Getamber Anand, Noida V. DCIT, Noida

ITA 3127/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3163 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 31-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Salary income
• Section: 142(1); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH FRIDAY A NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 3127/DEL /2016 ASSESSMENT YEAR: 2004-05 GETAMBER ANAND, C-226, SECTOR 44, NOIDA-110019 (PAN: ACHPA0868K) VS DCIT, CENTRAL CIRCLE, NOIDA. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VED JAIN, ADVOCATE RESPONDENT BY : SHRI AMIT JA IN, SR. DR DATE OF HEARING : 23.02.2018 DATE OF PRONOUNCEMENT : 27.02.2018 ORDER PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 29.03.2016 PASSED BY THE LD . CIT(A)-IV, KANPUR FOR ASSESSMENT YEAR 2004-05 WHERE IN THE LD. COMMISSIONER OF INCOME TAX(A) HAS CONFIRMED PENALTY OF RS.3,30,000/- IMPOSED U/S 271(1)(C) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER CALLED 'THE ACT') . ITA NO. 3127/DEL/2016 ASSESSMENT YEAR 2004-05 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS THE MANAGING DIRECTOR AND MAJOR SHAREHOLDER IN M/S ATS INFRASTRUCTURE LTD. DURING THE YEAR UNDER CONSIDER ATION, THE ASSESSEE HAD SHOWN INCOME FROM SALARY RECEIVED FROM M/S ATS INFRASTRUCTURE LTD. AMOUNTING TO RS. 17,80,000/-. A SEARCH OPERATION WAS CARRIED OUT ON THE VARIOUS RESIDENTIAL AND OTHER PREMISES OF THE ASSES SEE INCLUDING PREMISES AT C-226, SECTOR 44, NOIDA ON 15.02.2008. A SEARCH WARRANT IN RESPECT OF LOCKER NO. 439, HDFC BANK, SECTOR 18, NOIDA IN THE NAME OF THE ASSESSEE WAS ALSO ISSUED AND THE SAID LOCKER WAS SEARCHED ON 20.02.2008. DURING THE COURSE OF SEARC H, THE FOLLOWING CASH WAS FOUND AND SEIZED:- (I) CASH FROM RESIDENCE AT C-226, SECTOR 44, NOIDA - FOUND RS. 2,56,95,000/- AND SEIZED RS.2,22,00,000 /- (II) CASH FROM LOCKER NO. 439, HDFC BANK - FOUND RS. 1,20,00,000/- AND SEIZED RS. 1,20,00,000/ - 2.1 THE ASSESSEE WAS SUBSEQUENTLY ISSUED A NOTICE U /S 153 OF THE ACT CALLING FOR RETURN OF INCOME AND THE RETURN OF INCOME WAS FILED DECLARING INCOME OF RS. 17,58,4 40/-. ITA NO. 3127/DEL/2016 ASSESSMENT YEAR 2004-05 3 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SHO WN LOANS RECEIVED AMOUNTING TO RS. 7,12,000/-AND THE ASSESSEE WAS REQUIRED TO PROVE THE GENUINENESS OF T HE TRANSACTION AS WELL AS THE IDENTITY AND CREDITWORTH INESS OF THE CREDITORS. AS THE ASSESSEE, AS PER THE ASSE SSING OFFICER, COULD NOT PROVE THE LOAN CREDITS, AN ADDIT ION OF RS. 5,12,000/-WAS MADE ON THIS ACCOUNT. SIMILARLY, THE ASSESSEE HAD CLAIMED TO HAVE RECEIVED GIFTS TOTALLI NG TO RS. 68,48,315/- FROM VARIOUS PERSONS AND THE ASSESS EE COULD NOT PROVE THE IDENTITY, GENUINENESS, CREDITWORTHINESS OF FOUR OF THE DONORS. THE ASSESS ING OFFICER PROCEEDED TO ADD BACK AN AMOUNT OF RS. 15,00,000/- U/S 68 OF THE ACT. THE ASSESSING OFFIC ER ALSO MADE AN ADDITION OF RS. 2,00,550/- AS INCOME F ROM UNDISCLOSED SOURCES WHICH THE ASSESSEE HAD SHOWN AS MISCELLANEOUS INCOME. THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS. 38,09,481/-. 2.2 SUBSEQUENTLY, ON APPEAL, THE ADDITION PERTAININ G TO UNEXPLAINED GIFTS AMOUNTING TO RS. 15,00,000/- WAS ITA NO. 3127/DEL/2016 ASSESSMENT YEAR 2004-05 4 CONFIRMED TO THE EXTENT OF RS. 10,00,000/- BY THE L D. COMMISSIONER OF INCOME TAX(A). 2.3 THEREAFTER, THE ASSESSING OFFICER IMPOSED A PEN ALTY OF RS. 3,30,000/- U/S 271(1)(C) OF THE ACT ON THE A DDITION SO CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX( A). THIS PENALTY WAS UPHELD BY THE LD. COMMISSIONER OF INCOME TAX (A) AND NOW THE ASSESSEE IS IN APPEAL BE FORE THE ITAT AGAINST THE UPHOLDING OF THIS PENALTY. 3. LD. AR SUBMITTED THAT THE IMPUGNED ADDITION WAS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURIN G THE COURSE OF SEARCH. IT WAS FURTHER SUBMITTED THA T IN THE PRESENT CASE, THE SEARCH WAS CONDUCTED ON 22.02.2008 AND THE ASSESSMENT YEAR UNDER CONSIDERAT ION IS 2004-05. LD. AR SUBMITTED THAT THE LIMITATION P ERIOD FOR ISSUANCE OF STATUTORY NOTICE U/S 142(1) OF THE ACT HAD ALREADY EXPIRED AND, THEREFORE, THE ASSESSMENT WAS ALREADY COMPLETED AND NOT ABATED. IT WAS ALSO SUBM ITTED THAT IT IS UNDISPUTED THAT THE ADDITION ON ACCOUNT OF GIFT/S RECEIVED WAS NOT BASED ON ANY MATERIAL FOUND DURING THE COURSE OF SEARCH. IT WAS SUBMITTED THAT IT IS A SETTLED LAW THAT IN ABSENCE OF ANY INCRIMINATING MA TERIAL ITA NO. 3127/DEL/2016 ASSESSMENT YEAR 2004-05 5 FOUND DURING THE COURSE OF SEARCH, NO ADDITION CAN BE MADE U/S 153A OF THE ACT. 4. LD. SR. DR PLACED RELIANCE ON THE ORDERS OF BOTH THE LOWER AUTHORITIES AND SUBMITTED THAT EVEN THE LD. COMMISSIONER OF INCOME TAX (A) HAD CONFIRMED THE QUANTUM AS WELL AS THE PENALTY AND, THEREFORE, THE ASSESSEE SHOULD NOT BE ALLOWED TO TAKE REFUGE BEHIN D A MERE TECHNICAL GROUND AS THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF GIFTS AMOUNTING TO RS. 10,00,000/-. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN THIS CASE ARE UNDISPUTED. IT IS UNDISPUTED THAT THE ADDITION OF RS. 15,00,000/-, SUSTAINED TO THE EXTENT OF RS. 10,00,0 00/- BY THE LD. COMMISSIONER OF INCOME TAX(A), IN RESPEC T OF UNEXPLAINED GIFTS WAS NOT BASED ON ANY INCRIMINATIN G MATERIAL FOUND DURING THE COURSE OF SEARCH. THIS F ACT IS EVIDENT FROM PARA 2, PAGE 3 OF THE ASSESSING OFFICE RS ORDER ITSELF WHEREIN THE ASSESSING OFFICER HAS MENT IONED THAT THE ASSESSEE HAS SHOWN TO HAVE RECEIVED VARIOU S GIFTS TOTALLING TO RS. 68,48,315/- FROM VARIOUS PER SONS. ITA NO. 3127/DEL/2016 ASSESSMENT YEAR 2004-05 6 HOWEVER, THERE IS NO REFERENCE, WHATSOEVER, TO ANY SEIZED/INCRIMINATING MATERIAL FOUND DURING THE COUR SE OF SEARCH WHICH LED THE ASSESSING OFFICER TO INQUIRE A BOUT THESE GIFTS HAVING BEEN RECEIVED FROM THE ASSESSEE. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KAB UL CHAWLA REPORTED IN 380 ITR 573 (DEL) HAS HELD THAT ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FO UND DURING THE COURSE OF SEARCH OR OTHER POST SEARCH MA TERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT M EAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOU T ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. T HE HONBLE DELHI HIGH COURT WENT ON TO HOLD THAT THE ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL. IN THE CASE BEFORE U S, IT IS VERY MUCH EVIDENT FROM THE PERUSAL OF THE ASSESSMEN T ORDER THAT THE ADDITION IN RESPECT OF UNEXPLAINED G IFTS WAS NOT MADE WITH ANY REFERENCE TO ANY SEIZED/INCRIMINATING MATERIAL FOUND DURING THE COUR SE OF SEARCH BUT WAS RATHER BASED ON THE INQUIRIES MADE B Y ITA NO. 3127/DEL/2016 ASSESSMENT YEAR 2004-05 7 THE AO DURING THE COURSE OF ASSESSMENT. AS SUCH, T HE QUANTUM ADDITION ITSELF WAS NOT SUSTAINABLE. HOWEV ER, SINCE THE ASSESSEE IS NOT IN APPEAL BEFORE US AGAIN ST THE QUANTUM ADDITION AND HAS ACCEPTED THE ADJUDICATION BY THE LD. COMMISSIONER OF INCOME TAX (A) CONFIRMING T HE QUANTUM TO THE EXTENT OF RS. 10 LAKH, THE SAME CANN OT BE DISTURBED. HOWEVER, SINCE THE QUANTUM ADDITION ITSELF IS NOT LEGALLY SUSTAINABLE, WE ARE OF THE CONSIDERE D OPINION THAT THE PENALTY ON SUCH QUANTUM ADDITION A LSO CANNOT BE SUSTAINED. THEREFORE, WE SET ASIDE THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (A) ON THIS ISSU E AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENA LTY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 27.0 2.2018. SD/- SD/- (B.P. JAIN) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27 TH FEBRUARY, 2018 GS ITA NO. 3127/DEL/2016 ASSESSMENT YEAR 2004-05 8 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR