Income Tax Appellate Tribunal - Delhi
Patli Putra Investment Pvt. Ltd.,, ... vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "A" NEW DELHI
BEFORE SHRI R.P. TOLANI AND SHRI SHAMIM YAHYA
IT(SS)A No. 243/Del/97
Block period: 1-4-1986 to 27-6-1996
Annie Investment & Finance Co. P. Ltd., Vs. ACIT Cen. Cir.-4,
E-10, Sector 15, Noida. New Delhi.
PAN No. 3-A
IT(SS)A No. 244/Del/97
Block period: 1-4-1986 to 27-6-1996
Kandla Petro Chemicals Corp. Ltd., Vs. ACIT Cen. Cir.-4,
E-10, Sector 15, Noida. New Delhi.
PAN No. 6-K
IT(SS)A No. 245/Del/97
Block period: 1-4-1986 to 27-6-1996
M/s Patliputra International Trading Ltd., Vs. ACIT Cen. Cir.-4,
E-10, Sector 15, Noida. New Delhi.
PAN No. 8-P
IT(SS)A No. 247/Del/97
Block period: 1-4-1986 to 27-6-1996
Harmony Psychiatry Centre Pvt.. Ltd., Vs. ACIT Cen. Cir.-4,
E-10, Sector 15, Noida. New Delhi.
PAN No. 4-H
IT(SS)A No. 269/Del/97
Block period: 1-4-1986 to 27-6-1996
Vikram Investment & Finance Pvt. Ltd., Vs. ACIT Cen. Cir.-4,
E-10, Sector 15, Noida. New Delhi.
PAN No. 13-U
2 IT(SS) 243/Del/97 & 5 ors.
Annie Investment & Fin. P. Ltd. & ors.
IT(SS)A No. 35/Del/98
Block period: 1-4-1986 to 27-6-1996
Processional Leasing & Capital Services Ltd. Vs. ACIT Cen. Cir.-4,
E-10, Sector 15, Noida. New Delhi.
PAN No. 5-P
( Appellant ) ( Respondent )
Appellants by : Shri Vinod Bindal & Ms. Sweety Kothari CAs
Respondent by : Shri Ashok Pandey CIT DR
ORDER
PER R.P. TOLANI , J.M :
This bunch of appeals arises out of the very same group of assessees. Issues involved in these appeals being interconnected the same were being heard together and are being decided by this consolidated order for the sake of convenience.
2. Learned counsel for the are at the very out set contends that the assessees in question are part of Mr. Anil Sanghi and Mr. P.C. Yadav group. The substantive additions have been made in the case of Mr. Anil Sanghi who owned up all the transactions of these companies. Revenue made additions in respect of other entities also over and above the additions in the case of Mr. Anil Sanghi. Similar issues came up before the ITAT Delhi Bench 'A' in IT(SS)A nos. 241 & 242/Del/97 in the cases M/s Shilpi Securities P. Ltd. and M/s Vaidahi Lease & Finance respectively, wherein, after taking into consideration all relevant facts and circumstances, the ITAT vide its consolidated order dated 23-7-2010 has restored the assessments back to the file of AO by following observations:
3 IT(SS) 243/Del/97 & 5 ors.
Annie Investment & Fin. P. Ltd. & ors.
"4. He has filed these grounds and submitted that on merits in other group cases these grounds were restored back to the file of AO for the reason that the impugned additions form part of the amount declared in the hands of Shri Anil Sanghi and Sh. Praskah Chandra Yadav. He drew our attention towards the order of Tribunal dated 17-03-06 in the case of M/s Patliputra Credit & Securities Ltd. [IT(SS)A no. 372/Del/1997] and it was submitted that the issue was dealt with by the Tribunal in the aforementioned order as under (copy of the said order is filed at pages 1 to 17 of the paper book):
"Patliputra Credit & Securities Ltd. [IT(SS)A no. 372/Del/1997] :-
"13. "In this case, search was carried out on 1.11.1996 covering the registered office of the company, the residence of the directors and certain bank accounts in the name of the company. In response to notice u/s 158BC, the assessee declared undisclosed income of Rs. 1,24,947/- for the block period. The company had come out with a public issue wherein it received Rs. 7,94,77,000/- as share application money. The total receipt on account of share capital amounted to Rs. 10,44,78,000/-. Here also, statements of Shri Anil Sanghi and Shri Prakash Chandra Yadav were recorded These statements were in conflict with each other alleging each other to be the owner of the money received by the company. Not being satisfied with the explanation of either of the deponents, the AO made the addition of the deposits in the bank accounts and determined the total undisclosed income at Rs. 11,81,81,210/-.
14. The main contention of the ld. Counsel is that most of the moneys received by the company has been treated as undisclosed income of Sh. Anil Sanghi as the money has primarily flowed from him and in that sense the same income ha been taxed twice.
15. We have already restored the issue in the case of Sh. Anil Sanghi back to the file of the AO to consider the 4 IT(SS) 243/Del/97 & 5 ors.
Annie Investment & Fin. P. Ltd. & ors.
peak amount for addition. Sine the contention her is that most of the money has come from Sh. Anil Sanghi, it would be in the fitness of things to restore this matter also back to the file of the AO with the direction to see that the same income does not get taxed twice. The AO shall give due opportunity of being heard to the assessee."
5. Similarly he drew our attention towards the issue of interest which was also restored back to the file of AO in the case of Patliputra Credit & Securities Ltd. in IT(SS)A no. 10/Del/08 order dated 31-03-09, where the Tribunal has dealt with this issue in para 8 to 9 as under:- (Copy of such order is filed at pages 18 to 23 of the paper book):
"8. The next issue for consideration relates to addition of Rs. ______ The next issue for consideration relates to addition of Rs. 29,83,768/- on account of interest income and income from other sources. The assessee in the grounds of appeal has clarified that the correct total of the income for assessment years 1995-96 to 1997-98 determined by the AO comes to Rs. 56,83,769/- and not Rs. 29,83,768/-. Thus, the total undisclosed income from interest and other sources has been under-totalled by Rs. 27,00,001/-. During the course of hearing before us, the ld. AR of the assessee submitted that the income received from parties, banks and other sources have been disclosed. The AO has wrongly stated that the assessee ahs not filed returns of income for these years before the date of search. He ahs further submitted that these facts are verifiable from the records and, therefore, the income already disclosed in the returns of income cannot be assessed as undisclosed income of the assessee. However, he agreed that the issue may be decided subject to verification by the AO. On the other hand, the ld. CIT DR supported the order of the AO.
9. We have heard both the parties. As per the assessee the income of Rs. 56,83,769/- on account of interest income from parties, banks and from other 5 IT(SS) 243/Del/97 & 5 ors.
Annie Investment & Fin. P. Ltd. & ors.
sources has been disclosed in the returns of income and, therefore, the same cannot constitute as undisclosed income from the block period. On the other hand, the AO has mentioned that returns of income were not filed before the date of search. It is a settled law that income which has been assessed u/s 143(3) or sec. 144 of the Act or sec. 147 prior to the date of commencement of search or the date of requisition, the income cannot be assessed as income from undisclosed sources. Similarly, the return of income had been filed u/s 139 or in response to notice u/s 142(1) or 148 of the Act, but assessments have not been made till the date of search or requisition, the income on the basis of such returns will be reduced from undisclosed income determined for the block period u/s 158BB(1) of the Act. Likewise in clause (d) of sec. 158BB(1) in a case where the previous year has not ended or the date of filing the return of income under sub-section (1) of sec. 139 has not expired, on the basis of entries relating to such income or transactions as recorded in the books of account and other documents maintained in the normal course on or before the date of the search or requisition relating to such previous years shall not be taken as undisclosed income. For AY 1995- 96 the due date for filing of return of income expired and therefore, it has to be verified whether assessee had disclosed interest/ other income as claimed by assessee in the return of income. For AY 1996 the due date for filing of return of income in case of a company was 30.11.1996which was not expired on the date of search. For AY 1997-98, the previous year was not ended on the date of search. Therefore, whatever was income recorded in the books of account will not constitute undisclosed income for assessment years 1996-97 and 1997-98. We, therefore, feel it proper to set aside the matter for the purpose of verification to the file of the AO with the directions that if the return of income for AY 1995-96 and 1997-98 the returns of income were not due on the date of search. The AO will exclude the income recorded in books of account for the assessment years 1996-97 & 1997-98 after proper verification."
6 IT(SS) 243/Del/97 & 5 ors.
Annie Investment & Fin. P. Ltd. & ors.
6. Thus, it was submitted by ld. AR that matter may be restored back to the file of AO as the facts are identical and such proceedings are also same.
7. On the other hand, ld. DR relied upon the order of AO & CIT(A).
8. We have carefully considered the rival submissions in the light of material placed before us. The Tribunal in the group cases under similar facts has already restored the matter back to the file of AO with the aforemention4ed observations. The above mentioned orders of the Tribunal mutates mutandis will apply to the present cases. Therefore, we pass similar order as has been passed by the Tribunal in the case of Patliputra Credit & Securities Ltd. The issue is restored back to the file of AO to decide the present cases in the light of directions given in the Tribunal in the aforementioned two orders, the relevant portion of which have been reproduced above. We direct accordingly."
3. Learned counsel contends that the issue being similar, following the ITAT order in the cases of M/s Shilpi Securities P. Ltd. & M/s Vaidahi Lease & Finance P. Ltd. (supra), the issue needs to be set aside, restored back to the file of AO with similar directions.
4. Learned DR agrees that the facts of the appeals in question are similar with those mentioned to above and has no objection to the setting aside of the matter.
5. We have heard rival submissions and have gone through the entire material available on record. In view of above facts and circumstances, respectfully following the order of ITAT in the cases of M/s Shilpi Securities P. Ltd. & M/s Vaidahi Lease & Finance P. Ltd. (supra), we set aside, restore back the issues involved in these appeals to the file of AO with 7 IT(SS) 243/Del/97 & 5 ors.
Annie Investment & Fin. P. Ltd. & ors.
the direction to decide the issues in question in the light of our observations in the case of Patliputra Credit & Securities Ltd. (supra). We order accordingly.
6. In the result, all the appeals filed by the assessee stand allowed for statistical purposes only.
Order pronounced in open court on 10-01-2011.
Sd/- Sd/- (SHAMIM YAHYA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 10-01- 2011. MP Copy to : 1. Assessee 2. AO 3. CIT 4. CIT(A) 5. DR