ITO, New Delhi V. Sh. Girish Nagpal, New Delhi

ITA 2670/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4584 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 01-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Keywords: Unexplained investment; Search and seizure
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.2670/DEL./2017 ASSESSMENT YEAR 2006-2007 THE INCOME TAX OFFICER WARD-32(4), ROOM NO.1307, 13 TH FLOOR, E-2, PRATKSHYA KAR BHAWAN, SHAYAMA PRASAD MUKHERJEE CIVIC CENTRE, JAWAHARLAL NEHRU MARG, MINTO ROAD, NEW DELHI 110 002. VS. MR. GIRISH NAGPAL W-8, 3 RD FLOOR, GREEN PARK MAIN, NEW DELHI 110 019. PAN AADPN5297R (APPELLANT) (RESPONDENT) FOR ASSESSEE : -NONE- FOR REVENUE : SHRI T. VASANTHAN, SR. D.R. DATE OF HEARING : 04.09.2017 DATE OF PRONOUNCEMENT : 04.09.2017 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-11, NEW DELHI, DATED 28 TH FEBRUARY, 2017, FOR THE A.Y. 2006-2007, CHALLENGING THE DELETION OF ADD ITION OF RS.39,50,000 ON ACCOUNT OF UNEXPLAINED INVESTMENT I N PROPERTY. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME AT RS.3,19,443. AN INFORMATION WAS RECEIV ED FROM THE O/O. DGIT (INV. WING), NEW DELHI, THAT IN THE COURSE OF SEARCH AND SEIZURE 2 ITA.NO.2670/DEL./2017 SHRI GIRISH NAGPAL, NEW DELHI OPERATION CONDUCTED IN THE CASE OF ARENS GROUP WH O ARE ENGAGED IN THE BUSINESS OF REAL ESTATE, IT WAS FOUND THAT A SSESSEE HAS INVESTED A SUM OF RS.57 LAKHS (RS.17,50,000 BY CHEQUE AND RS .39,50,000 IN CASH) TOWARDS UNIT NO.UG-15, PLOT NO.W-2, AEZ, VAIS HALI. THE CASE WAS REOPENED UNDER SECTION 148 OF THE I.T. ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, ON THE REQUEST OF THE ASSES SEE, LETTER WAS WRITTEN TO DDIT (INV.), NEW DELHI, TO PROVIDE COPY OF THE STATEMENT OF THE PERSON WHO ALLEGED TO HAVE RECEIVED UNACCOUNTED CASH IN THE FORM OF UNEXPLAINED INVESTMENT IN THE PROJECT OF A RENS GROUP FROM THE ASSESSEE. HOWEVER, IN A SIMILAR CASE, IT WAS IN FORMED BY ADIT (INV.), NEW DELHI TO ITO, WARD-23(4) THAT THE INFOR MATION SUPPLIED WAS RETRIEVED FROM THE HARD DISK FOUND AND SEIZED D URING THE COURSE OF SEARCH AT THE CORPORATE O/O. AEZ GROUP I.E., PAR T OF ARENS GROUP WHEREIN SUCH CASH TRANSACTION WAS RECORDED. ACCORDI NGLY, ASSESSEE WAS DIRECTED TO EXPLAIN THE SOURCE OF THE CASH OF R S.39,50,000. THE ASSESSEE SUBMITTED BEFORE THE A.O. THAT DURING THE YEAR, ASSESSEE HAD PURCHASED PROPERTY IN THE JOINT NAME WITH HIS W IFE SMT. ARUNIMA NAGPAL FROM M/S. KHEMKA STUART LEISURE LTD., OF RS. 17,50,000 AND NO CASH HAVE BEEN PAID BY THE ASSESSEE TO M/S. AREN S GROUP AS SAME 3 ITA.NO.2670/DEL./2017 SHRI GIRISH NAGPAL, NEW DELHI COULD BE VERIFIED WITH THE BUYER AGREEMENT. COPY OF THE AGREEMENT AND BANK STATEMENTS WERE SUBMITTED. THE A.O. HOWEVE R, WAS NOT SATISFIED WITH THE EXPLANATION OF ASSESSEE AND MADE ADDITION OF RS.39,50,000 ON ACCOUNT OF UNEXPLAINED INVESTMENT I N PROPERTY. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT (A) AND SAME SUBMISSIONS WERE REITERATED. 3. THE LD. CIT(A) CONSIDERING THE MATERIAL ON RECO RD FOUND THAT THE A.O. MADE ADDITION AGAINST THE ASSESSEE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTY ON THE BASIS OF THE DATA RETRIEVED FROM THE HARD DISK SEIZED DURING THE COURSE OF SEAR CH IN THE CASE OF M/S. AEZ GROUP. THE CONTENTION OF THE ASSESSEE, HOW EVER, HAD BEEN THAT ASSESSEE DENIED MAKING ANY CASH PAYMENT TO ANY PERSON. ASSESSEE FILED CONFIRMATION OF ACCOUNT FROM THE BUI LDER. A.O. HAS NOT PROVIDED COPY OF THE STATEMENT/MATERIAL BASED ON WH ICH THE CASE WAS REOPENED DESPITE SPECIFIC REQUEST MADE BY THE ASSES SEE. THE A.O. HAS NOT PROVIDED PROPER OPPORTUNITY TO EXAMINE THE EVID ENCE WHICH HAVE BEEN COLLECTED FROM THIRD PARTY ON THE BASIS OF WHI CH ADDITION HAVE BEEN MADE. THE DATA, IF ANY, WAS RETRIEVED FROM THE HARD DISK OF THIRD PARTY, ASSESSEE HAS NO CONTROL OVER THE SAME. THE A SSESSEE HAS ALSO 4 ITA.NO.2670/DEL./2017 SHRI GIRISH NAGPAL, NEW DELHI FURNISHED COPY OF REPLY FILED BY M/S. AEZ GROUP BEF ORE A.O. IN WHICH THE RECEIPT OF ANY CASH PAYMENT HAS BEEN DENIED. TH E SOLE CONTENTION OF ASSESSEE WAS THAT NO INCRIMINATING MATERIAL WAS FOUND AGAINST THE ASSESSEE FOR MAKING THE ADDITION. THE LD. CIT(A) IN VIEW OF THE ABOVE FOUND MERIT IN THE CONTENTION OF ASSESSEE AND NOTED THAT A.O. HAS NOT BEEN ABLE TO CORROBORATE THE INFORMATION RECEIV ED FROM INVESTIGATION WING WITH ANY EVIDENCE TO REBUT THE C ONTENTION OF ASSESSEE. THE LD. CIT(A) RELIED UPON THE DECISION O F DELHI HIGH COURT IN THE CASE OF CIT VS. ANIL KHANDELWAL ITA APPEAL N O.247/2015 AND ITA.248/2015 IN WHICH IT WAS HELD THAT ADDITION MAD E MERELY ON THE BASIS OF STATEMENT OF THIRD PARTY WITHOUT ANY CORRO BORATE EVIDENCE IS NOT TENABLE AND THE PRESUMPTION UNDER SECTION 132(4 A)/292C IS AVAILABLE ONLY IN THE CASE OF PERSON FROM WHOSE POS SESSION AND CONTROL DOCUMENTS ARE FOUND AND IT IS NOT AVAILABLE IN RESPECT OF A THIRD PARTY. THE LD. CIT(A) ACCORDINGLY, DELETED TH E ADDITION. 4. I HAVE HEARD THE LD. D.R. WHO HAS RELIED UPON T HE ORDER OF THE A.O. HOWEVER, NONE APPEARED ON BEHALF OF THE AS SESSEE DESPITE NOTIFYING THE DATE OF HEARING THROUGH REGISTERED PO ST. 5 ITA.NO.2670/DEL./2017 SHRI GIRISH NAGPAL, NEW DELHI 5. AFTER HEARING THE LD. D.R, I DO NOT FIND ANY ME RIT IN THE DEPARTMENTAL APPEAL. THE CASE WAS INITIALLY REOPENE D AGAINST THE ASSESSEE ON THE BASIS OF INFORMATION RECEIVED BY IN VESTIGATION WING BASED ON STATEMENT OF THIRD PERSON THAT ASSESSEE HA S INVESTED RS.39,50,000 IN CASH FOR PURCHASE OF THE FLAT. HOWE VER, LATER ON, NO SUCH STATEMENT WAS PROVIDED TO THE ASSESSEE DESPITE REQUEST MADE BY THE ASSESSEE. IT WAS INFORMED TO THE ASSESSEE TH AT INFORMATION SUPPLIED WAS RETRIEVE FROM HARD DISK FOUND AND SEIZ ED DURING THE COURSE OF SEARCH AT THE CORPORATE OFFICE OF ARENS G ROUP OF CASES WHEREIN SUCH TRANSACTION HAS BEEN RECORDED. THE ASS ESSEE HOWEVER, DENIED OF ANY SUCH CASH PAYMENT TO ANY PARTY AND FI LED THE AGREEMENT WITH THE BUILDER SUPPORTED BY THE BANK ST ATEMENT. NO INCRIMINATING MATERIAL WAS FOUND FROM THE POSSESSIO N OF THE ASSESSEE. IF THE DEPARTMENT WANTED TO USE SOME ENTR Y AGAINST THE ASSESSEE, IT SHOULD BE CONFRONTED TO ASSESSEE AND S HOULD BE RELIABLE. HOWEVER, NOTHING HAS BEEN DONE IN THIS CASE. NO COR ROBORATIVE EVIDENCE HAS BEEN BROUGHT ON RECORD TO CONNECT THE ASSESSEE WITH INVESTMENT MADE IN CASH. IN THE ABSENCE OF ANY RELI ABLE AND COGENT EVIDENCE ON RECORD AGAINST THE ASSESSEE, I AM NOT I NCLINED TO INTERFERE 6 ITA.NO.2670/DEL./2017 SHRI GIRISH NAGPAL, NEW DELHI WITH THE ORDER OF THE LD. CIT(A) IN DELETING THE AD DITION. THE DEPARTMENTAL APPEAL HAS NO MERIT AND THE SAME IS AC CORDINGLY DISMISSED. 6. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 04 TH SEPTEMBER, 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE.