ITO, New Delhi V. Smt. Maheep manjeet singh, New Delhi

ITA 2381/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65331 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 01-08-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 19-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Assessee Lawyers: S R WADHWA
• Keywords: Income from undisclosed sources; Opportunity of being heard; Additional evidence
• Section: 68; 6; 144

Judgement Text

ITA NO.2381/DEL/2010 ASSTT.YEAR: 2005-06 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 2381/DEL/2010 ASSESSMENT Y EAR: 2005-06 INCOME TAX OFFICER, VS SMT. MAHEEP M ANJIT SINGH, WARD 31(1), 28-A, PRITHVI RAJ ROAD, C. R. BUILDING, NEW DELHI. NEW DELHI. (PAN NO. APMPS1355P) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI R.S. NEGI, SR. DR RESPONDENT BY: SHRI S.R. WADHWA O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAIN ST THE ORDER OF COMMISSIONER OF INCOME TAX(A)-XXVI, NEW DELHI DATED 23.3.2010 BY WHICH HE DELETED THE ADDITIONS MADE BY THE ASSESSIN G OFFICER ON ACCOUNT OF BANK DEPOSITS IN CASH ON VARIOUS DATES DURING THE Y EAR UNDER CONSIDERATION TO THE ASSESSEES BANK ACCOUNT. THE GROUNDS OF APPEA L READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING THE ASSESSEE TO FILE ADDITIONAL EVIDENCE UNDER RULE 46-A OF THE INCOME T AX ACT, 1961 IN SPITE OF THE FACT THAT THE ASSESSEE WA S PROVIDED SUFFICIENT OPPORTUNITIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ITA NO.2381/DEL/2010 ASSTT.YEAR: 2005-06 2 2. LD. COMMISSIONER OF INCOME TAX(A) HAS ERRED IN ACCEPTING THE ASSESSEES EXPLANATION ABOUT THE SOUR CE OF CASH DEPOSITS TO THE TUNE OF RS.10,03,108/- MADE IN THE ALTER HALF OF F.Y.2004-05, WHEREAS FUNDS STATED TO HAVE BEEN WITHDRAWN IN THE F.Y. 2003-04. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE FILED HIS RETURN DECLARING AN INCOME OF RS. 1,82,480 FOR AY 2005-06. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS AND A N OTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 DATED 11.7.2006 WAS SERVED ON THE ASSESSEE. THE ASSESSING OFFICER NOTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE DEPOSITED CASH IN SB ACCOUNT AMOUNTING TO RS.19,00,108/- ON VARIOUS DATES. THE ASSESSING OFFICER ASKED THE ASS ESSEE TO EXPLAIN THE SOURCE OF THE CASH DEPOSITS WITH SUPPORTING EVIDENC E AND THE ASSESSEE FAILED TO SUBMIT THE SAME. ACCORDINGLY, THE ASSESSING OFF ICER ADDED THE CASH DEPOSITED TO THE RETURNED INCOME OF THE ASSESSEE U/ S 68 OF THE ACT. 3. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE COMMISSIONER OF INCOME TAX(A) WHICH WAS ALLOWED BY DELETING THE ADD ITION OF RS.19,00,108/-. HENCE, THIS APPEAL BY THE REVENUE BEFORE THIS TRIBUNAL. 4. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTIE S IN THE LIGHT OF MATERIAL PLACED ON RECORD BEFORE US. THE LD. DR SU BMITTED THAT THE ASSESSEE DID NOT COOPERATE DURING THE ASSESSMENT PROCEEDINGS AND HE FAILED TO FURNISH REQUIRED DETAIL AND SOURCE OF DEPOSITS OF CASH AMOU NT TO THE HSBC BANK ITA NO.2381/DEL/2010 ASSTT.YEAR: 2005-06 3 ACCOUNT OF THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER RIGHTLY ADDED THE AMOUNT TO THE RETURNED INCOME OF THE ASSESSEE U/S 6 8 OF THE ACT AS INCOME FROM UNDISCLOSED SOURCES. LD. DR ALSO SUBMITTED TH AT THE COMMISSIONER OF INCOME TAX(A) ADMITTED THE EVIDENCE IN CONTRAVENTIO N TO RULE 46A OF THE I.T. RULES, 1962 AND ALSO ACCEPTED THE EXPLANATION OF ASSESSEE REGARDING CASH DEPOSITS ON MISLEADING FACTS AND UNREASONABLE GROUNDS. THE LD. DR FINALLY SUBMITTED THAT THE IMPUGNED ORDER MAY BE SE T ASIDE, RESTORING THE ORIGINAL ASSESSMENT ORDER. 5. THE ASSESSEES REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER WRONGLY CALCULATED THE CASH DEPOSITED AMOUNT TO RS. 19,00,108/- WHICH WAS RIGHTLY CALCULATED BY THE LD. COMMISSIONER OF INCOM E TAX(A) TO RS.10,03,108/- TO THE HDFC BANK ACCOUNT OF THE ASSE SSEE ON THE BASIS OF CONFIRMATION BY THE SAID BANK. THE AR ALSO SUBMITT ED THAT THE LD. COMMISSIONER OF INCOME TAX(A) RIGHTLY HELD THAT THE APPELLANT HAD SUFFICIENTLY FURNISHED THE SOURCE OF THE CASH WITHD RAWALS FROM THE HUF BANK ACCOUNT IN VIEW OF SALE OF HUF PROPERTY AT 28-A, PR ITHVIRAJ ROAD, NEW DELHI. THE AR SUPPORTED THE IMPUGNED ORDER AND FIN ALLY SUBMITTED THAT THE ACTION OF THE ASSESSING OFFICER WAS BASED ON MISINT ERPRETATION OF THE FACTS AND IGNORING THE TRUTHFUL EVIDENCE BY EXPLANATION F URNISHED BY THE ASSESSEE. ITA NO.2381/DEL/2010 ASSTT.YEAR: 2005-06 4 6. AT THE OUTSET, WE NOTE THAT REPRESENTATIVES OF B OTH THE PARTIES BEFORE US ADMITTED THAT THE IMPUGNED AMOUNT OF CASH DEPOSITED AS ESTIMATED BY THE ASSESSING OFFICER WAS OF RS.19,00,108 WHICH WAS RIG HTLY CALCULATED BY LD. COMMISSIONER OF INCOME TAX(A) AT RS.10,03,108/-. B OTH THE PARTIES SUBMITTED THAT THE ACTUAL AMOUNT IN QUESTION WAS RS .10,03,108/- RELATED TO DEPOSIT OF CASH IN THE ACCOUNT OF THE ASSESSEE. 7. THE AR HAS ALSO DRAWN OUR ATTENTION TOWARDS PAGE NO. 25 TO 29 OF THE PAPER BOOK WHICH REVEALS THAT THERE WAS A MEMORANDU M OF UNDERSTANDING (MOU) DATED 21.10.2003 BETWEEN BHAI MANJIT SINGH (H UF) THROUGH ITS KARTA SMT. MAHEEP MANJIT SINGH (ASSESSEE-APPELLANT) AND M/S YAHOO PROPERTIES (P) LTD. RELATING TO SALE OF PLOTS AND C ONSTRUCTION THEREON SITUATED AT 28-A, PRITHVIRAJ ROAD, NEW DELHI FOR TOTAL CONSI DERATION OF RS.29 CRORES WITH AN ADVANCE OF RS.1.51 CORES AT THE TIME OF EXE CUTION OF SAID MOU. 8. WE HAVE ALSO PERUSED LETTER DATED 29.12.2009 OF THE ASSESSING OFFICER SUBMITTED TO THE LD. COMMISSIONER OF INCOME TAX(A) REGARDING ADMISSIBILITY OF ADDITIONAL EVIDENCE AVAILABLE ON PAGE 113 TO 116 OF THE PAPER BOOK WHICH REVEALS THAT THE ASSESSING OFFICER OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE BUT DID NOT MAKE ANY COMMENT ON THE MERITS OF THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE. ITA NO.2381/DEL/2010 ASSTT.YEAR: 2005-06 5 9. ON BARE READING OF THE IMPUGNED ORDER, WE OBSERV E THAT THE LD. COMMISSIONER OF INCOME TAX(A) CONSIDERED THE ASSESS MENT ORDER AND FIRSTLY, HE ARRIVED TO A CONCLUSION THAT THE IMPUGN ED CASH DEPOSITED WAS ONLY OF RS.10,03,108 AND THIS FACT HAS NOT BEEN DISPUTED BY THE LD. DR BEFORE US. WE FURTHER OBSERVE THAT THE LD. COMMISSIONER OF INC OME TAX(A) ADMITTED THE ADDITIONAL EVIDENCE WITH FOLLOWING OBSERVATIONS :- 5. ON CAREFUL CONSIDERATION OF THE FACTS OF THE CASE AND THE VARIOUS CONDITIONS ENTAILED IN RULE 46 A, I FIND THAT THE MAJOR ADDITION WAS ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN THE BANK STATEMENT. F OR THIS PURPOSE, EXAMINATION OF THE BANK STATEMENT WAS A CLEAR MUST. HOWEVER, BEING AN OLD RECORD, THE SAME WAS NOT PROVIDED BY THE BANK TO THE APPELLANT DURING TH E SHORT PERIOD OF 3 DAYS BETWEEN THE LAST 2 HEARING. THE SAID BANK STATEMENT WAS ALSO SOUGHT BY THE LEARNED ASSESSING OFFICER FROM THE BANK, HOWEVER, TILL THE DATE OF ASSESSMENT, THE ASSESSING OFFICER WAS NOT PROVIDED WITH THE SAME BY THE BANK. IN VIEW OF THE ABOVE, AND CONSIDERING VARIOUS OTHER GROUNDS IN PARA 4 ABOVE, I FIND THAT THERE WAS SUFFICIENT CAUSE FOR THE APPELLANT F OR NOT FURNISHING THE KEY EVIDENCE, I.E. THE BANK STATEMEN T BEFORE THE LEARNED AO WHICH WAS RELEVANT TO THE MAJ OR GROUND OF ADDITION. IN VIEW OF THE SAME, I ALLOW ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A. 10. ACCORDINGLY, LD. COMMISSIONER OF INCOME TAX(A) ADMITTED ADDITIONAL EVIDENCE FOLLOWING RULE 46A(1)(B)(C) OF THE INCOME TAX RULES, 1962 (HEREINAFTER REFERRED TO AS THE RULES). ITA NO.2381/DEL/2010 ASSTT.YEAR: 2005-06 6 11. THEREFORE, WE OBSERVE THAT THE LD. COMMISSIONER OF INCOME TAX(A) ADMITTED ADDITIONAL EVIDENCE FOLLOWING RULE 46A(1)( C) OF THE RULES BUT HE DID NOT FOLLOW MANDATORY PROVISIONS OF RULE 46A(3) OF THE RULES AS AFTER ADMISSION OF ADDITIONAL EVIDENCE, THE ASSESSING OFF ICER SHOULD BE GIVEN AN OPPORTUNITY TO EXAMINE THE ADDITIONAL EVIDENCE OR D OCUMENT PRODUCED BY THE APPELLANT AND TO PRODUCE ANY EVIDENCE OR DOCUMENT I N REBUTTAL OF THE ADDITIONAL EVIDENCE PRODUCED BY THE APPELLANT. 12. AT THIS JUNCTURE, WE ARE INCLINED TO TAKE NOTIC E OF JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE C ASE OF COMMISSIONER OF INCOME TAX VS MANISH BUILD WELL (P) LTD. IN ITA NO.928/2011 DATED 15.11.2011 REPORTED AS (2011) 63 DTR JUDGEMENTS 369 WHEREIN THEIR LORDSHIPS HELD THAT AFTER ADMISSION OF ADDITIONAL E VIDENCE, IT IS MANDATORY TO FOLLOW RULE 46A(3) OF THE RULES BUT IN THE CASE IN HAND, WE OBSERVE THAT THE LD. COMMISSIONER OF INCOME TAX(A) MERELY PROCEEDED TO DECIDE THE MATTER ONLY ON THE OBJECTIONS OF ASSESSING OFFICER ON ADMI SSION OF ADDITIONAL EVIDENCE BECAUSE AS PER LETTER OF THE ASSESSING OFF ICER DATED 29.12.2009 AVAILABLE ON PAPER BOOK FROM PAGE 113 TO 116, WE OB SERVE THAT THE ASSESSING OFFICER ONLY OBJECTED THE ADMISSIBILITY O F ADDITIONAL EVIDENCE AND RESTRICTED HIMSELF TO COMMENT ON THE MERITS OF THE EVIDENCE. THEREFORE, WE FINALLY OBSERVE THAT THE LD. COMMISSIONER OF INCOME TAX(A) DID NOT FOLLOW ITA NO.2381/DEL/2010 ASSTT.YEAR: 2005-06 7 THE MANDATORY PROCEDURE FOR CONSIDERATION OF ADDITI ONAL EVIDENCE AT THE FIRST APPELLATE STAGE. 13. DURING THE ARGUMENT, THE LD. DR SUBMITTED THAT THE CASE SHOULD BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR C OMPLIANCE OF RULE 46A(3) OF THE RULES AND THE AR CONTENDED THAT IF WE REACH TO THE CONCLUSION THAT THE MATTER NEEDS TO BE CONSIDERED BY THE AUTHORITIES BE LOW, THEN THE MATTER SHOULD BE RESTORED TO THE FILE OF THE LD. COMMISSIO NER OF INCOME TAX(A). AFTER CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS AN D FACTS AND CIRCUMSTANCES OF THE CASE, WE NOTE THAT THE LD. COM MISSIONER OF INCOME TAX(A) CONSIDERED ADDITIONAL EVIDENCE VIOLATING RUL E 46A(3) OF THE RULES BUT AT THE SAME TIME, WE ALSO OBSERVE THAT THE APPE LLANT FILED A PAPER BOOK CONTAINING 109 PAGES BEFORE THE COMMISSIONER OF INC OME TAX(A) WHICH HE COULD NOT SUBMIT BEFORE THE ASSESSING OFFICER DURIN G THE ASSESSMENT AND THE ASSESSING OFFICER CONCLUDED THE ASSESSMENT U/S 144 OF THE ACT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD BEFORE HIM. THEREF ORE, WE FIND IT APPROPRIATE TO RESTORE THE MATTER BACK TO THE FILE OF THE ASSES SING OFFICER FOR ADJUDICATION AFRESH AFTER DUE CONSIDERATION OF ADDITIONAL EVIDEN CE AND AFFORDING A DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN VIE W OF ABOVE, THE APPEAL OF THE REVENUE IS DISPOSED OF AND ACCORDINGLY, IT IS T REATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.2381/DEL/2010 ASSTT.YEAR: 2005-06 8 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH AUGUST, 2012. SD/- SD/- ( J.S. REDDY ) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 29 TH AUGUST 2012 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR