ACIT, New Delhi V. Shri Dev Suman Sindhu, Rohtak

ITA 2/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3672 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 01-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Income from undisclosed sources; Search and seizure; Document seized; Opportunity of cross examination; Additional evidence; Question of law; Corroborative evidences; Accommodation entries; Assessment record; Block assessment; Capital receipt; Onus to prove; Retraction; Documents seized
• Section: 143(3); 133A; 153A; 147; 131; 68; 148; 132

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 02 & 03/DEL/2016 (ASSESSMENT YEAR: 2012 - 13 & 2013 - 14) ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI VS. DEV SUMAN SINDHU, H NO. 53/54, SECTOR - 14, HUDA, ROHTAK PAN:ABOPS1385F (APPELLANT) (RESPONDENT) CO NO. 177 & 134/DEL/2016 (IN ITA NO. 02 & 03/DEL/2016) (ASSESSMENT YEAR: 2012 - 13 & 2013 - 14) DEV SUMAN SINDHU, H NO. 53/54, SECTOR - 14, HUDA, ROHTAK PAN:ABOPS1385F VS. ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 04 & 0 5 /DEL/2016 (ASSESSMENT YEAR: 2012 - 13 & 2013 - 14 ) ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI VS. VRIT PAL SINDHU, H NO. 53/54, SECTOR - 14, HUDA, ROHTAK PAN:ANHPS7883H (APPELLANT) (RESPONDENT) CO NO. 178 , 179 /DEL/2016 (IN ITA NO. 04/DEL/2016 ) (ASSESSMENT YEAR: 2012 - 13 , 2013 - 14 ) VRIT PAL SINDHU, H NO. 53/54, SECTOR - 14, HUDA, ROHTAK PAN:ANHPS7883H VS. ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI (APPELLANT) (RESPONDENT) 2 | P A G E ITA NO. 06/DEL/2016 (ASSESSMENT YEAR: 2012 - 13) ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI VS. KULDEEP SINGH SOLANKI, B - 9/16, VASANT VIHAR, NEW DELHI PAN: AAOPS0365E (APPELLANT) (RESPONDENT) CO NO. 137/DEL/2016 (IN ITA NO. 06/DEL/2016) (ASSESSMENT YEAR: 2012 - 13) KULDEEP SINGH SOLANKI, B - 9/16, VASANT VIHAR, NEW DELHI PAN: AAOPS0365E VS. ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 07 & 08/DEL/2016 (ASSESSMENT YEAR: 2012 - 13 & 2013 - 14) ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI VS. VIR SEN SINDHU, H NO. 53/54, SECTOR - 14, HUDA, ROHTAK PAN:ANIPS8381D (APPELLANT) (RESPONDENT) CO NO. 169 & 170/DEL/2016 (IN ITA NO. 08/DEL/2016) (ASSESSMENT YEAR: 2012 - 13 & 2013 - 14) VIR SEN SINDHU, H NO. 53/54, SECTOR - 14, HUDA, ROHTAK PAN:ANIPS8381D VS. ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 09 & 10 /DEL/2016 (ASSESSMENT YEAR: 2012 - 13 & 2013 - 14) ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI VS. RUDRA SEN SINDHU, H NO. 53/54, SECTOR - 14, HUDA, ROHTAK PAN: ANPPS3885D 3 | P A G E (APPELLANT) (RESPONDENT) CO NO. 171 & 172/DEL/2016 (IN ITA NO. 09 & 10/DEL/2016) (ASSESSMENT YEAR: 2012 - 13 AND 2013 - 14) RUDRA SEN SINDHU, H NO. 53/54, SECTOR - 14, HUDA, ROHTAK PAN: ANPPS3885D VS. ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI (APPELLANT) (RESPONDENT) ITA NO. 11& 12/DEL/2016 (ASSESSMENT YEAR: 2012 - 13 & 2013 - 14) ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI VS. SATYA PAL SINDHU, H NO. 53/54, SECTOR - 14, HUDA, ROHTAK PAN:ABOPS1384E (APPELLANT) (RESPONDENT) CO NO. 173 & 174/DEL/2016 (IN ITA NO. 11/DEL/2016) (ASSESSMENT YEAR: 2012 - 13 & 2013 - 14) SATYA PAL SINDHU, H NO. 53/54, SECTOR - 14, HUDA, ROHTAK PAN:ABOPS1384E VS. ACIT, CENTRAL CIRCLE - 17, ROOM NO. 101, 1 ST FLOOR, HALL NO. 1, ARA CENTRE, E - 2, JHANDEWALAN, NEW DELHI (APPELLANT) (RESPONDENT) REVENUE BY : MS. RACHNA SINGH, CIT DR ASSESSEE BY: SHRI SAJJAN KUMAR TULSHIYAN, ADV MS. NISHA RACHH, CA SHRI KARAN KUMR A , CA DATE OF HEARING 07/12 /2017 DATE OF PRONOUNCEMENT 3 1 / 01 / 2018 O R D E R PER PRASHANT MAHARISHI, A. M. 1. ALL THESE 11 APPEALS ARE FILED BY THE REVENUE AGAINST THE COMPOSITE ORDER PASSED BY THE LD CIT(A) - 27, NEW DELHI DATED 28.10.2015 FOR ASSESSMENT YEARS 2012 - 13, 2013 - 14 IN CASE OF SIX INDIVIDUAL ASSESSES WHERE THE LD 4 | P A G E CIT(A) HAS DELETED THE ADDITION MADE BY THE LD ASSESSING OFFICER BASED ON THE DISCLOSURE MADE BY ONE PERSON IN CASE OF A GROUP COMPANIES. THE ASSESSEE HAS FILED CROSS OBJECTI ONS IN ALL THE 11 APPEALS WHICH MERELY SUPPORT THE ORDER OF THE LD CIT(A). 2. THE ONLY ISSUE INVOLVED IN THESE APPEALS ARE AS UNDER: - I. ADDITION BECAUSE OF ADMISSION MADE BY CAPT . R.S. SINDHU IN HIS STATEMENT U/S 132(4) OF THE ACT WHICH WAS SUBSEQUENTLY RETRACT ED. THE LD ASSESSING OFFICER MADE ADDITION BASED ON THE STATEMENT WHEREAS, THE LD CIT ( A) DELETED THE ABOVE ADDITION. THEREFORE, THIS ISSUE IS CONTESTED BY REVENUE AND ASSESSEES HAVE FILED THE CROSS OBJECTIONS SUPPORTING THE ORDER OF THE LD CIT(A). II. ADDITI ON U/S 69A OF THE ACT ON ACCOUNT OF UNEXPLAINED CASH OF RS. 9873500/ - OUT OF CASH FOUND OF RS. 10379300/ - . THE LD ASSESSING OFFICER MADE THE ADDITION WHICH WAS DELETED BY THE LD CIT ( A) AND THEREFORE, REVENUE IS IN APPEAL. 3. FIRST, WE TAKE UP THE ITA NO. 0 2/DEL/2016 IN CASE OF SHRI DEV SUMAN SINDHU FOR AY 2012 - 13 . IN THIS APPEAL, THE ISSUE NO. 2(I) IS INVOLVED. FURTHER IN APPEAL FOR AY 2013 - 14 BOTH THE ISSUES MENTIONED IN PARA NO 2 ARE INVOLVED. WE SUBMIT THE FACTS OF THE CASE AND THEN DECIDE THE ISSUE FOR THAT ASSESSEE AND APPLY TO ALL OTHER APPEALS COVERED BY THIS ORDER. 4. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 10,29,48,000/ - ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU IN HIS STAT EMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 3. THAT THE LD.. CIT(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WI THOUT OFFERING AN OPPORTUNITY TO THE ASSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 4. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON ACCOUNT OF WAIVER OF LOAN BY M/S LEHMAN 5 | P A G E BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 6. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING HONBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - 11 VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 7. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 5. THE ASS ESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL IN CO NO. 177/DEL/2016 FOR ASSESSMENT YEAR 2012 - 13: - 1) THAT THE LD. C.I.T.(A) ON THE FACTS OF THE CASE AND IN LAW HAS RIGHTLY DELETED THE ADDITION OF RS. 10,29,48,000/ - AS INCOME FROM UNDISCLOSED SOURCES AND THE SAME SHOULD BE UPHELD. 2) THAT THE LD. C.I.T.(A) RIGHTLY DELETED THE ADDITION OF RS. 10,29,48,000 AS THE AMOUNT IN QUESTION WAS WAIVER OF LOAN IN THE CASE OF CELLCAP SECURITIES LTD. AND HAVE NOTHING TO DO WITH THE APPELLANT. 3) THAT THE LD. C.I.T.(A) CORRECTLY APPRECIATED THE IMPUGNED SUM OF RS. 10,29,48,000 WAS DISCLOSED LOAN OF LEHMAN BROS, IN FAVO UR OF CELLCAP SECURITIES LTD. AND ITS WAIVER IN THE HANDS OF THE SAID COMPANY CANNOT BE SUBJECT OF SURRENDER AS UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 4) THAT THE DISCLOSURE SO OBTAINED IN COURSE OF SEARCH IN REGARD TO SUM OF RS. 10.29 CRORES W AS DIRECTLY IN CONTRADICTION TO CBDT INSTRUCTION NOS. F.NO.286 2 2 33 - IT(INV) DATED 10.03.2003 AND F.NO. 286/ 98/2013 - IT(INV.II) DATED 18.12.2014 AND. THEREFORE, MERELY BECAUSE IN A STATEMENT U/S. 132(4) APPELLANT ADMITTED THE IMPUGNED SUM AS UNDISCLOSED I NCOME WILL GO TO CREATE AN INCOME IN HIS HAND CHARGEABLE TO TAX UNDER THE INCOME TAX ACT 5) THAT THE LD. C.I.T.(A) RIGHTLY CONSIDERED THE FACTS BROUGHT ON RECORD BY THE RESPONDENT. 6) THAT THE LD. C.I.T.(A) CORRECTLY RELIED ON THE WORKINGS SUBMITTED BY T HE RESPONDENT, AND SINCE SUCH WORKINGS AND EXPLANATIONS PROVIDED BY RESPONDENT WERE SUFFICIENT, THERE WAS NO NEED FOR CROSS EXAMINATION OF THE SAME. 7) THAT ALTHOUGH THE RESPONDENT HAD OFFERED ADDITIONAL INCOME, IT HAD BEEN CLEARLY STATED THAT ITS TAXABIL ITY WILL BE SUBMITTED SUBSEQUENTLY. 8) THAT THE RESPONDENT HAD DISCLOSED COMPLETE LINKAGE OF WAIVER OF LOAN TO THE ADDITIONAL INCOME THROUGH VARIOUS CORRESPONDENCES WITH 6 | P A G E THE REVENUE AUTHORITIES, THUS SUCH EXPLANATION WAS NOT AN AFTERTHOUGHT. 9) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT AO HAD ACCESS TO THE ENTIRE SEIZED MATERIAL, AND WAS UNABLE TO SHOW ANY DOCUMENT/ EVIDENCE THAT COULD HAVE BEEN TREATED AS INCRIMINATING OR UNEXPLAINED. 10) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT EVEN IF THE WAIVER OF LOA N WAS LIABLE TO TAX, THEN THE SAME WOULD HAVE BEEN TAXED IN THE HANDS OF THE ALLEGED BENEFICIARY I.E. CELLCAP SECURITIES LTD. 11) THAT THE ORDER OF LD. C.I.I.(A) IS CORRECT IN LAW AND ON FACTS OF THE CASE, AND IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 6. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 03/DEL/2016 FOR THE ASSESSMENT YEAR 2013 - 14: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.3,20,00,000/ - ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.9,95,000/ - ON AC COUNT OF UNEXPLAINED CASH IN HAND U/S 69A OF THE IT ACT, 1961 WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SAME AFTER DUE OPPORTUNITIES. 3. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU I N HIS STATEMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 4. THAT THE LD. CIT(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASS ESSEE WITHOUT OFFERING AN OPPORTUNITY TO THE ASSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFE RED ON ACCOUNT OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 6. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 7. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING HONBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 7 | P A G E 8. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 7. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL IN CO NO. 134/DEL/2016 FOR ASSESSMENT YEAR 2013 - 14: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.3,20,00,000/ - ON ACCOUNT OF RETRACT ION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.9,95,000/ - ON ACCOUNT OF UNEXPLAINED CASH IN HAND U/S 69A OF THE IT ACT, 1961 WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SAME AFTER DUE OPPORTUNITIES. 3. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU IN HIS ST ATEMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 4. THAT THE LD. CIT(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WI THOUT OFFERING AN OPPORTUNITY TO THE ASSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON A CCOUNT OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 6. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN B ROTHERS PERTAINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 7. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING HONBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 8. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 8. THE BRIEF F ACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. SEARCH AND SEIZURE OPERATIONS U/S 132 WERE CONDUCTED ON 12.04.2012 IN CASE OF ASSESSEE ALONG WITH SOME OTHER CASES OF ARYAN SAINIK GROUP. THEREFORE , NOTICE U/S 153A WAS ISSUED ON 09.10.2013 IN RESPON SE TO WHICH THE ASSESSEE FILED RETURN OF RS. 25965213/ - ON 30.10.2014. THE ASSESSMENT U/S 153A READ WITH SECTION 143(3) OF THE ACT WAS PASSED ON 31.03.2015 8 | P A G E AT RS. 128813210/ - . THE MAIN ADDITION WAS MADE BY THE LD ASSESSING OFFICER OF RS. 10 , 29 , 48 , 000/ - AS PER PARA NO. 5 OF THE ASSESSMENT ORDER AS UNDER: - 5. RETRACTION OF ADDITIONAL INCOME DISCLOSED SH. R.S. SINDHU IS THE MAIN PROMOTER AND CONTROLLER OF THE ARYAN SAINIK GROUP. HE ON BEHALF OF THE ARYAN SAINIK GROUP AND OTHER FAMILY MEMBERS HAS OFFERED TOTAL ADDITIONAL INCOME OF RS.150 CRS. FOR TAXATION. HIS OFFER LETTER IS REPRODUCED BELOW: THE ASS TT. DIRECTOR OF INCOME TAX (INV), ROOM NO. 274, ARA CENTRE, JHANDEWALAN EXT. NEW DELHI REF: OUR EARLIER DATED 24.04.2012, 14.05.2012, 28.05.2012 AND 11.06.2012, SUB: SEARCH AND SEIZURE PROCEEDINGS ON SAINIK - ARYAN GROUP. PURSUANCE TO OUR LETTERS DEATED 24.04.2012, 14.05.2012, 28.05.2012 ABD 11.06.2012 WE ARE HEREBY SUBMITTING A SUMMARY OF ADDITIONAL INCOME OFFERED TILL DATE VIDE ANNEXURE - A, IT MAY BE NOTED THAT ALL ADDITIONAL INCOME OFFERED FOR TAXATION IN TERMS OF SEIZED DOCUMENTS, HAS BEEN INCL UDED IN BREAK UP GIVEN VIDE OUR VARIOUS LETTERS REFERRED TO HERE IN ABOVE. AS PER ABOVE OFFER LETTER SH. DEV SUMAN SNDHU HAS OFFERED RS. 1029.48 LACS, RS, 320 LACS FOR THE A.Y. 2012 - 13 AND A.Y. 2013 - 14 RESPECTIVELY. A PERUSAL OF RETURN SHOWS THAT NO INCOM E HAS BEEN OFFERED AS ADDITIONAL INCOME FOR A.Y 2012 - 13 AS AGAINST RS. 10.29 CRORES. VIDE HIS LETTER DATED 20.03.2015, HE HAS EXPLAINED HIS RETRACTION AS UNDER; - AT THE TIME OF SEARCH AND DURING THE POST SEARCH PROCEEDINGS, THE ISSUE OF TAXABILITY OF WAI VER OF LOAN OF LEHMAN BROTHERS COMMERCIAL CORPORATION ASIA LIMITED (LBCCA) IN CELLCAP SECURITIES LIMITED IN BVI(CSL) WAS RAISED BY THE INVESTIGATION WING AND IT WAS ADVISED BY THE DEPARTMENT THAT GROUP SHOULD DISCLOSE RS.86 CRORE ON THAT ACCOUNT. ACCORDING LY GROUP OFFERED FOR ADDITIONAL INCOME OF RS.150 CRORES AND I ALONGWITH MY BROTHERS & CAPT K. S SOLARIKI STICK TO THE OFFER OF ADDITIONAL INCOME OF RS.86 CRORE IN THEIR HANDS AS PER DETAILS GIVE HEREUNDER: - NAME OF THE PERSONS AMOUNT (RS. IN LACS) CAPT R S SINDHU 1684.08 9 | P A G E SH. VIR SEN SINDHU 1 905.18 SH. VRIT PAL SINDHU 1690.00 SH. SATY A PAL SINDHU 1390.3 SH. DEV SUMAN SMDHU 1349.48 CAPT K S SOLANKI 630,50 TOTAL 8649.57 DURING POST SEARCH PROCEEDINGS, THE GROUP HAS TAKEN A LEGAL ADVICE REGAR DING WAIVER OF IPAN OF LEHMAN BROTHERS AND IT HAS BEEN ADVISED THAT THE SAME IS NOT TAXABLE IN THE HANDS OF ANY INDIVIDUAL OR GROUP SINCE (I) THE WAIVER OF USD 18, 70 MILLIONS OF LOAN OF LEHMAN BROTHERS IS NOT TAXABLE IN'LHE HANDS OF ABOVE INDIVIDUALS. FURTHER, THE SAME IS ALSO NOT TAXABLE IN THE HAND OF M/S CELLCAP SECURITIES LTD IN ASSESSMENT YEAR 2009 - 10. SINCE THE INVESTMENT HAS NOT BEEN SOLD DURING 2009 - 10, THIS WAIVER HAS BEEN CREDITED TO CAPITAL RESERVE, TO BE ADJUSTED AGAINST THE INVESTMENT AT TH E TIME OF DISPOSAL OF THE INVESTMENT.' THE AMOUNT OF RS. 10,29,48,000/ - WAS NOT OFFERED AS ADDITIONAL INCOME IN RETURN FOR A.Y. 2012 - 13. IT IS PERTINENT TO MENTION HERE THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO A.Y. 2010 - 11 WHEREA S THE ASSESSEE HAD OFFERED UNDISCLOSED INCOME FOR A.Y. 2012 - 13 AND A.Y. 2013 - 14. APPARENTLY THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS IS NOT RELATED TO THE UNDISCLOSED INCOME OFFERED BY THE ASSESSEE UNDER HEADS OF INCOME FROM OTHER SOURCES/UNDISCL OSED INCOME/UNDISCLOSED INVESTMENT. THE LINKING OF UNDISCLOSED INCOME OFFERED EARLIER IS PURELY AN AFTERTHOUGHT SINCE THERE WERE SEVERAL INCRIMINATING DOCUMENTS WHICH WERE SEIZED AND ON THE BASIS OF WHICH THE ASSESSEE HAS OFFERED ADDITIONAL INCOME AS MENTI ONED IN EARLIER PARAS. THE REASON FOR EARLIER OFFER MUST HAVE BEEN IN HIS SPECIAL KNOWLEDGE ON THE BASIS OF WHICH THE UNDISCLOSED INCOME WAS OFFERED FOR TAXATION AND LATERON RETRACTED. MOREOVER, ON THE BASIS OF SAME OFFER LETTER WHOLE GROUP HAS DISCLOSED A DDITIONAL INCOME IN DIFFERENT ENTITIES. IT IS ALSO PRESUMING THAT THE, UNDISCLOSED INCOME OFFERED WAS EARNED IN INDIA. ACCORDINGLY, THE CONTENTION OF THE ASSESSEE IS HEREBY REJECTED AND THE AMOUNT OF RS. 10,29,48,000/ - NOT OFFERED FOR TAXATION IS BEING ADD ED AS INCOME FROM UNDISCLOSED SOURCES IN THE HANDS OF THE ASSESSEE. SINCE THE UNDISCLOSED INCOME DETERMINED UNDER THIS HEAD REPRESENTED; EITHER WHOLLY OR PARTLY, BY WAY OF ANY MONEY, BULLION OR JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND DURING THE COURSE OF SEARCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS 10 | P A G E MAINTAINED IN THE NORMAL COURSE RELATING TO THE ASSESSMENT YEAR OR OTHERWISE NOT BEEN DISCLOSED TO THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH, I AM SATISFIED THAT THE PROVISIONS OF SECTION U/S 271AAA OF THE ACT IS APPLICABLE IN THE CASE OF THE ASSESSEE FOR THE AY IN RESPECT OF THE ADDITION MADE UNDER THIS HEAD. ACCORDINGLY PENALTY PROCEEDINGS UNDER THE SAID SECTION ARE BEING INITIATED SEPARATELY. ( ADDITION: RS. 10,29,48,000/ - ) 9. THE ASSESSING OFFICER NOTED THAT ALONG WITH THE ABOVE LETTER INCORPORATED IN ABOVE PARA 4 THE ASSESSEE SUBMITTED ANNEXURE - A WHEREIN, FOR THE ASSESSEE DISCLOSURE OF RS. 1029.48 LACS WAS OFFERED IN THE HANDS OF ASSESSEE FOR ASSESSMENT YEAR 2012 - 13 AND RS. 320 LACS FOR ASSESSMENT YEAR 2013 - 14. THE ABOVE SUM WAS NOT OFFERED IN THE RETURN OF INCOME AND THEREFORE, THE ADDITION WAS MADE. 10. AGAINST THE ORDER OF THE LD ASSESSING OFFICER ASSESSEE PREFERRED APPEAL BEFORE THE LD CIT(A), WHO DELETED THE ABOVE ADDITION AS UNDER: - 5. AY 2012 - 13 AND 2013 - 14 THIS GROUND RELATES TO ADDITION OF RS. 10,29,48,000/ - AND RS. 3,20,00,000/ - ON ACCOUNT OF RETRACTION OF ADDITIONA L INCOME DISCLOSED IN ASST YR 2012 - 13 AND 2013 - 14 RESPECTIVELY. 6. BACKGROUND AND FACTS OF THE CASE ARE AS UNDER: - APPELLANT IN AN INDIVIDUAL AND DERIVED INCOME UNDER THE HEADS SALARY, HOUSE PROPERTY, BUSINESS & PROFESSION, CAPITAL GAINS AND OTHER SOURCES . THE APPELLANT IS NOT ENGAGED IN ANY SOLE PROPRIETORY BUSINESS. SEARCH & SEIZURE AND SURVEY OPERATIONS U/S 132/133A OF THE INCOME TAX ACT, 1961 WERE CONDUCTED ON 12/04/2012 IN THE CASE OF ASSESSEE ALONG WITH THE CASES OF THE ARYAN SAINIK GROUP AT VARIOUS RESIDENTIAL & BUSINESS PREMISES. (I) THAT DURING THE CURRENCY OF SEARCH PROCEEDINGS, SH R. S. SINDHU, THE MAIN PROMOTER AND CONTROLLER OF THE ARYAN SAINIK GROUP HAD OFFERED TOTAL ADDITIONAL INCOME OF RS 150 CRS FOR TAXATION VIDE HIS LETTER DATED 11.6.2012 ADDRESSED TO ADIT (INV) UNIT - II(3), NEW DELHI. (II) THAT AS PER THE BREAK - UP GIVEN IN ANNEXURE - A TO THE SAID LETTER, THE APPELLANT WAS TO OFFER RS 1029.48 LACS AND RS 320 LACS AS ADDITIONAL INCOME FOR AY 2012 - 13 AND 2013 - 14 RESPECTIVELY. (III) THAT IT WAS SEEN VIDE APPELLANTS ITR FOR AY 2013 - 14 THAT HE HAD NOT INCLUDED THE AMOUNT OFRS 1029.48 LACS RS 3.20 CRS AS ADDITIONAL INCOME. 11 | P A G E (IV) THAT VIDE HIS LETTER DATED 20.03.2015 THE APPELLANT HAD EXPLAINED THE REASONS FOR HIS ALILEGED RETRACTION. (V) THAT THE ISSUE OF WAIVER OF LOAN OF LEHMAN BROTHERS PERTAINED TO AY 2010 - 11 WHEREAS THE APPELLANT HAD OFFERED UNDISCLOSED INCOME FOR AY 2012 - 13 AND 2013 - 14 RESPECTIVELY. (VI) THAT APPARENTLY, THE ISSUE OF WAIVER OF LOAN BY LEHMAN BROS IS NOT RELATED TO THE UNDISCLOSED INCOME OFFERED BY THE APPELLANT UNDER THE HEADS OF INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/ UNDISCLOSED INVESTMENT. (VII) THAT THE LINKING OF UNDISCLOSED INCOME OFFERED EARLIER IS PURELY AN AFTERTHOUGHT SINCE THERE WERE SEVERAL INCRIM INATING DOCUMENTS WHICH WERE SEIZED AND ON THE BASIS OF WHICH THE APPELLANT HAD OFFERED ADDITIONAL INCOME AS MENTIONED IN EARLIER PARAS. (VIII) THE REASON FOR EARLIER OFFER MUST HAVE BEEN IN HIS (APPELLANTS) SPECIAL KNOWLEDGE ON THE BASIS OF WHICH THE UN DISCLOSED INCOME WAS OFFERED FOR TAXATION AND LATER ON RETRACTED. (IX) THAT ON THE BASIS OF SAME OFFER LETTER WHOLE GROUP HAS DISCLOSED ADDITIONAL INCOME IN DIFFERENT ENTITIES. ON ACCOUNT OF AFORE STATED PURPORTED REASONS THE LD AO REJECTED THE CONTENTI ON OF THE APPELLANT RAISED VIDE HIS LETTER DATED 20.3.2015 AND ADDED THE AMOUNT OF RS 1029.48 LACS AND RS 3.20 CRS AS INCOME FROM UNDISCLOSED SOURCES IN THE HANDS OF THE APPELLANT IN AY 2012 - 13 AND 2013 - 14 RESPECTIVELY. 7. FINDINGS OF THE ASSESSING OFFICER THE LD ASSESSING OFFICER, IN PARA 5 PAGES 2 TO 5 OF HIS ASSESSMENT ORDER HAS MENTIONED FCHAT: - THE AMOUNT OF RS. 10,29,48,000/ - AND RS 3,20,00,000/ - WERE NOT OFFERED AS ADDITIONAL INCOME IN RETURN FOR A.Y 2012 - 13 AND 2013 - 14 RESPECTIVELY. IT IS PERTINENT TO MAINTAIN HERE THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO A.Y 2010 - 11 WHEREAS THE ASSESSEE HAD OFFERED UNDISCLOSED INCOME FOR A.Y 2008 - 09 AND A.Y 2012 - 13. APPARENTLY THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS IS NOT RELA TED TO THE UNDISCLOSED INCOME OFFERED BY THE ASSESSEE UNDER HEADS OF INCOME FROM OTHER SOURCES/ UNDISCLOSED INCOME / UNDISCLOSED INVESTMENT. THE LINKING OF UNDISCLOSED INCOME OFFERED EARLIER IS PURELY AN AFTERTHOUGHT SINCE THERE WAS SEVERAL INCRIMINATING D OCUMENTS WHICH WERE SEIZED AND ON THE BASIS OF WHICH THE ASSESSEE HAS OFFERED ADDITIONAL INCOME AS MENTIONED IN EARLIER PARAS. THE REASON FOR EARLIER OFFER MUST HAVE BEEN IN HIS SPECIAL KNOWLEDGE ON THE BASIS OF WHICH THE UNDISCLOSED INCOME WAS OFFERED FOR TAXATION AND LATER ON RETRACTED. MOREOVER, ON THE BASIS OF SAME OFFER LETTER WHOLE GROUP HAS DISCLOSED ADDITIONAL INCOME IN DIFFERENT ENTITIES. ACCORDINGLY , THE CONTENTION OF THE ASSESSEE IS HEREBY REJECTED AND THE BALANCE AMOUNT OF RS. 10,29,48,000/ - AN D RS 3,20,00,000/ - NOT OFFERED FOR TAXATION IS BEING ADDED AS INCOME FROM UNDISCLOSED SOURCES IN THE HANDS OF THE ASSESSEE. 12 | P A G E 8. SUBMISSIONS OF THE APPELLANT THE PARA - WISE RELEVANT SUBMISSIONS OF THE APPELLANT MAY BE SUMMARIZED AS UNDER: - (I) IT IS ADMITTE D THAT CAPT R. S. SINDHU HAD OFFERED TOTAL ADDITIONAL INCOME OF RS 150 CRORES FOR TAXATION ON BEHALF OF THE ENTIRE GROUP VIDE HIS LETTER DATED 11.6.2012. (II) IT IS ADMITTED THAT AS PER BREAK - UP GIVEN AS ANN - A TO THE LETTER DATED 11.6.2012, THE APPELLANT WAS TO OFFER RS 1029.48 LACS AND RS 320 LACS AS ADDITIONAL INCOME FOR AY 2012 - 13 AND 2013 - 14 RESPECTIVELY. (III) IT IS ADMITTED THAT VIDE APPELLANTS ITR FOR AY 2013 - 14 HE HAD NOT INCLUDED THE AMOUNT OFRS 3.20 CRS AS ADDITIONAL INCOME. (IV) IT WILL BE SEE N FROM PAGE 10 OF THE IMPUGNED ASSESSMENT ORDER THAT THE LD AO IS REFERRING TO ONLY PART OF HIS FIRST LETTER FILED ON 20. F 2015 (PLEASE SEE AS ANN - L ABOVE). HE HAS EXTRACTED ONLY LIMITED FACTS FROM THE SAID LETTER. MOREOVER, THE LD AO HAS COMPLETELY IGNOR ED/ NOT CONSIDERED THE LETTER SIGNED BY CAPT R. S. SINDHU AND CAPT K. S. SOLANKI ALSO FILED ON 20.3.2015 (PLEASE SEE ANN - M ABOVE). THE REASONS AND CIRCUMSTANCES WERE CLEARLY STATED IN CAPT R.S.SINDHUS LETTER ENCLOSED WITH THE ARS LETTER DATED 13.7.2012 A DDRESSED TO THE LD ADI THE LD AO ALSO DID NOT MAKE ANY MENTION OF THE STATEMENT RECORDED U/S 131 OF THE ACT OFSH VIR SEN SINDHU ETC ON 26.2.2015. (V) IT IS ADMITTED THAT THE WAIVER OF LOAN TOOK PLACE IN THE PREVIOUS YEAR RELEVANT TO A.Y. 2010 - 11. THE LD A O ALSO RE - OPENED THE CASE OF CSL IN RESPECT OF A.Y. 2010 - 11. THEREFORE, THE APPELLANTS COULD NOT AND SHOULD NOT HAVE INITIALLY (EVEN THOUGH TENTATIVELY) OFFERED THE SAME IN A.Y. 2012 - 13 AND 2013 - 14. (VI) AT THE TIME OF MAKING THE INITIAL OFFER OF DISCLOSI NG ADDITIONAL INCOME OF RS 150 CRORES THE APPELLANTS HAD VERY MUCH INCLUDED THE ISSUE OF WAIVER OF LOAN BY LEHMAN BROS AS PART OF THE TOTAL OFFER. SINCE THE NATURE, HEAD OF INCOME, THE DOCUMENT ON THE BASIS OF WHICH SUCH INCOME WAS OFFERED AND THE PURPORTE D MANNER IN WHICH SUCH INCOME WAS EARNED REMAINED STILL TO BE FINALLY SETTLED, THE APPELLANTS HAD STATED THE HEAD OF INCOME AS INCOME FROM OTHER SOURCES/ UNDISCLOSED INCOME/ UNDISCLOSED INVESTMENTS. (VII) THIS IS NOT AN AFTERTHOUGHT BECAUSE THE AMOUNT O F LOAN WRITTEN - OFF WAS RS 86 CRORES AND PRECISELY RS 86 CRORES HAD BEEN INCLUDED BY THE APPELLANTS IN THE BREAK - UP ATTACHED TO CAPT R.S.SINDHUS LETTER DATED 11/6/2012. THIS LINKING WAS FURTHER CLARIFIED VIDE SECOND LETTER OF CAPT R. S. SINDHU TO ADI ALSO DATED 11. 6.2012 AND ARS LETTER DATED 13.7.2012 ENCLOSED AS ANN - J AND ANN - K ABOVE AND STATEMENT OF PROMOTERS RECORDED U/S 131 OF THE ACT ON 26.2.2012. ASSUMING THOUGH NOT ADMITTING THAT THE ALLEGATION OF THERE BEING SEVERAL INCRIMINATING DOCUMENTS THAT WE RE SEIZED ON THE BASIS OF WHICH THE APPELLANT HAD OFFERED THE ADDITIONAL INCOME THEN THE LD AO SHOULD HAVE POINTED OUT ATLEAST ONE INCRIMINATING DOCUMENT LYING SEIZED WITH HIM THAT COULD HAVE BEEN LINKED TO UNDISCLOSED INCOME OF RS 86 CRORES. THE FACT IS T HAT THE ENTIRE SEIZED MATERIAL IS STILL LYING WITH THE LD AO. 13 | P A G E THE ONUS IS ON THE LD AO TO ATLEAST SHOW THE INCRIMINATING DOCUMENT OTHER THAN THOSE RELATING TO CSL, THAT COULD HAVE BEEN LINKED WITH APPELLANTS DISCLOSURE OF RS 86 CRORES. THE ALLEGATIONS MADE BY LD AO ARE WITHOUT ANY BASIS. MERE PRESUMPTIONS, CONJECTURES AND SURMISES NOT SUPPORTED BY ANY COGENT MATERIAL/ EVIDENCE. (IX) THIS ALLEGATION TOO IS FACTUALLY INCORRECT. THE REASONS FOR EARLIER OFFER WERE NOT IN APPELLANTS SPECIAL KNOWLEDGE. THE APPELLANTS HAD DULY DISCLOSED TO THE INVESTIGATION WING AS WELL AS THE LD AO AT EVERY STAGE THAT SINCE THE ISSUE OF TAXABILITY OF WAIVER LOAN WAS TOO COMPLEX AND COULD NOT YET BE SETTLED AT THE INITIAL STAGE, THE SAID AMOUNT WAS BEING TENTATIVELY OFFERED I N AY 2012 - 13 AND 2013 - 14 TO AVAIL THE BENEFITS OF NON - LEVY OF PENALTY U/S 271AAA. IT WAS FURTHER CLEARLY STATED THAT FINAL CALL ON THE TAXABILITY OF THIS ISSUE WOULD BE TAKEN AT THE TIME OF FILING OF LTRS. (IX) THE DOCUMENTS/ SEIZED MATERIAL THAT COULD NOT BE SATISFACTORILY EXPLAINED, THE AMOUNTS IN RESPECT OF SUCH DOCUMENTS/ SEIZED MATERIAL WERE AGREED TO BE OFFERED AS ADDITIONAL INCOME IN THE ITRS THAT WERE REQUIRED TO BE FILED IN RESPONSE TO NOTICES U/S 153A TO BE RECEIVED IN FUTURE. THE DOCUMENTS/ SEIZED MATERIAL THAT COULD BE SATISFACTORILY EXPLAINED, THE AMOUNTS IN RESPECT OF SUCH DOCUMENTS/ SEIZED MATERIAL WERE NOT OFFERED AS ADDITIONAL INCOME IN THE ITRS THAT WERE REQUIRED TO BE FILED IN RESPONSE TO NOTICES U/S 153A. THE ARS OF T HE APPELLANT HAVE ALSO PLACED RELIANCE ON INSTRUCTION NO. F NO. 286/2/2003 - IT (INV) DATED 10.03.2003 AND INSTRUCTION NO. F.NO. 286/ 98/2013 - IT (INV.II) DATED 18.12.2014 OF THE CBDT. RELIANCE WAS ALSO PLACED ON FOLLOWING CASE - LAWS: CITVS. NARESH KUMAR AGGA RWAL REPORTED IN 369 ITR 171 G. CHINNA YELLLAPPA IN ITA NO. 268 OF 2003 DATED 6.11.2014 ABDUL QAYUM V CIT REPORTED IN 184 ITR 404. PULLANGODE RUBBER PRODUCE CO. LTD. VS. SWIFT OF KERALA BY APEX COURT REPORTED IN 91 ITR 18 AIR 1976 SC 376 SRI KRISHNA VS. K URUKSHTETRA UNIVERSITY 56 ITR 67 (SC) CIT VS. V. MR. P. FIRM, MUAR 88 ITR 293 (P&H) KRISHAN LAI SHIV CHAND RAI V CIT 218 ITR 239 (SC) ITO VS. CH. ATCHIAH 238 ITR 461 (SC) UOI VS. BANWARI LAI AGGARWAL 245 ITR 102 (AT) (CHD) BALDEV KRISHAN KAPOOR VS. ACIT 25 5 ITR 69 (AT) ACIT V SATYA NARAIN AGGARWAL 278 ITR 454 (ALL) CIT VS. RADHA KISHAN GOEL FINDING 9. I HAVE CONSIDERED THE WRITTEN SUBMISSIONS OF THE APPELLANT, CASE LAWS AND HAVE GONE THROUGH THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 153A OF THE ACT. I HAVE ALSO EXAMINED THE SUBMISSIONS OF THE ARS REGARDING VERIFICATION OF ASSESSMENT RECORDS, WHICH WERE REQUISITIONED FROM THE AO AND VERIFIED DURING THE COURSE OF APPEAL PROCEEDINGS. IT IS SEEN THAT THE OFFER OF DECLARING ADDITIONAL INCOME OF RS 10,29,48,0 00/ - (A.Y. 2012 - 13) AND RS 3,20,00,000/ - (2013 - 14) WAS GIVEN ON BEHALF OF THE APPELLANT BEFORE THE ADI VIDE LETTER DATED 11.6.2012. IT IS SEEN THAT THIS OFFER OF ADDITIONAL INCOME WAS IN RESPECT OF AND 14 | P A G E REPRESENTED THE WAIVER OF LOAN BY LEHMAN BROTHERS. THI S LINKAGE OF ADDITIONAL INCOME WITH THE AMOUNT OF ADDITIONAL INCOME WAS MADE KNOWN TO THE INVESTIGATION WING VIDE SECOND LETTER DATED 11.6.2012 WHEREIN IT WAS STATED AS UNDER: - IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, THE GROUP WILL TAKE FINAL CALL REGAR DING THE TAXABILITY OF CSL AND THE - YEAR OF TAXABILITY AT THE TIME OF FILING OF ITR IN RESPONSE TO NOTICE U/S 153A OFITHE - INCOME TAX ACT, 1961 AND ACCORDINGLY THE PAYMENT OF BALANCE TAXES ON ADDITIONAL INCOME AS PER CHART/ DETAILS OF EVEN DATE SHALL THEREFO RE BE MADE AT THE TIME OF FILLING OFLTRS U/S 153A. 9.1.1 THE INVESTIGATION WING WAS AGAIN APPRISED OF THE LINKAGE OF ADDITIONAL INCOME WITH THE AMOUNT OF ADDITIONAL INCOME VIDE NOTE ACCOMPANYING ARS LETTER DATED 13.7.2012 WHEREIN IT WAS STATED AS UNDER: - THOUGH THE ADDITIONAL INCOME ON ACCOUNT OF CSL PERTAINS TO AY 2010 - 11, THE SAME WAS OFFERED IN SPECIFIED PREVIOUS YEAR AS DEFINED IN SECTION 271 AAA OF THE INCOME TAX ACT, 1961 I.E, AY 2012 - 13 AND AY 2013 - 14 INSTEAD OF AY 2010 - 11 TO AVAIL THE BENEFIT OF N ON LEVY OF PENALTY AS PER SECTION 271AAA. 9.1.2 COPIES OF APPELLANTS SUBMISSIONS DATED 11.6.2012 AND 13.7.2012 WERE FURNISHED TO THE AO. IT IS ALSO SEEN THAT THE AO HAS QUOTED ONLY A PART EXTRACTED FROM THE ARS LETTER DATED 20.3.2015. 9.1.3 FROM ABOVE FACTS IT IS ESTABLISHED THAT THERE WAS COMPLETE LINKAGE OF WAIVER OF LOAN BY LEHMAN BROTHERS TO THE ADDITIONAL INCOME INITIALLY OFFERED BY THE APPELLANT. SINCE THE APPELLANT WAS REPEATEDLY APPRISING OF THIS LINKAGE FROM AS EARLY AS 11.6.2012, IT CANNOT BE SAID THAT THIS WAS AN AFTERTHOUGHT. 9.1.4 THE ASSESSING OFFICER, BASED ON THE MATERIAL GATHERED BY THE INVESTIGATION WING HAD REOPENED THE CASE OF CELLCAP SECURITIES LTD, THE ALLEGED BENEFICIARY OF THE WAIVER OF LOAN BY LEHMAN BROTHERS. EVEN IF THE WAIVER OF LOAN BY LEHMAN BROTHERS WAS LIABLE TO TAX, IT WOULD BE LIABLE TO TAX IN THE HANDS OF CELLCAP SECURITIES LTD. 9.1.5 THE ASSESSING OFFICER HAD ACCESS TO ENTIRE SEIZED MATERIAL. HE HAS NOT BEEN ABLE TO SHOW ANY DOCUMENT/ EVIDENCE THAT COULD HAVE BEEN TREA TED AS INCRIMINATING OR UNEXPLAINED. 9.1.6 THE INSTRUCTIONS OF THE CBDT AND THE CASE LAWS CITED BY THE ARS CLEARLY ESTABLISH THAT MERE LETTER GIVEN DURING SEARCH PROCEEDINGS ALONE CANNOT BE THE BASIS FOR MAKING ADDITION. SUCH ADMISSION/ LETTER SHOULD BE S UPPORTED BY INCRIMINATING SEIZED MATERIAL/ DOCUMENTS. IN THE INSTANT CASE, THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL/ EVIDENCE IN 'SUPPORT OF THIS ADDITION. HENCE THE ADDITION OF RS. 10,29,48,000/ - AND RS 3,20,00,000/ - MADE IN ASSESSMENT YEAR 2012 - 13 AND 2013 - 14 RESPECTIVELY IS DELETED. 11. THEREFORE, AGGRIEVED WITH THE ORDER OF THE LD CIT ( A) REVENUE HAS PREFERRED THIS APPEAL. THE REVENUE SUBMITTED WRITTEN SUBMISSION ON THAT ISSUE WHEREIN, AFTER STATING REASONS GIVEN BY THE LD AO AND CIT(A) , SHE RELIED ON SEVERAL DECISION : - 15 | P A G E THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT(A) WHO HAS DELETED AN ADDITION OF RS 11.90 CR (A.Y 2012 - 13) AND RS 5.00 CR (A.Y 2013 - 14) MADE ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED IN A STATEMENT UNDER SEC TION 132(4). THE CIT(A) HAS WRONGLY DELETED THE ADDITION ACCEPTING THE SUBMISSION OF THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS WITHOUT OFFERING AN OPPORTUNITY TO THE AO TO COUNTER OR CROSS - EXAMINE. THE CIT(A) ALSO IGNORED THE FACT THAT THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO A.Y 2012 - 13 & 2013 - 14 AND HAS NO LINK WITH THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROS WHICH PERTAINS TO A.Y 2010 - 11 AND ON THE BASIS OF WHICH CIT(A) HAS DELETED THE SAID ADDITION. THE CIT(A) HAS ALS O IGNORED THE PRINCIPLE ENUNCIATED BY DELHI HIGH COURT IN THE CASE OF M/S JANSAMPARK ADVERTIZING & MARKETING LTD. 375 ITR 373(DELHI). SUBMISSIONS OF REVENUE FACTS OF THE CASE SEARCH & SEIZURE AND SURVEY OPERATION UNDER SECTION 132/133A OF THE INCOME TAX AC T, 1961 WERE CONDUCTED ON 12.04.2012 IN THE CASE OF ASSESSEE. SH. R.S. SINDHU IS THE MAIN PROMOTER AND CONTROLLER OF THE ARYAN SAINIK GROUP. HE ON BEHALF OF THE ARYAN SAINIK GROUP AND OTHER FAMILY MEMBERS OFFERED TOTAL ADDITIONAL INCOME OF RS.150 CRS. FOR TAXATION. HIS LETTER OF SURRENDER READS AS UNDER: THE ASSISTANT DIRECTOR OF INCOME TAX (INV.) UNIT - II(3) ROOM NO.274, ARA CENTRE JHANDEWALAN EXTN. NEW DELHI; REF: OUR EARLIER LETTERS DATED. 24 - 04 - 2012, 14 - 05 - 2012, 28 - 05 - 2012 & 11 - 06 - 2012 SUB: SEARCH AND SEIZURE PROCEEDING ON SAINIK - ARYAN GROUP RESPECTED SIR, PERUSING TO OUR LETTERS DATED .24 - 04 - 2012, 14 - 05 - 2012, 28 - 05 - 2012 & 11 - 06 - 2012, WE ARE HEREBY SUBMITTING A SUMMARY OF ADDITIONAL INCOME OFFERED TILL DATE VIDE ANNEXURE A. IT MAY NOTED THAT ALL THE A DDITIONAL INCOME OFFERED FOR TAXATION IN TERMS OF SEIZED DOCUMENTS, HAS BEEN INCLUDED IN BREAK - UP GIVEN VIDE OUR VARIOUS LETTERS REFERRED TO HEREIN ABOVE. AS PER ABOVE OFFER LETTER SH. VIR SEN SINDHU HAS OFFERED RS. 1190 LACS, AND RS 500 LACS FOR THE A.Y. 2012 - 13 AND A.Y. 2013 - 14 RESPECTIVELY. A PERUSAL OF RETURN SHOWS THAT HE HAS DISCLOSED NO ADDITIONAL INCOME FOR A.Y 2012 - 13 & A.Y 2013 - 14 AGAINST THE LARGER ADDITIONAL INCOME DISCLOSED IN STATEMENT RECORDED U/S 132(4) VIDE HIS LETTER DATED 20.03.2015, THE ASSESSEE HAS EXPLAINED HIS RETRACTION AS UNDER: 'AT THE TIME OF SEARCH AND DURING THE POST SEARCH PROCEEDINGS, THE ISSUE OF TAXABILITY OF WAIVER OF LOAN OF LEHMAN BROTHERS COMMERCIAL CORPORATION ASIA LIMITED (LBCCA) IN CELLCAP SECURITIES LIMITED IN BVI(CSL ) WAS RAISED BY THE SH. R.S. SINDHU IS THE MAIN PROMOTER AND CONTROLLER OF THE ARYAN SAINIK GROUP. HE ON BEHALF OF THE ARYAN SAINIK GROUP AND OTHER FAMILY MEMBERS OFFERED TOTAL ADDITIONAL INCOME OF RS.150 CRS. FOR TAXATION. HIS LETTER OF SURRENDER READS AS UNDER: 'AT THE TIME OF SEARCH AND DURING THE POST SEARCH PROCEEDINGS, THE ISSUE OF TAXABILITY OF WAIVER OF LOAN OF LEHMAN BROTHERS COMMERCIAL CORPORATION ASIA LIMITED (LBCCA) IN CELLCAP SECURITIES LIMITED IN BVI(CSL) WAS RAISED BY THE INVESTIGATION WING A ND IT WAS ADVISED BY THE DEPARTMENT THAT GROUP SHOULD DISCLOSE RS.86 CRORE ON THAT ACCOUNT. ACCORDINGLY, GROUP OFFERED FOR ADDITIONAL INCOME OF RS.150 CRORES AND I ALONG WITH MY BROTHERS & CAPT K.S SOLANKI STICK TO THE OFFER OF ADDITIONAL INCOME OF RS. 86 CRORE IN THEIR HANDS AS PER DETAILS GIVE HEREUNDER: NAME OF THE PERSONS AMOUNT (RS. IN LOAN) CAPT RS SINDHU 1684.08 SH. VIR SEN SINDHU 1905.18 16 | P A G E SH. VRIT PAL SINDHU 1690.00 SH.SATYA PAL SINDHU 1390.3 SH. DEV SUMAN SINDHU 1349.48 CAPT K S SOLANKI 630.50 TOTAL 8649.57 THE ASSESSEE SUBMITTED THAT DURING POST SEARCH PROCEEDINGS, THE GROUP HAS TAKEN LEGAL ADVICE REGARDING WAIVER OF LOAN OF LEHMAN BROTHERS AND IT HAS BEEN ADVISED THAT THE SAME IS NOT TAXABLE IN THE HANDS OF ANY INDIVIDUAL OR GROUP SINCE: THE WAIVER OF USD 18.70 MILLIONS OF LOAN OF LEHMAN BROTHERS IS NOT TAXABLE IN THE HANDS OF ABOVE INDIVIDUALS. FURTHER, THE SAME IS ALSO NOT TAXABLE IN THE HAND OF M/S CELLCAP SECURITIES LTD. IN FY 2009 - 10. SINCE THE INVESTMENT HAS NOT BEEN SOLD DURING FY 2 009 - 10, THIS WAIVER HAS BEEN CREDITED TO CAPITAL RESERVE, TO BE ADJUSTED AGAINST THE INVESTMENT AT THE TIME OF DISPOSAL OF THE INVESTMENT.' FINDING OF AO (REF PAGE 5/AO) THE AMOUNT OF RS.11,90,00,000/ - (RS 5,00,00,000/ - FOR A.Y 2013 - 14) WAS NOT OFFERED AS ADDITIONAL INCOME IN RETURN OF A.Y. 2012 - 13. IT IS PERTINENT TO MENTION HERE THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO A.Y.2010 - 11 WHEREAS THE ASSESSEE HAD OFFERED UNDISCLOSED INCOME FOR A.Y.2012 - 13 AND A.Y.2013 - 14. APPARENTLY, TH E ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS IS NOT RELATED TO THE UNDISCLOSED INCOME OFFERED BY THE ASSESSEE UNDER HEADS OF INCOME FROM OTHER SOURCES/ UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. THE LINKING OF UNDISCLOSED INCOME OFFERED EARLIER IS PURE LY AN AFTERTHOUGHT SINCE THERE WERE SEVERAL INCRIMINATING DOCUMENTS WHICH WERE SEIZED AND ON THE BASIS OF WHICH THE ASSESSEE HAS OFFERED ADDITIONAL INCOME AS MENTIONED IN EARLIER PARAS. THE REASON FOR EARLIER OFFER MUST HAVE BEEN IN HIS SPECIAL KNOWLEDGE O N THE BASIS OF WHICH THE UNDISCLOSED INCOME WAS OFFERED FOR TAXATION AND LATER ON RETRACTED. MOREOVER, ON THE BASIS OF SAME OFFER LETTER WHOLE GROUP HAS DISCLOSED ADDITIONAL INCOME IN DIFFERENT ENTITIES. IT IS ALSO PRESUMING THAT THE UNDISCLOSED INCOME OFF ERED WAS EARNED IN INDIA. ACCORDINGLY, THE CONTENTION OF THE ASSESSEE IS HEREBY REJECTED AND THE AMOUNT OF RS.11,90,00,000/ - (RS 5,0,00,000/ - FOR A.Y 2013 - 14) NOT OFFERED FOR TAXATION IS BEING ADDED AS INCOME FROM UNDISCLOSED SOURCES IN THE HANDS OF THE AS SESSEE. SINCE THE UNDISCLOSED INCOME DETERMINED UNDER THIS HEAD REPRESENTED, EITHER WHOLLY OR PARTLY, BY WAY OF ANY MONEY, BILLION OR JEWELLERY OR OTHER EVALUABLE ARTICLE OR THING FOUND DURING THE COURSE OR SEARCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE ASSESSMENT YEAR OR OTHERWISE NOT BEEN DISCLOSED TO THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH, I AM SATISFIED FINDING OF CIT(A )PARA 9.4.1/ PAGE 11 CIT(A)) THE ASSESSING OFFICER, BASED ON THE MATERIAL GATHERED BY THE INVESTIGATION WING HAD REOPENED THE CASE OF CELLCAP SECURITIES LTD, THE ALLEGED BENEFICIARY OF THE WAIVER OF LOAN BY LEHMAN BROTHERS. EVEN IF THE WAIVER OF LOAN BY LEHMAN BROTHERS WAS LIABLE TO TAX, IT WOULD BE LIABLE TO TAX IN THE HANDS OF CELLCAP SECURITIES LTD. THE ASSESSING OFFICER HAD ACCESS TO ENTIRE SEIZED MATERIAL. HE HAS NOT BEEN ABLE TO SHOW ANY DOCUMENT/EVIDENCE THAT COULD HAVE BEEN TREATED AS INCRIMINATIN G OR UNEXPLAINED. THE INSTRUCTIONS OF THE CBDT AND THE CASE LAWS CITED BY THE ARS CLEARLY ESTABLISH THAT MERE LETTER GIVEN DURING SEARCH PROCEEDINGS ALONE CANNOT BE THE BASIS OF MAKING ADDITION. SUCH ADMISSION/ LETTER SHOULD BE SUPPORTED BY INCRIMINATING S EIZED MATERIAL/ DOCUMENTS. IN THE INSTANT CASE, THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL/ EVIDENCE IN SUPPORT OF THIS ADDITION. THE CIT(A) HAS DELETED THE ADDITION WITHOUT CONSIDERING THE FOLLOWING: [A] EVIDENCE TO BE PRODUCED BY ASSESSEE BEFORE AO T O SUBSTANTIATE CLAIM. 17 | P A G E NO SUCH EVIDENCE PRODUCED BEFORE AO. THE AO BASED ON STATEMENT UNDER SECTION 132(4) REQUIRED THE ASSESSEE TO EXPLAIN WHY ADDITIONAL INCOME DISCLOSED UNDER SECTION 132(4) WAS NOT REFLECTED IN RETURN OF INCOME AND WHY TAXES WERE NOT PAI D ON SUCH DISCLOSED INCOME. APEX COURT IN THE CASE OF KESHAV MILLS & CO 56 ITR 365 (SC) HAS HELD SO. SECTION 114(G) OF THE INDIAN EVIDENCE ACT SATES THAT: CENTRAL GOVERNMENT ACT SECTION 114(G) IN THE INDIAN EVIDENCE ACT, 1872 (G) THAT EVIDENCE WHICH COULD BE AND IS NOT PRODUCED WOULD, IF PRODUCED, BE UNFAVORABLE TO THE PERSON WHO WITHHOLDS IT; A PERUSAL OF THE STATEMENT OF DISCLOSURE (REF ANNEXURE A TO LETTER OF DISCLOSURE) CLEARLY SHOWS THAT DISCLOSURE UNDER SECTION 132(4) WAS MADE ON ACCOUNT OF THE FOLLOW ING: INCOME FROM OTHER SOURCES UNDISCLOSED INCOME UNDISCLOSED INVESTMENT REVENUE RELIES ON FOLLOWING CASE LAWS ON THE ISSUE OF RETRACTION 1. KISHORE KUMAR VS CIT (62 TAXMANN.COM 215. 234 TAXMAN 771 (COPY ENCLOSED) WHERE HON'BLE SUPREME COURT DISMISSED SLP AGAINST HIGH COURT'S ORDER WHERE IT WAS HELD THAT SINCE ASSESSEE HIMSELF HAD STATED IN SWORN STATEMENT DURING SEARCH AND SEIZURE ABOUT HIS UNDISCLOSED INCOME, TAX WAS TO BE LEVIED ON BASIS OF ADMISSION WITHOUT SCRU TINIZING DOCUMENTS. B KISHORE KUMAR VS CIT (52 TAXMANN.COM 449) MADRAS HIGH COURT CONFIRMED (COPY ENCLOSED) 2. BHAAIRATH AAAARWAL VS CIT (31 TAXMANN.COM 274. 215 TAXMAN V 229. 351 ITR 1431 (COPY ENCLOSED WHERE HON'BLE DELHI HIGH COURT HELD THAT AN ADDITIO N IN ASSESSEE'S INCOME RELYING ON STATEMENTS RECORDED DURING SEARCH OPERATIONS CANNOT BE DELETED WITHOUT PROVING STATEMENTS TO BE INCORRECT. 3. SMT DAYAWANTI VS CIT [20161 75 TAXMANN.COM 308 (DELHI) (2017) 245 TAXMAN 293 (DELHI) (2017) 390 ITR 496 (DELHI (2016) 290 CTR 361 (DELHI) (COPY ENCLOSED) WHERE HON'BLE DELHI HIGH COURT HELD THAT WHERE INFERENCES DRAWN IN RESPECT OF UNDECLARED INCOME OF ASSESSEE WERE PREMI SED OH MATERIALS FOUND AS WELL AS STATEMENTS RECORDED BY ASSESSEE'S SON IN COURSE OF SEARCH OPERATIONS AND ASSESSEE HAD NOT BEEN ABLE TO SHOW AS TO HOW ESTIMATION MADE BY ASSESSING OFFICER WAS ARBITRARY OR UNREASONABLE, ADDITIONS SO MADE BY ASSESSING OFFIC ER BY REJECTING BOOKS OF ACCOUNT WAS JUSTIFIED 4. M/S PEBBLE INVESTMENT AND FINANCE LTD VS ITO (2017 - TIQL - 238 - SC - IT) (COPY ENCLOSED) WHERE HON'BLE SUPREME COURT DISMISSED SLP CHALLENGING THE JUDGMENT, WHEREBY THE HIGH COURT HAD HELD THAT STATEMENT MADE U /S 133A COULD BE RELIED UPON FOR PURPOSES OF ASSESSMENT, IN ABSENCE OF ANY CONTRARY EVIDENCE OR EXPLANATION AS TO WHY SUCH STATEMENT MADE WAS NOT CREDIBLE. 5. GREENVIEW RESTAURANT VS ACIT R20031 133 TAXMAN 432 GAUHATI) (2003) 263 ITR 169 FGAUHATIVR20031 18 5 CTR 651 (GAUHATH (COPY ENCLOSED) 'FROM FACTS, IT WAS CLEAR THAT THERE WAS A DELAY ON THE PART OF THE APPELLANT AND ITS PARTNER IN RETRACTING THE STATEMENTS RECORDED. THE ATTENTION OF THE COURT HAD ALSO NOT BEEN DRAWN TO ANY MATERIAL ON RECORD TO ESTABLIS H THAT ANY ATTEMPT WAS MADE ON BEHALF OF THE APPELLANT TO PROVE THE ALLEGATION OF INDUCEMENT, THREAT OR COERCION THROUGH THE WITNESSES. HAVING EXAMINED THE IMPUGNED ORDERS RENDERED BY THE TRIBUNAL WITH THE REASONINGS IN SUPPORT OF ITS FINDING AGAINST THE C OMPLAINT OF THREAT, INDUCEMENT OR COERCION, NO GOOD AND SUFFICIENT REASON WAS FOUND TO DIFFER FROM IT. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, HAVING REGARD TO THE MATERIALS ON RECORD, THE APPELLANT HAD FAILED TO ESTABLISH 18 | P A G E THAT THE STATEMENTS OF ITS PA RTNER HAD BEEN RECORDED IN THE COURSE OF THE SEARCH BY USING COERCION, THREAT OR INDUCEMENT. HENCE, THE CONTENTIONS ADVANCED BY THE APPELLANT IN THAT REGARD WERE DISMISSED AND THE CONCLUSION OF THE TRIBUNAL ON THAT COUNT WAS AFFIRMED.' [PARA 9] 6. RAI HANS TOWERS (P.) LTD. VS CIT (56 TAXMANN.COM 67. 230 TAXMAN 567, 373 ITR SM (COPY ENCLOSED) WHERE HON'BLE DELHI HIGH COURT HELD THAT WHERE ASSESSEE HAD NOT OFFERED ANY SATISFACTORY EXPLANATION REGARDING SURRENDERED AMOUNT BEING NOT BONA FIDE AND IT WAS ALSO NO T BORNE OUT IN ANY CONTENTIONS RAISED BEFORE LOWER AUTHORITIES, ADDITIONS SO MADE AFTER ADJUSTING EXPENDITURE WERE JUSTIFIED (SURVEY CASE) 7. PCIT VS AVINASH KUMAR SETIA T20171 81 TAXMANN.COM 476 (DELHI) (COPY ENCLOSED) WHERE HON'BLE DELHI HIGH COURT HELD THAT WHERE ASSESSEE SURRENDERED CERTAIN INCOME BY WAY OF DECLARATION AND WITHDRAW SAME AFTER TWO YEARS WITHOUT ANY SATISFACTORY EXPLANATION, IT COULD NOT BE TREATED AS BONA FIDE AND, HENCE, ADDITION WOULD SUSTAIN (SURVEY CASE) FOR RETRACTION TO BE VALID, THREAT OR COERCION HAS TO BE PROVED WHICH HAS NOT BEEN DONE IN THE PRESENT CASE: MANOHARLAL KASTURCHAND CHOKSHI V S ACIT (ITAT, AHD) 61 ITD55 PARAMANANDBUILDERS VS ITO (ITAT, MUM) 59 ITD 29 WORKS OF ART (P) LTD, VS ACIT (ITAT, JP) 65 ITD 40 AMRITLAL BHAGWANDAS SONI V S DCIT (ITAT, AHD) 59 TT D418 HIRALAL MAGANLAL & CO. V S DCIT (ITAT, MUM) 96 ITD 113 AIRPORT AUTHORITY OF INDIA V S CBEC (DEL) 207 CTR 196 RAVINDRA D. TRIVEDI VS CIT (RAJ) 215 CTR313 WHEN STATEMENT WAS MADE VOLUNTARILY AND WAS NOT ALLEGED TO HAVE BEEN OBTAINED UNDER THREAT OR COERCION, ONUS WAS ON ASSESSEE TO PROVE THAT SAID DECLARATION WAS MADE UNDER ANY MISCONCEPTION OF FACTS - SINCE ASSESSEE HAD NOT TAKEN ANY STEPS TO RECTIFY ITS DECLARATION BEFORE AUTHORITIES BEFORE WHOM SUC H DECLARATION WAS MADE, THERE WAS NO VALID REASON FOR RETRACTION OF SAME AFTER A GAP OF ABOUT TWO AND A HALF MONTHS . PCIT VS AVINASH KUMAR SETIA T20171 81 TAXMANN.COM 476 (DELHI) (COPY ENCLOSED) WHEN STATEMENT WAS MADE VOLUNTARILY AND WAS NOT ALLEGED TO H AVE BEEN OBTAINED UNDER THREAT OR COERCION, ONUS WAS ON ASSESSEE TO PROVE THAT SAID DECLARATION WAS MADE UNDER ANY MISCONCEPTION OF FACTS - SINCE ASSESSEE HAD NOT TAKEN ANY STEPS TO RECTIFY ITS DECLARATION BEFORE AUTHORITIES BEFORE WHOM SUCH DECLARATION WA S MADE, THERE WAS NO VALID REASON FOR RETRACTION OF SAME AFTER A GAP OF ABOUT TWO AND A HALF MONTHS CARPENTERS CLASSICS (EXIM)(P) LTD VS. DCIT (ITAT), BANG) 108 ITD 142 THE CIT(A) HAS WRONGLY DELETED ADDITION OF RS 2,05,500/ - ON ACCOUNT OF UNEXPLAINED CASH FOUND FROM THE BEDROOM OF THE ASSESSEE. THE ISSUE IS DISCUSSED AT LENGTH IN PARA 5/PAGE 2 & 3 OF THE ORDER OF AO. IT IS PERTINENT TO NOTE THAT NO SUPPORTING EVIDENCE TO SUBSTANTIATE CLAIM WAS PLACED BEFORE THE AO. CIT(A) HAS NOTED IN PARA 14/PAGE 19 THAT APPELLANT AND FAMILY MEMBERS WERE NOT MAINTAIN BOOKS OF ACCOUNT REGARDING THEIR INCOME AND EXPENDITURE. THE CIT(A) HAS ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AT FACE VALUE AND NOT MADE ANY FRESH INQUIRY OR VERIFICATIONS IN ALL THE CASES OF THIS GROUP. TH E ORDER OF CIT(A) TO THAT EXTENT ARE NON - SPEAKING ORDERS. (REF ACIT VS SHUKLA /& BROS (SC IN SLP 4666 OF 2009 DATED 15.04.2010) IN THE LIGHT OF THE WRITTEN/ORAL SUBMISSIONS THE ISSUE MAY BE DECIDED IN FAVOUR OF REVENUE. 12. SHE FURTHER SUBMITTED THAT THE ORDE R OF THE LD CIT ( A) SHOWS NON APPLICATION OF MIND. SHE FURTHER REFERRED TO THE CONSOLIDATED PAPER BOOK OF 104 PAGES SUBMITTED BY THE ASSESSEE REFERRING OF STATEMENT OF SHRI 19 | P A G E RUDRA SEN SINDHU AND LETTER DATED 24.04.2012 WRITTEN TO ADDLL. DIRECTOR OF INCOME TAX WHEREIN, DISCLOSURE OF RS. 150 CRORES WAS MADE. AT THAT PARTICULAR TIME IT WAS SUBMITTED BY SHRI RS SINDHU THAT HE WILL SUBMIT THE BREAK UP PERSONS, ENTITIES, ASSESSMENT YEAR AND HEADS O F INCOME WHERE THESE ADDITIONAL INCOME IS TO BE BOOKED. SHE FURTHER REFERRED TO LETTER DATED 11.06.2012 SUBMITTED BY THE SHRI RS SINDHU WHEREIN WITH RESPECT TO HE HAS MENTIONED POST SEARCH PROCEEDINGS GROUP HAS TAKEN LEGAL ADVICE REGARDING WAIVER OF LOAN O F LAYMAN BROTHERS AND HE HAS BEEN ADVISED THAT SUCH SUM IS NOT INCLUDIBLE IN THE HANDS OF THE INDIVIDUAL ASSESSES. THEREFORE, IT WAS STATED THAT THE GROUP WILL TAKE THE FINAL CALL REGARDING THE ABOVE SUM IN CELLCAP SECURITIES PVT. LTD AND THE YEAR OF TAXAB ILITY ONLY AT THE TIME OF FILING OF INCOME TAX RETURNS U/S 153A. SHE FURTHER STATED THAT ALONG WITH THAT THE OPINION OF DR. RN DASH WAS ALSO ATTACHED WHEREIN, IT WAS STATED THAT NO TAXABLE EVENT HAD OCCURRED WITHIN INDIA IN CASE OF CELLCAP SECURITIES PVT. LTD WHICH AS TAKEN LOAN FROM LAYMAN BROTHERS. THEREFORE, HER ARGUMENTS WAS THAT ASSESSEE CONSTANTLY CONFIRMING ABOUT THE DISCLOSURE BUT LATER ON AFTER THREE YEARS SAME IS RETRACTED. SHE FURTHER STATED THAT AT THE TIME OF DISCLOSURE NO COERCIVE ACTION WAS PROVED BY THE ASSESSEE AND THEREFORE, THE SHELTER UNDER THE CIRCULAR OF CBDT IS NOT AVAILABLE. SHE FURTHER SUBMITTED THAT LD CIT(A) HAS BLINDLY ACCEPTED THE SUBMISSION OF THE ASSESSEE AND HAS NOT LOOKED IN TO THE VARIOUS FACTORS AND SURROUNDING CIRCUMSTANC ES IN WHICH THE ASSESSEE HAS MADE DISCLOSURE. SHE FURTHER RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN CASE OF CIT VS. JANSAMPARK ADVERTISEMENT 375 ITR 373. THEREFORE, SHE SUBMITTED THAT ASSESSEE HAS DISCLOSED THE ABOVE SUM IN STATEMENT U/S 132( 4) OF THE ACT AND THEREFORE, RETRACTION AFTER THREE YEARS IS BAD. SHE FURTHER SUBMITTED THAT DISCLOSURE OF RS. 86 CRORES LINKED TO LOAN OF M/S. LEHMAN BROTHERS IS AN AFTERTHOUGHT. SHE FURTHER SUBMITTED THAT THE WAIVER OF LOAN IS PERTAINING TO ASSESSMENT YE AR 2010 - 11 AND NOT TO ASSESSMENT YEAR 2012 - 13 AND 2013 - 14 WHERE THIS DISCLOSURE ORIGINALLY MADE AND NOW RETRACTED. SHE THEREFORE, SUBMITTED THAT ADDITION SHOULD BE CONFIRMED. 20 | P A G E 13. THE LD AUTHORISED REPRESENTATIVE SUBMITTED A DETAILED SUBMISSION ON THIS ISSUE WHICH IS AS UNDER: - 1. SEARCH & SURVEY OPERATION IN THE CASE OF THE ARYAN SAINIK GROUP WAS CONDUCTED ON 12.04.2012. 1.1. DURING THE COURSE OF THE SEARCH PROCEEDINGS, STATEMENT OF CAPT. R.S. SINDHU, THE PROMOTER DIRECTOR OF THE ARYAN SAINIK GROUP WAS RECOR DED U/S 132(4) OF THE ACT ON 13.04.2012. (COPY OF STATEMENT OF R.S. SINDHU IS ATTACHED AT PAGES 01 - 22 OF THE PAPER BOOK). IN THE SAID STATEMENT, CAPT RS SINDHU HAS EXPLAINED THE VARIOUS GROUP COMPANIES AND THEIR INTERFOLDING . ASLO THE INVESTMENTS OF THE GR OUP OF BVI COMPANIES, CELLCAP SECURITIES LTD (CSL) AND PINNACLE OVERSEAS ASSETS LTD (POAL) WERE DISCUSSED IN GREAT DETAILS. CERTAIN CASH RECEIPTS AND PAYMENT WERE FOUND RECORDED IN SOME OF THE SEIZED DOCUMENTS AND ON ENQUIRY, CAPT RS SINDHU, HAS ACCEPTED T HE SAME TO BE UNRECORDED. 2. SUBSEQUENT TO THE ABOVE, THE GROUP, VIDE LETTER DATED 24.04.2012 OFFERED AN ADHOC ESTIMATED ADDITIONAL INCOME OF RS. 150 CRORES ON TENTATIVE BASIS (COPY OF LETTER DATED 24.04.2012 IS ATTACHED AS PAGE 23 - 24 OF THE PAPER BOOK). THE SAID OFFER WAS MADE IN ORDER TO COVER THE ERRORS OR MISTAKES IN THE RECORDS OF THE BUSINESS OWNED AND CONTROLLED BY VARIED/DIVERSE GROUP UNITS. THEY WERE ALSO MADE TO COVER ANY DISCREPANCIES ARISING OUT OF SEIZED DOCUMENTS, JEWELLERY, CASH ETC. 3. NE XT, THE ASSESSEE, VIDE LETTER DATED 11.06.2012 SUBMITTED THE BREAKUP OF THE RS. 150 CRORES WHICH WAS OFFERED AS THE ADDITIONAL INCOME. THE NAMES OF THE VARIOUS INDIVIDUALS UNDER WHOSE NAME AND UNDER WHICH A.YS THE ADDITIONAL INCOME WAS OFFERED WAS ALL CHAR TED OUT VIDE ANNEXURE A TO THE SAID LETTER. HOWEVER, SINCE THE NATURE, HEAD OF INCOME, THE DOCUMENT ON THE BASIS OF WHICH SUCH INCOME WAS OFFERED AND THE PURPORTED MANNER IN WHICH SUCH INCOME WAS EARNED REMAINED STILL TO BE FINALLY SETTLED, THE ASSESSEE HA D IN THE SAID LETTER STATED THE HEAD OF INCOME AS INCOME FROM OTHER SOURCES/ UNDISCLOSED INCOME/ UNDISCLOSED INVESTMENTS. (COPY OF LETTER DATED 11.06.2012 IS ATTACHED AS PAGES 25 - 30 OF THE PAPER BOOK). 4. FOLLOWING THE ABOVE OFFER OF THE RS.150 CRORES, T HE ASSESSEE, IMMEDIATELY, FILED ANOTHER LETTER DATED 11 JUNE 2012 (COPY ENCLOSED AT PAGES 31 - 32 OF THE PAPERBOOK) WHEREIN EXPLAINING THE SOURCE OF THE RS.86 CRORES (OUT OF THE RS.150 CRORES SO OFFERED) IN THE INDIVIDUALS HANDS, IT WAS EXPLAINED THAT THE S AME AROSE ON ACCOUNT OF WAIVER OF LOAN TAKEN BY CELLCAP SECURITIES LTD (CSL) FROM LEHMAN BROTHERS COMMERCIAL CORPORATION ASIA LIMITED (LBCCA). IT WAS DUTY STATED THAT THE ABOVE TENTATIVE OFFER OF ADDITIONAL INCOME OF RS. 150 CRORES WAS INCLUSIVE OF THE SAI D RS. 86 CRORES ON ACCOUNT OF LOAN WAIVER. 4.1. THE 86 CRORES (INCLUDED IN THE 150 CRORE DISCLOSURE) WAS OFFERED AS UNDER: S.NO NAME OF THE PERSONS RS. (LACS) AY 12 - 13 RS. (LACS) AY 13 - 14 RS. (LACS) TOTAL 1 . CAPT R S SINDHU 1234.08 450.00 1684.08 2. SH. VIR SEN SINDHU 1484.97 420.21 1905.18 3. SH. VRIT PAL SINDHU 1190.00 500.00 1690.00 4. SH. SATYA PAL SINDHU 1070.33 320.00 1390.33 21 | P A G E 5. SH. DEV SUMAN SINDHU 1029.48 320.00 1349.48 6. CAPT K S SOLANKI 630.50 - 630.50 TOTAL 6639.36 2010.21 8649.57 4.2. IN CONNECTION TO THE ABOVE, IT WOULD BE OF RELEVANCE HERE TO BRING TO YOUR NOTICE, AS HAS ALSO BEEN STATED BY THE ASSESSEE IN THE SAID LETTER DATED 11/06/2012, THAT THE ABOVE DISCLOSURE OF RS. 86 CRORES WAS MADE BY THE ASSESSEE BECAUSE DURING THE COURSE O F SEARCH AND POST SEARCH PROCEEDINGS, THE ISSUE OF TAXABILITY OF WAIVER OF LOAN OF LBCCA IN CSL WAS RAISED BY INVESTIGATION WING. THE ASSESSEE WAS ALL ALONG MADE TO BELIEVE THAT WAIVER OF LOAN OF LBCCA CONSTITUTED INCOME AND THIS INCOME WAS ALLEGEDLY ASSES SABLE IN INDIA SINCE ITS MANAGEMENT AND CONTROL WAS LOCATED IN INDIA AND NON REPORTING OF THE SAME WOULD EXPOSE THE COMPANY AND ITS PROMOTERS TO PENALTY AND PROSECUTION. SINCE CSL WAS A FOREIGN CO WITHIN THE MEANING OF SEC 6(3)(II) OF THE ACT AND WAS NOT H AVING ANY PAN IN INDIA, SO IT COULD NOT OFFER THIS AMOUNT TO TAX IN ITS HANDS. AS CSL WAS REPRESENTED BY ITS PROMOTERS, THEREFORE IT WAS ADVISED BY THE DEPARTMENT THAT THE GROUP SHOULD DISCLOSE RS. 86 CRORES. THUS THE GROUP TENTATIVELY OFFERED FOR TAX. THE ADDITIONAL INCOME OF RS. 86 CRORES ON ACCOUNT OF WAIVER OF LOAN OF LEHMAN BROS AS PART OF TOTAL ADDITIONAL INCOME OF RS. 150 CRORES. 4.3 FURTHER, IT IS STATED, AS WAS ALSO STATED IN THE ABOVE LETTER, THAT DURING POST SEARCH PROCEEDINGS, AFTER THE ADVISE BY THE INVESTIGATION WING, A LEGAL ADVISE REGARDING THE TAXABILITY OF THE LOAN WAIVER WAS TAKEN BY THE ASSESSEE GROUP. IN THE SAID ADVICE IT IS OPINED THAT THE WAIVER OF LOAN WAS NOT TAXABLE IN THE HANDS OF ANY INDIVIDUAL OR GROUP SINCE: - (COPY OF SAID LEG AL OPINION DATED 15.05.2012 IS ATTACHED AS PAGES 33 - 36 OF THE PAPER BOOK) THE WAIVER OF USD 18.70 MILLIONS OF LOAN OF LEHMAN BROTHERS IS NOT TAXABLE IN THE HANDS OF ABOVE INDIVIDUALS. FURTHER, THE SAME IS ALSO NOT TAXABLE IN THE HAND OF M/S CELLCAP SECURITIES LIMITED IN F.Y. 2009 - 10. SINCE THE INVESTMENT HAS NOT BEEN SOLD DURING FY 2009 - 10, THIS WAIVER HAS BEEN CREDITED TO CAPITAL RESERVE, TO BE ADJUSTED AGAINST THE INVESTMENT AT THE TIME OF DISPOSAL OF INVESTMENT. CSL IS A BVI RESIDENT COMPANY, BOTH IN FORM AND SUBSTANCE AND ALSO IN VIEW OF THE COMMERCIAL OBJECTIVE FOR WHICH IT WAS SET UP. CSL IS, THUS, NOT WITHIN THE TAX JURISDICTION OF INDIA. THE EFFECTIVE CONTROL AND MANAGEMENT OF CSL, AS IT IS EVIDENT, REMAINED ALWAYS WITH LEHMAN BROTHERS BY VIRT UE OF SHA AND LOAN AGREEMENT. NO TAXABLE EVENT HAS OCCURRED WITHIN INDIA TAX JURISDICTION. THUS, IT WAS ON THE BASIS OF THE LEGAL OPINION THAT CAPT. R. S. SINDHU FILED THE IMMEDIATE SECOND LETTER DATED 11.06.2012 WITH THE LD. ADI WHEREIN HE PUT FORTH THE A BOVE NARRATED LEGAL ADVICE 4.4. LASTLY, IN THE SAID LETTER IT WAS ALSO PUT FORTH TO THE ADI THAT, IN VIEW OF THE LEGAL OPINION SO TAKEN, EVEN THOUGH THE SAID OFFER OF THE RS. 86 CRORES WAS MADE, THE FINAL TAXABILITY OF THE SAID SUM WOULD HOWEVER BE TAKEN A T THE TIME OF FILING OF THE 153A RETURNS. THE CONCLUDING PARA OF THE SAID LETTER IS REPRODUCED AS UNDER : - IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, THE GROUP WILL TAKE FINAL CALL REGARDING THE TAXABILITY OF CSL AND THE YEAR OF TAXABILITY AT THE TIME OF F ILING OF ITR IN RESPONSE TO NOTICE U/S 153A OF THE INCOME TAX ACT, 1961 AND ACCORDINGLY THE PAYMENT OF BALANCE TAXES ON ADDITIONAL INCOME AS PER CHART/ DETAILS OF EVEN DATE SHALL THEREFORE BE MADE AT THE TIME OFFILING OFLTRS U/S 153 AT 22 | P A G E 5. NEXT, IN RESPONS E TO THE QUERY RAISED BY THE ADI IN THE ORDER SHEET DATED 18.06.2012, THE ASSESSEE FILED ANOTHER LETTER 13.07.2012 BEFORE THE LD. ADI. ALONG WITH THE LETTER, NOTE ON LOAN TAKEN FROM LEHMAN BROS WAS ALSO ANNEXED. IN THE SAID LETTER, SH. R.S. SINDHU REITERAT ED THAT THE DISCLOSURE OF RS. 150 CRORES INCLUDED THE ADDITIONAL INCOME OF RS. 86 CRORES ON ACCOUNT OF WAIVER OF LOAN OF LEHMAN BROS (COPY OF LETTER DATED 13.07.2012 IS ATTACHED IN PAGES 37 - 42 OF THE PAPER BOOK). IT WAS POINTED OUT THAT THE WAIVER OF LOAN PERTAIN TO AY 2010 - 11, BUT THE REASON FOR INCLUDING THE SAME IN AY 2012 - 13 AND 2013 - 14 WAS GIVEN IN THE CONCLUDING PARA AS UNDER: THOUGH THE ADDITIONAL INCOME ON ACCOUNT OF CSL PERTAINS TO AY 10 - 11, THE SAME WAS OFFERED IN SPECIFIED PREVIOUS YEARS AS DEF INED IN SECTION 271AAAQ, OF THE INCOME TAX ACT, 1961 I.E. ASSESSMENT YEAR 2012 - 13 & AY 2013 - 14 INSTEAD OF AY 2010 - 11, TO AVAIL THE BENEFIT OF NON - LEVY OFPENALTY AS PER SECTION 271 AAAT 6. FINALLY, ON 30.10.2014, THE RETURNS U/S 153A OF THE ACT WERE FILED BY ALL THE INDIVIDUAL PROMOTERS OF THE GROUP. THE RETURNS WERE ALL FILED DISCLOSING FULL AMOUNT OFFERED IN FIRST LETTER DATED 11.06.2012 EXCLUDING HOWEVER RS. 86 CRORES RELATING TO THE WAIVER OF LOAN OF LEHMAN BROS AS WAS ALSO DULY SUBMITTED BY CAPT. R.S. SINDHU VIDE HIS SECOND LETTER DATED 11.06.2012 THAT THE GROUP WOULD TAKE THE FINAL CALL REGARDING THE TAXABILITY OF CSL AND THE YEAR OF TAXABILITY AT THE TIME OF FILING OF ITR IN RESPONSE TO NOTICE U/S 153A OF THE ACT. 7. PURSUANT TO THE ABOVE RETURNS, SU MMONS U/S 131 OF THE ACT WERE ISSUED BY THE LD AO ON 09.02.2015 FOR NOT OFFERING RS. 86 CRORES IN ITRS OF THE INDIVIDUALS PROMOTERS. THE SUMMONS WERE ISSUED TO SH. VIR SEN SINDHU. SH. VRIT PAL SINDHU, SH. DEV SUMAN SINDHU AND SH. ASHOK MRIG. HEARINGS PURS UANT TO SUMMONS WERE MADE ON 26.02.2015, WHEREIN THE STATEMENT OF SH. DEV SUMAN SINDHU AND SH. VIR SEN SINDHU WERE RECORDED. IT WAS SUBMITTED AND EXPLAINED BY THEM THAT THE SAID DISCLOSURE OF RS. 86 CRORES WAS MADE UNDER THE ERRONEOUS IMPRESSION THAT THE W AIVER OF LOAN OF LEHMAN BROS WAS TAXABLE IN THE HANDS OF PROMOTERS. IT WAS STATED THAT SUBSEQUENTLY, LEGAL OPINION WAS OBTAINED AND THE GROUP WAS ADVISED THAT THE SAME WAS IN THE NATURE OF CAPITAL RECEIPT AND THEREFORE NOT TAXABLE. FURTHER IT WAS SUBMITTED THAT THE DETAILED SUBMISSION IN THIS CONNECTION WAS SUBMITTED VIDE LETTER DATED 13.07.2012 SUBMITTED DURING THE POST SEARCH PROCEEDINGS. 8. SUBSEQUENT TO THE ABOVE, LETTER DATED 20.03.2015 WAS FILED WITH THE LD. AO, WHEREIN A COMPREHENSIVE NOTE EXPLAININ G THE ISSUE OF WAIVER OF LOAN AND THE LEGAL POSITION ABOUT TAXABILITY IN CASE OF CAPT R.S.SINDHU WAS SUBMITTED (COPY OF LETTER IS ATTACHED IN PAGE 43 - 44 OF THE PAPER BOOK). 9. FURTHER, ANOTHER LETTER DATED 20.03.2015 WAS FILED WITH THE LD AO AS HE WAS NOT SATISFIED WITH THE MERE REITERATION OF TRANSACTION (COPY OF LETTER IS ATTACHED IN PAGE 45 OF THE PAPER BOOK). IN THIS SECOND LETTER, THE PROMOTERS EXPLAINED THE CIRCUMSTANCES AND SEQUENCE OF EVENTS STARTING FROM INCLUDING THE AMOUNT OF RS 86 CRORES IN THE TOTAL ADDITIONAL INCOME OF RS 150 CRORES INITIALLY OFFERED AND ENDING 23 | P A G E WITH THE REASONS FOR THEIR NON - INCLUSION OF THIS AMOUNT OF RS 86 CRORES IN THEIR ITRS. THE SAID LETTER CONTAINED COPIES OF SUBMISSIONS FILED BY ARS BEFORE THE LD ADI ON 13.7.2012, COPY OF SECOND LETTER OF CAPT R.S. SINDHU DATED 11.6.2012 AND COPY OF THE OPINION OBTAINED FROM SH R.N.DASH (FORMER DG INTERNATIONAL TAXATION) DATED 15.5.2012. 10. HOWEVER, COMPLETING THE ASSESSMENT PROCEEDINGS, THE LD. AO IN HIS ASSESSMENT ORDERS DATED 30.0 3.2015/31.03.2015 FOR AY 2012 - 13 & AY 2013 - 14 IN THE CASE OF ALL THE INDIVIDUALS MADE THE ADDITION ON ACCOUNT OF WAIVER OF LOAN IN THE HANDS OF INDIVIDUAL ASSESSES, TOTALLING TO RS.86 CRORES. HERE IT IS POINTED OUT THAT THE LD AO, ON PERUSAL OF THE LETTER SUBMITTED BEFORE HIM, DID SEEM TO BE CONVINCED THAT THIS AMOUNT OF RS 86 CRORES CONSTITUTED UNDISCLOSED INCOME IN THE HANDS OF CSL AND NOT INDIVIDUAL ASSESSEES. THAT WAS PRECISELY THE REASON THAT AFTER TAKING PRIOR APPROVAL FROM HIS SUPERIORS, NOTICES U/S 148 OF THE ACT WERE ISSUED IN THE CASE OF CSL FOR A.Y. 2008 - 09 TO 2011 - 12. (COPY OF NOTICES ARE ATTACHED IN PAGES 46 - 49 OF THE PAPER BOOK). 11. APPEAL WAS ACCORDINGLY PREFERRED BY ALL THE INDIVIDUAL ASSESSES FOR A.YS 2012 - 13 & 2013 - 14 BEFORE CIT(A) WHERE IN THE LD. CIT(A), VIDE HIS COMBINED ORDER FOR ALL THE INDIVIDUAL ASSESSES FOR BOTH THE A.YS, BASED ON THE SUBMISSIONS OF THE ASSESSEE, DELETED THE SAID ADDITION OF 86.49 CRORES MADE BY THE LD. AO. 12. PURSUANT TO THE ABOVE, APPEAL WAS PREFERRED BY THE DE PARTMENT BEFORE YOUR HONOURS AND THE SUBSEQUENT CROSS OBJECTION WAS FILED. SUBMISSION OF THE ASSESSEE: 1. BASED ON ALL THE ABOVE DETAILED FACTS OF THE CASE OF THE ASSESEE, ON THE BASIS OF THE ALLEGATIONS MADE VIDE THE GROUNDS RAISED BY THE DEPARTMENT, IT IS SUBMITTED BEFORE YOU HONORS THAT THE FIRST GROUND IN CONNECTION WITH THE SAID ADDITION, THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAD NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON ACCOUNT OF WAIVER OF LOAN BY M/S. LEHMAN BROTHERS TO CELL CAP SECURITIES LTD AND THE SAME WAS AN AFTERTHOUGHT IS ABSOLUTELY INCORRECT AND NOT BASED ON PROPER APPRECIATION OF THE CASTS OF THE CASE OF THE ASSESSEE. 1.1. WITH RESPECT TO THE ABOVE, IT IS SUBMITTED THAT THAT THE ISSUE OF TAXABILITY OF WAIVER OF LOAN O F LBCCA IN CSL WAS RAISED BY INVESTIGATION WING DURING THE SEARCH PROCEEDINGS ITSELF AND IT WAS ADVISED BY THE DEPARTMENT THAT THE GROUP SHOULD DISCLOSE RS. 86 CRORES ON THAT ACCOUNT. ACCORDINGLY THE GROUP OFFERED ADDITIONAL INCOME OF RS. 150 CRORES INCLUD ING RS. 86 CRORES ON ACCOUNT OF WAIVER OF LOAN. THIS FACT IS EVIDENT FROM SECOND LETTER FILED BY CAPT. R.S. SINDHU ON 11.06.2012 WHEREIN IT HAS CLEARLY BEEN MENTIONED BY THE ASSESSEE THAT THE INVESTIGATION WING HAD ADVISED THE ASSESSEE AND IT WAS ON THAT B ASIS THAT THE SAID DISCLOSURE WHICH WAS INCLUDED IN THE RS. 150 DISCLOSURE WAS MADE. (REFER PAGE 23 - 24 OF THE PAPER BOOK). THE SAID LETTER, AS HAS ALSO BEEN AMPLY POINTED OUT IN THE FACTS OF THE CASE, CLEARLY STATED THAT THE ADDITIONAL INCOME OF RS. 150 CR ORES INCLUDED WAIVER OF LOAN BY LEHMAN BROS AMOUNTING TO RS. 86 CRORES. 24 | P A G E IT WAS ALSO MENTIONED IN THE LETTER THAT, BASED ON THE LEGAL OPINION, THE GROUP WOULD TAKE FINAL CALL REGARDING THE TAXABILITY OF CSL AT THE TIME OF FILING OF ITR IN RESPONSE TO NOTICE U/S 153A OF THE ACT. THE RELEVANT PORTION IS ALSO QUOTED ABOVE. 1.2. IN FACT IT IS HERE BROUGHT TO YOUR HONOURS NOTICE THAT THE STATEMENT U/S 132(4) NOWHERE CONTAINED ANY DISCLOSURE OF ANY AMOUNT AS ADDITIONAL INCOME. THE FIRST DISCLOSURE BY THE ASSESEE GROUP CAME VIDE THE FIRST LETTER DATED 11/06/2012 WHICH CONTAINED THE DISCLOSURE OF RS. 150 CRORES ALONG WITH BREAKUP OF THE SAME, VERY MUCH INCLUDED IN IT THE RS.86 CRORES DISCLOSURE. THE SAID FIRST LETTER CONTAINED THE BREAKUP OF THE ADDITIONAL INCOME AS TO THE NAME OF THE INDIVIDUAL ASSESSES IN WHOSE NAMES THEY WERE TO BE OFFERED. THE NATURE, HEAD OF INCOME, THE DOCUMENT ON THE BASIS OF WHICH SUCH INCOME WAS OFFERED AND THE PURPORTED MANNER IN WHICH SUCH INCOME, REMAINING TO BE FINALLY SETTLED, THE ASSES SEE HAD IN THE SAID LETTER STATED THE HEADS OF INCOME BROADLY AS INCOME FROM OTHER SOURCES/ UNDISCLOSED INCOME/ UNDISCLOSED INVESTMENTS. HOWEVER, SINCE THE SOURCE OF THE RS.86 CRORES WAS SEEMINGLY KNOWN TO THE ASSESSEE, THE ASSESSEE , IMMEDIATELY VIDE A S ECOND LETTER, ON THE SAME DAY ITSELF, EXPLAINED THAT THE RS.86 CRORES INCLUDED IN THE RS.150 CRORES AROSE OUT OF THE WAIVER OF THE LOAN. AS POINTED OUT EARLIER, SINCE THE TAXABILITY OF THE SAID WAIVER WAS DISPUTED, THE ASSSESE HAD CLEARLY MENTIONED IN THE SAME LETTER, AS HAS BEEN AMPLY POINTED OUT EARLIER, THAT THE INCLUSION OF THE SAME WOULD BE DECIDED AT THE TIME OF FILING OF THE RETURN. 1.3. THUS, FROM THE ABOVE IT IS SEEN THAT THE VERY FIRST DISCLOSURE OF THE ADDITIONAL INCOME WHICH WAS MADE ON 11/06/2 012 VERY MUCH REFERRED, IN FACT VERY SPECIFICALLY, TO THE RS. 86 CRORES ON ACCOUNT OF THE WAIVER OF THE LOAN. INFACT, IT NEEDS TO BE BROUGHT TO YOUR HONOURS NOTICE, THAT THE LEGAL OPINION REFERRED IN THE LETTER DATED 11/06/2012 IS DATED 15.05.2012, WHICH F URTHER RECONFIRMS THAT THE ISSUE OF THE RS.86 CRORES WAIVER OF LOAN WAS DELIBERATED UPON AND DISCUSSED EVEN BEFORE THE ACTUAL DISCLOSURE OF ANY ADDITIONAL INCOME BY THE ASSESSEE GROUP. THIS ALSO CONFIRMS THE FACT WHICH WAS POINTED OUT BY THE ASSSEE THAT TH E ISSUE OF THE RS. 86 CRORE WAS DISCUSSED ALSO IN THE SEARCH PROCEEDINGS. 1.4. THUS, FROM ALL THE ABOVE, IT STANDS PROVED THAT THE DISCLOSURE OF THE RS.86 CRORES WAS NOT AT ALL AN AFTERTHOUGHT. 2. NEXT IT IS SEEN THAT THE DEPARTMENT HAS ALLEGED THAT THE IS SUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINED TO THE AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINED TO AY 2012 - 13 AND AY 2013 - 14 AND THEREFORE THE SAME COULD NOT BE LINKED. WITH RESPECT TO THE ABOVE, FIRSTLY THE ASSESS EE WOULD LIKE TO SUBMIT THAT THE REASON FOR DISCLOSING THE WAIVER OF LOAN IN ASSESSMENT YEAR 2012 - 13 AND ASSESSMENT YEAR 2013 - 14 WAS TO AVAIL THE BENEFIT OF NON LEVY OF PENALTY U/S 271AAA. THE SAME WAS MENTIONED IN THE LETTER DATED 13.07.2012, FILED BY THE AR OF THE ASSESSEE. SECONDLY IT IS SUBMITTED THAT THE WAIVER OF LOAN BY LEHMAN BROS, IS A CAPITAL RECEIPT WHICH IS NOT TAXABLE. EVEN IF IT IS TAXABLE, IT SHOULD BE IN THE HAND OF CSL AND NOT THE PROMOTERS OF THE GROUP. INFACT THE AO WAS 25 | P A G E ALSO CONVINCED BY THIS FACT AND THUS HE RE - OPENED THE CASE OF CSL IN RESPECT OF AY 2010 - 11. MERELY BECAUSE INDIVIDUAL ASSESSES DISCLOSED IN DISCLOSURE PETITION FILED PURSUANT TO SEARCH AS THEIR INCOME FOR AY 2012 - 13 & AY 2013 - 14, THE IMPUGNED SUM CAN NEVER BE ASSESSED IN T HE HANDS OF INDIVIDUALS IN THESE YEARS AND THEREFORE THE LD. CIT(A) HAD RIGHTLY DELETED THE IMPUGNED SUM. 3. IT IS THEN ALLEGED BY THE DEPARTMENT THAT AN OPPORTUNITY OF CROSS EXAMINATION WAS NOT GIVEN TO THEM. IN THIS REGARD IT IS SUBMITTED THAT, NEITHER A NY STATEMENT WAS GIVEN BY THE ASSESSEE BEHIND THE BACK OF THE ASSESSING OFFICER NOR ANY ADDITIONAL EVIDENCE WAS PRODUCED BEFORE CIT(A). ALL THE EVIDENCES PRODUCED BEFORE THE LD. CIT(A) WERE PROVIDED TO THE AO DURING THE ASSESSMENT PROCEEDINGS. THEREFORE TH E QUESTION OF CROSS EXAMINATION BY THE LD. AO DOES NOT ARISE AND THE GROUND TAKEN BY THE DEPARTMENT HAS NO SUBSTANCE. 4. IT IS FURTHER ALLEGED BY THE DEPARTMENT THAT ADMISSION MADE BY CAPT. R.S. SINDHU IN HIS STATEMENT U/S 132(4) CANT BE RETRACTED BY BALD AND WRONG STATEMENT AND THUS SUCH RETRACTION IS INVALID. 4.1. IN CONNECTION TO THE ABOVE, ATTENTION IS SOUGHT TO THE FOLLOWING TWO CIRCULARS ISSUED BY THE CBDT: - > F. NO. 286/2/2003 - IT (INV) GOVERNMENT OF INDIA MINISTRY OF FINANCE & C OMPANY AFFAIRS DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES ROOM NO. 254/NORTH BLOCK, NEW DELHI, THE 10TH MARCH, 2003 TO ALL CHIEF COMMISSIONERS OF INCOME TAX, (CADRE CONTRA) & ALL DIRECTORS GENERAL OF INCOME TAX INV. SIR SUBJECT: CONFESSION OF ADDI TIONAL INCOME DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATION - REGARDING INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHERE ASSESSEES HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF THE SEARCH & S EIZURE AND SURVEY OPERATIONS. SUCH CONFESSIONS, IF NOT BASED UPON CREDIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSESSEES WHILE FILING RETURNS OF INCOME. IN THESE EIRCUMSTANCES, ON CONFESSIONS DURING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPER ATIONS DO NOT SERVE ANY USEFUL PURPOSE. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENTS. SIMILARLY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH IT SEIZURES AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CONTRARY SHALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING 26 | P A G E ASSESSMENT PROCEEDINGS ALSO, ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCE/ MATERIALS GATHERED DURING THE COURSE SEARCH/ SURVEY OPERATIONS OR THEREAFTER WHILE FRAMING THE RELEVANT ASSESSMENT ORDERS. YOURS FAITHFULLY SD/ - (S. R. MAHAPATRA] UNDER SECRETARY (INV. II) GOVERNMERTTDFLNDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES ROOM NO. 254, NORTH BLOCK NEW DELHI, THE 18TH DECEMBER, 2014 TO 1. ALL PRINCIPAL CHIEF COMMISSIONERS OF INCOME TAX 2. ALL CHIEF COMMISSIONERS OF INCOME TAX 3. ALL DIRECTORS GENERAL OF INCOME TAX (INV.) 4. DIRECTOR GENERAL OF INCOME TAX (I & CL), NEW DELHI] SUBJECT: ADMISSIONS OF UNDISCLOSED INCOME UNDER COERCION/PRESSURE DURING SEARCH/SURVEY REG. REF 1) CBDT LETTER F. NO. 286/57/2002 - LT(INV.II) DT. 03 - 07 - 2002 2) CBDT LETTER F. NO. 286/2/2003 - IT(INV.II) DT. 10 - 03 - 2003 3) CBDT LETTER F. NO. 286/98/2013 - IT(INV.II) DT. 09 - 01 - 2014 SIR/MADAM, INSTANCES/COMPLAINTS OF UNDUE INFLUENCE/COERCION HAVE COME TO NOTICE OF THE CBDT THAT SOME, ASSESSEES WERE COERCED TO ADMIT UNDISCLOSED INCOME DURING SEARCHES/SURVEYS CONDUCTED BY THE DEPARTMENT. IT IS ALSO SEEN THAT MANY SUCH ADMISSIONS ARE RETRACTED IN THE SUBSECJUENT PROCEEDINGS SINCE THE SAME ARE NOT BACKED BY CREDIBLE EVIDENCE. S UCH ACTIONS DEFEAT THE VERY PURPOSE OF SEARCH/SURVEY OPERATIONS AS THEY FAIL TO BRING THE UNDISCLOSED INCOME TO TAX IN A SUSTAINABLE MANNER LEAVE ALONE LEVY OF PENALTY OR LAUNCHING OF PROSECUTION. FURTHER, SUCH ACTIONS SHOW THE DEPARTMENT AS A WHOLE AND OF FICERS CONCERNED IN POOR LIGHT. 2. I AM FURTHER DIRECTED TO INVITE YOUR ATTENTION TO THE INSTRUCTIONS/GUIDELINES ISSUED BY CBDT FROM TIME TO TIME, AS REFERRED ABOVE, THROUGH WHICH THE BOARD HAS EMPHASIZED UPON THE NEED TO FOCUS ON GATHERING EVIDENCES DURIN G SEARCH/SURVEY AND TO STRICTLY AVOID OBTAINING ADMISSION OF UNDISCLOSED INCOME UNDER COERCION/UNDUE INFLUENCE. 27 | P A G E 3. IN VIEW OF THE ABOVE WHILE REITERATING THE AFORESAID GUIDELINES OF THE BOARD, I AM DIRECTED TO CONVEY THAT ANY INSTANCE OF UNDUE INFLUENCE /COERCION IN THE RECORDING OF THE STATEMENT DURING SEAR CH/SURVEY/OTHER PROCEEDING UNDER THE IT. ACT, 1961 AND/OR RECORDING A DISCLOSURE OF UNDISCLOSED INCOME UNDER UNDUE PRESSURE/COERCION SHALL BE VIEWED BY THE BOARD ADVERSELY. 4. THESE GUIDELINES MAY BE BROUGHT TO THE NOTICE OF ALL CONCERNED IN YOUR REGION FOR STRICT COMPLIANCE. 5. I HAVE BEEN FURTHER DIRECTED TO REQUEST YOU TO CLOSELY OBSERVE/OVERSEE THE ACTIONS OF THE OFFICERS FUNCTIONING UNDER YOU IN THIS REGARD. 6. THIS ISSUES WITH APPROVAL OF THE CH AIRPERSON, CBDT. (JAI NATH VERMA) DCIT OSD (INVT II CBDT 4.2. RELYING UPON CASE LAWS IT IS SEEN THAT HON BLE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH IN THE CASE OF ACIT CENTRAL CIRCLE, 25 NEW DELHI VS DHARAM PAL GULATI IN IT A NO.671/DEL/2012 HAS EXAMINED THE LEGAL POSITION OF THE EVIDENTIARY VALUE OF STATEM ENTS RECORDED U S 132(4) IN DETAIL. THE SAME IS PRESENTED HERE - UNDER FOR YOUR READY REFERENCE: - IN OUR CONSIDERED VIEW, NO ADDITION CAN BE MADE MERELY ON THE BASIS OF SURRENDER WITHOUT EXISTENCE OF ANY CORROBORATIVE EVIDENCE FOUND AGAINST THE ASSESSEE. FO R THIS PROPOSITIONS, RELIANCE IS PLACED ON THE FOLLOWING CASE LAW 'A. KAILASHBEN MANGARLAL CHOKSHI VS CIT (2008) 174 TAXMANN 466 (GUJ.) / (2008) 14 DTR 257 (GUJ.) MERELY ON THE BASIS ADMISSION, THE ASSESSEE COULD NOT HAVE BEEN SUBJECTED TO ADDITIONS, UNLESS AND UNTIL SOME CORROBORATIVE EVIDENCE WAS FOUND IN SUPPORT OF SUCH ADMISSION. FURTHER STATEMENT RECORDED AT SUCH ODD HOURS (AT MIDNIGHT) COULD NOT BE CONSIDERED TO BE VOLUNTARY STATEMENT, IT WAS SUBSEQUENTLY RETRACTED AND NECESSARY EV IDENCE WAS LED CONTRARY TO SUCH ADMISSION. ADDITION WAS DELETED. B. ARUN KUMAR BHANSALI VS DCIT (2006) 10 SOT 46 (BANG) (URO) BLOCK PERIOD 1990 - 91 TO 1999 - 2000 - WHETHER WHILE COMPUTING UNDISCLOSED INCOME OF ASSESSEE, ASSESSING OFFICER SHOULD TAKE COGNIZA NCE OF SUCH CORRECT INCOME AS DEPICTED IN BOOKS OF ACCOUNT AS WELL AS IN SEIZED MATERIAL, AND SHOULD NOT ADOPT A FIGURE MERELY AS PER ADMISSION OF ASSESSEE - HELD, YES. C. SHREE CHAND SONI VS DCIT (2006) 101 TTJ (JD) 1028 SEARCH AND SEIZURE - BLOCK ASSESS MENT - CONSUMPTION OF UNDISCLOSED INCOME - ADDITION BASED ON THE ASSESSEE'S STATEMENT UNDER S. 132(4) - ADMITTEDLY, NO INCRIMINATING DOCUMENT WAS FOUND TO SUPPORT THE IMPUGNED ADDITION REGARDING BOGUS CAPITAL - STATEMENT RECORDED UNDER S. 132(4) DOES NOT T ANTAMOUNT TO UNEARTHING ANY INCRIMINATING EVIDENCE DURING THE COURSE OF SEARCH - THEREFORE, NO ADDITION COULD BE MADE ONLY ON THE BASIS OF SUCH STATEMENT. D. RAJES H JAIN VS DCIT (2006) 100 TTJ (DEL) 929 SEARCH AND SEIZURE - BLOCK ASSESSMENT - RETRACTION O F STATEMENT 28 | P A G E - ADDITION OF RS.25 LAKHS MADE SOLELY ON THE BASIS OF CONFESSIONAL STATEMENT OF ASSESSEE THAT HE EARNED THE SAID AMOUNT IN THE LAST TEN YEARS WAS NOT JUSTIFIED - CONFESSIONAL STATEMENT SHOULD BE CORROBORATED WITH SOME MATERIAL TO SHOW THAT ASSE SSMENT MADE IS JUST AND FAIR - CONDUCT OF AFFAIRS BY THE REVENUE AUTHORITIES SHOWS THAT GOOD AMOUNT OF PSYCHOLOGICAL PRESSURE WAS BUILT ON THE ASSESSEE TO MAKE THE SAID STATEMENT, WHICH WAS RETRACTED - FURTHER, THE ADDITION WAS ILLEGAL AS WHILE THE ASSESSE E SPOKE OF EARNING THE SAID INCOME OVER A PERIOD OF 10 YEARS, TOTAL ADDITION WAS MADE IN TWO ASST. YRS. 1999 - 2000 AND 2000 - 2001 - ALL MATERIAL FOUND DURING SEARCH WAS DULY EXPLAINED BY ASSESSEE ON WHICH NO ADVERSE COMMENT WAS MADE BY AO - ASSESSEE TO BE AS SESSED ON THE INCOME RETURNED BY HIM FOR THE BLOCK PERIOD. FURTHER RELIANCE IS ALSO PLACED WHETHER NO ADDITION CAN BE MADE SIMPLY ON THE BASIS OF SURRENDER WITHOUT ANY COGENT AND VALID REASONS AND WHICH THE ASSESSEE HAS SUBSEQUENTLY RETRACTED. FOR THIS PRO POSITION, THE RELIANCE IS PLACED ON THE FOLLOWING CASE LAWS : - 'A. INDIA SEED HOUSE V S ASSTT. CIT (2000) 69 TT J (DELHI) (TM) 241 IN CASE OF BLOCK ASSESSMENT NO ADDITION CAN BE MADE MERELY ON THE BASIS OF STATEMENT RECORDED AT THE TIME OF SEARCH WHICH STA NDS FULLY PROVED TO BE INCORRECT IN VIEW OF THE MATERIAL ITSELF WHICH WAS SEIZED AT THE TIME OF SEARCH. B. PRANAV CONSTRUCTION CO. VS ASSTT. CIT (1998) 3 DTC 719 (MUM - TRIB) (1998) 61 TTJ (MUNU - TRIB) 145 IT WAS HELD THAT THE ADMISSION CANNOT BE READ AS AN A CT OF PARLIAMENT AND THAT IT HAS TO BE READ IN THE CONTEXT FAIRLY AND REASONABLY HENCE, THE LEGAL POSITION IN CASE WHERE ASSESSEE DENIES THE CONTENT OF RS. 132(4) STATEMENT ON THE GROUND EITHER THE SAME BEING NOT CORRECT ON FACTS OR IN LAW OR HAVING BEI NG OBTAINED BY THREAT OR COERCION, THE SAME SHALL BE CONSIDERED ON THE BASIS OF FOLLOWING POSITION AS PER THE ABOVE CITED JUDICIAL PRECEDENTS: - STATEMENT RECORDED AT THE TIME OF SEARCH CANNOT BE USED AS AN EVIDENCE AGAINST THE ASSESSEE UNTIL AND UNLESS T HE SAME IS SUPPORTED BY ANY OTHER INCRIMINATING MATERIAL DISCOVERED IN THE COURSE OF SEARCH. FURTHER THE STATEMENT IF RETRACTED THE SAME CANNOT BE USED AS AN EVIDENCE AGAINST THE ASSESSEE UNTIL AND UNLESS THERE ARE STRONG MATERIALS ON RECORD TO PROVE OTHER - WISE. 4.3 THE ABOVE DISCUSSION CLEARLY BRINGS OUT THAT A STATEMENT RECORDED U/S 132(4) OF THE INCOME TAX ACT, 1961, IF RETRACTED, CANNOT BE USED AS EVIDENCE AGAINST THE ASSESSEE UNTIL AND UNLESS THE SAME WAS SUPPORTED BY ANY INCRIMINATING MATERIAL DISCOVERED IN THE COURSE OF SEARCH. THEREFORE THE LD. AO SHOULD HAVE POINTED OUT AT LEAST SOME INCRIMINATING MATERIAL THAT COULD HAVE ANY LINK WITH THE UNDISCLOSED INCOME OF RS. 86 CRORES ASSESSED BY HIM. THUS THE ALLEGATION MADE BY THE DEPARTMENT IS WITHOUT ANY EVIDENCE BASED ON MERE PRESUMPTIONS, CONJECTURES AND SURMISES. 29 | P A G E 14. THE LD AR ST ATED THAT THE ABOVE DISCLOSURE OF RS. 150 CRORES WAS A BALD DISCLOSURE WITHOUT ANY EVIDENCE AND WITHOUT ANY BREAK - UP. HE REFERRED TO THE STATEMENT OF SHRI R . S . SINDHU WHEREIN, IN REPLY TO QUESTION NO. 3 HE HAS GIVEN DETAIL ED EXPLANATION ABOUT THE LOAN OF L EHMAN BROTHERS. HE FURTHER REFERRED TO Q NO. 5, WHERE HE HAS REFERRED TO AMOUNT OF LOAN FROM LEHMAN BROTHERS . THEREFORE, HE SUBMITTED THAT DISCLOSURE WAS PARTLY BECAUSE OF WAIVER OF LOAN OF LEHMAN BROTHERS. HE ALSO REFERRED TO LETTER DATED 11.06.2012 TO SHOW THAT THE FIRST INSTANCE THE ASSESSEE HAS DISCLOSED THAT THE ABOVE DISCLOSURE CANNOT BE MADE IN THE HANDS OF INDIVIDUAL SHARE HOLDER AND ASSESSEE WILL MAKE FINAL CALL ONLY AT THE TIME OF FILING O F RETURN OF INCOME U/S 153A OF THE ACT. HE FURTHER REFERRED THE LEG AL ADVICE GIVEN BY ONE ADVOCATE, WHO IS AN INTERNATIONAL TAX ADVISOR WHEREIN, IT WAS SPECIFICALLY STATED THAT CELLCAP SECURITIES LTD. IS A COMPANY RESIDENT B VI AND IS NOT WITHIN THE TAX JUR ISDICTION OF INDIA. IT WAS FURTHER OPINED THAT THE EFFECTIVE CONTROL AND MANAGEMENT OF THE ABOVE COMPANY REMAINED ALWAYS WITH LEHMAN BROTHERS BY VIRTUE OF SHAREHOLDER AGREEMENT AND LOAN AGREEMENTS. THEREFORE, IT WAS OPINED THAT BY THE WAIVER OF LOAN BY THE LEHMAN BROTHER NO TAXABLE EVENT HAS OCCURRED WITHIN INDIA TAX JURISDICTION. IN THE END , HE SUBMITTED THAT ASSESSMENT ORDERS IN CASE OF CELLCAP SECURITIES LTD FOR AY 008 - 09 TO 2014 - 15 WHEREIN, IT HAS BEEN HELD BY THE LD ASSESSING OFFICER HIMSELF WHILE FRA MING ASSESSMENT U/S 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT PASSED ON 30.12.2016 THAT IT IS A FOREIGN COMPANY HAVING ITS CONTROL AND MANAGEMENT OUTSIDE INDIA AND IS NOT HAVING ANY INCOME ACCRUING OR ARISING TO IT FROM INDIA AND IS THUS NOT TAX ABLE IN INDIA. THEREFORE, HE SUBMITTED THAT THE CASE OF THAT COMPANY WAS REOPENED FOR THE PURPOSE OF TAXING WAIVER OF LEHMAN BROTHERS BUT IT WAS NOT TAXABLE SAME WAS DROPPED. HE FURTHER SUBMITTED THAT EXCEPT THE ABOVE SUM OF WAIVER OF RS. 86 CRORES THERE W ERE NO MATERIAL FOUND DURING THE SEARCH PROCEEDINGS WHERE ANY ADDITION CAN BE MADE. IN NUTSHELL HE SUBMITTED THAT THERE WAS NOT A SINGLE MATERIAL WAS FOUND DURING THE SEARCH WHICH SHOW ABOUT THE UNACCOUNTED INCOME OF THE GROUP. HE FURTHER RELIED ON THE CBD T INSTRUCTION MENTIONED IN HIS WRITTEN SUBMISSION . HE SUBMITTED 30 | P A G E THAT THESE INSTRUCTIONS ARE BINDING ON THE LOWER AUTHORITIES AND THEREFORE, SHOULD HAVE BEEN FOLLOWED AT THE TIME OF THE PASSING ORDER. IN NUTSHELL, HE SUBMITTED THAT RS. 86 CRORES IF CHARGEA BLE TO TAX AT ALL BECAUSE OF WAIVER OF LOAN OF LEHMAN BROTHERS IN CELLCAP SECURITIES WHO HAS TAKEN SUCH LOAN, SHALL BE CHARGEABLE INTO THE HANDS OF THAT COMPANY ONLY AND NOT IN THE HANDS OF INDIVIDUAL ASSESSES. HE FURTHER SUBMITTED THAT EVEN IF THERE IS AD MISSION BY THE ASSESSEE BUT ADMISSION IS FOUND TO BE ERRONEOUS IT CANNOT FORM BASIS FOR AN ASSESSMENT. HE SUBMITTED THAT IT IS ALWAYS OPEN FOR THE ASSESSEE TO DEMONSTRATE AND SATISFY THAT A PARTICULAR INCOME IS NOT CHARGEABLE TO TAX IN HIS HANDS BUT IS OFF ERED UNDER AN ERRONEOUS IMPRESSION OF LAW. HE RELIED HEAVILY ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN ABDUL QAYUME VS. CIT FOR ABOVE PROPOSITION. HE FURTHER SUBMITTED THAT AS IT IS EVIDENT FROM THE STATEMENT OF SHRI R. S. SINDHU WHERE THE DETAILS OF LOAN OF LEHMAN BROTHERS AND ITS WAIVER IS MENTIONED THEREFORE, IT CANNOT BE SAID THAT IT IS AN AFTERTHOUGHT. HE SUBMITTED THAT BASED ON THE STATEMENT AS WELL AS THE LETTER DATED 11.06.2012 IF READ TOGETHER CLEARLY SHOWS THAT A DISCLOSURE OF RS. 150 CRO RES INCLUDES RS. 86 CRORES OF LEHMAN BROTHERS LOAN WAIVER. HE STATED THAT EXCEPT THIS RS. 86 CRORES THE OTHER BALANCE DISCLOSURE HAS BEEN OWNED BY THE ASSESSEE WITHOUT THERE BEING ANY EVIDENCE OF UNACCOUNTED MONEY. HE FURTHER STATED THAT ABOVE DISCLOSURE I S MADE IN ASSESSMENT YEAR 2012 - 13 AND 2013 - 14 ONLY FOR THE PURPOSE OF LEVY OF PENALTY U/S 271AAA OF THE ACT. HE THEREFORE, SUBMITTED THAT ADDITION MADE BY THE LD ASSESSING OFFICER HAS BEEN RIGHTLY DELETED BY THE LD CIT ( A). 15. IN REJOINDER, THE LD CIT DR VE HEMENTLY OPPOSED THE SUBMISSION OF THE LD AR. SHE SUBMITTED THAT ABOVE DECISION CITED REFERS TO THE ERRONEOUS CLAIM MADE IN THE RETURN OF INCOME AND NOT IN THE CASES OF SEARCH WHERE ASSESSEE HAS DISCLOSED IN THE PRESENT CASE. SHE THEREFORE, SUBMITTED THAT RELIANCE ON THE ABOVE DECISION OF HONBLE ALLAHABAD HIGH COURT IS MISPLACED. SHE FURTHER SUBMITTED THAT ASSESSEE HAS OBTAINED THE LEGAL OPINION ON 15.05.2012 BUT SUBMITTED BEFORE THE ADIT ONLY ON 11.06.2012. SHE THEREFORE, SUBMITTED THAT ISSUE OF WAIVER OF LOAN OF LEHMAN BROTHERS CANNOT BE RELATED TO THE INDIVIDUAL SHAREHOLDERS AND 31 | P A G E THEREFORE, THE ASSESSEE IS WRONGLY INCLUDING IT WITH THE DISCLOSURE OF RS. 150 CRORES. SHE FURTHER STATED THAT CBDT CIRCULAR IS ONLY ON COERCION ETC AS NOT ON THE ISSUE OF DISCLOSURE OR RETRACTION . THEREFORE, RELIANCE ON THAT IS MISPLACED . SHE THEREFO RE, SUBMITTED THAT ARGUMENT OF THE LD AR ARE NOT RELEVANT. 16. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE BRIEF FACTS OF THE CASE ARE THAT THE SEARCH AND SEIZURE IN CASE OF THE ABOVE GROUP TOOK PLAC E ON 12.04.2012 AND STATEMENT OF SHRI RS SINDHU WAS RECORDED U/S 132(4) OF THE ACT ON 13.04.2012. ON 24.04.2012 , THE ASSESSEE SUBMITTED A LETTER BEFORE ADDITIONAL DIRECTOR OF INCOME TAX. ACCORDING TO THAT LETTER, IT WAS MENTIONED THAT CASH, JEWELLERY, COMP UTER HAR D DISK AND OTHER PAPERS WERE FOUND AND SEIZED. IT WAS FURTHER SUBMITTED THAT THE COMPANIES OF THE ASSESSEE GROUP ARE NOT ENGAGED IN ANY ACTIVITY, WHICH GIVES RISE TO ANY UNDISCLOSED INCOME. HOWEVER, THERE MAY BE CERTAIN ERRORS OR THERE MAY BE SOME VARIATION IN JEWELLERY AND CASH AS WELL AS THERE MAY BE SOME PARTIES MAY ALSO NOT GIVE THE REPLIES ETC IN TIME WHO ARE THIRD PARTIES, THEREFORE, TO COVER SUCH CONTINGENCY AND ANY ERROR OR OMISSION AND FURTHER TO AVOID ANY INDISCRIMINATE SUMMONS , ENQUIRIES, ETC AND TO SAVE FROM PROTRACTED LITIGATION , SHRI RS SINDHU VOLUNTARILY OFFERED AN ADDITIONAL INCOME OF RS. 150 CRORES AND PROMISE D TO PAY THE AMOUNT OF TAX SUBJECT TO NO LEVY OF INTEREST , PENALTY OR PROSECUTION. IT WAS FURTHER STATED THAT HE WOULD SUBMIT THE BREAK - UP OF PERSON AND ENTITIES AND ASSESSMENT YEARS WHEREIN SUCH DISCLOSURE IS TO BE BOOKED AFTER GOING THROUGH THE RELEVANT RECORDS AND DOCUMENTS. FURTHER, ON 11.06.2012 THE ASSESSEE ADDRESSED ANOTHER LETTER WHEREIN, THE BREAK - UP OF TOTAL DISCLOSURE OF RS. 150 CRORES WAS GIVEN AS PER ANNEXURE A TO THE ASSISTANT DIRECTOR OF INCOME TAX WHEREIN, THE DISCLOSURE WAS BIFURCATED IN 13 ASSESSEES AND STARTING FROM ASSESSMENT YEAR 2007 - 08 TO AY 2013 - 14. THE DISCLOSURE WAS MADE AS INCOME FROM OTHER SOURCES FROM UNDISCLOSED INCOME AND UNDISCLOSED INVESTMENT. VIDE LETTER DATED 11.06.2012 REFERRING TO LETT E R DATED 24.04.2012, 14.05.2012 AND 11.06.2012 , IT WAS SUBMITTED THAT AT THE TIME OF SEARCH AND DURING THE POST SEARCH 32 | P A G E PROCEEDINGS THE TAXABILITY OF WAIVER OF LOA N OF LEHMAN BROTHERS COMMERCIAL CORPORATION ASIA LTD IN CELLCAP SECURITIES LTD WAS RAISED BY THE INVESTIGATION WING AND IT WAS ADVISED BY THE DEPARTMENT THAT THE GROUP SHOULD DISCLOSE RS. 86 CRORES ON THAT ACCOUNT. IT WAS FURTHER STATE D THAT ACCORDINGLY, G ROUP DISCLOSED RS . 150 CRORES AMONGST VARIOUS FAMILY MEMBERS. SUBSEQUENTLY, THE GROUP WAS ADVISED THAT WAIVER OF LOAN IS NOT TAXABLE IN THAT HANDS OF ANY INDIVIDUAL BUT CAN BE TESTED FOR TAXABILITY ONLY IN THE HANDS OF THE COMPANY WHO HAS BORROWED IT. IT W AS FURTHER ADVISED THAT IT COULDNT BE TAXED IN THE HANDS OF THAT COMPANY ALSO AS THE COMPANY IS NOT A TAXABLE ENTITY IN INDIA AS ITS EFFECTIVE MANAGEMENT AND CONTROL IS OUT OF INDIA. THEREFORE, IT WAS STATED TO ADIT THAT , RS. 86 CRORES WHICH WAS PART OF DISCLOSURE OF RS. 150 CRORES , SHALL NOT BE TAXABLE IN THE HANDS OF THE INDIVIDUAL ENTITIES. FURTHER , VIDE LETTER DATED 13.07.2012 , IT WAS INFORMED TO THE ASSTT. DIRECTOR OF INCOME TAX VIDE HIS QUERY LETTER DATED 18.06.2012 THAT TENTATIVE OFFER OF ADDITIONA L INCOME OF RS. 150 CRORES WAS MADE AFTER TAKING INTO ACCOUNT RS. 86 CRORES AS PER STATEMENT OF SHRI R . S . SINDHU U/S 132(4) OF THE ACT IS NOT CHARGEABLE TO TAX IN THE HANDS OF INDIVIDUAL PERSONS. THOUGH ASSESSEE OWNED THE BALANCE DISCLOSURE OF RS 64 CRORE S OUT OF RS 150 CRORES, BUT SUBSEQUENTLY, THE ABOVE INCOME OF RS 86 CRORES WAS NOT OFFERED IN THE RETURN OF INCOME OF ALL THOSE PERSONS. THEREFORE, LD ASSESSING OFFICER HAS MADE THE ADDITION IN THE HANDS OF ALL THOSE PERSONS INCLUDING THE ASSESSEE. ON C AREFUL PERUSAL OF THE ORDER OF THE LD ASSESSING OFFICER IT IS APPARENT THAT THE WHOLE ADDITION HAS BEEN MADE ON ACCOUNT OF LETTER DATED 11.06.2012 OF SHRI R. S. SINDHU WHEREIN, HE HAS GIVEN BREAK UP OF RS. 150 CRORES IN THE HANDS OF 13 ASSESSEE OF HIS FAMI LY. IT WAS MENTIONED THAT ABOVE DISCLOSURE ALSO INCLUDES THE WAIVER OF LOAN OF LEHMAN BROTHERS. IN ANSWER TO QUESTION NO. 4 IT IS MENTIONED THAT BECAUSE OF THE INVESTMENT BY THE LEHMAN BROTHERS WHICH MEANT FINANCIAL UNSTABLE SUBSEQUENTLY WANTED TO WITHDRAW FROM THE PROJECT OF THE GROUP AND THE STAKE OF LEHMAN BROTHERS WAS BOUGHT OVER. FURTHER IN ANSWER QUESTION NO. 5 THE DETAILS OF THE ABOVE LOAN AND ITS SETTLEMENT WAS DISCUSSED. IN ALL SUCH QUESTIONS, THE ASSESSEE REFERRED TO THE C SL I.E. 33 | P A G E CELLCAP SECURITI ES LTD. SUCH QUESTIONS WERE ASKED UP TO QUESTION NO. 12 OF HIS STATEMENT. THEREAFTER, IT WAS EVIDENT THAT THERE IS INCOME, WHICH WILL ARISE ON WAIVER OF THE LOAN BY THE LEHMAN BROTHERS. APPARENTLY, ON THAT BASIS THE ASSESSEE DISCLOSED A SUM OF RS. 150 CR ORES ON 25.04.2012. THEREFORE, BASED ON THE STATEMENT DATED 13.04.2012 , HE DISCLOSED ON 24.02.2012 A SUM OF RS. 150 CRORES. ON 11.06.2012 , HE GAVE THE BREAKUP OF THE RESPECTIVE ASSESSES . FURTHER ON 11.06.2012 THE ASSESSEE INFORMED THAT OUT OF ABOVE DISCL OSURE OF RS. 150 CRORES RS. 86 CRORES PERTAINS TO THE ISSUE OF TAXABILITY OF WAIVER OF LOAN OF LEHMAN BROTHERS COMMERCIAL CORPORATION ASIA LTD IN CELLCAP SECURITIES LTD WHICH IS A BVI COMPANY AND THEREFORE, THE ABOVE IS NOT TAXABLE IN INDIA. HENCE, IT WOUL D NOT BE SHOWN IN THE INDIVIDUAL HAND BUT IT WOULD BE TESTED WHILE FILING 153A RETURN IN CASE OF CELLCAP SECURITIES LTD ONLY. THE ABOVE LETTER WAS ADDRESSED TO THE ASSTT. DIRECTOR OF INCOME TAX (INVESTIGATION), NEW DELHI. THE OPINION OF THE LAWYER ALSO SHO WS THAT THE ABOVE INCOME IS NOT TAXABLE IN THE HANDS OF CELLCAP SECURITIES ALSO. IT IS UNDISPUTED THAT THE IMPACT OF WAIVER OF LOAN OF LEHMAN BROTHERS WOULD BE IN THE HANDS OF M/S. CELLCAP SECURITIES LTD ONLY. SUCH FACT WERE ALSO SCRUTINIZED BY THE REVENU E BY REOPENING THE CASES OF M/S. CELLCAP SECURITIES LTD WHERE THE CASES WERE REOPENED BY ISSUE OF NOTICE U/S 147 FROM ASSESSMENT YEARS 2008 - 09 TO 2014 - 15. SUBSEQUENTLY, THE ASSESSMENT ORDERS FOR ALL THESE YEARS WERE PASSED U/S 143(3) OF THE ACT READ WITH S ECTION 147 OF THE ACT HOLDING AS UNDER: - 2. THE ASSESSEE COMPANY ALONG WITH ITS RETURN ALSO FILED A LETTER STATING THEREIN THAT IT IS A FOREIGN COMPANY, HAVING CONTROL AND MANAGEMENT OF ITS AFFAIRS OUTSIDE INDIA AND IS NOT HAVING ANY INCOME ACCRUING OR ARISING TO IT FROM INDIA AND, THUS, IS NOT ASSESSA BLE TO TAX IN INDIA. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COMPANY HAS FURNISHED DOCUMENTARY EVIDENCE TO THE EFFECT THAT ITS STATUS IS THAT OF A FOREIGN COMPANY. IN VIEW OF THE ABOVE FACTS AND DISCUSSION, THE INCOME OF THE ASSESSEE COMP ANY IS ASSESSED AT NIL, AS RETURNED. FROM THE ABOVE FINDING OF THE LD ASSESSING OFFICER IT IS APPARENT THAT THE ABOVE WAIVER WAS NOT TAXABLE IN INDIA. THEREFORE, EVEN OTHERWISE THE ABOVE SUM WAS NOT CHARGEABLE TO TAX IN THE HANDS OF INDIVIDUALS AS THE Y 34 | P A G E HAVE NEITHER OBTAINED THE LOAN, NOR THEY GOT ANY BENEFIT BECAUSE OF WAIVER. 17. FURTHER, REGARDING THE LINKAGE OF RS. 86 CRORES ON ACCOUNT OF WAIVER WAS MADE KNOWN TO THE INVESTIGATION WING FIRSTLY IN THE STATEMENT AND SECONDLY, FROM THE LETTER DATED 11.06.2012 FILED BEFORE THE INVESTIGATION WING. SUBSEQUENTLY, THE ASSESSEE SUBMITTED ON 13.07. 2012 BEFORE THE ADI WHEREIN, A NOTE WAS ANNEXED ABOUT THE TAXABILITY OF ABOVE SUM AND DISCUSSED IN DETAIL. ON THAT BASIS, THE ASSESSEE DID NOT OFFER OUT OF RS. 150 CRORES RS. 86 CRORES PERTAINING TO THE ABOVE WAIVER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE SUMMONS WERE ALSO ISSUED WHERE THE ASSESSEE HAS STATED THAT DISCLOSURE WAS ERRONEOUSLY MADE AS DEFINITELY ON WAIVER OF THE ABOVE LOAN SUCH INCOME ARIS ES TO THE GROUP BUT SAME IS NOT TAXABLE IN INDIA AS THE LOAN IS TAKEN BY CELLCAP SECURITIES LTD BVI WHICH IS A FOREIGN COMPANY. THERE IS NO WHISPER EITHER FROM THE INVESTIGATION WING OR FROM THE LD ASSESSING OFFICER ON THIS ISSUE THROWING BACK ANY EVIDENCE TO SHOW THAT THE TOTAL DISCLOSURE OF RS 150 CRORES IS BASED ON SEIZED DOCUMENTS OR EVIDENCES. FURTHER, NO SUCH OTHER MATERIAL WAS ALSO REFERRED TO OR PRODUCED DURING THE ASSESSMENT PROCEEDINGS BY REVENUE TO SHOW THAT OUT OF RS. 150 CRORES THE DISCLOSURE AMOUNT OF RS. 86 CRORES IS NOT PERTAINING TO THE LOAN WAIVED BY LEHMAN BROTHERS. IN VIEW OF THIS, IT CANNOT BE SAID THAT LINKAGE OF DISCLOSURE WITH THE ABOVE SUM OF LOAN WAIVER IS AN AFTERTHOUGHT. FURTHER, THE ASSESSMENT PROCEEDINGS IN CASE OF CELLCAP SECU RITIES LTD ALSO SHOW THAT REVENUE IS ALSO ATTEMPTED TO TAX THE ABOVE WAIVER IN THE HANDS OF CELLCAP SECURITIES. FURTHER, THOUGH WAIVER HAPPENED TO BE IN ASSESSMENT YEAR 2010 - 11, WHEREAS THE DISCLOSURE WAS MADE BY ASSESSEE IN ASSESSMENT YEAR 2012 - 13 AND 201 3 - 14 CANNOT BE THE BASIS FOR MAKING THE ADDITION BECAUSE AS SUCH THERE IS NO MATERIAL AVAILABLE TO TAX ANYTHING ELSE OTHER THAN WHAT IS OWNED BY THE ASSESSEE. IN A BSENCE OF ANY POSITIVE MATERIAL, MERE THE CONFESSIONAL STATEMENT WHICH IS CORRECTED/ RETRACTED WITH PLAUSIBLE EXPLANATION, CANNOT BE A BASIS FOR MAKING AN ADDITION WHEN IT IS RETRACTED WITH EVIDENCE. THE INSTRUCTION ISSUED BY CBDT ALSO SHOWS THAT DISCLOSURE IN STATEMENT U/S 132(4) OF THE ACT IF NOT BACKED BY CREDIB LE EVIDENCE 35 | P A G E WOULD BE DIFFICULT TO SUSTAIN. THE BOARD HAS FURTHER STATED THAT NEED TO FOCUS ON GATHERING THE EVIDENCES DURING SEARCH SHOULD BE MADE SO THAT SUCH DISCLOSURE BECOME SUSTAINABLE. ADMITTEDLY, IN THE ABOVE DISCLOSURE THERE IS NO EVIDENCE IS AVAIL ABLE TO SUSTAIN THE ABOVE ADDITION. THE LD CIT ( A) HAS DELETED THE ABOVE ADDITION HOLDING THAT THERE WAS A LINKAGE OF WAIVER OF LOAN TO THE ADDITIONAL INCOME OF RS. 150 CRORES OFFERED INITIALLY. SHE FURTHER HELD THAT REVENUE HAS ALSO TESTED THE TAXABILITY OF THE ABOVE SUM IN THE HANDS OF CELLCAP SECURITIES LTD UNSUCCESSFULLY. SHE FURTHER HELD THAT L ASSESSING OFFICER DESPITE HAVING EXCESS TO THE FULL SEIZED MATERIAL COULD NOT BRING ANY EVIDENCE TO SUPPORT THE TAXABILITY OF THE INCOME IN THE HANDS OF THESE A SSESSES . THE LD DR COULD NOT POINT OUT HOW THE ORDER OF THE LD CIT ( A) IS NOT SUSTAINABLE. 18. THERE ARE MANY JUDICIAL PRECEDENTS RELIED UP ON BY BOTH THE PARTIES. WE HAVE CAREFULLY CONSIDERED THEM WHILE DECIDEING THE ISSUES BEFORE US. WE NOW COMING TO VARIO US CASE LAWS, WHICH WE THINK ARE RELEVANT, WHICH HAVE BEEN RELIED UPON BY THE REVENUE AS WELL AS ASSESSEE TO SHOW THEIR IMPLICATIONS. F IRST DECISION RELIED UPON IS OF HON'BLE MADRAS HIGH COURT IN CASE OF B KISHORE KUMAR VS. DY. CIT 52 TAXMANN.COM 449. IN THAT PARTICULAR CASE THE ADDITION WAS OF RS. 5273920/ - ON THE BASIS OF DOCUMENT AND THE STATEMENT. NO SUCH STATEMENT WAS RETRACTED BY THE ASSESSEE . IN THE PRESENT CASE THE ASSESSEE HAS AMPLE MADE CLEAR THAT THOUGH THE WAIVER MAY BE THE INCOME BUT SAME IS N OT TAXABLE. FURTHER IN THE CASE THE SEIZED PAPER WERE SHOWN WHICH SHOWED THAT ASSESSEE WAS GIVING CASH LOAN TO THE SEVERAL PERSONS. IN THE PRESENT CASE BEFORE US THERE IS NO REFERENCE OF ANY SEIZED MATERIAL. THE SECOND DECISION RELIED UPON IS IN CASE OF BH AGIRATH AGGARWAL VS. CIT 351 ITR 143. IN THAT PARTICULAR CASE THE ORIGINAL STATEMENT MADE WAS FURTHER CONFIRMED BY THE ASSESSEE BY ANOTHER LETTER. FURTHER, THERE WAS NO RETRACTION OF THE STATEMENT. THE COURTS HAVE FURTHER HELD THAT THE ASSESSEE HAS NOT PRO DUCED ANY EVIDENCE TO SHOW THAT THE ADMISSION MADE BY HIM WERE INCORRECT. IN THE PRESENT CASE BEFORE US THE ASSESSEE HAS DEMONSTRATED THAT WAIVER OF RS. 86 CRORES IS NOT CHARGEABLE TO TAX IN THE HANDS OF THE INDIVIDUAL ASSESSES BUT IN CASE OF CELLCAP SECU RITIES ONLY. FURTHER SUCH 36 | P A G E COMPANY BEING A FOREIGN COMPANY SAME IS NOT TAXABLE IN INDIA. THE REVENUE ON THE ABOVE INFORMATION REOPENED THE CASE OF THAT PARTICULAR COMPANY FOR SEVERAL YEARS. IN VIEW OF THIS IN THE PRESENT CASE, ASSESSEE HAS DEMONSTRATED THA T HIS ADMISSION WAS INCORRECT. IN CASE OF SMT. DAYAVANTI VS. CIT (SUPRA) THERE WAS STATEMENTS AS WELL AS INCRIMINATING MATERIALS ALSO. IN THE PRESENT CASE THE REVENUE COULD NOT LAY HANDS ON ANY INCRIMINATING MATERIAL WITH RESPECT TO THE DISCLOSURE CORRECT ED BY THE ASSESSEE. THE RELIANCE ON THE DECISION OF M/S. PEEBLE INVESTMENT AND FINANCE LTD VS. ITO (SUPRA) THERE WAS ABSENCE OF CONTRARY EVIDENCE AND EXPLANATION AS TO WHY SUCH STATEMENT WAS NOT RELIABLE. IN THE PRESENT CASE, THE ASSESSEE HAS SHOWN THE AMO UNT NOT TAXABLE IN INDIA AT ALL. FURTHER, THE RELIANCE ON PR. CIT VS. AVINSASH KUMAR SETIA ( SUPRA) THE HON'BLE DELHI HIGH COURT HELD THAT WHEN THE ASSESSEE HAS SURRENDERED INCOME BY WAYS OF DECLARATION AND WITHDREW THE SAME AFTER TWO YEARS WITHOUT ANY S ATISFACTORY EXPLANATION SUCH RETRACTION COULD NOT BE BONAFIDE. IN THE PRESENT CASE ASSESSEE DISCLOSED RS. 150 CRORES AND IMMEDIATELY AFTER THAT RETRACTED RS. 86 CRORES BASED ON LEGAL ADVISE THAT ABOVE SUM IS NOT CHARGEABLE TO TAX IN INDIA. IN VIEW OF THIS THE DECISION RELIED UPON BY THE REVENUE CANNOT HELP ITS CASE. FURTHERMORE, THE HON'BLE ALLAHABAD HIGH COURT IN 184 ITR 404 HAS HELD THAT ERRONEOUS ADMISSION BY THE ASSESSEE CANNOT BE A FOUNDATION FOR THE ASSESSMENT WHEREAS IT WAS OFFERED UNDER ERRONEOUS IM PRESSION OR MISCONCEPTION OF LAW. IT IS ALWAYS POSSIBLE FOR ASSESSEE TO DEMONSTRATE AND SATISFY THE AUTHORITIES THAT PARTICULAR INCOME WAS NOT TAXABLE AND IT WAS OFFERED UNDER ERRONEOUS IMPRESSION. IN THE PRESENT CASE BEFORE US THE REVENUE ALSO COULD NOT B RING FORTH ANY MATERIAL TO SHOW THAT DISCLOSURE OF RS. 86 CRORES OR EVEN RS. 150 CRORES IS BACKED BY ANY CREDIBLE EVIDENCE. IN VIEW OF THIS WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD CIT(A) IN DELETING THE ADDITION ON ACCOUNT OF ADMISSION MADE BY SHRI R. S. SINDHU IN HIS STATEMENT U/S 132(4) OF THE ACT WHICH WAS SUBSEQUENTLY RETRACTED. 19. THE SECOND ISSUE INVOLVED IS WITH RESPECT TO THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH IN AY 2013 - 14 . DURING THE COURSE OF SEARCH A SUM OF 37 | P A G E RS. 10379300/ - WAS FOUND FROM THE BEDROOM OF SEVERAL FAMILY MEMBERS. DURING THE COURSE OF SEARCH STATEMENTS WERE RECORDED U/S 132(4) ON 12.04.2012 AND THE SOURCE OF SUCH CASH WAS ASKED. SUBSEQUENTLY ON 10.07.2012 THE ASSESSEE DISCLOSED AND GAVE BREAK UP OF CASH OF RS. 10382601/ - SUPPORTING IT WITH WEALTH TAX RETURN, BANK STATEMENTS AND CASH FLOW STATEMENT AS ON 12.04.2012. FURTHER, ON 19.03.2015 THE ABOVE EXPLANATION WITH SUPPORTING EVIDENCE WERE FILED. HOWEVER, THE LD ASSESSING OFFICER MADE THE ADDITION IN THE HANDS OF SATYA PAL SINDHU RS. 4673000/ - , MR. VRIT PAL SINDHU RS. 205500/ - , SHRI DEV SUMAN SINDHU RS. 995000/ - AND IN CASE OF SHRI RUDRA SEN SINDHU OF RS. 40 LACS. ON APPEAL THE LD CIT(A) DELETED THE ABOVE ADDITIO N VIDE PARA NO. 14 AS UNDER: - FINDINGS 14. THIS IS A FACT THAT THE APPELLANT AND HIS FAMILY MEMBERS WERE STAYING TOGETHER IN THEIR FAMILY HOME IN ROHTAK. THIS IS ALSO A FACT THAT THEY WERE ASSESSED TO WEALTH TAX AND HAD FILED THEIR WEALTH TAX RETURNS FOR AY 2011 - 12 ON 28.12.2011 ABOUT 4 MONTHS PRIOR TO THE DATE OF SEARCH. THE APPELLANT AND HIS FAMILY MEMBERS FURNISHED COPIES OF WTRS GIVING POSITION OF OPENING CASH IN HAND AS ON 1.4.2011 ALONG WITH B ANK STATEMENTS AND OTHER DOCUMENTS RELATING TO THE PERIOD 1.4.2011 TILL 12.4.2012. AFTER INCREASING/ DECREASING THE CASH IN HAND AS PER THESE DOCUMENTS, THE APPELLANT AND HIS FAMILY MEMBERS GAVE THE POSITION OF CASH IN HAND AS ON 12.4.2012. AS PER THIS WOR KING, THE CASH IN HAND AVAILABLE WITH THE APPELLANT AND HIS FAMILY MEMBERS WAS RS 1,03,82,601.98 WHEREAS THE CASH FOUND DURING SEARCH WAS,RS 1,03,79,300/ - . 14.1 IT IS ALSO A FACT THAT THE APPELLANT AND HAS FAMILY MEMBERS WERE NOT MAINTAINING DAY TO DAY B OOKS OF ACCOUNTS REGARDING THEIR INCOME AND EXPENDITURE. HOWEVER, CASH POSITION CAN BE ASCERTAINED FROM OTHER METHODS ALSO AS WAS DONE BY THE APPELLANT AND HIS FAMILY MEMBERS. 14.2 THE ASSERTION OF THE AO THAT NO SUPPORTING EVIDENCE WAS FURNISHED BY THE APPELLANT AND HIS FAMILY MEMBERS IS FACTUALLY INCORRECT AS THEY HAD FURNISHED THE EVIDENCE DURING POST SEARCH ENQUIRIES AS WELL AS DURING ASSESSMENT PROCEEDINGS. 14.3 IN THE CASE OF SH. RUDRA SEN SINDHU ALSO IT IS SEEN THAT HE HAD FURNISHED BEFORE THE INV ESTIGATION WING AS WELL AS THE ASSESSING OFFICER, COPY OF A WEALTH TAX RETURN FOR A.Y. 2011 - 12 WHICH WAS FILED PRIOR TO THE DATE OF SEARCH, COPIES OF BANK STATEMENTS AND WORKING OF CASH IN HAND ON 12.4.2012 FOR HIMSELF AND HIS WIFE SMT. SAROJ SINDHU BASED ON THE POSITION OF CASH IN HAND AS ON 1.4.2011 AS SHOWN IN WT RETURN AND AS MODIFIED BY WITHDRAWALS FROM BANK AND OTHER TRANSACTION UPTO THE DATE OF 38 | P A G E SEARCH. THUS, THE CASH IN HAND FOUND AT THE RESIDENCE OF SH. RUDRA SEN SINDHU STANDS EXPLAINED. IN VIEW OF THIS, THE ADDITION OF RS.40,00,000/ - IN THE CASE OF SH. RUDRA SEN SINDHU FOR THE A.Y.2013 - 14 IS DELETED. 20. THE LD CIT DR VEHEMENTLY RELIED ON THE ORDER OF THE LD ASSESSING OFFICER. 21. THE LD AR RELIED UPON THE ORDER OF THE LD CIT(A) AND FURTHER SUBMISS ION WAS MADE WHICH IS AS UNDER : - II. ADDITION MADE U/S 69A OF THE ACT AS UNEXPLAINED CASH (I) SH. DEV SUMAN SINDHU A.Y. 2013 - 14 :RS.9,95,000/ - :GRD 2 OF DEPARTMENTAL APPEAL :GRD 5 OF ASSESSEES CROSS OBJECTION (II) SH. VRIT PAL SINDHU A.Y. 2013 - 14 : RS.2,05,500/ - :GRD 2 OF DEPARTMENTAL APPEAL :GRD 5 OF ASSESSEES CROSS OBJECTION (III) SH. RUDRA SEN SINDHU A.Y. 2013 - 14 :RS.40,00,000/ - :GRD 2 OF DEPARTMENTAL APPEAL :GRD 5 OF ASSESSEES CROSS OBJECTION (IV) SH. SATYA PAL SINDHU A.Y. 2013 - 14 :RS.46,73,000/ - :GRD 2 OF DEPARTMENTAL APPEAL :GRD 5 OF ASSESSEES CROSS OBJECTION FACTS OF THE CASE ON THE ABOVE GROUND: IN CASE OF SH. DEV SUMAN SINDHU, SH. VRIT PAL SINDHU & SH. SATYA PAL SINDHU 1. SEARCH & SURVEY OPERATION WAS CONDUCTED ON 12.04.2012 AT THE RESIDENTIAL PREMISE OF THE ASSESSEE AT H. NO. 53 - 57, SECTOR - 14 (HUDA), ROHTAK - 124001 (HARYANA). THIS IS THE RESIDENTIAL PREMISE OF SH. DEV SUMAN SINDHU, SH. SATYA PAL SINDHU, SH. VRIT PAL SINDHU AND SH. ABHIMANYU SINDHU WHO ARE BROTHERS AND STAYING TOGETHER ALONG WITH THEIR WIVES AND THEIR MOTHER SMT. PARMESHWARI DEVI AS A JOINT FAMILY. 1.1 DURING THE COURSE OF SEARCH, FOLLOWING AMOUNT OF CASH WAS FOUND AT THE ROHTAK PREMISES OF THE ABOVE NAMED ASSESSEE AND THEIR FAMILY MEMBERS: - S N O . DESCRIPTION CASH FOUND (RS.) 1 BEDROOM OF SH. SATVA PAL SINDHU 46,73,000 2 BEDROOM OF SH. DEVSUMAN SINDHU 9,95,000 3 BEDROOM OF SH. ABHIMANYU SINDHU 42,76,500 39 | P A G E 4 BEDROOM OF SH. VRIT PAL SINDHU 2,05,500 5 BEDROOM OF MRS. PARMESHWARI DEVI 2,29,300 TOTAL 1,03,79,300 1.2. THE STATEMENT OF FAMILY MEMBERS WERE ALSO RECORDED U/S 132(4) DURING THE COURSE OF SEARCH PROCEEDINGS ON 12.04.2012. THEY WERE ASKED ABOUT THE SOURCE OF CASH FOUND DURING SEARCH. IT WAS STATED IN THE STATEMENT THAT THEY WOULD BE SUBMITTING THE DETAILS REGARDING THE SOURCE OF THE CASH FOUND AT A LATER DATE. 2. SUBSEQUENTLY, ASSESSEE AND HIS FAMILY MEMBERS VIDE THEIR SUBMISSION DATED 10. 07.2012 SUBMITTED BEFORE THE INVESTIGATION WING, THE BREAKUP AND DETAILS OF CASH IN HAND OF VARIOUS FAMILY MEMBERS AS ON 12.04.2012 (I.E. THE DATE OF SEARCH). BREAKUP OF CASH IN HAND IS AS UNDER: - DETAILS OF CASH IN HAND AT ROHTAK DT. 12/04/2012 PARTICULARS AM OUN T SMT. PARMESHWARI DEVI 50,60,986.37 CAPT. ABHIMANYU SINDHU 84,256.41 MRS. EKTA SINDHU 35,269.17 MAJ. SATYA PAL SINDHU 1415,673.94 MRS. ANIKA SINDHU 9,13,666.97 MR. DEV SUMAN SINDHU 4,72,749.12 MRS. SAROJ SINDHU (RETAINED WITH MAJ SATYA PAL SINDHU) 24,00,000.00 TOTAL 1,03,82,601.98 2.1. THE ASSESSEES ALONG WITH THEIR FAMILY MEMBERS HAD ALSO SUBMITTED VARIOUS DOCUMENTS SUCH AS WEALTH TAX RETURN, BANK STATEMENTS, COMPUTATION OF CASH IN HAND AS ON 12.04.2012 AND OTHER DOCUMENTARY EVIDENCES CORROBORATING OTHER CASH TRANSACTION AS EVIDENCES IN SUPPORT OF THEIR CLAIM FOR POSITION OF CASH IN HAND AS ON 12.04.2012. 3. NEXT, IN RESPONSE TO THE QUESTIONNAIRE ISSUED BY THE ACIT ON 26.12.2014, THE ASSESSEE FILED ANOTHER LETTER ON 19.03.201 5 WHICH WAS ANNEXED WITH THE COPY OF SUBMISSION DATED 10.07.2012 ALONG WITH ENTIRE SUPPORTING EVIDENCES. (COPY OF SAID LETTER IS ATTACHED IN PAGES 50 - 79 OF THE PAPER BOOK). 40 | P A G E 4. HOWEVER THE LD. AO NEITHER CONSIDERED NOR REJECTED THE EVIDENCE SUBMITTED BY T HE ASSESSEES SH. DEV SUMAN SINDHU, SH VRIT PAL SINDHU AND SH. SATYA PAL SINDHU IN HIS ASSESSMENT ORDER DATED 30.03.2015/31.03.2015 AND MADE FOLLOWING ADDITIONS IN THEIR RESPECTIVE HANDS ON ACCOUNT OF UNEXPLAINED CASH IN HAND U/S 69A OF THE ACT: - 1. SH. SAT YA PAL SINDHU RS. 46,73,000 2. SH. VRIT PAL SINDHU RS. 2,05,500 3. SH. DEV SUMAN SINDHU RS. 9.95,000 RS. 58,73,500 IN CASE OF RUDRA SEN SINDHU 1. DURING THE COURSE OF SEARCH ON 12.04.2012, A SUM OF RS. 4417900/ - WAS FOUND AT THE RESIDENCE OF SH. RUDRA SEN SINDHU 2. IN HIS STATEMENT RECORDED U S 131 OF THE IT ACT, THE ASSESSEE HAD STATED THAT THE SEIZED CASH WAS CASH BALANCE AS ON 12.04.2012 BELONGING TO HIM AND HIS FAMILY MEMBERS. 3. THE ASSESSEE SUBMITTED VARIOUS DOCUMENTS SUCH AS WEALTH TAX RETURN, BA NK STATEMENTS, AND COMPUTATION OF CASH IN HAND AS ON 12.04.2012, OF HIM AND HIS WIFE, AS EVIDENCES IN SUPPORT OF HIS CLAIM FOR POSITION OF CASH IN HAND AS ON 12.04.2012. AS PER THE COMPUTATION GIVEN, CASH IN THE HAND OF SH. R.S. SINDHU WAS AMOUNTING TO RS. 39,99,755.73/ - WHEREAS CASH IN HAND OF HIS WIFE (SMT. SAROJ SINDHU) WAS AMOUNTING TO RS. 28,58,174.25/ - AS ON 12.04.2012. (COPY OF THE SAID DOCUMENTS IS ATTACHED AS PAGES 80 - 91 OF THE PAPER BOOK). 4. THE ASSESSEE HAD ALSO FILED SUBMISSION DATED 20.01.201 5, 16.02.2015 AND 09.03.2015 ALONG WITH ENTIRE SUPPORTING EVIDENCES BEFORE THE LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 5. HOWEVER THE LD. AO NEITHER CONSIDERED NOR REJECTED THE EVIDENCES SUBMITTED BY THE ASSESSEE AND MADE ADDITION ON ACCOUNT OF UNEXPLAINED CASH IN HAND U/S 69A OF THE ACT IN THE HAND OF THE ASSESSEE IN HIS ASSESSMENT ORDER DATED 30.03.2015. SUBMISSION OF THE ASSESSEE 1. THE GROUND TAKEN BY THE DEPARTMENT THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDIT ION ON ACCOUNT OF UNEXPLAINED CASH IN HANDS U/S 69A OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SAME AFTER DUE OPPORTUNITIES IS NOT CORRECT. 41 | P A G E 2. IN THIS REGARD, IT IS FIRST RELEVANT TO QUOTE AND ANALYSE SECTIO N 69A, WHICH READ AS UNDER: - ] UNEXPLAINED MONEY, ETC. 69A. WHERE IN ANY FINANCIAL YEAR THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE AND SUCH MONEY, BULLION, JEWELLERY OR VALUABLE ARTICLE IS NOT RECORDED IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF ACQUISITION OF THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE, OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE [ASSESSING] OFFICER, SATISFACTORY, THE MONEY AND THE VALUE OF THE BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR.' 2.1. IN VIEW OF THE ABOVE SECTION IT IS HUMB LY SUBMITTED THAT SECTION 69A OF THE ACT CAN ONLY BE INVOKED IN TWO CASES: (I) WHERE THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF THE MONEY, OR (II) WHERE EXPLANATION OFFERED BY THE ASSESSEE IS NOT, IN THE OPINION OF THE ASSESSING OFFI CER, SATISFACTORY. 3. WITH RESPECT TO POINT NO. (I), IT IS SUBMITTED THAT ALL THE INDIVIDUAL ASSESSEES HAD SUBMITTED BEFORE THE INVESTIGATION WING FULL WORKING OF CASH IN HAND OF VARIOUS FAMILY MEMBERS AS ON 12.04.2012. THE POSITION OF CASH IN HAND WAS ARR IVED AT AFTER TAKING INTO ACCOUNT THE POSITION OF CASH IN HAND AS AT 31.03.2011 AS DECLARED IN THE COMPUTATION OF NET WEALTH FILED ALONG WITH WEALTH TAX RETURN OF THE ASSESSEE AND OTHER FAMILY MEMBERS. THESE WEALTH TAX RETURNS WERE FILED FOR ASSESSMENT YEA R 2011 - 12 AND 28.12.211 WHICH WAS NEARLY 4 MONTHS PRIOR TO THE DATE OF SEARCH. THIS POSITION OF CASH IN HAND WAS INCREASED/ DECREASED/ MODIFIED IN ACCORDANCE WITH THE WITHDRAWALS/ DEPOSITS IN THE BANK ACCOUNTS AND OTHER CASH TRANSACTIONS THAT TOOK PLACE DU RING THE INTERVENING PERIOD FROM 01.04.2011 AND 12.04.201 (THE DATE OF SEARCH) 3.1. IT IS EVIDENT FROM THE WORKING THAT SH. DEV SUMAN SINDHU, SH. SATYA PAL SINDHU AND SH. VRIT PAL SINDHU AND THEIR FAMILY MEMBERS WERE HAVING CASH IN HAND AVAILABLE, AS PER WEALTH TAX RECORDS, BANK STATEMENTS AND OTHER DOCUMENTS, AMOUNTING TO RS. 1,03,82,601.98 WHEREAS CASH FOUND FROM THEIR PREMISES DURING SEARCH WAS AMOUNTING TO RS. 1,03,79,300/ - . ALSO AS PER THE WORKING, SH. RUDRA SEN SINDHU AND HIS WIFE (SMT. SAROJ SINDHU ) WERE HAVING CASH IN HAND AVAILABLE 42 | P A G E AMOUNTING TO RS.39,99,755.73/ - AND RS.28,58,174.25/ - RESPECTIVELY. OUT OF THE CASH IN HAND BALANCE OF SMT. SAROJ SINDHU, RS.24,00,000/ - WAS KEPT AT ROHTAK WITH SH. SATYA PAL SINDHU. THEREFORE NET CASH IN HAND AVAILABLE WITH THE ASSESSEE AND HIS WIFE WAS AMOUNTING TO RS.44,57,929.98/ - [RS.39,99,755.73 + (RS.28,58,174.25 - RS.24,00,000)] WHEREAS CASH FOUND FROM THEIR PREMISES DURING SEARCH WAS RS. 44,17,900/ - . THUS THE ENTIRE CASH FOUND DURING SEARCH WAS FULLY EXPLAINED. A S IS NATURAL, CASH OF ONE FAMILY MEMBER CAN BE IN THE ROOM OF THE OTHER FAMILY MEMBER AS THEY ARE HAVING JOINT BUSINESS AND LIVING IN JOINT FAMILY IN THE FAMILY HOME. SO HAPPENED IN THE CASE OF SH. DEV SUMAN SINDHU, SH. VRIT PAL SINDHU AND SH. SATYA PAL SI NDHU. 3.2. THUS, A COMPLETE WORKING OF CASH IN HAND WAS GIVEN TO THE LD. AO. ALSO THE POSITION OF CASH IN HAND WAS DULY SUPPORTED BY DOCUMENTARY EVIDENCES FILED ALONG WITH THE WORKING OF CASH IN HAND. SO IN THE INSTANT CASE, THE ASSESSEE HAD OFFERED FULL EXPLANATION REGARDING THE NATURE AND SOURCE OF CASH FOUND. THEREFORE THE ALLEGATION OF THE DEPARTMENT THAT ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE CASH FOUND IS NOT CORRECT AND BAD IN LAW. 4. COMING ON TO POINT NO. (II), IT IS SUBMITTED THAT THE LD. ASSESSING OFFICER CAN BE INVOKE ADDITION U/S 69A WHERE EXPLANATION OFFERED BY THE ASSESSEE IS NOT SATISFACTORY IN THE OPINION OF THE ASSESSING OFFICER. IN THE INSTANT CASE, THE LD. AO HAS NEITHER GIVEN ANY REASON WHATSOE VER TO REJECT THE WORKING OF CASH IN HAND NOR POINTED OUT ANY MISTAKE IN THE WORKING OF CASH IN HAND SUBMITTED BY THE ASSESSEE. THEREFORE SECTION 69A CANNOT BE INVOKED EVEN ON THE BASIS OF THIS REASON AS THE LD. AO HAS NOT ALLEGED THAT THE EXPLANATION OFFE RED BY THE ASSESSEE IS NOT SATISFACTORY. 5. SUBSTANTIATING ITS CONTENTION, THE ASSESSEE WOULD LIKE TO PLACE RELIANCE ON THE JUDGEMENT OF CHANDIGARH ITAT IN CASE OF ARUNDEEP SINGH PROP VS. JCIT (2016) 48 CCH 272, WHEREIN IT WAS HELD THAT WHERE EXPLANATION OF ASSESSEE WAS REASONABLE AND THERE WAS NOTHING ON RECORD TO SHOW THAT AMOUNT WAS UTILIZED BY ASSESSEE IN ANY OTHER MANNER THAN ONE WHICH WAS REPRESENTED BY ASSESSEE, ONUS WOULD LIE ON DEPARTMENT TO SHOW THAT EXPLANATION OF ASSESSEE SHOULD NOT BE ACCEPTED AND IN ABSENCE OF SAME, ASSESSEES APPEAL WAS JUSTIFIED TO BE ALLOWED. 6. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY ASSESSING OFFICER U/S 69A OF THE I.T. ACT AS UNEXPLAINED CASH. 43 | P A G E 22. WE HAVE CAREFULLY CONSI DERED THE RIVAL CONTENTIONS. DURING THE COURSE OF SEARCH A SUM OF RS. 5060986/ - WAS FOUND FROM SMT PARMESHWARI DEVI FOR WHICH THE ASSESSEE HAS SUBMITTED THE CASH FLOW STATEMENT IN HER HAND WHEREIN, THE ABOVE SUM WAS EXPLAINED. THE SAME WAS ALSO SUPPORTED B Y THE RETURN OF INCOME AS WELL AS THE BANK STATEMENT. IT WAS FURTHER STATED THAT THE ABOVE SUM WERE RECEIVED AS AN ADVANCE FOR SALE OF LAND. OUT OF THE ABOVE SUM RS. 4250000/ - WAS LYING WITH MR. ABHIMANNU SINDHU AND RS. 550000/ - WAS WITH SHRI DEV SUMAN SIN DHU. SIMILARLY, FOR MR. ABHIMANNU SINDHU THE CASH OF RS. 84256/ - WAS AVAILABLE. THE ASSESSEE HAS SUBMITTED A CHART WHICH WAS ALSO BEFORE THE LD ASSESSING OFFICER VIDE LETTER DATED 19.03.2015. ACCORDING TO THAT THE CASH FOUND OF RS. 10379300/ - WAS EXPLAINED BY THE AVAILABILITY OF CASH OF RS. 10382601/ - IN THE HANDS OF THE VARIOUS FAMILY MEMBERS. THE ABOVE FACTS WERE DULY SUBMITTED BEFORE THE LD ASSESSING OFFICER. HOWEVER, WITHOUT POINTING OUT ABOUT THE NON AVAILABLE OF CASH IN HANDS. THE ABOVE ADDITION HAS BEEN MADE. BASED ON THE ABOVE FACTS IT IS APPARENT THAT FULL WORKING OF CASH IN HAND OF VARIOUS FAMILY MEMBERS WERE DISCLOSED BEFORE THE INVESTIGATION WING ON 12.04.2012, WHICH WAS SUPPORTED WITH CASH FLOW STATEMENT, AND WEALTH TAX RETURNS PRIOR TO THE DAT E OF SEARCH. THEREFORE, THE ABOVE CASH IN HAND WAS DULY EXPLAINED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES AND LD CIT(A) ON VERIFICATION OF THE SAME DELETED THE ABOVE ADDITION. IN VIEW OF THIS NO INFIRMITY WAS SHOWN TO US IN THE ORDER OF THE LD CIT(A) IN DELETING THE ABOVE ADDITION ON ACCOUNT OF CASH FOUND DURING THE COURSE OF SEARCH. 23. FURTHER REVENUE HAS ALSO RAISED THE GROUND THAT DECISION IN CASE OF HONOURABLE DELHI HIGH COURT IN CASE OF CIT V JANSAMPARK ADVERTISING AND MARKETING PVT LTD 375 ITR 373 AND CONSEQUENTLY IF AO HAS FAILED TO DO SOME INQUIRY ETC, THEN LD CIT (A) SHOULD HAVE DOEN IT OR ITAT SHOULD REMAND IT BACK TO THE AO. 24. THE LD CIT DR REITERATED THOSE ARGUMENTS. 25. THE LD AR VEHEMENTLY OBJECTED THE SAME AND ALSO MADE FOLLO WING SUBMISSION. 44 | P A G E .III. DEPARTMENT RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS. M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD 375ITR 373 (I) SH. DEV SUMAN SINDHU A.Y. 2012 - 13 :GRD 6 OF D EPARTMENTAL APPEAL A.Y. 2013 - 14 : GRD 7 OF DEPARTMENTAL APPEAL (II) SH. VIR SEN SINDHU A.Y. 2012 - 13 :GRD 6 OF DEPARTMENTAL APPEAL A.Y. 2013 - 14 : GRD 6 OF DEPARTMENTAL APPEAL (III) SH. VRIT PAL SINDHU A.Y. 2012 - 13 :GRD 6 OF DEPARTMENTAL APPEAL A.Y. 2013 - 14 :GRD 7 OF DEPARTMENTAL APPEAL (IV) SH. RUDRA SEN SINDHU A.Y. 2012 - 13 :GRD 6 OF DEPARTMENTAL APPEAL A.Y. 2013 - 14 :GRD 7 OF DEPARTMENTAL APPEAL (V) SH. SATYA PAL SINDHU A.Y. 2012 - 13 :GRD 6 OF DEPARTMENTAL APPEAL A.Y. 2013 - 14 :GRD 7 OF DEPARTMENTAL APPEAL (VI) SH. KULDEEP SINGH SOLANKI A.Y. 2012 - 13 :GRD 6 OF DEPARTMENTAL APPEAL 1. BEFORE CONCLUDING THE CASE OF THE ABOVE ASSESSEE, IT WOULD BE PERTINENT TO NOTE THAT THE DEPARTMENT PLACING RELIANCE ON THE JUD GEMENT OF HONBLE DELHI HIGH COURT IN CASE OF THE COMMISSIONER OF INCOME TAX - II VS JANSAMPARK ADVERTISING AND MARKETING (P) LTD (COPY OF THE SAID JUDGEMENT IS ENCLOSED AS PAGES 92 - 104 OF THE PAPER BOOK) HAS RAISED THE GROUND THAT THE COMMISSIONER OF INCOM E TAX (APPEAL) HAS ERRED IN LAW AND ON FACTS BY IGNORING HONBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 2. THE DECISION OF THE SAID JUDGEMENT IN THE CASE OF THE CO MMISSIONER OF INCOME TAX - II VS JANSAMPARK ADVERTISING AND MARKETING (P) LTD (375ITR 373) DEL H.C. IS QUOTED AS UNDER: THE OBJECTIVE BEHIND SECTION 68 OF THE INCOME - TAX ACT, 1961, IS TO HOLD THE ASSESSEE ACCOUNTABLE FOR EACH SUM FOUND CREDITED IN HIS BOOKS OF ACCOUNT BY RESPONDING TO THE CALL OF THE ASSESSING OFFICER TO GIVE A SATISFACTORY EXPLANATION ABOUT THE NATURE AND SOURCE 45 | P A G E OF SUCH SUMS. IF NO EXPLANATION IS FORTHCOMING OR THE EXPLANATION GIVEN IS FOUND TO BE UNSATISFACTORY, THE SUM OF MONEY SO CREDI TED MAY BE LAWFULLY INCLUDED IN THE INCOME OF THE ASSESSEE FOR THE CORRESPONDING PERIOD. THE PROVISION CONTAINED IN SECTION 68 SUGGESTS THAT THE INITIAL BURDEN OF PROOF IS ON THE ASSESSEE. THE ASSESSEE IN RECEIPT OF MONEY (BY WHATEVER NAME CALLED, INCLUDIN G IN THE FORM OF SHARE APPLICATION MONEY CREDITED IN ITS BOOK BY A COMPANY) MUST COLLECT AND HAVE IN ITS POSSESSION SOME PROOF TO SATISFY THE ASSESSING AUTHORITIES, WHEN THE NEED ARISES, NOT ONLY AS TO THE IDENTITY OF THE PARTY MAKING THE PAYMENT BUT ALSO ITS CREDITWORTHINESS AS INDEED THE GENUINENESS OF THE TRANSACTION. THE PROVISION OF APPEAL BEFORE THE COMMISSIONER (APPEALS) AND THEN BEFORE THE TRIBUNAL IS MADE MORE AS A CHECK ON THE ABUSE OF POWER AND AUTHORITY BY THE ASSESSING OFFICER. WHILST IT IS TRU E THAT IT IS THE OBLIGATION OF THE ASSESSING OFFICER TO CONDUCT PROPER SCRUTINY OF THE MATERIAL, GIVEN THE FACT THAT THE TWO APPELLATE AUTHORITIES ARE ALSO FORUMS FOR FACT - FINDING, IN THE EVENT OF THE ASSESSING OFFICER FAILINGS TO DISCHARGED HIS FUNCTIONS PROPERLY, THE OBLIGATION TO CONDUCT PROPER INQUIRY ON THE FACTS WOULD NATURALLY SHIFT TO THE DOOR OF THE APPELLATE AUTHORITY. FOR SUCH PURPOSES, ONE STEP IN THE PROCEDURE IN APPEAL IS PRESCRIBED IN SECTION 250 WHEREIN, BESIDES IT IS OBLIGATORY FOR THE RIGH T OF HEARING TO BE AFFORDED NOT ONLY TO THE ASSESSEE BUT ALSO THE ASSESSING OFFICER, THE FIRST APPELLATE AUTHORITY IS GIVEN THE LIBERTY TO MAKE, OR CAUSE TO BE MADE, FURTHER INQUIRY IN TERMS OF SUB - SECTION (4). THE FURTHER INQUIRY ENVISAGED UNDER SECTION 2 50(4) IS GENERALLY WHAT IS KNOWN AS A REMAND REPORT. THE PURPOSE OF THIS ENABLING CLAUSE IS ESSENTIALLY TO ENSURE THAT THE MATTER OF ASSESSMENT REACHES FINALITY WITH THE REQUISITES FACTS FOUND. THE ASSESSEE FILED ITS RETURN FOR THE ASSESSMENT YEAR 200 4 - 05 DECLARING AN INCOME OF RS. 3,180. THE ORIGINAL RETURN WAS ACCEPTED. SOMETIME IN 2007, THE ASSESSING OFFICER WAS IN RECEIPT OF INFORMATION FROM THE DIRECTOR OF INCOME - TAX THAT THE ASSESSEE HAD BEEN IN RECEIPT OF ACCOMMODATION ENTRIES FROM THE ENTRY PRO VIDERS. NOTICE WAS ISSUED UNDER SECTION 148 . IT WAS FOUND THAT SHARE CAPITAL HAD BEEN RECEIVED FROM CERTAIN OPERATORS WHO WERE ALLEGEDLY ENGAGED IN THE BUSINESS OF GIVING ACCOMMODATION ENTRIES. IN ORDER TO VERIFY THE GENUINENESS OF THE CLAIM OF RECEIPT OF THE SHARE APPLICATION MONEY, SUMMONS WERE ISSUED UNDER SECTION 131 OF THE ACT TO THOSE ENTITIES IN RESPONSE TO WHICH, NO ONE APPEARED AND SOME OF THE PROCESSES WERE RETURNED UNDELIVERED WITH THE POSTAL REMARKS LEFT/NO SUCH PERSON . IN THIS FACT SITUATIO N, THE ASSESSINS OFFICER CALLED UPON THE ASSESSEE TO PRODUCE THE PARTIES/PERSONS IN QUESTION WHICH DIRECTION WAS NOT COMPLIED WITH. THE ASSESSING OFFICER, THUS, TREATED THE AMOUNT OF 46 | P A G E RS. 71 LAKHS AS UNEXPLAINED CREDIT IN TERMS OF THE PROVISIONS CONTAINED I N SECTION 68 . THE COMMISSIONER (APPEALS) DELETED THE ADDITION AND THIS WAS UPHELD BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT: HELD, ALLOWING THE APPEAL, THAT THE ASSESSING OFFICER MIGHT HAVE FAILED TO DISCHARGE HIS OBLIGATION TO CONDUCT A PROPER INQUIRY TO TAKE THE MATTER TO LOGICAL CONCLUSION. BUT THE COMMISSIONER (APPEALS), HAVING NOTICED WANT OF PROPER INQUIRY, COULD NOT HAVE CLOSED THE CHAPTER SIMPLY BY ALLOWING THE APPEAL AND DELETING THE ADDITIONS MADE. IT WAS ALSO THE OBLIGATION OF THE FIRST APPEL LATE AUTHORITY, AS INDEED OF THE TRIBUNAL, TO HAVE ENSURED THAT EFFECTIVE INQUIRY WAS CARRIED OUT, PARTICULARLY IN THE FACE OF THE ALLEGATIONS OF THE REVENUE THAT THE ACCOUNT STATEMENTS REVEALED A UNIFORM PATTERN PF CASH DEPOSITS OF EQUAL AMOUNTS IN THE RE SPECTIVE ACCOUNTS PRECEDING THE TRANSACTIONS IN QUESTION. THIS NECESSITATED A DETAILED SCRUTINY OF THE MATERIAL SUBMITTED BY THE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION 148 ISSUED BY THE ASSESSING OFFICER, AS ALSO THE MATERIAL SUBMITTED AT THE STA GE OF APPEALS, IF DEEMED PROPER BY WAY OF MAKING OR CAUSING TO BE MADE A FURTHER INQUIRY IN EXERCISE OF THE POWER UNDER SECTION 250(4) . THIS APPROACH NOT HAVING BEEN ADOPTED, THE ORDER OF THE TRIBUNAL, AND CONSEQUENTLY THAT OF THE COMMISSIONER (APPEALS ) COULD NOT BE APPROVED OR UPHELD. [MATTER REMANDED TO THE COMMISSIONER (APPEALS).] 3. NOW INTERPRETING AND ANALYSING THE ABOVE JUDGEMENT, THE FACTS AND CIRCUMSTANCES OF THE SAID CASE RELIED UPON BY THE DEPARTMENT ARE AS FOLLOWS: (I) THE AO MADE ADDITION U /S 68 OF THE ACT AS UNEXPLAINED CREDIT ON ACCOUNT OF SHARE CAPITAL RAISED BY THE ASSESSEE FROM 12 PARTIES TO THE EXTENT OF RS.71,00,000/ - AS IT WAS FOUND THAT SHARE CAPITAL HAD BEEN RECEIVED FROM 3 DIFFERENT ENTRY OPERATORS WHO ARE ALLEGEDLY ENGAGED IN THE BUSINESS OF GIVING ACCOMMODATION ENTRIES. (II) FURTHER A SUM OF RS. 1,42,000/ - (I.E 2% OF RS.71,00,000/) WAS ALSO ADDED U/S 68 OF THE ACT TO THE INCOME TAKING AS PROBABLE COMMISSION GIVEN OUT OF THE UNACCOUNTED INCOME NOT HAVING BEEN BOOKED. (III) THE A SSESSEE PREFERRED AN APPEAL AGAINST THE ASSESSMENT ORDER BEFORE CIT(A) WHICH WAS ALLOWED BY THE LD. CIT(A) DELETING THE ADDITION MADE BY THE AO RELYING UPON CIT VS. LOVELY EXPORTS PVT. LTD., (2008) 216 CTR 195 (SC). (IV) THE REVENUE PREFERRED APPEAL (TO WH ICH THE ASSESSEE HAD ALSO FILED COUNTER OBJECTION) WAS UNSUCCESSFUL BEFORE ITAT. 47 | P A G E (V) HIGH COURT HELD THAT THE AO HAD FAILED TO DISCHARGE HIS OBLIGATIONS TO CONDUCT A PROPER INQUIRY. ALSO CIT(A) DID NOT MAKE FURTHER INQUIRY IN TERMS OF SECTION 250(4) AND CL OSED THE CHAPTER SIMPLY BY DELETING THE ADDITION MADE BY AO. AGAIN ITAT UPHELD THE ORDER OF CIT(A) WITHOUT MAKING PROPER ENQUIRY. (VI) THUS IN HIGH COURT, THE QUESTION OF LAW WAS ANSWERED IN FAVOUR OF THE REVENUE WITH A DIRECTION THAT THE MATTER OF ASSESS MENT ARISING OUT OF NOTICE U/S 148 OF IT ACT IN RESPECT OF THE ASSESSEE WOULD REMITTED TO THE CIT(A) FOR FRESH CONSIDERATION IN ACCORDANCE WITH LAW. 4. AS IS EVIDENT FROM THE ABOVE JUDGEMENT, THE FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE IS TOTALLY D IFFERENT FROM THAT OF THE CASE RELIED UPON BY THE DEPARTMENT. THE ASSESSEES CASE IS BASED ON TWO GROUNDS AS STATED BELOW: ADDITION ON ACCOUNT OF ADMISSION MADE BY CAPT. R.S. SINDHU IN HIS STATEMENT MADE UNDER OATH U/S 132(4) WHICH WAS SUBSEQUENTLY RETRA CTED. ADDITION MADE U/S 69A OF THE ACT AS UNEXPLAINED CASH ON ACCOUNT OF CASH FOUND DURING SEARCH FROM THE PREMISES OF THE ASSESSEE. 5. THUS THE GROUND TAKEN BY THE DEPARTMENT THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS BY IGNORING JUDGEMENT OF HONBLE DELHI HIGH COURT IN CASE OF THE COMMISSIONER OF INCOME TAX - II VS JANSAMPARK ADVERTISING AND MARKETING (P) LTD, IS NOT CORRECT AND BAD IN LAW. 26. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. IN THE PR ESENT CASE THE ADDITIONS ARE INVOLVED BASED ON STATEMENT U/S 132 (4) OF THE ACT AS WELL AS CASH FOUND DURING THE COURSE OF SEARCH. THE ADDITION BECAUSE OF ADMISSIONS IS BALD ADMISSION AND WHICH IS PARTLY RETRACTED AND CORRECTED TO THE EXTENT OF RS 8 6 CRORES. THE STATEMENT WAS OBTAINED BY THE REVENUE WITHOUT COLLECTING THE EVIDENCES AT THE TIME OF SEARCH. NEITHER THE LD AO, NOR INVESTIGATION WING SHOWED ANY EVIDENCE BASED ON WHICH THE ABOVE DISCLOSURE OF RS 150 CRORES WAS SUBSTANTIATED. THERFORE TH ERE IS NO REASON THAT MATTER CAN BE SET ASIDE. NO JUSTIFICATION WAS ALOS SHOWED BEFORE US IN THE ABOVE GROUND AS TO WHAT INQUIRY LD AO HAS FAILED TO MAKE WHICH IS 48 | P A G E NOW SHOULD BE MADE BY APPELLATE FORUM. FURTHERMORE THE SECOND ADDITION ON ACCOUNT OF CASH F OUND WAS ALSO SUBSTANTIATED BY THE ASSESSEE TO SHOW WEALTH TAX RETURNS OF THE FAMILY MEMBERS AS WELL AS THE CASH POSITION STATEMENT AS ON THE DATE OF SEARCH. THE LD AO HAS MADE THE ADDITION IGNORING THEM. NOW BEFORE US , IT IS NOT STATED THAT WHAT EL SE INQUIRY OR EVIDENCES SHOULD HAVE BEEN INQUIRED ABOUT THE ABOVE ISSUE. THEREFORE WE REJECT THE ABOVE GROUNDS OF THE REVENUE. 27. IN THE RESULT APPEAL OF THE REVENUE FOR AY 2012 - 13 AND 2013 - 14 IS DISMISSED. THE CO OF THE ASSESSEE IS SUPPORTING THE O RDER OF THE LD CIT (A). AS WE HAVE CONFIRMED THE FINDING OF THE D CIT (A) , THE SUPPORTIVE CO OF THE ASSESSEE DESERVES TO BE ALLOWED. RE VRIT PAL SINDHU AY 2012 - 13 AND 2013 - 14 28. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 04/DEL/201 6 FOR THE ASSESSMENT YEAR 2012 - 13: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 119000000/ - / - ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SO URCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU IN HIS STATEMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAM E CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 3. THAT THE LD. C1T(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WITHOUT OFFERING AN OPPORTUNITY TO THE ASSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 4. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON ACCOUNT OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRAC T THE SURRENDER OF ADDITIONAL INCOME. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 49 | P A G E 6. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING HONBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANS AMPARK ADVERTISING AND MARKETING (P) LTD. 7. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 29. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL IN CO NO. 178/DEL/2016 FOR ASSESSMENT YEAR 2012 - 13 : - 1) THAT THE LD. C.I.T.(A) ON THE FACTS OF THE CASE AND IN LAW HAS RIGHTLY DELETED THE ADDITION OF RS. 119000000/ - AS INCOME FROM UNDISCLOSED SOURCES AND THE SAME SHOULD BE UPHELD. 2) THAT THE LD. C.I.T.(A) RIGHTLY DELETED THE ADDITION OF RS. 11.90 CRORES AS THE AMOUNT I N QUESTION WAS WAIVER OF LOAN IN THE CASE OF CELLCAP SECURITIES LTD. AND HAVE NOTHING TO DO WITH THE APPELLANT. 3) THAT THE LD. C.I.T.(A) CORRECTLY APPRECIATED THE IMPUGNED SUM OF RS. 11.90 CRORES WAS DISCLOSED LOAN OF LEHMAN BROS, IN FAVOUR OF CELLCAP SE CURITIES LTD. AND ITS WAIVER IN THE HANDS OF THE SAID COMPANY CANNOT BE SUBJECT OF SURRENDER AS UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 4) THAT THE DISCLOSURE SO OBTAINED IN COURSE OF SEARCH IN REGARD TO SUM OF RS. 11.90 CRORES WAS DIRECTLY IN C ONTRADICTION TO CBDT INSTRUCTION NOS. F.NO.286 2 2 33 - IT(INV) DATED 10.03.2003 AND F.NO. 286/ 98/2013 - IT(INV.II) DATED 18.12.2014 AND. THEREFORE, MERELY BECAUSE IN A STATEMENT U/S. 132(4) APPELLANT ADMITTED THE IMPUGNED SUM AS UNDISCLOSED INCOME WILL GO TO CREATE AN INCOME IN HIS HAND CHARGEABLE TO TAX UNDER THE INCOME TAX ACT 5) THAT THE LD. C.I.T.(A) RIGHTLY CONSIDERED THE FACTS BROUGHT ON RECORD BY THE RESPONDENT. 6) THAT THE LD. C.I.T.(A) CORRECTLY RELIED ON THE WORKINGS SUBMITTED BY THE RESPONDENT, A ND SINCE SUCH WORKINGS AND EXPLANATIONS PROVIDED BY RESPONDENT WERE SUFFICIENT, THERE WAS NO NEED FOR CROSS EXAMINATION OF THE SAME. 7) THAT ALTHOUGH THE RESPONDENT HAD OFFERED ADDITIONAL INCOME, IT HAD BEEN CLEARLY STATED THAT ITS TAXABILITY WILL BE SUBMITTED SUBSEQUENTLY. 8) THAT THE RESPONDENT HAD DISCLOSED COMPLETE LINKAGE OF WAIVER OF LOAN TO THE ADDITIONAL INCOME THROUGH VARIOUS CORRESPONDENCES WITH THE REVENUE AUTHORITIES, THUS SUCH EXPLANATION WAS NOT AN AFTERTHOUGHT. 9) THAT THE LD. C.I. T.(A) RIGHTLY HELD THAT AO HAD ACCESS TO THE ENTIRE SEIZED MATERIAL, AND WAS UNABLE TO SHOW ANY DOCUMENT/ EVIDENCE THAT COULD HAVE BEEN TREATED AS INCRIMINATING OR UNEXPLAINED. 10) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT EVEN IF THE WAIVER OF LOAN WAS LI ABLE TO TAX, THEN THE SAME WOULD HAVE BEEN TAXED IN THE HANDS OF THE ALLEGED BENEFICIARY I.E. CELLCAP SECURITIES LTD. 50 | P A G E 11) THAT THE ORDER OF LD. C.I.T(A) IS CORRECT IN LAW AND ON FACTS OF THE CASE, AND IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 30. THE REV ENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 05/DEL/2016 FOR THE ASSESSMENT YEAR 2013 - 14: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.50000000/ - ON ACCOUNT OF RETRACTION O F ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.205500/ - ON ACCOUNT OF UNEXPL AINED CASH IN HAND U/S 69A OF THE IT ACT, 1961 WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SAME AFTER DUE OPPORTUNITIES. 3. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU IN HIS STATEMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 4. THAT THE LD. CIT(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WITHOUT O FFERING AN OPPORTUNITY TO THE ASSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON ACCOUNT OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 6. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 7. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS B Y IGNORING HONBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 8. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 31. THE ASSESSEE HAS R AISED THE FOLLOWING GROUND OF APPEAL IN CO NO. 179/DEL/2016 FOR ASSESSMENT YEAR 2013 - 14 : - 1) THAT THE LD. C.I.T.(A) ON THE FACTS OF THE CASE AND IN LAW HAS RIGHTLY DELETED THE ADDITION OF RS.50000000/ AS INCOME FROM UNDISCLOSED SOURCES AND THE SAME SHOULD BE UPHELD. 51 | P A G E 2) THAT THE LD. C.I.T.(A) RIGHTLY DELETED THE ADDITION OF RS.5 CRORE AS THE AMOUNT IN QUESTION WAS WAIVER OF LOAN IN THE CASE OF CELLCAP SECURITIES LTD. AND HAD NOTHING TO DO WITH THE APPELLANT. 3) THAT THE LD. C.I.T.(A) CORRECTLY APPRECIATED T HE IMPUGNED SUM OF RS. 5 CRORE WAS DISCLOSED LOAN OF LEHMAN BROS, IN FAVOUR OF CELLCAP SECURITIES LTD. AND ITS WAIVER IN THE HANDS OF THE SAID COMPANY CANNOT BE SUBJECT OF SURRENDER AS UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 4) THAT THE DISCLOSUR E SO OBTAINED IN COURSE OF SEARCH IN REGARD TO SUM OF RS.5 CRORES WAS DIRECTLY IN CONTRADICTION TO CBDT INSTRUCTION NOS. F.NO.286/2/2003 - IT(INV) DATED 10.03.2003 AND F.NO. 286/ 98/2013 - IT(INV.II) DATED 18.12.2014 AND, THEREFORE, MERELY BECAUSE IN A STATEME NT U/S. 132(4) APPELLANT ADMITTED THE IMPUGNED SUM AS UNDISCLOSED INCOME WILL GO TO CREATE AN INCOME IN HIS HAND CHARGEABLE TO TAX UNDER THE INCOME TAX ACT. 5) THAT THE LD. C.I.T.(A) AFTER CONSIDERING THE FACT OF JOINT LIVING OF THE FAMILY MEMBERS,. THEIR W.T. RETURNS SHOWING POSITION OF CASH - IN - HAND, BANK STATEMENTS AND OTHER DOCUMENTS ETC HAS RIGHTLY DELETED THE ADDITION OF RS. 2.05.500/ - MADE U/S. 69A OF THE ACT AS UNEXPLAINED HENCE NO INTERFERENCE ON THE ISSUE IS CALLED FOR. 6) THAT THE LD. C.L.T.(A) RIGHTLY CONSIDERED THE FACTS BROUGHT ON RECORD BY THE RESPONDENT. 7) THAT THE LD. C.I.T.(A) CORRECTLY RELIED ON THE WORKINGS SUBMITTED BY THE RESPONDENT, AND SINCE SUCH WORKINGS AND EXPLANATIONS PROVIDED BY RESPONDENT WERE SUFFICIENT, THERE WAS NO NEE; CR OSS EXAMINATION OF THE SAME. 8) THAT ALTHOUGH THE RESPONDENT HAD OFFERED ADDITIONAL INCOME, IT HAD BEEN CLEARLY STATED THAT ITS TAXABILITY WILL BE SUBMITTED SUBSEQUENTLY. 9) THAT THE RESPONDENT HAD DISCLOSED COMPLETE LINKAGE OF WAIVER OF LOAN TO THE ADDI TIONAL INCOME THROUGH VARIOUS CORRESPONDENCES WITH THE REVENUE AUTHORITIES, THUS SUCH EXPLANATION WAS NOT AN AFTERTHOUGHT. 10) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT AO HAD ACCESS TO THE ENTIRE SEIZED MATERIAL, AND WAS UNABLE TO SHOW ANY DOCUMENT/ EVIDEN CE THAT COULD HAVE BEEN TREATED AS INCRIMINATING OR UNEXPLAINED. 11) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT EVEN IF THE WAIVER OF LOAN WAS LIABLE TO TAX, THEN THE SAME WOULD HAVE BEEN TAXED IN THE HANDS OF THE ALLEGED BENEFICIARY I.E. CELLCAP SECURITIES LTD. 12) THAT THE ORDER OF LD. C.I.T(A) IS CORRECT IN LAW AND ON FACTS OF THE CASE, AND IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 32. IN BOTH THE APPEAL OF THE REVENUE, SIMILAR ISSUE AS DECIDED BY THIS ORDER IN CASE OF SHRI DEV SUMAN SIDHU HAS BEEN R AISED. THE CO OF THE ASSESSEE 52 | P A G E FOR BOTH THE YEARS ARE SUPPORTIVE IN NATURE. THEREFORE FOR THE REASONS GIVEN BY US IN APPEALS OF REVENUE IN CASE OF MR. DEV SUMAN SIDHU WE DISMISS THE APPEAL OF THE REVENUE AND ALLOW THE CO OF THE ASSESSEE. SHRI KULDIP SINGH SOLANKI A Y 2012 - 13 33. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 06/DEL/2016 FOR THE ASSESSMENT YEAR 2012 - 13: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 6 ,30,50,000/ - ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU IN HIS STATEMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 3. THAT THE LD. CIT(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WITHOUT OFFERI NG AN OPPORTUNITY TO THE ASSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 4. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON ACCOUNT OF WA IVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERT AINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 6. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGN ORING HONBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE .COMMISSIONER OF INCOME TAX - 11 VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. (A) THE ORDER OF THE CIT (A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 34. THE ASSESSEE HAS RAISED THE FO LLOWING GROUND OF APPEAL IN CO NO. 137/DEL/2016 FOR ASSESSMENT YEAR 2012 - 13: - 1) THAT THE LD. C.I.T.(A) ON THE FACTS OF THE CASE AND IN LAW HAS RIGHTLY DELETED THE ADDITION OF RS. 6,30,50,000/ - AS INCOME FROM UNDISCLOSED SOURCES AND THE SAME SHOULD BE UPH ELD. 2) THAT THE LD. C.I.T.(A) RIGHTLY DELETED THE ADDITION OF RS. 6,30,50,000/ - MADE IN ASSESSMENT YEAR 2012 - 13 AS THE AMOUNT IN 53 | P A G E QUESTION WAS WAIVER OF LOAN IN THE CASE OF CELLCAP SECURITIES LTD. AND HAVE NOTHING TO DO WITH THE APPELLANT. 3) THAT THE LD. C.I.T.(A) CORRECTLY APPRECIATED THE IMPUGNED SUM OF RS. 6,30,50,000/ - WAS DISCLOSED LOAN OF LEHMAN BROS, IN FAVOUR OF CELLCAP SECURITIES LTD. AND ITS WAIVER IN THE HANDS OF THE SAID COMPANY CANNOT BE SUBJECT OF SURRENDER AS UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 4) THAT THE DISCLOSURE SO OBTAINED IN COURSE OF SEARCH IN REGARD TO SUM OF RS. 6,30,50,000/ - WAS DIRECTLY IN CONTRADICTION TO CBDT INSTRUCTION NOS. F.NO. 286/2/2003 - IT(INV) DATED 10.03.2003 AND F.NO. 286/ 98/2013 - IT(INV.II) DATED 18.12.2 014 AND, THEREFORE, MERELY BECAUSE IN A STATEMENT U/S 132(4) APPELLANT ADMITTED THE IMPUGNED SUM AS UNDISCLOSED INCOME WILL GO TO CREATE AN INCOME IN HIS HAND CHARGEABLE TO TAX UNDER THE INCOME TAX ACT. 35. IN APPEAL OF THE REVENUE SIMILAR ISSUE AS DECIDED BY THIS ORDER IN CASE OF SHRI DEV SUMAN SIDHU HAS BEEN RAISED. THE CO OF THE ASSESSEE FORAY 2012 - 13 IS SUPPORTIVE IN NATURE. THEREFORE FOR THE REASONS GIVEN BY US IN APPEALS OF REVENUE IN CASE OF MR. DEV SUMAN SIDHU, WE DISMIS S THE APPEAL OF THE REVENUE AND ALLOW THE CO OF THE ASSESSEE. MR. VIR SEN SIDHU AY 2012 - 13 AND 2013 - 14 36. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 07/DEL/2016 FOR THE ASSESSMENT YEAR 2012 - 13: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 14,84,97,000/ - ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THAT THE LD. CIT(A) H AS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU IN HIS STATEMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 3. THAT THE LD. C1T(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WITHOUT OFFERING AN OPPORTUNITY TO THE ASSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 4. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 13 2(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON ACCOUNT OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 54 | P A G E 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 6. THA T THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING HONBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 7. (A) THE ORDER OF THE CIT(APP EALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 37. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL IN CO NO. 169/DEL/2016 FOR ASSESSMENT YEAR 2012 - 13 : - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELE TING THE ADDITION OF RS. 14,84,97,000/ - ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS S INDHU IN HIS STATEMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 3. THAT THE LD. CIT(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WITHOUT OFFERING AN OPPORTUNITY TO THE ASSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 4. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME W AS OFFERED ON ACCOUNT OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 6. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING HONBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 7. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACT S. 38. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 08/DEL/2016 FOR THE ASSESSMENT YEAR 2013 - 14: - 55 | P A G E 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 42021000/ - ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU IN HIS STATEMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 3. THAT THE LD. C1T(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WITHOUT OFFERING AN OPPORTUNITY TO THE A SSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 4. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON ACCOUNT OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 6. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING HONBLE DELHI HIGH C OURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 7. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 39. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL IN CO NO. 170/DEL/2016 FOR ASSESSMENT YEAR 2013 - 14 : - 1) THAT THE LD. C.I.T.(A) ON THE FACTS OF THE CASE AND IN LAW HAS RIGHTLY DELETED THE ADDITION OF RS. 42021000/ - AS INCOME FROM UNDISCLOSED SOURCES AND THE SAME SHOULD BE UPHELD. 2) THAT THE LD. C.I.T.(A) RIGHTLY DELETED THE ADDITION OF RS. 4.20 CRORES AS THE AMOUNT IN QUESTION WAS WAIVER OF LOAN IN THE CASE OF CELLCAP SECURITIES LTD. AND HAVE NOTHING TO DO WITH THE APPELLANT. 3) THAT THE LD. C.I.T.(A) CORRECTLY APPRECIATED THE IMPU GNED SUM OF RS. 4.20 CRORES WAS DISCLOSED LOAN OF LEHMAN BROS, IN FAVOUR OF CELLCAP SECURITIES LTD. AND ITS WAIVER IN THE HANDS OF THE SAID COMPANY CANNOT BE SUBJECT OF SURRENDER AS UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 4) THAT THE DISCLOSURE SO OBTAINED IN COURSE OF SEARCH IN REGARD TO SUM OF RS. 4.20 CRORES WAS DIRECTLY IN CONTRADICTION TO CBDT INSTRUCTION 56 | P A G E NOS. F.NO.286 2 2 33 - IT(INV) DATED 10.03.2003 AND F.NO. 286/ 98/2013 - IT(INV.II) DATED 18.12.2014 AND. THEREFORE, MERELY BECAUSE IN A STATE MENT U/S. 132(4) APPELLANT ADMITTED THE IMPUGNED SUM AS UNDISCLOSED INCOME WILL GO TO CREATE AN INCOME IN HIS HAND CHARGEABLE TO TAX UNDER THE INCOME TAX ACT 5) THAT THE LD. C.I.T.(A) RIGHTLY CONSIDERED THE FACTS BROUGHT ON RECORD BY THE RESPONDENT. 6) T HAT THE LD. C.I.T.(A) CORRECTLY RELIED ON THE WORKINGS SUBMITTED BY THE RESPONDENT, AND SINCE SUCH WORKINGS AND EXPLANATIONS PROVIDED BY RESPONDENT WERE SUFFICIENT, THERE WAS NO NEED FOR CROSS EXAMINATION OF THE SAME. 7) THAT ALTHOUGH THE RESPONDENT HAD O FFERED ADDITIONAL INCOME, IT HAD BEEN CLEARLY STATED THAT ITS TAXABILITY WILL BE SUBMITTED SUBSEQUENTLY. 8) THAT THE RESPONDENT HAD DISCLOSED COMPLETE LINKAGE OF WAIVER OF LOAN TO THE ADDITIONAL INCOME THROUGH VARIOUS CORRESPONDENCES WITH THE REVENUE AUTHORITIES, THUS SUCH EXPLANATION WAS NOT AN AFTERTHOUGHT. 9) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT AO HAD ACCESS TO THE ENTIRE SEIZED MATERIAL, AND WAS UNABLE TO SHOW ANY DOCUMENT/ EVIDENCE THAT COULD HAVE BEEN TREATED AS INCRIMINATING OR UNEXPLAINED. 10) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT EVEN IF THE WAIVER OF LOAN WAS LIABLE TO TAX, THEN THE SAME WOUL D HAVE BEEN TAXED IN THE HANDS OF THE ALLEGED BENEFICIARY I.E. CELLCAP SECURITIES LTD. 11) THAT THE ORDER OF LD. C.I.I.(A) IS CORRECT IN LAW AND ON FACTS OF THE CASE, AND IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 40. IN BOTH THE APPEAL OF THE REVENUE, SI MILAR ISSUE AS DECIDED BY THIS ORDER IN CASE OF SHRI DEV SUMAN SIDHU HAS BEEN RAISED. THE CO OF THE ASSESSEE FOR BOTH THE YEARS ARE SUPPORTIVE IN NATURE. THEREFORE FOR THE REASONS GIVEN BY US IN APPEALS OF REVENUE IN CASE OF MR. DEV SUMAN SIDHU WE DISMIS S THE APPEAL OF THE REVENUE AND ALLOW THE CO OF THE ASSESSEE. MR. RUDRA SEN SIDHU A Y 2012 - 13 AND 2013 - 14 41. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 09/DEL/2016 FOR THE ASSESSMENT YEAR 2012 - 13: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 12,34,08,000/ - ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 57 | P A G E 2. THAT THE LD. CIT(A ) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU IN HIS STATEMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 3. THAT THE LD. CIT( A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WITHOUT OFFERING AN OPPORTUNITY TO THE ASSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 4. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON ACCOUNT OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 6. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING HONBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 7. (A) THE ORDER OF THE CIT(A PPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 42. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL IN CO NO. 171/DEL/2016 FOR ASSESSMENT YEAR 2012 - 13: - 1) THAT THE LD. C.I.T.(A) ON THE FACTS OF THE CASE AND IN LAW HAS RIGHTLY DELETED THE AD DITION OF RS. 12,34,08,000/ - AS INCOME FROM UNDISCLOSED SOURCES AND THE SAME SHOULD BE UPHELD. 2) THAT THE LD. C.I.T.(A) RIGHTLY DELETED THE ADDITION OF RS. 12.34 CRORE AS THE AMOUNT IN QUESTION WAS WAIVER OF LOAN IN THE CASE OF CELLCAP SECURITIES LTD. AN D HAD NOTHING TO DO WITH THE APPELLANT. 3) THAT THE LD. C.I.T.(A) CORRECTLY APPRECIATED THE IMPUGNED SUM OF RS. 12.34 CRORE WAS DISCLOSED LOAN OF LEHMAN BROS, IN FAVOUR OF CELLCAP SECURITIES LTD. AND ITS WAIVER IN THE HANDS OF THE SAID COMPANY CANNOT BE S UBJECT OF SURRENDER AS UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 4. THAT THE DISCLOSURE SO OBTAINED IN COURSE OF SEARCH IN REGARD TO SUM OF RS. 12.34 CRORES WAS DIRECTLY IN CONTRADICTION TO CBDT INSTRUCTION NOS. F.NO.286/2/2003 - IT(INV) DATED 10.03. 2003 AND F.NO. 286/ 98/2013 - IT(INV.LI) DATED 18.12.2014 AND, THEREFORE, MERELY BECAUSE IN A STATEMENT U/S. 132(4) APPELLANT ADMITTED THE IMPUGNED SUM AS UNDISCLOSED INCOME WILL GO TO CREATE AN INCOME IN HIS HAND CHARGEABLE TO TAX UNDER THE INCOME TAX ACT. 58 | P A G E 5) THAT THE LD. C.I.T.(A) RIGHTLY CONSIDERED THE FACTS BROUGHT ON RECORD BY THE RESPONDENT. 6) THAT THE LD. C.I.T.(A) CORRECTLY RELIED ON THE WORKINGS SUBMITTED BY THE RESPONDENT, AND SINCE SUCH WORKINGS AND EXPLANATIONS PROVIDED BY RESPONDENT WERE SUFFICIENT, THERE WAS NO NEED FOR CROSS EXAMINATION OF THE SAME. 7) THAT ALTHOUGH THE RESPONDENT HAD OFFERED ADDITIONAL INCOME, IT HAD BEEN CLEARLY STATED THAT ITS TAXABILITY WILL BE SUBMITTED SUBSEQUENTLY. 8) THAT THE RESPONDENT HAD DISCLOSED COMPLETE LIN KAGE OF WAIVER OF LOAN TO THE ADDITIONAL INCOME THROUGH VARIOUS CORRESPONDENCES WITH THE REVENUE AUTHORITIES, THUS SUCH EXPLANATION WAS NOT AN AFTERTHOUGHT. 9) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT AO HAD ACCESS TO THE ENTIRE SEIZED MATERIAL, AND WAS UN ABLE TO SHOW ANY DOCUMENT/ EVIDENCE THAT COULD HAVE BEEN TREATED AS INCRIMINATING OR UNEXPLAINED. 10) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT EVEN IF THE WAIVER OF LOAN WAS LIABLE TO TAX, THEN THE SAME WOULD HAVE BEEN TAXED IN THE HANDS OF THE ALLEGED BEN EFICIARY I.E. CELLCAP SECURITIES LTD. 11) THAT THE ORDER OF LD. C.I.I.(A) IS CORRECT IN LAW AND ON FACTS OF THE CASE, AND IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 43. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 10/DEL/2016 FOR THE A SSESSMENT YEAR 2013 - 14: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 4,50,00,000/ - ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDIS CLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 40,00,000/ - ON ACCOUNT OF UNEXPLAINED CASH IN HAND UNDER SECTION 69A OF THE IT ACT, 1961 WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SAME AFTER DUE OPPORTUNITIES. 3. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU IN HIS STATEMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBER S OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 4. THAT THE LD. CIT(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WITHOUT OFFERING AN OPPORTUNITY TO THE ASSESSING OFFICER TO COUN TER AND CROSS EXAMINE THE SAME. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON ACCOUNT OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SEC URITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 6. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO AY 2010 - 11 59 | P A G E WHEREAS THE ISSUE OF - DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 7. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING HONBLE DELHI HIGH COURT DIRECTION IN THE CA SE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 8. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 44. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL IN CO NO. 172/DEL/ 2016 FOR ASSESSMENT YEAR 2013 - 14: - 1) THAT THE LD. C.I.T.(A) ON THE FACTS OF THE CASE AND IN LAW HAS RIGHTLY DELETED THE ADDITION OF RS. 4,50,00,000/ - AS INCOME FROM UNDISCLOSED SOURCES AND THE SAME SHOULD BE UPHELD. 2) THAT THE LD. C.L.T.(A) RIGHTLY DELETED THE ADDITION OF RS. 4.50 CRORE AS THE AMOUNT IN QUESTION WAS WAIVER OF LOAN IN THE CASE OF CELLCAP SECURITIES LTD. AND HAD NOTHING TO DO WITH THE APPELLANT. 3) THAT THE LD. C.I.T.(A) CORRECTLY APPRECIATED THE IMPUGNED SUM OF RS. 4.50 CRORE WAS DISC LOSED LOAN OF LEHMAN BROS, IN FAVOUR OF CELLCAP SECURITIES LTD. AND ITS WAIVER IN THE HANDS OF THE SAID COMPANY CANNOT BE SUBJECT OF SURRENDER AS UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 4) THAT THE DISCLOSURE SO OBTAINED IN COURSE OF SEARCH IN RE GARD TO SUM OF RS.4.50 CRORES WAS DIRECTLY IN CONTRADICTION TO CBDT INSTRUCTION NOS. F.NO.286/2/2003 - IT(INV) DATED 10.03.2003 AND F.NO. 286/ 98/2013 - IT(INV.II) DATED 18.12.2014 AND, THEREFORE, MERELY BECAUSE IN A STATEMENT U/S. 132(4) APPELLANT ADMITTED TH E IMPUGNED SUM AS UNDISCLOSED INCOME WILL GO TO CREATE AN INCOME IN HIS HAND CHARGEABLE TO TAX UNDER THE INCOME TAX ACT. 5) THAT THE LD. C.I.T.(A) AFTER CONSIDERING THE FACT OF JOINT LIVING OF THE FAMILY MEMBERS, THEIR W.T. RETURNS SHOWING POSITION OF CASH - IN - HAND, BANK STATEMENTS AND OTHER DOCUMENTS ETC. HAS RIGHTLY DELETED THE ADDITION OF RS. 40,00,000/ - MADE U/S. 69A OF THE ACT AS UNEXPLAINED CASH AND HENCE NO INTERFERENCE ON THE ISSUE IS CALLED FOR. 6) THAT THE LD. C.I.T.(A) RIGHTLY CONSIDERED THE FACTS BROUGHT ON RECORD BY THE RESPONDENT. 7) THAT THE LD. C.I.T.(A) CORRECTLY RELIED ON THE WORKINGS SUBMITTED BY THE RESPONDENT, AND SINCE SUCH WORKINGS AND EXPLANATIONS PROVIDED BY RESPONDENT WERE SUFFICIENT, THERE WAS NO NEED FOR CROSS EXAMINATION OF THE SA ME. 8) THAT ALTHOUGH THE RESPONDENT HAD OFFERED ADDITIONAL INCOME, IT HAD BEEN CLEARLY STATED THAT ITS TAXABILITY WILL BE SUBMITTED SUBSEQUENTLY. 60 | P A G E 9) THAT THE RESPONDENT HAD DISCLOSED COMPLETE LINKAGE OF WAIVER OF LOAN TO THE ADDITIONAL INCOME THROUGH VARI OUS CORRESPONDENCES WITH THE REVENUE AUTHORITIES, THUS SUCH EXPLANATION WAS NOT AN AFTERTHOUGHT. 10) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT AO HAD ACCESS TO THE ENTIRE SEIZED MATERIAL, AND WAS UNABLE TO SHOW ANY DOCUMENT/ EVIDENCE THAT COULD HAVE BEEN TR EATED AS INCRIMINATING OR UNEXPLAINED. 11) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT EVEN IF THE WAIVER OF LOAN WAS LIABLE TO TAX, THEN THE SAME WOULD HAVE BEEN TAXED IN THE HANDS OF THE ALLEGED BENEFICIARY I.E. CELLCAP SECURITIES LTD. 12) THAT THE ORDER OF LD. C.I.I.(A) IS CORRECT IN LAW AND ON FACTS OF THE CASE, AND IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 45. IN BOTH THE APPEAL OF THE REVENUE, SIMILAR ISSUE AS DECIDED BY THIS ORDER IN CASE OF SHRI DEV SUMAN SIDHU HAS BEEN RAISED . THE CO OF THE ASSESSEE FOR BOTH THE YEARS ARE SUPPORTIVE IN NATURE. THEREFORE FOR THE REASONS GIVEN BY US IN APPEALS OF REVENUE IN CASE OF MR. DEV SUMAN SIDHU WE DISMISS THE APPEAL OF THE REVENUE AND ALLOW THE CO OF THE ASSESSEE. MR. SATYA PAL SIDHU A Y 2012 - 13 AND 2013 - 14 46. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 11/DEL/2016 FOR THE ASSESSMENT YEAR 2012 - 13: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 10,70,33, 00/ - ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU IN HIS STATEMENT MADE UNDER O ATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEMENT. 3. THAT THE LD. CIT(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WITHOUT OFFERING AN OP PORTUNITY TO THE ASSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 4. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON ACCOUNT OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 5. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 61 | P A G E 2012 - 13 AND AY 2013 - 14 AND THE SAME CANNOT BE LINKED BY ANY STRETCH OF IMAGINATION. 6. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING HO NBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 7. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 47. THE ASSESSEE HAS RAISED THE FOLL OWING GROUND OF APPEAL IN CO NO. 173/DEL/2016 FOR ASSESSMENT YEAR 2012 - 13: - 1) THAT THE LD. C.I.T.(A) ON THE FACTS OF THE CASE AND IN LAW HAS RIGHTLY DELETED THE ADDITION OF RS. 10,70,33,000/ - AS INCOME FROM UNDISCLOSED SOURCES AND THE SAME SHOULD BE UPHE LD. 2) THAT THE LD. C.I.T.(A) RIGHTLY DELETED THE ADDITION OF RS. 10.70 CRORE AS THE AMOUNT IN QUESTION WAS WAIVER OF LOAN IN THE CASE OF CELLCAP SECURITIES LTD. AND HAD NOTHING TO DO WITH THE APPELLANT. 3) THAT THE LD. C.I.T.(A) CORRECTLY APPRECIATED THE IMPUGNED SUM OF RS. 10.70 CRORE WAS DISCLOSED LOAN OF LEHMAN BROS, IN FAVOUR OF CELLCAP SECURITIES LTD. AND ITS WAIVER IN THE HANDS OF THE SAID COMPANY CANNOT BE SUBJECT OF SURRENDER AS UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 4) THAT THE DISCLOSU RE SO OBTAINED IN COURSE OF SEARCH IN REGARD TO SUM OF RS. 10.70 CRORES WAS DIRECTLY IN CONTRADICTION TO CBDT INSTRUCTION NOS. F.NO.286/2/2003 - IT(INV) DATED 10.03.2003 AND F. NO. 286/98/2013 - IT (INV.II) DATED 18.12.2014 AND THEREFORE, MERELY BECAUSE IN A STATEMENT U/S. 132(4) APPELLANT ADMITTED THE IMPUGNED SUM AS UNDISCLOSED INCOME WILL GO TO CREATE AN INCOME IN HIS HAND CHARGEABLE TO TAX UNDER THE INCOME TAX ACT. 5) THAT THE LD. C.I.T.(A) RIGHTLY CONSIDERED THE FACTS BROUGHT ON RECORD BY THE RESPONDENT. 6) THAT THE LD. O.I.T.(A) CORRECTLY RELIED ON THE WORKINGS SUBMITTED BY THE RESPONDENT, AND SINCE SUCH WORKINGS AND EXPLANATIONS PROVIDED BY RESPONDENT WERE SUFFICIENT, THERE WAS NO NEED FOR CROSS EXAMINATION OF THE SAME. 7) THAT ALTHOUGH THE RESPONDENT HAD OFFERED ADDITIONAL INCOME, IT HAD BEEN CLEARLY STATED THAT ITS TAXABILITY WILL BE SUBMITTED SUBSEQUENTLY. 8) THAT THE RESPONDENT HAD DISCLOSED COMPLETE LINKAGE OF WAIVER OF LOAN TO THE ADDITIONAL INCOME THROUGH VARIOUS CORRESPONDENCES WITH THE REVENU E AUTHORITIES, THUS SUCH EXPLANATION WAS NOT AN AFTERTHOUGHT. 9) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT AO HAD ACCESS TO THE ENTIRE SEIZED MATERIAL, AND WAS UNABLE TO SHOW ANY DOCUMENT/ EVIDENCE THAT COULD HAVE BEEN TREATED AS INCRIMINATING OR UNEXPLAIN ED. 62 | P A G E 10) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT EVEN IF THE WAIVER OF LOAN WAS LIABLE TO TAX, THEN THE SAME WOULD HAVE BEEN TAXED IN THE HANDS OF THE ALLEGED BENEFICIARY I.E. CELLCAP SECURITIES LTD. 11) THAT THE ORDER OF LD. C.I.I.(A) IS CORRECT IN LAW AND ON FACTS OF THE CASE, AND IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 48. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL IN ITA NO. 12/DEL/2016 FOR THE ASSESSMENT YEAR 2013 - 14: - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.3,20,00,000/ - ON ACCOUNT OF RETRACTION OF ADDITIONAL INCOME DISCLOSED UNDER THE HEAD INCOME FROM OTHER SOURCES/UNDISCLOSED INCOME/UNDISCLOSED INVESTMENT. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS.46,73,000/ - ON ACCOUNT OF UNEXPLAINED CASH IN HANDS UNDER SECTION 69A OF THE IT ACT, 1961 WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE SAME AFTER DUE OPPORTUNITI ES. 3. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE ADMISSION MADE BY CAPT RS SINDHU IN HIS STATEMENT MADE UNDER OATH U/S 132(4) AND OTHER INDIVIDUAL MEMBERS OF THE GROUP NOT ONCE BUT AT LEAST TWICE AND THE SAME CANT BE RETRACTED BY BALD AND WRONG STATEM ENT. 4. THAT THE LD. CIT(A) HAS ERRED IN RELYING ON THE WRONG STATEMENT MADE BY THE ASSESSEE WITHOUT OFFERING AN OPPORTUNITY TO THE ASSESSING OFFICER TO COUNTER AND CROSS EXAMINE THE SAME. 5. THAT THE LD. C1T(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSE SSEE IN ITS STATEMENT U/S 132(4) HAS NOWHERE STATED THAT THE ADDITIONAL INCOME WAS OFFERED ON ACCOUNT OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS TO CELLCAP SECURITIES LTD. AND THE SAME IS AN AFTERTHOUGHT TO RETRACT THE SURRENDER OF ADDITIONAL INCOME. 6. THAT THE LD. CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ISSUE OF WAIVER OF LOAN BY M/S LEHMAN BROTHERS PERTAINS TO AY 2010 - 11 WHEREAS THE ISSUE OF DISCLOSURE OF ADDITIONAL INCOME PERTAINS TO AY 2012 - 13 AND AY 2013 - 14 AND THE .SAME CANNOT BE LINKED BY ANY S TRETCH OF IMAGINATION. 7. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS BY IGNORING HONBLE DELHI HIGH COURT DIRECTION IN THE CASE OF THE COMMISSIONER OF INCOME TAX - II VS M/S JANSAMPARK ADVERTISING AND MARKETING (P) LTD. 8. (A) THE ORDER OF THE CIT(APPEALS) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. 49. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL IN CO NO. 174/DEL/2016 FOR ASSESSMENT YEAR 2013 - 14 : - 63 | P A G E 1) THAT THE LD. C.I.T.(A) ON THE FACTS OF THE CASE AND IN LAW HAS RIGHTLY DELETED THE ADDITION OF RS.3,20,00,000/ - AS INCOME FROM UNDISCLOSED SOURCES AND THE SAME SHOULD BE UPHELD. 2) THAT THE LD. C.I.T.(A) RIGHTLY DELETED THE ADDITION OF RS.3.20 CRORE AS THE AMOUNT IN QUESTION WAS WAIVER OF LOAN IN THE CASE OF CELLC AP SECURITIES LTD. AND HAD NOTHING TO DO WITH THE APPELLANT. 3) THAT THE LD. C.I.T.(A) CORRECTLY APPRECIATED THE IMPUGNED SUM OF RS. 3.20 CRORE WAS DISCLOSED LOAN OF LEHMAN BROS, IN FAVOUR OF CELLCAP SECURITIES LTD. AND ITS WAIVER IN THE HANDS OF THE SAID COMPANY CANNOT BE SUBJECT OF SURRENDER AS UNDISCLOSED INCOME IN THE HANDS OF THE APPELLANT. 4) THAT THE DISCLOSURE SO OBTAINED IN COURSE OF SEARCH IN REGARD TO SUM OF RS.3.20 CRORES WAS DIRECTLY IN CONTRADICTION TO CBDT INSTRUCTION NOS. F.NO.286/2/2003 - IT( INV) DATED 10.03.2003 AND F.NO. 286/ 98/2013 - IT(INV.II) DATED 18.12.2014 AND, THEREFORE, MERELY BECAUSE IN A STATEMENT U/S. 132(4) APPELLANT ADMITTED THE IMPUGNED SUM AS UNDISCLOSED INCOME WILL GO TO CREATE AN INCOME IN HIS HAND CHARGEABLE TO TAX UNDER THE INCOME TAX ACT. 5) THAT THE LD. C.I.T.(A) AFTER CONSIDERING THE FACT OF JOINT LIVING OF THE FAMILY MEMBERS,. THEIR W.T. RETURNS SHOWING POSITION OF CASH - IN - HAND, BANK STATEMENTS AND OTHER DOCUMENTS ETC HAS RIGHTLY DELETED THE ADDITION OF RS. 46,73,000/ - MADE U/S. 69A OF THE ACT AS UNEXPLAINED HENCE NO INTERFERENCE ON THE ISSUE IS CALLED FOR. 6) THAT THE LD. C.L.T.(A) RIGHTLY CONSIDERED THE FACTS BROUGHT ON RECORD BY THE RESPONDENT. 7) THAT THE LD. C.I.T.(A) CORRECTLY RELIED ON THE WORKINGS SUBMITTED BY THE RESPONDENT, AND SINCE SUCH WORKINGS AND EXPLANATIONS PROVIDED BY RESPONDENT WERE SUFFICIENT, THERE WAS NO NEE; CROSS EXAMINATION OF THE SAME. 8) THAT ALTHOUGH THE RESPONDENT HAD OFFERED ADDITIONAL INCOME, IT HAD BEEN CLEARLY STATED THAT ITS TAXABILITY WILL BE SUBMITTED SUBSEQUENTLY. 9) THAT THE RESPONDENT HAD DISCLOSED COMPLETE LINKAGE OF WAIVER OF LOAN TO THE ADDITIONAL INCOME THROUGH VARIOUS CORRESPONDENCES WITH THE REVENUE AUTHORITIES, THUS SUCH EXPLANATION WAS NOT AN AFTERTHOUGHT. 10) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT AO HAD ACCESS TO THE ENTIRE SEIZED MATERIAL, AND WAS UNABLE TO SHOW ANY DOCUMENT/ EVIDENCE THAT COULD HAVE BEEN TREATED AS INCRIMINATING OR UNEXPLAINED. 11) THAT THE LD. C.I.T.(A) RIGHTLY HELD THAT EVEN IF THE WAIVER OF LOAN W AS LIABLE TO TAX, THEN THE SAME WOULD HAVE BEEN TAXED IN THE HANDS OF THE ALLEGED BENEFICIARY I.E. CELLCAP SECURITIES LTD. 12) THAT THE ORDER OF LD. C.I.I.(A) IS CORRECT IN LAW AND ON FACTS OF THE CASE, AND IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 64 | P A G E 50. I N BOTH THE APPEAL OF THE REVENUE, SIMILAR ISSUE AS DECIDED BY THIS ORDER IN CASE OF SHRI DEV SUMAN SIDHU HAS BEEN RAISED. THE CO OF THE ASSESSEE FOR BOTH THE YEARS ARE SUPPORTIVE IN NATURE. THEREFORE FOR THE REASONS GIVEN BY US IN APPEALS OF REVENUE IN C ASE OF MR. DEV SUMAN SIDHU WE DISMISS THE APPEAL OF THE REVENUE AND ALLOW THE CO OF THE ASSESSEE. 51. IN THE RESULT ALL THE APPEALS OF THE REVENUE IS DISMISSED AND CO OF THE ASSESSEES WHICH ARE SUPPORTING ORDER OF THE LD CIT (A) ARE ALLOWED. ORDER PRONOUN CED IN THE OPEN COURT ON 3 1 / 01 / 2018 . - S D / - - S D / - ( BHAVNESH SAINI ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 1 / 01 / 2018 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI