DCIT, New Delhi V. Shri Ankit Gupta, New Delhi

ITA 37/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3741 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-05-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 04-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GEETMALA MOHANAMI
• Assessee Lawyers: B L GUPTA ARI T P
• Keywords: Document seized; Documents seized
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A DELHI) BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRESIDENT AND SHRI A.D. JAIN ITA NOS. 37 TO 40 (DEL)2010 ASSESSMENT YEARS: 1999-2000 TO 2001-02& 2005-06 DY.COMMISSIONER OF INCOME TAX, SHRI ANK IT GUPTA, CENTRAL CIR.19, NEW DELHI. V. H- 472, NEW RAJINDER NAGAR, NEW DELHI-110060. ITA NOS.43 & 44(DEL)2010 ASSESSMENT YEARS: 2002-03 &2003-04 DY.COMMISSIONER OF INCOME TAX, SMT. ABH A GUPTA, CENTRAL CIR.19, NEW DELHI. V. 29 2, TAGORE PARK EXT., MODEL TOWN, DELHI-9. (APPELLANT) (RESP ONDENT) APPELLANT BY: MS. GEETMALA MOHANAMI, CIT/DR RESPONDENT BY: SHRI B.L . GUPTA, AR(I.T.P.) ORDER PER A.D. JAIN, J.M . THESE ARE DEPARTMENTS APPEALS FOR ASSESSMENT YEARS 1999-2000 TO 2003-04 AND 2005-06 RAISING EXACTLY SIMILAR ISSUES. FOR THE SAKE OF CONVENIENCE, THE FACTS ARE BEING TAKEN FROM ITA NO. 43(DEL)2010. 2. THE EFFECTIVE GROUNDS RAISED BY THE DEPARTMENT A RE AS FOLLOWS: ITA NOS. 37 TO 40,43&44 2 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN ANNULLING T HE ASSESSMENT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS BY HOLDING THA T THE SEIZED DOCUMENTS ON THE BASIS OF WHICH PROCEEDINGS WERE IN ITIATED DO NOT BELONG TO THE ASSESSEE. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE ,THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN RELYING ON THE IMPUGNED ORDERS OF THE ITAT. 3. THE LD. CIT(A) HAS ANNULLED THE ASSESSMENT FRAME D U/S 153 C OF THE INCOME TAX ACT. WHILE DOING SO, IT HAS BEEN HELD THAT THE DOCUMENTS SEIZED DID NOT BELONG TO THE ASSESSEE AND SO, THE A O WAS NOT JUSTIFIED IN INITIATING ACTION U/S 153A READ WITH SECTION 153 C OF THE ACT. 4. ACTION U/S 132 OF THE I.T. ACT WAS TAKEN ON 15.1 2.04 IN THE B.M. GUPTA GROUP OF CASES. IN THE SEARCH, VARIOUS INCRI MINATING DOCUMENTS AND BOOKS OF ACCOUNT WERE SEIZED FROM THE BUSINESS PREM ISES AND RESIDENTIAL PREMISES OF SHRI B.M. GUPTA AND FROM THE RESIDENCE OF SHRI RAM AVTAR SINGHAL, ACCOUNTANT OF SHRI B.M. GUPTA. SHRI B.M. GUPTA WAS ENGAGED IN THE MONEY LENDING BUSINESS AND AS PER THE STATEMENT OF SHRI RAM AVTAR SINGHAL, SHRI B.M. GUPTA WAS CHARGING COMMISSION @ 10 PAISE PER ` 100/- ITA NOS. 37 TO 40,43&44 3 ON THE TRANSACTIONS OF CASH LOAN ADVANCED BY THE LE NDERS AND RECEIVED BY THE BORROWERS ROUTED THROUGH HIM. 5. IN THE ASSESSMENT PROCEEDINGS IN THE CASE OF B.M . GUPTA, IT WAS FOUND FROM THE SEIZED MATERIAL, BEING LEDGER BOOKS CONTAI NING THE NAMES OF THE PARTIES, WHO HAD ADVANCED CASH LOAN FROM SHRI B.M. GUPTA AND HAD EARNED INTEREST INCOME THEREON, AS INDICATED AGAINST THEIR NAMES, THAT THE ASSESSEE HAD ALSO ADVANCED CASH LOANS AND HAD EARNED INTERES T INCOME THEREON DURING THE ASSESSMENT YEARS 2000-01 AND 2002-03. THE ASS ESSMENT WAS COMPLETED U/S 153C OF THE ACT, DETERMINING THE INCOME AT ` 1,94,627/-, AS AGAINST THE RETURNED INCOME OF ` 1,21,560/-. 6. THE DEPARTMENT CONTENDS THAT THE ENTRIES IN THE DOCUMENTS SEIZED ALSO CONSTITUTE BOOKS OF ACCOUNT, AS ENVISAGED U/S 153 C OF THE ACT. 7. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. IT HAS BEEN CONTENDED THAT SECTION 153C OF THE ACT CATEGORICALLY ENVISAGES THAT IT IS ONLY WHERE THE AO IS SATISFIED WITH ANY BOOKS OF ACCOUNT SEIZED BELONGED TO A PERSON OTHER THAN A PERSON REFERRED TO IN SECTION 153A, THOUGH THE BOOK S OF ACCOUNT SEIZED SHALL BE HANDED OVER TO THE AO HAVING JURISDICTION OVER S UCH OTHER PERSON AND THAT THE AO SHALL PROCEED AGAINST SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON ITA NOS. 37 TO 40,43&44 4 NOTICE AND ASSESS OR REASSESS THE INCOME OF SUCH OT HER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A; THAT THE BOOKS OF ACCOUNT SEIZED DURING THE SEARCH IN THE CASE OF B.M. GUPTA GROUP OF CASES DO NOT BELONG TO THE ASSESSEE; THAT THE ENTRIES IN THE SEIZED MATERIAL D O NOT AMOUNT TO BOOKS OF ACCOUNT; AND THAT THEREFORE, THE LD. CIT(A) HAS CO RRECTLY ANNULLED THE ASSESSMENT. 8. THE QUESTION IS AS TO WHETHER THE ENTRIES PERTAI NING TO THE ASSESSEE, IN THE BOOKS OF ACCOUNT OF SHRI B.M. GUPTA AMOUNT TO BOOKS OF ACCOUNT. 9. SECTION 153C(1) STATES AS FOLLOWS:- 153C [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN S ECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY M ONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOO KS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN T HE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHAL L BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH S UCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR RE ASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A.] [ PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MA KING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO [SUB-SE CTION (1) OF] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON.] ITA NOS. 37 TO 40,43&44 5 10. AS EVIDENT FROM THE LANGUAGE OF SECTION ITSELF, IT IS THE BOOKS OF ACCOUNT PER SE ABOUT WHICH THE AO NEEDS TO BE SATI SFIED AS BELONGING TO A PERSON OTHER THAN A PERSON REFERRED TO IN SECTION 1 53A. IN THE PRESENT CASE, UNDISPUTEDLY, THE BOOKS OF ACCOUNT WERE NOT OF THE ASSESSEE. ACTION U/S 153C OF THE ACT CAN BE TAKEN IN RESPECT OF ANY PERS ON OTHER THAN THE ONE MENTIONED IN SECTION 153A, ONLY IF THE BOOKS OF AC COUNT BELONGING TO SUCH OTHER PERSON ARE SEIZED DURING THE SEARCH. NOW, TH E ENTRIES IN THE NAME OF THE ASSESSEE, AS CONTAINED IN THE BOOKS OF SHRI B.M . GUPTA CANNOT AND DO NOT AMOUNT TO THE BOOKS OF ACCOUNT OF THE ASSESSEE. T HE DEPARTMENT HAS NOT BROUGHT ANYTHING ON RECORD TO COUNTER THIS POSITION . IN FACT, THE DOCUMENTS SEIZED INDICATED THE NAMES OF PERSONS, INCLUDING TH E ASSESSEE, WHO HAD GIVEN CASH LOANS. 11. IN THESE FACTS, THE LD. CIT(A) WAS CORRECT IN H OLDING THAT THE DOCUMENTS ON THE BASIS OF WHICH PROCEEDINGS U/S 153 C OF THE ACT HAD BEEN INITIATED, DID NOT BELONG TO THE ASSESSEE. THE PR OVISIONS OF SECTION 153C OF THE ACT WERE INVOKED BY THE AO WITHOUT THE SATISFAC TION NOTE OF THE AO OF THE PERSON IN WHOSE CASE THE SEARCH HAD BEEN CONDUC TED. 12. IN VIEW OF THE ABOVE, FINDING NO ERROR THEREIN, THE ORDER OF THE LD. CIT(A) IS CONFIRMED, REJECTING THE GRIEVANCE OF THE APPEAL RAISED BY THE DEPARTMENT. ITA NOS. 37 TO 40,43&44 6 ITA NOS. 37 TO 40 &44 (DEL)2010: 13. AS STATED IN THE BEGINNING OF THIS ORDER, THE F ACTS IN THESE CASES ARE PARI MATERIA WITH THOSE IN ITA NO. 43(DEL)2010(SUP RA). THEREFORE, OUR OBSERVATIONS MADE THEREIN ARE, MUTATIS MUTANDIS, AP PLICABLE TO ALL THESE CASES ALSO. FOLLOWING THOSE OBSERVATIONS HEREIN A LSO, THE GRIEVANCE OF THE DEPARTMENT IN ALL THESE APPEALS IS ALSO REJECTED. 14. IN THE RESULT, ALL THE APPEALS FILED BY THE DEP ARTMENT ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.06.2011. SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED: 10.06.2011 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR.