Sh. Narinder Pal, Faridkot V. DCIT, CC-II, Ludhiana

ITA 1057/CHANDI/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6402 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 08-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR G S PHANI KISHORE
• Keywords: Search and seizure
• Section: 143(3); 153A; 143(1); 250; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B , CHANDIGARH !' , # $ %! & ' ( ) * , $ BEFORE SMT.DIVA SINGH, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.1057/CHD/2018 / ASSESSMENT YEAR : 2008-09 & ./ ITA NO.1059/CHD/2018 / ASSESSMENT YEAR : 2005-06 SH.NARINDER PAL S/O SH.SIRI PAL, MOHALLLA KHOKHARAN WALA, FARIDKOT. THE D.C.I.T., CENTRAL CIRCLE-II, LUDHIANA. ./PAN NO: AAQPP4847G /APPELLANT /RESPONDENT /ASSESSEE BY: SHRI SUDHIR SEHGAL, ADV. ! / REVENUE BY: DR. G.S.PHANI KISHORE, CIT DR ' # $ /DATE OF HEARING : 15.07.2019 %&'( $ /DATE OF PRONOUNCEMENT: 31.07.2019 /ORDER PER BENCH : BOTH THE ABOVE APPEALS HAVE BEEN PREFERRED BY THE SAME ASSESSEE AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, LUDHIA NA [(IN ITA NO.1057 & 1059/CHD/2018 A.Y.2008-09 & 2005-06 2 SHORT CIT(A)] BOTH DATED 4.5.2018, PASSED U/S 250 (6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS A CT), RELATING TO ASSESSMENT YEARS 2008-09 AND 2005-06 RESPECTIVELY. 2. AT THE OUTSET IT WAS POINTED OUT THAT THE ISSUES INVOLVED IN BOTH THE APPEALS WERE COMMON. THEREFORE , THESE APPEALS WERE TAKEN UP TOGETHER FOR HEARING. W E SHALL BE TAKING UP THE ASSESSEES APPEAL IN ITA NO.1057/CHD/2018 AND THE DECISION TENDERED THEREIN WILL APPLY TO THE OTHER APPEAL WITH EQUAL FORCE. ITA NO.1057/CHD/2018(A.Y.2008-09): 3. GROUNDS OF APPEAL RAISED BY THE ASSESSEE READS A S UNDER: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (A), LUDHIANA HAS ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER IN SUSTAINING THE ADDITION OF RS.2,63,000/- ON ACCOUNT OF LONG TERM CAPITAL GAIN. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) IS NOT JUSTIFIED IN NOT APPRECIATING THE FACTS AND SUBMISSIONS MADE BY THE APPELLANT AND WRONGLY CONFIRMED THE ADDITION OF RS.5,59,398/-. 3. THAT THE ADDITION AS CONFIRMED BY THE CIT(A) ON ACCOUNT OF CAPITAL GAIN IS NOT JUSTIFIED SINCE NO INCRIMINATING MATERIAL HAS BEEN FOUND DURING THE ITA NO.1057 & 1059/CHD/2018 A.Y.2008-09 & 2005-06 3 COURSE OF SEARCH CONDUCTED ON 21 ST OF OCTOBER 2010 RELATING TO THE ABOVE ADDITION. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEAR D OR DISPOSED OFF. 4. THE LD.COUNSEL FOR THE ASSESSEE FIRST TOOK UP GROUND NO.3 BEFORE US STATING THAT IT WAS A LEGAL GROUND CHALLENGING THE VALIDITY OF THE ASSESSMENT FRAMED IN THE PRESENT CASE. TAKING US THROUGH THE FACTS IT WAS CONTENDED THAT A SEARCH WAS CONDUCTED U/S 132 OF THE ACT ON 21.10.2010 ON THE ASSESSEE AN D THEREAFTER ASSESSMENT FRAMED U/S 153A R.WS. 143(3) OF THE ACT MAKING VARIOUS ADDITIONS TO THE INCOME O F THE ASSESSEE. IT WAS POINTED OUT THAT THE ORDE R SO PASSED BY THE AO WAS CHALLENGED BEFORE THE LD.CIT(A ) WHEREIN THE ASSESSEE HAD TAKEN AN ADDITIONAL GROUN D CHALLENGING THE ADDITIONS SO MADE ON THE GROUN D THAT NO INCRIMINATING MATERIAL WAS FOUND DURING T HE COURSE OF SEARCH AND, THEREFORE, NO ADDITION COU LD HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE IN THE ABSENCE OF THE SAME. OUR ATTENTION WAS DRAWN TO THE GROUND SO RAISED BEFORE THE CIT (A), REPRODUCED AT PARA 2.1 OF THE CIT(A)S OR DER. ITA NO.1057 & 1059/CHD/2018 A.Y.2008-09 & 2005-06 4 THEREAFTER IT WAS POINTED OUT FROM THE ORDER OF THE CIT(A) THAT THE ASSESSEES ADDITIONAL GROUNDS WERE SENT TO THE AO FOR HIS COMMENTS WHO FORWARDED HIS COMMENTS OBJECTING TO THE ADDITIONAL GROUND RAISED. OUR ATTENTION WAS DRAWN TO PARA 2.2(D) OF THE CIT(A ) REPRODUCING THE COMMENTS OF THE AO ON THE ISSUE AS UNDER: D) THE APPELLANT-ASSESSEE HAS RAISED ADDITIONAL GROUND OF APPEAL VIDE MEMORANDUM DATED 18-07-2017, AS THE ASSESSMENT IN THE AFORESAID CASE HAS BEEN COMPLETED IN RESPONSE TO NOTICE ISSUED U/S 153A OF I. T. ACT, WH ICH WAS ISSUED AFTER SEARCH AND SEIZURE OPERATION CARRI ED OUT U/S 132 OF I.T. ACT, RAISING OF THE ADDITIONAL GRO UND OF APPEAL BY THE APPELLANT IS STRONGLY OBJECTED. NEVERTHELESS, IT IS PRAYED THAT THE APPEAL OF THE ASSESSEE MAY KINDLY BE DECIDED ON MERIT.' 5. THEREAFTER IT WAS POINTED OUT THAT THE ASSESSEE SUBMITTED HIS REPLY ON THE REMAND REPORT OF THE AO WHICH WAS REPRODUCED AT PATA 2.3(D) AS UNDER: PARA (DL IT IS CORRECT THAT THE APPELLANT/ASSESSEE HAS RAISE D AN ADDITIONAL GROUNDS OF APPEAL VIDE MEMORANDUM DATED 18.07.2017 WHICH IS REPRODUCED HERE UNDER; '1. THAT THE WORTHY DEPUTY COMMISSIONER OF INCOME TAX HAS ERRED IN MAKING ADDITIONS ON ISSUES AS PER GROUND OF APPEAL DESPITE THE FACT THAT NO INCRIMINATING EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH CONDUCTED ON 21/22-OCTOBER-2010 BY TH E ITA NO.1057 & 1059/CHD/2018 A.Y.2008-09 & 2005-06 5 DEPARTMENT ON ACCOUNT OF VARIOUS ADDITIONS WHICH HAVE BEEN CHALLENGED BY THE ASSESSEE'. '2. THAT THE ADDITION IS OTHERWISE NOT SUSTAINABLE BECAUSE OF NUMBER OF JUDGMENTS IN THE FAVOUR OF ASSESSEE'. THE LD. ASSESSING OFFICER HAS STATED IN HIS REMAND REPORT THAT 'THE RAISING OF THE ADDITIONAL GROUND O F APPEAL BY THE APPELLANT IS STRONGLY OBJECTED'. SIMP LY BY OBJECTING THE ADMISSION OF ADDITIONAL GROUND DOE S NOT SERVE THE PURPOSE. THE APPELLANT/ASSESSEE HAS ALREADY FURNISHED WRITTEN SUBMISSIONS IN THIS REGARD AND QUOTED VARIOUS JUDGMENTS OF THE SUPERIOR COURTS AND THE LD. ASSESSING OFFICER HAS FAILED TO REBUT THE SUBMISSIONS. THE GROUND RAISED IS A LEGAL GROUND AND CAN BE DECIDED ON THE BASIS OF MATERIAL AND FACTS AVAILABLE. A LEGAL GROUND CAN BE RAISED A ND ADMITTED AT APPELLATE STAGE. INCOME HAD BEEN ORIGINALLY ASSESSED AND THE RETURN FILED BY THE ASSESSEE WAS ACCEPTED U/S 143(1) OF TH E INCOME TAX ACT, 1961 AND THE PERIOD FOR ISSUING NOTICE U/S 143(2) HAD BEEN EXPIRED ON THE DATE OF INITIATION OF SEARCH, AND FURTHER NO INCRIMINATING MATERIAL PERTAINING TO THE IMPUGNED YEAR WAS FOUND DURING THE SEARCH CONDUCTED ON THE ASSESSEE AND THE ADDITION MADE, IN THE COURSE OF ASSESSMENT FRAMED U/S 153(A), DID NOT PERTAIN TO ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH. NO ASSESSMENT FOR SUCH YEAR WAS PENDING ON THE DATE OF SEARCH. HENCE, IT IS PRAYED THAT THE APPEAL MAY KINDLY BE ACCEPTED ON THIS SCORE.' 6. THE LD.COUNSEL FOR THE ASSESSEE THEREAFTER CONTENDED THAT ON CONSIDERING THE ABOVE THE LD.CIT( A) ADJUDICATED THE ISSUE AT PARA 3.8 OF HIS ORDER AS UNDER: ITA NO.1057 & 1059/CHD/2018 A.Y.2008-09 & 2005-06 6 3.8 ADDITIONAL GROUNDS OF APPEAL: - VIDE THE ADDITIONAL GROUNDS OF APPEAL, THE ASSESSEE HAS CHALLENGED THE ADDITION IN THE ABSENCE OF INCRIMINATING EVIDENCE F OUND DURING THE SEARCH. HERE IT IS OBSERVED THAT ADDITION/DISALLOWANCE HAS BEEN MADE BY THE AO ON AC COUNT OF THE FACT THAT THE ASSESSEE COULD NOT SUBSTANTIAT E THE CLAIM OF DEDUCTION ON ACCOUNT OF EXPENSES ON IMPROVEMENT AS COST OF BOUNDARY WALL AND COST OF EARTH FILING. IT WAS NOT A CASE WHERE ANY NEW ADDITION HAS BEEN MADE BY THE AO BUT A CASE WHERE THE CLAIM OF THE ASSESSEE HAS BEEN DENIE D IN THE ABSENCE OF PROOF. IT IS A SETTLED POSITION OF LAW T HAT FOR CLAIMING ANY EXPENSE THE ASSESSEE IS REQUIRED TO SUBSTANTIATE THE SAME WITH THE DOCUMENTARY EVIDENCE S. IN THE PRESENT CASE, THE ASSESSEE HAS NOT BEEN ABLE TO FILE THE EVIDENCE IN SUPPORT OF HIS CLAIM FOR THE EXPENS ES TOWARDS EARTH FILING AND CONSTRUCTION OF BOUNDARY W ALL EVEN DURING THE APPELLATE PROCEEDINGS. THE SOURCE OF EXP ENSES HAS ALSO NOT BEEN EXPLAINED. UNDER THESE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE ADDITIONAL GROUNDS O F APPEAL ARE FOUND TO BE WITHOUT MERITS AND HENCE DISMISSED. 7. REFERRING TO THE ABOVE THE LD.COUNSEL FOR THE ASSESSEE POINTED OUT THAT IT IS OBVIOUS THAT THE LD.CIT(A) HAD NOT ADJUDICATED THE SPECIFIC GROUND RAISED BEFORE HIM REGARDING THE VALIDITY OF THE ASSESSMENT FRAMED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DESPITE THE SPECIFIC GROUND AND SPECIFIC SUBMISSIONS MADE IN THIS REGARD . THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT THE FINDING OF THE LD.CIT(A) ON THE ADDITIONAL GROUND A RE MERELY A REITERATION OF HIS FINDINGS ON THE M ERITS OF THE CASE AND DO NOT DEAL THE ISSUE WHETHE R THE ITA NO.1057 & 1059/CHD/2018 A.Y.2008-09 & 2005-06 7 ASSESSMENT IN THE PRESENT CASE HAD BEEN VALIDLY FRAMED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING SEARCH. 8. THE LD. DR FAIRLY AGREED THAT THERE WAS NO FINDINGS OF THE CIT(A) WHETHER THERE WAS ANY INCRIMINATING MATERIAL FOUND DURING SEARCH RELATING TO THE ISSUE ON WHICH ADDITION HAD BEEN MADE. HE, THEREFORE, REQUESTED THAT THE ISSUE BE RESTORED BAC K TO THE CIT(A) TO GIVE A SPECIFIC FINDING ON THE ISSUE AFTER CONSIDERING ALL MATERIAL ON RECORD. 9. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES. WE HAVE GONE THROUGH THE ORDER OF THE CIT( A) AND HAVE NOTED THAT THE ASSESSEE HAD RAISED AN ADDITIONAL GROUND BEFORE HIM VIS--VIS THE VALIDITY OF THE ASSESSMENT FRAMED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. WE HAVE ALSO NOTED THAT THE ASSESSEE HAD MADE SUBMISSIONS IN THIS REGARD ALSO AND HAVE REFERRED TO VARIOUS JUDICIAL DECISIONS ALSO. ON GOI NG THROUGH THE FINDINGS OF THE LD.CIT(A) ON THIS GROUN D ITA NO.1057 & 1059/CHD/2018 A.Y.2008-09 & 2005-06 8 RAISED AT PARA 3.8 OF IS ORDER REPRODUCED ABOVE WE FIND THAT THE LD.CIT(A) HAD NOT DEALT WITH THE ISSU E AT HAND. THERE IS NO FINDING WHETHER THERE WAS ANY INCRIMINATING MATERIAL FOUND OR NOT DURING THE COUR SE OF SEARCH RELATING TO THE ISSUE ON WHICH ADDITION W AS MADE. THERE IS NO DISCUSSION IN HIS ORDER AS TO HOW THE ORDER WAS VALIDLY PASSED ON THE CONTENTION RAIS ED BY THE LD.CIT(A). THE LD.CIT(A), WE FIND, HAS ONLY REITERATED HIS FINDINGS ON THE MERITS OF THE CASE. IN VIEW OF THE SAME, WE CONSIDER IT FIT TO RESTORE THE ISSUE BACK TO THE CIT(A) TO ADJUDICATE THE SAME AFR ESH AFTER GOING THROUGH THE FACTS OF THE CASE GIVING SPECIFIC FINDINGS ON THE ISSUE. THE LD.CIT(A) IS DIRECTED TO PASS A SPEAKING ORDER. NEEDLESS TO ADD THE ASSESSEE BE GRANTED FULL OPPORTUNITY OF HEARING. 10. SINCE THE LD.CIT(A) OUGHT TO HAVE ADJUDICATED T HE LEGAL GROUND FIRST BEFORE DEALING WITH THE MERITS O F THE CASE, WE RESTORE THE ENTIRE APPEAL BACK TO THE CIT( A) TO CONSIDER THE SAME AFRESH AFTER FIRST DEALING WIT H THE LEGAL GROUND RAISED BY THE ASSESSEE. 11. IN EFFECT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ITA NO.1057 & 1059/CHD/2018 A.Y.2008-09 & 2005-06 9 ITA NO.1059/CHD/2018(A.Y.2005-06): 12. GROUNDS OF APPEAL RAISED BY THE ASSESSEE READS AS UNDER: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (A), LUDHIA NA HAS ERRED IN CONFIRMING THE ADDITION OF RS.5,59,398 /- AS OPENING CASH IN HAND AS ON 01.04.2004, WHICH IS AGA INST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) I S NOT JUSTIFIED IN NOT APPRECIATING THE FACTS AND SUBMISS IONS MADE BY THE APPELLANT AND WRONGLY CONFIRMED THE ADDITION OF RS.5,59,398/-. 3. THAT THE ADDITION AS MADE BY THE ASSESSING OFFICER IS ITSELF NOT JUSTIFIED SINCE NO INCRIMINATING MATERIA L HAS BEEN FOUND DURING THE COURSE OF SEARCH CONDUCTED ON 21 ST OF OCTOBER 2010 RELATING TO THE ABOVE ADDITION. 4. NOTWITHSTANDING THE ABOVE SAID GROUNDS OF APPEAL, T HE ADDITION OF RS.5,59,398/- AS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEAR D OR DISPOSED OFF. 13. IT IS RELEVANT TO MENTION HERE THAT THE ISSUE INVOLVED IN THIS APPEAL IS SIMILAR TO THAT INVOLVED IN ITA NO.1057/CHD/2018 AND THE DECISION RENDERED THEREIN WILL APPLY WITH EQUAL FORCE TO THIS APPEAL ALSO. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1057 & 1059/CHD/2018 A.Y.2008-09 & 2005-06 10 14. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- !' & ' ( ) * (DIVA SINGH ) (ANNAPURNA GUPTA) # $ /JUDICIAL MEMBER +, $ /ACCOUNTANT MEMBER &! /DATED: 31 ST JULY, 2019 * * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35# / GUARD FILE &) ' / BY ORDER, / ASSISTANT REGISTRAR