Sh. Ashok Prasad Gupta, New Delhi V. ITO, New Delhi

CO 4/DEL/2010

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6202 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-06-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 18-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MONA MOHANTY
• Keywords: Unexplained investment; Gift; Search and seizure; Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER & SHRI B.K. HALDAR, ACCOUNTANT MEMBER ITA NOS. 4417 TO 4420/DEL/2009 ASSESSMENT YEARS: 2001-02, 02-03, 04-05 & 2005-06 ITO, VS. ASHOK PRASAD GUPTA, WARD 29(2), PROP. M/S CHEMICAL TRADERS, ROOM NO. 112, 1/188, GALI SARASWATI, DRUM SHAPED BUILDING, TILAK NAGAR, NEW DELHI. I.P. ESTATE, NEW DELHI. AAAFG2208G (APPELLANT) (RESPONDENT) CROSS OBJECTION NOS. 4 TO 7/DEL/2010 (IN ITA NOS. 4417 TO 4420/DEL/09) ASSESSMENT YEARS: 2001-02, 02-03, 04-05 & 2005-06 ASHOK PRASAD GUPTA, VS. ITO, PROP. M/S CHEMICAL TRADERS, WARD 29(2), ROOM NO. 1 12, 1/188, GALI SARASWATI, DRUM SHAPED BUILDING, TILAK NAGAR, NEW DELHI. I.P. ESTATE, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. MONA MOHANTY, SR. DR RESPONDENT BY : K. SAMPATH, ADV. ORDER PER BENCH : THE APPEALS ARE FILED BY THE REVENUE AND CROSS OBJ ECTIONS ARE FILED BY THE ASSESSEE. THEY ARE DIRECTED AGAINST O RDER PASSED BY LD. ITA NOS. 4417 TO 4 420/D/2009 & CO NOS. 4 TO 7/D/10 2 CIT(A) DATED 6 TH OCTOBER, 2009 (EVEN DATED FOUR ORDERS) IN RESPECT OF ASSESSMENT YEARS 2001-02 TO 2005-06. 2. ALL THESE APPEALS RELATE TO THE ADDITIONS MADE I N THE CASE OF THE ASSESSEE ON THE BASIS OF INCRIMINATING DOCUMENT S FOUND DURING THE COURSE OF SEARCH IN THE GROUP CASES OF SHRI BRI J MOHAN GUPTA, WHEREIN HE HAD ADMITTED OF BEING INVOLVED IN THE UN ACCOUNTED HUNDI TRANSACTIONS/CASH LOANS ON BEHALF OF VARIOUS PARTIE S AND HAD DISCLOSED THE BROKERAGE INCOME EARNED BY HIM IN RES PECT OF SUCH TRANSACTIONS. ACCORDINGLY BASED ON THOSE DOCUMENTS , FOLLOWING ADDITIONS WERE MADE IN THE CASE OF THE ASSESSEE: - S.NO. A.Y. UNEXPLAINED INVESTMENT U/S 69A UNDISCLOSED INTEREST ON SUCH INVESTMENT TOTAL ADDITION 1. 2001 - 02 46,00,000/ - 5,52, 500/ - 51,52,500/ - 2. 2002 - 03 6,47,500/ - 6,96,000/ - 13,43,500/ - 3. 2004 - 05 1,56,04,000/ - 26,52,000/ - 1,82,56,000/ - 4. 2005-06 NIL 7,32,000/- 7,32,000/- 3. LD.CIT(A) HAS DELETED SUCH ADDITION ON THE GROUN D THAT THE ADDITION AS MADE SIMPLY ON THE BASIS OF MATERIAL FO UND DURING THE COURSE OF SEARCH IN THE CASE OF SHRI BRIJ MOHAN GUP TA. THE ASSESSEE HAS DENIED TO HAVE MADE ANY INVESTMENT. THERE IS N O MATERIAL AVAILABLE ON RECORD VIDE WHICH IT COULD BE CONFIRME D THAT SUCH LOAN TRANSACTIONS WERE REALLY EXISTING. THE MATERIAL BA SED UPON WHICH THE ITA NOS. 4417 TO 4 420/D/2009 & CO NOS. 4 TO 7/D/10 3 ADDITIONS HAVE BEEN MADE WAS NOT PROVIDED TO THE AS SESSEE AND THUS, ADDITION MADE BY THE AO WAS WITHOUT FOLLOWING THE D UE COURSE OF LAW. HOWEVER, LD. CIT(A) HAS UPHELD THE VALIDITY O F REASSESSMENT PROCEEDINGS AND AFTER UPHOLDING THE VALIDITY OF REA SSESSMENT PROCEEDINGS LD. CIT(A) HAS DELETED THE ADDITION ON MERITS. 4. IN THE APPEALS FILED BY THE REVENUE THE DELETION OF SUCH ADDITIONS IS AGITATED AND IN THE CROSS OBJECTIONS F ILED BY THE ASSESSEE THE VALIDITY OF REASSESSMENT PROCEEDING HAS BEEN AG ITATED. 5. AT THE OUTSET, IT WAS THE SUBMISSION OF LD. COUN SEL OF THE ASSESSEE THAT SIMILAR ADDITIONS WERE MADE IN THE CA SES OF OTHER ASSESSES ALSO WHICH WERE BASED UPON THE DOCUMENTS F OUND DURING THE COURSE OF SEARCH CONDUCTED ON SHRI B.M. GUPTA A ND THOSE ADDITIONS WERE DELETED BY LD. CIT(A) AND THE TRIBUN AL HAS UPHELD THE ORDER OF CIT(A). HE HAS PRODUCED BEFORE US A COPY OF SUCH ORDER WHICH IS IN THE CASE OF ITO VS. ANIL KUMAR BANSAL ( HUF) (DEL.) (ORDER DATED 11 TH SEPTEMBER, 2009 IN ITA NO. 1156/DEL/09 A.Y. 2005-06) AND ALSO IN THE CASE OF ITO VS. M/S P.C. C HEMICALS (DEL.) AND IS DATED 25.02.2011 IN ITA NOS. 4421 TO 4424/DE L/09 IN RESPECT OF ASSESSMENT YEARS 2001-02 TO 2003-04 & 2005-06 & CO NOS. 8 TO 11/DEL/09 FOR ASSESSMENT YEARS 2001-02 TO 2003-04 & 2005-06, ITA NOS. 4417 TO 4 420/D/2009 & CO NOS. 4 TO 7/D/10 4 WHEREIN THE CROSS OBJECTIONS FILED BY THE ASSESSEE WERE DISMISSED ON ACCOUNT OF BEING NOT PRESSED AND THE APPEALS OF THE DEPARTMENT WERE ALSO DISMISSED BY FOLLOWING THE EARLIER ORDERS OF T HE TRIBUNAL IN THE CASE OF ITO VS. ANIL KUMAR (HUF) (SUPRA). HE, THER EFORE, SUBMITTED THAT ISSUE RAISED BY THE REVENUE AS WELL AS BY THE ASSESSEE ARE COVERED BY THE AFOREMENTIONED ORDERS OF THE TRI BUNAL AND SIMILAR ORDER MAY BE PASSED IN THE PRESENT APPEALS AND CROS S OBJECTIONS. 6. LD. DR THOUGH NOT CONTROVERTED THAT THE FACTS AN D CIRCUMSTANCES OF THE PRESENT CASE ARE IN SIMILARITY TO THE FACTS OF THE AFOREMENTIONED CASES REFERRED TO BY LD. AR BUT SHE RELIED UPON THE ORDER PASSED BY THE AO AND CONTENDED THAT THE ADDIT IONS WERE RIGHTLY MADE BY THE AO AND THESE HAVE WRONGLY BEEN DELETED BY LD. CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. WE HAVE ALSO GONE THROU GH THE IMPUGNED ASSESSMENT ORDERS AND THE ORDERS OF CIT(A) IN THE C ASE OF STHE ASSESSEE. WE HAVE ALSO CAREFULLY GONE THROUGH THE AFOREMENTIONED ORDERS OF THE TRIBUNAL DATED 11 TH SEPTEMBER, 2009 & 25.02.2011 AND WE FOUND THAT THE ADDITIONS WERE MADE BY THE DEPART MENT IN THOSE CASES ON THE BASIS OF SEARCH CONDUCTED IN THE CASE OF SHRI BRIJ MOHAN ITA NOS. 4417 TO 4 420/D/2009 & CO NOS. 4 TO 7/D/10 5 GUPTA AND THE FACTS IN THOSE CASES AND IN THE CASE OF THE ASSESSEE ARE IDENTICAL. FINDING SO, WE HAVE NO REASON TO DEVIAT E FROM THE EARLIER DECISIONS OF THE TRIBUNAL IN THE SIMILAR FACTS AND CIRCUMSTANCES. FOR THE SAKE OF COMPLETENESS THE AFOREMENTIONED ORDER O F THE TRIBUNAL DATED 11 TH SEPTEMBER, 2009 IS REPRODUCED IN ITS ENTIRETY: - THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDER OF LEARNED CIT(APPEALS) DATED 30.01.2009 PASS ED FOR ASSESSMENT YEAR 2005-06. THE SOLITARY GRIEVANCE OF REVENUE IS THAT LEARNED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.20,98,550/- WHICH WAS A DDED BY THE ASSESSING OFFICER ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCE. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN HUF AND RUNNING A PROPRIETARY CONCERN IN THE NAME A ND STYLE OF M/S. RAM KISHORE & SONS WHICH DEALS IN TRA DING OF BOP FILMS, POLYESTER AND GIFT PACKING SHEETS. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 15.12.2004 IN THE CASE OF SHRI BRIJ MOHAN GUPTA, 1281-GALI HINGA BEG. STATEMENT OF SHRI RAJIV GUPTA S/O SHRI BM GUP TA AND SHRI RAM AVTAR, ACCOUNTANT WAS RECORDED. IN THE SEARCH, A DIARY INVENTORIZED AS ANNEXURE A-5 WAS SE IZED. SHRI RAJIV GUPTA AND RAM AVTAR GUPTA HAVE EXPLAINED THAT SHIR BM GUPTA IS ENGAGED IN THE BUSINESS OF ADVANCING MONEY. HE USED TO RECEIVE LOAN FROM DIFFE RENT PERSONS AND FURTHER ADVANCE IT. IN THIS ACTIVITY, H E EARNED COMMISSION INCOME. A COMMISSION INCOME WAS OFFERED BY SHRI BM GUPTA IN HIS RETURN OF INCOME. IN THIS S EIZED ITA NOS. 4417 TO 4 420/D/2009 & CO NOS. 4 TO 7/D/10 6 MATERIAL, NAME OF MR. NAGAR MAL APPEARED AND AGAINS T HIS NAME 5 AND 15 ARE MENTIONED. ACCORDING TO THE STATEMENT OF SHRI RAJIV GUPTA AND RAM AVTAR GUPTA W HO WERE HANDLING THE BUSINESS OF MONEY LENDING PERTAIN ING TO SHRI BRIJ MOHAN GUPTA HAVE CLARIFIED THAT 5 INDI CATES 5 LACS AND 15 INDICATES 15 LACS. ACCORDING TO THE INTERPRETATION OF ASSESSING OFFICER, THE ABOVE AMOU NT OF R.20 LACS WAS HANDED OVER TO MR. BM GUPTA BY MR. NAGAR MAL FOR GIVING ON LOAN TO OTHER PERSONS ON INTEREST. THIS INFORMATION WAS SUPPLIED TO THE ASSE SSING OFFICER OF THE ASSESSEE BY THE ASSESSING OFFICER OF SHRI BM GUPTA ON 8.5.2007 VIDE LETTER NO.ADDL.CIT/R28/2007-08/41. THE ASSESSING OFFICER W AS DIRECTED TO EXPLORE THE INITIATION OF PROCEEDINGS U NDER SEC. 153-C OF THE ACT. SINCE SCRUTINY ASSESSMENT WA S PENDING THEN ASSESSING OFFICER DID NOT DEEM IT NECE SSARY TO INITIATE PROCEEDINGS UNDER SEC. 153-C AND HE CONFRONTED THE ASSESSEE WITH MATERIAL. ACCORDING TO THE ASSESSING OFFICER, MR. NAGAR MAL EXPIRED ON 11.1.20 02 THUS IT IS NOT POSSIBLE FOR HIM TO ADVANCE R.20 LAC S AND RECEIVE INTEREST FROM MR. BM GUPTA. THE ASSESSEE BE ING KARTA OF M/S. RAM KISHORE & SONS AFTER THE DEATH OF MR.NAGAR MAL, THE ALLEGED AMOUNT OF RS.20 LACS HAS BEEN CONSIDERED AS ADVANCED BY THE ASSESSEE TO SHRI BM GUPTA. 3. THE ASSESSEE CONTENDED THAT HE HAD NOT ADVANCED ANY MONEY TO SHRI BM GUPTA. THE ASSESSING OFFICER D ID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND PUTTI NG RELIANCE UPON THE STATEMENT OF SHRI RAJIV GUPTA & R AM ITA NOS. 4417 TO 4 420/D/2009 & CO NOS. 4 TO 7/D/10 7 AVTAR, HE TREATED THAT RS. 20 LACS MENTIONED IN COD ED WORDS OF THE DIARY SEIZED AT THE PREMISES OF SHRI B M GUPTA AS THE MONEY OF ASSESSEE INTEREST OF RS.49,05 0/- AND BROKERAGE OF RS.56,100/- WERE CALCULATED BY THE ASSESSING OFFICER. HE MADE AN ADDITION OF RS.20,98, 550 WHICH INCLUDE INTEREST ALSO. 4. ON APPEAL, LEARNED CIT(APPEALS) HAS DELETED THE ADDITION ON THE STRENGTH OF HON'BLE SUPREME COURT I N CASE OF CBI VS. V.C. SUKLA (1998) AIR 1406 (S.C). ACCORDING TO THE CIT(APPEALS), THE ASSESSEE HAD FURNISHED THE DETAILS RELATING TO THE COMMISSION PA ID TO SHRI BM GUPTA. THIS COMMISSION WAS FOR BORROWING AN D NOT LENDING HENCE THERE WAS NO LINK OF RS.20 LACS S TATED TO HAVE BEEN ADVANCED BY THE ASSESSEE. LEARNED CIT(APPEALS) FURTHER OBSERVED THAT ASSESSING OFFICE R HAS FAILED TO ESTABLISH ANY CASE AGAINST THE ASSESSEE. ACCORDING TO THE LEARNED CIT(APPEALS), THE ASSESSIN G OFFICER OUGHT TO HAVE CARRIED OUT FURTHER INVESTIGA TION IN THE CASE, THE INFORMATION SUPPLIED BY THE ASSESSING OFFICER OF SHRI BM GUPTA IS ONLY A CORROBORATIVE PI ECE OF EVIDENCE. ON THE BASIS OF THIS INFORMATION CONCLUSI VELY IT CANNOT BE HELD THAT ASSESSEE HAD GIVEN ANY AMOUNT T O SHRI BM GUPTA FOR INVESTMENT. LEARNED CIT(APPEALS) OBSERVED THAT ASSESSING OFFICER NEITHER PROVIDED CO PIES OF THE STATEMENT OF SHRI RAJIV GUPTA AND RAM AVTAR NOR GIVEN OPPORTUNITY TO CROSS EXAMINE OF THOSE PERSONS TO THE ASSESSEE. THE RELATIONSHIP OF SHRI NAGAR MAL AN D SHRI ANIL KUMAR BANSAL HAS ALSO NOT BEEN ESTABLISHE D. ITA NOS. 4417 TO 4 420/D/2009 & CO NOS. 4 TO 7/D/10 8 5. LEARNED DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER WHEREAS THE LEARNED COUNSEL FOR THE ASSESSE E RELIED UPON THE ORDER OF THE LEARNED CIT(APPEALS). 6. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTANCES, WE FIND THAT ASSESSING OFFICER HAS MISERABLY FAILED TO ESTABLISH THEIR RELATIONSHIP BE TWEEN SHIR NAGAR MAL AND ANIL KUMAR BANSAL. THE NAME OF SHRI NAGAR MAL WAS AVAILABLE IN THE ALLEGED SEIZED MATERIAL. THE NAME OF SHRI NAGAR MAL WAS FOUND TO B E RECORDED BY A THIRD PERSON IN HIS BOOKS. IT CAN ONL Y BE A CORROBORATIVE PIECE OF EVIDENCE BUT SOLELY ON THE B ASIS OF ANY ENTRY FOUND IN THE DIARY OF ANY THIRD PERSON CA NNOT BE CONSIDERED SUFFICIENT TO HOLD THAT UNEXPLAINED INVESTMENT WAS MADE BY THE ASSESSEE. THERE IS NO EVIDENCE ON THE RECORD WHICH CAN CONNECT THE ASSESS EE EVEN WITH THE SEIZED MATERIAL. MORE SO, LEARNED CIT(APPEALS) HAS RECORDED A FINDING THAT A LOAN WAS TAKEN FROM SHRI RAJIV GUPTA AND NOT GIVEN. IN SUCH SITUATION, ADDITION ON ACCOUNT OF UNEXPLAINED INVES TMENT CANNOT BE MADE. LEARNED CIT(APPEALS) HAS APPRECIATE D THE FACTS AND CIRCUMSTANCES IN RIGHT PERSPECTIVE AN D NO ADDITION IS CALLED FOR. HENCE THE APPEAL OF THE REV ENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 11 .09.200 9 8. IT MAY BE MENTIONED HERE THAT FOLLOWING THE AFOR EMENTIONED ORDER, THE TRIBUNAL IN THE CASE OF ITO VS. M/S P.C. CHEMICALS (SUPRA) HAS DELETED THE ADDITION. ITA NOS. 4417 TO 4 420/D/2009 & CO NOS. 4 TO 7/D/10 9 9. IN VIEW OF THE ABOVE DISCUSSION, RESPECTFULLY FO LLOWING THE AFOREMENTIONED ORDERS, WE DISMISS THE APPEALS FILED BY THE REVENUE. WE ALSO DISMISS THE CROSS OBJECTIONS FILED BY THE A SSESSEE AS THE LD. COUNSEL OF THE ASSESSEE DID NOT PRESS THEM. 10. IN THE RESULT, THE APPEALS AS WELL AS CROSS OBJ ECTIONS BOTH ARE DISMISSED IN THE MANNER AFORESAID. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 16.6.2011 SD/- SD/- (B.K. HALDAR) (I.P. BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16.6.11 *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR