ACIT, New Delhi V. Sh. Jugal Kishore Arora, New Delhi

ITA 3766/DEL/2011

• Counselvise Citation: 376620114 RSA 2011
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-10-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 05-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Assessee Lawyers: SSH SALIL KAPOOR
• Keywords: Validity of assessment
• Section: 153A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI A.N. PAHUJA ITA NO. 3766/DEL/2011 ASSESSMENT YEAR: 2002-03 ASSISTANT CIT, VS. SH. JUGAL KISHORE ARORA, CENTRAL CIRCLE-22, CENTRE-2, COMMUNITY COMPLEX NEW DELHI. MASJID MOTH, G.K.II, NEW DELHI-1100 48 (PAN: AAJPA9385M) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI DK MISHR A, CIT(DR) RESPONDENT BY: S/SH. SALIL KAPO OR & VIKAS JAIN, ADV. ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 04.05.2011 PASSED FOR ASSESSMENT YEAR 2002-03. THE REVENUE HAS RAISED FOUR GROUNDS OF APPEAL. GROUND N OS. 3 AND 4 ARE GENERAL GROUNDS OF APPEAL, THEY DO NOT REQUIRE ANY SPECIFIC FINDING TO BE RECORDED. IN GROUND NOS. 1 AND 2, REVENUE HAS PLEADED THAT LEARN ED CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.16 LACS BY HOL DING THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH, THEREFORE, NO ADDITION UNDER SEC. 153A OF THE ACT CAN BE MADE. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH A ND SEIZURE OPERATION WAS CARRIED OUT IN KOHINOOR FOODS GROUP OF CASES ON 05. 12.2007. THE ASSESSEE 2 HAS FILED HIS RETURN OF INCOME UNDER SEC. 139 OF TH E INCOME-TAX ACT, 1961 ON 28.10.2002 DECLARING TOTAL INCOME OF RS.39,84,806. THE PREMISES OF THE ASSESSEE WAS ALSO SEARCHED AND AFTER THE SEARCH A N OTICE UNDER SEC. 153A OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE ON 27.1.2009. IN RESPONSE TO THE NOTICE, ASSESSEE HAS FILED HIS RETURN OF INC OME ON 06.02.2009 DECLARING THE SAME INCOME I.E. RS.39,84,806. LEARNED ASSESSI NG OFFICER THEREAFTER ISSUED NOTICE UNDER SEC. 143(2) AND 152(1) OF THE A CT. HE PASSED THE ASSESSMENT ORDER ON 30.12.2009 DETERMINED THE TAXAB LE INCOME OF THE ASSESSEE AT RS.55,84,806. HE MADE AN ADDITION OF RS . 16 LACS. IT IS A VERY BRIEF ASSESSMENT ORDER RUNNING INTO TWO PAGE ONLY. ON FIRST PAGE, LEARNED ASSESSING OFFICER HAS JUST NARRATED THE DATES ON WH ICH SEARCH WAS CONDUCTED AND NOTICE UNDER SEC. 153A OF THE ACT WAS ISSUED. O N THE SECOND PAGE, HE OBSERVED THAT IN RESPONSE TO THE NOTICE ISSUED UNDE R SEC. 143(2) OF THE ACT, SHRI SUNIL GUPTA, CA AND RAVI GUPTA, ADVOCATE, APPE ARED BEFORE HIM FROM TIME TO TIME. THEREAFTER, HE MADE THE ADDITION OF R S. 16 LACS BY RECORDING FOLLOWING FINDINGS IN PARAGRAPH 4: 4. IN THE BALANCE SHEET SUBMITTED BY ASSESSEE FOR THE YEAR ENDED ON 31.03.2001 THE DEBIT BALANCES OF JAI BHAGWAN, JAI K ARAM PAL, RAMESH KUMAR, VINAY KUMAR WERE SHOWN AS RS.800000/- EACH. IN THE STATEMENT SHOWING ADVANCES GIVEN DURING THE YEAR AT TACHED ALONG WITH THE LETTER DATED 08.10.2009 IT IS MENTIONED THAT AM OUNT OF RS.400000 3 EACH WAS PAID DURING THE YEAR TO AFORESAID FOUR PAR TIES. IN THE BALANCE SHEET SUBMITTED BY THE ASSESSEE WITH THE SAID LETTE R THE CLOSING BALANCE OF THESE PARTIES WERE SHOWN AS RS.800000 EACH. THE PAYMENT MADE DURING THE YEAR TO ABOVE PARTIES WERE NOT INCORPORA TED IN THE ACCOUNTS. FROM THE FORGOING IT IS EVIDENT THAT THE ASSESSEE H AS SUPPRESSED THE ASSETS IN THE BALANCE SHEET OF 31.03.2002, AND APPEARS TO HAVE MANUFACTURED/FABRICATED THE ACCOUNTS TO SUIT HIS RE QUIREMENT AND IN ABSENCE OF ANY CONFIRMATION FROM THESE PARTIES OR E NTRIES IN BANK STATEMENT A SUM OF RS.1600000/- (400000*4) IS ADDED TO THE INCOME OF ASSESSEE. PENALTY PROCEEDINGS UNDER SEC. 271(1)(C) TO BE INIT IATED SEPARATELY FOR CONCEALMENT OF INCOME AND FILING OF INACCURATE PARTICULARS OF INCOME AS DISCUSSED ABOVE. 3. ON APPEAL, LEARNED CIT(APPEALS) HAS DELETED THE ADDITION. 4. LEARNED DR WHILE IMPUGNING THE ORDER OF LEARNED CIT(APPEALS) CONTENDED THAT ASSESSEE FAILED TO FILE ANY CONFIRMA TION FROM THE DEBTOR AND, THEREFORE, ADDITION WAS JUSTIFIED BY THE ASSESSING OFFICER. THE ASSESSEE SHOULD HAVE FILED THE EVIDENCE ABOUT THE ALLEGED LO ANS GIVEN BY HIM. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER HAND CONTENDED THAT ADDITION WAS MADE ON MISCONCEPTION OF FACTS. HE SUBMITTED TH AT FOR THE TIME BEING HE IS NOT CHALLENGING THE VALIDITY OF THE ASSESSMENT O RDER PASSED UNDER SEC. 4 153A OF THE ACT. ACCORDING TO HIM, FOR THE SAKE OF ARGUMENT, IF IT IS ASSUMED THAT ASSESSMENT ORDER IS SUSTAINABLE EVEN THOUGH NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, THIS ADDITIO N CANNOT BE MADE. FOR BUTTRESSING HIS CONTENTIONS, HE TOOK US THROUGH THE PAGE 22 OF THE PAPER BOOK. IT IS STATEMENT OF A BANK ACCOUNT OF THE ASSE SSEE WITH THE PUNJAB NATIONAL BANK. FROM THIS BANK ACCOUNT, VIDE FOUR CH EQUES, ASSESSEE HAS GIVEN A LOAN OF RS. 8 LACS EACH ON 23 RD SEPTEMBER 2000 AND 25 TH SEPTEMBER, 2000 TO THE FOUR PERSONS. THE ASSESSEE HAS FILED RE TURN OF THE INCOME-TAX FOR THIS ASSESSMENT YEAR ON 28 TH OCTOBER 2002. IN THE BALANCE SHEET, ALL THESE FOUR PERSONS WERE SHOWN CREDITOR. HE TOOK US THROUG H THE COPY OF THE BALANCE SHEET AS ON 31.3.2002 AVAILABLE ON PAGE 34. HE ALSO TOOK US THROUGH THE BALANCE SHEET OF THE PRECEDING YEAR I.E. AS ON 31.3.2001 AND SHOWN THE AMOUNT OF RS. 8 LACS APPEARING AGAINST THE NAME OF EACH PERSON. THE LEARNED COUNSEL FOR THE ASSESSEE THEREAFTER TOOK US THROUGH THE WEALTH-TAX RETURN SUBMITTED BY THE ASSESSEE FOR ASSESSMENT YEAR 2001- 02 ON 05 TH DECEMBER 2001, COPY OF THE RETURN IS AVAILABLE ON PAGE 42 OF THE PAPER BOOK. IN THE NET MOVEABLE ASSETS, ASSESSEE HAS SHOWN INVESTMENT OF R S.32 LACS AGAINST THE NAME OF THESE FOUR PERSONS. HE POINTED OUT THAT DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE HAS FILED A REPLY. IN THE REPLY, HE HAS ANNEXED A CHART GIVING DETAILS OF LOAN AND ADVANCES DURING THE YEAR 2002-03. 5 IN THESE DETAILS, INSTEAD OF MENTIONING RS. 8 LACS AGAINST THE NAME OF EACH INDIVIDUAL, ASSESSEE HAS WRONGLY MENTIONED RS.4 LAC S. THESE DETAILS ARE AVAILABLE ON PAGE 20 OF THE PAPER BOOK. ON THE BASI S OF THIS REPLY, ASSESSING OFFICER HAS PRESUMED THAT ASSESSEE HAD PAID RS. 4 L ACS TO EACH PARTY DURING THIS YEAR AND THIS PAYMENT HAS NOT BEEN INCORPORATE D IN THE ACCOUNTS. ASSESSING OFFICER MISERABLY FAILED TO LOOK INTO TRU E FACTS. ON THE STRENGTH OF THESE DETAILS, HE SUBMITTED THAT ORDER OF THE LEARN ED CIT(APPEALS) DOES NOT CALL FOR ANY INTERFERENCE BY THE ITAT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE RECORD CAREFULLY. THE ASSESSEE HAS ADVANCED MONEY OF RS.32 LACS I.E. RS. 8 LACS EACH TO SHRI JAI BHAGWAN, JAI KARAM PAL, RAMESH KUM AR AND SHRI VINAY KUMAR. THESE ADVANCES WERE GIVEN THROUGH ACCOUNT PA YEE CHEQUES BEARING NOS. 901414 DATED 23.9.2000 TO JAIBHAGWAN, 901412 D ATED 25.9.2000 TO JAI KARAM PAL, 901411 DATED 25.9.2000 TO RAMESH KUMAR A ND 901413 DATED 25.2.2000 TO SHRI VINAY KUMAR. AS ON 31.3.2001, ASS ESSEE HAS SHOWN THESE ADVANCES ON THE ASSETS SIDE IN THE BALANCE SHEET. C OPY OF THE BALANCE SHEET IS AVAILABLE ON PAGE 38 OF THE PAPER BOOK. THE ASSESSE E HAS INCLUDED THESE AMOUNTS IN THE NET ASSET FOR THE PURPOSE OF WEALTH- TAX RETURN IN THE RETURN FILED FOR ASSESSMENT YEAR 2001-02. IN THE BALANCE S HEET FOR ASSESSMENT YEAR 6 2002-03 I.E. AS ON 31.3.2002, THESE AMOUNTS WERE AG AIN SHOWN ON THE ASSETS SIDE. THE COPY OF THE BALANCE SHEET IS AVAILABLE ON PAGE 34. LET US SEE THE INFERENCE DRAWN BY THE ASSESSING OFFICER FROM THE R EPLY OF THE ASSESSEE. HE OBSERVED THAT THE PAYMENT MADE DURING THE YEAR TO A BOVE PARTY WERE NOT INCORPORATED IN THE ACCOUNTS. THE ASSESSEE HAS CONT ENDED THAT HE WAS NOT SUPPOSED TO MAKE THE PAYMENT RATHER HE WAS TO RECEI VE THE PAYMENT FROM THESE PERSONS. IN THE CLOSING BALANCE, ON PAGE 20, ASSESSEE HAS SHOWN THE BALANCE AGAINST EACH PERSON A SUM OF RS. 8 LACS. TH E ASSESSEE HAS SHOWN THE EVIDENCE OF ADVANCING LOAN OF RS.8 LACS, ALSO SHOWN THE CLOSING BALANCE OF THIS AMOUNT IN THE ASSESSMENT YEARS 2001-02 AND 200 2-03. LEARNED ASSESSING OFFICER COULD BE JUSTIFIED IN HIS CONCLUS ION IF HE OBSERVED AS AS ON 31.3.2001, THE CLOSING BALANCE AGAINST THE NAME OF THESE PERSONS WAS RS. 4 LACS EACH AND DURING THE ACCOUNTING PERIOD RELEVANT TO ASSESSMENT YEAR 2002- 03, ASSESSEE HAS FURTHER ADVANCED RS. 4 LACS EACH, BUT IN THAT CASE ALSO, NO ADDITION COULD BE MADE BECAUSE IN THE BALANCE SHEET AS ON 31.3.2002, ASSESSEE HAS SHOWN THE CLOSING BALANCE AT RS. 8 LAC S EACH. WHERE IS THE QUESTION TO ENHANCE THIS CLOSING BALANCE BY A FURTH ER SUM OF RS.4 LACS. ON PAGE 20, THE ALLEGED REPLY FILED BY THE ASSESSEE AL SO DO NOT SHOW THE CLOSING BALANCE MORE THAN RS. 8 LACS AGAINST THE NAME OF EA CH PERSON. LEARNED ASSESSING OFFICER HAS MADE THE ADDITION WITHOUT APP RECIATING THE FACTS AND 7 WITHOUT LOOKING INTO THE DETAILS. HIS ADDITION DOES NOT STAND TO LOGIC. THEREFORE, WITHOUT GOING INTO THE ISSUE WHETHER SUC H TYPE OF ADDITION CAN BE MADE IN AN ASSESSMENT ORDER PASSED UNDER SEC. 153-A OF THE ACT WITHOUT THERE BEING ANY MATERIAL FOUND DURING THE COURSE OF SEARCH, WE ARE OF THE VIEW THAT ADDITION NOT AT ALL CAN BE MADE. WE NEED NOT TO GO TO OTHER LEGAL ASPECTS ABOUT THE VALIDITY OF ASSESSMENT UNDER SEC. 153A OF THE ACT. THE ORDER OF THE LEARNED CIT(APPEALS) DOES NOT CALL FOR ANY INTERFERENCE, HENCE, THE APPEAL OF THE REVENUE IS DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 19.10.20 12 SD/- SD/- ( A.N. PAHUJA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19/10/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR