M/s. JPM Tools Ltd., Delhi V. ACIT, New Delhi

ITA 916/DEL/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3200 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 16-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Opportunity of being heard; Period of limitation; Difference of opinion; Accommodation entries; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH - SMC NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 916/DEL/201 7 ASSESSMENT YEAR : 2007-08 JPM TOOLS LTD. GI-48, G.T. KARNAL ROAD INDUSTRIAL AREA, DELHI 110 033. PAN AAACJ3128K VS. ACIT CENTRAL CIRCLE-13 NEW DELHI. (APPELLANT) (RESPONDENT) PER BHAVNESH SAINI, JUDICIAL MEMBER ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTE D AGAINST THE ORDER OF LD. CIT(A) 28 NEW DELHI DATED 20 TH DECEMBER, 2016 FOR ASSTT. YEAR 2007-08. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT RETURN DE CLARING INCOME OF RS. 21,76,400/- WAS FILED ON 31.10.2007. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT ORDER U/S 143(3) WAS PASSED AT THE RETURNED INCOME OF ASSESSEE VIDE ORDER DATED 15 TH MAY, 2009 (PB 35A). LATER, THE CASE WAS SELECTED FOR SCRUTINY U/S 147 / 143(3) OF THE I.T. ACT. THE AO PASSED THE REASSESSMENT ORDER U/S 147 / 143(3) O F THE I.T. ACT DATED ASSESSEE BY : SHRI SALIL AGGARWAL, SHRI SHAILESH GUPTA, ADVOCATE DEPARTMENT BY: MS.BEDOBANI, SR. DR DATE OF HEARING 22/05/2017 DATE OF PRONOUNCEMENT 24/05/2017 ITA NO. 916/DEL/2017 M/S. JPM TOOLS LTD. VS. ACIT 2 3 RD JANUARY, 2013 AT THE INCOME OF RS. 22,28,840/- AFT ER DISALLOWING AN AMOUNT OF RS. 52,445/- ON ACCOUNT OF PROFIT OR DIVI DEND.(PB 35C) THEREAFTER, AS PER ASSESSMENT ORDER, AGAIN NOTICE U /S 148 OF THE I.T. ACT WAS ISSUED TO THE ASSESSEE ON 29 TH MARCH, 2014. THE ASSESSING OFFICER AFTER HEARING THE ASSESSEE NOTED THAT DURING THE YE AR UNDER CONSIDERATION THE DDIT (INVESTIGATION) NEW DELHI HA S SENT A REPORT DATED 20 TH JANUARY, 2012 GIVING INFORMATION ABOUT ACCOMMODATI ON ENTRY RECEIVED BY ASSESSEE. THE REPORT IS REPRODUCED IN T HE ASSESSMENT ORDER IN WHICH IT WAS BRIEFLY EXPLAINED THAT NAME OF ASSE SSEE APPEARED IN LIST OF BENEFICIARIES WHO HAVE TAKEN ACCOMMODATION ENTRI ES IN THE GARB OF SHARES APPLICATION MONEY, LOAN GIFTS, BOGUS SALES / PURCHASE ETC. FROM THE ENTRY OPERATORS AND ASSESSEE HAS TAKEN ACCOMMOD ATION ENTRY OF RS. 17,00,000/- (I.E. RS. 9 LAKHS) FROM M/S. MARRASS IN DUSTRIES PVT. LTD. AND M/S. BSA FINCAP PVT. LTD. FOR A SUM OF RS. 8 LACS. THE ASSESSING OFFICER IN THE LIGHT OF ABOVE MADE THE ADDITION OF RS. 17,0 0,000/- VIDE REASSESSMENT ORDER U/S 148 OF THE ACT DATED 30 TH MARCH, 2015. 3. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(A) . LD. CIT(A) CONFIRMED THE ADDITION OF RS. 17,00,000/- AN D DISMISSED THE APPEAL OF ASSESSEE. 4. THE ASSESSEE IN THE PRESENT APPEAL CHALLENGED TH E ISSUE OF NOTICE U/S 148 / 147 OF THE I.T. ACT AND ADDITION OF RS. 1 7,00,000/- U/S 68 OF THE I.T. ACT. 5. I HAVE HEARD LD. REPRESENTATIVE OF BOTH THE PART IES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE FILED A COPY O F THE REASONS ITA NO. 916/DEL/2017 M/S. JPM TOOLS LTD. VS. ACIT 3 RECORDED U/S 147 OF THE ACT DATED 9 TH MARCH, 2012, COPY OF WHICH IS FILED ON PAGE 37 OF THE PAPER BOOK AND READS AS UNDER :- DATED 09.03.2012 A.Y. 2007-08 M/S. JPM TOOLS PVT. LTD., PLOT NO. 25, SECTOR 37, PACE CITY -1, GURGAON, HARYANA. REASONS RECORDED UNDER SECTION 147 OF THE ACT. AS PER THE INFORMATION RECEIVED FROM INVESTIGATION WING, INCOME TAX DEPARTMENT, NEW DELHI REGARDING LIST OF ACCOMMODATION ENTRIES, THE ABOVE MENTIONED ASSESSEE WAS FOUND TO HAVE TAKE ACCOMMODATION ENTRIES AMOUNTING TO RS. 9,00,000/- FROM M/S. MARRASS INDUSTRIES PVT. LTD. V IDE ABN AMRO BANK CHEQUE NO. 116244 DATED 18.5.2006 AND RS. 8,00 ,0000/- FROM M/S. BSA FINCAP PVT. LTD. VIDE ABN AMRO BANK C HEQUE NO. 890488 DATED 18.5.2006. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE THA T THE INCOME OF RS. 17,00,000/- CHARGEABLE TO TAX HAS ESCAPED ASSES SMENT WITHIN THE MEANING OF SECTION 147 / 148 OF THE INCOME TAX ACT, 1961. (AMANINDER SINGH DHINDSA) ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 4(1), NEW DELHI. 6. IT IS WELL SETTLED LAW THAT VALIDITY OF REASSESS MENT PROCEEDINGS IS TOBE DETERMINED WITH REFERENCE TO THE REASONS RECOR DED U/S 147 OF THE I.T. ACT. LD. COUNSEL FOR ASSESSEE CONTENDED THAT T HE REPORT OF THE DDIT (INVESTIGATION) SENT TO THE ASSESSING OFFICER ON DA TED 20 TH JANUARY, 2012 WAS ALREADY AVAILABLE TO THE ASSESSING OFFICER AT T HE TIME OF PASSING OF THE FIRST REASSESSMENT ORDER U/S 147 OF THE I.T. AC T DATED 3 RD JANUARY, 2013. NO NEW MATERIAL HAS BEEN BROUGHT ON RECORD AN D THE ASSESSING ITA NO. 916/DEL/2017 M/S. JPM TOOLS LTD. VS. ACIT 4 OFFICER WITHOUT APPLICATION OF MIND AND IN MECHANIC AL MANNER RECORDED THE REASONS FOR REOPENING OF THE ASSESSMENT. THEREF ORE THE REASSESSMENT OF THE ASSESSEE IS BAD IN LAW AS WELL AS BASED ON CHANGE OF OPINION. IN SUPPORT OF ITS CONTENTION, HE HAS RE LIED UPON DECISION OF THE DELHI HIGH COURT IN THE CASE OF RASALILKA TRADI NG AND INVESTMENT PVT. LTD 365 ITR 447 AND G & G PHARMA INDIA LIMITED 384 ITR 147. HE HAS ALSO SUBMITTED THAT REPORT OF INVESTIGATION WING DA TED 20 TH JANUARY, 2012 WAS ALREADY ON RECORD AT THE TIME OF REOPENING OF T HE ASSESSMENT IN FIRST INSTANCE. THEREFORE REPORT IS NOT SACROSANCT ON WHI CH NO INQUIRY HAS BEEN CONDUCTED BY THE ASSESSING OFFICER. HE HAS FUR THER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT OBTAINED ANY APPROVAL FROM JCIT AT THE TIME OF REOPENING OF THE ASSESSMENT. HE HAS SUBMITT ED THAT ADDITION IS MADE WITHOUT ANY BASIS. ON THE OTHER HAND LD. DR OB JECTED TO THE LEGAL ISSUE RAISED BY THE ASSESSEE BECAUSE IT WAS NOT RAI SED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE LD. CIT(A). LD. DR SUBMITTED THAT THESE ISSUES WERE NOT RAISED IN THE GROUND OF APPEA L BEFORE LD. CIT(A) AND NO FACTS ARE AVAILABLE ON RECORD. LD. DR FURTHE R SUBMITTED THAT THE NEW INFORMATION WAS OBTAINED BY THE ASSESSING OFFIC ER FROM DDIT (INVESTIGATION) AT THE TIME OF SECOND REOPENING OF THE ASSESSMENT WHICH WAS CREDIBLE. THEREFORE PRIMA FACIE CASE WAS MADE O UT FOR REOPENING OF THE ASSESSMENT. LD. DR RELIED UPON FOLLOWING DECISI ONS :- 1. RAJAT EXPORT IMPORT INDIA LTD. WP (C) 8341/11 2. PRATIBHA FINVEST P LTD. WP(C) 7538/12 3. CIT VS. NAVODYA CASTLE P LTD. 50/TAXMAN/110(D) 4. TARIKA PROPERTIES INVESTMENT P LTD. 40/TAXMAN 5 25 (D) ITA NO. 916/DEL/2017 M/S. JPM TOOLS LTD. VS. ACIT 5 7. LD. DR ALSO SUBMITTED THAT ADDITION ON MERIT HAS CORRECTLY BEEN MADE. 8. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MATE RIAL AVAILABLE ON RECORD. I AM OF THE VIEW THE MATTER REQUIRES CONSID ERATION AT THE LEVEL OF THE ASSESSING OFFICER. IT IS NOT IN DISPUTE EARLIER REASSESSEMENT WAS DONE VIDE ORDER DATED 3 RD JANUARY, 2013. THEREFORE AT THAT TIME THE REPORT O F DDIT (INVESTIGATION) NEW DELHI DATED 20 TH JANUARY, 2012 BE AVAILABLE TO THE ASSESSING OFFICER ON RECORD REGARDING ACCOMMODA TION ENTRY ALLEGEDLY RECEIVED BY THE ASSESSEE. THEREFORE, NO NEW TANGIBL E MATERIAL HAS BEEN BROUGHT ON RECORD AT THE TIME OF SECOND REOPENING O F THE ASSESSMENT. THE CONTENTION OF LD. DR THAT NEW INFORMATION WAS R ECEIVED IS DEVOID OF MERIT. THE ASSESSING OFFICER NOTED IN THE IMPUGNED REASSESSMENT ORDER THE NOTICE U/S 148 OF THE I.T. ACT HAS BEEN ISSUED TO THE ASSESSEE COMPANY ON 29 TH MARCH, 2014 AND PASSED THE REASSESSMENT ORDER U/S 148 OF THE I.T. ACT ON 30 TH MARCH, 2015. THE ASSESSEE, HAS HOWEVER, PRODUCED THE COPY OF THE REASONS RECORDED U/S 148 OF THE I.T. ACT DATED 9 TH MARCH, 2012.COPY OF WHICH IS FILED AT PAGE 37 OF T HE PAPER BOOK AND REPRODUCED ABOVE. COPY OF THE NOTICE U/S 148 OF I. T. ACT IS FILED ON PAGE 36 OF THE PAPER BOOK WHICH DATED 9/12 TH MARCH 2012. THEREFORE ASSESSING OFFICER HAS INCORRECTLY RECORDED IN THE A SSESSMENT ORDER THAT NOTICE U/S 148 WAS ISSUED ON 29 TH MARCH, 2014. THIS ISSUE SHALL HAVE LOOKED INTO BY VERIFYING FACTS FROM THE RECORD. FUR THER WHETHER, ASSESSING OFFICER HAS OBTAINED SANCTION FROM JOINT COMMISSIONER OF ITA NO. 916/DEL/2017 M/S. JPM TOOLS LTD. VS. ACIT 6 INCOME TAX ON REASONS RECORDED U/S 148 OF THE ACT SHALL HAVE TOBE VERIFIED FROM THE RECORD FOR DECIDING THE ISSUE OF REOPENING OF THE ASSESSMENT. THE ISSUE OF VALIDITY OF REOPENING IS RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL AND SINCE THE FACTS REQUIRES VE RIFICATION REGARDING DATE ON WHICH REASONS U/S 147 HAS BEEN RECORDED AND SANCTION BY JCIT, THEREFORE THE MATTER REQUIRES CONSIDERATION AT THE LEVEL OF THE ASSESSING OFFICER. IT MAY ALSO BE NOTED HERE THAT IF REASONS ARE RECORDED ON 9 TH MARCH, 2012, PERHAPS THE ASSESSING OFFICER SHALL HA VE TO EXPLAIN WHETHER REASSESSMENT ORDER DATED 30 TH MARCH, 2015 HAS BEEN PASSED WITHIN THE PERIOD OF LIMITATION. IT MAY ALSO BE NOT ED HERE THAT THE ASSESSING OFFICER DID NOT DISCUSS ANYTHING ON MERIT OF THE ADDITION IN ASSESSMENT ORDER AND MERELY BY GONE THROUGH THE REP ORT OF THE INVESTIGATION WING MADE THE ADDITION OF RS. 17,00,0 00/- IN THE HANDS OF THE ASSESSEE WITHOUT DISCUSSING THE EVIDENCES AND M ATERIAL BROUGHT ON RECORD BY THE ASSESSEE. SINCE THE REPORT OF THE DDI T DATED 20 TH JANUARY, 2012 WAS ALSO AVAILABLE ON RECORD AT THE TIME OF FI RST REASSESSMENT PROCEEDINGS VIDE ORDER DATED 3 RD JANUARY, 2013 THEREFORE IT MAY BE A CASE OF AVAILABILITY OF THE SAME MATERIAL ON RECORD OF THE ASSESSING OFFICER AND MAY HAVE SOME IMPACT ON THE REOPENING O F THE ASSESSMENT IN THE MATTER AS WELL. IN ORDER TO DECIDE ALL THESE POINTS, PARTICULARLY WHEN THESE POINTS WERE NEVER RAISED BEFORE AUTHORIT IES BELOW, I AM OF THE VIEW THE MATTER SHOULD BE REMANDED TO THE ASSES SING OFFICER FOR DETERMINATION OF ALL THE ISSUES IN ACCORDANCE WITH LAW. I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE ABO VE ISSUES TO THE FILE OF ITA NO. 916/DEL/2017 M/S. JPM TOOLS LTD. VS. ACIT 7 THE ASSESSING OFFICER WITH DIRECTION TO RE DECIDE A LL THE ABOVE POINTS OF THE ASSESSEE RAISED ABOVE IN ACCORDANCE WITH LAW BY VERIFYING THE FACTS FROM THE RECORD AND IN THE LIGHT OF SUBMISSIONS MAD E BY THE ASSESSEE. THE ASSESSING OFFICER SHALL GIVE REASONABLE SUFFICI ENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT. SD/- ( BHAVNESH SAINI ) JUDICIAL MEMBER DATED: 24 TH MAY, 2017 *VEENA* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. PRINCIPAL CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR