Sh. Ram Avtar Singhal, New Delhi V. DCIT, New Delhi

ITA 1558/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96947 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 01-07-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 14-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAGAN SOOD
• Assessee Lawyers: MUKESH GUPTA
• Keywords: Document seized; Opportunity of being heard; Block assessment; Documents seized
• Section: 132; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 1558 /DEL/201 4 (ASSESSMENT YEAR - 200 2 - 03 ) RAM AVTAR SI NGHAL, 125, GAGAN VIHAR, NEW DELHI. PAN - AQKPS2374M (APPELLANT) VS DCIT, CENTRAL CIRCLE - 19, NEW DELHI (RESPONDENT ) APPELLANT BY SH.MUKESH GUPTA, ADV. RESPONDENT BY SH.GAGAN SOOD, SR.DR ORDER BY THE PRESENT APPEAL, THE ASSESSEE ASSAILS THE CORRECTNESS OF ORDER DATED 06.12.2013 OF CIT(A) - XII, NEW DELHI PERTAINING TO 2002 - 03 ASSESSMENT YEAR ON VARIOUS GROUNDS . 2. AT THE TIME OF HEARING, AN ADJOURNMENT PETITION WAS MOVED ON BEHALF OF THE ASSESSEE SEEKING TIME HOWEVER CONSIDERING THE MATERIAL AVAILABLE ON RECORD IN THE CONTEXT OF GROUND NO. - 2 RAISED IN THE PRESENT APPEAL, THE PETITION SEEKING TIME WAS REJECTED AND TH E PARTIES WERE HEARD ON GROUND NO. - 2 WHICH READS AS UNDER: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT WAS INCORRECT AND UNJUSTIFIED IN 1. 2. DISMISSING THE APPEAL OF THE ASSESSEE WITHOUT PASSING A SPEAKING ORDER. 3. .. . . 4. . 5. . 6. . . 3 . A PERUSAL OF THE RECORD SHOWS THAT SEARCH U/S 132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED ON 15.12.2006 IN BRIJ MOHAN GUPTA GROUP OF CASES WHICH ALSO COVERED RESIDEN TIAL PREMISES OF SH. RAM AVTAR AT A - 24, GURU RAM DASS DATE OF HEARING 01 .0 7 .2015 DATE OF PRONOUNCEMENT 07 .0 8 .2015 I.T.A .NO. - 1558/ DEL/2014 PAGE 2 OF 4 NAGAR, LAKSHMI NAGAR, DELHI, THE ACCOUNTANT OF SH. BRIJ MOHAN GUPTA. ACTION U/S 132 WAS ALSO TAKEN IN LOCKER NO. - 29 OWNED BY THE SH.RAM AVTAR SINGHAL I.E THE ASSESSEE . A CCORDINGLY NOTICE U/S 153A WAS ISSUED TO THE ASSESSEE ON 13.06.2006 REQUIRING HIM TO FURNISH THE RE TURN OF INCOME. THE ASSESSEE RETURNED INCOME OF RS.72,647/ - IN RESPONSE TO THE NOTICE. THE AO PROCEEDED TO MAKE THE ADDITION OF RS.2,20,340/ - ON THE BASIS OF SEIZED MATERIAL FOUND . T HE EXPLANATION OFFERED BY THE ASSESSEE WAS FOUND TO BE NON - ACCEPTABLE BY THE AO ON THE ACCOUNT OF THE FOLLOWING FACTS: - 2.3. THE ABOVE REPLY OF THE ASSESSEE HAS BEEN CONSIDERED BUT IS NOT FOUND SATISFACTORY. IT WOULD BE PERTIN ENT TO REITERATE THAT THE ASSESSEE IS THE ACCOUNTANT OF SHRI.B.M.GUPTA AND DURING THE COURSE OF SEARCH BOOKS OF ACCOUNT AND DOCUMENTS WERE SEIZED IN WHICH HIS (ASSESSEE S) NAME IS APPEARING IN THE LEDGER BOOKS AS ONE OF THE PARTIES WHO HAD ADVANCED CASH LO ANS THROUGH SHRI B.M.GUPTA AND EARNED INTEREST THEREON. ON SUCH ADVANCES COMMISSION WAS EARNED BY SHRI B.M.GUPTA @ 10 PAISE PER RS.100. THE SAID COMMISSION INCOME HAS BEEN SURRENDERED BY SHRI.B.M . GUPTA AS HIS UNACCOUNTED COMMISSION INCOME AND HAS PAID TA XES THEREON. SINCE, COMMISSION EARNED BY S H RI B.M.GUPTA HAS BEEN DECLARED FOR TAX, IT IS CLEAR AND THERE IS LEFT NOT EVEN AN IOTA OF DOUBT THAT THE ABOVE SUMS OF RS.2 LAC, RS.10 LAC, RS.10 LAC AND RS.32 LAC HAVE BEEN ADVANCED BY THE ASSESSEE THROUGH HIM ( SHRI B.M.GUPTA). MORE INTERESTING AND IMPORTANT FACETS OF THIS CASE ARE THAT THE ASSESSEE HAS HIMSELF WRITTEN ALL THE BOOKS OF ACCOUNT OF SHRI B.M.GUPTA WHICH WERE SEIZED DURING THE COURSE OF SEARCH FROM THE BUSINESS PREMISES OF S H RI GUPTA AND ALSO FROM T HE RESIDENCE OF S H RI RAM AVTAR SINGHAL (THE ASSESSEE). IT IS ALSO WORTH MENTIONING HERE THAT IN HIS OWN STATEMENT RECORDED U/S 132 BEFORE THE INVESTIGATION WING, HE HAS ADMITTED THAT ALL THE SEIZED BOOKS OF ACCOUNTS OF SHRI GUPTA HAVE BEEN WRITTEN BY HIM IN HIS OWN HANDWRITING. HE HAS ALSO FURTHER DEPOSED THAT RA APPEARING IN THE SEIZED BOOKS OF ACCOUNTS IS MYSELF - RAM AVTAR BUT NOW AT THE STAGE OF ASSESSMENT PROCEEDINGS NOT ONLY HE IS TOTALLY NON - COOPERATIVE (HE DID NOT ATTEND WHEN SUMMONS WERE ISSUE D FOR PERSONAL APPEARANCE ON 21.12.06), BUT ALSO HE IS DENYING HAVING ADVANCED AND CASH LOANS AND HAVING EARNED ANY INTEREST INCOME THEREON. AS PER HIS STATEMENT RECORDED ON 15.12.2004 WHEN THE ENTRY OF RA APPEARING IN THE SEIZED DOCUMENTS AND CONTAINED INTEREST OF RS.10,340 WAS CONFRONTED TO HIM HE HIMSELF HAS ADMITTED THIS ENTRY AS BELONGING TO HIM (RAM AVTAR). THEREFORE THE ABOVE CASH LOAN ADVANCES OF RS.2 LAC, RS.10 LAC, RS.10 LAC AND RS.32 LAC ARE HELD TO BE BELONGING TO THE ASSESSEE FOR THE ASSESS MENT YEAR 2002 - 03, 2003 - 04 AND 2004 - 05. 4 . AGGRIEVED BY THIS, THE ASSESSEE CAME IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. I N THE CONTEXT OF THE GROUND ARGUED BEFORE THE ITAT THE LD. AR INVIT ED ATTENTION TO PAGE 2 & 3 OF THE IMPUGNED ORDER WHEREIN THE GROUNDS RAISED BY THE ASSESSEE ARE FOUND REPRODUCED . IN SUPPORT OF THE GROUND REFERRING TO THE FINDINGS UNDER CHALLENGE IT WAS SUBMITTED THAT THE LD.CIT(A) MERELY I.T.A .NO. - 1558/ DEL/2014 PAGE 3 OF 4 JUSTIFIES WHY THE AO MADE THE ADDITION WITHOUT CARING T O ADDRESS THE ARGUMENT OF THE ASSESSEE. THE ARGUMENT IT WAS SUBMITTED ARE ADDRESSED IN ONE LINE IN PARA 1.1 WITHOUT BRINGING OUT WH A T WERE THE ARGUMENTS. ACCORDINGLY IT WAS HIS SUBMISSION THAT THE FINDING IS A NON - SPEAKING FINDING AND CANNOT BE UPHELD. 5. THE LD.SR.DR RELIED UPON THE IMPUGNED ORDER HOWEVER COULD NOT DISPUTE THAT THE DISCUSSION ON SUBMISSIONS OF THE ASSESSEE ARE MISSING. 6. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD, I FIND THAT O N FACTS THE C O R R E C T N E S S O F T H E PLEADINGS OF THE LD.A R ARE BORNE OUT FROM RECORD. FOR READY - REFERENCE, THE RELEVANT EXTRACT IS REPRODUCED HEREUNDER: - 1.1. I HAVE CONSIDERED THE GROUNDS RAISED IN APPEAL AND THE FACTS OF THE CASE. I HAVE ALSO CONSIDERED THE SUBMISSION FILED BY THE AR OF THE APPELLANT. 1.2 THE ASSESSING OFFICER HAS MADE ADDITION ON ACCOUNT OF UNEXPLAINED CASH LOAN AND INTEREST EARNED ON CASH LOAN ADVANCED. THE APPELLANT HAS CHALLENGED BOTH THE ADDITIONS. IT IS SEEN FROM THE ORDER OF ASSESSMENT THAT THE APPELLANT WAS WORKING AS ACCOUNTAN T FOR OVER 20 YEARS WITH THE SHRI B.M. GUPTA ON WHICH SEARCH U / S 132 HAD TAKEN PLACE. FROM THE SEIZED MATERIAL THERE WAS EVIDENCE THAT THE APPELLANT HAD ADVANCED CASH LOAN TO SHRI GUPTA DURING THE BLOCK ASSESSMENT YEARS 2002 - 03, 2003 - 04 AND 2004 - 05 AND ALS O EARNED INTEREST INCOME THEREON. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE SAID CASH LOAN WHICH THE APPELLANT MISERABLY FAILED TO EXPLAIN. THE ASSESSING OFFICER HAS CORRECTLY MADE THE ADDITION OF THE SAID CASH LOAN IN THE ABSE NCE OF THE EVIDENCE TO PROVE THE SOURCE WHEREAS THERE IS CONCLUSIVE EVIDENCE THAT THE AMOUNT BELONGS TO THE APPELLANT ONLY. THE APPELLANT'S NAME IS APPEARING IN THE LEDGER BOOKS AS ONE OF THE PARTIES WHO HAD ADVANCED CASH LOANS TO SHRI GUPTA AND EARNED INT EREST THEREON. ON SUCH ADVANCES COMMISSION WAS EARNED BY SHRI GUPTA @ 10 PAISE PER RS.100. THE SAID COMMISSION INCOME WAS SURRENDERED BY SHRI GUPTA AS HIS UNACCOUNTED COMMISSION INCOME AND TAX HAS BEEN PAID ON THE SAME. HENCE THE ASSESSING OFFICER HAS RIG HTLY DRAWN THE CONCLUSION TH A T SINCE COMMISSION EARNED BY SHRI GUPTA HAS BEEN DECLARED FOR TAX THE SOURCE OF THE SAID ADVANCE IS NOTHING BUT THE APPELLANT SPECIFICALLY IN VIEW OF THE LEDGER ENTRIES IN THE NAME OF THE APPELLANT WHO HAS ADVANCED THE CASH TO SHRI GUPTA ON 10% INTEREST. THERE IS CONCLUSIVE PROOF IN THE FORM OF THE APPELLANT'S STATEMENT RECORDED U/S 132 AND LEDGER EN TRIES IN THE BOOKS OF ACC OUNTS WRITTEN BY THE APPELLANT IN HIS OWN HAND WRITING. THEREFORE, THE ASSESSING OFFICER HAS CORRECTLY AS SESSED THE CASH LOAN ADVANCES AND INTEREST EARNED THEREON AS APPELLANT'S INCOME. THERE IS NO NEED TO INTERFERE WITH THE ORDER OF ASSESSMENT. ALL THE GROUNDS RAISED IN APPEAL ARE DISMISSED. 7 . IN THE AFORE - MENTIONED PECULIAR FACTS AND CIRCUMSTANCES , CON SIDERING THE LIMITED PRAYER OF THE LD. AR AND FINDING THE GRIEVANCE TO BE CORRECT THE IMPUGNED ORDER IS SET ASIDE ON THE GROUNDS THAT IT IS A NON - SPEAKING ORDER . NOTHING HAS BEEN BROUGHT ON RECORD SHOW THAT THE ARGUMENTS PRESUMABLY I.T.A .NO. - 1558/ DEL/2014 PAGE 4 OF 4 ADVANCED DESERVED TO BE REJECTED. IN THE ABSENCE OF ANY DISCUSSION THEREON THE CORRECTNESS OF THE CONCLUSION CANNOT BE TESTED. I N THE LIGHT OF THE AFORE - MENTIONED PECULIAR FACTS AND CIRCUMSTANCES AND CONSIDERING THE SUBMISSIONS OF THE PARTIES BEFORE THE BENCH, THE IMPUGNED ORD ER IS SET ASIDE AND THE ISSUE IS RESTORED BACK TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 0 7 T H OF AUGUST, 2015. S D / - (DIVA SINGH) JUDICIAL MEMBER DATED: 0 7 / 0 8 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI