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Income Tax Appellate Tribunal, DELHIBENCH ‘A’, NEW DELHI
Before: Sh. Saktijit DeyDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal and Cross Object have been filed by Revenue and the assessee against the order of ld. CIT(A)-32, New Delhi dated 07.03.2018.
Following grounds have been raised by the Revenue:
“1. The findings of ld. CIT(A) are perverse. On the one hand, the ld. CIT(A) confirms that Sh. Rajiv Singh has given accommodation entry, whereas on the other hand, the addition of accommodation entry of 2 CO No. 158/Del/2018 Anjaney Steels Pvt. Ltd. Rs.2,25,00,000/- plus commission is deleted in the hands of the recipient, i.e. M/s Anjaney Steels Pvt. Ltd.
2. The ld. CIT(A) erred in deleting the addition of Rs.2,25,00,000/- plus commission @ 1.50% amounting to Rs.3,37,500/- on the accommodation entry taken by the assessee.”
3. The assessee filed return of income on 13.11.2008 declaring Nil income. Proceedings were initiated u/s 147 of the Income Tax Act, 1961 and notice u/s 148 has been issued by the AO. On perusal of the notice, we find that the notice has been addressed to the assessee at 401, Mahavirji Complex, LSC, Shakarpur, New Delhi-110092 whereas the correct address is 401, Mahavirji Complex, LSC, Rishab Vihar New Delhi-110092.
It is a fact on record that the time of inspection of the file on 19.07.2017, it has been found that this notice has returned back and the original envelope was also lying in the file. Secondly, no notice has been issued on the address written in the ITR filed. The revenue has submitted that another notice addressed to Rishab Vihar has been served through affixture. It is undisputed fact that the notice addressed to Rishab Vihar has not been sent by post but was served by affixture. No evidence of issue of notice to the correct address of the assessee has been produced before us.
Further, we have gone through the Assessment Order. For the sake of ready reference, the entire portion of the relevant part of the Assessment Order is reproduced below:
3 CO No. 158/Del/2018 Anjaney Steels Pvt. Ltd. “2. Not satisfied the assessee filed a writ petition before the Hon’ble High Court of Delhi seeking to quash the notice issued u/s 148. The Hon’ble High Court in its order dated 11-03-2016 in WP (C) 2132/2016 has disposed off the writ petition by stating as under:-
Having learned counsel for the petitioner at some length, the court is of the view that the above grounds do not merit consideration by the court at this stage in exercise of its writ jurisdiction. It would be appropriate for the AO to examine each of these grounds in accordance with law.
The Hon’ble high court has not given any adverse finding against the orders disposing off the objections. Further in compliance to the directions of the high court objections and three grounds were disposed off by passing an order dated 28-03-2016 No. 370 in winch all the three grounds raised before the Hon’ble Court have been addressed to as per law. It was requested to the assessee to submit the necessary details to enable the undersigned to complete the reassessment proceedings. Till the date of passing the order the assessee did not submit any confirmation or details. The assessment are therefore being completed on the basis of whatever material was available on records.
The failure to submit the details proves that the assessee has also taken accommodation entries totaling to Rs. 2.25 crores from the concerns being operated by the established accommodation entry operators. Hence this amount of Rs. 2.25 crores is treated as unexplained as per the provisions of section 68 and assessed as income of the assessee. The penalty proceedings u/s 271(1)(c) for failure to furnish true particulars of its income. (Addition: Rs.2,25,00,000/-)”
On going through the Assessment Order, we find that even the reasons for recording the satisfaction, or the details of satisfaction recorded viz., name, amount, bank details, details of the accommodation entity have not even been mentioned.
The Assessing Officer has not travelled even an inch beyond the allegations to prove the facts. Allegations, however
4 CO No. 158/Del/2018 Anjaney Steels Pvt. Ltd. strong cannot be a reason to make addition without brining any basic tangible material on record.
Hence, the action of the revenue is to be discharged on merits and on account of failure to serve a valid statutory notice u/s 148.
In the result, CO of the assessee is allowed and the appeal of the revenue is dismissed.