Chander Mohan Sethi, Delhi V. DCIT, Central circle, Ghaziabad

ITA 1326/DEL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6698 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 26-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KR. JIWANI
• Keywords: Capital Gains
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.-1326/DEL/2018 ( ASSESSMENT YEAR: 2015-16) CHANDER MOHAN SETHI C/O. C.S.ANAND, ADV., 104, PANKAJ TOWER, 10- L.S.C. SAVITA VIHAR, DELHI NEW DELHI PIN-110092 VS DCIT, CENTRAL CIRCLE GHAZIABAD PAN : AASPS1246A ASSESSEE BY SH. C.S.ANAND, ADV. REVENUE BY SH. VIJAY KR. JIWANI, SR. DR ORDER PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST OR DER DATED 31.01.2017 PASSED BY THE LD. CIT (APPEALS) IV, KA NPUR AND PERTAINS TO ASSESSMENT YEAR 2015-16. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 (HERE INAFTER CALLED AS THE ACT) WAS CARRIED OUT IN THE PREMISE S OF THE ASSESSEE COMPRISING OF CLOUD-9 AND SETHI GROUP OF CASES ON 1 3.05.2014. DURING THE COURSE OF SEARCH OPERATION AT THE RESID ENTIAL PREMISES DATE OF HEARING 09.05.2018 DATE OF PRONOUNCEMENT 30.07.2018 2 ITA N O. 1326/DEL/2018 OF THE ASSESSEE AT E-18, PREET VIHAR, NEW DELHI-92, THE INCOME TAX OFFICIALS FOUND CASH OF RS. 1,64,22,360/-. THE TAX OFFICIALS SEIZED CASH OF RS. 1,60,00,000/- AND ALSO SEIZED CERTAIN D OCUMENTS AND ALSO RECORDED THE STATEMENT OF THE ASSESSEE U/S 132 (4) OF THE ACT. ANOTHER STATEMENT OF THE ASSESSEE WAS RECORDED U/S 132(4) ON 23.06.2014. IN THE FIRST STATEMENT RECORDED ON 13.0 5.2014 THE ASSESSEE, WHEN INQUIRED ABOUT THE CASH FOUND IN HIS PREMISES, SUBMITTED THAT THE MOTHER-IN-LAW OF HIS BROTHER HAD EXPIRED AND, THEREFORE, HE WAS TO GO TO THE CREMATION AND HE WAS NOT IN A MENTAL STATE TO GIVE DETAILS AND THAT THE SAME WILL BE PROVIDED IN DUE COURSE OF TIME. DURING THE RECORDING OF THE SEC OND STATEMENT OF OATH U/S 132(4) OF THE ACT, THE ASSESSEE STATED THAT HE HAD RECEIVED CASH OF RS. 1,82,01,920/- ON SALE OF 96,00 0 SHARES IN THE MEHTA ART PRESS PVT. LTD. OVER AND ABOVE RS. 3,19,9 9,680/- RECEIVED THROUGH CHEQUES AND ALSO STATED THAT THE E NTIRE SALE CONSIDERATION RECEIVED THROUGH CHEQUES AS WELL AS I N CASH WILL BE CONSIDERED WHILE FILING THE RETURN OF INCOME FOR AS SESSMENT YEAR 2014-15. 2.1 THE ASSESSEE FILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 30.09.2015 DECLARING A TOTAL INCOM E OF RS. 62,42,990/-. BEFORE THE AO, THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD ALREADY TAKEN INTO CONSIDERATION THE C ASH OF RS. 3 ITA N O. 1326/DEL/2018 1,82,90,920/- IN THE COMPUTATION OF CAPITAL GAINS F OR ASSESSMENT YEAR 2014-15 AND, THEREFORE, THE SAME WAS NOT TO BE CONSIDERED IN ASSESSMENT YEAR 2015-16 I.E. THE YEAR UNDER CONS IDERATION. HOWEVER, THE AO DID NOT ACCEPT THE ASSESSEES SUBMI SSION AND PROCEDED TO ADD THE IMPUGNED AMOUNT OF RS. 1,64,22, 360/- TO THE INCOME OF THE ASSESSEE AND COMPLETED THE ASSESSMENT AT RS. 2,26,65,350/-. 2.2 AGGRIEVED, THE ASSESSEE APPROACHED THE LD. CIT (A) WHO ALSO UPHELD THE ADDITION. NOW THE ASSESSEE HAS APPROACHE D THE ITAT AGAINST THE ORDER OF THE LD. CIT (A) UPHOLDING THE IMPUGNED ADDITION. 3. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT IT IS SETTLED PRINCIPLE OF LAW THAT SAME AMOUNT CANNOT BE TAXED T WICE. IT WAS SUBMITTED BY THE LD. AR THAT WITH RESPECT TO THE IM PUGNED CASH FOUND DURING THE COURSE OF SEARCH AND AMOUNTING TO RS. 1,64,22,360/- IT HAD BEEN SUBMITTED BEFORE THE AO T HAT THIS AMOUNT REPRESENTED THE SALE CONSIDERATION OF SHARES OF MEHTA ART PRESS PVT. LTD. AND THE SAME HAD ALREADY BEEN OFFER ED FOR TAX IN ASSESSMENT YEAR 2014-15. THE LD. AUTHORISED REPRESE NTATIVE FURTHER SUBMITTED THAT BOTH THE AO AS WELL AS THE L D. CIT (A) HAD NOT CONSIDERED THE SECOND STATEMENT OF THE ASSESSEE WHICH WAS RECORDED ON 23.06.2014 AND HAD ALSO NOT EXAMINED TH E VERACITY OF 4 ITA N O. 1326/DEL/2018 THE ASSESSEES STATEMENT FROM THE INCOME TAX RETURN AND THE RELATED RECORDS OF ASSESSMENT YEAR 2014-15 IN WHICH THE AMOUNT HAD ALREADY BEEN OFFERED FOR TAX. IT WAS SUBMITTED THAT THE LOWER AUTHORITIES COULD NOT DISPROVE THE EXPLANATION OFFE RED BY THE ASSESSEE REGARDING THE SOURCE OF CASH. OUR ATTENTIO N WAS ALSO DRAWN TO QUESTION NO. 17 OF THE STATEMENT RECORDED ON 23.06.2014 WHEREIN THE ASSESSEE HAD SPECIFICALLY STATED THAT T HE CASH WAS RECEIVED ON ACCOUNT OF SALE OF SHARES HELD BY HIM I N MEHTA ART PRESS PVT. LTD. THE LD. AUTHORISED REPRESENTATIVE A LSO DREW OUR ATTENTION TO COMPUTATION OF INCOME ATTACHED WITH TH E RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 AND SHOWED THAT INCOME FROM LONG TERM CAPITAL GAIN ON SALE OF SHARES HAD B EEN REFLECTED IN THIS COMPUTATION OF INCOME. IT WAS PRAYED THAT THE IMPUGNED ADDITION BE DELETED. 4. IN RESPONSE, THE LD. SR. DEPARTMENTAL REPRESENTA TIVE VEHEMENTLY PLACED RELIANCE ON THE CONCURRENT FINDIN GS OF BOTH THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE H AD MADE CONTRADICTORY STATEMENTS BEFORE THE TWO LOWER AUTHO RITIES AND FURTHER THAT THE EXPLANATION REGARDING SALE OF SHAR ES WAS AN AFTERTHOUGHT. IT WAS ALSO SUBMITTED THAT NO PERSON OF ORDINARY PRUDENCE WILL KEEP THIS MUCH OF CASH AT HIS RESIDEN CE. IT WAS ALSO 5 ITA N O. 1326/DEL/2018 SUBMITTED THAT THERE WAS NO EVIDENCE LINKING THE MO NEY SEIZED WITH THE SHARE CONSIDERATION. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIAL ON RECORD. IT IS SEEN THAT THE ASSESSE E HAD SPECIFICALLY REPLIED IN ANSWER TO QUESTION NO. 17 IN HIS STATEME NT RECORDED U/S 132(4) OF THE ACT ON 23.06.2014 THAT THE CASH PERTA INED TO THE CASH COMPONENT OF THE SALE OF SHARES. IT WAS ALSO S UBMITTED BEFORE THE AO THAT THE AMOUNT OF LONG TERM CAPITAL GAINS F ROM THE SALE OF SHARES HAVE BEEN OFFERED TO TAX IN THE PRECEDING AS SESSMENT YEAR I.E. AY 2014-15. HOWEVER, BOTH THE LOWER AUTHORIT IES HAVE SIMPLY BRUSHED ASIDE THE ASSESSEES EXPLANATION WITHOUT VE RIFYING THE VERACITY OF ASSESSEES CLAIM. IT IS OUR CONSIDERED OPINION THAT IN THE INTEREST OF JUSTICE THIS ISSUE SHOULD BE RE-EXA MINED BY THE ASSESSING OFFICER. ACCORDINGLY, WE RESTORE THE ISSU E TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DULY THE SECOND STATEMENT OF THE ASSESSE WHICH WAS RECORDED ON 23.06.2014 AND TO FURTHER RELATE THE SAME WITH THE RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2014-15 AND THEREAFTER PASS THE ORDER IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE TO PRE SENT HIS CASE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE STA ND ALLOWED FOR STATISTICAL PURPOSES. 6 ITA N O. 1326/DEL/2018 6. IN THE FINAL RESULT, APPEAL OF THE ASSESSEE STA NDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30.07.2018 SD/- SD/- (R.K.PANDA) (SUDHANSHU SRI VASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30.07.2018 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI