ACIT, New Delhi V. Sh. Vipin Aggarwal, New Delhi

ITA 1937/DEL/2012

• Counselvise Citation: 193720114 RSA 2012
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 04-12-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 26-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS SUSHMA SINGH
• Assessee Lawyers: ADESH K JAIN
• Keywords: Unexplained investment; Search and seizure; Valuation report
• Section: 194C; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H : NEW DELHI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER ITA NO.1937/DEL/2012 ASSESSMENT YEAR : 2006-07 ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, NEW DELHI. VS. SHRI VIPIN AGGARWAL, 240, OKHLA INDUSTRIAL ESTATE-II, NEW DELHI. PAN : AAEPA5202G. (APPELLANT) (RESPONDENT) APPELLANT BY : MRS.SUSHMA SINGH, CIT-DR. RESPONDENT BY : SHRI ADESH K.JAIN, CA. ORDER PER JOGINDER SINGH, JM : THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 29 FEBRUARY, 2012 PASSED BY THE LEARNED FIRST APPELLATE AUTHORITY, DELHI. THE FIRST GROUND RAISED BY THE REVENUE PERTAINS TO DELETING THE ADDITION OF RS.1 0 LAKHS MADE ON ACCOUNT OF DISALLOWANCE U/S 40(A)(IA) OF THE ACT. DURING HEARING, MRS.SUSHMA SINGH, LEARNED CIT-DR DEFENDED THE ADDITION WHEREAS SHRI ADESH 2 ITA-1937/DEL/2012 KUMAR JAIN, LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE CONCLUSION DRAWN IN THE IMPUGNED ORDER. 2. WE HAVE CONSIDERED THE ASSERTION MADE BY THE LEARNED RESPECT IVE COUNSELS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FAC TS IN BRIEF ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRI ED OUT ON 15 JANUARY, 2009 IN GOPAL ZARDA GROUP OF CASES. IT WAS OBSERVED BY THE ASSESSING OFFICER THAT MOST OF THE SERVICE JOBS WERE ON CONTRACTUAL BASI S, THEREFORE, THE PROVISION OF TDS IS ATTRACTED AS THE ASSESSEE DID NOT M ADE AVAILABLE THE COMPLETE DETAILS OF EXPENDITURE ON WHICH TDS WAS DE DUCTIBLE. AS PER THE REVENUE, IN THE ABSENCE OF SUCH DETAILS, AN AMOUNT OF RS.10 LAKHS WAS DISALLOWED ON ESTIMATE BASIS AS PER THE PROVISIONS OF SECTION 40(A)(I A) OF THE ACT. ON APPEAL, THE LEARNED CIT(A) CONCLUDED THAT THE PROVISI ONS OF SECTION 194C OF THE ACT ARE NOT ATTRACTED. CONSEQUENTLY, THE DISALLOWANCE WAS DELETED WHICH IS UNDER CHALLENGE BEFORE US. WE FIND THAT THE DISALLOWANCE OF RS.10 LAKHS WAS MADE BY THE ASSESSING OFFICER ON ESTIMATE BASIS BY HOLDING THAT MOST OF THE SERVICES WERE GOT DONE BY THE ASSESSEE O N JOB BASIS WHICH ARE OF CONTRACTUAL IN NATURE. THE CLAIM OF THE ASSESSEE WAS THAT THE WORK WAS STARTED AS PROPRIETOR DURING THE FINANCIAL YE AR UNDER CONSIDERATION AND IT WAS THE FIRST YEAR IN WHICH THE ASSESSEE WAS TO GET HIS BOOKS AUDITED U/S 44AB. THE TURNOVER OF SUCH GROSS RECEIPTS DID NOT EXCE ED 3 ITA-1937/DEL/2012 THE PRESCRIBED LIMIT OF RS.40 LAKHS IN FY 2004-05 AND IN HI S SUPPORT, THE RELEVANT RECORD/RETURN OF INCOME WAS FURNISHED BEFORE THE LEARNED CIT(A). THE FACTUAL FINDING RECORDED BY THE LEARNED CIT(A) WAS NOT CONTROVERT ED BY THE REVENUE, THEREFORE, WE ARE IN AGREEMENT THAT THE T DS PROVISION ENVISAGED U/S 194C ARE NOT ATTRACTING IN THE PRESENT APPEAL. EVEN OTH ERWISE, IT WAS NOT A CASE OF AUDIT. CONSEQUENTLY, THE STAND OF THE LEARNED CIT(A) I S AFFIRMED. 3. THE NEXT GROUND PERTAINS TO DELETING THE ADDITION OF RS.25 LAK HS MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT MADE IN THE PROPERTY. THE CRUX OF ARGUMENT ON BEHALF OF THE REVENUE IS IN SUPPORT TO THE ASSESSMENT ORDER BY FURTHER SUBMITTING THAT ESTIMATE OF PROFIT WAS MADE BY THE ASSESSING OFFICER AND ALL BILLS AND VOUCHERS WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER WHEREAS THE STAND OF THE ASSESSEE IS THAT NECESSARY DETAILS, BILLS AND VOUCHERS WERE DULY PRODUCED FOR WHICH OUR ATTENTION WAS INVITED TO PAGE 3 O F THE ASSESSMENT ORDER. RELIANCE WAS ALSO PLACED UPON THE DECISION IN SA RGAM CINEMA VS. CIT (2011) 197 TAXMAN 203 (SC). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATER IAL AVAILABLE ON RECORD. THE FACTS IN BRIEF ARE THAT THE ASSESSEE A CQUIRED PROPERTY BEARING NO.1-5, MAHARANI BAGH AND UNDERTOOK CONSTRUCTION/RENOVATION OF THE PROPERTY. THE ASSESSEE WAS ASKED TO FILE COMPLETE DETAILS OF THE EX PENDITURE 4 ITA-1937/DEL/2012 IN SUPPORT OF HIS CLAIM. THERE IS A CATEGORICAL FINDING IN THE ASSE SSMENT ORDER ITSELF THAT THE CLAIM OF THE ASSESSEE WAS THAT THE PROPERT Y WAS SOLD AS PER DECLARED CONSIDERATION AND THE NECESSARY BILLS AND VOUCHERS, SHOWIN G EXPENDITURE ON CONSTRUCTION ARE ALREADY IN THE POSSESSION OF THE DEPART MENT. WE FURTHER FIND THAT TO ASCERTAIN THE VALUE OF THE PROPERTY AN D ALSO TO WORK OUT THE EXPENDITURE INCURRED ON CONSTRUCTION/RENOVATION, THE MA TTER WAS REFERRED TO THE VALUATION CELL OF THE DEPARTMENT BY THE ASSESSIN G OFFICER. IN THE ABSENCE OF RECEIPT OF SUCH VALUATION REPORT AS THE ASSESSMENT WAS GE TTING TIME BARRED, THE ASSESSING OFFICER ESTIMATED THE EXPENDITURE AND T HUS THE AMOUNT OF RS.25 LAKHS WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL, THE LEARNED CIT(A) DELETED THE ADDITION WHICH IS UNDER CHALLENGED BEFORE THIS TRIBUNAL. THE LEARNED CIT(A) HAS DEALT WITH THE ISSUE IN PARA 7 ONWARDS OF THE IMPUGNED ORDER AND UNDISPUTEDLY, THE ASSESSEE MAINTAINE D BOOKS OF ACCOUNT FOR SUCH CONSTRUCTION AND ADDITION WAS MADE ON ESTIMATED BASIS. THE ADDITION WAS ALSO MADE ON THE PRESUMPTION THAT THE GROUP H AS BEEN INVOLVED IN UNACCOUNTED INVESTMENT IN PURCHASING THE PROPERTI ES. HOWEVER, THIS IS A CASE OF AN INDIVIDUAL AND THE ADDITION IS BASED UPON PURE GUESS WORK, THAT TOO, WITHOUT BRINGING ANY INCRIMINATING MATERI AL ON RECORD INDICATING THAT ACTUALLY UNACCOUNTED INVESTMENT WAS MADE IN TH E PROJECT. IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, WE FIND NO JUSTIFI CATION TO MAKE AD- 5 ITA-1937/DEL/2012 HOC ADDITION. CONSEQUENTLY, WE CONFIRM THE CONCLUSION DRAWN IN TH E IMPUGNED ORDER. FINALLY, THE APPEAL OF THE REVENUE IS HAVING NO MERIT, THE REFORE, DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 7 DECEMBER, 2012. SD/- SD/- (B.C.MEENA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 07.12.2012 VK. COPY FORWARDED TO: - 1. APPELLANT : ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, NEW DELHI. 2. RESPONDENT : SHRI VIPIN AGGARWAL, 240, OKHLA INDUSTRIAL ESTATE-II, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR