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11-04-2019, Radico Khaitan, Section 245-I, 132, 153A, Tribunal Delhi

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2 months 1 week ago #9156 by amit
Section - 245-I, 132, 153A, 245C(1), 245D(4), 148
Order Date - 11-04-2019
Favouring - Assessee
Court - Tribunal Delhi
Appellant - Radico Khaitan Ltd
Respondent - DCIT
Justice - N. K. BILLAIYA AM & K. N. CHARY JM
Citation - 419Taxpundit191
Appeal No. - ITA No. 4355/DEL/2015
Asstt. Year - 2005-06

Order

PER : N.K. BILLAIYA

With this appeal, the assessee has challenged the correctness of the order of the CIT(A)- 30, New Delhi dated 19.02.2015 pertaining to assessment year 2005-06.

2. With the first three grounds of appeal, the assessee has challenged the jurisdiction of the Assessing Officer in framing the assessment order u/s 153A of the Income-tax Act, 1961 [hereinafter referred to as 'the Act'.

3. Ground No. 4, with its sub grounds, challenges the disallowance of expenditure of Rs. 1.78 crores on merits of the case.

4. Since Ground Nos. 1 to 3 go to the root of the matter, we proceed to decide these grounds.

5. The under lying facts in this issue are that a search and seizure action u/s 132 of the Act was carried out in the Radico Khaitan group of cases including the assessee company on 15.02.2011. The assessee company had also been covered in an earlier search u/s 132 of the Act on 14.02.2006.

6. Pursuant to the present search, i.e. on 15.02.2011, the Assessing Officer commenced the assessment proceedings as the present A.Y is 2005-06 is one of the six A.Ys, preceding the A.Y relevant to the previous year in which the search was conducted.

7. From the records available, the Assessing Officer observed that during the year under consideration, the assessee entered into a transaction with M/s Count Trade Links Pvt Ltd and booked expenses/made payment of Rs. 1,78,30,714/-.

8. On the basis of some information received from the DDIT, UNIT IV(3) [INV], New Delhi, the Assessing Officer found that that M/s Count Trade Links Pvt Ltd has received a large amount from the assessee towards reimbursement of marketing expenses. In this regard, some bills pertaining to the purchase of gold and diamond was also obtained by M/s Count Trade Links Pvt Ltd on behalf of the assessee.

9. On further enquiries, the Assessing Officer came to know that no sale of gold /diamond was made by the parties from whom M/s Count Trade Links Pvt Ltd contended purchases. It came to the notice of the Assessing Officer that the parties from whom M/s Count Trade Links Pvt Ltd purchases gold/diamond, namely, M/s L.N. Nylon Pvt Ltd, M/s Surbhi Textiles, M/s Alka Gems, Shree Gee Jewellers, M/s Badshah Johri Pvt Ltd and N.V. Distilleries & Breweries Pvt Ltd were providing accommodation entries by charging commission @ 10 paise per Rs. 100.

10. In view of these enquiries and material gathered therefrom, the Assessing Officer asked the assessee to furnish details and documents to explain the genuineness of the transaction with M/s Count Trade Links Pvt Ltd amounting to Rs. 1,78,30,714/-. The assessee filed detailed reply dated 28.05.2013. The most relevant submissions of the assessee read as under:

“Your honour before going into the merit of allegation we would firstly like to point out that as already submitted earlier before your honour, that the assessment for the AY 2005-06 was covered u/s 153A of the Income Tax Act,1961 pursuant to search being conducted at the assessee's premises on 14.2.2006 and the
assessee company had filed an application before the Hon'ble Settlement Commission for settlement of its income for the A Y/s

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