ITO, New Delhi v. M/s Onyx & Sales Limited,, New Delhi

ITA 1963/DEL/2009 | 1999-2000
Pronouncement Date: 30-07-2010 | Result: Allowed

Appeal Details

RSA Number 196320114 RSA 2009
Assessee PAN AAACO0979R
Bench Delhi
Appeal Number ITA 1963/DEL/2009
Duration Of Justice 1 year(s) 2 month(s) 19 day(s)
Appellant ITO, New Delhi
Respondent M/s Onyx & Sales Limited,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted F
Tribunal Order Date 30-07-2010
Date Of Final Hearing 20-07-2010
Next Hearing Date 20-07-2010
Assessment Year 1999-2000
Appeal Filed On 11-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI I.P.BANSAL JM AND SHRI R.C.SHARMA AM ITA NO.1963/DEL/2009 ASSESSMENT YEAR : 1999-2000 INCOME TAX OFFICER WARD-13(4) NEW DELHI. VS. M/S ONYX & SALES LIMITED 2842 STREET MODI MAHAL CLASSIC APARTMENT DARYAGANJ NEW DELHI 110 002. PAN NO.AAACO0979R. (APPELLANT) (RESPONDENT) APPELLANT BY : MS.BANITA DEVI NAOREM SR.DR. RESPONDENT BY : NONE. ORDER PER R.C.SHARMA AM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 20.2.2009 FOR THE AY 1999-2000 IN THE MATTER OF OR DER PASSED BY THE AO U/S 143(3) READ WITH SECTION 148 OF THE IT ACT WHEREIN FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD.CIT(A) ERRED IN LAW IN QUASHING THE NOTICE U /S 148 OF THE IT ACT AS BARRED BY LIMITATION AND THEREBY QUASHING TH E REASSESSMENT AS PER ASSESSMENT ORDER SO PASSED ON THE GROUND THAT I NCOME WHICH ESCAPED ASSESSMENT AS PER ASSESSMENT ORDER WAS QUAN TIFIED TO BE LESS THAN RS.1 LAC THOUGH THE NOTICE U/S 148 WAS ISSUED AFTER 4 YEARS AND THEREFORE THE INCOME ESCAPING ASSESSMENT TO INITIAT E PROCEEDINGS U/S 148 SHOULD HAVE BEEN 1 LAC OR ABOVE. 2. THE LD.CIT(A) FURTHER ERRED IN LAW IN NOT APPREC IATING THE FACT THAT THE AMOUNT OF ESCAPEMENT SHOULD BE SEEN WITH R EFERENCE TO REASONS RECORDED FOR ASSUMPTION OF VALID JURISDICTI ON AND NOT THE AMOUNT ULTIMATELY DETERMINED IN THE REASSESSMENT OR DER. ITA-1963/DEL/2009 2 2. NOBODY APPEARED ON BEHALF OF THE ASSESSEE INSPIT E OF GIVING SO MANY OPPORTUNITIES. THE CASE WAS FIXED BY SERVICE OF NO TICE ON 19.11.2009 14.1.2010 AND 5.4.2010 BUT NOBODY APPEARED NOR ANY ADJOURNME NT PETITION WAS FILED. LASTLY NOTICE WAS SERVED THROUGH THE DR FIXING THE DATE FOR HEARING ON 20.7.2010. THE NOTICE WAS SERVED BY LEARNED DR AND ACKNOWLEDGE MENT FOR THE SAME WAS ALSO PLACED ON RECORD. WHEN THE CASE WAS CALLED FOR HEA RING NOBODY WAS THERE ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT PETITION WAS SOUGHT FOR. ACCORDINGLY BENCH DECIDED TO DISPOSE THE APPEAL AFTER HEARING T HE LEARNED DR AND CONSIDERING THE MATERIAL PLACED ON RECORD. 3. FACTS IN BRIEF ARE THAT ASSESSEE COMPANY FILED R ETURN AT INCOME OF RS.6 563/-. THE RETURN WAS PROCESSED U/S 143(1) ON 27.5.2000 HEREAFTER REASONS FOR REOPENING WERE RECORDED AND NOTICE U/S 148 DATE D 27.2.2006 WAS ISSUED AND DULY SERVED UPON THE ASSESSEE. SUBSEQUENTLY NOTIC E U/S 142(1) AND 143(2) WERE ALSO ISSUED AND SERVED UPON THE ASSESSEE THROUGH SP EED POST. THE AO STATED THAT ALL THESE NOTICES REMAINED UNCOMPLIED WITH. THE AO OBSERVED THAT IN ITS RETURN OF INCOME THE ASSESSEE HAS SHOWN COMMISSION INCOME AT RS.2 68 875 AND INCOME FROM OTHER SOURCES AT RS.5 490. AFTER CLAIMING EXPE NSES UNDER VARIOUS HEADS THE INCOME HAS BEEN SHOWN AT RS.6 563 ONLY. THE AO FOUN D THAT ASSESSEE HAD SHOWN SHARE APPLICATION MONEY TO THE TUNE OF RS.7.95 LACS . THE ASSESSEE WAS ASKED TO FILE DETAILS IN RESPECT OF PARTIES FROM WHOM IT HAS RECEIVED THE SHARE APPLICATION MONEY AND ALL THESE PARTIES WERE REQUIRED TO APPEAR EITHER PERSONALLY OR THROUGH THEIR ARS AND WERE FURTHER REQUIRED TO PRODUCE COPY OF BANK STATEMENTS COPY OF ACKNOWLEDGE OF FILING OF INCOME-TAX RETURNS AND DOC UMENTS IN RESPECT OF INVESTMENT IN SHARE CAPITAL/SHARE APPLICATION MONEY IN M/S. ONYX EXIM & SALES PVT. LTD. DURING THE F.Y. 1998-99 ALONG WITH DETAIL S OF SOURCE OF SUCH INVESTMENT. THE AO FURTHER STATED THAT SUMMONS U/S. 131 SENT A T THE ADDRESSES GIVEN BY THE ASSESSEE WERE RECEIVED BACK UNDELIVERED IN RESPECT OF THE PARTIES MENTIONED AT S.NO. 3 4 5 & 8 AND NONE OF THE OTHER PARTIES APPE ARED AT ALL NEITHER ON THE APPOINTED DATE NOR SUBSEQUENTLY. THE ASSESSEE WAS I NFORMED ABOUT THIS FACT VIDE ITA-1963/DEL/2009 3 LETTER DATED 20.11.2006 WHICH WAS SERVED PERSONALL Y ON 20.11.2006 ITSELF AND ASSESSEE WAS REQUESTED TO PRODUCE ALL THE PARTIES O N 23.11.2006. ON THIS DATE AR OF THE ASSESSEE SHRI R.K. GUPTA ATTENDED THE PROCEE DINGS AND FILED SOME OF THE DETAILS VIDE HIS LETTER DATED 23.11.2006. RATHER TH AN PRODUCING THE PARTIES AS ASKED FOR VIDE LETTER DATED 20.11.2006 THE AR OF THE ASS ESSEE FILED THE SO-CALLED CONFIRMATIONS FROM SOME OF THE PARTIES. THE AO FURT HER STATED THAT NO DOCUMENTS IN RESPECT OF CREDITWORTHINESS SUCH AS BANK STATEME NTS OR DETAILS OF SOURCE OF MAKING SUCH INVESTMENT BY THESE PARTIES HAVE BEEN F ILED EXCEPT FOR M/S. KRISHNA CINEMA INDIA LTD. THE SO-CALLED CONFIRMATION OF KRI SHNA CINEMA INDIA LTD. NEITHER BEARS ANY DATE NOR THE NAME OF THE SIGNATUR E OF THE PERSON SIGNING IT. A PERUSAL OF ITS BANK STATEMENT SHOWS THAT THE COMPAN Y WAS HAVING A MEAGER BALANCE BETWEEN THE RANGE RS.200 TO RS.700 THROUGHO UT THE PERIOD EXCEPT WHEN THE ALLEGED SHARE APPLICATION MONEY WAS PAID. IT IS NOTICED THAT PRIOR TO THIS PAYMENT THERE WERE DEPOSITS THROUGH TRANSFER ENTRIE S AND THE BALANCE WAS TRANSFERRED ON THE VERY SAME DAY ITSELF. AFTER DIS CUSSING EACH SHARE APPLICANT THE AO MADE ADDITION OF RS.7.95 LACS TO THE INCOME OF T HE ASSESSEE U/S. 68 OF THE ACT. 4. THE AO ALSO NOTICED THAT THE INVESTIGATION WING HAS INFORMED THAT THE ASSESSEE HAS PROVIDED THE ACCOMMODATION ENTRIES DUR ING THE YEAR TO THE TUNE OF RS.6 57 200/-. IN RESPECT OF COMMISSION EXPENDITURE SHOWN AT RS.1 15 890/- THE AO DISALLOWED THE SAME BY OBSERVING THAT NO DETAILS WERE FILED BY THE ASSESSEE IN RESPECT OF THE REASONS AND THE PARTIES TO WHOM SUCH COMMISSION WAS PAID. THE AO ALSO MADE THE ADDITION OF RS.75 650/- ON ACCOUNT OF DIFFERENCE IN BANK BALANCE AS DISCUSSED AT PAGE 5 OF HIS ASSESSMENT ORDER. ACCORD INGLY THE RETURNED INCOME OF RS.6 560/- WAS ASSESSED AT RS.10 25 960/-. BY THE I MPUGNED ORDER CIT(A) ANNULLED THE ASSESSMENT. 5. WE HAVE CONSIDERED THE CONTENTION OF LEARNED DR AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT CIT( A) HAS ANNULLED THE ASSESSMENT BY ASSUMING THAT INCOME ESCAPED WAS ONLY RS.32 860/ -. ACCORDINGLY CIT(A) ITA-1963/DEL/2009 4 HELD THAT NO NOTICE U/S 148 CAN BE ISSUED AFTER EXP IRY OF FOUR YEARS. SINCE IN THE INSTANT CASE NOTICE FOR REOPENING WAS ISSUED U/S 14 8 AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNDER CONSI DERATION HE HELD THAT REASSESSMENT PROCEEDING WAS BAD IN LAW ACCORDINGLY ASSESSMENT SO FRAMED WAS ANNULLED. THERE IS NO MERIT IN THE CIT(A)S CONCLU SION TO THE EFFECT THAT INCOME ESCAPED WAS ONLY RS.32 860/-. THE CIT(A) HIMSELF A T PAGE 11 OF HIS ORDER OBSERVED AS UNDER:- IN THE PRESENT CASE THE NOTICE U/S 148 WAS ISSUED BY THE ASSESSING OFFICER ON THE BASIS OF THE INFORMATION RECEIVED F ROM THE INVESTIGATION WING THAT THE APPELLANT HAD PROVIDED ACCOMMODATION ENTRIES TO THE FOLLOWING PARTIES:- (1) VENUS SECURITIES PVT.LTD. RS.54 200/- (2) RLF INDUSTRIES PVT.LTD. RS.4 03 000/- (3) M/S PREM SONS INTERNATIONAL LTD. RS.2 00 000/ - ON THE BASIS OF THE ABOVE INFORMATION IT WAS HELD B Y THE ASSESSING OFFICER THAT SINCE THE APPELLANT WAS PROVIDING ACCO MMODATION ENTRIES IT MUST BE RECEIVED COMMISSION FOR PROVIDI NG SUCH ACCOMMODATION ENTRIES WHICH HAS NOT BEEN DECLARED I N THE INCOME AND HAS ESCAPED ASSESSMENT. IT IS CRYSTAL CLEAR FROM THE ABOVE THAT AO HAS INF ORMATION REGARDING ESCAPEMENT OF INCOME TO THE TUNE OF RS.6 57 200/-. IN ADDITION TO THIS THE AO HAS COMPUTED COMMISSION INCOME OF 5% ON THE AMOUNT OF A CCOMMODATION ENTRY PROVIDED AND WORKED OUT THE SAME AT RS.32 860/-. T HUS THERE IS NO MERIT IN CIT(A)S ACTION FOR HOLDING THAT ESCAPEMENT WAS WIT H RESPECT TO RS.32 860/-. FURTHERMORE IN VIEW OF EXPLANATION-3 INSERTED BY F INANCE (NO.2) ACT 2009 WITH RETROSPECTIVE EFFECT FROM 1.4.1989 ACCORDING TO WHI CH WHILE MAKING THE REASSESSMENT ADDITION NOT ONLY WITH RESPECT TO THE ISSUE GIVEN IN THE NOTICE BUT ALSO OTHER INCOME WHICH IS FOUND TO HAVE ESCAPED AS SESSMENT CAN BE ADDED. WE THEREFORE SET ASIDE THE ORDER OF CIT(A) AND IN THE INTEREST OF JUSTICE RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR DECIDING AFRE SH AND ASSESSEE IS DIRECTED TO ITA-1963/DEL/2009 5 FURNISH ALL THE REQUIRED DOCUMENTS FOR COMPLETION O F ASSESSMENT. WE DIRECT ACCORDINGLY. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH JULY 2010. SD/- SD/- (I.P.BANSAL) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30.07.2010. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT DEPUTY REGISTRAR ITA-1963/DEL/2009 6