Income Tax Appellate Tribunal - Delhi
Essel Securities Ltd., New Delhi vs Department Of Income Tax on 14 December, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "B" NEW DELHI
BEFORE SHRI R.P. TOLANI AND SHRI A.N. PAHUJA
ITA No. 919/Del/2011
Asstt. Yr: 2002-03
DCIT Cir. 11(1), Vs. M/s Essel Securities Ltd.,
New Delhi. D-124, Saket New Delhi.
PAN/GIR No. AAACE2145H
(Appellant) ( Respondent )
Appellant by : Shri Pradeep Kumar Sr. DR
Respondent by : Shri Mukesh Kohli CA
ORDER
PER R.P. TOLANI, J.M :
This is Revenue's appeal against CIT(A)'s order dated 14-12-2010 relating to A.Y. 2002-03. Sole effective ground raised is as under:
"On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of Rs. 58,02,620/- on account of accommodation entries."
2. Assessee's assessment was reopened on some alleged information from Investigation Wing that assessee had received accommodation entries of Rs. 58,02,620/-. The information gives only the names of persons who had given entries but there is no mention about the name of the recipients of such accommodation entries either in the reasons recorded or in the assessment order. During the course of reassessment proceedings assessee filed written submissions dated 23-12-2009 claiming that assessee had not received any payment from the entities mentioned in the information and the proceedings against assessee were undertaken under misconception. Assessee produced bank accounts and account books pleading that there was 2 ITA 919/Del/11 Essel Securities Ltd.
no mention of such entities in his books of accounts. AO, however, without indicating, which was accommodation entry received by the assessee, made the impugned addition u/s 68 of the I.T. Act.
2.1. Aggrieved, assessee preferred first appeal before the CIT(A), who deleted the addition by following observations:
"The appellant has filed copy of audited balance sheet in which the details of all bank accounts maintaining by them during the year along with their closing balances are also mentioned. Further the copy of all these bank accounts as also the copy of ledger account of all these bank accounts in assessee's books of accounts giving the narration regarding source of deposit made in these Bank Accounts during the year has been filed on 13- 12-10. These have been verified with the details of accommodation entries and it is observed that none of the creditors who formed the basis for addition to income u/s 68 in the impugned assessment order/ notice for reopening u/s 148, figure in any of these bank accounts, which ahs also been verified through the narration of ledger account of these bank accounts in appellant books of accounts. Accordingly the very basis for making the addition being not substantiated, (as there has been no cash credit from the said creditors) the addition made for Rs. 58,02,620/- by the AO u/s 68 of the IT Act is directed to be deleted."
Aggrieved, revenue is before us.
3. Ld. DR relies on the order of AO.
4. Ld. counsel for the assessee, on the other hand, vehemently argues that the assessment order does not contain a finding that assessee had received any cash credit entry from any of the persons mentioned in the assessment order or the reasons recorded. Therefore, there being no cash credit received by the assessee from such dubious entries, the entire addition has been made in gross violation of the provisions of law. CIT(A) has 3 ITA 919/Del/11 Essel Securities Ltd.
endorsed the assessee's claim that no such cash credit entry was received by the assessee and deleted the addition. Order of CIT(A) is relied on.
5. We have heard rival contentions and gone through the entire material available on record. In our considered view, the addition made by AOA was totally unjustified and against the provisions of the I.T. Act. Reopening of assessment is a separate aspect but when it goes to make the addition, AO is duty bound to indicate which cash credit entry are being added to the income of the assessee. We find no mention at all as to which are cash credits received by the assessee. In our view, the additions made by AO are grossly unjustified and arbitrary. We find no infirmity in the order of CIT(A), deleting such arbitrary additions. In our considered view, such appeal should not have been filed by the department, as there is no merits in the challenge of the department at all. Order of Cit(A) is upheld.
6. In the result, revenue's appeal is dismissed.
Order pronounced in open court on 23-02-2012.
Sd/- Sd/-
( A.N. PAHUJA) ( R.P. TOLANI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 23-02-2012.
MP
Copy to :
1. Assessee
2. AO
3. CIT
4. CIT(A)
5. DR
4 ITA 919/Del/11
Essel Securities Ltd.