Shri Kuldeep Singh Rawar, Dehradun V. DCIT, Central circle, Dehradun

ITA 1302/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1155 (ITAT-DEHRADUN)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 18-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K K JUNEJA SH S K CHATTERJEE
• Keywords: Salary income; Assessment record; Set aside
• Section: 143(3); 142(1); 153A; 143(1); 143(2); 153; 153C; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH: DEHRADUN (THROUGH VIDEO CONFERENCING) BEFORE, SHRI R.K.PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.1302/DEL/2019 (ASSESSMENT YEAR-2010-11) SHRI KULDEEP SINGH RAWAT, VILLAGE RATANPUR, SHIMLA BYPASS ROAD, DEHRADUN. PANBVTPS 0381R VS. DY. CIT, CENTRAL CIRCLE, DEHRADUN. (APPELLANT) (RESPONDENT) APPELLANT BY SH. K.K. JUNEJA RESPONDENT BY SH. S.K. CHATTERJEE. SR. DR DATE OF HEARING 25.09.2020 DATE OF PRONOUNCEMENT 27.11.2020 ORDER PER SUDHANSHU SRIVASTAVA, JM: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST O RDER DATED 28.01.2019 PASSED BY THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS)-IV KANPUR, {CIT(A)} AND PERTAINS TO ASSES SMENT YEAR 2010-11. 2 ITA NO.1302/DEL/2019 SHRI KULDEEP SINGH RAWAT VS . DCIT 2.0 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE DERIVES INCOME FROM SALARY, BUSINESS & PROFESSION AND OTHER SOURCES. A SEARCH & SEIZURE OPERATION WAS CONDUCTED IN SHRI KUL DEEP SINGH RAWAT AND M/S DOON VALLEY DISTILLERS/BREWERS GROUP O F CASES ON 18.03.2016. AS PER THE ASSESSMENT ORDER, DURING THE COURSE OF SEARCH, CERTAIN INFORMATION/DOCUMENTS BELONGING TO THE ASSESSEE WERE ALSO FOUND. SUBSEQUENTLY, NOTICE U/S 153A(1)(A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) WAS ISSU ED FOR FURNISHING RETURN OF INCOME. IN RESPONSE TO THE SAID NOTICE, T HE RETURN OF INCOME WAS FILED DECLARING A TOTAL INCOME OF RS.1,99 ,710/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF CASH DEPOSITS IN THE BANK ACC OUNT AMOUNTING TO RS.1,30,71,308/-. SUBSEQUENTLY, THIS AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE BEING UNEXPLAINED CASH CREDI TS AND THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.1,32,71, 018/-. 2.1 AGGRIEVED, THE ASSESSEE APPROACHED THE LD. FIR ST APPELLATE AUTHORITY CHALLENGING THE ASSESSMENT. THE LD. CIT (A) DISMISSED THE ASSESSEES APPEAL ON THE GROUND THAT THE ASSESSEE 3 ITA NO.1302/DEL/2019 SHRI KULDEEP SINGH RAWAT VS . DCIT HAD FAILED TO SUBSTANTIATE THE NATURE AND SOURCE OF CASH DEPOSITS WITH COGENT EVIDENCES. 2.2 NOW, THE ASSESSEE HAS APPROACHED THIS TRIBUNAL CHALLENGING THE ORDER OF THE LD. CIT (A) BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE PROCEEDINGS INITIATE D UNDER SECTION 153A OF I.T. ACT, WHICH IS BAD IN LAW IN TH E ABSENCE MY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE BEING FOUND DURING THE COURSE OF SEARCH. 2. THAT IN FACTS AND IN THE CIRCUMSTANCE OF T HE CASE, THE AO HAS ERRONEOUSLY COMPLETED THE ASSESSMENT U/S 153 A (1) (B)/143(3) WHICH HAS BEEN SUSTAINED BY CIT (A) IS UNWARRANTED AND UNJUSTIFIED. 3. THAT IN FACT AND CIRCUMSTANCES OF THE CASE, ADDITION TO THE RETURNED INCOME WITHOUT BRINGING ON RECORD ANY INCREMENTAL MATERIAL IS BAD AT LAW AND AGAINST ESTA BLISHED JUDICIARY PRONOUNCEMENTS. 4. THAT IN FACT AND CIRCUMSTANCES OF THE CASE, THE CIT (A) HAS SUSTAINED THE ADDITIONS BY RELYING UPON THE DEC ISIONS WHICH HAS BEEN OVERRULED BY THE HON'BLE DELHI HIGH COURT AND APPELLATE TRIBUNAL, NEW DELHI 5. THAT IN FACT AND CIRCUMSTANCES OF THE CASE, THE CIT (A) WRONGLY SUSTAINED AN ADDITION MADE BY AO HAS TAKING ONLY 4 ITA NO.1302/DEL/2019 SHRI KULDEEP SINGH RAWAT VS . DCIT THE CREDIT SIDE OF THE BANK ACCOUNTS, TOTALLY IGNOR ING DEBIT SIDES OF THE BANKS, AS WELL AS THE ADVANCES RECEIVE D FROM PROSPECTIVE BUYERS WHICH ARE ACCEPTED BY THE AUTHOR ITIES BELOW, IGNORING THE SAME IS WRONG AND ERRONEOUS. 6. THAT IN FACT AND CIRCUMSTANCES OF THE CAS E, AN ADDITION OF RS.1,30,71,308/- TO THE RETURNED INCOME MAY KIND LY BE DELETED. 7. THAT IN FACT AND CIRCUMSTANCES OF THE CASE, ASSUMING THE JURISDICTION TO PASS THE ASSESSMENT ORDER U/S 153A/143(3) DATED 31.12.2017 IS BAD IN LAW, MORE SO WHEN NO MANDATORY NOTICE U/S 143(2) HAS BEEN ISSUED WITH IN THE PRESCRIBED PERIOD OR BEFORE COMPLETION OF THE ASSES SMENT. 8. THAT THE CHARGING OF INTEREST U/S 234 IS W RONG, THE SAME MAY BE DIRECTED TO RECALCULATE ACCORDING TO LA W. 9. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, MO DIFY, DELETE AND OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL O N OR BEFORE THE DATE OF HEARING. 3.0 THE LD. AUTHORIZED REPRESENTATIVE (AR) SUBMITT ED THAT THE ORIGINAL RETURN OF INCOME U/S 139 OF THE ACT WAS FILED ON 20.07.2010 AND THE ASSESSMENT WAS THEREAFTER COMPLET ED ON 15.10.2010 U/S 143(1) TO THE ACT ON THE RETURNED IN COME AND NO NOTICE U/S 142(1) OR 143(2) OF THE ACT WAS ISSUED TI LL THE DATE OF SEARCH. 5 ITA NO.1302/DEL/2019 SHRI KULDEEP SINGH RAWAT VS . DCIT 3.1 THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED TH AT IN THE ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT, THE ASS ESSING OFFICER (AO) HAS MADE ADDITION OF ALL THE CASH DEPOSITS IN THE BANK WITHOUT BRINGING ON RECORD ANY EVIDENCE REGARDING ANY INCRI MINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE C ASE OF THE ASSESSEE. IT WAS SUBMITTED THAT IN THE ABSENCE OF IN CRIMINATING MATERIAL, THIS BEING A SEARCH CASE, THE ASSESSING O FFICER COULD NOT HAVE MADE THESE ADDITIONS AS THE SAME WAS AGAINST T HE SETTLED LAW AS PROPOUNDED BY THE HONBLE DELHI HIGH COURT AS WE LL AS THE VARIOUS BENCHES OF THE TRIBUNAL. IT WAS SUBMITTED TH AT NO ADDITION COULD HAVE BEEN MADE IN ABSENCE OF ANY INCRIMINATIN G MATERIAL AS THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) OF THE ACT HAD ALREADY EXPIRED. RELIANCE WAS PLACED ON THE JUDGMEN T OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. SINGHAD TECHNICAL EDUCATION SOCIETY [2017] 397 ITR 344 (SC) WHEREIN THE HONBLE APEX COURT HAD HELD THAT NO ADDITION WAS SUSTAINABLE, IF NO INCRIMI NATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA REPORTED IN [2016] 380 ITR 573 (DEL.) FOR THE SAME 6 ITA NO.1302/DEL/2019 SHRI KULDEEP SINGH RAWAT VS . DCIT PROPOSITION. RELIANCE WAS ALSO PLACED ON NUMEROUS OT HER ORDERS OF THE TRIBUNAL. 4.0 PER CONTRA, THE LD. SR. DEPARTMENTAL REPRESENT ATIVE (DR) SUBMITTED THAT THE LANGUAGE OF SECTION 153A/153C DO ES NOT REQUIRE ANY INCRIMINATING MATERIAL TO BE FOUND DURING THE C OURSE OF SEARCH FOR THE PURPOSES OF MAKING THE ADDITION. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD NOT RESPONDED TO THE ASSESSING OFF ICER WHEN THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF CASH DEPOSITS. IT WAS SUBMITTED THAT SINCE THE ASSESSEE HAD FAILED TO EXP LAIN THE SOURCE, THE ADDITION WAS JUSTIFIED. THE LD. SR. DR ALSO REL IED ON THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CA SE OF E.N.GOPAKUMAR VS. CIT REPORTED IN [2016] 75 TAXMAN. COM 215 (KERALA) WHEREIN IT HAD BEEN HELD THAT ASSESSMENT PROCEEDING S GENERATED BY ISSUANCE OF A NOTICE U/S 153 A(1)(A) C AN BE CONCLUDED AGAINST THE INTEREST OF THE ASSESSEE INCLUDING MAKI NG ADDITIONS EVEN WITHOUT ANY INCRIMINATING MATERIAL BEING AVAILABLE A GAINST THE ASSESSEE IN SEARCH U/S 132 OF THE ACT. THE LD. SR. DR SUBMITTED THAT IN VIEW OF THE FACTS AND SETTLED LAW, THE ASSESS EES APPEAL DESERVED TO BE DISMISSED. 7 ITA NO.1302/DEL/2019 SHRI KULDEEP SINGH RAWAT VS . DCIT 5.0 IN REJOINDER, THE LD. AUTHORIZED REPRESENTATIV E SUBMITTED THAT THERE WAS NO JUDGMENT OF THE JURISDICTIONAL HIG H COURT I.E., HONBLE UTTRAKHAND HIGH COURT ON THE ISSUE AND, THE REFORE, IN VIEW OF THE JUDGMENT THE HONBLE APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD. REPORTED IN [1972] 88 ITR 1 92 (SC), THE CONSTRUCTION WHICH FAVOURED THE ASSESSEE MUST BE ADO PTED. IT WAS FURTHER SUBMITTED THAT THE ITAT BENCH OF CHANDIGARH IN THE CASE OF DY. CIT VS. CHANDIGARH DEVELOPERS (PVT.) LTD. REPOR TED IN [2018] TAXPUB (DT) 6736 (CHD. TRIB) HAD CONSIDERED THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF E.N. GOPAK UMAR (SUPRA) AND HAD THEREAFTER HELD THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, NO ADDI TION COULD HAVE BEEN MADE. THE AUTHORIZED REPRESENTATIVE ALSO DREW O UR ATTENTION TO THE RESPONSE OF THE ASSESSEE SUBMITTED BEFORE TH E ASSESSING OFFICER IN RESPONSE TO HIS QUERY AND PLACED AT PAGE -2 OF THE PB AND SUBMITTED THAT THESE CERTIFIED COPIES HAVE BEEN TAK EN FROM THE ASSESSMENT RECORDS AND THAT THESE COPIES WERE SUBMI TTED ALONG WITH CASH FLOW STATEMENT BEFORE THE ASSESSING OFFICER AND AS SUCH IT WAS AN INCORRECT STATEMENT BY THE ASSESSING OFFICER THAT NO 8 ITA NO.1302/DEL/2019 SHRI KULDEEP SINGH RAWAT VS . DCIT RESPONSE HAD BEEN GIVEN TO THE QUERY RAISED BY THE ASSESSING OFFICER. THE LD. AR ALSO DREW OUR ATTENTION TO THE REPLY RECEIVED FROM THE DEPARTMENT UNDER THE RIGHT TO INFORMATION ACT, 2005 WHEREIN IT WAS ACCEPTED THAT NO INCRIMINATING MATERI AL BELONGING TO THE ASSESSEE HAD BEEN FOUND DURING THE COURSE OF SE ARCH.THE LD. AUTHORIZED REPRESENTATIVE PRAYED THAT THE ASSESSEE S APPEAL BE ALLOWED. 6.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE A LSO PERUSED THE MATERIAL ON RECORD. THE ESSENTIAL QUEST ION FOR OUR DETERMINATION IS WHETHER AS TO THE IMPUGNED ADDITION WAS BASED ON ANY INCRIMINATING MATERIAL RELATING TO OR BELONGING TO THE ASSESSEE AND FOUND DURING THE COURSE OF SEARCH. IN THIS REGA RD, IT IS SEEN THAT THE ASSESSEE HAD APPLIED UNDER THE RIGHT TO INFORMA TION ACT, 2005 REQUIRING THE DEPARTMENT TO DISCLOSE IF ANY INCRIMI NATING MATERIAL HAD BEEN FOUND DURING THE COURSE OF SEARCH AND WHETH ER THE ADDITION MADE RELATED TO ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN RESPONSE, VIDE ORDER U/S 7 (1) OF THE RIGHT TO INFORMATION ACT, 2005, DATED 25.06.2019, RECEIVED F ROM CENTRAL CIRCLE, DEHRADUN THE FOLLOWING REPLY HAS BEEN RECEIV ED: 9 ITA NO.1302/DEL/2019 SHRI KULDEEP SINGH RAWAT VS . DCIT INFORMATION SOUGHT REPLY POINT 1 PLEASE LET THE UNDER SIGN KNOW AS TO WHETHER ANY INCRIMINATING MATERIAL WAS FOUND DURING SEARCH FOR THE ABOVE SAID ASSESSMENT YEAR. IF THE ANSWER IS IN AFFIRMATIVE KINDLY SUPPLY THE COPY OF THE SAME. N.A. AS PER RECORD OF THIS OFFICE NO INCREMENTAL MATERIAL WAS FOUND DURING THE SEARCH FOR THE ABOVE SAID ASSESSMENT YEAR I.E. A.Y. 2010-11. POINT 2 THAT THE ADDITION AS MADE IN THE ASSESSMENT ORDER RELATES TO ANY INCREMENTAL MATERIAL FOUND DURING THE COURSE OF SEARCH, THE COPY OF THE SAME MAY PLEASE BE SUPPLY. N.A. AS PER ASSESSMENT ORDER U/S 153(I)(B) R.W.S U/S 143(3) OF THE INCOME TAX ACT, 1961 FOR A.Y. 2010-11 PASSED BY THIS OFFICE HAS BEEN MADE IN THE BASIS OF ANY INCREMENTAL MATERIAL FOUND DURING THE COURSE OF SEARCH. 6.1 THUS, IT IS APPARENT THAT EVEN THE DEPARTMENT HAS ACCEPTED THAT NO INCRIMINATING MATERIAL RELATING TO OR BELONGING TO THE ASSESSEE WAS FOUND DURING THE COURSE OF SEARCH A ND THAT THE ADDITION HAD BEEN MADE WITHOUT ANY INCRIMINATING MAT ERIAL. THIS FACT IS ALSO EVIDENT FROM A PERUSAL OF THE ASSESSME NT ORDER AS WELL AS THE FIRST APPELLATE AUTHORITYS ORDER WHEREIN NO REFERENCE HAS 10 ITA NO.1302/DEL/2019 SHRI KULDEEP SINGH RAWAT VS . DCIT BEEN MADE TO ANY INCRIMINATING MATERIAL HAVING BEEN FOUND DURING THE COURSE OF SEARCH WHICH WAS RELATING TO OR BELONG ING TO THE ASSESSEE. IN SUCH A SITUATION, THE LAW HAS ALREADY B EEN CRYSTALLIZED BY JUDGMENT OF THE HONBLE APEX COURT IN THE CASE O F CIT VS. SINGHAD TECHNICAL EDUCATION SOCIETY (SUPRA) WHEREIN THE HONBLE APEX COURT HAS DISMISSED THE SPECIAL LEAVE PETITION S OF THE REVENUE FOR THE ASSESSMENT YEARS WHERE NO INCRIMINAT ING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. ALTHOUGH, THI S JUDGMENT WAS RENDERED WITH REFERENCE TO ASSESSMENT FRAMED U/S 153C OF THE ACT, BUT ALL THE SAME, THE OBITER CAN BE IMPORTED FOR ASSESSMENT FRAMED U/S 153A OF THE ACT ALSO. FURTHER, THE JUDGM ENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KAB UL CHAWLA (SUPRA) ALSO SUPPORTS THE CASE OF THE ASSESSEE WHERE IN PURSUANT TO THE SEARCH, A NOTICE U/S 153 A (1) OF THE ACT WAS IS SUED TO THE ASSESSEE BUT AS ON THE DATE OF SEARCH, NO ASSESSMEN T PROCEEDINGS WERE PENDING FOR THE RELEVANT ASSESSMENT YEARS AND T HE ASSESSMENT HAD ALREADY BEEN CONCLUDED U/S 143(1) OF THE ACT. THE TRIBUNAL HAD DELETED THE ADDITIONS ON THE GROUND TH AT ADDITIONS MADE FOR THE RELEVANT ASSESSMENT YEARS WERE NOT BAS ED ON ANY 11 ITA NO.1302/DEL/2019 SHRI KULDEEP SINGH RAWAT VS . DCIT INCRIMINATING MATERIAL FOUND DURING THE SEARCH OPER ATIONS AND, THEREFORE, THE SAME WERE NOT SUSTAINABLE. ON DEPART MENTS APPEAL BEFORE THE HONBLE DELHI HIGH COURT, THE HONBLE HI GH COURT OBSERVED THAT SINCE ON THE DATE OF SEARCH, THE ASSE SSMENTS ALREADY STOOD COMPLETED AND SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITION COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. THE QUESTION WAS ANSWERED IN FAVOU R OF THE ASSESSEE AND AGAINST THE REVENUE AND THE REVENUES APPEAL WAS DISMISSED. THEREFORE, SINCE IN THE PRESENT CASE THE ASSESSMENT ALREADY STOOD COMPLETED AND THE TIME LIMIT FOR ISSU ANCE OF NOTICE U/S 142(1) OR 143(2) OF THE ACT ALREADY STOOD EXPIR ED AND FURTHER SINCE NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH WHICH COULD BE SAID TO BE BELONGING TO OR REL ATING TO ASSESSEE, THE IMPUGNED ADDITION CANNOT BE SUSTAINED . WE ALSO AGREE WITH THE ARGUMENT RAISED BY THE LD. AUTHORIZED REPRESENTATIVE THAT ALTHOUGH THE HONBLE KERALA HIG H COURT, IN THE CASE OF E.N.GOPAKUMAR (SUPRA), HAS HELD AGAINST THE ASSESSEE ON IDENTICAL ISSUE, SINCE THERE IS NO JUDGMENT ON THE ISSUE BY THE HONBLE HIGH COURT OF UTTARAKHAND (BEING THE JURISD ICTIONAL HIGH 12 ITA NO.1302/DEL/2019 SHRI KULDEEP SINGH RAWAT VS . DCIT COURT FOR THE ASSESSEE), THE JUDGMENT WHOSE CONSTRUC TION IS FAVOURING THE ASSESSEE SHOULD BE FOLLOWED AS LAID D OWN BY THE HONBLE APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD. (SUPRA). THEREFORE, ON A OVERALL VIEW OF THE FACTS O F THE CASE AND THE SETTLED JUDICIAL POSITION, WE SET ASIDE THE ORDER O F THE LD. CIT (A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDI TION. 9.0 IN THE FINAL RESULT, THE APPEAL OF THE ASSESSE E STANDS ALLOWED. ORDER PRONOUNCED ON 27 TH NOVEMBER, 2020. SD/- SD/- (R.K.PANDA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27/11/2020 PK/PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT DEHRADUN