Yogi Properties (P) Ltd, New Delhi V. ACIT Circle-27(2), New Delhi

ITA 9651/DEL/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 9298 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 19-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJKUMAR CA SH SACHIN JAIN
• Keywords: Unexplained cash credit; Unexplained expenditure; Accommodation entries; Competent authority; Reassessment proceedings
• Section: 69C; 142(1); 143(1); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI G.S. PANNU, HONBLE VICE PRESIDENT & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.- 9651 /DEL/ 2019 (ASSESSMENT YEAR: 2010-11) YOGI PROPERTIES PVT. LTD, C/O RAJKUMAR AND ASSOCIATES, CA, L-7A, (LGF) SOUTH EXTENSION, NEW DELHI VS. ACIT, CIRCLE-27 (2), ROOM NO. 194B, DELHI PAN NO. AACC Y2881L APPELLANT RESPONDENT ASSESSEE BY SH. RAJKUMAR, CA SH. SACHIN JAIN, CA REVENUE BY SH. KANV BALI, SR. DR DATE OF HEARING: 4/1/2021 PRONOUNCEMENT ON 4/1/2021 ORDER PER K. NARASIMHA CHARY, JM AGGRIEVED BY THE ORDER DATED 18/10/2019 IN APPEAL NO. 44/18- 19/1077 PASSED BY THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS)- 28, NEW DELHI (LD. CIT(A)) IN THE CASE OF M/S YOG I PROPERTIES PVT. LTD (THE ASSESSEE), FOR THE ASSESSMENT YEAR 2010-11, THE ASSESSEE PREFERRED THIS APPEAL. 2. BRIEF FACTS OF THE CASE AS COULD BE CULLED OUT FRO M THE 2 IMPUGNED ORDERS ARE THAT THE ASSESSEE IS A PVT. LTD COMPANY AND THEY HAVE FILED THEIR RETURN OF INCOME ON 14.10.2010 DEC LARING THE INCOME AT RS. NIL/-. THE CASE WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, INFORMATION WAS RECEIVED BY AO FROM THE INVESTIGATI ON WING OF THE DEPARTMENT THAT THE ASSESSEE IS BENEFICIARY OF TAKI NG ACCOMMODATION ENTRIES OF RS. 1,12,00,000/- IN THE GARB OF SHARE C APITAL/PREMIUM FROM ENTRY PROVIDERS NAMELY SHRI PRADEEP KUMAR JINDAL GR OUP IN THE NAMES OF FOLLOWING ENTITIES: - S. NO. NAME AND ADDRESS OF THE BENEFICIARY ( AS PER ITO) AMOUNT DATE OF ENTRY ENTRY PROVIDER BY PAN NO. OF BENEFICIARY 1. YOGI PROPERTIES PVT. LTD 1500000 17.06,2009 JENEJA NAGPAL CONSTRUCTION PVT. LTD AAACY2881L 2. YOGI PROPERTIES PVT. LTD 1500000 17.06.2009 AT ALL TIMES SECURITIES PVT. LTD AAACY2881L 3. YOGI PROPERTIES PVT. LTD 2000000 16.06.2009 MAYANK MEDILABPVT. LTD AAACY2881L 4, YOGI PROPERTIES PVT. LTD 1500000 18.06.2009 JUJEJA NAGPAL CONSTRUCTION PVT. LTD AAACY2881L 5. YOGI PROPERTIES PVT. LTD 1500000 18.06.2009 JUJEJA NAGPAL CONSTRUCTION PVT. LTD AAACY2S81L 6. YOGI PROPERTIES PVT, LTD 1800000 20.06.2009 JUJEJA NAGPAL CONSTRUCTION PVT. LTD AAACY2881L 7. YOGI PROPERTIES PVT. LTD 100000 01.07.2009 MAYANK MEDILABPVT. LTD AAACY2881L 8. YOGI PROPERTIES PVT. LTD 1300000 09.02.2010 EUPHORIA CAPITAL PVT. LTD AAACY2881L TOTAL 11200000 3. ON THE BASIS OF THE ABOVE INFORMATION, REASONS WERE RECORDED AND REASSESSMENT PROCEEDINGS WERE INITIATED BY HIM BY ISSUING NOTICE U/S 148 OF THE ACT DATED 29.03.2017 AFTER OBTAINING NECESSARY SANCTION 3 U/S 151 OF IT ACT FROM THE COMPETENT AUTHORITY. HOW EVER, NO RETURN WAS FILED IN RESPONSE TO THE SAID NOTICE. SUBSEQUENTLY, AO ISSUED NOTICE U/S 142(1) DATED 01.08.2017 AND IN RESPONSE TO THAT, TH E ASSESSEE ASKED FOR THE ORIGINAL RETURN FILED TO BE TREATED AS RETURN F ILED IN RESPONSE TO NOTICE U/S 148 OF THE ACTON 12,10.2017. DURING THE REASSESSMENT PROCEEDINGS, SEVERAL OBJECTIONS WERE RAISED BY ASSE SSEE VIDE LETTER DATED 08.11.2017 WHICH WERE DEALT WITH BY AO BY PAS SING THE SPEAKING ORDER DATED 10.11.2017. DURING THE RAISING OF OBJEC TIONS, ASSESSEE CONTENDED THAT THE NOTICE U/S 148 WAS NOT ISSUED AN D DISPATCHED BEFORE 31.03.2017. HOWEVER, AO REJECTED THE OBJECTION AND PROVIDED THE PROOF OF SERVICE OF SAID NOTICE AS PER THE ANNEXURES TO T HE ORDER DISPOSING OBJECTIONS. FURTHER, DURING THE ASSESSMENT PROCEEDI NGS, AO EXAMINED THE GENUINENESS OF SHARE APPLICATION MONEY RECEIVED BY HIM FROM VARIOUS SHARE APPLICANTS AND FOUND THAT DESPITE OF GIVING MULTIPLE OPPORTUNITIES, ASSESSEE FAILED TO COMPLY THE NOTICE S AND SHOW CAUSE LETTERS AND IN THE CASE OF TWO PERSONS NAMELY, M/S. MAYANK MEDILAB AND MR. JUNEJA NAGPAL, WHATEVER DETAILS WERE FILED, DO NOT ESTABLISH THE CREDITWORTHINESS OF SHARE APPLICANTS. THE STATEMENT S OF SHRI RAKESH BOBAL, DIRECTOR OF COMPANY AND OTHER PERSONS WERE A LSO RECORDED WHICH ARE REPRODUCED IN ASSESSMENT ORDER. AFTER TALLYING THE DETAILS GIVEN IN THE STATEMENTS, AO CONCLUDED THAT FOLLOWING ENTRIES OF SHARE PREMIUM WERE RECEIVED BY ASSESSEE FROM ENTRY OPERATOR. SR. NO. DATE AMOUNT (RS.) NAME OR ENTRY PROVIDER 1. 17.06.2009 1500000 JUNEJA NAGPAL CONSTRUCTION PVT. LTD 2. 16.06.2009 2000000 MAYANK MEDILABPVT. LTD 3. 18.06.2009 1500000 JUNEJA NAGPAL CONSTRUCTION PVT. LTD 4. 20.06.2009 1800000 JUNEJA NAGPAL CONSTRUCTION PVT. LTD 4 5. 01,07,2009 100000 MAYANK MEDILABPVT. LTD 6. 09.02.2010 1300000 EUPHORIA CAPITAL PVT. LTD (BEING EARLIER KNOWN AS AT ALL TIMES YOURS SECURITIES PVT. LTD) TOTAL 82,00,000/ - 4. IT WAS FURTHER CONCLUDED BY HIM, IN THE LIGHT OF SEVERAL DECISIONS OF DIFFERENT COURT AS DISCUSSED BY HIM IN THE ASSES SMENT ORDER, THE ASSESSEE FAILED TO DISCHARGE ITS ONUS TO SATISFY AL L THREE CONDITIONS IN TERMS OF PROVISIONS OF SECTION 68 OF THE ACT. HE, T HEREFORE, TREATED THE AFORESAID AMOUNT OF RS. 82,00,000/- AS UNEXPLAINED CASH CREDIT U/S 68 OF IT ACT AND ADDED TO THE INCOME OF THE ASSESSEE. SIM ILARLY, TWO AMOUNTS RS. 15,00,000/- EACH (TOTAL RS. 30,00,000) RECEIVED FROM AT ALL TIMES SECURITY PVT. LTD AND JUNEJA NAGPAL CONSTRUCTIONS P VT. LTD RESPECTIVELY WERE ALSO TREATED AS UNEXPLAINED UNDER THE SAID SEC TION AND ACCORDINGLY THE ADDITIONS WERE MADE. THE UNEXPLAINED COMMISSION CHARGES @ 3% ON THE TOTAL ADDITIONS OF RS. 1,12,000/- WHICH AMOUNTE D TO RS. 3,36,000/- WAS ALSO ADDED BY AO TO THE INCOME OF THE ASSESSEE. FINALLY, THE TOTAL TAXABLE INCOME OF ASSESSEE WAS DETERMINED TO RS. 1, 15,36,000/- AGAINST THE NIL INCOME DECLARED BY ASSESSEE. 4. ASSESSEE CHALLENGED THE SAID ORDER BEFORE THE LD. C IT(A) ON SEVERAL GROUNDS STATING THAT THE PROCEEDINGS UNDER SECTION 147/143(3) OF THE ACT ARE WITHOUT JURISDICTION ILLEGAL AND UNS USTAINABLE AS NO NOTICE UNDER SECTION 148 WAS ISSUED ON OR BEFORE 31/3/2017 ON WHICH DATE THE LIMITATION FOR ISSUANCE OF SUCH NOTICE STOOD EX PIRED; THAT THERE WAS NO APPLICATION OF MIND OR INDEPENDENT ENQUIRY BY TH E LEARNED ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT UNDE R SECTION 147/143(3) OF THE ACT AND IT WAS IN VIOLATION OF TH E DIRECTIONS OF THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFT S; THAT IN THE 5 ABSENCE OF PROVIDING THE COPIES OF ALL THE MATERIAL USED AGAINST THE ASSESSEE AND BY NOT PROVIDING CROSS EXAMINATION OF THE PERSONS ON WHOSE STATEMENTS THE RELIANCE WAS MADE, THE ASSESSM ENT IS UNSUSTAINABLE; AND THAT THERE WAS AN ERROR IN MAKIN G THE ADDITION OF RS. 3,36,000/-AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT. 5. LD. CIT(A) CONSIDERED THE CONTENTIONS RAISED BY THE ASSESSEE AND RETURNED DOWN THE ALLEGATIONS THAT THERE WAS NO PRO PER SERVICE OF NOTICE UNDER SECTION 148 OF THE ACT WELL WITHIN THE TIME STIPULATED UNDER LAW OR THAT THERE WAS NO APPLICATION OF MIND OR INDEPENDENT ENQUIRY BY THE LEARNED ASSESSING OFFICER, BUT GRANT ED RELIEF TO THE ASSESSEE TO THE EXTENT OF 30 LACS HOLDING THAT IN R ESPECT OF THE 15 LACS ENTRY RELATING TO ALL TIMES SECURITY PVT. LTD, VERI FICATION OF BANK STATEMENT REVEALED THAT NO AMOUNT WAS RECEIVED BY T HE ASSESSEE FROM SUCH ENTITY ON 17/6/2009 AND AT THE SAME TIME SUCH ENTRY WAS ALSO REPEATED. LD. CIT(A), ACCORDINGLY, GRANTED PARTIAL RELIEF TO THE ASSESSEE. ASSESSEE IS THEREFORE, BEFORE US IN THIS APPEAL TAK ING ALL THE PLEA IS THAT WERE TAKEN BEFORE THE LD. CIT(A) ASSAILING THE JURI SDICTION OF THE LEARNED ASSESSING OFFICER FOR FRAMING THE ASSESSMENT UNDER SECTION 147/143(3) OF THE ACT AND ALSO ON THE QUESTION OF LIMITATION, APART FROM MERITS OF THE CASE. 6. INSOFAR AS GROUND NO. 1 RELATING TO THE LIMITATION ASPECT IS CONCERNED NOTICE UNDER SECTION 148 OF THE ACT IS DA TED 29/3/2017 AND THE LIMITATION FOR ITS ISSUANCE UNDER SECTION 151 O F THE ACT EXPIRES BY 31/3/2017. ACCORDING TO THE REVENUE SUCH NOTICE WAS DISPATCHED ON 6 31/3/2017 ITSELF BEFORE OFFICE HOURS AND IT WAS SEN T BY SPEED POST WITH THE RECEIPT NO. ED481673181IN. EVEN ACCORDING TO TH E LEARNED ASSESSING OFFICER VIDE LETTER DATED 4/12/2017 THAT THE NOTICE WAS DISPATCHED FROM THE OFFICE ON 31/3/2017 AND WAS BOO KED FOR SPEED POST ON 1/4/2017. ASSESSEE, HOWEVER, MADE ENQUIRIES WITH THE POSTAL DEPARTMENT AND CAME TO KNOW FROM THE POSTAL DEPARTM ENT BY LETTER DATED 5/12/2017 THAT ED481673181 WAS RECEIVED IN TH EIR OFFICE ON 30/6/2017 AND WAS DELIVERED TO THE ADDRESSEE ON 3/7 /2017. TO COUNTER THIS ARGUMENT, REVENUE RELIES UPON THEIR OFFICE DIS PATCH REGISTER WHEREIN THE SPA NUMBER WAS MENTIONED AS ED48167318I N INSTEAD OF ED481673181IN, FALLING SHORT OF ONE NUMERICAL. FURT HER, FROM THE TRACK CONSIGNMENT AND SCREENSHOT OF THE SPEED POST WEB PO RTAL, THE ASSESSEE DEMONSTRATED BEFORE US THAT THE SPEED POST ENVELOPE WAS RECEIVED BY THE POSTAL DEPARTMENT ON 30/6/2017 AND THE SAME WAS DELIVERED TO THE ADDRESSEE ON 3/7/2017. 7. LD. DR SUBMITTED BEFORE US THAT WHILE DESPATCHING T HE NOTICE BY SPEED POST, THE SAME WAS SENT BY WAY OF EMAIL. ON A COMPARISON OF THE EMAIL OF THE ASSESSEE GIVEN IN THE RETURN OF INCOME WITH THE EMAIL TO WHICH THE LEARNED ASSESSING OFFICER SENT THE NOTICE , WE FIND THAT THE EMAIL ID OF THE ASSESSEE IS [e-mail] WHE REAS THE LEARNED ASSESSING OFFICER SENT THE NOTICE TO MIGHTLTD@GMAIL .COM, WITH THE 7 LETTER Y MISSING. OBVIOUSLY EMAIL ADDRESS IS INCO RRECT AND COULD NOT HAVE BEEN DELIVERED. THOUGH THE LEARNED ASSESSING O FFICER CLAIMED TO HAVE CENTRED THE NOTICE THROUGH ITBA PORTAL ALSO, L D. AR DEMONSTRATED BEFORE US WITH REFERENCE TO THE SCREEN SHOT OF THE ITBA PORTAL WHICH CLEARLY SHOWS THAT IT WAS ACTIVATED FOR THE 1 ST TIME ONLY WHEN THE APPEAL BEFORE THE LD. CIT(A) WAS FILED AND NEVER BEFORE. 8. VIEWING ALL THESE THINGS TOGETHER, WEARE OF THE CON SIDERED OPINION THAT THE NOTICE WAS ISSUED BY WAY OF SPEED POST WITH THE SPA NUMBER ED481673181IN NOT BEFORE 1/4/2017, EVEN GOIN G BY THE VERSION OF THE LEARNED ASSESSING OFFICER FOR THE TI ME BEING. LD. AR PLACED RELIANCE ON THE DECISION OF THE HONBLE GUJA RAT HIGH COURT IN THE CASE OF KANUBHAI M PATEL VS. HIREN BHATT 334 ITR 25 (GUJ) AND SUBMITTED THAT FOR THE PURPOSE OF RECKONING THE LIM ITATION IN RESPECT OF THE REASSESSMENT NOTICE, MERE SIGNING OF NOTICE IS NOT SUFFICIENT, BUT THE DATE OF ISSUE WOULD BE THE DATE ON WHICH THE NO TICE WAS HANDED OVER FOR SERVICE TO THE PROPER OFFICER. INASMUCH AS THERE IS NO TRUSTWORTHY EVIDENCE TO SHOW THAT THE NOTICE WAS IN FACT DISPATCHED ON 31/3/2017 ITSELF, HE PLEADED THAT SUCH NOTICE COULD NOT BE TAKEN TO HAVE BEEN ISSUED WELL WITHIN THE TIME AND THE PROCE EDINGS ARE BARRED BY LIMITATION. 9. AS REFERRED TO ABOVE, THE NOTICE SENT BY EMAIL IS N OT TO CORRECT ADDRESS OF THE ASSESSEE; THAT THERE IS NO EVIDENCE TO CLINCH THE ISSUE THAT SUCH NOTICE WAS DISPATCHED ANYTIME ON OR BEFOR E 31/3/2017 INASMUCH AS NOT ONLY THERE IS DISCREPANCY IN THE DA TES OF DISPATCH AS PLEADED BY THE POSTAL DEPARTMENT IN THEIR LETTER AS WELL AS THE LEARNED ASSESSING OFFICER; AND THAT EVEN IF WE GO BY THE RU SSIAN OF THE LEARNED 8 ASSESSING OFFICER SUCH NOTICE WAS DISPATCHED BY SPE ED POST ONLY ON 1/4/2017 AND NOT BEFORE. THE SPEED POST BOOKING LIS T MAINTAINED BY THE DEPARTMENT IS OF NO USE IN THIS MATTER BECAUSE THERE IS DISCREPANCY WITH RESPECT TO THE SPA NUMBER AND ALSO THE SPA NUM BERS THAT FOLLOWED THIS PARTICULAR ENTRY ARE NOT IN THE IMMED IATE PROXIMITY OF THIS PARTICULAR ED481673181IN AND ALSO THAT THEY ARE COR RECTED SPA NUMBERS WITH 9 NUMERICALS. FURTHER THE PLEA BASED O N THE SENDING OF NOTICE BY WAY OF ITBA PORTAL IS ALSO DEMOLISHED BY THE ASSESSEE BY REFERRING TO THE SCREEN SHOT OF ITBA PORTAL WHICH S HOWS THAT IT WAS ACTIVATED FOR THE 1 ST TIME ONLY WHEN THE APPEAL WAS PREFERRED BEFORE THE LD. CIT(A). VIEWING FROM ANY ANGLE THERE IS NO CONVINCING MATERIAL BEFORE US TO BELIEVE THAT THE NOTICE WAS DISPATCHED AT ANY TIME EARLIER TO 1/4/2017, LET ALONE THE LETTER DATED 5/12/2017 I SSUED BY THE POSTAL DEPARTMENT TO SAY THAT THE NOTICE WAS HANDED OVER T O THE POSTAL DEPARTMENT TO BE SENT BY SPEED POST ONLY ON 30/6/20 17 IS NOT TO BE BELIEVED. ON THIS FACTUAL SITUATION, WHILE APPLYING THE LAW LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KANUB HAI M PATEL (SUPRA), WE FIND THAT IT IS ONLY 1/4/2017 THAT HAS TO BE TAK EN AS THE DATE OF DISPATCH BECAUSE THAT IS THE DATE ON WHICH THE NOTI CE IS SHOWN TO HAVE BEEN HANDED OVER TO THE POSTAL DEPARTMENT FOR SERVI CE. NO MATERIAL TO REBUT THIS CONCLUSION IS EMANATING FROM ANY INDEPEN DENT SOURCE. FOR THESE REASONS WE HOLD THAT THERE IS NO NOTICE THAT WAS ISSUED IN THIS MATTER WELL WITHIN THIS TIME STIPULATED UNDER SECTI ON 151 OF THE ACT AND THE PROCEEDINGS ARE BARRED BY LIMITATION. ON THIS S CORE THE ASSESSEE IS ENTITLED TO SEEK THE CRASHING OF PROCEEDINGS UNDER SECTION 147 OF THE ACT. WE THEREFORE, HOLD THAT THE ASSESSMENT ORDER U NDER SECTION 147/143(3) OF THE ACT CANNOT BE SUSTAINED. WE ANSWE R GROUNDS NO. 1 9 AND 2 ACCORDINGLY. 10. IN VIEW OF THE FACT THAT THE ASSESSEE GOT RELIEF ON GROUNDS NO. 1 AND 2 ITSELF, WE DEEM THAT ANY DISCUSSION ON OTHER GROUNDS WOULD BE ACADEMIC AND IS NOT WARRANTED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT IMMEDIATELY AFTE R THE CONCLUSION OF THE HEARING IN THE VIRTUAL COURT ON 4 /1/2021 SD/- SD/- (G.S. PANNU) (K. NARSIMHA CHARY) VICE PRESIDENT JUDICIAL MEMBE R DATED: 4/1/2021 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI