DCIT, New Delhi V. M/s Essel Securities Ltd., New Delhi

ITA 919/DEL/2011

• Counselvise Citation: 91920114 RSA 2011
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-02-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Accommodation entries; Reassessment proceedings
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI A.N. PAHUJA ITA NO. 919/DEL/2011 ASSTT. YR: 2002-03 DCIT CIR. 11(1), VS. M/S ESSEL SECURITIES LTD., NEW DELHI. D-124, SAKET NEW DELHI. PAN/GIR NO. AAACE2145H (APPELLANT) ( RESPONDENT ) APPELLANT BY : SHRI PRADEEP KUMAR SR. DR RESPONDENT BY : SHRI MUKESH KOHLI CA O R D E R PER R.P. TOLANI, J.M : THIS IS REVENUES APPEAL AGAINST CIT(A)S ORDER D ATED 14-12-2010 RELATING TO A.Y. 2002-03. SOLE EFFECTIVE GROUND RAI SED IS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 5 8,02,620/- ON ACCOUNT OF ACCOMMODATION ENTRIES. 2. ASSESSEES ASSESSMENT WAS REOPENED ON SOME ALLEG ED INFORMATION FROM INVESTIGATION WING THAT ASSESSEE HAD RECEIVED ACCOMMODATION ENTRIES OF RS. 58,02,620/-. THE INFORMATION GIVES ONLY THE NAMES OF PERSONS WHO HAD GIVEN ENTRIES BUT THERE IS NO MENTION ABOUT THE NAME OF THE RECIPIENTS OF SUCH ACCOMMODATION ENTRIES EITHER IN THE REASONS RE CORDED OR IN THE ASSESSMENT ORDER. DURING THE COURSE OF REASSESSMENT PROCEEDINGS ASSESSEE FILED WRITTEN SUBMISSIONS DATED 23-12-2009 CLAIMING THAT ASSESSEE HAD NOT RECEIVED ANY PAYMENT FROM THE ENTITIES MENTIONED IN THE INFORMATION AND THE PROCEEDINGS AGAINST ASSESSEE WERE UNDERTAKEN UNDER MISCONCEPTION. ASSESSEE PRODUCED BANK ACCOUNTS AND ACCOUNT BOOKS P LEADING THAT THERE WAS ITA 919/DEL/11 ESSEL SECURITIES LTD. 2 NO MENTION OF SUCH ENTITIES IN HIS BOOKS OF ACCOUNT S. AO, HOWEVER, WITHOUT INDICATING, WHICH WAS ACCOMMODATION ENTRY RECEIVED BY THE ASSESSEE, MADE THE IMPUGNED ADDITION U/S 68 OF THE I.T. ACT. 2.1. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL BEF ORE THE CIT(A), WHO DELETED THE ADDITION BY FOLLOWING OBSERVATIONS: THE APPELLANT HAS FILED COPY OF AUDITED BALANCE SH EET IN WHICH THE DETAILS OF ALL BANK ACCOUNTS MAINTAINING BY THE M DURING THE YEAR ALONG WITH THEIR CLOSING BALANCES ARE ALSO MEN TIONED. FURTHER THE COPY OF ALL THESE BANK ACCOUNTS AS ALSO THE COPY OF LEDGER ACCOUNT OF ALL THESE BANK ACCOUNTS IN ASSESS EES BOOKS OF ACCOUNTS GIVING THE NARRATION REGARDING SOURCE OF D EPOSIT MADE IN THESE BANK ACCOUNTS DURING THE YEAR HAS BEEN FIL ED ON 13- 12-10. THESE HAVE BEEN VERIFIED WITH THE DETAILS OF ACCOMMODATION ENTRIES AND IT IS OBSERVED THAT NONE OF THE CREDITORS WHO FORMED THE BASIS FOR ADDITION TO INCO ME U/S 68 IN THE IMPUGNED ASSESSMENT ORDER/ NOTICE FOR REOPENING U/S 148, FIGURE IN ANY OF THESE BANK ACCOUNTS, WHICH AHS ALS O BEEN VERIFIED THROUGH THE NARRATION OF LEDGER ACCOUNT OF THESE BANK ACCOUNTS IN APPELLANT BOOKS OF ACCOUNTS. ACCORDINGL Y THE VERY BASIS FOR MAKING THE ADDITION BEING NOT SUBSTANTIAT ED, (AS THERE HAS BEEN NO CASH CREDIT FROM THE SAID CREDITORS) TH E ADDITION MADE FOR RS. 58,02,620/- BY THE AO U/S 68 OF THE IT ACT IS DIRECTED TO BE DELETED. AGGRIEVED, REVENUE IS BEFORE US. 3. LD. DR RELIES ON THE ORDER OF AO. 4. LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, VEHEMENTLY ARGUES THAT THE ASSESSMENT ORDER DOES NOT CONTAIN A FINDIN G THAT ASSESSEE HAD RECEIVED ANY CASH CREDIT ENTRY FROM ANY OF THE PERS ONS MENTIONED IN THE ASSESSMENT ORDER OR THE REASONS RECORDED. THEREFORE , THERE BEING NO CASH CREDIT RECEIVED BY THE ASSESSEE FROM SUCH DUBIOUS E NTRIES, THE ENTIRE ADDITION HAS BEEN MADE IN GROSS VIOLATION OF THE PROVISIONS OF LAW. CIT(A) HAS ITA 919/DEL/11 ESSEL SECURITIES LTD. 3 ENDORSED THE ASSESSEES CLAIM THAT NO SUCH CASH CRE DIT ENTRY WAS RECEIVED BY THE ASSESSEE AND DELETED THE ADDITION. ORDER OF CIT (A) IS RELIED ON. 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. IN OUR CONSIDERED VIEW, THE AD DITION MADE BY AOA WAS TOTALLY UNJUSTIFIED AND AGAINST THE PROVISIONS OF T HE I.T. ACT. REOPENING OF ASSESSMENT IS A SEPARATE ASPECT BUT WHEN IT GOES TO MAKE THE ADDITION, AO IS DUTY BOUND TO INDICATE WHICH CASH CREDIT ENTRY ARE BEING ADDED TO THE INCOME OF THE ASSESSEE. WE FIND NO MENTION AT ALL A S TO WHICH ARE CASH CREDITS RECEIVED BY THE ASSESSEE. IN OUR VIEW, THE ADDITIONS MADE BY AO ARE GROSSLY UNJUSTIFIED AND ARBITRARY. WE FIND NO INFIR MITY IN THE ORDER OF CIT(A), DELETING SUCH ARBITRARY ADDITIONS. IN OUR C ONSIDERED VIEW, SUCH APPEAL SHOULD NOT HAVE BEEN FILED BY THE DEPARTMENT , AS THERE IS NO MERITS IN THE CHALLENGE OF THE DEPARTMENT AT ALL. ORDER OF CI T(A) IS UPHELD. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 23-02-2012. SD/- SD/- ( A.N. PAHUJA) ( R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23-02-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR ITA 919/DEL/11 ESSEL SECURITIES LTD. 4