M/s Dev Dutt Prasad Raj Kumar Garg, Delhi V. ITO, New Delhi

ITA 1522/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0149 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 08-03-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 07-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K RAVI RAM CHANDRAN
• Assessee Lawyers: VK SABHARWAL
• Keywords: Assessment record; Onus to prove; Reassessment proceedings
• Section: 143(2); 69A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI K. D. RANJAN ITA NO. 1522/DEL/10 ASSTT. YR: 2001-02 M/S DEV DUTT PRASAD RAJ KUMAR GARG VS. INCOME-TAX OFFICER, 6112/23, RAM DEV MARKET, WARD 28(3), NEW DELHI. KHARI BAOLI, DELHI-110006. PAN/ GIR NO. AAAFD2327B ITA NO. 2727/DEL/10 ASSTT. YR: 2001-02 INCOME-TAX OFFICER, VS. M/S DEV DUTT PRASAD RAJ KU MAR GARG WARD 28(3), NEW DELHI. 6112/23, RAM DEV MARKET, KHARI BAOLI, DELHI-110006. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI V.K. SABHARWAL ADV. RESPONDENT BY : SHRI K. RAVI RAM CHANDRAN SR. DR O R D E R PER R.P. TOLANI, J.M: : THESE ARE CROSS APPEALS, ONE BY THE ASSESSEE CHALLE NGING VALIDITY OF PROCEEDINGS U/S 148 AND THE OTHER BY THE REVENUE CH ALLENGING THE DELETION OF ADDITIONS BY THE CIT(A). RESPECTIVE GROUNDS ARE AS UNDER: IN ITA NO. 1522/DEL/2010 THE ASSESSEE HAS RAISED F OLLOWING GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE PROCEEDINGS INITIATED U/S 147 BY THE ASSESSING OFFI CER AND UPHELD BY THE LD. CIT(A) IS AGAINST THE LAW AND TO THE FACTS OF THE CASE. ITA 1522 & 2727/DEL/10 DEV DUTT PRASAD RAJ KUMAR GARG 2 2. THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED AND HAD ERRED IN LAW FOR NOT PASSING ANY SPEAKING ORDERS ON THE OBJECTION RAISED BY THE ASSESSEE WITH REGARD TO INI TIATION OF PROCEEDINGS U/S 147 OF THE ACT. IN ITA NO. 2727/DEL/10, REVENUE HAS RAISED FOLLOWI NG EFFECTIVE GROUND: IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,01,00,0 00/- MADE U/S 69A OF THE I.T. ACT. 3. RELEVANT OBSERVATIONS OF CIT(A) REGARDING VALIDI TY OF PROCEEDINGS U/S 147/148 ARE AS UNDER: 4.3. THERE IS NO MERIT IN THE CONTENTION OF THE AP PELLANT THAT THE ASSESSING OFFICER FAILED TO PASS A SPEAKING ORD ER ON THE OBJECTIONS RAISED BY THE APPELLANT IN RESPECT OF TH E 147 PROCEEDINGS. IT IS NOTED THAT HE APPELLANT FILED A LETTER DATED 13- 12-2008 WITH THE SUBJECT OBJECTION FOR OPENING OF THE CASE OF M/S DEV DUTT PARSHAD RAJ KUMAR FOR REASSESSMENT U/S 147/148 OF THE INCOME TAX ACT FOR THE ASST. YEAR 2001-02. IN THE BODY OF THE SAID LETTER, THE REASON PROVIDED BY THE ASSE SSING OFFICER FOR TAKING RECOURSE TO 147 PROCEEDINGS IS ACKNOWLED GED AND BY WAY OF OBJECTION, TRANSACTION WITH BRIJ MOHAN GUPTA IS DENIED. IT IS ALSO NOTED THAT THE SO CALLED OBJECTION TO THE REASSESSMENT PROCEEDINGS WAS FILED ONLY TOWARDS THE CLOSE OF THE ASSESSMENT PROCEEDINGS AND AFTER THE ISSUE OF THE SHOW CAUSE N OTICE. FURTHER, THE DENIAL OF TRANSACTIONS WITH BRIJ MOHAN GUPTA CONSTITUTE SUBMISSIONS MADE DURING THE COURSE OF RE ASSESSMENT PROCEEDINGS AND CANNOT BE SAID TO BE AN OBJECTION TO THE REASSESSMENT PROCEEDINGS. IN FACT, THE APPELLANT N EVER FILED ANY OBJECTION TO THE REASSESSMENT PROCEEDINGS AND AS SU CH THERE WAS NO OBLIGATION ON THE PART OF THE ASSESSING OFFICER TO PASS A SPEAKING ORDER IN CONNECTION WITH THE ISSUE OF NOTI CE U/ 148. IN OTHER WORDS, THE RATIO OF GKN DRIVE SHAFTS INDIA LT D. VS. ITO [2003] 259 ITR 19 (SC) IS NOT APPLICABLE HERE. THER EFORE, THIS ARGUMENT OF THE APPELLANT ALSO FAILS. ITA 1522 & 2727/DEL/10 DEV DUTT PRASAD RAJ KUMAR GARG 3 4.4. IN VIEW OF THE ABOVE DISCUSSION, THE REOPENIN G OF THE ASSESSMENT U/S 147 IS HELD TO BE VALID. 4. ON MERITS, THE CIT(A) DELETED THE ADDITION OF RS . 1,01,00,000/- MADE U/S 69A BY FOLLOWING OBSERVATIONS: 5.1. IT IS CONTENDED BY THE APPELLANT THAT THE ASS ESSING OFFICER PROCEEDED TO MAKE AN ADDITION U/S 69A WITHOUT DISCH ARGING THE BURDEN TO PROVE THE OWNERSHIP OF THE ASSESSEE OVER MONEY ETC. IT WAS ALSO CONTENDED THAT THE ADDITION WAS MADE ME RELY ON THE BASIS OF STATEMENTS OF THIRD PARTIES RECORDED DURIN G SEARCH ON ANOTHER PERSON AND THAT THE APPELLANT WAS NEVER CON FRONTED WITH THOSE STATEMENTS, NOR WAS ANY OPPORTUNITY AFFORDED FOR CROSS- EXAMINATION, THUS VIOLATING THE PRINCIPLE OF NATURA L JUSTICE. 5.2. THE SUBMISSIONS OF THE APPELLANT ARE CONSIDERE D. ON EXAMINATION OF THE ASSESSMENT RECORD IT IS SEEN THA T THE APPELLANT CATEGORICALLY DENIED HAVING ANY FINANCIAL OR BUSINESS TRANSACTION WITH SH. BRIJ MOHAN GUPTA. A REQUEST WA S ALSO MADE TO PROVIDE COMPLETE STATEMENTS ON THE BASIS OF WHICH ADDITION WAS BEING CONTEMPLATED BY THE ASSESSING OF FICER. HOWEVER, THE ASSESSING OFFICER DID NOT PROVIDE THE COPIES OF THOSE STATEMENTS. DURING THE REMAND PROCEEDINGS ALS O, THE ASSESSING OFFICER DID NOT THROW ANY LIGHT ON ANY IN QUIRY/ INVESTIGATION CARRIED OUT BY HIM THAT COULD JUSTIFY THE ADDITIONS MADE BY HIM. 5.3. FROM THE FACTS ENUMERATED ABOVE, IT IS CLEAR T HAT THE ASSESSING OFFICER FAILED TO ESTABLISH ANY CASE AGAI NST THE APPELLANT. FURTHER INQUIRY/ INVESTIGATION WAS REQUI RED TO BE CARRIED OUT ON THE INFORMATION PASSED BY THE DCIT, CENTRAL CIRCLE 19, NEW DELHI, BUT NO WORTHWHILE OR COGENT W ORK WAS DONE TOWARDS THIS END. NO CORROBORATIVE EVIDENCE TO THAT FOUND DURING SEARCH ON SH BRIJ MOHAN GUPTA WAS GATHERED I N RELATION TO THE APPELLANT. COPIES OF THE AVERMENTS/ STATEMEN TS, ON THE BASIS OF WHICH ADDITIONS WERE MADE, WERE NOT PROVID ED NOR WAS THE OPPORTUNITY TO CROSS-EXAMINE GIVEN TO THE APPEL LANT. THE ASSESSING OFFICER MERELY SUMMARIZED THE SALIENT FEA TURES OF T EH ASSESSMENT PROCEEDINGS RELATING TO SH. BRIJ MOHAN G UPTA AND ITA 1522 & 2727/DEL/10 DEV DUTT PRASAD RAJ KUMAR GARG 4 THEREAFTER SUMMARILY REJECTED THE REPLY OF THE APPE LLANT AS NOT SATISFACTORY. 5.4. IN VIEW OF THE DISCUSSION ABOVE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 1,01,00 ,000/-. ACCORDINGLY, GROUNDS 2,3,4,5,6 AND 9 OF THE APPEAL ARE ALLOWED. 5. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUT SET CONTENDS THAT NOTICES U/S 148 WERE ISSUED IN THE NAME OF SHRI D EV DUTT RAJ, M/S DEV DUTT PRASAD RAJ KUMAR, WHICH ARE PLACED ON PAPER B OOK PAGE NOS. 30 & 31. SHRI DEV DUTT HAD EXPIRED ON 6-3-1994, COPY OF DEAT H CERTIFICATE IS ENCLOSED IN PAPER BOOK AT PAGE NO. 38. LEARNED COUNSEL FURTH ER CONTENDS THAT THIS FACT WAS BROUGHT TO THE NOTICE OF AO AND A GROUND WAS TA KEN BEFORE CIT(A) UNDER RULE 46A. CIT(A) HAD CALLED A REMAND REPORT O N THIS ISSUE, HOWEVER, THIS GROUND HAS BEEN SUMMARILY DECIDED. 6. LEARNED DR ON THE OTHER HAND, VEHEMENTLY ARGUES THAT THE ORIGINAL NOTICES U/S 148 PLACED ON PAPER BOOK PAGE NOS. 28 & 29 DO NOT REFER TO THE WORD PROPRIETOR, THE APPROVAL OBTAINED BY AO REFE RS TO THE SAME PERTAINING TO REGISTERED FIRM, COPY THEREOF IS PLAC ED ON PAPER BOOK PAGE NO. 27, THEREFORE, THE ASSUMPTION OF JURISDICTION U/S 1 48 IS VALID. THE NOTICES BEING POINTED OUT BY THE ASSESSEE ON PAPER BOOK PAG ES 31 & 32 ARE SUBSEQUENT NOTICES OF ASSESSMENT, AO HAVING ASSUMED VALID JURISDICTION U/S 147/148 A MERE MISTAKE IN SUBSEQUENT NOTICES CALLIN G FOR ATTENDANCE BY INADVERTENTLY PUTTING THE WORD PROPRIETOR WILL NO T MAKE THE PROCEEDINGS INVALID AND THE MISTAKE IS CLEARLY CURABLE U/S 292B . THE ASSESSEE HAS NOT RAISED ANY GROUND ABOUT THE VALIDITY OF NOTICES U/S 143(2) AND 142(1), ITA 1522 & 2727/DEL/10 DEV DUTT PRASAD RAJ KUMAR GARG 5 THEREFORE, CIT(A) HAS VALIDLY UPHELD THE VALIDITY O F REASSESSMENT PROCEEDINGS. HIS ORDER IS RELIED ON. 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. COMING TO THE FIRST ISSUE RAISED BY THE ASS ESSEE, I.E. ASSUMPTION OF WRONG JURISDICTION BY ISSUING A NOTICE ON THE DEAD PERSON, IS CONCERNED, WE SEE NO MERIT IN THE ARGUMENT OF THE ASSESSEE INASMU CH AS 148 NOTICE DID NOT REFER TO THE WORD PROPRIETOR AND SUCH WORD IS MEN TIONED ON SOME NOTICE ISSUED U/S 143(2) OR 142(1). ASSESSEE HAS NOT RAISE D THE ISSUE ABOUT THESE NOTICES. BESIDES, WE ARE IN AGREEMENT WITH THE LEAR NED DR THAT HAVING ASSUMED A VALID JURISDICTION INADVERTENT MENTIONING OF WORD PROPRIETOR WILL NOT BE OF MUCH SIGNIFICANCE AND IS TO BE READ U/S 292B. BESIDES, THE ASSESSEE INSTEAD OF BRINGING IT TO THE NOTICE OF AO HAS FILED THE RETURN OF INCOME OF THE FIRM, MEANING THEREBY, THE ASSESSEE H AD NO OBJECTION ON 148 NOTICE AND FILED A PROPER RETURN AND ATTENDED THE P ROCEEDINGS THERETO. THEREFORE, THIS PLEA OF THE ASSESSEE IS REJECTED. 8. COMING TO THE ASSESSEES PLEA THAT THERE WAS NO MATERIAL ON RECORD TO COME TO A REASONABLE PLEA THAT ASSESSEES INCOME HA D ESCAPED ASSESSMENT ALSO CANNOT BE ACCEPTED. ON A DEPARTMENTAL SEARCH I N THE CASE OF A FINANCE BROKER SHRI BRIJ MOHAN GUPTA, A DIARY WAS FOUND REF LECTING ENTRY NO. 177 IN THE NAME OF THE ASSESSEE. AS PER INFORMATION RECEIV ED, THE BROKER HAD FACILITATED THIS TRANSACTION. IN OUR VIEW AO HAD RE ASONABLE MATERIAL IN HIS POSSESSION TO COME TO A SATISFACTION THAT INCOME HA D ESCAPED ASSESSMENT. ON THIS ASPECT ALSO, ISSUANCE OF NOTICE U/S 148 READ W ITH SECTION 147 IS UPHELD. ASSESSEES GROUNDS ARE DISMISSED. ITA 1522 & 2727/DEL/10 DEV DUTT PRASAD RAJ KUMAR GARG 6 9. COMING TO THE REVENUES APPEAL AGAINST THE ACTIO N OF CIT(A), ON MERIT, DELETING THE ADDITION OF RS. 1,01,00,000/- MADE U/S 69A, LEARNED DR CONTENDS THAT SINCE THE NAME OF THE ASSESSEE WAS AP PEARING IN THE DIARY, CIT(A) OUGHT NOT HAVE DELETED THE ADDITION. ORDER O F AO WAS RELIED ON. 10. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, CONTENDS THAT NEITHER THE SAID SHRI BRIJ MOHAN GUPTA WAS ALLOWED TO BE CROSS-EXAMINED NOR A COPY OF HIS STATEMENT WAS GIVEN DESPITE SEVER AL REQUESTS. THE AOS CONTENTION TO THE EFFECT THAT THE CONTENTS OF THE S TATEMENT WERE MADE KNOWN TO THE ASSESSEE, IS NOT A COMPLIANCE OF MANDATORY R EQUIREMENT TO PROVIDE THE ASSESSEE INCRIMINATING MATERIAL TO DEFEND ITS CASE. CIT(A) AHS CATEGORICALLY HELD THAT: (I) COMPLETE STATEMENT OF BRIJ MOHAN GUPTA WAS NEVER GI VEN. (II) NO ADVERSE OBSERVATIONS WERE MADE BY AO ON REMAND R EPORT CALLED UPON BY THE CIT(A). (III) BEYOND THE BELIEF OF PRESUMPTION ON THE INFORMATION SUPPLIED BY THE DCIT-19, NEW DELHI, NO FURTHER INQUIRY OR INVES TIGATION WAS CARRIED OUT BY THE AO TO SUSTAIN THIS ADDITION. (IV) CROSS-EXAMINATION OF SHRI BRIJ MOHAN GUPTA WAS NEVE R ALLOWED DESPITE CIT(A)S DIRECTION AND REMAND OF THE MATTER . (V) THE ASSESSEE FIRM HAD STRONGLY DENIED HAVING ANY FI NANCIAL TRANSACTION WITH MR. BRIJ MOHAN GUPTA. 10.1. IN VIEW OF THESE FINDINGS, CIT(A) HAS RIGHTLY HELD THAT THE ADDITION MADE BY THE AO, WITHOUT ANY CORROBORATIVE EVIDENCE, WHAT-SO-EVER, WAS UNJUSTIFIED. 11. WE HAVE HEARD RIVAL SUBMISSIONS. THE ABOVE OBSE RVATIONS OF THE CIT(A) HAVE NOT BEEN CONTROVERTED BY LEARNED DR. IT IS CLEAR THAT CIT(A) CALLED FOR A REMAND REPORT FROM THE AO WHEREIN NOTH ING ADVERSE EXCEPT A ITA 1522 & 2727/DEL/10 DEV DUTT PRASAD RAJ KUMAR GARG 7 BALD RELIANCE ON THE STATEMENT OF SHRI BRIJ MOHAN G UPTA, WHICH WAS NOT SUPPLIED TO THE ASSESSEE, NO CORROBORATIVE EVIDENCE HAS BEEN BROUGHT ON RECORD. IN VIEW OF THESE FACTUAL EXIGENCIES WE SEE NO INFIRMITY IN THE ORDER OF CIT(A) DELETING THE ADDITION IN QUESTION. THUS, ORDER OF CIT(A) IS UPHELD. 12. IN THE RESULT, BOTH THE APPEALS, FILED BY THE A SSESSEE AS WELL AS THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 17-3-2011. SD/- SD/- ( K.D. RANJAN ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17-03-2011. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR