TMI Blog2016 (12) TMI 1711X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO. The property in question was used by the assessee for its own business purposes. The said fact is evident from page no. 28 of the assessee s paper book i.e. the copy of ROC master data which revealed that the assessee s registered office is situated at 48, Friends Colony East, New Delhi. Therefore the impugned addition made by the AO on the basis of presumption that the assessee had let out the property to Gambhir brothers and sustained by the ld. CIT(A) was not justified. Accordingly, the same is deleted. - Decided in favour of assessee - ITA No. 4236/Del/2015 - - - Dated:- 16-12-2016 - Sh. N. K. Saini, Accountant Member Assessee by : Sh. Sashi Tulsiyan, Adv. Revenue by : Sh. F. R. Meena, Sr. DR ORDER This is an appeal by the assessee against the order dated 10.02.2015 of ld. CIT(A)-30, New Delhi. 2. Following grounds have been raised in this appeal: 1. That the CIT (Appeals) erred on facts and in law in upholding the impugned assessment order passed under sections 147 of the Income Tax Act, 1961 which is without jurisdiction, illegal and bad in law since the prerequisite conditions for initiating proceedings under section 147 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as received various amounts during the FY 2004-05 relevant to the AY 2005-06, has taken accommodation entries from the various companies controlled by Jain brothers. 6. The details of various documents/books seized during the course of search and seizure action at .the residential and business premises of Jain brothers showing the receipt of cash and the providing of accommodation entries to M/s Golden Technobauild Pvt Ltd including name of the concern of the Jain brothers giving the entry; name of the bank of the concern of the Jain brothers giving the entry; PO/BC/cheque number; amount of PO/BC/cheque; name of the beneficiary concern in whose favour PO/BC/cheque is issued etc are as under: Bank Book Date From To Bank Cheque/RTGS Cheque Date Amount (In Rs.) ANNWho is the No. Page No. Mediator Beneficiary 17-Feb-05 VPC Golden Techno Build P. Ltd. KOTAK 28222 17-Feb-05 700,000 A-34 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se property in its return of income, but the assessee has shown its income form house property at Rs. NIL in its return of income for the AY 2005-06. Therefore, addition of ₹ 1877528 (7,00,000 + 11,77,528) is added to the income of assessee as discussed above. Addition:- Rs, 1877528 6. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted as under: That on perusal of reason to belief supplied by AO it was noticed that AO had found some materials from possession of some Jain brother's during search and seizure action on Jain brother's on 14-9-2010. That from documents obtained from Jain brother's shows that ₹ 7,00,000/- has been given from Ms Golden Techno Build Pvt. Ltd. to assessee company. On that very basis AO had added the amount U/s 68 of the Act. We are before your goodself against the addition of ₹ 7,00,000/- U/s 68 made by AO. First, that it is an undisputed fact that assessee had received an amount of ₹ 7,00,000/- from M/s Golden Techno Build Pvt. Ltd. during the year. Further the assessee company had not paid any cash against the receipt of such amount. Further the assessee company has provided ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a part of Jain brother documents, which shows that on 17.02.2015 M/s Golden Technobuild Pvt. Ltd. has given ₹ 7,00,000/- vide cheque no. 28222 to assessee company through mediator Mr. Chawla. However, we wish to sate that we do not know that person Mr. Chawla. Further the details given by the AO is wrong due to the fact that amount of ₹ 7.00,000/- has been received by assessee vide cheque no 0221584 and had no link and no knowledge of cheque no. 28222. FIVE, FURTHER WITHOUT PREJUDICE, it is being submitted that assessee company had received funds front M/s Golden Technobuild Pvt. Ltd. and in respect thereof the assessee had filed all the requisite details and documents before AO to prove the identity, credit worthy and genuinity of transaction. Further the assessee company knows only and only the predecessor company that is M/s Golden Technobuild Pvt. Ltd. It is not (he fault on assessee company that from where (he predecessor company had arranged the funds. If that is the case, than the AO should call and made addition in the hands of M/s Golden Technobuild Pvt. Ltd. and not in the hands of assessee company. Assessee company simply under a bonafide belief had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir brother's and premises is coowned by assessee company, thereby making an addition U/s 23 of the Act. We rely on following judgements:- Balakrishna H. Warni vs. ITO (2010) 321 ITR 519 (Bom) CIT VS. SFIL STOCK BROKING LTD. 233 CTR (DEL) 69 CIT Vs. ATUL JAIN (2007) 164 TAXMAN 33 (DEL/299 ITR 383 (DEL) ITO VS. TAKSHILA DISTRIBUTORS (P) LTD. (2009) 20 DTR (DEL.) (TRIB.) 156 POYSHA INVESTMENTS (P) LTD. 136 TTJ (DEL) (UO) 57 SECOND, the Ld. AO has arrived at the valuation of ₹ 41,69,718/- for the property under consideration and has calculated the shares of assessee at ₹ 11,77,528/- being 28.24% of ₹ 41,69,718/-. It is submitted that assessee share is 27.20% (i.e .1050 sq yards co owned out of 3860 sq yards). Now, the basis of calculating the annual value of the property has not been made known nor the calculation thereof has been provided to the assessee. Ld. AO is duty bound to supply the details and documents on the basis of which he relies and using against the assessee, thus, the Ld. AO has acted against the principles of natural justice. Further, it has been held in many authorities that the evidence used against the assessee should be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y year is a different year under the eyes of law and if due to any special reasons he wishes to follow the same judgements than the facts of both the years should be same and it should be subject to some adjustments. SIX, that the facts submitted by the assessee company had no! been adjudicated by the Ld. AO and no new facts has been brought on record by the AO and simply stated that assessee contention is no/ acceptable, in a tailor made fashion. KESHAV SHARES STOCKS LTD. VS. ITO (2008) 11 DTR (DEL) 49. 8. The ld. CIT(A) after considering the submissions of the assessee confirmed the addition of ₹ 7,00,000/- by observing as under: It may be mentioned here that in present case, dummy companies of Jain Brothers has given cheques to again a dummy companies of Today Group namely M/s. Technobuild (P) Ltd., as the appellant is the beneficiary and M/s. Technobuild (P) Ltd. is found to be non functional companies controlled by Sh. Gambhir, main person of Today group, used to channelize accommodation entries. Even settlement commission in Today Group on the application of Today group has held various companies of Today group as dummy/paper companies including M/s. Golden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is supported by the findings of the Hon ble Settlement Commission in Today group of cases that the creditor M/s. Golden Technobuild (P) Ltd. is a dummy/paper concern of Today Group to receive accommodation entries. Further, during the search clinching evidences of cash receipt and name of the mediator were found during the search from the premise of Jain Brothers which have to be utilized for assessing income of the assessee. Ld. AR has argued that the appellant does not know Mr. Chawla who has allegedly cited as mediator. In this regard, I have perused the order of settlement commission in Today group where it has been mentioned that Mr. Chawla is rated to promoters and controlling persons of the Today group namely Gambhirs and an advocate appearing for Income Tax matters in Today Group. The appellant definitely belongs to Today group. Therefore, such argument that Mr. Chawla is not known to the appellant cannot be accepted. 9. The another addition of ₹ 11,77,528/- was also confirmed by observing as under: I have considered the assessment order, written submission and oral arguments of Ld. AR. The property in question namely, 48 Friends colony, New Delhi is owned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss purposes. I do not agree with this argument of Ld. AR also as the group is having huge office establishment at statesman Building. Further, as accepted by Mr. Subhiki, Vice-President of the group that these owner companies do not conduct any business except owning this property. In this circumstances, mere receiving of Dak at this address cannot be term as conducting the business. Considering the entire facts and circumstances, I am of the opinion that the entire property at 48. Friends colony is used for the residential purpose of main person of Today group namely Gambhirs. Therefore, the assessing officer is correct to apply Fair rental value which it might reasonably fetch for the purpose of determining income under the head Income from house property' as per the provision of section 23 of I.T. Act. Ld. AR's argument that the assessing officer should have accepted municipal valuation in absence of any further enquiry is also misplaced. In present case, the part of the property is rented to other companies which is acceptably used by Gambhirs for residential purpose. The assessing officer after considering these facts and prevailing rent has estimated the annual rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t form the sole basis of the addition in the absence of any opportunity being provided to the assessee to crossexamine the witness, whose statement was made the basis for the impugned addition. It was further submitted that one of the co-owner company M/s Palos Verdes Estate Pvt. Ltd., let out its proportionate share to the company, M/s Today Homes Infrastructure Pvt. Ltd. from October 2004 and was earning rental income there from which was reflected in the accounts of the said company, in the relevant assessment years 2005-06 to 2009-10. It was explained that the company M/s Today Homes Infrastructure Pvt. Ltd. term had let out the proportionate share of M/s Palos Verdes Estate Pvt. Ltd. to Gambhirs for their residence but they were residing only on the portion let out by M/s Palos Verdes Estate Pvt. Ltd. to the company M/s Today Homes Infrastructure Pvt. Ltd. However, the assessee s share in the said property was used for the business purposes and registered office was situated in the said property. A reference was made to page no. 28 of the assessee s paper book which is the copy of Registrar of Company (ROC), Master data evidencing the registered office address of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also proved. Therefore, considering the totality of the facts, I am of the view that the addition made by the AO and sustained by the ld. CIT(A) on account of ₹ 7,00,000/- received from M/s Golden Technobuild (P) Ltd. was not justified. Accordingly, the same is deleted. 15. As regards to the another addition of ₹ 11,77,528/-, it is noticed that the said amount was added on the basis of presumption that the property at 48, Friends Colony East, New Delhi in which the assessee was having 28.24% was let out to Gambhir brothers but infact, the Gambhirs brothers were the tenant of M/s Today Homes Infrastructure Pvt. Ltd. who was the tenant of M/s Palos Verdes Estate Pvt. Ltd. Therefore, the addition made by the AO on the basis of presumption was not justified particularly when the assessee had not given property on rent to Gambhir brothers as alleged by the AO. The property in question was used by the assessee for its own business purposes. The said fact is evident from page no. 28 of the assessee s paper book i.e. the copy of ROC master data which revealed that the assessee s registered office is situated at 48, Friends Colony East, New Delhi. Therefore, by considering ..... X X X X Extracts X X X X X X X X Extracts X X X X
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