Ashwani Talwar, New Delhi V. DCIT, Noida

ITA 3155/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2344 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 18-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI
• Keywords: Gift; Opportunity of being heard; Additional evidence; Difference of opinion; Deemed dividend; Tax effect; Change of opinion; Capital Gains
• Section: 142(1); 153A; 2(22)(e); 13; 22; 68; 69; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI A BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI G.S. PANNU, VICE PRESIDENT AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NOS.3153 TO 3155/DEL/2017 ASSESSMENT YEARS : 2004-05 TO 2006-07 ASHWANI TALWAR, ADVOCATE DEEPAK KAPOOR, 59, NEHRU APARTMENTS, OUTER RING ROAD, KALKAJI, NEW DELHI-110019. PAN-AAAPT0920E VS DCIT, CENTRAL CIRCLE, 2 ND FLOOR, ARTO COMPLEX, SECTOR-33, NOIDA. APPELLANT RESPONDENT APPELLANT BY SH.DEEPAK KAPOOR, ADV. RESPONDENT BY SH. SATPAL GULATI, CIT DR DATE OF HEARING 30.03.2021 DATE OF PRONOUNCEMENT 29 .0 6 .2021 ITA NO.3156/DEL/2017 ASSESSMENT YEARS : 2007-08 ASHWANI TALWAR, ADVOCATE DEEPAK KAPOOR, 59, NEHRU APARTMENTS, OUTER RING ROAD, KALKAJI, NEW DELHI-110019. PAN-AAAPT0920E VS DCIT, CENTRAL CIRCLE, 2 ND FLOOR, ARTO COMPLEX, SECTOR-33, NOIDA. APPELLANT RESPONDENT APPELLANT BY SH.DEEPAK KAPOOR, ADV. RESPONDENT BY SH. SATPAL GULATI, CIT DR DATE OF HEARING 28.05.2021 DATE OF PRONOUNCEMENT 29 .06.2021 ORDER PER KUL BHARAT, JM : THESE APPEALS BY THE ASSESSEE FOR THE ASSESSMENT YE ARS 2004-05 TO 2007-08 ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) -IV, KANPUR, ALL DATED 31.03.2017. ITA NOS.-3153 TO 3156/DEL/2017 2 2. ALL THESE APPEALS ARE HAVING IDENTICAL GROUNDS OF APPEALS . THEREFORE, ALL APPEALS WERE TAKEN UP TOGETHER BEING DISPO SED OF BY WAY OF A CONSOLIDATED ORDER. 3. FIRST WE TAKE UP ITA NO.3153/DEL/2017 [ASSESSMENT YEAR 2004-05] WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THE IMPUGNED ASSESSMENT ORDER IS INVALID AS THER E WAS NO INCRIMINATING MATERIAL QUA THE ASSESSEE FOUND/UNEARTHE D DURING THE SEARCH AND THE ASSESSMENT FOR ASSESSMENT YEAR 04-05 ALREADY STOOD COMPLETED. THEREFORE, NO ADDITION COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. RELIANCE IS PLACED ON JUD GEMENT OF HONBLE DELHI HIGH COURT IN CIT VS KABUL CHAWALA (2016) 380 ITR 573; CIT VS MURALIDHAR DR. S AND VIBHU BAKHRU JJ. (201 6) 384 ITR 543. 2) THAT THE IMPUGNED ORDER IS NOT MAINTAINABLE IN LAW AS THE LD. CIT(A)- KANPUR VIDE IMPUGNED ORDER HAS REVERSED THE JUDGMENT AND ORDER OF HIS PREDECESSOR CIT(A)~ MEERUT, WHO VIDE ORDER DATED 22-07-2011 DELETED THE ADDITION MADE BY THE LD. AO EVEN THOUGH THERE IS NO FRESH MATERIAL BROUGHT ON RECORD BY THE L D. CIT(A)- KANPUR AND/OR THE LD. AO IN REMAND PROCEEDINGS. 3) THAT THE IMPUGNED ORDER IS NOT TENABLE IN LAW IN SO F AR AS THE LD. CIT(A) HAS TAKEN A DIFFERENT VIEW AND WENT ON TO CONFIRM THE ADDITION RELATING TO S.NO. 1 EVEN THOUGH THE PROVISIONS OF R ULE 46A OF IT RULES, 1962 WERE NOT APPLICABLE IN RESPECT OF THE A DDITIONS MADE. IN OTHER WORDS, ON THE SAME FACTS AND EVIDENCE, THE LD. AO HAS REVERSED THE JUDGMENT OF HIS PREDECESSOR WITHOUT EVE N CONDUCTING ANY FURTHER ENQUIRY WHATSOEVER AND BRINGING ANY FRE SH EVIDENCE ON RECORD. 4) THAT ON FACTS AND IN LAW, THE ADDITION OF RS. 65,000/- UNDER SECTION 69 OF THE INCOME TAX ACT, 1961 BEING UN EXPLAINED ITA NOS.-3153 TO 3156/DEL/2017 3 INVESTMENT IN THE PPF A/C OF THE ASSESSEE IS UNJUST IFIED, ILLEGAL AND UNWARRANTED. THE ASSESSEE MADE INVESTMENT IN PPF ACC OUNT OUT OF KNOWN SOURCES AND OUT OF INCOME CHARGEABLE TO TAX. TH EREFORE, ON GROUNDS TAKEN, BASIS ADOPTED AND ON FACTS AS WELL AS IN LAW THE ADDITION OF RS. 65,000/- IS UNJUSTIFIED, ILLEGAL AND UNWARR ANTED AND THE SAME DESERVES TO BE DELETED. 4. AT THE OUTSET, IT WAS NOTICED THAT THERE WAS A TYPOGR APHICAL ERROR IN THE GROUND NO.1. THE ERROR WAS POINTED TO THE LD. COU NSEL FOR THE ASSESSEE WHO SUBSEQUENTLY MODIFIED THE GROUND. THE GRO UND NO.1 OF THE APPEAL NOW READS AS UNDER:- I. THE IMPUGNED ASSESSMENT ORDER IS INVALID AS THER E WAS NO INCRIMINATING MATERIAL FOR THE ASSESSEE FOUND/UNEARTH DURING THE SEARCH AND ASSESSMENT ORDER FOR ASSESSMENT YEAR 200 4-05 ALREADY STOOD COMPLETED. THEREFORE, NO ADDITION COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. RELIANCE IS PLACED ON TH E JUDGEMENT OF HONBLE DELHI HIGH COURT IN CIT VS KABUL CHAWLA (2016 ) 380 ITR 573. 5. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT A SEARCH OPERATION WAS CARRIED OUT ON THE RESIDENTIAL AND OTHER P REMISES OF THE ASSESSEE INCLUDING RESIDENTIAL PREMISES NO.F-2, MAHARANI BAGH , NEW DELHI ON 15.02.2008. DURING THE COURSE OF SEARCH OPERATION , THE CASH AND JEWELLERY WAS FOUND AND SEIZED. A NOTICE U/S 153A OF THE INCOME TAX ACT, 1961 (THE ACT) WAS ISSUED ON 29.07.2009 CALLING U PON THE ASSESSEE FOR FILING RETURN OF INCOME. THUS, THE RETURN OF IN COME WAS FILED ON 22.09.2009 DECLARING INCOME AT RS.23,93,936/- AND ALSO AG RICULTURAL INCOME OF RS.4,02,170/-. THE ASSESSING OFFICER PROCEEDED TO FRAME ASSESSMENT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND INFORMATION ITA NOS.-3153 TO 3156/DEL/2017 4 SUPPLIED BY THE ASSESSEE. THE ASSESSING OFFICER MADE ADD ITION OF RS.65,000/- U/S 69 OF THE ACT, ON ACCOUNT OF CASH DEPOS ITED IN PPF ACCOUNT OF THE ASSESSEE; BOGUS GIFT AND LOAN OF RS.60,000/- AND RS.15,50,000/- RESPECTIVELY. HENCE, THE ASSESSING OFFICER AS SESSED THE INCOME OF THE ASSESSEE AT RS.44,71,105/-. 6. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED APPEAL B EFORE LD.CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS DELETED THE ADDITIONS OF RS.60,000/- & RS.15,50,000/- AND SUSTAINED THE ADDITION OF RS.65,000/- MADE ON ACCOUNT OF CASH DEPOSITS IN PPF ACCO UNT OF THE ASSESSEE. 7. AGGRIEVED AGAINST THE ORDER OF LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 8. IT IS PERTINENT TO NOTE THAT THAT THIS IS SECOND ROU ND OF LITIGATION AND IN THE EARLIER ROUND, THE TRIBUNAL WAS PLEASED TO RESTORE THE APPEAL TO THE FILE OF LD.CIT(A) FOR ADMITTING THE ADDITIONAL EVIDENCES AND DECIDE THE APPEAL AFRESH. HENCE, IN THE SECOND ROUND OF LITIGATION, LD.CIT(A) AFTER CONSIDERING THE SUBMISSIONS AND EVIDENCES PLACED ON RECORD, DELETED THE ADDITION RELATED TO GIFT AND LOAN AMOUNTING TO RS.60,000/- & RS.15,50,000/- RESPECTIVELY. THE ONLY ADDITION SUSTAINED W AS RELATED TO CASH DEPOSIT IN PPF ACCOUNT OF RS.65,000/-. 9. AGAINST THIS, THE ASSESSEE HAS PREFERRED THE APPEAL BE FORE THE TRIBUNAL. ITA NOS.-3153 TO 3156/DEL/2017 5 10. GROUND NOS. 1 & 2 RAISED BY THE ASSESSEE ARE LEGAL G ROUNDS AND HAVE BEEN RAISED AGAINST THE VALIDITY AND LEGALITY OF THE AS SESSMENT FRAMED BY THE ASSESSING OFFICER. 11. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THERE WAS NO FRESH MATERIAL BEFORE THE ASSESSING OFFICER. MOREOV ER, NO INCRIMINATING MATERIAL WAS FOUND IN THE SEARCH OPERATION AS SUCH NO ADDITION COULD HAVE BEEN MADE. HE FURTHER SUBMITTED THAT THE ASSESSMENT HAS BEEN FRAMED CONTRARY TO THE RATIO LAID D OWN BY THE JUDGEMENTS OF HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA [2016] 380 ITR 573 [DEL.] AND PR. CIT VS LATA JAIN [ 2016] 384 ITR 543 [DEL.]. HE SUBMITTED THAT IN THE LIGHT OF AFORESAID JUDGEMENTS OF H ONBLE DELHI HIGH COURT, THE ASSESSMENT SO FRAMED DESERVES TO BE QUASHED. 12. ON THE CONTRARY, LD. CIT DR OPPOSED THESE SUBMISSION S AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 13. IN REJOINDER, LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE ASSESSMENT IN QUESTION IS UNABATED, THEREFORE, IN THE LIGHT OF THE JUDGEMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA (SUPRA), THE ASSESSMENT DESERVES TO BE QUASHED. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE REVENUE COULD NOT CONTROVERT T HE FACT THAT THE ADDITIONS AS MADE BY THE ASSESSING OFFICER ARE NOT ON THE BASIS OF MATERIAL GATHERED DURING THE COURSE OF SEARCH. ADMITTEDL Y, THE ADDITIONS ARE NOT LINKED WITH INCRIMINATING MATERIAL FOUND DURING THE CO URSE OF SEARCH. MOREOVER, IT IS NOT DISPUTED THAT THE ASSESSMEN T WAS NOT ABATED ITA NOS.-3153 TO 3156/DEL/2017 6 IN THE YEAR UNDER CONSIDERATION, THE ASSESSMENT HAD BEE N COMPLETED. THE HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (S UPRA) HELD AS UNDER:- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, RE AD WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAI NED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERG ES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF TH E ACT, NOTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORILY IS SUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH ASSESSMEN T YEARS WILL HAVE TO BE COMPUTED BY THE ASSESSING OFFICERS AS A FRE SH EXERCISE. III. THE ASSESSING OFFICER WILL EXERCISE NORMAL ASSESS MENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AS SESSMENT YEAR IN WHICH THE SEARCH TAKES PLACE. THE ASSESSING OFFICER HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AF OREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS, THERE WILL BE ONLY ONE ASSESSMENT ORDER I N RESPECT OF EACH OF THE SIX ASSESSMENT YEARS IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. IV. ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITION S SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE E VIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIA L. OBVIOUSLY, AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. V. IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTI ON 153A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSE SSMENT PROCEEDINGS. VI. IN SO FAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SH ALL BE MADE ITA NOS.-3153 TO 3156/DEL/2017 7 SEPARATELY FOR EACH ASSESSMENT YEAR ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE ASSESSING OFFICER. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY T HE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT UNDER SECTION 15 3A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DU RING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UND ISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHIC H WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN TH E COURSE OF ORIGINAL ASSESSMENT. 15. RESPECTFULLY FOLLOWING THE SAME, WE HEREBY QUASH THE IMP UGNED ASSESSMENT ORDER BEING NOT IN THE CONFORMITY WITH LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT. GROUND OF APPEAL NOS. 1 & 2 RAISED BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED. 16. RESTS OF THE GROUNDS ARE ON MERIT OF ADDITION, HAVE BE COME OF ACADEMIC NATURE ONLY AS WE HAVE QUASHED THE ASSESSME NT ORDER, HENCE ARE NOT BEING ADJUDICATED HEREIN. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.31 53/DEL/2017 [ASSESSMENT YEAR 2004-05] IS ALLOWED. 18. NOW, WE TAKE UP ITA NO.3154/DEL/2017 [ASSESSMENT YEAR 2005-06] FILED BY THE ASSESSEE. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1). THE IMPUGNED ASSESSMENT ORDER IS INVALID AS THE RE WAS NO INCRIMINATING MATERIAL QUA THE ASSESSEE FOUND/UNEARTHE D DURING THE SEARCH AND THE ASSESSMENT FOR AY 05-06 ALREADY STOOD COMPLETED. THEREFORE, NO ADDITION COULD HAVE BEEN MADE TO THE INC OME ALREADY ASSESSED. RELIANCE IS PLACED ON JUDGEMENT OF HONBLE DE LHI HIGH COURT IN CIT VS KABUL CHAWALA (2016) 380 ITR 573; CIT VS MURALIDHAR DR. S AND VIBHU BAKHRU JJ. (2016) 384 ITR 543. ITA NOS.-3153 TO 3156/DEL/2017 8 2) THAT THE IMPUGNED ORDER IS NOT MAINTAINABLE IN LAW AS THE LD. CIT(A)- KANPUR VIDE IMPUGNED ORDER HAS REVERSED THE JUDGMENT AND ORDER OF HIS PREDECESSOR CIT(A)- MEERUT, WHO VIDE ORDER DATED 23-03-2011 DELETED THE ADDITION MADE BY THE LD. AO EVEN THOUGH THERE IS NO FRESH MATERIAL BROUGHT ON RECORD BY THE L D. CIT(A)- KANPUR AND/OR THE LD. AO IN REMAND PROCEEDINGS. 3) THAT THE IMPUGNED ORDER IS NOT TENABLE IN LAW IN SO F AR AS THE LD. CIT(A) HAS TAKEN A DIFFERENT VIEW AND WENT ON TO CONFIRM THE ADDITION RELATING TO S.NO. 1 EVEN THOUGH THE PROVISIONS OF R ULE 46A OF IT RULES, 1962 WERE NOT APPLICABLE IN RESPECT OF THE A DDITIONS MADE. IN OTHER WORDS, ON THE SAME FACTS AND EVIDENCE, THE LD. AO HAS REVERSED THE JUDGMENT OF HIS PREDECESSOR WITHOUT EVE N CONDUCTING ANY FURTHER ENQUIRY WHATSOEVER AND BRINGING ANY FRE SH EVIDENCE ON RECORD. 4) THAT ON FACTS AND IN LAW, THE ADDITION OF RS. 70 ,000/- UNDER SECTION 69 OF THE INCOME TAX ACT, 1961 BEING UNEXPL AINED INVESTMENT IN THE PPF A/C OF THE ASSESSEE IS UNJUST IFIED, ILLEGAL AND UNWARRANTED. THE ASSESSEE MADE INVESTMENT IN PPF ACC OUNT OUT OF KNOWN SOURCES AND OUT OF INCOME CHARGEABLE TO TAX. TH EREFORE, ON GROUNDS TAKEN, BASIS ADOPTED AND ON FACTS AS WELL AS IN LAW THE ADDITION OF RS. 70,000/- IS UNJUSTIFIED, ILLEGAL AND UNWARR ANTED AND THE SAME DESERVES TO BE DELETED. 5) THAT ON FACTS AND IN LAW, THE ADDITION OF RS. 60 ,000/- UNDER SECTION 69 OF THE INCOME TAX ACT, 1961 BEING UNEXPLAI NED CASH DEPOSITS IN BANKS IS UNJUSTIFIED, ILLEGAL AND UNWARRANT ED. THE ASSESSEE DEPOSITED THE AMOUNT IN THE BANK ACCOUNT O UT OF KNOWN SOURCES. THEREFORE, ON GROUNDS TAKEN, BASIS ADOPTED AND ON FACTS AS WELL AS IN LAW, THE ADDITION OF RS. 60,000/- IS UNJUSTI FIED, ILLEGAL AND UNWARRANTED AND THE SAME DESERVES TO BE DELETED. 6) THAT ON FACTS AND IN LAW, THE ADDITION OF RS. 50 L AKHS UNDER SECTION 2 (22) (E) OF THE INCOME TAX ACT, 1961 IS ILLEGA L AND ITA NOS.-3153 TO 3156/DEL/2017 9 UNJUSTIFIED. THE PROVISIONS OF SECTION 2(22) (E) ARE N OT APPLICABLE AND THE LD. ASSESSING OFFICER DID NOT APPLY ITS MIND TO THE FACTS BROUGHT TO HIS NOTICE. THEREFORE, ON GROUNDS TAKEN AND BASIS ADOPTED AND ON FACTS AND IN LAW, THE ADDITION OF RS. 50,00,000/- IS UN JUSTIFIED AND UNWARRANTED AND THE SAME DESERVES TO BE DELETED. 7) THAT ON FACTS AND IN LAW TREATING LONG TERM CAPIT AL AMOUNTING TO RS. 35,25,645/- AS INCOME FROM OTHER SOURCES IS TOT ALLY WRONG, UNJUSTIFIED AND ILLEGAL. LONG TERM CAPITAL ARISES ON SALE OF SHARES OF INDIAN COMPANY WITHIN THE MEANING OF SECTION 2(29B) OF THE ACT. DURING ASSESSMENT PROCEEDINGS APPELLANT FILED ALL SUPP ORTING DOCUMENTS, EVIDENCES. THE LD. ASSESSING OFFICER IGNORE D THE FACTS AND TREATED LONG TERM CAPITAL GAINS INCOME AS INCOME F ROM OTHER SOURCES. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ALSO UPHELD THE TREATMENT GIVEN BY THE LD. A.O. BY IGNORING THE ISSUES RAISED BY THE APPELLANT IN FIRST APPEAL. THEREFORE, ON FACTS AND IN LAW AND ON GROUNDS TAKEN AND BASIS ADOPTED, THE TREATMENT OF LONG TERM CAPITAL GAINS AMOUN TING TO RS. 35,25,645/- AS INCOME FROM OTHER SOURCES IS ILLEGAL AND U NJUSTIFIED AND TREATMENT/TAXABILITY UNDER THE HEAD LONG TERM CA PITAL GAINS IS TO BE ALLOWED AS ORIGINALLY CLAIMED IN THE RETURN BY THE APPE LLANT. 19. AT THE OUTSET, IT WAS ALSO NOTICED IN THIS APPEAL THA T THERE WAS A TYPOGRAPHICAL ERROR IN THE GROUND NO.1. THE ERROR WAS POINTED TO THE LD. COUNSEL FOR THE ASSESSEE WHO SUBSEQUENTLY MODIFIED THE G ROUND. THE GROUND NO.1 OF THE APPEAL NOW READS AS UNDER:- I. THE IMPUGNED ASSESSMENT ORDER IS INVALID AS THER E WAS NO INCRIMINATING MATERIAL FOR THE ASSESSEE FOUND/UNEARTH DURING THE SEARCH AND ASSESSMENT ORDER FOR ASSESSMENT YEAR 200 4-05 ALREADY STOOD COMPLETED. THEREFORE, NO ADDITION COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. RELIANCE IS PLACED ON TH E JUDGEMENT ITA NOS.-3153 TO 3156/DEL/2017 10 OF HONBLE DELHI HIGH COURT IN CIT VS KABUL CHAWLA (2016 ) 380 ITR 573. 20. THE FACTS ARE IDENTICAL AS WERE IN ASSESSMENT YEAR 20 04-05 EXCEPT TWO ADDITIONAL ADDITIONS IN THE FORM OF DEEMED DIVIDEND AND BOGUS LONG TERM CAPITAL GAIN. IN THE PRESENT CASE, LD.CIT(A) SUSTAINED ADDITIONS RELATED TO CASH DEPOSITS IN PPF ACCOUNT OF RS.70,000/-, BA NK ACCOUNTS OF RS.60,000/- AND ADDITION OF RS.50,00,000/- MADE BY INVOKING THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT AND LONG TERM CAP ITAL GAIN DECLARED ON ACCOUNT ON SALE OF SHARES OF RS.35,25,645/-. 21. AGGRIEVED AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFO RE THIS TRIBUNAL. 22. GROUND NOS. 1 & 2 RAISED BY THE ASSESSEE IN THIS AP PEAL ARE AGAINST THE LEGALITY AND VALIDITY OF THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER. 23. LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES ADOPTE D THE SAME ARGUMENTS AS WERE IN ASSESSMENT YEAR 2004-05. IN TH IS YEAR AS WELL THE ASSESSMENT HAD BEEN COMPLETED HENCE THE ASSESSMENT W AS NOT ABATED AND ADDITIONS HAVE NO NEXUS WITH THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN THE ASSESSMENT YEAR 20 04-05, WE HAVE QUASHED THE ASSESSMENT ON THE GROUND THAT SAME HAS NOT BEEN FRAMED ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURS E OF SEARCH. BY FOLLOWING THE JUDGEMENT OF HONBLE DELHI HIGH COURT RENDE RED IN THE CASE OF CIT VS KABUL CHAWLA (SUPRA). THE REVENUE HAS NOT POINTED OUT ANY CHANGE INTO THE FACTS AND CIRCUMSTANCES, THEREFORE, T AKING A ITA NOS.-3153 TO 3156/DEL/2017 11 CONSISTENT VIEW, THE ASSESSMENT FOR THE YEAR UNDER APPE AL IS HEREBY QUASHED BEING CONTRARY TO THE LAW LAID DOWN BY THE HON BLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF KABUL CHAWLA (SUPRA). GROUND NOS. 1 & 2 RAISED BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED. 24. RESTS OF THE GROUNDS ARE ON THE MERIT OF ADDITIONS SIN CE WE HAVE ALREADY QUASHED THE ASSESSMENT ORDER. THE OTHER GROU NDS HAVE BECOME ACADEMIC IN NATURE ONLY HENCE, ARE NOT ADJUDICATED. TH EREFORE, THE APPEAL OF THE ASSESSEE IN ITA NO.3154/DEL/2017 PERTAINING TO ASSESSMENT YEAR 2005-06 IS ALLOWED IN TERMS INDICATED ABOVE. 25. NOW, WE TAKE UP ITA NO.3155/DEL/2017 [ASSESSMENT YEAR 2006-07] FILED BY THE ASSESSEE. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1) THE IMPUGNED ASSESSMENT ORDER IS INVALID AS THER E WAS NO INCRIMINATING MATERIAL QUA THE ASSESSEE FOUND/UNEARTHE D DURING THE SEARCH AND THE ASSESSMENT FOR AY 06-07 ALREADY STOOD COMPLETED. THEREFORE, NO ADDITION COULD HAVE BEEN MADE TO THE INC OME ALREADY ASSESSED. RELIANCE IS PLACED ON JUDGEMENT OF HONBLE DE LHI HIGH COURT IN CIT VS KABUL CHAWALA (2016) 380 ITR 573; CIT VS MURALIDHAR DR. S AND VIBHU BAKHRU JJ. (2016) 384 ITR 543. 2) THAT THE IMPUGNED ORDER IS NOT MAINTAINABLE IN LAW AS THE LD. CIT(A)- KANPUR VIDE IMPUGNED ORDER HAS REVERSED THE JUDGMENT AND ORDER OF HIS PREDECESSOR CIT(A)- MEERUT, WHO VIDE ORDER DATED 23-03-2011 DELETED THE ADDITION MADE BY THE LD. AO EVEN THOUGH THERE IS NO FRESH MATERIAL BROUGHT ON RECORD BY THE L D. CIT(A)- KANPUR AND/OR THE LD. AO IN REMAND PROCEEDINGS. 3) THAT THE IMPUGNED ORDER IS NOT TENABLE IN LAW IN SO F AR AS THE LD. CIT(A) HAS TAKEN A DIFFERENT VIEW AND WENT ON TO CONFIRM THE ITA NOS.-3153 TO 3156/DEL/2017 12 ADDITION RELATING TO S.NO. 1 EVEN THOUGH THE PROVISIONS OF R ULE 46A OF IT RULES, 1962 WERE NOT APPLICABLE IN RESPECT OF THE A DDITIONS MADE. IN OTHER WORDS-, ON THE SAME FACTS AND EVIDENCE, THE L D. AO HAS REVERSED THE JUDGMENT OF HIS PREDECESSOR WITHOUT EVE N CONDUCTING ANY FURTHER ENQUIRY WHATSOEVER AND BRINGING ANY FRE SH EVIDENCE ON RECORD. 4) THAT ON FACTS AND IN LAW, THE ADDITION OF RS. 70 ,000/- UNDER SECTION 69 OF THE INCOME TAX ACT, 1961 BEING UNEXPL AINED INVESTMENT IN THE PPF A/C OF THE ASSESSEE IS UNJUST IFIED, ILLEGAL AND UNWARRANTED. THE ASSESSEE MADE INVESTMENT IN PPF ACC OUNT OUT OF KNOWN SOURCES AND OUT OF INCOME CHARGEABLE TO TAX. TH EREFORE, ON GROUNDS TAKEN, BASIS ADOPTED AND ON FACTS AS WELL AS IN LAW THE ADDITION OF RS. 70,000/- IS UNJUSTIFIED, ILLEGAL AND UNWARR ANTED AND THE SAME DESERVES TO BE DELETED. 5) THAT ON FACTS AND IN LAW, THE ADDITION OF RS. 2,50,00 0/- UNDER SECTION 69 OF THE INCOME TAX ACT, 1961 BEING U NEXPLAINED CASH DEPOSITS IN BANKS IS UNJUSTIFIED, ILLEGAL AND UNWAR RANTED. THE ASSESSEE DEPOSITED THE AMOUNT IN THE BANK ACCOUNT O UT OF KNOWN SOURCES. THEREFORE, ON GROUNDS TAKEN, BASIS ADOPTED AND ON FACTS AS WELL AS IN LAW, THE ADDITION OF RS. 2,50,000/- IS UNJUS TIFIED, ILLEGAL AND UNWARRANTED AND THE SAME DESERVES TO BE DELETED. 6) THAT ON FACTS AND IN LAW, THE ADDITION OF RS. 2,00,0 00/- UNDER SECTION OF THE INCOME TAX ACT, 1961 IS UNJUSTI FIED AND ILLEGAL. THE ASSESSEE DULY DISCHARGED THE ONUS UNDER SECTION 68 AND NO ADVERSE INFERENCE WAS CALLED FOR. THEREFORE, ON GROUNDS TAKEN AND BASIS ADOPTED AND ON FACTS AND IN LAW, THE ADDITION OF RS. 2,00,000/- IS ILLEGAL AND UNWARRANTED AND SAME DESERVES TO BE DELETED IN TOTO. 26. AT THE OUTSET, IT WAS ALSO NOTICED IN THIS APPEAL THAT THERE WAS A TYPOGRAPHICAL ERROR IN THE GROUND NO.1. THE ERROR WAS POINTED TO THE LD. ITA NOS.-3153 TO 3156/DEL/2017 13 COUNSEL FOR THE ASSESSEE WHO SUBSEQUENTLY MODIFIED THE G ROUND. THE GROUND NO.1 OF THE APPEAL NOW READS AS UNDER:- I. THE IMPUGNED ASSESSMENT ORDER IS INVALID AS THER E WAS NO INCRIMINATING MATERIAL FOR THE ASSESSEE FOUND/UNEARTH DURING THE SEARCH AND ASSESSMENT ORDER FOR ASSESSMENT YEAR 200 4-05 ALREADY STOOD COMPLETED. THEREFORE, NO ADDITION COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. RELIANCE IS PLACED ON TH E JUDGEMENT OF HONBLE DELHI HIGH COURT IN CIT VS KABUL CHAWLA (2016 ) 380 ITR 573. 27. THE FACTS ARE IDENTICAL AS WERE IN ITA NO.3154/DEL/201 7 PERTAINING TO ASSESSMENT YEAR 2005-06. IN THIS YEAR, LD.CIT(A HAD SUSTAINED THE ADDITIONS OF RS. 70,000/- AND RS.2,50,000/- MADE ON ACCOUN T OF CASH DEPOSITS IN THE PPF ACCOUNT AND CASH DEPOSITS IN THE BA NK ACCOUNTS OF THE ASSESSEE RESPECTIVELY. 28. LD.CIT(A) ALSO SUSTAINED THE ADDITION OF RS.2,00,000/- MADE ON ACCOUNT OF BOGUS GIFTS AND HOWEVER, THE ADDITION OF RS.2,00 ,000/- WAS DELETED. 29. AGGRIEVED AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 30. WE HAVE HEARD LD. AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES. WE FIND THAT GROUND NOS. 1 & 2 RAISED BY THE ASSESSEE IN THIS APPEAL ARE AGAINST THE LEGALITY AND VALIDITY OF THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER. LD. AUTHORIZED REPRESENTATIVES OF THE PAR TIES ADOPTED THE SAME ARGUMENTS AS WERE IN ASSESSMENT YEAR 2004-0 5. IN THE ASSESSMENT YEAR 2004-05, WE HAVE QUASHED THE ASSESSM ENT ON THE ITA NOS.-3153 TO 3156/DEL/2017 14 GROUND THAT SAME HAS NOT BEEN FRAMED ON THE BASIS OF IN CRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. BY FOLLOWING TH E JUDGEMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS KABUL CHAWLA (SUPRA). THE REVENUE HAS NOT POINTED OUT ANY CHANGE INT O THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THEREFORE, THE ASSES SMENT FOR THE YEAR UNDER APPEAL IS HEREBY QUASHED BEING CONTRARY TO THE LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE O F KABUL CHAWLA (SUPRA). GROUND NOS. 1 & 2 RAISED BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED. 31. RESTS OF THE GROUNDS ARE ON THE MERIT OF ADDITIONS SIN CE WE HAVE ALREADY QUASHED THE ASSESSMENT ORDER. THE OTHER GROU NDS HAVE BECOME ACADEMIC IN NATURE ONLY AND ARE NOT ADJUDICATING. THERE FORE, THE APPEAL OF THE ASSESSEE IN ITA NO.3155/DEL/2017 PERTAINING TO ASS ESSMENT YEAR 2006-07 IS ALLOWED IN TERMS INDICATED ABOVE. 32. NOW, WE TAKE UP ITA NO.3156/DEL/2017 [ASSESSMENT YEAR 2007-08] FILED BY THE ASSESSEE. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- I) THE IMPUGNED ASSESSMENT ORDER IS INVALID AS THER E WAS NO INCRIMINATING MATERIAL QUA THE ASSESSEE FOUND/UNEARTHE D DURING THE SEARCH. RELIANCE IS PLACED ON JUDGEMENT OF HONBLE DELHI HIGH COURT IN CIT VS KABUL CHAWALA (2016) 380 ITR 573; CIT VS MUR ALIDHAR DR. SAND VIHHU BAKHRU JJ. (2016) 384 ITR 543. II) THAT THE IMPUGNED ORDER IS NOT MAINTAINABLE IN LAW AS THE LD. CIT(A)- KANPUR VIDE IMPUGNED ORDER HAS REVERSED THE JU DGMENT AND ORDER OF HIS PREDECESSOR CIT(A)- MEERUT, WHO VIDE ORDE R DATED 10.03.2011 DELETED THE ADDITION MADE BY THE LD. ASSESSIN G OFFICER ITA NOS.-3153 TO 3156/DEL/2017 15 EVEN THOUGH THERE IS NO FRESH MATERIAL BROUGHT ON REC ORD BY THE LD. CIT(A)- KANPUR AND/OR THE LD. AO IN REMAND PROCEEDINGS. III) THAT THE IMPUGNED ORDER IS NOT TENABLE IN LAW IN SO FAR AS THE LD. CIT(A) HAS TAKEN A DIFFERENT VIEW AND WENT ON TO CON FIRM THE ADDITION RELATING TO S.NO. 2 & 3 EVEN THOUGH THE PROVI SIONS OF RULE 46A OF IT RULES, 1962 WERE NOT APPLICABLE IN RESPECT OF THE ADDITIONS MADE. IN OTHER WORDS, ON THE SAME FACTS AND EVIDENCE, THE LD. AO HAS REVERSED THE JUDGMENT OF HIS PREDECESSOR WITHOUT EVEN CONDUCTING ANY FURTHER ENQUIRY WHATSOEVER AND BRING ING ANY FRESH EVIDENCE ON RECORD. THIS IS NOTHING BUT A CHANGE OF OPINION BY THE LD. CIT(A) WHICH IS NOT PERMISSIBLE IN LAW. IV) THAT ON FACTS AND IN LAW, THE ADDITION OF RS. 20 L AKHS UNDER SECTION 2 (22) (E) OF THE INCOME TAX ACT, 1961 IS ILLEGA L AND UNJUSTIFIED. THE PROVISIONS OF SECTION 2(22)(E) ARE NO T APPLICABLE AND THE LD. CIT(A) DID NOT APPLY ITS MIND TO THE FACTS BRO UGHT TO HIS NOTICE. THEREFORE, ON GROUNDS TAKEN AND BASIS ADOPTED AND ON FACTS AND IN LAW, THE ADDITION OF RS. 20,00,000/- IS UNJUSTIF IED AND UNWARRANTED AND THE SAME DESERVES TO BE DELETED. V) THAT ON FACTS AND IN LAW, THE ADDITION OF RS. 2,00,00 ,000/- ON ACCOUNT OF BENEFIT DERIVED ON PURCHASE OF FLAT FOR LOWER CONSIDERATION IS ILLEGAL AND UNJUSTIFIED. THE ADDITION IS MADE BY THE ON THE BASIS OF CONJECTURE & SURMISES WITHOUT AFFORDING THE ASSESSEE REASONABLE OPPORTUNITY OF BEING HEARD. THE IT DEPARTMENT ALSO DID NOT PROVIDE THE MATERIAL RELIED UPON BY IT TO MAKE THE ADDITION. THE REFORE, ON GROUNDS TAKEN AND BASIS ADOPTED AND ON FACTS AND IN LAW THE ADDITION OF RS. 2,00,00,000/- IS ILLEGAL & UNWARRANTED AND THE SAME DESERVES TO BE DELETED IN TOTO. 33. AT THE OUTSET, IT WAS ALSO NOTICED IN THIS APPEAL THAT THERE WAS A TYPOGRAPHICAL ERROR IN THE GROUND NO.1. THE ERROR WAS POINTED TO THE LD. ITA NOS.-3153 TO 3156/DEL/2017 16 COUNSEL FOR THE ASSESSEE WHO SUBSEQUENTLY MODIFIED THE G ROUND. THE GROUND NO.1 OF THE APPEAL NOW READS AS UNDER:- I. THE IMPUGNED ASSESSMENT ORDER IS INVALID AS THER E WAS NO INCRIMINATING MATERIAL FOR THE ASSESSEE FOUND/UNEARTH DURING THE SEARCH AND ASSESSMENT ORDER FOR ASSESSMENT YEAR 200 4-05 ALREADY STOOD COMPLETED. THEREFORE, NO ADDITION COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. RELIANCE IS PLACED ON TH E JUDGEMENT OF HONBLE DELHI HIGH COURT IN CIT VS KABUL CHAWLA (2016 ) 380 ITR 573. 34. GROUND NO.(I) RAISED BY THE ASSESSEE IN THIS APPEAL IS AGAINST THE LEGALITY OF THE ASSESSMENT ON THE GROUND THAT NO FRESH M ATERIAL WAS BROUGHT ON RECORD. LD. COUNSEL FOR THE ASSESSEE REITERA TED THE SUBMISSIONS AS MADE IN THE ASSESSMENT YEARS 2004-05 TO 2006-07. 35. LD.CIT DR OPPOSED THE SUBMISSIONS AND SUBMITTED THAT IN THIS YEAR, THE ASSESSMENT WAS ABATED. THEREFORE, THE ASSESS MENT FRAMED CANNOT BE QUASHED. 36. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH PARTIES A ND PERUSED THE MATERIAL AVAILABLE ON RECORD. LD. COUNSEL FOR THE ASSESSEE COULD NOT CONTROVERT TO FACTS THAT IN THE YEAR UNDER APPEAL, THE ASSESSMENT WAS NOT ABATED. ADMITTEDLY IN THE YEAR UNDER APPEAL, REGULAR ASS ESSMENT WAS NOT COMPLETED, THEREFORE, WE DO NOT SEE ANY MERIT IN THE CONTENTION OF THE ASSESSEE. THUS, GROUND NO.(I) RAISED BY THE ASSESSEE IS REJECTED. 37. GROUND NOS.(II), (III) & (IV) RAISED BY THE ASSESSEE ARE INTER- CONNECTED AND RAISED AGAINST THE SUSTAINING OF ADDITION O F RS.20 LAKHS INVOKING UNDER THE PROVISION OF SECTION 2(22)(E) OF THE ACT. ITA NOS.-3153 TO 3156/DEL/2017 17 38. FACTS OF THE CASE ARE THAT WHILE FRAMING THE ASSESSM ENT, THE ASSESSING OFFICER OBSERVED THAT AS PER THE BANK STATEME NT OF THE ASSESSEE, THERE WERE CREDIT ENTRIES OF M/S. ATS INFRASTRUC TURE LTD. TOTALING TO RS.20 LAKHS ON 17.05.2006. IT WAS OBSERVED T HAT IN THE SAID COMPANY, THE ASSESSEE WAS HAVING SHARE HOLDING/VOTING PO WER OF 33.33%. THEREFORE, TREATING THE CREDIT IN THE ACCOUNT OF THE ASSESSEE AS THE LOAN FROM M/S. ATS INFRASTRUCTURE LTD. THE ASSESSING O FFICER MADE ADDITION BY INVOKING THE PROVISION OF SECTION 2(22)(E) OF THE AC T. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A) WHO IN T HE SECOND ROUND OF THE LITIGATION SUSTAINED THIS ADDITION. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 39. IT IS PERTINENT TO NOTE THAT THE IMPUGNED ADDITION WAS INFACT DELETED BY LD.CIT(A) IN THE ORIGINAL PROCEEDINGS. HOWEVER, W HEN THE MATTER WAS REMANDED BY THIS TRIBUNAL FOR FRESH ADJUDICAT ION, LD.CIT(A SUSTAINED THIS ADDITION. LD. COUNSEL FOR THE ASSESSEE RE ITERATED THE SUBMISSIONS AS MADE BEFORE THE LD.CIT(A). LD. COUNSEL FOR T HE ASSESSEE SUBMITTED THAT IN THE ORIGINAL PROCEEDINGS, LD.CIT(A), MEERUT HAD INFACT DELETED THIS ADDITION. HE DREW OUR ATTENTION TO THE FINDING S OF LD.CIT(A), MEERUT WHO VIDE ORDER DATED 10.03.2011 IN PARA 9.5 HELD T HAT THE SUM OF RS.20 LAKHS RECEIVED BY THE ASSESSEE ON 17.05.2006 FROM M/S. ATS INFRASTRUCTURE LTD. REPRESENTS REPAYMENT OF PRE-EXISTING LIABILITY BY M/S. ATS INFRASTRUCTURE LTD., THEREFORE, THE SAME IS NOT COVER ED U/S 2(22)(E) OF THE ACT. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT HO WEVER, IN THE PROCEEDINGS REMANDED BY THE TRIBUNAL, LD.CIT(A) IGNORED THE FACTUM OF FINDING OF LD.CIT(A) WHO HAD CATEGORICALLY CAME TO THE CONCLU SION THAT ITA NOS.-3153 TO 3156/DEL/2017 18 THE IMPUGNED ADDITION REPRESENTS THE REPAYMENT OF PRE- EXISTING LIABILITY BY M/S. ATS INFRASTRUCTURE LTD. HOWEVER, LD.CIT(A) MERELY O N THE CONJECTURES AND SURMISES SUSTAINED THE ADDITION. 40. ON THE CONTRARY, LD. CIT DR OPPOSED THESE SUBMISS IONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 41. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE CONTENTION OF THE ASSESSEE THR OUGHOUT HAD BEEN THAT THE IMPUGNED ADDITION REPRESENTED THE PRE-EXISTING LIABILITY. WE FIND THAT IN THE ORIGINAL PROCEEDINGS, LD.CIT(A) VIDE ORDER DAT ED 10.03.2011 HAS DECIDED THE ISSUE BY OBSERVING AS UNDER:- 9.5. DECISION AND REASONS THEREFOR: I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS INC LUDING THOSE MADE IN THE REMAND REPORT AND REJOINDER THEREOF. THE AO ISSUED NOTICE DATED 29/09/09 U/S 142(1) OF THE INCOME-TAX A CT IN WHICH 27 QUERIES WERE RAISED. NONE OF THESE QUERIES PERTAINS TO TAXABILITY OF SUM RECEIVED BY THE ASSESSEE FROM M/S ATS INFRASTRU CTURE LTD AND APPLICATION OF PROVISIONS OF SECTION 2(22)(E) IN RESP ECT THEREOF. THE ASSESSEE FILED THE REPLY ON 14/12/09 ALONG WITH DOCUMEN TS AND PAPERS. SINCE THERE WAS-NE QUERY IN RESPECT OF TAXABI LITY OF SUM OF RS.20 LACS BY THE AO, NO SUBMISSIONS WERE MADE BY THE ASSESSEE IN THIS RESPECT DURING ASSESSMENT PROCEEDINGS. IN APPEAL BEFORE ME, THE ASSESSEE HAS CONTENDED THAT NO REASONABLE OPPORTUNITY WAS GIVEN TO THE ASSESSEE. THE ASSESSEE HAS STATED THAT THE ASSESSEE HAD BOOKED 11 FLATS/PLOT S IN HIS PERSONAL CAPACITY, IN HIS OWN NAME, IN THE NAME OF HIS W IFE MRS AFSHA TALWAR AND DAUGHTER MS SANAM TALWAR WITH M/S A TS INFRASTRUCTURE LTD AND ACCORDINGLY THE ASSESSEE HAD GIVEN BOOKING ITA NOS.-3153 TO 3156/DEL/2017 19 AMOUNT OF RS.20 LACS TO M/S ATS INFRASTRUCTURE LTD T HROUGH VARIOUS CHEQUES ON 03/03/06. THE ASSESSEE STATED THAT THE BOOKING AMOUNT OF RS.2 0 LACS PAID BY THE ASSESSEE ON 03/03/06 WAS ACTUALLY REPAID BY M/S ATS INFRASTRUCTURE LTD ON 16/05/06. THE ASSESSEE HAS FILED VARIOUS DOCUMENTARY EVIDENC E SUCH AS CONFIRMATION CERTIFICATE FROM M/S ATS INFRASTRUCTU RE LTD, COPY OF ACCOUNT OF ASSESSEE FOR BOOKING OF FLATS/PLOTS IN PR OJECTS AS APPEARING IN THE BOOKS OF M/S ATS INFRASTRUCTURE LT D ALONG WITH THE BANK ACCOUNT STATEMENT OF HDFC BANK LTD FROM WHICH THE PAYMENT OF RS.20 LAC WAS MADE BY THE ASSESSEE TO M/S ATS INF RASTRUCTURE LTD. CONSIDERING THE EVIDENCE PLACED ON RECORD I AM OF THE VIEW THAT THE SUM OF RS, 20 LACS RECEIVED BY THE ASSESSEE ON 1 7/05/06 FROM M/S ATS INFRASTRUCTURE LTD REPRESENTS A REPAYMENT O F PRE-EXISTING LIABILITY BY M/S ATS INFRASTRUCTURE LTD AND THEREFOR E, THE SAME IS NOT COVERED U/S 2(22)(E) OF THE INCOME TAX ACT, 1961. THE ADDITION OF RS.20 LAC IS THEREFORE DELETED. 42. HOWEVER, VIDE ORDER DATED 31.03.2017, ADDITION WAS SUS TAINED BY OBSERVING AS UNDER:- IT MAY BE SEEN FROM THE ASSESSMENT ORDER THAT IT IS UNDISPUTED FACT THAT APPELLANT HAS MORE THAN 10% SHARES IN THE COMPA NY. MOREOVER, IT IS ALSO UNDISPUTED FACT THAT THE AMOUNT HAS FLOWN F ROM THE ACCOUNT OF THE COMPANY TO THE ACCOUNT OF APPELLANT. I N SUPPORT OF HIS CLAIM APPELLANT COULD NOT FURNISH ANY AGREEMENT BETWE EN M/S. ATS INFRASTRUCTURE LTD. AND HIMSELF WITH RESPECT OF SALE O F PROPERTY FOR WHICH APPELLANT HAS CLAIMED TO HAVE PAID BOOKING AMOU NT TO THE COMPANY. IN THIS SITUATION, IT EMERGES THAT THE STORY P UT BY APPELLANT TO EXPLAIN THE AMOUNT TAKEN AS REPAYMENT OF BOOKING AMOUNT IS NOTHING BUT AN AFTERTHOUGHT OF APPELLANT. BECAUSE AT THE ASSESSMENT STAGE AS WELL AS DURING THE COURSE OF HEARING, HE COU LD NOT PRODUCE ANY DOCUMENTARY EVIDENCE TO PROVE THE GENUINENESS O F BOOKING OF ITA NOS.-3153 TO 3156/DEL/2017 20 FLAT AS WELL AS REPAYMENT THEREOF. WHAT HE COULD PRODUC E IS THE CONFIRMATION FROM BUILDER. SINCE, THE APPELLANT IS A DI RECTOR IN THE COMPANY, THEREFORE, SUCH CONFIRMATION CAN OBVIOUSLY BE OBTAINED AND FURNISHED FROM INTERESTED PERSON. THEREFORE, I DO NOT FIND FORCE IN THE CONTENTION OF THE APPELLANT AND I CONSIDER T HE TRANSACTION AS LOAN TRANSACTION AND ADDITION IS CONFIRMED. THE CASES R ELIED UPON BY THE APPELLANT ARE ON THEIR OWN FOOTING AND DISTINGUI SHABLE ON FACTS. THEREFORE, THIS IS NOT APPLICABLE TO THE PRESENT CASE . THUS, ADDITION OF RS. 20,00,000/- IS CONFIRMED. 43. IN THE AFORESAID FINDINGS OF LD.CIT(A), IT IS CLEAR THAT NO EFFORT WAS MADE TO ASCERTAIN THE VERACITY OF THE CONFIRMATION MADE B Y THE ASSESSEE. THERE IS NO EVIDENCE SUGGESTING THAT THE AMOUNT OF RS.20 LAKHS FROM M/S. ATS INFRASTRUCTURE LTD. WAS LOAN ON ADVANCE TO THE ASSESSEE. IN THE ABSENCE OF EVIDENCES, WE ARE NOT INCLINED TO AFFIRM THE VIEW OF LD.CIT(A) WHEN UNDISPUTEDLY DURING THE ORIGINAL APPELLATE PRO CEEDINGS. LD.CIT(A HAD CATEGORICALLY STATED THAT THE IMPUGNED AMO UNT REPRESENTS REPAYMENT OF PRE-EXISTING LIABILITY. LD.CIT(A) HAS NOT BROUGHT ANY MATERIAL TO TAKE A CONTRARY VIEW. EVEN DURING THE APPELLA TE PROCEEDINGS, LD.CIT(A) HAS RECORDED THE FACTUM OF CONFIRMATION FURNISHED BY THE ASSESSEE. HENCE, WE HEREBY DELETE THE ADDITION. THUS, GROUND NOS. (II), (III) & (IV) RAISED BY THE ASSESSEE IN THIS APPEAL ARE ALLOWED. 44. NOW COMING TO GROUND NO.(V) RAISED BY THE ASSESSEE IN THIS APPEAL IS AGAINST THE SUSTAINING OF ADDITION OF RS.2 CRORE ON ACCOU NT OF BENEFIT DERIVED ON PURCHASES OF FLAT FOR LOWER CONSIDERATION. 45. LD.CIT(A) SUBMITTED THAT IN CASE OF MR. GEETAMBAR ANA ND, CO- DIRECTOR OF THE COMPANY, ADOPTED TOTALLY DIFFERENT VIEW POIN T THEREBY, HE ITA NOS.-3153 TO 3156/DEL/2017 21 DELETED THE ADDITION. LD. COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS AS MADE IN THE APPELLATE PROCEEDINGS. 46. LD. CIT DR OPPOSED THE ADDITIONS AND SUPPORTED TH E ASSESSMENT ORDER. 47. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS ASSAILED THE IMPUGN ED ADDITION ON THE GROUND THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE ADDITION. IT IS CONTENDED THAT THE ASSESSING OFFICER ERRED IN ADOPTING MARKET PRICE AT RS.3.5 CRORE IN UTTER DISREGARD TO THE FACT THAT THE VALUE ADOPTED BY STAMP VALUATION AUTHORITY IS MUCH LOWER THAN THE VALUE AS DISCLOSED BY THE ASSESSEE. LD. COUNSEL FOR THE ASSESSEE HAS ALSO FILED WRITTEN NOTE WHICH IS REPRODUCED HERE UNDER FOR READY-REFEREN CE:- 1. THE ADDITION OF RS 2 CRORE ON ACCOUNT OF BENEFIT S DERIVED ON ALLOTMENT OF FLAT WAS MADE BY THE INCOME TAX DEPARTMEN T IN THE CASE OF THE ASSESSEE AS WELL AS THE OTHER CO-DIRECTORS OF A TS INFRASTRUCTURE LIMITED VIZ. MR. GEETAMBAR ANAND AND AN IL KUMAR SAHA, BY USING THE EXACT LANGUAGE. 2. IN THE CASE OF CO-DIRECTOR MR. GEETAMBAR ANAND, THE INCOME TAX DEPARTMENT HAS ACCEPTED THE DELETION OF ADDITION OF RS. 2 CRORE ON ACCOUNT OF BENEFITS DERIVED ON ALLOTMENT OF FLAT. TH E COPY OF THE ORIGINAL ASSESSMENT ORDER DT. 29-12-2009, CIT (APPEALS) OR DERS DT. 09-03-2011 AND 13-01-2014 AND ITAT ORDERS DT. 28-06-12 AN D 16- 06-2017 IN CASE OF CO-DIRECTOR MR.GEETAMBER ANAND HAVE BEEN PLACED ON RECORDS. THE CIT (APPEALS) VIDE ORDER DATED 13-01-2014 IN APPEAL NO.: 297/13-14 (IN PURSUANCE OF ORDER OF THE ITA T DATED 28- 06-2012 IN ITA NO. 2707/DELL2011) DELETED THE ADDITION OF RS. 2 CRORE ON ACCOUNT OF BENEFITS DERIVED ON ALLOTMENT OF FLAT. THE INCOME TAX DEPARTMENT DID NOT FILE THE APPEAL AGAINST THE DE LETION OF ITA NOS.-3153 TO 3156/DEL/2017 22 ADDITION AND THE PROCEEDINGS FOR ASSESSMENT YEAR 200 7-08 IN CASE OF MR.GEETAMBAR ANAND ACHIEVED FINALITY VIDE ORDER DA TED 16.06.2017 IN ITA NO.2217/DEL/2014. THE COPY OF THE ORD ER DATED 16.06.2017 IN ITA NO.2217/DEL/2014 IS PLACED ON RECORD. 48. ON THE CONTRARY, LD.CIT DR OPPOSED THESE SUBMISSION S AND SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 49. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. THE REVENUE IS NOT DISPUTED THE FACT THAT THE FACTS OF THE CASE OF MR. GEETAMBAR ANAND, CO-DIRECTOR OF THE CO MPANY ARE IDENTICAL AND IN THE CASE OF MR. GEETAMBAR ANAND, CO-DIRECT OR OF THE COMPANY, THE ADDITION HAS BEEN DELETED. THE MATTER TRA VELLED UPTO THE STAGE OF THE TRIBUNAL IN ITA NO.2217/DEL/2014. THE TRIBUN AL VIDE ORDER DATED 16.06.2017 DISMISSED THE APPEAL OF REVENUE BEING LOW TAX EFFECT. ADMITTEDLY IN THE CASE OF THE CO-DIRECTOR, THE REVENUE HAD NOT CHALLENGED THE DELETION OF ADDITION OF RS.2 CRORE. CONSIDERIN G THE TOTALITY OF THE FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE LD.C IT(A) WAS NOT JUSTIFIED IN MAKING THE ADDITION IN THE CASE OF THE ASSESSEE WHEN IN THE SIMILARLY SITUATED CO-DIRECTOR, ADDITION WAS DELETED. MOREOV ER, IN THE ORIGINAL PROCEEDINGS, LD.CIT(A), MEERUT CONSIDERED THE FACTS IN DEPTH AND RELYING ON THE JUDGEMENT OF HONBLE SUPREME COURT REND ERED IN THE CASE OF M/S. DHAKESHWARI COTTON MILLS VS CIT, WB [1954] 26 ITR 7 75M 782 (SC), OBSERVED THAT THE ADDITION OF RS.2 CRORE WAS LIABLE TO BE DELETED. HE HAD CATEGORICALLY GIVEN A FINDING THAT THE ASSESSEE HAD FILE D AN AGREEMENT FOR ALLOTMENT DATED 02.09.2006 BETWEEN M/S ATS INFRASTRUCTURE LTD. AND MR. PRABODH NATH AGGARWAL FOR C ONSIDERATION OF RS.1.5 CRORE. IT WAS FURTHER OBSERVED THAT THE ASSESSIN G OFFICER NEITHER ITA NOS.-3153 TO 3156/DEL/2017 23 CONDUCTED ANY INQUIRY FROM MR. PRABODH NATH AGGARWAL NOR THE ASSESSING OFFICER TRIED TO FIND OUT THE MARKET PRICE OF K-V ILLA AT THE TIME OF ALLOTMENT IN FINANCIAL YEAR 2006-07. IT WAS FURTHER OBSE RVED THAT THE STATEMENT OF MR. GEETAMBAR ANAND IS VAGUE AND IT WAS NO T CLEAR AS TO WHAT THE VALUE OF K-VILLA WAS AT THE TIME OF ALLOTMENT TO THE ASSESSEE. H E FURTHER OBSERVED THAT CONSIDERING THESE FACTS FOR THE PU RPOSE OF STAMP DUTY, THE VALUE OF K-VILLA WAS ONLY RS.81,04,355/- AND THE H DFC BANK ALSO GRANTED A LOAN OF RS.1.35 CRORE AGAINST THE MARKET P RICE OF RS.1.5 CRORE. THEREFORE, HE HELD THAT MARKET PRICE OF RS.1.5 CROR E AT THE TIME OF ALLOTMENT WAS FAIR AND REASONABLE. IT IS FURTHER OBSERVED THAT LD.CIT(A) HAS NOT BROUGHT ANY NEW MATERIAL TO REBUT THE FINDING OF LD.CIT(A) IN THE ORIGINAL PROCEEDINGS, THEREFORE, THE ADDITION CANNOT BE SUST AINED. ACCORDINGLY THE ASSESSING OFFICER IS HEREBY DIRECTED TO D ELETE THE ADDITION. THUS, GROUND NO.(V) RAISED BY THE ASSESSEE IN THIS APPEAL IS ALLOWED. 50. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 51. IN THE FINAL RESULT, ALL APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIRTUAL HE ARING IN THE PRESENCE OF BOTH THE PARTIES ON 29 TH JUNE, 2021. SD/- SD/- (G.S. PANNU) (KUL BHARAT) VICE PRESIDENT JUDICIAL MEMBER * AMIT KUMAR * ITA NOS.-3153 TO 3156/DEL/2017 24 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI