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Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI
Before: DR B.R.R. KUMAR & SHRI YOGESH KUMAR US
“1. That the order of the CIT (A) in confirming addition of Rs.2,49,76,706/- made by the AO as unexplained cash credit under section 68 in spite of knowing the fact that the matter is pending in the ITAT on the same amount of addition and on the same issue is totally wrong, bad in law and needs to be quashed. – Rs. 1,21,86,700/-
That the notice dated 31.03.2017 u/s 148 was issued for A.Y. 2010-11 presuming that your income chargeable to tax has escaped assessment within the meaning ol section 147 of the Act. The reasons for reopening was that assessee has not explained an amount of Rs. 2,49,76,706/- received from Abhinav Co-operative Group Housing Society and thus escaped assessment within the meaning of section 147 of the Act. The assessee submitted before the AO vide letter dated 10.07.2017 and that the same amount of Rs. 2,49,76,706/- has already been assessed in the hands ol the assessee by the AO. vide order dated 23.03.2013. He was also Cross 3 AND M/s. Pacific Projects Ltd., N. Delhi.
informed that the CIT(A) deleted the said addition of Rs. 2,49,76,706/- vide its order dated 16.03.2015 and now department has filed appeal in ITAT against the said deletion of Rs. 2,49,76,706/- by the CIT (A) which is pending. The assessee in his letter dated 10.07.2017 raised objection before the ITO that as per section 147, the AO may assess or reassess such income other than the income involving matter which are the subject matter of any appeal, revision and reference. The same objection was raised before the CIT(A) also i.e. the AO may assess or reassess such income, other than the income involving matter which are the subject matter of any appeal, revision or reference but as the appeal is pending before the ITAT on the same ground and on the same issue and hence the assessee cannot be reassessed on the same income but the CIT(A) did not agree with the assessee and confirmed the addition vide its order dated 25.03.2019. The order of the CIT(A) confirming the addition of Rs. 2,49,76,706/- in the hands of the assessee is totally wrong, bad in law and needs to be quashed.
3. That the assessee prays permission to add, delete or amend one or more grounds of appeal.
4. That the assessee assures unstinted co-operation in all proceedings before your good self.”
The Revenue has raised the following grounds of appeal:-
“The CIT (A)-07, New Delhi has wrongly deleted the addition for an amount of Rs.2,49,76,706/-, where- as latest enquiry has proved that the assesse has misled the CIT(A) on facts. Order of the CIT (A)
Cross 4 AND M/s. Pacific Projects Ltd., N. Delhi. deserved to be set-aside as the creditor M/s Abhina Cooperative Group Housing Society has been found to be non-existent”.
Brief facts of the case are that, the assessment for the Assessment Year 2010-11 was completed u/s 143(3) of the Act on 25/03/2013 at an income of Rs. 3,16,27,375/- as against the returned income of the assessee of Rs. 34,80,651/-, wherein the Ld. A.O has made an addition on unexplained cash credit u/s 68 of the Act to tune of Rs. 2,49,76,706/- and unexplained share application money of Rs. 31,70,000/-.
Aggrieved by the assessee assessment order, the assessee has filed an Appeal before the CIT(A) .The Ld.CIT(A) vide order dated 19/03/2015 deleted the above addition made by the A.O. After the deletion of the above addition, the Department of Revenue, based on the enquiry, claim to have been found that M/s Abhinav Cooperative Group Housing Society is nonexistent. Therefore, the Department has filed an Appeal before the Tribunal in 651 days.
Further, an order u/s 143(3)/147 of Income Tax came to be passed against the assessee vide order dated 28/12/2017 by making an addition of Rs. 2,49,76,706/-. As against the assessment order dated 28/12/2017, the assessee has preferred an appeal before the CIT(A). The Ld.CIT (A) vide order dated 25/03/2019 has dismissed the Appeal filed by the assessee.
Aggrieved by the order dated 25/03/2019, the assessee has preferred Appeal in on the grounds mentioned above.
We have heard the parties perused the material on record and gave our thoughtful consideration. In the present case, initially assessment proceedings have been initiated and an assessment order came to be passed u/s 143(3) of Cross 5 AND M/s. Pacific Projects Ltd., N. Delhi.
the Act on 25/03/2013 by making addition on unexplained cash credit u/s 68 of the Act to the tune of Rs. 2,49,76,706/-. As against the said assessment order dated 25.03.2013, the assessee has preferred an appeal before the CIT(A) and the Ld.CIT(A) vide order dated 19/03/2015 allowed the Appeal of the assessee by deleting the said addition. It is the case of the Department that on enquiry it is found that M/s AbhinavCooperative Group Housing Society has been found to be nonexistent. Therefore, the AO has issued Notice under section 148 of the Act and also issued Notice under section 144 of the Act, in response the Assessee has filed objection for reopening of the assessment proceedings. Consequently, the assessment order came to be passed on 28.12.2018 which has been confirmed y the Ld. CIT (A).
The sole basis for initiating assessment proceedings u/s 143(3)/147 of the Act is that, as per the enquiry, it is found that M/s Abhinav Cooperative Group Housing Society is non-existent entity. Therefore, the entire cash credit of Rs. 2,49,76,706/- received from the said society has been treated as unexplained cash credit and added to the income of the assessee company. The Ld. Counsel for the assessee has produced several documents to substantiate contention that M/s Abhinav Cooperative Group Housing Society was in existent, ie: The letter dated 26/12/2017 from M/s Abhinav Cooperative Group Housing Society written to A.O confirming the transaction of cash receipts, copy of the Assessee’s letter dated 14/11/2018 along with audit report and financial of M/s Abhinav Cooperative Group Housing Society Ltd. since from 2008 onwards and also produced copy of ITR computation, balance sheet and tax audit report for Financial Year 2009-10. The above documents produced by the assessee along with paper book has neither disputed nor question by the Ld. DR. The above documents clearly negate the contention of the Department that the M/s Abhinav Cooperative Group Housing Society is nonexistent entity. Therefore, in our opinion, the Ld. A.O and the Ld.CIT(A)
Cross 6 AND M/s. Pacific Projects Ltd., N. Delhi. have committed error in finding the fact and making addition on the ground that M/s Abhinav Cooperative Group Housing Society is nonexistent entity. Therefore, in our considered opinion, the grounds of Appeal filed by the assessee are deserves to be allowed. Accordingly, we allow the Assessee’s grounds of Appeal.
In the result, the Appeal of the assessee in is allowed.
There is adelay of 615 days in filing the Appeal by the Revenue and the revenue has filed an application for condoning the delay stating the reason that after allowing the Appeal of the Assessee the CIT (A), the department has conducted an enquiry and found that M/s Abhinav Cooperative Group Housing Society is a nonexistent entity, thereafter, filed the present Appeal. For the reasons stated in the Application, we condone the delay in filing the Appeal by the Revenue.
The main ground urged by the Revenue in the above Appeal is that the Ld. CIT(A) has erred in deleting the addition of Rs. 2,49,76,706/- since the creditor M/s Abhinav Cooperative Group Housing Society has been found to be nonexistent. The issue as to whether the said M/s Abhinav Cooperative Group Housing Society was inexistent or otherwise has been elaborately examined in the Appeal filed by the assessee in wherein we have already held that there was sufficient material to prove the existence of M/s Abhinav Cooperative Group Housing Society which has been already examined by the Lower Authorities during original assessment proceedings and the said
Cross 7 AND M/s. Pacific Projects Ltd., N. Delhi. documents has been produced before us along with the paper book. In view of the said findings made in and by following the same, we hold that there is sufficient material on record to prove that M/s Abhinav Cooperative Group Housing Society was in existent, further Department has not produced any document to negate the said findings. Therefore, we do not find merit in the Appeal filed by the Revenue. Accordingly the Appeal filed by the Revenue in ITA No. 1835/Del/2019 is dismissed.
In the result, filed by the assessee is allowed and Department is dismissed.
Order pronounced in the open court on : 12/08/2022.