Sukumar Rajagopalan, New Delhi V. ACIT, New Delhi

ITA 718/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3101 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 10-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Keywords: Accommodation entries; Onus to prove; Reason to believe
• Section: 143(3); 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC , NEW DELHI BEFORE SH. N. K. SAINI, A CCOUNTANT M EMBER ITA NO. 718/DEL/2016 : ASSTT. YEAR : 2006 - 07 ITA NO. 719/DEL/2016 : ASSTT. YEAR : 2007 - 08 SUKUMAR RAJAGOPALAN, 1516, 2 ND FLOOR, KOTLA MUBARAKPUR, NEW DELHI - 110024 VS ACIT, CIRCLE - 26(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A A GPR6405G ASSESSEE BY : SH. TARUN ROHATGI, CA REVENUE BY : SH. AMRIT LAL, SR. DR DATE OF HEARING : 18 .0 5 .201 7 DATE OF PRONOUNCEMENT : 19 .05 .201 7 ORDER THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 26.11.2015 OF LD. CIT(A) - 15, NEW DELHI. 2. COMMON ISSUES ARE INVOLVED IN THESE APPEALS WHICH WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. IN ITA NO. 718 /DEL/201 6 FOR THE ASSESSMENT YEAR 2006 - 07, FOLLOWING GROUNDS HAVE BEEN RAISED: 1. TH AT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) WAS NOT JUSTIFIED IN HOLDING THAT THE ACTION OF THE LEARNED ASSESSING OFFICER IN REOPENING THE ASSESSMENT U/S 148 IS VALID. ITA NO S. 718 & 719/ DEL /201 6 SUKUMAR RAJAG OPALAN 2 1.1 THAT THE LEARNED CIT (A) HAS ERRED IN SUSTAINING THE AC TION IN REOPENING THE ASSESSMENT U/S 148 MERELY ON THE BASIS OF INFORMATION FROM INVESTIGATION DEPARTMENT IN ABSENCE OF ANY MATERIAL OR REASONABLE NEXUS WITH THE APPELLANT POINTING TO THE ESCAPEMENT OF INCOME. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE, THE LEARNED CIT (A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.4,00,000 ON ACCOUNT OF UNSECURED LOANS U/S 68 OF THE INCOME TAX ACT. 3. THAT IN VIEW OF THE FACT, THAT PERMANENT ACCOUNT NUMBER (PAN), CONFIRMATIONS, BANK STATEMENTS, INCOME - TAX RETURNS AND ACCOUNTS OF LENDERS BEING LIMITED NBFC COMPANY WERE ON RECORD, THE LEARNED CIT (A) WAS NOT JUSTIFIED IN MAKING THE ADDITION U/S 68. 4. THAT THE ONUS TO PROVE THE IDENTITY, GENUINENESS AND CREDIT - WORTHINESS OF THE CREDITS HAVING BEING DISCH ARGED BY THE APPELLANT, THE LEARNED CIT(A) OUGHT TO HAVE DELETED THE ADDITION OF RS.4,00,000. 5. WHETHER MERE NON - APPEARANCE OF THE LENDER CAN RESULT IN THE CREDITS BEING NOT GENUINE. 5.1 THAT NO EFFORTS WERE MADE BY THE LEARNED ASSESSING OFFICER TO ENFO RCE THE SUMMONS U/S 131 OF THE ACT. 5.2 THAT THE FINDING BY THE LEARNED CIT (A) THAT THE SUMMONS TO M/S BANSALI NHOLD LIMITED REMAINED UN - SERVED IS CONTRARY TO THE MATERIAL ON RECORD . ITA NO S. 718 & 719/ DEL /201 6 SUKUMAR RAJAG OPALAN 3 6. THAT THE APPELLANT CRAVES FOR LEAVE TO RESERVE TO ITSELF THE RIGHT TO ADD, ALTER OR MODIFY ANY OF THE GROUNDS OF APPEAL MENTIONED ABOVE AT TIME OF HEARING. IN ANOTHER APPEAL I.E. IN ITA NO. 719/DEL/2016 FOR THE ASSESSMENT YEAR 2007 - 08, SIMILAR GROUNDS ARE RAISED. THE ONLY DIFFERENCE IS IN THE FIGURES OF THE ADDITION M ADE. 4. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET S T ATED THAT IDENTICAL ISSUES HAVING SIMILAR FACTS WERE INVOLVED IN THE CASE OF THE DAUGHTER OF THE ASSESSEE JYOTSANA SUKUMAR VS ITO, WARD - 32(4), NEW DELHI IN ITA NO. 4064 & 4065/DEL/2015 WHERE IN THE CASE OF ASSESSEE WAS ALSO REOPEN ED ON THE SAME FACTS AND SIMILAR ADDITIONS WERE MADE AND THE MATTER TRAVELED UPTO THE ITAT IN ITA NOS. 4064 & 4065/DEL/2015 FOR THE ASSESSMENT YEAR 2006 - 07 AND 2009 - 10 WHEREIN VIDE ORDER DA TED 30.10.2015, THE ADDITION S MADE WERE DELETED (COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACED ON RECORD). THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY THE LD. DR. 5. I HAVE CONSIDERED THE SUBMISSIONS OF BOT H THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE CASES OF THE ASSESSEE AS WELL AS HIS DAUGHTER JYOTSNA SUKUMAR WERE ITA NO S. 718 & 719/ DEL /201 6 SUKUMAR RAJAG OPALAN 4 REOPENED IN SIMILAR CIRCUMSTANCES AND EVEN THE ADDITIONS MADE IN BOTH THE CASES ARE SIMILAR. THE ONLY DIFFERENCE IS IN THE AMOUNTS INVOLVED. 6. IT IS NOTICED THAT T HE SIMILAR ISSUE S HAVE BEEN DECIDED IN THE CASE OF JYOTSNA SUKUMAR VS ITO, WARD - 32(4), NEW DELHI AND THE ADDITIONS WERE DELETED BY THE ITAT VIDE ORD ER DATED 30.10.2015 IN ITA NO. 4064 & 4065/DEL/2015 FOR THE ASSESSMENT YEARS 2006 - 07 AND 2009 - 10 , THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARAS 4 TO 7 WHICH READ AS UNDER: 4. I HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PERUSED THE MATERIAL ON RECORD. THE REASONS FOR REOPENING O F ASSESSMENT ARE AS FOLLOWS: - AS REQUESTED, THE REASONS FOR RE - OPENING THE C ASE ARE REPRODUCED AS UNDER: - AN INFORMATION HAS BEEN RECEIVED FROM THE INVESTIGATION WING, NEW DELHI THROUGH ITO, WARD - 32(2), NEW DELHI THAT MS JYOTS NA SUKUMAR, PROP., BUREAU OF INTERNATIONAL CONFERENCE SERVICES (PAN AMHPS4797H) HAS TAKEN ACCOMMODATION ENTRY IN THE FORM OF UNSECURED LOAN AMOUNTING TO RS.5,25,000/ - FROM FOLLOWING PARTIES DURING THE A.Y. 2006 - 07: I) VINEET BANSAL RS.1,25,00 0/ - II) ANURAG BANSAL RS.2,00,000/ - III) BANSAL INHOLD LTD. RS.2,00,000/ - TOTAL RS.5,25,000/ - ITA NO S. 718 & 719/ DEL /201 6 SUKUMAR RAJAG OPALAN 5 THE INFORMATION SO RECEIVED HAS GONE THROUGH AND CONSIDERED BY ME. ACCORDINGLY, I HAVE REASON TO BELIEVE THAT THE AMOUNT OF RS.5,25,000/ - HAS ESCAPED ASSESSMENT DURING THE F.Y. 2005 - 2006 RELEVANT TO THE A.Y. 2006 - 2007 WITHIN THE MEANING OF SECTION 148 OF THE INCOME TAX ACT, 1961. YOUR CASE IS FIXED FOR HEARING O 01.11.2012. YOURS FAITHFULLY, SD/ - (S.P. BAXLA) INCOME TAX OFFICER, WARD - 32(4), NEW DELHI. 5. THE HON BLE DELHI HIGH COURT IN THE CASE CIT VS. G & G PHARMA INDIA LTD. IN ITA 545/2015 VIDE JUDGEMENT DATED 8.10.2015, HELD AS UNDER: - 12. IN THE PRESENT CASE, AFTER SETTING OUT FOUR ENTRIES, STATED TO HAVE BEE N RECEIVED BY THE ASSESSEE ON A SINGLE DATE I.E. 10TH FEBRUARY 2003, FROM FOUR ENTITIES WHICH WERE TERMED AS ACCOMMODATION ENTRIES, WHICH INFORMATION WAS GIVEN TO HIM BY THE DIRECTORATE OF INVESTIGATION, THE AO STATED: I HAVE ALSO PERUSED VARIOUS MATERIAL S AND REPORT FROM INVESTIGATION WING AND ON THAT BASIS IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN HTTP://WWW.ITATONLINE.ORG ITA NO. 545/2015 PAGE 7 OF 8 UNACCOUNTED MONEY IN ITS BANK ACCOUNT BY WAY OF ABOVE ACCOMMODATION ENTRIES. THE A BOVE CONCLUSION IS UNHELPFUL IN UNDERSTANDING WHETHER THE AO APPLIED HIS MIND TO THE MATERIALS THAT HE ITA NO S. 718 & 719/ DEL /201 6 SUKUMAR RAJAG OPALAN 6 TALKS ABOUT PARTICULARLY SINCE HE DID NOT DESCRIBE WHAT THOSE MATERIALS WERE. ONCE THE DATE ON WHICH THE SO CALLED ACCOMMODATION ENTRIES WERE PROVIDED IS KNOWN, IT WOULD NOT HAVE BEEN DIFFICULT FOR THE AO, IF HE HAD IN FACT UNDERTAKEN THE EXERCISE, TO MAKE A REFERENCE TO THE MANNER IN WHICH THOSE VERY ENTRIES WERE PROVIDED IN THE ACCOUNTS OF THE ASSESSEE, WHICH MUST HAVE BEEN TENDERED ALONG WITH THE RETURN , WHICH WAS FILED ON 14TH NOVEMBER 2004 AND WAS PROCESSED UNDER SECTION 143(3) OF THE ACT. WITHOUT FORMING A PRIMA FACIE OPINION, ON THE BASIS OF SUCH MATERIAL, IT WAS NOT POSSIBLE FOR THE AO TO HAVE SIMPLY CONCLUDED: IT IS EVIDENT THAT THE ASSESSEE COMPA NY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY ITA NOS.4064 & 4065/DEL/2015 IN ITS BANK BY WAY OF ACCOMMODATION ENTRIES . IN THE CONSIDERED VIEW OF THE COURT, IN LIGHT OF THE LAW EXPLAINED WITH SUFFICIENT CLARITY BY THE SUPREME COURT IN THE DECISIONS DISCUSSE D HEREINBEFORE, THE BASIC REQUIREMENT THAT THE AO MUST APPLY HIS MIND TO THE MATERIALS IN ORDER TO HAVE REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT IS MISSING IN THE PRESENT CASE. 6. SIMILAR IS THE POSITION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF SIGNATURES HOTELS PVT. LTD. VS. ITO AND ANOTHER (2011) 338 ITR 51 (DEL), MADHU KHOSLA VS. CIT 368 ITR 165 (DEL) AND CIT VS. INSECTICIDES (INDIA) PVT. LTD., 357 ITR 330 (DEL). 7. RESPECTFULLY FOLLOWING THE PROPOSITIONS LAID DOWN IN ALL THESE CASES, I HOLD THAT THE REOPENING IN BOTH THESE ASSESSMENT YEARS ARE BAD IN LAW AS THERE IS NO APPLICATION OF MIND BY THE AO. ITA NO S. 718 & 719/ DEL /201 6 SUKUMAR RAJAG OPALAN 7 SO, RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER DATED 30.10.2015, THE ADDITIONS MADE IN THE HANDS OF THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS 2006 - 07 & 2007 - 08, ARE DELETED. 7 . IN THE RESULT, APPEAL S OF THE ASSESSEE ARE ALLOWED . ( ORDER PRON OUNCED IN T HE COURT ON 19 /05/2017) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DAT ED: 19 /05 /2017 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR