Income Tax Appellate Tribunal - Delhi
Indu Surveyors & Loss Assessors (P) ... vs Department Of Income Tax on 23 October, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'C' NEW DELHI
BEFORE SHRI U.B.S.BEDI, JUDICIAL MEMBER
AND
SHRI J.S.REDDY, ACCOUNTANT MEMBER
I.T.A .Nos-1048-1053/Del./2012
(ASSESSMENT YEARs -2003-04 to 2008-09)
ACIT, Vs Indu Surveyors & Loss Assessores (P) Ltd.,
Central Circle-21,Room No.-344, (Amalgamated with B.S.Infratech (P) Ltd.)
ARA Centre, E-2,F-6/5, Basement, Vasant Vihar, New Delhi-110057
Jhandewalan Extn., New Delhi-55.
PAN-AAACI0558A
(APPELLANT) (RESPONDENT)
(C.O. Nos.-127-132/Del/2012)
(In I.T.A .Nos.-1048-1053/Del./2012)
(ASSESSMENT YEARs -2003-04 to 2008-09)
Indu Surveyors & Loss Assessores (P) Ltd., Vs ACIT,
(Amalgamated with B.S.Infratech (P) Ltd.) Central Circle-21,Room No.-344,
F-6/5, Basement, Vasant Vihar, ARA Centre, E-2, Jhandewalan
New Delhi-110057 Extn., New Delhi-55.
PAN-AAACI0558A
Appellant by: Sh.Ris Gill, Sr. Dr
Respondent by: Sh. Kapil Goel.
Date of Hearing:-23.10.2012
Date of Pronouncement:-02.11.2012
ORDER
PER BENCH All these appeals by the revenue are directed against the common order of the Ld. CIT(A)-II, Delhi dated 21.10.2008 passed for AYs 2003-04, 2004-05, 2005-06, 2006-07, 2007-08 & 2008-09.
2 C.O. Nos.-127-132/Del/2012(In I.T.A .Nos.-1048-1053/Del./2012) Briefs facts of the case:-
2. The assessee company belongs to the Thapar Group of cases. Action u/s 132 of the Income Tax Act, 1961 was carried on in the case of Sh. B.K.Dhingra, Smt. Poonam Dhingra & M/s Madhusudan Buildcon Pvt. Ltd. on 20.10.2008. On the basis of documents found during the course of search, proceedings were initiated in the case of assessee company u/s 153C. The AO made additions on account on unexplained purchases, disallowance on expenditure, among other additions/disallowances. The First Appellate Authority in his order has deleted these additions on merits.
3. Aggrieved, the revenue is on appeal on the following grounds for the AYs 2003-04 :-
"(1) That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case in holding that the assessment order passed on the assessee is a nullity as the assessee company stood dissolved on amalgamation with M/s DynamicBuildmart Pvt. Ltd. (2) That the Commissioner of Income Tax (Appeals) erred in law and on facts in deleting the addition of Rs.32,45,010/- made by the Assessing Officer u/s 69C of the Income Tax Act, 1961 on account of unexplained purchases.
(3) That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case in accepting the transactions of sale and purchase made in cash as genuine.
(4) That the Commissioner of Income Tax (Appeals) erred in law and on facts indeleting the addition of Rs.4,57,334/- made by the 3 C.O. Nos.-127-132/Del/2012 (In I.T.A .Nos.-1048-1053/Del./2012) Assessing Officer by way of 100% disallowance of expenditure and depreciation claimed by the assessee.
(5) That the Commissisoner of Income Tax (Appeals) erred in law and on facts of the case in holding that the statements of various persons without being confronted to the assessee had no evidentiary value and they did not have any connection with the assessee. (6) (a) The order of the CIT(A) is erroneous and not tenable in law and on facts.
(b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal."
Similar grounds of appeal were taken for the AYs 2004-05, 2005-06, 2006-07, 2007-08 & 2008-09.
4. The assessee filed the following similar cross-objections for all the AYs:-
"(1) That in view of the facts & circumstances of the case and in law the CIT(A) has erred in not holding that the notice issued U/s 153C and the assessment order passed U/s 153C/143(3) are illegal, bad in law, without jurisdiction and barred by time limitation. (2) That the documents found during search proceedings, as referred to in the satisfaction note, do not belong to assessee as the same were part of working papers of the C.A Sh. B.K.Dhingra in whose office the search was conducted. Hence, the notice issued U/s 153C, based on said documents, is illegal, bad in law and without jurisdiction. (3) That admittedly, as recorded in the satisfaction note, no seized documents related to the relevant assessment year was found and the seized paper referred in the said satisfaction note were duly reflected in 4 C.O. Nos.-127-132/Del/2012 (In I.T.A .Nos.-1048-1053/Del./2012) the regular books of A/c and no incriminating material was found.
Hence the notice issued U/s 153C is illegal, bad in law & without jurisdiction.
(4) That in view of the facts & circumstances of the case the CIT(A) has erred on facts and in law in holding that the assessment has been framed in conformity with statutory provision of Section 153C r/w Section 153A of the Act.
(5) That in view of the facts and circumstance of the case the CIT(A) has erred in facts and on law in upholding the validity of assessment particularly when the seized document were never handed over to the A.O. who framed the assessment and the additions made are illegal, bad in law & without jurisdiction.
(6) That on view of the facts and circumstances of the case and the provisions of the law, the Ld CIT(A) has erred in not considering the fact that the assessment proceeding for the year under appeal was not pending on the date of the recording of satisfaction u/s 153C of the Act and accordingly the same did not abate for the purpose of initiation of proceedings u/s 153C and as such the assessment being bad in law deserves to be quashed.
(7) That the respondent reserves the right to add/amend/alter the grounds of cross objection."
5. After hearing both parties, we find that similar issues, on the same set of facts has come up before the 'A' Bench of the Tribunal in the case of ACIT, Central Circle-21 vs M/s Blue Luxury Index Pvt. Ltd. in ITA Nos.-5495-5500/Del./2011 with CO Nos. 31-36/Del./2011 order dated 13.06.2012. Both parties agree that the 5 C.O. Nos.-127-132/Del/2012 (In I.T.A .Nos.-1048-1053/Del./2012) finding of the Tribunal in the case of M/s Blue Luxury Index Pvt. Ltd, (supra) cover the issue on hand.
6. The Tribunal at para 6 to para 8 of that order in ITA No.-5495- 5500/Del./2011, held as follows:-
"6. We have heard the learned DR and have gone through the facts of the case. Indisputably & as pointed out by the ld. CIT(A), the entire purchases added by the AO are accounted for in the books of account. The AO, without rejecting the books results added the entire purchases, source of which, according to learned CIT(A), was duly explained. Likewise, the learned CIT(A) found that sales had been made by account payee cheques and duly reflected in stock registers and supported by sales and purchase vouchers. The ld. CIT(A) ITA nos.5495 to 5500/Del/2011 & CO nos. 31 to 36/Del./20118 also found that the AO in his remand report did not comment adversely on the submissions of the assessee in respect of purchases and sales. Accordingly, the ld. CIT(A) deleted the aforesaid additions in these six assessment years. While interpreting the provisions of sec. 69C of the Act, Hon'ble jurisdictional High Court in Radhika Creation (supra) held that the focus of section 69C is on the "source" of such expenditure and not on the authenticity of the expenditure itself. In that case also it was an admitted position that the expenditure was shown by the assessee in its regular books of account and it was because of this reason that the ITAT observed as under:--
"As the expenditure was accounted in the regular books, the source is obviously explained. The provisions of section 69C are not applicable as there was no unaccounted expenditure." [Emphasis supplied]"
6.1 Hon'ble High Court, accordingly, held that section 69C refers to the 'source of the expenditure' and not to the expenditure itself. Consequently, the AO was clearly wrong in treating the said expenditure as unexplained expenditure under section 69C of the said Act and the lower appellate authorities were right in their conclusions in deleting the said addition, Hon'ble Court concluded. 6.2 In the instant case before us, indisputably, the purchases and sales are accounted for in the books of accounts. Thus, source of the expenditure incurred in purchases is obviously explained. In the light of view taken in the their aforesaid decision by the Hon'ble jurisdictional High Court ,especially when the Revenue did not place 6 C.O. Nos.-127-132/Del/2012 (In I.T.A .Nos.-1048-1053/Del./2012) any material before us, controverting the aforesaid findings of facts recorded by the ld. CIT(A) so as to enable us to take a different view in the matter, we have no basis to interfere. In view thereof, ground nos.1 & 2 in the appeal are dismissed.
7. As regards disallowance of expenses in these six assessment years, the ld. CIT(A) found that in the assessment of the assessee for AY 2002-03, no disallowance of expenses was made while the AO ,in the years under consideration, did not point out any item of expenditure, warranting disallowance.
In these circumstances, and in the absence of any basis, when the Revenue did not even identify any specific amount of expenditure, which was not related to the business of the assessee, we are not inclined to interfere. Therefore, ground no 3 in these appeals is also dismissed.
8. In view of our aforesaid findings, rejecting the appeals of the Revenue, the grounds raised by the assessee in their COs become purely academic and therefore, do not survive for our adjudication."
7. This decision was followed by the ITAT in the case of Anupma Links Pvt.
Ltd. in ITA Nos.-4135-4140/Del./2011 order dated 12.10.2012 as well as in the case of AA Testronics Solutions in ITA Nos. 4233-4228/Del./2010 order dated 20.10.2012. Hence, on merits the issue is covered in favour of the assessee.
8. As the issue on merits is decided in favour of the assessee by following the Co-ordinate Bench decisions, we do not deal with the issue arising out of the fact of amalgamation.
9. Consistent with the view taken in the decision, we uphold the orders of Commissioner of Income Tax (Appeals) and dismiss the appeals of the revenue.
10. Coming to the cross-objections, the Ld. Counsel for the assessee stated that they filed the same in support of the order of the Commissioner of Income Tax (Appeals). On legal issues, it was submitted that the grounds would become 7 C.O. Nos.-127-132/Del/2012 (In I.T.A .Nos.-1048-1053/Del./2012) academic if the merits are decided in the assessee's favour and hence he would not press the same. Hence, in view of our decision on merits, the cross-objections are dismissed as not pressed.
11. In the result, the appeals of the revenue as well as cross-objections of the assessee are dismissed.
Order pronounced in the Open Court on 02nd November 2012.
Sd/- Sd/-
(U.B.S.BEDI) (J.S.REDDY)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 02/11/2012
*Amit Kumar*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI