Jaspreet Thapar, New Delhi V. ACIT, New Delhi

ITA 1312/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8082 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2006-2007
• Appeal Filed On: 09-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Document seized; Opportunity of being heard; Cost of acquisition; Documents seized; Set aside

Judgement Text

~ 1 ~ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.1312/DEL/2016 ASSESSMENT YEAR:2006-07 SHRI JASPREET THAPAR, A-48, VASANT MARG, VASANT VIHAR, NEW DELHI. PAN:AADPT 6261 D VS. A.C.I.T., CC-17 (OLD), CC-15 (NEW), NEW DELHI. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT(A)-XXVI, NEW DELHI DATED 02/02/2016 PERTAINING TO ASSESSMENT YEAR 2006-2007. 2. THE ASSESSEE HAS TAKEN VARIOUS GROUNDS OF APPEAL WHICH ARE BOTH ON LEGAL IN NATURE AND ON MERITS OF THE CASE. HOWEVER , DURING THE COURSE OF HEARING BEFORE US, LEARNED A.R. ARGUED ONLY GROUNDS ON MERITS THEREFORE, GROUND NO. 1 TO 4, WHICH ARE LEGAL IN NATURE, ARE D ISMISSED AS NOT PRESSED. 3. LEARNED A.R. SUBMITTED THAT DURING SEARCH PROCEE DINGS INCRIMINATING DOCUMENTS WERE FOUND ON THE BASIS OF WHICH AN ADDIT ION OF RS.13 LAC HAS BEEN MADE. LEARNED A.R. IN THIS RESPECT INVITED OU R ATTENTION THE ASSESSMENT ORDER WHERE THE ASSESSING OFFICER HAD MA DE AN ADDITION OF RS.13 LAC ON ACCOUNT OF SUMS RECEIVED OF RS.3 LAC O N 18/05/2005 AND APPELLANT BY SHRI BHUPESH KUMAR DHINGRA, C.A. RESPONDENT BY SHRI S. S. RANA, CIT, (DR) DATE OF HEARING 10/04/2019 DATE OF PRONOUNCEMENT 12/04/2019 ~ 2 ~ RS.10 LAC ON 21/02/2005 ON ACCOUNT OF SALE OF JEWEL LERY. LEARNED A.R. ALSO INVITED OUR ATTENTION TO THE SEIZED DOCUMENTS, PLAC ED AT PAGES 78 AND 79 OF THE PAPER BOOK. LEARNED A.R. SUBMITTED THAT THE ASS ESSING OFFICER HAS MADE THE ADDITION OF TOTAL AMOUNT AS SHORT TERM CAP ITAL GAIN WITHOUT CONSIDERING THE COST PRICE OF THE JEWELLERY AND CAP ITAL GAINS ARE TAXED ONLY FOR THE DIFFERENCE AMOUNT OF SALE CONSIDERATION AND THE COST OF ACQUISITION. THEREFORE, IT WAS PRAYED THAT THE MATTER MAY BE SET ASIDE TO THE ASSESSING OFFICER TO DETERMINE THE CORRECT AMOUNT OF CAPITAL GAIN AS ENTIRE AMOUNT CANNOT BE TREATED AS SHORT TERM CAPITAL GAIN. 4. LEARNED D.R., ON THE OTHER HAND, SUBMITTED THAT THE ASSESSING OFFICER WAS CORRECT IN MAKING THE ADDITION OF THE T OTAL AMOUNT AS THE ASSESSEE WAS NOT ABLE TO FILE ANY EXPLANATION. IT WAS SUBMITTED THAT ASSESSEE DURING THE PROCEEDINGS BEFORE THE AUTHORIT IES BELOW HAD ONLY BEEN SAYING THAT THE DOCUMENT WAS A DUMB DOCUMENT A ND THEREFORE, NO ADDITION WAS POSSIBLE AND AT THIS STAGE THE LEARNED A.R. IS SAYING THAT THE ADDITION CAN ONLY BE MADE ON ACCOUNT OF GAIN ONLY. IT WAS SUBMITTED BY LEARNED D.R. THAT THE ASSESSEE DID NOT TAKE ANY PLE A DURING THE PROCEEDINGS BEFORE THE AUTHORITIES BELOW. LEARNED D .R. RELIED ON THE ORDER OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SONAL CONSTRUCTION [2012-TIOL-851-HIGH COURT-DEL-IT] (DELHI). 5. LEARNED A.R., IN HIS REJOINDER, SUBMITTED THAT I T IS WRONG ON THE PART OF LEARNED D.R. TO SAY THAT NO SUCH SUBMISSIONS ON MER ITS WERE MADE BEFORE THE AUTHORITIES BELOW. AS REGARDS THE PROCEEDINGS BEFORE THE ASSESSING OFFICER, LEARNED A.R. SUBMITTED THAT ASSESSMENT WAS COMPLETED IN A SHORT PERIOD OF TWO MONTHS WHICH IS APPARENT FROM THE ASS ESSMENT ORDER WHEREAS THE ASSESSING OFFICER GAVE FIRST NOTICE ON 11/10/20 10 AND COMPLETED THE ASSESSMENT ON 31/12/2010. IT WAS SUBMITTED THAT BE FORE CIT(A) THE ASSESSEE DID ARGUE ON THE MERITS ALSO AND OUR ATTEN TION WAS INVITED TO PAGE 15 OF THE CIT(A)S ORDER WHERE THE ASSESSEE HAD REQ UESTED THE LEARNED ~ 3 ~ CIT(A) THAT NO INQUIRY WAS MADE BY THE ASSESSING OF FICER FROM ANY PERSON REGARDING AUTHENTICITY OF THE SEIZED DOCUMENTS. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSING OFFICER HAS PASSED THE ORDER IN A SHORT SPAN OF TWO MONTHS AND HAS RECORDED IN HIS FI NDINGS THAT THE AMOUNT OF RS.13 LAC WAS RECEIVED ON ACCOUNT OF SALE OF JEW ELLERY AND HAS MADE THE ADDITION OF ENTIRE AMOUNT OF RS.13 LAC AS SHORT TER M CAPITAL GAIN PRESUMING THE COST OF JEWELLERY TO BE NIL. THE ACT OF THE AS SESSING OFFICER IS NOT CORRECT AS SHORT TERM CAPITAL GAIN CAN BE CALCULATED ONLY B Y REDUCING THE COST OF ACQUISITION OF AN ITEM SOLD. THE ARGUMENT OF LEARN ED D.R. THAT SUCH ARGUMENT WAS TAKEN BEFORE THE AUTHORITIES BELOW HAS NO FORCE IN VIEW OF THE FACT THAT ASSESSING AUTHORITIES HAVE TO TAX ONLY TH E CORRECT INCOME. ON THE ONE HAND THE ASSESSING OFFICER HIMSELF HELD THAT TH E AMOUNT WAS RECEIVED ON ACCOUNT OF SALE OF JEWELLERY THEREFORE, HE SHOUL D HAVE CALCULATED THE CAPITAL GAIN ONLY AND SHOULD NOT HAVE MADE THE ADDI TION OF THE ENTIRE SALE CONSIDERATION. THEREFORE, IN THE INTEREST OF SUBST ANTIAL JUSTICE, WE SET ASIDE THE ISSUE REGARDING CONSIDERATION OF CALCULATION OF CAPITAL GAIN TO THE ASSESSING OFFICER WITH A DIRECTION TO MAKE THE ADDI TION ONLY TO THE EXTENT OF SHORT TERM CAPITAL GAIN IF ANY EARNED BY THE ASSESS EE. NEEDLESS TO SAY THAT THE ASSESSEE WILL BE AFFORDED A REASONABLE AND SUFF ICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AS A RESULT, THE LEG AL GROUNDS OF THE APPEAL ARE DISMISSED WHEREAS THE GROUNDS ON MERITS ARE ALL OWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 12/04/2019) SD/. SD/. (SUCHITRA KAMBLE) ( T. S. KAPOOR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:12/04/2019 *SINGH ~ 4 ~ COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T.,