NANDA DEEP ASSOCIATES PVT. LTD/ COMPANY,NEW DELHI vs. ITO WARD-17(4), NEW DELHI

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ITA 3597/DEL/2019Status: DisposedITAT Delhi29 November 2021AY 2009-106 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s order, finding no infirmity in the validity of re-assessment proceedings or the additions made. The assessee failed to substantiate the identity, creditworthiness, and genuineness of the transactions.

What were the facts?

The assessee's case was reopened based on information that it received bogus share capital/loan as accommodation entries. The Assessing Officer made additions for the amount received and the commission paid for arranging these entries.

What were the issues?

The key issues were the validity of the re-assessment proceedings and the addition of unexplained cash credits and commission for accommodation entries.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C,Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI

Before: SHRI R.K. PANDA

Hearing: 29.11.2021Pronounced: 29.11.2021

ORDER This appeal filed by the Assessee is directed against the Order dated 26.03.2019 of the Ld. CIT(A)-37, New Delhi, relevant to the A.Y. 2009-2010.

2.

None appeared on behalf of the assessee at the time of hearing. The order sheet entry shows that the assessee was not appearing on the past occasions. The notice issued through RPAD fixing the date of hearing for 29.11.2021 was returned by the Postal Authorities with the 2 ITA.No.3597/Del./2019 M/s. Nanda Deep Associates Pvt. Ltd., Delhi. remark “Incomplete address”. The assessee has also not taken any steps to intimate the change of address, if any. Under these circumstances, I deem it proper to decide the issue on the basis of the material available on record and after hearing the Ld. D.R.

1.

Although a number of grounds have been raised 3. by the assessee, these all relate to the order of the Ld. CIT(A) in upholding the validity of re-assessment proceedings and sustaining the addition of Rs.26 lakhs under section 68 of the I.T. Act, 1961.

4.

Facts of the case, in brief, are that the assessee is a Company and filed its return of income on 05.08.2016 declaring total income of Rs.300/-. A search and survey operation was carried-out in the case of Shri Tarun Goyal Group of cases during which it was noticed that he was involved in issuing bogus share capital/premium/ loan in the shape of accommodation entries etc., to several beneficiaries. Since the assessee is one of the beneficiary, the case of the assessee was reopened after recording

3 ITA.No.3597/Del./2019 M/s. Nanda Deep Associates Pvt. Ltd., Delhi. reasons under section 147 of the I.T. Act, 1961. Accordingly, notice under section 148 of the I.T. Act, 1961 was issued and served on the assessee. The assessee in response to notice under section 148 of the I.T. Act, 1961 submitted that the original return filed on 21.11.2009 may be treated as return filed in response to notice under section 148 of the I.T. Act, 1961.

4.1. During the course of assessment proceedings, the A.O. asked the assessee to substantiate the identity and creditworthiness of the investor company M/s. Campari Fiscal Services Pvt. Ltd., amounting to Rs.25 lakhs and the genuineness of the transaction by producing the relevant details. Since the assessee failed to substantiate the identity and creditworthiness of the above party and genuineness of the transaction, the A.O. made addition of Rs.25 lakhs to the total income of the assessee. Similarly, the A.O. made addition of Rs.50,000/- under section 69C of the I.T. Act, 1961 being commission paid @ 2% for arranging such accommodation entry of Rs.25 lakhs.

4 ITA.No.3597/Del./2019 M/s. Nanda Deep Associates Pvt. Ltd., Delhi. 5. Before the Ld. CIT(A) the assessee apart from challenging the addition on merit, challenged the validity of the re-assessment proceedings. However, the Ld. CIT(A) was not satisfied with the arguments advanced by the assessee and upheld the validity of re-assessment proceedings and the addition on merit.

6.

Aggrieved with such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal.

7.

I have heard the Ld. D.R. and perused the record. I find the A.O. in the instant case reopened the assessment of the assessee on the basis of information received that assessee is a beneficiary of accommodation entry of Rs.25 lakhs from a company namely M/s. Campari Fiscal Services Pvt. Ltd., operated by Shri Tarun Goyal Group of cases. I find during the assessment proceedings due to failure on the part of the assessee to substantiate with evidence to his satisfaction regarding the identity and creditworthiness of the share applicant and the genuineness of the transaction, the A.O. made addition of Rs.25 lakhs to the total income of assessee by invoking provisions of Section 68 of the I.T. Act,

5 ITA.No.3597/Del./2019 M/s. Nanda Deep Associates Pvt. Ltd., Delhi. 1961. Similarly, the A.O. made addition of Rs.50,000/- under section 69C of the I.T. Act, 1961 on the ground that assessee has spent Rs.50,000/- being 2% as commission for arranging accommodation entry of Rs.25 lakhs. I find the Ld. CIT(A) upheld the validity of re-assessment proceedings and sustained the addition on merit. I do not find any infirmity in the order of the Ld. CIT(A) on both these issues. He has given justifiable reasons including case law while upholding the validity of re-assessment proceedings. He has also elaborately discussed the manner in which the assessee has received accommodation entries and how the assessee failed to discharge the onus cast on it. I do not find any infirmity in the well reasoned order passed by the Ld. CIT(A) on both these issues. I, therefore, uphold the order of the Ld. CIT(A) and the grounds raised by the assessee are dismissed.

8.

In the result, appeal of the Assessee is dismissed.

6 ITA.No.3597/Del./2019 M/s. Nanda Deep Associates Pvt. Ltd., Delhi. Order pronounced in the open Court at the time of hearing itself i.e., on 29.11.2021.

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