Sh. Roop Kishore Madan, New Delhi V. DCIT, New Delhi

ITA 2789/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6183 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 08-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K MISHRA
• Assessee Lawyers: R K SARDAR
• Keywords: Search and seizure
• Section: 153A; 154

Judgement Text

ACSWNVIN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH C, NEW DELHI BEFORE : SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 2789/DEL/2015 ASSESSMENT YEAR: 2011-12 ROOP KISHORE MADAN, A/9/4, VASANT VIHAR, NEW DELHI. PAN ABWPM 6914G (APPELLANT) VS. DCIT, CENTRAL CIRCLE - 21 NEW DELHI. (RESPONDENT) APPELLANT BY SH. R.K. SARDAR, A.R. RESPONDENT BY SH.A.K. MISHRA, CIT/DR ORDER PER L.P. SAHU, A.M.: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-16, NEW DELHI DATED 16.03.2015 FOR THE ASSESSMENT YEAR 2011-12 ON THE FOLLOWING GROUND : 1. THAT LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING T HE DISALLOWANCE OF CLAIM OF SET-OFF OF B/F UNABSORBED SHORT TERM CAPITAL LO SS RS.49,83,312/- AGAINST THE CURRENT YEARS INCOME FROM SHORT TERM CAPITAL G AIN WHICH DISALLOWANCE IS BAD IN LAW AND FACTS OF THE CASE. DATE OF HEARING 03.01.2019 DATE OF PRONOUNCEMENT 28.01.2019 ITA NO. 2789/DEL/2015 2 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION WAS CARRIED OUT ON 17.09.2010 IN THE CASE OF SANJAY GRO UP OF CASES. THE ASSESSEE IS ONE OF THE CASE OF SANJAY GROUP AND WAS COVERED U/S . 132(1) OF THE IT ACT. THE ASSESSEE IS ENGAGED IN THE INSURANCE BUSINESS AND W HOLESALE MAIN STOCKIEST OF CIGARETTES. THE ASSESSEE ALSO DERIVES INCOME FROM H OUSE PROPERTY AND INCOME FROM OTHER SOURCES. IN RESPONSE TO NOTICE, RETURN O F INCOME WAS FILED DECLARING INCOME OF RS.14,59,19,383/- ON 08.02.2013. DURING T HE SEARCH AND SEIZURE OPERATION, A DIARY WAS FOUND MARKED AS ANNEXURE-A-5 . THIS DIARY CONTAINED THE DETAILS OF ADVANCES AND CASH RECEIVED WITH REGARD T O PROPERTY TRANSACTIONS DONE BY THE ASSESSEE DURING THE PERIOD RELEVANT TO AY 20 11-12. IN THE STATEMENTS U/S. 132(4), THE ASSESSEE HAD ADMITTED THAT THE TRANSACT IONS APPEARING IN THE SAID DIARY HAVE NOT BEEN ACCOUNTED FOR IN THE REGULAR BO OKS OF ACCOUNTS. AS PER THE DIARY, THE AGGREGATE PROFIT EARNED BY THE ASSESSEE WAS RS.15.92 CRORES AND AS PER ANSWER TO QUESTION NO. 18 OF HIS STATEMENTS, THE AS SESSEE OFFERED THE WHOLE AMOUNT OF RS.15.92 CRORES AS HIS ADDITIONAL INCOME FOR THE ASSESSMENT YEAR 2011-12. THE ASSESSING OFFICER FURTHER NOTICED THAT CASH OF RS.70.00 LACS WAS FOUND FROM THE LOCKER, WHICH WAS LAST OPERATED ON 2 0.01.2010. HE, THEREFORE, REDUCED THE ADDITIONAL INCOME TO THE EXTENT OF RS.7 0 LAKHS. ACCORDINGLY, HE DETERMINED THE ADDITIONAL INCOME OF RS.15.22 CRORES . HOWEVER, ON PERUSAL OF ITA NO. 2789/DEL/2015 3 RETURN FILED BY THE ASSESSEE, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD DECLARED ONLY RS.14,72,16,687/- AS HIS ADDITIONAL I NCOME AGAINST ADDITIONAL INCOME OF RS.15.22 CRORES DECLARED U/S. 132(4). THE ASSESSEE HAS ADJUSTED UNABSORBED SHORT TERM CAPITAL LOSS BROUGHT FORWARD FROM ASSESSMENT YEAR 2008- 09 AMOUNTING TO RS.49,83,312/-. THE ASSESSING OFFIC ER FURTHER NOTICED THAT IN THE STATEMENT RECORDED U/S. 132(4), THE ASSESSEE DID NO T CLAIM THE ADJUSTMENT OF BROUGHT FORWARD SHORT TERM CAPITAL LOSS. THE ASSESS ING OFFICER, THEREFORE, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE REGARDING SET OFF OF BROUGHT FORWARD CAPITAL LOSS FROM ADDITIONAL INCOME (UNDISCLOSED INCOME) DE CLARED IN THE STATEMENT U/S. 132(4). LATER ON, THE ASSESSEE FILED AN APPLICATION U/S. 154 WHICH WAS ALSO REJECTED BY THE ASSESSING OFFICER. AGGRIEVED FROM T HE ORDER OF THE ASSESSING OFFICER THE ASSESSEE APPEALED BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE LD. AR OF THE ASSESSEE SUBMITTED THAT THIS L OSS CAN BE SET OFF FROM THE UNDISCLOSED INCOME DECLARED BY THE ASSESSEE IN THE SEARCH PROCEEDINGS. THE ASSESSEE IS FILING CONTINUOUS RETURN OF INCOME. HE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND RELIED ON THE SOME CASE LAWS, PLACED ON ITA NO. 2789/DEL/2015 4 RECORD. HE FURTHER SUBMITTED THAT THE ASSESSEE IS L EGALLY ENTITLED FOR SET OFF AS PER PROVISIONS OF THE IT ACT. 4. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE LOWER AUTHORITIES AND SUBMITTED THAT BROUGHT FORWARD CAPITAL LOSS CAN NOT BE SET OFF FROM THE INCOME SURRENDERED DURING THE COURSE OF SEARCH. SEC TION 153A IS A SPECIFIC PROVISION TO SEARCH OUT THE UNDISCLOSED INCOME OF T HE ASSESSEE WHICH IS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. THEREFORE, T HE LOSS, IF ANY, CANNOT BE SET OFF AGAINST SUCH UNDISCLOSED INCOME. IN HIS STATEMENT, THE ASSESSEE NOWHERE UNFOLDED ANY CAPITAL LOSS BROUGHT FORWARD BY HIM. T HE ALLEGED LOSS RELATED TO A.Y. 2008-09. 5. AFTER HEARING BOTH THE SIDES AND HAVE GONE THROU GH THE ENTIRE MATERIAL AVAILABLE ON RECORD, WE FIND NO SUBSTANCE IN THE CO NTENTION OF THE ASSESSEE. IT IS NOTABLE THAT THE PROVISIONS OF SECTION 153A HAS BEE N INSERTED IN THE STATUTE AS A DEVICE TO BRING THE UNDISCLOSED INCOME OF THE ASSES SING UNDER THE NET OF TAXATION. IN HIS STATEMENT U/S. 132(4), THERE IS NOT EVEN A W HISPER ON ANY CAPITAL LOSS AND ITS SET OFF AGAINST THE INCOME SURRENDERED. THEREFO RE, THE ALLEGED UNABSORBED BROUGHT FORWARD CAPITAL LOSS, IF ANY, SUFFERED BY T HE ASSESSEE IN REGULAR COURSE OF BUSINESS, COULD BE SET OFF AGAINST SUCH REGULAR INC OME, IF DECLARED IN THE BOOKS OF ACCOUNT AND NOT AGAINST THE UNDISCLOSED INCOME UNEA RTHED AS A RESULT OF SEARCH ITA NO. 2789/DEL/2015 5 PROCEEDINGS. IN HIS STATEMENTS U/S. 132(4), THE ASS ESSEE HAD SURRENDERED THE INCOME CATEGORICALLY STATING THAT IT IS OVER AND AB OVE THE INCOME DECLARED IN THE BOOKS OF ACCOUNT AND RETURN. THEREFORE, THE LD. CI T(A) HAS RIGHTLY CONFIRMED THE ACTION OF THE ASSESSING OFFICER FOR TAXING THE ENTI RE SURRENDERED AMOUNT OF RS.15.22 CRORES IN THE HANDS OF THE ASSESSEE. IN TH E PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE CASE LAWS RELIED BY ASSESSEE DO NOT RENDER ANY HELP TO THE ASSESSEE, HAVING BEEN BASED ON DIFFEREN T SET OF FACTS. THUS, FINDING NO INFIRMITY IN THE IMPUGNED ORDER, WE AFFIRM THE SAME . ACCORDINGLY, THE APPEAL OF THE ASSESSEE DESERVES TO FAIL. 6. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.01.2019. SD/- SD/- (AMIT SHUKLA) (L.P. S AHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28.01.2019 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI