ACIT, New Delhi V. Shri Rajender Agarwal, Delhi

ITA 2865/DEL/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8916 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 12-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK WADEKAR
• Keywords: Search and seizure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI A.T. VARKEY, JM ITA NO.2865/DEL/2013 ASSESSMENT YEAR : 2009-10 ACIT, CENTRAL CIRCLE-5, NEW DELHI. VS. RAJENDER AGARWAL, 23/5, SHAKTI NAGAR, DELHI. PAN: ADQPA4147F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VINOD KUMAR BINDAL, FCA DEPARTMENT BY : SHRI VIVEK WADEKAR, CIT, DR DATE OF HEARING : 12.03.2015 DATE OF PRONOUNCEMENT : 12 .03.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 28.2.2013 IN RELATION TO THE ASSESSMENT Y EAR 2009-10. ITA NO.2865/DEL/2013 2 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE DELETION OF ADDITION OF RS.14,00,000 MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH U/S 69A OF THE INCOME-TAX ACT, 1961 (HEREINAFT ER ALSO CALLED `THE ACT). 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE ALONG WITH OTHER RELATED PERSONS AND SOME OF THE CONCERNS IN W HICH HE IS INTERESTED, WAS SUBJECT TO SEARCH AND SEIZURE OPERATIONS. DURI NG THE SEARCH OPERATION, CASH AMOUNTING TO RS.21,41,200/- WAS FOU ND AT THE RESIDENCE OF THE ASSESSEE. OUT OF THIS, A SUM OF RS.16 LAC W AS SEIZED AT THE TIME OF SEARCH. DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE ASSESSEE WAS CALLED UPON TO EXPLAIN THE SOURCE OF CASH AMOUNTING TO RS.21,41,200/- ALONG WITH THE SUPPORTING DOCUMENTARY EVIDENCE. TH E ASSESSEE SUBMITTED DETAILS OF THE SOURCE OF CASH TO THE EXTE NT OF RS.16 LAC AS UNDER:- NAME AMOUNT (RS.) M/S RITE PAC INDIA P. LTD. 6,00,000/- M/S KIWI FOOD INDIA P. LTD. 2,00,000/- ITA NO.2865/DEL/2013 3 M/S PLASTO GRAPH INDIA P. LTD. 6,00,000/- M/S RITE PAC INDUSTRIES P. LTD. 75,000/- SH. RAJENDER AGGARWAL 1,25,000/- TOTAL 16,00,000/- 4. IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE SHOWI NG THE AVAILABILITY OF CASH WITH THESE ENTITIES, THE AO RE FUSED TO ACCEPT THE EXPLANATION TENDERED BY THE ASSESSEE FOR THE REASON S, INTER ALIA, THAT NO DOCUMENTARY EVIDENCE, SUCH AS, CASH BOOK OF THESE C OMPANIES SHOWING THE AVAILABILITY OF CASH TO THIS EXTENT, WAS FILED . CONSIDERING THE FACT THAT THE ASSESSEE SURRENDERED A SUM OF RS.6,64,100/- ON ACCOUNT OF CASH IN HIS HANDS, THE AO MADE ADDITION FOR THE REMAINING A MOUNT OF RS.14 LAC. DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS, T HE ASSESSEE FURNISHED CASH BOOKS OF THE ABOVE COMPANIES. NOTING THE FACT THAT THE SAID COMPANIES HAD CASH BALANCE MORE THAN THE AMOUNT CLA IMED BY THE ASSESSEE AT HIS RESIDENCE, THE LD. CIT(A) DELETED T HE ADDITION. THE REVENUE IS AGGRIEVED AGAINST THE DELETION OF THE AD DITION. ITA NO.2865/DEL/2013 4 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT RECORD, WE FIND THAT THE ASSESSEE CONTENDED BEFORE THE AO THAT CASH OF RS.14.75 LAC BELONGED TO THE FOUR COMPANIES LISTED IN THE ABOVE TABLE. HOWEVER, CASH BOOKS OF THESE COMPANIES WERE NOT PRO DUCED BEFORE THE AO. IT WAS ONLY DURING THE COURSE OF THE FIRST APP ELLATE PROCEEDINGS, THAT THE ASSESSEE CAME OUT WITH THEIR CASH BOOKS ON THE BASIS OF WHICH THE LD. CIT(A) DELETED THE ADDITION. THERE CAN BE NO QUARR EL OVER THE PROPOSITION THAT IF CASH IN HAND IN THE BOOKS OF TH ESE COMPANIES IS PROVED TO BE MORE THAN THAT CLAIMED BY THE ASSESSEE AVAILABLE IN HIS POSSESSION AT THE TIME OF SEARCH ON THE RELEVANT DA TES, THEN, THERE CAN BE NO QUESTION OF MAKING ANY SUCH ADDITION. HOWEVER, THE FACT OF THE MATTER IS THAT DESPITE THE REPEATED REQUESTS MADE B Y THE AO, THE ASSESSEE FAILED TO FURNISH CASH BOOKS OF ANY OF THESE FOUR C OMPANIES TO CORROBORATE HIS EXPLANATION. THE LD. CIT(A) ACCEPTE D THE EXPLANATION GIVEN BEFORE HIM FOR THE FIRST TIME DESPITE THE SPE CIFIC MENTION IN THE ASSESSMENT ORDER THAT NO SUCH CASH BOOKS WERE FURNI SHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTWITHSTANDING A SPECIFIC REQUISITION. IN OUR CONSIDERED OPINION, THE ENDS OF JUSTICE WOUL D MEET ADEQUATELY IF ITA NO.2865/DEL/2013 5 THE IMPUGNED ORDER ON THIS ISSUE IS SET ASIDE AND T HE MATTER IS RESTORED TO THE FILE OF AO. WE ORDER ACCORDINGLY AND DIRECT HI M TO VERIFY CASH BOOKS OF THESE FOUR COMPANIES TO ASCERTAIN WHETHER THE CASH TO THE TUNE OF RS.14.75 LAC AS CLAIMED, WAS GENUINELY JUSTIFIED . NEEDLESS TO SAY, THE ASSESSEE WILL BE ALLOWED A REASONABLE OPPORTUNITY O F HEARING IN SUCH FRESH PROCEEDINGS. 6. THE LD. AR ARGUED THAT CASH WAS FOUND FROM TH E POSSESSION OF SH. SANJAY KUMAR AGARWAL, ANOTHER RELATED PERSON AND HE NCE THE ADDITION OUGHT TO HAVE BEEN CONSIDERED ONLY IN THE HANDS OF THAT ASSESSEE. WE ARE NOT SATISFIED WITH THIS ARGUMENT TAKEN UP BEFORE US FOR THE FIRST TIME. IT IS NOT DISPUTED THAT SH. SANJAY KUMAR AGARWAL, A CLOSE RELATIVE OF THE ASSESSEE, WAS ALSO SIMULTANEOUSLY SEARCHED IN A COM MON SEARCH OPERATION. BOTH THE ASSESSEE AS WELL AS SH. SANJAY KUMAR AGARWAL ARE INTERESTED IN THESE FOUR CONCERNS. IT CAN BE SEEN FROM THE ASSESSMENT ORDER OF SH. SANJAY KUMAR AGARWAL THAT NO ADDITION ON ACCOUNT OF UNEXPLAINED CASH HAS BEEN CONSIDERED OR MADE IN HIS HANDS. NATURALLY, THE ADDITION CAN BE MADE ONLY IN ONE HAND. AS THE A SSESSEE MADE ITA NO.2865/DEL/2013 6 SURRENDER OF RS. 6,64,100 ON ACCOUNT OF UNEXPLAINED CASH IN HIS HANDS, WHICH THE AO HAS ACCEPTED AND FURTHER THE ASSESSEE KEPT ON GIVING EXPLANATION ABOUT THE SOURCE OF SUCH CASH, IT IS T OO LATE IN THE DAY TO COME OUT WITH SUCH AN ARGUMENT. THIS ARGUMENT IS RE PELLED. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.03.201 5. SD/- SD/- [A.T. VARKEY] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 12 TH MARCH, 2015. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.