Deepak Makhija, Delhi V. ITO ward-47(2), New Delhi

ITA 8068/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2701 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 07-10-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; TDS
• Section: 68; 37

Judgement Text

ITA NOS.-8067 & 8068/DEL/2019. DEEPAK MAKHIJA. PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: B: NEW DELHI) (THROUGH VIDEO CONFERENCING) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 8068/DEL/2019 ( ASSESSMENT YEAR: 2014-15) SHRI DEEPAK MAKHIJA, DELHI. VS. ITO, WARD- 47(2), NEW DELHI. PAN NO: AASPK5007D APPELLANT RESPONDENT ITA NO:- 8067/DEL/2019 ( ASSESSMENT YEAR: 2013-14) SHRI DEEPAK MAKHIJA, DELHI. VS. ITO, WARD- 47(2), NEW DELHI. PAN NO: AASPK5007D APPELLANT RESPONDENT ASSESSEE BY : MS. SUMANGLA SAXENA, ADV. AND SHRI SHYAM SUNDAR, CA REVENUE BY : SHRI JAGDISH SINGH, SR. DR PER ANADEE NATH MISSHRA, AM (A) THE AFOREMENTIONED APPEALS IN THE CASE OF THE ASSE SSEE ARE TAKEN UP TOGETHER FOR THE SAKE OF CONVENIENCE AND BREVITY; AND ARE HEREBY DISPOSED OFF THROUGH THIS CONSOLIDATED ORDER. GROUNDS TAKEN IN THESE APPEALS OF ASSESSEE ARE AS UNDER: ITA NOS.-8067 & 8068/DEL/2019. DEEPAK MAKHIJA. PAGE 2 OF 7 ITA NO. 8068/DEL/2019 . 1. THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE DISALLOWANCE OF RS.17,74 ,972/- ON ACCOUNT OF INTEREST PAID ON LOAN RECEIVED FROM MS VARRENYAM SECURITIES PVT. LTD. MERELY BECAUSE SUCH LOAN WAS NOT ACCEPTED IN AY 2013-14 WHILE NATU RE AND SOURCE OF THE LOAN CANNOT BE DOUBTED BECAUSE: A) IDENTIFY CANNOT BE DOUBTED BEING NBFC, AN INCOME T AX ASSESSEE DECLARING HUGE INCOME OF RS.1.33CRORES. B) GENUINENESS OF THE LENDOR COMPANY CAN ALSO NOT BE DOUBTED AS THIS COMPANY IS REGULARLY GRANTING LOANS AND ASSE SSEE HAS ALSO TAKEN LOAN THROUGH ACCOUNT PAYEE CHEQUES AND INTE REST WAS PAID ON SUCH LOAN BY DEDUCTING TDS. C) CREDITWORTHINESS CANNOT BE DOUBTED AS LOAN WAS RECE IVED FROM THE BANK ACCOUNT OF THE LENDOR HAVING SUFFICIENT BALANCE OF OVER RS.12 CR BEFORE GIVING LOAN TO THE ASSESSEE COMPA NY. 2. THAT LD. CIT(APPEALS) HAS FURTHER ERRED IN LAW A S WELL AS ON FACTS IN NOT APPRECIATING THAT : I) THE VARIOUS DOCUMENTS FILED IN SUPPORT CLEARLY ESTABLISHING NATURE AND SOURCE OF THE CREDIT BEING SATISFACTORILY EXPLAINED. II) NOT A SINGLE MATERIAL WAS FOUND TO THE CONTRA RY BY THE AO IN RELATION TO THE TRANSACTION MADE WITH THE ASSESSE E BY M/S VARRENYAM SECURITIES PVT. LTD. III) THE EVIDENCE REFERRED TO BY THE AO DURING AS SESSMENT FOR AY 2013-14 RELATES TO PREVIOUS PERIOD WHEN LENDOR C OMPANY WAS ESTABLISHED AND BROUGHT MONEY IN ITS BANK AND BO OKS OF ACCOUNT FROM VARIOUS SOURCES WHICH HAS NO CONNECTION WIT H THE ASSESSEE COMPANY. IV) THE MONEY RECEIVED BY M/S VARRENYAM SECURITI ES PVT. LTD. WAS ALREADY ASSESSED IN THEIR HANDS IN AY 2012-13 WH ICH WAS INVESTED WITH THE ASSESSEE COMPANY AND THE SAME CANNOT BE TAXED AGAIN IN THE HANDS OF THE ASSESSEE. V) THE AO DID NOT ALLOW ANY OPPORTUNITY DURING ASS ESSMENT FOR AY 2013-14 TO CROSS EXAMINE THE PERSONS, STATEMENT OF WHOM WAS RELIED UPON BY HIM AND SO SUCH EVIDENCE CANNOT BE USED AGAINST THE ASSESSEE. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ALSO ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE ADHOC DISALLOWANCE @1 0% ON EXPENDITURES CLAIMED UNDER VARIOUS HEADS I.E. BUSINESS PROMOTION , REPAIR AND MAINTENANCE, STAFF WELFARE, CONVEYANCE, VEHICLE MAI NTENANCE, TELEPHONE, ITA NOS.-8067 & 8068/DEL/2019. DEEPAK MAKHIJA. PAGE 3 OF 7 VEHICLE DEPRECIATION BECAUSE : A) NO EXPENDITURE CLAIMED U/S 37 CAN BE DISALLOWED MERELY ON DOUBTS, BECAUSE INCURRED IN CASH, WITHOUT PINPOINTI NG THE PARTICULAR EXPENSE FOUND TO BE NOT VERIFIABLE. B) SHE HAS FAILED TO NOTICE THAT THERE IS NO ELEME NT OF PERSONAL USE AS VARIOUS EXPENDITURE INCURRED ON OTHER CAR, MAINT AINED BY WIFE, OR MOBILES, SEPARATELY USED, WERE NOT CLAIMED. ITA NO. 8067/DEL/2019 . 1. THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE ADDITION OF RS.5,20,00,0 00/- MADE BY THE AO U/S 68 OF THE INCOME TAX ACT, 1961, ON ACCOUNT OF LOAN RECEIV ED FROM MS VARRENYAM SECURITIES PVT. LTD. WHOSE NATURE AND SOURCE CANNOT BE DOUBTED BECAUSE: A) IDENTIFY CANNOT BE DOUBTED BEING NBFC, AN INCOME T AX ASSESSEE DECLARING HUGE INCOME OF RS.1.33 CRORES. B) GENUINENESS OF THE LENDOR COMPANY CAN ALSO NOT BE DOUBTED AS THIS COMPANY IS REGULARLY GRANTING LOANS AND ASSESS EE HAS ALSO TAKEN LOAN THROUGH ACCOUNT PAYEE CHEQUES AND INTERE ST WAS PAID ON SUCH LOAN BY DEDUCTING TDS. C) CREDITWORTHINESS CANNOT BE DOUBTED AS LOAN WAS RECE IVED FROM THE BANK ACCOUNT OF THE LENDOR HAVING SUFFICIENT BALANCE OF OVER RS.12 CR BEFORE GIVING LOAN TO THE ASSESSEE COMPA NY. 2. THAT LD. CIT(APPEALS) HAS FURTHER ERRED IN LAW A S WELL AS ON FACTS IN NOT APPRECIATING THAT : I) THE VARIOUS DOCUMENTS FILED IN SUPPORT CLEARLY ESTABLISHING NATURE AND SOURCE OF THE CREDIT BEING SATISFACTORILY EXPLAINED. II) NOT A SINGLE MATERIAL WAS FOUND TO THE CONTRA RY BY THE AO IN RELATION TO THE TRANSACTION MADE WITH THE ASSESSE E BY M/S VARRENYAM SECURITIES PVT. LTD. III) THE EVIDENCE REFERRED TO BY THE AO RELATES T O PREVIOUS PERIOD WHEN LENDOR L COMPANY WAS ESTABLISHED AND BROUGH T MONEY IN ITS BANK AND BOOKS OF ACCOUNT FROM VARIOUS SO URCES WHICH HAS NO CONNECTION WITH THE ASSESSEE COMPANY. IV) THE MONEY RECEIVED BY M/S VARRENYAM SECURITI ES PVT. LTD. WAS ALREADY ASSESSED IN THEIR HANDS IN AY 2012-13 WH ICH WAS INVESTED WITH THE ASSESSEE COMPANY AND THE SAME CANNOT BE TAXED AGAIN IN THE HANDS OF THE ASSESSEE. V) THE AO DID NOT ALLOW ANY OPPORTUNITY TO CROSS EX AMINE THE PERSONS, STATEMENT OF WHOM WAS RELIED UPON BY HIM A ND SO SUCH ITA NOS.-8067 & 8068/DEL/2019. DEEPAK MAKHIJA. PAGE 4 OF 7 EVIDENCE CANNOT BE USED AGAINST THE ASSESSEE. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HA S ALSO ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE ADHOC DISALLOWANCE @1 0% ON EXPENDITURES CLAIMED UNDER VARIOUS HEADS I.E. BUSINESS PROMOTION , REPAIR AND MAINTENANCE, STAFF WELFARE, CONVEYANCE, VEHICLE MAI NTENANCE, TELEPHONE, VEHICLE DEPRECIATION BECAUSE : A) NO EXPENDITURE CLAIMED U/S 37 CAN BE DISALLOWED MERELY ON DOUBTS, BECAUSE INCURRED IN CASH, WITHOUT PINPOINTI NG THE PARTICULAR EXPENSE FOUND TO BE NOT VERIFIABLE. B) SHE HAS FAILED TO NOTICE THAT THERE IS NO ELEME NT OF PERSONAL USE AS VARIOUS EXPENDITURE INCURRED ON OTHER CAR, MAINT AINED BY WIFE, OR MOBILES, SEPARATELY USED, WERE NOT CLAIMED. 4. THAT BOTH THE LOWER AUTHORITIES HAVE FAILED TO APPRECIATE THAT LOAN WAS GIVEN BY M/S VARRENYAM SECURITIES PVT. LTD. TO TH E ASSESSEE BECAUSE I) THE ASSESSEE HAS AN ESTABLISHED BUSINESS OF S ALE AND PURCHASE OF GOLD FOR MORE THAN 25 YEARS WHOSE CREDITWORTH INESS IN THE MARKET HAS ALREADY BEEN ESTABLISHED AND II) THE LOAN WAS RECEIVED BY THE ASSESSEE AFTER KNOWING THE CREDENTIALS OF THE NBFC COMPANY WHO IS ENGAGED I N GRANTING LOANS AND ALSO WANTED TO MAKE INVESTMENT IN GOLD WITH THE ASSESSEE COMPANY. 5. THAT THE LEARNED CIT(A) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN SUSTAINING THE ADDITION ON MISCONCEIVED AND IRREL EVANT FACTS AND HENCE THE ORDER OF THE LEARNED CIT(A) IS VITIATED IN LA W. (B) AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE IN FORMED US THAT THE ASSESSEE HAS FILED A DECLARATION UNDER VIVAD SE VISHWAS SCHEME ( VSVS, FOR SHORT) AND THAT THE ASSESSEE HAS ALREADY FILED THE RELEVANT FORMS. THE LD. COUNSEL FOR ASSESSEE ALSO DREW OUR ATTENTION TO LETTER DATED 25.11.2020 FILED IN INCOM E TAX APPELLATE TRIBUNAL (ITAT, FOR SHORT) GIVING INTIMATION FOR THE SAME. (B.1) AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL F OR ASSESSEE AS WELL AS THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE (LD. SR . DR, FOR SHORT) SUBMITTED BEFORE US THAT THESE APPEALS MAY BE TREATED AS WITHDRAWN AND MAY BE DISMISSED ON ACCOUNT OF THE ITA NOS.-8067 & 8068/DEL/2019. DEEPAK MAKHIJA. PAGE 5 OF 7 AFORESAID VSVS; SUBJECT TO SETTLEMENT OF THE DISPUT ES IN THESE APPEALS, UNDER THE AFORESAID VSVS. AFTER DUE CONSIDERATION, IN VIEW O F THE FOREGOING; AND AS BOTH SIDES HAVE AGREED TO THIS; WE TREAT BOTH THESE APPEALS AS WITH DRAWN ON ACCOUNT OF THE AFORESAID VSVS. ACCORDINGLY, BOTH THESE APPEALS ARE DISMISSED , SUBJECT TO SETTLEMENT OF THE DISPUTES IN THE APPEALS, UNDER THE AFORESAID VSVS. (B.2) BEFORE WE PART, WE HEREBY CLARIFY, BY WAY OF ABUNDA NT CAUTION, THAT IF FOR SOME REASON THE DISPUTES UNDER THESE APPEALS BEFORE US ARE NOT SETTLED UNDER THE AFORESAID VSVS, THEN THE ASSESSEE WILL BE AT LIBERTY TO APPRO ACH ITAT FOR RESTORATION OF ANY OR BOTH OF THESE APPEALS, IN ACC ORDANCE WITH LAW. (B.3) WITH THESE DIRECTIONS, THE AFORESAID APPEALS OF TH E ASSESSEE ARE DISMISSED, BEING TREATED AS WITHDRAWN. (C) IN THE RESULT, THESE APPEALS ARE DISMISSED. THESE ORDERS WERE ALREADY PRONOUNCED ON 25 TH NOVEMBER, 2020 IN OPEN COURT, IN THE PRESENCE OF REPRESENTATIVES OF BOTH SIDES; A FTER CONCLUSION OF THE HEARINGS. SD/- SD/- (H.S. SIDHU) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 25/11/20 POOJA/- ITA NOS.-8067 & 8068/DEL/2019. DEEPAK MAKHIJA. PAGE 6 OF 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NOS.-8067 & 8068/DEL/2019. DEEPAK MAKHIJA. PAGE 7 OF 7 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER