Varun Tibrewal, New Delhi v. ITO, New Delhi

ITA 2301/DEL/2012 | 2004-2005
Pronouncement Date: 31-10-2013 | Result: Allowed

Appeal Details

RSA Number 230120114 RSA 2012
Assessee PAN ADTPT5258M
Bench Delhi
Appeal Number ITA 2301/DEL/2012
Duration Of Justice 1 year(s) 5 month(s) 15 day(s)
Appellant Varun Tibrewal, New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 31-10-2013
Date Of Final Hearing 08-08-2013
Next Hearing Date 08-08-2013
Assessment Year 2004-2005
Appeal Filed On 15-05-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH :SMC: NEW DELHI BEFORE SHRI I. C. SUDHIR JUDICIAL MEMBER ITA NO. 2301/DEL/2012 ASSESSMENT YEAR: 2004- 2005 VARUN TIBREWAL VS. ITO C/O BUBBER JINDAL & CO. CA 3072 WARD -26(4) PRATAP STREET GOLA MARKET NEW DELH I. BEHIND GOLCHA CINEMA DARYAGANJ NEW DELHI (PAN ADTPT5258M) (APPELLANT) (RESPONDEN T) AND ITA NO. 2302/DEL/2012 ASSESSMENT YEAR: 2004- 2005 VISHAL TIBREWAL VS. ITO C/O BUBBER JINDAL & CO. CA 3072 WARD -26(4) PRATAP STREET GOLA MARKET NEW DELH I. BEHIND GOLCHA CINEMA DARYAGANJ NEW DELHI (PAN ADTPT5258M) (APPELLANT) (RESPONDEN T) APPELLANT BY : SHRI R.S. SING HVI ADVOCATE RESPONDENT BY : MRS. RENUKA JAIN GUPTA SR. DR ORDER PER I.C. SUDHIR JUDICIAL MEMBER THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS :- 1(I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING REASSESSMENT U/S 1 48 EVEN THOUGH THERE IS NO EVIDENCE OR REQUISITE SATISFACTION FOR AS SUMING JURISDICTION (II) THAT IMPUGNED REASSESSMENT IS NOT IN CONF ORMITY WITH PROVISION OF ITA NOS. 2301/ 2302/DEL/2012 2 SECTION 148 AND SETTLED LEGAL PRINCIPLES . 2. THAT DECISION OF DELHI HIGH COURT IN THE C ASE OF A.G.R. INVESTMENT LTD. AND RAJAT EXPORT & IMPORT INDIA PVT. LTD. HAVE BEEN APPLIED ON MECHANICAL BASIS WITHOUT PROPER APPRE CIATION OF FACTS. 3.(I) THAT EVEN OTHERWISE THERE IS NO JUSTIFIC ATION FOR ANY ADDITION EVEN ON MERITS AS ASSESSING OFFICER HAS MA DE ADDITION ON MECHANICAL BASIS WITHOUT MAKING REFERENCE TO A NY EVIDENCE OR MATERIAL IN SUPPORT OF ALLEGATION ABOUT ACCOMMODATI ON ENTRIES. (II) THAT THIS IS A CASE OF REASSESSMENT AND ASSESSING OFFICER HAS NOT DISCHARGED ONUS SO AS TO ESTABLISH THAT ANY INCOME HAS ESCAPED ASSESSMENT AND ADDITION WAS MERELY MADE ON PRESUMPTION AND SURMISES. (III) THAT GENUINENESS OF THE GIFT IS SU PPORTED FROM THE RELEVANT DOCUMENTS AND THESE DOCUMENTS HAVE BEEN DISREGARDED ON GENERAL AND ARBITRARY BASIS. 2. THE ASSESSEE HAS QUESTIONED VALIDITY OF N OTICE ISSUED U/S 148 OF THE ACT AND THE ADDITION MADE ON ACCOUNT OF NON-GENUINE NESS OF THE GIFT. 3. ON THE ISSUE OF VALIDITY OF NOTICE U/S 14 8 THE LD. AR SUBMITTED THAT THE REASONS TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT IS MERELY BASED ON THE INFORMATION RECEIVED BY THE AO FROM TH E INVESTIGATION WING OF THE DEPARTMENT. IN THIS REGARD HE REFERRED PAGE NO. 11 OF THE PAPER BOOK. HE CONTENDED THAT THE AO NEITHER SUPPLIED THE DETAI LS OF THE INFORMATION AS ASKED BY THE ASSESSEE NOR ALLOWED THE REQUEST OF TH E ASSESSEE TO CROSS EXAMINE THE PERSON ON THE BASIS OF WHOSE INFORMATIO N PROCEEDINGS U/S 148 WERE INITIATED. IN THIS REGARD HE REFERRED PAGE NO. 12 TO 16 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE WHICH IS COPY OF THE OBJECTIONS AGAINST THE REASSESSMENT RAISED BY THE ASSESSEE BEFORE THE AO. TO SUPPORT HIS ITA NOS. 2301/ 2302/DEL/2012 3 CONTENTION THAT PROCEEDINGS U/S 148 OF THE ACT FOR REOPENING CANNOT BE INITIATED MERELY ON THE BASIS OF INFORMATION RECEIV ED FROM INVESTIGATION WING OF THE DEPARTMENT LD. AR PLACED RELIANCE ON THE FO LLOWING DECISIONS :- SIGNATURE HOTELS PVT. LTD. VS. ITO (2011) 338 ITR 5 1 (DELHI) CIT VS. PRADEEP KUMAR GUPTA (2008) 303 ITR 95 (DELH I). CIT VS. SMT. VINITA JAIN (2007) TAXMAN 325 (DELHI) CIT VS. ORIENT CRAFT LTD. (2013 354 ITR 536 (DELHI) MMTC VS. ACIT 308 ITR 361 (AT) (DELHI). 4. LD. DR ON THE OTHER HAND TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE. SHE SUBMITTED THAT THE INFORMAT ION RECEIVED FROM INVESTIGATION WING OF THE DEPARTMENT IS SUFFICIENT MATERIAL ON THE BASIS OF WHICH REASONS TO BELIEVE CAN BE FORMED. THERE WAS N EXUS BETWEEN INFORMATION RECEIVED AND ESCAPEMENT OF INCOME. SHE PLACED RELIANCE ON THE FOLLOWING DECISIONS : AGR INVESTMENT LTD. VS. ACIT (2011) 333 ITR 146 (D ELHI) SHALIMAR BUILDCON (P) LTD. VS. ITO 136 TTJ 701 (JAI PUR) KALYANJI MAVJI AND CO. V. COMMISSIONER OF INCOME T AX WEST BENGAL II . 102 ITR 287 (DELHI). 5. IN THE REJOINDER THE LD. AR POINTED OUT THAT THE DECISIONS OF HONBLE DELHI HIGH COURT IN THE CASE OF AGR INVESTM ENT VS. ACIT (SUPRA) HAS BEEN CONSIDERED BY THE HONBLE DELHI HIGH COUR T IN ITS LATEST DECISION IN THE CASE OF SIGNATURE HOTEL (P) LTD. VS. ITO (SUPRA ). HE SUBMITTED THAT EXISTENCE OF BELIEVE IS THE ISSUE . THE OTHER DECIS IONS RELIED UPON BY THE LD. ITA NOS. 2301/ 2302/DEL/2012 4 DR HAVING DISTINGUISHABLE FACTS ARE NOT HELPFUL TO THE REVENUE. IT IS THE QUESTION OF SUFFICIENCY OF BELIEVE AND NON APPLICA TION OF INDEPENDENT MIND BY THE AO. 6. WHEN WE PERUSE THE REASONS OF BELIEVE RECORDED BY THE AO FOR INITIATION OF REOPENING PROCEEDINGS MADE AVAILABLE AT PAGE NO. 11 OF THE PAPER BOOK WE FIND SUBSTANCE IN THE ABOVE CONTENTIO N OF THE LD. AR THAT REOPENING PROCEEDINGS WERE INITIATED MERELY ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTM ENT. FOR A READY REFERENCE THE CONTENTS OF THE SAID REASONS RECORDED BY THE AO WHILE ISSUING NOTICE U/S 148 OF THE ACT IS BEING REPRODUC ED HEREUNDER :- IN THIS CASE AN INFORMATION IS RECEIVED FROM THE O/O THE (INV. UNIT-V). ARA CENTRE JHANDEWALAN EXTN. NEW DELHI THAT VARUN TIBREWAL HAS TAKEN BOGUS ACCOMMODATION ENTRIES FROM THE FOLL OWING PARTIES IN LIEU OF UNACCOUNTED MONEY PAID BY THE ABOVE NAMED ASSESSEE. AS PER ANNEXURE ENCLOSED WITH THE ABO VE INFORMATION OF DIT(INV. UNIT-V) NEW DELHI THE DETAILS OF TRANSACTION MADE BY HIM IS AS UNDER :- DATE AMOUNT INSTRUMENT NO. NAME OF THE PARTY 30.12.03 150000/- TO CLG:00239219 SHANTI DEVI GUPTA I AM SATISFIED THAT VARUN TIBERWAL RE SIDENT OF F-146 VIKAS PURI NEW DELHI HAS CONCEALED HIS INCOME OF RS. 1 5 0 000/-. THE INCOME OF RS. 1 50 000/- HAS ESCAPED WITHIN THE MEANING OF SE CTION 147 OF THE INCOME TAX ACT 1961 FOR THE ASSTT. YEAR 2004-05. (RAGHUBEER SINGH) INCO ME TAX OFFICER WARD 26(4) NEW DELHI 110 002. NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT 196 1 IS ISSUED FOR ASSTT. YEAR 2004-05. (RAGHUBEER SINGH) ITA NOS. 2301/ 2302/DEL/2012 5 INCOME TAX OFFICER WARD 26 (4) NEW DELHI 110 002. 7. HAVING GONE THROUGH THE DECISIONS RELIED UPON BY THE PARTIES WE FIND THAT IN THE CASE OF SIGNATURE HOTELS PVT. LTD. VS. ITO (SUPRA) ALMOST SIMILAR ARE THE FACTS WHEREIN VALIDITY OF NOTICE I SSUED U/S 148 WAS QUESTIONED. IN THAT CASE ALSO THE VARIOUS PROCEEDIN GS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATIO N WING OF THE DEPARTMENT THAT THE ASSESSEE HAD INTRODUCED MONEY AMOUNTING TO RS. 5 LACS DURING THE FINANCIAL YEAR 2002-03 AS STATED IN THE ANNEXURE. A CCORDING TO THE INFORMATION THE AMOUNT RECEIVED FROM A COMPANY WAS NOTHING BUT AN ACCOMMODATION ENTRY THE ASSESSEE WAS THE BENEFICI ARY. THE HONBLE HIGH COURT HELD THAT THE REASONS DID NOT SATISFY THE REQ UIREMENT OF SECTION 147 OF THE ACT. THERE WAS NO REFERENCE OF ANY DOCUMENT OR STATEMENT EXCEPT THE ANNEXURE. IT WAS HELD THAT THE ANNEXURE COULD NOT B E REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWS OR ESTA BLISHES NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNEXURE WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. FURTHER THE AO DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE BA SIS AND MATERIAL OF THE INFORMATION. THE RELEVANT EXTRACT OF THE ABOVE DECI SION IS REPRODUCED HEREUNDER : IN THESE CIRCUMSTANCES WE ARE EXAMINING THE REASO NS GIVEN BY THE ASSESSING OFFICER IN THE PROFORMA SEEKING PERMISSIO N/APPROVAL OF THE COMMISSIONER AND WHETHER THE SAME SATISFY THE PRE-C ONDITIONS MENTIONED IN SECTION 147 OF THE ACT. ITA NOS. 2301/ 2302/DEL/2012 6 ANNEXURE ATTACHED TO THE SAID PROFORMA PLACED ON RE CORD OF THE PETITIONER READS AS UNDER :- BENEFICIARYS NAME VALUE OF ENTRY TAKEN INSTRUMENT NO. BY WHICH ENTRY TAKEN DATE ON WHICH ENTRY TAKEN SIGNATURE HOTELS PVT. LTD. 500000 (AC NO.21060) 09-OCT-02 NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT BANK FROM WHICH ENTRY GIVEN BRANCH OF ENTRY GIVING BANK A/C. NO. ENTRY GIVING ACCOUNT SWETU STONE PV SBP DG 50106 THE FIRST SENTENCE OF THE REASONS STATES THAT INFOR MATION HAD BEEN RECEIVED FROM DIRECTOR OF INCOME-TAX (INVESTIGATION) THAT TH E PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS. 5 LAKHS DURING TH E FINANCIAL YEAR 2002- 03 AS PER THE DETAILS GIVEN IN THE ANNEXURE. THE SA ID ANNEXURE REPRODUCED ABOVE RELATES TO A CHEQUE RECEIVED BY THE PETITION ON OCTOBER 9 2002 FROM SWETU STONE PV FROM THE BANK AND THE ACCOUNT N UMBER MENTIONED THEREIN. THE LAST SENTENCE RECORDS THAT AS PER THE INFORMATION THE AMOUNT RECEIVED WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. THE AFORESAID REASONS DO NOT SATISFY THE REQUIREMEN TS OF SECTION 147 OF THE ACT. THE REASONS AND THE INFORMATION REFERRED TO IS EXTREMELY SCANTY AND VAGUE. THERE IS NO REFERENCE TO ANY DOCUMENT OR STA TEMENT EXCEPT THE ANNEXURE WHICH HAS BEEN QUOTED ABOVE. THE ANNEXURE CANNOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWS OR ESTABLISHES NEXUS OR LINK WHICH DISCLOSES ESCAPEMENT OF INCOME. THE ANNEXURE IS NOT A POINTER AND DOES NOT INDICATE ESCAPEMENT OF INCOME. FURTHER IT IS APPARENT THAT THE ASSESSING OFFICER DID NOT APPLY HIS OWN MIND TO TH E INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATION. THE ASSESSING OFFICER ACCEPTED THE PLEA ON THE BASIS OF VAGUE INFORMATION IN A MECHANICAL MANNER. THE COMMISSIONER ALSO ACTED ON THE SAME BAS IS BY MECHANICALLY GIVING HIS APPROVAL. THE REASONS RECORDED REFLECT T HAT THE ASSESSING OFFICER DID NOT INDEPENDENTLY APPLY HIS MIND TO THE INFORMA TION RECEIVED FROM THE DIRECTOR OF INCOME-TAX (INVESTIGATION) AND ARRIVE A T A BELIEF WHETHER OR NOT ANY INCOME HAD ESCAPED ASSESSMENT. ITA NOS. 2301/ 2302/DEL/2012 7 8. WE THUS RESPECTFULLY FOLLOWING THE RA TIO LAID DOWN IN THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SIGNATUR E HOTELS P LTD. VS ITO (SUPRA) HOLD THAT THE AO WAS NOT JUSTIFIED IN INITI ATING THE REOPENING PROCEEDINGS IN THE PRESENT CASE MERELY ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT WITH OUT REFERENCE TO ANY DOCUMENT OR STATEMENT IN ABSENCE OF WHICH THE INFO RMATION COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIME FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. WE THUS WHILE SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW IN THIS R EGARD HOLD THAT THE NOTICE ISSUED U/S 148 OF THE ACT IN THE PRESENT CASE WAS NOT AS PER THE REQUIREMENT OF SECTION 47 OF THE ACT AND IS THUS IN VALID. THE ASSESSMENT FRAMED IN FURTHERANCE TO THE SAID NOTICE U/S 148 OF THE ACT IS THUS QUASHED AS NULL AND VOID IN CONSEQUENCE. THE RELATED GROUND S ARE THUS ALLOWED IN FAVOUR OF THE ASSESSEE. SO FAR AS THE QUESTION OF M ERITS OF THE ADDITION IS CONCERNED IT IS NOT REQUIRED TO BE ADJUDICATED UPON AS THE ASSESSMENT ORDER ITSELF HAS BEEN QUASHED HEREINABOVE ON THE QUESTION OF THE VALIDITY OF NOTICE U/S 148 OF THE ACT. IN THE RESULT APPEAL IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER. 2013. SD/- ( I.C. SUDHIR ) JUDICIAL MEMBER DATED 31 ST OCTOBER 2013 VEENA ITA NOS. 2301/ 2302/DEL/2012 8 COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR ITAT