Delhi High Court - Orders
Mectech Knitfabs Private Limited vs Dcit Circle 16(1) New Delhi & Anr on 16 January, 2023
Author: Rajiv Shakdher
Bench: Rajiv Shakdher
$~27
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 488/2023
MECTECH KNITFABS PRIVATE LIMITED ......Petitioner
Through: Mr Ruchesh Sinha, Advocate.
versus
DCIT CIRCLE 16(1) NEW DELHI & ANR. ......Respondents
Through: Mr Abhishek Maratha, Sr. Standing
Counsel.
CORAM:
HON'BLE MR JUSTICE RAJIV SHAKDHER
HON'BLE MS JUSTICE TARA VITASTA GANJU
ORDER
% 16.01.2023 [Physical Hearing/Hybrid Hearing (as per request)] CM APPL. 1953/2023
1. Allowed, subject to the petitioner filing legible copies of annexures, at least three days before the next date of hearing. W.P.(C) 488/2023 and CM APPL. 1952/2023[Application filed on behalf of the petitioner seeking interim relief]
2. This writ petition concerns Assessment Year (AY) 2014-2015.
3. The principal allegation against the petitioner is, that it has entered into transactions with three entities going by the name MKR Trading Pvt. Ltd. [in short, "MKR"], MKRS Garments Pvt. Ltd. [in short, "MKRS"] and M/s RSKM Traders Pvt. Ltd. [in short, "RSKM"]. 3.1 It is alleged, that the petitioner is a beneficiary of accommodation entries provided by the aforementioned entities.
W.P.(C) 488/2023 page 1 of 4 Signature Not Verified Digitally Signed By:TARUN RANA Signing Date:19.01.2023 16:36:01 3.2 Insofar as MKR is concerned, it is alleged, that the petitioner has
obtained accommodation entries worth Rs.1 crore. 3.3 Likewise, as regards MKRS, the allegation is that the petitioner has obtained accommodation entries amounting to Rs.99,99,916/-. 3.4 As far as RSKM is concerned, the allegation is that accommodation entries worth Rs.1,62,440/- has been obtained by the petitioner.
4. These entities, according to the respondents/revenue, are managed by, one, Mr Joginder Pal Gupta.
5. Mr Ruchesh Sinha, who appears on behalf of the petitioner, says that the petitioner, in its reply dated 10.06.2022 to the show-cause notice dated 18.05.2022 issued under Section 148A(b) of the Income Tax Act, 1961 [in short, "the Act"] has taken a categoric stand, that it has only dealt with MKRS, and there have been no dealings with the other two entities i.e., MKR and RSKM.
6. Furthermore, it is Mr Sinha's contention, that even insofar as MKRS is concerned, the allegation that it has entered into a loan transaction is incorrect.
6.1 For this purpose, Mr Sinha has drawn our attention to paragraph 5.2 of the reply dated 10.06.2022. The said paragraph reads as follows:
"5.2 It may be also noted that the assessee has not entered any transaction whatsoever with M/s MKT Trading Pvt. Ltd. and M/s RSKM Traders Pvt. Ltd. as alleged in the show cause notice. The assessee has not entered any loan transaction with M/s MKRS garments Pvt. Ltd. The same is evident from para 31(a) of the Tax Audit report. (Copy enclosed)."
W.P.(C) 488/2023 page 2 of 4 Signature Not Verified Digitally Signed By:TARUN RANA Signing Date:19.01.2023 16:36:01
7. Mr Sinha says, that the petitioner has only entered into purchase transactions with MKRS.
8. Therefore, based on these facts, as emerging from the record presently made available to us, Mr Sinha's submission is, that the pre-requisites of Section 149(1)(b) of the Act are not fulfilled.
9. Pointedly, Mr Sinha says, that insofar as the petitioner's transaction with MKRS is concerned, it cannot be categorized as an "asset".
10. Issue notice.
10.1 Mr Abhishek Maratha accepts notice on behalf of the respondents/revenue.
11. Mr Maratha says, that Mr Joginder Pal Gupta is under investigation for providing accommodation entries to several persons/entities, and the petitioner is one such entity.
12. We are informed, that apart from what is stated in the show-cause notice issued under Section 148A(b) of the Act and in the order issued under Section 148A(d) of the Act, no other material has been furnished to the petitioner.
13. Therefore, according to us, the matter requires examination.
14. List the matter on 06.09.2023.
15. Although we have issued notice in the writ petition, the Assessing Officer is given liberty to proceed with the reassessment proceedings. 15.1 However, if any order is passed, which is adverse to the interests of the petitioner, the same shall not be given effect to, till further directions of the Court.
W.P.(C) 488/2023 page 3 of 4 Signature Not Verified Digitally Signed By:TARUN RANA Signing Date:19.01.2023 16:36:01
16. Parties will act based on the digitally signed copy of the order.
RAJIV SHAKDHER, J
TARA VITASTA GANJU, J
JANUARY 16, 2023 / tr
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W.P.(C) 488/2023 page 4 of 4
Signature Not Verified
Digitally Signed By:TARUN
RANA
Signing Date:19.01.2023
16:36:01