DCIT,CC-XIII,KOLKATA, Kolkata V. M/S. Dhoot Infrastructure Projects Pvt. Ltd., Kolkata

ITSSA 127/KOL/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7476 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 17-07-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K SRIHARI CIT LD
• Assessee Lawyers: A K TULSIYAN; MIS
• Keywords: Unexplained cash credit; Business income
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI S.S. GODARA, JM & SHRI DR. A.L. SAINI ] I .T (SS)) NO. 127/KOL/2014 A.Y 2007 - 08 DCIT, CC - XIII, KOLKATA VS. M/S. DHOOT INFRASTRUCTURE PROJECTS PVT. LTD. PAN: AACCD2118H (APPELLANT) (RESPONDENT) I .T (SS)) NO. 12 8 /KOL/2014 A.Y 200 8 - 09 I .T (SS)) NO. 12 9 /KOL/2014 A.Y 200 9 - 10 DCIT, CC - XIII, KOLKATA VS. M/S. DHOOT DEVELOPERS PVT. LTD. PAN: AA BCD 5433A (APPELLANT) (RESPONDENT) FOR THE APPELLANT /DEPARTMENT : SHRI P.K. SRIHARI, CIT, LD.DR FOR THE RESPON DENT /ASSESSEE : SHRI A.K.TULSIYAN, FCA & MISS SIKHA AGARWAL, FCA, LD.ARS DATE OF HEARING : 2 4 - 04 - 2019 DATE OF PRONOUNCEMENT : 30 - 04 - 2019 ORDER SHRI S.S. GODARA, JM : 1. THIS THREE REVENUES APPEAL FOR ASSESSMENT YEAR S 2007 - 08, 08 - 09 & 09 - 10 ARISE AGAINST THE CIT(A) , CENTRAL - II , KOLKATAS SEPARATE ORDER S DATED 28 - 05 - 2014 PASSED IN CASE NO S . 167/CC - XIII / CIT(A) C - II/14 - 15, 162/CC - XIII/CIT(A)C - II/14 - 15 AND 163/CC - XIII/CIT(A)C - II/14 - 15 INVOLVING PROCEEDINGS U/S 147/ 143(3) /153D/153A OF THE ACT. HEARD BOTH THE PARTIES. CASE FILE S PERUSED. 2 IT (SS) NO. 127/KOL/2014 A.Y 2007 - 08 IT(SS) NO.128/KOL/2014 A.Y 2007 - 08 IT(SS) NO. 129/KOL/2014 A.Y 2007 - 08 DEPARTMENT VS. M/S. DHOOT INFRASTRUCTURE PROJECTS PVT. LTD & M/S. DHOOT DEVELOPERS PVT. LTD 2 2. WE COME TO R EVENUES FIRST APPEAL IN IT(SS) NO. 127//KOL/2014 FOR THE A.Y 2007 - 08 IN FORM ER ASSESSEE M/S. DH OOT INFRASTRUCTURE PROJECTS PVT. LTD S CASE. SUFFICE TO SAY, IT TRANSPIRES AT THE OUTSET THAT THE D EPARTMENT HAD CARRIED OUT TWO SEARCHES ON 25 - 09 - 2008 AND 24 - 01 - 2012 IN ASSESSEES CASE. B OTH THE CORRESPONDING ASSESSMENT S ADDED THE ASSESSEES SHARE APPLI CATION/SHARE PREMIUM MONEY AMOUNTING TO RS.5.75 CRORES AS UNEXPLAINED CASH CREDIT S U/S. 68 OF THE ACT . THERE IS NO DISPUTE THAT THE INSTANT CASE PERTAINS TO THE LATTER SEARCH , WHEREIN THE CIT(A) HAS FOLLOWED HIS PREDECESSOR I.E THE CIT(A) - III, NEW DELHIS ORDER DT. 19 - 12 - 2011 DELETING THE VERY ADDITION IN FORM ER SEARCH ASSESSMENT . WE SOUGHT TO KNOW THE FINAL OUTCOME OF THE REVENUES APPEAL, IF ANY, IN THE SAID FORM ER ROUND RISING THE ISSUE OF UNEXPLAINED CASH CREDIT IN THE NATURE OF ASSESSEES SHARE AP PLICATION/PREMIUM. WE ARE INFORMED THAT THE REVENUES APPEAL ITA NO. 931/DEL/2012 INVOLVING THE SAID FORM ER ROUND IS PENDING BEFORE THE T RIBUNAL . WE DEEM IT FIT AND APPROPRIATE A S AGREED BETWEEN THE PARTIES CONCERN ED THAT THE INSTANT CASE REQUIRES TO BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO AWAIT THE FINAL OUTCOME IN R REVENUES SAID APPEAL. WE ORDER ACCORDINGLY. 3 . THE REVENUES INSTANT FIRST APPEAL - IT(SS) NO.127/KOL/2014 IN FORMER ASSESSEES CASE IS ALLOWED FOR STATISTICAL PURPOS E S IN ABOVE TERMS . 4 . SAME ORDER IS ALSO TO FOLLOW IN REVENUES SECOND APPEAL - IT(SS) NO. 128/KOL/2014 FOR THE A.Y 2008 - 09 INVOLVING THE LATTER ASSESSE, M/S. DHOOT DEVELOPERS PVT. LTD , WHEREIN THE A SSESSING O FFICER HAD ADDED THE IDENTICAL SHARE APPLICATION /PREMIUM MONEY OF RS.5.75 CRORES AS UNEXPLAINED CASH CREDIT S AND THE CIT(A) DELETED THE SAME BY FOLLOWING THE LOWER APPELLATE ORDER IN FIRST ROUND OF SEARCH . 3 IT (SS) NO. 127/KOL/2014 A.Y 2007 - 08 IT(SS) NO.128/KOL/2014 A.Y 2007 - 08 IT(SS) NO. 129/KOL/2014 A.Y 2007 - 08 DEPARTMENT VS. M/S. DHOOT INFRASTRUCTURE PROJECTS PVT. LTD & M/S. DHOOT DEVELOPERS PVT. LTD 3 WE ARE INFORMED THAT THE REVENUES APPEAL - IT(SS) NO. 932/DEL/2012 INVOLVING THE SAID FORM ER ROUN D IS PENDING BEFORE THE T RIBUNAL . WE ORDER ACCORDINGLY. 5 . THE REVENUES SECOND APPEAL - IT(SS) NO.128/KOL/2014 IS ALLOWED FOR STATISTICAL PURPOSE S IN ABOVE TERMS . 6 . LAST CASE REVENUES APPEAL - IT(SS) NO. 129/KOL/2014 FOR THE A.Y 2009 - 10 SEEKING TO REVI V E SECTION 40A(2)(B) ADDITION OF RS. 40,00,000/ - . CASE FILE SUGGESTS THAT THE C O - ORDINATE B ENCH IN IT(SS)A NO. 34/KOL/2013 DECIDED ON 19 - 10 - 2016 RELEVANT TO THE FORM ER ROUND OF SEARCH HAS DECLINED THE RAISING GROUND AS FOLLOWS: - 4. THE LAST GROU ND TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD. CITA JUSTIFIED IN DELETING THE ADDITION OF RS.40 LACS MADE BY THE LD.AO ON ACCOUNT OF UNDERCHARGING OF SALES TO GROUP COMPANIES IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4.1. THE BRIEF FACTS OF T HIS ISSUE IS THAT THE ID AO OBSERVED THAT THE SIZEABLE PORTION OF THE SALES OF R$. 52.52 CRORES HAS BEEN MADE TO GROUP COMPANY I. E DHOOT INFRASTRUCTURE PROJECT LTD AND ESSEL HOUSING WHO CONTRIBUTED THE LAND. THE ASSESSEE WAS ASKED TO GIVE BIFURCATION OF SA LE RATE WITH RESPECT TO EACH SALE AND TO FURNISH DETAILS OF EACH SALE WHICH COULD NOT BE FURNISHED BY THE ASSESSEE. ACCORDINGLY THE ID AO CONCLUDED THAT THE UNDERPRICING OF THE SALE AMOUNT TO THE GROUP COMPANIES CANNOT BE RULED OUT AND HELD THAT THE SALE MADE TO GROUP COMPANIES WOULD BE COVERED U/S 40A(2)(B) OF THE ACT. HE ALSO HELD THAT THE HUGE SALES ARE SHOWN A S SUNDRY DEBTORS UNDER THE NAME M/S DHOOT INFRASTRUCTURE PROJECTS LTD AND NO INTEREST IS CHARGED ON THESE SUNDRY DEBTORS FOR BELATED PAYMENTS. HE NCE HE MADE AN ESTIMATED ADDITION OF RS.40,00,000/ - ON ACCOUNT OF UNDERCHARGING OF SALES. 4.2. THE ASSESSEE SUBMITTED THAT THERE WAS NO SALE MADE TO ESSEL HOUSING WHO CONTRIBUTED THE LAND. THE ASSESSEE STATED THAT THE L D AO DID NOT SEEK ANY INFORMATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ID CITA DELETED THE ADDITION BY OBSERVING AS UNDER: - 4 IT (SS) NO. 127/KOL/2014 A.Y 2007 - 08 IT(SS) NO.128/KOL/2014 A.Y 2007 - 08 IT(SS) NO. 129/KOL/2014 A.Y 2007 - 08 DEPARTMENT VS. M/S. DHOOT INFRASTRUCTURE PROJECTS PVT. LTD & M/S. DHOOT DEVELOPERS PVT. LTD 4 ' ON GOING THROUGH THE DETAILS OF TOTAL SALES MADE BY THE APPELLANT, IT IS SEEN THAT OUT OF THE TOTAL SALES AMOUNTING TO RS. S2, 53, 19,562 , THE APPEL L ANT HAS MADE THE SALES OF 6289 SQUARE FEET TO DHOOT INFRASTRUCTURE AT A SELLING PRICE OF RS. 5000 PER SQUARE FOOT AND 4879 SQUARE FEET IS SOLD AT R S. 4950 PER SQUARE FEET AND THIS RATE OF PER SQUARE FEET IS THE MORE THAN THE RATE CHARGED FROM OTHER 108 PA RTIES IN NUMBER, TO WHOM THE APPELLANT HAS SOLD THE UNITS, RANGING FROM RS.2, 100 PER SQUARE FEET TO R S.4,500 PER SQUARE FEET. IN VIEW OF THE ABOVE STATED FACTS I DON'T SEE ANY REASON OF UNDERPRICING OF SALES MADE TO GROUP COMP ANY, ACCORDINGLY THE AD DITION OF RS . 40 LACS DESERVES TO BE DELETED. ' 4.3. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING ,GROUND : - 13. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(AJ ERRED IN DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF UNDER CHARGING OF SALES. MADE TO GROUP COMPANIES. 14. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT NO INTEREST HAD BEEN CHARGED BY THE ASSESSEE ON SUNDRY DE BTORS. 4.4. THE ID OR VEHEMENTLY RELIED ON THE ORDER OF THE ID AO. THE LD AR VEHEMENTLY RELIED ON THE ORDER OF THE LD CITA. 4.5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE ID CITA HAD GIVEN A FINDING ON VERIFICATION OF THE ACCOUNT S OF THE ASSESSEE THAT THE SALES MADE TO GROUP COMPANIES WERE MADE AT RATES WHICH ARE MORE THAN THAT MADE TO O THERS . THIS FACT HAS NOT BEEN CONTROVERTED BY THE REVENUE BEFORE US. WE FIND MAT THE INSTANT ADDITION WAS MADE U / S 40(A)(2)(B) OF THE ACT BY THE J,1 AO IN RESPECT OF UNDERCHARGING OF SALES MADE TO GROUP COMPANIES. WE FIND THAT THE PROVISIONS OF SECTION 40A(2)(B) OF THE ACT ONLY SPEAKS ABOUT PAYMENTS MADE BY AN ASSESSEE AND NOT THE SALES MADE THEREON. WE HOLD THAT THE SAID PROVISIONS HAVE BEEN WRONG LY INVOKED BY THE ID AO AND THE SAME CANNOT BE MADE APPLICABLE IN ANY STRETCH OF IMAGINATION. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE ID CITA. ACCORDINGLY, THE GROUNDS 13 & 14 RAISED BY THE REVENUE ARE DISMISSED. 5 IT (SS) NO. 127/KOL/2014 A.Y 2007 - 08 IT(SS) NO.128/KOL/2014 A.Y 2007 - 08 IT(SS) NO. 129/KOL/2014 A.Y 2007 - 08 DEPARTMENT VS. M/S. DHOOT INFRASTRUCTURE PROJECTS PVT. LTD & M/S. DHOOT DEVELOPERS PVT. LTD 5 7 . WE CONCLUDE IN TH ESE PECULIAR FACTS AND CIRCUMSTANCES THAT THE R EVENUES INSTANT GRIEVANCE HAS NO LEGS TO STAND S INCE THE C O - ORDINATE B ENCH IN ASSESSEES OWN CASE (SUPRA) HAS DELETED THE IMPUGNED DISALLOWANCE MADE U/S. 40A(2)(B) OF THE ACT . THIS LAST APPEAL IT(SS) A NO. 128/ KOL/14 FAILS 8 . THESE REVENUES FORMER TWO APPEALS I.E IT ( SS ) NOS. 127 & 128/KOL/2014 ARE ALLOWED FOR STATISTICAL PURPOSE AND LAST APPEAL IT(SS) NO. 129/KOL/2014 IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 30 - 04 - 2019 SD/ - SD/ - [ DR . A.L. SAINI ] [ S.S.GODARA ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 - 04 - 2019 **PRADIP, SR. PS C OPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/ DEPAR TMENT: THE DCIT,CC - XIII, KOL AAYKAR BHAVAN POORVA, 110 SHANTI PALLI, EM BYE PASS, 4 TH FL., KOLKATA - 107.. 2. RESPONDENT/ASSESSEE: ASSESSEE : M/S. DHOOT INFRASTRUCTURE PROJECTS P.LTD/ M/S. DHOOT DEVELOPERS P.LTD 5 J.B.S HALDEN AVENUE, SILVER ARCADE, 2 ND FL, KOLKATA - 105 3..C.I.T (A) . - 4. C.I.T. - KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR H.O.O/D.D.O KOLKATA