Veer Savarkar Katyal, New Delhi V. ITO, New Delhi

ITA 1880/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2328 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 29-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: UMANG LUTHRA
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Opportunity of being heard; Reason to believe; Reassessment proceedings; Set aside
• Section: 142(1); 143(2); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.1880/DEL/2017 ASSESSMENT YEAR: 2007-08 VEER SAVARKAR KATYAL, 329, SAINIK VIHAR, PITAMPURA, NEW DELHI. PAN: ABDPK7569E VS ITO, WARD-42(2), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN, ADVOCATE & MISS UMANG LUTHRA, ADVOCATE REVENUE BY : SHRI S.S. RANA, CIT, DR DATE OF HEARING : 03.12.2019 DATE OF PRONOUNCEMENT : 06.12.2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 31 ST JANUARY, 2017 OF THE CIT(A)-14, NEW DELHI RELATING TO ASSESSMENT YEARS 2007-08. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 30 TH OCTOBER, 2007 DECLARING THE TOTAL INCOME AT RS.1,9 1,180/-. IN THIS CASE, INFORMATION WAS RECEIVED THROUGH THE DY. DIRECTOR OF INCOME-TAX ITA NO.1880/DEL/2017 2 (INV.), UNIT-1(1), NEW DELHI, VIDE LETTER F.NO.DDIT (INV.)/UNIT-1(1)/UM/2013- 14/912 DATED 05.03.2014 THAT A SEARCH AND SEIZURE O PERATION WAS CONDUCTED IN THE CASE OF M/S UNITECH MACHINES GROUP ON 18.02.2013. AS PER INFORMATION PROVIDED, THE ASSESSEE HAD PURCHASED ONE PROPERTY V3S-OMAXE F ROM MRS. BRIJ BALA & M/S YOGUM DEVELOPERS LTD. FOR RS.1,05,55,375/- IN CASH. ON THE BASIS OF THIS INFORMATION, PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961 WERE INITIATED AND AFTER RECORDING REASONS AND GETTING REQUISITE APPRO VAL U/S 151(2) OF THE IT ACT 1961, THE ASSESSING OFFICER ISSUED A NOTICE U/S 148 OF THE IT ACT DATED 26.03.2014. THE ASSESSING OFFICER ISSUED NOTICE U/S 142(1) TO T HE ASSESSEE AND ALSO U/S 143(2) CALLING FOR CERTAIN INFORMATION REGARDING THE INVES TMENT MADE BY THE ASSESSEE. HOWEVER, IN ABSENCE OF ANY PROPER COMPLIANCE FROM T HE SIDE OF THE ASSESSEE, THE ASSESSING OFFICER MADE ADDITION OF RS.1,05,55,375/- BEING THE UNEXPLAINED INVESTMENT OUT OF INCOME FROM UNDISCLOSED SOURCES. THE ASSESSING OFFICER ACCORDINGLY DETERMINED THE TOTAL INCOME OF THE ASSE SSEE AT RS.1,07,46,560/-. 3. BEFORE THE CIT(A), THE ASSESSEE CHALLENGED THE A DDITION ON MERIT AS WELL AS THE VALIDITY OF REASSESSMENT PROCEEDINGS. SO FAR A S THE MERIT OF THE CASE IS CONCERNED, THE LD.CIT(A) NOTED THAT THE PROPERTY WA S PURCHASED BY THE ASSESSEE ALONG WITH TWO OTHER PERSONS. SINCE THE ASSESSEES SHARE IS ONLY 1/3, THE LD.CIT(A) SUSTAINED THE ADDITION OF RS.35,18,458/- I.E., 1/3 OF THE TOTAL INVESTMENT AS AGAINST RS.1,05,55,375/- MADE BY THE ASSESSING OFFICER. SO FAR AS THE VALIDITY OF THE ITA NO.1880/DEL/2017 3 REASSESSMENT PROCEEDINGS ARE CONCERNED, THE LD.CIT( A) UPHELD THE VALIDITY OF REASSESSMENT PROCEEDINGS. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING GROUNDS:- 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) IS BAD BOTH ON LAW AND FACTS. 2. THE PART OF IMPUGNED ORDER IS CONTRARY TO THE E VIDENCE AND MATERIAL ON RECORD, CONTRARY TO THE PRINCIPLES OF LAW AND BI NDING JUDGMENTS OF THE COURT, CONTRARY TO THE RELEVANT PROVISIONS OF THE A CT AND DESERVES TO BE QUASHED AND SET ASIDE. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS GRIEVOUSLY ERRED CONFIRMING THE INVOCATION OF THE P ROVISIONS U/S 147 MADE BY LEARNED ASSESSING OFFICER AND WHO DOES NOT HAVE ANY REASON TO BELIEVE THAT THE INCOME CHARGEABLE FOR THE YEAR HAS ESCAPED THE ASSESSMENT. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN SUSTAINING AN ADDITION OF A SUM OF RS. 3518458/-, O N ESTIMATION BASIS, WITHOUT SUBSTANTIATING ANY REASON FOR ARRIVING AT SUCH AMOU NT OF RS. 3518458/- IN THE ABSENCE OF ANY MATERIAL ON RECORD. 5. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COM MISSIONER OF INCOME TAX (APPEALS) SHOULD NOT HAVE ACCEPTED THE ADDITION OF RS. 3518458/- BEING THE AMOUNT OF CASH PAID TO SH. SUSHANT CHABRA AND S MT. BALA CHABRA ON ACCOUNT OF PURCHASE OF PROPERTY, IN COMPLETE DISREG ARD OF THE FACT THAT THE APPELLANT PURCHASED PROPERTY IN QUESTION WHICH WAS OWNED ONLY BY SH. SUSHANT CHABRA AND NOT JOINTLY BY SH. SUSHANT CHABR A AND SMT. BALA CHABRA AS ALLEGED. 6. THAT THE APPELLANT CRAVES LEAVE AND PRAYS THAT THE RELIEF CLAIMED ABOVE OR ANY OTHER RELIEF, TO WHICH THE APPELLANT I S ENTITLED, MAY KINDLY BE ALLOWED. 5. THE LD. COUNSEL FOR THE ASSESSEE, REFERRING TO T HE LETTER ADDRESSED TO THE ASSESSING OFFICER, COPY OF WHICH IS PLACED AT PAGES 10-13 OF THE PAPER BOOK, DREW THE ATTENTION OF THE BENCH TO PAGE 11 AND SUBMITTED THAT THE ASSESSEE HAD ASKED THE ITA NO.1880/DEL/2017 4 ASSESSING OFFICER TO PROVIDE THE COPIES OF SUCH PUR PORTED DOCUMENTS AND ALSO REQUESTED HIM TO PROVIDE AN OPPORTUNITY TO THE ASSE SSEE TO CONFRONT THE PERSON ON THE BASIS OF WHOSE STATEMENT ACTION ERRONEOUSLY HAS BEEN INITIATED IN THE CASE OF THE ASSESSEE. RELYING ON VARIOUS DECISIONS, HE SUBMITT ED THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER IS N OT VALID AS PER LAW. SO FAR AS THE MERIT OF THE ADDITION IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO PROPER OPPORTUNITY WAS GRANTED BY THE ASSESSING OFFICER AND THE ADDITION HAS BEEN MADE MERELY ON THE BASIS OF SURMISES AND SUSPI CION AND, THEREFORE, THE SAME SHOULD BE DELETED. HE SUBMITTED THAT IT IS THE SET TLED PRINCIPLE OF LAW THAT NO CONCEALED INCOME CAN BE TAXED TWICE I.E., ONCE IN T HE HANDS OF A PERSON WHERE IT IS DISCOVERED AND AGAIN IN THE HANDS OF ANOTHER PERSON . IN HIS ALTERNATE CONTENTION, THE LD. COUNSEL SUBMITTED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO GIVE O NE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE CASE ON BOTH THE ISSUE S I.E., THE VALIDITY OF REASSESSMENT PROCEEDINGS AND THE ADDITION ON MERIT BY PROVIDING COPIES OF THE DOCUMENTS WHICH ARE THE BASIS FOR REOPENING OF THE ASSESSMENT AND M AKING THE ADDITION. 6. THE LD. DR, ON THE OTHER HAND, WHILE SUPPORTING THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A), FAIRLY CONCEDED THAT HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR F RESH ADJUDICATION. 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF ITA NO.1880/DEL/2017 5 THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND, THE ASSESSING OFFICER, IN THE INSTANT CASE, O N THE BASIS OF THE INFORMATION OBTAINED FROM THE INVESTIGATION WING THAT THE ASSES SEE HAD PURCHASED ONE PROPERTY V3S-OMAXE FROM MRS. BRIJ BALA & M/S YOGUM DEVELOPER S LTD. FOR RS.1,05,55,375/- IN CASH, MADE THE ADDITION OF THE SAME TO THE TOTAL INCOME OF THE ASSESSEE IN THE REASSESSMENT PROCEEDINGS INITIATED U/S 147 OF THE ACT. WE FIND, THE LD.CIT(A) SUSTAINED AN AMOUNT OF RS.35,18,458/- BEI NG 1/3 OF THE TOTAL INVESTMENT IN THE PROPERTY SINCE THE SAID PROPERTY WAS PURCHAS ED BY THE ASSESSEE JOINTLY WITH TWO OTHER PERSONS. IT IS THE SUBMISSION OF THE LD. COUNSEL THAT DESPITE REQUEST BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE CIT(A), THE DOCUMENTS/STATEMENTS WHICH WERE THE BASIS FOR REOPE NING OF THE ASSESSMENT AS WELL AS THE ADDITION SO MADE WERE NEVER SUPPLIED TO THE ASSESSEE TO REBUT SUCH ALLEGATIONS AND THE ASSESSEE WAS NOT GIVEN ANY OPPO RTUNITY TO CONFRONT THE PERSONS WHOSE STATEMENT WAS RECORDED AND WHICH IS THE BASIS OF INITIATION OF REASSESSMENT PROCEEDINGS AND FOR MAKING THE ADDITION. IT IS ALS O THE SUBMISSION OF THE LD. COUNSEL THAT IF THE SO-CALLED DOCUMENTS/STATEMENTS, WHICH ARE THE BASIS OF INITIATION OF REASSESSMENT PROCEEDINGS AND THE ADDITION, ARE P ROVIDED TO THE ASSESSEE, THE ASSESSEE IS IN A POSITION TO REBUT THE SAME. CONSI DERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO P ROVIDE THE COPY OF THE STATEMENT SO RECORDED AND THE DOCUMENTS SO OBTAINED FROM THE INVESTIGATION WING WHICH ARE THE BASIS FOR INITIATION OF REASSESSMENT PROCEEDING S AND MAKING THE ADDITION. THE ITA NO.1880/DEL/2017 6 ASSESSING OFFICER SHALL DECIDE THE ISSUE AS PER FAC T AND LAW, AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOL D AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLO WED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 0 6.12.2019. SD/- SD/- (KULDIP SINGH) (R.K. PANDA) JUDICIAL MEMBER ACCO UNTANT MEMBER DATED: 06 TH DECEMBER, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI