ITO, New Delhi v. M/s. Aanchal Net Technologies (P) Ltd., New Delhi

ITA 416/DEL/2010 | 2005-2006
Pronouncement Date: 04-01-2011 | Result: Allowed

Appeal Details

RSA Number 41620114 RSA 2010
Assessee PAN AAFCA1040C
Bench Delhi
Appeal Number ITA 416/DEL/2010
Duration Of Justice 11 month(s) 5 day(s)
Appellant ITO, New Delhi
Respondent M/s. Aanchal Net Technologies (P) Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 04-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted A
Tribunal Order Date 04-01-2011
Date Of Final Hearing 04-01-2011
Next Hearing Date 04-01-2011
Assessment Year 2005-2006
Appeal Filed On 29-01-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 414/DEL/2010 A.Y. : 2005-06 INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI VS. M/S ANCHAL PROJECTS (P) LTD. PLOT NO. 55 PATPARGANJ INDUSTRIAL AREA DELHI 110 092 (PAN/GIR NO. : AAFCA1040C) I.T.A. NO. 415/DEL/2010 A.Y. : 2005-06 INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI VS. M/S ANCHAL INFRASTRUCTURAL (P) LTD. 88 BALDEV PARK PARWANA ROAD KHURAJI KHASS DELHI 110 051 (PAN/GIR NO. : AAFCA1720R) I.T.A. NO. 416/DEL/2010 A.Y. : 2005-06 INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI VS. M/S ANCHAL NET TECHNOLOGIES (P) LTD. 88 BALDEV PARK PARWANA ROAD KHURAJI KHASS DELHI 110 051 (PAN/GIR NO. : AAFCA1042A) I.T.A. NO. 417/DEL/2010 A.Y. : 2005-06 INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI VS. M/S ANCHAL TOWNSHIPS (P) LTD. 88 BALDEV PARK PARWANA ROAD KHURAJI KHASS DELHI 110 051 (PAN/GIR NO. : AAFCA1719A) 2 I.T.A. NO. 418/DEL/2010 A.Y. : 2005-06 INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI VS. M/S ANCHAL BUILDCON (P) LTD. PLOT NO. 55 PATPARGANJ INDUSTRIAL AREA DELHI 110 092 (PAN/GIR NO. : AAFCA1039C) AND C.O. NO. 92/DEL/2010 (IN ITA NO. 414/DEL/2010) A.Y. 2005-06 M/S ANCHAL PROJECTS (P) LTD. PLOT NO. 55 PATPARGANJ INDUSTRIAL AREA DELHI 110 092 (PAN/GIR NO. : AAFCA1040C) VS. INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI C.O. NO. 93/DEL/2010 (IN ITA NO. 415/DEL/2010) A.Y. 2005-06 M/S ANCHAL INFRASTRUCTURAL (P) LTD. 88 BALDEV PARK PARWANA ROAD KHURAJI KHASS DELHI 110 051 (PAN/GIR NO. : AAFCA1720R) VS. INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI C.O. NO. 94/DEL/2010 (IN ITA NOS. 416/DEL/2010) A.Y. 2005-06 M/S ANCHAL NET TECHNOLOGIES (P) LTD. 88 BALDEV PARK PARWANA ROAD KHURAJI KHASS DELHI 110 051 (PAN/GIR NO. : AAFCA1042A) VS. INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI C.O. NO. 95/DEL/2010 (IN ITA NOS. 417/DEL/2010) A.Y. 2005-06 M/S ANCHAL TOWNSHIPS (P) LTD. 88 BALDEV PARK PARWANA ROAD KHURAJI KHASS DELHI 110 051 (PAN/GIR NO. : AAFCA1719A) VS. INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI 3 C.O. NO. 96/DEL/2010 (IN ITA NO. 418 /DEL/2010) A.Y. 2005-06 M/S ANCHAL BUILDCON (P) LTD. PLOT NO. 55 PATPARGANJ INDUSTRIAL AREA DELHI 110 092 (PAN/GIR NO. : AAFCA1039C) VS. INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI AND AND AND AND ITA NO. 2243 /DEL/2010) A.Y. 2006-07 M/S ANCHAL INFRASTRUCTURALS PVT. LTD. 104 MUKUND HOUSE COMMERCIAL COMPLEX AZADPUR DELHI 110 033 (PAN/GIR NO. : AAFCA1720R VS. INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI ITA NO. 2244/DEL/2010) A.Y. 2006-07 M/S ANCHAL PROJECTS (P) LTD. PLOT NO. 55 PATPARGANJ INDUSTRIAL AREA DELHI 110 092 (PAN/GIR NO. : AAFCA1040C) VS. INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI ITA NO. 2245/DEL/2010) A.Y. 2006-07 M/S ANCHAL CONTRACTORS (P) LTD. PLOT NO. 55 PATPARGANJ INDUSTRIAL AREA DELHI 110 092 (PAN/GIR NO. : AAFCA1041D) VS. INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI ITA NO. 2246/DEL/2010) A.Y. 2006-07 M/S ANCHAL BUILDCON (P) LTD. 104 MUKUND HOUSE COMMERCIAL COMPLEX AZADPUR DELHI 110 033 (PAN/GIR NO. : AAFCA1039F) VS. INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI 4 ITA NO. 224 7/DEL/2010) A.Y. 2006-07 M/S ANCHAL TOWNSHIPS PVT. LTD. 104 MUKUND HOUSE COMMERCIAL COMPLEX AZADPUR DELHI 110 033 (PAN/GIR NO. : AAFCA1719A) VS. INCOME TAX OFFICER WARD 1(1) ROOM NO. 398-B C.R. BUILDING I.P. ESTATE NEW DELHI (APPELLANT (APPELLANT (APPELLANT (APPELLANT S SS S ) )) ) (RESPONDENT (RESPONDENT (RESPONDENT (RESPONDENT S SS S ) )) ) ASSEESSEE BY : SH. R.C. RAI CA DEPARTMENT BY : MRS. ANUSHA KHURANA SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER BENCH BENCH BENCH BENCH THE ABOVE APPEALS BEING ITA NOS. 414-418/DEL/2010 F ILED BY THE REVENUE AND CROSS OBJECTIONS BEING NO. 92-96/DEL/2010 FILED BY THE RESPECTIVE ASSESSEES ARE DIRECTED AGAINST THE RESPE CTIVE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR A.Y. 200 5-06 AND ITA NOS. 2243-2247/DEL/2010 FILED BY THE ASSESSEES FOR ASSESSMENT YEAR 2006-07 ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). SINCE THE APPE ALS WERE HEARD TOGETHER AND THE ISSUES ARE CONNECTED. THESE APPE ALS ARE CONSOLIDATED AND DISPOSED OF BY THIS COMMON ORDER FO R THE SAKE OF CONVENIENCE. ITA NO. 418 & CO NO. 96; ITA NO. 416 & CO NO. 94 AN D ITA NO. 414 & CO ITA NO. 418 & CO NO. 96; ITA NO. 416 & CO NO. 94 AN D ITA NO. 414 & CO ITA NO. 418 & CO NO. 96; ITA NO. 416 & CO NO. 94 AN D ITA NO. 414 & CO ITA NO. 418 & CO NO. 96; ITA NO. 416 & CO NO. 94 AN D ITA NO. 414 & CO NO. 92. NO. 92. NO. 92. NO. 92. 2. IN THE CROSS OBJECTIONS PERTAINING TO ABOVE APP EALS THE ASSESSEES HAVE RAISED A COMMON GROUND THAT LD. COMMISS IONER OF INCOME TAX (APPEALS) HAS ERRED IN NOT ADJUDICATING T HE GROUND FILED AND CONTENTION RAISED BY THE ASSESSEE REGARDING VAL IDITY OF RETURN OF INCOME IN THE IMPUGNED ASSESSMENT ORDER. IT IS TH E CLAIM OF THE ASSESSEE THAT RETURNS FILED WERE INVALID AND ADDITI ONAL GROUND IN THIS 5 REGARD WAS RAISED BEFORE THE LD. COMMISSIONER OF INC OME TAX (APPEALS) WHO HAS FAILED TO ADJUDICATE THE SAME. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. WE FIND THAT IT IS THE SUBMISSIONS OF THE ASSESSEE T HAT BY WAY OF ADDITIONAL GROUND BEFORE THE LD. COMMISSIONER OF IN COME TAX (APPEALS) ASSESSEE HAS RAISED A GROUND THAT RETURN S WERE INVALID. HENCE THE ASSESSMENTS FRAMED ON THE SAID INVALID R ETURNS CANNOT STAND. WE FIND THAT THERE IS NO ADJUDICATION IN TH IS REGARD IN THE LD. COMMISSIONER OF INCOME TAX (APPEALS)S ORDER. UNDER T HE CIRCUMSTANCES BOTH THE COUNSEL FAIRLY AGREED THAT T HE MATTER NEEDS TO BE REMITTED TO THE FILES OF THE AUTHORITIES BELOW TO CONSIDER THE SAME. HENCE IN THE INTEREST OF JUSTICE WE REMIT THIS ISS UE TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE ADDITIONAL GROUN D RAISED BY THE ASSESSEE AND PASS AN ORDER IN THIS REGARD. IF IT IS FOUND THAT THE ADDITIONAL GROUND IS SUSTAINABLE THEN THE WHOLE AS SESSMENT WILL GET QUASHED. ON THE OTHER HAND IT IS FOUND THAT GROU ND RAISED BY THE ASSESSEE IS NOT VALID REVENUES INTEREST WILL NOT BE PREJUDICED AND THE ISSUE RAISED BY THE REVENUE IN ITS APPEAL WILL STAN D AS BEFORE. 3.1 IN ALL APPEALS INCLUDING THE ABOVE THE ASSESSE ES HAVE FILED THE CROSS OBJECTIONS STATING THAT ON THE FACTS AND CIRCU MSTANCES OF THE CASE AS WELL AS IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED IN UPHOLDING THE RESPONDENT ASSES SEE ENTRY PROVIDER IN SPITE OF THE FACTS THAT : (A) COPY OF THE ALLEG ED STATEMENT OF PRADEEP JINDAL RECORDED AT THE BACK AND BEHIND THE ASSESS EE AND COPY OF STATEMENT WAS NOT PROVIDED DURING ASSESSMENT PROCEE DING; (B) REQUEST OF THE ASSESSEE TO CROSS EXAMINE MR. PRADEEP JINDAL AND CHALLENGE OF CAPACITY OF MR. PRADEEP JINDAL TO MAKE A STATEMENT AND 6 VALIDITY OF STATEMENT BY ASSESSEE DURING REMAND R EPORT PROCEEDING BEFORE THE ASSESSING OFFICER AND LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS DENIED AND OPPORTUNITY TO CROSS EXAMIN E MR. PRADEEP JINDAL WAS NOT PROVIDED. 3.2 IN ALL THE ABOVE APPEALS ASSESSING OFFICER HA S COME TO THE CONCLUSION THAT THE COMPANIES WERE ENTRY PROVIDERS. THE BASIS OF THE SAME WAS THAT THEY WERE NOT FOUND ON THE ADDRESSES GIVEN AND ON LOCAL ENQUIRIES FROM THE LOCALITY DID NOT YIELD ANY RESULT AS NO ONE WAS AWARE OF THESE COMPANIES. ASSESSING OFFICER FURTH ER FOUND THAT SHRI P.K. JINDAL WAS DIRECTOR IN THREE OUT OF SEVEN COMPAN IES. ON THE BASIS OF STATEMENT OF SHRI JINDAL THAT HE WAS DIRECTOR IN THREE OF THE SEVEN COMPANIES AND WAS CONTROLLING ALL THE OTHER COMPANIES INDIRECTLY AND ON THE BASIS OF STATEMENT OF SHRI P.K. JINDAL THAT T HE ASSESSEES COMPANIES WERE MERELY ENTRY PROVIDER ASSESSING OFFIC ER PROCEEDED TO MAKE ASSESSMENT OF UNDISCLOSED INCOME OF THE ASSESSE E BEING ENTRY PROVIDER. 3.3 UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (APPEALS) GRANTED SUBSTANTIAL RELIEF. 3.4 AGAINST THESE ORDERS REVENUE HAS FILED APPEALS AND ASSESSEES HAS FILED CROSS OBJECTIONS. 3.5 NOW IN THE CROSS OBJECTIONS THE ASSESSEES HAVE AT THE OUTSET RAISED A CONTENTION THAT SHRI P.K. JINDAL IS NOT AT ALL DIRECTOR AND HAS NO INVOLVEMENT IN ANY OF THE COMPANIES. UNDER THE CI RCUMSTANCES HIS STATEMENT CANNOT BE THE BASIS OF MAKING THE ADDITION IN THIS REGARD. 7 IT HAS FURTHER BEEN CONTENDED THAT NO OPPORTUNITY H AS BEEN GIVEN TO THE ASSESSEE TO CROSS EXAMINE SHRI P.K. JINDAL. 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS. WE FIND THAT AS THE ASSESSMENTS IN THESE CASES HAVE BEEN FRAMED TO A CONSIDERABLE EXTENT RELYING UPON THE STATEMENT OF SHRI PK JINDAL IT WAS INCUMBENT UPON THE REVENUE TO GIVE THE CHANCE TO THE ASSESSEE TO REBUT HIS STATEMENT AND CROSS EXAMINE. IT IS ALSO NECESSARY TO EXAMINE THE VERACITY OF THE ASSESSEES STATEMENT THAT SHRI PK JIN DAL HAS NO ASSOCIATION IN ANY OF THE COMPANIES. 5. HONBLE APEX COURT IN THE CASE OF M/S SAHARA INDIA (FARMS) VS. CIT & ANR. 300 ITR 403 HAS HELD THAT EVEN AN ADMINISTRATIVE ORD ER HAS TO BE CONSISTENT WITH THE RULES OF NATURAL JUSTICE. 6. UNDER THE CIRCUMSTANCES THE INTEREST OF JUSTICE DEMANDS THAT THESE CROSS OBJECTIONS ARE REMITTED TO THE FILES OF THE ASSESSING OFFICER TO EXAMINE THIS ASPECT OF THE ASSESSEES CLAIM. TH E STATEMENT RECORDED FROM SHRI P.K. JINDAL SHOULD BE PROVIDED TO THE ASSESSEE AS WELL AS AN OPPORTUNITY TO CROSS EXAMINE THE SAME. HE NCE IN THE INTEREST OF JUSTICE WE REMIT THE ISSUE TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRESH IN LIGHT OF OU R ABOVE OBSERVATIONS AS ABOVE. BOTH THE COUNSEL S FAIRLY AGREED TO THIS PROPOSITION. 8 NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GRANTE D ADEQUATE OPPORTUNITY OF BEING HEARD. SINCE WE ARE REMITTING THE ISSUE ON THE PRELIMINARY GROUND ITSELF THE ADJUDICATION ON THE R EVENUES APPEAL IS NOT BEING DONE BY US. THE ASSESSING OFFICER SHA LL BE AT LIBERTY TO EXAMINE THE CASE ACCORDINGLY ON THE MERITS AS WELL. HENCE WE ARE NOT ADJUDICATING UPON THE REVENUES APPEAL IN THIS REGARD. 7. ITA NOS. 2243 AND 2247 ARE APPEALS BY THE RESPEC TIVE ASSESSEES ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE L D. COMMISSIONER OF INCOME TAX (APPEALS) FOR A.Y. 2006-07. 8. THE COMMON PRELIMINARY ISSUE RAISED IS THAT LD. CO MMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THAT COPY OF ALLEGED STATEMENT OF SHRI PRADEEP JINDAL AND ADVERSE MATERIAL USED AG AINST THE ASSESSEE WAS PROVIDED TO THE ASSESSEE WHICH WAS OTHERWISE NO T PROVIDED THE APPELLANT TILL DATE. THE ALLEGED STATEMENT OF SH. PRADEEP JINDAL IS VALIDLY USED AGAINST THE ASSESSEE WHICH OTHERWISE R ECORDED BACK AND BEHIND THE ASSESSEE. THE COPY OF ALLEGED STATEMENT AND OPPORTUNITY TO EXAMINE SHRI PRADEEP JINDAL WAS NOT PROVIDED AND CAP ACITY INTENTION AND MOTIVE OF SHRI PRADEEP JINDAL TO MAKE SUCH STATE MENT IS DOUBTED AND CHALLENGE BY THE APPELLANT. 9 9. IN THESE CASES ALSO ASSESSEES WERE FOUND TO BE E NTRY OPERATOR BY THE ASSESSING OFFICER. THE ASSESSEES IN THESE C ASES WAS SAID TO HAVE EARNED CONTRACT INCOME FROM PACL INDIA LTD. AND MADRAS INFRASTRUCTURE PVT. LTD. ON THE BASIS OF STATEMENT OF SHRI PK JINDAL WHO WAS THE DIRECTOR ASSESSING OFFICER CONCLUDED T HAT ASSESSEE WAS ENTRY PROVIDER ONLY. IN THE CONCLUSION IN THIS RE GARD THE ASSESSING OFFICER ASSESSED THE INCOME OF THE ASSESSEE ON PRO TECTIVE BASIS @8% OF GROSS RECEIPT THE ASSESSING OFFICER FURTHER HEL D IF IT IS HELD THAT EXPENSES OF M/S PACL INDIA LTD. AND MADRAS INFRASTRUC TURE ARE BOGUS THEN THE BUSINESS INCOME OF THE ASSESSEE SHALL BE DETERMINED OF 2% OF THE GROSS RECEIPTS. UPON ASSESSEES APPEALS LD. C OMMISSIONER OF INCOME TAX (APPEALS) GRANTED PART RELIEF. 10. AGAINST THESE ORDERS ASSESSEES ARE IN APPEAL B EFORE US. 11. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THESE ASSESSMENTS ARE ALSO FRAMED TO A SU BSTANTIAL EXTENT ON THE BASIS OF STATEMENT OF SHRI PK JINDAL. ASSESSEE IS AGGRIEVED THAT THIS STATEMENT OF SHRI JINDAL WAS NOT PROVIDED TO T HE ASSESSEE NOR THE ASSESSEE WAS GIVEN ANY CHANCE TO CROSS EXAMINE HIM. UNDER THE CIRCUMSTANCES IN THE INTEREST OF JUSTICE WE REMIT TH IS ISSUE TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRE SH AND GRANT THE ASSESSEES NECESSARY OPPORTUNITY. BOTH THE COUNS ELS FAIRLY AGREED TO 10 THIS PROPOSITION. SINCE WE ARE REMITTING THE ISSUE O N THE PRELIMINARY GROUND ITSELF THE OTHER ISSUES ARE NOT BEING ADJUDI CATED. THE ASSESSING OFFICER SHALL BE AT LIBERTY TO CONSIDER THE ISSUE AFRESH. 12. IN THE RESULT ALL THE APPEALS FILED BY THE R EVENUE AND RESPECTIVE ASSESSEES AND CROSS OBJECTIONS FILED BY THE RESPECTI VE ASSESSEES STAND ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04/01/2011 UP ON CONCLUSION OF HEARING. SD/- SD/- [ [[ [RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 04/01/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES