ITO, New Delhi V. M/s. Rishi Kumar Naveen Kumar, New Delhi

ITA 2908/DEL/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7110 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 08-12-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 11-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RASMITA JHA
• Keywords: Search and seizure; Loose papers
• Section: 131; 148; 6; 132

Judgement Text

1 ITA NO. 29 08/DEL/2012 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT ME MBER & SMT. BEENA PILLAI, JUDICIAL MEMBER I.T.A .NO.-2908/DE L/2012 (ASSESSMENT YEAR-2002- 03) ITO, WARD 28(3), ROOM NO. 214, DRUM SHAPED BLDG., I.P. ESTATE, NEW DELHI. VS RISHI KUMAR NAVEEN KUMAR, 6638, KHARI BAOLI, NEW DELHI. AAFFR3888N APPELLANT BY SMT. RASMITA JHA, SR. DR RESPONDENT BY SH. PIYUSH KAUSHIK, ADV. ORDER PER BEENA PILLAI, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER OF THE LD. CIT(A)S-XXV, NEW DELHI VIDE HIS O RDER DATED 16/04/2012 FOR A.Y. 2002-03 ON THE FOLLOWING GROUND S: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A)-XXV, NEW DELHI HAS ERRED IN DELETING THE ADD ITION OF RS. 20,00,000/- MADE BY THE ASSESSING OFFICER U/S 6 9A OF THE I.T. ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A)-XXV, NEW DELHI HAS ERRED IN CONCLUDING THAT ASSESSEE HAS RECEIVED LOAN FROM SH. BRIJ MOHAN GUPT A GROUP OF CASES WHEREAS ASSESSEE AS PER INCRIMINATIN G DOCUMENTS IS A LOAN PROVIDER. DATE OF HEARING 08.12.2015 DATE OF PRONOUNCEMENT 08/02/2016 2 ITA NO. 29 08/DEL/2012 3. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIGHT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS AP PEAL. 2. BRIEF FACTS OF THE CASE AS RECORDED BY THE AUTHO RITIES BELOW ARE AS UNDER: 2.1. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED ON 15/12/04 IN THE CASE OF ONE BRIJ MOHAN GUPTA AND GROUP. DURING THE COURSE OF SEARCH AND SEIZURE OPE RATION VARIOUS INCRIMINATING DOCUMENTS/DIARIES/LOOSE PAPERS WERE F OUND AND SEIZED. THE ASSESSMENT IN THE CASE OF M/S RISHI KU MAR NAVEEN KUMAR, WAS REOPENED ON THE BASIS OF SEARCH PROCEEDI NGS IN THE CASE OF BRIJ MOHAN GUPTA GROUP, FROM WHERE THE AO R ECEIVED AN INFORMATION REGARDING THE PRESENT ASSESSEE. ACCORD INGLY, THE LD. AO ISSUED SHOW CAUSE NOTICE. DETAILED REASONS FOR REOP ENING OF THE CASE U/S 148 WERE GIVEN AND THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS MENTIONED THEREIN. 2.2. IN RESPONSE TO THE AFOREMENTIONED NOTICE ISSUE D BY THE LD. AO THE ASSESSEE FILED A LETTER DATED 17/12/08 IN WHICH IT WAS CLAIMED THAT NO TRANSACTION HAS TAKEN PLACE BETWEEN THE ASS ESSEE AND SHRI BRIJ MOHAN GUPTA GROUP. THE ASSESSEE ALSO CONFIRME D THAT NONE OF THE PARTNERS OF THE FIRM, BEING NAVEEN KUMAR OR RIS HI KUMAR HAS EVER HAD ANY TRANSACTION WITH THE ALLEGED SHRI BRIJ MOHAN GUPTA GROUP. 2.3. THE AO REJECTED THE ARGUMENTS AND SUBMISSIONS OF THE ASSESSEE AND MADE ADDITION TO AN EXTENT OF RS. 20 L ACS AS UNEXPLAINED TRANSACTION U/S 69A OF THE ACT. THE AS SESSEE PREFERRED 3 ITA NO. 29 08/DEL/2012 AN APPEAL TO THE CIT(A) WHO IN TURN DELETING THE AD DITION SO MADE BY THE ASSESSEE. THE REVENUE FILED AN APPEAL BEFOR E THIS TRIBUNAL IN ITA NO. 4588/D/09 AGAINST THE ORDER OF THE LD. C IT(A). THIS TRIBUNAL, VIDE ITS ORDER DATED 19/03/2010, SET ASID E THE ISSUE TO THE FILES OF THE AO, WITH A DIRECTION THAT OPPORTUN ITY MAY BE GRANTED TO THE ASESSEE TO CROSS EXAMINE THE DEPONENTS ON TH E BASIS OF WHICH THE ADDITION WAS MADE BY THE AO. IT WAS ALSO OPEN FOR THE AO TO MAKE ANY FURTHER ENQUIRY/INVESTIGATION, AS MAY BE N ECESSARY FOR DECIDING THE ISSUE. THE ASSESSEE WAS GIVEN OPPORTU NITY TO PRODUCE FURTHER EVIDENCE IN SUPPORT OF ITS CASE AND ALSO AN Y REBUTTAL OF THE ADDITIONS MADE BY THE REVENUE. 2.4. IN THE PROCEEDINGS BEFORE THE AO IN THE SECOND ROUND OF REASSESSMENT THE ASSESSEE SUBMITTED AFFIDAVITS BY S HRI RISHI KUMAR, NAVEEN KUMAR BEING PARTNER OF THE ASSESSEE, WHICH IS PLACED AT PAGES 20 TO 21 OF THE PAPER BOOK. THE LD . AO DURING THE SECOND ROUND OF ASSESSMENT PROCEEDINGS, PROVIDED TH E ASSESSEE WITH THE COPIES OF THE STATEMENT OF SHRI BRIJ MOHAN GUPTA, HIS SON SHRI RAJEEV GUPTA AND SHRI RAM AVTAR SINGHAL, HIS A CCOUNTANT, WHICH WAS RECORDED AT THE TIME OF SEARCH U/S 131 OF THE I.T. ACT. THE LD. AO ALSO ISSUED FRESH NOTICE TO ALL THESE PE RSONS U/S 131 OF THE ACT. THE ASSESSEE WAS ASKED TO REMAIN PRESENT FOR CROSS EXAMINING THESE THREE PERSONS AND ALSO TO CONFRONT THE STATEMENTS AND THE DOCUMENTS RECORDED ORIGINALLY IN THE COURSE OF SEARCH PROCEEDINGS. IN THE FRESH STATEMENT AND CROSS EXAM INING OF SHRI RAM AVTAR AND SHRI RAJEEV GUPTA IT WAS STATED THAT THEY WERE INVOLVED IN THE BUSINESS OF SHRI BRIJ MOHAN GUPTA A ND ACTED AS PER 4 ITA NO. 29 08/DEL/2012 THE INSTRUCTIONS/DIRECTIONS OF SHRI BRIJ MOHAN GUPT A ONLY. AT THE RELEVANT TIME SHRI BRIJ MOHAN GUPTA HAD DEMISED. T HE LD. AO HAS RECORDED THAT SHRI RAM AVTAR SINGHAL AND RAJEEV GUP TA DENIED THAT THEY KNEW ANY PARTY BY THE NAME OF M/S RISHI KUMAR, NAVEEN KUMAR AND BOTH OF THEM FAILED TO IDENTIFY THE ASSES SEE. THE LD. AO COMPLETED THE ASSESSMENT ON THE SAME BASIS AS THE P REVIOUS ASSESSMENT ORDER MADE ADDITION OF RS. 20 LACS UNDER THE HEAD UNEXPLAINED INCOME U/S 69A OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE LD. CIT(A). 3.1. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED T HAT THERE IS NO EVIDENCE BEFORE AO TO SHOW THAT THE ASSESSEE HAS TA KEN ANY CASH LOAN OR HUNDI LOAN AND THAT THE ISSUE HAS BEEN EXAM INED IN DETAIL BY THE PREVIOUS CIT(A), DURING THE COURSE OF THE AP PELLATE PROCEEDINGS IN THE FIRST ROUND OF APPEAL. IT WAS A LSO SUBMITTED BEFORE THE LD. CIT(A) THAT NO DOCUMENTS THAT HAVE B EEN SEIZED BELONGS TO THE ASSESSEE AND, THEREFORE, NO ADVERSE INFERENCE COULD BE DRAWN AGAINST THE ASSESSEE. 3.2. CONSIDERING THE SUBMISSIONS AND THE ORDERS PAS SED IN THE CASE OF THE ASSESSEE THE LD. CIT(A) DELETED THE ADDITION MADE BY THE AO. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 4.1. WE HAVE PERUSED ALL THE RECORDS IN RESPECT OF THE FIRST ROUND OF ASSESSMENT PROCEEDINGS, THE SUBMISSIONS AND THE PAP ER BOOK FILED BEFORE US. 5 ITA NO. 29 08/DEL/2012 4.2. IT IS PERTINENT TO NOTE THAT IN THE SECOND ROU ND OF PROCEEDINGS THE SAID PERSONS I.E. RAJEEV GUPTA (SON OF LATE SHR I B.M. GUPTA) AND RAM AVTAR SINGHAL (ACCOUNTANT OF LATE B.M. GUPT A), IN THE COURSE OF THE CROSS EXAMINATION BEFORE THE AO HAVE CLEARLY DENIED ANY SOUGHT OF DEALINGS WITH THE ASSESSEE AND THAT T HEY IDENTIFY THE ASSESSEE. EVEN IN THE AFFIDAVITS FILED BY THESE PE RSONS BEFORE THE LD. AO THEY HAVE DENIED THAT SHRI B.M. GUPTA KNEW THE A SSESSEE AND THAT THEY HAVE NEVER COME ACROSS ANY TRANSACTION OF RS. 20 LACS OR ANY OTHER FINANCIAL TRANSACTION BETWEEN LATE SHRI B .M. GUPTA AND RAM AVTAR SINGHAL ARE PLACED AT PAGES 16 TO 19 OF T HE PB. THE LD. AR HAS SUBMITTED THAT THE AO HAS NOT BROUGHT ANY CO RROBORATIVE EVIDENCE WHICH COULD PROVE THAT THE DOCUMENTS SEIZE D DURING THE TIME OF SEARCH ON BM GUPTA AND GROUP HAD ANY RELATI ON WITH THE ASSESSEE OR ITS PARTNERS. 4.3. THE LD. AR THUS, CONTENDED THAT THE AO COULD N OT CORROBORATE THE ENTRIES FOUND IN THE SEIZED MATERIAL TO JUSTIFY THE ADDITIONS MADE IN THE CASE OF THE ASSESSEE. 4.4. ON THE CONTRARY, THE LD. DR RELIED UPON THE OR DERS OF THE AO. 4.5. FROM THE FACTS ENUMERATED ABOVE, IT IS CLEAR T HAT THE ASSESSING OFFICER FAILED TO ESTABLISH ANY CASE AGAINST THE AP PELLANT. THE IMPUGNED ORDER DOES NOT THROW ANY LIGHT ON ANY INQUIRY/INVESTIGATION CARRIED OUT BY THE ASSESSING OFFICER THAT COULD CORROBORATE THE ENTRIES FOUND IN THE SEIZED MATERIA L AND JUSTIFY THE ADDITIONS MADE IN THE CASE OF THE ASSESSEE. FURTHE R INQUIRY/INVESTIGATION, WAS REQUIRED TO BE CARRIED O UT ON THE INFORMATION PASSED BY THE DCIT, CENTRAL CIRCLE 19, NEW DELHI, BUT 6 ITA NO. 29 08/DEL/2012 APPARENTLY NO WORTHWHILE OR COGENT WORK WAS DONE TO WARDS THIS END. 4.6. IN THE SECOND ROUND OF ASSESSMENT PROCEEDINGS, THE SAID PERSONS DURING THE CROSS EXAMINATION HAS DENIED ANY SORT OF DEALINGS WITH THE ASSESSEE AND IN FACT HAS EVEN FAI LED TO IDENTIFY THE ASSESSEE. THEY HAVE FURNISHED THEIR DULY SWORN AFFI DAVITS DEPOSING THESE FACTS(SUPRA). NO DIRECT OF CORROBORATIVE EVID ENCE COULD BE DISCOVERED BY THE LD.AO FROM THE ASSESSEES POSSESS ION, WHICH COULD SUBSTANTIATE THE ALLEGED ADDITION. IT IS NOT AT ALL THE CASE WHERE THE ASSESSEE HAS MADE AN UNEXPLAINED INVESTME NT OF CASH. THE ASSESSING OFFICER MERELY SUMMARIZED THE SALIENT FEATURES OF THE ASSESSMENT PROCEEDINGS RELATING TO SHRI BRIJ MOHAN GUPTA AND THEREAFTER SUMMARILY REJECTED THE REPLY OF THE ASSE SSEE AS NOT ACCEPTABLE. THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION OF RS. 20,00,000/-. 15. FROM THE ABOVE DISCUSSIONS, WE DO NOT FIND ANY MERITS IN THE CASE OF THE REVENUE. WE, ACCORDINGLY, DISMISSED TH E APPEAL FILED BY THE REVENUE. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 08/02/2016 SD/- SD/- (N.K. SAINI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 08/02/2016 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 7 ITA NO. 29 08/DEL/2012 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI