Commissioner Of Income Tax (Central), Gurgaon v. M/S Misty Meadows Pvt. Ltd., New Delhi

ITA No. 318 of 2015 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 318 of 2015 Date of Decision: 17.11.2015 Commissioner of Income Tax (Central), Gurgaon ....Appellant. Versus M/s Misty Meadows Pvt. Ltd., New Delhi ...Respondent. 1.Whether the Reporters of the local papers may be allowed to see the judgment?the judgment? 2.To be referred to the Reporters or not? 3.Whether the judgment should be reported in the Digest? CORAM:-HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.HON'BLE MR. JUSTICE RAMENDRA JAIN. PRESENT: Mr. Rajesh Sethi, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1.This appeal has been preferred by the revenue underSection 260A of the Income Tax Act, 1961 (in short “the Act”) against theorder dated 19.12.2014 (Annexure-3) passed by the Income TaxAppellate Tribunal, Jaipur Bench, Jaipur (hereinafter referred to as “theTribunal”) in C.O. No. 68/JP/2012, claiming the following substantialquestions of law:- (i) Whether, in the facts and in the circumstancesof the case, the Ld. ITAT was right in law inupholding the order of CIT(A) and dismissingthe appeal filed by the Revenue for the (ii) (iii) (iv) (v) additions made on account of Unexplainedshare capital of Rs.1,05,00,000/- andUnexplained cash credit of Rs.14,01,765/-?Whether, on the facts and in the circumstancesof the case, the Ld. ITAT was right in lawallowing the cross objection filed by theassessee? Whether the ITAT relied upon inadmissibleevidence as the procedure adopted by CIT (A)allowing the additional evidence is against thewell defined procedure engrafted in Rule 46A ofthe Income Tax Rules, 1962? Whether, in the facts and circumstances of thecase, Hon'ble ITAT was legally justified indeleting the addition of Rs.1,05,00,000/- andRs.14,01,765/- made u/s 68 of IT Act, 1961 byholding that the assessee has discharged theonus cast upon it u/s 68 of the Act whileignoring the facts that the initial evidencesfurnished by the assessee were duly rebuttedby the Assessing Officer after making thoroughenquiries and holding that the applicantcompanies were not in existence?Whether ITAT has erred in law in deleting anaddition under Section 68 of IT Act, 1961 byholding that insistence of the Assessing Officerasking the assessee to produce further evidence is 'impossible compliance' whereasthe Assessing Officer based on enquiries hasdiscarded evidence already adduced by theassessee? (vi)Whether, in the facts and circumstances of thecase, Hon'ble ITAT was legally justified inallowing relief to the assessee and deletingaddition of Rs.10,00,000/- on the basis of crossobjection filed by the assessee whereas thesaid issue was not a part of revenue's appealand as such, no cross objection could havebeen filed by the assessee and the issue couldhave been legally decided only on appeal filedby the assessee before the Tribunal against thisaddition? (vii)Whether the findings have been recorded byITAT on misreading and misinterpretation offacts and evidence emanating on record?ITAT on misreading and misinterpretation offacts and evidence emanating on record? (viii)Whether the ITAT committed grave error inarriving at such conclusions after adoptingerroneous criteria and by importing such factsand circumstances which are contrary torecord?arriving at such conclusions after adoptingerroneous criteria and by importing such factsand circumstances which are contrary torecord? 2.A few facts necessary for adjudication of the present appealas narrated therein may be noticed. A search and seizure operationunder Section 132 of the Act was conducted on 17.9.2008 in KamdhenuGroup of cases including M/s Misty Meadows Pvt. Ltd. (the assessee (viii)Whether the ITAT committed grave error inarriving at such conclusions after adoptingerroneous criteria and by importing such factsand circumstances which are contrary torecord?arriving at such conclusions after adoptingerroneous criteria and by importing such factsand circumstances which are contrary torecord? 2.A few facts necessary for adjudication of the present appealas narrated therein may be noticed. A search and seizure operationunder Section 132 of the Act was conducted on 17.9.2008 in KamdhenuGroup of cases including M/s Misty Meadows Pvt. Ltd. (the assessee herein). A notice dated 22.1.2010 under Section 153A of the Act wasissued to the assessee who filed its return on 30.3.2010 for theassessment year 2003-04 declaring the total income at ` 1,22,320/-.Thereafter, notice dated 7.5.2010 under Sections 142(1) and 143(2) ofthe Act along with a questionnaire were issued to the assessee who filedreply to the same. The assessment order dated 15.12.2010 (Annexure-1) under Section 143(3) of the Act was passed by the AssistantCommissioner of Income Tax, Central Circle, Alwar assessing theincome of the assessee at ` 3,62,00,330/-. Feeling aggrieved, theassessee filed an appeal under Section 250(6) of the Act before theCommissioner of Income Tax (Appeals), Central Jaipur [for brevity “theCIT(A)”]. The CIT(A) vide order dated 28.2.2012 (Annexure-2) partlyallowed the appeal and deleted the additions of ` 1,05,00,000/- out of atotal addition of ` 1,15,00,000/- on account of unexplained share capitaland ` 14,01,765/- on account of unexplained cash credit. Against thesaid order, Annexure-2, the revenue filed an appeal whereas theassessee filed cross-objections before the Tribunal. The Tribunal videorder dated 19.12.2014 (Annexure-3) dismissed the appeal of therevenue and allowed the cross objections filed by the assessee. TheTribunal deleted the whole of the amount on account of unexplainedshare capital and ` 14,01,765/- on account of unexplained cash credit.Hence, the present appeal by the revenue. 3.We have heard learned counsel for the revenue. 4.The issue that arises for consideration is whether this Courtwould have territorial jurisdiction to decide the appeal when theAssessing Officer who passed the assessment order was based at Alwarand the first appeal was adjudicated by the CIT(A), Central Jaipur. The ITA No. 318 of 2015 second appeal was decided by the Tribunal at Jaipur. 5.The matter is no longer res integra. This Court inCommissioner of Income Tax (Central) Gurgaon v. M/s ParabolicDrugs Ltd. ITA No. 49 of 2012 decided on 11.10.2012 following itsearlier Division Bench judgment in The Commissioner of Income Tax,Faridabad v. M/s Motorola India Ltd. ITA No. 44 of 2005 decided on3.10.2007 had held that this Court had no territorial jurisdiction to decidethe appeal when the order passed by the assessing authority was atDelhi. It was recorded as under:- “8.Accordingly, the present appeal is dismissed byholding that this Court has no territorial jurisdiction toadjudicate upon the lis over an order passed by theAssessing Officer at New Delhi. Consequently, theappeal is returned to the Revenue for filing before thecompetent Court of jurisdiction in accordance withlaw.” 6.In view of the above, the present appeal is dismissed as thisCourt has no territorial jurisdiction to adjudicate upon the lis over anorder passed by the Assessing Officer at Alwar. Consequently, theappeal is returned to the revenue for filing before the competent court ofjurisdiction in accordance with law. (AJAY KUMAR MITTAL) JUDGE November 17, 2015gbs (RAMENDRA JAIN) JUDGE