DILBAG SINGH SAINI (HUF), GURGAON V. ITO, WARD- 1(4), GURGAON

ITA 3334/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7930 (ITAT-DELHI)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 08-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Opportunity of cross examination; Benefit of exemption; Set aside
• Section: 68; 234B; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC, NEW DELHI BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3332/DEL/2018 ASSESSMENT YEAR: 2015-16 SH. VIKAS SAINI, C/O RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI (PAN: DYWPS6375F) VS. ITO, WARD 4(5), GURGAON (APPELLANT) (RESPONDENT) ITA NO. 3333/DEL/2018 ASSESSMENT YEAR: 2015-16 SH. SUBHASH CHANDER (HUF), C/O RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI (PAN: AAYHS1113E) VS. ITO, WARD 4(3), GURGAON (APPELLANT) (RESPONDENT) ITA NO. 3334/DEL/2018 ASSESSMENT YEAR: 2015-16 SH. DILBAG SINGH SAINI (HUF) RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI (PAN: AAHHD8869D) VS. ITO, WARD 1(4), GURGAON (APPELLANT) (RESPONDENT) ITA NO. 3335/DEL/2018 ASSESSMENT YEAR: 2015-16 SH. JASBIR SINGH SAINI, C/O RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI VS. ITO, WARD 2(2), GURGAON 2 (PAN: AAGHJ4276B) (APPELLANT) (RESPONDENT) ORDER THE AFORESAID ASSESSEES HAVE FILED THE APPEALS AG AINST THE RESPECTIVE ORDERS PASSED BY LD. CIT(A) CONFIRMING T HE ORDERS OF ASSESSING OFFICER WHEREIN FOLLOWING ADDITIONS WERE MADE AGAIN ST SALE OF SHARES IN THE SCRIP OF M/S EFFINGO TEXTILE & TRADING LTD, TR EATED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). THIS WAS CLAIMED AS EXEMPT BY ASSESSEES U/S 10(38) OF THE IN COME TAX ACT, 1961. NAME OF THE CASE ITA NO. ADDITION (RS) VIKAS SAINI 3332/DEL/2018 RS 25,02,610/- SUBHASH CHANDER SAINI (HUF) 3333/DEL/2018 RS. 24,98,000/- DISBAGH SINGH SAINI (HUF) 3334/DEL/2018 RS 25,01,427/- JASBIR SINGH SAINI (HUF) 3335/DEL/2018 RS. 24,81,510/- 2. SINCE FACTS INVOLVED IN THESE APPEALS ARE SAME A ND IDENTICAL, HENCE, THE APPEALS WERE HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE, ALL THESE APPEALS ARE BEING CONSOLIDATED AND DISPOSED O F BY THIS COMMON ORDER. FOR SAKE OF REFERENCE AND FACILITY, THE FACT S IN CASE OF SH. VIKAS ASSESSEE BY DR. RAKESH GUPTA, ADVOCATE; SH DEEPESH GARG, ADVOCATE & SH. SHUBHAM SOBTI, ADVOCATE DEPARTMENT BY SH. S.L. ANURAGI, SR. DR. 3 SAINI VS. ITO, WARD 4(5), GURGAON (AY 2015-16) ARE TAKEN UP AND ONLY GROUNDS OF APPEAL RAISED BY ASSESSEE IN THIS CASE A RE REPRODUCED HEREUNDER FOR THE SAKE OF CONVENIENCE, BEING IDENT ICAL AND SIMILAR, EXCEPT THE DIFFERENCE IN THE FIGURES. 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE ACSE, LD. CIT(A) HAS ERRED IN LAW AND ONF ACTS IN CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS. 25,02,610/- U/S. 68 A ND HAS FURTHER ERRED IN NOT ALLOWING THE EXEMPTION U/S. 10(38) AS CLAIMED BY THE ASSESSEE AND THAT TOO BY RECORDING INCORRECT FACTS AND FINDINGS AND WITHOUT GRANTING OPPORTUNITY OF CROSS EXAMINATION AS PER LAW AND WITHOUT PROVIDING THE ENTIRE ADVERSE MATERIAL ON RE CORDS AND WITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACT ION OF THE LD. CIT(A) IN CONFIRMING THE ACTION OF THE AO IN MAKING ADDITION OF RS. 25,02,610/- U/S. 68 AND NOT ALLOWING THE BENEFIT O F EXEMPTION U/S. 10(38), IS BAD IN LAW AND AGAINST THE FACTS AND CIR CUMSTANCES OF THE CASE. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT REVERSI NG THE ACTION OF AO IN CHARGING INTEREST U/S. 234B OF THE INCOME TA X ACT, 1961. 4. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARIN G AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 4 3. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE HAS STATED THAT THE ISSUE IN ALL THE APPEALS ARE ALMOST IDENTICAL, BUT HE IS ARGUING ONLY ONE APPEAL I.E. ITA NO. 3332/DEL/2018 (AY 2015-16) VIKAS SAINI VS. ITO AND DREW MY ATTENTION TOWARDS GROUND NO. 1 RAISED BY THE ASSESSEE IN THE APPEAL AS WELL AS THE GROUND RAISED BY THE ASSE SSEE BEFORE THE LD. CIT(A), WHICH THE LD. CIT(A) HAS REPRODUCED IN HIS IMPUGNED ORDER. ALSO DURING THE HEARING, HE FURTHER DRAW MY ATTENTION TO WARDS GROUND NO. 1 IN ALL THE APPEALS AND STATED THAT THE SAID ISSUE IS I N LEGAL NATURE, HENCE, HE WANTS TO ARGUE THE SAME FIRST AND IF THE ASSESSEE SUCCEEDS IN THIS GROUND, THEN THE ADDITION IN DISPUTE MAY BE DELETED AND AS SESSMENT MAY BE CANCELLED. HE FURTHER STATED THAT IF THE BENCH I S NOT AGREED WITH THE ASSESSEES CONTENTION ON THE ISSUE INVOLVED IN GROU ND NO. 1, THEN ON MERITS, THE APPEAL OF THE ASSESSEE MAY BE RE-FIXE D FOR HEARING. HE FURTHER SUBMITTED THAT THE ADDITION IN DISPUTE IN ALL THE APPEALS HAVE BEEN MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) U/S . 68 OF THE I.T. ACT ON THE BASIS OF THE STATEMENT OF THE ENTRY PROVIDER SH. ANIL KUMAR KHEMKA AND NIKHIL JAIN REFERRED IN THE IMPUGNED ORD ER, BUT THE SAME HAS NOT BEEN PROVIDED TO THE ASSESSEE AS WELL AS THE OP PORTUNITY OF CROSS EXAMINATION HAS ALSO NOT BEEN PROVIDED TO THE ASSES SEE DESPITE THE REQUEST MADE BY THE ASSESSEE TO THE AO. HE FURTHE R REQUESTED THAT NON- PROVIDING OF OPPORTUNITY TO CROSS EXAMINE THE ABOVE SAID ENTRY PROVIDERS, IT IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND AGAINST THE SETTLED LAW. HE ALSO DRAW MY ATTENTION TOWARDS ONE PAPER BOOK FILED BY THE ASSESSEE CONTAINING PAGES 1 TO 67 ESPECIALLY THE PAGE NO. 21 -29 IN WHICH HE HAS 5 ATTACHED THE COPY OF LETTER ISSUED BY DDIT (INV.), UNIT-II, KOLKATA TO ITO, WARD 4(3), GURGAON DATED 11.10.2017 STATING THAT NO BODY ATTENDED FOR CROSS EXAMINATION; COPY OF REPLY DATED 27.9.2017 F ILED WITH THE AO SUBMITTING THAT THE ASSESSEE DEPUTED SH. ASHWANI VE RMA AND MR. SM SAINI AND ISSUED HIM POWER OF ATTORNEY FOR CARRYIN G OUT CROSS EXAMINATION OF SH. ANIL KUMAR KHEMKA ON HIS BEHALF AND FURTHER ASSESSEE SUBMITTING THE COPY OF LETTER DATED 8.9.2017 ISSUED BY THE AO PROVIDING OPPORTUNITY FOR CROSS EXAMINATION; RECEIPT COPY OF LETTER DATE D 22.9.2017 FILED TO DDIT (INV.) UNIT-II, KOLKATA TO CONDUCT CROSS VERIF ICATION OF SH. ANIL KUMAR KHEMKA ALONGWITH POWER OF ATTORNEY AND COPY OF AIR TICKETS; CONFIRMED COPY OF ACCOUNT OF M/S DB (INTERNATIONAL) STOCK BRO KERS LTD.; COPY OF LETTER DATED 31.7.2017 FROM M/S ANKUSH POLY ENGINE ERING (P) LTD. ISSUED TO ASSESSEE PROVIDING THE CONFIRMED COPY OF BILL, C ONFIRMED COPY OF RECEIPT OF PAYMENT, COPY OF ITR AND THE COPY OF WRITTEN STA TEMENT FILED BEFORE LD. CIT(A). HE ALSO FILED THE ANOTHER PAPER BOOK WHICH IS COMPILATION OF 30 CASE LAWS CONTAINING PAGES 1 TO 402 AND STATED THAT THE ISSUE ON MERIT IS SQUARELY COVERED BY THE SAID DECISIONS. HE FURTHER SUBMITTED THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS WELL AS THE DOCUMENTARY EVIDENCES FILED BY THE ASSESSEE AND THE SUPPORTING CASE LAWS REFERRED BY HIM IN THE PAPER BOOK, THE ADDITION IN DISPUTE MAY BE DELETED AND REQUESTED TO CANCEL THE ORDERS OF THE AUTHORITI ES BELOW. 4. ON THE OTHER HAND, LD DR HAS STRONGLY RELIED ON THE ORDERS OF LOWER AUTHORITIES AND STATED THAT THE OPPORTUNITY OF CROS S EXAMINATION HAS BEEN GIVEN TO THE ASSESSEE, BUT THE ASSESSEE HAS NOT AVA ILED THE SAME. HE 6 DRAW MY ATTENTION TOWARD THE LETTER WRITTEN BY THE ITO TO THE ASSESSEE PROVIDING THE STATEMENT OF ENTRY PROVIDERS AS WELL AS THE OPPORTUNITY TO THE ASSESSEE FOR CROSS EXAMINATION THE ENTRY PROVID ERS. HE REQUESTED THAT THE ASSESSEE HAS NOT AVAILED THE OPPORTUNITY O F CROSS EXAMINATION IN SPITE OF THE FACT THAT THE AO HAS PROVIDED THE STAT EMENT OF THE ENTRY PROVIDER TO THE ASSESSEE. THEREFORE, THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE AS WELL AS THE CASE LAWS RELIED BY HIM ARE NOT USEFUL ON THE GROUND NO. 1 IN ALL THE APPEALS, HENC E, ON THIS ACCOUNT THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. 5. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE PAPER BOOKS FILED BY THE LD. COUNSEL FOR THE ASSESSEE AS WELL AS THE IMPUGNED ORDER. IN FIND THAT ASSESSEE HAS FILED A P APER BOOK CONTAINING PAGES 1 TO 67 ESPECIALLY THE PAGE NO. 21-29 IN WHIC H HE HAS ATTACHED THE COPY OF LETTER ISSUED BY DDIT (INV.), UNIT-II, KOLK ATA TO ITO, WARD 4(3), GURGAON DATED 11.10.2017 STATING THAT NOBODY ATTEND ED FOR CROSS EXAMINATION; COPY OF REPLY DATED 27.9.2017 FILED WITH THE AO SUBMITTING THAT THE ASSESSEE DEPUTED SH. ASHWANI VERMA AND MR. SM SAINI AND ISSUED HIM POWER OF ATTORNEY FOR CARRYING OUT CROS S EXAMINATION OF SH. ANIL KUMAR KHEMKA ON HIS BEHALF AND FURTHER ASSESSE E SUBMITTING THE COPY OF LETTER DATED 8.9.2017 ISSUED BY THE AO PROV IDING OPPORTUNITY FOR CROSS EXAMINATION; RECEIPT COPY OF LETTER DATED 22 .9.2017 FILED TO DDIT (INV.) UNIT-II, KOLKATA TO CONDUCT CROSS VERIFICATI ON OF SH. ANIL KUMAR KHEMKA ALONGWITH POWER OF ATTORNEY AND COPY OF AIR TICKETS; CONFIRMED COPY OF ACCOUNT OF M/S DB (INTERNATIONAL) STOCK BRO KERS LTD.; COPY OF 7 LETTER DATED 31.7.2017 FROM M/S ANKUSH POLY ENGINE ERING (P) LTD. ISSUED TO ASSESSEE PROVIDING THE CONFIRMED COPY OF BILL, C ONFIRMED COPY OF RECEIPT OF PAYMENT, COPY OF ITR AND THE COPY OF WRITTEN STA TEMENT FILED BEFORE LD. CIT(A) AND ALSO PERUSED ANOTHER PAPER BOOK WHICH I S COMPILATION OF 30 CASE LAWS CONTAINING PAGES 1 TO 402 WHICH ARE ON ME RIT OF THE CASE. I AM OF THE CONSIDERED VIEW THAT ASSESSEE HAS RAISED GRO UND NO. 3 BEFORE THE LD. CIT(A) IN ALL THE APPEALS REQUESTING FOR GRANTI NG THE OPPORTUNITY OF CROSS EXAMINATION AS PER LAW PROVIDING ENTIRE ADVE RSE MATERIAL ON RECORD USED AGAINST HIM. IT IS NOTED THAT ASSESSEE HAS RE QUESTED TO THE LD. CIT(A) FOR PROVIDING CROSS EXAMINATION OF THE ENTRY PROVIDER AND REQUESTED FOR THE ADVERSE MATERIAL USED AGAINST THE ASSESSEE, BUT THE LD. CIT(A) HAS NOT DECIDED THIS GROUND IN THE IMPUGNED ORDER. I HAVE ALSO GONE THROUGH ALL THE FOUR APPEALS AND I AM OF THE C ONSIDERED VIEW THAT ASSESSEE HAS RAISED 6 GROUNDS BEFORE THE LD. CIT(A) . FOR THE SAKE OF CONVENIENCE, I AM REPRODUCING 06 GROUNDS OF APPEAL AS UNDER, WHICH ARE ALSO MENTIONED AT PAGE NO. 2 OF THE IMPUGNED ORDER: - 1. THAT THE APPELLANT DENIES HIS LIABILITY TO BE AS SESSED AT TOTAL INCOME OF 25,34,787/- AS AGAINST RETURNED INCOME OF RS. 33,360/- AND ACCORDINGLY DENIES LIABI LITY TO PAY TAX, CESS AND INTEREST DEMANDED THEREON. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN FRAMING IMPUGNED ASSESSMENT ORDER AND THAT TOO WITH ASSUMING JURISDICTION US PER LAW. 8 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD AO HAS ERRED IN LAW AND ON FACTS IN MA KING ADDITION OF RS. 25,01,427/- U/S. 68 AND HAS FURTHER ERRED IT NOT ALLOWING THE EXEMPTION U/S 10(38) AS CLAIMED BY THE ASSESSEE AND THAT TOO BY RECORDING INCORRECT FA CTS AND FINDINGS WITHOUT GRANTING OPPORTUNITY OF CROSS EXAMINATION AS PER LAW AND PROVIDING THE ENTIRE ADV ERSE MATERIAL ON RECORDS AND WITHOUT OBSERVING THE PRINC IPLES OF NATURAL JUSTICE. 4. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF ID. AO IN MAKING ADDITION OF RS. 25,01,427 U/S 6 8 AND NOT ALLOWING THE BENEFIT OF EXEMPTION U/S 10(38), I S BAD IN LAW AGAINST THE FACTS AND CIRCUMSTANCES OF THE C ASE. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN CHARGING INTEREST U/S 234B OF THE INCOME TAX ACT, 1 961. 6. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MOD IFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHO UT PREJUDICE TO EACH OTHER. 5.1 AFTER PERUSING THE AFORESAID GROUNDS RAISED BEF ORE THE LD. CIT(A) BY THE ASSESSEE AS WELL AS THE IMPUGNED ORDER OF THE LD. CIT(A), I NOTE THAT LD. CIT(A) HAS NOT DECIDED THE GROUND 3 RAISE D BEFORE HIM AND DISMISSED THE APPEAL FILED BY THE ASSESSEE ON OTHER GROUNDS. NO DOUBT THAT ASSESSEE HAS RAISED THE GROUND NO. 1 IN THESE APPEALS WHICH IS RELATING TO GRANTING THE OPPORTUNITY OF CROSS EXAMI NATION AND PROVIDING 9 ENTIRE ADVERSE MATERIAL TO THE ASSESSEE. AS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE THAT AT PAGE NO. 23-30 IN WHICH STATEM ENT OF ENTRY PROVIDER HAS BEEN GIVEN TO THE ASSESSEE FOR CROSS EXAMINATIO N NAMELY SH. ANIL KUMAR KHEMKA S/O LAKHI NARAYAN KHEMKA WAS ALSO PROV IDED TO THE ASSESSEE. IT IS ALSO NOTED THAT AS PER THE EVIDENC E PRODUCED BY THE ASSESSEE REGARDING THE AIR TICKET AT PAGE NO. 27-30 OF THE PAPER BOOK, THE ASSESSEE HAS GONE TO THE OFFICE OF THE DY. DIRECTOR OF INCOME TAX (INVESTIGATION), UNIT-II(3), KOLKATA WHERE THE CR OSS EXAMINATION OF THE ENTRY PROVIDER WAS TO BE GIVEN BY THE AUTHORITY, B UT THE SAME WAS NOT PROVIDED TO THE A.R. FOR THE ASSESSEE. ON THE CONT RARY, LD. DR HAS STATED THAT OPPORTUNITY FOR CROSS EXAMINATION OF THE ENT RY PROVIDERS HAS BEEN PROVIDED TO THE ASSESSEE. IN MY VIEW, THE ISSUE IN DISPUTE I.E. CROSS EXAMINATION OPPORTUNITY TO THE ASSESSEE WAS PROVIDE D OR NOT PROVIDED IS NOT CLEAR AND IS DISPUTED. SECONDLY, THIS GROUND R AISED BY THE ASSESSEE BEFORE THE LD. CIT(A) VIDE GROUND NO. 3, WHICH IS R EPRODUCED ABOVE, HAS NOT BEEN DECIDED BY THE LD. FIRST APPELLATE AUTHOR ITY. HENCE, IN MY CONSIDERED VIEW AND IN THE INTEREST OF JUSTICE, I D EEM IT FIT THAT THE ISSUE IN DISPUTE RAISED IN GROUND NO. 1 IN THE PRESENT APPEA L BEFORE THIS TRIBUNAL AND ISSUE RAISED IN GROUND NO. 3 RAISED BEFORE THE LD. FIRST APPELLATE AUTHORITY NEEDS TO BE SET ASIDE TO THE FILE OF TH E LD. CIT(A) WITH THE DIRECTIONS TO DECIDE THE SAME AS PER LAW, AFTER GIV ING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I HOL D AND DIRECT ACCORDINGLY. LD. CIT(A) IS ALSO DIRECTED TO VERIFY THE GENUINENE SS OF THE AIR TICKETS IN DISPUTE. HOWEVER, ASSESSEE IS DIRECTED TO FULLY C OOPERATE WITH THE LD. 10 CIT(A) FOR DISPOSING OF THE ISSUE IN DISPUTE IN TH E PRESENT APPEAL AND WILL NOT SEEK ANY UNNECESSARY ADJOURNMENT. IN THE RESULT , THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. SINCE IN ALL THE OTHER THREE APPEALS, I.E., IN T HE CASE OF SUBHASH CHANDER (HUF) IN ITA 3333/DEL/2018 (AY 2015-16); DI SBAGH SINGH SAINI (HUF) IN ITA NO. 3334/DEL/2018 (AY 2015-16); AND JASBIR SINGH SAINI (HUF) IN ITA 3335/DEL/2018 (AY 2015-16), SIMILAR FA CTS ARE PERMEATING, THEREFORE, MY FINDING GIVEN ABOVE WILL APPLY MUTATI S MUTANDIS IN THESE THREE APPEALS ALSO, BECAUSE THE GROUND RAISED, EVID ENCES AND DOCUMENTS ARE EXACTLY THE SAME IN ALL THE APPEALS. 7. IN THE RESULT, ALL THE FOUR APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. THE DECISION IS PRONOUNCED ON 08/01/2019. SD/- (H.S. SIDHU) JUDICIAL MEMBER DATED: 08/01/2019 SRBHATNAGAR COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI