Shri Govind Kripa Builders And ... vs Assessee

Shri Govind Kripa Builders and Promoters vs. ITO, Ward 8 (3), Pvt. Ltd., New Delhi. 9239, Gali No.7, West Rohtash Nagar, Shahdara, Delhi - 110 032.

(PAN : AAICS4365H)

(APPELLANT) (RESPONDENT)

ASSESSEE BY : Shri R.S. Singhvi, Advocate REVENUE BY : Shri Vijay Chaddha, Addl. CIT DR

Date of Hearing : 25.06.2015 Date of Pronouncement : 25.06.2015

ORDER

PER GEORGE GEORGE K., JUDICIAL MEMBER :

This appeal, at the instance of the assessee, is directed against the

order of the Commissioner of Income-tax (Appeals)-IX, New Delhi dated

29.05.2013. The relevant assessment year is 2008-09.

2. The grounds raised by the assessee read as follows :-

"l. That on the facts and in the circumstances of the case, CIT (A) was not justified in passing appellate order without giving proper and reasonable opportunity or proper appreciation of facts.

2 ITA Nos.4232/Del./2013 2(i). That further CIT (A) was not justified in confirming penalty order passed u/s 271(1)(c) on account of addition made u/s 68 of the Income-tax Act, 1961.

2(ii). That there is no case of any concealment or furnishing of inaccurate particulars and merely on account of addition made by the Assessing Officer, there cannot be any case of penalty u/s 271(1)(c).

3. That even otherwise there is no justification for any addition even on merits and appeal of the assessee is pending before Income Tax Appellate Tribunal, New Delhi.

4. That orders of the lower authorities are not justified on facts and same are bad in law."

3. Briefly stated, the facts of the case are as follows.

The return of income was filed on 23.09.2008 declaring income of

Rs.8,867/-. Assessment proceedings were initiated by the Assessing

Officer by issuing notice u/s 148 of the Act on 30.03.2010 on the basis of

information received from the DIT (Inv.), New Delhi that the assessee had

received accommodation entry of Rs.24 lacs during the year. The

Assessing Officer observed that the genuineness of the transaction and

sources of the same were required to be examined. Accordingly, after

going through the reply and details submitted by the assessee, Assessing

Officer was of the view that there was a failure on the part of the assessee

to produce the Principal Officer of the share applicant companies and also

on account of failure of share applicants to appear personally and confirm

transaction made with the assessee company, the share transaction cannot 3 ITA Nos.4232/Del./2013

be treated as genuine. Therefore, an addition of Rs.15 lacs made u/s 68 of

the Act as unexplained credits in the books of the assessee. Against the

order of the Assessing Officer, assessee appealed before the CIT (A), who

vide impugned order dated 23.11.2012 had dismissed the appeal of the

assessee.

4. The Assessing Officer initiated the penalty proceedings u/s

271(1)(c) for furnishing inaccurate particulars of its income with a view to

concealment of income and made a penalty of Rs.12,69,639/-. The CIT

(A) confirmed the action of the Assessing Officer.

5. At the outset of the hearing, the learned AR submitted that the

Assessing Officer made an addition of Rs.15 lacs as unexplained credits in

the books of accounts of the assessee. The quantum appeal went up to the

ITAT and the ITAT has quashed the reassessment proceedings u/s 148 of

the Act. In view of this fact, he pleaded that the assessee should not be

visited by penalty u/s 271(1)(c) of the Act and no penalty can be sustained.

6. On the other hand, learned DR relied on the orders of the authorities

below.

7. We have heard both the sides. We find that the Tribunal had

quashed the reassessment proceedings u/s 148 of the Act in the quantum

assessment in ITA No.304/Del/2013 order dated19.12.2014. The relevant

finding of the Tribunal's aforesaid order reads as follows : 4 ITA Nos.4232/Del./2013

"7. We have heard both the counsel and perused the records, specially the Paper Books filed by the assessee, orders of the Revenue authorities. As regards the effective ground in this appeal relating to reassessment proceedings u/s. 148 of the I.T. Act is concerned, the Assessee has reiterated that reassessment proceedings are illegal and without jurisdiction in the absence of any tangible evidence or material in respect of any undisclosed income and recording of requisite satisfaction in respect of any such undisclosed income. After hearing both the parties on the issue in dispute as well as after going through the orders passed by the Revenue Authorities alongwith order dated 21.7.2011 passed by the Hon'ble Jurisdictional High Court in the case of Signature Hotels P. Ltd. vs. Income Tax Officer [2011] 338 ITR 0051 wherein the Hon'ble High Court has held matter as under:-

"Held, allowing the petition, that the reassessment proceeding were initiated on the basis of information received from the Director of Income Tax (Investigation) that the petitioner had introduced money amounting to Rs. 5 lacs during the financial year 2002-03 as stated in the Annexure. According to the information, the amount received from a company, S, was nothing but an accommodation entry and the assessee was the beneficiary. The reasons did not satisfy the requirements of Section 147 of the Act. There was no reference to any document or statement, except the annexure. The annexure could not be regarded as a material or evidence that prima facie showed or established nexus or link which disclosed escapement of income. The annexure was not a pointer and did not indicate escapement of income. Further, the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. There was no dispute that the company, S, had a paid-up capital of Rs. 90 lakhs and was incorporated on January 4, 1989, and was also allotted a permanent account number in September, 2001. Thus, it could not be held to be a fictitious person. The reassessment proceedings were not valid and were liable to be quashed."

5 ITA Nos.4232/Del./2013 7.1 In view of above, we are of the considered view that above issue is exactly the similar to the issue involved in the present appeal and squarely covered by the aforesaid decision of the Hon'ble High Court of Delhi. Hence, respectfully following the above precedent, we decide the legal issue in dispute in favor of the Assessee and against the Revenue and accordingly quash the reassessment proceedings. The other issues are not dealt with as the same have become academic in nature."

Since the Tribunal has quashed the quantum assessment, the penalty

imposed on the same has lost it substratum and penalty is, therefore,

deleted. It is ordered accordingly.

9. In the result, the appeal filed by the assessee is allowed.

Order pronounced in open court on this 25th day of June, 2015.

Sd/- sd/- (N.K. SAINI) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated the 25th day of June, 2015 TS

Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A)-IX, New Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.