Sunil Kumar Aggarwal, Delhi V. ITO, Ward-61(5), New Delhi

ITA 2159/DEL/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9350 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 28-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S THUING ALENG
• Assessee Lawyers: K P GANGULI
• Keywords: Corroborative evidences; Reassessment proceedings
• Section: 143(3); 133A; 147; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.2159/DEL/2018 ASSESSMENT YEAR: 2009-10 SUNIL KUMAR AGGARWAL, B-174, GROUND FLOOR, NIRMAN VIHAR, VIKAS MARG, DELHI 110092. PAN: AAGPA1651B VS. ITO, WARD-61(5), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.P. GANGULI, ADVOCATE REVENUE BY : SHRI P.S. THUINGALENG, SR.DR DATE OF HEARING : 10.12.2018 DATE OF PRONOUNCEMENT : 19.12.2018 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31 ST JANUARY, 2018 OF THE CIT(A)-20, NEW DELHI RELATING TO ASSESSMENT YEAR 2009-10. 2. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS A DOCTOR AND FILED HIS RETURN OF INCOME ON 30 TH MARCH, 2010 DECLARING TOTAL INCOME OF RS.1,77,510/ -. THE CASE OF THE ASSESSEE WAS REOPENED BY ISSUE OF NOTIC E U/S 148 ON THE GROUND THAT THE ASSESSEE HAS RECEIVED CASH PAYMENT OF RS.2 LAKH DUR ING F.Y. 2008-09 WHICH WAS LARGELY UNACCOUNTED FOR AS PER THE INFORMATION RECE IVED FROM THE DCIT, CIRCLE 1, NEW DELHI. THE ASSESSEE, IN RESPONSE TO THE SAME, SUBM ITTED THAT THE ORIGINAL RETURN FILED ON 20 TH MARCH, 2010 MAY BE TREATED AS RETURN FILED IN RESP ONSE TO NOTICE U/S 148. ON ITA NO.2159/DEL/2018 2 BEING ASKED BY THE ASSESSEE TO ISSUE THE REASONS RE CORDED, THE ASSESSING OFFICER SUPPLIED THE FOLLOWING REASONS:- AS PER THE INFORMATION, A SURVEY U/S 133A HAD TAKEN PLACE IN THE CASE M/S ADVANCE THERAPEUTICS PVT. LTD. FURTHER, IT WAS NO TICED THAT ASSESSEE HAS MADE CASH PAYMENT TO VARIOUS MEDICAL PROFESSIONAL WHICH WERE LARGELY UNACCOUNTED. THE DETAIL IN RESPECT OF DR. SUNIL AGARWAL IS A UNDER:- NAME PAN AMOUNT & DATE OF PAYMENT MODE OF PAYMENT SH. SUNIL KUMAR AGGARWAL AAGPA 1 651B , 1,00,000/- 02AUG2008 10,000/- 28 AUG 2008 90,000/- 15 OCT 2008 CASH 3. THE ASSESSEE FILED ITS OBJECTIONS TO SUCH REOPEN ING OF THE ASSESSMENT. HOWEVER, THE ASSESSING OFFICER VIDE ORDER DATED 07.11.2016, DISPOSED OF THE OBJECTIONS BY REJECTING THE SAME. THEREAFTER, THE ASSESSING OFFI CER RECORDED THE STATEMENT OF SHRI GURMEET SINGH CHUGH, MD OF M/S ADVANCED THERAPEUTIC S PVT. LTD., WHICH WAS RECORDED ON OATH U/S 131(1) (1A) OF THE IT ACT DURI NG WHICH SHRI CHUG HAD STATED THAT HE DOES NOT RECOLLECT THE SAME SINCE THE MATTER IS OF THE YEAR 2008. THE ASSESSEE WAS PROVIDED WITH COPY OF THE STATEMENT OF SHRI CHUG. HOWEVER, HE EXPRESSED HIS UNWILLINGNESS TO CROSS-EXAMINE SHRI CHUG. THE ASSE SSING OFFICER, THEREFORE, MADE ADDITION OF RS.2 LAKH ON THE BASIS OF THE LEDGER AC COUNT IMPOUNDED DURING THE COURSE OF SURVEY OPERATION IN THE CASE OF ADVANCED THERAPE UTICS PVT. LTD. AND THE STATEMENT OF SHRI GURMEET SINGH CHUG DURING THE COURSE OF SUR VEY. 4. BEFORE THE CIT(A), APART FROM CHALLENGING THE AD DITION ON MERIT, THE ASSESSEE ALSO CHALLENGED THE VALIDITY OF THE REASSESSMENT PR OCEEDINGS. HOWEVER, THE LD.CIT(A) REJECTED BOTH THE GROUNDS I.E., THE GROUNDS CHALLEN GING THE VALIDITY OF REASSESSMENT ITA NO.2159/DEL/2018 3 PROCEEDINGS AS WELL AS THE GROUND ON MERIT. AGGRIE VED WITH SUCH ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RA ISING THE FOLLOWING GROUNDS:- 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE CIT (APPEALS)-20 ERRED IN LAW AND ON FACTS IN NOT ADMITTING ADDITION GROUND TAKEN BY THE APPELLANT WHICH READS AS UNDER- THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE ITO WARD 61(5) NEW DELHI WAS NOT JUSTIFIED IN THE OPENING OF THE CASE U/S 147 OF INCOME TAX ACT 1961, ON THE BASIS OF STATEMENT RECORDED OF A THIRD PARTY AND ALSO NOT PROVIDING THE APPELLANT AN OPPORTUNITY TO CROSS EXAMINE AND ALSO NOT CONFRONTI NG THE ASSESSEE WITH A COPY OF STATEMENT WHICH WAS USED AGAINST HIM. THE HON'BLE COMMISSIONER OF INCOME TAX (APPEAL)-20 MAY CONSIDER ADMISSION OF THE ABOVE MENTIONED GROUND OF APPEAL FOR ADJUDICATI ON. THIS IS A LEGAL GROUND OF JURISDICTION WHICH GOES TO THE ROOTS OF THE PROCEED INGS AND FACTS OF WHICH ARE ALREADY AVAILABLE OF RECORD. RELIANCE IN THIS REGAR D IS PLACED ON THE DECISION OF HON'BLE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER COMPANY LIMITED VS. COMMISSIONER OF INCOME TAX (1998) 229/ITR 383(SC). 2. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE CIT (APPEALS)-20 ERRED IN LAW AND ON FACTS IN NOT ADMITTING ADDITION AL EVIDENCE U.R. 46 (A) OF INCOME TAX RULES, 1962. 3. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE CIT (APPEALS)-20 WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 2,00,000/- MADE BY A.O. WITHOUT DISPOSING OFF THE OBJECTIONS OF THE APPELLANT TO TH E NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 BY PASSING A SPEAKING ORDER. 4. THAT THE ASSESSEE CRAVES LEAVE TO URGE ANY OTHER GROUND BEFORE OR AT THE TIME OF HEARING OR AMEND THE EXISTING GROUND OF APP EAL. 5. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLE NGED THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ADDITION WAS MADE SOLELY ON T HE BASIS OF STATEMENT OF SHRI GURMEET SINGH CHUG DURING THE COURSE OF SURVEY U/S 133A OF THE IT ACT. RELYING ON VARIOUS DECISIONS, HE SUBMITTED THAT THE STATEMENT RECORDED DURING THE COURSE OF SURVEY DOES NOT HAVE ANY EVIDENTIARY VALUE UNLESS IT IS BA CKED UP BY CORROBORATIVE EVIDENCES. REFERRING TO THE DECISION OF THE HON'BLE MADRAS HIG H COURT IN THE CASE OF CIT VS. S. ITA NO.2159/DEL/2018 4 KHADERKHAN SON REPORTED IN (2008) 300 ITR 157 (MAD. ), HE SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAME DECISION HAS HELD THAT SECTI ON 133A DOES NOT EMPOWER ANY IT AUTHORITY TO EXAMINE ANY PERSON ON OATH, HENCE, ANY SUCH STATEMENT HAS NO EVIDENTIARY VALUE AND ANY ADMISSION MADE DURING SUCH STATEMENT CANNOT BY ITSELF BE MADE THE BASIS FOR ADDITION. HE SUBMITTED THAT THE SLP FILE D BY THE REVENUE AGAINST THE ABOVE ADDITION WAS DISMISSED BY HON'BLE SUPREME COURT AS REPORTED IN 352 ITR 480. HE SUBMITTED THAT SIMILAR VIEW HAS BEEN HELD IN THE CA SE OF K. VELAYUTHAM VS. ACIT IN WRIT PETITION NO.33917 TO 33920 OF 2017 AND IN THE CASE OF P. MATHEWS & SONS VS. CIT REPORTED IN (2003) 263 ITR 101 (KER.). REFERRI NG TO THE STATEMENT RECORDED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, HE SUBMITTED THAT SHRI CHUG HAS CATEGORICALLY STATED IN HIS STATEMENT THAT HE HAS NOT PAID ANY AMOUNT TO THE ASSESSEE DR. SUNIL KUMAR AGGARWAL AND THE ASSESSING OFFICER HAS CONVENIENTLY IGNORED THE RELEVANT ANSWER OF SHRI CHUG. HE ACCOR DINGLY, SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) IS NOT JUSTIFIED. 6. SO FAR AS THE VALIDITY OF THE REASSESSMENT PROCE EDINGS ARE CONCERNED, HE SUBMITTED THAT THE ASSESSING OFFICER HAS MERELY REL IED ON THE INFORMATION RECEIVED FROM THE ACIT CIRCLE 1(1), NEW DELHI AND HAS NOT AP PLIED HIS INDEPENDENT MIND. RELYING ON VARIOUS DECISIONS INCLUDING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. G & G PHARMA (2015) 384 ITR 147 (DEL) AND VARIOUS OTHER DECISIONS, HE SUBMITTED THAT WHERE THE ASSESSING OF FICER HAD NOT MADE ANY EFFORT TO DISCUSS THE MATERIAL ON THE BASIS OF WHICH HE FORME D THE PRIMA FACIE VIEW THAT THE INCOME HAD ESCAPED ASSESSMENT, THE BASIC REQUIREMEN T OF SECTION 147 THAT THE ITA NO.2159/DEL/2018 5 ASSESSING OFFICER HAS TO APPLY HIS MIND IN ORDER TO FORM REASONS TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT WHICH HAD NOT BEEN FU LFILLED. ACCORDINGLY, REASSESSMENT PROCEEDINGS WERE TO BE HELD INVALID. RELYING ON VARIOUS OTHER DECISIONS IN THE PAPER BOOK, HE SUBMITTED THAT SIMILAR VIEW H AS BEEN TAKEN. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT DISPOSED OF THE OBJECTIONS BY PASSING A SPEAKING ORDER. HE ACCORDINGLY, SUBMITTED THAT BOTH LEGALLY AND FACTUALLY, THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED. 7. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND CIT(A). 8. I HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH TH E SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. I FIND THE ASSESSING OFFICER ON THE BASIS OF INFORMATION RECEIVED FROM THE DCIT, CIRCLE 1(1), NEW DELHI THAT THE ASSESSEE HAS RECEIVED CASH PAYMENT OF RS.2 LAKH DURING F.Y. 2008-09, REOPENED THE ASSESSMENT BY ISSUE OF NOTICE U/S 148. WHILE MAKING THE ADDITION, THE ASSESSING OFFICER REFERRED TO THE STATEMENT OF SHRI GURMEET SINGH CHUG, MD OF ADVANCED THERAPEUTIC S PVT. LTD. WHICH WAS RECORDED ON OATH DURING THE COURSE OF SURVEY OPERAT ION U/S 133A OF THE IT ACT DATED 6 TH DECEMBER, 2008. HE ALSO REFERRED TO THE STATEMENT OF SHRI CHUG RECORDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEREIN HE HAD STATED THAT SINCE IT IS A MATTER OF THE YEAR 2008 HE DOES NOT RECALL THE SAME. ON THE OTHER HAND, THE LD.CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER ON THE GROUND T HAT SHRI CHUG HAD MADE THE STATEMENT DURING THE COURSE OF SURVEY AT HIS PREMIS ES U/S 133A AND CERTAIN LEDGERS ITA NO.2159/DEL/2018 6 WERE FOUND DEPICTING THE PAYMENT TO VARIOUS MEMBERS WHEREIN THE NAME OF THE ASSESSEE WAS ALSO MENTIONED. IT IS THE SUBMISSION OF THE LD COUNSEL FOR THE ASSESSEE THAT THE REVENUE AUTHORITIES DO NOT HAVE THE POWER TO RECORD THE STATEMENT OF A PERSON DURING THE COURSE OF SURVEY U/S 133A AND SUCH STATE MENT HAS NO EVIDENTIARY VALUE. IT IS ALSO HIS SUBMISSION THAT DURING THE STATEMENT RE CORDED U/S 131(1) (1A), SHRI GURMEET SINGH HAD CATEGORICALLY STATED THAT HE HAS NOT GIVEN ANY CASH PAYMENT TO THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER HAS CONVE NIENTLY IGNORED THOSE REPLIES AND SIMPLY REPRODUCED THE ANSWER TO QUESTION NO.8. I F IND MERIT IN THE ABOVE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. IT HAS BEEN HELD IN VARIOUS DECISIONS THAT SECTION 133A DOES NOT EMPOWER ANY IT AUTHORITIES TO EXAMINE ANY PERSON ON OATH AND, THEREFORE, ANY SUCH STATEMENT HAS NO EVIDENTIARY VALUE AND ANY ADMISSION MADE DURING SUCH STATEMENT CANNOT BY ITSELF BE MADE THE BASIS FOR AD DITION. I FURTHER FIND MR. CHUG IN HIS STATEMENT RECORDED ON OATH U/S 131 OF THE IT AC T DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE ON 17 TH OCTOBER, 2016 HAS SUBMITTED AS UNDER:- QUESTION NUMBER 5 SURVEY OPERATION U/S 133A OF THE I.T.ACT. 1961 WERE CARRIED OUT BY THE DEPARTMENT ON 06/12/2008 AT 2 ND FLOOR METRO TOWER 1 LSC, NEW RAJENDER NAGAR, NEW DELHI- 110060 FROM THE PAPERS/DOCUMENTS IMPOUNDED DURING T HE COURSE OF SURVEY, IT IS NOTICED THAT YOUR COMPANY H AS MADE THE CASH PAYMENT OF RS. 2,00,000/-ON VARIOUS D ATES TO ONE DR,SUNIL AGARWAL (PAN- AAGPA1651B) DURING THE PERIOD 12/07/2008 TO 12/11/2008, AS PER RECORD SEIZED. PLEASE EXPLAIN THE NATURE OF THIS CASH PAYM ENT WHETHER THIS IS SALE OR COMMISSION OR SERVICE CHARG E. ALSO EXPLAIN WHETHER TDS WAS DEDUCTED ON THIS AMOUN T. ANSWER NO.5 IT IS DENIED THAT ANY CASH PAYMENTS WAS EVER PAID T O DR. SUNIL AGARWAL OR ANY OTHER CARDIOLOGIST EVER. THERE WERE A FEW ENTRIES MADE AGAINST THE NAME OF FEW DOCTORS ITA NO.2159/DEL/2018 7 WHICH WERE RELATED TO ALLOCATIONS FOR MARKETING ACTIVITIES/ TOTAL BUSINESS DONE/ EXPECTS BUSINESS D URING THE MONTH OR QUARTERS ETC. QUESTION NUMBER 6. PLEASE PRODUCE THE EVIDENCE/PROOF/RECEIPT IF ANY AVAILABLE WITH THE COMPANY ON THE BASIS OF WHICH HU GE AMOUNT OF CASE OF RS 2,00,000/- WAS PAID TO DR SUNI L AGARWAL (PAN- AAGPA1651 B) ANSWER NUMBER 6. IT IS DENIED THAT ANY CASH PAYMENT S WAS EVER PAID TO DR. SUNIL AGARWAL OR ANY OTHER CARDIOLOGIST EVER. QUESTION NUMBER 7 PLEASE ALSO EXPLAIN WHETHER DR, S UNIL AGARWAL (PAN- AAGPA1651B) WAS ON PANEL OF MAX HOSPITAL FOR RENDERING ANY SERVICES, DURING THE PERIOD 2008-09 RELEVANT TO A/Y 2009-10, DO YOU HAVE ANY IDEA ABOUT THIS ANSWER NUMBER 7 I HAVE NO IDEA ABOUT THE ASSOCIATION OF DR. SUNIL A GARWAL WITH MAX HOSPITAL. QUESTION NUMBER 8 I AM SHOWING YOU COPY OF LEDGER A CCOUNT OF M/S ADVANCE THERAPEUTICS PVT. LTD WHICH WERE IMPOUNDING DURING THE COURSE OF SURVEY OPERATION CONDUCTED U/S 133A OF THE I.T. ACT ON 06/12/2008 AT 2 ND FLOOR METRO TOWER, 1 LSC, NEW RAJENDER NAGAR, NEW DELHI-110060. PLEASE EXPLAIN THE SAME. ANSWER NUMBER 8 SINCE IT IS A MATTER OF THE YEAR 20 08 I DON'T RECALL THE SAME QUESTION NUMBER 9 DO YOU WANT TO SAY ANYTHING' ANSWER NUMBER 9 NO I DON'T WANT SAY ANYTHING. I AM SUBMITTING COPY OF ITR ALONG WITH ALL ENCLOSURES AND ASSESSMENT ORDER PASS UNDER SECTION 143(3) OF THE I.T ACT BY THE THEN DCI T CIRCLE-1 (1), DELHI. 9. FROM THE ABOVE, IT IS CLEAR THAT SHRI CHUG, AT T HE TIME OF SURVEY, HAD MADE CERTAIN STATEMENTS WHICH WAS RETRACTED DURING THE C OURSE OF RECORDING OF HIS STATEMENT SUBSEQUENTLY. AS HAD BEEN HELD EARLIER, THE IT AUT HORITIES HAVE NO POWER TO RECORD STATEMENT DURING THE COURSE OF SURVEY AND SUCH STAT EMENT HAS NO EVIDENTIARY VALUE. THUS, IN THE INSTANT CASE, THERE ARE CONFLICTING ST ATEMENTS: ONE MADE DURING THE COURSE ITA NO.2159/DEL/2018 8 OF SURVEY WHICH HAS NO EVIDENTIARY VALUE AND THE OT HER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHERE THE SAID PERSON HAS D ENIED TO HAVE MADE ANY CASH PAYMENT TO THE ASSESSEE. IT IS ALSO NOT DISCERNIBL E FROM THE ORDERS OF THE AUTHORITIES BELOW AS TO WHETHER ANY SUCH ADDITION HAS BEEN MADE IN THE HANDS OF OTHER RECIPIENTS WHOSE NAME APPEAR IN THE LIST OF SUCH IMPOUNDED MAT ERIAL RECOVERED FROM THE PREMISES OF M/S ADVANCE THERAPEUTICS PVT. LTD. IN T HIS VIEW OF THE MATTER, I AM OF THE CONSIDERED OPINION THAT THE ADDITION MADE BY THE AS SESSING OFFICER AND SUSTAINED BY THE CIT(A) IS NOT JUSTIFIED. ACCORDINGLY, I DIRECT THE ASSESSING OFFICER TO DELETE THE SAME. SINCE THE ASSESSEE SUCCEEDS ON MERIT, THE GR OUND CHALLENGING THE VALIDITY OF REASSESSMENT PROCEEDINGS IS NOT BEING ADJUDICATED A S THEY BECOME ACADEMIC IN NATURE. 10. IN THE RESULT, THE APPEAL FILED BY THE AS SESSEE IS ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 9.12.2018. SD/- ( R.K. PANDA) ACCOUNTANT MEMFBE R DATED: 19 TH DECEMBER, 2018 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI.