ITO, New Delhi V. Sh. Manoj Kumar Gupta, New Delhi

ITA 3745/DEL/2013

• Counselvise Citation: 374520114 RSA 2013
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 11-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G R KESWANI
• Keywords: Business income; Source of fund; Onus to prove
• Section: 80HHC

Judgement Text

ITA NO.3745/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : E : NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO.3745/DEL/2013 ASSESSMENT YEAR : 2003-04 ITO, WARD 23 (2), NEW DELHI. VS. MANOJ KUMAR GUPTA, E-904, GROUND FLOOR, CR PARK, NEW DELHI. PAN ; ADUPC5332Q ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI G.R. KESWANI, CA DEPARTMENT BY : S HRI KEYUR PATEL, SR. DR ORDER PER A.D. JAIN, JUDICIAL MEMBER: THIS IS DEPARTMENTS APPEAL FOR ASSESSMENT YEAR 2003-04 A GAINST THE ORDER DATED 21.03.2013, PASSED BY THE CIT (A)-XXIII, NEW DELHI, TAKING THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF ` 1,90,00,0 00/- ON THE GROUND THAT DEPARTMENT HAS NOT BROUGHT ANY MATERIAL ON RECORD THAT RS.2 CRORES OF DUTY DRAW BACK HAD BEEN RECEIVED BY THE ASS ESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, TH E LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.1,90,00, 000/- WHEN ASSESSEE HAS HIMSELF CONFESSED THAT DUTY DRAWBACK TO THE TUNE OF RS.2 CRORES WERE WRONGLY AVAILED BY HIS FIRMS. ITA NO.3745/DEL/2013 2 2. THE FACTS ARE THAT THE COMPLETED ASSESSMENT OF THE ASSE SSEE WAS REOPENED ON THE BASIS OF INFORMATION RECEIVED FROM TH E DIRECTOR OF REVENUE INTELLIGENCE, NEW DELHI, THAT INVESTIGATIONS INTO EXC ESS CLAIM OF DUTY DRAWBACK ON EXPORT OF READY-MADE GARMENTS, THROUGH O VER-INVOICING TO MOSCOW, DUBAI AND HAMBURG, HAD REVEALED THAT THE ASSE SSEE AND OTHERS CONNECTED WITH THE BUSINESS OF M/S VISION INC., NAMELY M /S SRI GANESHA OVERSEAS INTERNATIONAL, M/S C & A INTERNATIONAL, M/S RA OVERSEAS, M/S BHAVNA TEXTILE IMPEX WERE ACTUALLY CONTROLLED BY TH E ASSESSEE. IN THE STATEMENT RECORDED BY THE DRI, THE ASSESSEE HAD ADMITTED THE OVER- INVOICING OF THE EXPORTS MADE BY HIM AND THE OTHER F IRMS CONTROLLED BY HIM AND HE UNDERTOOK TO REFUND THE EXCESS DUTY DRAWBACK T O THE TUNE OF ` 2,00,00,000/-. IN THE RE-ASSESSMENT PROCEEDINGS, THE ASSESSE E STATED THAT HE HAD NO CONNECTION WITH THE FIRMS NAMED BY THE DRI AN D THAT ALL OF THESE CONCERNS WERE OWNED BY OTHER PERSONS. HOWEVER, THE ASSE SSING OFFICER, RELYING ON THE SHOW CAUSE NOTICE DATED 31.03.2004, ISSU ED BY THE DRI, HELD THAT THE ASSESSEE HAD AVAILED EXCESS DUTY DRAWBACK OF ` 2 ,00,00,000/-, OUT OF WHICH HE HAD REFUNDED ` 10 LAC TO THE GOVERNMENT AS PER EVIDENCE FILED. THE ASSESSING OFFICER TREATED THE BALANCE AMOUNT OF ` 1 ,90,00,000/- AS UNDISCLOSED INCOME OF THE ASSESSEE AND ADDED THE SAME TO T HE RETURNED INCOME OF THE ASSESSEE. 3. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT (A) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER 4. AGGRIEVED, THE DEPARTMENT IS IN APPEAL. 5. CHALLENGING THE IMPUGNED ORDER, THE LD. DR HAS CO NTENDED THAT THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF ` 1,90 ,00,000/- CORRECTLY MADE BY THE ASSESSING OFFICER; THAT WHILE DOING SO, THE LD. C IT (A) HAS WRONGLY OBSERVED THAT THE DEPARTMENT HAS NOT BROUGHT ANY MATE RIAL ON RECORD TO SHOW THAT THE DUTY DRAWBACK OF ` 2 CRORES HAD BEEN RE CEIVED BY THE ASSESSEE; THAT THE LD. CIT (A) FAILED TO CONSIDER THE FA CT THAT THE ASSESSEE ITA NO.3745/DEL/2013 3 HAD HIMSELF CONFESSED IN THE RE-ASSESSMENT PROCEEDINGS TH AT DUTY DRAWBACK OF ` 2 CRORES WAS WRONGLY AVAILED BY HIS FIRMS; AND TH AT THE LD. CIT (A) HAS FAILED TO VERIFY THE ASSESSEES STATEMENT THAT NO DUTY DR AWBACK WAS RECEIVED BY THE FIRMS OF THE ASSESSEE. 6. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER AND HAS SUBMITTED THAT AS STATED BEFORE THE AUTHORITIES BELOW, THE DUTY DRAWBACK, AS ASSESSED IN THE HANDS OF THE ASSESSEE, BELONGS TO VARIOUS OTHER PERSONS INCLUDING A FIRM , VISION INC., WHEREIN THE ASSESSEE WAS A PARTNER; THAT THE FIRM HAD B EEN ASSESSED FOR ASSESSMENT YEAR 2003-04 AND HAD DECLARED A SUM OF ` 68, 97,158/- AS DUTY DRAWBACK IN ITS AUDITED ACCOUNTS; THAT THE ASSESSMENT HAD BEEN MADE TO INCLUDE INCOME OF OTHER PERSONS IN THE INCOME OF THE ASSESSEE, WHICH WAS ENTIRELY ILLEGAL; THAT ON QUERY, THE ASSESSEE HAD FILED EXPORT DOCUMENTS ALONG WITH DETAILS OF DUTY DRAWBACK OF RA OVERSEAS, BHAVNA T EXTILE IMPEX, VISION INC. AND SRI GANESHA OVERSEAS INTERNATIONAL; THAT THE SE DOCUMENTS CLEARLY SUPPORTED THE CLAIM THAT THE DUTY DRAWBACK OF ` 1.9 CRORES ASSESSED IN THE HANDS OF THE ASSESSEE DID NOT BELONG TO THE ASSESSEE AT ALL , BUT BELONGED TO THE PARTIES WHO HAD CARRIED OUT THE EXPORTS; THAT THE LD. CIT (A) CARRIED OUT DETAILED INQUIRIES FROM THE RESPECTIVE ASSESSING OFFICER S OF VISION INC. AND SHRI ARUN GUPTA, BROTHER OF THE ASSESSEE, PROPRIETOR OF M/S RA OVERSEAS; THAT THE ASSESSING OFFICER OF VISION INC. REPORTED THAT THE D UTY DRAWBACK OF ` 68,91,759/- HAD BEEN ACCOUNTED FOR BY VISION INC., H AVING BEEN DISCLOSED IN THE AUDITED PROFIT & LOSS ACCOUNT FOR ASSESSMENT YEAR 200 3-04 AND THAT IN SCRUTINY ASSESSMENT FOR ASSESSMENT YEAR 2003-04, THIS AMOUNT HAD BEEN ASSESSED IN THE HANDS OF THAT FIRM; THAT VIDE REMAND REP ORT DATED 06.02.2013, THE ASSESSING OFFICER OF SHRI ARUN GUPTA HA D STATED THAT RETURN OF INCOME HAD BEEN FILED BY RA OVERSEAS FOR ASSESSMENT YE AR 2003-04, DISCLOSING BUSINESS INCOME OF ` 11,58,060/-, ON WHICH, D EDUCTION U/S 80HHC OF THE IT ACT HAD BEEN CLAIMED AT ` 5,91,030; THAT IN THE REJOINDER DATED 14.02.2013 FILED BY THE ASSESSEE TO BOTH THESE REPORTS, T HE ASSESSEE HAD ITA NO.3745/DEL/2013 4 SUBMITTED BEFORE THE LD. CIT (A), INTER ALIA, THAT T HE REMAND REPORT IN THE CASE OF VISION INC. CLEARLY SUPPORTED THE ASSESSEES CLAIM THAT THE DUTY DRAWBACK RECEIVED BY THE FIRM WAS A PART OF THE TAXA BLE INCOME OF VISION INC. FOR ASSESSMENT YEAR 2003-04, THAT THE SAME HAD BEEN ASSESSE D IN THE HANDS OF THE SAID FIRM AND THAT THE REMAND REPORT IN THE C ASE OF RA OVERSEAS, WHICH ESTABLISHED THE INDEPENDENT ASSESSMENT CREDENTIALS O F SHRI ARUN KUMAR GUPTA, WAS IN CONCILIATION WITH THE INCOME-TAX RETURN FILED BY SHRI ARUN KUMAR GUPTA AND THE AUDITED ACCOUNTS FULLY REF LECTED THE RECEIPT OF THE DUTY DRAWBACK; THAT SO, THE ASSESSEES CLAIM THAT THE DUT Y DRAWBACK RECEIVED BY THE OTHER PARTIES, I.E., VISION INC., RA OVERSEAS, BHAVNA TEXTILE IMPEX AND SRI GANESHA OVERSEAS INTERNATIONAL WAS TAXABL E IN THEIR RESPECTIVE HANDS AND NOT IN THE HANDS OF THE ASSESSEE; THA T IT WAS BROUGHT TO THE NOTICE OF THE LD. CIT (A) THAT THE STATEMENTS OF THE ASSESSEE, RECORDED BY THE DRI ON 15.01.2003, 17.02.2003 AND 11.11.2003, W HEREIN THE ASSESSEE HAD STATED THAT VARIOUS FIRMS CONTROLLED BY HIM HAD O VER-INVOICED THEIR EXPORTS, HAD BEEN OBTAINED UNDER THREAT AND COERCION , USING THIRD DEGREE METHODS AND THAT A COMPLAINT DATED 12.11.2003 HAD BE EN FILED IN THIS REGARD WITH THE CONCERNED SHO; THAT A COPY OF SUCH COMPLAIN T WAS FILED WITH THE LD. CIT (A); THAT THE ASSESSEE HAD ALSO FILED BEFORE THE LD . CIT (A), AFFIDAVITS OF THE RECIPIENTS OF THE AMOUNTS OF DUTY DRAWBACK ADDED IN THE HANDS OF THE ASSESSEE, I.E., S/SHRI ARUN KUMAR GUPTA, PROPRIETOR OF RA OVERSEAS, PREM JOSHI, PROPRIETOR OF BHAVNA TEXTILE IMPEX, GIRISH SA WHNY, PROPRIETOR OF SRI GANESHA OVERSEAS INTERNATIONAL AND MANOJ KUMAR GUPTA, PARTNER OF VISION INC; THAT IN THESE AFFIDAVITS, THE DEPONENTS HAD AFFIR MED THAT THEY WERE THE ONLY BENEFICIARIES OF THE EXPORT INCENTIVES CREDITED DURING F.Y. 2002-03 IN THEIR RESPECTIVE ACCOUNTS; THAT THE ASSESSEE HAD ALSO FILE D BEFORE THE LD. CIT (A) COPIES OF EXPORT INVOICES, SHIPPING DOCUMENTS AND B ANK CERTIFICATES OF EXPORT AND REALIZATION AVAILED BEFORE THE DGFT IN T HE CASES OF VISION INC., RA OVERSEAS, BHAVNA TEXTILE IMPEX AND SRI GANESHA OVERSEA S INTERNATIONAL; THAT IT HAD BEEN SUBMITTED THAT VISION INC., HAD RECE IVED AND ACCOUNTED FOR DUTY DRAWBACK OF ` 68,91,759/-, RA OVERSEAS - ` 59,14 ,407/- AND BHAVNA ITA NO.3745/DEL/2013 5 TEXTILE IMPEX - ` 33,84,837/-; THAT THE LD. CIT (A) HAD BEEN REQUESTED TO SUMMON THE DETAILS OF DUTY DRAWBACK RECEIVED BY AND A SSESSMENT PARTICULARS OF THE OTHER PARTIES FROM THE ASSESSING OFFIC ER, AS THE ASSESSEE WAS NOT IN A POSITION TO PRODUCE SUCH DETAILS; THAT REL IANCE HAD BEEN PLACED ON ORDER DATED 30.03.2007 PASSED BY THE LD. CIT (A)-X XIII, NEW DELHI IN THE CASE OF VISION INC., FOR ASSESSMENT YEAR 2003-04, WHEREI N THE CIT (A) HAD DELETED THE ADDITION ON EXCISE DUTY DRAWBACK RECEIVE D OF ` 68,97,158/-, FOR THE REASON THAT VISION INC. HAD ACTUALLY EXPORTED GOO DS, RECEIVED THE EXPORT PROCEEDS AND DISCLOSED THE DUTY DRAWBACK IN THE RETURN OF INCOME; THAT IT HAD BEEN SUBMITTED BEFORE THE LD. CIT (A) THAT THE A PPEAL OF THE DEPARTMENT AGAINST THE SAID ORDER OF THE CIT (A) HAD BEEN DISMIS SED BY THE ITAT, ALLOWING THE CROSS OBJECTION FILED BY VISION INC. FOR THE REASON THAT STATUTORY NOTICE U/S 143 (2) OF THE ACT HAD NOT BEEN SERVED ON IT; THAT IT HAD BEEN STATED BEFORE THE LD. CIT (A) THAT THE HONBLE DELHI HIGH COURT, VIDE ORDER DATED 25.05.2012, HAD RESTORED THE MATTER TO THE TRI BUNAL FOR DISPOSAL ON MERITS AND THAT PROCEEDINGS BEFORE THE TRIBUNAL WERE PENDING; THAT ORDER DATED 28.10.2010, PASSED BY THE CESTAT, MUMBAI IN THE CASE OF VISION INC. VS. COMMISSIONER OF CUSTOMS (EXPORT), MUMBAI, HAD BEEN PLACED BEFORE THE LD. CIT (A); THAT VIDE THE SAID ORDER, THE CESTAT HA D SET ASIDE THE ORDER OF THE COMMISSIONER OF CUSTOMS ON THE GROUNDS THAT THE DOCU MENTS RELIED ON HAD NOT BEEN PROVIDED TO THE ASSESSEE VISION INC., THAT OPPORTUNITY OF CROSS- EXAMINATION HAD NOT BEEN ALLOWED QUA THE PERSONS WHOSE STATEMENTS HAD BEEN USED AGAINST VISION INC. AND THAT THE VARIOUS DOCU MENTS FILED BY VISION INC. AS PROOF OF GOODS EXPORTED TO RUSSIA HAD NOT BEEN CONSIDERED; THAT IT HAD ALSO BEEN STATED BEFORE THE LD. CIT (A) THAT THE SET ASIDE PROCEEDINGS WERE PENDING BEFORE THE COMMISSIONER OF CUSTOMS, MUMBAI ; THAT WHILE PASSING THE IMPUGNED ORDER, THE LD. CIT (A) HAS DULY T AKEN INTO CONSIDERATION ALL THE ABOVE DETAILED FACTS AND DOCUMENTS; THAT THER EAFTER, THE LD. CIT (A) HAS PASSED AN ELABORATE SPEAKING ORDER, CORRECTLY DELET ING THE ADDITION WRONGLY MADE; THAT THEREFORE, THERE IS NO MERIT WHAT SOEVER IN THE APPEAL PRESENTLY FILED BY THE DEPARTMENT; AND THAT THE SAME BE DISMISSED. ITA NO.3745/DEL/2013 6 7. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MAT ERIAL ON RECORD. WHILE DELETING THE ADDITION MADE, THE LD. CIT (A) H AS OBSERVED AS FOLLOWS:- 4.4 IT IS OBSERVED THAT THE ADDITION OF RS. 1,90,00,00 0/- MADE IN THE ASSESSMENT ORDER ON ACCOUNT OF EXCESS DUTY DRAW BACK R ECEIVED BY THE APPELLANT RELIES ENTIRELY ON THE SHOW CAUSE NOTICE I SSUED BY THE DRI, WHEREIN THE PRINCIPAL ALLEGATION WAS THAT THE APPE LLANT EXPORTED GOODS IN THE NAME OF FIRMS CONTROLLED BY HIM, WHICH W ERE OVERVALUED SO AS TO CLAIM EXCESS DUTY DRAW BACK FROM THE CUSTOMS A UTHORITIES. IT IS ALLEGED IN THE SHOW CAUSE NOTICE THAT THE GOODS IN QU ESTION DID NOT IN FACT REACH RUSSIA, AND HENCE THE DUTY DRAW BACK CLA IMED BY THE FIRMS REQUIRED TO BE RECOVERED. THE FIGURE OF EXCESS DUTY DRAW BACK OF RS. 2,00,00,000/- HAS BEEN TAKEN FROM PAGE NO. 7 OF THE SHOW CAUSE NOTICE, WHEREIN IT IS STATED THAT THE APPELLANT ADMI TTED OVER INVOICING OF THE EXPORTED GOODS BY FIRMS OWNED/CONTROL LED BY HIM AND UNDERTOOK TO REFUND THE DRAW BACK AMOUNT TO THE TUNE OF RS . 2,00,00,000/-. THE UNDISCLOSED INCOME OF RS. 1,90,0 0,000/- HAS BEEN ARRIVED AT BY REDUCING THE AMOUNT OF RS. 10,00,000/- D EPOSITED BY THE APPELLANT WITH THE DRI ON 20.01.2003 FROM THE AMOUNT OF RS. 2,00,00,000/-. IT CANNOT BE LOST SIGHT OF THAT THE APPELLA NT IMMEDIATELY RETRACTED THE STATEMENT OF CONFESSION RECORD ED BY THE DRI. EVIDENTLY, THE ASSESSMENT HAS BEEN COMPLETED WITH OUT CONSIDERING THE SUBMISSIONS MADE BY THE APPELLANT THAT TH E ENTIRE DUTY DRAW BACK HAD BEEN RECEIVED BY OTHER PARTIES, NO NE OF WHOM WAS OWNED OR CONTROLLED BY THE APPELLANT. THE APPELLA NT HAD PRODUCED HIS BOOKS OF ACCOUNT AND BANK STATEMENT BEFORE THE ASSESSING OFFICER TO SHOW THAT HIS ONLY SOURCES OF INC OME FOR THE YEAR UNDER CONSIDERATION WERE INTEREST AND DIVIDEND. COPIE S OF SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER HAVE B EEN PLACED ON RECORD. THE APPELLANT'S CONNECTION WAS ONLY TO M/S VIS ION INC., IN WHICH HE WAS A PARTNER, AND ADDITION WAS MADE OF EXCE SS DUTY DRAW BACK OF THE SAME AMOUNT OF RS. 68,91,759/- IN THE HAND S OF M/S VISION INC. IT IS ALSO NOTED THAT ADDITION OF EXCESS DUTY DRAW BACK MADE IN THE HANDS OF M/S VISION INC. HAS BEEN DELETED BY THE ORDER OF THE CIT(A)-XXIII, NEW DELHI, DATED 30.03.2007 AFTER VERI FYING AND ACCEPTING THE EVIDENCES FILED THAT THE GOODS HAD ACTUALLY BEEN SHIPPED FOR EXPORT TO RUSSIA AND DUBAI, THAT THE BUYERS HAD CONFIRMED THE TRANSACTIONS, THAT THE GOODS HAD BEEN PHY SICALLY DELIVERED TO THE SHIPPING AGENCY AS CERTIFIED BY THE CU STOMS DEPARTMENT, THAT THE EXPORT PROCEEDS WERE RECEIVED AS PE R THE INVOICES THROUGH BANKING CHANNELS, AND NO CASE HAD B EEN MADE OUT THAT THE AMOUNTS HAD BEEN GIVEN BACK TO THE RESPECTIVE P ARTIES. THE CIT(A) HAS HELD THAT THE AMOUNT OF RS. 68,97,158/- RECE IVED AS DUTY ITA NO.3745/DEL/2013 7 DRAW BACK BY M/S VISION INC. IN THE FINANCIAL YEAR 2 002-03 HAD BEEN PROPERLY DISCLOSED AS PART OF ITS INCOME, AND THE SAME HAD NOT BEEN DISPROVED BY THE DRI. 4.5 IT IS FURTHER SEEN THAT THE ORDER OF THE COMMISSION ER OF CUSTOMS IN THE CASE OF M/S VISION INC. HAS BEEN SET ASIDE BY THE CESTAT AFTER OBSERVING THAT THE COMMISSIONER 'MADE A VERBATIM REPROD UCTION OF THE ALLEGATIONS OF THE DEPARTMENT AND RECORDED CONCLUSIO NS AGAINST THE APPELLANTS IN TERMS OF THE SHOW CAUSE NOTICE.' CONS IDERING THE VARIOUS SUBMISSIONS MADE BY THE APPELLANT, AND PARTICU LARLY IN VIEW OF THE APPELLATE ORDERS PASSED IN THE CASE OF M/S VIS ION INC., IT IS HELD THAT THE ADDITION MADE IN THE ASSESSMENT ORDER BY SOLELY RELYING UPON THE SHOW CAUSE NOTICE ISSUED BY THE DRI IN 2004, WITHO UT REFUTING ANY OF THE EVIDENCES FURNISHED BY THE APPELLANT, CANNOT BE SUSTAINED. NO CASE HAS BEEN MADE OUT IN THE ASSESSMENT ORDER THAT THE A PPELLANT WAS THE BENEFICIARY OF THE DUTY DRAW BACK RECEIVED BY THE OTHER FIRMS, INCLUDING M/S VISION INC., MENTIONED IN THE D RI NOTICE. IN REMAND PROCEEDINGS, THE ASSESSING OFFICER OF M/S VIS ION INC. HAS CONFIRMED THAT THE DUTY DRAW BACK ADDED IN THE HANDS OF THE APPELLANT IS REFLECTED IN THE AUDITED BOOKS OF ACCOUNT OF THE FIRM. FROM THE REMAND REPORT OF THE ASSESSING OFFICER OF M/S R A OVERSEAS, IT APPEARS THAT THE ASSESSING OFFICER DOES NOT HAVE THE R ECORDS OF THE ASSESSMENT YEAR 2003-04, AND HAS NOT OBTAINED DETAILS O F THE DUTY DRAW BACK RECEIVED AS PER THE PROFIT AND LOSS ACCOUNT. HOWEVER, THE APPELLANT HAS FURNISHED COPY OF RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-04 FILED ON 02.12.2003 BY SH. ARUN GUPTA, PROPRIETOR OF M/S R A OVERSEAS, ALONGWITH COPY OF AUDITED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SHOWING DUTY DRAW BACK RECEIVED DURING TH E YEAR OF RS. 1,47,20,092/-, INCLUDING THE DUTY DRAW BACK OF RS. 59 ,14,407/- ON 10 SHIPMENTS BETWEEN 15.04.2002 TO 26.08.2002. THE SUPPOR TING INVOICES, BILLS OF LADING AND DUTY ENTITLEMENT PASSBOO K SHOWING THAT THE GOODS HAVE BEEN PASSED BY THE CUSTOMS AUTHORITIES, H AVE BEEN FILED. THE DEPARTMENT HAS NOT BROUGHT ANY MATERIAL ON RECORD THAT RS. 2,00,00,000/- OF DUTY DRAW BACK HAD BEEN RECEIVED BY THE APPELLANT. NO EVIDENCE HAS BEEN BROUGHT ON RECORD THAT THE DUTY DRA W BACK RECEIVED BY OTHER PARTIES, AND REFLECTED IN THEIR AUDI TED BOOKS OF ACCOUNT AND THEIR RETURNS OF INCOME, CONSTITUTED UNDISC LOSED INCOME IN THE HANDS OF THE APPELLANT. HENCE THE ADDITION MADE OF RS. 1,90,00,000/- IS DELETED. 5. IN THE RESULT, THE APPEAL IS ALLOWED. 8. A PERUSAL OF THE AFORE-QUOTED RELEVANT PORTION OF THE LD. CIT (A)S ORDER SHOWS THAT THE LD. CIT (A) HAS DULY TAKEN INTO CONSIDER ATION ALL THE MATERIAL ITA NO.3745/DEL/2013 8 BEFORE HIM WHILE CORRECTLY DELETING THE ADDITION MA DE. TO PLACE THE FACTS IN PERSPECTIVE, THE COMPLETED ASSESSMENT OF THE ASSESSEE WAS REO PENED SOLELY ON THE BASIS OF THE SHOW CAUSE NOTICE ISSUED BY THE DRI, WHEREIN IT HAD BEEN ALLEGED THAT THE ASSESSEE HAD EXPORTED THE GOODS BY THE FIRMS CONTROLLED BY HIM, THAT THESE GOODS WERE OVER-VALUED SO AS TO CLAIM E XCESS DUTY DRAWBACK FROM THE CUSTOMS AUTHORITIES, AND THAT THE GOODS NEVER REACHED RUSSIA AND SO THE DUTY DRAWBACK CLAIMED WAS REQUIRED TO BE RECOV ERED. IT WAS STATED IN THE SAID SHOW CAUSE NOTICE THAT THE ASSESSEE HAD ADMITTE D OVER-INVOICING OF EXPORTED GOODS BY FIRMS OWNED/CONTROLLED BY HIM AND T HAT HE HAD UNDERTAKEN TO REFUND THE DUTY DRAWBACK AMOUNT OF ` 2,00,00,000/- SINCE THE ASSESSEE HAD DEPOSITED AN AMOUNT OF ` 10 LAC WITH THE D RI. IT WAS THEREFORE, THAT THE UNDISCLOSED INCOME OF ` 1,90,00,000/- HAD BE EN ARRIVED AT. 9. PERTINENTLY, THE STATEMENTS OF THE ASSESSEE, RECORDE D BY THE DRI ON 15.01.2003, 17.02.2003 AND 11.11.2003, I.E., THE AL LEGED STATEMENTS OF CONFESSION, STOOD RETRACTED IMMEDIATELY AFTER RECORDIN G THEREOF AND A COMPLAINT HAD BEEN FILED WITH THE CONCERNED SHO IN THIS REGARD ON 12.11.2003. THE ASSESSEE MAINTAINS THAT THE ENTIRE DUTY DRAWBACK HAD BEEN RECEIVED BY OTHER PARTIES AND THE ASSESSEE DID NOT HAVE ANY CONCERN WITH THEM. DURING THE YEAR, THE ONLY SOURCES OF INCOME OF THE ASSESSEE WERE INTEREST AND DIVIDEND. THE ASSESSEE PRODUCED HIS BOOKS OF ACCOUNT AND BANK STATEMENT BEFORE THE ASSESSING OFFICER TO PROVE THIS. THE ASSESSEE IS ONLY CONCERNED WITH M/S VISION INC., IN WHICH, HE WAS A PAR TNER. IN THE CASE OF VISION INC., A SUM OF ` 68,91,759/- WAS ADDED AS EXCISE DUTY DRAWBACK. THIS ADDITION WAS DELETED BY THE CIT (A) VIDE ORDER DATED 30.03.2007, OBSERVING, ON VERIFICATION OF THE EVIDENCE FILED, THAT THE GOO DS EXPORTED HAD ACTUALLY BEEN SHIPPED FOR EXPORT TO RUSSIA AND DUBAI, WHICH FAC T STOOD CONFIRMED BY THE BUYERS, THAT THE GOODS HAD BEEN ACTUALLY DELIVER ED TO THE SHIPPING AGENCY, WHICH FACT STOOD CERTIFIED BY THE CUSTOMS DEPA RTMENT, THAT THE RECEIPT OF THE EXPORT PROCEEDS WAS DULY EVIDENCED BY INVOICES, THROUGH BANKING CHANNELS AND THAT THERE WAS NOTHING TO SHOW TH AT THE AMOUNTS HAD ITA NO.3745/DEL/2013 9 BEEN GIVEN BACK TO THE RESPECTIVE PARTIES. THE CIT (A ) HAD OPINED THAT VISION INC. HAD RECEIVED THE DUTY DRAWBACK IN F.Y. 2002-03 AND HAD DULY DISCLOSED IT AS PART OF ITS INCOME, WHICH FACTS DID NOT STAND CONTR OVERTED, MUCH LESS DISPROVED BY THE DRI. THE MATTER HAD BEEN SET ASIDE IN THE CASE OF M/S VISION INC. BY THE CESTAT, OBSERVING THAT THE COMMISSIO NER HAD JUST REPRODUCED THE ALLEGATIONS OF THE DEPARTMENT VERBATI M AND HAD RECORDED CONCLUSIONS AGAINST VISION INC. ONLY IN TERMS OF THE SHO W CAUSE NOTICE. THE LD. CIT (A), IN THE CASE OF THE PRESENT ASSESSEE, VIDE TH E IMPUGNED ORDER, DULY TOOK ALL THESE FACTS INTO CONSIDERATION AND THERE FORE, IN OUR CONSIDERED OPINION, RIGHTLY ARRIVED AT THE CONCLUSION THAT THE ADDITION HAD BEEN MADE BY THE ASSESSING OFFICER BY MERELY AND SOLELY RELYING ON T HE SHOW CAUSE NOTICE ISSUED BY THE DRI IN 2004, WITHOUT REBUTTING ANY OF T HE EVIDENCES FILED BY THE ASSESSEE. NO FAULT WHATSOEVER CAN BE FOUND WITH THESE OBSERVATIONS/CONCLUSIONS OF THE LD. CIT (A), IN ABSENCE OF ANYTHING TO THE CONTRARY BROUGHT ON THE RECORD BEFORE US. FURTHER, A S CORRECTLY OBSERVED BY THE LD. CIT (A), THERE IS NOTHING IN THE ASSESSMENT ORDE R TO PROVE THAT IT WAS THE ASSESSEE WHO WAS THE BENEFICIARY OF THE DUTY DRAWBAC K RECEIVED BY THE OTHER FIRMS, INCLUDING VISION INC. THE LD. CIT (A) A LSO DULY TOOK NOTE OF THE FACT THAT IN THE REMAND PROCEEDINGS, THE ASSESSING OFFIC ER OF VISION INC. HAD CONFIRMED THAT THE DUTY DRAWBACK ADDED IN THE HANDS OF THE ASSESSEE STOOD REFLECTED IN THE AUDITED BOOKS OF ACCOUNT OF VISION I NC. THE LD. CIT (A) ALSO NOTED THAT FROM THE REMAND REPORT OF THE ASSESSING OFFI CER OF RA OVERSEAS, IT WAS EVIDENT THAT THE ASSESSING OFFICER DID NOT HAVE THE RECORDS OF ASSESSMENT YEAR 2003-04 AND THAT HE HAD NOT OBTAINED TH E DETAILS OF THE DUTY DRAWBACK RECEIVED AS PER THE PROFIT & LOSS ACCOUN T. IT WAS TAKEN NOTE OF THAT THE ASSESSEE HAD FILED COPY OF RETURN OF INCOME FILED BY ARUN GUPTA, PROPRIETOR OF RA OVERSEAS FOR ASSESSMENT YEAR 2003-04 ALO NG WITH COPY OF AUDITED BALANCE SHEET AND PROFIT & LOSS ACCOUNT. THESE DOCUMENTS REVEALED THAT RA OVERSEAS HAD RECEIVED DUTY DRAWBACK OF ` 1,47 ,20,092/- DURING THE YEAR. THIS DUTY DRAWBACK INCLUDED THAT OF ` 59,14,40 7/- OF TEN SHIPMENTS BETWEEN 15.04.2000 AND 26.08.2002. ALSO, THE ASSESSEE HA D FILED SUPPORTING ITA NO.3745/DEL/2013 10 EVIDENCE IN THE SHAPE OF INVOICES, BILLS OF LADING AN D DUTY ENTITLEMENT PASSBOOK. THIS EVIDENCE SHOWED THAT THE GOODS HAD BEEN P ASSED BY THE CUSTOMS AUTHORITIES. 10. THUS, THE LD. CIT (A) IS FOUND TO HAVE DELETED TH E ADDITION ON HAVING CONSIDERED THE ENTIRE VOLUMINOUS EVIDENCE FILED BY TH E ASSESSEE WHICH DOES NOT STAND REBUTTED EVEN BEFORE US. GROUND NO.1, WHIC H ALLEGES THAT THE LD. CIT (A) WAS WRONG IN DELETING THE ADDITION ON THE BA SIS THAT THE DEPARTMENT HAD NOT BROUGHT ANY MATERIAL THAT DUTY DRAWBACK OF ` 2 CRORES HAD BEEN RECEIVED BY THE ASSESSEE, DOES NOT HOLD WATER. AS DISCUSSE D HEREINABOVE, SUCH OBSERVATION OF THE LD. CIT (A) IS BASED ON THE EV IDENCE BROUGHT BEFORE HIM. BEFORE US TOO, NOTHING IN REBUTTAL TO THE WELL REASONED FINDINGS OF THE LD. CIT (A) IN THIS REGARD HAS BEEN PLACED BY THE DEP ARTMENT. ACCORDINGLY, GROUND NO.1 IS REJECTED. 11. GROUND NO.2, WHICH STATES THAT THE LD. CIT (A) DE LETED THE ADDITION DESPITE THE CONFESSION OF THE ASSESSEE THAT DUTY DRAWBACK OF ` 2 CRORE WAS WRONGLY AVAILED BY HIS FIRMS, ALSO DOES NOT HAVE ANY LE GS TO STAND ON. THIS, IN VIEW OF THE CLEAR-CUT UN-REBUTTED FINDINGS OF THE LD . CIT (A) ON CONSIDERING THE RELEVANT EVIDENCE, THAT THE SAID CONFESSION WAS A FORCED CONFESSION, RECORDED UNDER THREAT AND COERCION BY THE DRI AND T HAT IT WAS WITHDRAWN WITHOUT DELAY. GROUND NO.2, THEREFORE, ALSO HAS NO ME RIT AND IT IS REJECTED. 12. THERE IS NO FORCE EVEN IN THE ALLEGATION OF THE DEPARTMENT THAT THE LD. CIT (A) DID NOT VERIFY THE ASSESSEES STATEMENT THAT NO D UTY DRAWBACK WAS RECEIVED BY THE ASSESSEE, I.E., HIS FIRMS. THE ONUS, RATHE R THE BURDEN TO PROVE THAT THE DUTY DRAWBACK WAS IN FACT SO RECEIVED BY THE ASSESSEE LAY HEAVY ON THE DEPARTMENT AND IT WAS NOT DISCHARGED IN VIEW OF THE ELABORATE DISCUSSION MADE BY CIT (A) WHICH WE HAVE UPHELD, AS AB OVE. IT IS TRITE THAT NOBODY CAN BE PUT TO PROVE A NEGATIVE OR AN IMPOSSIBI LITY. THE ASSESSEE, IN TURN, AS TAKEN NOTE OF IN THE PRECEDING PART OF THIS ORDER, HAS DULY PROVED THAT THE ASSESSMENT WAS COMPLETED WITHOUT CONSIDERING THE ASSESSEES ITA NO.3745/DEL/2013 11 SUBMISSION TO THE EFFECT THAT THE ENTIRE DUTY DRAWBACK HAD BEEN RECEIVED BY OTHER PARTIES, NONE OF WHICH WAS EITHER OWNED OR CONT ROLLED BY THE ASSESSEE. THE BOOKS OF ACCOUNT AND BANK STATEMENT PRODUCED BY T HE ASSESSEE SHOWED THAT HIS ONLY SOURCE OF INCOME DURING THE YEAR WAS INT EREST AND DIVIDEND. THE ASSESSEE WAS CONNECTED ONLY WITH VISION INC. AS HE WAS A PA RTNER IN THE SAID FIRM. ADDITION OF ` 68,91,759/- REPRESENTING EXCESS DU TY DRAWBACK WAS MADE IN THE HANDS OF VISION INC. THIS ADDITION TOO, WAS DEL ETED BY THE LD. CIT (A) BY PASSING A SPEAKING ORDER. AS DULY TAKEN NOTE OF BY THE LD. CIT (A), IN WHICH ORDER, THE RELEVANT EVIDENCE WAS CONSIDERED AND IT WA S FOUND THAT THE EXPORT PROCEEDS HAD BEEN RECEIVED AS PER THE INVOICES, THROUG H BANKING CHANNELS. THIS FINDING WAS RECORDED ON THE BASIS OF MATERIAL DOC UMENTARY EVIDENCE WHEREBY IT STOOD PROVED THAT THE GOODS HAD BEEN ACTU ALLY SHIPPED FOR EXPORT TO RUSSIA AND DUBAI, THAT THE TRANSACTIONS WERE GENUIN E INASMUCH AS THE BUYERS HAD CONFIRMED THE SAME, THAT THE GOODS HAD BEE N PHYSICALLY DELIVERED TO THE SHIPPING AGENCY, WHICH FACT HAD BE EN CERTIFIED BY THE CONCERNED DEPARTMENT, I.E., THE CUSTOMS DEPARTMENT. T HIS ORDER OF THE CIT (A) IN THE CASE OF VISION INC. HAS NOT BEEN SHOWN BY TH E DEPARTMENT TO HAVE BEEN REVERSED BY THE TRIBUNAL ON REMAND BY THE HONB LE HIGH COURT, VIDE ORDER DATED 25.05.12 (SUPRA). THEREFORE, THE OBJECTI ON OF THE DEPARTMENT IN THIS REGARD ALSO DOES NOT CARRY ANY WEIGHT WHATSOEVER AND THE SAME IS ALSO REJECTED. 13. IN VIEW OF THE ABOVE DISCUSSION, FINDING NO MERIT THEREIN, THE GRIEVANCE SOUGHT TO BE RAISED BY THE DEPARTMENT BY WAY OF THE G ROUNDS OF APPEAL TAKEN AND THE OBJECTION RAISED, STANDS REJECTED. 14. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 17.01.201 4. SD/- SD/- [ G.D. AGRAWAL ] [A.D. JAIN] VICE PRESIDENT JUDICIAL MEMBER DATED, 17 TH JANUARY, 2014. ITA NO.3745/DEL/2013 12 DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.