TaxTMI 
TaxTMI 
2016 (12) TMI 1711
X X X X Extracts X X X X
X X X X Extracts X X X X
....lden Techno Build Pvt. Ltd. as unexplained cash credits u/s 68 of the Act. 4. That the CIT(Appeals) erred on facts and in law in upholding the aforesaid addition of Rs. 7 lacs without appreciating that the appellant had discharged its onus in terms of section 68 of the Income Tax Act, 1961." 3. Ground No. 1 is not pressed, therefore, the same is dismissed as not pressed. 4. Vide Ground No. 2, the grievance of the assessee relates to the sustenance of addition of Rs. 11,77,528/- on account of income from house property and vide Ground Nos. 3 & 4, the assessee is aggrieved by the sustenance of addition of Rs. 7,00,000/- made by the assessee u/s 68 of the Income Tax Act, 1961 (hereinafter referred to as the Act). 5. The facts related to these issues in brief are that a search and seizure operation was carried out at various premises of M/s Today Homes and Infrastructure Pvt. Ltd. The assessee company is one of the associated companies of Today group of cases. The AO issued a notice u/s 148 of the Act on 29.03.2012. In response to the same, the AO did not file its return of income. The AO made the impugned addition by observing in paras 5 to 8 as under: "5. During the co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in view of the foregoing discussions, sum of Rs. 7,00,000/- credited in the books of account of the assessee during the financial year 2004-05 relevant to the assessment year 2005-06 fails to pass the test of genuineness within the meaning of Section 68 of the Act. 7. Further during the course of assessment proceedings for the AY 2009-10, it was seen that the assessee is one of the co-owner of the property at 48 Friends Colony East, New Delhi in along with other group concerns namely M/s Takshila Distributors Pvt Ltd; M/s Rancho Place Estate Pvt. Ltd. The assessee owns 28.24% of the share in the property at 48 Friends Colony East, New Delhi and this property of the assessee company at 48, Friends Colony East, New Delhi. Further it was noticed that this property was being used by Gambhirs for their residence and was not being used by the assessee as well as the other group concerns for the purpose of their own business or profession, therefore, as per the provision of section 23 of the Act, the sum for which the whole of property at 48, Friends Colony East, New Delhi, might reasonably be expected to be let out was determined at Rs. 41,69,718/-. 8. During the FY 2004-05 also th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n and no further enquiries made by (he AO on his own and no new facts brought on record. Now, duty lies on the AO to confirm from his own part/sources by way of issuing notice U/s 133(6) or by deposing some person on job or by any other way he deems fit. However, he never tried to fulfill his job and simply copy pasted the reasons in the assessment order and made addition in a tailor made fashion. Thus, without making/applying his own mind and without making his own enquiries, addition merely on the basis of information from ADIT(INV) is invalid and needs to be deleted. SMT. MEERA KAPOOR VS. C1T (ITA NO. 1395/2008) DECIDED VIDE ORDER DTD. 31.08.2012 (DELHI HIGH COURT) CIT VS. SFIL STOCK BROKING LTD. 233 CTR (DEL.) 69 DIT VS. MRS. RAINEE S1NGH 125 TTJ (DEL) 816 (AFFIRMED BY HIGH COURT IN (2009) 30 DTR (DEL) 105 /330 ITR 417 (DEL.) THIRD, that AO had relied only on the basis of information, statements and documents received from third party, i.e. Jain brother's, investigation proceedings. Further AO had relied on some backside of page 13 in annexure A - 34 from Jain brother documents. The third party statements and the documents ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d Gambhir's as residence, therefore AO has made an addition of Rs. 11,77,528/- by invoking the provisions of Sec 23 of the IT Act. First, That as per Sec 22 of IT Act the A V of the property consisting of any building and land appurtenant thereto of which the assessee is an owner. OTHER THAN SUCH PORTIONS OF SUCH PROPERTY AS HE MAY OCCUPY FOR THE PURPOSE OF ANY BUSINESS OR PROFESSION carried on by him the profits of which are chargeable to tax, shall be chargeable to income (ax under the head Income from house property. . In other words to charge the income U/H house property the property should not be used for its business or profession. However, in our case it was outrightly stated before Id. AO that the said property was being used for the registered office of the assessee company. To support our contention we had filed the following details before LD AO:- Ø Copy of bank A/c Ø Copy of ITR filing acknowledgement. Ø Copy of TAN allotment letter. Ø Copy of From 18 showing registered address of the company. That we wish to put some light on one of the factor that should be taken due care while judging the provisions U/s 23 in our ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of this fact following documents were filed before the Ld. AO and now filed before your goodself:- Ø Payment of House tax receipt. Ø Calculation of Annual value as per Municipal Corporation Act. That the valuation as per MCD Act should be followed in the absence of standard rent and actual rent.) We rely on following judgements:- ACIT VS. MAYUR RECREATION AND DEVELOPMENT LTD. 301 ITR (AT) 324 (SB) (DEL.) The Hon'ble Delhi High Court in case CIT VS. MON1 KUMAR SUBBA 333 ITR 38 (DEL) (FB) TYPOGRAPHY IN ITA NO. 1213 OF 2011 DTD. 08.08.2014 has followed the decisions of Delhi High Conn staled above. PARKPAPER INDUSTRIES (P) LTD. (2008) 25 SOT 406 (MUM.) SATYA COMPANY LTD. 140 CTR (CAL.) 569 FOUR, that no basis had been provided for calculating the annual value / rental income of the said property. It is purely on the basis of information he had and no further. FOUR, that no basis had been provided for calculating the annual value / rental income of the said property. It is purely on the basis of information he had and no further enquiries made by the AO on his own and no new facts brought on record to reach at correct facts. He even fa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ajender Kumar Gambhir, S.A. No DL/DC53/2011- 12/53-IT Under these facts and circumstances relying on filing the paper evidences in form of Income Tax Return, Balance Sheet, PAN and bank statement of M/s. Golden Technobuild (P) Ltd. do not prove the genuine of transaction as argued by Ld. AR. Further, addition in the hand of M/s. Golden Technobuild (P) Ltd. also does not help the appellant as M/s. Golden Technobuild (P) Ltd. itself is a dummy/paper company of Today group. Further. I do not agree with the arguments of Ld. AR that the appellant has discharged its primary onus by filing document evidence in support of transaction with M/s. Golden Technobuild (P) Ltd. as the basic findings in that the amount received by the appellant is an accommodation entry which has been obtained by paying cash to Jain Brothers through dummy concern of Jain Brothers and dummy concern of Today group namely, M/s. Golden Tenchnobuild (P) Ltd. Under these circumstances, reliance of Ld. AR on various judicial pronouncement given on different facts do not held the appellant. In fact entire chain of fund flow through various layers of fund transfer through bank accounts of dummy/paper companies are no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erty let out which were in turn used by Gambhirs as residences. As the property is used for their own business purposes, the income cannot be taxed under the head 'Income from house property' as per the provision of sec 22 of I.T. Act. I have examined this arguments of Ld. AR closely. Firstly issue to be resolved as to whether entire property at 48. Friend colony is used for Gambhir's Residence exclusively or partly used for the residence of Gambhirs and partly used for business of these company. On this issue, I have perused the evidences contained in the assessment order. During the search, statement of Sh. Vinay Subhikhi, Vice President of the group was recorded u/s 132(4) of I.T. Act. 1961 who have stated that these four owner of 48, Friend's Colony are not doing any business. These four companies just own one asset namely 48, Friends Colony, New Delhi which is used as residences by Mr. G.K. Gambhir and Sh. R.K. Gambhir, main person of Today group. This portion of statement is reproduced in the assessment order. In view of this categorical statement recorded u/s 132(4) by the Vice-President of the group, I do not think that there is any confusion that entire ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sufficient documentary evidences in the form of PAN card, Certificate of Incorporation, relevant copies of audit report, balance sheet of the said company, copy of ITR filing acknowledgement, copy of confirmation and relevant copy of bank statement. A reference was made to page nos. 32 to 48 of the assessee's paper book which are the copies of the aforesaid documents and it was stated that the said documents established the identity and creditworthiness of the creditor and genuineness of the transaction. Therefore, addition made u/s 68 of the Act was not justified. The reliance was placed on the following case laws: ØCIT Vs Gangeshwari Metal (P.) Ltd. 30 Taxmann.com 328 (Del.) ØCIT Vs Kamdhenu Steel & Alloys Ltd. (2012) 361 ITR 220 (Del.) 11. It was further stated that the aforesaid amount was received by the depositor M/s Golden Technobuild (P) Ltd. from a company of Jain brothers and the addition of the same had already been made in the hands of M/s Golden Technobuild (P) Ltd. for the assessment year 2005- 06, vide assessment order dated 28.03.2013 (copy of the said order was furnished which is placed on record). It was accordingly submitted that the additi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that the amount was received from a company namely, M/s Golden Technobuild (P) Ltd. who in turn received the amount from a dummy company of Jain brothers who were engaged in providing the accommodation entries. It is also noticed that the impugned amount of Rs. 7,00,000/- was a part of the addition made by the AO in the hands of M/s Golden Technobuild (P) Ltd. i.e. the creditor from whom assessee received the impugned amount, the said fact is evident from the copy of assessment order dated 28.03.2013 for the assessment year 2005-06 in the hands of M/s Golden Technobuild (P) Ltd. Therefore, on that score alone, the addition made in the hands of the assessee is not justified particularly when the source of the source was proved and the tax has already been charged on the impugned amount. Furthermore, the assessee furnished the copy of confirmation from M/s Golden Technobuild (P) Ltd., which is placed at page no. 3 of the assessee's paper book wherein the said company in its confirmation dated 1st April, 2005 clearly stated that an amount of Rs. 7,00,000/- was given to the assessee vide cheque no. 221584 dated 20.02.2005. The creditor, M/s Golden Technobuild (P) Ltd. is assessed to t....