Pr. Commissioner Of Incometax (Central)- 3 v. Dhamaka Trading & Constructionpt. Ltd

$~ *IN THE HIGH COURT OF DELHI AT NEW DELHI20 + ITA 675/2016 PR. COMMISSIONER OF INCOMETAX (CENTRAL)- 3..... AppellantThrough:Mr. Zoheb Hossain, Sr. StandingCounsel and Mr. Deepak Anand, Jr.Standing Counsel Versus DHAMAKA TRADING & CONSTRUCTIONPT. LTD. ..... Respondent Through:Mr. S. Krishnan, Advocate CORAM:JUSTICE S.MURALIDHARJUSTICE CHANDER SHEKHARO R D E R%02.05.2017CM Nos.33416-33417/2016 For the reasons stated therein, the applications are allowed. Delay of 10 daysin filing and 15 days in re-filing the appeal is condoned. ITA No.675/2016 1.This appeal by the Revenue under Section 260A of the Income Tax Act,1961 (‘the Act’) is directed against the order dated 2[nd]February, 2016passedbytheIncomeTaxAppellateTribunal(‘ITAT’)inITANo.3575/Del/2013 pertaining to Assessment Year (‘AY’) 2008-09. 2. While admitting this appeal by order dated 14[th]September 2016, thefollowing question of law was framed: “Whether in the facts of the case, the findings of the ITAT with respectto the inapplicability of the Section 68 of the Income Tax Act were justifiedand sustainable". 3. Mr. Krishnan, learned counsel for the Respondent Assessee, drew ITA 675/2016Page 1 of 3 attention to the order passed by this court on 29[th]September, 2015 in ITANo.683/2015(PrincipalCommissionerofIncomeTaxv.VijayConductors Pvt. Ltd.) wherein the entire question of the disclosure made byone Mr. S. K. Gupta before the Income Tax Settlement Commissionregarding providing of accommodation entries to beneficiaries throughseveral conduit companies and obtaining of commission/brokerage wasexamined. The said disclosure was made by Mr Gupta consequent upon asurvey operation under Section 133 A of the Act. One such 'conduitcompany' was the Assessee in the above case i.e. Vijay Conductors Pvt. Ltd.The Court held that the conduit companies were not the beneficiaries of suchaccommodation entries and, therefore the order of the ITAT deleting theadditions in their hands under Section 68 of the Act did not suffer from anylegal infirmity. The Revenue's appeal was dismissed and thereby an orderdated 28th January 2015 of the ITAT in a batch of appeals was affirmed. 4. The above order in Principal Commissioner of Income Tax v. VijayConductors Pvt. Ltd. (supra) was followed by this Court in its order dated6th October 2015 in ITA No. 707 of 2015 (Principal Commissioner ofIncome Tax v. Omni Farms Pvt. Ltd.) Thus the Court affirmed the orderdated 28th January 2015 of the ITAT in ITA No. 3477/Del/2013. 5. However another bench of the ITAT made a departure in its order dated22nd April 2015 in ITA No. 3576/Del/2013 while dealing with the appeal ofone more of the 'conduit companies' Rapid Packaging Ltd. The ITAT by thesaid order remanded the matter to the Assessing Officer (AO) to verify thedisclosure made in the case of Mr S K Gupta before the ITSC and whether ITA 675/2016 Page 2 of 3 the cash deposited in the case was covered by such disclosure. 6. In the case on hand, the ITAT has by the impugned order dated 2ndFebruary 2016 followed its earlier decision dated 28th January 2015 in ITA3477/Del/2013 and deleted the additions made by the AO in the hands of theAssessee under Section 68 of the Act. 7. The main plank of the Revenue's case before this Court is the order of theITAT in the case of Rapid Packaging Ltd. Mr. S. Krishnan has placed beforeus the assessment order passed by the AO in the case of Rapid PackagingLtd. on 30th December 2016 consequent upon the remand by the ITAT bythe order dated 22nd April 2015. The AO has "assessed at return (ed)income". In other words the AO has made no additions under Section 68 ofthe Act even in the case of Rapid Packaging Ltd. which is one more of the'conduit companies' like the Assessee herein. 8. In that view of the matter, the impugned order dated 2nd February 2016of the ITAT in the present case calls for no interference. The question framedis answered in the affirmative i.e., in favour of the Assessee and against theRevenue. 9. The appeal is accordingly dismissed. 8. In that view of the matter, the impugned order dated 2nd February 2016of the ITAT in the present case calls for no interference. The question framedis answered in the affirmative i.e., in favour of the Assessee and against theRevenue. 9. The appeal is accordingly dismissed. S.MURALIDHAR, J MAY 02, 2017/b CHANDER SHEKHAR, J ITA 675/2016