Mr. Tribhuwan Singh, Ghaziabad V. ACIT, Ghaziabad

ITA 1790/DEL/2011

• Counselvise Citation: 179020114 RSA 2011
• Duration Of Justice: 4 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 17-06-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 13-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDRELEAR
• Keywords: Search and seizure; Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. H.S.SIDHU , JM ITA NO. 1790/DEL/2011 : ASSTT . YEAR : 2004-05 TRIBHUWAN SINGH C/O. S.K. BAJAJ, ADVOCATE 106-NAVYUG MARKET GHAZIABAD VS ACIT CIRCLE-2 GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. ABVPS6123J APPELLANT BY : SH. C.S.AGARWAL, SR. ADVT., SH. R .P.MALL, ADV. RESPONDENT BY : SH. J.P.CHANDRELEAR, SR. DR DATE OF HEARING : 17.06.2015 DATE OF PRONOUNCEMENT : 17.08.2015 ORDER PER N.K. SAINI, A.M. THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 8.2.2011 OF CIT(A), GHAZIABAD. 2. GROUND NO. 1, 3 AND 7 ARE GENERAL IN NATURE S O THESE GROUNDS DO NOT REQUIRE ANY COMMENTS ON OUR PART. GROUND NO. 2 IS CO-RELATED WITH THE REMAINING GROUNDS I.E. GROUND NOS. 4 TO 6. THEREFORE, THIS GROUND WILL BE ADJUDICATED ALONG WITH THE GROUND NO . 4 TO 6. 3. VIDE GROUND NOS. 4 TO 6 THE GRIEVANCE OF THE ASSESSEE RELATES TO THE SUSTENANCE OF ADDITION OF RS. 4,60,000/- MAD E BY THE A.O. ITA NO.1790/DEL/2011 TRIBHUVAN SINGH 2 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSES SEE ENJOYED THE INCOME FROM SALARY, HOUSE PROPERTY, CAPITAL GAIN AN D FROM OTHER SOURCES. THE ASSESSEE FILED THE RETURN OF INCOME DE CLARING INCOME OF RS. 3,60,000/-, LATER ON A SEARCH AND SEIZURE OPERA TIONS U/S 103 READ WITH SECTION 165 OF THE CRIMINAL PROCEDURE CODE BY THE C.B.I AT THE RESIDENTIAL PREMISES OF THE ASSESSEE AND HIS WIFE W HICH WAS FOLLOWED BY SEARCHES AT BANK LOCKERS, WAS CONDUCTED ON 10.07 .2003 ON THE PREMISES OF THE ASSESSEE AND HIS BANK LOCKERS. AS A RESULT OF THE SEARCH FOLLOWING AMOUNT OF INDIAN CURRENCY WAS RECO VERED AND SEIZED :- I) FROM FLAT NO. V-10. SATYA SADAN, CHANAKAYAPURI. N.DELHI. CASH FOUND RS. 2,27,000/- BUT SEIZED ONLY RS. 2,20,000/- RS. 2,20,000/- II) FROM BANK LOCKER NO. 9 WITH STATE BANK OF BIKA RNER & JAIPUR, NOIDA, U.P. HELD JOINTLY IN THE NAMES OF SHRI TRIBHUVAN SINGH AND HIS WIFE, SMT. VENEETA SIN GH RS. 3,00,000/- III) FROM LOCKER NO. 294 WITH SYNDICATE BANK, MAYUR VIHAR, PHASE-I, NEW DELHI HELD IN THE NAME OF SMT. VINEETA SINGH, JOINTLY WITH HER DOMESTIC SERVANT, SMT. KALINDI RS. 16,33,000/- TOTAL RS. 21,53,000/- 5. THE AO FRAMED THE ASSESSMENT AT AN INCOME OF RS. 29,44,920/-, AN ADDITION OF RS. 4,81,916/- WAS MADE, ON SUBSTANT IVE BASIS WHICH WAS THE SUM OF REIMBURSEMENT RECEIVED FROM NDMC AS MEDICAL EXPENSES ON THE TREATMENT OF HIS WIFE MRS. VINEETA SINGH TREATING THE SAME AS PERQUISITIES BESIDES THAT THE AO MADE THE A DDITION OF THE INDIAN CURRENCY RECOVERED AND SEIZED ON PROTECTIVE BASIS. ITA NO.1790/DEL/2011 TRIBHUVAN SINGH 3 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MA TTER TO THE LD. CIT(A) WHO VIDE IMPUGNED ORDER DATED 8.2.2011 DELET ED THE ADDITION OF RS. 4,81,916/- AND SUSTAINED THE ADDITION OF RS. 4,60,000/- ON SUBSTANTIVE BASIS OUT OF THE ADDITION OF RS. 21,5 3,000/- MADE BY THE AO ON PROTECTIVE BASIS. THE ABOVE SAID AMOUNT OF RS. 4,60,000/- WAS O UT OF RS. 2,20,000/- CASH FOUND AND SEIZED BY CBI FOR THE COM MON RESIDENTIAL PREMISES AND RS. 3,00,000/- CASH FOUND FROM LOCKER NO. 9, STATE BANK OF BIKARNER AND JAIPUR, NOIDA, UTTAR PRADESH O UT OF ABOVE SAID AMOUNT OF RS. 5,20,000/- (RS. 2,20,000+3,00,000) TH E LD. CIT(A) ALLOWED THE DEDUCTION OF RS. 60,000 BEING AMOUNT OF CASH BALANCE IN HANDS, OUT OF PAST SAVINGS. NOW THE ASSESSEE IS IN APPEAL. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT LOCKER NO. 9 WAS IN THE JOINT NAME OF THE ASSESSEE AND HIS WIFE AND PRIOR TO THE DATE OF SEARCH I.E. ON 10.07.2003, LOCKER HAS BEEN OPERATED 7 TIMES AND ON ALL THE OCCASIONS WIFE OF THE ASSESSEE SMT. VINEETA SINGH OPERATED THE LOCKER. REFERENCE WAS MADE TO PAGE NO. 237 AND 238 OF THE ASSESSEES PAPER BOOK. IT WAS ACCORDINGLY SUBMI TTED THAT THE ADDITION SUSTAINED OF RS. 3,00,000/- FOUND FROM THE LOCKER NO. 9 STATE BANK OF BIKANER AND JAIPUR IN THE HANDS OF THE ASSE SSEE WAS FULLY UNWARRANTED AND LIABLE TO BE DELETED. IT WAS FURTHE R SUBMITTED THAT THE SUM OF RS. 2,20,000/- BELONGED TO THE WIFE OF THE A SSESSEE AND IT WAS CLAIMED BY HER. THEREFORE, THE LD. CIT(A) WAS NOT J USTIFIED IN THE ITA NO.1790/DEL/2011 TRIBHUVAN SINGH 4 ABSENCE OF ANY OTHER FRESH EVIDENCE OR MATERIAL TO HOLD THAT THIS AMOUNT SHOULD BE ADDED ON SUBSTANTIVE BASIS IN THE HANDS OF THE ASSESSEE EVEN WHEN THE AO ADDED THE SAME ON PROTECT IVE BASIS. IT WAS STATED THAT THERE WAS NO SUPPORTIVE EVIDENCE T O HOLD THAT THE SAID AMOUNT BELONGED TO THE ASSESSEE. IT WAS FURTHER SUB MITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AFFIDAVITS WER E FURNISHED FROM THE PERSONS FROM WHOM CASH HAD BEEN RECEIVED BY THE WIFE OF THE ASSESSEE. THEREFORE, THE ADDITION MADE BY THE AO ON PROTECTIVE BASIS AND SUSTAINED BY THE LD. CIT(A) ON SUBSTANTIVE BASI S IN THE HANDS OF THE ASSESSEE WAS NOT JUSTIFIED. RELIANCE WAS PLACED ON THE FOLLOWING CASES LAWS :- 1. D.S.P. CHENNAI VS. K. INBASAGARAN IN 282 I TR 435 (S.C) 2. S.N.GANGULY VS. COMMR. OF INCOME-TAX REPORTE D IN 24 ITR 16 (PATNA) 3. TOLARAM DAGA VS. COMMISSIONER OF INCOME-TAX REPORTED IN 59 ITR 632 (GAUHATI) 4. RAMKINKAR BANERJI VS. COMMISSIONER OF INCOME TAX 4 ITR 108 (PATNA) 5. JAN MOHAMMED, NAINITAL VS. THE COMMR. OF INC OME TAX 23 ITR 15 (ALL) 6. SHANKARBHAI KHODABHAI BHOI VS. ACIT REPORTED IN 59 ITD 364 7. ABDULLA GANI VS. ACIT REPORTED IN 43 ITD 180 8. MEHTA PARIKH AND CO. VS. CIT (1956) 30 ITR 181 ( SC) 9. SONA ELECTRIC CO. VS. CIT REPORTED IN 152 ITR 507 (DEL) 10. PARASHURAM POTTERY WORKS CO. LTD. VS. ITO REPO RTED IN 106 ITR 1 AT 10) 11. OMAR SALAY MOHAMMAD SAIT VS. CIT . 37 ITR 151 (SC) 12. DHIRAJLAL GIRDHARILAL VS. CIT, 26 ITR 736 (SC) , 13. DHAKESHWARI COTTON MILLS ITD. VS. CIT 26 ITR 77 5 (SC) 14. LAL CHAND BHAGAT AMBICA RAM VS. CIT 37 ITR 288 (SC) 7. IN HIS RIVAL SUBMISSIONS, THE LD. DR STRONG LY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND FURTHER SUBMITTED THAT SINCE THE AMOUNT WAS RECOVERED FROM THE COMMON RESI DENCE OF THE ASSESSEE AND THE LOCKER IN THE JOINT NAME OF THE AS SESSEE AND HIS WIFE. ITA NO.1790/DEL/2011 TRIBHUVAN SINGH 5 THEREFORE, THE CASH BELONGED TO THE ASSESSEE AND WA S RIGHTLY ADDED IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOT H THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE SUM OF RS. 2,2 7,000/- WERE FOUND FROM THE COMMON RESIDENTIAL PREMISES OF THE ASSESSE E AND HIS WIFE SMT. VINEETA SINGH AT FLAT NO. V-10 SATYA SUDAN, NE W DELHI OUT OF THE SAID CASH A SUM OF RS. 2,20,000/- WAS SEIZED. T HE SAID AMOUNT WAS CLAIMED TO BE BELONGING TO SMT. VINEETA SINGH W IFE OF THE ASSESSEE, WHO IS ASSESSED TO TAX AND FILING THE RET URN OF INCOME COPY OF WHICH IS PLACED AT PAGE NO. 1 TO 18 OF THE ASSES SEES PAPER BOOK STATEMENT OF SMT. VINEETA SINGH WAS RECORDED, (COPY OF WHICH IS PLACED AT PAGE NO. 144 TO 148 OF THE ASSESSEES PAP ER BOOK) IN THE SAID STATEMENT SMT. VINEETA SINGH SAID THAT HER MOT HER IN LAW SMT. SHAKUNTLA DEVI HAD BEEN LIVING WITH THEM, WHO WAS R EGULARLY DRAWING CASH FROM HER PENSION ACCOUNT AND HAD BEEN GIVING ALL SUCH CASH TO HER (SMT. VINEETA SINGH) FOR PERSONAL NEEDS . SHE ALSO STATED THAT HER SON SH. ANANT SINGH WAS WORKING WITH WIPRO SPECTRUM MINE WHO WAS GIVING SUBSTANTIAL CASH TO HER OUT OF THE WITHDRAWAL FROM HIS SALARY. SMT. VINEETA SINGH WHO IS AN ARC HITECT BY QUALIFICATION, IN PARA E OF HER STATEMENT STATED AS UNDER :- THE BASIC SYSTEM OF OUR HOUSE HOLD HAS BEEN THAT WHATEVER CAS H IS DRAWN BY HUSBAND MY SON AND MY MOTHER IN LAW, THEY GIVE ME A S THEIR ITA NO.1790/DEL/2011 TRIBHUVAN SINGH 6 COMMITMENT TOWARDS THE HOUSEHOLD, BECAUSE I MANAGE THE HOUSEHOLD AFFAIRS. MY WAY OF RUNNING THE HOUSEHOLD HAS BEEN T O RUN THE HOUSEHOLD BY USING EITHER MINE OR MY HUSBANDS MON EY, BUT NOT TO TOUCH THE MONEY OF MY SON AND MOTHER IN LAW AS FAR AS POSSIBLE. IN HER STATEMENT SMT. VINEETA SINGH STATED THAT THE CA SH WHICH HAD BEEN SEIZED BY THE CBI WAS NOT REFLECTED IN ACCOUNTS AND OUT OF THAT ONLY 40,000/- CASH BELONGED TO HER HUSBAND SHRI TRIBHUVA N SINGH AND REST WAS EITHER HER MONEY OR WAS WITH HER AS TRUST MONEY . THE STATEMENT OF SHRI TRIBHUVAN SINGH (THE ASSESSEE) WAS ALSO RE CORDED COPY OF WHICH IS PLACED AT PAGE NOS. 149 TO 152 OF THE ASSE SSEES PAPER BOOK, IN THE SAID STATEMENT, THE ASSESSEE ALSO STATED THA T ONLY RS. 40,000/- BELONGED TO HIM AND THE BALANCE MONEY EITHER BELONG ED TO HIS WIFE OR WAS THE TRUST MONEY WITH HER. FROM THE ABOVE STATEM ENTS, IT IS CLEAR THAT SMT. VINEETA SINGH OWNED THE MONEY WHICH WAS F OUND DURING THE COURSE OF SEARCH. THEREFORE, THE AO MADE THE AD DITION OF THE SAID AMOUNT ON SUBSTANTIVE BASIS IN HER HANDS SIMILAR WA S THE POSITION WITH REGARD TO THE CASH AMOUNTING TO RS. 3,00,000/- FOUND FROM BANK LOCKER NO. 9 WITH STATE BANK OF BIKANER AND JAIPUR, NOIDA HELD JOINTLY IN THE NAME OF THE ASSESSEE AND SMT. VINEE TA SINGH. IN THE PRESENT CASE, IT IS EVIDENT FROM PAGE NO. 238 OF T HE ASSESSEES PAPER BOOK THAT LOCKER WAS OPERATED BY SMT. VINEETA SINGH FROM 20.2.2003 TO 30.6.2003 EIGHT TIMES, ON 20.2.2003, 2.4.2003, 1 6.4.2003, 4.5.2003, 11.5.2003, 6.6.2003, 26.6.2003 AND 30.6.2 003 AND THE ITA NO.1790/DEL/2011 TRIBHUVAN SINGH 7 SEARCH BOOK PLACED ON 10.7.2003. THE ASSESSEE HAD NOT OPERATED THE SAID BANK LOCKER AFTER 16 TH FEBRUARY, 2003 AND TILL THE DATE OF SEARCH THEREFORE, THE CASH FOUND DURING THE COURSE OF SEAR CH IN THE SAID BANK LOCKER BELONGED TO SMT. VINEETA SINGH AND NOT TO TH E ASSESSEE. IN THAT VIEW OF THE MATTER. WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN TREATING THE CASH OF RS. 5,20,000/- ( RS. 2,20,000/- + RS. 3,00,000/-) FOUND DURING THE COURSE OF SEARCH IN TH E HANDS OF THE ASSESSEE PARTICULARLY WHEN HIS WIFE CLAIMED THAT TH E SAID CASH BELONGED TO HER. ACCORDINGLY, WE DELETE THE ADDITIO N OF RS. 4,60,000/- WHICH WAS DIRECTED BY THE LD. CIT(A) TO BE MADE IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS. AS REGA RDS TO THE ANOTHER ADDITION OF RS. 16,33,000/- ON ACCOUNT OF AMOUNT FO UND FROM LOCKER NO. 294 SYNDICATE BANK IN THE NAME OF SMT. VINEETA SINGH JOINTLY WITH HER DOMESTIC SERVANT, THE LD. CIT(A) ALTHOUGH STATED AT PAGE NO. 40 OF THE IMPUGNED ORDER THAT THIS CASH OF RS. 16,3 3,000/- WOULD BE TREATED AS BELONGING TO SMT. VINEETA SINGH AS THE A SSESSEE SHRI TRIBHUVAN SINGH IS NOT PARTY, HOWEVER, INADVERTENTL Y IT HAS BEEN MENTIONED THAT THE ADDITION TO THAT EXTENT CAN BE M ADE IN THE NAME OF THE ASSESSEE ON SUBSTANTIVE BASIS. 11. IN OUR OPINION, THAT OBSERVATION I.E. THE AD DITION CAN BE MADE IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS IS W RONG PARTICULARLY WHEN THE LD. CIT(A) HIMSELF ACCEPTED THAT THE LOCKE R NO. 294 SYNDICATE BANK WAS IN THE NAME OF SMT. VINEETA SING H WIFE OF THE ITA NO.1790/DEL/2011 TRIBHUVAN SINGH 8 ASSESSEE JOINTLY WITH HER DOMESTIC SERVANT AND THE ASSESSEE SHRI TRIBHUVAN SINGH WAS NOT PARTY TO THAT AND THE CASH OF RS. 16,33000/- WOULD BE TREATED AS BELONGING TO SMT. VINEETA SINGH . 12. WE, THEREFORE, ARE OF THE VIEW THAT THE OBSERV ATION OF THE LD. CIT(A) THAT THIS AMOUNT SHOULD BE TREATED IN THE HA NDS OF THE ASSESSEE WAS WRONG. ACCORDINGLY, WE DIRECT THE AO T O DELETE THIS ADDITION ALSO FROM THE HANDS OF THE ASSESSEE. 13. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLO WED. (ORDER PRONOUNCED IN THE COURT ON 17/08/2015) . SD/- SD/- (H.S.SIDHU) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17 /08/2015 *B.RUKHAIYAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITA NO.1790/DEL/2011 TRIBHUVAN SINGH 9 DATE INITIAL 1. DRAFT DICTATED ON 11/08/2015 PS 2. DRAFT PLACED BEFORE AUTHOR 12/08/2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.