Uday Kumar Vaish, New Delhi V. ACIT, New Delhi

ITA 2338/DEL/2013

• Counselvise Citation: 233820114 RSA 2013
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 06-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 22-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Revision of order; Documents seized
• Section: 143(3); 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: H NEW DELHI BEFORE SHRI G.C. GUPTA, VICE PRESIDENT & SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER I.T.A .NO. 2339 /DEL/201 3 (ASSESSMENT YEAR - 200 9 - 10 ) MRS. MAYA GUPTA VS. ACIT, C.C. 3 52/79, RAMJAS ROAD NEW DELHI KAROL BAGH NEW DELHI 110 005 PAN: AAMPG 1719 F & I.T.A .NO. 2338 /DEL/201 3 (ASSESSMENT YEAR - 200 9 - 10 ) SHRI UDAY KUMAR VAISH VS. ACIT, C.C.3 52/79, RAMJAS ROAD NEW DELHI KAROL BAGH NEW DELHI 110 005 PAN: AAIPV 1716 G ( A P P E L L A N T ) ( R E S P O N D E N T ) A P P E L L A N T B Y : D R . R A K E S H G U P T A , F C A R E S P O N D E N T B Y : S H . A K S A R O H A , C I T , D . R . ORDER PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER BOTH THESE APPEALS ARE FILED BY DIFFERENT ASSESSEE S AND ARE DIRECTED AGAINST SEPARATE BUT IDENTICAL ORDERS OF LD.CIT(A), NEW DELHI FOR THE A.Y. 2009 - 10 DATED 19 TH FEB.2013 AND 18 TH FEB.,2013 RESPECTIVELY. AS THE ISSUES INVOLVED IN BOTH THESE APPEALS ARE COMMON, FOR THE SAKE OF CONVENIENCE, THEY ARE HEARD TOGETHER AND ARE DISPOSED OF BY WAY OF THIS COMMON ORDER. 2 2. TWO ISSUES ARISE IN THESE APPEALS. THESE ARE (A) WHETHER THE ASSUM PTION OF JURISDICTION U/S 153C OF THE INCOME TAX ACT, 1961 (THE ACT) WAS RIGHT; AND (B) WHETHER THE HEAD OF TAXABILITY HAS RIGHTLY BEEN CHANGED BY THE LD.A.O, FROM CAPITAL GAINS TO OTHER SOURCES. 3. WE HAVE HEARD DR.RAKESH GUPTA, THE LD.COUNSEL ON BEHALF OF THE ASSESSEE AND SHRI A.K.SAROHA, LD.CIT, D.R. ON BEHALF OF THE REVENU. 4. AFTER CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF MATERIAL PLACED ON RECORD AND ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAWS CITED, WE HOLD AS UNDER. 5. AS REGARDS THE FIRST ISSUE ON ASSUMPTION OF JURISDICTION U/S 153C OF THE ACT, WE FIND THAT CERTAIN DOCUMENTS WERE FOUND AND SEIZED , DURING THE SEARCH ON MAHESH GROUP OF COMPANIES ON 30.6.2009. AMONG THE DOCUMENTS SEIZED DURING THE SEARCH WER , E BAHI KHATAS FOR THE F.Y. 2008 - 09, COMPRISING OF LEDGER, JOURNAL AND CASH BOOKS, WHERE CASH AND OTHER TRANSACTIONS OF THE MAHESH GROUP WAS FOUND RECORDED , AFTER SUPPRESSING THE LAST TWO DIGITS OF NUMBERS. DOCUMENT NO. ANNEXURE A 4 PAGE 93 , REFLECTED TRANSACTIONS ENTERED BY HONEST ESTATES P.LTD. A MAHESH MEHTA GROUP COMPANY, WITH THE ASSESSEE AND HER SPOUSE AND ANOTHER CONCERN BY NAME M/S MAGIC AUTO P LTD. WITH RESPECT TO THE SALE OF PROPERTY NO.56/7, DESH BANDHU GUPTA ROAD, KAROL BAGH, NEW DELHI. IN THIS DOCUMENT, CASH RECEIVED AS WELL AS THE OFFICIALLY RECORDED CONSIDERATION AS PER SALE DEED , WERE MENTIONED. ON BEING EXAMINED, MR. UDAI KUMAR VAISH ADMITTED TO HAVE BEEN RECEIVED ADDITIONAL CONSIDERATION. UNDER THE CIRCUMSTANCES, THIS ARGUM ENT OF THE ASSESSEE IS REJECTED AND THIS ISSUE OF ASSUMPTION OF JURISDICTION U/S 153C OF THE ACT IN THIS CASE IS HELD IN FAVOUR OF THE REVENUE. THESE GROUNDS OF THE ASSESS EE ARE DISMISSED. 6. ON THE SECOND ISSUE, THE LD.D.R. HAS EXTENSIVELY RELIED ON THE ORDER OF THE REVENUE AUTHORITIES AS WELL AS THE ORDER PASSED BY THE LD.CIT, 3 C.C.2, NEW DELHI DT. 6.3.2014 FOR THE A.Y. 2009 - 10 PASSED U/S 263 OF THE ACT IN RESPECT OF THE ASSESSMENT ORDER DT. 28.12.2011 PASSED U/S 143(3) R.W.S. 153 OF THE ACT IN THE CASE OF MRS. MAYA GUPTA. THE LD.A.R. RELIED ON THE ORDER OF THE TRIBUNAL IN ITA NO.5701/DEL/2014 FOR THE A.Y. 2009 - 10 IN THE ASSESSEE S OWN CASE AND SUBMITTED THAT THIS IS A C OVERED MATTER. 7. THE TRIBUNAL IN ITA NO.5701/DE/2014 FOR THE AY 2009 - 10 IN THE ASSESSEE S OWN CASE HAD CANCELLED THE ORDER PASSED U/S 263 OF THE ACT VIDE ITS ORDER DT. 8.7.2015 AT PARA 23 AND 24 WHICH IS EXTRACTED HEREUNDER. 23. FROM THE COPY OF THE A SSESSMENT ORDER PASSED U/S 143(3)/153C OF THE ACT, WE NOTE THAT THE ISSUE OF UNACCOUNTED RECEIPT FROM SHRI MAHESH MEHTA AND ISSUE OF PAYMENT OF UNACCOUNTED MONEY TO M/S HONEST ESTATE (P) LTD. HAS BEEN DEALT FROM PARA NO. 5 TO 5.8 ELABORATELY. FROM THE NOTI CES OF THE AO DATED 30.6.11 ALONG WITH LETTER (ASSESSEE S PAPER BOOK PAGE 11 TO 14), WE FIND THAT DURING THE ITA NO. 5701/DEL/2014 ASSTT.YEAR: 2009 - 10 25 COURSE OF PROCEEDINGS, THE AO SHOWCAUSED THE ASSESSEE ASKING QUESTION RELATING TO SEARCH OF MR. MAHESH MEHTA, DETAILS OF ALL BANK ACCOUNTS OF THE ASSESSEE, PROPERTIES AND INVESTMENT MADE, UTILIZATION OF MONEY AND THERE IS A SPECIFIC QUERY ABOUT THE PROVISIONS OF PROPERTY NO. 56/7, DB GUPTA ROAD, KAROL BAGH, INVOLVING THE ALLEGED UNACCOUNTED PAYMENT OF RS.2 CRORE OUT OF WHICH RS.1 CRORE PERTAINS TO THE ASSESSEE. WE FURTHER OBSERVE FROM THE COPY OF THE ASSESSEE S SUBMISSIONS DATED 15.11.11FILED BEFORE THE AO REPLYING TO THE QUESTIONNAIRE AND NOTICE DATED 30.6.11, THE ASSESSEE SUBMITTED COPIES OF BANK ACCOUNT, STATEMENT OF ASSETS AND LIABILITIES AND A DETAILED NOTE ON THE PROPERTIES PURCHASED BY THE ASSESSEE AND PROPERTY SOLD DURING THE PERIOD UNDER CONSIDERATION. IN ASSESSEE S PAPER BOOK PAGE 17 TO 73, WE OBSERVE THAT THE ASSESSEE JOINTLY PURCHASED PROPERTY NO . 56/7, DB GUPTA ROAD, WITH HER SPOUSE FROM M/S HONEST ESTATES PVT. LTD. WHEREIN THREE SEPARATE SALE DEEDS HAVE BEEN EXECUTED IN FAVOUR OF THE ASSESSEE, FIRST SALE DEED WAS REGISTERED ON 11.7.2008 AND REMAINING TWO SALE DEEDS WERE REGISTERED ON 17.7.2008. FROM SALE DEEDS PERTAINING TO PROPERTY BEARING NO. 783/160, 161 & 162, DB GUPTA ROAD, NEW DELHI AVAILABLE FROM PAGES 74 TO 171 OF THE ASESSEE S PAPER BOOK, WE NOTE THAT THE ASSESSEE AND HER HUSBAND JOINTLY SOLD ONE PROPERTY TO MRS. ANITA CHHABRA AND HER SO N SITAKSH CHHABRA, ANOTHER PROPERTY TO MRS. GURCHARAN KAUR AND TWO PARTS OF THIS PROPERTY HAVE BEEN SOLD TO MR. MAHESH MEHTA BY GETTING REGISTERED SALE DEED IN HIS FAVOUR ON THE SAME DATE I.E. 17.7.2008. ITA NO. 5701/DEL/2014 ASSTT.YEAR: 2009 - 10 4 24. IF WE FURTHER ANALYSE THIS ISSUE, THEN WE OBSERVE THAT AS PER STATEMENT OF ASSESSEE S HUSBAND SHRI UDAY KUMAR VAISH RECORDED U/S 133 OF THE ACT ON 18.8.2009 AT THE TIME OF SURVEY OF THE ASSESSEE, WE NOTE THAT THE HUSBAND OF THE ASSESSEE REPLYING TO QUE STION NO. 6 AT PAGE NO. 4 OF THE STATEMENT FAIRLY ADMITTED THAT A SUM OF RS. 2 CRORE IN CASH ON ACCOUNT OF PART OF SALE CONSIDERATION OF PROPERTY NO. 783/161 WAS KEPT BY MR. MAHESH MEHTA AS PURCHASE CONSIDERATION OF NEWLY PURCHASED BUILDING AT 56/7, DB GUP TA ROAD, NEW DELHI PURCHASED FROM HIM I.E. MR. MAHESH MEHTA HIMSELF, HE WAS UNDER THE IMPRESSION THAT NO CAPITAL GAIN WAS TO BE INVOKED ON THIS AMOUNT. HOWEVER, IN THE SUBSEQUENT PART OF THE ANSWER, ASSESSEE S HUSBAND SUBMITTED THAT IF THIS IS THE CAPITAL GAIN AGAINST HIS OLD BUILDING AS A PART OF SALE CONSIDERATION, THEN HE IS READY TO PAY THE CAPITAL GAIN TAX ON THIS AMOUNT SUBJECT TO NO PENALTY PROCEEDINGS JUST TO BUY PEACE. FROM THE STATEMENT OF SHORT TERM AND ALONG TERM CAPITAL GAIN FILED ALONG WITH TH E RETURN OF INCOME AVAILABLE AT PAGE 10 OF THE ASSESSEE S PAPER BOOK, WE NOTE THAT THE ASSESSEE OFFERED SHORT TERM CAPITAL GAIN OF RS.4,18,200 ON SALE CONSIDERATION OF PROPERTY AT 783/162, KAROL BAGH FOR HALF SHARE. IN THE SECOND PART OF THIS STATEMENT, WE SEE THAT THE ASSESSEE HAS OFFERED LONG TERM CAPITAL GAIN ACCRUED TO HER FROM SALE CONSIDERATION OF THREE PROPERTIES VIZ. 16C, MOTIA KHAN, PAHARGANJ, PROPERTY NO. 8750, DB GUPTA ROAD, NEW DELHI AMOUNTING TO RS.1,35,81,857 AND IN THE CALCULATION OF TAXABLE INCOME, INCOME FROM CAPITAL GAIN HAS BEEN SHOWN AS RS.1,40,00,057. AT THIS POINT, IT IS RELEVANT TO CONSIDER THE CONTENTION OF THE ASSESSEE WHICH WERE PLACED BEFORE THE ITA NO. 5701/DEL/2014 ASSTT.YEAR: 2009 - 10 27 CIT IN REPLY DATED 3.3.2014 TO NOTICE U/S 263 OF THE ACT WHEREIN AT PAGE 5 MIDDLE PARA, IT HAS BEEN MENTIONED THAT THE PURCHASE FROM DIFFERENT PERSONS AND SALE TO DIFFERENT PERSONS IS APPARENT FROM THE SALE DEED BUT THE GROUP AND DEALING PERSON IS THE SAME I.E. MR. MAHESH MEHTA FOR THE TRANSACTION AND SALE OF PROPERTY AT 783/162 AND PURCHASE OF PROPERTY AT 56/7, DB GUPTA ROAD THROUGH MR. MAHESH MEHTA WHO IS THE AUTHORISED DIRECTOR OF M/S HONEST ESTATE (P) LTD. AND HE ENTERED INTO PROPERTY TRANSACTION WITH THE ASSESSEE FOR PURCHASE OF PROPERTY IN IN DIVIDUAL CAPACITY AND FOR SALE OF PROPERTY IN THE REPRESENTATIVE CAPACITY AS DIRECTOR OF THE SAID COMPANY. THIS FACT AND CONTENTION OF THE ASSESSEE HAS NOT BEEN DEMOLISHED BY THE CIT AND WITHOUT BRINGING OUT ANY ALLEGATION THAT THE PURCHASE OF PROPERTY AND SALE OF PROPERTY WAS WITH DIFFERENT PERSONS AND ENTITIES, IT CANNOT BE HELD THAT THE ASSESSEE HAD ENTERED INTO PROPERTY TRANSACTION WITH DIFFERENT PERSONS/ENTITIES. FURTHER, AS WE HAVE ALREADY NOTED THAT THE SALE OF PROPERTY NO. 783/161 WAS MADE TO SHRI M AHESH MEHTA AND PURCHASE OF PROPERTY NO. 56/7, DB GUPTA ROAD WAS ALSO MADE FROM M/S HONEST ESTATES (P) LTD. IN WHICH MR. MAHESH MEHTA IS A DIRECTOR REPRESENTATIVE OF THE TRANSACTION, THEN IN TOTALITY OF THE FACTS AND CIRCUMSTANCES, ESPECIALLY WHEN THE SALE DEEDS OF BOTH THE TRANSACTIONS ARE REGISTERED AND EXECUTED ON THE SAME DATE I.E. 17.7.2011, THEN THE HALF SHARE 5 OF SALE CONSIDERATION RECEIVED BY THE ASSESSEE AMOUNTING TO RS. 1 CRORE ATTRACTS CAPITAL GAIN WHICH HAS BEEN OFFERED BY THE ASSESSEE IN THE STA TEMENT OF LONG TERM CAPITAL GAIN AS DISCUSSED ABOVE. WE FURTHER OBSERVE THAT WHILE THE ASSESSEE HAS SHOWN UNACCOUNTED CONSIDERATION IN ITA NO. 5701/DEL/2014 ASSTT.YEAR: 2009 - 10 28 THE STATEMENT OF CAPITAL GAIN FILED ALONG WITH THE RETURN OF INCOME, THEN IT FURTHER EXPLAINS THE SOURCE OF UNACCOUNTED PAYMENT OF CONSIDERATION OF PURCHASE OF PROPERTY BEARING NO. 56/7, DG GUPTA ROAD, HENCE, NO ADDITION PERTAINING TO UNDISCLOSED INVESTMENT COULD HAVE BEEN MADE. HOWEVER, AS A VIGILANT TAX COLLECTING AUTHORITY, THE AO ADOPTED A CONSERVATIVE APPROACH AND DEDUCTED RS. 1 CRORE FROM CAPITAL GAIN AND TAXED THE SAME UNDER THE HEAD OF INCOME FROM OTHER SOURCES WHICH OBVIOUSLY ATTRACTS HIGHER TAX RATE, THEN THIS ACTION OF THE AO IS MORE FAVOURABLE TO THE REVENUE WHICH CANNO T BE HELD AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 7.1. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE HOLD THAT THE INCOME IN QUESTION SHOULD BE RIGHTLY TAXED UNDER THE HEAD CAPITAL GAINS AND NOT UNDER THE HEAD INCOME FROM OTHER SOURCES . ALL OTHER ISSUES RAISED BY THE LD.D.R. ARE NO MORE RES INTEGRA IN VIEW OF THE ABOVE REFERRED ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL. IN THE RESULT THIS GROUND IS DE CIDED IN FAVOUR OF THE ASSESSEE IN BOTH THE APPEALS. 8. IN THE RESULT BOTH THE APPEALS I.E. ITA NO.2338/DEL/2013 AND ITA 2339/DEL/13 ARE PARTLY ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 4 T H OCTOBER, 2015. S D / - S D / - (G.C. GUPTA) (J.S UDHAKAR REDDY) VICE PRESIDENT ACCOUNTANT MEMBER DATED: THE 1 4 T H OCTOBER, 2015 *MANGA 6 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI