ACIT, New Delhi V. Sh. Rajinder Prasad Arora, New Delhi

ITA 2296/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86845 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 18-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK WADEKAR
• Keywords: Unexplained expenditure; Gift; Search and seizure
• Section: 143(3); 153A; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER ITA NO.2296/DEL./2011 (ASSESSMENT YEAR : 2007-08) ACIT, CENTRAL CIRCLE 2, VS. SHRI RAJINDER PRASAD ARORA, NEW DELHI. B 4/48, PASCHIM VIHAR, NEW DELHI. (PAN : AAGPA1401M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL JAIN, CA REVENUE BY : SHRI VIVEK WADEKAR, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE EMANATES FROM THE ORDER OF CIT (APPEALS)-III, DELHI DATED 17.02.2011 FOR THE ASSES SMENT YEAR 2007-08. 2. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT A T THE WINGS PHARMACEUTICALS PVT. LTD. GROUP OF CASES ON 14.02.2 008. THE ASSESSEE WAS ALSO COVERED IN THE SEARCH OPERATION. THE ASSESSME NT WAS FINALIZED U/S 143(3) AND 153A OF THE INCOME-TAX ACT, 1961 ON 30.1 2.2009. THE ASSESSEES APPEAL WAS ALLOWED ON VARIOUS GROUNDS BY THE CIT (A) AGAINST WHICH THE REVENUE IS IN APPEAL BY TAKING THE FOLLOW ING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE A DDITION OF ITA NO.2296/DEL./2011 2 RS.56,93,200/- MADE BY THE ASSESSING OFFICER U/S 69 B OF THE INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE A DDITION MADE BY THE ASSESSING OFFICER U/S 69B OF THE INCOME TAX AC T, 1961 ON THE GROUND OF ABSENCE OF ANY ACTUAL EVIDENCE ALLEGI NG OR ESTABLISHING THAT ANY EXTRA INVESTMENT WAS MADE BY THE ASSESSEE, AS IT PLACES AN UNFAIR BURDEN ON THE DEPARTMENT BEC AUSE AVAILABILITY OF DIRECT EVIDENCE IS IMPOSSIBLE IN SU CH TYPE OF CASES WHERE BOTH PARTIES GAIN BY UNDERSTATING THE REAL CO NSIDERATION OF IMMOVABLE PROPERTY WHICH IS TRANSFERRED? 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE A DDITION OF RS.4,25,600/- MADE BY THE ASSESSING OFFICER ON ACCO UNT OF FAIR RENTAL VALUE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE A DDITION OF RS.2,79,690/- MADE BY THE ASSESSING OFFICER ON ACCO UNT OF UNEXPLAINED EXPENDITURE DURING FOREIGN TRAVEL. 5. THE ORDER OF LD. CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURS E OF THE HEARING OF THE APPEAL. 3. IN THE GROUND NOS.1 & 2, THE ISSUE INVOLVED IS D ELETING THE ADDITION OF RS.56,93,200/- MADE U/S 69B OF THE ACT. 4. THE ASSESSEE HAS PURCHASED PROPERTY BEARING NO.1 0/78, PUNJABI BAGH (WEST), NEW DELHI FROM SHRI S.K. SACHDEVA ON 22.01. 2007 ALONG WITH OTHER THREE CO-OWNERS FOR A CONSIDERATION OF RS.1,0 5,00,000/- AND STAMP DUTY WAS PAID OF RS.8,40,000/-. THE ASSESSEES SHA RE IN THIS PROPERTY WAS 1/4 TH AND THE OTHER CO-OWNERS WERE HIS BROTHERS. THE AS SESSING OFFICER ITA NO.2296/DEL./2011 3 REFERRED THE ISSUE TO THE DISTRICT VALUATION OFFICE R FOR VALUATION AND HE HAS VALUED THE PROPERTY AT RS.6,47,72,800/-. ONE-FOURT H OF THE SHARE OF THE ASSESSEE COMES TO RS.1,61,93,200/-. ACCORDINGLY, D IFFERENCE OF RS.56,93,200/- (RS.1,61,93,200/- MINUS RS.1,05,00,0 00/-) WAS ADDED TO THE INCOME OF THE ASSESSEE. THE CIT (A) DELETED THE AD DITION. 5. AT THE OUTSET OF THE HEARING, LD. AR SUBMITTED T HAT THIS ISSUE HAS BEEN CONSIDERED BY THE ITAT, BENCH F, NEW DELHI I N ITS ORDER DATED 08.08.2014 IN ITA NO.2293/DEL/2011 AND RELIEF HAS B EEN GRANTED IN THE CO-OWNERS CASE. HE RELIED ON THE ORDER OF THE ITAT ON THIS ISSUE. 6. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE AFORESAID DECISION OF THE ITAT. RELEVANT PORTION OF THE ORDER IS REPRODUCED HEREUNDER :- 11. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT LD. CI T (A) HAS DELETED THE ADDITIONS ON ACCOUNT OF DIFFERENCE IN M ARKET PRICES OF PROPERTIES AS COMPARED TO DECLARED VALUES FOLLOWING CERTAIN JUDICIAL PRONOUNCEMENTS AND BY ELABORATING THE FACT S CLEARLY. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WI TH HIS FINDINGS. HIS ORDER ON OTHER ADDITIONS IS ALSO VER Y ELABORATE AND MERITS NO INTERVENTION. SINCE THE ADDITION HAS BEEN DELETED IN THE CASE OF CO-OWNERS OF THE PROPERTY ON THE SIMILAR FACTS AND CIRCUMSTANCES, TH EREFORE, WE DISMISS THESE TWO GROUNDS OF ASSESSEES APPEAL RELATING TO THE ADDITION MADE U/S 69B OF THE INCOME-TAX ACT, 1961. ACCORDINGLY, GROU ND NOS.1 & 2 ARE DISMISSED. ITA NO.2296/DEL./2011 4 7. IN THE GROUND NO.3, THE ISSUE INVOLVED IS DELETI NG THE ADDITION OF RS.4,25,600/- MADE ON ACCOUNT OF FAIR RENTAL VALUE. 8. ON THIS ISSUE ALSO, LD. AR SUBMITTED THAT THE FA IR RENTAL VALUE ESTIMATED IN THE CASE OF SHOP AT BHAGIRATH PLACE, N EW DELHI HAS BEEN DEALT WITH IN THE CASE OF ACIT VS. ANIL ARORA IN ITA NO.2 293/DEL./2011 BY THE ITAT, BENCH F, NEW DELHI IN ITS ORDER DATED 08.08 .2014. ON THE SIMILAR FACTS AND CIRCUMSTANCES, THE ADDITION WAS DELETED. IT WAS ALSO PLEADED THAT THE FLAT AT KAILASH VIHAR, BADDI WAS INCOMPLETE AND INHABITABLE DURING THE RELEVANT PERIOD. IT WAS SUBSEQUENTLY LET OUT TO M/ S. WING PHARMACEUTICALS PVT. LTD. IN THE FINANCIAL YEAR 2007-08 AND THE REN TAL INCOME OF RS.3,50,000/- OF THE SAME WAS OFFERED FOR TAXATION. THEREFORE, IN THIS YEAR, THERE WAS NO JUSTIFICATION FOR ESTIMATING THE RENTA L INCOME FROM THIS PROPERTY. HE PLEADED TO SUSTAIN ORDER OF CIT (A) O N THIS ISSUE. 9. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. THIS ISSUE IS PARTLY COVERED BY THE AFORESAID DECISION OF ITAT IN RESPEC T OF RENTAL ESTIMATED FOR BHAGIRATH PLACE, CHANDNI CHOWK, NEW DELHI SHOP. THE FLAT AT KAILASH VIHAR, BADDI WAS NOT HABITABLE DURING THE RELEVANT PERIOD. IN THE SUBSEQUENT YEARS, IT WAS LET OUT AND THE RENT HAS B EEN DECLARED IN THE INCOME OF ASSESSEE. IN VIEW OF THESE FACTS, WE FIN D NO MERITS IN THIS GROUND OF REVENUES APPEAL AND THE SAME IS DISMISSE D. 10. IN THE GROUND NO.4, THE ISSUE INVOLVED IS DELET ING THE ADDITION OF RS.2,79,690/- ON ACCOUNT OF UNEXPLAINED EXPENDITURE DURING FOREIGN TRAVEL. ITA NO.2296/DEL./2011 5 11. THE ASSESSING OFFICER HAS DEALT THIS ISSUE IN P ARA 7 WHICH IS REPRODUCED AS UNDER :- 7. DURING THE YEAR UNDER CONSIDERATION THE ASSESSE E HAS UNDERTAKEN FOREIGN TRAVEL TO EUROPE. THE ASSESSEE W AS ASKED TO FURNISH DETAILS OF SUCH EXPENSES ALONG WITH DETAILS OF COUNTRIES VISITED, PERIOD OF TRAVEL, TICKET EXPENSES, BOARDIN G AND LODGING EXPENSES ETC. THE ASSESSEE HAS SUBMITTED THAT FOREI GN TRAVEL HAS BEEN UNDERTAKEN DURING THE YEAR BUT THE EXPENDITURE OF THE FOREIGN TRAVEL HAS BEEN BORNE BY ASSESSEE'S HUF. TH E ASSESSEE HAS FILED THE DETAILS REGARDING FOREIGN TRAVEL UNDE RTAKEN DURING THE YEAR AND SUBMITTED THAT PACKAGE TOUR WAS TAKEN THROUGH SOTC AND A CERTIFICATE TO THE SAME EFFECT HAS BEEN FILED FROM SOTC THAT THE TOURS INCLUDE COST OF AIR TICKETS, AC COMMODATION, FOODING, TRANSFER AND SIGHT SEEING. IN ABSENCE OF D ETAILS OF EXPENDITURE INCURRED ON OTHER RELATED ACTIVITIES, S UCH AS PLACE, PERIOD OF STAY, EXPENDITURE ON GIFTS/SOUVENIRS AND SHOPPING ETC., THE EXPENDITURE SO CLAIMED WAS NOT TREATED TO BE AD EQUATE AND ACCORDINGLY ESTIMATED AT RS.10,00,000/- OUT OF WHIC H RS.7,20,310/- HAS BEEN CLAIMED TO HAVE BEEN INCURRE D BY THE HUF. AS SUCH AN ADDITION OF RS.2,79,690/- IS BEING MADE IN THE HANDS OF THE ASSESSEE BEING EXPENDITURE MADE OUT OF UNDISCLOSED SOURCES. ... (ADDITION RS.2,79,690/-). THE CIT (A) HAS GRANTED THE RELIEF BY HOLDING AS UN DER :- 7. GROUND OF APPEAL NO. XII: THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF THE LAW, THE LEARNED ASSESSING OF FICER HAS ERRED IN MAKING AN ADDITION OF RS.279690/- ON ACCOUNT OF FOREIGN TRAVELLING. THE LD AO ON MERE PRESUMPTION AND ASSUMPTION ESTIMA TED TOTAL EXPENDITURE ON FOREIGN TRAVELING TO EUROPE AT RS.10 LACS. AND THE ASSESSEE HAS ALREADY DISCLOSED EXPENDITURE OF RS.720310/-, HE HAS MADE AN ADDITION OF RS.279690/- ON THIS ACCO UNT. IT IS AN UNDISPUTED FACT THAT THE SAID TOUR WAS A P ACKAGE TOUR ARRANGED BY SOTC WHICH INCLUDES ALL THE THINGS I.E COST OF AIR TICKETS, ACCOMMODATION, FOODINGS, TRANSFERS, SIGHT SCENE ETC. NO QUESTION OF ANY UNEXPLAINED EXPENDITURE IN THIS REG ARD ARISES. ITA NO.2296/DEL./2011 6 THUS THERE IS NO JUSTIFICATION FOR MAKING ANY ADDIT ION ON THIS ACCOUNT. ACCORDINGLY AO IS DIRECTED TO DELETE THE A DDITION OF RS.279690/- MADE ON THIS ACCOUNT. 12. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. LD. AR SUBMITTED THAT THE DELETION OF ADDITION HAS BEEN SUSTAINED IN THE CASE OF ACIT, CENTRAL CIRCLE 2, NEW DELHI VS. RAKESH KUMAR ARORA IN ITA N O.2295/DEL/2011 BY THE ITAT, DELHI BENCH F, NEW DELHI VIDE ITS ORDER DATED 08.08.2914. RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF IT AT, WE SUSTAIN THE ORDER OF THE CIT (A) ON THIS ISSUE AND DELETE THIS GROUND. 13. GROUND NOS.5 & 6 ARE GENERAL IN NATURE AND DO N OT REQUIRE ANY ADJUDICATION. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 23 RD DAY OF FEBRUARY, 2015. SD/- SD/- (C.M. GARG) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 23 RD DAY OF FEBRUARY, 2015 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-III, DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.