ACIT, New Delhi V. M/s. D.J. Infrastructure Dev Pvt. Ltd., New Delhi

ITA 1019/DEL/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0197 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-06-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 29-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY PRASAD
• Assessee Lawyers: ADESH JAIN
• Keywords: Search and seizure; Loose papers; Document seized; Documents seized
• Section: 69C; 143(3); 142(1); 132

Judgement Text

ITA NO. 1019/ DEL/ 2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A. NO. 1019 / DEL/201 2 A.Y. : 200 7 - 0 8 ACIT, CENTRAL CIRCLE - 2, NEW DELHI ROOM NO. 323, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. M/S D.J. INFRASTRUCTURE DEV. PVT. LTD., 201, SURYA KIRAN BUILDING, 19, KG. MARG, NEW DELHI (PAN: AACCD2756K) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. SANJAY PRASAD, CIT (DR) ASSESSEE BY : SH. ADESH JAIN & AKSHAT JAIN, CA S DATE OF HEARING : 1 0 - 0 6 - 201 5 DATE OF ORDER : 11 - 0 6 - 201 5 ORDER PER H.S. SIDHU, JM REVENUE HAS FILED THIS APPEAL AGAINST THE O RDER DATED 10.6.2015 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS ), III, DELHI P ERTAINING TO ASSESSMENT YEAR 200 7 - 0 8 ON THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 47,02,750/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED EXPENSES IN RESPECT OF MOTIA KHAN PROPERTY. 2. ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING ITA NO. 1019/ DEL/ 2012 2 THAT THE ISSUE UNEXPLAINED EXPENSES IN RESPECT OF MOTIA KHAN PROPERTY HAS BEEN ADJUDICATED UPON BY THE HON BLE SETTLEMENT COMMISSION. 3. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 2 . THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE ACTION U/ S. 132 OF THE I.T. ACT WAS CARRIED OUT IN THE GOPAL ZARDA GROUP OF CASES ON 15.1.2009 AND DURING THE COURSE OF SEARCH AT THE RESIDENTIAL PREMISES OF SH. ASHOK KUMAR AGGARWAL, DIRECTOR GOPAL CORPORATION LTD. AT B - 6, KALINDI COLONY, 3 RD FLOOR, MAHARANI BAGH , NEW DELHI CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE WERE SEIZED. ON THE BASIS OF DOCUMENTS SO FOUND WHICH BELONGED TO THE ASSESSEE COMPANY AND SEIZED FROM A PERSON U/S. 132 OF THE I.T. ACT . AFTER RECORDING THE SATISFACTION NOTE U/S. 153C OF THE ACT, NOTICE U/S. 153C OF THE INCOME TAX ACT, 1961 WAS ISSUED ON 21.6.2010 AND DULY SERVED UPON THE ASSESSEE REQUIRING IT TO FURNISH THE TRUE AND CORRECT RETURN OF INCOME FOR THE AY 2007 - 08 WITHIN 21 DA YS FROM THE DATE OF RECEIPT OF THE NOTICE. THE ASSESSEE DID NOT FILE ITS RETURN OF INCOME WITHIN THE TIME STIPULATED IN THE NOTICE U/S. 153C. THE RETURN OF INCOME WAS FILED ON 13.9.2010 DECLARING TOTAL INCOME AT RS. 15,280/ - DELAY IN FILING OF RETURN OF INCOME WAS MORE THAN TWO MONTHS. EARLIER ASSESSEE HAD FILED HIS ORIGINAL RETURN OF INCOME DECLARING SAME INCOME. SUBSEQUENTLY NOTICE U/S. 143(2) OF THE ACT DATED 14.9.2010 WAS ISSUED AND SERVED UPON THE ASSESSEE. PREVIOUSLY, NOTICE U/S. 142(1) OF THE ACT DATED 28.7.2010 ALONG WITH THE QUESTIONNAIRE WERE ISSUED AND SERVED UPON THE ASSESSEE. ITA NO. 1019/ DEL/ 2012 3 THEREAFTER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS BEEN REQUESTED TO FURNISH THE DETAILS AS REQUESTED VIDE NOTICE U/.S 142(1) OF THE ACT. IN RESPONSE TO THESE NOTICES, AUTHORIZED REPRESENTATIVE ATTENDED THE ASSESSMENT PROCEEDINGS FROM TIME TO TIME AND FURNISHED VARIOUS DETAILS. AO NOTED THAT THE ONUS IS ON THE ASSESSEE TO PROVE WHICH REMAINS UNEXPLAINED . A FTER CONSIDERING THE FACTS AN D CIRCUMSTANCES OF THE CASE , AO MADE AN ADDITION OF RS. 47,02,750/ - ON ACCOUNT OF UNEXPLAINED SOURCE OF EXPENSES U/S. 69C R.W.S. 37 OF THE ACT AND C OMPLETED THE ASSESSMENT VIDE ORDER DATED 29.12.2010 PASSED U/S. 153C R.W.S. 143(3) OF THE I.T. ACT, 196 1. 3 . AGAINST THE AFORESAID ASSESSMENT ORDER OF THE ASSESSING OFFICER, ASSEESSEE APPEALED BEFORE THE LD. FIRST APPELLATE AUTHORITY, WHO VIDE IMPUGNED ORDER 1 5 . 1 2 .201 1 HAS ALLOWED THE APPEAL OF THE ASSESEE AND DELETED THE ADDITION IN DISPUTE. 4 . AGGRIEVED BY THE AFORESAID IMPUGNED ORDER DATED 1 5 . 1 2 .201 1 , REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5 . AT THE TIME OF HEARING LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND REITERATED ON THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL FILED BY THE REVENUE. 6 . ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE ORDER OF THE LD. CIT(A) MAY BE UPHELD. 7 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS ESPECIALLY THE IMPUGNED ORDER DATED 1 5 . 1 2 .201 1 , WE FIND THAT AO HAS MADE THE ADDITION OF RS. 47,02,750/ - TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED AND UNACCOUNTED EXPENSES IN THE MOTIA KHAN PROPERTY. DURING THE COURSE OF SEARCH PROCEEDINGS ITA NO. 1019/ DEL/ 2012 4 U/S. 153C, CERTAIN PAPERS ANNEXURIZED AS PAGE NO. 47 OF ANNEXURE A - 1 WAS FOUND. ON THIS PAPER, DETAILS OF EXPENSES AND PAYMENT OF SHARE PREMIUM IS MENTIONED. THE AO CONTENDED THAT SINCE THE DIRECTORS OF THE ASSESSEE COMPANY HAS ACCEPTED THE PAYMENT AND RECEIPT OF PREMIUM MENTIONED IN ANNEXURE A - 1 OF THE SEIZED DOCUMENTS THEREFORE THE AMOUNT OF EXPENSES MENTIONED ON PAGE NO. 47 OF ANNEXURE A - I IS ALSO CORRECT. THE AO FURTHER CONTENDED THAT DURING THE PERIOD UNDER CONSIDERATION CONSTRUCTION OF TWO PROPERTIES I.E. HOTEL MOTIA KHAN PROPERTY OF THE ASSESSEE COMPANY AND HOTEL PROJECT IN MEHRAULI IN THE NAME OF M/S PENGUINE FARMS PVT. LTD. WAS IN PROGRESS. THESE LANDS WERE PURCHASED IN ASSESSMENT YEAR 2006 - 07 AND ASSESSMENT YEAR 2008 - 09. THE PLEA OF THE AO WAS THAT SINCE THESE TWO PROJECT LANDS WERE ACQUIRED AND HOTEL PROJECTS WERE LAUNCHED BY THE OWNERS OF BOTH THE COMPANIES, THEREFORE, THESE EXPENSES WERE RELATED TO BOTH THESE COMPANIES AND THUS MADE A DDITION OF RS. 47,02,750/ - (50% OF TOTAL EXPENDITURE OF RS. 94,05,500/ - ) EACH IN THE HANDS OF THE ASSESSEE COMPANY AND M/S PENGUINE FARMS PVT. LTD. 8. WE FURTHER FIND THAT THE LD. CIT(A) HAS OBSERVED THAT T HE CRUX OF THE SUBMISSION OF THE ASSESSEE DATED 13.12.2011 WERE AROUND THE PREPOSITION THAT THE ADDITIONS MADE IN CASE OF THE A SSESSEE WITH REGARD TO UNEXPLAINED AND UNDISCLOSED EXPENSES RELATED TO PROPERTY AT MOTIA KHAN BY THE AO ARE COVERED BY THE ORDER U/S 2450(4) PASSED BY THE SETTLEMENT COMMISSION DATED 31.12.2010 THEREFORE IN TERMS OF THE SECTION 245 - I OF THE IT ACT THE MATTERS WHICH ARE COVERED BY THE ORDER OF SETTLEMENT COMMISSION COULD NEITHER BE RE - OPENED NOR ELIGIBLE FOR ANY FURTHER ADDITION UNDER ANY PROCEEDINGS UNDER THIS ACT. 8. 1 AFTER PE RUSING OF THE ASSESSMENT ORDER, THE SUBMISSIONS MADE BY THE A SSESSEE AS WELL AS THE FINDINGS GIVEN BY THE SETTLEMENT ITA NO. 1019/ DEL/ 2012 5 COMMISSION IN ORDER DATED 31.12.2010 PASSED U/S 245 D (4) OF THE IT ACT IS OF THE VIEW THAT THERE IS NO CASE FOR ADDITION MADE BY THE AO ON A CCOUNT OF UNEXPLAINED AND UNACCOUNTED EXPENSES WITH RESPECT TO PROPERTY AT MOTIA KHAN, AS MADE IN THE ASSESSMENT ORDER. WHILE IT IS TRUE THAT THE ASSESSMENT ORDER HAS BEEN PASSED ON 29. 1 2 . 10 AND THEREFORE THE AO WAS NOT HAVING THE BENEFIT OF HAVING THE SET TLEMENT COMMISSION ORDER AND FINDING GIVEN THEREIN BUT THEN NOW AS THE ORDER OF THE SETTLEMENT COMMISSION HAS ALREADY BEEN PASSED UPON CONSIDERATION OF THE ENTIRE ISSUES AND HAVING CONSIDERED THE ADDITION TO INCOME WITH RESPECT TO THE CONCERNED PROPERTIES IN RESPECT OF THE ASSESSEE GROUP, THEREFORE IN TERMS OF SECTION 245 - I OF THE ACT THE ADDITIONS MADE IN THE ASSESSMENT O RDER ARE RIGHTLY BEEN DELETED BY THE LD. CIT(A). IN THIS CONNECTION , LD. CI T (A) HAS R EFER RED THE RELEVANT PORTION OF SETTLEMENT COMMISSI ON'S ORDER WHERE A SPECIFIC FINDING WITH REFERENCE TO WHICH THE ADDITION HAS BEEN MADE . THE RELEVANT PORTION OF THE ORDER OF THE LD. CIT(A) IS REPRODUCED AS UNDER: - THE ISSUE OF UNEXPLAINED AND UNACCOUNTED EXPENSES ON ACCOUNT OF P ROPERTY AT MOTIA KHAN, AS DISCUSSED BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER WAS ALREADY CONSIDERED ON PAGE NO. 27 TO 31 IN THE ORDER OF THE INCOME TAX SETTLEMENT COMMISSION U/S. 245D(4) OF THE ACT DATED 31 ST DECEMBER, 2010. THE RELEVANT PARA 2 4 OF THE O RDER REITERATING THE JUDGMENT OF HON BLE SETTLEMENT COMMISSION IS PRESENTED HEREUNDER FOR YOUR KIND PERUSAL: 'WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ISSUES WERE DISCUSSED IN DETAIL DURING THE HEARING. THERE IS ONE ITEM WHICH IS FIGURING IN THE STATEMENT OF SHRI GO PAL GUPTA WHERE HE HAS SURRENDERED RS. 6.5 CRORES. EVEN GOING BY THE CALCULATION A/PREMIUM, THE AMOUNT COMES ITA NO. 1019/ DEL/ 2012 6 TO RS.13.3 CRORES ( 1/3 RD OF RS.40 CRORES). THE APPLICANTS HAVE DECLARED MORE. SO THE AMOUNT OF DISCLOSURE NEED NOT BE DISTURBED. REGARDING THE HA ND IN WHICH THIS AMOUNT SHOULD BE TAXED, - SHRI DINESH JAIN OR SMT. LATA JAIN - IT IS IMMATERIAL SINCE IT WOULD BE REVENUE NEUTRAL. SO WE MAY ALLOW TAXING THIS AMOUNT IN THE HANDS OF SM T. LATA JAIN . REGARDING THE YEAR OF TAXABILITY, THE SEIZED DOCUMENT S DO NOT INDICATE ANY DATE OF RECEIPT OF THE PREMIUM. HOWEVER FROM THE CASH F LOW STATEMENT GIVEN BY SMT. LATA JAIN AND ROSHAN AGARWAL, IT IS NOTICED THAT ONE PART OF R S .55 CRORES WAS RECEIVED FROM SHRI GOPAL GUPTA ON 08.11.2006. RS.2.5 CRORE WAS RECEIVED O N 16.4.200 7. WHEN QUESTIONED WHY THE PREMIUM WOULD BE TAXED IN A. Y 2008 - 09, IT WAS REPLIED THAT THE FIRST INSTALLMENT WAS GIVEN AS ADVANCE. FINAL APPROPRIATION WAS MADE WHEN THE SHARES WERE ACTUALLY TRANSFERRED. I N THE LIGHT OF EXPLANATION GIVEN BY THE AP PLICANT NO INTERFERENCE IS BEING MADE.' 8. 2 KEEPING IN VIEW OF THE ABOVE, IT IS C LEAR THAT THE SETTLEMENT COMMISSION HAS NOT MADE ANY FURTHER ADDITION IN RESPECT TO THE PROPERTY AT MOTIA KHAN, KAROL BAGH. THE SETTLEMENT COMMISSION HAS HOWEVER MADE AN ADDITION OF RS.5 CRORES IN THE HANDS OF BOTH PRADEEP AGGARWAL GROUP AND DINESH J AIN G ROUP ON ACCOUNT OF UNEXPLAINED TRANSACTIONS (RECORDED ON LOOSE PAPERS WHICH IN C LUDES PAGE 47 OF ANNEXURE A - I) IN RESPECT OF THE PROPERTIES BROUGHT BEFORE THE SETTLEMENT COMMISSION AND HENCE ANY FURTHER ADDITION MADE BY THE ASSESSING OFFICER WOULD RESULT IN A CASE OF DOUBLE ADDITION. 8. 3 IN THIS CONNECTION , LD. CIT(A) HAS REPRODUCED THE RELEVANT PARA 68 ON PAGE 72 OF THE ORDER PASSED BY HON SETTLEMENT COMMISSION AT PAGE NO. 12 OF THIS IMPUGNED ORDER WHICH IS AS UNDER: - ITA NO. 1019/ DEL/ 2012 7 'WHILE GOING THROUGH THE SEIZED MATER IAL, THERE HAVE BEEN INDICATIONS OF SEVERAL INVESTMENTS OF A SMALL AMOUNT WHICH COULD NO T BE DECIPHERED. THE APPLICANT COULD NOT EXPLAIN THESE NOTINGS. IT APPEARS THAT . THERE WERE HEAVY CASH TRANSACTIONS AND APPLICANTS HAD SUFFICIENT ROLLING FUND IN CASH. TAKING AN OVERALL VIEW, WE TAKE UNEXPLAINED CASH OF RS. 5 CRORES IN THE HAND OF THE MAIN APPLICANT OF THE TWO GROUPS'. 8. 4 KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES EXPLAINED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE SETTLEMENT COMMISSION HAS MA DE TOTAL ADDITION OF RS.2.5 CRORES EACH IN THE HANDS OF DINESH JAIN GROUP AND PARDEEP AGGARWAL GROUP BASED ON THE AFORESAID SEIZED PAPER AT PAGES 47 OF A - I AND CONSEQUENTLY THE ADDITION OF RS.47,02,750 / - MADE BY THE ASSESSING OFFICER HAS RIGHTLY BEEN DELE TED BY THE LD. CIT(A) . THEREFORE, W E DO NOT SEE ANY REASON TO INTERFERE WITH THE WELL REASONED ORDER OF THE LD. CIT(A), ACCORDINGLY, WE UPHOLD THE SAME AND DECIDE THE ISSUE AGAINST THE REVENUE BY DISMISSING THIS GROUND OF APPEAL. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 11 / 0 6 /20 1 5 . SD/ - SD/ - [ J.S. REDDY ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 11 / 6 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES