The Deputy Commissioner Of Income Tax, Central Circle, Kota v. M/S Kota Dall Mill, C-Block, Multymetals Ltd. Campus

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 63/2019 The Deputy Commissioner Of Income Tax, Central Circle, Kota ----Appellant Versus M/s Kota Dall Mill, C-Block, Multymetals Ltd. Campus, 6/7,Heavy Industrial Area, Consua Road, Kota ----Respondent Connected With D.B. Income Tax Appeal No. 58/2019 The Deputy Commissioner Of Income Tax, Central Circle, Kota ----AppellantVersus M/s Kota Dall Mill, C-Block, Multymetals Ltd. Campus, 6/7,Heavy Industrial Area, Consua Road, Kota ----Respondent D.B. Income Tax Appeal No. 59/2019 The Deputy Commissioner Of Income Tax, Central Circle, Kota ----AppellantVersus M/s Kota Dall Mill, C-Block, Multymetals Ltd. Campus, 6/7,Heavy Industrial Area, Consua Road, Kota ----Respondent D.B. Income Tax Appeal No. 61/2019 The Deputy Commissioner Of Income Tax, Central Circle, Kota ----Appellant Versus M/s Kota Dall Mill, C-Block, Multymetals Ltd. Campus, 6/7,Heavy Industrial Area, Consua Road, Kota ----Respondent D.B. Income Tax Appeal No. 62/2019The Deputy Commissioner Of Income Tax, Central Circle, Kota ----Appellant M/s Kota Dall Mill, C-Block, Multymetals Ltd. Campus, 6/7,Heavy Industrial Area, Consua Road, Kota ----Respondent D.B. Income Tax Appeal No. 74/2019 The Principal Commissioner Of Income Tax (Central), Jaipur ----Appellant Versus M/s Multimetals Limited, Plot No. 6 And 7, Heavy Industrial Area,Kansua Road, Kota, ----Respondent D.B. Income Tax Appeal No. 77/2019 The Principal Commissioner Of Income Tax (Central), Jaipur ----Appellant Versus M/s Multimetals Limited, Plot No. 6 And 7 Heavy Industrial Area,Kansua Road, Kota ----Respondent D.B. Income Tax Appeal No. 103/2019 The Principal Commissioner Of Income Tax, (Central), Jaipur ----AppellantVersus M/s Oriental Power Cables Ltd., Nh-12, Cable Nagar, Po CableNagar, Kota-325003 (Raj) ----Respondent D.B. Income Tax Appeal No. 105/2019 The Principal Commissioner Of Income Tax, (Central), Jaipur ----Appellant Versus M/s Oriental Power Cables Ltd., Nh-12, Cable Nagar, Po CableNagar, Kota-325003 (Raj) ----Respondent D.B. Income Tax Appeal No. 106/2019 The Principal Commissioner Of Income Tax, (Central), Jaipur ----Appellant M/s Oriental Power Cables Ltd., Nh-12, Cable Nagar, Po CableNagar, Kota-325003 (Raj) ----Respondent D.B. Income Tax Appeal No. 107/2019 The Principal Commissioner Of Income Tax, (Central), Jaipur ----Appellant Versus M/s Oriental Power Cables Ltd., Nh-12, Cable Nagar, Po CableNagar, Kota-325003 (Raj) ----Respondent D.B. Income Tax Appeal No. 108/2019 The Principal Commissioner Of Income Tax, (Central), NewCentral Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Edila Business World Pvt. Ltd., 6 And 7, Heavy IndustrialArea, C-Block, Multimetal Limited Campus, Kansua Road, LargeScale Industrial Area, Kota ----Respondent D.B. Income Tax Appeal No. 109/2019 The Principal Commissioner Of Income Tax, (Central) NewCentral Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Edila Business World Pvt. Ltd., 6 And 7, Heavy IndustrialArea, C-Block, Multimetal Limited Campus, Kansua Road, LargeScale Industrial Area, Kota ----Respondent D.B. Income Tax Appeal No. 113/2019 The Principal Commissioner Of Income Tax, (Central) NewCentral Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Tirupati Balaji Estates Pvt. Ltd., Plot No. 6 And 7, C-Block,Multimetals Limited Campus, Kansua Road, Large ScaleIndustrial Area, Kota D.B. Income Tax Appeal No. 114/2019 The Principal Commissioner Of Income Tax, (Central) NewCentral Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Hadoti Punj Vikas Ltd., C-Block, 6/7, Multimetals Campus,Large Scale Industrial Area, Kota Rajasthan ----Respondent D.B. Income Tax Appeal No. 115/2019 The Principal Commissioner Of Income Tax, (Central) NewCentral Revenue Building, Statue Circle, Jaipur ----AppellantVersus ----Respondent D.B. Income Tax Appeal No. 113/2019 The Principal Commissioner Of Income Tax, (Central) NewCentral Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Tirupati Balaji Estates Pvt. Ltd., Plot No. 6 And 7, C-Block,Multimetals Limited Campus, Kansua Road, Large ScaleIndustrial Area, Kota D.B. Income Tax Appeal No. 114/2019 The Principal Commissioner Of Income Tax, (Central) NewCentral Revenue Building, Statue Circle, Jaipur ----Appellant Versus M/s Hadoti Punj Vikas Ltd., C-Block, 6/7, Multimetals Campus,Large Scale Industrial Area, Kota Rajasthan ----Respondent D.B. Income Tax Appeal No. 115/2019 The Principal Commissioner Of Income Tax, (Central) NewCentral Revenue Building, Statue Circle, Jaipur ----AppellantVersus M/s Tirupati Balaji Estates Pvt. Ltd., Plot No. 6 And 7, C-Block,Multimetals Limited Campus, Kansua Road, Large ScaleIndustrial Area, Kota ----Respondent D.B. Income Tax Appeal No. 116/2019 The Principal Commissioner Of Income Tax, (Central) NewCentral Revenue Building, Statue Circle, Jaipur ----AppellantVersus M/s Rajasthan Cable Industries Ltd., 4 And 12, Large Scale,Industrial Area, Kansua Road, Kota ----Respondent D.B. Income Tax Appeal No. 162/2019The Principal Commissioner Of Income Tax, New CentralRevenue Building, Rawat Bhata Road, Kota ----Appellant Versus M/s Resonant Wealth Consultancy Pvt. Ltd., 69/331, V.t. Road,Mansarovar, Jaipur Rajasthan ----Respondent For Appellant(s) : Mr. Anil Mehta, Sr. Adv. with Mr. Siddharth Bapna through VCFor Respondent(s): Mr. Sanjay Jhanwar, Sr. Adv. with HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SUDESH BANSAL Judgment 08/02/2022 There are defects in some of the appeals. The same are waived. D.B. Civil Misc. Application Nos.1799/2019 in D.B. ITANo.114/2019andD.B.CivilMisc.Application-Nos.1800/2019 in D.B. ITA No.116/2019: For the reasons stated in the applications and those madeout before us during the course of arguments, delay caused infiling these appeals is condoned. Applications stand disposed of. D.B. Civil Misc. Application Nos.69776/2019, 69780/2019,70920/2019, 70927/2019, 48922/2019, 48935/2019,-63367/2019 and 64456/2019: Since certified copy of the impugned judgment of thetribunal which is common in several appeals is filed in one ofthem, request for dispensing with filing certified copies in all theappeals is granted. The applications are disposed of. D.B. Income Tax Appeal Nos.63/2019, 58/2019, 59/2019,61/2019, 62/2019, 74/2019, 77/2019, 103/2019,105/2019, 106/2019, 107/2019, 108/2019, 109/2019,113/2019,114/2019,115/2019,116/2019and-162/2019: These appeals involve the same group of assessees and ariseout of search action carried out by the revenue against the group.Due to commonality of facts, we may refer to the materialproduced in D.B. Income Tax Appeal No. 63/2019. The appeal isfiled by the department to challenge the judgment of the IncomeTax Appellate Tribunal. Following questions are presented for ourconsideration:- 1.Whether, on the facts and in the circumstancesof the case the Hon’ble ITAT was justified in deletingthe addition made by the assessing officer underSection 68 of the Income Tax Act, 1961 on accountof unexplained unsecured loans obtained by theassessee? 2.Whether, on the facts and in the circumstancesof the case the Hon’ble ITAT was justified inupholding the order of the CIT (A) deleting theadditions made on account of unsecured loans byobserving that the alleged lenders were not shellcompanies without even considering the financialstatements of these companies? 1.Whether, on the facts and in the circumstancesof the case the Hon’ble ITAT was justified in deletingthe addition made by the assessing officer underSection 68 of the Income Tax Act, 1961 on accountof unexplained unsecured loans obtained by theassessee? 2.Whether, on the facts and in the circumstancesof the case the Hon’ble ITAT was justified inupholding the order of the CIT (A) deleting theadditions made on account of unsecured loans byobserving that the alleged lenders were not shellcompanies without even considering the financialstatements of these companies? 3.Whether, on the facts and in the circumstancesof the case the Hon’ble ITAT was justified inupholding order of the CIT (A) on account ofunexplained partners capital receipts from allegedpartners by observing that the burden cast upon theassessee under section 68 of the Income Tax Act,1961 to explain the nature and source oftransaction has been discharged? 4.Whether, on the facts and in the circumstancesof the case the Hon’ble ITAT was justified inupholding order of CIT (A) in deleting the additionof partners capital despite the fact that the allegedpartners were never produced before the learnedassessing officer for examination? 5.Whether, on the facts and in the circumstancesof the case the Hon’ble ITAT was justified in holdingthe additions made during reassessmentproceedingsunderSection-153Atobeunsustainable on the ground that reassessmentunder Section-153A could not have been made onthe basis of information/report of the InformationWing, Kolkata? Though, five different questions are framed, the central issueis one, namely, the deletion of the addition made by the assessingofficer under Section 68 of the Income Tax Act, 1961 (for short‘the Act’). We may record that the assessing officer having madesuch additions, in appeal filed by the assessee, the Commissioner(Appeals) had deleted the same. Thus revenue was in appealbefore the tribunal. The tribunal had dismissed the revenue’sappeal. Thus, there are concurrent findings by the CIT (Appeals)and the tribunal in favour of the assessee. Further, perusal of rather long order passed by the tribunal,we find that the conclusions are based on assessment of evidenceon record. All these findings are thus purely factual in nature. Thetribunal confirmed the view of the CIT (Appeals) that the additionsmade by the assessing officer were not sustainable. It wasobserved that the companies through which the assessees hadindulge into bogus accommodation entries, were not managed orcontrolled by Mr. Anand Sharma, who was supposed to be thekingpin. Further, it was observed that there was no link found inthe documents and the financial statements of the companiesconcerned. It was noted that the assessee had produced theaffidavit and the notices issued by the assessing officer underSection 131 and 133(6) of the Act which was duly complied by thecreditors. The statement of director of Ms. Royal Crystal DealersPvt. Ltd. was also recorded by the assessing officer while thedirector has confirmed the transaction of loan. The tribunal furtherobserved that the assessment order was passed solely on thereport of the Investigation Wing, Kolkata which merely containedthe narration of the statements recorded during the investigationand the assessing officer had in his possession only the statementof Anand Sharma. The tribunal was of the opinion that theassessing officer could not have made the additions in the handsof the assessee on the basis of the Investigation Wing at Kolkatato which the assessee was not privity to. The assessee was alsonot granted opportunity to cross-examine the persons whosestatements were recorded by the investigation wing. We are informed that in some of the cases the tribunal hasalso held that the reassessment was invalid this was an additionalground to delete the additions. Since in relation to the deletion of We are informed that in some of the cases the tribunal hasalso held that the reassessment was invalid this was an additionalground to delete the additions. Since in relation to the deletion of additions no question of law arises, we have not examined thecorrectness of the view of the tribunal on the question of validityof the reassessment. Under the circumstances we do not find any reason toentertain these appeals since no question of law arises. All appealsare dismissed. Pending applications, if any, are also disposed of. (SUDESH BANSAL),J(AKIL KURESHI),CJBRIJ MOHAN GANDHI/16-33