ACIT, RANGE I, V. NAVEEN VERMA,

ITSSA 108/DEL/2007

AI Insights

The case involves a series of appeals related to block assessment proceedings under the Income-tax Act, 1961, concerning the period from April 1, 1988, to April 16, 1999. The primary issues revolved around the jurisdiction of the ACIT, Range-1, Faridabad, the validity of the block assessment order, and the assessment of undisclosed investments and income. The Tribunal examined the additions made by the Assessing Officer, which were partly upheld and partly rejected based on the actual amounts invested and the nature of the income derived by the assessee from real estate activities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 40595 (ITAT-DELHI)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: misc
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL YADAV
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Unexplained investment; Block assessment
• Section: 158BD; 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘F’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER IT(SS)A No.90/Del/2005 Block Period: 01.04.1988 to 16.04.1999 With IT(SS)A No.108/Del/2007 Block Period: 01.04.1988 to 16.04.1999 ACIT, Range-I, Faridabad Vs. Sh. Naveen Verma, I-16, Sector-10, Faridabad PAN:ADBPV7392L (Appellant) (Respondent) With IT(SS)A No.8/Del/2005 Block Period: 01.04.1988 to 16.04.1999 Sh. Naveen Verma, I-16, Sector-10, Faridabad Vs. ACIT, Range-I, Faridabad PAN: (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM The instant batch of three appeals involves the single assessee herein, Sh. Naveen Verma. This assessee and the Revenue Assessee by Dr. Rakesh Gupta, Adv. Sh. Somil Agarwal, Adv. Department by Sh. Sunil Yadav, CIT(DR) Date of hearing 20.03.2025 Date of pronouncement 20.03.2025 IT(SS)A Nos.8 & 90/Del/2005 & 108/Del/2007; 2 | P a g e have filed their respective cross appeals IT(SS)A Nos.8/Del/2005 and 90/Del/2005 for block assessment 01.04.1988 to 16.04.1999 against the ACIT, Range-1, Faridabad’s order dated 30.04.2003 involving proceedings under section 158BD(2)/144 of the Income- tax Act, 1961 (in short ‘the Act’). The Revenue has filed the appeal IT(SS)A No.108/Del/2007 against the CIT, Range-I, Faridabad’s order dated 27.03.2006 involving section 158BFA(2) penalty proceedings. Heard both the parties at length. Case files perused. The assessee’s appeal IT(SS)A No.8/Del/2005, raises the following grounds of appeal: 1. The Ld. Commissioner of Income Tax (Appeals) erred on facts as well as in law in holding that ACIT, Range - 1, had jurisdiction to assess the assessee and consequently, the Block Assessment Order dispute was valid. 2. The Ld. Commissioner of Income Tax (Appeals) erred on facts as well as in law in holding that the mandatory provisions of law were complies with. 3. The Ld. Commissioner of Income Tax (Appeals) erred on facts as well as in law in holding that investment of Rs.11,000/= in M/s. Nasa Systems was undisclosed income of the assessee being from unexplained sources. 4. The Id. Commissioner of Income Tax (Appeals) erred on facts as well as in law in holding that investment of Rs. 1 Lakh in Agriculture Land measuring 20 K 8M was undisclosed income of the assessee from unexplained sources. 5. The Ld. Commissioner of Income Tax (Appeals) erred on facts as well as in law in holding that the investment of Rs.43,750/= in PNB Building at Ballabgarh was undisclosed income of the assessee being from unexplained sources. 6. The Ld. Commissioner of Income Tax (Appeals) erred on facts as well as in law in holding that advance of Rs. 10,000/= paid for purchase IT(SS)A Nos.8 & 90/Del/2005 & 108/Del/2007; 3 | P a g e of Plot No.438/3 was undisclosed income of the assessee being from unexplained sources. 7. The Ld. Commissioner of Income Tax (Appeals) erred on facts as well as in law in holding that the source of payment of Rs.34.155/= towards booking of Plot at Gurgaon was undisclosed income of the assessee being from unexplained sources. 8. The Ld. Commissioner of Income Tax (Appeals) erred on facts as well as in law in holding that the income from STD Booth and M/s Spreadcom could not be established and therefore the same was Nil. 9. The Ld. Commissioner of Income Tax (Appeals) erred on facts as well as in law in not considering incomes earned from M/s. Spreadcom and STD Booth and in denying set-off of the same against alleged undisclosed investment, to the assessee. 10. The assessee craves leave to add, amend or delete any of the Grounds of Appeal. 3. The Revenue’s cross appeal IT(SS)A No. 90/Del/2005, on the other hand, pleads the following substantive grounds: 1. In deleting the addition of Rs.1,24,000/- out of the total addition of Rs.2,24,000/- made on account of investment from undisclosed sources in land in village Dhatir. 2. In deleting the addition of Rs.3,50,000/- out of total addition of Rs.3,60,000/- made on account of investment from undisclosed sources in plot no. 438, sec-3, Faridabad. 3. In deleting the addition of Rs.1,13,41,500/- made on account of investment from undisclosed sources in various properties. 4. We come to the Revenue’s appeal first of all for the sake of convenience and brevity. The instant batch of three appeals has admittedly emanated from the department’s search assessment dated 12.03.2019 involving block assessment period from 01.04.1988 to 16.04.1999. The assessee further appears to have proceeded under section 158BD of the Act. It is in this factual backdrop that the learned Assessing Officer has framed his assessment on 30th April, 2003 making the impugned additions IT(SS)A Nos.8 & 90/Del/2005 & 108/Del/2007; 4 | P a g e which stand partly deleted in lower appellate discussion leaving both the parties aggrieved to the extent of their respective grievances pleaded in the instant cross appeals. 5. We now advert to the Revenue’s first and foremost substantive ground seeking to revive the Assessing Officer’s action adding unexplained investment from undisclosed sources in entirety to the tune of Rs.2.24 lakhs. A perusal of the lower appellate discussion in paras 8 to 7.1 (pages 8 to 9) indicates that the assessee was actually found to have actually invested only an amount of Rs.25,000/- as advance(s) on 16.06.1996 and Rs.75,000/- later on. That being the case, we hardly find any merit in the Revenue’s instant substantive ground seeking to revive extrapolated addition amount of Rs.1.24 lakhs. Rejected accordingly. 6. Next comes the Revenue’s second substantive ground is that the CIT(A) has erred in law and on facts in reversing the assessment findings making unexplained investment addition of Rs. 3.50 lakhs out of Rs. 3.60 lakhs relating to plot no. 438, Sector-3, Faridabad. We note from a perusal of case records/seized material(s) that the corresponding actual figure therein is only Rs.10,000/- which already stands upheld. We thus see no reason to revive the IT(SS)A Nos.8 & 90/Del/2005 & 108/Del/2007; 5 | P a g e impugned remaining addition of Rs.3.5 lakhs. Rejected accordingly. 7. Lastly comes the third substantive issue between the parties relating to investment from undisclosed sources involving the amount of Rs.1,13,41,500/-. 8. It emerges during the course of hearing that the assessee was nowhere found to have actually made any such investments in “HUDA” plots/properties etc. as per the remand report coming from the Assessing Officers end. The fact, however, remains that although the assessee himself does not own the property(ies) in question. A perusal of the corresponding seized material at pages 137 to 147 reveals his name along with the rate of the relevant asset which fairly leads us to an irresistible conclusion that he in fact worked as a real estate broker deriving commission income from various lands dealings. There would be hardly any dispute that such seized material carries presumption of correctness regarding the contents thereof as per section 292C of the Act. We, thus, reject the assessee’s vehement contentions against the assessment of his commission income and direct the learned Assessing Officer to assess a lump sum amount of Rs. 2 lakhs only, IT(SS)A Nos.8 & 90/Del/2005 & 108/Del/2007; 6 | P a g e in these peculiar facts and circumstances with a rider that the same shall not be treated as a precedent. The Revenue’s instant third and last substantive grounds of the main appeal IT(SS)A No. 90/Del/2005 is partly accepted to this limited extent. Revenue’s appeal IT(SS)A No. 90/Del/2005 is partly allowed. 10. So far as the assessee’s IT(SS)A No. 8/Del/2005 is concerned, we are of the considered view that the above lump sum addition of Rs. 2 lakhs would cover of all his substantive grounds pleaded herein as per ‘telescoping’ method. We further make it clear that the assessee has not pressed for it’s former twin substantive grounds challenging validity of the impugned section 158BD assessment which stood settled in the first round travelling upto hon’ble jurisdiction high court. These former twin grounds are rejected in very terms. This assessee’s instant appeal IT(SS)A No. 8/Del/2005 is partly allowed in above terms. 12. Same order to follow in the Revenue’s consequential section 158BF penalty appeal IT(SS)A No.108/Del/2007 as none of the quantum additions made by the learned Assessing Officer have IT(SS)A Nos.8 & 90/Del/2005 & 108/Del/2007; 7 | P a g e been upheld in principle in the preceding terms. This Revenue’s IT(SS)A No. 108/Del/2007 fails therefore. 12. No other grounds or arguments have been pressed before us. 13. To sum up, the assessee’s and Revenue’s “quantum” cross appeals IT(SS)A No.8/Del/2005 and IT(SS)A No.90/Del/2005 are partly allowed and the latter’s penalty case IT(SS)A No. 108/Del/2007 is dismissed, in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 20th March, 2025 Sd/- Sd/- (AMITABH SHUKLA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 20th March, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "