M/S. JAY HOSPITALITIES PVT. LTD.,NEW DELHI vs. ITO, NEW DELHI
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Income Tax Appellate Tribunal, [ DELHI BENCH “D” NEW DELHI ]
Before: SHRI G. S. PANNUSHRI SAKTIJIT DEY
आदेश / O R D E R PER SAKTIJIT DEY , J. M. :
This is an appeal by the assessee against order dated 19.01.2017 of learned Commissioner of Income Tax (Appeals)-5 [hereinafter referred to as CIT (Appeals)] New Delhi, for assessment year 2012-13.
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When the matter was called for hearing, none appeared on behalf of the assessee. Perusal of record reveals that, though, the appeal was listed for hearing on seven occasions earlier, the assessee never appeared despite hearing notice being issued to the assessee. These facts reveal complete lack of interest on the part of the assessee in pursuing the present appeal. Since, multiple opportunities have already been given to the assessee, which the assessee has failed to avail, we proceed to dispose of the appeal ex-parte qua the assessee after hearing the learned Departmental Representative and based on material on record.
The substantive grounds raised by the assessee are as under:-
“1. That the impugned order of the Ld. Commissioner of Income Tax (Appeals) [hereinafter refer to "Ld. CIT (A)"] dated 19.01.2017 is bad in law and on facts. 2. That the Ld. CIT (A) has erred in law in sustaining the validity of the notice issued under section 153C of the Act, which is illegal on the ground that the reasons recorded were not in accordance with the relevant provisions of the Act and therefore, the notice is without jurisdiction and ought to be quashed. 3. That the Ld. CIT (A) has erred in law in sustaining the assessment made under section 153C of the Act, despite the fact that there was no document belonging to the appellant found during the course of search. 4. The Id. AO has erred in law and on facts in not passing a speaking order while disposing off the objections raised by assessee to the satisfaction recorded under section 153C of the Act. 5. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in sustaining the total income at Rs. 25,61,580/- as against the returned income of Rs.1,75,280/-. 6. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in sustaining the disallowance of the bank charges amounting Rs.8,86,298/-.
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That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in sustaining addition u/s. 68 of the Act, amounting Rs. 15 Lacs on account of payment made by Mr. Inder Preet Chadha to Punjab Infrastructure Development Board on behalf of the appellant company during the impugned assessment year. 8. That the grounds of appeal are without prejudice to each other.”
Briefly stated the facts are, the assessee is a resident corporate entity. In course of search and seizure operation conducted in the case of Madhok Group on 24.02.2012, certain documents relating to the assessee were seized. After recording satisfaction based on the seized documents, proceedings under section 153C of the Income Tax Act, 1961 (the Act) was initiated in case of the assessee. In response to the notice issued under section 153C of the Act, the assessee participated in the assessment proceedings. During the assessment proceedings the Assessing Officer raised several queries based on the seized documents. Though, the assessee filed some details, however, the Assessing Officer was not convinced. Ultimately, he disallowed bank charges of Rs.8,86,298/- being of the view that it is in the nature of capital expenditure. Further, the Assessing Officer found that in the year under consideration the assessee claimed to have paid a sum of Rs.1,00,00,000/- as project development fee to Punjab Infrastructure Development Board, which has been shown as capital work-in-progress. However, out of the payment of Rs.1,00,00,000/-, an amount of Rs.85,00,000/- was paid by the assessee directly from HDFC Bank account and the remaining Rs.15,00,000/- was paid by another person, Mr. Inder Preet Chadha, which was shown as un-secured loan in the books of the assessee. Alleging that the assessee was unable to establish the genuineness of such loan, the Assessing Officer treated it as unexplained credit under section 68 of the Act and added back to the 3
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income of the assessee. Against the assessment order so passed the assessee preferred appeal before learned CIT (Appeals), inter-alia, on the ground that the proceeding initiated under section 153C of the Act is invalid. While deciding the appeal learned CIT (Appeals) upheld the validity of assessment order. Further, he sustained both the additions made by the Assessing Officer.
We have heard learned Departmental Representative and perused the material on record. On going through the orders of the departmental authorities it is observed that in so far as disallowance of bank charges of Rs.8,86,298/-, both the authorities have recorded finding that it was paid against bank guarantee and booked against capital work-in-progress for the on-going project. Hence, they have treated it as capital expenditure. No material has been brought on record by the assessee to controvert the factual finding of the Departmental Authorities. In so far as the addition of Rs.15,00,000/- under section 68 of the Act is concerned, undisputedly, the assessee has treated the amount as un- secured loan received from Shri Inder Preet chadha. However, neither before the Assessing Officer nor before learned CIT (Appeals) the assessee could furnish any documentary evidence to prove the genuineness of the transaction and the creditworthiness of the creditor. Even, before us the assessee has neither appeared nor produced any evidence to controvert the factual finding of the Departmental Authorities. Thus, keeping in view the concurrent finding of the Assessing Officer and learned CIT (Appeals) that the assessee has failed to prove the genuineness of the un-secured loan as well as the creditworthiness of the creditor, it has to be held that the addition made under section 68 of the Act has to be upheld.
As far as assessee’s grounds regarding validity of proceedings under section 153C of the Act, it is observed that the procedure laid 4
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down under the Statute in initiating proceedings under section 153C of the Act have been duly complied with by the Assessing Officer. Neither before the first appellate authority nor at this stage, the assessee has brought any substantive material on record to demonstrate any legal or procedural irregularity regarding the initiation of proceedings under section 153C of the Act. That being the case, we do not find any merit in the grounds raised by the assessee. Accordingly, grounds are dismissed.
In the result, the appeal is dismissed.
Order pronounced in the open court on : 29/11/2022.
Sd/- Sd/- ( G. S. PANNU ) ( SAKTIJIT DEY ) PRESIDENT JUDICIAL MEMBER
Dated : 29/11/2022. *MEHTA* Copy forwarded to : 1. Appellant; 2. Respondent; 3. CIT 4. CIT (Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, New Delhi.
Date of dictation 24.11.2022 Date on which the typed draft is placed before the dictating 28.11.2022 member
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Date on which the typed draft is placed before the other member 29.11.2022 Date on which the approved draft comes to the Sr. PS/ PS 29.11.2022 Date on which the fair order is placed before the dictating 29.11.2022 member for pronouncement Date on which the fair order comes back to the Sr. PS/ PS 29.11.2022 29.11.2022 Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk 29.11.2022 Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the order
