ITO, Ward-2(2), New Delhi V. Altamash Township P.Ltd, New Delhi

ITA 6826/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4330 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 29-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDER SINGH
• Keywords: Accommodation entries
• Section: 69C; 142(1); 143(2); 139(1); 147; 68; 148

Judgement Text

1 ITA NO. 6826/DEL/2018 IN THE INCOME TAX APPE LLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER AND DR. B. R. R. KUMAR, ACCOUNT ANT MEMBER ITA NO. 6826/DEL/ 2018 ( A.Y 2009-10) (THROUGH VIDEO C ONFERENCING) ITO WARD-2(2) ROOM NO. 375, C. R. BUILDING, NEW DELHI (APPELLANT) VS ALTAMASH TOWNSHIP P. LTD. C/O. SHRI JAGMINDER GUPTA, DIRECGTOR, J-181, SAKET NEW DELHI AABCA0598H (RESPONDENT) APPELLANT BY SH. VIRENDER SINGH, SR. DR RESPONDENT BY SH. VED JAIN, ADV ORDER PER SUCHITRA KAMBLE, JM THIS APPEALS IS FILED BY REVENUE AGAINST THE ORDER DATED09/08/2018 PASSED BY CIT(A)-1, NEW DELHI FOR ASSESSMENT YEAR 2 009-10. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD.CIT(A) HAS ERRED IN QUASHING PROCEEDINGS, U/S 147 OF THE IT AC T ON THE GROUND OF NON- ISSUANCE OF NOTICE U/S 143(2) OF THE INCOME TAX ACT . 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD.CIT(A) HAS ERRED IN NOT CONSIDERING THE ORDER OF THE HON'BLE H IGH COURT OF DELHI IN THE CASE OF CIT-II VS. MADHYA BHARAT ENERGY CORPORATION LTD. IN ITA NO. 950/2008. DATE OF HEARING 27.09.2021 DATE OF PRONOUNCEMENT 05.10.2021 2 ITA NO. 6826/DEL/2018 3. THE ASSESSEE IS A PRIVATE LIMITED COM PANY ENGAGED IN THE BUSINESS OF REAL ESTATE. THE RETURN FOR THE YEAR UNDER CONSIDER ATION I.E. 2009-10 WAS FILED ON 31.03.2010 DECLARING NIL INCOME. ON 25.03.2014, NOTICE UNDER SECTION 148 WAS ISSUED BY THE ASSESSING OFFICER. IN RESPONSE TO THE ABOVE NOTICE, THE AR OF THE ASSESSEE COMPANY VIDE ITS LETTER DATED 04.02.20 15 INFORMED THE ASSESSING OFFICER THAT THE NAME OF THE ASSESSEE COMPANY HAS B EEN STRUCK OFF FROM THE RECORDS OF ROC W.E.F. F.Y. 2009-10. ACCORDINGLY, NE ITHER THE ASSESSEE NOR ITS DIRECTOR HAVE RECEIVED ANY NOTICE U/S 148 FOR THE A Y 2009-10 AND REQUESTED HIM TO PROVIDE A COPY OF NOTICE U/S 148. LATER ON, THE ASSESSING OFFICER ISSUED NOTICE U/S 142(1) ON THE ADDRESS OF AR OF THE COMPA NY. IN RESPONSE TO WHICH, THE AR VIDE LETTER DATED 10.02.2015 INFORMED THAT H E IS THE AUDITOR OF THE COMPANY, THE COMPANY HAS BEEN CLOSED AND ITS NAME H AS BEEN STRUCK OFF FROM THE RECORDS OF ROC AND HE IS NOT IN POSSESSION OF A NY OF THE DOCUMENTS OR INFORMATION WITH RESPECT TO THE ASSESSEE COMPANY. THEREAFTER, ASSESSEE FILED A REPLY DATED 11.02.2015 IN WHICH IT WAS STATED THAT THE ORIGINAL ROI FILED U/S 139(1) ON 31.03.2010 MAY BE TREATED AS ROI IN RESPO NSE TO NOTICE U/S 148. VIDE LETTER DATED 11.02.2015, THE AR SUBMITTED THE FINANCIALS AND ITR OF THE ASSESSEE COMPANY AND REQUESTED THE ASSESSING OFFICE R TO PROVIDE THE COPY OF REASONS RECORDED FOR REOPENING THE CASE U/S 147. A S PER THE REASONS RECORDED, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA S RECEIVED ACCOMMODATION ENTRIES OF RS 1.40 CRORES FROM VARIOUS COMPANIES BE LONGING TO SHRI. ASEEM GUPTA. THEREAFTER VIDE LETTER DATED 13.02.2015, TH E ASSESSEE FILED ITS OBJECTION TO THE REASONS RECORDED BY THE ASSESSING OFFICER. T HE SAID OBJECTIONS WERE DISPOSED OFF BY THE ASSESSING OFFICER VIDE LETTER D ATED 13.02.2015. VIDE LETTER DATED 16.02.2015, THE AR OF THE ASSESSEE COMPANY IN FORMED THE ASSESSING OFFICER THAT SINCE THE NAME OF THE COMPANY HAS BEEN STRUCK OFF FROM ROC AND ALL ITS OPERATIONS ARE CLOSED THERE IS NO RECORD RE TAINED BY THE COMPANY. FURTHER, THE AR AT THE TIME OF ASSESSMENT PROCEEDIN GS INFORMED THE ASSESSING OFFICER THAT THE COMPANY IS ALSO NOT IN POSSESSION OF ITS BANK ACCOUNT, ACCORDINGLY THEY ARE UNABLE TO CONFIRM THE SHARE AP PLICATION MONEY EXACTLY RECEIVED IN THE YEAR UNDER CONSIDERATION. THE ASSES SING OFFICER WAS INFORMED 3 ITA NO. 6826/DEL/2018 THAT THE SHARE APPLICATION MONEY RECEIVED TO THE EX TENT OF RS. 1.01 CRORE FROM M/S. MODERATE CREDIT CORPORATION PVT. LTD. HAS ALRE ADY BEEN FORFEITED AND DISCLOSED AS INCOME IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION FILED BY THE ASS ESSEE ADDED RS. 39,00,000/- IN THE HANDS OF THE ASSESSEE U/S 68 OF THE ACT TREA TING THE SAME AS ACCOMMODATION ENTRY TAKEN BY THE ASSESSEE AND ALSO ADDED RS. 39,000/- AS COMMISSION EXPENSE U/S 69C OF THE ACT ON NOTIONAL B ASIS. THE ASSESSING OFFICER ALSO DISALLOWED RS. 1,24,22,000/- BEING THE SECURITIES AND DEPOSITS WRITTEN OFF BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT STATING THAT THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION IN THIS RE GARD. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE AS SESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) ALLOWED THE APPEAL O F THE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITIONS AS THE ASSESSEE COMPANY HAS DELIBERATELY DEALT THE TRANSACTION TILL ASSESSMENT YEAR 2009-10 AND THEREAFTER FILED PROCEE DINGS THEREBY, THE ASSESSEE COMPANY WAS STRUCK OFF FROM THE RECORDS OF ROC W.E.F. FINANCIAL YEAR 2009-10 WHILE LETTER DATED 4/5/2015 AND THE SAME WA S INFORMED TO THE ASSESSING OFFICER. THE LD. DR FURTHER SUBMITTED TH AT THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT VS. MADHYA BHARAT ENERGY CORPN. LTD. IN ITA NO. 950/2008 ORDER DATED 11 JULY, 2011 WAS N OT AT ALL CONSIDERED BY THE CIT(A). THE GROUNDS OF APPEAL BEFORE THE CIT(A ) RELATING TO NON ISSUANCE OF NOTICE UNDER SECTION 143(2) WAS ALSO NOT RAISED AT THE INITIAL STAGES. THUS, THE LD. DR SUBMITTED THAT THE ADDITIONS MADE BY THE ASS ESSING OFFICER SHOULD HAVE BEEN CONFIRMED BY THE CIT(A). 6. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A) AND FURTHER SUBMITTED THAT THE DECISION OF THE MADHYA BHARAT ENERGY CORPN . LTD. (SUPRA) IS REVIEWED AND IS NO MORE A GOOD LAW. THE LD. AR RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF PR. CIT VS. SHRI JAI SH IV SHANKAR TRADERS PVT. LTD. 4 ITA NO. 6826/DEL/2018 2015 (10) TMI 1765 DATED 14.10.2015 AS WELL AS PR. CIT VS. SILVER LINE 2015 (11) DATED 04.11.2015 AND CIT VS. LAXMAN DAS KHANDE LWAL 2019 (8) TMI 660 DATED 13.08.2019 DECIDED BY THE HON'BLE SUPREME COU RT. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT IN THE REMAND REPORT THE ASSESSING OFFICER HAS NOT COMMENTED UPON THE QUERY RELATED TO ISSUANCE OF NOTICE U/S 143(2). THERE WAS NOTHING ON THE RECORD TO SHOW THA T 143(2) NOTICE WAS ISSUED TO THE ASSESSEE. THUS, AT THRESHOLD ITSELF THE ASS ESSMENT PROCEEDINGS BECOMES BAD IN LAW AS HELD IN THE CASE OF PR. CIT VS. SILVE R LINE (SUPRA) UPHOLDING THE DECISION OF THE TRIBUNAL THAT THE REASSESSMENT ORDE R CANNOT BE PASSED WITHOUT COMPLYING WITH THE MANDATORY REQUIREMENT OF NOTICE BEING ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE U/S 143(2) OF TH E ACT AND, THEREFORE, THE RE- ASSESSMENT ORDER WAS LEGALLY UNSUSTAINABLE. THUS, THE CIT(A) HAS RIGHTLY QUASHED RE-ASSESSMENT ORDER PASSED U/S. 147 AND ALL OWED THE APPEAL OF THE ASSESSEE. THERE IS NO NEED TO INTERFERE WITH THE F INDINGS OF THE CIT(A). HENCE, APPEAL OF THE REVENUE IS DISMISSED. 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 05 TH DAY OF OCTOBER, 2021 SD/- SD/- (B. R. R. KUMAR) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED: 05/10/2021 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT 5 ITA NO. 6826/DEL/2018 ASSISTANT REGISTRAR ITAT NEW DELHI