Anil Bhalla, New Delhi V. ACIT, New Delhi

ITA 3142/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4696 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 18-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Assessee Lawyers: C S AGGARWAL
• Keywords: Search and seizure; Additional evidence; Set aside
• Section: 153A; 73; 131; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE MS. SUSHMA CHOWLA, VICE PRESIDENT DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (E-COURT MODULE) ITA NO. 2113/DEL/2017 : ASSTT. YEAR : 2007-08 ACIT, CENTRAL CIRCLE-8, NEW DELHI VS SH. ANIL BHALLA, FARM NO. 4, HYDE PARK, PRAKRITI MARG, VILLAGE-SULTANPUR, MEHARULI, NEW DELHI-110030 (APPELLANT) (RESPONDENT) PAN NO. A EEPB9416N ITA NO. 3142/DEL/2017 : ASSTT. YEAR : 2013-14 SH. ANIL BHALLA, FARM NO. 4, HYDE PARK, PRAKRITI MARG, VILLAGE-SULTANPUR, MEHARULI, NEW DELHI-110030 VS ACIT, CENTRAL CIRCLE-8, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AFEPB9416N ASSESSEE BY : SH. C. S. AGGARWAL, SR. ADV. REVENUE BY : SH. D. K. MISHRA, CIT DR DATE OF HEARING: 24.08.2020 DATE OF PRONOUNCEMENT: 15.10.2020 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEALS HAVE BEEN FILED BY THE REVENUE AND THE ASSESSEE AGAINST THE ORDERS OF THE LD. CIT(A)-2 4, NEW DELHI DATED 23.01.2017 AND 17.03.2017. ITA NOS. 2113 & 3142/DEL/2017 ANIL BHALLA 2 2. IN ITA NO. 2113/DEL/2017, FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: 1. THE ORDER OF LD. CIT (A) IS NOT CORRECT IN LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION U/S 68 OF THE ACT AMOUNTING TO RS.8,46,11,456/-. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN RELYING ON THE ORDER OF HONBLE DELHI HIGH COURT IN CASE OF KABUL CHAWLA AS SECTION 153A DOES NOT RESTRICT THE ASSESSMENT TO SEIZED DOCUMENT. 3. IN ITA NO. 3142/DEL/2017, FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1. THAT THE LEARNED CIT (A) HAS ERRED BOTH ON FACTS AND IN LAW IN UPHOLDING THE VALIDITY OF THE ORDER O F ASSESSMENT. 2. THAT THE LEARNED CIT(A) HAS FURTHER ERRED IN NOT ADMITTING THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE (ON AN APPLICATION MADE UNDER RULE 46A OF I.T. RULES) DESPITE THE FACT THAT THE ASSESSEE HAD NOT BEEN PROVIDED A FAIR AND PROPER OPPORTUNITY OF BEIN G HEARD IN THE COURSE OF ASSESSMENT PROCEEDINGS AND ALSO TO ADDUCE EVIDENCE IN SUPPORT OF THE CREDIT OF RS. 6 LACS, RECEIVED AS A LOAN. THE CONTENTION OF THE ASSESSEE SPECIFICALLY RAISED HAVING NOT BEEN ADVERS ELY DECIDED, THE LEARNED CIT(A) OUGHT TO HAVE ADMITTED THE ADDITIONAL EVIDENCE. 2. THE LEARNED CIT(A) HAS FAILED TO COMPREHEND THAT RULE 46A OF THE I.T. RULES DOES NOT DEBAR AN ASSESS EE TO ADDUCE AN ADDITIONAL EVIDENCE BUT IS AN AID TO DETERMINE THE TRUTH OF THE ISSUE INVOLVED. (SEE 14 TTJ 470 (DEL.) 3. THAT WITHOUT PREJUDICE AND IN THE ALTERNATIVE TH E CIT(A) HAS FAILED TO APPRECIATE WHEN A REQUEST WAS MADE TO SUMMON THE CREDITOR, THE AO WAS DUTY BOUND TO HAVE EXERCISED HIS POWER U/S 131 OF THE INCOME ITA NOS. 2113 & 3142/DEL/2017 ANIL BHALLA 3 TAX ACT, AS HELD BY THE ALLAHABAD HIGH COURT IN THE CASE OF NATHU RAM PREM CHAND AND AS SUCH THE CREDITS COULD NOT BE HELD AS UNEXPLAINED WITHOUT HAVING SUMMONED THE CREDITOR. (SEE 49 ITR 561) 4. THAT FURTHER THE LEARNED CIT(A) ERRED IN SUSTAIN ING THE ADDITION, DISREGARDING THAT THE ASSESSEE HAD LE D SATISFACTORY EVIDENCE BEFORE HIM TO ESTABLISH THE GENUINENESS OF THE CREDIT WHICH WAS WELL EXPLAINED. 5. THAT HE ALSO HAS FAILED TO APPRECIATE THAT INCOM E RETURNED BY THE ASSESSEE WAS OF A SUBSTANTIAL SUM O F RS. 2,30,08,530/- AND IN THE ABSENCE OF ANY ADVERSE EVIDENCE TO THE CONTRARY THERE WAS NO JUSTIFICATION NOT TO HAVE DELETED THE SAID ADDITION BY NOT ACCEPT ING THE CLAIM OF THE ASSESSEE. 4. THE FACTS RELEVANT FOR THE ADJUDICATION OF THE G ROUNDS RAISED BY THE REVENUE ARE AS UNDER: A SEARCH AND SEIZURE ACTION WAS CONDUCTED ON THE VA TIKA GROUP OF CASES ON 16.01.2013. THE ASSESSEE WHO IS INDIVID UAL INVOLVED IN THE BUSINESS AFFAIRS OF VATIKA GROUP WAS ALSO CO VERED U/S 132 OF THE INCOME TAX ACT, 1961. THE ASSESSMENT WAS COM PLETED U/S 153A OF THE INCOME TAX ACT, 1961. AFTER EXAMINI NG THE RETURN OF INCOME, THE A.O. MADE ADDITION OF RS. 8,4 6,11,456/- IN RESPECT OF LOANS AND ADVANCES RECEIVED DURING TH E YEAR. THE ASSESSMENT PERTAINS TO THE ASSESSMENT YEAR 2006-07. THE ASSESSMENT IN QUESTION IS NOT AN ABATED ASSESSMENT AS PER THE PROVISIONS OF SECTION 153A OF THE ACT. THE LOANS & ADVANCES HAVE BEEN DULY REFLECTED IN THE ACCOUNTS OF THE ASS ESSEE PREPARED AS AT MARCH 31, 2007. THERE WAS NO MATERIA L SEIZED IN RELATION TO SUCH LOANS & ADVANCES RECEIVED AND THE ASSESSMENT ORDER ALSO DO NOT REFER TO ANY SEIZED MATERIAL WHIL E ASSESSING THE LOANS & ADVANCES RECEIVED DURING THE YEAR. ITA NOS. 2113 & 3142/DEL/2017 ANIL BHALLA 4 5. THE LD. CIT (A) DELETED THE ADDITION ACCEPTING T HE ARGUMENTS OF THE ASSESSEE THAT AS PER THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE C ASE OF CIT VS. KABUL CHAWLA 61 TAXMAN 412 WHEREIN IT WAS HELD THAT WHERE NO INCRIMINATING MATERIAL WERE FOUND DURING THE SEARCH & SEIZURE OPERATION ADDITIONS MADE U/S 153A ARE NOT LEGALLY V ALID. SIMILAR HAS BEEN CONFIMED BY THE HONBLE SUPREME COURT IN T HE CASE OF PR. CIT VS. MEETA GUTGUTIA [2018] 96 TAXMANN.COM 46 8 AND ALSO IN THE CASE PR. CIT VS. KURELE PAPER MILLS [20 16] 380 ITR 571 (DELHI). 6. SINCE, THE DECISION OF THE LD. CIT (A) IS BASED ON THE JUDGMENTS OF THE HONBLE JURISDICTIONAL HIGH COURT AND THE HONBLE APEX COURTS, WE HEREBY DECLINE TO INTERFERE WITH THE ORDER OF THE LD. CIT (A). IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS LIABLE TO BE DISMISSED. 7. IN THE APPEAL OF THE ASSESSEE, A GROUND WAS RAIS ED AGAINST REJECTION OF ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE UNDER RULE 46A OF THE INCOME TAX RULES BEFORE THE L D. CIT (A). WE FIND THAT THE ADDITIONAL EVIDENCES CONSIST OF CO NFIRMATION LETTER AND BANKS STATEMENT OF THE CREDITORS, IN THE ABSENCE OF WHICH AN APPROPRIATE DECISION REGARDING THE ADJUDIC ATION OF THE ISSUE CANNOT BE ARRIVED. THE LD. CIT (A) HAS NOT PA SSED ANY SPEAKING ORDER REGARDING THE APPLICABILITY OR OTHER WISE OF CONDITIONS MENTIONED UNDER RULE 46A. HENCE, THE MAT TER IS BEING REFERRED BACK TO THE FILE OF THE LD. CIT (A) TO GIVE A CATEGORICAL FINDING REGARDING ADMITTING OR NOT ADMI TTING THE ADDITIONAL EVIDENCES IN ACCORDANCE WITH THE RATIO L AID DOWN IN ITA NOS. 2113 & 3142/DEL/2017 ANIL BHALLA 5 THE CASE OF MANISH BUILDWELL PVT. LTD. 204 TAXMANN 106 AND ITO VS. PARDEEPA RANI 73 TAXMANN 392. 8. HENCE, WE SET ASIDE THE AFORESAID IMPUGNED APPEL LATE ORDER OF LD. CIT(A) WITH THE DIRECTION TO PASS A FR ESH ORDER. IF THE LD. CIT(A) DECIDES TO ADMIT ADDITIONAL EVIDENCE S, HE SHOULD CLEARLY STATE THE SPECIFIC CLAUSE(S) OF RULE 46A(1) OF I.T. RULES THAT WOULD APPLY WHILE RECORDING THE REASONS UNDER RULE 46A(2) OF I.T. RULES. FURTHER, IF THE LD. CIT(A) DECIDES T O ADMIT ADDITIONAL EVIDENCES, REASONABLE OPPORTUNITY PRESCR IBED UNDER RULE 46A(3) OF I.T. RULES MUST BE PROVIDED BY THE L D. CIT(A) TO THE AO. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTIC AL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 15/10/2020. SD/- SD/- (SUSHMA CHOWLA) (DR. B. R. R. KUMAR) VICE PRESIDENT ACCOU NTANT MEMBER DATED: 15/10/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR