Smt. Abha Gupta, New Delhi V. ACIT, New Delhi

ITA 2294/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2985 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-03-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 15-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: BL GUPTA
• Keywords: Document seized; Documents seized
• Section: 153A; 69; 148; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI SHRI N.K. SAINI, ACCOUNTANT MEMBER AND BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 2294/DEL/2014 ASSESSMENT YEAR : 2003-04 ABHA GUPTA, 292, TAGORE PARK EXTN., MODEL TOWN-I, NEW DELHI-110009 (PAN: AAOPG8309G) VS ACIT, CC-19, NEW DELHI. APPELLANT BY SHRI B.L. GUPTA, AR RESPONDENT BY SHRI S.K. JAIN, DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF LD. CIT (A)-VI, NEW DELHI DATED 21.02.2014 AND PERTAINS TO ASSESSMENT YEAR 2003-04. 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 (THE ACT) WAS CONDUCTED ON 15 TH DECEMBER 2004 IN THE BRIJ MOHAN GUPTA GROUP OF CASES. DURING THE COURSE OF SEARCH PROCEE DINGS, CERTAIN DATE OF HEARING 09.03.2017 DATE OF PRONOUNCEMENT 31.05.2017 I.T.A. NO. 2294/DEL/2014 ASSESSMENT YEAR 2003-04 2 DOCUMENTS AND BOOKS OF ACCOUNTS WERE SEIZED FROM TH E RESIDENTIAL PREMISES FROM SHRI BRIJ MOHAN GUPTA AND FROM THE RESIDENCE OF SHRI RAM AVTAR SINGHAL, ACCOUNTANT OF SHRI BRIJ MOHAN GUPTA. AS PER THE SEIZED DOCUMENTS, AS APPEA RING IN ANNEXURE A-5 OF PARA H-4, IT WAS THE AOS OBSERVATI ON THAT THE ASSESSEE SMT. ABHA GUPTA, DURING THE ASSESSMENT YEA R, HAD ADVANCED CASH LOAN TO THE TUNE OF RS. 31 LAKH ON DI FFERENT OCCASIONS, THE PEAK OF WHICH WAS CALCULATED AT RS. 20 LAKH. THE ASSESSEE HAD ALSO EARNED INTEREST THEREON TO THE TU NE OF RS. 1,48,967/-. IT WAS ALSO INFERRED FROM THE SEIZED R ECORDS COUPLED WITH THE CONTENTS OF THE STATEMENT OF SHRI RAM AVTA R SINGHAL, ACCOUNTANT, THAT THE FIGURES OF CASH AMOUNT OF SUCH ADVANCES MADE BY THE ASSESSEE THROUGH SHRI BRIJ MOHAN GUPTA WERE IN LAKHS. SHRI BRIJ MOHAN GUPTA, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SURRENDERED UNACCOUNTED COMMISSION EAR NED BY HIM ON ACCOUNT OF SUCH ADVANCES TO VARIOUS PARTIES. THE AO WAS OF THE OPINION THAT SINCE THE ASSESSEES NAME APPEA RED IN THE SEIZED DOCUMENTS/BOOKS OF ACCOUNTS, THE PEAK CALCUL ATED AT RS. 20 LAKH ON THE AMOUNT OF RS. 31 LAKH ALLEGED TO HAV E BEEN ADVANCED BY THE ASSESSEE WAS TO BE CONSIDERED AS BE LONGING TO THE ASSESSEE AND ACTION U/S 153C OF THE ACT WAS, AC CORDINGLY, I.T.A. NO. 2294/DEL/2014 ASSESSMENT YEAR 2003-04 3 INITIATED. ASSESSMENT U/S 153C WAS COMPLETED BY MA KING AN ADDITION OF RS. 20 LAKH ON PEAK BASIS AS WELL AS AD DITION OF RS. 1,48,967/- WAS MADE ON INTEREST EARNED THEREON. TH E ASSESSING OFFICER ALSO NOTED THAT SMT. ABHA GUPTA WAS CLOSELY RELATED TO SHRI BRIJ MOHAN GUPTA AS HER FATHER SHRI ASHISH GUP TA WAS THE SON OF SHRI BRIJ MOHAN GUPTA AND ,THEREFORE, THE AS SESSEE WAS THE GRANDDAUGHTER OF SHRI B.M. GUPTA IN WHOSE CASE ACTION U/S 132 OF THE ACT WAS TAKEN. 3. THE ASSESSEE APPROACHED THE FIRST APPELLATE AUTH ORITY WHO ANNULLED THE ASSESSMENT HOLDING THAT THE DOCUMENTS SEIZED DID NOT BELONG TO THE ASSESSEE AND, THEREFORE, THE ASSE SSING OFFICER WAS NOT JUSTIFIED IN INITIATING ACTION U/S 153A OF ACT. THE LD. CIT (A) ALSO OBSERVED THAT THE ASSESSING OFFICER WAS FR EE TO TAKE PROPER REMEDIAL ACTION AS PROVIDED IN THE STATUTE. 4. SUBSEQUENTLY, A NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE AND SINCE NO COMPLIANCE WAS MADE TO THE NOTICE, THE ASSESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSMENT U/S 14 4 R.W.S. 148 OF THE ACT BY ADDING BACK RS. 20 LAKH U/S 69A OF TH E ACT. THE ASSESSING OFFICER ALSO BROUGHT TO TAX RS. 1,48,967/ - ON ACCOUNT OF INTEREST EARNED ON ALLEGED ADVANCES. I.T.A. NO. 2294/DEL/2014 ASSESSMENT YEAR 2003-04 4 5. AGGRIEVED, THE ASSESSEE AGAIN APPROACHED THE LD. CIT (A) CHALLENGING THE INITIATION OF REASSESSMENT PROCEEDI NGS U/S 148 AS WELL AS CHALLENGING THE ADDITIONS ON MERITS. HOWEV ER, THE LD. CIT (A) DISMISSED THE ASSESSEES APPEAL ON BOTH THE GRO UNDS AND NOW THE ASSESSEE HAS APPROACHED THE ITAT AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS INCORRECT AND UNJUSTIFIED IN A) HOLDING THAT THE ORDER PASSED BY THE AO U/S 144/14 8 WAS VALID. B) HOLDING THAT ACTION U/S 148 HAS BEEN LEGALLY TAKEN AND THEREFORE WAS NOT CORRECT IN REJECTING THE SUBMISSI ON TAKEN BY THE AO IN THIS REGARD SUMMARILY EVEN WITHOUT CONSID ERING GIVING REASONS FOR SUCH REJECTING. C) HOLDING THAT THE NAME OF ABHA GUPTA IN THE BOOKS A S BRIJ MOHAN IN THE NAME OF THE ASSESSEE WHO HAS GIVEN THE AMOUNT OF RS. 20 LAKH ON LOAN THEREFORE BRIJ MOHAN. D) REJECTING THE AFFIDAVIT FILED BY THE ASSESSEE THAT SHE HAS NOT GIVEN ANY LOAN THROUGH BRIJ MOHAN OF RS. 20 LAKH AS ALLEGED BY THE REVENUE EVEN WITHOUT CONFRONTING HER AND ALS O WITHOUT FUNDING ANY INCORRECTNESS OR WRONG STATEMENT IN THE AFFIDAVIT. E) WITHOUT PREJUDICE TO ABOVE ON PASSING THE APPEAL O RDER WITHOUT DECIDING ALL THE GROUNDS INDIVIDUALLY AND RESPECTFULLY. F) IN HOLDING THAT THE ACTION TAKEN U/S 147/148 WAS V ALID. G) CONFIRMING THE ADDITION OF RS. 20 LAKH INCORRECTLY MADE BY THE AO. I.T.A. NO. 2294/DEL/2014 ASSESSMENT YEAR 2003-04 5 6. LD. AR SUBMITTED THAT THE ASSESSING OFFICER WAS INCORRECT AND UNJUSTIFIED IN TREATING THE AMOUNT OF RS. 20 LA KH AS THE INCOME OF THE ASSESSEE U/S 69 OF THE ACT AS THE ASS ESSEE HAD, INTER ALIA, FILED AN AFFIDAVIT BEFORE THE LD. CIT(A ) THAT SHE HAD NEVER GIVEN ANY AMOUNT TO SHRI BRIJ MOHAN GUPTA OR FOR THAT MATTER TO ANYBODY ELSE FOR ANY INVESTMENT AND THAT THE NAME OF ABHA GUPTA IN ANNEXURE A-5 OF PARA H-4 HAD NO RELAT ION OR CONNECTION WHATSOEVER WITH HER AND THAT THE SAID EN TRY WAS NOT RELATED TO HER. IT WAS SUBMITTED THAT THE LD. CIT (A) HAD COMPLETELY DISREGARDED THIS AFFIDAVIT AND HAD CONFI RMED THE ADDITION. IT WAS FURTHER SUBMITTED THAT IN A RELAT ED CASE OF SHRI RAJEEV GUPTA S/O SHRI BRIJ MOHAN GUPTA, WHERE CASH LOANS WERE ALLEGEDLY ADVANCED AND INTEREST EARNED, THE ASSESSI NG OFFICER HAD MADE ADDITIONS OF RS. 21 LAKH IN ASSESSMENT YEAR 2 000-01 AND RS. 31 LAKH IN ASSESSMENT YEAR 2002-03 WHICH WERE D ELETED BY THE LD. CIT(A) AND ON REVENUES APPEAL, ITAT DELHI BENCH IN ITA NOS. 1304 AND 1305/DEL/2009 VIDE ORDER DATED 9 TH OCTOBER 2009, HAD HELD THAT THE NAME IN THE SEIZED PAPER WA S NOT THAT OF SHRI RAJIV GUPTA BECAUSE THERE MIGHT BE SEVERAL PER SONS WITH THE NAME OF SHRI RAJIV GUPTA AND SINCE THE ASSESSEE HAD TAKEN SPECIFIC OBJECTION REGARDING THE IDENTITY BEFORE TH E ASSESSING I.T.A. NO. 2294/DEL/2014 ASSESSMENT YEAR 2003-04 6 OFFICER, THE ASSESSING OFFICER SHOULD HAVE TAKEN ST EPS TO ESTABLISH HIS ALLEGATIONS THAT THE NAME MENTIONED I N THE SEIZED DOCUMENT WAS THAT OF SHRI RAJIV GUPTA IN THAT CASE. THE LD. AR PLACED RELIANCE ON THIS ORDER OF THE ITAT AND SUBMI TTED THAT IN THE CASE OF THE ASSESSEE, IT HAD BEEN WRONGLY INFER RED FROM THE SEIZED MATERIAL (BEING LEDGER BOOKS, CONTAINING THE NAMES OF THE PARTIES, WHO HAD ADVANCED CASH LOANS THROUGH SHRI B RIJ MOHAN GUPTA AND THE NAMES INCLUDED THE NAME OF SHRI RAJIV GUPTA, SHRI ANKIT GUPTA AND SMT. ABHA GUPTA) THAT THE ASSE SSEE HAD ADVANCED LOANS TO SHRI BRIJ MOHAN GUPTA AND THE ASS ESSEE HAD SPECIFICALLY OBJECTED TO SUCH INFERENCE THROUGH AN AFFIDAVIT BUT THE DEPARTMENT, ON THE PREPONDERANCE OF PROBABILITY , HAD REJECTED THE AFFIDAVIT FILED BY THE ASSESSEE. IT W AS SUBMITTED THAT IN VIEW OF THE ORDER OF THE ITAT IN THE CASE OF ANO THER ASSESSEE, SHRI RAJIV GUPTA, FALLING WITHIN THE SAME GROUP OF CASES, THE IMPUGNED ADDITION SHOULD BE DELETED. 7. LD. DR PLACED RELIANCE ON THE ORDERS OF THE ASSE SSING OFFICER AS WELL AS THE LD. CIT (A) AND VEHEMENTLY ARGUED TH AT THE ADDITION BE UPHELD. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE RELEVANT MATERIAL ON RECORD. A PERUSAL OF THE ORDE RS OF THE ITAT I.T.A. NO. 2294/DEL/2014 ASSESSMENT YEAR 2003-04 7 IN THE CASE OF SHRI RAJIV GUPTA FOR ASSESSMENT YEAR S 2000-01 AND 2002-03 IN ITA NOS. 1304 & 1305/DEL/09 SHOWS THAT I DENTICAL ISSUE WAS BEFORE THE ITAT DELHI E BENCH IN THAT C ASE. IT IS UNDISPUTED THAT THE ASSESSEE ALSO BELONGS TO SHRI B .M. GUPTA GROUP OF CASES IN WHICH THE SEARCH WAS CARRIED OUT ON 15.12.2004. IN THE SAID ORDER THE RELEVANT FINDING S OF THE ITAT ARE FOUND IN PARA 8 AND 9 WHICH ARE BEING REPRODUCE D HERE-IN- UNDER FOR A READY REFERENCE:- WE FEEL THAT BEFORE DECIDING AS TO WHETHER THE SEIZ ED DOCUMENTS BELONGS TO THIS ASSESSEE ALSO OR NOT, WE SHOULD DECIDE AS TO WHETHER THE NAME OF RAJIV GUPTA APPEARING IN THE SEIZED PAPERS IS OF THE ASSESSEE OR NOT. FOR THIS PURPOSE, WE HAVE EXAMINED IN DETAIL ALL THE STATEME NTS OF THE ASSESSEE AND OF SHRI BM GUPTA AND OF THE ACCOUN TANT SHRI RA SINGHAL AND IN THEIR STATEMENTS THERE IS NO QUESTION ASKED ABOUT THE IDENTITY OF RAJIV GUPTA', WHOSE NAME IS APPEARING IN THE SEIZED PAPER. BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS TAKEN SPECIFIC OBJECTION THAT THIS IS NOT HIS NAME BUT IN SPITE OF THIS, THE ASSESSING OFFICER HAS NOT TAKEN ANY ACTION TO FIND OUT THE TR UTH. HE COULD HAVE RECORDED THE STATEMENT OF THE ASSESSEE AND COULD HAVE ASKED TO POINT OUT THE PERSON WHOSE NAME IS APPEARING IN THE SEIZED PAPERS BECAUSE SOME DOCUME NTS ARE IN HIS HAND WRITING ALSO OR HE COULD HAVE RECOR DED STATEMENT OF SHRI BM GUPTA AND/OR SHRI RA SINGHAL T O ENQUIRE ABOUT THE IDENTITY OF 'RAJIV GUPTA, WHOSE NAME IS APPEARING IN THE SEIZED PAPER. THE ASSESSING OFFICE R HAS DONE NOTHING TO ESTABLISH THAT THIS NAME OF 'RAJIV GUPTA APPEARING IN THE SEIZED PAPER IS OF THE ASSESSEE. H E HAS DECIDED THE ISSUE ON PRESUMPTION ONLY THAT SINCE T HE NAME IS TALLYING WITH THE NAME OF THE ASSESSEE, THE NAME MENTIONED IN THE SEIZED PAPER IS OF THE ASSESSEE. UNDER THESE FACTS, WE CANNOT GIVE A FINDING THAT THE NA ME IN SEIZED PAPER IS OF THE ASSESSEE ONLY BECAUSE THERE MAY BE I.T.A. NO. 2294/DEL/2014 ASSESSMENT YEAR 2003-04 8 SEVERAL PERSONS BY THE NAME OF RAJIV GUPTA AND SI NCE THE ASSESSEE HAS TAKEN SPECIFIC OBJECTION BEFORE THE AS SESSING OFFICER, THE ASSESSING OFFICER SHOULD HAVE TAKEN AC TION TO ESTABLISH HIS ALLEGATION THAT THE NAME MENTIONED IN THE SEIZED DOCUMENT IS OF THE ASSESSEE. BEFORE US ALS O, LD DR OF THE REVENUE COULD NOT POINT OUT ANY BASIS FOR HO LDING THAT THE NAME MENTIONED IN THE SEIZED PAPER IS OF THE AS SESSEE ONLY PARTICULARLY WHEN THE ASSESSEE IS OBJECTING TH E SAME AND THIS POSSIBILITY CANNOT BE RULED OUT THAT THIS NAME MAY BE OF SOME OTHER PERSON BECAUSE THERE MAY BE SEVERA L PERSONS BY NAME OF RAJIV GUPTA. UNDER THESE FACT S, WE ARE OF THE CONSIDERED OPINION THAT IT CANNOT BE HEL D THAT THE NAME APPEARING IN THE SEIZED DOCUMENT IS OF THE ASS ESSEE ONLY. NO PURPOSE WILL BE SERVED EVEN IF WE RESTORE THIS MATTER BACK TO THE ASSESSING OFFICER SINCE MUCH TIM E HAS ELAPSED. UNDER THESE FACTS, THE ADDITION MAY BY THE ASSESSING OFFICER CANNOT BE SUSTAINED BECAUSE THE ASSESSING OFFICER COULD NOT ESTABLISH THAT THE NAME APPEARING IN THE SEIZED PAPERS IS OF THE ASSESSEE O NLY. 9. IN VIEW OF OUR FINDING THAT THE NAME MENTIONED IN THE SEIZED PAPER CANNOT BE HELD TO BE OF THE ASSESSEE, WE FEEL THAT NO ADJUDICATION IS CALLED FOR ON THE FIRST ASP ECT OF THE MATTER AS TO WHETHER THE SEIZED DOCUMENTS CAN BE S AID TO BE BELONGING TO THE ASSESSEE OR NOT BECAUSE EVEN IF IT IS FOUND AND HELD THAT SEIZED DOCUMENTS ARE BELONGING TO THE ASSESSEE, THE ADDITION MADE BY THE ASSESSING OFFIC ER CANNOT BE SUSTAINED FOR THE REASONS THAT THE NAME F OUND IN THE SEIZED PAPER IS NOT ESTABLISHED TO BE THAT OF THE ASSESEE. WE, THEREFORE, DO NOT DECIDE THIS ASPECT O F THE MATTER AS TO WHETHER THE SEIZED DOCUMENT BELONGED T O THE ASSESSEE OR NOT BECAUSE IT IS OF ACADEMIC INTEREST ONLY. IN VIEW OF OUR ABOVE DISCUSSION, WE CONFIRM THE ORDER OF LD CIT(A) IN BOTH THE YEARS ALTHOUGH FOR DIFFERENT REA SONS. 9. ON THE FACTUAL MATRIX OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEES CASE IS ALSO SQUARELY C OVERED BY THE RATIO OF DECISION OF THE CO-ORDINATE BENCH OF THE I TAT IN THE CASE I.T.A. NO. 2294/DEL/2014 ASSESSMENT YEAR 2003-04 9 OF SHRI RAJIV GUPTA (SUPRA). WE ALSO HAVE ON RECOR D COPY OF THE ITAT ORDER IN ITA NO. 43 AND 44/DEL/2010 IN THE CAS E OF THE ASSESSEE FOR ASSESSMENT YEARS 2002-03 AND 2003-04, WHEREIN THE ITAT VIDE ORDER DATED 10.06.2011 HAS DISMISSED THE DEPARTMENTS APPEAL CHALLENGING THE ACTION OF THE L D. CIT (A) IN HOLDING THAT THE DOCUMENTS ON THE BASIS OF WHICH PR OCEEDINGS U/S 153C OF THE ACT HAD BEEN INITIATED IN THE CASE OF THE ASSESSEE DID NOT BELONG TO THE ASSESSEE. ACCORDINGLY, WE SE T ASIDE THE ORDER OF THE LD. CIT (A) AND DIRECT THE ASSESSING O FFICER TO DELETE THE IMPUGNED ADDITIONS. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31ST MAY, 2 017. SD/- SD/- (N.K. SAINI) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: 31ST MAY, 2017 GS COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASSTT. REGISTRAR I.T.A. NO. 2294/DEL/2014 ASSESSMENT YEAR 2003-04 10 FOLLOWING GROUNDS HAVE BEEN PREFERRED BY THE ASSESS EE:-