DCIT, New Delhi V. Sh. Jaawant Singh Chawla, Gurgaon

ITA 3286/DEL/2013

• Counselvise Citation: 328620114 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 18-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 23-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Onus to prove; Documents seized
• Section: 143(3); 132

Judgement Text

ITA NO. 3285&3286/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO S . 3285 & 3286/D EL/201 3 A.Y RS . : 200 7 - 0 8 & 2008 - 09 DEPUTY COMMISSIONER OF INCOME TAX, CC - 22, NEW DELHI VS. SH. JASWANT SINGH CHAWLA, 122, VISTA VILLA, GREENWOOD CITY, GURGAON (PAN: AADPC9722A) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. VIKRAM SAHAY, SR. DR ASSESSEE BY : SH. R.S. SINGHVI, CA DATE OF HEARING : 1 8 - 0 3 - 201 5 DATE OF ORDER : 2 0 - 0 3 - 201 5 ORDER PER H.S. SIDHU, JM REVENUE HAS FILED TH ESE TWO APPEAL S AGAINST THE SEPARATE O RDER S BOTH DATED 11 . 0 3 .201 3 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - III, NEW DELHI P ERTAINING TO ASSESSMENT YEAR S 2007 - 08 & 2008 - 09. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, WE ARE THEREFORE, PROCEEDING TO DISPOSE THEM BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE, BY DEALING WITH ITA NO. 3285/DEL/2013 (A.Y. 2007 - 08). 2. THE GROUNDS RAISED BY THE DEPARTMENT IN ITA NO. 3285/DEL/2013 (A.Y. 2007 - 08) READ AS UNDER: - ITA NO. 3285&3286/ DEL/ 2013 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,00,00,000/ - MADE BY THE AO ON ACCOUNT OF DOCUMENT I.E. COMPUTER PRINTOUT FOUND AND SEIZED FROM THE PREMISES OF SH. SANDEEP SINGH KHINDA DURING THE COURSE OF SEARCH. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THIS ADDITION AND IGNORING THE FACTS THAT SH. SANDEEP SINGH KHINDA IS A BUSINESS ASSOCIATE OF THE ASSESSEE, I.E. SH. JASWANT SINGH CHAWLA AND TH E ASSESSEE S NAME HAS BEEN WRITTEN IN ABBREVIATED FORM, I.E. JSC AND A PAYMENT AMOUNTING TO RS. 1.0 CRORE HAS BEEN SHOWN TO HAVE BEEN MADE TO THE ASSESSEE IN CASH. 3. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. T HE AS SESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 3. THE GROUNDS RAISED BY THE DEPARTMENT IN ITA NO. 3286/DEL/2013 (A.Y. 2008 - 09) READ AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,10,00,000/ - MADE BY THE AO ON ACCOUNT OF DOCUMENT I.E. COMPUTER PRINTOUT FOUND AND SEIZED FROM THE PREMISES OF SH. SANDEEP SINGH KHINDA DURING THE COURSE OF SEARC H. ITA NO. 3285&3286/ DEL/ 2013 3 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THIS ADDITION AND IGNORING THE FACTS THAT SH. SANDEEP SINGH KHINDA IS A BUSINESS ASSOCIATE OF THE ASSESSEE, I.E. SH. JASWANT SINGH CHAWLA AND THE ASSESSEE S NAM E HAS BEEN WRITTEN IN ABBREVIATED FORM, I.E. JSC AND A PAYMENT AMOUNTING TO RS. 1.10 CRORE HAS BEEN SHOWN TO HAVE BEEN MADE TO THE ASSESSEE IN CASH. 3. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 3 . THE BRIEF FACTS OF THE CASE ARE THAT AS AGAINST THE INCOME ASSESSED U/S. 153A/143(3) AT RS. 13,85,600/ - , THE AO ASSESSED AN INCOME AT RS. 1,13,75,600/ - BY MAKING AN ADDITION OF RS. 1,00,00,000/ - ON ACCOUNT OF ENTRY RECORDED IN THE DOCUMENTS SEIZED FROM THE RESIDENCE OF ONE SH. SANDEEP SING H KHINDA DURING THE SEARCH, VIDE HIS ORDER DATED 30.12.2011 PASSED U/S. 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961. 4 . AGAINST THE AFORESAID ASSESSMENT ORDER DATED 30.12.2011 OF THE ASSESSING OFFICER, ASSEESSEE APPEALED BEFORE THE LD. FIRST APPELLAT E AUTHORITY, WHO VIDE IMPUGNED ORDER 11 . 3. 201 3 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESEE BY DELETING THE ADDITION OF RS.1 CRORE. 5 . AGGRIEVED BY THE AFORESAID ORDER DATED 11 . 3. 201 3 , REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO. 3285&3286/ DEL/ 2013 4 6 . AT THE TIME OF HEAR ING LD. DEPARTMENTAL REPRESENTATIVE HAS RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND REITERATED ON THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL FILED BY THE REVENUE. 7 . ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE ORDER OF THE LD. CIT(A) MAY BE UPHELD. 8 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS ESPECIALLY THE IMPUGNED ORDER DATED 11 . 2 .201 3 , WE FIND THAT LD. CIT(A) HAS CAREFULLY GONE THROUGH THE FINDINGS OF THE AO AS WELL AS THE SUBMISSIONS MADE BY THE ASSESSEE. LD. CIT(A) OBSERVED THAT THE BASIC AND PRIMARY ISSUE TO BE DECIDED IN THE FACTS OF THIS CASE IS WHETHER BASED ON A COMPUTER PRINTO UT WHICH HAS BEEN TAKEN FROM THE COMPUTER AT THE PREMISES OF SH. SANDEEP SINGH KHINDA, WHO IS A THIRD PARTY, A LEGAL PRESUMPTION CAN BE DRAWN UNDER SECTION 292C OF THE I.T. ACT AGAINST THE ASSESSEE. WE FIND THAT THE LD. CIT(A) HAS CONSIDERED THAT IT IS A N ESTABLISHED FACT THAT THE SAID DOCUMENT HAS NOT BEEN FOUND FROM THE POSSESSION / CONTROL OF THE ASSESSEE AND FURTHER NEITHER THIS PAGE BEARS THE HANDWRITING OR SIGNATURE OF THE ASSESSEE AND NOR THERE IS ANY ADVERSE STATEMENT RECORDED OF SH. SANDEEP SINGH KHINDA WITH RESPECT TO THE TRANSACTION RECORDED ON THE SEIZED PAPER WHICH RELATES TO THE A SSESSEE , THEREFORE THERE IS CONSIDERABLE MERIT IN THE SUBMISSION OF THE ASSESSEE THAT NO PRESUMPTION IN LAW UNDER SECTIONS 292C OF THE INCOME TAX ACT WOULD APPLY WIT H RESPECT TO THE IMPUGNED DOCUMENT OR CONTENTS THEREOF AGAINST THE A SSESSEE . 8.1 WE FIND THAT THE LD. CIT(A) HAS RIGHTLY MENTIONED THAT THE SEARCH WAS ALSO CONDUCTED ON THE ASSESSEE PREMISES TOO AND IN THE ASSESSMENT ORDER PASSED UNDER SECTION 153A/143(3) IT WAS SEEN THAT AO HAS NOT/ MADE ANY ADDITION ON THE BASIS OF ANY UNACCOUNTED ITA NO. 3285&3286/ DEL/ 2013 5 /UNDISCLOSED INVESTMENT/EXPENDITURE AND THEREFORE THE ADDITION NOW MADE IN THE ORDER UNDER SECTION 148/ 143(3) ON THE BASIS OF THE ENTRY RECORDED ON THE BASIS. OF COMPUTER PRINTOUT FOUND FROM THE PREMISES OF SH. SANDEEP KINDA, IS THEREFORE BASED ON THE PRESUMPTION OF THE A O AND IT IS UNSUPPORTED BY ANY COGENT OR INCRIMINATING EVIDENCE. 8.2 WE ARE OF THE V IEW THAT THE LD. CIT(A) HAS RIGHTLY NOTED THAT I T IS A WELL DECIDED PROPOSITION THAT THE AD CANNOT RELY UPON AND PRESUME AGAINST THE ASSESSEE ON THE BASIS OF ANY DOCUMENT FOUND AS A RESULT OF SEARCH FROM A PERSON OTHER THAN THE ASSESSEE FOR INSTANCE: (A ) IN ASSTT. CIT VS. KISHORE LAL BALWANI RAI [2007] 17 SOT 380 (CHD.) IT WAS HELD THAT THOUGH THE DIARY SEIZED ENABLES THE REVENUE TO PRESUME THAT ITS CONTENTS ARE TRUE, SUCH PRESUMPTION IS AVAILABLE ONLY AGAINST THE PERSON TO WHOM IT BELONGS AND NOT OTHER S. (B) IN THE CASE OF SHETH AKSHAY PUSHPAVADAN V. DY. CIT [2010] 130 TTJ 42 (AHD) (U O ),IT WAS CLEARLY STATED THAT THE PRESUMPTION UNDER SECTION 132 (4A) IS NOT AVAILABLE, WHEN THE SEIZED PAPER IS RECOVERED FROM THIRD PARTY AND NOT FROM THE ASSESSEE. 8 .3 WE FIND CONSIDERABLE COGENCY IN OBSERVATION OF THE LD. CIT(A) IN RELYING UPON THE DECISION OF HON'BLE DELHI BENCH OF THE INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF ACIT VS. D.K. GUPTA ITSS NO. 133/2005 VIDE ORDER DATED LB.OL.200B (30B ITR 230) IN WHICH HON'BLE TRIBUNAL HAS RELIED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF GIRISH CHAUDHARY (163 TAXMAN 60B), TO HOLD THAT NO ADDITION CAN BE MADE ON THE BASIS OF DOCUMENT, WHEN THE A O DOES NOT HAVE ANY MATERIAL TO SHOW AS TO ON WHAT BASI S HE REACHED TO THE CONCLUSION THAT THE FIGURES NOTED IN THE DOCUMENT ITA NO. 3285&3286/ DEL/ 2013 6 WAS INCOME OF THE ASSESSEE. IN THE FACTS OF THE PRESENT CASE, WE FIND NOTHING HAS BEEN BROUGHT ON RECORD BY THE A O , AS TO ON WHAT P REMISE HE CAME TO THE CONCLUSION THAT MR. SANDEEP SING H KHINDA HAS PAID RS. 1 CRORE TO THE ASSESSEE AND THAT WITHOUT AFFORDING ANY OPPORTUNITY TO THE ASSESSEE OR GIVING THE STATEMENT OF MR. SANDEEP SINGH KHINDA. 8 .4 KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES AS STATED ABOVE, WE ARE OF THE VIEW THAT LD . CIT(A) HAS RIGHTLY HELD THAT IT IS A TRITE LAW AND PRINCIPLE OF JURISPRUDENCE, AS IS PRONOUNCED BY THE SUPREME COURT OF INDIA AT JUDGMENT REPORTED AT CHUHARMAL 172 ITR 250 (S C ) THAT SECTION 110 OF THE EVIDENCE ACT LAYS DOWN THAT A SALUTARY PRINCIPLE OF C OMMON LAW JURISPRUDENCE IS THAT WHERE A PERSON WAS FOUND IN POSSESSION OF ANYTHING THE ONUS TO PROVE THAT HE WAS NOT OWNER WAS ON THAT PERSON AND IT WAS HELD THAT THIS PRINCIPLE IS EQUALLY APPLICABLE TO TAXATION PROCEEDINGS UNDER THE INCOME TAX ACT, 1961. AS SUCH, APPLYING THE SAID PRINCIPLE IT IS CLEAR THAT SEIZED DOCUMENT FOUND FROM THE POSSESSION OF SH KINDA, BELONG TO THEM AND IF IT IS CLAIMED THAT SAID DOCUMENT BELONG TO ASSESSEE , TH E N IN THAT EVENT THE ONUS OF PROOF VEST WITH THE A O . IN THE FACTS OF T HE CASE IN HAND, LD. CIT(A) HAS RIGHTLY FOUND THAT THIS ONUS HAS NOT BEEN DISCHARGED BY THE AO, IN SO FAR AS THERE IS NO CORROBORATIVE EVIDENCE BROUGHT ON RECORD TO SUBSTANTIATE THAT DOCUMENT OR TRANSACTIONS MENTIONED THEREIN BELONG TO ASSESSEE EXCEPT CON JECTURES AND PRESUMPTIONS AND WHAT TO TALK OF ANY LIABILITY FOR TAXATION FROM UNDISCLOSED INCOME OF SEIZED DOCUMENT BEING FASTENED ON A SSESSEE . 8.5 WE FIND CONSIDERABLE FORCE IN THE FINDING OF THE LD. CIT(A) THAT FROM THE AFOREMENTIONED DISCUSSIONS AND AS PER THE TRITE LAW THAT 'THERE MUST BE SOMETHIN G MORE THAN SUSPICION TO SUPPORT AN ASSESSMENT, THE ASSESSMENT BASED ON PURE SUSPICION IS BOUND TO BE ITA NO. 3285&3286/ DEL/ 2013 7 QUASHED'. ACCORDINGLY, LD. CIT(A) HAS RIGHTLY CONCLUDED THAT THE ATTEMPT OF THE AO TO CONNECT SEIZED PA PER WITH ASSESSEE HAS FAILED AND FINDING GIVEN IN THE ASSESSMENT ORDER IS ERRONEOUS ON FACTS AND IS PERVERSE AND WHIMSICAL AND STANDS VITIATED AND ANY ADDITION BASED THEREON DESERVES TO BE DELETED. IN THE BACKGROUND OF THE AFORESAID DETAILED DISCUSSIONS AN D PRECEDENTS, WE FIND THAT LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS. 1,00,00,000/ - . THEREFORE, W E DO NOT SEE ANY REASON TO INTERFERE WITH THE WELL REASONED ORDER OF THE LD. CIT(A), ACCORDINGLY, WE UPHOLD THE SAME AND DECIDE THE ISSUE AGAINST THE REVENUE BY REJECTING THE GROUND OF APPEAL FILED BY THE REVENUE. 9. IN THE RESULT, B O T H THE APPEAL S FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE O PEN C OURT ON 2 0 / 0 3 /20 1 5 . SD / - S D / - [ T.S. KAPOOR ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 2 0 / 3 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. ASSESSEE - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES