PCIT (Central) Vs Agson Global Pvt. Ltd. (Delhi High Court)
1. Dismissing a bunch of appeals against deletion of addition u/s 68 towards Share capital/ share premium, bogus purchases and deposit in bank account, the Hon’ble Delhi High Court vide judgment delivered on 19.01.2022 (yesterday) has held that where the ITAT decided the matter based on appreciation of evidences placed on record and the order of ITAT not being challenged on ground of perversity, no substantial question of law arises.
2. It also held that the investigation wing directed the A O to frame the assessment in a manner that would protect the revenue’s interest.
3. The A O performs a quasi judicial function while framing an assessment. The revenue can not dictate the manner, in which, the A O frames the assessment order.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. These appeals, which are six in number, are preferred under Section 260A of the Income Tax Act, 1961 [hereafter referred to as “the Act”] and are directed against a common order dated 31.10.2019, passed by the Income Tax Appellate Tribunal [in short “the Tribunal”].
1.1 The Tribunal, via the impugned order, rendered a decision in twelve appeals out of which six were preferred by the respondent i.e., Agson Global Pvt. Ltd. [hereafter referred to as “assessee”], while the remaining six appeals were preferred by the appellant [hereafter referred to as “revenue”]. 1.2. The impugned order concerned six assessment years [in short ―AYs”] i.e., 2012-2013, 2013-2014, 2014-2015, 2015-2016, 2016-2017 and 20172018.
2. The record shows that the Tribunal was, principally, grappling with three broad issues. These issues concerned additions/deletions made to the declared/returned income of the assessee under the following broad heads:
(i) Additions qua amounts received by the assessee in the form of share capital/share premium under Sections 68 of the Act.
(ii) Deletions made on account of alleged bogus purchase transactions. Under this head, the Assessing Officer ruled that 25% of the bogus purchases in value should be added to the assessee’s declared/returned
(iii) Addition made, under Section 68 of the Act, in respect of monies deposited by the assessee with its banker during the demonetization period.
2.1. Insofar as issue nos. (i) and (ii) are concerned, they were common to all six AYs, referred to hereinabove. However, insofar as issue no. (iii) is concerned, it arises only in AY 2017-2018. In this regard, it requires to be noticed that demonetization was brought about on 08.11.2016 and the period of demonetization spanned between 09.11.2016 and 30.12.2016.
2.2. Therefore, we would be dealing with submissions and counter-submissions of parties bearing in mind the aforesaid issues and the fact as to whether or not substantial questions of law have arisen which require consideration and/or adjudication.
Background:-
3. Before we proceed further, certain facts and circumstances, in the backdrop of which the above-captioned appeals have been lodged, are required to be noticed.
3.1. The assessee had filed its return of income qua AY 2012-2013 under Section 139 (1) of the Act on 31.10.2013. In this return, the assessee had declared its income as Rs.6,02,85,750/-. The Assessing Officer [in short ―A.O.”] passed an assessment order under Section 143(3) of the Act, on 24.03.2015. Via the said assessment order, the A.O. made an addition of Rs.18,50,00,000/- to the declared/returned income of the assessee on account of ―unexplained share capital and share premium”. Resultantly, the assessed income shot up to Rs.24,52,85,750/-. Being aggrieved, the assessee preferred an appeal. The CIT(A), vide order dated 31.03.2016, deleted the aforesaid addition. Pertinently, the revenue did not carry the matter further. Consequently, the assessment proceedings vis-à-vis AY 2012-2013, stood concluded.
3.2. Likewise, for AYs 2013-2014 and 2014-2015, the A.O. passed assessment orders under Section 143(3) of the Act, whereby the income declared/returned by the assessee was accepted. The assessment order qua AY 2013-2014 was passed on 31.03.2016. The assessed income, which was also the declared/returned income, was pegged at Rs.7,22,89,816/-. Similarly, for AY 2014-2015, the assessment order was passed on 28.12.2016 and the assessed income, which was also the declared/returned income, was pegged at Rs.3,16,41,113/-.
3.3. Insofar as the remaining three AYs are concerned i.e., 2015-2016, 2016-2017 and 2017-2018, even while the returns filed by the assessee were pending assessment, a search and seizure operation was carried out qua the assessee on 21.03.2017. For ease of reference, as regards these three AYs, the details as to when returns were filed and the amount which was declared as income by the assessee is set forth hereafter:
