Commissioner Of Income Tax v. G.g.medical Health Care Ltd

KIN THE HIGH COURT OF DELHI AT NEW DELHI 12)Date of decision : August 23, 2007 +ITA No. 465 of 2006 COMMISSIONER OF INCOME TAX ..... AppellantThrough Ms. P.L.Bansal, Advocate. Versus G.G.MEDICAL HEALTH CARE LTD. ..... Respondent Through Ms. Manita Verma, Advocate. CORAM:HON'BLE MR. JUSTICE MADAN B. LOKURHON'BLE DR. JUSTICE SMURALIDHAR ORDER % |inThis appeal 1s directed against the order dated 18.5.2005 passed by theIncome Tax Appellate Tribunal (‘Tribunal’) in ITA No. 2786(Del) 79 for theAssessment Year 1993-94. The Tribunal dismissed the appeal filed by theDepartment and affirmed the order dated 24.3.1999 passed by theCommissioner of Income Tax (Appeals) ['CIT (A)'] whereby he had deletedthe addition of Rs.33,30,301 made on protective basis, ? For the Assessment Year 1n question the Assessee's income was assessedat a loss of Rs.7,34,190. The Assessing Officer (‘AO’) 1n his order noted thatthe ACIT had informed the AO bya letter dated 22.3.1996 that the Assesseehad received a commission of Rs. 13,26,801 from Inter Kardio (P) Ltd for theyear 1993-94. However the Assessee denied having received any suchcommission. The Assessee also denied that a current account had been openedwith the Bank of Rajasthan on 6.11.1992 in its name as had been claimed byInter Kardio (P) Ltd. It appears that while framing the Assessment for InterKardio (P) Ltd, it had been claimed by the said Assessee |Inter Kardio (P) Ltd]that it had paid the aforementioned amount by cheque to the Assessee here LTA No. 4685 of 200 page 1 of4 (G.G.Medical Health Care Limited). The AO accordingly added the sum of Rs.13,26,801 as income of the Assessee for the Assessment Year 1993-94. Sincethe copy of the bank account No. 4380 with the Bank of Rajasthan, in theAssessee'Ss name showed that a sum of Rs.33,30,301 (inclusive of thecommission of Rs.13,26,801) had been credited, the AO added the said amountto the income of the Assessee “on protective basis.” 3)The CIT (A) by order dated 24.3.1999 found that the Respondent herehad not only denied receipt of commission but also the opening of the currentaccount in which commission had been deposited. Further the Respondent hadalso filed an FIR with the Karol Bagh Police Station against the fraudulentopening of the bank account No. 4380 in its name with the Bank of Rajasthanand that it had asked bank to get the fraud unearthed. Accepting thisexplanation, the CIT (A) held that the addition of Rs.33,30,301 was notJustified “even on protective basis” and accordingly directed the addition to bedeleted. 4By the impugned order dated 18.5.2005, the Tribunal rejected the appealfiled by the Department on the ground that nothing had been found to connectthe Assessee with the payment of the commission. It took note of the fact thatin the order for the subsequent Assessment Year 1994-95, the AssessingOfficer (AQO') mentioned that a letter had been written to the DeputyCommissioner of Income Tax (‘DCIT'), Circle II, enquiring about the fate ofthe commission paid to the Assessee by Inter Kardio Pvt. Ltd as disclosed bythe latter under the Voluntary Disclosure of Income Scheme ('VDIS') 1n respectof which a Circular had been issued on 19.11.1997. The DCIT bya letter dated7.3.2001 informed the AO that the following income had been disclosed by page 2 of4 M/s. Inter Kardio (P) Ltd: “Rs. 17,26,801 for asstt. year 1993-94 as commission paid;Rs. 7,04,930 for asstt. year 1994-95 as commission paid;Rs. 5,88,035 for asstt. year 1995-96 as commission paid;Rs. 12,14,341 for asstt. year 1995-96 as commission paid.”’The Tribunal after discussing the facts noted that bank account was disowned by the Assessee. Since nothing incriminating against the Assessee had beenbrought on record, the Tribunal agreed with the CIT (A) that the addition ofRs.33,30,301 had to be deleted. page 2 of4 M/s. Inter Kardio (P) Ltd: “Rs. 17,26,801 for asstt. year 1993-94 as commission paid;Rs. 7,04,930 for asstt. year 1994-95 as commission paid;Rs. 5,88,035 for asstt. year 1995-96 as commission paid;Rs. 12,14,341 for asstt. year 1995-96 as commission paid.”’The Tribunal after discussing the facts noted that bank account was disowned by the Assessee. Since nothing incriminating against the Assessee had beenbrought on record, the Tribunal agreed with the CIT (A) that the addition ofRs.33,30,301 had to be deleted. 4 After hearing learned counsel for the Revenue at some length, this Courtis not inclined to interfere with the impugned order of the Tribunal. AlthoughInter Kardio (P) Ltd by their letter dated 14.3.2001 informed the AO they hadpaid Rs.2,37,556 to the Assessee out of total commission of Rs.7,04,930 duringthe Assessment Year 1994-95 there 1s nothing to indicate that the said amountwas 1n fact paid to the Assessee. This Court also finds that, consistent with itsplea that the bank account in question was fraudulently opened in its name withthe Bank of Rajasthan, the Assessee has lodged an FIR with the Police Station,Karol Bagh. 6.This Court finds no reason to interfere with the impugned order of theTribunal. No substantial question of law arises. TdThe Appeal is dismissed. Sd/MADAN B. LOKUR, J AUGUST 23, 2007 &'()S.MURALIDHAR, J page 3 of4 '- ����������������������������������������������!"#$�������