Sh. Naresh, Gurgaon V. ITO, Gurgaon

ITA 2971/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5177 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 22-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R C DANDAYA
• Assessee Lawyers: V K AGGARWAL
• Keywords: Principle of natural justice; Additional evidence
• Section: 143(3); 142(1); 154

Judgement Text

PAGE 1 OF 19 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NOS. 2971/DEL/2014 & 870/DEL/2017 A.Y. : 2009-10 NARESH VS. ITO, WARD-II(1), VPO KHERI DAULA, GURGAON DISTT. GURGAON (PAN:AEYPN1905M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. V.K. AGGARWAL, A.R. DEPARTMENT BY : SH. R.C. DANDAYA, SR. DR O R D E R PER H.S. SIDHU, JM THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED A GAINST THE ORDER DATED 28.3.2014 OF THE LD. CIT(A)-2, FARIDABAD A ND ORDER 09.12.2016 OF THE LD. CIT(A)-I, GURGAON RELEVANT TO ASSESSMENT YEAR 2009-10:- 2. THE GROUNDS RAISED IN ITA NO. 2971/DEL/2014 (2009-10 ) READ AS UNDER:- PAGE 2 OF 19 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E APPELLATE ORDER PASSED BY THE LD. CIT(A) IS ILLEGAL B EING AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND AGAINST THE PROVISIONS OF I.T. ACT, 1961. 2. THE LD. CIT(A) GROSSLY ERRED ON FACTS AS WELL AS I N LAW IN CONFIRMING THE ADDITION OF RS. 91,89,000/- ON ACCOUN T OF CASH DEPOSITED IN STATE BANK OF HYDERABAD, GURGAON. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIF Y AND WITHDRAW ANY GROUND OF APPEAL BEFORE OR DURING THE APPELLATE PROCEEDINGS. 3. THE GROUNDS RAISED IN ITA NO. 870/DEL/2017 (2009-10 ) READ AS UNDER:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLATE ORDER PASSED BY THE LD. CIT(A) AGAINST THE ORDER U/S. 154 PASSED BY THE AO IS ILLEGAL BEING AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND AGAINST THE PROVISION OF I.T. ACT, 1961. PAGE 3 OF 19 2. THE LD. CIT(A) GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN HOLDING THAT THE ORIGINAL ASSESSMENT ORDER HAS NOT MERGED WITH THE APPELLATE ORDER OF THE LD. CIT(A) AND THEREFORE, AO WAS JUSTIFIED IN INVOKING SECTION 154. 3. THE LD. CIT(A) GROSSLY ERRED ON FACTS AS WELL AS IN LAW IN CONFIRMING THE ADDITION OF RS. 59,50,000/- ON ACCOUNT OF CASH DEPOSITED IN AXIS BANK, GURGAON. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY AND WITHDRAW ANY GROUND OF APPEAL BEFORE OR DURING THE APPELLATE PROCEEDINGS. ITA NO. 2971/DEL/2014 (AY 2009-10) 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 24.11.2011 DECLARING INCOME OF RS. 16,7 2,240/- WHICH WAS PROCESSED U/S. 143(1) OF THE I.T. ACT, 1961 AT T HE RETURNED INCOME. THE CASE OF THE ASSESSEE WAS SELECTED THRO UGH CASS IN VIEW OF BOARD DIRECTIONS. STATUTORY NOTICE U/S. 143(2) OF THE I.T. ACT, 1961 WAS ISSUED ON 26.8.2011 WHICH WAS DULY SERVED U PON THE PAGE 4 OF 19 ASSESSEE. NOTICE U/S. 142(1) OF THE I.T. ACT, 1961 A CT. ALONGWITH DETAILED QUESTIONNAIRE WAS ISSUED ON 30.9.2011. THE REQUISITE INFORMATION CALLED FOR HAVE BEEN FURNISHED, EXAMINED A ND VERIFIED. ASSESSMENT PROCEEDINGS WERE DULY ATTENDED BY THE ASSE SSEE HIMSELF ALONGWITH HIS A.R. FROM TIME TO TIME. AFTER CONSID ERING THE SAME, AO HELD THAT THE SUM OF RS. 1,11,89,000/-, DEPOSITED O N VARIOUS DATES IN THE SB ACCOUNT OF THE ASSESSEE, HENCE, HE TREATED TH E SAME AS THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES AND A DDED BACK AS SUCH INTO THE INCOME OF THE ASSESSEE FOR THE FINANCI AL YEAR 2008-09 RELEVANT TO ASSESSMENT YEAR 2009-10 AND ASSESSED THE INCOME OF THE ASSESSEE AT RS. 1,28,61,240/- VIDE ORDER DATED 9.2.2 010 PASSED U/S. 143(3) OF THE I.T. ACT, 1961. 3. AGGRIEVED WITH THE ASSESSMENT ORDER DATED 09.2.2010 , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A)-2 FARIDABAD WHO VIDE HIS IMPUGNED ORDER DATED 28.3.2014 HAS PARTLY AL LOWED THE APPEAL OF THE ASSESSEE BY CONFIRMING THE ADDITION OF RS. 91,89,000/- AND GAVE THE RELIEF OF RS. 20,00,000/- OUT OF A TO TAL ADDITION OF RS. 1,11,89,000/-. 4. AGAINST THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. PAGE 5 OF 19 5. AT THE TIME OF HEARING, LD. A.R. OF THE ASSESSEE H AS FILED A PAPER BOOK CONTAINING THE PAGES 1 TO 40 HAVING THE CO PY OF WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE THE CIT(A) DATED NIL; COPY OF WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A) DATED 17.1.2014; REMAND REPORT DATED 3.10.2013; BANK ACCOUNT STATEMEN T OF STATE BANK OF HYDERABAD FROM 1.3.2008 TO 31.3.2009; STATEMEN T OF MR. BHISM KUMAR GUPTA DATED 11.3.2013; ADVANCE RECEIPT CU M AGREEMENT TO SALE AND PURCHASE BETWEEN MR. NARESH AND M R. BHISM KUMAR GUTPA DATED 2.5.2008; CASH BOOK FROM 1.4.2008 T O 31.3.2009; BALANCE CONFIRMATION FROM SH. AMAR SINGH YADAV; LEDGER ACCOUNT OF SH. AMAR SINGH FOR THE AY 2009-10; COPY OF PAN SH. AMA R SINGH; PAY IN SLIP OF DEPOSITING RS. 2,82,000/- IN BANK ACCOUN T; ADVANCE RECEIPT CUM AGREEMENT TO SALE AND PURCHASE BETWEEN MR. NARESH A ND MR. BHISM KUMAR GUPTA DATED 4.8.2008; RECEIPT OF AMOUNT RE CEIVED BACK AND AGREEMENT DATED 4.8.2008 STAND CANCELLED; RECEIP T OF AMOUNT RECEIVED BACK AND AGREEMENT DATED 2.5.2008 STAND CAN CELLED AND REMAND REPORT DATED 17.7.2013. LD. A.R. OF THE ASSES SEE ALSO CERTIFIED THAT THE ABOVE DOCUMENTS WERE FILED / AVAIL ABLE WITH AO AS WELL AS LD. CIT(A), EXCEPT THE WRITTEN SUBMISSIONS F ILED BEFORE THE LD. CIT(A), AS AFORESAID. LD. A.R. OF THE ASSESSEE DRAW O UR ATTENTION ON EACH OF THE DOCUMENTS, AS MENTIONED ABOVE, ONE BY O NE AND STATED PAGE 6 OF 19 THAT ALL THE DEPOSITS TOTALING RS. 91,89,000/- ARE FULLY EXPLAINED AND HENCE THE ADDITION CONFIRMED BY THE LD. CIT(A) MAY KI NDLY BE DELETED. 6. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. HE STATED LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS AVAILABLE WITH US ESPECIALLY THE PAPER BOOK CONTAINI NG PAGES 1 TO 40 HAVING THE COPY OF WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE THE CIT(A) DATED NIL; COPY OF WRITTEN SUBMISSIONS FIL ED BEFORE THE CIT(A) DATED 17.1.2014; REMAND REPORT DATED 3.10.201 3; BANK ACCOUNT STATEMENT OF STATE BANK OF HYDERABAD FROM 1.3. 2008 TO 31.3.2009; STATEMENT OF MR. BHISM KUMAR GUPTA DATED 1 1.3.2013; ADVANCE RECEIPT CUM AGREEMENT TO SALE AND PURCHASE BETWEEN MR. NARESH AND MR. BHISM KUMAR GUTPA DATED 2.5.2008; CASH BOOK FROM 1.4.2008 TO 31.3.2009; BALANCE CONFIRMATION FROM SH. AMAR SINGH YADAV; LEDGER ACCOUNT OF SH. AMAR SINGH FOR THE AY 20 09-10; COPY OF PAN SH. AMAR SINGH; PAY IN SLIP OF DEPOSITING RS. 2,8 2,000/- IN BANK ACCOUNT; ADVANCE RECEIPT CUM AGREEMENT TO SALE AND PU RCHASE BETWEEN MR. NARESH AND MR. BHISM KUMAR GUPTA DATED 4. 8.2008; RECEIPT OF AMOUNT RECEIVED BACK AND AGREEMENT DATED 4.8.2008 PAGE 7 OF 19 STAND CANCELLED; RECEIPT OF AMOUNT RECEIVED BACK AND AGREEMENT DATED 2.5.2008 STAND CANCELLED AND REMAND REPORT DAT ED 17.7.2013 7.1 WE NOTE THAT AO HAS MADE AN ADDITION OF RS. 1,1 1,89,000/- ON ACCOUNT OF CASH/ CHEQUE DEPOSITS IN THE STATE BANK OF HYDERABAD ACCOUNT OF THE ASSESSEE. HOWEVER, LD. CIT(A) HAS CONF IRMED THE ADDITION OF RS. 91,89,000/- AND GAVE A RELIEF OF RS. 20,00,000/- AFTER ADMITTING THE ADDITIONAL EVIDENCES AND CONSIDERING T HE REMAND REPORT. WE FURTHER NOTE THAT LD. CIT(A) HAS MENTIONED THAT TH E EXPLANATION FILED FOR RS. 67,00,000/- BEING ADVANCE FROM SH. BHIS M KUMAR GUPTA AGAINST SALE OF LAND IS NOT SATISFACTORY BECAUSE THE RE IS NO WITHDRAWAL FROM THE BANK ACCOUNT FOR REPAYMENT OF THE SAME. FOR T HE CONFIRMATION OF THE BALANCE AMOUNT HE HAS MENTIONED THAT NO EXPLANATION HAS BEEN FILED. IN FACT, EXPLANATION WA S FILED FOR ALL THE ENTRIES VIDE LETTERS DT. NIL & 17/01/2014 (PG.1 & 5, PB ) AND EVEN THE AO HAS SUBMITTED REMAND REPORT DT 03/10/2013 ON ALL THE ENTRIES (PG. 8, PB). WE FURTHER NOTE THAT THE LD. CIT(A) HAS CONFIRM ED THE ADDITIONS ON ACCOUNT OF THE FOLLOWING ENTRIES IN THE BANK ACCOUNT OF STATE BANK OF HYDERABAD: DATE AM OUNT (RS.) 01/07/2008 5,00,000/- PAGE 8 OF 19 11/08/2008 67,00,000/- 18/09/2008 40,000/- 10/10/2008 1,00,000/- 20/10/2008 30,000/- 11/11/2008 3,00,000/- 11/11/2008 5,00,000/- 11/11/2008 2,82,000/- 01/12/2008 3,00,000/- 02/12/2008 1,87,000/- 02/12/2008 1,90,000/- 02/12/2008 60,000/- TOTAL 91,89,000/- A) THE ADDITION OF RS. 5,00,000/- ON 01/07/2008 IS A CREDIT ENTRY BY WAY OF CHEQUE NO. 248125 (PG. 13, PB). WE NOTE THA T THIS AMOUNT WAS RECEIVED BY WAY OF CHEQUE AND NOT CASH AS MENTI ONED IN THE REMAND REPORT WHICH IS REPRODUCED ON PAGE 5 OF THE APPE LLATE ORDER. THEREFORE, THE BASIS OF ADDITION OF RS. 5,00,000/- D OES NOT SURVIVE. B) THE ADDITION OF RS. 67,00,000/- WAS DEPOSITED IN CASH ON 11/08/2008 IN THE BANK ACCOUNT. THIS AMOUNT WAS RECE IVED FROM SH. BHISM KUMAR GUPTA AGAINST SALE OF PROPERTY AT VJLLAGE PANDWALA KALAN, NAZAFGARH (RS. 60,00,000/- PG. 37, PB) AND AT VILLAGE KHARKHARI 1ATMAL (RS. 15,00,000/- PG. 25,PB). DURING TH E REMAND PAGE 9 OF 19 PROCEEDINGS, THE AO HAS ALSO RECORDED THE STATEMENT OF SH. BHISM KUMAR GUPTA, WHO HAS CONFIRMED THAT HE PAID RS. 60,0 0,000/- IN CASH TO THE APPELLANT FOR PURCHASE OF LAND AND SINCE THE DEAL WAS CANCELLED, THE SAME WAS RECEIVED BACK IN APRIL 2009. THE AO, IN HIS REMAND REPORT, HAS ADMITTED THAT THE ASSESSEE HAS FURNI SHED A COPY OF 'ADVANCE RECEIPT CUM AGREEMENT TO SELL AND PURCHAS E' (PG.22 & 34, PB) BUT CONSIDERED THE AMOUNT AS UNEXPLAINED ONL Y BECAUSE ORIGINAL COULD NOT BE PRODUCED. IT IS A COMMON KNOWLE DGE THAT THE ORIGINAL RECEIPT IS ALWAYS WITH THE PAYER & NOT WITH T HE PAYEE. THEREFORE, THE ASSESSEE HAD ONLY THE COPY OF THE REC EIPT WHICH WAS PRODUCED BEFORE THE AO. THE LD. CIT(A) CONFIRMED THE A DDITION BY INTRODUCING A NEW ELEMENT THAT THERE IS NO WITHDRAWAL FROM THE BANK ACCOUNT IN APRIL'2009 FOR THE REPAYMENT OF THE SAME. IN FACT, REPAYMENT WAS MADE OUT OF THE OPENING CASH BALANCE O F RS. 1,00,49,000/- AS ON 01/04/2009 (PG.29,PB). EVEN T HE COPIES OF RECEIPTS OF RS. 60,00,000/- AND 15,00,000/- BY SH. BHISM KUMAR GUPTA WERE FILED BEFORE THE LOWER AUTHORITIES WHEREIN HE HAS CONFIRMED HAVING RECEIVED THESE AMOUNTS (PG. 38 & 39, PB). THOUGH THIS FACT WAS EXPLAINED TO THE LD. CIT(A) BUT HE IGN ORED THE SAME. THE LD. CIT (A) HAS MENTIONED THAT THE ASSESSEE COU LD NOT GIVE ANY SUBMISSIONS / EVIDENCE FOR REPAYMENT OF RS. 67,00,00 0/-. THE FACT IS PAGE 10 OF 19 THAT REPAYMENT WAS EVIDENCED BEFORE THE LD. CIT(A) FROM THE OPENING BALANCE OF RS. 1,00,49,000/- AS EXPLAINED EARLIER AN D ALSO FROM THE STATEMENT OF THE RECIPIENT RECORDED BY THE AO. THEREFO RE, THE ALLEGATION MADE BY THE LD. CIT(A) IS INCORRECT AND AG AINST THE MATERIAL ON RECORD. C) I) AS REGARDS CASH DEPOSIT OF RS. 40,000/- ON 18/ 0912008 IN THE BANK ACCOUNT, IT WAS EXPLAINED THAT THIS IS OUT OF CASH WITHDRAWALS AVAILABLE WITH THE APPELLANT AS PER THE CASH FLOW ( PG.27, PB) FILED BEFORE THE LD. CIT(A) WHO HAS ADMITTED THE SAME U/R 4 6A AFTER OBTAINING REMAND REPORT FROM THE AO. EVEN AFTER THE DE POSIT OF RS.40,000/-, THE ASSESSEE HAD CASH IN HAND AT RS. 24,55,000/- (PG.27, PB). II) SIMILARLY CASH DEPOSIT OF RS.100,000/- & RS. 3 0,000/- ON 10/10/2008 AND 20/10/2008 RESPECTIVELY WERE MADE OUT O F CASH WITHDRAWALS AVAILABLE WITH THE ASSESSEE AND THE CASH BALANCE AFTER THESE DEPOSITS WAS RS. 98,25,000/- AS EVIDENCE BY T HE CASH FLOW STATEMENT.(PG.28, PB). D) AS REGARDS DEPOSIT OF RS. 3,00,000/- ON 11/11/200 8 IN THE BANK ACCOUNT, IT IS NOT BY WAY OF CASH BUT RECEIVED BY WA Y OF CHEQUE NO. PAGE 11 OF 19 133341 (PG.16, PB) FROM SHRI AMAR SINGH YADAV WHOSE CON FIRMATION WAS ALSO FILED BEFORE THE LOWER AUTHORITIES. (PG. 30, 31 & 32, PB). E) AS REGARDS DEPOSIT OF RS. 5,00,0001- ON 11111/2008 IN THE BANK ACCOUNT, IT WAS MADE OUT OF CASH WITHDRAWALS AVAILAB LE WITH THE ASSESSEE AND THE CASH BALANCE AFTER THESE DEPOSITS W AS RS. 95,25,000/- (PG.28 & 16, PB). F) THE DEPOSIT OF RS. 2,82,000/- ON 20111/2008 IS B Y WAY OF CHEQUE AS IS EVIDENT FROM THE PAY-IN-SLIP OF DEPOSITING THE SAME IN THE BANK. (PG.33, PB). THIS CHEQUE WAS DISHONORED AND DEBITED IN THE BANK ACCOUNT ON 24/11/2008 ALONGWITH DISHONOR CHARGES OF R S. 100/- -. (PG.16, PB). THEREFORE, NO ADDITION COULD BE MADE ON THIS ACCOUNT AS NO MONEY COULD BE RECEIVED AGAINST THIS CHEQUE. G) AS REGARDS CASH DEPOSITS OF RS. 3,00,000/- , 1,8 7,000/-, 1,90,000/- & 60,000/-, THEY WERE MADE OUT OF CASH WITHDRAWALS AVAILABLE WITH THE ASSESSEE AND THE CASH BALANCE AF TER THESE DEPOSITS WAS RS. 88,75,000/- (PG. 28). 8. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT ALL THE DEPOSITS TO TALING RS. 91,89,000/- ARE FULLY EXPLAINED AND HENCE THE A DDITION CONFIRMED PAGE 12 OF 19 BY THE CIT(A) DESERVE TO BE DELETED. THEREFORE, WE D ELETE THE ADDITION OF RS. 91,89,000/- AND ALLOW THE APPEAL OF THE ASSESSEE, AS A RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ITA NO. 870/DEL/2017 (AY 2009-10) 9. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 24.11.2011 DECLARING INCOME OF RS. 16,7 2,240/-. THE ASSESSMENT IN THIS CASE WAS COMPLETED VIDE ORDER DAT ED 9.12.2010 AT AN INCOME OF RS. 1,28,61,240/- AFTER MAKING AN ADDIT ION OF RS. 1,11,89,000/- ON ACCOUNT OF UNEXPLAINED CASH DE POSITS IN HIS SAVINGS BANK ACCOUNT. ON PERUSAL OF ASSESSMENT REC ORD REVEALED THAT THE AO HAD DISCUSSED AT LENGTH CASH DEPOSIT OF RS. 59,50,000/- WITH AXIS BANK, SECTOR-14, GURGAON AND RS. 1,11,89,000/- WITH STATE BANK OF HYDERABAD, VILLAGE NARSINGHPUR, GURGAON. HOWEVER, WH ILE PASSING ORDER U/S. 143(3) OF THE I.T. ACT, 1961, THE AO INADV ERTENTLY MADE A TOTALING MISTAKE AND AMOUNT OF RS. 59,50,000/- WAS LEFT TO BE ADDED IN THE TAXABLE INCOME OF THE ASSESSEE AND HENCE ESC APED ASSESSMENT. AS THE MISTAKE WAS APPARENT FROM RECORD, ACCORDINGLY, A NOTICE U/S. 154/155 OF THE I.T. ACT, 1961 DATED 24.9.2015 WAS IS SUED TO THE ASSESSEE FOR 9.10.2015, BUT NOBODY ATTENDED ON THE SAID DATE NEITHER ANY REPLY WAS RECEIVED. THE AO ACCORDINGLY H ELD THAT THE PAGE 13 OF 19 AMOUNT OF RS. 59,50,000/- AS UNEXPLAINED CASH DEPOS IT OF THE ASSESSEE AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE VIDE ORDER DATED 11.12.2015 AND ASSESSED THE INCOME AT RS. 1,68,11,240/- VIDE ORDER PASSED U/S. 154 OF THE I.T. ACT, 1961. 10. AGGRIEVED WITH THE ORDER DATED 11.12.2015, THE ASS ESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A)-I, GURGAON WHO VIDE HIS IMPUGNED ORDER DATED 09.12.2016 HAS DISMISSED THE A PPEAL OF THE ASSESSEE BY CONFIRMING THE ACTION OF THE AO. 11. AGAINST THE ORDER OF THE LD. CIT(A), ASSESSEE IS I N APPEAL BEFORE THE TRIBUNAL. 12. AT THE TIME OF HEARING, LD. A.R. OF THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 22 HAVING THE COPY OF NO TICE U/S. 154 OF THE INCOME TAX ACT, 1961 FOR THE AY 2009-10 DATED 24 .9.2015; REPLY TO NOTICE U/S. 154/155 OF THE I.T. ACT, 1961 DATED 9. 10.2015; STATEMENT OF SH. RANDHIR KUMAR DATED 17.2.2014; STATE MENT OF SH. GIRGHARI LAL MODI DATED 26.2.2014; GENERAL POWER OF AT TORNEY IN FAVOUR OF SH. RANDHIR KUMAR DATED 20.1.2009 AND GENERA L POWER OF ATTORNEY IN FAVOUR OF SH. GIRDHARI LAL MODI DATED 2.2.2 009. LD. A.R. OF THE ASSESSEE CERTIFIED THAT THE ABOVE DOCUMENTS WERE FILED / AVAILABLE WITH AO AS WELL AS LD. CIT(A). WITH REGARD TO GROUND NO. 1 & 2 PAGE 14 OF 19 RELATING TO INVOKING THE SECTION 154 OF THE I.T. ACT , 1961 BY THE AO IS CONCERNED, THE LD. A.R. SUBMITTED THAT THE ISSUE WA S THOROUGHLY EXAMINED DURING THE REMAND PROCEEDINGS AND EARLIER APP ELLATE PROCEEDINGS BEFORE THE LD. CIT(A), THEREFORE, THE ASS ESSMENT OR DER TO THE EXTENT OF ISSUE IN DISPUTE GETS MERGED IN TH E ORDER OF THE LD. CIT(A) AND THE AO WAS NOT COMPETENT TO INVOKE SECTI ON 154 OF THE I.T. ACT, 1961. ACCORDINGLY, REQUESTED TO DISMISS THE GROUND NO. 1 & 2 RAISED BY THE ASSESSEE. WITH REGARD TO GROUND NO. 3 RE LATING TO CONFIRMATION OF ADDITION OF RS. 59,50,000/- IS CONCE RNED, THE A.R. OF THE ASSESSEE OF THE ASSESSEE DRAW OUR ATTENTION ON EACH OF THE DOCUMENTS, AS MENTIONED ABOVE, ONE BY ONE AND STATE D THAT THE ADDITION OF RS. 59,50,000/- IS FULLY EXPLAINED AND HENCE THE ADDITION CONFIRMED BY THE LD. CIT(A) MAY KINDLY BE DELETED. 13. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW. HE STATED LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS AVAILABLE WITH US ESPECIALLY THE PAPER BOOK CONTAINI NG PAGES 1 TO 22 HAVING THE COPY OF NOTICE U/S. 154 OF THE INCOME TAX ACT, 1961 FOR THE AY 2009-10 DATED 24.9.2015; REPLY TO NOTICE U/S. 154/155 OF THE PAGE 15 OF 19 I.T. ACT, 1961 DATED 9.10.2015; STATEMENT OF SH. RA NDHIR KUMAR DATED 17.2.2014; STATEMENT OF SH. GIRGHARI LAL MODI DA TED 26.2.2014; GENERAL POWER OF ATTORNEY IN FAVOUR OF SH. RANDHIR KUMAR DATED 20.1.2009 AND GENERAL POWER OF ATTORNEY IN FAVOUR OF SH. GIRDHARI LAL MODI DATED 2.2.2009. LD. A.R. OF THE ASSE SSEE CERTIFIED THAT THE ABOVE DOCUMENTS WERE FILED / AVAILABLE WITH AO AS WELL AS LD. CIT(A). 14.1 WITH REGARD TO GROUND NO. 1 & 2 RELATING TO INVOKI NG THE SECTION 154 OF THE I.T. ACT, 1961 BY THE AO IS CONCERNED, W E NOTE THAT IN THE ORIGINAL ASSESSMENT ORDER THE AO HAS MADE AN ADDITION OF RS. 1,11,89,000/- ON ACCOUNT OF DEPOSITS IN THE BAN K ACCOUNT WITH STATE BANK OF HYDERABAD, GURGAON AND LD. CIT(A) HAS GIV EN A RELIEF OF RS. 20,00,000/- AND THE BALANCE AMOUNT OF RS. 91 ,89,000/- WAS CONFIRMED. THE AO HAS ADDED RS. 59,50,000/- U/S 154 OF THE I.T. ACT, 1961 ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT WIT H AXIS BANK, GURGAON. THE LD. CIT(A) HAS CONFIRMED THE ORDER U/S 154 AGAINST WHICH THIS APPEAL HAS BEEN FILED BEFORE THE ITAT. I N THE ORIGINAL ASSESSMENT U/S 143(3), THE AO HAS MENTIONED THAT SUM OF RS. 1,11,89,000/- DEPOSITED ON VARIOUS DATES IN THE SAVI NG ACCOUNT OF THE ASSESSEE IS ADDED BACK. THE AO HAS NOWHERE MENTIONE D IN THE PAGE 16 OF 19 ASSESSMENT ORDER THAT RS. 59,50,000/- IS ALSO TO BE A DDED BACK. ONCE THERE IS NO FINDING FOR ADDITION OF RS. 59,50,000/- IN THE ORIGINAL ASSESSMENT ORDER, IT CANNOT BE ADDED U/S 154 BECAUSE THERE IS NO MISTAKE APPARENT FROM RECORD. WE ALSO NOTE THAT LD. CI T(A) HAS MENTIONED THAT THE ASSESSEE HAS NOT FURNISHED ANY EV IDENCE OR EXPLANATIONS AS PER PAGE 2 OF THE ASSESSMENT ORDER. HOW EVER HE HAS COMPLETELY IGNORED PAGE 1 OF THE ASSESSMENT ORDER WH ERE THE FOLLOWING OBSERVATIONS OF THE AO ARE RECORDED: - 'ON 16/11/2011 THOUGH THE PROCEEDINGS WERE DULLY ATTENDED BY ASSESSEE HIMSELF ALONGWITH SH. PRAVIN GARQ, CA AND SUBMITTED SOME DETAILS / DOCUMENTS' 14.2 THIS SHOWS THAT THE ASSESSEE DID SUBMIT THE DE TAILS AND DOCUMENTS AND PROPER HEARING WAS CONDUCTED. IT IS IN THIS BACKGROUND THAT THE AO WAS SATISFIED WITH THE DEPOSITS IN AXIS BANK AND HENCE THE DEPOSITS OF RS. 59,50,000/- WAS NEITHER ADVERSELY COM MENTED UPON NOR ANY ADDITION WAS MADE. THEREFORE, THERE IS NO MIST AKE APPARENT FROM RECORD TO JUSTIFY ADDITION OF RS. 59,50,000/-. IN THE WORST POSSIBLE SCENARIO, EVEN IF THE PRESENT AO FEELS THAT ADDITION WAS TO BE MADE, IT BECOMES A DEBATABLE ISSUE AS TO WHETHER THE THEN AO WAS SATISFIED WITH THE GENUINENESS OF THE DEPOSITS OR NO T. SECTION 154 PAGE 17 OF 19 CANNOT BE INVOKED ON DEBATABLE ISSUES. WE ARE OF TH E VIEW THAT EVEN AFTER THE ASSESSMENT U/S 143(3), THE ISSUE REGARDING DEPOSITS OF RS. 59,50,000/- WAS CONSIDERED BY THE AO AGAIN DURI NG REMAND PROCEEDINGS WHEN THE APPEAL WAS PENDING BEFORE THE LD . CIT(A) AGAINST THE ORIGINAL ASSESSMENT ORDER. THE STATEMENTS OF SOME CONNECTED PERSONS WERE ALSO RECORDED (PG 6-9, PB). T HE RELEVANT EXTRACT FROM THE REMAND REPORT DATED 14/03/2014 COPIED O N PAGE 6 OF THE LD. CIT(A)'S ORDER DATED 28/03/2014 AGAINST ORIGINA L ASSESSMENT ORDER IS REPRODUCED HEREUNDER FOR READY REFERENCE: - 'BUT IT APPEARS THAT NO ADDITION ON ACCOUNT OF CASH DEPOSITS WITH AXIS BANK TO THE TUNE OF RS. 59,50,00 0/- HAS BEEN MADE BY THE THEN AD. HOWEVER AMOUNT OF RS. 24,00,000/- EACH DEPOSITED ON 14/08/2009 SHOWN AS INI TIAL DEPOSITS, THE STATEMENT OF SHRI RANDHIR KUMAR S/O SHRI RAM, R/O JYOTI PARK, GURGAON AND SHRI GIRDHARI LAL MODI S/O SHRI BRAHMA NAND MODI R/O SIRSA WAS RECORDED 17/02/2014 AND 26/02/2014 RESPECTIVELY. BOTH OF THEM HAS ADMITTED THAT THE SUM OF RS. 24,00,000/- EACH W AS PAID TO MR. NARESH FOR PURCHASE OF PLOT MEASURING 400 S Q. YARDS EACH BEARING NO. 800/3 AND 799/3 SITUATED AT PREM PAGE 18 OF 19 NAGAR, GURGAON THROUGH CHEQUES. IT HAS FURTHER BEEN STATED THAT THE AGREEMENT WAS NOT REGISTERED AT THAT T IME AS REGISTRY WAS BANNED AT THAT TIME, THEREFORE THESE AGREEMENT WERE CONVERTED INTO GPA. AS REGARDS CASH DEPOSITED ON 12/08/2008 AND 06/01/2009 RESPECTIVELY OUT OF CASH AVAILABLE WITH THE ASSESSEE BUT NO SUPPORTIN G EVIDENCE HAS BEEN FURNISHED BY THE ASSESSEE DURING T HE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS REMAND PROCEEDINGS. THE AO HAS NOT AT ALL ADVERSELY COMMENT ED UPON THE TWO DEPOSITS OF RS. 24,00,000/- EACH EVEN DURING REMAND PROCEEDINGS. THIS INDICATES THAT THE LD. AD WAS SATISFIED WITH THE GENUINENESS OF THE DEPOSITS WHIC H IS FURTHER CONFIRMED FROM THE FACT THAT HE DID NOT REQUEST THE LD. CIT(A) FOR ANY ENHANCEMENT. THEREFORE, THERE IS N O MISTAKE APPARENT FROM THE RECORD. IN THE WORST POSSI BLE SCENARIO, EVEN IF THE PRESENT AO FEELS THAT ADDITION WAS TO BE MADE, IT BECOMES A DEBATABLE ISSUE AS TO WHETHER THE THEN AO WAS SATISFIED WITH THE GENUINENESS OF THE D EPOSITS OR NOT. SECTION 154 CANNOT BE INVOKED ON DEBATABLE I SSUES. PAGE 19 OF 19 14.3 IN VIEW OF THE ABOVE, THE IMPUGNED ISSUE WAS T HOROUGHLY EXAMINED DURING THE REMAND PROCEEDINGS AND EARLIER APP ELLATE PROCEEDINGS BEFORE THE LD. CIT(A). THEREFORE, THE AS SESSMENT ORDER TO THE EXTENT OF IMPUGNED ISSUE GETS MERGED IN THE O RDER OF THE LD. CIT(A), AND HENCE, THE AO WAS NOT COMPETENT TO INVO KE SECTION 154 OF THE I.T. ACT, 1961. THEREFORE, THE AOS ORDER PASS ED U/S. 154 OF THE ACT AS WELL AS ORDER OF THE LD. CIT(A) ARE HEREBY CANCELLED AND ACCORDINGLY, GROUND NO. 1 & 2 STAND REJECTED. AS REGARD S GROUND NO. 3 RELATING TO ADDITION IN DISPUTE IS CONCERNED, SINCE W E HAVE ALREADY CANCELLED THE ORDER OF THE AOS PASSED U/S. 154 OF T HE I.T. ACT, 1961 AS WELL AS LD. CIT(A)S ORDER, AS AFORESAID, THE ADD ITION IN DISPUTE DOES NOT SURVIVE. IN THE RESULT, THE ITA NO. 870DEL/20 17 (AY 2009- 10) STANDS ALLOWED. 15. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSE E ARE ALLOWED. ORDER PRONOUNCED ON 02-08-2017. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 02/08/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR , ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES