ACIT, New Delhi V. Sh. R.P. Singh, New Delhi

ITA 1516/DEL/2009

• Counselvise Citation: 151620114 RSA 2009
• Duration Of Justice: 3 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 29-05-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 16-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: J S KOCHAR; UDAIBIR SINGH
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.1516/DEL/2009 ASSESSMENT YEAR : 2000-01 ACIT, SHRI R.P. SINGH, CIRCLE -15 (1), 382-BEHRA ENCLAVE, NEW DELHI. V. PACHIM VIHAR, N. DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.ASDPS ASDPS ASDPS ASDPS- -- -1051 1051 1051 1051- -- -J JJ J APPELLANT BY : DR. BRR KUMAR, SR. DR. RESPONDENT BY : SHRI J.S. KOCHAR, C.A. & SHRI UDAIBIR SINGH, ADVOCATE. ORDER PER TS KAPOOR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE OR DER OF LD CIT(A) DATED 9.1.2009. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF AMOUNT OF INVE STMENTS IN IVPS OF ` . 9 LAKHS AND INTEREST THEREON FOR ` .82,875/- AS PANCHNAMA DRAWN BY CBI SHOWS THAT THESE IVPS WERE IN JO INT NAMES OF SHRI R.P. SINGH AND HIS WIFE MRS., USHA SINGH. THE CLAIM THAT THE INVESTMENT IS REFLECTED IN THE RETURN OF INC OME OF THE COMPANY HOLDS NO GROUND AS THE RETURN OF INCOME OF T HE COMPANY FOR THE ASSESSMENT YEAR 2000-01 WAS FILED ON ITA NO1516/DEL/2009 2 30.11.2000 AFTER THE SEARCH BY CBI WAS CONCLUDED AT T HE RESIDENT OF SHRI RP SINGH. 2. THE APPELLANT CRAVES TO BE ALLOWED TO AMEND, DELETE OR ADD ANY OTHER GROUNDS OF APPEAL DURING THE COURSE OF HEARING OF THIS APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT IN TH IS CASE WAS COMPLETED U/S 143(3) ON 3.2.2003 AT A TOTAL INCOME O F ` .3,60,180/- AGAINST RETURNED INCOME OF ` .2,96,210/-. THE RESIDENTIAL HOUSE OF THE ASSESSEE WHO HAPPENS TO BE A DIRECTOR OF THE COMPANY M/S R.P. SINGH & CO. PVT. LTD. WAS SEARCHED BY CBI ON 12.5.2000 AND DURING THE COURSE OF SEARCH CASH OF ` .2 LAKHS AND INDIRA VIKAS PATRAS (IVPS) OF ` .8,97,500/- PURCHASED DURING THE PERIOD 12.7.1999 TO 15.7.1999 WERE FOUND FROM LOCKER OF SHRI RP SINGH. THE ASSESSING OFFIC ER REOPENED THE CASE OF ASSESSEE U/S 148 OF THE ACT AND CONFRONTED THE ASSE SSEE REGARDING INVESTMENT IN IVPS. THE ASSESSEE CLAIMED THAT IVPS BELONGED TO THE COMPANY M/S RP SINGH & CO.PVT. LTD. WHICH HAD MADE THE INVESTMENT IN IVPS AFTER RAISING SHARE APPLICATION MONEY TO THE TUNE OF ` .13,90,000/- FROM 29 DIFFERENT INDIVIDUALS. HE FURT HER CLARIFIED THAT THE TOTAL VALUE OF IVP WAS ` .9,00,000/- INSTEAD OF ` .8,97,500/-. THE ASSESSEE FURTHER SUBMITTED THAT THE COMPANY HAD PROPERLY SHOWN THE INVESTMENT IN IVPS IN ITS BALANCE SHEET AND HAS REFLECT ED THE ACCRUED INTEREST THEREON IN THE P&L ACCOUNT OF THE COMPANY. THE ASSESSING OFFICER DID NOT AGREE WITH THE SUBMISSIONS OF ASSESSEE AND MADE THE ADDITION OF ` .9,00,000/- AND ` .82,875/- AS INTEREST ACCRUED THEREON TO THE INCOME OF ASSESSEE. THE ASSESSING OFFICER HELD THIS VIE W ON THE FOLLOWING FACTS:- 1. THAT THESE IVPS BELONGED TO THE COMPANY AS AT THE TIM E OF PURCHASE OF IVPS THE COMPANY HAD ONLY ` .1 LAKH AS ITS AUTHORIZED ITA NO1516/DEL/2009 3 CAPITAL AND IT HAD RAISED THE AUTHORIZED CAPITAL ONL Y ON 4.1.2002 BY FILING FORM NO.5 WITH THE REGISTRAR OF COMPANIES. 2. THAT SINCE IVPS WERE FOUND IN THE PERSONAL LOCKER OF S HRI RP SINGH AND MRS. USHA SINGH, THEY CANNOT BE SAID TO BE B ELONG TO THE COMPANY. 3. THAT INCOME TAX RETURN OF THE COMPANY FOR ASSESSMENT Y EAR 2000-01 WAS FILED ON 30.11.2000 AFTER THE DATE OF SEA RCH AND ASSESSEE HAD SHOWN THE INVESTMENT AS THAT OF COMPANY TO C OVER UP THE INVESTMENT IN IVPS RECOVERED FROM HIS LOCKER. 3. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE LD CIT( A) AND SUBMITTED THE FOLLOWING:- 1. THAT INVESTMENT IN IVPS OF ` .9,00,000/- WERE MADE BY THE COMPANY M/S RP SINGH & CO. PVT. LTD. DURING THE PERI OD 12.7.1999 TO 15.7.1999 AND THESE IVPS WERE BEARER IN NATURE AND WERE KEPT IN THE LOCKER MAINTAINED IN THE JOINT NAM E OF SHRI RP SINGH AND HIS WIFE MRS. USHA SINGH. 2. THAT THESE IVPS HAD BEEN PROPERLY DISCLOSED AND REFL ECTED IN THE BOOKS OF ACCOUNTS OF THE SAID COMPANY. 3. THAT THE INCOME EARNED FROM THESE IVPS WAS ASSESSED IN THE HANDS OF THE COMPANY. 4. THAT THE IVPS WERE BEARER IN NATURE AND THESE WERE KEPT IN THE LOCKER FOR SAFETY PURPOSES AND IT DOES NOT MEAN THAT IV PS ARE RELATED TO LOCKER OWNER AND INSTEAD THE ASSESSING OFFIC ER SHOULD HAVE FOUND OUT AS TO WHO PROVIDED THE FUNDS TO PURCHA SE THESE IVPS. RELIANCE WAS PLACED ON THE DECISIONS OF HON'BLE SUPREME ITA NO1516/DEL/2009 4 COURT IN THE CASE OF ITO V. BACHU LAL KAPOOR 60 ITR 74, CIT V. LATHA CHANDY 260 ITR (KER.), CIT V. SURENDRA GULAB CHAND MODI & ACIT V. V.P. OSWAL 92 ITD 227 (PUNE). 4. THE LD CIT(A) AFTER HEARING THE SUBMISSIONS MADE BY THE LD AR DELETED THE ADDITION MADE BY ASSESSING OFFICER. THE R ELEVANT PARAGRAPH OF LD CIT(A)S ORDER IS REPRODUCED BELOW:- I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPE LLANT AND THE CONTENTIONS OF ASSESSING OFFICER. THE ASSESSING OFFICER ADDED THE AMOUNT OF INVESTMENT IN IVPS OF ` .9,00,000/- AND INTEREST THEREON OF ` .82,875/-. THE IVPS WERE FOUND IN THE LOCKER MAINTAINED BY THE ASSESSEE AND HIS WIFE, SO IT BELONGED T O THE ASSESSEE. THE APPELLANT HAD SUBMITTED ALL THE RELEVANT DETAILS AND DOCUMENTS REGARDING INVESTMENT IN IVPS THAT THE IN VESTMENT IN IVPS WAS MADE BY THE COMPANY AND PRODUCED THE FINA NCIAL DOCUMENTS OF THE COMPANY SHOWING THE INVESTMENT BY TH E COMPANY WHICH HAD ALREADY BEEN DISCLOSED IN THE BOOK S OF THE COMPANY AND THE INCOME THEREON HAD ASSESSED TO TAX EVER Y YEAR AND ALSO EXPLAINED THE SOURCE OF INVESTMENT MADE BY TH E COMPANY. THE ASSESSING OFFICER HAD NOT POINTED OUT AN Y DEFECT IN THESE DOCUMENTS. THE SINGLE INVESTMENT AND INCOME T HEREON CANNOT BE ASSESSED IN TWO HANDS. THE INVESTMENT IN IVPS AN D INTEREST THEREON IS ALREADY ASSESSED IN THE HANDS OF THE C OMPANY OF WHICH THE ASSESSEE IS A DIRECTOR. IN VIEW OF THE ABO VE DISCUSSION, IN MY CONSIDERED OPINION, THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT SUSTAINABLE AND THEREFORE DIRECT ED TON BE DELETED. 5. AGGRIEVED, THE REVENUE HAS FILED APPEAL BEFORE TH IS TRIBUNAL. ITA NO1516/DEL/2009 5 6. THE LD DR ARGUED THAT IVPS WERE RECOVERED FROM TH E PERSONAL LOCKER OF SHRI RP SINGH AND HIS WIFE AND ARGUED THAT COMPANYS ASSET CANNOT BE IN THE LOCKER OF DIRECTOR. HE FURTHER ARG UED THAT ASSESSEES CLAIM THAT THESE IVPS BELONG TO THE COMPANY IS ONLY A COVER UP AS COMPANY ITSELF HAD RAISED SHARE APPLICATION MONEY FRO M 29 SHAREHOLDERS WITHOUT OBTAINING THE APPROVAL OF REGISTR AR OF COMPANIES WHICH WAS TAKEN MUCH AFTER THE RECEIPT OF SHARE APPLI CATION MONEY. 7. ON THE OTHER HAND, LD AR ARGUED THAT THOUGH IVPS WERE RECOVERED FROM THE PERSONAL LOCKER OF DIRECTOR BUT T HEY DID NOT BELONG TO THE ASSESSEE AS THESE HAVE BEEN DULY REFLECTED IN THE BOOKS OF ACCOUNTS OF THE COMPANY AND ITS BALANCE SHEET. HE FUR THER ARGUED THAT IVPS WAS ALWAYS BEARER AND THEY CANNOT BE IN THE NAME OF ANY PERSON OR A COMPANY. THE LD AR FURTHER BROUGHT TO OU R NOTICE THAT AN ADDITION OF ` .13,90,000/- WAS MADE IN THE HANDS OF COMPANY M/S RP SINGH & CO. PVT. LTD. AND HON'BLE ITAT HAD REMANDED THE CASE BACK TO ASSESSING OFFICER AND THE ASSESSING OFFICER HAS AGAIN CONFIR MED THE ADDITION. HE ARGUED THAT THE ADDITION OF ` .13,90,000/- WAS ON ACCOUNT OF SHARE APPLICATION MONEY WHICH THE ASSESSEE HAS CLAIMED THAT SAME WAS USED FOR PURCHASE OF IVPS. THEREFORE, IN VIEW OF T HE FACT THAT SHARE APPLICATION MONEY HAS ALREADY BEEN TAXED IN THE HAND S OF COMPANY AND THERE CANNOT BE DOUBLE TAXATION AGAIN IN THE HA NDS OF DIRECTOR. 8. IN HIS REJOINDER, THE LD DR QUESTIONED ABOUT THE A PPEAL FILED BY THE COMPANY WITH RESPECT TO ADDITION OF ` .13,90,000/-. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND FROM THE P&L ACCOUNT FILED AT PAGE 4 OF THE PAPER BOOK THAT INCOME FROM IVPS ITA NO1516/DEL/2009 6 HAS BEEN DULY REFLECTED AS THE INCOME OF THE COMPANY. SIMILARLY, INVESTMENTS IN IVPS HAVE BEEN DULY REFLECTED IN THE B ALANCE SHEET AS ON 31.3.2001 PLACED AT PAGE 5 OF THE PAPER BOOK. WE ALSO OBSERVE THAT THERE WERE ONLY TWO DIRECTORS OF THE COMPANY M/S RP S INGH & CO. PVT. LTD. VIZ RP SINGH & USHA SINGH AND THERE WAS NO BETTE R PLACE TO KEEP IVPS WHICH ARE BEARER IN NATURE IN THE PERSONAL LOCKE R OF DIRECTORS. THEREFORE, IN VIEW OF THE ABOVE, WE ARE OF THE CONSI DERED OPINION THAT THE AMOUNT OF IVPS ALONG WITH INTEREST THEREON CANNO T BE ASSESSED IN THE HANDS OF THE ASSESSEE AS THESE HAS ALREADY BEEN ASSESSED IN THE HANDS OF THE COMPANY. THEREFORE, WE DO NOT SEE ANY R EASON TO INTERFERE IN THE ORDER OF LD CIT(A)., 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 11. ORDER PRONOUNCED IN THE OPEN COURT ON THE 6TH D AY OF JULY, 2012. SD/- SD/- (I.C. SUDHIR) (T.S. KAP OOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT.06.07.2012. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO1516/DEL/2009 7 DATE OF HEARING 29.5.2012 DATE OF DICTATION 03.7.2012 DATE OF TYPING 04.7.2012 DATE OF ORDER SIGNED BY 06.07.2012 BOTH THE MEMBERS & PRONOUNCEMENT. DATE OF ORDER UPLOADED ON NET 06.07.2012 & SENT TO THE BENCH CONCERNED.