Frost Falcon Distelleries Ltd, New Delhi V. DCIT, Central Circle-1, Faridabad

ITA 7946/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3916 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 14-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Search and seizure; Block assessment
• Section: 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI B BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.7713/DEL/2018 ASSESSMENT YEAR : 2008-09 DCIT, CENTRAL CIRCLE-I, 7 TH FLOOR, HSIIDC BUILDING, UDYOG VIHAR, PHASE-V, GURUGRAM, HARYANA-122016 VS M/S FROST FALCON DISTILLERIES LTD., C-654, NEW FRIENDS COLONY, NEW DELHI PAN-AAACF0434C REVENUE ASSESSEE ITA NO.7946/DEL/2018 ASSESSMENT YEAR : 2008-09 M/S FROST FA LCON DISTILLERIES LTD., C-654, NEW FRIENDS COLONY, NEW DELHI VS DCIT, CENTRAL CIRCLE-I, 7 TH FLOOR, HSIIDC BUILDING, UDYOG VIHAR, PHASE-V, GURUGRAM, HARYANA-122016 PAN-AAACF0434C ASSESSEE REVENUE ASSESSEE BY SH.VINOD KUMAR BINDAL, CA MS. RINKY SHARMA, ITP REVENUE BY MS. NIDHI SRIVASTAVA, CIT - DR ITA NOS. 7713 & 7946/DEL/2018 2 | P A GE DATE OF HEARING 20.09.2021 DATE OF PRONOUNCEMENT 07 . 10 .2021 ORDER PER SANJAY GARG, JUDICIAL MEMBER : THE CAPTIONED ARE CROSS APPEALS, ONE BY THE REVENUE AND OTHER BY THE ASSESSEE, PREFERRED AGAINST THE ORDER DATED 04.09.2018 OF THE LD. COMMISSIONER OF INCOME TAX (A PPEALS) (HEREINAFTER REFERRED TO CIT(A)), GURUGRAM, FOR T HE ASSESSMENT YEAR 2008-09. 2. SINCE, THE COMMON ISSUE HAS BEEN RAISED IN BOTH THE APPEALS, THE SAME HAS BEEN HEARD TOGETHER AND ARE B EING DISPOSED OF BY THIS COMMON ORDER. 3. THE BRIEF, FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO THE ACT) WAS CARRIED OUT AT THE PREMI SES OF THE ASSESSEE ON 09.11.2011. CONSEQUENT TO THAT, THE ASS ESSMENT WAS FRAMED U/S 153A OF THE ACT FOR THE YEAR UNDER CONSI DERATION, VIDE ASSESSMENT ORDER DATED 27.02.2014, WHEREIN, THE ASSE SSING OFFICER MADE ADDITION OF RS.5,50,00,000/- INTO THE INCOME OF THE ITA NOS. 7713 & 7946/DEL/2018 3 | P A GE ASSESSEE U/S 68 OF THE ACT ON ACCOUNT OF UNACCOUNTE D MONEY INTRODUCED INTO THE ASSESSEE COMPANY BY FOUR PARTIE S IN THE FORM OF SHARE CAPITAL AND SHARE PREMIUM. THE ASSESSING O FFICER HELD THAT THE AFORESAID INVESTOR COMPANIES WERE NON-EXIS TANT AND PAPER COMPANIES THROUGH WHICH THE ASSESSEE INTRODUCED HIS OWN UNACCOUNTED MONEY IN THE FORM OF SHARE CAPITAL AND SHARE PREMIUM. 4. BEING AGGRIEVED BY THE AFORESAID ORDER OF THE A SSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE L D. CIT(A). 5. THE LD. CIT(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF THREE PARTIES, HOWE VER, UPHELD THE ADDITION OF RS.75 LAKHS IN RESPECT OF THE SHARE CAP ITAL/SHARE PREMIUM RECEIVED BY THE ASSESSEE FROM ONE M/S AACHM AN VANIJYA (P.) LTD. THE LD. CIT(A) DELETED THE ADDITION IN R ESPECT OF THREE PARTIES OBSERVING THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH ACTION IN RESPECT OF THE INVESTMENT MADE BY THE SAID THREE PARTIES. FURTHER, THAT THE ORIGINAL ASSESSME NT FOR THE YEAR UNDER CONSIDERATION STOOD COMPLETED ON THE DATE OF SEARCH. HE, IN THIS RESPECT RELIED UPON THE DECISION OF THE HONBL E DELHI HIGH ITA NOS. 7713 & 7946/DEL/2018 4 | P A GE COURT IN THE CASE OF CIT VS KABUL CHAWLA (380 ITR 57 3)(DEL.) AND ON THE DECISION OF THE CO-ORDINATE DELHI BENCH OF T HE ITAT IN THE CASE OF M/S JAIPURIA INFRASTRUCTURE DEVELOPERS P. L TD. VS ACIT IN ITA NO.5522 & 5523/DEL/2015, WHEREIN, IT HAS BEEN HE LD THAT IN CASE OF COMPLETED ASSESSMENTS, NO ADDITION CAN BE M ADE IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. 6. HOWEVER, IN THE CASE OF SHARE CAPITAL/SHARE PRE MIUM RECEIVED FROM M/S AACHMAN VANIJYA (P) LTD., THE LD. CIT(A) REFERRED TO THE STATEMENT RECORDED OF SH. KASHI PRA SAD CHOTIA, DIRECTOR OF M/S AACHMAN VANIJYA (P) LTD. DURING TH E SURVEY ACTION CARRIED OUT AT THE PREMISES OF THE SAID COMPANY, WH EREIN, HE HAD STATED THAT HE WAS ONLY DUMMY DIRECTOR OF THE COMPA NY AND THAT M/S AACHMAN VANIJYA (P) LTD. WAS A PAPER CONCERN AND NO GENUINE BUSINESS ACTIVITIES WERE CARRIED OUT BY THE SAID COMPANY. FURTHER THAT THE SAID COMPANY USED TO PROVIDE ACCOM MODATION ENTRIES. THE LD. CIT(A) RELIED UPON THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF CIT, CHENNAI VS S. AJI T KUMAR (2018) 93 TAXMANN.COM 294(SC), WHEREIN IT HAS BEEN HELD THA T ANY MATERIAL OR EVIDENCE FOUND/COLLECTED IN SURVEY, WHIC H HAS BEEN ITA NOS. 7713 & 7946/DEL/2018 5 | P A GE SIMULTANEOUSLY MADE AT THE PREMISES OF A CONNECTED PERSON, CAN BE UTILIZED WHILE MAKING THE BLOCK ASSESSMENT IN RES PECT OF AN ASSESSEE UNDER SECTION 158BB READ WITH SECTION 158 B H OF THE I. T. ACT. HE, THEREFORE, CONFIRMED THE ADDITION OF R S.75 LAKH IN RESPECT OF THE SHARE CAPITAL/SHARE PREMIUM RECEIVED BY THE ASSESSEE FROM THE AFORESAID COMPANY. 7. THE REVENUE, THEREFORE, HAS COME IN APPEAL BEFO RE US CONTESTING THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION IN RESPECT OF THE REMAINING THREE PARTIES AMOUNTING TO RS.4,75,00,000/- AND WHEREAS THE ASSESSEE HAS COME I N APPEAL CONTESTING THE CONFIRMATION OF ADDITION OF RS.75 LA KH IN RESPECT OF SHARE PREMIUM/SHARE CAPITAL RECEIVED FROM M/S AACHM AN VANIJYA (P.) LTD. 8. WE HAVE HEARD THE RIVAL CONTENTION AND GONE THR OUGH THE RECORD. ADMITTEDLY, THE ORIGINAL ASSESSMENT IN THIS CASE WAS ALREADY COMPLETED AND NOT ABATED AS ON THE DATE OF SEARCH. IT IS ALSO AN ADMITTED FACT THAT NO INCRIMINATING MATERIA L WAS FOUND IN THE PREMISES OF THE ASSESSEE DURING THE SEARCH ACTI ON RELATING TO THE AFORESAID SHARE CAPITAL/SHARE PREMIUM RECEIVED BY THE ITA NOS. 7713 & 7946/DEL/2018 6 | P A GE ASSESSEE. NOW, THE LD. CIT(A) WHILE DELETING THE ADDI TION IN RESPECT OF THE THREE PARTIES HAS RELIED UPON THE DECISION O F THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA (SUPRA) AND OTHER HIGH COURTS, WHEREIN, IT HAS BEEN HELD THAT IN CASE OF COMPLETED ASSESSMENT, NO ADDITION CAN BE MADE IN TH E ABSENCE OF ANY INCRIMINATING MATERIAL. WE DO NOT FIND ANY INF IRMITY IN THE ORDER OF THE LD. CIT(A) IN THIS RESPECT. 9. HOWEVER, SO FAR AS THE CONFIRMATION OF ADDITION BY THE LD. CIT(A) IN RESPECT OF SHARE CAPITAL/SHARE PREMIU M RECEIVED FROM M/S AACHMAN VANIJYA (P.) LTD. IS CONCERNED, WE FIN D THAT THE LD. CIT(A) HAS RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT, CHENNAI VS S. AJIT KUMAR (SUPRA ), WHEREIN, THE HONBLE SUPREME COURT HAS HELD THAT ANY MATERIAL OR EVIDENCE FOUND/COLLECTED IN A SURVEY ACTION WHICH HAS BEEN SI MULTANEOUSLY MADE AT THE PREMISES OF A CONNECTED PERSON CAN BE U TILIZED WHILE MAKING THE BLOCK ASSESSMENT IN RESPECT OF AN ASSESS EE UNDER SECTION 158BB R.W.S. 158BH OF THE ACT. THE HO NBLE SUPREME COURT IN THIS RESPECT HAS HELD THAT THE WOR DS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WIT H THE ASSESSING ITA NOS. 7713 & 7946/DEL/2018 7 | P A GE OFFICER AND RELATABLE TO SUCH EVIDENCE OCCURRING IN SECTION158BB OF THE ACT WILL COVER THE MATERIAL FOUND OR COLLECTE D IN A SIMULTANEOUS A SURVEY ACTION AT THE PREMISES OF THE CONNECTED PERSON. HOWEVER, WE NOTE THAT THE AFORESAID PROPOSI TION WAS LAID DOWN BY THE HONBLE SUPREME COURT IN RELATION TO THE BLOCK ASSESSMENT MADE U/S 158BB R.W.S. 158BH OF THE ACT. H OWEVER, THE SAID PROVISIONS OF SECTION 158BB AND 158BH ARE NOT APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE AS SESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IN THIS CAS E HAS BEEN FRAMED UNDER THE PROVISIONS OF SECTION 153A OF THE ACT, WHEREIN, SUCH WORDS AS REFERRED TO BY THE HONBLE SUPREME COU RT DOES NOT EXIST. MOREOVER, WE FIND THAT THE STATEMENT RELIED UPON BY THE LD. CIT(A) OF ONE SH. KASHI PRASAD CHOTIA, DUMMY DIRECT OR OF THE M/S AACHMAN VANIJYA (P.) LTD. IS OTHERWISE NOT TRUSTWORT HY AND IS NOT ENOUGH TO MAKE ADDITION BASED SOLELY ON THE SAID ST ATEMENT. MR. KASHI PRASAD CHOTIA IN THE SURVEY ACTION HAD STATED THAT HE WAS DUMMY DIRECTOR ONLY, WHICH MEANS, HE WAS NOT AWARE OF THE ACTUAL ACTIVITY OF THE SAID COMPANY I.E. M/S AACHMA N VANIJYA (P.) LTD. HE HAD FURTHER STATED THAT HE WAS NOT AWARE ABOU T THE COMMISSION PAID BUT THE DETAILS OF THE COMMISSION E ARNED COULD ITA NOS. 7713 & 7946/DEL/2018 8 | P A GE BE FURNISHED BY THE SH. PRAMOD BAID, WHO WAS THE KEY PERSON IN THE COMPANY. WHEN HE WAS ASKED AS TO WHAT WAS THE NAT URE OF BUSINESS OF M/S AACHMAN VANIJYA (P.) LTD., HE REPLI ED THAT ALL SUCH INFORMATION IN RESPECT OF M/S AACHMAN VANIJYA (P.) LTD. COULD BE GIVEN BY SH. PRAMOD BAID ONLY. EXCEPT THE AFORESAID STATEMENT OF SH. KASHI PRASAD CHOTIA, NO OTHER INCR IMINATING MATERIAL OR EVIDENCE HAS BEEN REFERRED IN THE ASSES SMENT ORDER, IN RESPECT OF SURVEY ACTION CARRIED OUT IN THE CASE OF M/S AACHMAN VANIJYA (P.) LTD.. THE STATEMENT OF SAID SH. KASHI PRASAD CHOTIA HAS NOT BEEN CONFRONTED TO THE ASSESSEE. THE LD. CO UNSEL FOR THE ASSESSEE IN THIS RESPECT HAS RELIED UPON THE DECISI ON OF THE HONBLE SUPREME COURT IN THE CASE OF M/S ANDMAN TIMBER INDU STRIES VS COMMISSIONER OF CENTRAL EXCISE, KOLKATA IN CIVIL AP PEAL NO.4228/2006, ORDER DATED 02 ND SEPTEMBER, 2015, WHEREIN, THE HONBLE SUPREME COURT HAS HELD THAT WHERE THE ASSESS EE HAD NOT BEEN GIVEN AN OPPORTUNITY TO CROSS EXAMINE THE WITNE SS, WHO MADE STATEMENT SUCH BALD STATEMENT, CANNOT BE MADE THE S OLE BASIS TO MAKE ADDITION. SINCE, THE WORDS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WITH THE ASSESSING OFF ICER AND RELATABLE TO SUCH EVIDENCE DO NOT FIND MENTION UNDER THE ITA NOS. 7713 & 7946/DEL/2018 9 | P A GE PROVISIONS OF SECTION 153A OF THE ACT AND FURTHER I T HAS BEEN HELD TIME AND AGAIN BY THE VARIOUS HIGH COURT THAT ADDIT ION CAN BE MADE IN CASE OF COMPLETED ASSESSMENT AS ON THE DATE OF SEARCH ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND D URING THE SEARCH ACTION, HENCE, IN OUR VIEW, THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS.75 LAKHS ON THE BASIS OF SOLE STATEMENT OF ONE DUMMY DIRECTOR, RECORDED DURING TH E SURVEY ACTION IN CASE OF THAT COMPANY, WITHOUT CONFRONTING THE SAME TO THE ASSESSEE, CANNOT BE HELD TO BE JUSTIFIED. THE I MPUGNED ADDITION IS, THEREFORE, ORDERED TO BE DELETED. IN V IEW OF THE ABOVE DISCUSSION, THE APPEAL OF THE REVENUE IS HEREBY DIS MISSED, WHEREAS THE APPEAL OF THE ASSESSEE IS ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 07/ 10/2021. SD/- SD/- (ANIL CHATURVEDI) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI; DATED: 07 / 10 /2021 . F{X~{T F{X~{T F{X~{T F{X~{T ITA NOS. 7713 & 7946/DEL/2018 10 | P A GE COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI