DCIT, New Delhi v. M/s. Super Star Innovation Pvt. Ltd.,, New Delhi

ITSSA 67/DEL/2008 | misc
Pronouncement Date: 04-11-2011 | Result: Dismissed

Appeal Details

RSA Number 6720116 RSA 2008
Assessee PAN AABCS7795Q
Bench Delhi
Appeal Number ITSSA 67/DEL/2008
Duration Of Justice 3 year(s) 5 month(s) 5 day(s)
Appellant DCIT, New Delhi
Respondent M/s. Super Star Innovation Pvt. Ltd.,, New Delhi
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 04-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 04-11-2011
Assessment Year misc
Appeal Filed On 30-05-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI G BENC H BEFORE SMT. DIVA SINGH JM & SHRI A.N. PAHUJA AM IT(SS) A NO.67/D/2008 BLOCK PERIOD: 01.04.1990TO 17.10.2000 DCIT CENTRAL CIRCLE-25 ROOM NO. 331 E-2 ARA CENTRE JHANDEWALAN EXTENSION NEW DELHI V/S . M/S SUPER STAR INNOVATION PVT. LTD. PREM NURSERY GOPAL NAGAR BLOCK-A NAZAFGARH NEW DELHI [PAN NO.: AABCS 7795 Q] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI VENKATESH MOHAN AR REVENUE BY SHRI NIRANJAN KOULI DR DATE OF HEARING 31-10-2011 DATE OF PRONOUNCEMENT 04-11-2011 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 30.5.2008 BY THE REVENUE AGAI NST AN ORDER DATED 20 TH MARCH 2008 OF THE LEARNED CIT(A)-I NEW DELHI R AISES THE FOLLOWING GROUNDS:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` `10 75 000/- MADE BY AO ON ACCOUNT OF SHARE CAPITAL. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` `32 49 625/- ON ACCOUNT OF INVESTMENT MADE IN PURCHASE OF PLOT. 3. THE ORDER OF THE CIT(A) IS ERRONEOUS IN LAW AND ON FACTS. 4. THE APPELLANT CRAVES LEAVE TO ADD ALTER OR AMEN D ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING O F THE APPEAL. IT(SS)A NO.67/DEL./2008 2 2. ADVERTING FIRST TO GROUND NO.1 IN THE APPEAL FA CTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT A SEARCH U/S 132(1) OF THE INCOME-T AX ACT 1961(HEREINABOVE REFERRED TO AS THE ACT) WAS CONDUCTED IN THE PREMIS ES OF THE ASSESSEE ON 17 TH OCTOBER 2000 WHEN A NUMBER OF INCRIMINATING DOCUME NTS WERE SEIZED AS PER ANNEXURE A-1 TO A-16 OF THE PANCHNAMA. CONSEQUENTL Y A NOTICE U/S 158 BC OF THE ACT WAS SERVED UPON THE ASSESSEE ON 23 RD APRIL 2002 REQUESTING THE ASSESSEE TO SUBMIT RETURN OF THE UNDISCLOSED INCOME WITHIN FIFTEEN DAYS OF THE SERVICE OF THE NOTICE. DESPITE HAVING COPIES OF SE IZED DOCUMENTS AND COPIES OF PRINT OUTS FROM HARD DISK OF THE COMPUTER THE ASS ESSEE DID NOT FILE ANY RETURN. ULTIMATELY THE ASSESSEE FILED RETURN ON 26 TH AUGUST 2002. ON PERUSAL OF SEIZED DOCUMENTS THE ASSESSING OFFICER[AO IN SHORT] NOTIC ED THAT THESE CONTAINED BLANK SHARE TRANSFER FORMS BLANK POWER OF ATTORNEY FORMS OF RENUNCIATION SIGNED BY DIRECTORS OF M/S SARA OVERSEAS PVT. LTD. AND M/S INSPIRATION SECURITIES PVT. LTD. THE COMPANIES WHICH SUBSCRIBED TO SHARE CAPI TAL OF ` ` `5 LACS EACH OF THE ASSESSEE COMPANY. NO BOOKS OF ACCOUNTS OF THE ASSES SEE COMPANY WERE FOUND DURING THE SEARCH. TO A QUERY BY THE AO AS TO WHY S UBSCRIPTION OF ` `5 LACS EACH BY THE AFORESAID TWO COMPANIES BE NOT TREATED AS BO GUS THE ASSESSEE SUBMITTED A COPY OF AFFIDAVIT OF SHRI M.K. JHA THE DIRECTOR OF M/S M/S INSPIRATION SECURITY PVT. LTD. THE ADDRESS OF THE DIRECTOR GIV EN IN THE COPY OF AFFIDAVIT WAS A-115 VAKIL CHAMBERS SHAKARPUR NEW DELHI. IN RE SPONSE TO SUMMONS ISSUED U/S 131 OF THE ACT SHRI RAJESH RASTOGI THE OTHER DIRECTOR OF THE SAID COMPANY STATED IN HIS STATEMENT THAT THEIR COMPANY HAD NOT INVESTED ANY SUM IN M/S SUPER STAR INNOVATIONS PVT. LTD. . THE SUMMONS ISS UED TO DIRECTOR OF M/S SARA OVERSEAS PVT. LTD. COULD NOT BE SERVED SINCE NO SUC H PERSON WAS AVAILABLE AT THE GIVEN ADDRESS AS PER REPORT OF THE INSPECTOR. ACCORDINGLY THE AO ADDED THE AMOUNT OF ` `5 LAKHS EACH ALLEGEDLY INVESTED BY M/S INSPIRATION SECURITY PVT. LTD. & M/S SARA OVERSEAS PVT. LTD. IN TERMS OF PROVISIO NS OF SEC. 68 OF THE ACT. MOREOVER AN AMOUNT OF ` .75 000/- TRANSFERRED FROM THE BANK ACCOUNT OF MRS. RADHA AGGARWAL TO THE ACCOUNT OF THE ASSESSEE TOW ARDS SHARE CAPITAL WAS ALSO ADDED U/S 68 OF THE ACT ON THE GROUND JUST BEFORE T RANSFER THERE WAS A CREDIT OF IT(SS)A NO.67/DEL./2008 3 ` 75 000/- IN THE BANK ACCOUNT OF SMT. RADHA AGGARWAL . THUS TOTAL AMOUNT OF RS. 10 75 000/- WAS ADDED U/S 68 OF THE ACT. 2.1 BESIDES THE AO NOTICED ON PERUSAL OF SEIZED DO CUMENTS THAT THE ASSESSEE PURCHASED THE FOLLOWING PLOTS OF LAND:- ANNEXURE NO. PAGE NO. PLOT NO DATE. NAME OF SELLER AREA OF PLOT IN SQ. YDS. CONSI- DERATION [IN ` ] ` REMARKS A-52 58-60 C-174 02.11.95 KAPIL MEHTA S/O R.L. MEHTA 160 60000 AGREEMENT A-111 33-35 07.10.99 NAND KISHORE S/O RAM KALA 160 1400000 AGREEMENT A-111 36-38 05.10.99 NAND KISHORE S/O RAM KALA 160 1400000 AGREEMENT A-112 1-5 F-95 04 01 .00 SAVTRI DEVI GUPTA W/O J.P. GUPTA 479 179625 AGREEMENT A-112 6-10 B-183 22.11.99 RAKESH BAJAJ S/O M.L. BAJAJ 200 75000 AGREEMENT A-112 11-15 C-174 06.02.00 NISHA MEHTA W/O R.L. MEHTA 160 60000 AGREEMENT A-112 16-22 C-174 06.02.00 KAPIL MEHTA & VIKAS MEHTA 160 60000 AGREEMENT A-112 23-26 F-385 19.01.00 DINESH MAN S/O V.P. MAN 200 75000 AGREEMENT 2.11 TO A QUERY BY THE AO THE ASSESSEE REPLIED THA T THE AFORESAID PLOTS WERE RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. SINCE T HE ASSESSEE DID NOT EXPLAIN THE SOURCE OF AMOUNT INVESTED IN THE PLOTS THE AO ADDED AN AMOUNT OF ` ` `33 09 629/- TOWARDS UNDISCLOSED INCOME. IT(SS)A NO.67/DEL./2008 4 3. ON APPEAL THE LEARNED CIT(A) AFTER HAVING A RE MAND REPORT FROM THE AO AND SUBMISSIONS OF THE ASSESSEE THEREON CONCLUDED AS UNDER:- 9. I HAVE GONE THROUGH THE FACTS AND CIRCUMSTAN CES OF THE CASE SUBMISSIONS MADE ASSESSMENT ORDER AND REMAND REPOR TS. REGARDING THE ADDITION OF RS.`33 09 625/- FOR THE P URCHASE OF PLOTS IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS A CCEPTED THAT THESE PLOTS HAVE BEEN RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. IN THE REMAND REPORT THE ASSESSING OFFICER HAS MEN TIONED THAT PLOT NO.174 PURCHASED FROM SHRI KAPIL MEHTA FOR RS.`60 0 00/- HAS BEEN ADDED TWICE. NO OTHER ADVERSE FINDINGS HAVE BEEN G IVEN BY THE ASSESSING OFFICER IN THE REMAND REPORT. IT WAS ARG UED BEFORE ME THAT ALL THE PURCHASE OF PLOTS WERE DULY RECORDED I N THE BOOKS OF ACCOUNTS AND/THE PAYMENTS HAVE BEEN MADE THROUGH CH EQUES AS PER ANNEXURE-A TO THIS ORDER. THE ASSESSING OFFICER HAS MADE THE ADDITION IN THE ASSESSMENT ORDER ON SUMMARY BASIS. IN VIEW OF THE ABOVE THE INVESTMENTS STAND EXPLAIN ED. THE ADDITION MADE BY THE ASSESSING OFFICER IS DELETED. 10. REGARDING THE ADDITION OF `RS.5 00 000/- EACH FROM M/S INSPIRATION SECURITY PVT. LTD. AND M/S SARA OVERSEA S PVT. LTD. THE ASSESSING OFFICER HAS MADE SUBSTANTIAL AND SUFFICIE NT ENQUIRY AS MENTIONED IN THE REMAND REPORT. THE SHARE CAPITAL HAVE BEEN RECEIVED THROUGH CHEQUES AND DISCUSSED BY THE ASSES SING OFFICER. IN THE CASE OF CIT VS. DWARKADHISH INVESTMENTS (P) LTD. 167 TAXMAN 321 (DELHI). THE HONBLE HIGH COURT HAD HEL D AS UNDER:- SECTION 68 OF THE INCOME-TAX ACT 1961 CASH CRED IT-AY 1997-98- ASSESSING OFFICER MADE ADDITIONS ON ACCOUNT OF SHAR E APPLICATION MONEY RECEIVED BY ASSESSEE ON FINDING THAT NONE OF SHARE APPLICANTS WERE FOUND TO EXIST AT ADDRESS GIVEN IN CONFIRMATIONS OF SHARE APPLICANTS- COMMISSIONER (APPEALS) ADMITTED ADDITIONAL EVIDENCE FURNISHED BY ASSESSEE AND INTER ALIA OBSERVED THAT SHARE APPLI CANTS CONCERNED WERE IDENTIFIED AND THEY CONFIRMED PAYMENT OF MONIES TO ASSESSEE FOR PURPOSE OF SHARES; TRANSACTIONS IN QUESTION WERE BY CHEQUES ; THERE WAS NO GROUND FOR DISBELIEVING CONTENTS OF AFFIDAVITS OF SUBSCRIB ERS; ASSESSING OFFICER HAD NOT ISSUED SUMMONS TO SUBSCRIBERS OR HAD ASKED ASSE SSEE TO PRODUCE THEM AND MOST OF SUBSCRIBERS WERE COMPANIES INCORPO RATED WITH REGISTRAR OF COMPANIES-COMMISSIONER (APPEALS) ACCOR DINGLY DELETED IT(SS)A NO.67/DEL./2008 5 ADDITION TRIBUNAL UPHELD ORDER OF COMMISSIONER (A PPEALS)-WHETHER TRIBUNAL WAS JUSTIFIED-HELD YES. IN VIEW OF THE FINDINGS GIVEN BY THE ASSESSING OFF ICER IN THE REMAND REPORT AND SUBMISSIONS MADE BY THE APPELLANT AND THE OBSERVATIONS OF THE HONBLE HIGH COURT THE ADDITIO N OF RS.`10 00 000/- AS SHARE CAPITAL IS DELETED. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF LEARNED CIT(A).THE LD. DR WHILE CARRYING US THROUGH THE IMPUGNED ORDERS SUPPORTED THE FINDINGS OF THE AO WHILE THE LEARNED AR ON BEHALF OF THE ASSESSEE RELIED UPON THE IMPUGNED ORDER. TO A QUERY BY THE B ENCH AS TO WHETHER THE AMOUNT CAN BE ADDED BY WAY OF UNDISCLOSED INCOME IN BLOCK ASSESSMENT WHEN THE TRANSACTIONS WERE RECORDED IN THE BOOKS OF ACCO UNTS THE LD. DR DID NOT REPLY. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY THE AMOUNT OF ` `32 49 625/- ON ACCOUNT OF INVESTMENT IN PLOTS ADDED BY THE AO U/S 68 OF THE ACT IS RECORDED IN T HE REGULAR BOOKS OF ACCOUNTS. LIKEWISE THE TRANSACTIONS ON ACCOUNT OF SHARE CA PITAL OF ` 5LACS EACH SUBSCRIBED BY M/S INSPIRATION SECURITY PVT. LTD. & M/S SARA OVERSEAS PVT. LTD. ALSO FORM PART OF REGULAR BOOKS OF ACCOUNTS. THE LD . CIT(A) FOUND THAT DETAILS OF INVESTMENT MADE BY M/S SARA OVERSEAS PVT. LTD. THROUGH THE CHEQUE NO. 552628 DATED 12.12.1995 AND THE NAME OF THE BANK AND THE BRANCH THE INCOME TAX NUMBER OF THE COMPANY 1088-S COMPANY CIRCLE 33 WERE ALL AVAILABLE WITH THE AO. LIKE WISE DETAILS OF INVESTMENT MADE BY M/ S INSPIRATION SECURITY PVT. LTD. STATED TO BE ASSESSED IN COMPANY CIRCLE-15 T HROUGH CHEQUE NO.552148 DATED 12.12.1995 WERE ALSO AVAILABLE WITH THE AO. E VEN COPIES OF BANK STATEMENTS OF THESE TWO COMPANIES WERE AVAILABLE WI TH THE AO. IT IS ALSO UNDISPUTED THAT MR . RAJESH RASTOG I WAS NOT THE DIRECTOR OF THE COMPANY M/S INSPIRATION SECURITY PVT. LTD. WHEN THIS INVESTMENT WAS MADE AND NO OPPORTUNITY SEEMS TO HAVE BEEN ALLOWED TO THE ASSESSEE FOR CROS S-EXAMINATION. AS REGARDS AMOUNT OF ` `75 000/- IN RESPECT OF SHARE CAPITAL IN THE NAME O F MRS. RADHA AGGARWAL THE LD. CIT(A) DID NOT RECORD ANY FINDING S. CONSEQUENTLY THE ISSUE RELATING TO THIS ADDITION DOES NOT ARISE FROM THE I MPUGNED ORDER. THE LD. CIT(A) IT(SS)A NO.67/DEL./2008 6 WHILE ENCLOSING ANNEXURE A TO HIS ORDER OBSERVED THAT THE AO ACCEPTED THE FACT THAT INVESTMENT IN THE PLOTS IS RECORDED IN THE REG ULAR BOOKS OF ACCOUNTS. WE FIND THAT THE AO HAD NO CASE ANYWHERE IN THE ASSESSMENT ORDER OR EVEN IN HIS REMAND REPORT THAT THE TRANSACTIONS HAD NOT BEEN RE CORDED IN THE REGULAR BOOKS OF ACCOUNT OF ASSESSEE BEFORE THE SEARCH WAS CARRIE D OUT. IT IS VERY PERTINENT TO NOTE THAT THE ATTEMPT OF AO WAS TO VERIFY GENUINENE SS OF THE TRANSACTIONS IN THE COURSE OF BLOCK ASSESSMENT. WHEN THE TRANSACTIONS A RE ALREADY REFLECTED IN THE REGULAR BOOKS OF ACCOUNT AND THE SEARCH HAD NOTHING TO DO WITH THE RETRIEVAL OF INFORMATION REGARDING THOSE TRANSACTIONS ADDITION AS UNDISCLOSED INCOME IS NOT JUSTIFIED. THE ADDITION MADE ON THE BASIS OF ENTRI ES RECORDED IN THE REGULAR BOOKS OF ACCOUNT ARE OUTSIDE THE SCOPE OF SPECIAL PROVIS IONS FOR ASSESSMENT OF BLOCK PERIOD AND COULD BE CONSIDERED ONLY IN THE REGULAR ASSESSMENT AS HELD BY THE HONBLE GUJRAT HIGH COURT IN THE CASE OF N. R. PAPER AND BOARD LTD . V. DEPUTY CIT [1998] 234 ITR 733 (GUJ) FOLLOWED IN DCIT VS . RADHE DEVELOPERS-329 ITR 1(GUJ). . IN CIT VS. RAVI KANT JAIN (2001) 167 CTR (DEL) 566 : (2001) 250 ITR 141 (DEL) HONBLE HIGH COURT WHILE DISCUSSING THE PR OVISIONS OF S. 158B OF THE ACT HELD THAT: 'THE SPECIAL PROCEDURE OF CHAPTER XIV-B IS INTENDED TO PROVIDE A MODE OF ASSESSMENT OF UNDISCLOSED INCOME WHICH HAS BEEN DE TECTED AS A RESULT OF SEARCH. AS THE STATUTORY PROVISIONS GO TO SHOW IT IS NOT INTENDED TO BE A SUBSTITUTE FOR REGULAR ASSESSMENT. ITS SCOPE AND AM BIT IS LIMITED IN THAT SENSE TO MATERIALS UNEARTHED DURING SEARCH. IT IS IN ADDITIO N TO THE REGULAR ASSESSMENT ALREADY DONE OR TO BE DONE. THE ASSESSMENT FOR THE BLOCK PERIOD CAN ONLY BE DONE ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT OR DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WITH THE AO. EVIDENCE FOUND AS A RESULT OF SEARCH I S CLEARLY RELATABLE TO SS. 132 AND 132A.' 5.1 IN THE INSTANT CASE THE LD. DR DID NOT PLACE BEFORE US ANY MATERIAL DETECTED DURING THE SEARCH WHICH FORMED THE BASIS FOR THE A DDITION OF ` `32 49 625/- OR OF ` 10 LACS. EVEN OTHERWISE THE LD. CIT(A) CONCLUDED THAT SOURCE OF INVESTMENTS IN PLOTS AND SHARE CAPITAL STAND EXPLAINED. THE REVEN UE HAVE NOT BROUGHT TO OUR NOTICE ANY MATERIAL CONTROVERTING THESE FINDINGS O F FACTS RECORDED BY THE LD. CIT(A) SO AS TO ENABLE US TO TAKE A DIFFERENT VIEW IN THE MATTER. IN THE ABSENCE OF IT(SS)A NO.67/DEL./2008 7 ANY BASIS WE DO NOT FIND ANY INFIRMITY IN THE FIN DINGS OF THE LD. CIT(A). THEREFORE GROUND NOS.1 & 2 IN THE APPEAL ARE DISMISSED. 6. GROUND NO.3 BEING GENERAL IN NATURE NOR ANY SUBMISSIONS HAVING BEEN MADE BEFORE US ON THIS GROUND DOES NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US I N TERMS OF RESIDUARY GROUND NO.4 IN THE APPEAL ACCORDINGLY THESE GROUNDS ARE DISMISSED. 7. IN THE RESULT APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 4.11.2011 SD/- SD/- ( SMT. DIVA SINGH ) (A.N . PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER NS COPY OF THE ORDER FORWARDED TO :- 1. DCIT CENTRAL CIRCLE-25 NEW DELHI. 2. M/S SUPER STAR INNOVATION PVT. LTD. PREM NURSER Y GOPAL NAGAR BLOCK-A NAZAFGARH NEW DELHI 3. CIT (APPEALS)-I NEW DELHI 4. THE CIT CONCERNED. 5. THE DR ITAT G BENCH NEW DELHI 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT DELHI