Smt. Nidhi Mehta, New Delhi V. DCIT, New Delhi

ITA 1492/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8997 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 21-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: THAT TOO ON ADHOC BASIS
• Keywords: Search and seizure; Salary income; Principle of natural justice
• Section: 142(1); 139(1); 132

Judgement Text

1 ITA NO. 1492 /DEL/201 6 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO. 1492 /DEL/201 6 (A.Y . 20 10 - 1 1 ) SMT. NIDHI MEHTA 3,EMPIRE ESTATE, MEHRAULI GURGAON ROAS, SULTANPUR, NEW DELHI - 110030 (APPELLANT) VS . DCIT, CENTRAL CIRCLE - 28, NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 16 .0 2 .201 6 PASSED BY THE CIT(A) - 29 , NEW DELHI FOR ASSESSMENT YEAR 20 10 - 1 1 . 2. THE GROUNDS OF APPEAL ARE AS UNDER : 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.3,17,000/ - (I.E. 50% OF (300000+334000) OUT OF TOTAL ADDITION OF RS. 15,00,000/ - ON ACCOUNT OF CASH SEIZED DURING THE COURSE OF SEARCH AND THAT TOO ON ADHOC BASIS. APPELLANT BY SH. SOMIL AGARWAL, PULKIT ADVANI, ADV S RESPONDENT BY MS. NIDHI SRIVASTAVA , CIT - DR DATE OF HEARING 0 7 .0 8 .2019 DATE OF PRONOUNCEMENT 03 . 10 .2019 2 ITA NO. 1492 /DEL/201 6 2. THAT IN ANY C ASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.3,17,000/ - (I.E. 50% OF (300000+334000) OUT OF TOTAL ADDITION OF RS. 15,00,000/ - ON ACCOUNT OF CASH SEIZED IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUM STANCES OF THE CASE AND WITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.2,80,000/ - (I.E. 50% OF RS .5,60,000/ - ) OUT OF TOTAL ADDITION OF RS. 16,00,000/ - ON ACCOUNT OF CASH SEIZED FROM BANK LOCKER AND THAT TOO ON ADHOC BASIS. 4. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.2,80,000/ - ( I.E. 50% OF RS.5,60,000/ - ) OUT OF TOTAL ADDITION OF RS. 16,00,000/ - ON ACCOUNT OF CASH SEIZED IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND WITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 5. THAT HAVING REGARD TO THE FACTS AND C IRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.3,10,000/ - OUT OF TOTAL ADDITION OF RS.9,31,075/ - ON ACCOUNT OF JEWELLEY SEIZED FROM BANK LOCKER AND THAT TOO O ADHOC BASIS. 6. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.3,10,000/ - OUT OF TOTAL ADDITION OF RS.9,31,075/ - ON ACCOUNT OF JEWELLEY SEIZED FROM BANK LOCKER IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF TH E CASE AND WITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 7. THAT THE APPELLANT CRAVES TO LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3. THE ASSESSEE FILED RETURN OF INCOME UNDER SECTION 139(1) OF THE INCOME - TAX ACT, 1961 ON 31.07.2010, DECLARING TOTAL INCOME OF RS.70,06,888/ - . THE 3 ITA NO. 1492 /DEL/201 6 ASSESSEE DERIVED INCOME FROM SALARY AND OTHER SOURCES. A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN M/S. ALKEM GROUP OF CASE ON 04.02.2010/05.02.2010. A SEARCH WARRANT UNDER SECTION 132(1) OF THE ACT WAS ISSUED AND EXECUTED IN THE NAME OF THE ASSESSEE AS WELL. THE ASSESSEE IS WIFE OF SH. RAMAN MEHTA, WHO IS THE KEY PERSON AND PROMOTER OF M/S. ALKEM INTERNATIONAL LTD. AND ITS ASSOCIATE CONCERN. THE CASE OF THE ASSESSEE WAS SCRUTINIZED AND NOTICE UNDER SECTION 132(2) OF THE ACT WAS ISSUED ON 20.09.2011 AND DULY SERVED UPON THE ASSESSEE. THEREAFTER, NOTICE UNDER SECTION 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED ON 10.10.2011 AND SERVED UPON THE ASSESSEE. IN RESPONSE TO THIS NOTICE, CHARTERED ACCOUNTANT AND AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED THE PROCEEDINGS AND FILED DETAILS. DURING THE COURSE OF SEARCH ACTION UN DER SECTION 132 OF THE ACT CARRIED OUT AT THE PREMISES OF THE ASSESSEE, VARIOUS DOCUMENTS WERE FOUND AND SEIZED AS ANNEXURE A - 1 TO A - 3. THE ASSESSING OFFICER ASKED THE ASSESSEE VIDE SHOW CAUSE DATED 2 2.11.2011 TO FURNISH PAGE - WISE EXPLANATION OF THE SEIZED MATERIAL. THE ASSESSEE IN REPLY STATED THAT ONLY PAGE 14 TO 20/A - 2 AND PAGE 22/A - 3 ARE IN HER HANDWRITING. AS REGARDS THE OTHER PAGES OF SEIZED MATERIAL, THE SAME HAS BEEN STATED TO BE NOT PERTAINING TO THE ASSESSEE. THE ASSESSING OFFICER ASSESSED THE ASS ESSEE S INCOME AT RS.1,10,99,250/ - BY MAKING ADDITION ON ACCOUNT OF PROPERTY INCOME AT RS.61,290/ - , ADDITION ON ACCOUNT OF CASH SEIZED IN SE ARCH AT RS.15,00,000/ - , ADDITION ON ACCOUNT OF CASH SEIZED FROM BANK LOCKERS AT RS.16,00,000/ - AND ADDITION ON ACC OUNT OF JEWELLERY SEIZED FROM THE BANK LOCKERS AT RS.9,31,075/ - . 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. A S REGARDS GROUND NO. 1 & 2 RELATING TO TH E ADDITION OF RS.3,17,0001/ - SUSTAINED BY THE CIT(A), THE LD. AR SUBMITTED THAT D URING THE COURSE OF SEARCH CASH OF RS.18,34,100/ - WAS FOUND FROM THE RESIDENCE OUT OF WHICH A SUM OF RS.15,00,000/ - WAS SEIZED. THIS ADDITION WAS CHALLENGED BEFORE THE CIT(A), WHO ACCEPTED THAT A SUM OF RS.12,00,000/ - OUT OF THE SAID SUM OF RS.15,00,000/ - 4 ITA NO. 1492 /DEL/201 6 BELONGED TO M/S ALCHEM INTERNATIONAL LTD. THE LD. AR SUBMITTED THAT THE ADDITION MADE BY ITSELF IN THE ASSESSMENT ORDER WAS OF RS. 15,00,000/ - OUT OF WHICH THE CIT(A) ACCEPTE D THAT A SUM OF RS. 12,00,000/ - BELONGS TO M/S ALCHEM INTERNATIONAL LTD., THE MAXIMUM ADDITION WHICH COULD BE SUSTAINED BY THE CIT(A) WAS RS.3,00,000/ - . THE LD. AR FURTHER SUBMITTED THAT OUT OF 3,00,000/ - , THE ASSESSEE HAS EXPLAINED RS.1,50,000/ - BEFORE TH E CIT(A) THROUGH THE DOCUMENTARY EVIDENCES AND HENCE NO ADDITION SHOULD HAVE BEEN MADE. 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECOR D. IT IS PERTINENT TO NOTE THAT THE CIT(A) ACCEPTED THAT A SUM OF RS. 12,00,000/ - BELONGS TO M/S ALCHEM INTERNATIONAL LTD., THE MAXIMUM ADDITION WHICH COULD BE SUSTAINED BY THE CIT(A) WAS RS.3,00,000/ - . THUS, IT WILL BE APPROPRIATE TO REMAND BACK THIS ISSU E TO THE FILE OF THE CIT(A) FOR TAKING THE PROPER QUANTIFICATION OF THE AMOUNT TO BE ADDED OR NOT. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN THE OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. THUS, GROUND NOS. 1 AND 2 ARE PARTLY ALLOWED FO R STATISTICAL PURPOSE. 8. AS REGARDS GROUND NO. 3 & 4, THE ASSESSING OFFICER MADE ADDITION OF RS.16,00,000/ - BEING THE AMOUNT OF CASH FOUND FROM LOCKER, THE LD. AR SUBMITTED THAT THE SAID AMOUNT FOUND IN THE LOCKER WAS EXPLAINED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A) TO THE EXTENT OF RS. 10,90,000/ - AND FOR BALANCE THE CIT(A) ACCEPTED TO THE EXTENT OF 50%. THE LD. AR SUBMITTED THAT THERE IS AN ERROR COMMITTED BY THE ASSESSING OFFICER AS WELL AS BY THE CIT(A) AS THE C ASH FOUND IN THE LOCKER WAS RS.16,00,000/ - AND NOT RS.16,50,000/ - AS WRONGLY UNDERSTOOD BY THE CIT(A). THEREFORE, TAKING RS.10,90,000/ - AS EXPLAINED, THE BALANCE COMES TO RS.5,10,000/ - AND NOT RS.5,60,000/ - . THEREFORE GOING BY THE ADDITION S USTAINED BY LD. CIT(A), IT SHOULD BE 50% OF RS.5,10,000/ - , I.E., RS.2,55,000/ - AND NOT RS. 2,80,000/ - . THEREFORE, THE LD. AR SUBMITTED THAT THIS ADDITION MAY BE DELETED. 5 ITA NO. 1492 /DEL/201 6 9. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 10. WE HAV E HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT SEEMS THAT THE SUBMISSION OF THE ASSESSEE TO THE EXTENT OF BALANCE THE CIT(A) ACCEPTED TO THE EXTENT OF 50% WHICH NEEDS TO BE VERIFIED AS PER THE EXPLANATIONS GIVEN BY T HE LD. AR . THEREFORE, THIS ISSUE ALSO NEEDS TO BE REMANDED BACK TO THE FILE OF THE CIT(A) AND BE PROPERLY ADJUDICATED. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN THE OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. THUS, GROUND NOS. 3 AND 4 A RE PARTLY ALLOWED FOR STATISTICAL PURPOSE. 11. THE LD. AR SUBMITTED THAT A S REGARDS GROUND NO. 5 AND 6 RELATING TO THE ADDITION OF RS.3,10,000/ - OUT OF THE TOTAL ADDITION OF RS.9,31,075/ - ON ACCOUNT OF JEWELLERY FOUND/SEIZED DURING THE COURSE OF SEARCH FRO M THE BANK LOCKER MADE BY THE ASSESSING OFFICER , WHICH WAS REQUIRED TO BE PROVED BY THE ASSESSEE. THE LD. AR HAS GIVEN BALANCE - SHEET OF LATE SMT. LEELA MEHTA WHEREIN JEWELLERY APPEARS AMOUNTING TO RS.4,60,380/ - AND ALSO WEALTH TAX ASSESSMENT ORDER OF SMT. LEELA MEHTA (MOTHER - IN - LAW OF THE ASSESSEE) FOR A.Y. 1976 - 77 AND A.Y. 1986 - 87, BUT THE SAME WAS NOT TAKEN INTO COGNIZANCE BY THE ASSESSING OFFICER AS WELL AS THE CIT(A). 12. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 13. WE H AVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE NOT TAKEN INTO ACCOUNT THE EVIDENCES PRODUCE BEFORE THEM. THEREFORE, THIS ISSUE ALSO NEEDS TO BE REMANDED BACK TO THE FILE OF THE CIT(A). NEEDLESS TO SAY, THE ASSESSEE BE GIVEN THE OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. THUS, GROUND NO. 5 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 6 ITA NO. 1492 /DEL/201 6 14. IN RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. O RDER P RONOUNCED IN THE OPEN COURT ON 3 RD OCTOBER , 2019 . SD/ - SD/ - ( PRASHANT MAHARISHI ) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03 / 10 /2019 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI