PAM CONSTRUCTIONS PVT. LTD., NEW DELHI V. DCIT, CENTRAL CIRCLE- 25, NEW DELHI

ITA 6690/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3675 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 06-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSLENDRA TIWARI
• Assessee Lawyers: DINESH MEHTA
• Keywords: Unexplained cash credit; Opportunity of being heard; Accommodation entries; Assessment record
• Section: 143(3); 133(6); 68; 132

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH FRIDAY : NEW DELHI BEFORE SHRI H.S.SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 6690/DEL/2017 (ASSESSMENT YEAR: 2012 - 13 ) PAM CONSTRUCTION PVT. LTD, 2529 - 2531, GALI NO 6 &&, BEADON PUJA, KAROL BANGH, NEW DELHI PAN:AAFCP4784N VS. DCIT, CENTRAL CIRCLE - 25, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DINESH MEHTA, CA REVENUE BY: SHRI KAUSLENDRA TIWARI, SR. DR DATE OF HEARING 24/11 / 2017 DATE OF PRONOUNCEMENT 31 / 01 / 201 8 O R D E R PER PRASHANT MAHARISHI , A. M. 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - 29, NEW DELHI DATED 08.09.2017 , WHEREIN THE ADDITION MADE BY THE LD ASSESSING OFFICER U/S 68 OF THE ACT OF RS. 4 CRORES VIDE ORDER DATED 30.03.2015 U/S 143(3) OF THE INCOME TAX ACT WAS CONFIRMED. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - . 1. THAT ON THE FACTS AND CIRCUMSTANCE S OF THE CASE AND IN LAW, THE ORDER PASSED BY CIT (A) - 29, NEW DELHI (HEREINAFTER REFERRED TO AS CIT (A), IS BAD IN LAW. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT (A) WAS NOT JUSTIFIED IN UPHOLDING THE ACTION OF AO IN MAKING AN A DDITION OF RS. 4,00,00,000/ - BY TREATING THE SHARE APPLICATION MONEY RECEIVED DURING THE ASSESSMENT YEAR UNDER CONSIDERATION AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT. 3. THAT THE CIT (A) WAS NOT JUSTIFIED IN UPHOLDING THE ACTION OF AO IN MAK ING IMPUGNED ADDITION AND ERRED IN NOT ADJUDICATING THE FOLLOWING SPECIFIC GROUNDS RAISED BY THE APPELLANT : - 3.1 PROPER AND REASONABLE OPPORTUNITY WAS NOT PROVIDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 3.2 COPIES OF CONFIRMATION, ITR, BALANCE SHEET OF ALL THE COMPANIES WHO INVESTED IN SHARE CAPITAL IN THE ASSESSEE COMPANY WERE DULY FILED DURING THE ASSESSMENT PROCEEDINGS TO PROVE THE PAM CONSTRUCTION PVT. LTD VS. DCIT ITA NO. 6690/DEL/2017 (ASSESSMENT YEAR: 2012 - 13) PAGE | 2 IDENTITY, GENUINITY AND CREDIT - WORTHINESS WHEREAS THE SAME HAVE BEEN OVERLOOKED BY AO. 3.3 AO LOST SIGHT OF THE FACT THAT THE SHARES ALLOTTED TO INVESTING COMPANIES WERE NOT BOUGHT BACK TILL DATE AND ARE STILL EXISTING IN THE NAME OF INVESTING COMPANIES. 3.4 AT THE FAG - END OF ASSESSMENT PROCEEDINGS I.E. ONLY ON 23.03.2015 THE ASSESSEE COMPANY WAS REQUIRED TO PRODUCE DIR ECTORS OF INVESTING COMPANIES AND AS SUCH PROPER AND REASONABLE OPPORTUNITY WAS NOT PROVIDED BY THE AO. 3.5 AS SUFFICIENT COMPLIANCE WAS MADE TO NOTICE ISSUED U/S 133(6) OF THE INVESTING COMPANIES ON 17.02.2015 ESTABLISHING THE FACT OF ALL THESE ENTITIES WERE GENUINELY EXISTING, WHICH HAS BEEN OVERLOOKED BY THE A.O. 3.6 AO RELIED UPON THE STATEMENT OF THE PROMOTERS OF THE ASSESSEE COMPANY NAMELY SH. ASHOK GOEL & SH. PRAVEEN GUPTA WITHOUT PROVIDING A COPY OF THE SAID STATEMENT FOR REBUTTAL AND CROSS - EXAMIN ATION, WHICH IS AGAINST THE PROPOSITION OF LAW LAID DOWN BY THE DELHI HIGH COURT IN CIT VS. BEST INFRASTRUCTURE (INDIA) PVT. LTD. IN ITA NO. 12/2017 VIDE ORDER DATED 01.08.2017. 3.7 AO HAS RELIED UPON THE INQUIRIES CONDUCTED BY INVESTIGATION WING ON THE IN VESTING COMPANIES WITHOUT PROVIDING ANY OPPORTUNITY TO THE ASSESSEE FOR A REBUTTAL DURING THE ENTIRE ASSESSMENT PROCEEDINGS INSPITE OF ISSUING SPECIFIC QUESTIONNAIRES DATED 28.01.2014 AND 13.03.2015. 3.8 AO HAS RELIED UPON THE INQUIRIES CONDUCTED IN RESPEC T 'OF INVESTING COMPANIES BASED OUT OF KOLKATA WITHOUT CONFRONTING WITH THE FINDINGS OF THESE INQUIRIES TO THE ASSESSEE FOR A REBUTTAL AND CLARIFICATION. 3.9. AO HAS RELIED UPON THE STATEMENT OF SH. RAJESH KUMAR AGGARWAL RECORDED BY DDIT (INV), UNIT - IV(L) , KOLKATA WITHOUT PROVIDING A COPY OF THE SAID STATEMENT FOR REBUTTAL AND CROSS - EXAMINATION OF SH. RAJESH KUMAR AGGARWAL WHICH IS AGAINST THE PROPOSITION OF LAW LAID DOWN BY THE DELHI HIGH COURT IN CIT VS. BEST INFRASTRUCTURE (INDIA) PVT. LTD. IN ITA NO. 1 2/2017 VIDE ORDER DATED 01.08.2017. 3.10 AO HAS RELIED UPON THE FINANCIAL PARAMETERS OF THE INVESTING COMPANIES ON THE BASIS OF FIELD INQUIRIES CONDUCTED BY INVESTIGATION WING, NEW DELHI WITHOUT CONFRONTING THE FINDINGS OF SUCH INQUIRY AND PROVIDING AN OP PORTUNITY FOR REBUTTAL TO THE ASSESSEE COMPANY DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 3.11 AO HAS RELIED UPON THE INQUIRIES CONDUCTED BY INVESTIGATION WING WITH THE BANK ACCOUNTS OF THE INVESTING COMPANIES BY CALLING FOR INFORMATION FROM RESPECTIVE BANKS WHILE THE SAME WAS NOT PAM CONSTRUCTION PVT. LTD VS. DCIT ITA NO. 6690/DEL/2017 (ASSESSMENT YEAR: 2012 - 13) PAGE | 3 CONFRONTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR REBUTTAL NOR THE CONTENTS OF SUCH INQUIRIES WERE MADE AVAILABLE TO THE ASSESSEE FOR CLARIFICATION. 3. AS THE ASSESSEE HAS PREFERRED STAY PETITION BY THE CONSENT OF THE PARTIES THE MAIN APPEAL WAS HEARD TOGETHER. THE ASSESSEE IS A COMPANY OF SRM GROUP. IT FILED ITS RETURN OF INCOME ON 29.09.2012 FOR RS. 385902/ - . SEARCH U/S 132 WAS CARRIED OUT ON 15.10.2013 ON SRM GROUP. AS THE IMPUGNED ASSESSMENT WAS NOT CONCLUDED TH E ASSESSMENT WAS PASSED U/S 143(3) OF THE ACT AT RS. 40358902/ - . THE ONLY ADDITION MADE BY THE LD AO IS U/S 68 OF THE INCOME TAX ACT OF RS. 4 CRORES WITH RESPECT TO ALLOTMENT OF SHARES TO SEVERAL COMPANIES. THE ASSESSEE SUBMITTED THE CONFIRMATION OF THE PA RTIES, AUDITED ACCOUNTS, BANK STATEMENT AND ITR OF THE COMPANIES, HOWEVER, THE LD ASSESSING OFFICER CARRIED OUT FURTHER ENQUIRES BY ISSUE OF NOTICE U/S 133(6) TO ALL THE SHARE HOLDERS. MOST OF NOTICES WERE SERVED BUT NO COMPLIANCE WAS RECEIVED. THEREFORE, THE LD ASSESSING OFFICER HELD THAT THE TRANSACTION OF THE ISSUE OF SHARES WERE IN THE NATURE OF ACCOMMODATION ENTRIES. HE FURTHER HELD THAT ASSESSEE SUBMITTED DETAILS OF ONLY 12 SHARE HOLDER OUT OF 16 SHARE HOLDERS. HE FURTHER REFERRED TO THE ENQUIRIES MAD E FROM THE DIRECTORS OF THE ASSESSEE COMPANY AND THE AUDITORS. HE FURTHER HELD THAT THE LD ASSESSING OFFICER COULD NOT LOCATE THE ADDRESSES OF THE SHARE HOLDERS AND PREMISES WERE FOUND LOCKED. HE FURTHER HELD THAT INCOME OFFERED BY THE SHARE HOLDER IS VERY LOW AS PER THEIR ITRS. THE ENQUIRY WITH THE BANKERS THE BALANCES IN THE ACCOUNT OF THE SOME OF THE CREDITORS IS VERY LESS. 4. THE ASSESSEE AGGRIEVED WITH THE ORDER OF THE LD AO PREFERRED APPEAL BEFORE THE LD CIT(A), WHO CONFIRMED THE ADDITION HOLDING THAT AS SESSEE HAS FAILED TO DISCHARGE ITS ONUS ON ACCOUNT OF GENUINENESS OF THE TRANSACTION. FURTHER, HE HELD THAT THE SHARE APPLICANTS DO NOT HAVE ANY BUSINESS ACTIVITY. HE FURTHER MENTIONED THAT ONE OF THE GROUP CONCERN HAS ALREADY OFFERED RS. 40 CRORES ON ACCO UNT OF BOGUS SHARE CAPITAL. PAM CONSTRUCTION PVT. LTD VS. DCIT ITA NO. 6690/DEL/2017 (ASSESSMENT YEAR: 2012 - 13) PAGE | 4 5. THE ASSESSEE AGGRIEVED WITH THE ORDER OF THE LD CIT(A) PREFERRED APPEAL BEFORE US. HE SUBMITTED THAT LD ASSESSING OFFICER DID NOT GIVE PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. HE SUBMITTED THAT 133(6) NOTICES WERE ISSUED ON SHARE APPLICANTS ON 16.03.2015 AS PER PARA NO. 11 OF THE ASSESSMENT ORDER AND ON 23.03.2015 THE LD AO ASKED THE ASSESSEE TO PRODUCE THE DIRECTORS OF ALL THE SHARE HOLDERS COMPANY BY 26.03.2015. HE FURTHER SUBMITTED THAT THOUGH SEARCH OPERATIONS CARRIED OUT ON 15.10.2013 RETURN WAS FILED ON 29.09.2012 AT THE FAG END OF THE TIME LIMIT FOR COMPLETING THE ASSESSMENT. THE LD AO CARRIED OUT THE ENQUIRY AND DID NOT ALLOW OF ASSESSEE ENOUGH TIME TO DISCHARGE ITS ONUS OR TO MEET THE ENQUIRY OF THE AO. EVEN OTHERW ISE HE SUBMITTED THAT ASSESSEE HAS DISCHARGED ITS INITIAL ONUS. HOWEVER, HE SUBMITTED THAT IN THE INTEREST OF THE JUSTICE THE MATTER MAY BE SET ASIDE TO THE FILE OF THE LD AO SO THAT TO THE ENQUIRES OF THE AO PROPER EXPLANATION CAN BE GIVEN. 6. THE LD DR VEHEMENTLY CONTESTED THE ARGUMENT OF THE LD AR. HE SUBMITTED THAT ASSESSEE HAS BEEN GIVEN ENOUGH OPPORTUNITIES BUT IT HAS FAILED TO DISCHARGE ONUS CAST UPON IT. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDERS OF TH E LOWER AUTHORITIES. IT IS APPARENT THAT 133(6) NOTICES WERE ISSUED BY THE LD AO ON 16.03.2015. THE ASSESSEE WAS ASKED PRODUCE THE DIRECTORS OF THE SHARE HOLDERS COMPANY ONLY ON 23.03.2015 BY 26.03.2015. THE ASSESSMENT ORDER WAS PASSED ON 30.03.2015. THE RE IS NO MENTION THAT THE ENQUIRY OF THE AO WAS CONFRONTED TO THE ASSESSEE. THE SIMILAR ISSUE HAS BEEN DECIDED BY US IN CASE OF PAM JEWELLERS PVT. LTD IN ITA NO. 6691/DEL/2017 PASSED ON 22.01.2018 AS UNDER: - 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED R ECORDS, ESPECIALLY THE IMPUGNED ORDER. WE FURTHER NOTE THAT EARLIER THIS CASE WAS HEARD BY THE BENCH ON 12.12.2017 AND THE BENCH HAS PASSED THE FOLLOWING ORDER: - AT THE TIME OF HEARING BEFORE US, IT IS STATED BY THE LEARNED COUNSEL THAT THE ASSESSING O FFICER HAS PASSED THE PAM CONSTRUCTION PVT. LTD VS. DCIT ITA NO. 6690/DEL/2017 (ASSESSMENT YEAR: 2012 - 13) PAGE | 5 ORDER WITHOUT ALLOWING ADEQUATE OPPORTUNITY TO THE ASSESSEE AND WITHOUT CONFRONTING THE MATERIAL COLLECTED BEHIND THE BACK OF THE ASSESSEE. HE STATED THAT THE ASSESSING OFFICER STARTED INQUIRY WITH REGARD TO SHARE CAPITAL/SHARE PREMIU M ONLY ON 18TH MARCH, 2015 AND COMPLETED THE ASSESSMENT ON 30TH MARCH, 2015. IN BETWEEN, THE ASSESSING OFFICER ISSUED NOTICE U/S 133(6) TO VARIOUS SHAREHOLDERS. HOWEVER, WHETHER ANY COMMUNICATION IS RECEIVED FROM THEM OR WHAT COMMUNICATION IS RECEIVED HAS NEVER BEEN CONFRONTED TO THE ASSESSEE. SIMILARLY, FROM THE ASSESSMENT ORDER, IT IS FOUND THAT THE ASSESSING OFFICER HAS ALSO RECORDED THE STATEMENTS OF SOME OF THE SHAREHOLDERS BUT THE COPIES OF THE STATEMENTS WERE NEVER CONFRONTED TO THE ASSESSEE. LEARNED DR, ON THE OTHER HAND, STATED THAT THE CIT(A) HAS CONSIDERED ALL THESE ASPECTS AND, IN PARAGRAPH 7, HAS RECORDED THE FINDING THAT THE RESULT OF NOTICE ISSUED U/S 133(6) WAS CONFRONTED TO THE ASSESSEE AND HE HAS ALSO RECORDED THAT SUFFICIENT OPPORTUNITY OF BEING HEARD WAS GIVEN. HOWEVER, IN THE ASSESSMENT ORDER, THERE IS NO MENTION WHETHER THE OUTCOME OF NOTICE U/S 133(6) IS EVER CONFRONTED TO THE ASSESSEE, OR THE COPIES OF STATEMENTS WERE SUPPLIED TO THE ASSESSEE. IN VIEW OF THE ABOVE, TO ARRIVE AT THE COR RECT FACTUAL POSITION, WE DIRECT THE REVENUE TO PRODUCE THE ASSESSMENT RECORD. LEARNED DR HAS SOUGHT TIME OF 15 DAYS. ACCORDINGLY, THE HEARING IS ADJOURNED TO 28TH DECEMBER, 2017. COPY OF ORDER SHEET MAY BE SUPPLIED TO BOTH THE PARTIES. 6.1 ON 28.12.2017 , LD. DR HAS FILED AN APPLICATION DATED 28.12.2017 STATING THEREIN DURING THE COURSE OF PREVIOUS HEARING HONBLE BENCH DIRECTED TO OBTAIN THE CASE RECORD FROM FIELD FORMATION. LETTER WERE ISSUED TO THE CONCERNED AO, BUT ASSESSMENT RECORD ARE NOT RECEIVED AND SOUGHT ADJOURNMENT. ACCORDINGLY, THE CASE WAS ADJOURNED FOR 18.01.2018. 6.2 AGAIN ON 18.1.2018 THE LD. SR. DR UNABLE TO PRODUCE THE ASSESSMENT RECORDS AS ASKED BY THE BENCH VIDE ITS ORDER SHEET DATED 12.12.2017, AS AFORESAID AND IN THE ABSENCE THER EOF THE BENCH IS UNABLE TO DECIDE THE CASE IN A PROPER MANNER. THEREFORE, IN THE INTEREST OF JUSTICE, THE ISSUES IN DISPUTE ARE REMITTED BACK TO THE FILE OF THE AO TO DECIDE THE ISSUES IN DISPUTE AFRESH, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, KEEPING IN VIEW OF THE ORDER SHEET DATED 12.12.2017 OF THE TRIBUNAL, AS MENTIONED ABOVE. 8. IN VIEW OF THE ABOVE FACTS IT IS APPARENT THAT ADEQUATE OPPORTUNITY WAS NOT GRANTED TO THE ASSESSEE. THEREFORE, IN THE INTEREST OF JUSTICE WE SET PAM CONSTRUCTION PVT. LTD VS. DCIT ITA NO. 6690/DEL/2017 (ASSESSMENT YEAR: 2012 - 13) PAGE | 6 ASIDE THE WHOLE ISSUE BACK TO THE FILE OF LD AO TO DECIDE THE ISSUE IN DISPUTE AFRESH AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 1 / 01/2018 . - S D / - - S D / - ( H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 1 / 01/2018 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI