DCIT, New Delhi V. M/s. Thapar Homer Ltd., New Delhi

ITA 6424/DEL/2016

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7946 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 15-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Cost of acquisition
• Section: 68; 27; 69C; 142(1); 153A; 271D; 271E; 143(2); 13

Judgement Text

1 ITA Nos. 6424 & 6425/Del/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘G’ NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER AND SH. PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. No. 6424/DEL/2016 (A.Y 2008-09) & I.T.A. No. 6425/DEL/2016 (A.Y 2008-09) (THROUGH VIDEO CONFERENCING) DCIT Central Circle-15, Room No. 353, ARA Centre, E-2, Jhandewalan Extension New Delhi (APPELLANT) Vs Thapar Homer Ltd. B-10, Shivalik, Malviya Nagar, New Delhi AAECM0840R (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM These two appeals are filed by the assessee against the order dated 09/09/2016 & 28/10/2016 passed by CIT(A)-XXVI, New Delhi for assessment year 2008-09. 2. The grounds of appeal are as under: I.T.A. No. 6424/DEL/2016 (A.Y 2008-09) 1. “On the facts & circumstances of the case the CIT(A) has erred in law in holding that the order u/s 27ID passed by the Addl. CIT imposing penalty of Appellant by Sh. H. K. Choudhary, CIT(DR) Respondent by None Date of Hearing 02.09.2021 Date of Pronouncement 23.11.2021 2 ITA Nos. 6424 & 6425/Del/2016 Rs. 14,85,00,000/- was barred by limitation. 2. On the facts & circumstances of the case the CIT(A) has erred in law in holding that the order u/s 27 ID was barred by limitation without appreciating that the order was passed within 6 months of initiation of proceeding by Addl. CIT, who was the competent authority to levy this penalty. I.T.A. No. 6425/DEL/2016 (A.Y 2008-09) 1. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 11,56,55,000/- out of total addition of Rs. 13,81,89,000/- made by AO on account of unexplained cash credit u/s 68 of the I.T. Act, 1961, as the assessee had failed to establish the genuineness & creditworthiness of the creditors. 2. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 2,00,00,000/- made by AO on account of unexplained cost of acquisition of flat at Vasant Vihar. 3. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs.1,81,10,441/- made by AO on account of bogus expenditure claimed through dummy companies. 4. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 5,00,00,000/- made by AO on account of unexplained expenditure claimed. 5. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 75,00,000/- made by AO on account of suppression of value of property. 6. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs.2,00,00,000/- made by AO on account of suppression of value of property. 7. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 15,43,05,000/- out of addition of Rs. 16,69,53,000/- made by AO on account of loans taken and interest paid u/s 69C & 68, on the ground that when proceeding u/s 271D & 271E was initiated, no addition 3 ITA Nos. 6424 & 6425/Del/2016 can be made u/s 68 of the Act. 8. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 16,09,007/- out of addition of Rs. 16,72,902/- made by AO on account of interest income. 9. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 5,00,000/- out of addition of Rs. 10,00,000/- made by AO on account of Malba income. 10. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 81,516/- made by AO on account of disallowance u/s 35D. 11. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 1,40,00,000/- made by AO on account of payment to Krishna Theophilius. 12. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 20,00,000/- made by AO on account of loss on cancellation. 13. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 55,30,494/- made by AO on account of foreign travel expenses. 14. On the facts & circumstances of the case the CIT(A) has erred in deleting the addition of Rs. 30,61,934/- made by AO on account of excess Director’s remuneration.” 3. The assessee is engaged in real estate business. M/s Thapar Homes has declared advances received from various parties at Rs. 67,63,16,649/- during the year. The assessee was asked to file confirmation and proof that these advances were subsequently converted into sale. The assessee has furnished a few details in terms of sale deed of subsequent years but has not been able to furnish proof of having made sale m respect of the following parties. The assessee has also not been able to file any confirmation also. Thus the identity, creditworthiness and genuineness of the 29 parties were not proved and these 4 ITA Nos. 6424 & 6425/Del/2016 sums were added under Section 68 as cash credit. In this case, search was conducted at the premises of the assessee on 20.10.2008. Notice u/s 153A was issued on 13/11/2009 requiring the assessee to furnish return of income. In response thereto the assessee furnished return of income on 30/11/2009 declaring income at Rs.1,17,02,870/-. The Notices u/s 142(1) & 143(2) along with questionnaire were issued on 25.10.2010 requiring the assessee to furnish details. In response thereto Shri H.L. Sekhri, C.A appeared on behalf of Assessee Company and filed details asked for from time to time. Books of accounts produced have been examined on test check. The assessee Central Circle-17, New Delhi vide his letter 7/6/2011 reported that the assessee had entered into transactions in contravention of the provisions of Section 269SS of the Act. The Assessing Officer made various additions thereby assessing the income of the assessee at Rs. 45,98,2,2017/-. The ACIT pointed out the diversities of defaults committed u/s 271D & 271E as indicated in the assessment order passed for the Assessment Year 2008-09. The penalty order was passed on 27 th December, 2011. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee vide order dated 28/10/2016, as regards penalty order is concerned, the assessee filed appeal before the CIT(A) and the same is decided on 9 th September, 2016 thereby allowing the appeal of the assessee. 6. The Ld. DR submitted that the appeal of the Revenue may be allowed and relied upon the Assessment Order. 7. At the time of hearing on 16/9/2021, the assessee remained absent despite giving notice through Ld. DR. The Department has filed the service of notice report thereby stating therein that no such office existed at the concerned premises. Letter dated 23/7/2021 along with the Inspector Report filed by the Ld. DR is taken on record. On one occasion, one Shri Anoop Kumar, CA, appeared on 17/2/2020, wherein he has sought adjournment on 5 ITA Nos. 6424 & 6425/Del/2016 the personal difficulty of the authorized representative of the assessee but thereafter none appeared despite giving notices. The service report of the notice is filed by the Ld. DR before us is as follows: 6 ITA Nos. 6424 & 6425/Del/2016 7 ITA Nos. 6424 & 6425/Del/2016 8 ITA Nos. 6424 & 6425/Del/2016 7. We have heard Ld. DR and perused all the material available on record. As regards to Ground No. 1 relating to addition of Rs. 13,81,89,000/- made on account of unexplained cash credit u/s 68 of the Income Tax Act, 1961, as the assessee failed to establish the genuineness and creditworthiness of the creditors, the CIT(A) has stated in para 13 of the order that since the assessee has filed relevant documents the additions needs to be deleted. In fact, mere confirmation and bank statement of those parties regarding whom the so called details were filed by the assessee was simply accepted by the CIT(A). But the element of genuineness of the transactions as well as the creditworthiness of the parties were not at all discussed or verified by the CIT(A). In fact, no details to that extent was filed by the assessee before the Assessing Officer. Therefore, we set aside the order of the CIT(A) in respect of Ground No. 1 and allow Ground No. 1 of the revenue. 8. As regards to Ground No. 2 relating to addition of Rs. 2,00,00,000 on account of unexplained cost of acquisition of flat at Vasant Vihar, the CIT(A) has given a detailed finding. The CIT(A) has taken into account the supplementary collaboration agreement entered into by the assessee with JIT family Trust on 27.05.2008 and payments were made in F.Y. 2007-08 as well as 2008-09. The same was debited as part of the cost of the project in FY 2008- 09. There is no dispute of these facts, thus, the CIT(A) has rightly deleted this addition. Ground No. 2 is dismissed. 9. As regards Ground No. 3 relating to addition of Rs. 1,81,10,441/- on account of bogus expenditure claimed through dummy companies, the CIT(A) has observed that the figures mentioned in the seized trial balance represented accumulated balance as on 31.03.2007 and the same is identical to that of Profit and loss account of audited balance sheet as on 31.03.2007. Thus, addition made by the Assessing Officer is not correct and the CIT(A) rightly deleted this addition. Ground No. 3 is dismissed. 9 ITA Nos. 6424 & 6425/Del/2016 10. As regards to Ground No. 4 relating to addition of Rs. 5,00,00,000/- on account of unexplained expenditure claimed, the CIT(A) has given a finding that books of accounts were accepted by the Assessing Officer and the expenditures are related to the construction activity and material supplied for the same. Thus, the CIT(A) has rightly deleted the addition. Ground No. 4 is dismissed. 11. As regards to Ground No. 5 relating to addition of Rs. 75,00,000 on account of suppression of value of property, the CIT(A) has observed that the cash in excess of the sale consideration received by the assessee is not from any suppression of value of property. In fact, the Assessing Officer has also not doubted the transactions. Therefore, the CIT(A) has rightly deleted this addition. Ground No. 5 is dismissed. 12. As regards to Ground No. 6 relating to addition of Rs. 2,00,00,000 on account of suppression of value of property, the assessee has clearly pointed out that the in the seized documents the sale consideration is eventually is higher than the market price. The details were given by the Asssessee. Therefore, Ground No. 6 is dismissed. 13. As regards to Ground No. 7 on account of addition of Rs. 15,43,05,000 out of addition of Rs. 16,69,53,000/- on account of loans taken and interest paid u/s 69C & 68 on the ground that when proceedings u/s 271D & 271E was initiated no addition can be made u/s 68 of the Act, the CIT(A) has given a detailed finding and there is no need to interfere with the same. Ground No. 7 is dismissed. 14. As regards to Ground No. 8 relating to addition on account of interest income, the CIT(A) has given a proper finding and there is no need to interfere with the same. Ground No. 8 is dismissed. 15. As regards to Ground Nos. 9, 10, 11, 12, 13, 14 the CIT(A) has taken cognizance of the evidences brought upon by the assessee. The order of the 10 ITA Nos. 6424 & 6425/Del/2016 CIT(A) is elaborate and there is no need to interfere with the same. Ground Nos. 9,10,11,12, 13, 14 are dismissed. 16. Thus, ITA No. 6425/Del/2016 is partly allowed. 17. As regards penalty order, the CIT(A) has deleted the penalty on the ground that penalty imposed u/s 271D had to be done before 30/6/2011 and not 31/12/2011. Therefore, the penalty order was beyond the period of limitation as specified u/s 275(1)(c) of the Act. As regards penalty u/s 271E, the CIT(A) followed the decision of the Hon’ble Rajasthan High Court in case of CIT Vs. Hisar & Brothers 291 ITR 242 Rajasthan, which was confirmed by the Hon’ble Apex Court and deleted the said addition. The findings of the CIT(A) does not require any interference. Hence, ITA No. 6424/Del/2016 is dismissed. 18. In result, the appeal of the Revenue being is ITA No. 6425/Del/2016 is partly allowed and ITA No. 6424/Del/2016 is dismissed. Order pronounced in the Open Court on this 23 rd Day of November, 2021 Sd/- Sd/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 23/11/2021 R. Naheed * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 11 ITA Nos. 6424 & 6425/Del/2016