Signature Not Verified v. M/S Taneja Developer & Infrastructure Pvt. Ltd

Signature Not Verified $~39 IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 108/2020PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL)-3,PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL)-3, ..... Appellant Through:Ms.VibhootiMalhotra,SeniorStanding Counsel with Mr.ShailenderSingh, Advocate. versus M/S TANEJA DEVELOPER & INFRASTRUCTURE PVT. LTD...... Respondent Through:None. CORAM:HON'BLE MR. JUSTICE VIPIN SANGHIHON'BLE MR. JUSTICE SANJEEV NARULA O R D E R %18.02.2020 C.M. No. 6459/2020 (exemption) 1. Exemption allowed, subject to all just exceptions. 2. The application stands disposed of. ITA 108/2020 & C.M. No. 6460/2020 3. There is a delay of 142 days in filing the appeal. We have heard learnedsenior standing counsel for the Revenue on merits. Since we are not inclinedto interfere in the present appeal, we do not deem it appropriate to pass anyorder on the application seeking condonation of delay. Signature Not Verified 4. The revenue is in appeal against the order dated 29.03.2019, passed by theITAT, Delhi ‘C’ Bench in ITA No. 3952/DEL/2014 relating to AssessmentYear (AY) 2005-06, wherein the Tribunal rejected the appeal preferred bythe revenue. Addition of Rs. 20 crores was sought to be made against theassessee under Section 68 of the IT Act on account of credit received fromM/s Rangoli Buildtech Pvt. Ltd. and M/s Epic Developers Pvt. Ltd.However, it transpired that no money has been received from M/s RangoliBuildtech Pvt. Ltd. and only an amount of Rs.14.5 crores was received fromM/s Epic Developers Pvt. Ltd. The Assessing Officer (AO) made theaddition of the said amount of Rs.14.5 crores, received as loan from M/sEpic Developers Pvt. Ltd. on the premise that the credit worthiness of thecreditor M/s Epic Developers Pvt. Ltd. has not been established. Since, ithad filed return of income as ‘Nil,’ and no business had been transacted bythe said entity, it was held by the AO that the genuineness of the transactionhad not been proved. The CIT (A) however reversed the findings in thefollowing way: “With regard to the above observation of the AO, I am of theconsidered view that creditworthiness and genuineness of thetransaction is not solely dependent on the return of income filedeven if it is for Rs. Nil. The courts have held, that if the profitmaking apparatus is not their, then in that event source of sourcehas to verify so as to examine the genuineness of the loantransaction. Accordingly, the Balance Sheet of Epic DevelopersPvt. Ltd. was perused and it is found that in the year underconsideration they have been received a sum of Rs.17.35croresfrom following two entities, from which funds have been invested in the appellant's company:- From the perusal of the details of bank account and assessmentparticulars of both Benda Amtek Ltd. and Amtek Auto Ltd., it isfound that Epic Developers Pvt. Ltd. is one of the group entitiesof Amtek Ltd. and in the year under consideration Benda AmtekLtd. have a returned income of Rs.1,28,24,076 and that of AmtekAuto Ltd. is to the tune of Rs.10,93,50,330. Therefore, in view ofthe source of source having come from the creditworthy party, Iam of the considered view that the AO cannot add a sum ofRs.14.50 crores on account of credit received from EpitDevelopers Pvt. Ltd. by holding the same as a non-genuine loantransaction. In view of these above facts and evidences onrecord, the addition of Rs.14.50 crores received from EpicDevelopers Pvt. Ltd. is considered to be unexplained and genuinetransaction and hence the addition so made by the AO deservesto be deleted.” 5. The ITAT has concurred with the said finding. From the above, it wouldbe seen that the investor company, namely, M/s. Epic Developers Pvt. Ltd.was one of the group entities of Benda Amtek Ltd. and Amtek Auto Ltd. andbothhadsubstantialreturnedincomeintheyearinquestionofRs.1,28,24,076/- and Rs. 10,93,50,350/-. Therefore, there was no reason todoubt either the credit worthiness of the investor or the genuineness of thetransaction. The aforesaid findings are purely factual in nature and do notraise any substantial question of law for consideration of this Court. We donot find any reason to interfere with the impugned order. Signature Not Verified 6. The appeal is accordingly dismissed. FEBRUARY 18, 2020v VIPIN SANGHI, J SANJEEV NARULA, J