Anuradha Maitra, Delhi V. DCIT, New Delhi

ITA 3558/DEL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2786 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 05-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K TIWARI
• Assessee Lawyers: MANOJ GARG
• Keywords: Business income; Reason to believe
• Section: 147; 131; 148; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.3558/DEL/2017 ASSESSMENT YEAR : 2007-08 ANURADHA MAITRA, ANURADHA KHOSLA, 10/101, EAST END APARTMENTS, MAYUR VIHAR PHASE-I, DELHI 110 091. PAN: AHYPM5312L VS. DCIT, CIRCLE-70(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANOJ GARG, CA DEPARTMENT BY : SHRI V.K. TIWARI, SR. DR DATE OF HEARING : 21.03.2018 DATE OF PRONOUNCEMENT : 22.03.2018 ORDER PER R.S. SYAL, VP: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER PASSED BY THE CIT(A) ON 16.03.2017 IN RELATION TO THE ASSE SSMENT YEAR 2007-08. ITA NO.3558/DEL/2017 2 2. THE ASSESSEE FILED HER ORIGINAL RETURN ON 29.07. 2007 DECLARING TOTAL INCOME OF RS.8,89,970/-. THE ASSESSMENT WAS REOPEN ED BY ISSUING NOTICE U/S 148 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER AL SO CALLED `THE ACT) ON THE PREMISE THAT SHE WAS PROPRIETOR OF M/S GLOBAL C APITAL CONSULTING AND CERTAIN TRANSACTIONS OF THIS CONCERN WERE NOT DECLA RED. THE ASSESSEES OBJECTIONS AGAINST THE INITIATION OF RE-ASSESSMENT PROCEEDINGS WERE TURNED DOWN. THEREAFTER, THE ASSESSING OFFICER MADE AN AD DITION OF RS.16,55,000/- AS UNDISCLOSED INCOME OF THE ASSESSE E, APART FROM DISALLOWING EXEMPTION U/S 10 ON ACCOUNT OF HOUSE RE NT ALLOWANCE AMOUNTING TO RS.1,88,318/-. THE LD. CIT(A) UPHELD THE ASSESSMENT ORDER. 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE REL EVANT MATERIAL ON RECORD. THE FIRST GROUND RAISED IN THIS APPEAL IS AGAINST THE INITIATION OF RE- ASSESSMENT PROCEEDINGS. IN ORDER TO APPRECIATE THE RIVAL CONTENTIONS ON THIS ISSUE, IT WOULD BE APT TO EXTRACT THE REASONS RECOR DED BY THE ASSESSING OFFICER, WHICH HAVE BEEN REPRODUCED ON PAGE 1 OF TH E ASSESSMENT ORDER, AS UNDER :- THE PROCEEDINGS U/S 131 OF THE IT ACT, 1961 WAS IN ITIATED IN THE CASE OF THE ABOVE MENTIONED ASSESSEE. THE UNDERSIGNED NOTE D THAT CREDIT ENTRIES TO THE TUNE OF RS25,15,46,500/- IN THE BANK ACCOUNT NO.002905002609 ITA NO.3558/DEL/2017 3 HELD WITH M/S ICICI BANK LTD., GREATER KAILASH BRAN CH, NEW DELHI FOUND IN THE NAME OF M/S GLOBAL CAPITAL CONSULTING FOR TH E F.Y. 2007-08. DURING THE COURSE OF PROCEEDINGS AND AT THE TIME OF RECORDING THE STATEMENT ON OATH U/S 131, MS ANURADHA MITRA, PROP. M/S GLOBAL CAPITAL CONSULTING DENIED HAVING ANY BUSINESS CONNECTION IN THIS REGARD AND DID NOT FILE INCOME TA RETURN FOR THE INCOME ATTRIBUTAB LE TO M/S GLOBAL CAPITAL CONSULTING IN THIS CASE. BUT ON GOING THROUGH THE ACCOUNTING OPENING FORM ETC. RECEIVED FROM THE ICICI BANK ALONG WITH T HE BANK STATEMENT FOR ACCOUNT NO.002905002609, IT IS REASONABLE TO PRESUME THAT MS ANURADHA MAITRA HAS BEEN PROPRIETOR OF M/S GLOBAL CAPITAL CO NSULTING. KEEPING IN VIEW THE ABOVE FACTS, PROPRIETORY OF ACTION UNDER U /S 148 MAY BE EXAMINED SO THAT ANY INCOME OF MS ANURADHA MAITRA, PROP. M/S GLOBAL CAPITAL CONSULTING ESCAPING ASSESSMENT IS BROUGHT T O TAX. ON THE BASIS OF ABOVE INFORMATION, THE RETURN OF IN COME FOR THE A.Y. 2007-08 OF MS ANURADHA MAITRA WAS GENERATED FROM AS T SYSTEM. IN RETURN OF INCOME ASSESSEE DECLARED INCOME FROM SALA RY AND NO BUSINESS INCOME FROM M/S GLOBAL CAPITAL CONSULTING WAS DECLA RED. I HAVE REASON TO BELIEVE THAT THE ASSESSEE HAD KNOWINGLY AVOIDED DECLARING OF BUSINESS INCOME WITH THE INTENTION TO EVADE THE TAX LIABILIT Y AND HER INCOME IN RESPECT OF WHICH SHE IS ASSESSABLE/CHARGEABLE TO TA X FOR THE ASSESSMENT YEAR 2007-08 HAS ESCAPED ASSESSMENT WITHIN THE MEAN ING OF SECTION 147 OF THE INCOME TAX ACT, 1961. (EMPHASIS SUPPLIED BY US) 4. A PERUSAL OF THE ABOVE REASONS INDICATES THAT TH ERE WERE CREDIT ENTRIES TO THE TUNE OF RS.25.15 CRORE IN THE BANK ACCOUNT M AINTAINED BY M/S GLOBAL CAPITAL CONSULTING WITH ICICI BANK. THE ASSESSING OFFICER HAS RECORDED THE REASONS THAT THE ASSESSEE IS A PROPRIETOR OF M/ S GLOBAL CAPITAL CONSULTING. THE ASSESSEES OBJECTION THAT SHE WAS NOT HAVING ANY BUSINESS CONNECTION WITH THIS CONCERN DID NOT FIND FAVOUR WI TH THE ASSESSING OFFICER ITA NO.3558/DEL/2017 4 WHO RECORDED IN THE REASONS THAT: IT IS REASONABLE TO PRESUME THAT MS ANURADHA MAITRA HAS BEEN PROPRIETOR OF M/S GLOBAL C APITAL CONSULTING. IT IS, THEREAFTER THAT THE NOTICE WAS ISSUED IN RES PECT OF ENTRY OF RS.25 CRORE IN ICICI BANK. 5. AT THIS STAGE, IT IS RELEVANT TO MENTION TH AT THE ASSESSEES STATEMENT WAS RECORDED ON 29.02.2012 U/S 131 OF THE ACT. A C OPY OF SUCH STATEMENT IS AVAILABLE FROM PAGE 25 ONWARDS OF THE PAPER BOOK . QUESTION NO.13 RECOGNIZES THAT THE ASSESSEE DENIED TO HAVE ANY CO NNECTION WITH M/S GLOBAL CAPITAL CONSULTING. THEREAFTER, A COPY OF B ANK ACCOUNT OPENING FORM WITH ICICI BANK LTD. WAS SHOWN TO THE ASSESSEE WHICH BORE HER SIGNATURE AS AUTHORISED SIGNATORY. IN RESPONSE, THE ASSESSEE SUBMITTED THAT SHE DID NOT FILL UP THE FORM AND IT WAS NOT IN HER HANDWRITING AND, FURTHER, THE SIGNATURE ON THE FORM APPEARED TO HAVE BEEN FORGED BY HER ESTRANGED HUSBAND, MR. SIDHARTH MAITRA. IN RESPON SE TO THE QUESTION NO.14, SHE REITERATED THAT SHE WAS NEVER CONNECTED WITH M/S GLOBAL CAPITAL CONSULTINGS BUSINESS ACTIVITIES AND THE SAME WAS C ARRIED OUT BY HER HUSBAND, MR. SIDHHARTH MAITRA. IN SUPPORT OF HER CL AIM, SHE SUBMITTED PHOTOCOPIES OF CERTAIN CHEQUES WHICH WERE SIGNED BY SHRI SIDHARTH MAITRA. ITA NO.3558/DEL/2017 5 IT IS EVIDENT FROM THE STATEMENT RECORDED OF THE AS SESSEE U/S 131 ON 29.02.2012 THAT SHE CATEGORICALLY DENIED TO HAVE BE EN ASSOCIATED WITH M/S GLOBAL CAPITAL CONSULTING. THE ASSESSING OFFICER I SSUED NOTICE AFTER TWO YEARS FROM SUCH STATEMENT, NAMELY, ON 25.03.2014, A GAIN, TREATING HER AS A PROPRIETOR OF M/S GLOBAL CAPITAL CONSULTING, WHICH IS EVIDENT FROM HIS RECORDING IN THE REASONS THAT: IT IS REASONABLE TO PRESUME THAT MS ANURADHA MAITRA HAS BEEN PROPRIETOR OF M/S GLOBAL CAPITAL CO NSULTING. THE ENTIRE FOUNDATION OF THE ESCAPEMENT OF INCOME IS PREMISED ON THE ASSESSEE BEING SOLE PROPRIETOR OF M/S GLOBAL CAPITAL CONSULTING, W HICH IS ADMITTEDLY A PRESUMPTION OF THE ASSESSING OFFICER. THE AO HAS NO WHERE BROUGHT ANY CONCLUSIVE MATERIAL ON RECORD TO INDICATE THAT THE ASSESSEE WAS, IN FACT, THE PROPRIETOR OF THE CONCERN. 6. IT GOES WITHOUT SAYING THAT REASONS RECORDED BY THE ASSESSING OFFICER GIVE HIM THE JURISDICTION TO INITIATE REASSESSMENT. IT IS FURTHER A SETTLED LEGAL POSITION THAT THE VALIDITY OF REASSESSMENT CAN BE T ESTED ON THE TOUCHSTONE OF REASONS RECORDED AND NOT ANYTHING ELSE. WHEN WE AD VERT TO THE REASONS RECORDED BY THE ASSESSING OFFICER, IT BECOMES AMPLY CLEAR THAT THE SAME ARE SHAKY AND UNCERTAIN INASMUCH AS EVEN THE ASSESSING OFFICER PROCEEDED ON ITA NO.3558/DEL/2017 6 A PRESUMPTION AND WAS NOT SURE OF THE ASSESSEE BEIN G A PROPRIETOR OF M/S GLOBAL CAPITAL CONSULTING, WHOSE TRANSACTIONS HAVE BEEN CONSIDERED FOR THE PURPOSES OF INCLUSION IN THE TOTAL INCOME OF THE AS SESSEE. THE AO HAS NOT MADE A CASE OF `REASON TO BELIEVE ABOUT THE ESCAPE MENT OF INCOME, WHICH IS A PRE-CONDITION FOR INITIATING REASSESSMENT PROC EEDINGS. IN OUR CONSIDERED OPINION, THE REASONS RECORDED BY THE ASSESSING OFFI CER DO NOT PRIMA FACIE SHOW THAT THE ASSESSING OFFICER HAD REASONS TO BEL IEVE THAT ANY INCOME OF THE ASSESSEE CHARGEABLE TO TAX HAS ESCAPED ASSESSME NT. WE, THEREFORE, SET ASIDE THE VERY INITIATION OF REASSESSMENT. CONSEQU ENTIAL PROCEEDINGS FLOWING FROM SUCH INVALID INITIATION OF RE-ASSESSME NT ARE HEREBY SET ASIDE. 7. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 22.03.20 18. SD/ SD/ [SUCHITRA KAMBLE] [R.S. SYA L] JUDICIAL MEMBER VICE PRESIDENT DATED, 22 ND MARCH, 2018. DK ITA NO.3558/DEL/2017 7 COPY FORWARDED TO: APPELLANT RESPONDENT CIT CIT (A) DR, ITAT AR, ITAT, NEW DELHI.