ITO, New Delhi V. M/s. Glorious Club Pvt. Ltd., New Delhi

ITA 6561/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4375 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 10-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Search and seizure; Additional evidence
• Section: 132; 144

Judgement Text

ITA NO. 6561 /DEL/201 5 ASSESSMENT Y EAR: 2009 - 10 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI B HAVNESH SAINI , JUDICIAL MEMB E R & SHRI L.P. SAHU, ACCOUNTANT MEMEBR ITA NO. 6 561 /DEL./201 5 ASSESSMENT YEAR: 20 0 9 - 1 0 ITO WARD - 10(2), ROOM NO. 374, C.R. BUILDING, NEW DELHI VS. GLORIOUS CLUB PVT. LTD. B - 10, SHIVALIK, MALVIYA NAGAR, NEW DELHI (APPLICANT) (RESPONDENT) (PAN: AACCG4639E ) REVENUE BY: MS. EKTA JAIN, SR. DR ASSESSEE BY: SHRI LAKSHYA GOEL , PROXY COUNSEL FOR KAPIL GOYEL, ADVOCATE DATE OF HEARING 19 / 0 9 /201 7 DATE OF PRONOUNCEMENT 2 2 / 0 9 /201 7 ORDER PER BHAVNESH SAINI , JUDICIAL MEMBER : 1. THIS APPEAL BY THE REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(APPEALS) - X X V I , NEW DELHI DATED 2 5 . 0 8 .201 5 FOR A.Y. 20 0 9 - 1 0 , CHALLENGING THE DELETION OF ADDITION OF RS. 1,68,92,620/ - . 2. THE BRIE F FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE I.T. ACT WAS CARRIED OUT IN THE CASE S OF SHRI PAGE 2 OF 7 B.K. DHINGRA , MRS. POONAM DHINGRA AND M/S. MADHUSUDAN BUILDCON PVT. LTD. ON 20.10.2008 AND DURING THE COURSE OF THE SEARCH AT THE RESIDENTIAL PREMISES AT F - 6/5, VASANT VIHAR, NEW DELHI CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE WERE SEIZED. THE ASSESSING OFFICER ISSU ED STATUTORY NOTICES FOR COMPLETION OF THE ASSESSMENT . H OWEVER , NONE ATTENDED ON BEHALF OF THE ASSESSEE . ASSESSEE COMPANY BELONGS TO THE THAPAR GROUP OF CASES. ONE OF THE MAIN ALLEGATION AGAINST THE GROUP IS THAT SEVERAL CONCERNS HAVE BEEN ROUTED BY THE GR OUP WITH DUMMY DIRECTORS AND SHARE HOLDERS. THESE CONCERNS ARE BASICALLY CAPITAL FORMATIONS CONCERN S WHICH HAVE BUILD UP HUGE RESERVE AND SURPLUSES OVER THE YEARS. THESE RESERVE S SURPLUSES ARE DECLARED INVESTED IN STOCKS OF TEXTILES. AS AND WHEN THE CASH IS REQUIRED T HE STOCKS ARE SOLD AND THE MONEY ARE UTILIZED FOR OTHER PURPOSES AS PER REQUIREMENT. THE ASSESSING OFFICER NOTED THAT AS THE FACTS OF THE CASE REMAINED THE SAME FOR CURRENT YEAR ALSO , K EEPING IN VIEW , THE PAST HISTORY OF THE ASSESSEE, INCOME O F THE ASSESSEE WAS ASSESSED AT RS. 1,68,92,620/ - . THEREFORE, THE ASSESSING OFFICER ASSESSED THE INCOME OF THE ASSESSEE FOR ASSESSMENT YEAR UNDER THE APPEAL BY INCREASING 30% INCOME TAKEN LAST YEAR. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 144 OF THE I.T. ACT DATED 30.12.2010. T HE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LEARNED CIT(APPEALS) AND WRITTEN SUBMISSIONS OF THE ASSESSEE IS PAGE 3 OF 7 REPRODUCED IN THE APPELLATE ORDER IN WHICH IT WAS EXPLAINED THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRAD ING OF TEXTILE GOODS SINCE INCEPTION. THE ASSESSEE FILED HIS RETURN OF INCOME DECLAR ING NIL INCOME BECAUSE OF THE LOSS WHICH HAS BEEN ASSESSED AT RS. 1.68 CRORE ON AD HOC BASIC. THE ASSESSEE MAINTAINED BANK ACCOUNTS AND OTHER DETAILS OF PURCHASES ETC. THE ASSESSEE FILED AUDITED ACCOUNTS . I N THE CASE OF THE ASSESSEE NEITHER EVEN SINGLE PENNY OF UNACCOUNTED MONEY/ASSET HAS BEEN FOUND NOR HAS ANY PAPER OF INCRIMINATING NATURE HAS BEEN FOUND, TO JUSTIFY ADDITION TO THE DECLARED INCOME. THE ASSESSEE HAS ALSO F IL ED APPLICATION UNDER RULE 46A FOR ADMISSION OF THE ADDITIONAL EVIDENCES WHICH ARE AUDITED ACCOUNTS, COPY OF CASH BOOK, LEDGER STOCK REGISTER, DETAILS OF EXPENSES, DETAILS OF PURCHASES AND SALES ALONG WITH BANK STATEMENT. IT WAS SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITION WITHOUT ANY JUSTIFICATION. 3. THE LEARNED CIT(APPEALS) FOUND THAT APPARENTLY ONLY ONE OPPORTUNITY IN THE REAL SENSE HAS BEEN GRANTED BY THE ASSESSING OFFICER FOR GIVING A PERIOD OF LESS THAN 10 DAYS TO FILE THE INFORMATION AT ASSESSMENT STAGE . THE LEARNED CIT(APPEALS) IN THE ABSENCE OF REASONABLE OPPORTUNITIES COULD NOT BE GRANTED BY THE ASSESSING OFFICER TO THE ASSESSEE AT ASSESSMENT STAGE ADMITTED ADDITIONAL EVIDENCE U NDER RULE 46A OF THE INCOME TAX RULES. THE LEARNED CIT(APPEALS) ALSO FOUND FROM THE HISTORY OF T HE ASSESSEE . THERE WAS A PAGE 4 OF 7 LOSS TO THE ASSESSEE . I T WAS ALSO FOUND THAT ADDITION MADE BY THE ASSESSING OFFICER FOR A.Y. 2003 - 04 TO 2008 - 09 IN THE CASE OF THE ASSE SSEE ON THE ISSUE OF DISALLOWANCE OF BOGUS PURCHASES AND DISALLOWANCE OF EXPENSES HAVE BEEN DELETED BY THE LEARNED CIT(APPEALS) AND ORDER OF THE LEARNED CIT(APPEALS) HAVE BEEN CONFIRMED BY THE TRIBUNAL. THE ORDER OF THE TRIBUNAL IS REPRODUCED IN THE APPELL ATE ORDER. THE LEARNED CIT(APPEALS) FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE HELD THAT THERE WAS NO BASIS TO HOLD THAT THE PURCHASES DEBITED IN THE PROFIT AND LOSS ACCOUNT OR THE PURCHASES CLAIMED THERE IN WERE BOGUS. THE ASSESSING OF FICER IN FACT BASED THE ACTUAL ADDITION BY ENHANCING INCOME OF THE LAST YEAR BY 30% WHICH HAS NO LEGS TO STAND ON E SPECIALLY IN VIEW OF THE DECISION OF THE TRIBUNAL IN THE EARLIER YEARS, THE ENTIRE ADDITION HAS BEEN DELETED. THE APPEAL OF THE ASSESSEE HAS BEEN ALLOWED. 4. THE LD. DR HAS RELIED UPON THE ORDERS OF THE ASSESSING OFFICER AND CONTENDED THAT THE LEARNED CIT(APPEALS) HAS ERR ED IN ADMITTING THE ADDITIONAL EVIDENCE S . HOWEVER LD. DR WAS NOT ABLE TO SUPPORT THE ADDITION MADE BY THE ASSESSING OFFICER. THE LD. DR COULD NOT POINT OUT ANY BASIS ON WHICH THE ASSESSING OFFICER COMPUTED THE INCOME OF THE ASSESSING OFFICER AT RS. 1,68,92,620/ - AND ALSO DID NOT POINT OUT AS TO ON WHAT ACCOUNT ADDITION HAS BEEN MADE IN THE ASSESSMENT ORD ER. EVEN IF THE ASSESSEE REMAINED EX PARTE BEFORE THE PAGE 5 OF 7 ASSESSING OFFICER IT I S HIS DUTY OF THE ASSESSING OFFICER TO BRING THE EVIDENCE AND MATERIAL ON RECORD AND POINT OUT THE BASIS FOR WHICH ADDITION HAS BEEN MADE. THE ASSESSMENT ORDER REVEALED THAT EVEN THE ASSESSING OFFICER HAS NOT MENTIONED IN THE ASSESSMENT YEAR AS ON WHAT ACCOUNT THE ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEE. THE ADDITION MADE BY THE ASSESSING OFFICER IS PURELY AD HOC IN NATURE WITHOUT DISCUSSING ANY EVIDENCE OR INCRIMINATING MATERIAL AGAINST THE ASSESSEE WHICH PROMPTED THE ASSESSING OFFICER TO COMPUTE TH E INCOME BY INCREASING INCOME BY 30%. EVEN IT IS NOT DISCUSSED IN THE ASSESSMENT ORDER AS TO WHAT ADDITION HAS BEEN MADE IN THE EARLIER YEARS AND HOW IT HAS ANY RELEVANCY TO THE ASSESSMENT ORDER UNDER APPEAL. ON THIS REASON ITSELF WHEN THERE WAS NO BASIS F OR THE ASSESSING OFFICER TO MAKE THE ADDITION AGAINST THE ASSESSEE , THE LEARNED CIT(APPEALS) WAS JUSTIFIED IN DELETING THE ENTIRE ADDITION. FURTHER, THE LEARNED CIT(APPEALS) FOUND THAT THE ASSESSING OFFICER HAS NOT GIVEN SUFFICIENT OPPORTUNITIES OF BEING H EARD TO THE ASSESSEE AT ASSESSMENT STAGE FOR PRODUCING THE DOCUMENTS. THEREFORE, THE ADMISSION OF ADDITIONAL EVIDENCE IN SUCH CIRCUMSTANCES IS WHOLLY JUSTIFIED. THE LEARNED CIT(APPEALS) ALSO FOUND THAT THE LEARNED CIT(APPEALS) DELETED THE SIMILAR ADDITION IN ASSESSMENT YEARS 2003 - 04 T 2008 - 09 AND ORDER OF THE LEARNED CIT(APPEALS) HAVE BEEN CONFIRMED BY THE TRIBUNAL. IN THE ABSENCE OF PAGE 6 OF 7 ANY INFIRMITY POINTED OUT IN THE ORDER OF THE LEARNED CIT(APPEALS), WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE OR DER OF THE LEARNED CIT(APPEALS) IN DELETING THE ENTIRE ADDITION. 7 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 2 /0 9 /201 7 . S D / - S D / - ( L.P. SAHU ) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMB E R DATED: 2 2 . 0 9 .2017 NARENDER COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT (APPEALS) 5) DR: ITAT ASSISTANT REGISTRAR DATE DRAFT DICTATED ON 19 .0 9 .2017 DRAFT PLACED BEFORE AUTHOR 19 .0 9 .2017 DRAFT PROPOSED & PLACED BEFORE THE PAGE 7 OF 7 SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 2 2 . 9 .2017 KEPT FOR PRONOUNCEMENT ON FILE SENT TO THE BENCH CLERK 2 2 . 9 .2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.