TaxTMI 
TaxTMI 
2020 (4) TMI 822
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....No.2601/Del./2016, ITA.No.1589/Del./2016, ITA.No.1980/Del./2016 The ACIT, Central Circle-14, New Delhi Versus M/s. Believe Developers And Promoters Pvt. Ltd.,, The ACIT, Central Circle-14, New Delhi. Versus M/s. Gee Gee Buildtech (P) Ltd., The ACIT, Central Circle-14, New Delhi Versus M/s. King Buildcon Pvt. Ltd., M/s. King Buildcon Pvt. Ltd. Versus The DCIT, Central Circle-15 (Old), Central Circle-14 (New) New Delhi., The ACIT, Central Circle-14, New Delhi Versus M/s. Lakshya Consultants Pvt. Ltd., The ACIT, Central Circle-14, New Delhi Versus M/s. KG Builders P. Ltd., M/s. LKG Builders P. Ltd. Versus The DCIT, Central Circle-15, New Delhi., The ACIT, Central Circle-14, New Delhi Versus M/s. M.M. Buildcon Pvt. Ltd., M/s. M.M. Buildcon Pvt. Ltd. Versus The ACIT, Central Circle-14, New Delhi., The ACIT, Central Circle-14, New Delhi Versus M/s. Nageshwar Realtors Pvt. Ltd., M/s. Pegasus Softech (P) Ltd. Versus The DCIT, Central Circle-15, New Delhi., The ACIT, Central Circle-14, New Delhi. Versus M/s. Pegasus Softech (P) Ltd., The ACIT, Central Circle-14, New Delhi Versus M/s. Shine Star Buildcon Pvt., Ltd., The ACIT, Central Circle-14, New Delhi. Versus M/s. Witness Builders Pvt.....
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.... details were furnished. Accordingly, proceedings were culminated by passing an order under section 153A/144 of the Income Tax Act on 24th December 2009 at Rs. 2,14,55,132/-. Thereafter the assessee moved an application before Commissioner of Income Tax, Central (2), New Delhi, under section 264 of the Income Tax Act, 1961, which was disposed of by Order dated 12th March 2012 for the A.Y. 2002-2003 to A.Y. 2008-2009 and matter was restored back to the A.O. with direction to decide the matter as per Law. The A.O, in pursuance of the Order of the Commissioner of Income Tax, Central (2), New Delhi, tookup the assessment afresh. Show cause notice was issued to assessee and objections of the assessee were dropped. 5.1. The A.O. noted that in assessment year under appeal, assessee has claimed administrative and general expenses to the tune of Rs. 82,685/-. The assessee-company during the course of assessment as well as reassessment proceedings has failed to furnish any evidence of the source from which this expenditure was incurred. Therefore, in the absence of any evidence i.e., source of the expenditure, the A.O. made the addition of Rs. 82,685/-. 5.2. The A.O. further noted that....
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..... CIT(A) relied upon Judgment of the Hon'ble Supreme Court in the case of Smt. Prabha vs., Ramprakash Kalra 1987 (Suppl.) 339 (SC) in which it was held that "Courts should not adopt an injustice oriented approach in rejecting the application for condonation of delay." The Ld. CIT(A) also relied upon Judgment of the Hon'ble Supreme Court in the case of Vedabhai alias Vyjayantibhai Baburao Patil vs., Santaram Baburao Patil 253 ITR 798 (SC) in which the Hon'ble Apex Court made a distinction in delay and inordinate delay and it was held that "Court should adopt a pragmatic approach where delay is of few days only." The Ld. CIT(A) has also relied upon several other decisions and considering nominal delay in filing the appeal before him and for cause of substantial justice, condoned the delay in filing the appeal. 7. The assessee further raised issue of jurisdiction of the A.O. to proceed under section 153A of the Income Tax Act in respect of the year under consideration as no incriminating documents, assets had been found as a result of search on assessee. The assessee submitted before the Ld. CIT(A) that assessment proceedings under appeal had not abated inasmuch as the returns are ....
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....nder Rule 46A, in holding that A.O. could not have proceeded to frame the assessment under section 153A, in the absence of any incriminating material and in deleting the addition of Rs. 82,685/- on account of administrative and general expenses. 11. The assessee in its appeal has challenged the addition of Rs. 2,13,70,020/- under section 68 of the Income Tax Act, 1961. 12. The Ld. D.R. contended that there was a delay of 20 days in filing the appeal before the Ld. CIT(A). She has referred to ground of appeal, in which it is contended that the Ld. CIT(A) without considering the illegal conduct of the assessee and during the search operation including manhandling of the Search Officer, looting of seized material and registration of criminal cases against the protesters of the Group and their Associates due to the criminal action, should not have condoned the delay. The assessee was also non-cooperative at every stage, therefore, the delay should not be condoned. 13. On the other hand, Learned Counsel for the Assessee reiterated the submissions made before Ld. CIT(A) and submitted that delay was due to the above reasons and that penalty imposed under section 271(1)(b) of the ....
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....ction 68 of the Income Tax Act, 1961. Therefore, Revenue should not have any grievance. However, as regards small addition of disallowances of administrative expenses, the Ld. CIT(A) has referred to the assessment proceedings and proceedings under section 264 of Income Tax Act, 1961, in which details of these expenses are referred to. Therefore, the Ld. CIT(A) on the basis of the material on record, deleted the addition. The issue as regards assumption of jurisdiction under section 153A of the Income Tax Act for deleting the addition is concerned, it is a legal issue and can be dealt by the authorities at any point of time based on the material on record. The Ld. CIT(A), thus, did not violate any of the conditions of Rule 46A of the Income Tax Rules, 1962, therefore, this issue has no relevance to the matter in issue. These Grounds of appeal of Revenue are dismissed. 18. The Ld. D.R. as regards the assumption of jurisdiction under section 153A of Income Tax Act, 1961, to delete the above two additions submitted that this issue was not raised before the A.O. or before the Commissioner of Income Tax, Central-(2), New Delhi, under section 264 of the Income Tax Act, 1961, ther....
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....tial question of Law, the decisions of Hon'ble Supreme Court is not yet final. The Ld. D.R, therefore, submitted that decision of other High Courts are in favour of the Revenue on this legal issue that assessments can be framed even without incriminating material found during the course of search. The Ld. D.R. relied upon Judgment of Hon'ble Kerala High Court in the case of Mr. E.N. Gopakumar vs., CIT (Central) [2017] 390 ITR 131 (Kerala) in which it was held as under : "Assessment proceedings generated by issuance of a notice under section 153A(1)(a) can be concluded against interest of assessee including making additions even without any incriminating material being available against assessee in search under section 132 on basis of which notice was issued under section 153A(1)(a)." 18.1. On the same proposition the Ld. D.R. relied upon Judgment of Hon'ble Kerala High Court in the cases of Mr. K.P. Ummer vs., CIT vide Order Dated 19.02.2019 and CIT vs., Dr. P. Sasikumar 73 taxmann.com 173 that "when notice under section 153A is issued, which enables the Department to carry-out re-assessment or assessment with reference to six immediate prior years and the year in which....
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....n 153A of the Income Tax Act, 1961. He has submitted that no incriminating material was found during the course of search so as to make the above additions. 19.1. Learned Counsel for the Assessee apart from the above submissions also submitted that assessee has filed revised grounds of appeal before the Ld. CIT(A) and as per the revised grounds of appeal, the Ld. CIT(A) has decided the issue of non-recovery of incriminating material during the course of search and relied upon Judgment of Hon'ble jurisdictional Delhi High Court in the case of CIT vs., Kabul Chawla (supra). Therefore, there is no illegality in the Order of the Ld. CIT(A) in deciding this issue in favour of the assessee. Learned Counsel for the Assessee submitted that both the additions have been made by the A.O. based on the items already mentioned in the balance-sheet which were already disclosed to the Revenue Department in the original return of income. The original assessments were already completed. Therefore, in the absence of recovery of incriminating material during the course of search, the Ld. CIT(A) rightly decided the issue in favour of the assessee. He has submitted that Ld. CIT, Central (2), New Delh....
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....the assessee in response to the notice under section 153A of the I.T. Act requested that return filed originally under section 139 of the I.T. Act may be treated as return having been filed in response to the notice under section 153A of the I.T. Act, 1961. The A.O, however, did not accept the contention of assessee with regard to dropping of the proceedings. The A.O. in the impugned assessment order while making the additions on account of administrative and general expenses to the tune of Rs. 82,685/- noted that assessee company during the course of assessment as well as re-assessment proceedings has failed to furnish any evidence of source from which this expenditure have been incurred. The A.O. further noted in the impugned assessment order that during assessment year under appeal assessee company issued share capital of Rs. 2,13,70,020/-. The assessee company during the course of assessment as well as re-assessment proceedings failed to discharge onus of providing identity of the share applicants, their creditworthiness and genuineness of the transaction. The addition was, therefore, made under section 68 of the I.T. Act, 1961. These facts clearly show that both these addit....
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....ed in holding that the invocation of Section 153A by the Revenue for the AYs 2000-01 to 2003-04 was without any legal basis as there was no incriminating material quaeach of those AYs. Conclusion 72. To conclude : (i)Question (i) is answered in the negative i.e., in favour of the Assessee and against the Revenue. It is held that in the facts and circumstances, the Revenue was not justified in invoking Section 153 A of the Act against the Assessee in relation to AYs 2000-01 to AYs 2003-04." 20.3. The Revenue preferred SLP before the Hon'ble Supreme Court in the case of Pr. CIT, Central IT, New Delhi vs., Meeta Gutgutia (supra), which have been dismissed by the Hon'ble Supreme Court reported in 96 taxmann.com 468 (SC). Thus, the legal proposition decided in the case of Kabul Chawla (supra) and Meeta Gutgutia (supra) have become confirmed as is decided by the Hon'ble jurisdictional Delhi High Court. The Hon'ble Supreme Court in the case of CIT vs., Singhad Technical Education Society 397 ITR 344 (SC) considering the issue under section 153C of the I.T. Act, 1961, held that "the incriminating material which was seized had to pertain to assessment ....
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....ld as under: "The decision of the High Court is binding and the pendency of a petition for special leave to appeal to the Supreme Court from such a decision cannot obliterate its impact. It is binding until it is reversed or overruled." 20.4. The Hon'ble Madras High Court in the case of T.S. Santanam vs., Expenditure Tax Officer 87 ITR 582 (Mad.) while considering the Rule of Finality held "the essential principle as to the Rule of Finality of an assessment is that the A.O. cannot change his mood and try to reopen the closed state of affairs." Thus, the Rule of Finality apply in this case clearly show that legal proposition decided by the Hon'ble jurisdictional Delhi High Court in the cases of Kabul Chawla and Meeta Gutgutia (supra), have reached finality that "completed assessment can be interfered with by A.O. while making the assessments under section 153A only on the basis of some incriminating material unearthed during the course of search which was not produced or not already disclosed or made known in the course of original assessment." Since both the additions made by the A.O. in the impugned assessment order under section 153A of the I.T. Act are based on the i....
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....of search. Therefore, the contention of the Ld. D.R. cannot be accepted. The same is accordingly, rejected. In view of the above discussion and in the light of decisions of Hon'ble jurisdictional Delhi High Court in the cases of Kabul Chawla and Meeta Gutgutia (supra), we do not find any illegality or irregularlity in the Order of the Ld. CIT(A) in deciding this issue in favour of the assessee finding that there were no incriminating material unearthed during the course of search so as to make these additions. These additions are, therefore, rightly deleted. The Ld. CIT(A) was, therefore, justified in allowing this ground of appeal of assessee. These Grounds of appeal of Revenue are, therefore, dismissed. 20.6. The Other Ground of appeal in the Departmental Appeals is deletion of addition of Rs. 82,685/- and in the appeal of assessee, the assessee has agitated the addition on merit under section 68 of the I.T. Act, 1961 at Rs. 2,13,70,020/- on several grounds of appeals. In view of the finding on the issue of assumption of jurisdiction under section 153A of the I.T. Act and making the additions on merits as decided in the Departmental Appeal, the issues on merits are left with a....
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....Pvt. Ltd., (Appellant) (Respondent) ITA.No.118/Del./2017 - Assessment Year 2003-2004 ITA.No.119/Del./2017 - Assessment Year 2004-2005 ITA.No.121/Del./2017 - Assessment Year 2006-2007 The ACIT, Central Circle-14, vs., M/s. LKG Builders P. Ltd., (Appellant) (Respondent) ITA.No.6353/Del./2016 - Assessment Year 2003-2004 ITA.No.6354/Del./2016 - Assessment Year 2004-2005 ITA.No.6356/Del./2016 - Assessment Year 2006-2007 M/s. LKG Builders P. Ltd., vs., The DCIT, Central Circle-15 (Old), Central Circle-14 (New) New Delhi. (Appellant) (Respondent) ITA.No.3449/Del./2016 - Assessment Year 2006-2007 The ACIT, Central Circle-14, vs., M/s. M.M. Buildcon Pvt. Ltd., (Appellant) (Respondent) C.O.No.251/Del./2016 in ITA.No.3449/Del./2016 Assessment Year 2006-2007 M/s. M.M. Buildcon Pvt. Ltd., vs., The ACIT, Central Circle-14, (Cross Objector) (Respondent) ITA.No.1972/Del./2016 - Assessment Year 2006-2007 The ACIT, Central Circle-14. vs., M/s. Nageshwar Realtors Pvt. Ltd., (Appellant) (Respondent) &....
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....n the case of M/s. Ashutosh Developers P. Ltd., the Ld. D.R. also submitted that modus operandi of the assessee regarding share application money pending allotment is in issue along with land dealings, on which, allegations were before search made against the assessee, therefore, search was made in the Group cases. The issue of share application money, unexplained credits and unexplained sources of investment in land is mentioned in the appraisal report and sale deeds were found during the course of search, therefore, there were recovery of the incriminating material during the course of search, therefore, such a legal proposition would be different in the present case. 26. On the other hand, Learned Counsel for the Assessee demonstrated before us that all these items on which A.O. has made addition were part of the balancesheet item which were already disclosed to the Revenue Department on filing the original return of income. The original assessments have already completed prior to the date of the search. Therefore, no incriminating material was found during the course of search. Therefore, the issue is covered by the Judgment of Hon'ble jurisdictional Delhi High Court in t....
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.... A.O. and Ld. CIT(A) to show that no additions have been made based on any incriminating material. He has further submitted that no such addition was made in original assessment order under section 153A/144 of the I.T. Act, 1961. Present assessment order have been passed in pursuance to the Order under section 264 of the I.T. Act, 1961, in which no such issue have been raised. Therefore, A.O. could not have taken a new item to make the addition against the assessee which have not been considered by the Ld. CIT, Central-(2), New Delhi, in proceeding under section 264 of the I.T. Act, 1961. 33. In the case of Witness Builders Pvt. Ltd., the Ld. D.R. referred to Order of the A.O. and Ld. CIT(A) to show that land was purchased at Badshahpur. Appraisal report did not find mention any cash deposit. 34. On the other hand, Learned Counsel for the Assessee submitted that the same additions are based on the items already mentioned in the balance-sheet and reported in the original return of income. The A.O. has mentioned that documents were filed during original assessment proceedings. 35. As regards remaining Departmental Appeals, the submissions of the Ld. D.R. are same as have bee....
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....en decided being identical in the case of M/s. Alankar Saphire Developers (supra). Following the reasons for decision for the same, we do not find any infirmity in the Order of the Ld. CIT(A) in deciding these issues in favour of the assessee. In view of the above discussion, we hold that the Ld. CIT(A) correctly decided these issues in favour of the assessee holding that delay shall have to be condoned and there is no violation of Rule 46A and in deciding the issue of assumption of jurisdiction under section 153A in favour of the assessee, in the absence of any incriminating material during the course of search, when original assessments were already completed on the date of search. The issues on merit decided by the Ld. CIT(A) in favour of the assessee and against the assessee are thus left with academic discussion only. Accordingly, all the remaining appeals of the Department are dismissed and remaining Appeals/Cross Objections of the Assessee are treated as allowed. 37. In the result, all the remaining appeals of the Department are dismissed and remaining appeals of the Assessee and Cross Objection of the Assessee are treated as allowed. 38. ITA.No.1589/Del./2016 - A.Y - ....
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.... Land, for which, advance has been received from M/s. Unitech. In the absence of any details, notice under section 133(6) of the Act was issued regarding transaction made by M/s. Unitech with M/s. MDLR Group of Companies. M/s. Unitech confirmed that advance of Rs. 5.50 crores was given to the assessee, but, in the absence of any supporting documents, A.O. made addition of Rs. 5.50 crores being income from undisclosed sources. The A.O. also noted that during assessment year assessee has given Rs. 30,000/- as advance to others. In the absence of any evidence, addition of Rs. 30,000/- was made on account of unexplained investment. The A.O. also noted that assessee has claimed administrative and general expenses of Rs. 18,081/-. The assessee failed to furnish evidences at the original assessment as well as in re-assessment, therefore, the addition was made on account of disallowance of expenditure of Rs. 18,081/-. The A.O. also noted that assessee has claimed preliminary expenses to the tune of Rs. 76,470/- during original assessment as well as re-assessment. Assessee failed to furnish any evidences, therefore, addition was made of Rs. 76,470/- on account of preliminary expenses. 41....
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....above additional ground may be admitted for disposal of the appeal being legal in nature. 44. On the other hand, the Ld. D.R. strongly opposed the request for admission of the additional ground of appeal. 45. After considering the rival submissions, we are of the view that since the Ld. CIT(A) has decided this ground against the assessee and all the material are available on record of the impugned orders, therefore, it being the legal issue which goes to the root of the matter and legality of assessment order, therefore, we admit the same for disposal of the appeal of the assessee. 46. Learned Counsel for the Assessee on additional ground of appeal submitted that Ld. CIT(A) has decided this issue at pages 6 to 21 of the appellate order. The Ld. CIT(A) has decided this issue against the assessee because Agreement to Sell in cash was seized during the course of search as belonging to Shri Praveen Kumar from whom advance was received. He has referred to Para-14 of the assessment order in which A.O. has mentioned that assessee has received advance for land from Shri Praveen Kumar amounting to Rs. 7 lakhs. No land was sold to any of the party. The assessee failed to prove ident....
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.... balance-sheet. In the original return of income, the assessee has disclosed the receipt of Rs. 7 lakhs from Shri Praveen Kumar as per balance-sheet. Copy of the ledger account shows that it is already disclosed in the books of account of the assessee. Therefore, receipt of Rs. 7 lakhs from Shri Praveen Kumar as advance was already disclosed in the original return of income. Further, on the date of search, the return was not pending as same was completed because no proceedings were initiated against the assessee for passing the original assessment. Further the original assessment order were passed in the Group cases in which the Ld. CIT, Central-(2), New Delhi, has invoked jurisdiction under section 264 of the I.T. Act, 1961 and all the matters were restored to the file of A.O. for passing the Order afresh, as per Law. Thus, all the facts with regard to receipt of Rs. 7 lakhs from Shri Praveen Kumar was disclosed to the Revenue Department in the original return of income. therefore, mere recovery of the Agreement to Sell, through which, advance of Rs. 7 lakhs was received by assessee from Shri Praveen Kumar could not be treated as incriminating material found in search. Th....