Mrs. Vinita Chaurasia, New Delhi V. DCIT, New Delhi

ITA 1251/DEL/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98086 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 24-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 04-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Keywords: Unexplained investment; Search and seizure; Initiation of penalty proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH H NEW DELHI BEFORE : SHRI I.C. SUDHIR, JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 1251/DEL./2015 ASSTT. YEAR : 2010 - 11 VINITA CHAURASIA, VS. D.C.I.T., CENTRAL CIRCLE - 21, 575, 1 ST FLOOR, DOUBLE STOREY FLATS, NEW DELHI. NEW RAJENDRA NAGAR, NEW DELHI. [PAN: AAFPC4589D] (APPELLANT) (RESPONDENT) APPELLANT BY : SH. R.S. SINGHVI, ADVOCATE RESPONDENT BY : S H. RAVI JAIN, CIT/DR DATE OF HEARING : 24.11.2015 DATE OF PRONOUNCEMENT : 11 .12.2015 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 30.12.2014 OF LD. CIT(A) - XXVI, NEW DELHI FOR THE ASSESSMENT YEAR 2010 - 11 CHALLENGING THE SUSTENANCE OF PENALTY OF RS.5,07,56,000/ - IMPOSED BY AO U/S. 271(1)(C) OF THE IT ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). THE ASSESSEE HAS RAISED AS MUCH AS SEVEN GROUNDS OF APPEALS, BUT ALL OF THEM CHALLENG E THE INITIATION OF PENALTY PROCEEDINGS & CONSEQUENTIAL IMPOSITION OF PENALTY . ITA NO. 1251/DEL./2015 2 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION CONDUCTED ON 19.06.2009 ON THE PREMISES OF LALIT MODI, SOME INCRIMINATING DOCUMENTS WE RE FOUND, OUT OF WHICH ANNEXURE - A - 1 REVEALED A RECORD OF ACCOUNTED AND UNACCOUNTED TRANSACTIONS BETWEEN SUNCITY PROJECTS P. LTD. , THE DEVELOPER OF COMMERCIAL COMPLEXES AND THE ASSESSEE, WHO WAS FOUND TO BE THE PURCHASER OF SHOPS SPACE, AND ALSO THE RENT RE CEIVED BY ASSESSEE FROM THE TENANT FROM PANTALOON RETAIL LTD. THROUGH SUNCITY PROJECTS P. LTD. WITH EFFECT FROM MAY 2009 DURING THE POST SURVEY ENQUIRIES . THE DETAILS OF SEIZED PAPER ARE GIVEN AND ELABORATE DISCUSSION HAS BEEN MADE ON THE SAME AT PAGES 2 T O 6 OF THE IMPUGNED ORDER. ACCORDINGLY, AN ADDITION OF RS. 19,02,68,289 / - WAS MADE BY THE AO , OUT OF WHICH THE LD. CIT(A) IN QUANTUM APPEAL, CONFIRMED THE ADDITION OF RS.16,42,68,522/ - AND DELETED THE ADDITION OF RS.2,59,99,766/ - . HOWEVER, THE LD. CIT(A) FU RTHER ENHANCED THE ASSESSMENT BY A SUM OF RS.5,50,72,700/ - . THIS LED THE ASSESSING OFFICER TO INITIATE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT AND AFTER CONSIDERING THE FACTS OF THE CASE, IMPOSED A PENALTY OF RS.5,07,56,000/ - VIDE ORDER DATED 30.10.2 013. AGGRIEVED BY THIS ORDER, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A), ITA NO. 1251/DEL./2015 3 WHO DISMISSED THE SAME VIDE IMPUGNED ORDER. THE ASSESSEE HAS, THEREFORE, COME UP IN THIS APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. 4. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE ADDITION SO MADE BY THE ASSESSING ON THE BASIS OF SEIZED PAPER, WHICH LED THE ASSESSING OFFICER TO IMPOSE PENALTY, HAS BEEN DELETED BY ITAT VIDE ORDER 2 9.05.2015 IN THE QUANTUM APPEAL OF THE ASSESSEE . THEREFORE, NOW THERE REMAINS NO JUSTIFICATION TO SUSTAIN THE PENALTY IMPOSED ON T HE BASIS OF ADDITION WHICH STOOD DELETED BY ITAT. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE IMPUGNED ORDER. 5. WE FIND SUBSTANCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE . IT IS WORTHWHILE TO NOTE THAT ONCE THE ADDITIONS ON THE BASIS OF WHICH IMPUGNED PENALTY WAS IMPOSED STOOD DELETED BY ITAT, VIDE ORDER DATED 29.05.2015, THE VERY BASIS OF IMPOSITION OF PENALT Y STOOD COLLAPSED AND NO W THERE IS NO JUSTIFICATION TO OBSERVE THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF ITS INCOME OR HAS FURNISHED INACCURATE ITA NO. 1251/DEL./2015 4 PARTICULARS OF INCOME ENTAILING PENALTY AGAINST THE ASSESSEE. THE OBSERVATIONS OF THE ITAT ARE REPRODUC ED HEREINBELOW FOR READY REFERENCE : 84. IN VIEW OF OUR AFORESAID DISCUSSION, WE REACH TO A FORTIFIED CONCLUSION THAT THE ADDITION MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INVESTMENT AND ENHANCEMENT BY THE CIT(A) ON ACCOUNT OF REFUNDED EXCESS PAYMENT ON TH E BASIS OF STAND ALONE DOCUMENT IN QUESTION ANNEXURE A - 1 IS NOT SUSTAINABLE IN ABSENCE OF OTHER SUPPORTIVE EVIDENCE OR MATERIAL. HENCE, WITHOUT FURTHER INVESTIGATION OR ENQUIRY FROM OTHER RELATED ENTITIES, ADDITION MADE BY THE AO AND ENHANCED BY THE CIT(A) CANNOT BE HELD AS VALID AND LEGALLY SUSTAINABLE AND WE ARE UNABLE TO ACCEPT AND UPHOLD THE SAME. ACCORDINGLY, GROUND NO. 2(I) TO (VI), 3(I) TO (IV) AND 4(I) TO (III) OF THE ASSESSEE ARE HEREBY ALLOWED AND THE AO IS DIRECTED TO DELETE THE IMPUGNED ADDITION S ON ACCOUNT OF UNEXPLAINED INVESTMENT, EXPENDITURE AND RECEIPT OF PENDING RENT FOR AY 2010 - 11. WE FURTHER HOLD THAT UNDER ABOVE NOTED CONCLUSION, THE DIRECTIONS OF THE CIT(A) TO THE AO FOR ENHANCEMENT OF INCOME BY RS. 4 CRORES ARE ALSO NOT SUSTAINABLE AND WE ALSO DISMISS THE SAME. 85. SINCE BY THE EARLIER PART OF THIS ORDER, WE HAVE ALLOWED GROUND OF THE ASSESSEE AND HAVE DIRECTED THE AO TO DELETE THE ADDITION ON ACCOUNT OF PAYMENT OF OVER AND ABOVE PAYMENT OF SALE CONSIDERATION, COMMISSION/BROKERAGE TO SHRI LALIT MODI AND THE ADDITION MADE BY WAY OF ENHANCEMENT BY THE CIT(A) ON ACCOUNT OF PENDING RENT, THEREFORE, GROUND NO. 4 OF THE REVENUE IN ITA NO. 3551/DEL/2013 ALSO GETS CONCLUSION AND WE HOLD THAT THE PRESENT ASSESSEE SMT. VINITA CHAURASIA HAS NOT M ADE ANY PAYMENT ON ACCOUNT OF COMMISSION OR BROKERAGE TO SHRI LALIT MODI OR ANYBODY ELSE AS THE DEAL WAS MATERIALISED DIRECTLY WITH THE SELLER M/S SUNCITY PROJECT PVT. LTD. AND THERE WAS NO OCCASION OR QUESTION FOR PAYMENT OF COMMISSION OR BROKERAGE TO SHR I LALIT MODI OR ANYBODY ELSE BY THE ASSESSEE. HENCE, GROUND NO. 4 OF THE REVENUE IN ITA NO. 3551/DEL/2013 BEING DEVOID OF MERITS IS DISMISSED. ITA NO. 1251/DEL./2015 5 IN VIEW OF THIS DECISION AND THE OBSERVATIONS MADE ABOVE , THE IMPUGNED ORDER CONFIRMING PENALTY OF RS.5,07,560 00/ - IS NOT FOUND SUSTAINABLE IN THE EYE OF LAW. ACCORDINGLY, THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED ON THIS GROUND. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.12.2015. SD/ - SD/ - ( I.C. SUDHIR ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 11.12.2015 *AKS/ - COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI