Vipul Goel, Faridabad V. ACIT, Meerut

ITA 10/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5578 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2005-2006
• Appeal Filed On: 01-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY VARMA
• Assessee Lawyers: ASHISH GOEL SH ASHISH CHADHA
• Keywords: Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Opportunity of being heard; Period of limitation; Additional evidence; Notional interest; Tax effect; Condonation of delay; Reassessment proceedings
• Section: 153A; 234B; 68; 144; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH.BHAVNESH SAINI, JUDICIAL MEMBER AND SH.L.P.SAHU, ACCOUNTANT MEMBER ITA NO.5739 & 5740/DEL/2014 [ASSESSMENT YEAR: 2002-03 & 2003-04] ITA NO.1018/DEL/2014 [ASSESSMENT YEAR: 2005-06] C.O.NO.-297/DEL/2014 (IN ITA NO.1018/DEL/2014) [ASSESSMENT YEAR: 2005-06] C.O.NO.-298/DEL/2014 (IN ITA NO.1019/DEL/2014) [ASSESSMENT YEAR: 2006-07] ASSESSEE BY SH. VED JAIN, ADV. & SH. ASHISH GOEL, SH. ASHISH CHADHA, CA DEPARTMENT BY SH. VIJAY VARMA, CIT DR ITA NO.10 & 11/DEL/2015 [ASSESSMENT YEAR: 2005-06 & 2006-07] VIPUL GOEL, 579, SECTOR-17, FARIDABAD. PAN-ADCPG2917R VS ACIT, CENTRAL CIRCLE, MEERUT. (APPELLANT) (RESPONDENT) DCIT, CENTRAL CIRCLE, MEERUT. VS VIPUL GOYAL, 579, SECTOR-17, FARIDABAD. PAN-ADCPG2917R (APPELLANT) (RESPONDENT) VIPUL GOEL, H. NO.579, SECTOR-17, FARIDABAD. PAN-ADCPG2917R VS DCIT, CENTRAL CIRCLE, MEERUT. (APPELLANT) (RESPONDENT) VIPUL GOEL, H. NO.579, SECTOR-17, FARIDABAD. PAN-ADCPG2917R VS DCIT, CENTRAL CIRCLE, MEERUT. (APPELLANT) (RESPONDENT) VIPUL GOEL, 579, SECTOR-17, FARIDABAD. PAN-ADCPG2917R VS ACIT, CENTRAL CIRCLE, MEERUT. (APPELLANT) (RESPONDENT) PAGE | 2 ITA NO.170/DEL/2015 [ASSESSMENT YEAR: 2005-06] APPELLANT BY SH. VED JAIN, ADV. RESPONDENT BY SH. AMIT JAIN, SR. DR DATE OF HEARING 08.05.2018 DATE OF PRONOUNCEMENT 2 2 .05.2018 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER THIS ORDER SHALL DISPOSE OF ABOVE CROSS APPEALS/C.O S. WE HAVE HEARD BOTH PARTIES AND PERUSED MATERIAL ON RECORD. ITA NO.5739/DEL/2014 [ASSESSMENT YEAR: 2002-03] 2. THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AG AINST THE ORDER OF LD.CIT(A), MEERUT DATED 14.05.2013 FOR AY 2002-03. 3. EARLIER THIS APPEAL WAS DISMISSED ON DEFAULT WHI CH IS RESTORED BY ALLOWING THE MA BY THE ASSESSEE. THE APPEAL IS TIM E BARRED BY 436 DAYS. THE ASSESSEE FILED APPLICATION FOR CONDONATION OF DELAY IN WHICH IT WAS EXPLAINED THAT ORDER OF FIRST APPELLATE AUTHORITY WAS INADVER TENTLY MIXED IN THE OFFICE WITH OTHER FILES. THE SAME COULD NOT BE BROUGHT TO THE NOTICE OF THE LD. COUNSEL WHO WAS HANDLING THE TAXATION WORK. THE CR OSS-OBJECTION IN THE CASE OF THE ASSESSEE WAS BEING FILED FOR THE AY 2004-05 TO 2007-08 WHEREIN THE DEPARTMENT HAS FILED THE APPEAL BEFORE THE TRIBUNAL . WHEN THE CROSS- OBJECTIONS BEING PREPARED, FACTS OF THE APPELLATE ORDERS FOR ASSESSMENT YEAR UNDER APPEAL CAME TO THE LIGHT. IT WAS, THEREFORE, SUBMITTED THAT DELAY IN FILING THE APPEAL MAY BE CONDONED WHICH IS INADVERTENT OMI SSION ON THE PART OF THE ACIT, CENTRAL CIRCLE, MEERUT. VS VIPUL GOEL, 579, SECTOR-17, FARIDABAD. PAN-ADCPG2917R (APPELLANT) (RESPONDENT) PAGE | 3 ASSESSEE. AFFIDAVIT IN SUPPORT OF THE APPLICATION IS FILED. LD. COUNSEL FOR THE ASSESSEE REITERATED THE FACTS STATED IN THE APPLICA TION FOR CONDONATION OF DELAY AND SUBMITTED THAT THE ASSESSEE IN THE PRESENT APPE AL, HAS CHALLENGED THE CHARGING OF INTERESTS U/S 234A & 234B OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) AND THAT THE ADDITIONS HAVE BEEN MADE WITHOU T RECOVERY OF INCRIMINATING MATERIAL. THEREFORE, THE ASSESSEE HAS A PRIMA FACIE CASE FOR INFERENCE IN THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE PRAY ED FOR CONDONATION OF DELAY. LD. CIT DR, HOWEVER, OBJECTED TO THE SAME AND SUBMI TTED THAT THE DELAY MAY NOT BE CONDONED. 3.1. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE SA TISFIED THAT THE ASSESSEE COULD NOT FILE THE APPEAL DUE TO INADVERTENT MISTAK E WITHIN THE PERIOD OF LIMITATION. THE ASSESSEE WOULD NOT GAIN ANYTHING I N DELAYING THE FILING OF APPEAL WHEN HE HAS PRIMA FACIE CASE. THEREFORE, T HE DELAY IN FILING THE APPEAL IS CONDONED. 4. THE ASSESSEE IN THE PRESENT APPEAL HAS CHALLENGE D THE ORDERS OF THE AUTHORITIES BELOW IN CHARGING INTERESTS U/S 234A & 234B OF THE ACT. IT IS ALSO STATED THAT NO ADDITION COULD HAVE BEEN MADE IN ASS ESSMENT U/S 153A OF THE ACT SINCE THE ASSESSMENT HAD ALREADY BECOME FINAL A ND HAD NOT ABATED. AS A MATTER OF FACT, NO INCRIMINATING MATERIAL WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH. 5. BRIEFLY THE FACTS OF THE CASE ARE THAT THE SEARC H OPERATION WAS CARRIED OUT ON RESIDENTIAL PREMISE OF THE ASSESSEE SITUATED AT 579, SECTOR-17, FARIDABAD ON 15.02.2008. SUBSEQUENTLY, SEARCH WARRANTS IN RESPE CT OF LOCKER NO.99, OBC, SECTO-17, FARIDABAD AND LOCKER NO.32, OBC, RAJPUR R OAD, DEHRADUN IN THE NAME OF THE ASSESSEE WAS ALSO ISSUED AND THE SAID L OCKERS WERE SEARCHED. PAGE | 4 DURING SEARCH, CASH & JEWELLERY WERE FOUND AND SEIZ ED. NOTICE U/S 153A WAS ISSUED ON 13.03.2009 AND 29.07.2009. RETURN WAS FI LED ON 22.10.2009. FROM THE DETAILS OF INCOME FROM OTHER SOURCES, IT WAS NO TICED THAT THE ASSESSEE HAD DECLARED GROSS INTERESTS RECEIVED AMOUNTING TO RS.1 ,76,557/- ON LOAN GIVEN BY HIM TO M/S VIPUL REAL ESTATE PVT. LTD. FROM THIS G ROSS INTEREST RECEIVED, THE ASSESSEE HAD DEDUCTED SAME AMOUNT OF RS.1,76,557/- AS INTERESTS PAID ON BORROWINGS AND THUS, HAS SHOWN NET INTEREST RECEIVE D AT RS.NIL. THE AO, HOWEVER, HAD NOT ALLOW DEDUCTION OF AMOUNT IN TERMS OF SECTION 57 OF THE ACT AND, ACCORDINGLY, MADE THE ADDITION. INTEREST U/S 234A, 234B AND 234C WAS CHARGED. 6. THE ASSESSEE CHALLENGED THE CHARGING OF THE INTE REST U/S 234A & 234B OF THE ACT BEFORE LD.CIT(A). HOWEVER, THE APPEAL OF T HE ASSESSEE HAS BEEN DISMISSED. 7. THE ASSESSEE ON GROUND NO.3 SUBMITTED THAT NO AD DITION COULD HAVE BEEN MADE IN ASSESSMENT MADE U/S 153A OF THE ACT SI NCE THE ASSESSMENT HAD ALREADY BECAME FINAL AND HAD NOT ABATED. AS A MATT ER OF FACT, NO INCRIMINATING MATERIAL WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH. 8. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAS DISALLOWED INTERESTS, THEREFORE, THERE IS NO SEIZED MATERIAL M UCH LESS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH DURING T HE YEAR UNDER CONSIDERATION. HE HAS SUBMITTED THAT THE ASSESSEE HAS FILED ORIGINAL RETURN OF INCOME ON 31.03.2004 (P.B 3, 4). ACCORDINGLY, THE AO CANNOT MAKE ANY ADDITION IN REASSESSMENT PROCEEDINGS U/S 153A OF TH E ACT. THE ASSESSMENT OF THIS YEAR STOOD COMPLETED MUCH BEFORE THE SEARCH AN D WAS NOT PENDING ON THE DATE OF SEARCH. HE HAS RELIED UPON THE ORDERS OF J URISDICTIONAL CHANDIGARH PAGE | 5 ITAT IN THE CASE OF MALA BUILDERS P.LTD. VS ACIT [2016] 51 ITR (TRIB.) 272 IN WHICH IT WAS HELD THAT IN THE ABSENCE OF INCRIMINAT ING MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE ASSESSMENT PROCEEDINGS HAVING NOT ABATED, AT THE TIME OF SEARCH, THE AO HAS NO JURISDICTION TO MAKE THE ADDITION U/S 153A OF THE ACT. HE HAS RELIED UPON THE JUDGEMENT OF THE HONB LE DELHI HIGH COURT IN THE CASE OF CIT (CENTRAL)-III VS KABUL CHAWLA [2015] 380 ITR 57 3 (DELHI) IN WHICH IT WAS HELD THAT: ON A CONSPECTUS OF SECTION 153A(L), READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN VARIOUS DE CISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: (I) ONCE A SEARCH TAKES PLACE UNDER SECTION 132, N OTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE P ERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX ASSESSMENT YE ARS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE ASSESSM ENT YEAR IN WHICH THE SEARCH TAKES PLACE. (II) ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH ASSESSMENT Y EARS WILL HAVE TO BE COMPUTED BY THE ASSESSING OFFICERS AS A FRESH EXERC ISE. (III) THE ASSESSING OFFICER WILL EXERCISE NORMAL A SSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT A SSESSMENT YEAR IN WHICH THE SEARCH TAKES PLACE. THE ASSESSING OFFICER HAS T HE POWER TO ASSESS AND REASSESS THE TOTAL INCOME' OF THE AFOREMENTIONED S IX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTH ER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED IN COME WOULD BE BROUGHT TO TAX'. (IV) ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE O F THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RE LEVANCE OR NEXUS WITH PAGE | 6 THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' (V) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE C OMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REAS SESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153A IS RELATABL E TO ABATED PROCEEDINGS (I.E., THOSE PENDING ON THE DATE OF SEA RCH) AND THE WORD 'REASSESS' TO COMPLETE ASSESSMENT PROCEEDINGS. (VI) INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH ASSESSMENT YEAR ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A SSESSING OFFICER. (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT UNDER SECTION 1 53A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR P ROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. [P ARA 37] THE PRESENT APPEALS CONCERN ASSESSMENT YEARS 2002-0 3,2005-06 AND 2006-07. ON THE DATE OF THE SEARCH THE SAID ASS ESSMENTS ALREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL W AS UNEARTHED DURING THE SEARCH. NO ADDITIONS COULD HAVE BEEN MADE TO TH E INCOME ALREADY ASSESSED.[PARA 38] THE REVENUE'S APPEALS ARE ACCORDINGLY DISMISSED. 9. HE HAS ALSO RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT, CENTRAL-2, NEW DELHI VS MEETA GUTGUTIA PRO P. M/S FERNS N PETALS 395 ITR 526 IN WHICH IT WAS HELD THAT :- 69. WHAT WEIGHED WITH THE COURT IN THE ABOVE DEC ISION WAS THE 'HABITUAL' CONCEALING OF INCOME AND INDULGING IN CL ANDESTINE OPERATIONS' AND THAT A PERSON INDULGING IN SUCH ACTIVITIES 'CAN HARDLY BE ACCEPTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG.' THE SE FACTORS ARE ABSENT IN THE PRESENT CASE. THERE WAS NO JUSTIFICATION AT ALL FOR THE AO TO PROCEED ON PAGE | 7 SURMISES AND ESTIMATES WITHOUT THERE BEING ANY INCR IMINATING MATERIAL QUA THE AY FOR WHICH HE SOUGHT TO MAKE ADDITIONS OF FRANCHISEE COMMISSION. 70. THE ABOVE DISTINGUISHING FACTORS IN DAYAWANTI G UPTA (SUPRA), THEREFORE, DO NOT DETRACT FROM THE SETTLED LEGAL PO SITION IN KABUL CHAWLA (SUPRA) WHICH HAS BEEN FOLLOWED NOT ONLY BY THIS CO URT IN ITS SUBSEQUENT DECISIONS BUT ALSO BY SEVERAL OTHER HIGH COURTS. 71. FOR ALL OF THE AFOREMENTIONED REASONS, THE COUR T IS OF THE VIEW THAT THE ITAT WAS JUSTIFIED IN HOLDING THAT THE INVOCATION O F SECTION 153A BY THE REVENUE FOR THE AYS 2000-01 TO 2003-04,WAS WITHOUT ANY LEGAL BASIS AS THERE WAS NO INCRIMINATING MATERIAL QUA EACH OF THO SE AYS. CONCLUSION 72. TO CONCLUDE: (I) QUESTION (I) IS ANSWERED IN THE NEGATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IT IS HELD THAT IN THE FAC TS AND CIRCUMSTANCES, THE REVENUE WAS NOT JUSTIFIED IN INVOKING SECTION 153A OF THE ACT AGAINST THE ASSESSEE IN RELATION TO AYS 2000-01 TO AYS 2003 -04 . 10. HE HAS ALSO RELIED UPON VARIOUS OTHER DECISIONS IN SUPPORT OF THE SAME PROPOSITIONS. LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE ASSESSEE IS LOCATED AT FARIDABAD AND THE PRESENT AO IS WARD-2, FARIDABAD. HE HAS SUBMITTED THAT THE CASE OF THE ASSESSEE IS TRANSFER RED TO DCIT/ ACIT, CIRCLE-2, FARIDABAD VIDE TRANSFER ORDER DATED 30.06.2015. CO PY OF WHICH IS PLACED ON RECORD. HE HAS SUBMITTED THAT IT IS SETTLED LAW TH AT JURISDICTIONAL HIGH COURT IS THAT WHERE THE SITUS IS OF THE AO. FURTHER THE SITUS AS ON DATE IS TO BE CONSIDERED AS THERE CANNOT BE TWO AO OF THE SAME AS SESSEE. HE HAS SUBMITTED THAT THE JURISDICTIONAL HIGH COURT IN THE CASE OF T HE ASSESSEE IS NOT HONBLE ALLAHABAD HIGH COURT. 11. LD. CIT DR, HOWEVER, SUBMITTED THAT THIS GROUND WAS NOT PRESSED BEFORE LD.CIT(A) AND NEW GROUND IS RAISED BEFORE THE TRIBU NAL WHICH REQUIRES PAGE | 8 VERIFICATION OF THE FACT. LD.CIT DR SUBMITTED THAT THE ISSUE IS DECIDED AGAINST THE ASSESSEE BY HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS RAJ KUMAR ARORA [2014] 367 ITR 517 (ALLAHABAD) IN WHICH IT WAS HELD THAT IN THE LIGHT OF THE AFORESAID, THE REASONS GIVEN BY THE TRIBUNAL TH AT NO MATERIAL WAS FOUND DURING THE COURSE OF SEARCH CANNOT BE SUSTAINED. SINCE THE AO HAS THE POWER TO RE-ASSESS THE RETURN OF THE ASSESSEE NOT ONLY FOR T HE UNDISCLOSED INCOME FOUND DURING THE COURSE OF SEARCH OPERATION BUT ALSO WITH REGARD TO THE MATERIAL THAT WAS AVAILABLE AT THE TIME OF ORIGINAL ASSESSMENT. OTHER DECISION ON SAME POINT URGED. HE HAS ALSO RELIED UPON THE ORDER OF ITAT, DELHI BENCH IN THE CASE OF PARAG DALMIA VIDE ORDER DATED 26.02.2018 IN ITA NO. 5499/DEL/2017 IN WHICH DOCUMENTS WERE RECEIVED BY THE GOVERNMENT OF INDIA FROM A SOVEREIGN COUNTRY CONTAINING INFORMATION REGARDING THE UNDISC LOSED FOREIGN ACCOUNTS WERE RECEIVED PRIOR TO THE SEARCH AND CONFRONTED TO ASSESSEE DURING SEARCH WAS HELD TO CONSTITUTE INCRIMINATING MATERIAL. LD. COUNSEL FOR THE ASSESSEE, HOWEVER, SUBMITTED THAT THIS GROUND IS LEGAL IN NAT URE AND ARISE OUT OF THE ORDERS OF THE AUTHORITIES BELOW, THEREFORE, SAME MA Y BE ADJUDICATED. 12. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND MATERI AL ON RECORD. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF VMT SPINNING CO. LTD. VS CIT & ANOTHER [2016] 389 ITR 326 (P&H) HELD AS UNDER:- THE TRIBUNAL COULD DECIDE THE APPEAL ON A GROUND N EITHER TAKEN IN THE MEMORANDUM OF APPEAL NOR BY SEEKING ITS LEAVE. THE ONLY REQUIREMENT WAS THAT THE TRIBUNAL COULD NOT REST ITS DECISION O N ANY OTHER GROUND UNLESS THE PARTY WHO MIGHT BE AFFECTED HAD SUFFICIE NT OPPORTUNITY OF BEING HEARD ON THAT GROUND. THEREFORE, THE TRIBUNAL OUGH T TO HAVE EXERCISED ITS DISCRETION IN VIEW OF THE FACT THAT THE ASSESSEE IN TENDED RAISING ONLY A LEGAL ARGUMENT WITHOUT REFERENCE TO ANY DISPUTED QU ESTIONS OF FACT. SINCE THERE WERE NO ADDITIONAL EVIDENCE REQUIRED FOR THE DECISION ON THE NEW PAGE | 9 GROUND RAISED BY THE ASSESSEE AND SUCH QUESTION ARO SE FROM THE FACTS WHICH WERE ALREADY ON THE RECORD OF THE ASSESSMENT PROCEEDINGS AND SINCE A DECISION UPON THE NEW GROUND RAISED BY THE ASSESSEE WOULD ONLY HELP IN DETERMINING THE ASSESSEES CORRECT TAX LIAB ILITY, THE MATTER COULD BE REMANDED TO THE TRIBUNAL FOR ADJUDICATING UPON THE ADDITIONAL GROUND ON ITS MERITS. [MATTER REMANDED]. 13. HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS NILKANTH CONCAST P. LTD. [2016] 387 ITR 568 (DELHI) RELYING UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS CIT [1998] 229 ITR 383 (SC) HELD AS UNDER:- THE POWERS OF THE TRIBUNAL ARE WIDE ENOUGH TO CONS IDER A POINT WHICH MAY NOT HAVE BEEN URGED BEFORE THE COMMISSION ER (APPEALS) AS LONG AS THE QUESTION REQUIRES TO BE EXAMINED IN THE INTE REST OF JUSTICE. HELD ACCORDINGLY, THAT THE TRIBUNAL HAD NOT EXCEEDE D ITS JURISDICTION IN EXAMINING THE QUESTION WHETHER THE ASSESSING OFF ICER WAS JUSTIFIED IN EXTENDING THE TIME OF THE AUDITOR NOMINATED UNDER S ECTION 142(2C) OF THE INCOME TAX ACT, 1961, TO SUBMIT THE AUDIT REPORT. 14. CONSIDERING THE FACTS OF THE CASE AND IN THE LI GHT OF THE ABOVE DECISIONS, IT IS CLEAR THAT THE ISSUE INVOLVED ON GROUND NO.3 OF THE APPEAL OF THE ASSESSEE IS LEGAL IN NATURE AND ARISE OUT OF THE ORDERS OF T HE AUTHORITIES BELOW. NO NEW FACTS SHALL HAVE TO BE CONSIDERED. THERE IS NO NEE D TO CONSIDER ADDITIONAL EVIDENCES. THE ISSUE IS ADJUDICATED IN THE INTERES T OF JUSTICE. IN THIS CASE, SEARCH WAS CONDUCTED ON THE ASSESSEE AND THE AO ON THE BASIS OF THE RECORD PRODUCED BY THE ASSESSEE FOUND THAT THE ASSESSEE HA S SHOWN INCOME FROM OTHER SOURCES AGAINST WHICH EXPENDITURE HAVE BEEN C LAIMED U/S 57 OF THE ACT. THE AO DISALLOWED THE DEDUCTION OF THE EXPENDITURE U/S 57 OF THE ACT AND COMPUTED THE INCOME OF THE ASSESSEE. IT IS, THEREF ORE, CLEAR FROM THE FACTS MENTIONED IN THE ASSESSMENT ORDER THAT NO INCRIMINA TING MATERIAL WAS FOUND PAGE | 10 DURING THE COURSE OF SEARCH AGAINST THE ASSESSEE TO MAKE ANY ADDITION. THE ISSUE IS LEGAL IN NATURE AND SUFFICIENT OPPORTUNITY OF BEING HEARD HAS BEEN GRANTED TO THE REVENUE TO COUNTER THE CLAIM MADE BY THE ASSESSEE. MERELY BECAUSE THIS ISSUE WAS NOT CONTESTED BEFORE LD.CIT( A), IS NOT GROUND TO REJECT THE PRAYER OF THE ASSESSEE. HONBLE DELHI HIGH COUR T IN THE CASE OF PR. CIT VS NILKANTH CONCAST P. LTD. (SUPRA) HELD THAT THE POWERS OF THE TRIBUNAL ARE W IDE ENOUGH TO CONSIDER THE POINT WHICH MAY NOT HAVE BE EN URGED BEFORE THE COMMISSIONER (APPEALS) SO LONG AS THE QUESTION REQU EST TO EXAMINE IN THE INTERESTS OF JUSTICE. IN THIS CASE, THE ISSUE IS C OVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA AND MEETA GUTGUTIA PROP. M/S FERNS N PETALS (SUPRA), THEREFORE, THE CONTENTION OF THE LD. CIT DR IS REJECTED THAT THIS GROUND MAY NOT BE ADJUDICATED. LD. COUNSEL FOR THE ASSESSEE FILED THE TRANSFER ORDER I N THE CASE OF THE ASSESSEE TO SHOW THAT THE CASE OF THE ASSESSEE HAS BEEN TRANSFE RRED TO DCIT, CIRCLE-2, FARIDABAD ON 30.06.2015. THE ASSESSEE IS SITUATED AT FARIDABAD, THEREFORE, THE JURISDICTIONAL HIGH COURT IN THE CASE OF THE ASSESS EE WOULD BE HONBLE PUNJAB & HARYANA HIGH COURT. THE ASSESSEE, THEREFORE, RIG HTLY RELIED UPON THE DECISION OF THE ITAT, CHANDIGARH BENCH IN THE CASE OF MALA BUILDERS P.LTD. (SUPRA) IN WHICH THE POINT IN ISSUE HAS BEEN DECIDE D IN FAVOUR OF THE ASSESSEE. NO OTHER CONTRARY DECISION OF HONBLE PUNJAB & HAR YANA HIGH COURT HAVE BEEN CITED BY THE LD.CIT DR. THEREFORE, THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF RAJ KUMAR ARORA (SUPRA) CANNOT BE GIVEN PREFERENCE. THE OTHER DECISIONS CITED BY LD.CIT DR, THEREFORE, WOUL D NOT SUPPORT THE CASE OF THE REVENUE. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE FACT THAT ORIGINAL ASSESSMENT STANDS COMPL ETED ON THE DATE OF THE PAGE | 11 SEARCH AND NO INCRIMINATING MATERIAL WAS FOUND DURI NG THE COURSE OF SEARCH, THEREFORE, NO ADDITION COULD HAVE BEEN MADE TO THE INCOME OF THE ASSESSEE WHICH IS ALREADY ASSESSED. IT IS WELL-SETTLED LAW THAT COMPLETED ASSESSMENT CAN BE INTERFERED WITH BY THE AO BY MAKING ASSESSMENT U /S 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH WHICH WAS NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE K NOWN IN THE COURSE OF ORIGINAL ASSESSMENT. THEREFORE, NO ADDITION COULD BE MADE AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE DECISIONS, WE SET A SIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE ALL THE ADDITIONS. 15. IN THE RESULT, GROUND NO.3 IS ALLOWED. 16. ON THE GROUND NOS. 1 & 2, THE ASSESSEE CHALLENG ED THE CHARGING OF INTERESTS U/S 234A AND 234B OF THE ACT. LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT AS PER SECTION 234A(3) OF THE ACT, I NTERESTS IS TO BE CHARGED STARTING FROM THE MONTH FOLLOWING EXPIRY OF TIME AL LOWED TO FILE RETURN U/S 153A AND THE DATE OF FILING OF THE RETURN. IN THE PRESEN T CASE, AO HAS ISSUED NOTICE ON 13.03.2009 TO FILE THE RETURN WITHIN 20 DAYS I.E . 03.04.2009 (P.B 5). THE RETURN WAS FILED ON 22.10.2009, THUS, THE DEFAULT WAS 07 MONTHS ONLY. HENCE, INTERESTS U/S 234A(3) WILL BE FOR 07 MONTHS AND NOT FOR 20 MONTHS I.E 01.08.2002 TO 31.03.2004 ON THE BASIS OF THE ORIGIN AL RETURN CHARGED BY THE AO. HE HAS FURTHER SUBMITTED THAT CONSEQUENT TO TH E SEARCH CARRIED OUT ON 15.02.2008 WHEREBY CASH OF RS.27 LAKHS WAS SEIZED A ND HENCE AVAILABLE TO THE DEPARTMENT. THE AO HAS GIVEN CREDIT OF THIS CASH S EIZED ON 08.06.2010 WHEN HE MADE ADJUSTMENT OF CASH SEIZED AGAINST THE DEMAN D CREATED. THE AO CHARGED INTERESTS U/S 234B OF THE ACT FOR THE PERIO D 15.02.2008 TILL 29.12.2008. THUS, CHARGING OF INTEREST IS INCORRE CT AS THE AMOUNT WAS PAGE | 12 AVAILABLE WITH THE DEPARTMENT. HE HAS SUBMITTED TH AT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT IN THE CASE OF SUDHAKAR M SHETTY VS ACIT 2008(3) TMI 692-ITAT MUMBAI IN WHICH IT WAS HELD THAT AS PER AMENDED PROVISIONS OF LAW, THERE IS NO REQUIREMENT TO SEEK ANY REQUEST FROM THE ASSESSEE FOR ADJUSTMENT. THE AO WAS DIRECTED TO ADJUST THE REMAINING CASH SEIZED BY DEPARTMENT FROM THE DATE OF SEIZURE. COPY OF THE O RDER OF ITAT, MUMBAI BENCH IS FILED. 17. AFTER CONSIDERING RIVAL SUBMISSIONS, WE FIND TH E SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE TO BE CORRECT BECAUSE SUBM ISSION OF ASSESSEE IS NOT REBUTTED BY DEPARTMENT. LD. DR RELIED UPON THE JUD GEMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PRANNOY ROY & ANR. VS COMMISSIONER OF INCOME TAX [2002] 254 ITR 755 IN WHICH IT WAS HELD THAT INTERESTS U/S 234A WOULD BE PAYABLE ONLY IN A CASE WHERE TAX HAD NOT BEEN DEPOS ITED PRIOR TO THE DATE OF FILING OF THE RETURN. IN THIS JUDGEMENT, THE AMEND ED PROVISION INSERTED IN SECTION 234A(3) W.E.F. 01.06.2003 HAVE NOT BEEN CON SIDERED. THEREFORE, THIS DECISION WOULD NOT SUPPORT THE CASE OF THE REVENUE. THE CHARGING OF INTEREST U/S 254A IS TO BE RESTRICTED TO 07 MONTHS ONLY AND CASH SEIZED TO BE ADJUSTED AGAINST DEMAND U/S 234B AS DISCUSSED ABOVE. HOWEVE R, THE SAME ISSUE DOES NOT REQUIRE DETAILED DISCUSSION BECAUSE LEGAL ISSUE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE THAT ENTIRE ADDITION WOULD S TAND DELETED, THEREFORE, THIS GROUND IS LEFT FOR ACADEMIC DISCUSSION ONLY. THESE GROUNDS ARE ACCORDINGLY ALLOWED IN TERMS ABOVE. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. PAGE | 13 ITA NO.5740/DEL/2014 [ASSESSMENT YEAR: 2003-04] 19. THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED A GAINST THE ORDER OF LD.CIT(A), MEERUT DATED 14.05.2013 FOR AY 2003-04 C HALLENGING THE CHARGING OF INTERESTS U/S 234A & 234B OF THE ACT AND THE ADDITI ON OF RS.10 LAKHS U/S 68 OF THE ACT. IT IS ALSO STATED THAT THE RE-ASSESSME NT BECAME FINAL BEFORE THE DATE OF SEARCH HAD NOT ABATED, THEREFORE, NO ADDITION CO ULD BE MADE U/S 153A OF THE ACT. 20. THIS APPEAL IS ALSO TIME BARRED BY 436 DAYS. T HE REASONS ARE SAME AS HAVE BEEN EXPLAINED IN ITA NO.5739/DEL/2014. FOLLO WING THE REASONS FOR AY 2002-03 (SUPRA), THE SIMILAR DELAY IN FILING THE A PPEAL IS CONDONED. IN THIS CASE, THE ASSESSEE HAS FILED ORIGINAL RETURN OF INC OME AT RS.50,000/- ON 31.03.2005 (P.B. 1 & 2), THEREFORE, ASSESSMENT WAS COMPLETED ON THE DATE OF SEARCH. IT IS ADMITTED FACT THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH TO MAKE ANY ADDITION AGAINST THE A SSESSEE. THE AO MADE ADDITION OF RS.10 LAKHS ON PERUSAL OF BANK STATEMEN T AND BANK BOOK IN RESPECT OF THE CREDIT ENTRY IN THE BANK ACCOUNT. H OWEVER, ADDITION WAS MADE OF RS.50,000/- ON ACCOUNT OF UNEXPLAINED SOURCE OF PUR CHASE OF THE SHARES. LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT THE ISSUES ARE SAME AS ARE CONSIDERED IN ITA NO.5739/DEL/2014 (SUPRA). SINCE NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH QUA ABOVE ADD ITION AND THE ASSESSMENT WAS COMPLETED ON THE DATE OF SEARCH AND THERE IS NO ABATEMENT OF THE ASSESSMENT, THEREFORE, THE ISSUES COVERED IN THE CA SE OF THE ASSESSEE IN ITA NO.5739/DEL/2014. THEREFORE, ALL THE ADDITIONS STA ND DELETED. THE ISSUE OF CHARGING OF 234A & 234B, INTEREST IS ALSO COVERED B Y THE ORDER OF TRIBUNAL FOR AY 2002-03 (SUPRA). NO INCRIMINATING MATERIAL WAS FOUND IN SEARCH FOR MAKING PAGE | 14 ADDITION OF RS.10 LAKHS. P.B.20 IS REPLY OF THE AS SESSEE IN WHICH IT IS EXPLAINED THAT ASSESSEE IS IN BUSINESS OF REAL ESTATE. ADVAN CE WAS TAKEN AGAINST WHICH DEED IS EXECUTED. IT WAS RECEIVED THROUGH BANKING CHANNEL. ASSESSEE DID NOT RETAIN PAY IN SLIP AND AFTER 07 YEARS, IT WAS DIFFI CULT TO PRODUCE DETAILS. BUT IT IS NOT A CASE OF NO EXPLANATION. THE ADDITION IS L IABLE TO BE DELETED. THE EXPLANATION OF THE ASSESSEE IS ACCEPTED, HOWEVER NO FURTHER REASONS ARE REQUIRED IN VIEW OF FINDING ON GROUND NO.3. ALL GR OUNDS ARE ALLOWED. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ITA NO.1018/DEL/2014 & C.O.NO.-297/DEL/2014 [ASSESSMENT YEAR: 2005-06] 22. THE REVENUES APPEAL AS WELL AS CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD.CIT(A), MEERUT DAT ED 29.11.2013 FOR AY 2005- 06. THE AO PASSED THE ASSESSMENT ORDER U/S 153A/14 3(3) OF THE ACT ON 29.12.2009. THE ASSESSEE FILED RETURN OF INCOME DE CLARING INCOME OF RS.3,90,800/-. THE AO MADE AN ADDITION ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES WHICH WERE BASED ON THE RECORD PRODUCED BY THE ASSESSEE. THE AO MADE ADDITION OF RS.1,09,38,880/- ON ACCOUNT OF UNEXPLAINED CREDIT U/S 68 OF THE ACT WHICH WAS BASED UPON THE MATERIAL PRODUCED BY THE ASSESSEE AT THE ASSESSMENT STAGE. THE AO MADE AN ADDITION O F RS.1,50,000/- U/S 69 OF THE ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT FOR PU RCHASE OF FDS. AN ADDITION OF RS.27,000/- WAS MADE ON ACCOUNT OF UNEX PLAINED EXPENDITURE FOR PURCHASE OF SAMSUNG AIR CONDITIONER. AN ADDITION O F RS.3,00,000/- WAS MADE ON PREMIUM EARNED ON CANCELLATION OF LAND DEAL. TH E ASSESSEE PRODUCED ADDITIONAL EVIDENCES BEFORE LD.CIT(A). THE ASSESSE E EXPLAINED BEFORE LD.CIT(A) THAT DURING THE ASSESSMENT PROCEEDINGS DUE TO INADE QUACY OF TIME, THE PAGE | 15 EVIDENCES COULD NOT BE PRODUCED, THEREFORE, ADDITIO NAL EVIDENCES WERE FILED. THE SUBMISSIONS AND ADDITIONAL EVIDENCES WERE FORWA RDED TO THE AO FOR FILING REMAND REPORT. THE AO OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCES. THE ASSESSEE EXPLAINED THAT THE AO ISSUED QUESTIONN AIRE FOR THE FIRST TIME ON 23.11.2009 FIXING THE CASE FOR HEARING ON 30.11.200 9 AND THE ASSESSMENT WAS CONCLUDED ON 29.12.2009. THUS, THERE WAS LITTLE TI ME AVAILABLE WITH THE ASSESSEE TO OBTAIN RELEVANT DOCUMENTS FROM THE PART Y. LD.CIT(A), ACCORDINGLY, ADMITTED THE ADDITIONAL EVIDENCES. THE REVENUE IS IN APPEAL ON GROUND NO.1. LD.CIT(A) CONSIDERED THE ISSUE OF CREDIT OF RS.50 L AKHS RECEIVED FROM EROS CITY DEVELOPERS. IT WAS EXPLAINED THAT THE ASSESSEE HAS RECEIVED ACCOUNT PAYEE CHEQUE DATED 14.07.2004 AS REPAYMENT OF ADVANCE GIV EN BY THE ASSESSEE. THIS ADVANCE WAS GIVEN VIDE CHEQUE DATED 26.11.2003 DRAW N BY THE ASSESSEE ON ITS SAVING BANK ACCOUNT FOR THE BOOKING OF TWO PLOTS IN THE PROJECT AT FARIDABAD. COPIES OF THE FORWARDING LETTER WITH BANK STATEMENT S WERE FILED ALONGWITH CONFIRMATION, COMPLETE ADDRESS AND PAN. THE ASSESS EE FILED CONFIRMATION AND EXPLAINED AMOUNT WAS RETURNED ON REQUEST OF ASSESSE E WITH COMPENSATION OF RS.3 LAKHS. LD.CIT(A) ACCEPTED THE SUBMISSIONS OF LD.CIT(A) AND DELETED THE ADDITION. IT IS, THEREFORE, A CLAIM OF THE ASSESSE E THAT REFUND OF THE EARLIER AMOUNT WAS RECEIVED AND RS.3,00,000/- WAS RECEIVED ON ACCOUNT OF CANCELLATION OF THE DEAL WHICH HAVE BEEN SHOWN AS I NCOME. THE REVENUE ON GROUND NO.2 HAS CHALLENGED THE DELETION WITH THIS A DDITION. THE REVENUE FURTHER RAISED GROUND NO.3 FOR DELETION OF ADDITION OF RS.7,00,000/- U/S 68 OF THE ACT. IT WAS EXPLAINED AT THE APPELLATE STAGE T HAT AMOUNT HAS BEEN RECEIVED AND CREDITED TO THE BANK ACCOUNT AND THIS CREDIT WA S REVERSED AS THE PARTY ISSUED THE CHEQUE (SH. M.C.GUPTA) HAD INSUFFICIENT FUND IN THE BANK ACCOUNT. PAGE | 16 COPY OF THE RELEVANT BANK ACCOUNT WAS FILED. LD.CI T(A), ACCORDINGLY, DELETED THE ADDITION. 23. ON GROUND NO.4, THE REVENUE CHALLENGED THE DELE TION OF ADDITION OF RS.50,000/- AND RS.18,800/-. THE ASSESSEE FILED CO NFIRMATION IN THIS REGARD. COPIES OF THE BANK STATEMENT WAS FILED. IT WAS EX PLAINED THAT PARTLY REFUND OF RS.50,000/- WAS MADE BY THAT PARTY WHICH HAVE BEEN CREDITED TO THE BANK ACCOUNT OF THE ASSESSEE ON 25.08.2004. BESIDES INT ERESTS OF RS.18,880/- WAS ALSO PAID BY THE PARTY WHICH WAS CREDITED TO THE BA NK ACCOUNT OF THE ASSESSEE BUT THE CHEQUE WAS NOT HONOURED ON ACCOUNT OF INSUF FICIENT FUND, THEREFORE, EQUIVALENT AMOUNT WAS DEBITED. LD.CIT(A), ACCORDIN GLY DELETED THE ADDITION. 24. ON GROUND NO.5, REVENUE CHALLENGED THE DELETION OF ADDITION OF RS.1,50,000/- FOR SHORT TERM DEPOSIT/CUMULATIVE DEP OSIT FAVOURING WIFE AND DAUGHTER OF THE ASSESSEE. IT WAS FOUND THAT SUCH D EPOSIT WAS NOT IN THE NAME OF THE ASSESSEE. IT WAS IN THE NAME OF THE DAUGHTE R OF THE ASSESSEE IN WHICH WIFE OF THE ASSESSEE WAS NOMINEE, THEREFORE, THE AD DITION WAS DELETED. REVENUE RAISED GROUND NO.6 FOR DELETION OF RS.27,000/- FOR INVESTMENT IN AIR CONDITIONER WHICH WERE DELETED BY LD.CIT(A) WHERE I NVESTMENT WAS MADE BY THE WIFE AND ONLY GENERAL QUERY WAS MADE BY THE AO IN THIS REGARD. IT WOULD, THEREFORE, SHOW THAT ON THESE ADDITIONS, NO INCRIMI NATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. 24.1. LD. CIT DR RELIED UPON THE ORDER OF THE AO. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF L D.CIT(A). AFTER CONSIDERING RIVAL CONTENTIONS, WE DO NOT FIND ERROR IN ORDER OF LD.CIT(A) IN DELETING ALL ADDITIONS ON WHICH DEPARTMENT FILED APPEAL. THE AS SESSEE EXPLAINED AO ISSUED NOTICE ON 23.11.1999 FOR 30.11.1999 AND ASSESSMENT COMPLETED IN 29.12.1999 PAGE | 17 SO LITTLE TIME AVAILABLE FOR ASSESSEE TO FILE REQUI RED DETAILS. ASSESSEE HAS SUFFICIENT CAUSE FOR NOT FILING DETAILS BEFORE THE AO. LD.CIT(A) CORRECTLY ADMITTED ADDITIONAL EVIDENCES. THE ASSESSEE EXPLAI NED THAT HE RECEIVED BACK RS.50 LAKHS THROUGH BANKING CHANNEL FROM EROS CITY DEVELOPERS WITH COMPENSATION OF RS.03 LAKHS WHICH IS DECLARED AS IN COME. DOCUMENTARY EVIDENCES WERE FILED TO EXPLAIN AND SUPPORT CONTENT IONS. LD.CIT(A) RIGHTLY DELETED ADDITION. RS. 07 LAKHS WAS REVERSED IN BAN K A/C AS CHEQUE OF SH. M.C.GUPTA DISHONOURED. NO ADDITION COULD BE MADE O F SUCH ENTRY. SAME IS POSITION OF ADDITION OF RS.50,000/- AND RS.18,800/- . ASSESSEE FILED CONFIRMATION AND BANK STATEMENT. THE CHEQUE OF PAR TY DISHONOURED. ASSESSEE EXPLAINED ENTRIES. LD.CIT(A CORRECTLY DEL ETED THE ADDITIONS. THE FD/ TERM DEPOSITS WERE FOUND NOT IN THE NAME OF THE ASS ESSEE. IT WAS IN THE NAME OF DAUGHTER OF THE ASSESSEE AND HIS WIFE WAS NOMINE E. SO, IT CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE. INVESTMENT IN AIR-CO NDITIONER WAS FOUND MADE BY WIFE OF THE ASSESSEE. LD.CIT(A)THEN CORRECTLY DELE TED ALL ADDITIONS. NO MATERIAL PRODUCED TO REBUT THE FINDINGS OF FACTS RECORDED BY LD.CIT(A). DEPARTMENTAL APPEAL FAILS AND DISMISSED. 25. THE ASSESSEE ON GROUND NO.1 IN THE CROSS OBJECT ION HAS CHALLENGED THE ADDITION OF RS.12,80,000/-, RS.32,90,000/- AND RS.6 ,00,000/-. LD.CIT(A) SUSTAINED THE ADDITION OF RS.12,80,000/- BECAUSE DE TAILS OF THE CREDITORS WAS NOT EXPLAINED. THE ADDITION OF RS.32,90,000/- WAS SUSTAINED WHERE NO CONFIRMATION WAS FILED DURING THE COURSE OF ASSESSM ENT PROCEEDINGS. AS REGARDS OF RS.6 LAKHS, NO CONFIRMATION WAS FILED FO R THE AMOUNT RECEIVED FROM SH. NARENDRA. LD. COUNSEL FOR THE ASSESSEE REFERRE D TO P.B. 11 WHICH IS COPY OF THE BANK ACCOUNT TO SHOW THAT RS.31,70,000/- WAS GI VEN TO M/S ANSAL PAGE | 18 TOWNSHIP & LAND DEVELOPMENT LTD. ON 21.07.2004 AND THE ASSESSEE RECEIVED BACK RS.50,000/-, RS.30 LAKHS AND RS.2,40,000/- ON 06.10.2004 I.E. RS.32,90,000/-. THEREFORE, THERE IS AN EXCESS OF R S.1,20,000/- WHICH COULD HAVE BEEN ADDED TO THE INCOME OF THE ASSESSEE AS AG AINST ADDITION OF RS.32,90,000/-. AS REGARDS, ADDITION OF RS.12,80,0 00/-, THE DETAILS COULD NOT BE EXPLAINED BUT IT WAS EXPLAINED THAT IT WAS PAID BY DEMAND DRAFT. CHEQUE OF RS.6,00,000/- WAS RECEIVED ON 28.02.2005 FROM SH. N ARENDER AND IN AY 2007- 08, LD.CIT(A) DELETED THE ADDITION IN RESPECT OF SA ME PERSON AND DEPARTMENT IS NOT IN APPEAL. LD. CIT DR, HOWEVER, SUBMITTED THAT NO CONFIRMATIONS HAVE BEEN FILED BY THESE PARTIES. IT WAS ALSO EXPLAINED BY LD. COUNSEL FOR THE ASSESSEE THAT THESE ADDITIONS WERE MADE WITHOUT BR INGING INCRIMINATING MATERIAL DURING THE COURSE OF SEARCH AGAINST THE AS SESSEE. GROUND NO.2 OF THE CROSS-OBJECTION IS GENERAL IN NATURE AND GROUND NO. 3 IS WITH REGARD TO TELESCOPING WHICH WERE NOT PRESSED. GROUND NO.4 OF THE CROSS OBJECTION IS FOR CHARGING OF INTEREST U/S 234A & 234B OF THE ACT WHI CH IS SIMILAR AS DECIDED IN ITA NO.5739/DEL/2014. GROUND NO.5 OF THE CROSS OBJ ECTION IS THAT NO ADDITION COULD BE MADE IN THE ASSESSMENT U/S 153A O F THE ACT BECAUSE THE ASSESSMENT HAD BECOME FINAL AND HAD NOT ABATED. NO INCRIMINATING MATERIAL WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH QU A THESE ADDITIONS. LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT P.B 1 IS ORIGINAL RETURN OF INCOME FILED ON 31.03.2006 AND THE ASSESSMENT STOOD COMPLE TED ON THE DATE OF SEARCH. SINCE NO INCRIMINATING MATERIAL WAS FOUND DURING T HE COURSE OF SEARCH TO MAKE ADDITIONS, THEREFORE, ALL ADDITIONS ARE LIABLE TO BE DELETED. PAGE | 19 26. LD.CIT DR REITERATED THE SUBMISSIONS MADE ABOVE AND RELY ON ORDER OF THE AO AND ON THE ISSUE OF VALIDITY OF PROCEEDINGS U/S 153A RELY ON SUBMISSION MADE IN ITA NO.5740/DEL/2014. 27. AFTER CONSIDERING RIVAL SUBMISSIONS, WE FIND TH AT THIS ISSUE IS SAME AS HAS BEEN CONSIDERED IN ITA NO.5739 & 5740/DEL/2014 (SUPRA). FOLLOWING THE REASONS FOR DECISION, WE SET ASIDE THE ORDERS OF TH E AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITION BECAUSE ON THE DATE OF SEARCH A SSESSMENT STOOD COMPLETED AND NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH QUA ADDITIONS. 28. GROUND NO.5 OF THE CROSS-OBJECTION OF THE ASSES SEE IS ALLOWED. THE REMAINING GROUNDS IN CROSS-OBJECTION ARE LEFT WITH ACADEMIC DISCUSSION ONLY, HOWEVER, THE SAME ARE DISCUSSED IN BRIEF. 29. ON MERIT, THE ASSESSEE IS NOT ABLE TO EXPLAIN A DDITION OF RS.12,80,000/- WHICH IS LIABLE TO BE SUSTAINED. THE ASSESSEE, HOW EVER, EXPLAINED ADDITION OF RS.32,90,000/-. THE ASSESSEE GAVE ADVANCE OF RS.31 ,70,000/- TO ANSAL WHICH IS SUPPORTED BY BANK STATEMENT AND RECEIVED BACK RS .32.90,000/- THUS EXCESS OF RS.1,20,000/- SHALL HAVE TO BE TAXED AS AGAINST ADDITION OF RS.32,90,000/-. ON ADDITION OF RS.06 LAKHS, IT WAS RECEIVED FROM SH . NARENDER ON 28.02.2005 THOUGH CHEQUE (P.B-12 BANK STATEMENT). IN AY 2007- 08, LD.CIT(A) DELETED SIMILAR ADDITION AND DEPARTMENT DID NOT CHALLENGE D ELETION OF ADDITION BEFORE ITAT, THEREFORE, NO ADDITION COULD BE MADE. ORDER OF AUTHORITIES BELOW ARE SET ASIDE PARTLY ON GROUND NO.1 OF C.O AND ADDITIONS AR E RESTRICTED TO RS.12,80,000/- AND RS.1,20,000/- ONLY. CHANGING OF INTEREST U/S 234A & 234B ARE COVERED BY ORDER OF ITAT IN ITA NO.5739/DE L/2014 (SUPRA). PAGE | 20 30. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISS ED AND CROSS-OBJECTION OF THE ASSESSEE IS ALLOWED IN TERMS ABOVE. C.O.NO.-298/DEL/2014 (IN ITA NO.1019/DEL/2014) [ASSESSMENT YEAR: 2006-07] 31. THIS CROSS-OBJECTION BY THE ASSESSEE HAS BEEN D IRECTED AGAINST THE ORDER OF LD.CIT(A), MEERUT DATED 29.11.2013 FOR AY 2006-0 7. IT IS STATED THAT DEPARTMENT APPEAL HAS BEEN DISMISSED SEPARATELY FOR LOW TAX EFFECT. THE ASSESSEE FILED RETURN OF INCOME OF RS.77,930/-. TH E AO MADE SIMILAR ADDITIONS U/S 68 & 69 OF THE ACT AND ALSO DISALLOWED THE INTE RESTS U/S 36(1)(III) OF THE ACT. THE ASSESSEE CHALLENGED THESE ADDITIONS IN TH E CROSS-OBJECTION, CHARGING OF INTERESTS U/S 234A & 234B ARE ALSO CHALLENGED. THE ASSESSEE RAISED LEGAL GROUND ON GROUND NO.7 OF CROSS- OBJECTION THAT NO ADDITION CAN BE MADE U/S 153A OF THE ACT BECAUSE ASSESSMENT STOOD COMPLETED AND NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH TO M AKE THESE ADDITIONS. ADMITTEDLY, THE ORIGINAL RETURN OF INCOME WAS FILED ON 30.09.2006 AND ASSESSMENT WAS COMPLETED ON THE DATE OF SEARCH. TH E AO MADE THE ADDITION ON MERIT BASED ON RECORD AND DETAILS AND DOCUMENTS PRODUCED BY THE ASSESSEE AT THE ASSESSMENT STAGE. ADMITTEDLY, NO INCRIMINAT ING MATERIAL WAS FOUND SO AS TO MAKE THE ABOVE ADDITIONS UNDER CHALLENGE. TH EREFORE, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE IN THE CASE OF TH E SAME ASSESSEE IN ITA NO.5739/DEL/2014 (SUPRA). WE, ACCORDINGLY, SET ASI DE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE ALL THE ADDITIONS. GR OUND NO.7 OF C.O. IS ALLOWED. 32. BRIEFLY GROUNDS ON MERITS ARE ALSO CONSIDERED. ON GROUND NO.1 OF THE CROSS-OBJECTION, THE ASSESSEE CHALLENGED THE ADDITI ON OF RS.07 LAKHS U/S 68 OF THE ACT IN THE NAME OF SH. M.C.GUPTA. THE AO MENTI ONED IN THE ASSESSMENT PAGE | 21 ORDER THAT THERE WERE CREDITS IN THE BANK ACCOUNTS OF THE ASSESSEE ON ACCOUNT OF PAYMENTS RECEIVED FROM SH. M.C.GUPTA. THE ASSES SEE FILED CONFIRMED COPY OF THE ACCOUNT. BUT THE CONFIRMATION DID NOT BEAR THE ASSESSMENT PARTICULARS OF THE PARTIES. THE AO, ACCORDINGLY, MADE THE ADDI TION. LD.CIT(A) CONFIRMED THE ADDITION. LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIVED A PAYEE S ACCOUNT CHEQUE NO.5825 FOR RS.07 LAKHS FROM SH. M.C.GUPTA BEING REFUND OF THE AMOUNT ALREADY OUTSTANDING FROM HIM AS ON 31.03.2005 WHICH IS SHOW N UNDER THE HEAD LOANS AND ADVANCES IN AY 2005-06. IT WAS SUBMITTED BEFO RE AUTHORITIES BELOW THAT AN AMOUNT OF RS.07 LAKHS WAS OUTSTANDING AS DEBIT I N THE ACCOUNT OF THE PARTY AS ON 31.03.2005 WHICH IS MENTIONED IN THE BALANCE SHEET OF AY 2005-06. THE CREDIT ENTRY IN THE BANK ACCOUNT REPRESENTED REFUND OF THE OUTSTANDING AMOUNT ALREADY DUE FROM HIM. SH. M.C.GUPTA WAS NOT A CRED ITOR OF THE ASSESSEE. THE AMOUNT WAS GIVEN IN AY 2005-06 HAVE NOT BEEN DOUBTE D. THE ASSESSEE RELIED UPON THE ORDER OF ITAT, DELHI BENCH ON 07.12.2010 I N THE CASE OF ITO, WARD- 10(1), NEW DELHI VS DECENT FOODS PVT. LTD. IN ITA NO.2471/DEL/2010 WHEREIN IT WAS HELD THAT THE PARTIES WHICH REFUNDED ADVANCE TO THE ASSESSEE WERE NOT CREDITORS OF THE ASSESSEE AND THE ASSESSEE DID NOT TAKE ANY LOAN FROM THEM. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. THE ADDITION IS WHOLLY UNJUSTIFIED. THE ASSESSEE HAS G IVEN AMOUNT IN EARLIER YEAR 2005-06 WHICH WAS REFUND OF THE AMOUNT IN QUESTION. COPY OF THE BALANCE SHEET IS FILED IN AY 2005-06 WHICH SUPPORT THE EXPL ANATION OF THE ASSESSEE. THEREFORE, NO ADDITION COULD BE MADE AGAINST THE AS SESSEE. THIS GROUND OF CROSS-OBJECTION IS ALLOWED. PAGE | 22 33. ON GROUND NOS.2 TO 5 OF THE CROSS-OBJECTION, TH E ASSESSEE CHALLENGED THE ADDITION OF RS.2,27,185/- ON ACCOUNT OF DISALLO WANCE OF INTERESTS U/S 36(1)(III) OF THE ACT. THE ASSESSEE CONTESTED THE A CTION OF THE AO BEFORE LD.CIT(A) IN TAXING NOTIONAL INTERESTS OF RS.2,07,1 85/- AND ON SECOND ISSUE CHALLENGED THE DISALLOWANCE OF INTERESTS. THE AO N OTED THAT THE ASSESSEE CLAIMED TO HAVE PAID INTERESTS TO 06 PARTIES AGGREG ATING TO RS.2,07,185/-. THE AO OBSERVED THAT THE ASSESSEE HAD TAKEN LOAN/ADVANC ES ON INTERESTS WHEREAS ON THE OTHER HAND, HE HAS ADVANCED THESE AMOUNTS TO OTHER PERSONS AS LOANS/ADVANCES BUT HAS NOT CHARGED ANY INTERESTS TH EREON. INTEREST HAS BEEN PAID BY THE ASSESSEE ON LOANS OF RS.83 LAKHS. BUT THE ASSESSEE HAS GIVEN LOAN/ADVANCES/DEBTS TOTALING TO RS.89,19,030/- ON W HICH NO INTEREST HAS BEEN DECLARED. THE AO, THEREFORE, COMPUTED NOTIONAL INT ERESTS OF RS.2,22,637/- ON INTEREST FREE ADVANCES AND MADE THE ADDITION. IT W AS EXPLAINED BEFORE LD.CIT(A) THAT IN THE NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE THERE WERE NO PRACTICE OF CHARGING INTEREST ON LOAN/ADVANCES. FURTHER, THE EXPLANATION HAS BEEN GIVEN IN RESPECT OF CERTAIN PARTIES AS TO WHY INTEREST WAS NOT CHARGED FROM THEM AND MOREOVER, IT COULD NOT BE DISPUTED TH AT THE ASSESSEE HAD NOT ACTUALLY CHARGED ANY INTEREST. THE ASSESSEE, THERE FORE, CLAIMED THAT NO NOTIONAL INTEREST SHOULD BE CHARGED AND NO ADDITION SHOULD BE MADE ON HYPOTHETICAL INCOME. THE ASSESSEE RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SHOORJI VALLABHDAS 36 ITR 144 . IN THE SECOND LIMB OF THE ARGUMENTS, IT WAS CONTENDED THAT INTERE ST BEARING FUNDS USED FOR MAKING INVESTMENT WHICH HAVE YIELDED INCOME, THEREF ORE, INTEREST SHOULD BE ALLOWED DEDUCTION. LD.CIT(A) ACCEPTED THE EXPLANAT ION OF THE ASSESSEE THAT ADDITION ON ACCOUNT OF NOTIONAL INTEREST CANNOT BE SUSTAINED, ADDITION WAS PAGE | 23 ACCORDINGLY DELETED. HOWEVER, AS REGARDS, THE CLAI M OF DEDUCTION OF INTERESTS, LD.CIT(A) NOTED THAT THIS IS AN ADDITIONAL CLAIM MA DE AND FRESH EXERCISE HAS TO BE DONE, THEREFORE, ADDITIONAL GROUND WAS DISMISSED . THERE IS NO GROUND OF APPEAL BY THE DEPARTMENT FOR DELETION OF ADDITION O F RS.2,07,185/-. THE ASSESSEE ON GROUND NO.5 STATED THAT ACTUALLY THE AD DITION WAS OF RS.2,22,637/- BUT LD.CIT(A) DELETED THE ADDITION OF RS.2,07,185/-. THE ASSESSEE CONTENDED THAT IT IS THE DUTY OF THE AO TO APPLY RELEVANT PROVISION OF LAW FOR THE PURPOSE OF DETERMINING TRUE INCOME OF T HE ASSESSEE AND RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F CIT VS MAHALAXMI SUGAR MILLS PVT. CO. LTD. [1986] 160 ITR 920 AND NATIONAL THERMAL POWER CO. LTD. VS CIT [1998] 229 ITR 383 (SC). ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 34. THE ASSESSEE CLAIMED THAT INTEREST SHOULD BE AL LOWED DEDUCTION AS INTEREST BEARING FUNDS HAVE BEEN USED TO EARN TAXAB LE INCOME. THEREFORE, AUTHORITIES BELOW SHOULD HAVE ADMITTED ADDITIONAL G ROUND AND SHOULD HAVE ADJUDICATED UPON THE SAME. WE, ACCORDINGLY, SET AS IDE THE ORDERS OF THE AUTHORITIES BELOW AND ADMIT THE ADDITIONAL GROUND O F THE ASSESSEE AND RESTORE THE SAME TO AO WITH DIRECTION TO DECIDE SAME IN ACC ORDANCE WITH LAW. REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEAR D BE GIVEN TO THE ASSESSEE. THESE GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. HOWEVER, IN VIEW OF THE GROUND NO.7 OF THE CROSS-OBJECTION IS ALLOWED IN FA VOUR OF THE ASSESSEE. IT IS LEFT WITH ACADEMIC DISCUSSION ONLY. 35. ON GROUND NO.6 OF THE CROSS-OBJECTION, THE ASSE SSEE CHALLENGED THE CHARGING OF INTEREST U/S 234A & 234B OF THE ACT. T HIS GROUND IS SAME AS HAS BEEN DECIDED IN 2002-03 AY IN ITA NO.5739/DEL/2014. FOLLOWING THE ORDER IN PAGE | 24 THAT CASE, WE SET ASIDE THE ORDERS OF THE AUTHORITI ES BELOW AND DIRECT THE AO TO PASS A CONSEQUENTIAL ORDER. THIS GROUND OF THE CRO SS-OBJECTION IS ALLOWED ACCORDINGLY. 36. IN THE RESULT, THE CROSS-OBJECTION FILED BY THE ASSESSEE IS ALLOWED. ITA NO.10 & 170/DEL/2015 [ASSESSMENT YEAR: 2005-06] 37. BOTH THE CROSS-APPEALS ARE DIRECTED AGAINST THE ORDER OF LD.CIT(A), MEERUT DATED 20.10.2014 FOR AY 2005-06, CHALLENGING THE LEVY OF PENALTY AND CANCELLATION OF PENALTY U/S 271(1)(C) OF THE ACT. THE AO VIDE SEPARATE ORDER LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT ON THE ADDITION MADE IN THE ASSESSMENT ORDER. LD.CIT(A) PARTLY CONFIRMED THE A DDITIONS/SUSTAINED IN APPEAL. LD.CIT(A), THEREFORE, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND CANCELLED THE PART PENALTY. THE ASSESSEE IS IN APP EAL CHALLENGING THE PENALTY ORDER. THE REVENUE IS IN APPEAL CHALLENGING THE DE LETION OF PENALTY BECAUSE THE DEPARTMENTAL APPEAL ON MERITS IS PENDING BEFORE THE TRIBUNAL. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT QUANTUM ORDER OF TH E TRIBUNAL MAY BE FOLLOWED IN DECIDING THE PENALTY APPEALS AND ALSO FILED COPY OF THE SHOW CAUSE NOTICE DATED 29.12.2009 ISSUED FOR ASSESSMENT YEAR UNDER A PPEAL BEFORE LEVY OF PENALTY U/S 274 R.W.S 271(1)(C) IN WHICH THE AO HAS MENTIONED (C) HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED NOTICE IS BAD IN LAW AND THAT PENALTY IS NOT LEVIABLE IN THE MATTER. 38. ON THE OTHER HAND, LD. SR. DR RELIED UPON THE O RDERS OF THE AUTHORITIES BELOW AND RELIED UPON THE ORDER OF ITAT, MUMBAI BEN CH IN THE CASE OF SH. MAHESH M GANDHI VS ACIT IN ITA NO.2976/MUM/2016 VIDE ORDER DATED PAGE | 25 27.02.2017. IN THIS CASE IN NOTICE, REASONS FOR PE NALTY WERE NOT MENTIONED. THE TRIBUNAL HELD THAT THE AO HAS RECORDED SATISFAC TION IN THE ASSESSMENT ORDER IN RELATION TO INVOKING PENALTY PROCEEDINGS. LD. COUNSEL FOR THE ASSESSEE STATED THE DECISION CITED BY LD. SR.DR IS NOT APPLI CABLE TO THE FACTS OF THIS CASE. 39. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE ARE OF THE VIEW THAT PENALTY IS NOT LEVIABLE IN THE MATTER. ON QUANTUM APPEAL, WE HAVE DELETED ALL THE ADDITIONS IN ITA NO.1018/DEL/2014 & C.O.NO.-297/DEL /2014, THEREFORE, PENALTY CANNOT BE LEVIED AGAINST THE ASSESSEE. 40. FURTHER, THE AO HAS ISSUED A SHOW CAUSE NOTICE WHICH IS BAD IN LAW BECAUSE IT DID NOT SPECIFY UNDER WHICH LIMB OF SECT ION 271(1)(C), PENALTY PROCEEDINGS HAVE BEEN INITIATED I.E. WHETHER FOR CO NCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF KARNA TAKA HIGH COURT IN THE CASE OF CIT VS SSA EMARALD MEADOWS 73 TAXMANN.COM 241 IN WHICH SIMILAR VIEW WAS TAKEN AND DEPARTMENTAL APPEAL IS DISMISSED. TH E JUDGEMENT OF HONBLE HIGH COURT IS CONFIRMED BY THE HONBLE SUPREME COUR T BY DISMISSING THE SLP OF THE DEPARTMENT REPORTED IN 73 TAXMANN.COM 248. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND CANCE L THE PENALTY. 41. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED AND DEPARTMENTAL APPEAL IS DISMISSED. ITA NO.11/DEL/2015 [ASSESSMENT YEAR: 2006-07] 42. THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF LD.CIT(A), MEERUT DATED 20.10.2014 FOR AY 2006-07, CHALLENGING THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN THIS CASE, WE HAVE DELETED ALL THE ADDITIONS PAGE | 26 ON MERIT AND ALLOWED CROSS-OBJECTION I.E. C.O.NO.-2 98/DEL/2014 (IN ITA NO.1019/DEL/2014) [ASSESSMENT YEAR: 2006-07]. THE AO ISSUED SIMILAR SHOW CAUSE NOTICE BEFORE LEVY OF THE PENALTY AS WAS ISSU ED IN AY 2005-06 ABOVE. THE ISSUE IS IDENTICAL AS HAS BEEN CONSIDERED IN AY 200 5-06 ABOVE IN ITA NO.11 & 170/DEL/2015. FOLLOWING THE REASONS FOR DECISION F OR AY 2005-06, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY. 43. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 44. IN THE FINAL RESULT, THE APPEALS OF THE ASSESSE E AND CROSS OBJECTIONS ARE ALLOWED WHEREAS DEPARTMENTAL APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (L.P.SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AMIT KUMAR* DATE:- 22.05.2018 COPY FORWARDED TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) CONCERNED 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI