ACIT, New Delhi V. Col. Arjan Dev Khanna, New Delhi

ITA 1495/DEL/2012

• Counselvise Citation: 149520114 RSA 2012
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 30-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: SIMRAN GREWAL
• Keywords: Unexplained cash credit; Gift; Principle of natural justice; Additional evidence
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A: NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI I. C. SUDHIR, JUDICIAL MEMBER ITA NO. 1495/DEL/2012 ASSESSMENT YEAR: 2006- 2007 ACIT, CIRCLE-41(1), VS. COL. ARJAN DEV KHANNA, ROOM NO. 306, C-6/15, VASANT VIHAR, MAYUR BHAWAN, NEW DELHI 110057 NEW DELHI. (PAN AAAPK6327J) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI Y. KAKKAR , DR RESPONDENT BY : SHRI G.S. GREWAL, CA & SIMRAN GREWAL, CA ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE GROUND THAT THE LD. CIT(A) HAS ERRED IN 1. ADMITTING ADDITIONAL EVIDENCE WHICH WAS NOT SUBMITTED BEFORE THE AO BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS ; AND 2. DELETING ADDITION OF RS. 27,97 ,000/- U/S 68 INSPITE OF THE FACT THAT THE ASSESSEE WAS NOT ABLE TO PROVE TH E CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION DURING THE ASSESSMENT PROCEEDINGS. GROUND NO. 1 ITA NO. 1495/DEL/2012 2 2. IN SUPPORT OF THIS GROUND THE LD. DR SUBMIT TED T HAT THE AO HAD MADE ADDITION OF RS. 27,97,000/- AS UNEXPLAINED CAS H CREDIT WHICH WAS QUESTIONED BY THE ASSESSEE BEFORE THE LD. CIT(A). L D. CIT(A) ENTERTAINING THE APPLICATION OF THE ASSESSEE FOR ADDITIONAL EVID ENCE HAS ADMITTED THE SAME WITHOUT FOLLOWING DUE PROVISIONS OF LAW AND HA S DELETED THE ADDITION. SHE SUBMITTED THAT IT IS VIOLATION OF RULE 46A OF I .T. RULES 1962 AND THE PRINCIPLE OF NATURAL JUSTICE AS HELD BY THE HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS. MO DERN CHARITABLE FOUNDATION (2011) 335 ITR 105 (DELHI). 3. LD. AR ON THE OTHER HAND SUBMITTED THAT ON THE APPLICATION DATED 17.5.2010 MOVED BY THE ASSESSEE FOR THE ADMISSION O F ADDITIONAL EVIDENCE WHICH WERE A CONFIRMATION FROM HER DAUGHTER WHO HAD GIFTED THE AMOUNT IN QUESTION, ALONGWITH COPY OF HER PASSPORT AND A CERT IFICATE ISSUED BY SYNDICATE BANK REGARDING THE DIVIDEND RECEIVED DURI NG ASSTT. YEAR 2005-06, THE LD. CIT(A) HAD CALLED FOR REACTION OF THE AO ON THE APPLICATION AND AFTER CONSIDERING THE SAME THE LD. CIT(A) HAD ADMITTED TH OSE DOCUMENTS AS ADDITIONAL EVIDENCE. THUS IT IS NOT A CASE THAT LD. CIT(A) WITHOUT GIVING OPPORTUNITY TO THE AO HAD ADMITTED THE REQUESTED AD DITIONAL EVIDENCE VIDE LETTER 17.5.2010 OF THE ASSESSEE UNDER RULE 46A OF THE I.T. RULES 1962. 4. HAVING GONE THROUGH THE DECISION OF HONB LE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS. MODERN CHARITABL E FOUNDATION (SUPRA) RELIED UPON BY THE LD. DR WHICH IS BINDING ON THE D ELHI BENCH OF THE ITA NO. 1495/DEL/2012 3 TRIBUNAL, WE FIND THAT IN THAT CASE ALSO ASSESSEE H AD FAILED TO FURNISH THE DETAILS DESPITE BEING GIVEN OPPORTUNITY TO DO SO TH E AO TREATED THE DONATION AND UNSECURED LOAN AS UNDISCLOSED INCOME U/S 68 OF THE I.T. ACT 1961. THE ASSESSEE FILED AN APPEAL BEFORE THE COMMISSIONER (A PPEALS) AND PRODUCED SOME DOCUMENTS / EVIDENCE FOR THE FIRST TIME. THE L D. CIT(A) ASKED THE AO FOR A REMAND REPORT BUT HE OBJECTED TO THE ADMISSIO N OF THE ADDITIONAL EVIDENCE ON THE GROUND THAT NO REASONS WERE GIVEN BY THE ASSESSEE AS TO WHY SUCH EVIDENCE COULD NOT BE PRODUCED BEFORE THE AO, WHICH THE ASSESSEE SOUGHT TO PRODUCE BEFORE THE COMMISSIONER (APPEALS). THE COMMISSIONER (APPEALS) ADMITTED THE ADDITIONAL EVID ENCE AND ALLOWED THE APPEAL OF THE ASSESSEE ON THE BASIS OF THE ADDITION AL EVIDENCE HOLDING THAT THE ASSESSEE WAS ABLE TO POINT OUT THE SOURCE OF DO NATIONS AS WELL AS LOANS AND HOW THE DONATIONS AND LOANS WERE DULY APPLIED F OR THE OBJECTIVE OF THE ASSESSEE TRUST. THE TRIBUNAL UPHELD THE ORDER. ON APPEAL THE HONBLE HIGH COURT WAS PLEASED TO HOLD THAT THE COMMISSIONER (AP PEALS) AFTER ADMITTING THE EVIDENCE RELIED UPON THE SAME WITHOUT ANY VERIF ICATION, THEREFORE IN ORDER TO BALANCE THE EQUITIES ON THE ONE HAND, THE ASSESSEE SHOULD BE PERMITTED TO RELY UPON THE ADDITIONAL EVIDENCE PROD UCED BEFORE THE COMMISSIONER (APPEALS) AND AT THE SAME TIME THE AO SHOULD ALSO BE GIVEN AN OPPORTUNITY TO VERIFY THE DOCUMENTS. THE CASE WA S TO BE REMITTED TO THE AO TO GO INTO THE VERACITY OF THE DOCUMENT. IF THE ASSESSEE WAS ABLE TO EXPLAIN THE DONATIONS AS WELL AS UNSECURED LOANS PR OPERLY, AO THERETO ITA NO. 1495/DEL/2012 4 ACCEPT THEM, HELD THE HONBLE HIGH COURT. ALMOST SI MILAR ARE THE FACTS OF THE PRESENT CASE ON THE ISSUE. AS IN THE PRESENT C ASE WHILE FURNISHING THE REMAND REPORT AS CALLED FOR BY THE LD. CIT(A) ON TH E APPLICATION UNDER RULE 46A OF THE ASSESSSEE, THE AO HAD REQUESTED THE LD. CIT(A) TO ISSUE NECESSARY DIRECTION TO CARRY OUT APPROPRIATE VERIFI CATION SINCE THESE DOCUMENTS WERE NOT FILED DURING THE COURSE OF ASSTT . PROCEEDINGS AND IGNORING THE SAME LD. CIT(A) HAS ADMITTED THE ADDIT IONAL EVIDENCE. THUS THERE WAS DENIAL OF OPPORTUNITY AS REQUESTED BY THE AO IN ITS REMAND REPORT TO THE LD. CIT(A). WE THUS RESPECTFULLY FOLLOWING T HE DECISION OF HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF DIRE CTOR OF INCOME TAX VS. MODERN CHARITABLE FOUNDATION (SUPRA) SET ASIDE THE MATTER TO THE FILE OF THE AO TO GO INTO THE VERACITY OF THE DOCUMENTS FILED B EFORE THE LD. CTI(A) IN THE SHAPE OF ADDITIONAL EVIDENCE VIDE APPLICATION D ATED 17.5.2010 UNDER RULE 46A, AND IF THE ASSESSEE WAS ABLE TO EXPLAIN T HE GIFT / CLAIM PROPERLY THE AO WAS TO ACCEPT THEM. THE GROUND NO. 1 IS TH US ALLOWED. GROUND NO. 2 5. IN THIS GROUND THE REVENUE HAS QUESTIONED THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 27,97,000/- MADE U/S 68 OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH CREDIT. IN VIEW OF THE FINDING ON GROUND NO. 1 HEREINABOVE, THIS GROUND HAS BECOME INFRACTUOUS AS PER THE DIRECTION OF THE BENCH TO THE AO TO VERIFY THE VERACITY OF THE DOCUM ENTS FILED BEFORE THE LD. ITA NO. 1495/DEL/2012 5 CIT(A) AS ADDITIONAL EVIDENCE TO DECIDE THE FATE OF THE ADDITION IN QUESTION AFRESH. GROUND NO. 2 IS ACCORDINGLY ALLOWED FOR STA TISTICAL PURPOSES. 6. IN THE RESULT APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 TH JANUARY, 2014. SD/- SD/- (G.D. AGRAWAL) ( I.C. SUDHIR ) VICE PRESIDENT JUDICIAL MEMBER DATED 17 TH JANUARY, 2014 VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR, ITAT