Dua Health Care Pvt. Ltd., New Delhi V. DCIT, Circle- 11(1), New Delhi

ITA 8946/DEL/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 9520 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 18-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU MUKHERJEE
• Assessee Lawyers: VED JAIN CA SHRI ASHISH GOEL
• Keywords: Accommodation entries; Reason to believe
• Section: 147; 68; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC-1 BENCH, NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 8946/DEL/2019 [ASSESSMENT YEAR: 2012-13] DUA HEALTH CARE PVT LTD VS. THE DY. C.I.T RR-11, 2 ND FLOOR, MIANWALI NAGAR CIRCLE- 11(1) MAIN ROHTAK ROAD, PASCHIM VIHAR NEW DELHI NEW DELHI PAN: AADCD 8448 F [APPELLANT] [RESPONDENT] DATE OF HEARING : 18.03.2021 DATE OF PRONOUNCEMENT : 18.03.2021 ASSESSEE BY : SHRI VED JAIN,CA SHRI ASHISH GOEL, CA REVENUE BY : MS. RANU MUKHERJEE, SR. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] -15, DELHI DAT ED 25.10.2019 PERTAINING TO ASSESSMENT YEAR 2012-13. 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE AS SESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER REJECTING THE CONTENTION OF THE ASSESSEE THAT REOPE NING OF THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961 [HER EINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] AND CONSEQUENT REASSESSM ENT WITHOUT COMPLYING WITH THE STATUTORY CONDITIONS AND THE PRO CEDURE PRESCRIBED UNDER THE LAW ARE BAD AND LIABLE TO BE QUASHED. 3. ON MERITS, THE ASSESSEE IS ALSO AGGRIEVED BY THE ADDITION OF RS. 2 LAKHS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF S HARE APPLICATION MONEY. 4. REPRESENTATIVES OF BOTH THE SIDES WERE HEARD AT LENGTH. CASE RECORDS CAREFULLY PERUSED. 5. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS ENGAGED IN THE BUSINESS OF WHOLESALE AND TRADING OF MEDICINE. FOR THE YEAR UNDER CONSIDERATION, RETURN OF INCOME WAS FILE D ON 03.09.2012 DECLARING AN INCOME OF RS. 8,650/-. SEARCH AND SEI ZURE OPERATION WAS CARRIED OUT ON THE PREMISES OF DERA SACHA SAUDA BY THE ADIT, INVESTIGATION, ROHTAK AND VIDE LETTER DATED 25.01.2 018, IT WAS 3 INFORMED TO THE ASSESSING OFFICER THAT THE ASSESSEE COMPANY IS A COMPANY CLOSELY ASSOCIATED WITH DERA SACHA SAUDA AN D SAINT GURMEET RAM RAHIM SINGH AND HAS FAILED TO EXPLAIN THE SOURC E OF CREDITS APPEARING IN THE BANK STATEMENTS AS WELL AS SOURCE OF ACQUISITION OF MOVABLE AND IMMOVABLE ASSETS OF THE COMPANY. 6. NOTICE WAS ISSUED U/S 148 OF THE ACT AND ALONGWI TH REASONS FOR REOPENING ASSESSMENT. THE REASONS FOR INITIATING P ROCEEDINGS U/S 148 OF THE ACT READ AS UNDER: 4 5 6 7 8 7. A PERUSAL OF THE REASONS RECORDED FOR REOPENING THE ASSESSMENT MENTIONED HEREINABOVE SHOW THAT THE RE ASSESSMENT P ROCEEDINGS WERE INITIATED FOR QUANTUM OF INCOME WHICH HAS ESCAPED A SSESSMENT AMOUNTING TO RS. 8,52,910/- AND PERUSAL OF THE ASSE SSMENT ORDER SHOWS THAT THE ASSESSING OFFICER HAS MADE ADDITION U/S 68 OF THE ACT IN RESPECT OF SOME SHARE APPLICATION MONEY AMOUNTING T O RS. 2 LAKHS. 8. THIS MEANS THAT NO ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER IN RESPECT OF THE AMOUNT WHICH THE ASSESSIN G OFFICER HAD ALLEGED IN THE REASONS RECORDED TO HAVE ESCAPED ASS ESSMENT AND THE ASSESSING OFFICER WENT ON TO INDEPENDENTLY ASSESS S OME OTHER INCOME. 9. THIS ISSUE IS NO MORE RES INTEGRA IN VIEW OF THE SETTLED POSITION OF LAW IN THE CASE OF RANBAXY LABORATORIES LTD 336 ITR 136 WHEREIN THE HON'BLE HIGH COURT OF DELHI HAS HELD THAT IF AFTER ISSUING A NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSING OFFICER ACCEPTS THE CONTENTION OF THE ASSESSEE AND HOLDS THAT THE INCOM E WHICH HE HAS INITIALLY FORMED A REASON TO BELIEVE HAD ESCAPED AS SESSMENT, HAS AS A MATTER OF FACT NOT ESCAPED ASSESSMENT, IT IS NOT OP EN TO HIM INDEPENDENTLY TO ASSESS SOME OTHER INCOME. 9 10. THE RELEVANT FINDINGS OF THE HON'BLE HIGH COURT OF DELHI READ AS UNDER: SECTION 147 HAS THIS EFFECT THAT THE ASSESSING OFFI CER HAS TO ASSESSEE OR REASSESS THE INCOME ('SUCH INCOME') WHI CH ESCAPED ASSESSMENT AND WHICH WAS THE BASIS OF THE FORMATION OF BELIEF AND IF HE DOES SO, HE CAN ALSO ASSESS OR REASSESS ANY O THER INCOME WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE DURING THE COURSE OF THE PROCEEDINGS HOWEVER, IF AFTER ISS UING A NOTICE UNDER SECTION 148, HE ACCEPTED THE CONTENTION OF TH E ASSESSEE AND HOLDS THAT THE INCOME WHICH HE HAS INITIALLY FORMED A REASON TO BELIEVE HAD ESCAPED ASSESSMENT, HAS AS A MATTER OF FACT NOT ESCAPED ASSESSMENT, IT IS NOT OPEN TO HIM INDEPENDE NTLY TO ASSESS SOME OTHER INCOME. IF HE INTENDS TO DO SO, A FRESH NOTICE UNDER SECTION 148 WOULD BE NECESSARY, THE LEGALITY OF WHI CH WOULD BE TESTED IN THE EVENT OF A CHALLENGE BY THE ASSESSEE. 11. THIS JUDGEMENT OF THE HON'BLE HIGH COURT WAS AG AIN FOLLOWED BY THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF MONA RCH EDUCATION SOCIETY 387 ITR 416 WHEREIN IT WAS HELD AS UNDER: 6. HOWEVER, IN THE COURSE OF THE REASSESSMENT PROCE EDINGS, AS IS EVIDENT FROM THE ASSESSMENT ORDER DATED DECEMBER 10 , 2010 PASSED BY THE ASSESSING OFFICER, THE SUM THAT WAS S OUGHT TO BE 10 ADDED TO THE INCOME OF THE ASSESSEE WAS NOT THE AFO REMENTIONED SUM OF 16,61,000 BUT A SUM OF 26,10,000 WHICH ACCORDING TO THE ASSESSING OFFICER REPRESENTED THE UNSECURED LOANS T HAT WERE UNABLE TO BE EXPLAINED BY THE ASSESSEE. IN OTHER WO RDS, THE ADDITION SOUGHT TO BE MADE TO THE INCOME OF THE ASS ESSEE WAS NOT BASED ON THE ACCOMMODATION ENTRIES WHICH FORMED THE SUBJECT MATTER OF THE REASONS TO BELIEVE FOR ISSUANCE OF TH E NOTICE UNDER SECTION 148 OF THE ACT. 12. THE FACTS OF THE CASE IN HAND AND IN LIGHT OF T HE JUDGMENT OF THE HON'BLE HIGH COURT OF DELHI [SUPRA] WE DO NOT FIND ANY MERIT IN THE ASSESSMENT ORDER AND ACCORDINGLY, WE QUASH THE ASSE SSMENT ORDER AND ALLOW THE APPEAL OF THE ASSESSEE. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE IN ITA NO. 8946/DEL/2019 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 18.03. 2021. (BHAVNESH SAINI) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18 TH MARCH, 2021. 11 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT ASST. REGISTRAR 4. CIT(A) ITAT, NEW DELHI 5. DR 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.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE 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 RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER