DCIT, New Delhi V. M/s. I.G. Builders & Promoters (P) Ltd, New Delhi

ITA 1407/DEL/2009

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8200 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 15-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 09-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SAROHA
• Assessee Lawyers: VINOD AGGARWAL
• Keywords: Income from undisclosed sources; Document seized; Documents seized
• Section: 143(3); 142(1); 153A; 132

Judgement Text

ITA NOS. 1405 & 1407/DEL/2009 1 N THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A. NO S . 1405 & 1407 /DEL/20 09 A.YRS. : 2003-04 & 2006-07 DCIT, CIRCLE-11(1), C.R. BUILDING, NEW DELHI - 110 002 VS. M/S I.G. BUILDERS & PROMOTERS (P) LTD., C-581, DEFENCE COLONY, NEW DELHI (PAN:AAACI1640K) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. A.K. SAROHA, CIT(DR) ASSESSEE BY : SH. VINOD AGGARWAL, CA DATE OF HEARING : 15-03-2016 DATE OF ORDER : 28-04-2016 ORDER PER H.S. SIDHU : JM THE DEPARTMENT HAS FILED THESE APPEALS AGAINST THE SEPARATE IMPUGNED ORDERS BOTH DATED 23.1.2009 OF LD. CIT(A)-XV, NEW DELHI PE RTAINING TO ASSESSMENT YEARS 2003-04 & 2006-07 RESPECTIVELY. SINCE THE ISSUES IN VOLVED IN THESE APPEALS ARE COMMON AND IDENTICAL, HENCE, HEARD TOGETHER AND AR E BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED IN ITA NO. 1405/DEL/2009 (AY 2003-04) READ AS UNDER:- I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 91 LACS ON AC COUNT OF INCOME FROM UNDISCLOSED SOURCES. ITA NOS. 1405 & 1407/DEL/2009 2 II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DIRECTING TO AMEND THE RETURN AFTER VERIF ICATION FILED BY THE ASSESSEE FOR AY 2006-07 WHEN THE ISSUE DID NOT ARIS E OUT OF APPEAL FOR AY 2003-04. III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DIRECTING THAT INCOME OF AY 2006-07 BE MOD IFIED WHEN THE GROUND OF APPEAL FOR PRESENT ASSESSMENT YEAR HAVE B EEN DULY DISMISSED. IV) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. ITA NO. 1405/DEL/2009 (AY 2003-04) 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY IS ENGAGED IN THE CONSTRUCTION OF BUSINESS. IN THIS CASE, A SEARCH U /S. 132 OF THE I.T. ACT WAS CARRIED OUT ON 28.3.2006 AT THE BUSINESS PREMISES OF THE ASSESS EE AS WELL AS RESIDENTIAL PREMISES OF THE DIRECTORS NAMELY SH. GIREESH CHAUDHARY AND S MT. IRA CHAUDHARY WERE ALSO COVERED. THE ASSESSEE COMPANY AS WELL AS THE PROPRI ETORSHIP CONCERNS HAVE UNDERTAKEN VARIOUS PROJECTS IN DEFENCE COLONY AND S URROUNDING LOCALITIES. DURING THE COURSE OF SEARCH, CERTAIN INCRIMINATING DOCUMENTS / PAPERS WERE FOUND AND SEIZED. SINCE THE PREMISES OF THE ASSESSEE WAS COVERED U/S. 132 OF THE I.T. ACT, NOTICES U/S. 153A OF THE I.T. ACT WERE ISSUED FOR SIX ASSESSMENT YEARS ON 6.11.2006 AND SERVED ON THE ASSESSEE. IN RESPONSE THERETO, THE ASSESSEE FU RNISHED THE RETURN OF INCOME ON 30.8.2007 SHOWING THE TOTAL INCOME OF RS. 1,54,270. THE ASSESSEE FILED THE ORIGINAL RETURN ON 4.11.2003 SHOWING THE TOTAL INCOME AT RS. 1,54,270/-. THE ASSESSEE DID NOT ITA NOS. 1405 & 1407/DEL/2009 3 OFFER ANY ADDITIONAL INCOME IN THE RETURN FILED IN RESPONSE TO THE NOTICE U/S. 153A OF THE I.T. ACT. THEREAFTER, NOTICE U/S. 143(2) OF TH E I.T. ACT WAS ISSUED ON 5.9.2007 AND SERVED ON THE ASSESSEE ON 7.9.2007 AND IN RESPONSE TO NOTICES U/S. 143(2) AND 142(1) OF THE I.T. ACT, ASSESSEES AUTHORISED REPRESENTATI VE ATTENDED THE PROCEEDINGS AND FILED THE DETAILS. THEREAFTER, THE AO ASSESSED THE TOTAL INCOME AT RS. 94,54,270/- BY MAKING ADDITIONS VIDE ORDER DATED 31.12.2007 PASSE D U/S. 143(3) READ WITH SECTION 153A OF THE I.T. ACT. 4. AGGRIEVED BY THE AFORESAID ORDER OF THE ASSESSI NG OFFICER DATED 31.12.2007, ASSESSEE FILED AN APPEAL BEFORE THE LD. FIRST APPEL LATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 23.1.2009 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGGRIEVED WITH THE AFORESAID FINDING OF THE LD. CIT(A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. APROPOS GROUND NO. 1 RELATING TO DELETION OF ADD ITION OF RS. 91 LACS ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES IS CONCE RNED. 6.1 ON THIS ISSUE, LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL FILED B Y THE REVENUE. 6.2 ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT LD. CIT(A) HAS PASSED A WE LL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE AND THE SAME MAY BE UPHELD. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES. WE FIND THAT THE PAYMEN TS HAVE BEEN MADE AS PER ITA NOS. 1405 & 1407/DEL/2009 4 COLLABORATION AGREEMENT AND LEDGER ACCOUNT SHOWS TH E AMOUNT OF RS. 21 LACS PAID TO THE OWNER SH. HANWANTBIR SINGH AND THE COPY OF CONS TRUCTION ACCOUNT OF THE PROPERTY NO. C-550, DEFENCE COLONY, NEW DELHI IN THE BOOKS O F M/S IG BUILDERS AND PROMOTERS PVT. LTD. THE ASSESSEE HAS NOT PURCHAS ED THIS PROPERTY DIRECTLY FROM THE OWNER BUT HAS ONLY ENTERED INTO COLLABORATION AGREE MENT FOR CONSTRUCTION OF SAID PROPERTY AND THEREBY BECAME THE OWNER OF 2 ND FLOOR AND TERRACE ON THE 2 ND FLOOR OF THE SAID PROPERTY C-550, DEFENCE COLONY, NEW DELHI. AS THE ENTIRE CONSTRUCTION COST AND AMOUNT OF RS. 21 LACS PAID TO THE OWNER OF THE SAID PROPERTY HAVE BEEN DULY REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THEREFOR E, LD. CIT(A) HAS RIGHTLY HELD THAT AO WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 91 LACS AS INCOME FROM UNDISCLOSED SOURCES AND ACCORDINGLY DELETED THE ADD ITION. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. C IT(A), HENCE, WE UPHOLD THE SAME ON THIS ISSUE AND DISMISS THE GROUND NO. 1 RAISED B Y THE REVENUE. 7.1 SINCE WE HAVE ALREADY UPHELD THE ORDER OF THE L D. CIT(A) ON THE GROUND NO. 1 I.E. DELETION OF ADDITION OF RS. 91 LACS, HENCE, TH E ISSUE INVOLVED IN GROUND NO. 2 AND 3 HAVE BECOME ACADEMIC, THEREFORE, WE ARE NOT ADJUDIC ATING THE SAME. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE STANDS DISMISSED. ITA NO. 1407/DEL/2009 (AY 2006-07) 8. THE GROUNDS RAISED IN ITA NO. 1407/DEL/2009 (AY 2006-07) READ AS UNDER:- I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 60 LACS ON AC COUNT OF INCOME FROM UNDISCLOSED SOURCES. ITA NOS. 1405 & 1407/DEL/2009 5 II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 82.50 LACS ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES. III) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AM END ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 9. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY IS ENGAGED IN THE CONSTRUCTION OF BUSINESS. IN THIS CASE, A SEARCH U /S. 132 OF THE I.T. ACT WAS CARRIED OUT ON 28.3.2006 AT THE BUSINESS PREMISES OF THE ASSESS EE AS WELL AS RESIDENTIAL PREMISES OF THE DIRECTORS NAMELY SH. GIREESH CHAUDHARY AND S MT. IRA CHAUDHARY WERE ALSO COVERED. THE ASSESSEE COMPANY AS WELL AS THE PROPRI ETORSHIP CONCERNS HAVE UNDERTAKEN VARIOUS PROJECTS IN DEFENCE COLONY AND S URROUNDING LOCALITIES. DURING THE COURSE OF SEARCH, CERTAIN INCRIMINATING DOCUMENTS / PAPERS WERE FOUND AND SEIZED. SINCE THE PREMISES OF THE ASSESSEE WAS COVERED U/S. 132 OF THE I.T. ACT, NOTICES U/S. 153A OF THE I.T. ACT WERE ISSUED FOR SIX ASSESSMENT YEARS ON 6.11.2006 AND SERVED ON THE ASSESSEE. IN RESPONSE THERETO, THE ASSESSEE FI LED THE RETURN OF INCOME ON 13.12.2006 SHOWING THE TOTAL INCOME OF RS. 1,04,52, 360/-. THE RETURNED INCOME INCLUDED THE SUM OF RS. 85,00,000/- BEING THE DISCL OSURE MADE AT THE TIME OF SEARCH. THE DISCLOSURE HAS BEEN INCLUDED IN THE TOTAL INCO ME WHICH HAS RESULTED IN INCREASE OF THE RESERVES. THE DISCLOSURE WAS ON ACCOUNT OF EXPE NSES. THEREAFTER, NOTICE U/S. 143(2) OF THE I.T. ACT WAS ISSUED ON 5.9.2007 AND S ERVED ON THE ASSESSEE ON 7.9.2007 AND IN RESPONSE TO NOTICES U/S. 143(2) AND 142(1) O F THE I.T. ACT, ASSESSEES AUTHORISED REPRESENTATIVE ATTENDED THE PROCEEDINGS AND FILED THE DETAILS. THEREAFTER, THE AO ASSESSED THE TOTAL INCOME AT RS. 1,68,66,260 /- BY MAKING VARIOUS ADDITIONS ITA NOS. 1405 & 1407/DEL/2009 6 VIDE ORDER DATED 31.12.2007 PASSED U/S. 143(3) REA D WITH SECTION 153A OF THE I.T. ACT. 10. AGGRIEVED BY THE AFORESAID ORDER OF THE ASSESS ING OFFICER DATED 31.12.2007, ASSESSEE FILED AN APPEAL BEFORE THE LD. FIRST APPEL LATE AUTHORITY, WHO VIDE IMPUGNED ORDER DATED 23.1.2009 HAS ALLOWED THE APPEAL OF TH E ASSESSEE. 11. AGGRIEVED WITH THE AFORESAID FINDING OF THE LD. CIT(A), REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 12. APROPOS GROUND NO. 1 RELATING TO DELETION OF AD DITION OF RS. 60 LACS ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES IS CONCE RNED. 12.1 ON THIS ISSUE, LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL FILED B Y THE REVENUE. 12.2 ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT LD. CIT(A) HAS PASSED A WE LL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE AND THE SAME MAY BE UPHELD. 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES, WE FIND THAT ON THIS I SSUE AOS CONTENTION WAS THAT THE FRONT PART OF PAGE 8 OF A-7 CONTAINS ENTRIES IN LAC S AND HENCE IN THE SAME MANNER OF INTERPRETATION SHOULD BE MADE TO INTERPRET THE REV ERSE SIDE OF THE SAME PAGE. THIS VIEW COULD HAVE BEEN SUSTAINED ON THE HAPPENING OF TWO POSSIBILITIES. FIRST, IF THERE WAS INDEED A LINK BETWEEN THE ENTRIES MADE IN THE F RONT SIDE AND THE BACK SIDE OF PAGE 8. SECOND, IF AT ALL THE PAYMENT OR EVEN THE RECEIP T ON THE REVERSE SIDE OF PAGE 8 COULD BE DECIPHERED AS BEING UNACCOUNTED PAYMENT OR RECEI PT WITH REFERENCE TO THE ASSESSEES REGULAR BOOKS OF ACCOUNTS AND WITH REFER ENCE TO THE SEIZED DOCUMENTS. THE FRONT SIDE OF PAGE 8 IS AS REGARDS A PROPERTY AT D- 431, DEFENCE COLONY. THE ASSESSEE HAS NOT UNDERTAKEN ANY DEVELOPMENT WORK ON D-431, D EFENCE COLONY AS PER ITS WORK IN PROGRESS ACCOUNT OR PURCHASE ACCOUNT FOR A.Y. 03 -04, 04-05, 05-06 OR 06-07. THE ITA NOS. 1405 & 1407/DEL/2009 7 IMPORT OF PAGE 8 OF A-7 IS THEREFORE NOT RELEVANT F OR DECIPHERING THE CONTENTS OF THE ENTRIES ON THE REVERSE SIDE OF PAGE 8. THE SECOND P OSSIBILITY UNDER WHICH THE ENTRIES IN THE REVERSE SIDE OF PAGE 8 COULD HAVE BEEN TAXED AS INCOME FROM UNDISCLOSED SOURCES IS IF A REASONABLE VIEW COULD BE TAKEN ON SUCH CONN OTATION OF THE ENTRY FROM THE AVAILABLE FACTS. THE ENTRIES SIMPLY STATED IS 'PAID TO BEDHI 10 + 50, DIS TO KB REGD. - . THERE ARE NO DATES AVAILABLE TO INDICATE TH E TIMING OF THE ENTRY. NEITHER IS THERE ANY EVIDENCE TO INDICATE AS TO WHETHER THE EN TRIES PERTAIN TO RECEIPT OR EXPENDITURE. FINALLY THERE IS NO CORRELATION BETWEE N THE ENTRIES IN THE REVERSE OF PAGE 8 OF A- 7 AND THE ENTRIES ON THE FRONT SIDE OF THE SA ID PAGE. AS ALSO THE ASSESSEES PROJECTS FROM A.Y. 03-04 TO 06-07. THEREFORE, THE L D. CIT(A) HAS RIGHTLY HELD THAT THE ENTRIES ON THE REVERSE SIDE OF PAGE 8 OF A-7 COULD NOT HAVE BEEN DECIPHERED AS ANY INCOME FROM UNDISCLOSED SOURCES. THUS THE GROUND WA S RIGHTLY ALLOWED. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LD. CIT(A), HENCE, WE UPHOLD THE SAME ON THIS ISSUE AND DISMISS THE GROUN D NO. 1 RAISED BY THE REVENUE. 14. APROPOS GROUND NO. 2 RELATING TO DELETION OF AD DITION OF RS. 82.50 LACS ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES IS CONCE RNED. 14.1 ON THIS ISSUE, LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL FILED B Y THE REVENUE. 14.2 ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT LD. CIT(A) HAS PASSED A WE LL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE AND THE SAME MAY BE UPHELD. 15. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES, WE FIND THAT ON THIS IS SUE AOS HAS INCLUDED THE ENTIRE SET OF ENTRIES TOTALING RS. 82.50 LACS IN PAGE 11 OF A- 7 AS THE ASSESSEES INCOME FROM UNDISCLOSED SOURCES FOR AY 2006-07 ON THE BASIS THA T THE ENTIRE SET OF TRANSACTION IS UNRECORDED AND THERE WAS NO EVIDENCE TO SUBSTANTIAT E THAT THE RELEVANT DEAL DID NOT MATERIALIZE. HOWEVER, THE FACTS EARLIER STATED IN DICATE THAT AS PER THE ENTRIES IN PAGE 11 OF A-7 THAT APART FROM THE SPECIFIC DATED ENTRIE S ON 12.9.04 AND 20.9.04, NONE OF THE OTHER ENTRIES IS DATED. THERE IS A REFERENCE OF CHEQUE (10), ON S FLOOR SLAB (20L) ITA NOS. 1405 & 1407/DEL/2009 8 AND POSSESSION (22.5L) IN THE SAID PAGE, WITH NO R EFERENCE OF DATE AVAILABLE ON ANY OF THOSE ENTRIES. NEITHER THERE IS ANY MENTION THAT T HE SAID AMOUNTS HAVE BEEN PAID IN CASH. GOING BY THE DATES OF ENTRIES IN THE SEIZED DOCUMENT ALONE, THE ENTRIES THEREIN DO NOT FALL FOR CONSIDERATION FOR DETERMINING INCO ME FOR AY 2006-07. THEREFORE, THE LD. CIT(A) HAS RIGHTLY ALLOWED THE GROUND. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A), HENCE , WE UPHOLD THE SAME ON THIS ISSUE AND DISMISS THE GROUND NO. 2 RAISED BY THE REVENUE. 16. IN THE RESULT, BOTH THE REVENUES APPEALS STA ND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/04/2016. SD/- SD/- [J.S. REDDY] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 28/04/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES