DCIT, CENTRAL CIRCLE- 14, NEW DELHI V. R B FARMS AND ESTATES PVT. LTD., NEW DELHI

ITA 7145/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3217 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2016-2017
• Appeal Filed On: 08-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: I. P. S. BINDRA
• Keywords: Income from undisclosed sources; Search and seizure; Bogus
• Section: 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH. KUL BHARAT, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA NO.7144 & 7145/DEL/2018 ASSESSMENT YEAR: 2015-16 & 2016-17 DCIT CENTRAL CIRCLE-14 NEW DELHI VS R B FARMS AND ESTATES PVT. LTD. 2686, KASHMERE GATE, NEW DELHI PAN NO. AACCR7224E (APPELLANT) (RESPONDENT) APPELLANT BY SH. I. P. S. BINDRA, CIT RESPONDENT BY SH. ASHWANI KUMAR, CA DATE OF HEARING: 21/10/2021 DATE OF PRONOUNCEMENT: 21/10/2021 ORDER PER N. K. BILLAIYA, AM: 1. ITA NO. 7144/DEL/2018 AND ITA NO.7145/DEL/2018 A RE TWO SEPARATE APPEALS BY THE REVENUE PREFERRED AGAINST A CONSOLIDATED ORDER OF THE CIT(A)-27, NEW DELHI DATED 13.08.2018 PERTAINING TO A.Y.2015-16 AND 2016-17. 2. SINCE COMMON GRIEVANCE IS INVOLVED IN THE CAPTIO NED APPEALS AND SINCE CIT(A) HAS DISPOSED OF BOTH THE A PPEALS BY WAY OF A CONSOLIDATED ORDER, BOTH THESE APPEALS WERE HE ARD TOGETHER 2 AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SA KE OF CONVENIENCE AND BREVITY. 3. THE COMMON GRIEVANCE READ AS UNDER :- 4. IN A.Y.2016-17 THE QUANTUM INVOLVED IS RS.59.40 LACS. 5. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON AMP GROUP AND OTHER RELATED CASES ON 16.09.2015. SEARCH U/S. 132 (1) OF THE AC T WAS INTERLIA CONDUCTED AT PREMISES OF THE ASSESSEE. 6. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ESTATE ACTIVITIES. 3 7. DURING THE COURSE OF SEARCH AND SEIZURE OPERATIO N IT WAS FOUND THAT THE ASSESSEE HAS RECEIVED UNSECURED LOAN S IN F.Y. 2014-15, FROM TWO CONCERNS, NAMELY, EARTHWORKS META LLURGICALS PRIVATE LIMITED AND TACHYONS TRADING PRIVATE LIMITE D AS FOLLOWS :- 8. DURING ENQUIRIES, THE AO FOUND THAT THESE UNSECU RED LOANS ARE NON-GENUINE. THE AO WAS OF THE OPINION THAT THE GROUP COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED INCOME A S UNSECURED LOANS. 9. ON FURTHER ENQUIRY THE AO FOUND THAT THE TWO COM PANIES FROM WHICH THE ASSESSEE HAS TAKEN UNSECURED LOANS W ERE NOT FILING INCOME TAX RETURNS NOR DO THEY HAVE ANY CRED ITWORTHINESS. 10. THE ASSESSEE WAS ASKED TO EXPLAIN THE TRANSACTI ON IN THE LIGHT OF SECTION 68 OF THE ACT. 4 11. IN ITS REPLY THE ASSESSEE CONTENDED THAT THE UN SECURED LOAN HAS BEEN MET OUT OF THE FUND/ CASH RECEIVED ON ACCO UNT OF BOGUS/ INFLATED PURCHASE DONE BY M/S. ANAND MOTORS PRODUCT PVT. LTD. THE ASSESSEE POINTED OUT THAT AN APPLICA TION IS FILED BEFORE THE INCOME TAX SETTLEMENT COMMISSION. THE A O WAS OF THE OPINION THAT APPLICATION OF M/S. ANAND MOTORS P RODUCT PRIVATE LIMITED (AMP PRIVATE LIMITED) IS STILL PEND ING FOR ADJUDICATION. THE AO CONCLUDED BY HOLDING THAT THE SOURCE OF UNSECURED LOAN IS REMAINED UNEXPLAINED AND ACCORDIN GLY MADE ADDITION OF RS.10,37,50,000/- IN A.Y.2015-16 AND RS .59.40 LACS IN A.Y. 2016-17. 12. ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) A ND REITERATED ITS CONTENTION THAT THE UNSECURED LOAN IS MET OUT O F BOGUS/ INFLATED PURCHASES DONE BY GROUP COMPANY 13. CONSIDERING THE FACTS AND THE SUBMISSIONS THE C IT(A) FOUND THAT THE APPLICATION BEFORE THE ITSC HAS BEEN ACCEP TED AND DECIDED VIDE ORDER DATED 28.03.2018 FRAMED U/S. 245 D(4) OF THE ACT. THE CIT(A) EXTRACTED PARA 4.4.3 OF THE ORDER AS UNDER :- 4.4.3 COMMISSIONS FINDING: WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED THEIR SUBMISSIONS. IT IS OBSE RVED THAT THE APPLICANT HAS EXPLAINED THE INTRODUCTION OF SHARE CAPITAL THROUGH GENERATION OF CASH FROM INFLATION OF PURCHA SES. THE CASH FLOW STATEMENT SUBMITTED BEFORE THE COMMISSION HAS 5 BEEN VERIFIED BY THE PCIT. HENCE, NO FURTHER ADDITI ON IS CALLED FOR ON THIS ISSUE. 14. THE CIT(A) FOUND THAT IN THE AFORESAID ORDER TH OUGH ALL THE RELEVANT FACTS, QUANTUM, NAMES OF LENDER COMPANIES ETC. HAVE BEEN DISCUSSED AND DECIDED BY ITSC BUT THE NAME OF THE A SSESSEE COMPANY WAS NOT MENTIONED. 15. THE ITSC VIDE ORDER DATED 08.08.2018 ISSUED A C ORRIGENDUM AND INCLUDED THE NAME OF THE ASSESSEE AS UNDER :- 4.4 .. IT WAS FOUND THAT M/S. ANAND MOTOR PRODUCT PVT. LTD., M/S. AMP MOTORS PVT. LTD., HAD RECEIVED SHARE CA PITAL FROM CERTAIN COMPANIES TO THE EXTENT OF RS.19 CRORE S IN THE F.Y.2009-10 & 2014-15 AND M/S. RB FARMS PVT. LTD. A GROUP CONCERN OF THE AMP GROUP HAD RECEIVED UNSECURED LOAN S WORTH RS.10.96 CRORES FROM TWO NON GENUINE COMPANIES DURIN G F.Y.2014-15. 16. THE CIT(A) FOUND THAT THE ITSC, NEW DELHI HAS A CCEPTED FUND FLOW CHART BY THE ASSESSEE AND ACCORDINGLY DEL ETED THE ADDITION IN BOTH THE ASSESSMENT YEARS I.E. 2015-16 AND 2016-17. 17. THE DR STRONGLY SUPPORTED THE FINDINGS OF THE A O. IT IS THE SAY OF THE DR THAT THERE IS NO LINKAGE BETWEEN THE INFLATED PURCHASE AND THE UNSECURED LOANS, THEREFORE, THESE TWO SEPARATE 6 AND DISTINCT TRANSACTIONS AND THE CIT(A) SHOULD NOT HAVE DELETED THE ADDITIONS. 18. PER CONTRA THE COUNSEL FOR THE ASSESSEE STRONGL Y SUPPORTED THE FINDINGS OF THE CIT(A). 19. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW AND HAVE ALSO GONE THROUGH THE ORDERS OF THE ITSC, NEW DELHI PLACED ON RECORD IN THE FORM OF A PAPER BOOK. 20. IT IS AN UNDISPUTED FACT THAT BEFORE THE ITSC T HE GROUP COMPANY M/S. AMP MOTOR PRIVATE LIMITED HAVE TAKEN A PLEA THAT IT HAS BEEN INFLATING PURCHASES FROM WHICH IT HAS G ENERATED CASH. WE ARE OF THE OPINION THAT THE CASH SO GENERATED HA S BEEN RE- INTRODUCED IN THE BOOKS OF THE ASSESSEE IN THE FORM OF UNSECURED LOAN FROM THE TWO COMPANIES. SINCE THE GROUP COMPA NY HAS PAID TAXES ON SUCH INFLATED PURCHASES, WE DO NOT FIND AN Y REASON WHY THE SAME AMOUNT, WHEN RE-INTRODUCED IN THE BOOKS SH OULD BE TAXED AGAIN. 21. CONSIDERING THE TOTALITY OF THE FACTS WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE CIT(A) BOTH THE APPEALS BY THE REVENUE ARE DISMISSED. 7 22. DECISION ANNOUNCED IN THE OPEN COURT IN THE PRE SENCE OF BOTH THE REPRESENTATIVES ON 21.10.2021. SD/- SD/- (KUL BHARAT) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOU NTANT MEMBER *NEHA* DATE:-21.10.2021 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI DATE OF DICTATION 2 1 .10.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 21.10.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 21.10.2021 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS 2 1.10.2021 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 21.10.2021 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 21.10.2021 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 21.10.2021 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21.10.2021 DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER