DCIT Circle-17 (1), v. VRM (India) Ltd,

ITA 1276/DEL/2008 | 2005-2006
Pronouncement Date: 31-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 127620114 RSA 2008
Assessee PAN AAACV4698J
Bench Delhi
Appeal Number ITA 1276/DEL/2008
Duration Of Justice 5 year(s) 6 month(s) 23 day(s)
Appellant DCIT Circle-17 (1),
Respondent VRM (India) Ltd,
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted H
Tribunal Order Date 31-10-2013
Date Of Final Hearing 28-10-2013
Next Hearing Date 28-10-2013
Assessment Year 2005-2006
Appeal Filed On 07-04-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH H HH H : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL D.AGRAWAL D.AGRAWAL D.AGRAWAL VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NOS SS S. .. .1275/DEL/2008 & 1276/DEL/2008 1275/DEL/2008 & 1276/DEL/2008 1275/DEL/2008 & 1276/DEL/2008 1275/DEL/2008 & 1276/DEL/2008 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEARS SS S : : : : 2002 2002 2002 2002- -- -03 & 2005 03 & 2005 03 & 2005 03 & 2005- -- -06 0606 06 DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX INCOME TAX INCOME TAX INCOME TAX CIRCLE CIRCLE CIRCLE CIRCLE- -- -17(1) 17(1) 17(1) 17(1) NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S VRM (INDIA) LTD. M/S VRM (INDIA) LTD. M/S VRM (INDIA) LTD. M/S VRM (INDIA) LTD. B BB B- -- -33 DEFENCE COLONY 33 DEFENCE COLONY 33 DEFENCE COLONY 33 DEFENCE COLONY NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : PAN : PAN : PAN : AAACV4698J. AAACV4698J. AAACV4698J. AAACV4698J. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAMEER SHARMA SR.DR. RESPONDENT BY : SHRI NARENDER CHHILLAR ADVOCATE. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL D.AGRAWAL D.AGRAWAL D.AGRAWAL VP VPVP VP : : : : ITA NO.1275/DEL/2008 ITA NO.1275/DEL/2008 ITA NO.1275/DEL/2008 ITA NO.1275/DEL/2008 :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF LEARNED CIT(A)-XIX NEW DELHI DATED 16 TH JANUARY 2008 FOR THE AY 2002-03. 2. GROUND NO.1 OF THE REVENUES APPEAL READS AS UNDER: - ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(APPEAL) HAS ERRED IN DELETING THE ADDITION O F RS.4 00 000/- MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INCOME U/S 68 OF THE I.T. ACT. 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERI AL PLACED BEFORE US. THE ASSESSING OFFICER HAS MADE THE ADDITIO N OF ` 4 LAKHS ON THE BASIS OF SOME INFORMATION RECEIVED FROM DIT(INVESTI GATION) THAT THE PERSONS WHO ARE IN THE BUSINESS OF PROVIDING ACCOMMODATI ON ENTRIES ITA-1275 & 1276/D/2008 2 HAVE GIVEN THE ACCOMMODATION ENTRIES OF ` 4 04 000/- TO THE ASSESSEE THE DETAILS OF WHICH ARE AS UNDER:- SN NAME OF THE PARTY DATE AMOUNT 1 MRS. GITA RAJORIA 20-11-2001 2 02 000/- 2 M/S JAYANTI LAL & SONS 20-11-2001 2 02 000/- 4. IN VIEW OF THE ABOVE THE ASSESSING OFFICER MADE THE ADDITION OF ` 4 LAKHS IN THE HANDS OF THE ASSESSEE. HOWEVER LEARNED CIT(A) DELETED THE ADDITION WITH THE FOLLOWING FINDING:- I HAVE GONE THROUGH THE ORDER OF THE AO AND WRITTE N SUBMISSION OF THE APPELLANT. IN THE INSTANT CASE THE ALLEGATION OF UTILIZING ACCOMMODATION ENTRY HAS NOT BEEN PROVED BY THE A.O. NEITHER IN THE BOOKS OF ACCOUNTS NOR IN THE ONLY BANK A/C. MAINTAINED BY THE APPELLANT ANY SUM HAS BEEN RECEIVED FROM THE SAID TWO PARTIES. EVEN IF THE PAY ORDERS WERE PREPARED IN THE NAME OF THE APPELLAN T COMPANY THERE IS NO EVIDENCE THAT IT HAS BEEN ENCASHE D OR UTILIZED BY THE APPELLANT. THE ONUS WAS ON THE RE VENUE TO PROVE THAT THE ASSESSEE HAD TAKEN ACCOMMODATION ENTRY IN HIS BOOKS. THE AO HAS NOT DISCHARGED THIS ONUS. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE VARIOUS JUDGEMENTS CITED BY THE APPELLANT ABOVE INCL UDING THE JUDGEMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS. SMC SHARE BROKERS LIMITED I.T. APPEAL NO.1221 OF 20 06 DATED 29.8.2006 I DELETE THE ADDITION MADE BY THE ASSESSING OFFICER TO THE TUNE OF RS.4 00 000/-. 5. FROM THE ABOVE IT IS EVIDENT THAT LEARNED CIT(A) HAS RECORDED THE FINDING THAT THERE IS NO CREDIT FOR ` 4 04 000/- EITHER IN THE BANK ACCOUNT OF THE ASSESSEE OR IN THE BOOKS OF ACCOUNT OF T HE ASSESSEE. IN VIEW OF THE ABOVE IN OUR OPINION LEARNED CIT(A) R IGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. GROUND NO.1 OF THE REVENUES APPEAL IS REJECTED. ITA-1275 & 1276/D/2008 3 6. GROUND NO.2 OF THE REVENUES APPEAL READS AS UNDER: - ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(APPEAL) HAS ERRED IN ALLOWING THE CLAIM OF T HE ASSESSEE U/S 80IB(10) OF THE I.T. ACT AMOUNTING TO RS.5 20 333/-. 7. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERI AL PLACED BEFORE US. WE FIND THIS ISSUE TO BE COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT IN ASSESSEES OWN CASE FOR AY 2004 -05 IN ITA NO.811/DEL/2008 WHEREIN THE ITAT AFTER CONSIDERING THE DECISION OF CHENNAI BENCH OF THE TRIBUNAL RELIED UPON BY THE LE ARNED DR IN THE CASE OF INDWELL LININGS (P) LTD. 313 ITR 118 DECID ED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING THAT AS PER THE SCOPE OF WORK ACTUALLY UNDERTAKEN BY THE ASSESSEE IN TERMS OF THE AGRE EMENT EXECUTED WITH DDA/IRWO IT CAN SAFELY BE CONCLUDED THAT THE ASSESSEE HAS WORKED AS A DEVELOPER THEREFORE CLAIM FOR EXEMP TION UNDER SECTION 80IB CANNOT BE DENIED. ADMITTEDLY THE FAC TS OF THE YEAR UNDER CONSIDERATION ARE IDENTICAL. THEREFORE THE ABOVE F INDING OF FACT RECORDED BY THE ITAT FOR AY 2004-05 WOULD BE SQUAREL Y APPLICABLE. THE CIT(A) HAS ALSO ALLOWED THE RELIEF FOLLOWING THE ABOVE DECISION OF ITAT. IN VIEW OF THE ABOVE WE DO NOT FIND ANY INF IRMITY IN THE ORDER OF LEARNED CIT(A). THE SAME IS SUSTAINED AND GROUND NO.2 OF THE REVENUES APPEAL IS REJECTED. ITA NO.1276/DEL/2008 ITA NO.1276/DEL/2008 ITA NO.1276/DEL/2008 ITA NO.1276/DEL/2008 :- 8. GROUND NO.1 OF THE REVENUES APPEAL READS AS UNDER: - ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(APPEAL) HAS ERRED IN DELETING THE DISALLOWANC E OF RS.74 77 571/- MADE BY THE AO ON ACCOUNT OF PURCHASES. ITA-1275 & 1276/D/2008 4 9. THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE VERIFICATION OF PURCHASES BY ISSUE OF NOTICE UNDER SECTION 133(6) TO FOLLOWING SEVE N PARTIES:- (I) SAMAR PARTAP BUILDERS (II) GUPTA BUILDERS (III) M/S R.K. GEMINI (IV) ASHOK BUILDING MATERIALS (V) KMA ELECTRICALS PVT.LTD. (VI) AMBA STEELS (VII) SUPER BUILDING METAILS SUPPLIERS. 10. OUT OF THE ABOVE LETTERS ADDRESSED TO FIRST THREE PARTIES WERE RETURNED BACK UNSERVED AND REMAINING PARTIES DID NOT RESPOND TO THE NOTICE ISSUED UNDER SECTION 133(6). THEREFORE THE A SSESSING OFFICER ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE WHY THE PURCHASES MA DE FROM ABOVE SEVEN PARTIES AMOUNTING TO ` 74 77 571/- SHOULD NOT BE DISALLOWED. THE ASSESSEE FURNISHED THE REPLY AS UNDER:- IT IS TO SUBMIT THAT ALL THE LISTED SUPPLIERS ARE OF RE PUTE NAMELY KMA ELECTRICALS (PVT) LTD. IS A LIMITED CONCER N AND AMBA STEELS IS CERTIFIED ISO NO.14001 OF 96 COMPANY SO ARE THE OTHER FIRMS. IT IS NOT CLEAR AS TO HOW THE LETTER OF S. NO.1 TO 3 HAVE COME BACK TO YOUR OFFICE AND OTHERS ARE SILENT. WE TAKE AN OPPORTUNITY TO SUBMIT ADDRESSES COPIES OF BILLS BANK STATEMENTS COPIES OF CONFIRMING ENCASHMENT OF CHEQUES AND EXTRACTS FROM LEDGER ACCOUNTS TOGETHER WIT H PAID VOUCHERS IN RESPECT OF ALL THE FIRMS. THE ASSESSEE FURTHER SUBMITTED THAT THESE FIRMS CAN ALSO BE CONTACTED ON PHONES AND THE ASSESSEE FURNISHED MOBILE NO. OF 4 PARTIES. 11. THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES EXP LANATION AND MADE THE ADDITION OF ` 74 77 571/-. BEFORE THE LEARNED CIT(A) THE ITA-1275 & 1276/D/2008 5 ASSESSEE GAVE COMPLETE DETAILS REGARDING ALL THE SEVEN PA RTIES WHICH WERE REPRODUCED BY THE CIT(A) AT PAGES 5 & 6 OF HIS O RDER AND FOR THE SAKE OF BREVITY THE SAME IS NOT REPRODUCED. HOWEVER IF WE CONSIDER THE CASE OF THE FIRST PARTY ONLY NAMELY M/S AMBA STE ELS MEERUT ROAD MUZAFFAR NAGAR WE FIND THAT BEFORE THE ASSESSING OFFIC ER THE ASSESSEE DID NOT GIVE ANY EXPLANATION REGARDING M/S AMBA STEE LS BUT BEFORE THE CIT(A) THE ASSESSEE GAVE COMPLETE DETAILS WITH REG ARD TO THEIR SALES TAX REGISTRATION NUMBER CENTRAL EXCISE REGISTRATI ON NUMBER ETC. IN OUR OPINION ALL THESE DETAILS SHOULD HAVE BEEN FUR NISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. WE ALSO FIND THAT LE ARNED CIT(A) DID NOT ALLOW ANY OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THESE DETAILS FURNISHED BY THE ASSESSEE FOR THE FIRST TIME BEFOR E HIM. IN VIEW OF THE TOTALITY OF ABOVE FACTS IN OUR OPINION THE MATTER NEEDS RE- EXAMINATION AT THE END OF THE ASSESSING OFFICER. WE D IRECT THE ASSESSEE TO FURNISH ALL THE DETAILS BEFORE THE ASSESSING OFF ICER. WE ALSO DIRECT THE ASSESSING OFFICER TO EXAMINE THESE DETAI LS AS WELL AS OTHER DETAILS ALREADY FURNISHED BEFORE HIM VIZ. CO PIES OF BILLS BANK STATEMENT AS WELL AS EVIDENCE FOR THE ENCASHMENT OF CHE QUES ISSUED BY THE ASSESSEE AGAINST THE PURCHASE VALUE. THEREAFTER THE ASSESSING OFFICER WILL PASS THE ORDER IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT HE WILL ALLOW ADEQUATE OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE. 12. GROUND NO.2 OF THE REVENUES APPEAL READS AS UNDER :- ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(APPEAL) HAS ERRED IN DELETING THE ADDITION O F RS.5 10 000/- MADE U/S 14(1) OF THE I.T. ACT ON ACCOU NT OF CESSATION OF LIABILITIES. 13. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATER IAL PLACED BEFORE US. IT IS SETTLED LAW THAT SECTION 41(1) WOULD BE APPLICABLE WHEN ITA-1275 & 1276/D/2008 6 THERE IS REMISSION OR CESSATION OF THE LIABILITY AND MER ELY BECAUSE THE LIABILITY HAS BECOME OLD OR TIME BARRED WOULD BE NO GROUND FOR PRESUMING THAT THE LIABILITY HAS CEASED. MOREOVER IN THIS CASE IT WAS POINTED OUT BY THE ASSESSEES COUNSEL THAT THESE LIABILITI ES WERE RELATING TO GROUP CONCERNS ONLY. IN VIEW OF THE ABO VE WE ARE OF THE OPINION THAT THE CIT(A) RIGHTLY DELETED THE ADDITIO N OF ` 5 10 000/- MADE BY THE ASSESSING OFFICER UNDER SECTION 41(1). GROUND N O.2 IS ACCORDINGLY REJECTED. 14. GROUND NO.3 OF THE REVENUES APPEAL READS AS UNDER :- ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE THE LD.CIT(APPEAL) HAS ERRED IN ALLOWING THE CLAIM OF T HE ASSESSEE U/S 80IB(10) OF THE I.T. ACT AMOUNTING TO RS.68 73 953/-. 15. WE FIND THIS ISSUE TO BE IDENTICAL TO GROUND NO.2 OF THE REVENUES APPEAL FOR AY 2002-03. FOR THE DETAILED DISCUSSION IN PARAGRAPH NO.7 ABOVE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A) IN ALLOWING DEDUCTION UNDER SECTION 80IB(10). THE SAME IS SUSTAINED AND GROUND NO.3 OF THE REVENUES APPEAL IS REJECTED. 16. IN THE RESULT THE APPEAL OF REVENUE IN ITA NO.1 275/DEL/2008 IS DISMISSED WHEREAS THE APPEAL OF THE REVENUE IN ITA NO.1 276/DEL/2008 IS DEEMED TO BE PARTLY ALLOWED FOR STATISTICAL PURPOSE S. DECISION PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER 2013. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 31.10.2013 VK. ITA-1275 & 1276/D/2008 7 COPY FORWARDED TO: - 1. APPELLANT : DEPUTY COMMISSIONER OF INCOME TAX DEPUTY COMMISSIONER OF INCOME TAX DEPUTY COMMISSIONER OF INCOME TAX DEPUTY COMMISSIONER OF INCOME TAX CIRCLE CIRCLE CIRCLE CIRCLE- -- -17(1) 17(1) 17(1) 17(1) NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. 2. RESPONDENT : M/S VRM (INDIA) LTD. M/S VRM (INDIA) LTD. M/S VRM (INDIA) LTD. M/S VRM (INDIA) LTD. B BB B- -- -33 DEFENCE COLONY NEW DELHI. 33 DEFENCE COLONY NEW DELHI. 33 DEFENCE COLONY NEW DELHI. 33 DEFENCE COLONY NEW DELHI. 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR