The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that mere non completion certificate by the Developer isnot an enough ground to delete addition of scrutiny deposit.
The case of the assesseeJindal Construction was reopened on the basis that the assessee had not filed any return of income, though it entered into transaction of large magnitude.
Therefore, the case of the assessee was reopened under Section 147 of the Income-tax Act, 1961. A notice under section 148 of the Income Tax Act was issued and served upon the assessee. In response, the assessee filed return its of income on 10.4.2018 declaring income at Nil.
Thereafter, a notice under Section 143(2) of the Income Tax Act was also served upon the assessee. In response thereto CA/AR attended the proceedings. After considering the submissions the AO made addition of Rs. 25,00,000/- being security deposit treating to be forfeited by the assessee received from the developer.
Aggrieved against the decision of the AO, the assessee preferred appeal before the Commissioner of Income Tax (Appeals)[CIT(A)] who after considering the submissions sustained the addition. The theassessee appealed before this Tribunal.
The Department Representative of the Revenue opposed the submissions and supported the orders of the authorities below. He submitted that it was a clearcut case of having income from other sources as the security deposit was received during F.Y. 2003-04 and even after lapse of more than seven years the security deposit was not refunded.
The bench comprising of Kul Bharat held that there was no dispute with regard to the fact that the assessee had entered into a transaction with the Developer. It is also not disputed that assessee had not filed return of income. The return of income was filed in pursuance to the notice issued under Section 148 of the Income Tax Act. Therefore, the grounds taken by the assessee, lack on merits.
It was also held that there was no dispute with regard to the fact that the impugned security deposit was taken way back in FY 2003-04. Merely stating that the Developer had not provided completion certificate, no other material suggesting that there was any lapse on behalf of the Developer has been brought on record by the assessee. In the absence of such material, the tribunal see any reason to interfere in the finding of the authorities below.
Hence, the appeal was dismissed.
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