Sh. Rakesh Gupta, New Delhi V. ACIT, New Delhi

ITA 1598/DEL/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1745 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 02-07-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 18-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAGAN SOOD
• Assessee Lawyers: S K GUPTA
• Keywords: Income from undisclosed sources; Search and seizure; Assessment record
• Section: 142(1); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 1598 /DEL/201 4 (ASSESSMENT YEAR - 200 5 - 06 ) RAKESH GUPTA, C - 3/28 - 29, SECTOR - 15, ROHINI, NEW DLEHI - 110085. PAN - AJAPK4533H ( APPELLANT) VS ACIT, CENTRAL CIRCLE - 10, NEW DELHI (RESPONDENT ) APPELLANT BY SH.S.K.GUPTA, CA RESPONDENT BY SH.GAGAN SOOD, SR.DR ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 11.12.2013 OF CIT(A) - XXXII, NEW DELHI PERTAINING TO 2005 - 06 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: - 1. THE LD. CIT(A HAS ERRED BOTH IN LAW AND ON FA CTS IN CONFIRMING THE ADDITION OF RS.6,00,000/ - ON ACCOUNT OF PAYMENT MADE BY THE APPELLANT TO THE TENANT FOR VACATION OF THE PROPERTY. 2. THE APPELLANT CRAVES LEAVE TO ADD, DELETE, MODIFY/AMEND THE ABOVE GROUNDS OF APPEAL WITH THE PERMISSION OF THE HON BLE BENCH. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED BY THE INVESTIGATION WING WHER EIN OF THE DEPARTMENT ON 26.04.2010 IN SH. VISHESH GUPTA AND RAKESH GUPTA GROUP OF CASES. IN THE SAID SEARCH THE ASSESSEE S BUSINESS PREMISES AT C - 3/28 - 29, SECTOR - 15, ROHINI, DELHI W ERE ALSO COVERED. THE CASE WAS CENTRALIZED BY AN ORDER U/S 127 OF THE INCOME TAX ACT, 1961 VIDE F.NO.CIT - XIII/127/2010 - 11/756 DATED 11.08.2010 IN CENTRAL C IRCLE - 10, NEW DELHI ACCORDINGLY NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESSEE ON 11.04.2011 REQUIRING THE ASSESSEE TO FILE ITS RETURN. THE ASSESSEE ENCLOSED A COPY OF THE RETURN U/S 139(1) DECLARING AN INCOME OF RS.1,49,960/ - AND REQUESTED VIDE LE TTER DATED 30.05.2012 THAT IT MAY BE TREATED AS HAVING BEEN FILED U/S 153A. ACCORDINGLY AFTER ISSUANCE OF NOTICE U/S 142(1) AND 143(2) ETC. THE ASSESSEE WAS REQUIRED TO DATE OF HEARING 02 .0 7 .2015 DATE OF PRONOUNCEMENT 12 .0 8 .2015 I.T.A .NO. - 1598/ DEL/2014 PAGE 2 OF 5 EXPLAIN THE CONTENTS OF THE SEIZED DOCUMENT AT PAGE 35 OF ANNEXURE A - 6 PARTLY E - 1, WH ICH DISCLOSED THAT AN AGREEMENT HAD BEEN MADE BY THE ASSESSEE WITH SMT. RAJIA BAGEM, W/O - LATE SHREE ABDUL HAFFIZ, S/O - CHOTA KHAN DATED 09.02.2005 TO VACATE THE PROPERTY NO. - 3838, GORUND FLOOR, NEW DELHI FOR A PAYMENT OF RS. 6 LACS. REFERRING TO THE STATEM ENT RECORDED UNDER OATH OF 04.08.2010 WHEREIN THE RAKESH GUPTA HAS STATED THAT THE SAID PAYMENT WAS MADE BY CASH. THE SAID QUESTION AND ANSWER WAS CONFRONTED TO THE ASSESSEE . T HE SAME IS REPRODUCED HEREUNDER: - Q.16. I AM SHOWING YOU PAGE 35 OF ANNEXURE A - 6 PARTY E - 1. PLEASE EXPLAIN THE CONTENTS OF THIS DOCUMENTS? ANS: I HAVE PAID RS.6 LACS IN CASH FOR VACATE MY SHOP OUT OF MY REGULAR INCOME 3. AFTER C ONFRONTING TH E ABOVE QUESTION AND THE ANSWER THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE SAME. THE ASSESSEE S EXPLANATION DATED 18.03.2013 THAT HE ALONGWITH HIS WIFE M R S. MANJU GUPTA HAD PAID THIS MONEY FROM THEIR PAST SAVINGS AND REGULAR INCOME DISCLOSED EARLIER IN THEIR INCOME TAX RETURNS WAS NOT ACCEPTED BY THE AO. THE ASSESSEE IS FOUND TO HAVE EXPLAINED THAT SINCE THE PROPERTY WHICH WAS STUCK WITH SOME MISCHIEVOUS PERSONS NECESSITATED PAYMENT IN CASH A VAILABLE IN THE HANDS OF THE ASSESSEE AND HIS W IFE AND FROM THE DISCLOSED INCOME AND SAVINGS IN ORDER TO GE T RID OF THE MISCHIEVOUS PERSONS WAS NOT ACCEPTED CONSIDERING THE FACT THAT THE DECLARED RETURN OF THE ASSESSEE WAS RS.1,49,960/ - , THE SOURCE OF PAYMENT OF RS.6 LACS WAS CONSIDERED TO BE FROM UNEXPLAINED SOURCES. 4 . IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE SUBMISSIONS MADE BEFORE THE AO WERE AGAIN RE - ITERATED. FOR READY - REFERENCE, THESE ARE EXTRACTED FROM PARA 6.3 OF THE IMPUGNED ORDER : - GROUND NO. 2 THE LEARNED A.O. HAS ADDED RS. 6,00,000/ - AS INCOME FROM UNEXPLAINED SO URCES FOR THE PAYMENT MADE TO TENANT IN THIS REGARD IT IS SUBMITTED THAT THE MR. RAKESH GUPTA AGED AROUND 54 YEARS AND HIS WIFE MRS. MANJU GUPTA AGED AROUND 53 YEARS ARE A REGULAR INCOME TAX ASSESSEE SINCE MORE THEN 20 YEARS. ASSESSEE AND HIS WIFE MRS. MA NJU GUPTA HAVE PAID THIS MONEY FROM THEIR PAST SAVINGS AND REGULAR INCOME DISCLOSED EARLIER IN INCOME TAX RETURN. MR. RAKESH GUPTA AND HIS WIFE PAID THIS MONEY FROM THE CASH IN HAND AVAILABLE WITH THEM. THESE CASH WAS FROM THEIR DISCLOSED INCOME AND SAVING S ONLY. BUT DUE TO THEIR PROPERTY STUCK - UP WITH SOME MISCHIEVOUS PERSON AND THEY HAVE TO PAY THEIR HARD EARNED MONEY TO THEM FOR GET RID OF HIM FROM HIS PROPERTY. THESE ALL FACTS WERE DULY I.T.A .NO. - 1598/ DEL/2014 PAGE 3 OF 5 SUBMITTED AND EXPLAINED TO THE LEARNED AO. DURING THE COURSE OF ASS ESSMENT. IT IS FURTHER SUBMITTED THAT IN CASE OF AN ASSESSEE AND HIS SPOUSE FILING THEIR TAXABLE RETURN FROM LAST 20 - 22 YEARS AND LIVING IN A VERY REASONABLE LIFESTYLE WITH IN THEIR HOUSE ACCUMULATION OF ABOVE - SAID AMOUNT IS JUSTIFIABLE AND REASONABLE. GROUND NO. 3 THE LEARNED A.O. WHILE MAKING ADDITION OF RS. 6 LACS AS INCOME FROM UNDISCLOSED SOURCES FOR THE A/Y 2005 - 06 IGNORED THE FACT THAT THE ABOVE CASH WAS OUT OF INCOME AND SAVING OF THE ASSESSEE BROUGHT FORWARD FROM PREVIOUS YEARS WHICH WERE BEYON D THE 6 ASSESSMENT YEARS COVERED UNDER 153A OF THE INCOME TAX ACT, L961. THE ASSESSEE HAS ALSO SUBMITTED DURING THE COURSE OF ASSESSMENT DETAILED CHART OF YEAR - WISE CASH RETAINED BY HIM AND HIS WIFE TO THE LEARNED AO. THE A.O DID NOT DRAWN ANY ADVERSE INFE RENCE FOR THE YEAR - WISE CASH DETAIL SUBMITTED AND NOT REJECTED THE SAME. COPY OF CHART IS ENCLOSED. HENCE ADDITION MADE BY THE LEARNED AO. BEYOND THE PERIOD MENTIONED IN SECTION 153 A I.E. 6 A/Y IS AGAINST THE PROVISIONS OF LAW AND MAY BE DELETED. HENCE, I T IS HEREBY PRAYED THAT THE ORDER OF THE LEARNED ASSESSING OFFICER BEING ARBITRARY, ERRONEOUS AND AGAINST THE LAW, THE APPEAL OF THE ASSESSEE MAY KINDLY BE ALLOWED.' 4.1 . THESE SUBMISSIONS WERE ALSO NOT ACCEPTED BY THE CIT(A) WHO CONSIDERED THE DETAILED CHART AS BEING FILED MOTIV AT E D BY THE DESIRE TO EXPLAIN THE AVAILABILITY OF CASH OF RS. 6 LACS. 5 . AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BOTH THE PARTIES WERE HEARD. CONSIDERING THE FACT THAT THE CIT(A ) HAS MERELY DISMISSED , T HE DETAILED YEAR - WISE CHART OF AVAILABILITY OF CASH WITH HIM AND HIS WIFE AS BEING MOTIVATED WITHOUT CONSIDERING THE CORRECTNESS OF THE CLAIM BIASED AND MAKES THE CONCLUSION UNSUSTAINABLE IN LAW. THE LD.AR IN THE CIRCUMSTANCES WAS REQUIRED TO ADDRESS WHETHER HE W OULD W ANT TO GO BACK TO THE CIT(A) FOR A SPECIFIC FINDING AS THE FINDING ARRIVED AT IN PARA 7 IS VAGUE AND GENERAL AND CANNOT BE SUSTAINED. IT IS SEEN THAT THE ASSESSEE ON BEING QUESTIONED SOUGHT TO EXPLAIN THE AVAILABILITY OF THE C ASH OVER THE YEAR S WITH HIM BY BRING ON RECORD THAT BOTH THE HUSBAND AND WIFE BEING INCOME TAX A S SESSEE S FOR ALMOST 20 - 22 YEARS AND HAD RETAINED YEAR - WISE CASH WITH HIM AND HIS WIFE . THUS THE LD.CIT(A WAS ONLY REQUIRED TO ADDRESS THE CORRECTNESS OF THE CLAIM AND NOT CAST AS PERSONS ON THE MOTIVATION OF THE CLAIM AS THE MOTIVE STOOD EXPLAINED BY THE FACT THAT THE AO HAD REQUIRED TO EXPLAIN THE AVAILABILITY OF CASH. HOWEVER, T HE LD.AR IN THE FACTS OF THE PRESENT CASE SUBMITTED THAT HE WOULD BE SATISFIED I F A PART RELIEF IS GRANTED TO THE ASSESSEE AT THIS STAGE AS CONSIDERING THE SMALLNESS I.T.A .NO. - 1598/ DEL/2014 PAGE 4 OF 5 OF THE AMOUNTS, THE LITIGATION COST TO THE ASSESSEE ITSELF WOULD BE DETRIMENTAL. IN THESE CIRCUMSTANCES, IT WAS HIS SUBMISSION HE WOULD BE SATISFIED THAT THE RELIEF TO T HE EXTENT OF RS.4 LACS MAY BE ALLOWED. I N ORDER TO ESTABLISH THE REASONABLENESS OF HIS CLAIM AND THE FINDING BEING BIASED , THE FOLLOWING FINDING OF THE CIT(A) WAS READ OUT BY THE LD.AR : - 7. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE WRITTEN SUBMISSI ONS OF THE APPELLANT. I HAVE ALSO PERUSED THE ASSESSMENT RECORD FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. CONSIDERING THE FACTS OF THE CASE I FIND THAT THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING THE IMPUGNED ADDITION AS THE APPELLANT HAD FAILED TO EX PLAIN THE AVAILABILITY OF CASH WITH ANY DOCUMENTARY EVIDENCE. THE CHART OF AVAILABILITY OF YEAR WISE CASH FILED IN THE COURSE OF ASSESSMENT PROCEEDINGS WAS MOTIVATEDLY FILED IN ORDER TO EXPLAIN THE CASH OF RS.6,00,000/ - PAID FOR GETTING PROPERTY VACATED. IT WAS A MERE AFTERTHOUGHT. IT IS ALSO UNBELIEVABLE FACT THAT THE APPELLANT AND HIS WIFE WOULD KEEP SUCH HUGE CASH AT HOME YEAR AFTER YEAR I.E. SINCE 1996 - 1997. THEREFORE, CONSIDERING THE FACTS OF THE CASE I FIND THAT THERE IS NO REASON TO INTERFERE AND IN TERFERE IN THE ORDER PASSED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ADDITION OF RS.6,00,000/ - MADE BY THE ASSESSING OFFICER AS INCOME FROM UNEXPLAINED SOURCES IS CONFIRMED. 6 . REFERRING TO THE ABOVE FINDING OF THE LD. CIT(A), THE LD. SR.DR WAS REQUIRE D TO ADDRESS ON WHAT BASIS THE CLAIM SUPPORTED BY A DETAILED CHART YEAR - WISE EXPLAINING CASH RET AINED BY THE ASSESSEE AND HIS WIFE HAS BEEN REJECTED AND ADVANCE ARGUMENTS ON PART RELIEF SOUGHT BY THE ASSESSEE. THE LD.SR.DR IN REPLY STATED THAT IN THE CIRC UMSTANCES PART RELIEF MAY BE CONSIDERED HOWEVER NOT TO THE F ULL EXTENT AS SUGGESTED BY THE LD. AR. 7. HAVING HEARD THE RIVAL SUBMISSIONS OF T HE PARTIES AND CONSIDERED THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE ON RECORD , I AM OF THE VIEW THAT THE FINDING UNDER CHALLENGE CANNOT BE SUSTAINED AS INSTEAD OF ADDRESSING THE CORRECTNESS OF THE CLAIM THE LD.CIT(A) HAS INSTEAD DIGRESSED TO DOUBTING THE MOTIVE TO EXPLAIN. THE LOGIC APPLIED IS SELF - DEFEATING AS WHEN AN ASSESSEE IS CALLED UPON TO EXPLAIN THE C LAIM THE EXPLANATION OFFERED NECESSARILY IS MOTIVATED TO SUPPORT THE CLAIM AND CANNOT BE USED AS A REASON TO NOT LOOK INTO THE SAME. IN THESE PECULIAR FACTS AND CIRCUMSTANCES, AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES ON THE LIMITED PLEA BEFORE THE BENCH. CONSIDERING THE UNDISPUTED FACT THAT THE ASSESSEE AND HIS WIFE HAVE BEEN INCOME TAX ASSESSEE FOR A PERIOD OF 20 - 22 YEARS. IT IS DEEMED APPROPRIATE TO ALLOW THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS.3.5 LACS. THE ESTIMATE AT RS.3.5 LACS WAS ARRIVED AT AFTER HEARING BOTH THE PARTING AND WAS NOT OBJECTED TO BY THE LD. SR.DR WHO INFACT AGREED TO I.T.A .NO. - 1598/ DEL/2014 PAGE 5 OF 5 THE SAID ESTIMATE. T HE LD AR ON THE OTHER HAND STATED THAT THE ASSESSEE ALSO WOULD NOT CONTEST THE ISSUE FURTHER AND WOULD BE SAT ISFIED WITH THE RELIE F GRANTED. IN THE AFORE - MENTIONED PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE AVAILABILITY OF CASH AMOUNT ING T O RS.3.5 LACS IN THE HANDS OF THE ASSESSEE FROM HIS OWN SAVINGS AND THAT OF HIS WIFE OVER THE YEARS IS ACCEPTED. ACCORDINGLY IN TERMS OF TH E ABOVE, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE SAID ORDER WAS PRONOUNCED AT THE TIME OF HEARING ITSELF. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COU RT ON 1 2 T H OF AUGUST, 2015. S D / - (DIVA SINGH) JUDICIAL MEMBER DATED: 1 2 /08 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI