ACIT, New Delhi V. M/s. Shri Ram Hari Ram, New Delhi

ITA 2313/DEL/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2676 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APERWA KARAN
• Assessee Lawyers: ASHOK KUMAR JAIN AASHU GOEL
• Keywords: Income from undisclosed sources; Search and seizure; Retraction
• Section: 142(1); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MISS SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO. 1412/DEL./2012 : ASSTT. YEAR : 2009-10 ACIT CENTRAL CIRCLE-2, ROOM NO. 323 3 RD FLOOR, ARA CENTRE, E-2, JHANDEWALAN EXTN. NEW DELHI VS. SAKET APPARTMENT (P) LTD. 2 ND FLOOR, 22, MAHARISHI DEBENDRA ROAD KOLKATA PAN : AAJCS7575A ITA NO. 1416/DEL./2012 : ASSTT. YEAR : 2009-10 ACIT CENTRAL CIRCLE-2, ROOM NO. 323 3 RD FLOOR, ARA CENTRE, E-2, JHANDEWALAN EXTN. NEW DELHI VS. GARHWAL PROPERTIES (P) LTD. 264, BHARAT APARTMENT SECTOR-13, ROHINI NEW DELHI PAN : AACCG6295L ITA NO. 2313/DEL/2012 : ASSTT. YEAR : 2009-10 ACIT CENTRAL CIRCLE-2, ROOM NO. 323 3 RD FLOOR, ARA CENTRE, E-2, JHANDEWALAN EXTN. NEW DELHI VS. SHRI RAM HARI RAM 1658-59, DARIBA KALAN, CHANDNI CHOWK NEW DELHI PAN : AADFS7036D ITA NO. 2314/DEL/2012 : ASSTT. YEAR : 2009-10 ACIT CENTRAL CIRCLE-2, ROOM NO. 323 3 RD FLOOR, ARA CENTRE, E-2, JHANDEWALAN EXTN. VS. RAJIV GUPTA 4-A, PRITHVI RAJ ROAD NEW DELHI ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 2 NEW DELHI PAN : ACFPG9713R ASSESSEE BY : SH. ASHOK KUMAR JAIN, AASHU GOEL, CA RE VENUE BY : SMT. APERWA KARAN , CIT . D.R. DATE OF HEARING: 27 0 7 2017 DATE OF PRONOUNCEMENT: 0 7 2017 O R D E R PER R.K. PANDA, ACCOUNTANT MEMBER : THE ABOVE APPEALS FILED BY THE REVENUE ARE DIRECT ED AGAINST THE SEPARATE ORDERS OF THE CIT(A) III, NEW DELHI RELA TING TO ASSESSMENT YEAR 2009- 10. SINCE COMMON GROUNDS HAVE BEEN TAKEN BY THE RE VENUE IN ALL THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAME OF CONVENIENCE. 2. FIRST WE TAKE UP ITA NO. 1416.DEL.2012 AS THE LEAD CASE. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PR IVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE. ORIGINAL RETURN OF INCOME WAS FILED ON 26 TH SEPTEMBER, 2009 DISCLOSING TOTAL INCOME OF RS. 2,38 ,61,230/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT ACT WAS CONDUCTED IN TH E CASE OF SHRI RAM HARI RAM GROUP. DURING THE COURSE OF SEARCH DOCUMENTS BELONG ING TO BE ASSESSEE COMPANY WERE FOUND AND SEIZED FROM THE PREMISES OF SHRI BAL KISHAN SARAF AS PER ANNEXURE A-1 PAGES 3 TO 5 OF PARTY SOR -4. IN R ESPONSE TO NOTICE U/S 143(2) AND U/S 142(1) THE ASSESSEE APPEARED BEFORE THE AO AND FILED VARIOUS DETAILS FROM TIME TO TIME. THE AO NOTED THAT DURING THE CO URSE OF SEARCH PROCEEDINGS, STATEMENT OF SHRI RAJIV GUPTA WAS RECORDED U/S 131( 1A) OF THE IT ACT, 1961. IN THE SAID STATEMENT WHILE ANSWERING TO QUESTION NO. 21, HE HAD ADMITTED ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 3 UNACCOUNTED INCOME OF RS. 50 CRORES. HOWEVER, HE H AD NOT GIVEN NAMES OF THE PERSONS IN WHOSE HANDS HE HAD ADMITTED THE UNA CCOUNTED INCOME AND REQUESTED THAT HE WILL SUBMIT LATER THE DETAILS OF THE PERSONS IN WHOSE NAME THE UNACCOUNTED INCOME HAS BEEN DISCLOSED. HE OBSER VED THAT SHRI RAJIV GUPTA AND SHRI BAL KISHAN SARAF ARE THE CORE PERSONS OF A LL THE CONCERNS OF SHRI RAM HARI RAM GROUP AND ORCHID GROUP OF COMPANIES. 3. THE AO REFERRED TO THE REPLY GIVEN BY SHRI RAJIV GUPTA IN RESPONSE TO QUESTION NO. 21 WHERE HE HAD DISCLOSED ADDITIONAL I NCOME OF RS. 50 CRORES FOR THE CURRENT ASSESSMENT YEAR 2009-10. HE ALSO NOTED THAT MR. RAJIV GUPTA VIDE LETTER DATED 5 TH JUNE, 2009 AND 10 TH JUNE, 2009 FILED IN THE OFFICE OF THE ADIT (INV.), UNIT III(2), NEW DELHI HAD SUBMITTED THE N AMES OF THE PERSONS IN WHOSE NAME THE DISCLOSURE OF UNACCOUNTED INCOME HAS BEEN DECLARED. AS PER THE ABOVE LETTERS SHRI RAJIV GUPTA HAD OFFERED UNACCOUN TED INCOME OF RS. 2.5 CRORE IN THE CASE OF THE ASSESSEE. HOWEVER, THE ASSESSEE IN ITS RETURN OF INCOME FILED ON 26 TH SEPTEMBER, 2009 HAD DECLARED INCOME OF RS. 2,38,61 ,230/-. HE, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN THE REASON S FOR NOT SHOWING THE ADDITIONAL INCOME FOR THE YEAR UNDER CONSIDERATION AS ADMITTED BY SHRI RAJIV GUPTA IN HIS STATEMENT RECORDED U/S 131(1A) OF THE IT ACT. THE ASSESSEE VIDE LETTER DATED 16 TH DECEMBER, 2010 SUBMITTED THAT SHRI RAJIV GUPTA HAD ADMITTED INCOME OF RS. 50 CRORES WHICH INCLUDES NORMAL INCOM E. THE RELEVANT PARA OF THE LETTER WHICH HAS BEEN REPRODUCED BY THE AO AT P AGE 5 AND 6 OF THE ASSESSMENT ORDER READ AS UNDER : 'THIS IS WITH REFERENCE TO YOUR QUERY REGARDING EXP LANATION OF DISCLOSED INCOME IN STATEMENT RECORDED U/S 132(4) O N 27/02/2009 IN RESPECT OF WORD ADDITIONAL IT IS OVER & ABOVE INCO ME OF BOOKS OF ACCOUNT. PLEASE INFORM ABOUT SUCH ADDITIONAL INCOM E OF RS. 50 CRORES DECLARED IN THE STATEMENT AS ADDITIONAL INCO ME OF A. Y 2009- 10. HOW, IT HAS BEEN SHOWN IN RETURN OF INCOME IN W HOSE NAME & ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 4 PERIOD. IF THE SAME HAS NOT BEEN DECLARED THEN EXPL AIN WHY INCOME SHOULD NOT BE ASSESSED AS PER STATEMENT OF ASSESSEE IN HIS CASE AND GROUP CONCERNED. SOURCES, MANNER AND INVESTMENT OF SUCH ADDITIONAL INCOME SHOULD BE FURNISHED. DETAILS OF S EIZED MATERIAL ON THE BASIS OF WHICH SUCH ADDITIONAL INCOME IS ARRIVE D SHOULD BE CLEARLY IDENTIFIED. ITS DETAILS PERSON WISE, TAX WISE AND P ERIOD WISE SHOULD BE SUBMITTED. IN THIS REGARD, WE MOST RESPECTFULLY DRAW REFERENCE TO THE PERTINENT STATEMENT MADE BY SH. RAJIVE GUPTA ON THE DATE OF SEARCH ON 26.02.2009 CONDUCTED U/S 132 OF THE INCOME TAX A CT 1961, THE STATEMENT GIVEN AS PER QUESTION NO. 21, THE RELEVAN T TEXT OF SAME IS AS UNDER: I HEREBY DISCLOSE ADDITIONAL INCOME OF RS.50 CROR E FOR THE CURRENT ASSESSMENT YEAR 2009-10, OVER AND ABOVE NOR MAL INCOME OF THE AY 2009-10. (BOLD AND UNDERLINED PORTION WAS SPECIFICALLY WRIT TEN AND DELETED AS EVIDENT FROM STATEMENT). THIS OFFER OF ADDITIONAL INCOME IS GIVEN TO COVER ALL DOCUMENTS FOUND AT OTH ER PREMISES OF ORCHID GROUP OF COMPANIES, M/S SHRI RAM HARIRAM JEW ELLERS, DARIBA KALAN, RESIDENCE, AND OFFICES OF MY RELATIVES AND D EFICIENCY OF STOCK/CASH ETC FOUND AT OTHER PREMISES. AT PRESENT I AM NOT IN POSITION TO SUBMIT BIFURCATION OF THIS ADDITIONAL INCOME OF RS.50 CRORE AFTER GOING THROUGH ALL THE DOCUMENTS FOUND AT ALL THE PR EMISES COVERED IN SEARCH AND SURVEY OPERATION , VALUATION OF STOCK OF JEWELLERY AT THE PREMISES OF OUR PARTNERSHIP FIRM M/S SHRIRAM HARI R AM JEWELLERS AND IN CONSULTATION OF OTHER PARTNERS/DIRECTORS. AS SUCH, THE STATEMENT OF SURRENDERED INCOME WAS GI VEN BEFORE THE TEAM OF INVESTIGATING OFFICER OF MR. PARAMJEET SINGH, ADIT ON 26.02.2009 IN WHICH THE ASSESSEE HAS DECLARED A SUM OF RS. 50 CRORES WHICH PERTAINS TO ALL THE INDIVIDUALS AND GROUP COM PANIES I.E M/S ORCHID GROUP OF COMPANIES AND INDIVIDUALS AND THE A SSESSEES CATEGORICAL STAND THAT RS.50 CRORE INCLUDES NORMAL INCOME FOR AY 2009-10 IS CLEAR FROM THE FACT THAT QUALIFICATION I NTENDED TO BE ATTACHED TO INCOME OF RS.50 CRORE BY ADIT I/E RS.50 CRORE TO BE OVER AND ABOVE NORMAL INCOME OF THE AY 2009- 10 WAS JOINTLY DELETED BY ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 5 SEARCH TEAM AND THIS FACT IS UNDISPUTED ON THE FACE OF STATEMENT ITSELF WHICH IS ALSO FURTHER CLARIFIED AS IT SHOULD BE REA D WITH LETTER DATED 05.06.2009 AND 10.06.2009 ADDRESSED TO ADIT, INVEST IGATION WHICH ARE DULY ACKNOWLEDGED BY ADIT, LNVESTIGATION COPY E NCLOSED AT ANNESURE-2) WHERE THE UNDERSTANDING OF ASSESSEE WIT H SEARCH PARTY WAS REITERATED AND ACCEPTED BY INVESTIGATING OFFICE R LD ADIT, INVESTIGATION (UNIT III(2)), DELHI AND CORRECT STAT US OF RS.50 CRORES IS ABSOLUTELY CLEAR THAT IT INCLUDES NORMAL INCOME RAT HER THAN BEING OVER AND ABOVE NORMAL INCOME FOR THE AY 2009-10 RELEVANT TEXT REPRODUCED AS UNDER: 4. HOWEVER, THE AO WAS NOT SATISFIED WITH THE ABOVE REPLY GIVEN BY THE ASSESSEE. ACCORDING TO THE AO THE ASSESSEE SHOULD H AVE SEPARATELY DISCLOSED THE ADDITIONAL INCOME 2.5 CRORES. HE FURTHER WAS OF THE OPINION THAT THE DISCLOSURE BY WAY OF ADMISSION DURING THE COURSE OF SEARCH U/S 132 OF THE IT ACT IS NOT A MERE STATEMENT BUT A STATEMENT WHICH I S GIVEN UNDER OATH. FURTHER HE HAD MADE THE STATEMENT AT HIS OWN WILL AND NOT U NDER ANY COERCION. THE ASSESSEE HAS NEVER RETRACTED SUCH STATEMENT AT ANY STAGE. RELYING ON VARIOUS DECISIONS, THE AO HELD THAT THE ASSESSEE CAN NOT BA CKTRACK FROM THE SAID CONFESSION. HE ACCORDINGLY MADE ADDITION OF RS. 2.5 CRORES IN THE HANDS OF THE ASSESSEE AS UNACCOUNTED INCOME. (SIMILAR ADDITIONS WERE MADE IN THE CASE OF SAKET APARTMENT (P) LTD. RS. 3.00 CRORES SHRI RAM H ARI RAM RS. 2.00 CRORES AND MR. RAJIV GUPTA RS. 1.00 CRORE.) 5. BEFORE CIT(A), THE ASSESSEE REITERATED THE SAME ARGUMENTS AS MADE BEFORE THE AO. IT WAS SUBMITTED THAT THE ADDITION H AS BEEN MADE BASED ON THE STATEMENT OF RAJIV GUPTA GIVEN DURING THE COURSE OF SEARCH WHERE HE HAD OFFERED AN INCOME OF RS. 50 CRORES FOR THE GROUP F OR THE ASSESSMENT YEAR 2009-10. AN AMOUNT OF RS. 2.5 CRORES IS RELATABLE T O THE ASSESSEE, M/S. GARHWAL PROPERTIES PVT. LTD. FOR ASSESSMENT YEAR 2009-10. IT WAS SUBMITTED THAT THE OFFER OF INCOME OF RS. 2.5 CRORES HAS NOT BEEN MADE BY THE ASSESSEE COMPANY ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 6 OR ANY OF ITS DIRECTORS BUT BY MR. RAJIV GUPTA WHO IS A DIFFERENT PERSON AND NOT LINKED WITH THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT IN THE STATEMENT GIVEN BY SHRI RAJIV GUPTA THE WORDS OVER AND ABOVE NORMA L INCOME FOR ASSESSMENT YEAR 2009-10 WAS DELETED BY THE SEARCH PARTY. THIS WAS ALSO IN FORMED TO THE ADIT MR. PARAMJIT SINGH VIDE LETTER DATED 5 TH JUNE, 2009 WHICH WAS ACCEPTED BY HIM. ANOTHER LETTER DATED 9 TH JUNE, 2009 WAS ALSO ADDRESSED TO THE ADIT. IT WAS VEHEMENTLY ARGUED THAT THE ASSESSEE HAS NEVER OFFERED ADDITIONAL INCOME OF RS. 2.5 CRORES OVER AND ABOVE THE NORMAL INCOME. WITHOUT PREJUDICE TO THE ABOVE, THE ASSESSEE SUBMITTED THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. THE CBDT INSTRUCTION VIDE F. NO. 286/2/2003 DATED 10 TH MARCH 2003 WAS BROUGHT TO THE NOTICE OF THE CIT(A) . IT WAS ARGUED THAT IN SPITE OF COMPREHENSIVE SEARCH WHERE INVESTIGATION A ND VERIFICATION OF PAPERS, RECORDS, ASSETS WERE DONE AND NUMEROUS STATEMENTS W ERE RECORDED AND VERIFIED AND AFTER MARATHON ASSESSMENT PROCEEDINGS THERE IS NO MATERIAL TO SUGGEST THAT ADDITION OF RS. 2.5 CRORES IS SUPPORTE D BY ANY INCRIMINATING DOCUMENT OR COGENT MATERIAL FOUND AND AVAILABLE ON RECORD. 6. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD. CIT(A) DELETED THE ADDITION OF RS. 2,50,00,000/- BY OBSERV ING AS UNDER :- THE ABOVE GROUNDS RELATE TO THE ADDITION MADE FOR RS. 2,50,00,000/-. THE BASIS OF THIS ADDITION ARISES FROM THE DISCLOSURE O F CONCEALED INCOME FOR RS. 50 CRORES MADE BY SH. RAJEEV GUPTA FOR THE ENTIRE GROU P IN HIS STATEMENT RECORDED ON 26/27 02.2009 WHICH ALSO INCLUDES THAT OF THE ASSESSEE AND WHICH HAS SUBSEQUENTLY BEEN REITERATED BY SH. RAJEEV GUPT A IN THE BREAKUP PROVIDED IN HIS LETTER TO THE ADIT DATED 05.06.2009 & 10.06. 09 WHEREIN THE AMOUNT OF RS. 2.5 CRORES HAS BEEN DECLARED ON BEHALF OF THE A SSESSEE. THE AO IS OF THE VIEW THAT THE ASSESSEE HAS BACKTRACKED FROM HIS DIS CLOSURE OF RS. 2.5 CRORES AND CONSEQUENTLY THE SAME HAS BEEN ADDED TO THE INC OME OF THE ASSESSEE. ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 7 AS AGAINST THIS THE SUBSTANCE OF THE ASSESSEES ARG UMENT IS THAT THE INITIAL DISCLOSURE OF RS. 50 CRORES MADE IN VARIOUS HANDS B Y SH. RAJEEV GUPTA INCLUDED THE NORMAL INCOME OF THE GROUP AND WAS NOT OVER AND ABOVE THE NORMAL INCOME. IN THIS CONNECTION ATTENTION HAS BEEN INVIT ED TO THE STATEMENT OF SH. RAJEEV GUPTA DATED 27.02.09 AND HIS SUBSEQUENT LETT ER TO THE ADIT ON 05.06.09. IT HAS ALSO BEEN ARGUED BY THE APPELLANT THAT IN THE STATEMENT OF SH. RAJEEV GUPTA DATED 27.02.09 IN ANSWER TO QUESTION N O. 21 THE WORDS 'OVER AND ABOVE NORMAL INCOME OF THE AY 2009-10' WERE SPECIFICALLY DELETED AFTER HAVING BEEN RECORDED. IT HAS ALSO BEEN SUBMITTED THAT IN T HE LETTER DATED 05.06.09 ADDRESSED TO ADIT CONCERNED THIS PURPOSEFUL DELETIO N WAS POINTED OUT TO DISPLAY THE CATEGORICAL STAND OF SH. RAJEEV GUPTA T HAT RS. 50 CRORE DISCLOSURE INCLUDED NORMAL INCOME FOR AY 2009-10 OF THE VARIOU S ASSESSES WHOSE NAMES ARE WRITTEN IN THIS LETTER. REFERENCE HAS ALSO BEEN MADE TO THE LETTER DATED 09.06.09 WRITTEN BY RAJEEV GUPTA TO ADIT UNIT-ILL ( 2), NEW DELHI IN WHICH THE BIFURCATION OF 50 CRORES INCOME FOR AY2009-10 IN HA NDS OF VARIOUS ASSESSES WHICH INCLUDED THE APPELLANTS INCOME FOR RS. 2.5 C RORES TOGETHER WITH THE DETAILS OF PAYMENT OF ADVANCE TAX AND TDS HAS BEEN FILED. FROM ALL THESE SUBMISSIONS THE POINT BEING MADE BY THE APPELLANT IS THAT THE CONSOLIDATED DISCLOSURE OF RS. 50 CRORE ALSO INCLUD ED NORMAL INCOME FOR AY 2009-10. THUS THE APPELLANT HAS CONTENDED THAT THER E HAS BEEN NO BACKTRACKING FROM THE SURRENDER OF INCOME FOR RS. 2 .5 CRORES IN CASE OF THE APPELLANT. IT HAS ALSO BEEN SUBMITTED BY THE APPELL ANT THAT NO PART OF INCOME AS PER REGULAR BOOKS OF ACCOUNT MAINTAINED OR DOCUM ENT FOUND AND SEIZED HAS BEEN LEFT OUT. RELIANCE HAS ALSO BEEN PLACED ON THE DECISION IN CASE OF SARWAN SINGH RATTAN SINGH AIR 1957 SC 637 AND OF ITAT IN KARAM CHAND 73 ITD 434 WHICH IS TO THE EFFECT THAT IT IS OPEN TO THE PARTY TO PROVE THAT THE ADMISSION MADE BY HIM IS NOT CORRECT AND TRUE. THAT THE STATE MENT OF SH. RAJEEV GUPTA ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 8 HAS IN ANY CASE NOT BEEN RETRACTED BUT HAS BEEN ERR ONEOUSLY INTERPRETED BY THE AO. IT HAS LASTLY BEEN ARGUED THAT AS LAID DOWN IN THE CASE OF PULLANGODE RUBBER 91 ITR 18(0; ANOOP KUMAR 147 TAXMAN 26( ASR) THE RETRACTION FOR SURRENDER OF INCOME MADE U/S 132(4) DURING SEARCH P ROCEEDINGS MAY BE ACCEPTED IN FACTS OF CASE. FURTHER THAT IN THE ABSE NCE OF ANY SUPPORTIVE MATERIAL OR EVIDENCE , ADDITION COULD NOT BE MADE M ERELY ON THE BASIS OF STATEMENT RECORDED US/ 132(4) AS THERE IS NO INCRIM INATING MATERIAL ON RECORD TO JUSTIFY THE ADDITION. IT HAS ADDITIONALLY BEEN A RGUED THAT THE ADMISSION ON OATH FOR INCOME OF RS. 50 CRORES (RS. 2.5 CRORES IN CASE OF THE ASSESSEE) IS THAT OF SH. RAJEEV GUPTA AND NOT OF THE ASSESSEE AND THE REFORE RETRACTION IF ANY IS THAT OF SH. RAJEEV GUPTA AND NOT THAT OF THE ASSESS EE. CONSIDERING THE TOTALITY OF THE ARGUMENTS IT IS OBS ERVED THAT THE DISCLOSURE STATEMENT MADE BY SH. RAJEEV GUPTA ON 27.02.09 IS S OMEWHAT AMBIGUOUS IN NATURE AND THE ISSUE WHETHER THIS DISCLOSURE INCLUD ED THE NORMAL INCOME OF THE GROUP AND WAS NOT OVER AND ABOVE THE NORMAL INCOME IS NOT VERY CLEAR. HOWEVER AT THE SAME TIME IT IS ALSO NOTED THAT IN H IS SUBSEQUENT LETTERS WRITTEN TO THE ADIT CONCERNED ON 05 06.09 AND 10.06.09 SH. RAJEEV GUPTA HAS CLEARLY STATED THAT THE DISCLOSURE OF RS. 50 CRORES INCLUDE D NORMAL INCOME FOR AY 2009- 10 FOR ALL THE ASSESSES WHOSE NAMES ARE WRITTEN ON THE SE COMMUNICATIONS. MOREOVER, ALTERNATIVELY EVEN IF THE ASSESSEE GOES B ACK ON HIS DISCLOSURE FOR A CERTAIN AMOUNT, THE ONUS SHIFTS ON THE AO TO INVEST IGATE AND SUBSTANTIATE THE DIFFERENCE BETWEEN THE DISCLOSURE MADE AND THE RETU RNED INCOME AND THAT THE DIFFERENCE CANNOT STRAIGHTAWAY BE ADDED TO INCOME. IN SUCH CIRCUMSTANCE IT WAS THE DUTY OF THE AO TO HAVE INVESTIGATED THE MAT TER FURTHER BEFORE MAKING ADDITION TO INCOME AND NOT MERELY BASED THE SAME ON THE DISCLOSURE. IT IS APPARENT FROM THE ASSESSMENT ORDER THAT NO SUCH INV ESTIGATION HAS BEEN MADE NEITHER THERE IS REFERENCE TO ANY INCRIMINATING DOC UMENT FOUND RELATING TO THE ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 9 APPELLANT IN THE STATEMENT RECORDED OF SH. RAJEEV G UPTA ON 27.02.09 OR IN THE ASSESSMENT ORDER PASSED BY THE AO. RATHER IN THE AS SESSMENT ORDER THERE IS REFERENCE ONLY TO PAGE NO. 11 OF ANNEXURE A-L WHICH IS P & L A/C OF THE ASSESSEE FOR THE PERIOD 01.04.08 TO THE CONTENTS OF WHICH HA VE ALREADY BEEN EXPLAINED BY THE ASSESSEE TO THE AO AND WITH REFERENCE TO WHI CH NO ADVERSE INFERENCE HAS BEEN DRAWN BY THE AO IN THE ASSESSMENT ORDER. I N VIEW OF THE ABOVE DISCUSSION THE ADDITION MADE FOR RS. 2,50,00,000/- IS DIRECTED TO BE DELETED. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REV ENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUND : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 2. 50 CRORE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INCOME SURRENDERED DURING THE COURSE OF SEARCH. 8. THE LD. DR STRONGLY RELIED ON THE ORDER OF THE A SSESSING OFFICER SHE SUBMITTED THAT ASSESSEE IN HIS STATEMENT RECORDED U /S 131(1A), DURING THE COURSE OF SEARCH HAD OFFERED ADDITIONAL INCOME RS. 50 CRORES. HE HAD NOT GIVEN THE BIFURCATION OF THE AMOUNTS TO BE DISCLOSED IN T HE HANDS OF VARIOUS ASSESSES OF THE GROUP. SUBSEQUENTLY, HE HAD OFFERED ADDITIO NAL INCOME OF RS. 2.5 CRORES IN THE HANDS OF THE ASSESSEE. HOWEVER, THE SAME WAS NOT HONOURED IN THE RETURN OF INCOME FILED. BY OFFERING AN ADDITIONAL INCOME OF 2.5 CRORES, THE ASSESSEE HAS PRECLUDED THE AO FROM MAKING FURTHER I NQUIRIES. FURTHER IT IS A USUAL PRACTICE THAT WHENEVER ANY INCOME IS OFFERED DURING THE COURSE OF SEARCH, THE SAME IS ALWAYS ADDITIONAL INCOME OVER A ND ABOVE THE NORMAL INCOME. THEREFORE, THE AO UNDER THE FACTS AND CIRCU MSTANCES OF THE CASE, IS FULLY JUSTIFIED IN MAKING ADDITION OF RS. 2.50 CROR ES TO THE RETURN INCOME. SHE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE REVERSED AND THAT OF THE AO BE RESTORED. ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 10 9. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND HEAVILY RELIED ON THE ORDER OF THE CIT(A). REFERRING TO PAGE 45 OF THE PAPER BOOK, THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE ANSWER GIVEN BY SHRI RAJIV GUPTA TO QUESTION NO. 21. HE SUBMITTE D THAT IN THE SAID REPLY THE WORDS OVER AND ABOVE NORMAL INCOME OF THE ASSESSME NT YEAR 2009-10 HAS BEEN SPECIFICALLY STRUCK OFF. REFERRING TO THE LET TER ADDRESSED TO ADIT DATED 9 TH JUNE, 2009, COPY OF WHICH IS PLACED AT PAGE 48 OF TH E PAPER BOOK, THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE BIFURCATION OF INCOME OF RS. 50 CRORES IN THE HANDS OF VARIOUS PER SONS OF THE GROUP WHICH INCLUDES NORMAL INCOME. REFERRING TO THE LETTER AD DRESSED TO THE ADIT RECEIVED BY HIS OFFICE ON 5 TH JUNE, 2009, A COPY OF WHICH IS PLACED AT PAGE 39 O F THE PAPER BOOK, THE LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT IN THE SAID LETTER IT WAS CLARIFIED THAT THE OFFER OF RS. 50 CR ORES IN THE HANDS OF DIFFERENT ASSESSES INCLUDED NORMAL INCOME FOR ASSESSMENT YEAR 2009-10. REFERRING TO THE LETTER ADDRESSED TO THE AO VIDE LETTER DATED 16 TH DECEMBER, 2010, COPY OF WHICH IS PLACED AT PAGE 50 TO 55 OF THE PAPER BOOK, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE SAID LETTER THE AO W AS AGAIN REMINDED OF THE STATEMENT GIVEN DURING THE SEARCH AS WELL AS THE VA RIOUS LETTERS ADDRESSED TO THE ADIT STATING THAT THE OFFER OF ADDITIONAL INCOM E OF RS. 50 CRORES WAS INCLUSIVE OF INCOME FOR ASSESSMENT YEAR 2009-10. RE FERRING TO THE FOLLOWING CHART THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATT ENTION OF THE BENCH TO THE INCOME DECLARED BY DIFFERENT PERSONS WHICH INCLUDED THE DISCLOSURE MADE BY SHRI RAJIV GUPTA IN HIS STATEMENT MADE DURING THE C OURSE OF SEARCH. SR. NO. PARTICULARS A B C D RAJIV GUPTA SAKET APARTMENTS PVT. LTD. GARWAL PROPERTIES PVT. LTD. SHRI RAM HARI RAM ITA NO. 2314/DEL/12 1412/DEL/12 1416/DEL/12 2313/DEL/12 1 TOTAL INCOME ASPER RETURN OF INCOME ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 11 TAXABLE INCOME AS PER RETURN U/S 139(1) 73,75,260 3,03,79,790 2,38,61,230 2,06,10,105 ADD: A.EXEMPTED INCOME 75,59,376 - - - B.STANDARD DEDUCTION U/S 24(A) - 2,74,09,581 2,85,51,004 - C. DEDUCTION U/S 80G/80C 80,170 1,00,000 1,00,000 TOTAL INCOME INCLUDING NORMAL INCOME 1,50,14,806 5,78,89,371 5,25,12,234 2,06,10,105 2. DISCLOSURE MADE BY RAJIV GUPTA IN HIS STATEMENT U/S 132(4) 1,00,00,000 3,00,00,000 2,50,00,000 2,00,00,000 3 (SHORT)/EXCESS 50,14,806 2,78,89,371 2,75,12,234 6,10,105 4. WHETHER ANY SEARCH/SURVEY CONDUCTED YES NO NO NO 5. WHETHER ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH/SURVEY SUGGESTING ADDITION NO NO NO NO 6 . WHETHER ANY UNDISCLOSED VALUABLES LIKE CASH, JEWELLERY, OR OTHER ARTICLES HAS BEEN FOUND DURING THE COURSE OF SEARCH/SURVEY NO NO NO NO 7 . WHETHER ADDITION MADE BY LD. AO IS BASED ON ANY MATERIAL FOUND DURING SEARCH/SURVEY NO NO NO NO ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 12 8 . WHETHER RAJIV GUPTA IS DIRECTOR/PARTNER/EMPLOYEE N A NO NO YES (PARTNER) 10. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION MADE BY THE AO OF RS. 2.5 CRORES IS NOT BASED ON ANY INCRIM INATING MATERIAL. THERE IS NOT A WHISPER IN THE BODY OF THE ASSESSMENT ORDER REGARDING ANY INCRIMINATING MATERIAL THAT HAS BEEN FOUND DURING THE COURSE OF S EARCH AND WHICH IS THE BASIS FOR ADDITION. FURTHER MR. RAJIV GUPTA IS NEITHER TH E DIRECTOR NOR AN EMPLOYEE OF THE ASSESSEE COMPANY WHO HAD MADE THE SURRENDE R OF ADDITIONAL INCOME OF RS. 50 CRORES. REFERRING TO THE DECISION OF DELH I BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. RAMPRASTHA BUILDERS PVT. LTD. VID E ITA NO. 3238/DEL/2013 AND BUNCH OF OTHER APPEALS ORDER DATED 16 TH FEB., 2016, HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION HAS HELD THAT MERELY ON THE BASIS OF STATEMENT RECORDED U/S 132(4), NO ADDITION CAN BE MADE UNLESS SOME CORROBORATIVE EVIDENCE WAS FOUND IN SUPPORT OF SUCH ADDITION. REF ERRING TO CBDT INSTRUCTION VIDE F. NO. 286/2/2003 AND IT (INV. II) DATED 10 TH MARCH 2003, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AO SHOULD RELY UPON THE EVIDENCES / MATERIAL GATHERED DURING THE COURSE OF SEARCH OPERATION WHIL E FRAMING THE RELEVANT ORDERS. REFERRING TO VARIOUS OTHER DECISIONS PLACE D IN THE PAPER BOOK, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT HAS BEEN UNANIMOUSLY HELD IN ALL THESE DECISIONS THAT ADDITION CANNOT BE MADE MERELY ON THE BASIS OF STATEMENT RECORDED U/S 132(4) IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BEING IN CONSONANCE WITH LAW THE SAME SHOULD BE UPHELD AN D THE GROUND RAISED BY THE REVENUE SHOULD BE DISMISSED. 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAP ER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS D ECISIONS RELIED ON BY BOTH ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 13 THE SIDES. WE FIND THE AO ON THE BASIS OF STATEMENT RECORDED OF SHRI RAJIV GUPTA DURING THE COURSE OF SEARCH MADE AN ADDITION OF RS. 2.5 CRORES IN THE HANDS OF THE ASSESSEE. ACCORDING TO THE AO THE ABOV E AMOUNT WAS DECLARED AS ADDITIONAL INCOME OVER AND ABOVE THE NORMAL INCOME FOR THE IMPUGNED ASSESSMENT YEAR IN THE HANDS OF THE ASSESSEE. WHILE MAKING THE ADDITION, THE AO REJECTED THE EXPLANATION OF THE ASSESSEE THAT TH E ADDITIONAL INCOME SO DECLARED WAS INCLUSIVE OF THE NORMAL INCOME FOR THE IMPUGNED ASSESSMENT YEAR AND NOT OVER AND ABOVE THE NORMAL INCOME. WE F IND THE LD. CIT(A) RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF SWARN SINGH RATTAN SINGH (SUPRA) AND VARIOUS OTHER DECISIONS DELETED T HE ADDITION MADE BY THE AO, THE CONTENTS OF WHICH ARE ALREADY REPRODUCED IN THE PRECEDING PARAGRAPH. IT IS THE SUBMISSION OF THE LD. DR THAT THE OFFER O F INCOME OF 2.5 CRORES SHOULD HAVE BEEN OVER AND ABOVE THE NORMAL INCOME. IT IS T HE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT IN VIEW OF THE CATEGO RICAL ASSERTION BY SHRI RAJIV GUPTA AS WELL AS BY THE ASSESSEE THE OFFER OF INCOM E OF 2.5 CRORES WAS INCLUSIVE OF THE NORMAL INCOME OF THE CURRENT YEAR. IT IS ALS O HIS SUBMISSION THAT THE ADDITION WAS NOT BASED ON ANY INCRIMINATING MATERIA L FOUND DURING THE COURSE OF SEARCH. FURTHER, SHRI RAJIV GUPTA WAS NEVER CONF RONTED ABOUT SUCH DISCLOSURE AND HE WAS NOT EVEN AN EMPLOYEE OR DIREC TOR OF THE ASSESSEE COMPANY. 12. WE FIND MERIT IN THE ABOVE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE. ADMITTEDLY, MR. RAJIV GUPTA IN HIS ANSWE R TO QUESTION NO. 21 RECORDED DURING THE COURSE OF SEARCH U/S 131(1A) HA D OFFERED THE ADDITIONAL INCOME OF RS. 50 CRORES FOR THE CURRENT ASSESSMENT YEAR 2009-10 AND THE WORDS OVER AND ABOVE NORMAL INCOME OF THE ASSESSME NT YEAR 2009-10 ARE SPECIFICALLY STRUCK OFF BY THE SEARCH PARTY ITSELF WHO HAD RECORDED THE STATEMENT. THIS FACT WAS ALSO CLARIFIED BEFORE THE ADIT VIDE LETTER DATED 5 TH ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 14 JUNE 2009 AND 9 TH JUNE, 2009 COPIES OF WHICH ARE PLACED IN THE PAPER BOOK. THE ABOVE LETTERS ADDRESSED TO ADIT WHICH WERE ALSO STATED BEFORE THE AO ARE NOT PROVED TO BE FALSE OR UNTRUE. NEITHER THE INVES TIGATION WING NOR THE ASSESSING OFFICER AT ANY POINT OF TIME HAS CONFRONT ED THE ASSESSEE ABOUT SUCH LETTERS. UNDER THESE CIRCUMSTANCES, IT CANNOT BE SA ID THAT THE OFFER OF ADDITIONAL INCOME OF 2.5 CRORES IN THE HANDS OF THE ASSESSEE IS OVER AND ABOVE THE NORMAL INCOME. FURTHER THE SUBMISSION OF LD. CO UNSEL FOR THE ASSESSEE THAT THE ADDITION OF 2.5. CRORES AS UNDISCLOSED INCOME I N THE HANDS OF THE ASSESSEE IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DU RING THE COURSE OF SEARCH COULDNOT BE CONTROVERTED BY THE LD. DR. WE ALSO FIN D THERE IS NOTHING ON RECORD TO SHOW THAT SHRI RAJIV GUPTA WAS, AT ANY POINT OF TIME, CONFRONTED REGARDING THE SURRENDER MADE BY HIM IN THE HANDS OF THE ASSES SEE. SINCE THE ASSESSEE HAS STATED THAT THE ADDITIONAL INCOME OF 2.5 CRORES IS INCLUSIVE OF THE NORMAL INCOME OF THE CURRENT YEAR AND SINCE NO INCRIMINATI NG MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND SHRI RAJIV GUPTA WA S NEVER CONFRONTED REGARDING SUCH SURRENDER, THEREFORE WE DO NOT FIND ANY MERIT IN THE ADDITION MADE BY THE AO. UNDER THESE CIRCUMSTANCES, THE ORDE R OF THE CIT(A) DELETING THE ADDITION MADE BY THE AO IS FULLY JUSTIFIED. WE, THEREFORE, UPHOLD THE ORDER OF THE CIT(A) AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DI SMISSED. ITA NO. 1412/DEL/2012 ITA NO. 2313/DEL/2012 ITA NO. 2314/DEL/2012 13. AFTER HEARING BOTH THE SIDES, WE FIND THE GROUN DS RAISED BY THE REVENUE IN THE ABOVE APPEALS ARE IDENTICAL TO THE G ROUND RAISED IN ITA NO. 1416/DEL/2012. WE HAVE ALREADY DECIDED THE ISSUE AN D THE GROUND RAISED BY ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 15 THE REVENUE HAS BEEN DISMISSED. FOLLOWING THE SAME REASONING THE GROUNDS RAISED BY THE REVENUE IN ALL THESE APPEALS ARE DISM ISSED. 14. IN THE RESULT ALL THE ABOVE FOUR APPEALS FILE D BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON /07/ 2017. (SUCHITRA KAMBLE) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: .7.2017 *BINITA* COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT AS SISTANT REGISTRAR ITA NO. 1412, 1416,2313, 2314/DEL/2012, A.Y. 2009-10 16 DATE INITIAL 1. DRAFT DICTATED ON 27 /0 7 /2017 2. DRAFT PLACED BEFORE AUTHOR 28 /0 7 /2017 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 28/07/2017 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 28/07/2017 5. APPROVED DRAFT COMES TO THE SR.PS/PS 28/07/2017 6. KEPT FOR PRONOUNCEMENT ON 31/07/2017 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.