DCIT, New Delhi V. Shri Prem Khanna, New Delhi

ITA 2757/DEL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98139 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 03-12-2015
• Assessment Year: 1997-1998
• Appeal Filed On: 27-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VED PRAKASH MISHRA; ANUJ ARORA
• Keywords: Opportunity of being heard; Additional evidence
• Section: 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SMT. BEENA PILLAI, JM ITA NOS. 2757 & 2758/DEL/2011 : ASSTT. YEAR S : 1997 - 98 & 1998 - 99 DEPUTY DIRECTOR OF INCOM E TAX, CIRCLE - 3(1), INTERNATIONAL TAXATION, NEW DELHI VS SHRI PREM KHANNA, C/O - M/S V.K. KALRA & CO., CHARTERED ACCOUNTANTS, 15, ABUL FAZAL ROAD, BENG A LI MARKET, NEW DELHI - 110001 (APPELLANT) (RESPONDENT) ITA NOS. 2759 & 2760 /DEL/2011 : ASSTT. YEAR S : 1997 - 98 & 1998 - 99 DEPUTY DIRECTOR OF INCOME TAX, CIRCLE - 3(1), INTERNATIONAL TAXATION, NEW DELHI VS SHRI NARESH KHANNA, C/O - M/S V.K. KALRA & CO., CHARTERED ACCOUNTANTS, 15, ABUL FAZAL ROAD, BENGALI MARKET, NEW DE LHI - 110001 (APPELLANT) (RESPONDENT) ITA NOS. 2761 & 2762 /DEL/2011 : ASSTT. YEAR S : 1997 - 98 & 1998 - 99 DEPUTY DIRECTOR OF INCOME TAX, CIRCLE - 3(1), INTERNATIONAL TAXATION, NEW DELHI VS SHRI PREM KHANNA & SMT. NARESH KHANNA (AOP),C/O - M/S V.K. KALRA & CO., CHARTERED ACCOUNTANTS, 15, ABUL FAZAL ROAD, BENGALI MARKET, NEW DELHI - 110001 (APPELLANT) (RESPONDENT) PAN NO. ASSESSEE BY : SH. K. SAMPATH , ADV. REVENUE BY : SH. ANUJ ARORA, CIT DR & SH. VED PRAKASH MISHRA, SR. DR DATE OF HEARING : 03 .12 .2015 DATE OF PRONOUNCEMENT : 09 .12 .2015 ITA NO S. 2757 TO 2762 /DEL /2011 PREM & NARESH KHANNA 2 ORDER PER N. K. SAINI, AM: THESE APPEALS BY THE DEPARTMENT ARE DIRECTED AGAINST THE SEPARATE CONSOLIDATED ORDER S OF THE LD. CIT(A) - VII, NEW DELHI DATED 25.03.2011 IN THE CASE OF SHRI PREM KHANNA FOR THE ASSESSMENT YEARS 1997 - 98 AND 1998 - 99 AND SEPARATE ORDERS EACH DATED 28.03.2011 IN THE CASE OF OTHER ASSESSEES . 2. IDENTICAL GROUNDS ARE RAISED IN THESE APPEALS WHICH WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE COMMON GROUNDS RAISED IN THESE APPEALS READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS BY INFERRING THAT IN THIS REMAND REPORT, THE AO ADMITTED THAT THE ASSESSEE HAD NOT MADE MAY INVESTMENT IN PURCHASE OF FDRS DURING THE FYS 1996 - 97 & 1997 - 98; WITHOUT APPRECIATING THAT THE AO NEVER MADE AN Y SUCH ADMISSION BUT ONLY MENTIONED ------ IT APPEARS THAT THE DEPOSITS IN THESE ACCOUNTS WERE MADE FROM OLD NRE ACCOUNTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS; WITHOUT APPRECIATING THAT UNDER INSTRUCTIONS FROM THE CIT(A), THE AO WROTE A DETAILED LETTER TO THE BANK AT MUMBAI, SEEKING CLARIFICATIONS AND NO REPLY HAS BEEN RECEIVED DESPITE REMINDER. ITA NO S. 2757 TO 2762 /DEL /2011 PREM & NARESH KHANNA 3 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN INFERRING T HAT THE ORDER OF THE SPECIAL DIRECTOR OF ENFORCEMENT (SDE) IN THE CASES OF THE ASSESSEE, MEANT THAT THE FDRS WERE NOT MADE DURING THE YEARS UNDER CONSIDERATION; WITHOUT APPRECIATING THAT THE ORDER OF SDE NOWHERE SAID THAT THE FDRS WERE NOT MADE IN THE YEAR S UNDER CONSIDERATION. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN NOTING THAT THE AO WAS NOT SURE AS TO IN WHOSE HAND THE ADDITIONS WERE TO BE MADE BECAUSE SIMILAR ADDITIONS WERE MADE IN THE CASE OF THE OTHER TWO ASS ESSEES OF THE GROUP, NAMELY (1) SMT. NARESH KHANNA AND (2) SH. PREM KHANNA & SMT. NARESH KHANNA (AOP); WITHOUT APPRECIATING THAT PROTECTIVE ADDITIONS WERE MADE AS NO ONE RESPONDED DURING THE ASSESSMENT AND THE AO WAS COMPELLED TO PASS THE ASSESSMENT ORDER U/S 144 OF THE ACT. 5. THE APPELLANT CRAVES TO ADD, AMEND, MODIFY OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OR BEFORE THE HEARING OF APPEAL. 4. AT THE FIRST INSTANCE WE WILL DEAL WITH THE CASE OF SH. PREM KHANNA IN ITA NO S . 2757 & 2758 /DEL/2011. 5 . F ACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS AN NRI BASED IN LONDON AND HAVING HIS HOME AT M - 46, RAJOURI GARDEN, NEW DELHI . F OR THE ASS ESSMENT YEARS 1997 - 98 & 1998 - 99, H E DID NOT FILE THE RETURN S OF INCOME. T HE AO ISSUED THE NOTICE U/S 148 OF THE INC OME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON 15.03.2004 WHICH WERE RETURNED BACK UNSERVED BY THE POSTAL AUTHORITY WITH THE REMARKS LEFT WITHOUT ITA NO S. 2757 TO 2762 /DEL /2011 PREM & NARESH KHANNA 4 ADDRESS . SUBSEQUENTLY, THE NOTICES WERE SERVED BY FIXTURE ON 25.03.2004. THE AO FRAMED THE ASSESS MENT U/S 144 OF THE ACT AND DETERMINED THE TOTAL INCOME AT RS. 31,12,86,798/ - AND RS.1,81,15,815/ - FOR THE ASSESSMENT YEARS 1997 - 98 & 1998 - 99 RESPECTIVELY. THE SAID ADDITIONS WERE MADE ON ACCOUNT OF DEPOSIT IN FDR/CDR IN NRNR SCHEME WITH ORIENTAL BANK OF C OMMERCE, FORT, MUMBAI APPEARING IN THE NAME OF THE ASSESSEE AND THE SAME WAS TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE. 6 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND FURNISHED CERTAIN DOCUMENTS I.E. THE BANK STATEMENT RELAT ING TO NRNR SCHEME WITH ORIENTAL BANK OF COMMERCE, FORT, MUMBAI AND PHOTOCOPIES OF THE SAID DOCUMENTS WHICH WERE SENT TO THE AO IN ORDER TO GIVE OPPORTUNITY IN TERMS OF RULE 46A(3) OF THE INCOME TAX RULES, 1962 AND THOSE DOCUMENTS WERE TREATED AS ADDITIONA L EVIDENCES. IN RESPONSE THE AO FURNISHED A REMAND REPORT DATED 15.04.2008 STATING THERE IN AS UNDER: REGARDING THE SOURCE S OF DEPOSIT S IN THE NRNR ACCOUNTS, IT APPEARS THAT THE DEPOSITS IN THESE ACCOUNTS WERE MADE FROM OLD NRE ACCOUNT. 7 . THE LD. CIT(A ) AFTER RECEIVING THE REMAND REPORT DATED 15.04.2008 SOUGHT CERTAIN CLARIFICATIONS FROM THE AO VIDE LETTER DATED 13.04.2009 AS UNDER: ITA NO S. 2757 TO 2762 /DEL /2011 PREM & NARESH KHANNA 5 ACCORDING TO APPELLANT NO INVESTMENT WAS MADE BY HIM IN THE FINANCIAL YEAR 1996 - 97 AND 1997 - 98. YOU ARE, THEREFORE, REQU ESTED TO KINDLY VERIFY THIS FACT AND CONFIRM WHETHER THIS STATEMENT HAS BEEN EXAMINED BY YOU THAT NO INVESTMENTS HAVE IN FACT BEEN MADE DURING THE FINANCIAL YEAR 1996 - 97 & 1997 - 98 AND THESE DEPOSITS REPRESENT RENEWAL OF OLD DEPOSITS AS MENTIONED IN THE BAN K STATEMENT ENCLOSED BY THE APPELLANT IN HIS LETTER DATED 25.03.2008. THE APPELLANT HAD ALSO ENCLOSED PHOTOCOPIES OF THE BANK DEPOSITS WHICH WERE SENT TO YOU FOR YOUR COMMENTS. THE APPELLANT HAS SUBMITTED ANOTHER LETTER DATED 26 TH MAY 2008 WHEREIN THE ORIE NTAL BANK OF COMMERCE HAS GIVEN CERTAIN CLARIFICATION ABOUT THE DEPOSITS NUMBERS. THE CLAIM OF THE APPELLANT THAT THESE FDRS REPRESENT FDRS MADE OUT OF THE RENEWAL OF OLD DEPOSITS AND THOSE OLD DEPOSITS WERE MADE IN THE YEAR PRIOR TO A.Y. 1997 - 98. GIVEN T HIS SITUATION, THE INCOME OF THE APPELLANT EVEN IF CONSIDERED TO BE UNEXPLAINED CANNOT BE BROUGHT TO TAX IN A.Y. 1997 - 98 AND 1998 - 99. YOU ARE, THEREFORE, REQUESTED TO VERIFY THIS FACT AND CONFIRM WHETHER ANY OF THE FDRS WERE MADE DURING THE ACCOUNTING YEAR RELEVANT FOR A.Y. 1997 - 98 OR A.Y. 1998 - 99 FOR THE FIRST TIME AND THEY DID NOT REPRESENT RENEWAL OF OLD FDRS MADE DURING THE ASSESSMENT YEAR PRIOR TO A.Y. 1997 - 98. 8 . IN RESPONSE THE AO AGAIN FURNISHED THE REMAND REPORT DATED 28.08.2010 STATING THEREIN AS UNDER: PHOTOCOPY OF THE STATEMENT ISSUED BY OBC AND SUBMITTED BY COUNSEL FOR THE ASSESSEE AS ADDITIONAL EVIDENCE GOES TO SHOW THE FDRS DEPOSITED DURING THE PERIOD 01.04.96 TO 31.03.97 RELEVANT TO A.Y. 1997 - 98 HAS OLD CRD NUMBER OF DIFFERENT NUMBER OF YEAR 1995. ITA NO S. 2757 TO 2762 /DEL /2011 PREM & NARESH KHANNA 6 THESE DEPOSITS DO NOT APPEAR TO BE NEW DEPOSITS AS ALL THESE DEPOSITS HAVE OLD CRD NUMBER. IT IS FURTHER INFORMED THAT THE STATEMENT BY OBC AS STATED ABOVE DOES NOT HAVE ANY STAMP AND ALSO IT IS NOT AUTHENTICATED BY SIGNATURES OF BANK AUTHORITI ES. SO, IT WILL BE WORTHWHILE TO CALL FOR INFORMATION FROM BANK OFFICIALLY TO GET IT AUTHENTICATED. MOREOVER, THE STATEMENT RELATES TO 08.09.95 TO 09.08.96. 9. THE LD. CIT(A) AGAIN ASKED THE AO TO FURNISH CERTAIN MORE CLARIFICATIONS VIDE LETTER DATED 26. 03.2010 AS UNDER: THE ABOVEMENTIONED APPEALS ARE PENDING IN THIS OFFICE, YOU ARE REQUESTED TO SUPPLY THE FOLLOWING INFORMATION WITH REGARD TO THESE APPEALS: (I) COPY OF PROOF OF SERVICE OF ASSESSMENT ORDERS FOR THESE YEAR S ON THE ASSESSEE. (II) COPY OF REASONS RECORDED FOR REOPENING THESE ASSESSMENTS (III) IN THE A.Y. 1997 - 98, ADDITION OF RS.31,12,86,798/ - AND IN THE A.Y. 1998 - 99 ADDITION OF RS.1,81,15,815/ - HAS BEEN MADE IN THESE CASES. PLEASE SUPPLY COPY OF THE BANK ACCOUNT/DOCUMENT ON THE BASIS OF WHICH THESE AMO UNTS HAVE BEEN WORKED OUT. (IV) IN YOUR LETTER DATED 28.10.2009, IN THE LAST PARA YOU HAVE MENTIONED THAT THE STATEMENT BY OBC DOES NOT HAVE ANY STAMP OF THE BANK NOR IS IT AUTHENTICATED BY SIGNATURES OF THE BANK AUTHORITIES. YOU HAVE FURTHER MENTIONED THAT IT WILL BE WORTHWHILE TO CALL FOR INFORMATION FROM BANK OFFICIALLY TO GET AUTHENTICATED. IN ITA NO S. 2757 TO 2762 /DEL /2011 PREM & NARESH KHANNA 7 THIS REGARD, YOU ARE DIRECTED U/S 250(4) OF THE IT ACT TO GET THIS INFORMATION FROM THE CONCERNED BANK AND SUPPLY THE SAME TO THIS OFFICE ALONG YOUR COMMENTS THEREON. 10. THE AO FURNISHED THE REQUISITE DETAILS ON 02.11.2010. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE F URNISHED THE WRITTEN SUBMISSION ALONGWITH ADDITIONAL EVIDENCES IN REGARD TO THE ENTRY OF RS. 59,00,000/ - APPEARING ON 01.03.1997 IN THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH THE ORIENTAL BANK O F COMMERCE, FORT BRANCH, MUMBAI, C OPIES OF THE SAME WERE SENT TO THE AO VIDE LETTER DATED 25.11.2010 IN ORDER TO GIVE AN OPPORTUNITY TO HIM IN TERMS OF RULE 46A(3) OF THE INCOME TAX RULES, 1962 FOR EXAMINING THE SAID DOCUMENTS AS THE SAID DOCUMENTS WERE NOT BEFORE HIM WHILE COMPLETING THE ASSESSMENT ORDER U/S 144 OF THE ACT. THE LD. CIT(A) CATEGORICALLY STATED THAT THERE HAD BEEN NO RESPONSE FROM THE AO IN SPITE OF VARIOUS REMINDERS SENT TO HIM. THE LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENCES, SINCE THE AO HAD NOT MADE ANY OBJECTION. HE ALSO MENTIONED THAT THE AO IN THE REMAND REPORT HAD STATED THAT THE DEPOSITS IN THE ACCOUNT OF THE ASSESSEE WERE MADE FROM NRE ACCOUNT. THE LD. CIT(A) AFTER ADMITTED THE ADDITI ONAL EVIDENCES FURNISHED BY THE ASSESSEE , BY CONSIDERING THE WRITTEN SUBMISSION MADE ON BEHALF OF THE ASSESSEE AND T HE FINDINGS OF THE AO IN THE ASSESSMENT ORDER AS WELL AS IN THE REMAND REPORT , OBSERVED THAT THE AO IN ALL FAIRNESS ADMITTED IN THE REMAND R EPORT THAT THE ASSESSEE HAD NOT MADE ANY INVESTMENT IN THE PURCHASE OF THE NON - RESIDENT DEPOSIT RECEIPTS ITA NO S. 2757 TO 2762 /DEL /2011 PREM & NARESH KHANNA 8 (FDRS) DURING THE FINANCIAL YEARS 1996 - 97 & 1997 - 98. HE FURTHER OBSERVED THAT THE BANK STATEMENT RELATING TO NRNR SCHEME WITH ORIENTAL BANK OF COMMERCE , FORT, MUMBAI AND THE PHOTOCOPIES OF THE NON - RESIDENT DEPOSIT RECEIPTS (FDRS) , FORTIFIED THE VIEW TAKEN BY THE AO IN THE REMAND REPORT. THE LD. CIT(A) REFER RED TO THE OBSERVATIONS MADE BY THE SPECIAL DIRECTOR OF ENFORCEMENT, MUMBAI IN HIS ORDER NO. ADJ/11 - B/SDE/KNR/2006/2444 DATED 19.05.2006 WHEREIN IN PARA 42 IT WAS STATED AS UNDER: 42. IN THE LIGHT OF THE FACTUAL AND LEGAL POINTS DISCUSSED ABOVE, I FIND THAT SHRI PREM KHANNA HAD ACQUIRED FOREIGN EXCHANGE TO WIT (SIC. TOTALING) STG.PND.422,515 IN INDIA FROM PERSONS OTHER THAN AUTHORIZED DEALERS DURING 1993 - 95 WITHOUT PERMISSION FROM RBI, AND CONTRAVENED THE PROVISIONS OF SECTION 8(1) OF FERA, 1973. SUCH UNLAWFULLY ACQUIRED FOREIGN EXCHANGE COULD NOT HAVE BEEN CREDITED INTO HIS NRE/FCNR/NRNR ACCOUNTS . 11. THE LD. CIT(A) ALSO OBSERVED THAT THE IDENTICAL ADDITION HAD BEEN MADE BY THE AO IN THE HANDS OF SMT. NARESH KHANNA , WIFE OF THE ASSESSEE AND ONE AOP NAMELY, SH. PRE M KHANNA AND SMT. NARESH KHANNA, AOP, ON SUBSTANTIVE BASIS, WHICH CLEARLY INDICATED THAT THE AO WAS NOT SURE IN WHOSE HANDS THE SAID ADDITIONS COULD HAVE TO BE ACTUALLY MADE. THE LD. CIT(A) HELD THAT NO INVESTMENT WAS MADE BY THE ASSESSEE IN THE FINANCIAL YEARS UNDER CONSIDERATION AND THE IMPUGNED NON - RESIDENT DEPOSIT RECEIPTS (FDRS) REP RESENTED WERE FROM THE OLD DEPOSITS MADE IN THE YEARS PRIOR TO THE FINANCIAL YEAR RELEVANT TO THE ITA NO S. 2757 TO 2762 /DEL /2011 PREM & NARESH KHANNA 9 ASSESSMENT YEAR S UNDER CONSIDERATION. HE, THEREFORE, DELETED THE ADDITION OF RS.31,12,86,798 AND RS.1,81,15,815/ - IN THE ASSESSMENT YEARS 1997 - 98 & 1998 - 99 RE SPECTIVELY. 12. NOW THE DEPARTMENT IS IN APPEAL. THE LD. DR REITERATED THE OBSERVATIONS MADE BY THE AO IN THE ASSESSMENT ORDER DATED 28.02.2005 AND STRONGLY SUPPORTED THE SAID ORDER. IT WAS FURTHER SUBMITTED THAT IN THE REMAND REPORT THE AO HAD NOT CONCL USIVELY STATED THAT THE INVESTMENT IN THE FDRS WERE MADE FROM OLD NRE ACCOUNTS BECAUSE HE SIMPLY STATED THAT IT APPEARS THAT THE DEPOSITS IN THE NRE ACCOUNTS WERE MADE FROM OLD NRE ACCOUNT. THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITI ON MADE BY THE AO. 13. IN HIS RIVAL SUBMISSIONS THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION S MADE BEFORE THE LD. CIT(A) AND STRONGLY SUPPORTED THE IMPUGNED ORDER. IT WAS FURTHER SUBMITTED THAT THE AO PASS ED THE EX - PARTE ORDER WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREFORE, THE ASSESSEE HAD NO ALTERNATIVE EXCEPT TO FILE THE ADDITIONAL EVIDENCES BEFORE THE LD. CIT(A) WHO FORWARDED THOSE ADDITIONAL EVIDENCES TO THE AO FOR HIS REMAND REPORT AND THE AO IN HIS REMAND REPOR T ACCEPTED THAT THE DEPOSITS IN THE NRNR ACCOUNTS WERE MADE FROM THE OLD NRE ACCOUNTS OF THE ASSESSEE. THEREFORE, THE ADDITION MADE BY THE AO WAS RIGHTLY DELETED BY THE LD. CIT(A). ITA NO S. 2757 TO 2762 /DEL /2011 PREM & NARESH KHANNA 10 14. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY G ONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE AO MADE THE ASSESSMENT EX - PARTE U/S 144 OF THE ACT AND WHILE FRAMING THE ASSESSMENT , HE ADDED ALL THE DEPOSITS MADE BY THE ASSESSEE IN THE NRNR ACCOUNTS. FROM THE SAID ACCOUNT THE INVESTMENT WAS MADE IN THE FDRS WITH ORIENTAL BANK OF COMMERCE, FORT BRANCH, MUMBAI. IN THE 1 ST APPELLATE PROCEEDINGS T HE ASSESSEE FURNISHED THE DOCUMENTS WHICH COULD NOT BE PRODUCED BEFORE THE AO AND REQUESTED THE LD. CIT(A) TO ADMIT THO SE DOCUMENTS UNDER RULE 46A(3) OF THE INCOME TAX RULES, 1962. THE DOCUMENTS FURNISHED BY THE ASSESSEE WERE IN THE FORM OF BANK STATEMENT S RELATING TO NRNR SCHEME WITH OBC, FORT, MUMBAI AND PHOTOCOPIES OF NON - RESIDENT DEPOSIT RECEIPTS (FDRS). THE LD. CIT(A) FORWARDED THOSE DOCUMENTS TO THE AO FOR HIS REPORT, THE AO VIDE REMAND REPORT DATED 15.04.2008 SUBMITTED THAT THE DEPOS ITS IN THE NRNR ACCOUNTS APPEARED TO BE FROM THE OLD NRE ACCOUNTS. THEREAFTER, THE LD. CIT(A) SOUGHT CERTAIN CLARIFICATIONS RELATING TO THE CLAIM OF THE ASSESSEE THAT NO INVESTMENT WAS MADE BY HIM IN THE FINANCIAL YEAR 1996 - 97 & 1997 - 98 AND THAT THE FDRS REPRESENTED RENEWABLE OF ALL THE OLD DEPOSITS WHICH WERE MADE PRIOR TO THE ASSESSMENT YEAR 1997 - 98. THE AO FURNISHED THE REMAND REPORT DA TED 28.10.2009 AND STATED THAT THOSE DEPOSITS DID NOT APPEAR TO BE NEW DEPOSITS AS ALL THOSE DEPOSITS WERE HAVING OLD CRD NUMBER. THE LD. CIT(A) ALSO FORWARDED THE WRITTEN SUBMISSION OF THE ASSESSEE ALONGWITH ITA NO S. 2757 TO 2762 /DEL /2011 PREM & NARESH KHANNA 11 ADDITIONAL EVIDENCES RELATING TO THE ENTRY OF R S. 59,00,000/ - APPEARING ON 01.03.1997 IN THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH ORIENTAL BANK OF COMMERCE, FORT BRANCH, MUMBAI TO THE AO FOR HIS COMMENTS. HOWEVER, THE AO IN RESPONSE TO THAT NEITHER FURNISHED THE COMMENTS NOR REBUTTED THE CONTEN TIONS OF THE ASSESSEE. IN THE PRESENT CASE, NOTHING IS BROUGHT ON RECORD TO SUBSTANTIATE THAT THE INVESTMENT IN PURCHASE OF NON - RESIDENT DEPOSIT RECEIPTS (FDRS) WERE MADE DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR S UNDER CONSIDERATION. MOREO VER, THE AO WAS NOT SURE AS TO WHETHER THE ADDITION WAS TO BE MADE IN THE HANDS OF THE ASSESSEE OR IN THE HANDS OF HIS WIFE OR IN THE HANDS OF AOP OF THE ASSESSEE AND HIS WIFE. IN THE INSTANT CASE IT IS ALSO NOTICED THAT THE SPECIAL DIRECTOR OF ENFORCEMENT , MUMBAI LEVIED A PENALTY OF RS. 90,00,000/ - VIDE ORDER DATED 19.05.2006 BY OBSERVING THAT THE ASSESSEE HAD ACQUIRED FOREIGN EXCHANGE IN INDIA FROM THE PERSONS OTHER THAN AUTHORIZED DEALER DURING THE YEAR 1993 - 95 WITHOUT PERMISSION FROM RBI. DURING THE COU RSE OF APPELLATE PROCEEDINGS , THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAID PENALTY WAS DELETED BY SUBSEQUENT ORDER, HOWEVER, IN SUPPORT OF THE SAID CONTENTION , NO EVIDENCE OR DOCUMENT WAS FURNISHED. HOWEVER, THE FACTS REMAINED THAT THE AO IN HI S REMAND REPORT ACCEPTED THAT THE ASSESSEE HAD NOT MADE ANY INVESTMENT IN THE PURCHASE OF NON - RESIDENT DEPOSIT RECEIPTS DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEARS 1996 - 97 & 1997 - 98 AND THAT THE INVESTMENT IN THE FDRS WERE MADE FROM OLD NRE ACCOUNTS . WE, ITA NO S. 2757 TO 2762 /DEL /2011 PREM & NARESH KHANNA 12 THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS OF THE PRESENT CASE, ARE OF THE VIEW THAT THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ADDITION MADE BY THE AO. 15. THE FACTS RELATED TO THE ASSESSMENT YEAR 1998 - 99 IN ASSESSEE S OWN CASE AND F OR THE ASSESSMENT YEARS 1997 - 98 & 1998 - 99 IN THE CASE OF SMT. NARESH KHANNA AND SH. PREM KHANNA & SMT. NARESH KHANNA (AOP) ARE IDENTICAL TO THE FACTS INVOLVED IN THE CASE OF T HE ASSESSEE IN ITA NO. 1757/DEL/2011 FOR THE ASSESSMENT YEAR 1997 - 98, THEREFORE, OUR FINDINGS GIVEN IN THE FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS FOR THE REMAINING APPEALS. 16 . IN THE RESULT, THE APPEAL S OF THE DEPARTMENT ARE DISMISSED. ( ORDER PRON OUNCED IN THE COURT ON 09 /12 /2015 ) SD/ - SD/ - (BEENA PILLAI ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09 /12/2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR