DCIT, New Delhi V. Sh. K. Natwar Singh, New Delhi

ITA 3290/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86834 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 25-09-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 23-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV DVOEJA
• Assessee Lawyers: C S AGARWAL SR ADV SH RAVI MAL
• Keywords: Unexplained cash credit; Unexplained investment; Principle of natural justice; Question of law
• Section: 143(3); 147; 68; 69; 148

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI S.V.MEHROTRA , ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 3290 /DEL/ 2013 (ASSESSMENT YEAR: 2003 - 04 ) ITA NO. 3258 /DEL/ 2013 (ASSESSMENT YEAR: 2004 - 05 ) ITA NO. 4168 /DEL/ 2013 (ASSESSMENT YEAR: 2005 - 06 ) DCIT, CIRCLE - 40 (1), NEW DELHI VS. K.NATWAR SINGH, 105, JOR BAGH, NEW DELHI PAN:AANPS1569B P (APPELLANT) (RESPONDENT) APPELLANT BY : SH. GAURAV DVOEJA, SR. DR RESPONDENT BY : SH. C.S.AGARWAL, SR. ADV SH. RAVI MAL, ADV DATE OF HEARING 09 . 01 . 2015 DATE OF PRONOUNCEMENT 05 . 03 .2015 O R D E R PER A. T. VARKEY, JUDICIAL MEMBER THESE THREE REVENUE APPEALS INVOLVE CONSIDERATION OF COMMON ISSUES AND THEREFORE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY A CONSOLIDATE ORDER. 2. TO APPRECIATE THE FACTS AND ISSUE UNDER CONSIDERATION WE TAKE UP THE APPEAL FOR ASSESSMENT YEAR 2003 - 04 . IN THIS APPE AL THE REVENUE HAS RAISED FOLLOWING GROUNDS: - 1. DELETING THE ADDITION OF RS 30,50,000 / - (I.E. RS. 28,50,000 / - ON ACCOUNT OF UNEXPLAINED INVESTMENT + RS. 2,00,000 / - UNEXPLAINED INTEREST CREDITED TO THE ASSESSEE) MADE BY A.O. UNDER SECTION 69 ON THE I.T. ACT ,1961. 3. THE SOLITARY ISSUE EMERGING FROM THE AFORESAID GROUNDS, IS REGA RDING ADDITIONS OF RS. 30,50,000 / - REPRESENTING UNEXPLAINED CASH CREDIT/DEBITS HELD AS INCOME OF THE ASSESSEE. PAGE 2 OF 10 4. THE FACTUAL MATRIX IS THAT THE ASSESSEE FILED HIS RETURN OF INCOME F OR THE ASSESSM ENT YEAR UNDER CONSIDERATION DECLARING A TOTAL INCOME OF RS. 5,98,230/ - . THE RETURN FILED BY THE APPELLANT WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT) WHICH WAS NOT TAKEN UP FOR SCRUTINY AND HENCE NO ORDER U/S 143(3) OF THE ACT WAS PASSED. THEREAFTER, THE AO RECEIVED AN INFORMATION FROM THE ASSISTANT COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 12 , NEW DELHI, THAT IN SOME LEDGER ACCOUNT FOUND IN POSSESSION OF SH. CHETAN GUPTA, BY THE VIGILANCE BUREAU, LUDHIANA THE ASSESSEES NAME FIGURE IN THE SAID LEDGER ACCOUNT . AS PER THE INFORMA TION , A COMPUTER PEN - DRIVE WAS RECOVERED FROM SAID SH. CHETAN GUPTA. IT WAS ALSO INFORMED THAT THE NAMES OF CERTAIN PERSONS APPEARING IN THE DATA OF THE SAID PEN - DRIVE WERE FOUND AND DECIPHERED. AS PER THE INFORMATION, ONE NAME THAT APPEARED IN THE PRINTOUT OF THE DATA ON PEN - DRIVE WAS N.S. THE IDENTITY OF WHICH WAS DECIPHERED AS NATWAR SINGH , THE ASSESSEE. FROM THE PRINTOUT OF THE LEDGER ACCOUNT IN WHICH THE NAME N.S. WAS ENTERED INTO, WHICH WAS MADE AVAILABLE TO THE AO FROM THE DATA OF THE SAID SEIZED PEN - DRIVE, THE AO NOTICED THAT THERE WERE CREDITS/ DEPOSITS IN THE ACCOUNT OF N.S. AGGREGATING TO RS. 25 LAKH S + RS.5.50 LAKH S AS INTEREST . THE DETAILS CONTAINED IN THE PRINTOUT OF THE LEDGER ACCOUNT OF N.S. WERE AS UNDER: - OPENING BALANCE: 51,00,000.00 APL 17 INT/MAR 1,00,000.00 APR 28 APR 1,00,000.00 MAY 31 NS M/O MAY 1,00,000.00 JUN 30 NS M/O JUN 1,00,000.00 JUL 31 JUL 1,00,000.00 AUG 31 NS/AUG 1,00,000.00 SEP 30 SEP/ N.S. 1,00,000.00 OCT 31 OCT/N.S. 1,00,000.00 NOV 30 NOV 1,00,000.00 DEC 28 17,00,000.00 DEC 31 INT/DEC 1,00,000.00 JAN 31 INTT/ JAN 1,50,000.00 JAN 31 DIFF TRF TO INT A/C 1,00,000.00 FEB 28 INT M/O FEB 1,50,000.00 MAR 31 INT M/O MAR 1,50,000.00 CLOSING BALANCE 79,50,000.00 TOT PAYMENT 200000.00 CREDIT: 8150000.00 CREDIT BALANCE 7950000.00 PAGE 3 OF 10 5. THE AO OBSERVED THAT THESE CREDITS/ DEPOSITS TOTALING TO RS. 30,50,000/ - REMAINED UN - REFLECTED AND UNEXPLAINED IN THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. AS SUCH THE AO ISSUED A NOTICE DATED 30.03.2010 U/S 148 OF THE ACT AFTER RECORDING REASONS AS REQUIRED U/S 147 OF THE ACT AND O BTAINING NECESSARY APPROVAL U/S 151 FROM THE ADDL. C OMM ISSIONER OF INCOME - TAX, RANGE - 40 , NEW DELHI. IN COMPLIANCE TO THE SAID NOTICE, THE ASSESSEE FILED A RETURN OF INCOME ON 13.09.2010 DECLARING AN INCOME OF RS. 5,98,230 / - AS DECLARED IN THE ORIGINAL RETURN OF INCOME FILED ON 08.08.2002. 6. THE AO VIDE QU ESTIONNAIRE DATED 04 . 02 .2011 ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF CREDITS/ DEPOSITS APPEARING IN THE PRINTOUT OF THE LEDGER ACCOUNTS PERTAINING TO N.S. AND ALSO TO SHOW CAUSE AS TO WHY THESE CREDI TS/ DEPOSITS BE NOT ADDED IN HIS INCOME AS UN - REFLE CTED AND UNEXPLAINED CREDITS/ DEPOSITS FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. 7. I N RESPONSE TO THE SAME, VIDE HIS SUBMISSIONS DATED 21.02.2011 , THE ASSESSEE DENIED HAVING MADE ANY DEPOSITS WITH SH. CHETAN GUPTA AND FURTHER DENIED HAVING RECEIVED ANY INTEREST. THEREUPON, THE AO ASKED ASSESSEE VIDE LETTER DT 25.07 2011 TO PRODUCE SH. CHETAN GUPTA FOR HIS PE RSONAL DEPOSITION. THE ASSESSEE HOWEVER, VIDE HIS REPLY STATED THAT SINCE HE HAD ALREADY DENIED ANY DEPOSIT HAVING MADE WITH SH. CHETAN GUPTA, TH E ONUS OF PRODUCING HIM WAS ON THE DEPARTMENT. 8. THE AO, REJECTED THE EXPLANATION OF THE ASSESSEE AND MADE THE ADDITION OF RS.30,50,000/ - TO THE DECLARED INCOME OF RS.5,98,230/ - , THUS TOTALING RS.36,48,230/ - . 9. ON APPEAL, THE LD CIT(A) HAS DELETED THE ADDITION BY HOLDING AS UNDER: - 22. NOW COMING TO MERITS OF THE AFORESAID ADDITIONS AS MADE BY THE LEARNED ASSESSING OFFICER, I FIND THAT THERE IS NO EVIDENCE WHICH HAVE BEEN BROUGHT ON RECORD BY THE LEARNED A. O. THAT THE ASSESSEE HAD MADE AN INVESTMENT AND SUCH AN INVESTMENT STATED TO BE CREDITED IN THE BOOKS OF ACCOUNTS OF THIRD PARTY NAMELY SHRI CHETAN GUPTA HAS BEEN ESTABLISHED TO BE THE INVESTMENT OF APPELLANT IN MY OPINION IT WAS THE BURDEN ON THE ACIT TO ESTABLISH THAT CREDITS IN THE BOOKS OF ACCO UNTS OF SHRI CHETAN GUPTA WHICH WERE IN THE SHAPE OF A PEN DRIVE, A PRINT OUT OF WHICH WAS PLACED ON RECORD, WERE THE INVESTMENTS MADE BY THE APPELLANT. IN THE INSTANT CASE THE LEARNED A.O. HAS NOT RECORDED ANY STATEMENT OF SHRI CHETAN GUPTA WHO COULD HAVE DEPOSED THAT THE CREDITS IN THE PEN DRIVE WERE OF THE ASSESSEE. FURTHER, THE PAGE 4 OF 10 LEARNED A.O. HAS ALSO NOT BEEN ABLE TO BRING ANY MATERIAL WHATSOEVER TO SUPPORT THAT CREDITS IN THE PEN DRIVE WERE THAT OF THE APPELLANT. 23. IT HAS JUDICIALLY BEEN HELD THAT NO ADDITION COULD BE MADE IN THE HANDS OF AN ASSESSEE ON THE BASIS OF THIRD PARTY ACCOUNTS WITHOUT ESTABLISHING THE AUTHENTICITY OF THE SAID BOOKS OF ACCOUNTS. THIS IS THE PROPOSITION OF LAW SUPPORTED BY THE JUDGMENT OF PUN JAB HIGH COURT IN THE MATTER OF CHIRANJEE LAL STEEL ROILING MILLS LTD. V CIT REPORTED IN 84 ITR 222. 24. FURTHER, IT IS AGAIN A WELL SETTLED RULE OF LAW THAT NO ADDITION CAN BE MADE ON THE BASIS OF DOCUMENTS FOUND FROM THIRD PARTY WITHOUT EXAMINING THE TH IRD PARTY AND LINKING THE CONTENTS OF THE DOCUMENTS WITH HIM. THE AFORESAID LAW LAID DOWN IS SUPPORTED BY THE FOLLOWING JUDGMENTS: I. BANGODAYA COTTON MILLS LTD. V CIT 224 CTR 62 II. DCIT V MAHENDRA AMBALAL PATEL 40 DTR 243 III. PRAKASH CHAND NAHTA V. CIT 301 ITR 1 34 IV. CIT V. SALEK CHAND 300 ITR 426 (ALL) V. SMC SHARE BROKER LTD. 288 ITR 345 (DEL) VI. JMD COMPUTERS 20 DTR 317 VII. AMARJIT SINGH BAKSHI 263 ITR 75 VIII. KRISHNA TEXTILES 11 DTR 217 IX. A.N. DYANESWARAN {2008} 214 CTR (MAD) 482. 25 FURTHER, I FIND THAT IF THE ASSESSING OFFICER WAS OF THE OPINION THAT CREDITS APPEARING IN THE PEN DRIVE WERE UNEXPLAINED IN THE ABSENCE OF ASSESSEE CONFIRMING THE SAID ACCOUNTS PERTAINED TO HIM, IT IS OBVIOUS THAT ADDITION COULD BE MADE ONLY IN THE HANDS OF SHRI CHETAN GUPTA BY INVOKING THE P ROVISIONS OF SECTION 68 OF THE I.T. ACT. IN OTHER WORDS IF THE A.O. FOUND THAT THERE WERE CERTAIN CREDITS IN THE PEN DRIVE MAINTAINED BY SHRI CHETAN GUPTA THEN IN LAW, ADDITION OF THE CREDITS BEING UN - EXPLAINED HAS TO BE MADE AND COULD BE MADE ONLY IN THE HANDS OF SHRI CHETAN GUPTA AND CANNOT BE TREATED TO BE UNEXPLAINED CREDITS IN THE HANDS OF THE ASSESSEE UNLESS ASSESSEE ACCEPTS SUCH AN AMOUNTS WHICH REPRESENTED CREDIT IN THE BOOKS OF SHRI CHETAN GUPTA WERE THE RESULT OF AMOUNTS PROVIDED BY HIM BY WAY OF CREDITS. 26. IN MY OPINION HAVING REGARD TO THE FACT THAT ASSESSEE WAS IN RECEIPT OF INCOME BY WAY OF PENSION AND INCOME FROM OTHER SOURCES I.E. INTEREST FROM BANK, DIVIDEND, ROYALTY, ARTICLE FEE AND THERE IS NO OTHER SOURCE OF INCOME, I DO NOT FIND JUSTIFICATION IN UP HOLDING THE FINDINGS OF THE LEARNED A.O. THAT SUCH AN AMOUNT COULD BE HELD AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE. LASTLY IN MY OPINION, THE ISSUE STANDS FULLY DECIDED BY THE JUDGMENT OF THE DELHI HIGH COURT WHEN IT UPHOLD THE DECISION OF T HE TRIBUNAL IN THE CASE OF CIT VS RANINDER SINGH (A PARALLEL AND IDENTICAL CASE FOUND FROM LIST IN PEN DRIVE) WHEREIN THE HIGH COURT IN ITS JUDGEMENT OBSERVED AS UNDER: - 'THERE IS NO EVIDENCE IN THE POSSESSION OF THE REVENUE AUTHORITIES TO PROVE THAT THE ASSESSEE EVER PAID CASH TO SHRI CHETAN GUPTA EXCEPT THE SO CALLED REPORT OF ADIT INVESTIGATION, LUDHIANA, WHICH IN TURN IS BASED ON THE REPORT OF SUPERINTENDENT OF POLICE, LUDHIANA. HOWEVER, NEITHER THE REPORT OF THE SP, LUDHIANA IS AVAILABLE TO THE ASSESS ING OFFICER PAGE 5 OF 10 MUCH LESS TO THE ASSESSEE NOR ANY STATEMENT WAS RECORDED BY ADIT (INVESTIGATION) FROM SH.CHETAN GUPTA TO CORROBORATE THAT ANY CASH WAS PAID BY THE ASSESSEE TO SH. CHETAN GUPTA ON HIS DEPOSITION BEFORE THE ASSESSING OFFICER CLEARLY DENIED HAVING RECEIVED ANY CASH. SHRI CHETAN GUPTA ALSO DENIED HAVING GIVEN ANY STATEMENT ADMITTING RECEIPT OF CASH. THEREFORE, IN ABSENCE OF ANY EVIDENCE ON RECORD, THE ADDITION WAS NOT SUSTAINABLE. IT IS STRANGE TO NOTE THAT THE ASSESSING OFFICER HAVING RECORDED THE STATEMENT OF SHRI CHETAN GUPTA CHOSEN TO REMAIN SILENT. THIS PROVES THAT IN THE STATEMENT OF SH.CHETAN GUPTA WAS NO ADVERSE FACTOR AFFECTING THE TAX LIABILITY OF THE ASSESSEE.' 27. THUS IN MY OPINION, THE ADDITION MADE BY THE LEARNED A.O. BY INVOKING THE PROVISIONS OF SECTION 69 OF THE I.T. ACT CANNOT BE UPHELD SINCE THE BURDEN WHICH LAY UPON HIM HAS NOT BEEN DISCHARGED. 28. IN VIEW OF THE AFORESAID THE CONTENTION OF THE ASSESSEE THAT THE REOPENING OF THE ASSESSMENT WAS NOT TANGIBLE, CANNOT BE UPHELD BUT THE CONTENTION RAISED IN GROUND NUMBERS 2 & 3 THAT ADDITION MADE BY THE LEARNED A .O. FOR THE A.Y. 2003 - 04 OF RS. 30,50, 000 I - AND FOR A.Y. 2004 - 05 OF RS. 1,02,66, 159/ - IS HEREBY DELETED. 10. AGGRIEVED BY THE SAID ORDER OF THE LD CIT(A), THE REVENUE IS BEFORE US. 11 . THE LD DR CONTENDED THAT THE ADDITION WAS RIGHTLY MADE BY THE AO AND WAS BASED ON EVIDENCE RETRIEVED FROM A PEN - DRIVE RECOVERED FROM SH CHETAN GUPTA BY THE VIGILANCE BUREAU, PUNJAB. SHRI CHETAN GUPTA HAD ADMITTED INITIALLY THAT HE WAS LOOKING AFTE R THE TRANSACTIONS OF THE ASSESSEE. THUS IN THE FACE OF THE AFORESAID EVIDENCE, LD CIT(A) WAS NOT JUSTIFIED TO INTERFERE WITH THE ADDITION MADE BY THE AO. THE LD DR WANTS US TO SET - ASIDE THE ORDER OF THE LD CIT(A) AND RESTORE THE ORDER OF THE AO. ON THE OTHER HAND THE LD SR. ADVOCATE SHRI C. S.AGARWAL APPEARING FOR THE ASSESSEE, RELIED UPON THE FINDING OF THE LD CIT(A) AND STATED THAT MATTER IS FULLY COVERED BY THE ORDER OF THIS TRIBUNAL IN THE CASE OF CAPT. AMRINDER SINGH , SHRI RANDHIR SINGH , SMT. HEMINDER KUMARI ETC AGAINST WHOM THE SAME EVI DENCE (PEN DRIVE) FROM CHETAN GUPTA WAS USED TO REOPEN THE ASSESSMENT AND LATER ON ALL WERE DELETED . HE THUS PRAYED THAT THE ORDER DELETING THE ADDITION BE UPHELD. 12 . WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE RECORD AND CAREFULLY GONE THROUGH T HE CASE - LAWS CITED BY BOTH THE SIDES. IN THE INSTANT CASE THE ADDITION OF RS. 30,50,000 / - WAS BASED ON CERTAIN ENTRIES REFLECTED AND RETRIEVED FROM A PEN - DRIVE RECOVERED FROM SHRI CHETAN GUPTA. ACCORDING TO THE REVENUE, THE SEIZED PEN - DRIVE CONTAINS COMPUTE RIZED ACCOUNTS OF HAWALA TRANSACTIONS OF ABOUT 148 PAGE 6 OF 10 PEOPLE INCLUDING THE ACCOUNT OF THE ASSESSEE, WHOSE IDENTITY WAS DENOMINATED AS N.S. BASED ON THE SAID ENTRIES RETRIEVED FROM THE PEN - DRIVE ADDITIONS WERE MADE ALSO IN THE HANDS OF SHRI RANINDER SINGH S/ O. CAPT . AMRINDER SINGH . IN THE SAID CASE, THE CO - ORDINATE BENCH OF THIS TRIBUNAL HAD EXAMINED SIMILAR FACTS AS THAT OF THE ASSESSEE AND HELD AS UNDER: - 7. AS REGARDS MERITS OF THE ADDITION, THERE IS NO EVIDENCE IN THE POSSESSION OF THE REVENUE AUTHORITIE S TO PROVE THAT THE ASSESSEE OVER PAID CASH TO SHRI CHETAN GUPTA EXCEPT THE SO CALLED REPORT OF ADIT (INVESTIGATIONS), LUDHIANA, WHICH IN TURN IS BASED ON THE REPORT OF SUPERINTENDENT OF POLICE, LUDHIANA. HOWEVER, NEITHER THE REPORT OF SP, LUDHIANA IS AVAI LABLE TO THE ASSESSING OFFICER MUCH LESS TO THE ASSESSEE NOR ANY STATEMENT WAS RECORDED BY ADIT (INVESTIGATION) FROM SH. CHETAN GUPTA. ON THE CONTRARY SH. CHETAN GUPTA ON HIS DEPOSITION BEFORE THE ASSESSING OFFICER CLEARLY DENIED HAVING RECEIVED ANY CASH. SHRI CHETAN GUPTA ALSO DENIED HAVING GIVEN ANY STATEMENT ADMITTING RECEIPT OF CASH. THEREFORE, IN ABSENCE OF ANY EVIDENCE ON RECORD, THE ADDITION WAS NOT SUSTAINABLE. IT IS STRANGE TO NOTE THAT THE ASSESSING OFFICER HAVING RECORDED THE STATEMENT OF SH. CHE TAN GUPTA CHOSEN TO REMAIN SILENT. THIS PROVES THAT IN THE STATEMENT OF SHRI CHETAN GUPTA THERE WAS NO ADVERSE FACTOR AFFECTING THE TAX LIABILITY OF THE ASSESSEE. ACCORDINGLY, THE ADDITION WAS RIGHTLY DELETED BY THE LEARNED CIT(A). 13 . THE AFORESAID ORD ER WAS AFFIRMED BY THE HONBLE HIGH COURT OF DELHI ON 28.02.2011 , WHEREIN, THE HONBLE HIGH COURT HELD AS UNDER: - 'A PEN DRIVE OF ONE MR. CHETAN GUPTA WAS SEIZED AS PER WHICH THE ASSESSEE HAD RECEIVED CERTAIN MONEY. ON THE BASIS OF INFORMATION CONTAINED IN THE SAID PEN DRIVE, ADDITION WAS MADE IN THE INCOME OF THE ASSESSEE UNDER SECTION 69 OF THE INCOME TAX ACT. CIT(A) SET ASIDE THE ORDER OF THE ASSESSING OFFICER AND DELETED THE ADDITION ON THE GROUND THAT RELIANCE CANNOT BE PLACED ON PEN DRIVE. MORE SO, TH AT MR. CHETAN GUPTA, HAD DENIED PAYMENT TO ASSESSEE IN HIS STATEMENT RECORDED UNDER SECTION 131, ITAT HAS UPHELD THIS ORDER ON THE FOLLOWING TERMS: - AS REGARDS MERIT OF THE ADDITION, THERE IS NO EVIDENCE IN THE POSSESSION OF THE REVENUE AUTHORITIES TO PROVE THAT THE ASSESSEE EVER PAID CASH TO SHRI CHETAN GUPTA EXCEPT THE SO CALLED REPORT OF ADIT (INVESTIGATION), LUDHIANA, WHICH IN TURN IS BASED ON THE REPORT OF THE SUPERINTENDENT OF POLICE, LUDHIANA. HOWEVER, NEITHER THE REPORT OF THE SP, LUDHIANA IS AVAILABLE TO THE ASSESSING OFFICER MUCH LESS TO THE ASSESSEE NOR ANY STATEMENT WAS RECORDED BY ADIT (INVESTIGATION) FROM SH. CHETAN GUPTA TO CORROBORATE TH AT ANY CASH WAS PAID BY THE ASSESSEE TO SH. CHETAN GUPTA. ON THE CONTRARY, SH. CHETAN GUPTA ON HIS DEPOSITION BEFORE THE ASSESSING OFFICER CLEARLY DENIED HAVING RECEIVED ANY CASH. SHRI CHETAN GUPTA ALSO DENIED HAVING GIVEN ANY STATEMENT ADMITTING RECEIPT O F CASH. THEREFORE, IN ABSENCE OF ANY EVIDENCE ON RECORD, THE PAGE 7 OF 10 ADDITION WAS NOT SUSTAINABLE. IT IS STRANGE TO NOTE THAT THE ASSESSING OFFICER HAVING RECORDED THE STATEME N T OF SH.CHETAN GUPTA CHOSEN TO REMAIN SILENT. THIS PROVES THAT THE STATEMENT OF SH. CHET AN WAS NO ADVERSE FACTOR AFFECTING THE TAX LIABILITY OF THE ASSESSEE. ACCORDINGLY, THE ADDITION WAS RIGHTLY DELETED BY THE LEARNED CIT(A). WE FIND NO INFIRMITY OR ILLEGALITY IN THE AFORESAID ORDER. NO SUBSTANTIAL QUESTION OF LAW RISES FOR CONSIDERATION. A CCORDINGLY, THE PRESENT APPEAL IS DISMISSED.' ON THE BASIS OF THE INFORMATION SOUGHT BY THE APPELLANT THROUGH RTI, THAT HAS BEEN FILED IN THE PAPER BOOK, I FIND THAT THE DEPARTMENT HAS NOT FILED ANY SLP AND THEREFORE, THE ORDER OF THE HON'BLE HIGH COURT OF DELHI HAS ATTAINED FINALITY. 12. I ALSO FIN D THAT ADDITIONS WERE MADE IN SIMILAR CIRCUMSTANCES ON THE BASIS OF THE DATA FOUND IN THE PEN DRIVE SEIZED FROM SH. CHETAN GUPTA, IN THE CASES OF MAHARAJA SHRI AMARINDER SINGH AND SH. K. NATWAR SINGH, THE HUSBAND OF THE APPELLANT, WHERE THE SAID ADDITIONS WERE ALSO DELETED IN APPEALS. 13. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE HIGH COURT OF DELHI WHICH WAS RENDERED VIDE ORDER DATED 28.02.2011 ON IDENTICAL FACTS AND CIRCUMSTANCES IN THE CASE OF SH. RANINDER SINGH, HON'BLE ITAT, CHANDIGARH 'B' BENCH VIDE ORDER DATED 30.06.2010 IN THE CASE OF MAHARAJA SH. AMARINDER SINGH IN IT ACT, 1961 NO. 505/CHD/2009 FOR ASSESSMENT YEAR 2001 - 02 PASSED ON IDENTICAL FACTS AND CIRCUMSTANCES, CIT(A) XXX, NEW DELHI VIDE ORDER DATED 26.03.2013 PASSED IN APPEAL NOS. 1181 AND 1152/2012 - 13 FOR ASSESSMENT YEARS 2003 - 04 AND 2004 - 05, IN CASE OF SH. K. NATWAR SINGH, APPELLANT'S HUSBAND, I HOLD THAT THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER IS LIABLE TO BE DELETED ON SIMILAR FACTS AND CIRCUMSTANCES. ACCORDINGL Y, THE ADDITION OF RS.34,83,206/ - MADE BY THE ASSESSING OFFICER IS THEREFORE DELETED. THIS GROUND OF APPEAL IS THEREFORE, ALLOWED. 14 . FURTHERMORE, EVEN IN THE CASE OF CAPT. AMRINDER SINGH, THE CO - ORDINATE BENCH OF THIS TRIBUNAL HAD EXAMINED THIS MATTER AND VIDE ORDER DATED 30 TH JUNE 2010 DELETED THE ADDITIONS. IN THE SAID ORDER THE BENCH HAD REFERRED TO THE STATEMENT OF SHRI CHETAN GUPTA AND NOTED AS UNDER: - THE RELEVANT QUESTIONS PUT BY THE ASSESSING OFFICE AND THE REPLIES OF SHRI CHETAN GUPTA THERETO, ARE AS UNDER: - Q3. PLEASE STATE AS TO STATUS OF YOUR TRANSACTION WITH MAHARAJA AMRINDER SINGH FROM THE PERIOD FINANCIAL YEAR 1999 - 2000 TO 2006 - 07. A. I HAVE TO STATE THAT I HAD NEVER ANY TRANSACTION WITH MAHARAJA AMRINDER SINGH DURING ABOVESAID PERIOD OR THEREAFTER. PAGE 8 OF 10 Q.4. IS THERE ANY CASE PENDING AGAINST YOU UNDER IPC LODGED BY SP VIGILANCE BUREAU, LUDHIANA. IF YES, PLEASE STATE WHAT COMMENTS WERE RECORDED FROM YOU BY THE POLICE AND ALSO STATE WHAT DOCUMENTS WERE RECOVERED FROM YOU AND IMPOUNDED/ SEIZED BY THEM. A. AS FAR AS I REMEMBER, IN MARCH 2007 AN FIR WAS LODGED AGAINST ME AT LUDHIANA IN CONNECTION WITH LUDHIANA CITY CENTER SCAM. NOTHING WAS RECOVERED FROM ME. HOWEVER, THE POLICE CLAIMED THAT A PEN - DRIVE RECOVERED FROM ME WHICH IS NOT CORRECT. I HA VE ALREADY DENIED THIS ALLEGATION OF POLICE, DURING THE PROCEEDING BEFORE IT AUTHORITIES AS WELL AS DISTT. SESSION JUDGE, LUDHIANA. Q.5. I AM SHOWING YOU A LETTER WRITTEN TO DIT(INV.) LUDHIANA BY SP, VIGILANCE BUREAU UNIT - II LUDHIANA AS PER WHICH YOU WERE MAINTAINING A/CS OF ABOUT 148 ODD PEOPLE WHO HAD BLACK MONEY DEALING WITH YOU INCLUDING MAHARAJA AMRLNDER SINGH AND HIS FAMILY MEMBERS, PRESENCE OF WHICH REVEALS THAT YOU WER E ENGAGED IN H AWALA BUSINESS AND PAYMENTS WERE ROUTED THROUGH YOUR CONCERNS/COMP ANIES THROUGH CHEQUES AS MAINTAINED IN THE LETTER: PLEASE EXPLAIN THE NATURE OF ENTRIES PERTAINING TO MAHARAJA AM RINDER SINGH MADE THROUGH YOUR ABOVESAID CONCERNS. A. AS ALREADY STATED, THE ENTRIES FOUND IN SO CALLED PEN - DRIVE DO NOT PERTAIN TO ME AND NO CASE OF ENTRY OR TRANSACTION WITH MAHARAJA AMRINDER SINGH CAN BE SAID THROUGH ME OR MY COMPANY/ CONCERNS. Q6. AS STATED A BOV E , A COPY OF A/ C IN THE NAME OF MAHARAJA AMRIN D ER SING H FOR FINANCIAL YE A R 20 0 - 02 WAS GOT PRINTED FROM THE PEN DR I VE RECORD BY POLICE AS PER WHICH , IN ONE A / C O/ B IS SHOWN RS. 5 LACS AND C/B IN NILL AFTER MAKING TRANSFER ENTRY OF RS. 5 LACS AS ON 31 ST JULY. IN THE NEXT A/C OPENING & CLOSING BALANCE ARE SHOWN AS RS.2,25,000/ - . SIMILARLY, AN A/C FOUND IS PARTIALA POST IN WHICH OPENING BALANCE IS SHOWN 3.5 LACS AND CLOSING BALANCE IS SHOWN AT RS.4,73,800/ - AFTER MAKING THREE ENTRIES OF RS.26,200/ - . PLEASE EXPLAIN THE NATURE OF THESE ENTRIES, IF MAINTAINED BY YOU IN THE A/C OF MAH. AMRINDER SINGH. A. I HAVE ALREADY DENIED THE RECORDING OF ANY PEN - DRIVE. THEREFORE, NO QUESTION OF EXPLAINING THE ABOVE ENTRIES ARISES. 13. FROM THE AFORESAID REPLIES, IT IS EVIDENT THAT SHRI CHETAN GUPTA HAS DENIED ANY TRANSACTIONS WITH THE ASSESSEE, AND IN FACT Q.NO.3 REPRODUCED ABOVE, COVERS THE PERIOD UNDER OUR CONSIDERATION. 15 . IN THE LIGHT OF THE AFORESAID STATEMENT, THE C - ORDINATE BENCH OF THE TRIBUNAL WAS PLEASED TO ORDER AS UNDER: - 14. CONSIDERING THE AFORESAID FACTUAL MATRIX. IN OUR CONSIDERED OPINION, IT DOES NOT STAND ESTABLISHED T HAT THE ASSESSEE HAS MADE THE IMPUGNED INVESTMENT. WE SAY SO FOR THE REASON THAT THE BURDEN TO ESTABLISH THE PAGE 9 OF 10 EXISTENCE OF IMPUGNED INVESTMENT WAS ON THE REVENUE, WHICH, IN THE PRESENT CASE HAS NOT BEEN DISCHARGED. FIRSTLY, ASSESSEE DENIED THE IMPUGNED TRAN SACTION. SECONDLY, THE CLA I M OF THE ASSESSING OFFICER IS BASED ON THE ALLEGED EV I DENC E FOUND ON SHRL C HETAN GUPTA, AND QUITE CLEARLY S AID WITNESS HAS NOT BEEN CONFRONTED TO THE ASSESSEE AT ANY STAGE DURING THE COURSE OF ASSESSMENT, ALTHOUGH THE SAME WAS SPECIFICALLY PLEADED BY THE ASSESSEE. THE SAID PERSON IS THE WITNESS OF THE REVENUE BECAUSE IT IS ON THE BASIS OF HIS TESTIMONY , IT HAS BEEN HELD THAT THE ASSESSEE MADE THE IMPUGNED INVESTMENT. THEREFORE, NON - AFFORD I NG OF CROSS - EXAMINATION MAKES T HE USE OF SUC H EVIDENCE BY THE REVENUE, AS UNTENABLE . IN THIS CONNECTION, WE MAY RATER TO THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ASHWANI G UPTA , 322 ITR396 (DEL), WHICH FOLLOWED ITS EARLIER DECISION IN THE CASE OF SMG SHARE BROKERS LTD . (SUPRA). AS PER THE HON'BLE HIGH COURT, ONCE THERE WAS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE , I N AS MUCH AS SEIZ E D MATERIAL WAS NOT PROVIDED TO AN ASSESSEE NOR WAS CROSS - EXAMINATION OF THE P E RSON ON WHOSE STATEMENT THE ASSESSING OFFICER RELIED U PON GRANTED, THEN SUCH DEFICIENCIES WOULD AMOUNT TO DENIAL OF OPPORTUNITY AND WOULD BE F ATAL TO THE PROCEEDINGS. THIRDLY IN THIS CASE, SHRI CHETAN GUPTA HAS DENIED RECOVERY OF THE PEN - DRIVE AND ALSO THE IMPUGNED TRANSACTIONS IN THE STATEMENT RECORDED BY THE ASSESSING OFFICER ON 16.11.2009, SO HOWEVER, EVEN IF IT IS ACCEPTED THAT THE PEN - DRIVE WAS RECOVERED FROM SHRI CHETAN GUPTA, TH EN, IT ONLY AMOUNTS TO A THIRD - PARTY EVIDENCE AND COULD NOT BE STRAIGHTAWAY RELIED UPON WITHOUT BEING TESTED IN CROSS - EXAMINATION OR ON THE BASIS OF ANY CORROBORATIVE EVIDENCE. FOR THE AFORESAID PROPOSITION, WE ARE FORTIFIED BY THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF KISAN CHAND CHELLA RAM (SUPRA), THAT OF THE HONBLE DELHI HIGH COURT IN SMC SHARE BROKERS LTD. (SUPRA) AND S.M. AGGARWAL (SUPRA) AND, ALSO OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CHIRANJIL LAL STEEL ROLLING MI LLS (SUPRA). THE INFORMATION RECEIVED BY THE ASSESSING OFFICER FROM HIS INVESTIGATION WING, AT BEST, BE REGARDED AS A PRIMA - FACIE MATERIAL, BUT COULD NOT BE CONSTRUED AS CONCLUSIVE FOR USE AGAINST THE ASSESSEE TO FASTEN ANY TAX LIABILITY, BECAUSE THE SAME WAS REQUIRED TO BE CORROBORATED BY CREDIBLE AND INDEPENDENT EVIDENCE OR WAS REQUIRED TO BE TESTED IN CROSS - EXAMINATION BY THE ASSESSEE, QUITE CLEARLY NONE OF THESE ASPECTS HAVE DONE BY THE REVENUE IN THIS CASE. THEREFORE, IT IS UNDER THESE CIRCUMSTANCES, T HAT WE HAVE OBSERVED EARLIER THAT THE REVENUE HAS NOT PROVED THAT THE IMPUGNED INVESTMENT HAS BEEN MADE BY THE ASSESSEE. IN THE LIGHT OF ABOVE, THE ESSENTIAL PRE - REQUISITE OF SECTION 69 OF THE ACT IS NOT SATISFIED IN THIS CASE. 16 . LIKEWISE IN THE CASE OF SMT HEMINDER KUMARI , AO MADE SIMILAR ADDITION ON THE BASIS OF SAME PIECE OF EVIDENCE EMANATING FROM THE SAME PEN DRIVE RECOVERED FROM SH CHETAN GUPTA BY THE VIGILANCE BUREAU (PUNJAB) , WHICH WAS DELETED BY THE PAGE 10 OF 10 LD CIT(A) , WHICH ORDER WAS CONFIRMED BY THIS TRIBUNAL FOR ASSESSMENT YEAR 2002 - 03 TO 2005 - 06 VIDE ORDER DATED 29.08.2014. 17 . THE LD DR IN THE COURSE OF HEARING BEFORE US, HAS NOT POINTED OUT OR SHOWN ANY NEW FACT OR MATERIAL, SO AS TO ENABLE US, TO COME TO A DIFFERENT OPINION . IN VIEW OF THE ABOVE, AND THE ORDER OF THE CO - ORDINATE BENCH AND THE ORDER OF THE HIGH COURT, WE ARE NOT INCLINED TO INTERFERE WITH THE REASONED ORDER OF THE LD CIT(A). 18 . AS SUCH, THE IMPUGNED ORDER IS CONFIRMED. THE APPEAL OF THE REVENUE IS DISMISSED . 19 . NOW WE COME TO APPEAL NOS. 3258/DEL/2013 AND 4168/DEL/2013 20 . THE ISSUES AND FACTS INVOLVED IN ALL THE OTHER TWO APPEAL S ARE IDENTICAL, THEREFORE, WE ARE INCLINED TO SUSTAIN THE ORDER OF THE LD CIT(A) AND THEREFORE WE DISMISS ALL THE AFORESAID APPEALS OF THE REVENUE. 21 . IN THE RESULT THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 5 . 03 . 2015 . - S D / - - S D / - ( S.V.MEHROTRA ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 0 5 / 03 / 2015 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI