ITO, New Delhi V. Sh Bhai Manjit Singh, New Delhi

ITA 1807/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65333 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 01-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 20-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: S R WADHWA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 144

Judgement Text

ITA NO.1807/D/2010 ASSTT.YEAR: 2006-07 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 1807/DEL/2010 ASSESSMENT Y EAR: 2006-07 INCOME TAX OFFICER, VS BHAI MANJIT S INGH, WARD 31(1), 28-A, PRITHVI RAJ ROAD, C. R. BUILDING, NEW DELHI. NEW DELHI. (PAN NO. BBFPS2318A) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R.S. NEGI, SR. DR RESPONDENT BY: SHRI S.R. WADHWA O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAI NST THE ORDER OF COMMISSIONER OF INCOME TAX(A)-XXVI, NEW DELHI DATED 24.2.2010 FOR A.Y. 2006-07 BY WHICH THE LD. COMMISSIONER OF INCOM E TAX(A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER PERTAINING T O THE AMOUNT OF CASH DEPOSITED. THE ONLY GROUND IN THIS APPEAL RAISED B Y THE REVENUE IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS.91,08,000/- BY ACCEPTING THE EXPLANATION GIVEN B Y THE ASSESSEE WITH REGARD TO SOURCE OF CASH DEPOSITED IN THE ITA NO.1807/D/2010 ASSTT.YEAR: 2006-07 2 F.Y. 2005-06 PURPORTED TO HAVE BEEN WITHDRAWN FROM HUFS ACCOUNT IN THE F.Y. 2003-04 WITHOUT CONSIDERI NG THE FACT THAT THE ASSESSEE WAS ALLOWED SUFFICIENT OPPORTUNITY TO EXPLAIN THE SOURCE OF THE AMOUNT OF CASH DEPOSITED. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED HIS RETURN FOR AY 2006-07 ON 31.3.2007 DECLARING AN INCOME OF RS.2,45,570 AND THE RETURN WAS PROCESSED AND SUBSEQUENTLY SELECTED FOR SCRUTINY ON THE BASIS OF AIR INFORMATION RECEIVED. THE ASSESSING OFFICER IS SUED A SHOW CAUSE NOTICE TO EXPLAIN THE SOURCE OF THE PAYMENT OF CASH DEPOSITED IN THE BANK ACCOUNT OF RS. 91,08,000/- . DESPITE SEVERAL OPPOR TUNITIES, THE ASSESSEE DID NOT SUPPORT THE ASSESSMENT PROCEEDINGS AND THE ASSE SSING OFFICER HAD NO OTHER ALTERNATIVE BUT TO DECIDE THE CASE ON MERITS U/S 144 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON THE BASIS OF MATERIAL AVAILABLE ON RECORD FOLLOWING THE PRINCIPLE OF BEST JUDGEMENT. THE ASSESSING OFFICER NOTED THAT IN THE ABSENCE OF ANY DETAILS, SOURCE OF INFORMATION PERTAINING TO THE CASH DEPOSITED BY THE ASSESSEE IN HIS HDFC BANK ACCOUNT, DEFENCE COLONY, NEW DELHI BRANCH ON D IFFERENT DATES AND THE SAME WAS TREATED AS INCOME OF THE ASSESSEE FROM UND ISCLOSED SOURCES AND THE SAME WAS ADDED TO THE RETURNED INCOME OF THE ASSESS EE. ITA NO.1807/D/2010 ASSTT.YEAR: 2006-07 3 3. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE COMMISSIONER OF INCOME TAX(A) AND THE SAME WAS ALLOWED BY THE IMPUG NED ORDER. THE OPERATIVE PORTION OF IMPUGNED ORDER IS BEING REPROD UCED BELOW:- 7. IN VIEW OF THE ABOVE FACTS, I HOLD THAT DURING THE YEAR, THE APPELLANT HAD DEPOSITED RS.32,86,000/- ON LY IN HIS SAVING BANK ACCOUNT WITH HDFC BANK. THIS FACT HAS BEEN DULY CONFIRMED BY THE SAID BANK. TO THIS EXTE NT, THE INFORMATION CONTAINED IN THE AIR INFORMATION SUFFER ED FROM ARITHMETICAL INACCURACY. SINCE THE ASSESSING OFFICER WAS ALSO NOT IN POSSESSION OF BANK STATEMEN T OR ANY CERTIFICATE FROM THE BANKERS, HE HAD NO OTHER ALTERNATIVE BUT TO TREAT THE AMOUNT MENTIONED IN TH AT REPORT AS THE AMOUNT OF CASH DEPOSITED BY THE APPEL LANT. THE APPELLANT HAS GIVEN A REASONABLE EXPLANATION TH AT SOME OF THE ENTRIES HAVE BEEN REPEATED IN THE AIR INFORMATION. THIS FACT IS CLEARLY PROVED BY THE CE RTIFICATE FROM THE HDFC BANK DATED 23.11.2009, WHICH WAS FURNISHED BEFORE ME. REGARDING THE UNDISPUTED AMOU NT OF RS.32,86,000/-, I HOLD THAT THE SOURCE OF THE SA ME GETS CLEARLY EXPLAINED BY AVAILABILITY OF HEAVY AMOUNT O F CASH FROM THE BANK ACCOUNT OF THE HUF OF WHICH THE APPEL LANT WAS THE KARTA. IT WAS INFORMED THAT IN VIEW OF THE PROLONGED ILLNESS OF THE APPELLANT, HIS WIFE USED T O MANAGE EVEN THE ACCOUNTS OF THE ABOVE HUF. THE APPELLANT HAS SUFFICIENTLY FURNISHED THE SOURCE FOR CASH WITHDRAWAL FROM THE HUF BANK ACCOUNT, WHICH WAS IN VIEW OF SALE OF THE HUF PROPERTY AT 28A, PRITHVI RA J ROAD, NEW DELHI, WHICH WAS RECEIVED BY CHEQUE AND F OR WHICH NECESSARY CONFIRMATION FROM THE BUYER WAS FURNISHED. IN VIEW OF THE ABOVE, THE CASH DEPOSIT OF RS.32,86, 000/- ALSO GET DULY EXPLAINED BY THE APPELLANT. I HAVE A LREADY HELD THAT THE DIFFERENCE BETWEEN AMOUNT OF RS.91,08,000/- AS PER THE AIR INFORMATION AND THE AMOUNT OF RS.32,86,000/- AS PER THE HDFC BANK, WAS AN ARITHMETICAL ERROR INADVERTENTLY CREPT IN THE AIR R EPORT. ITA NO.1807/D/2010 ASSTT.YEAR: 2006-07 4 HENCE THIS APPEAL BY THE REVENUE BEFORE THIS TRIBUN AL. 4. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTIE S IN THE LIGHT OF MATERIAL ON RECORD BEFORE US. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT DESPITE SEVERAL OPPORTUNITIES, THE A SSESSEE DID NOT SUPPORT THE ASSESSMENT PROCEEDINGS AND HE FAILED TO SUBMIT DETA ILED SOURCES AND INFORMATION REGARDING THE CASH DEPOSITED BY HIM IN HIS HDFC BANK ACCOUNT ON DIFFERENT DATES DURING THE YEAR UNDER CONSIDERAT ION. THEREFORE, THE ASSESSING OFFICER RIGHTLY ADDED THIS AMOUNT TO THE RETURNED INCOME OF THE ASSESSEE. HE FURTHER SUBMITTED THAT THE LD. COMMIS SIONER OF INCOME TAX(A) ADMITTED ADDITIONAL EVIDENCE WITHOUT FOLLOWING RULE 46A OF THE INCOME TAX RULES, 1962 AND IMPUGNED ORDER HAS BEEN PASSED ON U NREASONABLE AND BASELESS GROUNDS BECAUSE THE ASSESSEE INTENTIONALLY CONCEALED THE DETAILS AND INFORMATION PERTAINING TO CASH DEPOSITED BY HIM BEF ORE THE ASSESSING OFFICER. THEREFORE, THE IMPUGNED ORDER MAY BE SET ASIDE RESTORING THE ASSESSMENT ORDER. 5. THE ASSESSEES REPRESENTATIVE VEHEMENTLY CONTEST ED THE ABOVE SUBMISSIONS AND SUBMITTED THAT THE ASSESSING OFFICE R MADE AN ADDITION ON THE BASIS OF WRONG MATHEMATICAL CALCULATION AND MIS INTERPRETATION OF THE FACTS OF THE CASE. THE AR ALSO SUBMITTED THAT ASSE SSEE PROPERLY AND CLEARLY EXPLAINED THE SOURCE OF CASH DEPOSITED IN HDFC BANK ACCOUNT AS THERE WAS ITA NO.1807/D/2010 ASSTT.YEAR: 2006-07 5 SUFFICIENT AVAILABILITY OF CASH AMOUNT FROM THE BAN K ACCOUNT OF THE HUF OF WHICH THE APPELLANTS WIFE WAS KARTA AND THE APPELL ANT WAS VENDOR OF THE HUF. THE AR FINALLY SUBMITTED THAT THE ASSESSEE SU CCEEDED TO SUBSTANTIATE THE FACT THAT THE SOURCE OF CASH DEPOSITED TO HIS A CCOUNT WAS WITHDRAWALS FROM THE HUF BANK ACCOUNT TO WHICH SUFFICIENT FUNDS WERE DEPOSITED FROM SALE PROCEED RECEIVED BY THE HUF RELATING TO HUF PR OPERTY SITUATED AT 28A, PRITHVIRAJ ROAD, NEW DELHI WHICH WAS RECEIVED BY CH EQUE AND FOR WHICH NECESSARY CONFIRMATION FROM THE BUYER WAS ALSO FURN ISHED. 6. AT THE OUTSET, WE NOTE THAT THE LD. AR ADMITTED THAT THERE WAS A CALCULATION MISTAKE BY THE ASSESSING OFFICER AND TH E LD. COMMISSIONER OF INCOME TAX (A) RIGHTLY HELD THAT THE CASH WHICH WAS DEPOSITED TO THE HDFC BANK ACCOUNT WAS OF RS.32,86,000 ONLY, AS THE FIGUR ES WRONGLY TAKEN BY THE ASSESSING OFFICER. WE OBSERVE THAT THE ONLY DISPUT E IN THIS APPEAL IS PERTAINING TO CASH DEPOSIT OF RS.32,86,000 WHICH WA S ACTUALLY DEPOSITED TO THE ASSESSEES HDFC BANK ACCOUNT. THE AR HAS ALSO DRAWN OUR ATTENTION TOWARDS PAGE NO. 14 TO 16 OF PAPER BOOK WHICH SHOWS THAT THERE WAS A MEMORANDUM OF UNDERSTANDING (MOU) DATED 21 ST OCTOBER, 2003 BETWEEN BHAI MANJIT SINGH (HUF) THROUGH ITS KARTA SMT. MAHE EP MANJIT SINGH WIFE OF THE ASSESSEE AND M/S YAHOO PROPERTIES PVT. LTD. RELATED TO SALE OF PLOT AND CONSTRUCTION THEREON SITUATED AT 28-A, PRITHVIRAJ R OAD, NEW DELHI WITH A ITA NO.1807/D/2010 ASSTT.YEAR: 2006-07 6 TOTAL CONSIDERATION OF RS.29 CRORES WITH AN ADVANCE OF RS. 01.51 CRORES AT THE TIME OF EXECUTION OF MOU. WE HAVE ALSO PERUSED THE LETTER DATED 24.12.09 SUBMITTED BY THE ASSESSING OFFICER TO THE LD. COMMI SSIONER OF INCOME TAX(A) REGARDING ADMISSIBILITY OF ADDITIONAL EVIDEN CE AVAILABLE ON PAGE 103-108 OF THE PAPER BOOK WHICH REVEALS THAT THE AS SESSING OFFICER OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE. 7. ON BARE READING OF THE IMPUGNED ORDER, WE OBSERV E THAT THE LD. COMMISSIONER OF INCOME TAX(A) CONSIDERED THE ASSESS MENT ORDER WITH AN OPEN MIND AND FIRSTLY HE ARRIVED TO THE CONCLUSION THAT THE IMPUGNED CASH DEPOSITED WAS ONLY OF RS.32,86,000 AND THE ASSESSIN G OFFICER WRONGLY CALCULATED THE FIGURE AT RS.91,08,000/-, AND THIS F ACT HAS NOT BEEN DISPUTED BY LD. DR BEFORE US. WE FURTHER OBSERVE THAT THE LD. COMMISSIONER OF INCOME TAX(A) ADMITTED THE ADDITIONAL EVIDENCE WITH THE FO LLOWING OBSERVATIONS:- ON CAREFUL CONSIDERATION OF THE FACTS OF THE CASE AND THE VARIOUS CONDITIONS ENTAILED IN RULE 46A, I FIND THAT THE MAJOR ADDITION WAS ON ACCOUNT OF UNEXPLAIN ED CASH DEPOSITS IN THE BANK STATEMENT. FOR THIS PURP OSE, EXAMINATION OF THE BANK STATEMENT WAS A CLEAR MUST. HOWEVER, BEING AN OLD RECORD, THE SAME WAS NOT PROVIDED BY THE BANK TO THE APPELLANT DURING THE SH ORT PERIOD OF 3 DAYS BETWEEN THE LAST 2 HEARINGS. THE SAID BANK STATEMENT WAS ALSO SOUGHT BY THE LEARNED ASSES SING OFFICER FROM THE BANK, HOWEVER, TILL THE DATE OF ASSESSMENT THE ASSESSING OFFICER WAS NOT PROVIDED W ITH THE SAME BY THE BANK. IN VIEW OF THE ABOVE, I FIND THAT THERE WAS SUFFICIENT CAUSE FOR THE APPELLANT FOR NO T FURNISHING THE KEY EVIDENCE, I.E. THE BANK STATEMEN T ITA NO.1807/D/2010 ASSTT.YEAR: 2006-07 7 BEFORE THE LEARNED ASSESSING OFFICER WHICH WAS RELE VANT TO THE MAJOR GROUND OF ADDITION. MOREOVER, DURING THE TIME WHEN THE ASSESSMENT PROCEEDINGS WERE FINALIZED , THE APPELLANT WAS HOSPITALIZED WITH GRAVE MEDICAL AILME NT. IN VIEW OF THE ABOVE, I ALLOW ADMISSION OF ADDITION AL EVIDENCE UNDER RULE 46A. 8. ACCORDINGLY, THE LD. COMMISSIONER OF INCOME TAX( A) ADMITTED EVIDENCE ACCEPTING THE GROUND THAT THE APPELLANT WA S HOSPITALIZED WITH GRAVE MEDICAL AILMENT AND FURTHER NOTED THAT THE IMPUGNED CASH DEPOSITS WERE OF RS.32,86,000/- ONLY. 9. THEREFORE, WE OBSERVE THAT THE LD. COMMISSIONER OF INCOME TAX(A) ADMITTED ADDITIONAL EVIDENCE FOLLOWING RULE 46A(1)( C) OF THE INCOME TAX RULES, 1962 (HEREINAFTER REFERRED TO AS THE RULES) BUT HE DID NOT FOLLOW MANDATORY PROVISIONS OF RULE 46A(3) OF THE RULES AS AFTER ADMISSION OF ADDITIONAL EVIDENCE, THE ASSESSING OFFICER SHOULD B E GIVEN AN OPPORTUNITY TO EXAMINE THE EVIDENCE OR DOCUMENT PRODUCED BY THE AP PELLANT AND TO PRODUCE ANY EVIDENCE OR DOCUMENT IN REBUTTAL OF THE ADDITIO NAL EVIDENCE PRODUCED BY THE APPELLANT. 10. AT THIS JUNCTURE, WE ARE INCLINED TO TAKE NOTIC E OF JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE C ASE OF COMMISSIONER OF INCOME TAX VS MANISH BUILD WELL (P) LTD. IN ITA NO.928/2011 DATED 15.11.2011 REPORTED AS (2011) 63 DTR JUDGEMENTS 369 WHEREIN THEIR ITA NO.1807/D/2010 ASSTT.YEAR: 2006-07 8 LORDSHIPS HELD THAT AFTER ADMISSION OF ADDITIONAL E VIDENCE, IT IS MANDATORY TO FOLLOW RULE 46A(3) OF THE RULES BUT IN THE CASE IN HAND, WE OBSERVE THAT THE LD. COMMISSIONER OF INCOME TAX(A) MERELY PROCEEDED TO DECIDE THE MATTER ON THE OBJECTIONS OF ASSESSING OFFICER ON ADMISSION OF ADDITIONAL EVIDENCE BECAUSE AS PER LETTER OF THE ASSESSING OFFICER DATE D 24.12.2009 AVAILABLE ON PAPER BOOK FROM PAGE 103 TO 107, WE OBSERVE THAT TH E ASSESSING OFFICER ONLY OBJECTED THE ADMISSIBILITY OF ADDITIONAL EVIDE NCE AND RESTRICTED HIMSELF TO COMMENT ON THE MERITS OF THE EVIDENCE. THEREFOR E, WE FINALLY OBSERVE THAT THE LD. COMMISSIONER OF INCOME TAX(A) DID NOT FOLLOW THE MANDATORY PROCEDURE FOR CONSIDERATION OF ADDITIONAL EVIDENCE AT THE FIRST APPELLATE STAGE. 11. DURING THE ARGUMENT, THE LD. DR SUBMITTED THAT THE CASE SHOULD BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR C OMPLIANCE OF RULE 46A(3) OF THE RULES AND THE AR CONTENDED THAT IF WE REACH TO THE CONCLUSION THAT THE MATTER NEEDS TO BE CONSIDERED BY THE AUTHORITIES BE LOW, THEN THE MATTER SHOULD BE RESTORED TO THE FILE OF THE LD. COMMISSIO NER OF INCOME TAX(A). AFTER CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS AN D FACTS AND CIRCUMSTANCES OF THE CASE, WE NOTE THAT THE LD. COM MISSIONER OF INCOME TAX(A) CONSIDERED ADDITIONAL EVIDENCE VIOLATING RUL E 46A(3) OF THE RULES BUT AT THE SAME TIME, WE ALSO OBSERVE THAT THE APPE LLANT FILED A PAPER BOOK ITA NO.1807/D/2010 ASSTT.YEAR: 2006-07 9 CONTAINING 99 PAGES BEFORE THE COMMISSIONER OF INCO ME TAX(A) WHICH HE COULD NOT SUBMIT BEFORE THE ASSESSING OFFICER DURIN G THE ASSESSMENT AND THE ASSESSING OFFICER CONCLUDED THE ASSESSMENT U/S 144 OF THE ACT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD BEFORE HIM. THEREF ORE, WE FIND IT APPROPRIATE TO RESTORE THE MATTER BACK TO THE FILE OF THE ASSES SING OFFICER FOR ADJUDICATION AFRESH AFTER DUE CONSIDERATION OF ADDITIONAL EVIDEN CE AND AFFORDING A DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN VIE W OF ABOVE, THE APPEAL OF THE REVENUE IS DISPOSED OF AND ACCORDINGLY, IT IS T REATED AS ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 29.8.2012. SD/- SD/- ( J.S. REDDY ) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 29 TH AUGUST 2012 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR