Sh. Daulat Ram Arora, New Delhi V. DCIT, New Delhi

CO 144/DEL/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1202 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-07-2015
• Assessment Year: misc
• Appeal Filed On: 03-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROHIT JAIN
• Assessee Lawyers: RAVI JAIN
• Keywords: Salary income; Source of fund; Question of law; Block assessment
• Section: 260A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. J.S.REDDY , ACCOUNTANT MEMBER I.T (SS).NO. - 8/DE L/2013 (ASSESSMENT YEAR/BLOCK PERIOD - 1990 - 91 TO 2000 - 01 ) D CIT, CENTRAL CIRCLE - 2, ROOM NO. - 323, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI. (APPELLANT) VS DAULAT RAM ARORA, H.NO. - 110, WARD NO. - 2, NEAR SHARAD BHAWAN, MEHRAULI, NEW DELHI PAN - AA RPA5388C (RESPONDENT) C.O. - 144/DEL/2013 (IN I.T (SS ).NO. - 8/DE L/2013 ) (ASSESSMENT YEAR/BLOCK PERIOD - 1990 - 91 TO 2000 - 01 ) DAULAT RAM ARORA, H.NO. - 110, WARD NO. - 2, NEAR SHARAD BHAWAN, MEHRAULI, NEW DELHI PAN - AA RPA5388C (APPELLANT) VS D CIT, CENTRAL CIRCLE - 2, ROOM NO. - 323, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI. (RESPONDENT) APPELLANT BY SH. RAVI JAIN, CIT DR RESPONDENT BY SH.ROHIT JAIN, ADV. ORDER PER DIVA SINGH, JM THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE ASSAILING THE CORRECTNESS OF THE ORDER DATED 07.01.2013 OF CIT(A) - III, NEW DELHI PERTAINING TO BLOCK PERIOD 1990 - 1991 TO 2000 - 2001 ON THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A HAS ERRED IN DELETING THE ADDITION BY THE A.O. BEING INVESTMENT MADE OUT OF UNDISCLOSED SOURCE OF INCOME. 2. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 2. THE ASSESSEE HAS FILED A C.O ON THE FOLLOWING GROUNDS: - DATE OF HEARING 14 .0 7 .2015 DATE OF PRONOUNCEMENT 14 .0 8 .2015 I.T (SS).NO. - 8/DEL/2013 & C.O. - 144/DEL/2013 PAGE 2 OF 10 1. THAT THE C IT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION ON ACCOUNT OF INVESTMENT IN PHILIP CO - OPERATIVE HOUSING SOCIETY BY HOLDING THE SAME AS INVESTMENT MADE OUT OF UNDISCLOSED INCOME. 1.1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING AFORESAID ADDITION WITHOUT APPRECIATING THAT TRIBUNAL VIDE ORDER DATED 06.06.2008 IN IT(SS)A NO. - 218/DEL/2004 HAD HELD THAT SAID INVESTMENT CANNOT BE REGARDED AS UNDISCLOSED INCO ME . 1.2. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING AFORESAID ADDITION WITHOUT APPRECIATING THAT SAID ADDITION AS WITHOUT JURISDICTION BEING VIOLATIVE OF CLEAR DIRECTIONS OF THE TRIBUNAL VIDE ORDER DAT ED 06.06.2008. 1.3. WITHOUT PREJUDICE, THE CIT(A ERRED ON FACTS OF THE CASE AND POSITION IN LAW IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING AFORESAID ADDITION ON THE GROUND THAT NO NEW EVIDENCES/DOCUMENTS HAVE BEEN SUBMITTED BY ASSESSEE TO ESTAB LISH THAT SUCH INVESTMENTS WERE MADE OUT OF DISCLOSED SOURCES OF INCOME. 1.4. WITHOUT PREJUDICE, THE CIT(A ERRED ON FACTS OF THE CASE AND POSITION IN LAW IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING AFORESAID ADDITION WITHOUT APPRECIATING THAT ON US WAS ON THE ASSESSING OFFICER TO ESTABLISH THAT AFORESAID INVESTMENT REPRESENT UNDISCLOSED INCOME UNDER CHAPTER XIV - B OF THE INCOME TAX ACT, 1961. 2. RIGHT AT THE OUTSET, LD.AR SUBMITTED THAT THE ISSUES ARE COVERED BY THE ORDER OF THE ITAT IN ASSESSEE S OWN CASE PASSED IN THE FIRST ROUND. THUS WITH THE C O N S E N T OF THE LD. CIT DR THE LD. AR WAS REQUIRED TO MAKE OUT HIS CASE WHICH THE DEPARTMENT CAN ADDRESS. IN THE SAID BACKGROUND, L D. AR REFERRING TO THE CHART OF ISSUES FILED SUBMITTED THAT THE DEPARTMENTAL APPEAL DESERVES TO BE DISMISSED AND THE CROSS - OBJECTION FILED BY THE ASSESSEE DESERVE TO BE ALLOWED. IN SUPPORT OF THE SAID SUBMISSION, ATTENTION WAS INVITED TO THE CHART OF ISSUES FILED ON AN EARLIER DATE BEFORE THE BENCH . ATTENTION WAS ALS O INVITED TO THE ITAT S ORDER DATED 06.06.2008 IN IT(SS) NO. - 218/DEL/2004 PASSED BY THE CO - ORDINATE BENCH PLACED AT PAGES 15 - 21 OF THE PAPER BOOK WHEREIN THE SAID ISSUES IT WAS SUBMITTED HAVE BEEN ADDRESSED BY A DETAILED FINDING. INVITING ATTENTION TO THE SAME, IT WAS SUBMITTED THAT THE TAX AUTHORITIES HAVE MISUNDERSTOOD THE DIRECTION S GIVEN IN THE REMAND IN PARA 7 BY THE TRIBUNAL. IT WAS SUBMITTED THAT THE REMAND WAS RELATABLE ONLY TO THE ISSUE OF RS. 2,00,952/ - AND NOT THE ENTIRE ISSUE AS WRONGLY MI SUNDERSTOOD. REFERRING TO I.T (SS).NO. - 8/DEL/2013 & C.O. - 144/DEL/2013 PAGE 3 OF 10 THE ORDERS OF THE AUTHORITIES BELOW IN THE FIRST ROUND WHICH TRAVELLED UP TO THE ITAT AND THE ORDERS OF THE AO AND THE CIT(A) IN THE SECOND ROUND IT WAS HIS SUBMISSION THAT THE AO HAD MADE AN ADDITION PURSUANT TO THE SEARCH CONDU CTED AT THE RESIDENCE OF THE ASSESSEE ON 13.01.2000 ON TWO COUNTS. ADDITION OF RS.7,73,000/ - HAD BEEN MADE ON ACCOUNT OF PURCHASE OF A FLAT IN PHILIPS GROUP COOPERATIVE HOUSING SOCIETY LTD. (HEREINAFTER REFERRED TO AS PGCHS ) AND ANOTHER ADDITION OF RS. 9,11,074/ - WAS MADE WHOSE BREAK UP WAS AS UNDER: - (A) FD OF RS.2,00,952 IN THE NAME OF ASSESSEE JOINTLY WITH OTHERS[NO APPEAL PREFERRED]; (B) FD OF RS.2,10,818 MADE IN FINANCIAL YEARS 1979 - 80 AND 1983 - 84 [DEPARTMENTAL APPEAL]; (C) FC OF RS.4,99,304 IN THE NAME OF OTHE RS [DEPARTMENTAL APPEAL]. 4. ADDRESSING THE AMOUNT OF RS.2,00,952/ - , IT WAS SUBMITTED THAT TH IS ISSUE HAD TRAVELLED TO THE ITAT IN THE FIRST ROUND AND THE ISSUE WAS REMANDED TO THE AO WHO HAS PROCEEDED TO MAKE THE ADDITION OF THE SAID AMOUNT . THE SAID ADDITION WAS NOT AGITATED FURTHER BY THE ASSESSEE AND THE REMAND WAS ONLY ON THIS ADDITION BY THE ITAT IT WAS SUBMITTED. 4.1. ADDRESSING THE REMAINING TWO AMOUNTS OF RS.2,10,818/ - AND 4,99,304/ - . IT WAS HIS SUBMISSION THAT THE TRIBUNAL IN PARA 5 HELD THA T WHEREAS THE AMOUNT OF RS.2,10,818/ - PERTAINED TO FINANCIAL YEAR 1979 - 80 & 1983 - 84, ACCORDINGLY IT CONCLUDED THAT SINCE IT PERTAINED TO THE PERIOD BEFORE THE COMMENCEMENTS OF THE RELEVANT BLOCK PERIOD AS SUCH IT COULD NOT BE ADDED IN THE RELEVANT BLOCK AS SESSMENT. ON THE SAID ISSUE, IT WAS SUBMITTED THERE WAS NO REMAND. 4.2. ADDRESSING THE AMOUNT OF RS. 4,99,304/ - IT WAS SUBMITTED THAT THE ITAT IN PARA 5 CONCLUDED THAT THE SAID AMOUNT ALSO COULD NOT BE TAXED IN THE HANDS OF THE ASSESSEE AS THE ASSESSEE S NAME WAS NOT APPEARING THEREIN. ACCORDINGLY IT WAS HIS SUBMISSION THAT THE ISSUES RAISED BY THE REVENUE IN THE PRESENT APPEAL DESERVE TO BE DISMISSED AS THE AO LACKED THE JURISDICTION TO MAKE THE ADDITION OF THE ABOVE STATED TWO AMOUNT IN THE SECOND RO UND AS THE ISSUES STOOD ALREADY CONCLUDED BY THE ITAT . 5. ADDRESSING THE I SSUE ARISING IN THE ASSESSEE S CROSS - OBJECTION IT WAS SUBMITTED THAT IT ALSO STOOD CONCLUDED BY THE ITAT IN PARA 6 AS SUCH THE AO I.T (SS).NO. - 8/DEL/2013 & C.O. - 144/DEL/2013 PAGE 4 OF 10 LACKED THE JURISDICTION TO MAKE THE ADDITION AND THE CIT(A) ON FACTS WAS NOT JUSTIFIED IN UPHOLDING THE ADDITION MADE. THESE ARGUMENTS IT WAS SUBMITTED WOULD ADDRESS THE ASSESSEE S C.O AS WELL AS THE STAND IN THE DEPARTMENTAL APPEAL. 6 . AS OBSERVED RIGHT AT THE OUTSET, THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE, HOWEVER SINCE THE LD. CIT DR, SH.RAVI JAIN HAD NO OBJECTION IF THE LD.AR ADDRESSED THE CHART FILED AND ELABORATED AS TO WHY THE ISSUE IS STATED TO BE COVERED IN FAVOUR OF THE ASSESSEE, THE ARGUMENTS WERE FIRST ADVANCED BY THE L D . A R . IN T HE AFORE - MENTIONED FACTUAL BACKGROUND AS CANVASSED BY THE LD.AR , THE LD.CIT DR ON A PERUSAL OF THE MATERIAL AVAILABLE ON RECORD AND ON A READING OF THE ORDER OF THE TRIBUNAL DID NOT RAISE ANY OBJECTIONS EITHER ON FACTS OR ON LAW TO CANVASS A CONTRARY VIEW AND PLACED RELIANCE UPON THE ASSESSMENT ORDER. IN THE FACE OF THE DEPARTMENTAL STAND LD. CIT DR WAS REQUIRED TO POINT OUT IF THERE IS ANY INFIRMITY ON FACTS AS ARGUED BY THE LD.AR SO AS TO COME TO A CONTRARY CONCLUSION. HOWEVER, NO SUBMISSIONS WERE ADVAN CED TO UPSET THE CLAIM OF THE LD.AR . 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE ORDERS OF THE AO AND THE CIT(A) IN THE FIRST ROUND AS WELL AS IN THE SECOND ROUND WHICH GIVE RISE TO THE PRESENT PROCEEDINGS BEFORE US . WE HAVE ALSO TAKEN INT O CONSIDERATION THE AFORESAID ORDER OF THE CO - ORDINATE BENCH 06.06.2008 REFERRED TO THE BY THE TAX AUTHORITIES AND ALSO IN THE PROCEEDINGS BEFORE US. COPY OF THE SAID ORDER IT IS SEEN IS PLACED AT PAGES 15 - 2 1 OF THE PAPER BOOK. COPY OF THE ORIGINAL ASSE SSMENT ORDER PASSED IN THE FIRST ROUND DATED 28.02.2002 BEEN PLACED AT PAGES 1 TO 4 OF THE PAPER BOOK AND THE ORDER DATED 31.03.2004 OF THE CIT(A) IS AT PAGES 5 - 14 OF THE PAPER BOOK. THE IMPUGNED ORDER AND THE ORDER OF THE AO PURSUANT TO THE REMAND HA V E ALSO BEEN TAKEN INTO CONSIDERATION. ON A CONSIDERATION OF THE SAME, IT IS SEEN THAT THE AO PURSUANT TO THE SEARCH CONDUCTED AT THE RESIDENCE OF THE ASSESSEE U/S 132 ON 13.01.2000 VIDE HIS ORDER U/S 158BC CONCLUDED THE ASSESSMENT AT AN INCOME OF RS.4, 99,000/ - AS OPPOSED TO THE NIL RETURN FILED BY THE ASSESSEE . THESE FACTS HAVE BEEN SUMMED UP BY THE CO - ORDINATE BENCH IN PARA 3 AT PAGES 16 I.T (SS).NO. - 8/DEL/2013 & C.O. - 144/DEL/2013 PAGE 5 OF 10 WH ICH ALSO INCORPORATES THE SUBMISSIONS OF THE ASSESSEE AND IS REPRODUCED FOR READY - REFERENCE: - 3. WE HAVE EXAMINED THE FACTS AND HEARD THE RIVAL SUBMISSIONS. IN A NUTSHELL, THE FOLLOWING CHART WOULD SHOW HOW THE UNDISCLOSED INCOME HAS BEEN ARRIVED AT BY THE ASSESSING OFFICER AT RS.4,99,000/ - : - ______________________________________________________________________ FY 1989 - 90 TO FY 1997 - 98 FY 1998 - 99 TOTAL INVESTMENTS DETERMINED BY AO 708,950 324,000 345,000 1,377,950 LESS: - CREDIT ALLOWED BY AO 705,635 125,000 125,000 BALANCE 3,315 1,99,000 220,000 UNDISCLOSED INCOME ASSESSED NIL 1,99,000 220,000 419,000 UNDISCLOSED INCOME ON ACCOUNT OF INVESTMENT 419,000 ADD: - CASH FOUND 80,000 UNDISCLOSED INCOME ASSESSED BY AO 499,000 THE BLOCK ASSESSMENT ORDER SHOWS THAT THE INVESTMENTS CONSIDERED BY THE ASSESSING OFFICER REPRESENT PAYMENTS MADE BY THE ASSESSEE FOR PURCHASE OF A FLAT IN THE PHILIPS COOPERATIVE GROUP HOUSING SOCIETY LIMITED IN WHICH THE ASSESSEE IS A MEMBER HOLDING MEMBERSH IP NO - 188. AT PAGE 13 OF THE PAPER BOOK IS A LETTER DATED 2.12.1996 WRITTEN BY THE SOCIETY TO THE ASSESSEE STATING THAT THE ASSESSEE HAS TILL THEN PAID RS.2,53,000/ - TO THE SOCIETY OF WHICH RS.1,33,000/ - WAS ADJUSTED TOWARDS THE LAND COST AND THE BALANCE TOWARDS TWO INSTALMENTS OF THE CONSTRUCTION COST. IN THE LETTER, CERTAIN NOTINGS WERE FOUND TO HAVE BEEN MADE SHOWING TOTAL INVESTMENT OF RS7,73,000/ - BETWEEN 2.12.1996 AND 18.1.1999. THE ASSESSING OFFICER WOULD APPEAR TO HAVE TAKEN A PART OF THE INVESTMEN T AS NOT DISCLOSED BY THE ASSESSEE. IT IS HOWEVER CONTENDED ON BEHALF OF THE ASSESSEE THAT ALL THESE I N VESTMENTS HAVE BEEN MADE OUT OF THE BANK ACCOUNT OF THE ASSESSEE IN WHICH HIS SALARY INCOME IS CREDITED. IN ADDITION, THE ASSESSING OFFICER HAS CONSIDERE D THE FIXED DEPOSITS OF RS.9,11,074/ - FOR DETERMINING THE UNDISCLOSED INCOME BUT A PERUSAL OF THE LISTS OF FIXED DEPOSITS (PAGE 2 OF THE PAPER BOOK) SHOWS THAT OUT OF THE AFORESAID AMOUNT, ONLY RS.2,00,952/ - ARE IN THE NAME OF THE ASSESSEE JOINTLY WITH O THERS. A SUM OF RS.2,10,818/ - REPRESENTS FIXED DEPOSITS MADE FOR THE FIRST TIME IN THE FINANCIAL YEARS 1979 - 80 AND 1983 - 84 WHICH ARE BEFORE THE COMMENCEMENT OF THE BLOCK PERIOD AND THEREFORE IT IS SUBMITTED THAT THEY CANNOT BE TACKLE D IN THE BLOCK ASSESSMENT. THAT LEAVES US WITH THE BALANCE OF RS.4,99,304/ - WHICH REPRESENT FIXED DEPOSITS IN THE NAME OF OTHERS, THE ASSESSEE'S NAME NOT FIGURING THEREIN. IT IS THE ASSESSEE'S CONTENTION THAT THIS AMOUNT CANNOT BE ADDED IN THE BLOCK ASSESSMENT SINCE THE FIXED DEPOSITS ARE NOT IN THE NAME OF THE ASSESSEE EITHER SINGLY OR JOINTLY AND IN A BLOCK ASSESSMENT, NO INFERENCE IS POSSIBLE THAT THE DEPOSITS ARE OF THE MONIES BELONGING TO THE ASSESSEE. IT IS ALSO THE CONTENTION OF THE ASSE SSEE THAT THE SALARY PAYMENT HAS BEEN SUBJECTED TO TAX DEDUCTED AT SOURCE AND SINCE THE TOTAL INCOME OF THE ASSESSEE WAS BELOW THE MAXIMUM AMOUNT NOT I.T (SS).NO. - 8/DEL/2013 & C.O. - 144/DEL/2013 PAGE 6 OF 10 LIABLE TO TAX, NO RETURNS WERE FILED BY THE ASSESSEE AND IN SOME YEARS AFTER GIVING CREDIT FOR THE TDS, TH ERE WAS ONLY A REFUND DUE. THE COMPUTATION OF THE TOTAL INCOME FOR SOME OF THE YEARS HAS ALSO BEEN FILED IN THE PAPER BOOK IN SUPPORT OF THE ABOVE PLEA. OUR ATTENTION HAS BEEN DRAWN TO THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. MRS. KUMKUM KOHLI (2005) 276 ITR 589 WHERE IT WAS HELD THAT IF THE ASSESSEE HAD PAID ADVANCE TAX FOR THE AMOUNT IN QUESTION PRIOR TO THE SEARCH AND THE RETURN FILED LATER WAS ACCEPTED BY THE DEPARTMENT AND THE AMOUNT IS ALSO REFLECTED IN THE ACCOUNT BOOKS , IT CANNOT BE SAID THAT THE AMOUNT REPRESENTS UNDISCLOSED INCOME. RELIANCE IS ALSO PLACED ON THE JUDGMENT OF THE RAJASTHAN HIGH COURT IN CIT VS. ASHOK TAKSALI (2002) 124 TAXMAN 45 WHERE IT WAS HELD THAT WHERE TAX WAS DEDUCTED FROM THE ASSESSEE'S SALARY, T HEN IT AMOUNTS TO DISCLOSED INCOME EVEN THOUGH NO RETURNS WERE FILED BY THE ASSESSEE. IT WAS ARGUED THAT IN ANY CASE EVEN IF THE ASSESSEE HAD NOT FILED THE RETURNS OF INCOME IF THE AMOUNTS ARE FACTUALLY AVAILABLE FOR INVESTMENT, THEY SHOULD BE CONSIDERED A ND GIVEN CREDIT. 8 . THE DEPARTMENTAL STAND ADDRESSING THE OBJECTIONS TO THE ASSESSEE S SUBMISSIONS ARE FOUND ADDRESSED AT PARA 4 OF THIS ORDER AND THE SAME READ S AS UNDER: - 4. ON THE OTHER HAND, THE LEARNED CIT - DR SUBMITTED THAT THE ASSESSEE IS NOT ABSOL VED FROM THE DUTY OF FILING THE RETURN OF INCOME MERELY BECAUSE TAX HAS BEEN DEDUCTED FROM THE SALARY. IT WAS SUBMITTED THA T THE STATUTE SAYS THAT MERE NON - FILI NG OF THE RETURN OF INCOME WOULD AMOUNT TO UNDISCLOSED INCOME, WHETHER TAX HAS BEEN DEDUCTED FRO M THE SALARY OR NOT. HE FURTHER CONTENDED THAT SO FAR AS THE FIXED DEPOSIT RECEIPTS IN THE NAME OF OTHERS ARE CONCERNED, THEY WERE SEIZED FROM THE ASSESSEE AND FURTHER THERE WAS NO EVIDENCE TO SHOW WHAT THEIR SOURCES OF INCOME WERE AND IN THESE CIRCUMSTANC ES, IT IS POSSIBLE TO CONSIDER THE INVESTMENTS AS THE UNDISCLOSED INCOME OF THE ASSESSEE. 9 . IT IS SEEN THAT C ONSIDERING THESE FACTS, THE CO - ORDINATE BENCH ONLY IN THE CONTEXT OF THE AMOUNT OF RS.2,00,952/ - CONCLUDED THAT THE ASSESSEE IS REQUIRED TO EXPLA IN THE SAME FOR THE REMAINING AMOUNT OF RS.2,10,818/ - AND RS.4,99,304/ - THE EXPLANATION OF THE ASSESSEE WAS ACCEPTED. THIS IS BROUGHT OUT FROM THE FOLLOWING FINDING OF THE CO - ORDINATE BENCH: - 5. WE HAVE CAREFULLY CONSIDERED THE FACTS AND THE RIVAL SUBM ISSIONS. SO FAR AS THE INVESTMENTS ARE CONCERNED, WE MAY FIRST TAKE UP THE FIXED DEPOSITS A LIST OF WHICH IS GIVEN AT PAGE 2 OF THE PAPER BOOK FILED BY THE ASSESSEE. IT SHOWS A TOTAL OF RS.9,11,074/ - (OUT OF THIS FIGURE, ONLY A SUM OF RS.2,00,952/ - IS IN THE NAME OF THE ASSESSEE, JOINTLY WITH OTHERS. THE ASSESSEE HAS TO EXPLAIN THE SAME.) HOWEVER, THE FIXED I.T (SS).NO. - 8/DEL/2013 & C.O. - 144/DEL/2013 PAGE 7 OF 10 DEPOSITS AMOUNTING TO RS.2,10,818/ - , THOUGH IN THE JOINT NAMES OF THE ASSESSEE AND NAND RANI, THEY ARE PRIOR TO THE BLOCK PERIOD AS ALREADY NOTED AND T HEREFORE CANNOT BE CONSIDERED IN THE BLOCK ASSESSMENT. THE MAJOR AMOUNT OF RS.4,99,304/ - REPRESENTS FIXED DEPOSITS IN THE NAMES OF OTHERS IN WHICH THE NAME OF THE ASSESSEE DOES NOT FIGURE. NO DOUBT THE RECEIPTS WERE FOUND DURING THE SEARCH BUT THESE PERSON S ARE ALL FAMILY MEMBERS AND IT MAY VERY WELL BE THAT THE MONEY CAME FROM THEM. IN ANY CASE, IF THE DEPARTMENT WANTS TO INFER THAT THE MONIES WERE PROVIDED BY THE ASSESSEE AND THESE PERSONS IN WHOSE NAMES THE RECEIPTS STOOD WERE BENAMIDARS OF THE ASSESSEE, IT IS FOR THE DEPARTMENT TO ESTABLISH THE ALLEGATION BY COGENT EVIDENCE. NO SUCH EVIDENCE HAS BEEN BROUGHT ON RECORD. THE EVIDENCE FOUND VIZ., THE FIXED DEPOSIT RECEIPTS DO NOT BY THEMSELVES SHOW THAT THE MONIES WERE PROVIDED BY THE ASSESSEE. THEREFORE, T HE AMOUNT OF RS.4,99,304/ - SHOULD ALSO BE LEFT OUT OF CONSIDERATION OF THE BLOCK ASSESSMENT. (EMPHASIS PROVIDED) 10 . SIMILARLY QUA THE TOTAL INVESTMENT OF RS.7,73,000/ - ADDRESSED IN THE CROSS - OBJECTION OF THE ASSESSEE IN PGCHS, THE CO - ORDINATE BENCH CONSIDERING THE POSITION ON FACTS AND LAW CONCLUDED THE ISSUE IN ASSESSEE S FAVOUR ON THE FOLLOWING REASONING : - 6. THE OTHER INVESTMENT IS THE PAYMENTS MADE TO THE PHILIPS COOPERATIVE HOUSING SOCIETY. THE TOTAL INVESTMENT HAS BEEN TAKEN AT RS.7,73,000/ - WHICH IS AS PER THE NOTINGS MADE IN THE LETTER DATED 2.12.1996 ISSUED TO THE ASSESSEE BY THE SOCIETY. THE BANK'S STATEMENTS FILED IN THE PAPER BOOK FROM PAGES 22 TO 33A SHOW THAT THESE AMOUNTS WERE PAID BY CHEQUES FROM THE BANK ACCOUNT IN WHICH THE SALARY RECEIVED BY THE ASSESSEE IS CREDITED. THERE ARE A FEW CASH DEPOSITS IN THE BANK ACCOUNT BUT THEY ARE NOT OF SUBSTANTIAL AMOUNTS SO AS TO EXCITE SUSPICION. IN ANY CASE, NO ENQUIRY HAS BEEN MADE INTO THE SOURCE OF THE CASH DE POSITS AND THEY HAVE BEEN ACCEPTED. THE ONLY IMPEDIMENT IN THE ASSESSEE'S CASE APPEARS TO BE TECHNICAL IN THE SENSE THAT THE ASSESSEE HAS NOT FILED ANY RETURNS OF INCOME WITH REGARD TO HIS SALARY INCOME. THE EXPLANATION IS THAT TAX WAS DEDUCTED AT SOURCE FROM THE SALARY WHICH WAS MORE THAN OR EQUAL TO THE TAX PAYABLE AND HENCE, THE RETURNS WERE NOT FILED. IN RESPECT OF THE ASSESSMENT YEAR 1997 - 98, THE ASSESSEE APPEARS TO HAVE, FILED THE RETURN OF INCOME AFTER PAYMENT OF SELF ASSESSMENT TAX OF RS.1,078/ - . THE RETURN WAS FILED ON 8 TH AUGUST 1997 (PAGES 19 TO 2 1 OF THE PAPER BOOK). NO RETURNS APPEAR TO HAVE BEEN FILED FOR THE OTHER YEARS INCLUDED IN THE BLOCK PERIOD. THE ONLY QUESTION IS WHETHER THE NON - FILING OF THE RETURNS IN THE ABOVE CIRCUMSTANCES IS REL EVANT. IN CIT VS. MRS. KUMKUM KOHLI (SUPRA), THE TRIBUNAL HAD HELD THAT THE ASSESSEE HAD PAID ADVANCE TAX ON THE INCOME BY WAY OF CAPITAL GAINS FOR THE ASSESSMENT YEAR 1995 - 96 AND THOUGH THE RETURN OF INCOME WAS NOT FILED BEFORE THE DATE OF THE SEARCH THE AMOUNT SHOWN IN THE RETURN CANNOT BE CONSIDERED AS UNDISCLOSED INCOME OF THE ASSESSEE. IN SO HOLDING, I.T (SS).NO. - 8/DEL/2013 & C.O. - 144/DEL/2013 PAGE 8 OF 10 THE TRIBUNAL HAD REFERRED TO ITS EARLIER ORDER IN THE CASE OF VIDYA MADAN LAL MALANI WHEREIN IT WAS HELD THAT IF THE INCOME RETURNED BY THE ASSESSEE IS FR OM DISCLOSED SOURCES, THEN NO ADDITION CAN BE MADE ON ACCOUNT OF UNDISCLOSED INCOME UNDER CHAPTER XIV - B MERELY ON THE GROUND THAT THE RETURN OF INCOME WAS NOT FILED BEFORE THE DATE OF SEARCH. THE TRIBUNAL ALSO REFERRED TO THE JUDGMENT OF THE BOMBAY HIGH CO URT IN THE CASE OF CIT VS. SHAM LAL BALRAM GURBANI - (2001) 249 ITR 501. UPHOLDING THE TRIBUNAL'S ORDER AND DISMISSING THE APPEAL FILED BY THE DEPARTMENT ON THE GROUND THAT NO SUBSTANTIAL QUESTION OF LAW AROSE, THE HON'BLE DELHI HIGH COURT HELD AS UNDER: - 'FROM THE ABOVE FACTS APPEARING ON RECORD BEFORE US, IT IS CLEAR THAT THE FINDING OF THE TRIBUNAL DOES NOT CALL FOR ANY INTERFERENCE BY THIS COURT IN EXERCISE OF JURISDICTION UNDER SECTION 260A OF THE ACT. THE PROVISIONS OF SECTION 158B OF THE ACT WOULD NO T BE ATTRACTED IN THE PRESENT CASE INASMUCH AS NOTHING HAS BEEN RECORDED IN THE ORDER OF ASSESSMENT OR IN ANY PROCEEDINGS THEREAFTER, THAT THE AMOUNT HAD NOT BEEN INDICATED IN THE BOOKS OF ACCOUNT OR THAT THE ASSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACC OUNT, AS DIRECTED BY THE ASSESSING OFFICER. THE PRESUMPTION AGAINST THE ASSESSEE COULD BE DRAWN ONLY IF THE SUMS WHOLLY OR PARTLY HAD NOT BEEN REFLECTED IN THE BOOKS OR THE ASSESSEE HAD FAILED TO RENDER EXPLANATION IN TERMS OF THE SAID PROVISIONS. HERE THE ASSESSEE HAD PAID THE ADVANCE TAX AND HAS ALSO SHOWN THE FIGURE IN HIS ACCOUNTS SUBMITTED BEFORE THE ASSESSING OFFICER.' A PERUSAL OF THE JUDGMENT OF THE BOMBAY HIGH COURT (SUPRA) SHOWS THAT THE ASSESSING OFFICER TREATED THE INCOME OF THREE YEARS 1993 - 9 4 TO 1995 - 96 AS UNDISCLOSED INCOME IN THE BLOCK ASSESSMENT SINCE THE ASSESSEE HAD NOT FILED RETURNS FOR THOSE YEARS BEFORE THE DATE OF SEARCH. THE TRIBUNAL FOUND THAT THE ASSESSEE'S INCOME FROM INTEREST, SALARY AND RENT WAS REFLECTED IN THE AUDITED BALANCE SHEET OF THE RESPECTIVE ASSESSMENT YEARS OF THE FIRM IN WHICH THE ASSESSEE WAS A PARTNER. THE FIRM HAD FILED ITS RETURNS WITH THE INCOME TAX AUTHORITIES. TAX HAD ALSO BEEN DEDUCTED AND PAID AND EVEN ADVANCE TAX HAD BEEN PAID. ON THESE FACTS, THE TRIBUNAL HELD THAT THE AMOUNT CANNOT BE ASSESSED AS UNDISCLOSED INCOME. IN CIT VS. ASHOK TAKSALI (SUPRA), THE RAJASTHAN HIGH COURT HELD THAT WHERE TDS HAS BEEN DEDUCTED FROM THE SALARY INCOME OF THE ASSESSEE AND THERE WAS NOTHING TO SHOW THAT THE SAME HAS BEEN REFU NDED TO THE ASSESSEE, THERE WAS NO QUESTION OF HOLDING THAT THE INCOME WAS UNDISCLOSED INCOME AND TO TAX IT AGAIN IN THE BLOCK ASSESSMENT AFTER THE SEARCH. THE RATIO OF ALL THESE JUDGMENTS TO OUR HUMBLE MINDS APPEARS TO BE THAT ANY INCOME WHICH HAS BEEN DI SCLOSED TO THE INCOME TAX DEPARTMENT, BY BEING SUBJECTED TO TDS OR BY PAYING ADVANCE TAX CANNOT BE CONSIDERED AS UNDISCLOSED INCOME MERELY BECAUSE NO ASSESSMENT HAS BEEN MADE OR NO RETURN WAS FILED. THE REQUIREMENT THAT THE INCOME SHOULD HAVE BEEN DISCLOSE D TO THE DEPARTMENT APPEARS TO HAVE BEEN SATISFIED BY THE FACT THAT IT HAS BEEN SUBJECTED TO TDS OR ADVANCE TAX. THE LEARNED COUNSEL FOR THE I.T (SS).NO. - 8/DEL/2013 & C.O. - 144/DEL/2013 PAGE 9 OF 10 ASSESSEE HAS ALSO POINTED OUT, IN OUR OPINION RIGHTLY, THAT WHEREVER THE TAX DEDUCTED AT SOURCE IS EQUAL TO OR GRE ATER THAN THE ACTUAL TAX LIABILITY OF THE ASSESSEE, NO CONSEQUENCE ATTACHES TO THE NON - FILING OF THE RETURN. IN THE PRESENT CASE, THE SALARY OF THE ASSESSEE HAS BEEN CREDITED TO THE BANK ACCOUNT FROM WHICH PAYMENTS HAVE BEEN MADE BY CHEQUES TO THE PHILIPS COOPERATIVE HOUSING SOCIETY. THE SALARY HAS BEEN SUBJECTED TO TDS AND IT HAS NOT BEEN SHOWN THAT THE TDS WAS INADEQUATE TO MEET THE REAL TAX LIABILITY. THE CHEQUES HAVE BEEN ISSUED FROM A DISCLOSED SOURCE OF INCOME. IN SUCH CIRCUMSTANCES, IT WILL BE HY PER - TECHNICAL TO HOLD THAT THE INVESTMENTS IN THE HOUSING SOCIETY REPRESENTED THE ASSESSEE S UNDISCLOSED INCOME. (EMPHASIS PROVIDED) 1 1 . IN THE LIGHT OF THESE DETAILED FINDINGS , IT IS SEEN THAT THE A O I N T H E REMAND V I D E PARA 7, WAS ONLY DIRECTED TO RE - COMPUT E THE UNDISCLOSED INCOME: - 7. WE THEREFORE SET ASIDE THE ORDERS OF THE DEPARTMENTAL AUTHORITIES AND RESTORE THE BLOCK ASSESSMENT PROCEEDINGS TO THE ASSESSING OFFICER WHO SHALL RECOMPUTED THE UNDISCLOSED INCOME, IF ANY , OF THE ASSESSEE IN THE LIGHT OF OUR ABOVE FINDINGS AND DIRECTIONS. THE APPEAL OF THE ASSESSEE IS ALLOWED TO THAT EXTENT. NO COSTS. (EMPHASIS PROVIDED) 1 2 . ON A CONSIDERATION OF THE SAME, WE FIND THAT THE AO IN THE PRESENT PROCEEDINGS HAD INCORRECTLY PROCEEDED TO RE - CONSIDER THE ISSUES WHICH ALREADY STOOD CONCLUDED BY THE CO - ORDINATE BENCH. IT IS TRITE LAW THAT IN THE REMAND PROCEEDINGS, THE AO CANNOT TRAVEL BEYOND THE DIRECTIONS GIVEN IN THE REMAND. ACCORDINGLY ON A CONSIDERATION OF THE SAME, WE ARE OF THE VIEW THAT THE FOLL OWING FINDING OF THE CIT(A ON FACTS DESERVES TO BE UPHELD WHICH WARRANTS THE DISMISSAL OF THE APPEAL OF THE REVENUE: - WITH REGARD TO THE ISSUE OF ADDITION MADE ON ACCOUNT OF INVESTMENT MADE IN FDR, SINCE THE HON BLE ITAT IN PARA 5 OF THEIR ORDER DATED 06 .06.2008 HAVE CLEARLY GIVEN A FINDING THAT THE FDR S WORTH RS.2,10,818 THE INVESTMENT IN WHICH WERE MADE PRIOR TO THE BLOCK PERIOD AND FDR OF RS.4,99,304 NOT IN THE APPELLANT S NAME SHOULD BE LEFT OUT OF THE CONSIDERATION OF BLOCK ASSESSMENT, THE AO IS THE REFORE DIRECTED TO SCRUPULOUSLY FOLLOW THE DIRECTION OF THE HON BLE TRIBUNAL. 1 3 . I T IS SEEN ALSO SEEN AS BROUGHT OUT IN THE EARLIER PART OF THIS ORDER THAT THE ISSUE EVEN FOR THE INVESTMENT WITH PGCHS ALSO STOOD CONCLUDED BY THE ITAT. HENCE REJECTION CAN NOT BE UPHELD AS THE FINDING QUA THE SAID ISSUE IS VERY CLEAR AND THE CIT(A) ERRED IN NOT CORRECTLY READING THE ORDER OF THE C O - I.T (SS).NO. - 8/DEL/2013 & C.O. - 144/DEL/2013 PAGE 10 OF 10 ORDINATE BENCH. ACCORDINGLY THE DEPARTMENTAL APPEAL FOLLOWING THE ORDER OF THE ITAT IS DISMISSED AND THE C.O. OF THE ASSESSEE F OLLOWING THE ORDER OF THE ITAT IN ASSESSEE S OWN CASE AS BROUGHT OUT IN PARA 10 OF THIS ORDER IS ALLOWED. 1 4 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED AND C.O. OF THE ASSESSEE IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 4 T H OF AUGUST, 2015. S D / - S D / - (J.S.REDDY) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 4 /08 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI