Sh. Ajay Singhal, New Delhi V. ACIT, New Delhi

ITA 2557/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3405 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 28-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: ASHISH CHADHA
• Keywords: Salary income; Document seized; Documents seized
• Section: 142(1); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO. 2557/DEL/2014 A.Y. : 2006-07 AJAY SINGHAL PROP. OM AUTO CARRIER 130, TRANSPORT CENTRE, PUNJABI BAGH, NEW DELHI (PAN: AATPS3309P) VS. ACIT, CENTRAL CIRCLE-21, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. VED JAIN, CA & SH. ASHISH CHADHA, CA DEPARTMENT BY : SMT. APARNA KARAN, CIT(DR) ORDER PER H.S. SIDHU : JM ASSESSEE HAS FILED THIS APPEAL AGAINST THE IMPUGNE D ORDER DATED 24.3.2014 PASSED BY THE LD. CIT(A)-II, NEW DELHI R ELEVANT TO ASSESSMENT YEAR 2006-07 WHEREIN THE ADDITION OF RS. 12,02,615 / - MADE BY THE AO ON ACCOUNT OF MARRIAGE EXPENDITURE WAS UPHELD. 2. THE BRIEF FACTS OF THE CASE ARE THAT ORIGINAL RE TURN WAS FILED DECLARING INCOME AT RS. 1,77,59,790/- ON 28-10-2006 UNDER THE HEAD INCOME FROM SALARY, BUSINESS & PROFESSION, CAPITAL GAIN AND OTHER SOURCES. IN THIS CASE SEARCH & SEIZURE OPERATION U/ S 132 OF THE LT. ACT WAS CONDUCTED IN CONSEQUENCE TO THE WARRANT OF AUTH ORIZATION ISSUED BY 2 D.I. (INV)-(II), NEW DELHI ON 04-10-2007 IN THE RES IDENCE/BUSINESS PREMISES OF THE ASSESSEE AT H. NO. 130, TRANSPORT C ENTRE, RING ROAD, PUNJABI BAGH, NEW DELHI THE RELATED PERSONS/CONCERN S OF AM LOGISTICS GROUP OF CASES. DURING THE COURSE OF SEARCH & SEIZU RE OPERATION CASH & JEWELLERY AMOUNTING TO RS. 1,37,530/- & 1,58,047/- WERE FOUND RESPECTIVELY AT THE RESIDENCE OF THE ASSESSEE. SHRI AJAY SINGHAL, PROP M/S OM AUTO CARRIER IS ALSO ONE OF THE DIRECTORS OF OM LOGISTICS GROUP OF CASES. IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE INCOME TAX ACT, 1961, THE ASSESSEE FILED RETURNS ULS 153 A DATED 04 -05-2009 FOR RS. 1,77,59,790/-. THE STATUTORY NOTICES ULS 142(1) & 1 43(2) ALONG WITH QUESTIONNAIRE WERE ISSUED FROM TIME TO TIME INCLUDI NG DETAILED QUESTIONNAIRE BASED ON SEIZED DOCUMENTS AND OTHER I SSUES RELATED TO THE ICOME OF THE ASSESSEE, DATED 07-08-2009 AND NECESSA RY COMPLIANCE WAS MADE BY THE A.R. OF THE ASSESSEE. THE ASSESSEE IS D ERIVING INCOME FROM SALARY, BUSINESS AND PROFESSION, THE BUSINESS OF LO GISTICS AND TRANSPORTATION OF GOODS ACROSS THE COUNTRY UNDER TH E NAME AND STYLE OF OM AUTO CARRIERS, SHORT TERM CAPITAL GAIN AND INCOM E FROM OTHER SOURCES. DURING THE YEAR, THE ASSESSEE HAS DECLARED GROSS RE CEIPTS FROM BUSINESS AT RS. 10,37,56,107/- ON WHICH PROFIT OF RS. 1,54,0 5,522/ HAS BEEN DECLARED GIVING N.P. RATIO OF 14.85% AS AGAINST N.P RATIO OF 11.12% IN THE IMMEDIATE PRECEDING YEAR. NECESSARY DETAILS CALLED FOR HAVE BEEN FILED. HENCE, THE TRADING RESULTS ARE NOT DISTURBED. DURIN G THE COURSE OF SEARCH OPERATION AT THE RESIDENTIAL PREMISES OF THE ASSESS EE, ANNX A-I AGE NO. 39-50 WERE SEIZED BY PARTY A-2 WHICH CONTAINED DETA ILS OF EXPENDITURE 3 RELATING TO SOME CARRIAGE. THE ASSESSEE WAS REQUIRE D TO FURNISH DETAILS OF THE MARRIAGE AND CORRELATE WITH THE EXPENDITURE WIT H DRAWINGS MADE IN THE RELEVANT PERIOD. THE ASSESSEE HAS SUBMITTED A D ETAILED REPLY AND AFTER CONSIDERING THE SAME, THE AO HAS COMPLETE THE ASSE SSMENT AT AN INCOME OF RS. 1,89,62,400/- AND MADE THE ADDITION ON ACCOU NT OF UNDISCLOSED EXPENDITURE ON MARRIAGE AMOUNTING TO RS. 12,02,615 /- VIDE HIS ORDER DATED 24.12.2009 PASSED U/S. 153A/143(3) OF THE AC T. 3. AGGRIEVED WITH THE ASSESSMENT ORDER DATED 24.12. 2009, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 24.03.2014 HAS DISMISSED THE APPEAL OF THE AS SESSEE. 4. AGAINST THE IMPUGNED ORDER DATED 24.3.2014, ASS ESSEE HAS FILED THE APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSES SEE HAS STATED THAT THE AO HAS MADE THE ADDITION OF RS. 12,02,615/- TO THE RETURNED INCOME OF THE ASSESSEE ALLEGING THAT THE SOURCE OF THE SAI D AMOUNT INCURRED BY THE ASSESSEE ON THE MARRIAGE OF HIS NIECE REMAINED UNEXPLAINED. HE FURTHER STATED THAT AO HAS MADE THE ADDITION BY HOL DING THE EXPENDITURE REFLECTED IN THE SEIZED DOCUMENTS TO BE MADE OUT O F UNDISCLOSED SOURCES. HE FURTHER STATED THAT LD. CIT(A) SUSTAINED THE ADD ITION IN DISPUTE BY RELYING UPON THE WHIMS AND FANCIES OF THE AO AND BY NOT APPRECIATING THE DETAILED SUBMISSIONS AND EVIDENCES FILED BY THE ASS ESSEE AND LD. CIT(A) CONFIRMED THE ADDITION BY HOLDING THAT THE ASSESSEE HAS NOT BEEN ABLE TO GIVE ANY COGENT AND SATISFACTORY EXPLANATION WITH R EGARD TO THE SAID 4 EXPENDITURE. HE FURTHER STATED THAT DURING THE ASSE SSMENT AND APPELLATE PROCEEDINGS IT WAS SUBMITTED THAT THE DOCUMENTS FOU ND DURING THE COURSE OF SEARCH REFLECTED THE EXPENDITURE INCURRED BY THE ASSESSEE ON THE MARRIAGE OF HIS NIECE AND OUT OF THE TOTAL EXPENDIT URE INCURRED ON THE MARRIAGE OF HIS NIECE, AN AMOUNT OF RS. 11.50 LACS WAS INCURRED BY THE ASSESSEE OUT OF THE RAWINGS MADE FROM HIS PROPRIETO RSHIP CONCERN M/S OM AUTO CARRIERS AND THE BALANCE OF RS. 52,615/- WAS I NCURRED BY THE PARENTS OF HIS NIECE. IN SUPPORT OF THIS CONTENTION, THE AS SESSEE DULY SUBMITTED A COPY OF ITS CASH FLOW STATEMENT FOR VARIOUS YEARS, WHEREIN THE WITHDRAWALS MADE FOR MARRIAGE EXPENSES WERE DULY REFLECTED AT P B-28 OF THE PB AND THE DETAILS OF THE MARRIAGE EXPENSES INCURRED ARE A T PAGE 29-30 OF PB. HE FURTHER STATED THAT A PERUSAL OF THE CASH FLOW STAT EMENT CLEARLY SHOWS THAT THE ASSESSEE HAD AN OPENING BALANCE OF RS. 8,04,661 /- DURING THE YEAR, AND AFTER MAKING WITHDRAWALS FOR THE MARRIAGE AND F OR HIS HOUSEHOLD EXPENDITURE, THE CLOSING BALANCE AVAILABLE WITH THE ASSESEE AT THE YEAR- END WAS RS. 4,51,360/-, HENCE, THE ASSESSEE HAD SUF FICIENT FUNDS AT HIS DISPOSAL, WHICH HAVE BEEN WITHDRAWN BY THE ASSESSEE AND UTILIZED FOR THE MARRIAGE PURPOSE OF HIS NIECE AND ACCORDINGLY THE EXPENDITURE INCURRED BY THE ASSESSEE WAS DULY EXPLAINED. IN VIEW OF THE ABOVE, HE REQUESTED TO DELETE THE ADDITION IN DISPUTE AND ALLOW THE APP EAL OF THE ASSESSEE. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW. 5 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS AND ALSO PERUSED THE ORDERS OF THE AUTHORITIES BELOW. ADMIT TEDLY, DURING THE COURSE OF SEARCH OPERATION ANNEXURE A-1 PAGE NO. 39 -50 WERE SEIZED WHICH CONTAIN THE DETAILS OF MARRIAGE EXPENSES INCU RRED BY THE ASSESSEE. THE DETAILS OF MARRIAGE EXPENSES ARE PLACED AT PAGE NO. 29 OF THE PB AMOUNTING TO RS. 12,02,615/-. THE ASSESSEE EXPLAINE D THE ABOVE EXPENDITURE PLACING THE CASH FLOW STATEMENT STARTIN G FROM THE ASSESSMENT YEAR 2001-02 TO 2007-08 WHEREIN A SUM OF RS. 11,50,000/- WERE SHOWN BY THE ASSESSEE BEING INCURRED FROM HIS WITHDRAWAL ON ACCOUNT OF MARRIAGE OF HER NIECE MS. RUPALI. THE CA SH FLOW STATEMENT SHOWED THAT THE ASSESSEE WAS HAVING AN OPENING BALA NCE OF RS. 8,04,661/- AND WITHDRAWAL FROM HIS PROPRIETORSH IP CONCERN M/S OM AUTO CARRIER OF RS. 12.70 LACS AND SALARY WHEREIN T HE TOTAL AVAILABLE CASH WITH THE ASSESSEE WAS RS. 23.33 LACS OUT OF WHICH A SSESSE HAS INCURRED MARRIAGE EXPENSES OF RS. 11.55 LACS. THE AO AS WEL L AS CIT(A) HAS REJECTED THE CASH FLOW STATEMENT STATING THAT IT IS NOT BELIEVABLE. ON CAREFUL PERUSAL OF THE CASH FLOW STATEMENT, THE ASS ESSEE HAS SHOWN YEAR- WISE OPENING BALANCE AVAILABLE FROM ASSESSMENT YEAR 2001-02 TO TILL ASSESSMENT YEAR 2007-08. NONE OF THE AMOUNT SHOWN IN THE CASH FLOW STATEMENT WAS FOUND TO BE INCORRECT. THEREFORE, ME RELY DISCARDING THE EVIDENCES PLACED BY THE ASSESSEE AS UNBELIEVABLE AN D THEREBY SUSTAINING THE ADDITION IS INCORRECT. IT IS ALSO TO BE NOTED THAT ASSESSEE HAS FILED HIS RETURN OF INCOME AT RS. 1.78 CRORES FOR THE ASS ESSMENT YEAR 2006-07. THE AMOUNT OF WITHDRAWALS AND GENERATION OF CASH S HOWN FOR 7 YEARS BY 6 THE ASSESSEE WERE NOT FOUND TO BE ERRONEOUS. FURT HER, MERELY BECAUSE THE CASH IS AVAILABLE WITH THE ASSESSEE FOR A LONGE R PERIOD, IT CANNOT BE SAID THAT IT IS NOT AVAILABLE WITH THE ASSESE FOR S PENDING, UNLESS THE REVENUE COULD LAY HANDS ON ANY EVIDENCES WHICH HAVE BEEN REMOTELY SHOW THAT CASH WAS USED FOR SOME OTHER PURPOSE. IN THE ABSENCE OF ANY SUCH POSITIVE EVIDENCES PRODUCED BY THE AO AND ALSO REBUTTING THE CASH FLOW STATEMENT OF THE ASSESSEE, THE ADDITION IN THE HANDS OF THE ASSESSEE IS NOT SUSTAINABLE. IN THE RESULT, WE ARE REVERSI NG THE FINDING OF THE LOWER AUTHORITIES AND DIRECT TO DELETE THE ADDITION OF RS. 12,02,615/- WHICH IS SUPPORTED BY THE CASH FLOW STATEMENT OF TH E ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/11/2017. SD/- SD/- [PRASHANT MAHARISHI] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 22/11/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT ASSISTANT REGISTRAR, ITAT, DELHI BENCHES