DCIT, Faridabad V. Sh. Jaininder Jain, New Delhi

ITA 1951/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5238 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 04-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAY VERMA
• Keywords: Search and seizure
• Section: 143(3); 153A

Judgement Text

ITA NO. 19 51 /DEL/201 3 ASSESSMENT Y EAR: 2010 - 11 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D BENCH NEW DELHI) BEFORE SHRI G.D. AGRAWAL, PRESIDENT & SHRI AMIT SHUKLA , JUDICIAL MEMB E R I N ITA NO. 19 51 /DEL/201 3 ASSESSMENT YEAR: 20 10 - 11 DCIT CENTRAL CIRCLE - II FARIDABAD VS. JAININDER JAIN, A - 16, MOHAN CO - OPERATIVE INDUSTRIAL ESTATE, 15 TH MILE STONE, DELHI MATHURA ROAD, NEW DELHI (APPLICANT) (RESPONDENT) (PAN: A BMPJ9220C ) REVENUE BY: SHRI VIJAY VERMA , CIT DR ASSESSEE BY: NONE DATE OF HEARING 0 3 / 0 8 /201 7 DATE OF PRONOUNCEMENT 0 7 / 0 8 /201 7 ORDER PER AMIT SHUKLA, JUDICIAL MEMBER : THE AFORESAID APPEAL HA S BEEN FILED BY THE REVENUE AGAINST I MPUGNED O RDER DATED 2 2 .1.201 3 , PASSED BY THE L D. CIT ( APPEALS ) GURGAON FOR THE QUANTUM OF ASSESSMENT PASSED U/S 153A READ WITH SECTION 143(3) FOR THE A.Y. 2010 - 11. IN THE GROUNDS OF APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 15,22,850/ - ON ACCOUNT OF UNEXPLAINED CASH ESPECIALLY WHEN THE ASSESSEE HAS NOT SUBMITTED ANY PROOF WITH REGARD TO PAGE 2 OF 8 AVAILABILITY OF CASH WITH HIM AND THAT THE ASSESSEE IN ITS HOUSEHOLD WITHDRAWALS AND NOT TO BE THE COMP ANY AS STATED BY HIM LATER DUR ING THE ASSESSMENT PROCEEDINGS? (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 2.25 CRORE MADE BY THE AO ON PROTECTIVE BASIS ON THE BASIS OF STATEMENT R ECORDED AT THE TIME OF SEARCH ESPECIALLY WHEN SMT. KIRAN JAIN & SH. VIKRAM JAIN HAS NOT ACCEPTED DECISION OF CIT(A) AND FIL ED THE APPEAL BEFORE HON BLE IT AT . (III) THAT THE APPELLANT CRAVES TO ADD, DELETE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. BEFORE US THE LD. CIT DR, SUBMITTED THAT DURING THE COURSE OF SEARCH AND SEIZURE ACTION WHICH WAS CONDUCTED ON 19.2010 IN THE CASE OF THE ASSESSEE AND OTHERS, CASH AMOUNTING TO RS. 15,22,500/ - WAS FOUND FROM THE RESIDENTIAL PREMIS ES OF THE ASSESSEE, WHICH HAS BEEN ADDED BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE COULD NOT PROPERLY EXPLAINED SOURCE OF SUCH CASH. THE LD. CIT ( APPEALS) HAS DELETED 50% OF THE CASH ON ESTIMATE BASIS ON THE GROUND THAT TO THIS EXTENT CASH C AN BE SAID TO BE EXPLAINED AND BALANCE 50% WAS CONFIRMED HIM . HE BROUGHT TO OUR NOTICE THAT IN ASSESSEE S APPEAL , CHALLENGING THE ADDITION OF 50% OF CASH, THE TRIBUNAL IN ITA NO. 819/DEL/2013 HAS SET ASIDE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE SAME AFRESH IN LIGHT OF EVIDENCE AND MATERIAL ON RECORD. SINCE 50% OF THE ADDITION HAS BEEN SET ASIDE TO THE ASSESSING OFFICER FOR EXAMINING IN AFRESH , THEREFORE , THE BALANCE 50% SHOULD ALSO BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. HOWEVER, HE SUBMITTED THAT THE TRIBUNAL WHILE DECIDING THE APPEAL OF THE ASSESSEE HAS TAKEN NOTE OF THE FACT THAT , SINCE THERE IS NO DEPARTMENTAL APPEAL AGAINST RELIEF OF 50% OF CASH FOUND GIVEN BY THE LD. CIT (CENTRAL), THEREFORE, ASSESSING OFFICER WILL N OT RECONSIDER PAGE 3 OF 8 THE SAID AMOUNT. HOWEVER, THE DEPARTMENT HAS FILED A MISCELLANEOUS APPLICATION AGAINST THE SAID OBSERVATION BEING M.A. NO. 333/DEL/2014 . THE SAID M.A. IS ALSO FIXED ON TODAY; T HEREFORE, HE SUBMITTED THAT ONCE THE APPEAL OF THE DEPARTMENT IS S ET ASIDE TO THE FILE OF THE ASSESSING OFFICER THEN M.A. WILL BECOME INFRUCTUOUS. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE ISSUANCE OF NOTICE THROUGH REGISTERED POST O N VARIOUS OCCASIONS AS PER THE RECORD . ACCORDINGLY, WE ARE PROCEEDING TO D ECIDE THE APPEAL ON MERITS. 4 . AFTER CONSIDERING THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER AS WELL AS THE ORDER OF THE TRIBUNAL, WE FIND THAT THE ADDITION PERTAINS TO UNEXPLAINED CASH FOUND FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE FOR SUMS A GGREGATING TO 15,22,850/ - . THE ASSESSEE S CONTENTION HAD BEEN THAT SOURCE OF THIS CASH ARE BY WAY OF WITHDRAWALS FROM M/S. JAIN MANUFACTURING COMPANY , WHICH IS THE PARTNERSHIP CONCERN , WHILE PART OF THE CASH BELONG TO M/S. KANIN INDIA LTD. THE BREAK - UP OF THE CASH WAS GIVEN IN THE FOLLOWING MANNER: - JAIN MANUFACTURING CO., LUDHIANA (JMC) : RS. 7,92,782 KANIN INDIA LTD. DORAHA (KIL) : RS. 4,00,000 JAININDER JAIN & FAMILY (CASH FOR HOUSEHOLD EXP.) : RS. 3,29,798 TOTAL: RS. 15,22,580 HOWEVER, THE LD. ASSESSING OFFICER CONFIRMED THE ENTIRE ADDITION OF RS. 15,22,580/ - ON THE GROUND THAT THE ASSESSEE COULD NOT PROPERLY EXPLAINED THE SOURCE OF CASH. IN THE FIRST APPEAL THE DETAILED PAGE 4 OF 8 SUBMISSION WAS MADE BY THE ASSESSEE , WHICH HAS BEEN DULY INCORPORATED IN THE APPELLATE ORDER FROM PAGES 3 TO 6. THE LD . CIT (APPEALS) REDUCED THE ADDITION BY 50% AFTER OBSERVING AND HOLDING AS UNDER: - 5 . 2 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND THE IMPUGNED ORDER. IT EMERGES FROM THE ORDER THAT THE EXPLANATION OF THE ASSESSEE WERE REJECTED, AS AN AFTER - THOUGHT, ON TWO - FOLDS. FIRSTLY THERE WAS NO DOCUMENTARY EVIDENCE PRODUCED REGARD ING WHO CARRIED THE CASH FROM TH E BUSINESS PREMIS ES AT LUDHIANA/ DORAHA TO THE RESIDENCE AND SECONDLY THAT IN THE PRELIMINARY STATEMENT RECORDED, THE CASH FOUND WAS STATED TO BE LARGELY FROM HOUSEHOLD WITHDRAWALS. AS REGARDS THE SHORTAGE OF PHYSICAL CASH AT THE BUSINESS PREMISES JMC AND K1L, NO EVIDENCE HAS BEEN ADDUCED BY THE LD . AO OF ANY UNDISCLOSED EXPENDITURE/ INVESTMENT MADE BY THESE CONCERNS. TO ITERATE, THERE IS NO EVIDENCE EXCEPT FOR THE SHORTAGE OF CASH. COMING TO THE AFFIDAVITS OF SENIOR MANAGEMENT KEEPING PART OF THE CASH, AS PER THE DETAILS G IVEN BY THE ASSESSEE, 1 AM AFRAID THE EXPLANATION IS TOO FARFETCHED. THERE IS NO EVIDENCE TO SUBSTANTIATE THE CLAIM THAT PART CASH ARE KEPT WITH VARIOUS PERSONNEL . HOWEVER THE ISSUE HERE IS NOT THE SHORT CASH FOUND AT THE BUSINESS PREMISES BUT THE CASH FOU ND AT THE RESIDENCE OF THE ASSESSEE. NO DOUBT THE PRELIMINARY STATEMENT CANNOT BE IGNORED BUT I FIND THAT THE ASSESSEE HAD NOT SPECIFIED THE BREAK - UP OF THE CASH AND INSTEAD HAS LEFT IT OPEN - ENDED. THE OSTENSIBLE BREAK - UP OF THE CASH WAS FURNISHED DURING T HE ASSESSMENT PROCEEDINGS. THE CONTENTION OF THE ASSESSEE THAT FOR SECURITY REASONS PART OF THE CASH OF THE FAMILY CONCERNS IS KEPT WITH THE DIRECTORS/PARTNERS TO MY MIND IS QUITE ACCEPTABLE. FURTHER THERE WILL SOME WITHDRAWALS FOR HOUSE HOLD TOO. THEREFOR E CONSIDERING THE ENTIRE GAMUT OF THE FACTS AND CIRCUMSTANCES, I WOULD THINK IT REASONABLE TO CONSIDER 50% OF THE CASH FOUND AS EXPLAINED. THUS, ASSESSEE PARTLY SUCCEEDS ON THIS GROUND OF APPEAL. PAGE 5 OF 8 5. WE FIND THAT THE TRIBUNAL IN ASSESSEE S CASE H AS SET ASIDE THIS MATTER TO THE FILE OF THE LEARNED CIT(APPEALS) AFTER OBSERVING AND HOLDING AS UNDER: - ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW; THE M ATTER IS RECONSIDERATION AT THE LEVEL OF THE ID. CIT (A). THE ABOVE FACTS CLEARLY SHOW THAT PART OF THE CASH BALANCE WAS LYING WITH HIM. THE ID. CIT (A) ACCEPTED THE EXPLANATION OF THE, ASSESSEE THAT CASH HAS BEEN KEPT BY THE DIRECTORS PERSONNEL FOR SECURITY REASONS AND THAT THERE WILL BE SOME WITHDRAWALS FOR HOUSE HOLD PURPOSE ALSO. THE ID. CIT (A), THEREFORE, DELETED 50% OF THE ADDITION. NO REASONS HAVE BEEN GIVEN IN THE IMPUGNED ORDER FOR SUSTAINING 50% OF THE ADDITION. AFFIDAVITS OF 'THE KEY PERSONNEL HAVE NOT BEEN DISCUSSED IN THE IMPUGNED ORDER, PRELIMINARY STATEMENT SUPPORTED BY AFFIDAVITS OF KEY PERSONNEL FILED IN THIS REGARD TO EXPLAIN POSSESSION OF THE CASH. FURTHER, ON ACCOUNT OF SHORTFALL OF THE CASH IN THE CASE OF KANIN INDIA LTD., THE ID. CIT (A) DELETED THE ADDITION AND WE HAVE ALSO CONFIRMED THE ORDER OF THE ID. CIT(A) AN D DISMISSED THE DEPARTMENTAL APPEAL. THEREFORE, THE ID. CIT (A) WA S NOT JUSTIFIED IN SUSTAINING 5 0% ADDITION ON THIS ISSUE. WE ACCORDINGLY, SET ASIDE THE ORDER OF THE ID. CIT(A) TO THE EXTENT OF SUSTAINING 50% ON THIS ISSUE AND RESTORE THE ISSUE OF 50% OF SUSTAINING THE ADDITION SHALL NOT BE SUBJECT MATTER OF RECONSIDERATION BECAUSE THERE IS NO DEPARTMENTAL APPEAL PREFERRED IN THIS REGARD. IN THE RESULT, GROUND NO. 2 OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. SINCE THE SAME HAS BEEN SET ASIDE TO THE FILE OF THE L D. CIT (APPEALS) , WE ARE THEREFORE, OF THE OPINION THAT THE BALANCE AMOUNT OF CASH OF 50% WHICH HAS BEEN DELETED BY THE LD . CIT (APPEALS) ON AD - HOC MANNER ALSO DESERVES TO BE REMANDED BACK TO ON SAME REASONING AND SHOULD BE DECIDE D AFRESH AFTER CONSIDERING THE ASSESSEE S EXPLANATION AS WELL AS THE MATERIAL ON RECORD . TH US, FOLLOWING THE PAGE 6 OF 8 TRIBUNAL ORDER IN ASSESSEE S APPEAL, GROUND NO. 1 IS REMANDED BACK TO THE FILE OF THE LD . CIT (APPEALS) WHICH DECIDE AFRESH. 7. SO FAR AS THE D ELETION OF THE ADDITION OF RS. 2.25 CRORES MADE BY THE ASSESSING OFFICER ON PROTECTIVE BASIS, W E FIND THAT THE LD . CIT (APPEALS) HAS IN FACT UPHELD THE ADDITION OF RS. 1.25 CRORE IN ASSESSEE S HANDS AND HAS DELET ED THE ADDITION MADE ON PROTECTIVE BASIS ON THE GROUND THAT THE SAME HAS BEEN CONFIRMED BY HIM IN HIS APPELLATE ORDER IN THE CASE OF SMT. KIRAN JAIN AND SHRI VIKRAM JAIN. THE TRIBUNAL IN ASSESSEE S APPEAL HA S DEALT WITH THIS ISSUE IN FOLLOWING MANNER: - ON GROUND NO. 3 & 4, THE ASSESSEE CHALLENGED THE ADDITION OF RS. 1.25 C R ORES. T HE AO ON THE BASIS OF STATEMENT OF THE ASSESSEE RECORDED U/S. 132(4) MADE ADDITION OF RS. 1.25 CRORES ON SUBSTANTIVE BASIS IN THE HANDS OF ASSESSEE AND RS.2.25 CRORES ON PROTECTIVE BASIS IN THE HANDS OF ASSESSEE AND SUBSTA NTIVE ADDITION OF RS . 1.25 CRORES AND 1 CRORE WERE MADE IN THE CASE OF S MT . KIRAN JAI N AND VIKRAM JAIN. IN THE CASE OF M/S. KANIN INDIA LTD. WE HAVE DELETED THE ADDITION ON THE BASIS OF STATEMENT MADE BY SHRI JAININDER JAIN U/S. 132(4) OF THE IT ACT. THERE FORE, FOLLOWING THE REASONS FOR DECISION IN THE CASE OF M/S. KANIN INCLIA (SUPRA), WE DELETE THE ADDITION OF RS.1.25 CRORES IN THE HANDS OF THE ASSESSEE. IN THE RESULT, GROUNDS NO. 3 & 4 OF APPEAL OF THE ASSESSEE ARE ALLOWED. IT MAY BE NOTED HERE THAT THE L D. CIT (A) DELETED THE PROTECTIVE ADDITION, AS THE SAME WERE CONFIRMED IN THE CASE OF SMT. KIRAN JAIN AND VIKRAM JAIN, WHICH WE HAVE ALREADY DELETED IN THEIR RESPECTIVE SEPARATE APPEALS. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 8. ON THIS GROUND ALSO , WE ARE OF THE OPINION THAT THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE LD . CIT (APPEALS) WHO SHALL PAGE 7 OF 8 DECIDE THE SAME AFTER TAKING INTO CONSIDERATION THE TRIBUNAL S ORDER IN ASSESSEE S CASE AND DECIDE ACCORDINGLY. IF THE ADDITIO N HAS BEEN DELETED ON MERITS, THEN OSTENSIBLY, NO ADDITION CAN BE MADE HERE IN THIS CASE OF THE ASSESSEE. ACCORDINGLY, GROUND NO. 2 IS ALSO SET ASIDE TO THE FILE OF LD . CIT (APPEALS) AND IN SETTING ASIDE PROCEEDINGS WILL PROVIDE HE SHALL PROVIDE DUE AND EF FECTIVE OPPORTUNITY TO THE ASSESSEE TO REPRESENT HIS CASE . 9 . IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER P RONOUNCED IN THE OPEN COURT ON 0 7 . 0 8 .201 7. S D / - S D / - ( G.D. AGRAWAL ) (AMIT SHUKLA) (PRESIDENT) (JUDICIAL MEMBER) DATED: 0 7 . 0 8 .2017 NARENDER COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT (APPEALS) 5) DR: ITAT ASSISTANT REGISTRAR PAGE 8 OF 8 DATE DRAFT DICTATED ON 0 3 .0 8 .2017 DRAFT PLACED BEFORE AUTHOR 04 . 0 8 .2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 7 . 8 .2017 KEPT FOR PRONOUNCEMENT ON 7 . 8 .2017 FILE SENT TO THE BENCH CLERK 7 . 8 .2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.