ACIT, New Delhi V. M/s. Varun Beverages (International) Ltd., New Delhi

ITA 853/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5953 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 12-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Assessee Lawyers: SSH AKSHAT JAIN
• Keywords: Unexplained investment; Search and seizure; Opportunity of being heard; Validity of assessment; Assessment record
• Section: 143(3); 153A; 14A; 132

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH A, NEW DELHI BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NOS. 853, 854, 855 & 856/DEL/2015 ASSESSMENT YEARS: 2008-09. 2009-10, 2010-11 & 2012- 13 ACIT, CENTRAL CIRCLE - 7, NEW DELHI. (APPELLANT) VS. VARUN BEVERAGES (INTERNATIONAL) LTD. R/O F-2/7, OKHLA INDL. AREA, PHASE-I, NEW DELHI (PAN-AAACG7763M) (RESPONDENT) APPELLANT BY SH. RAVI KANT GUPTA, SR. DR RE SPONDENT BY S/SH. AKSHAT JAIN & RAJAT JAIN, C.A. ORDER PER BENCH: THESE FOUR APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE ORDERS OF THE LD. CIT(A)-XXXI, NEW DELHI DATED 05.11.2014 FOR THE ASSESSMENT YEARS 2008-09, 2009-10, 2010-11 AND 2012-13 RESPECTIVELY. THE LD. CIT(A) HAS DECIDED THE APPEALS FOR A.Y. 2008-09 AND 2010-11 BY COMMON ORDE R AND REST OF THE APPEALS HAVE BEEN DECIDED BY SEPARATE ORDERS. IN ALL THESE APPEALS, THE GROUNDS RAISED ARE COMMON AND THEREFORE, THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. FOR THE SAKE OF BREVITY , GROUNDS RAISED BY THE REVENUE IN APPEAL FOR THE ASSESSMENT YEAR 2008-09 ARE REPRO DUCED HEREIN BELOW : 1. THE ORDER OF LD. CIT(A) IS NOT CORRECT IN LAW AN D FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT (A) HAS ERRED IN LAW BY RELYING ON THE CASE OF M/S SPICE INFOTAINMENT LT D. VS. CIT[(2012}274 ITR (DEL}500)] IN HOLDING THAT THE ACTION OF THE AO IN FRAMING ASSESSMENT IN THE NAME OF M/S VARUN BEVERAGES (INTERNATIONAL) LTD. AF TER THE SAID ENTITY STOOD DISSOLVED CONSEQUENT UPON ITS AMALGAMATION WITH M/S VARUN BEVERAGES LTD. DATE OF HEARING 21.05.2018 DATE OF PRONOUNCEMENT 25 .05.2018 ITA NOS. 853 TO 856/DEL./2015 2 W.E.F. 01.01.2012 WAS NOT A CURABLE MISTAKE AS PER SECTION 292B OF THE IT ACT, 1961 TREATING THE ASSESSMENT PASSED BY THE AO AS NU LL AND VOID-AB-INITIO SINCE MENTIONING OF THE INCORRECT NAME IN THE ASSESSMENT ORDER IS A CURABLE MISTAKE RECTIFIABLE U/S 292B OF I.T. ACT, 1961. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN LAW IN NOT APPRECIATING THE FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDING THE ASSESSEE HAS NEVER STATED THAT COMPANY M/S VARU N BEVERAGES (INTERNATIONAL) LTD., STANDS MERGED WITH M/S VARUN BEVERAGES LTD. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN LAW IN QUASHING THE ORDER PASSED BY ASSESSING OFFICER W ITHOUT GOING INTO THE MERITS OF CASE. 2. BRIEFLY STATED, THE FACTS OF THE CASES ARE THAT A SEARCH AND SEIZURE OPERATION U/S. 132 WAS CARRIED OUT ON M/S. JAIPURIA GROUP (R. K. JAIPURIA GROUP) OF CASES ON 27.03.2012. WARRANT OF AUTHORIZATION U/S. 132 WAS A LSO ISSUED IN THE NAME OF ASSESSEE. STATUTORY NOTICES WERE ISSUED TO THE ASSE SSEE AND ASSESSMENT WAS MADE U/S. 153A R.W.S. 143(3) BY MAKING FOLLOWING ADDITIO NS : PARTICULARS 2008-09 2009-10 2010-11 2012-13 RETURNED INCOME 6,65,31,280 7,00,39,280 6,78,97,3 00 13,07,34,130 DISALLOWANCE U/S. 14A 19,98,249 41,31,259 - - DISALLOWANCE OF INTT. ON LOANS 40,07,313 2,55,12 ,000 1,51,80,000 INTT. RECEIVED/RECEIVABLE FROM FROM ASSOCIATE ENTERPRISES - - - 2,83,40,945 UNEXPLAINED INVESTMENT - - - 55,97,500 TOTAL INCOME 7,25,36,842 9,96,82,539 8,30,77,300 21,50,50,075 3. THE ABOVE ADDITIONS WERE CHALLENGED BY THE ASSE SSEE IN APPEAL BEFORE THE LD. CIT(A) BY WAY OF VARIOUS GROUNDS ONLY ON MERITS OF THE ADDITIONS AND ALSO FILED DETAILED WRITTEN SUBMISSIONS IN SUPPORT. THE LD. CI T(A) VIDE IMPUGNED ORDERS DELETED THE ABOVE ADDITIONS OBSERVING THAT THE PROC EEDINGS U/S. 153A OF THE ACT WERE INITIATED AND THE IMPUGNED ASSESSMENT ORDERS W ERE ALSO MADE IN THE NAME OF M/S. VARUN BEVERAGES (INTERNATIONAL) LTD., WHICH GOT AMALGAMATED INTO M/S. ITA NOS. 853 TO 856/DEL./2015 3 VARUN BEVERAGES LTD. W.E.F. 01.01.2012 AS PER ORDER OF THE HONBLE DELHI HIGH COURT DATED 12.03.2013. HE, THEREFORE, OBSERVED THA T THE ASSESSMENT ORDERS HAVING BEEN PASSED IN THE NAME OF NON-EXISTENT ENTI TY, WERE VOID AB-INITIO, AS THIS DEFECT, NOT BEING A PROCEDURAL DEFECT, WAS NOT CURA BLE U/S. 292B OF ACT. FOR THIS, THE LD. CIT(A) HAS RELIED ON THE DECISION OF HONBL E DELHI HIGH COURT IN THE CASE OF SPICE INFOTAINMENT LTD. VS. CIT (2012) 247 CTR (DEL ) 500. AGGRIEVED, THE REVENUE IS IN PRESENT APPEALS BEFORE THE TRIBUNAL. 4. DURING THE COURSE OF HEARING, THE LD. DEPARTMENT AL REPRESENTATIVE, RELYING ON THE ASSESSMENT ORDERS, CONTENDED THAT THE LD. CI T(A) WAS NOT JUSTIFIED IN DELETING THE ADDITIONS IGNORING THE FACT THAT THAT THE MISTAKE POINTED OUT BY THE LD. CIT(A) WAS A CURABLE MISTAKE U/S. 292B OF THE IT AC T. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS NEVER STATED IN THE ASSESSMEN T PROCEEDINGS THAT M/S. VARUN BEVERAGES (INTERNATIONAL) LTD. STOOD MERGED WITH M/ S. VARUN BEVERAGE LTD. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAS ALSO RAISED NO GROUND BEFORE THE LD. CIT(A) OBJECTING TO THE ASSESSMENTS HAVING BEEN PASSED IN THE NAME OF WRONG ENTITY. IT IS ALSO SUBMITTED THAT THE LD. CIT(A) HAS DECIDED THE APPEAL ON ALTOGETHER DIFFERENT ASPECT, WITHOUT GIVING AN OPPORTUNITY TO THE ASSESS ING OFFICER TO REBUT THE SAME. IT WAS, THEREFORE, SUBMITTED THAT IN PRESENCE OF TH ESE FACTS, THE DECISION IN THE CASE OF SPICE INFOTAINMENT LTD. VS. CIT (SUPRA) RELIED B Y THE LD. CIT(A) IS NOT APPLICABLE TO THE PRESENT CASE. 5. ON THE OTHER HAND, SHRI AKSHAT JAIN, APPEARING O N BEHALF OF THE ASSESSEE, RELIED ON THE ORDER OF THE LD. CIT(A) AND HAS ALSO SUPPORTED THE IMPUGNED ORDER ON THE LEGAL PLEAS RAISED BY FILING FOLLOWING LEGAL GROUNDS IN THESE APPEALS OF THE REVENUE, FOR ADMISSION AND CONSIDERATION : '1. THAT ON THE FACTS AND CIRCUMSTANCES OF CASE, A DDITIONS MADE UNDER SECTION 153A OF THE INCOME TAX ACT, 1961 IS BAD IN LAW AS T HE SAME WERE NOT MADE ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH AND ITA NOS. 853 TO 856/DEL./2015 4 SEIZURE OPERATION AND THE CASE OF RELEVANT ASSESSME NT YEAR HAS ALREADY BEEN ASSESSED UNDER SECTION 143(1) WHICH COULD NOT ABATE ON THE DATE OF SEARCH. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF CASE, T HE APPEAL FILED BY THE LEARNED ASSESSING OFFICER BEFORE HON'BLE INCOME TAX APPELLATE TRIBUNAL IS DEFECTIVE AND HENCE NOT MAINTAINABLE AS THE SAME WA S FILED AGAINST THE NON- EXISTING COMPANY I.E. VARUN BEVERAGES (INTERNATIONA L) LIMITED WHICH HAS BEEN AMALGAMATED WITH VARUN BEVERAGES LIMITED W.E.F. 01. 01.2012.' 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ENTIRE MATERIAL ON RECORD. A PERUSAL OF THE ASS ESSMENT ORDER REVEALS THAT THE ASSESSEE NOWHERE UNEARTHED THE FACTUM THAT M/S. VAR UN BEVERAGE (INTERNATIONAL) LIMITED STOOD MERGED WITH M/S. VARUN BEVERAGE LTD. SO AS TO CHALLENGE THE JURISDICTION OF ASSESSING OFFICER HAVING PASSED THE ASSESSMENT ORDERS IN THE NAME OF NON-EXISTING ENTITIES. THE GROUND RAISED BY THE REVENUE ON THIS SCORE HAS NOT BEEN REBUTTED ON BEHALF OF THE ASSESSEE BEFORE US. A PERUSAL OF THE IMPUGNED ORDER ALSO REVEALS THAT IN APPEAL BEFORE THE LD. CI T(A), THE ASSESSEE HAS TAKEN EXTENSIVE GROUNDS OF APPEAL, ALL ON MERITS OF ADDIT IONS, BUT NO GROUND OR ISSUE OF JURISDICTIONAL DEFECT, AS OBSERVED BY THE LD. CIT(A ), WAS RAISED. THE ASSESSEE HAS MADE DETAILED SUBMISSIONS BEFORE THE LD. CIT(A), AS REPRODUCED IN THE IMPUGNED ORDER, BUT NO GRIEVANCE ON VALIDITY OF ASSESSMENT O RDER HAS BEEN RAISED. BEFORE US ALSO, THE ASSESSEE HAS NOT FILED ANY APPEAL OR CROS S OBJECTION. IT IS NO DOUBT TRUE THAT LEGAL GROUND CAN BE RAISED AT ANY STAGE, BUT T HE COURT WOULD HAVE AN OCCASION TO DECIDE SUCH LEGAL GROUNDS ONLY WHEN IT IS RAISED BY THE LITIGANT. IN THE INSTANT CASE, THE LD. CIT(A) HAS DELETED THE ADDITIONS, ON THE SUO MOTU REASONING THAT THERE WAS A JURISDICTIONAL DEFECT IN THE ASSESSMENT ORDERS HAVING BEEN PASSED IN THE NAME OF VARUN BEVERAGE (INTERNATIONAL) LTD. WHI CH STOOD MERGED WITH VARUN BEVERAGE LTD. AT THE TIME OF PASSING OF SUCH ORDERS . IT IS FURTHER SIGNIFICANT TO NOTE THAT WHILE DECIDING THE APPEALS ON THE SCORE ALTOGE THER DIFFERENT FROM THE GRIEVANCES RAISED BY THE ASSESSEE IN GROUNDS OF APP EAL AND WRITTEN SUBMISSIONS, IT ITA NOS. 853 TO 856/DEL./2015 5 WAS INCUMBENT UPON THE LD. CIT(A) TO SEEK COMMENTS FROM THE ASSESSING OFFICER ON THE ISSUE OF ALLEGED JURISDICTIONAL DEFECT, WHIC H IS NOT DONE IN THE INSTANT CASE. IN THE DECISION RELIED ON BY THE LD. CIT(A), THE AM ALGAMATED COMPANY APPEARED BEFORE THE ASSESSING OFFICER AND BROUGHT THIS FACT TO ITS KNOWLEDGE, HOWEVER, THE ASSESSING OFFICER DID NOT SUBSTITUTE THE NAME OF TH E AMALGAMATED COMPANY IN THE ASSESSMENT RECORDS IN THAT CASE. NO SUCH SITUATION DOES ARISES IN THE INSTANT CASE, AS THE REVENUE HAS TAKEN A SPECIFIC GROUND BEFORE U S THAT THE ASSESSEE DID NOT DISCLOSE THE FACTUM OF AMALGAMATION IN THE ASSESSME NT PROCEEDINGS. THEREFORE, THE FACTS OF THAT CASE RELIED BY LD. CIT(A) ARE NOT ALMOST SIMILAR TO THE PRESENT CASE AS OBSERVED BY THE LD. CIT(A). 7. NOW WE COME TO ADMISSION OF LEGAL PLEAS RAISED O N BEHALF OF THE ASSESSEE IN THE FORM OF ADDITIONAL GROUNDS IN THESE APPEALS OF THE REVENUE BEFORE US. IT IS WORTH CONSIDERATION THAT THE ASSESSEE IS NEITHER IN APPEAL NOR ANY CROSS OBJECTION HAS BEEN FILED ON ITS BEHALF. HOWEVER, IT APPEARS T HAT THE ASSESSEES AFORESAID GROUNDS ARE PURPORTED TO HAVE BEEN RAISED IN SUPPOR T OF THE IMPUGNED ORDER IN VIEW OF RULE 27 OF THE IT RULES. ON PERUSAL OF THE ABOVE GROUNDS, WE FIND THAT THE SAME HAVE BEEN RAISED UNDER THE SIGNATURE OF SHRI A KSHAT JAIN, FCA AND NOT UNDER THE SIGNATURE OF ASSESSEE OR ANY AUTHORIZED SIGNATO RY OF THE AMALGAMATED COMPANY, I.E., VARUN BEVERAGE LIMITED. THERE IS ALS O NO AUTHORITY LETTER OF THE ASSESSEE COMPANY AVAILABLE ON RECORD AND THEREFORE, IT IS NOT CLEAR AS TO WHICH OF THE COMPANIES WHETHER AMALGAMATING COMPANY OR AMA LGAMATED COMPANY AUTHORIZED SHRI AKSHAT JAIN TO FILE THE GROUNDS OF APPEAL UNDER HIS SIGNATURE. HENCE, IT CANNOT BE ACCEPTED AT THIS STAGE. MOREOVE R, THE PLEA RAISED IN GROUND NO. 1 IS A NEW PLEA, ON WHICH THERE IS NO FINDING OR CO MMENTS OF THE AUTHORITIES BELOW IN THEIR ORDERS. AS PER RULE 27, THE ASSESSEE CAN S UPPORT THE ORDER APPEALED AGAINST ON ANY GROUND WHICH STANDS DECIDED AGAINST THE ASSESSEE, BUT IN THE INSTANT CASE, THE PLEA RAISED IN GROUND NO. 1 STATI NG THAT ORDER U/S. 153A WAS ITA NOS. 853 TO 856/DEL./2015 6 MADE WITHOUT ANY INCRIMINATING MATERIAL FOUND IN SE ARCH, DOES NOT STAND DECIDED AGAINST THE ASSESSEE IN THE IMPUGNED ORDER. VIEWED FROM THIS ANGLE ALSO, THIS GROUND/PLEA CANNOT BE ACCEPTED AT THIS STAGE. THE P LEA RAISED IN SECOND ADDITIONAL GROUND IS TO SUPPORT THE CONCLUSION OF THE LD. CIT( A) RELATING TO ASSESSMENT HAVING BEEN PASSED IN THE NAME OF WRONG ENTITY, WHICH WE H AVE DEALT WITH IN THE PRECEDING PARA OF THIS ORDER. IN THE TOTALITY OF AL L THE ABOVE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE MATTER SHOULD GO BACK T O THE FILE OF LD. CIT(A) TO DECIDE THE APPEAL AFRESH AFTER SEEKING COMMENTS/REM AND REPORT OF THE ASSESSING OFFICER ON THE ISSUE OF ASSESSMENTS HAVING BEEN PAS SED IN THE WRONG NAME. THE ASSESSEE, HOWEVER, SHALL BE AT LIBERTY TO RAISE ANY ISSUE/GROUND IN ITS SUPPORT BEFORE THE LD. CIT(A) IF SO ADVISED AND THE LD. CIT (A) SHALL DECIDE THE SAME IN ACCORDANCE WITH LAW. NEEDLESS TO SAY, BOTH THE PART IES SHALL BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD. ACCORDINGLY, ALL THESE APPEALS DESERVE TO BE ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, ALL THE FOURS APPEALS ARE ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MAY, 2018 SD/- SD/- (BHAVNESH SAINI) ( L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25 TH MAY, 2018 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI