6, PASCHIM VIHAR, NEW DELHI PAN: AACCR 9908D VS. ITO, WARD-15(1), NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : MS. BEDOBANI CHAUDHURI, SR.D.R. ASSESSEE(S) BY : SHRI K.P. GANGULI, ADV. / DATE OF HEARING : 17/04/2017 / DATE OF PRONOUNCEMENT: 18/04/2017 ORDER THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER O F LEARNED CIT(A)- VII, NEW DELHI DATED 03.10.2016 FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C AS E, C I T(A)-7 , NEW DELHI WAS NOT JUSTIFIED IN HOLDING THE NOTICE U/S.148 OF THE ACT DATED 2.12.20 13 WAS VALIDLY ISSUED. 2.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, C I T(A)-7 , NEW DELHI WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS . 9 , 60 ,000 /- AS I NCOME OF THE ASSESSEE DUE TO AMOUNT RECEIVED FROM M /S V . A . FOODS (P) LTD. AND M/S CHAMP F I NVEST (P) LTD. 3 . . THAT ON THE FACTS AND IN THE C IR CUMSTANCES OF THE CASE , CIT (A) -7 NEW DELHI WAS NOT J UST I FIED IN CONFIRMING THE ADD I TION OF RS . 9 , 60 ,000 /- AS DEEMED INCOME U/S 69 C OF THE IT ACT ON THE PRESUMPTION THAT THE APPELLANT INCUR R ED E X PEN S ES FOR THE PURCHASE/RECE I PT OF ACCOMMODATION ENTRY . 4.THAT ON THE FACTS AND I N THE CIRCUMSTANCES OF TH E C A SE, CIT (A) - 7 , NEW DE L HI HAS FAILED TO A PPRECIATE THAT THE ASSES SIN G OFF I CER MADE THE ADDITION MENT I ONED ABOVE WITHOUT CONFRONT I NG THE APPELLANT WITH THE STATEMENT OF SHRI S K GUPT A GIVE N BY HIM BEFORE THE I NC OME TA X AUTHORITIES AND ALSO DENYING THE APPELLANT AN OP P O R TUN I TY TO CROSS E X AMINE SHRI S K GUPTA . 3. LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET A RGUED ABOUT THE LEGAL GROUNDS, I.E., GROUND NO.1 WITH REGARD TO THE INITI ATION OF REASSESSMENT PROCEEDINGS U/S.147/148 OF THE ACT. HE BROUGHT TO O UR NOTICE THE REASONS RECORDED WHICH ARE AT PAGES 3 AND 4 OF THE CIT(A) O RDER AND THE AO HAS ITA NO.6271/DEL/2016 2 PROCEEDED TO REOPEN THE MATTER ON THE BASIS OF INFO RMATION RECEIVED FROM DIT(INVESTIGATION) AND NO INDEPENDENT APPLICATION O F MIND HAS BEEN FRAMED BY THE AO IN THIS REGARD. 4. LEARNED CIT(A) HOWEVER DISMISSED THE LEGAL GROUN DS FOR THE REASONS MENTIONED IN HIS ORDER. 5. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT FROM THE REASONS RE CORDED AVAILABLE AT PAGES 3 AND 4 OF LEARNED CIT(A) ORDER THAT THE AO HAS PROCE EDED TO REOPEN THE ASSESSMENT U/S.147 OF THE ACT ON THE BASIS OF INFOR MATION RECEIVED FROM DIT(INVESTIGATION) AND NO INDEPENDENT APPLICATION O F MIND HAS BEEN FRAMED IN THIS REGARD THEREFORE THE AO DOES NOT ACQUIRE AN Y JURISDICTION TO MAKE THE ASSESSMENT / RE-ASSESSMENT U/S. 147/148 OF THE ACT. THE RELIANCE IS PLACED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN TH E CASE OF SIGNATURE HOTELS P. LTD. VS. INCOME TAX OFFICER AND ANOTHER, REPORTED IN (2011) 338 ITR 51 (DELHI) WHERE THE RELEVANT DECISION IS REPRO DUCED HEREINUNDER: HELD, ALLOWING THE PETITION, THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE DIREC TOR OF INCOME TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS.5 LAKHS DURING FINANCIAL YEAR 2002-03 AS STATED IN THE ANNE XURE. ACCORDING TO THE INFORMATION, THE AMOUNT RECEIVED FROM A COMPANY, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFI CIARY. THE REASONS DID NOT SATISFY THE REQUIREMENTS OF SECTION 147 OF THE ACT. THERE WAS NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEPT THE ANNEXURE. THE ANN EXURE COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE A NNEXURE WAS NOT A POINTER AND DID NOT APPLY HIS OWN MIND TO THE INFORMATION A ND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATION. THERE WAS NO DISPUTE T HAT THE COMPANY, S, HAD A PAID UP CAPITAL OF RS.90 LAKHS AND WAS INCORPORATED IN SEPTEMBER, 2001. THUS, IT COULD NOT BE HELD TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WERE NOT VALID AND WERE LIABLE TO BE QUASHED. ITA NO.6271/DEL/2016 3 5.1 RELIANCE IS ALSO PLACED UPON THE DECISION OF HO NBLE DELHI HIGH COURT IN THE CASE OF SARTHAK SECURITIES CO. P. LTD. VS. ITO, REPORTED IN (2010) 329 ITR 110 (DEL). 6. IN THE CIRCUMSTANCES AND FACTS OF THE PRESENT CA SE AND THE DECISION RELIED UPON HEREINABOVE THE AO DOES NOT ACQUIRE JUR ISDICTION TO ASSESS OR RE- ASSESS THE MATTER IN THE PRESENT CASE AND ACCORDING LY THE ASSESSMENT / RE- ASSESSMENT ARE DIRECTED TO BE QUASHED. 7. IN THE RESULT, THE LEGAL GROUND OF THE ASSESSEE, I.E. GROUND NO.1 IS ALLOWED. 8. SINCE THE ASSESSEE SUCCEEDS ON LEGAL GROUND, THE REFORE, THE GROUNDS ON MERIT BECOME ACADEMIC IN NATURE AND DO NOT REQUIRE ANY ADJUDICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY 18 TH APRIL, 2017 SD/- (B.P. JAIN) ACCOUNTANT MEMBER DATED: 18/04/2017 PRABHAT KUMAR KESARWANI, SR.P.S. COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT ASSTT. REGISTRAR, ITAT, NEW DELHI