M/s. K L Verma & Sons, New Delhi V. ACIT, New Delhi

ITA 3696/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7584 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 20-11-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 10-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV DUDEJA
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Capital asset; Rectification of order; Additional evidence
• Section: 131; 154

Judgement Text

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.3696 /DEL/2013 ASSESSMENT YEAR : 2004-05 M/S. K.L.VERMA & SONS, VS. ACIT, CIRCLE 22(1), D-836, NEW FRIENDS COLONY, NEW DELHI NEW DELHI-110 065 GIR / PAN:AAAHK4041H I.T.A.NO. 4060/DEL/2013 (ASSESSMENT YEAR 2004-05) ACIT, CIRCLE 22(1), VS. M/S. K.L. VERMA & SONS, NEW DELHI D-836, NEW FRIENDS COLONY, NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI TANEJA, ADV., RESPONDENT BY : SHRI GAURAV DUDEJA, DR ORDER PER T.S. KAPOOR, AM: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AS W ELL AS BY REVENUE AGAINST THE ORIGINAL ORDER OF LD. CIT(A) DATED 06.0 3.2013 ALONG WITH RECTIFICATION ORDER DATED 17.04.2013 TO THE ORIGINA L ORDER. THE REVENUE IS AGGRIEVED WITH THE REDUCTION OF ADDITION FROM RS.21 .32 LACS TO RS.12.12 LACS WHEREAS THE ASSESSEE IS AGGRIEVED WITH THE CONFIRMA TION OF ADDITION OF RS.12.12 LACS BY LD. CIT(A). THIS IS THE 2 ND ROUND OF APPEAL BEFORE ITAT. IN THE FIRST ROUND, HONBLE ITAT VIDE ORDER DATED 1 7.10.2008 HAD REMANDED ITA NOS.3696, 4060/DEL/2013 2 THE ISSUE BACK TO THE OFFICE OF A.O. WITH THE DIREC TION TO A.O. TO PROVIDE OPPORTUNITY TO ASSESSEE TO CROSS EXAMINATION OF ONE SHRI MANI RAM WHO HAD SOLD A PIECE OF LAND TO THE ASSESSEE BEFORE A.O. M R. MANI RAM HAD STATED THAT HE HAD RECEIVED AN AMOUNT OF RS.53.30 LACS IN CASH AGAINST SALE OF LAND ALONG-WITH CHEQUE OF RS.8.10 LACS WHEREAS ASSESSEE HAD DENIED OF HAVING PAID ANYTHING IN CASH. HONBLE ITAT OBSERVED THAT ASSESSEE WAS NOT PROVIDED OPPORTUNITY TO CROSS EXAMINE MR. MANI RAM AND, THEREFORE, THE MATTER WAS REMANDED BACK WITH THE FOLLOWING DIRECTI ON: 16. WE HAVE HEARD THE ARGUMENT OF BOTH THE SIDES AND ALSO PERUSED THE MATERIAL ON RECORD INCLUDING THE STATEM ENT OF SHRI MANIRAM. IT IS NO DOUBT TRUE THAT THE AREA OF LAND SOLD TO M/S SUNFLAME UDYOG WAS STATED AS 6 BIGHAS 8 BISWAS BY S HRI MANIRAM AND THE SELLING RATE WAS ALSO MENTIONED BY HIM AS R S.9,60,000/- PER BIGHA. THE LAND ACTUALLY PURCHASED BY M1SSUNFLAME U DYOG FROM SHRI MANIRAM AND OTHERS, CO- OWNERS, HOWEVER, WAS ACTUAL LY 4 BIGHAS AND THE AREA OF 6 BIGHAS AND 8 BISWAS MENTIONED BY HIM WAS, IN FACT, IS TOTAL LAND OWNED BY SHRI MANIRAM AND OTHERS. HOWEVE R, WHILE GIVING ANSWER TO QUESTION NO.2, HE HAD CLEARLY ADMITTED OF HAVING RECEIVED CASH OF RS.53,30,000/- FOR THE SALE OF THE SAID LAN D IN ADDITION TO THE AMOUNT OF RS.8, 10,0001- RECEIVED BY CHEQUE. EVEN I N ANSWER TO QUESTION NO.3, HE AND CATEGORICALLY STATED THAT A T OTAL AMOUNT OF RS.61,40,000/- WAS RECEIVED BY HIM AND HIS BROTHERS FOR SALE OF LAND TO M/;-SUNFLAME UDYOG. IN THEIR BANK ACCOUNTS, SHRI MANIRAM AND HIS BROTHERS WERE FOUND TO HAVE DEPOSITED A SUM OF RS48 LACS IN CASH IMMEDIATELY AFTER THE SALE OF THE SAID LAND. THERE WAS THUS, THE CONTRADICTION IN T OF SHRI MANIRAM AND IF THE SAID STATEMENT IS CONSIDERED IN THE LIGHT OF THE AMOUNTS FOUND TO BE DEPOSITED IN THE BANK ACCOUNT OF SHRI MANIRAM AND HIS BROTHERS, THE ISSUE RELATING TO THE EXACT AMOUNT OF CASH PAID FOR PURCHASE OF LAND TO SHRI MANIRAM AND OTHERS WAS DEBATABLE ONE WHICH REQUIRED FURTHER INVESTIGATION AND EXAMINATION TO DECIDE THE SAME. IN OUR OPINION, THE SAID ISSUE THUS, WAS BEYOND THE PURVIEW OF SECTION 154 OF WHIC H RECTIFICATION AS SOUGHT BY THE ASSESSEE WAS NOT PERMISSIBLE. IN THAT VIEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDERS OF THE LEARNED ERR (APPEALS) AND RESTORE THE ORDERS OF THE ASSESSING OFFICER PASSED U/S 154 REJECTING ITA NOS.3696, 4060/DEL/2013 3 THE APPLICATIONS FILED BY THE ASSESSEE FOR RECTIFIC ATION. HOWEVER, KEEPING IN VIEW THAT THE ISSUE RELATING TO THE ADDI TIONS MADE U/S 69B IN THE ASSESSMENTS HAS BEEN RESTORED BY US TO THE F ILE OF ASSESSING OFFICER FOR GIVING AN OPPORTUNITY TO THE ASSESSEE T O CROSS EXAMINE SHRI MANIRARN. WE DIRECT THE ASSESSING OFFICER TO ALLOW THE ASSESSEE TO RAISE AND ADDRESS THIS ISSUE ABOUT THE EXACT QUANTU M OF THE CONSIDERATION BEING MATERIAL AND RELEVANT TO THE MA IN ISSUE. 2. IN VIEW OF THE DIRECTION OF ITAT, THE A.O. ISSUE D A LETTER TO ASSESSEE AND FIXED THE DATE OF HEARING ON 27.07.2009. SINCE THE MATTER WAS REMANDED IN ORDER TO GIVE OPPORTUNITY TO CROSS EXAMINE THE W ITNESS SHRI MANIRAM, COMMISSION WAS ISSUED U/S 133(1) TO ADT(INV.), SHIM LA, THE REPORT OF WHICH WAS RECEIVED ON 10.11.2009. THE CONTENTS OF SUCH R EPORT AS NOTED IN ASSESSMENT ORDER IS REPRODUCED BELOW: .IN THIS CONTEXT IT IS SUBMITTED THAT SUMMONS U/ S 131 OF THE IT ACT WERE ISSUED TO, M/S K L VERMA AND SONS NEW DELH I AND SH MONT RAM 5/0 SH CHIRONJI OF VILL. BILAWALI DISTT. SOLAN HP FOR AFFORDING AN OPPORTUNITY TO SH K L VERMA AND SONS NEW DELHI T O CROSS EXAMINE SH. MANI RAM OF VIII BILAWALI (COPY OF SUMMONS ENCL OSED). THEY WERE REQUIRED TF( ATTEND THE OFFICE ON 28/10/09 FOR THE ABOVE PURPOSE. IN RESPONSE TO SUMMONS SH MANI RAM ATTENDED THE OFFICE AND HIS STATEMENT ON OATH WAS RECORDED ON DATED 28/10/09. I N HIS STATEMENT, HE HAS ADMITTED THAT HE ALONG WITH HIS BROTHERS HAD SOLD THE LAND MEASURING 6 BIGHAS AND 8 BISHWAS FOR RS.61,44,000/- TO M/S. SUNFLAME UDYOG IN THE YEAR 2003-04 AND THEY RECEIVE D THE PAYMENT OF RS. 53,00,000 (OPPROX.) IN CASH AND BALANCE AMOUNT WAS PAID TO THEM BY CHEQUE (COPY OF STATEMENT OF MANI RAM AND HIS BA NK STATEMENT IS ENCLOSED). IN RESPONSE TO SUMMONS ISSUED TO SH K L VERMA AND S ONS, NEW DELHI, NOBODY ATTENDEE THE OFFICE ON THE DATE MENTI ONED IN THE SUMMON WHEREAS THIS OFFICE HAS RECEIVED A LETTER 27 /10/09 FROM K L VERMA AND SONS NEW DELHI FOR TRANSFERRING THE ENQUI RY PENDING PROCEEDING TO DELHI AS HE IS A SENIOR CITIZEN AND W AS NOT IN GOOD HEALTH (COPY OF LETTER ENCLOSED)'. ITA NOS.3696, 4060/DEL/2013 4 3. THE A.O. OBSERVED THAT ON BEHALF OF ASSESSEE, NO BODY ATTENDED BEFORE THE COMMISSION AND IN FACT THE ASSESSEE REQUESTED T HE A.O. TO TRANSFER THE INQUIRY PROCEEDINGS TO DELHI AS HE WAS A SENIOR CIT IZEN AND WAS NOT KEEPING GOOD HEALTH. THEREFORE, THE A.O. FURNISHED A COPY OF LETTER DATED 11.11.2009 WRITTEN BY SHRI MANIRAM ALONG WITH A COPY OF BANK S TATEMENT TO THE ASSESSEE AND IN RESPONSE, THE LD. A.R. FILED WRITTEN SUBMISS IONS WHICH THE A.O. FOUND TO BE THE SAME AS WAS PROVIDED DURING ORIGINA L ASSESSMENT PROCEEDINGS. DURING THE COURSE OF HEARING ON 19.11 .2009, IT WAS POINTED OUT TO LD. A.R. OF THE ASSESSEE THAT AS PER THE DIRECTI ONS OF ITAT, THE ASSESSEE HAD NOT UTILIZED THE OPPORTUNITY TO CROSS EXAMINE T HE WITNESS AND IN REPLY, LD. A.R. CAME OUT WITH A PROPOSITION THAT HE WAS TR YING TO COORDINATE WITH THE WITNESS AND WILL ARRIVE AT A CONVENIENT TIME AN D PLACE WHERE IT WOULD BE CONVENIENT FOR BOTH THE PARTIES TO DEPOSE AND ASSES SEE COULD CROSS EXAMINE THE WITNESS. THE A.O. OBSERVED THAT EVEN AFTER LAP SE OF THREE WEEKS, THERE WAS NO RESPONSE FROM LD. A.R. AND THEREFORE, THE A. O. FURTHER ISSUED NOTICE TO BOTH THE PARTIES TO WHICH NOBODY APPEARED. THER EFORE, A.O. HELD THAT SINCE CROSS EXAMINATION COULD NOT TAKE PLACE, THE C LAIM OF THE ASSESSEE WAS NOT VERIFIABLE AND, THEREFORE, CONFIRMED THE ADDITI ON. AGGRIEVED, WITH THE ADDITION, THE ASSESSEE AGAIN APPROACHED LD. CIT(A). BEFORE LD. CIT(A), ASSESSEE FILED ADDITIONAL EVIDENCES AND CIT(A) DIRE CTED DCIT CIRCLE 22(1) TO EXAMINE THE ASSESSEES CLAIM AND TO PROVIDE A FR ESH OPPORTUNITY TO CROSS EXAMINE AND CONFRONT THE SELLER OF LAND I.E. SHRI M ANIRAM. IT WAS ALSO DIRECTED THAT IF SELLER OF LAND SHRI MANIRAM AND OT HERS DO NOT APPEAR, HE MAY CALL OTHER GPA HOLDER TO CONFIRM REGARDING TRANSFER OF LAND AND CONSIDERATION THEREOF. DCIT SUBMITTED HIS REPORT T O LD. CIT(A) WHEREBY HE SUBMITTED THAT SHRI MANIRAM DID NOT APPEAR AND THER EFORE, THE GPA OF SHRI ITA NOS.3696, 4060/DEL/2013 5 MANIRAM SHRI MANMOHAN KHANNA HAD APPEARED AND REITE RATED THAT NOTHING WAS RECEIVED IN CASH. BEFORE DCIT, CIRCLE 22(1), S HRI MANIRAM DID NOT APPEAR. LD. CIT(A) THEREAFTER HELD THAT SINCE THE SELLER OF THE LAND SHRI MANIRAM HAD CATEGORICALLY STATED THAT HE AND OTHERS HAD GOT RS.53 LACS CASH AFTER SALE OF LAND AND OUT OF WHICH RS.48 LACS WERE DEPOSITED IN THE BANK ACCOUNT AND, THEREFORE, HE UPHELD THE ADDITION MADE BY A.O. HOWEVER, VIDE ORDER DATED 17.04.2013, LD. CIT(A) PASSED A RECTIFI CATION ORDER U/S 154 AND REDUCED THE ADDITION OF RS.21.32 LACS TO RS.12.12 L ACS. THEREFORE, BOTH THE PARTIES ARE AGGRIEVED AND ARE BEFORE US. 4. AT THE OUTSET, LD. A.R. EXPLAINED THE FACTS OF T HE CASE AND FILED A WRITTEN SYNOPSIS AND LD. A.R. REITERATED HIS ORIGIN AL ARGUMENTS WHICH WERE IN THE ORIGINAL PROCEEDINGS BEFORE THE TRIBUNAL. T HE HONBLE TRIBUNAL HAD ALREADY PASSED ORDER ON 17.04.2008. LD. A.R. SUBMI TTED THAT THE ASSESSEE COULD NOT VISIT SHIMLA TO CROSS EXAMINE SHRI MANIRA M. HE WAS SENIOR CITIZEN AND WAS NOT KEEPING GOOD HEALTH BUT HE SUBM ITTED THAT IT IS A FACT THAT BEFORE LD. CIT(A), ASSESSEE HAD APPEARED AND SHRI M ANIRAM COULD NOT APPEAR. HOWEVER, IT WAS STATED THAT NOTHING WAS PA ID IN CASH AS THERE WAS NO OTHER EVIDENCE OTHER THAN A STATEMENT OF SHRI MANIR AM REGARDING PAYMENT IN CASH. THEREFORE, HE ARGUED THAT ADDITION WAS MADE AND CONFIRMED ONLY ON THE BASIS OF A STATEMENT & WAS NOT MAINTAINABLE. LD . D.R. ON THE OTHER HAND SUBMITTED THAT DESPITE THE OPPORTUNITY PROVIDED TO ASSESSEE, HE DID NOT CROSS EXAMINE MR. MANIRAM AND MR. MANIRAM AGAIN HAD REIT4 ERATED ABOUT RECEIPT OF CASH, THEREFORE, ADDITION NEEDS TO BE CONFIRMED. 5. WE HAVE HARD RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT HONBLE ITAT HAD REMANDED BACK THE CASE TO THE OFFICE OF A.O. FOR GIVING OPPORTUNITY TO THE ASSESS EE FOR CROSS EXAMINATION, ITA NOS.3696, 4060/DEL/2013 6 WHICH HAD NOT BEEN DONE IN THE PRESENT CASE DUE TO ONE REASON OR THE OTHER. THE HONBLE TRIBUNAL HAS ALREADY DEALT WITH THE ISS UE RAISED BY LD. A.R., THEREFORE, THE MERITS OF THE CASE CANNOT BE COMMENT ED UPON AND IT IS APPROPRIATE FOR US TO REMAND THE MATER BACK TO THE OFFICE OF A.O. WHO SHALL RE-ADJUDICATE THE ISSUE AFTER PROVIDING THE ASSESSE E AN OPPORTUNITY TO CROSS EXAMINE SHRI MANIRAM. THE A.O. SHOULD ENSURE THAT SHRI MANIRAM IS CROSS EXAMINED BY THE ASSESSEE AND AFTER KEEPING ALL FACT S AND CIRCUMSTANCES INCLUDING STATEMENT OF SHRI MANIRAM AND HIS CROSS E XAMINATION, THE A.O. SHOULD ARRIVE AT A CORRECT DECISION BASED UPON FACT S AND AS PER LAW. 6. IN VIEW OF ABOVE, APPEALS FILED BY THE REVENUE A S WELL AS BY ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH DEC., 2014. SD./- SD./- (H. S. SIDHU ) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 12 TH DEC., 2014 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NOS.3696, 4060/DEL/2013 7 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER