ITA--1152/2017. Case: THE PR. COMMISSIONER OF INCOME TAX CENTRAL-3 Vs. M/S. DREAMCITY BUILDWELL PVT. LTD.. High Court of Delhi (India)

Case NumberITA--1152/2017
CitationNA
Judgement DateAugust 09, 2019
CourtHigh Court of Delhi (India)

$~5 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1152/2017

THE PR. COMMISSIONER OF INCOME TAX

CENTRAL-3 ..... Appellant

Through: Ms. Vibhooti Malhotra, Sr. Standing

Counsel.

versus

M/S. DREAMCITY BUILDWELL PVT. LTD. ..... Respondent

Through: Mr. Salil Aggarwal with Mr.Madhur

Aggarwal and Mr.Uma Shankar, Advocates.

CORAM:

JUSTICE S.MURALIDHAR JUSTICE TALWANT SINGH

O R D E R % 09.08.2019

Dr. S. Muralidhar, J .:

  1. This is an appeal by the Revenue against the order dated 30th

    2017 passed by the ITAT in ITA No.4766/Del/2009 for the Year (‗AY‘) 2005-06.

  2. The question sought to be urged by the Revenue is whether the erred in deleting the addition of Rs.2.12 crores made by the Officer (‗AO‘) on account of unexplained cash credit under Section the Income Tax Act, 1961 (‗Act‘) adopting ‗a restrictive and interpretation‘ of the scope of assessment under Section 143 (3) read

    ITA 1152/2017 Page

    Section 153C of the Act?

  3. The background facts are that the Assessee is a company engaged business of real estate development. It filed its return of income for the in question, declaring ‗NIL‘ income. The return was picked up for and a notice under Section 143(2) was issued to the Assessee. assessment proceedings under Section 143(3) of the Act, the AO that the Assessee had received credit entries in the sum of Rs. 2.12 from one M/s. Shri Niwas Leasing & Finance Ltd. (SNLF). On account failure on the part of the Assessee to establish the identity, creditworthiness and genuineness of the entry appearing in its books, the AO added aforementioned sum to the income of the Assessee under Section 68 Act by the assessment order dated 28th December, 2007.

  4. The appeal by the Assessee against the above assessment order allowed by the Commissioner of Income Tax Appeals [CIT (A)] by an dated 14th October, 2009. The reasoning given by the CIT (A) was SNLF was an existing Assessee having a PAN and that, therefore, identity of SNLF was not in doubt. The money had been received by cheque and the amounts had been utilised for making payments to the authorities. Therefore, the transaction was genuine. The Assessee provided a confirmatory letter as well as a copy of the bank account SNLF. The amount had been received by cheques and the jurisdictional of SNLF had confirmed the said facts. It was further noted that the Assessee could not be fastened with the burden of proving credits in the accounts SNLF. In other words, the Assessee could not be asked to prove the

    ITA 1152/2017 Page

    of source. Accordingly, the addition made by the AO was deleted.

  5. The Revenue filed an appeal before the ITAT being No.4766/Del/2009. While the said appeal was pending, a search and seizure operation under Section 132 was carried out on 5th January 2009 in of the Taneja Puri Group at its various premises. According to the Revenue, during the course of search, some documents ‗belonging‘ to the were found in the searched premises. Notice under Section 153C of the was issued to the Assessee on 19th November, 2010.

  6. According to the AO, in addition to the credit entry of Rs.2.12 cores, Assessee had also received Rs.1.00 crore from six entities controlled managed by Mr. S.K. Gupta, who was an accommodation entry According to the Revenue, the search in the premises of Mr. S.K. revealed that the six companies/entities were paper companies only providing accommodation entries. An assessment order dated 29th

    2010 was framed against the Assessee under Section 143(3) read Section 153C of the Act, determining its income at Rs.3.12 crores.

  7. After the CIT (A) dismissed the Assessee‘s appeal by an order dated July, 2013 the Assessee filed an appeal being ITA No. 5201/Del/2013 in the ITAT. By a common order the ITAT dismissed the Revenue‘s appeal ITA No.4766/Del/2009, upholding the deletion by the CIT (A) on the addition of Rs.2.12 crores made by AO under Section 68 of the Act. ITAT allowed the appeal of the Assessee being ITA 5201/Del/2013,

    that the assumption of jurisdiction under Section 153C of the Act by the AO

    ...

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