IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH `E ', NEW DELHI)
BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER
AND SHRI KULDIP SINGH, JUDICIAL MEMBER
I.T.A. No.2533 /Del/2013
Assessment year : 2004-05
Next Wave India (AOP), Vs. ITO, Ward 36(3),
35, Varindavan Apartments, New Delhi
110, I.P. Extension,
Delhi
GIR / PAN:AAAAN6288L
(Appellant) (Respondent)
Appellant by : Shri Neeraj Jain, CA
Respondent by : Shri P. Dam Kanunjna, Sr. DR
Date of hearing : 14.09.2015
Date of pronouncement : 23.09.2015
ORDER
PER KULDIP SINGH, JM:
Appellant M/s. Next Wave India (A.O.) by filing the present appeal,
sought to set aside the impugned order dated 29.01.2013 passed by Ld.
CIT(A) XXVII, New Delhi for the Assessment Year 2004-05 on the grounds
inter alia that:
"1. That the order of the learned Commissioner of Income-tax
(Appeals) is bad in law and on the facts and in the circumstances of
the case.
2 . That the learned Commissioner of Income tax (Appeals) erred in
sustaining the finding of the Assessing Officer that the assessee was
engaged in money laundering.
2 ITA No.2533/Del/2013
3. That the learned Commissioner of Income tax (Appeals) has
erred in sustaining the addition on account of alleged accommodation
entries to the tune of Rs.16,65,000/- by invoking provisions of section
68 the Income Tax Act.
4. That the learned Commissioner of Income tax erred in rejecting
the details and evidences adduced by the appellant explaining the
deposits made in the bank accounts without properly going through
the same.
5. That the learned Commissioner of Income-tax (Appeals) has
erred in sustaining the disallowance of following expenses:-
a) out of Conveyance Rs. 1,980/-
b) out of Salary & Allowances Rs.16,500/-
c) Depreciation Rs. 4,050/-."
2. Briefly stated the facts of this case are that the assessment order was
passed by the A.O. on the basis of notice issued u/s 148 of the I. T. Act,
1961 (for short `the Act') during assessment proceedings of the assessee for
the Assessment Years 2002-03, 2003-04 and 2004-05 when accommodation
entries were noticed. Pursuant to the notice issued u/s 148, assessee filed
return of income in Form 2D on 03.10.2011 declaring an income of
Rs.35,271/- and thereafter, notices u/s 143(2) and 142(1) were issued on
06.12.2011 and consequently, Shri S. K. Narang, CA/ AR of the assessee
attended the proceedings, filed necessary details and explanation and the
case was discussed with him.
3. Present return of income has been filed in the name and style of M/s.
Next Wave India (A.O.P) and Shri Bharat Bhushan and Smt. Renu Bhushan
came into existence and the return in the capacity of AOP has been filed.
ITO, Ward 13(2), wrote a letter along with a copy of MOU signed by Shri
Bharat Bhushan and Smt. Renu Bhushan and a copy of statement of Shri
Bharat Bhushan was recorded by him.
3 ITA No.2533/Del/2013
4. Pursuant to the inquiries conducted by Investigation Wing of the
Department, it was noted that Shri Bharat Bhushan and Smt. Renu Bhushan
had opened bank account No.01000050902 in the name of Next Wave India
Pvt. Ltd. with Mayur Vihar Phase I, Branch of State Bank of Saurashtra on
21.11.2000 and had taken accommodation entries in this account from
Charms Investments Pvt. Ltd. during the period relevant to Assessment Year
2004-05. During proceedings u/s 148 before ITO Ward 13(2), Shri Bharat
Bhushan owned up the accounts operated by him in the name of M/s. Next
Wave (India) Pvt. Ltd. and no regular business activities were done by Shri
Bharat Bhushan and Smt. Renu Bhushan through the aforesaid account as
the entries recorded in this account are only laundering of money. The
transactions made through this account were never declared before any
income tax authorities and these were come in light only in the inquiries
made by the Investigation Wing of the Department.
5. Despite receipt being added in the name of the company M/s. Next
Wave (India) Pvt. Ltd., Shri Bharat Bhushan and Smt. Renu Bhushan filed
return of income in the capacity of AOP and owned up the transactions made
by them in the above said bank account, which was done in terms of
Memorandum of Understanding signed by the present directors of M/s. Next
Wave (India) Pvt. Ltd. The Bhushans were the first party and present
directors of M/s. Next Wave India Pvt. Ltd. namely Shri P. K. Arora, Smt.
Pooja Juneja and Mr. Rajeev Juneja were the second party to this agreement.
The relevant clause NO.2 of the Memorandum of Understanding states as
under:
"That the First Party declare and own in the capacity of an
Association of Persons, before the income Tax Authorities who are
assessing Nextwave, all the transactions done by it under the name of
4 ITA No.2533/Del/2013
Nextwave and shall therefore be solely and exclusively liable for any
income tax, interest and penalties and any other liability financial or
otherwise arising out of such transactions. For this purpose the First
Party shall provide its assessment particulars and all other
informations as may be required by the income Tax Authorities
assessing Nextwave. The First Party shall also execute such
affidavits/understandings/declarations/documents as may be required
by such authorities."
6. It is on record that AOP is nothing but the commitment made by the
previous alleged directors i.e. Mr. Bharat Bhushan and Smt. Renu Bhushan
to the present directors of M/s. Next Wave (India) Pvt. Ltd. that they would
bear the future liabilities likely to arise due to these financial transactions.
So, the money with shri Bharat Bhushan and Smt. Ritu Bhushan in the
books of account was operated by them in the name and style of M/s. Next
Wave India Pvt. Ltd. with the intention of introducing their unaccounted
money in the normal process. Therefore, entire receipt of Rs.17,00,058/- is
being treated as unexplained income of Shri Bharat Bhushan and Smt. Ritu
Bhushan and has been added u/s 68 of the Act in the hands of the AOP
pursuant to MOU annexed therewith.
7. Feeling aggrieved, the assessee challenged the order of A.O. by way
of appeal before Ld. CIT(A) who has partly allowed the same. Now, the
assessee has come up before the Tribunal by challenging the impugned
order.
8. Ld. A.R. challenging the impugned order contended inter alia that
assessee was operating account in the name and style of M/s. Next Wave
India Pvt. Ltd. and he has explained each and every transaction of the
aforesaid bank account vide various letters lying at pages 51-53 of the paper
book during assessment proceedings and Mr. Bharat Bhushan is a member
5 ITA No.2533/Del/2013
of AOP and confirmation from Mr. Bharat Bhushan and the bank statement
has already been filed vide para 9 of the letter, therefore, the assessee has
explained the identity, genuineness and creditworthiness of the person from
whom the money has been received but the A.O. as well as Ld. CIT(A)
have passed the impugned orders arbitrarily; that an identical issue in a
similar mater has been decided by ITAT, Delhi Benches `E' Bench, New
Delhi in the case of Next Wave India (AOP) and Next Wave India (P) Ltdd.
Vs ITO, New Delhi for the Assessment Years 2002-03, 2003-04 and 2004-
05 vide order dated 25.01.2012 in assessee's own case.
9. On the other hand Ld. D.R. relied upon the order of Ld. CIT(A) and
prayed for dismissal of appeal.
10. We have heard Ld. Authorized Representatives of both the parties and
gone through the documents relied upon in the light of facts and
circumstances of the case.
11. Under Section 68 of the Act, if any sum is found credited in the books
of an assessee maintained for any previous year, the onus lies upon the
assessee to explain the source of credit otherwise the sum so credited may be
charged to the income tax or the income of the assessee of that previous
year. In the instant case, the assessee stated to have discharged the initial
onus by explaining the credit entries before the A.O. but alleged to have not
considered by the A.O. The assessee has relied upon the confirmation from
APT Enterprises Pvt. Ltd., Anil Agencies Pvt. Ltd, New Age Services and
Quality Buildcon Pvt. Ltd., with the bank statements of the parties stated to
have been supplied to the A.O.
12. When the assessee has owned up the bank account No.010000050902
maintained with Bank of Saurashtra regarding the entry of Rs.17,00,058/-
6 ITA No.2533/Del/2013
and also discharged the initial onus by providing complete source of sum
credited in his account, it was for the A.O. to verify and decide the
genuineness and creditworthiness of the person who had transferred the sum
in question into the account of the assessee.
13. Keeping in view the totality of the facts and circumstances of the case
when the assessee has duly explained the source of credit in their account on
account of loan, interest on loan and cash deposits etc. and has also claimed
expenses on account of bank charges, conveyance, salary and allowances
and depreciation, we are of the considered view that addition should not
have been made without verifying the genuineness and creditworthiness of
the parties who have otherwise confirmed the same. So, in view of the
matter, it would be proper in the interest of justice to set aside the order
passed by the authorities below and the matter is restored back to the file of
A.O. for making assessment afresh after affording proper opportunity of
being heard to the assessee in accordance with the Act. Consequently, the
appeal of assessee is allowed for statistical purposes.
14. Order pronounced in the open court on 23rd Sep., 2015.
Sd./- Sd./-
( INTURI RAMA RAO) (KULDIP SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Date: 23.09.2015
Sp
Copy forwarded to:-
1. The appellant
2. The respondent
3. The CIT
4. The CIT (A)-, New Delhi.
5. The DR, ITAT, Loknayak Bhawan, Khan Market, New Delhi.
True copy. By Order (ITAT, New Delhi).
7 ITA No.2533/Del/2013
S.No. Details Date Initials Designation
1 Draft dictated on 15/9 Sr. PS/PS
2 Draft placed before author 15,17,21 Sr. PS/PS
Draft proposed & placed before the
3 JM/AM
Second Member
Draft discussed/approved by Second
4 AM/AM
Member
5 Approved Draft comes to the Sr. PS/PS 23/9/15 Sr. PS/PS
6 Kept for pronouncement 23/9 Sr. PS/PS
7 File sent to Bench Clerk 23/9 Sr. PS/PS
Date on which the file goes to Head
8
Clerk
9 Date on which file goes to A.R.
10 Date of Dispatch of order
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