DCIT, Central Circle- 14, New Delhi V. AMP Motors Pvt. Ltd., Delhi

ITA 7143/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2763 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 08-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI
• Keywords: Bogus purchase; Search and seizure; Bogus
• Section: 68; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 7142/DEL/2018 : ASSTT. YEAR : 2010-11 ITA NO. 7143/DEL/2018 : ASSTT. YEAR : 2015-16 DCIT, CENTRAL CIRCLE-14, NEW DELHI-110055 VS AMP MOTORS PVT. LTD., 2686, KASHMERE GATE, DELHI-110006 (APPELLANT) (RESPONDENT) PAN NO. AA ICA0034F ASSESSEE BY : SH. ASHWANI KUMAR, CA REVENUE BY : SH. SATPAL GULATI, CIT DR DATE OF HEAR ING: 18 . 10 .20 2 1 DATE OF PRONOUNCEMENT: 22 .10 .20 2 1 ORDER PER BENCH: THE PRESENT APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE ORDERS OF LD. CIT(A)-27, NEW DELHI DATE D 13.08.2018. 2. SINCE, THE ISSUES INVOLVED IN BOTH THE APPEALS A RE IDENTICAL, WHICH WERE HEARD TOGETHER. 3. IN ITA NO. 7142/DEL/2018, FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: 1. THAT THE LD. CIT(A) HAS ERRED IN FACTS AND ON L AW IN GIVING RELIEF ON ACCOUNT OF ADDITIONS MADE U/S SECT ION 68 IN THE CASE OF ASSESSEE COMPANY BASED ON THE CASH FLOW STATEMENT OF ANOTHER COMPANY I.E. M/S ANAND MOTORS ITA NOS. 7142 & 7143/DEL/2018 AMP MOTORS PVT. LTD. 2 PRODUCTS PVT. LTD. AND ALSO IGNORING THE FACT THAT THERE IS NO DIRECT LINKAGE OF CASH GENERATED OUT OF BOGUS PU RCHASES IN M/S ANAND MOTORS PRODUCTS PVT. LTD. TO INVESTMEN T IN M/S AMP PRODUCTS PVT. LTD. AS SHARE CAPITAL/ SHARE PREMIUM OF RS. 6.75CR. 2. THAT THE LD. CIT(A) HAS ERRED IN FACTS AND ON LA W IN STATING THAT THE ADDITIONS WERE MADE BY THE AO ONLY ON THE BASIS THAT THE APPLICATION OF THE ASSESSEE IS PENDI NG BEFORE ITSC AND CLEARLY IGNORING THE FACT THAT THE AO HAS MADE THE ADDITION AS THE ASSESSEE FAILED TO EXPLAIN THE IDENTITY AND CREDIT WORTHINESS OF THE SHARE HOLDERS AND ALSO FAILED TO PROVE THE GENUINENESS OF THE TRANSACTIONS. 3. THAT THE LD. CIT(A) HAS ERRED IN FACTS AND ON LA W IN DECIDING APPEAL OF THE ASSESSEE BASED ON CASH FLOW STATEMENT SUBMITTED AND ADMITTED BY HON'BLE ITSC WI THOUT APPRECIATING THE FACT THAT DEPARTMENT HAS NEVER ACC EPTED THE CASH FLOW STATEMENT FILED BY ASSESSEE AND PRAYE D FOR ENHANCING BOGUS PURCHASES RS.72.70 CR. BASED ON SEI ZED DOCUMENTS/ OR ALTERNATIVELY BOGUS PURCHASES OF RS. 104.63 CR. BASED ON PERCENTAGE OF TOTAL PURCHASES IN RULE 9/9A/D3 REPORT. 4. DELAY CONDONED. 5. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF DEALERSHIP OF LAND ROVER & JAGUAR IN DELHI NCRS. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON AMP GROUP AND OTHER RELATED CASES ON 16.09.2015 AT THE VARIOUS RESIDENT IAL AND BUSINESS PREMISES. IT WAS SUBMITTED THAT THE ASSESS EE HAS RECEIVED SHARE CAPITAL AND SHARE PREMIUM FROM TWO E NTITIES NAMELY, M/S BALLABHGARH REFRACTORIES LTD. OF RS.1.5 0 CRORES AND M/S USK EXIM PVT. LTD. OF RS.50 LACS IN A.Y. 2010-1 1 AND RS.6.75 CRORES FROM ENTITIES NAMELY, MS INFO LANDS SOFTWARE SOLUTIONS PVT. LTD., M/S SHRIDHAR PORTFOLIO MANAGEM ENT PVT. LTD. AND M/S MYSORE FINLEASE PVT. LTD. FOR THE A.Y. 2015 -16. 6. AT THE TIME OF ASSESSMENTS, THE APPLICATION FILE D BY THE ASSESSEE BEFORE THE INCOME TAX SETTLEMENT COMMISSIO N (ITSC) ITA NOS. 7142 & 7143/DEL/2018 AMP MOTORS PVT. LTD. 3 WAS PENDING FOR ACCEPTANCE. SUBSEQUENTLY, THE APPLI CATION OF THE ASSESSEE WAS ACCEPTED BY THE HONBLE ITSC AND P ASSED THE ORDER U/S 245D(4) OF THE INCOME TAX ACT ON 28.03.20 18. THE ITSC HAS CATEGORICALLY OBSERVED THAT THE APPLICANT HAS EXPLAINED THE INTRODUCTION OF SHARE CAPITAL THROUGH GENERATIO N OF CASH FROM INFLATION OF THE PURCHASES. THE CASH FLOW STATEMENT SUBMITTED BEFORE THE COMMISSION HAS BEEN VERIFIED BY THE LD. PCIT. H ENCE, NO FURTHER ADDITION IS CALLED FOR ON THIS ISSUE . 7. THE GROUNDS TAKEN UP BY THE REVENUE THAT THE DEP ARTMENT HAS NEVER ACCEPTED THE CASH FLOW STATEMENT FILED BY THE ASSESSEE IS IN CONTRAVENTION TO THE CATEGORICAL FIN DING OF THE HONBLE ITSC AS MENTIONED ABOVE. THE LD. CIT(A) AFT ER DULY CONSIDERING THE ORDER U/S 245D(4) OF THE HONBLE IT SC CAME TO A CONCLUSION THAT THE AMOUNT STANDS OFFERED TO TAX. ON GOING THROUGH THE ENTIRE RECORD, WE FIND NO REASONS TO IN TERFERE WITH THE ORDER OF THE LD. CIT(A). 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/10/2021. SD/- SD/- (AMIT SHUKLA) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 22/10/2021 *SUBODH KUMAR, SR. PS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR