Sh. Sarabjit Singh, Amritsar. V. The Income-tax Officer, Amritsar.

ITA 387/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0510 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-05-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 10-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SANJEEV MEHRA
• Keywords: Income from undisclosed sources; Additional evidence; Onus to prove
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NOS. 382 & 383 (ASR)/2014 ASSESSMENT YEARS: 1997-98 & 2003-04 SH. SARABJIT SINGH 39, THE MALL, AMRITSAR. PAN:ALQPS2907P VS. ASST. CIT, CIRCLE-V, AMRITSAR. (APPELLANT) (RESPONDENT) I.T.A NOS. 384 TO 387 (ASR)/2014 ASSESSMENT YEARS: 1998-99 TO 2001-02 SH. SARABJIT SINGH 39, THE MALL, AMRITSAR. PAN:ALQPS2907P VS. INCOME TAX OFFICER, WARD-5(4), AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SANJEEV MEHRA (CA) RESPONDENT BY: SH. UMESH TAKYAR (DR.) DATE OF HEARING: 31.05.2016 DATE OF PRONO UNCEMENT: 13.07.2016 ORDER PER T. S. KAPOOR (AM): THIS IS A BUNCH OF SIX APPEALS FILED BY ASSESSEE A GAINST THE COMMON ORDER PASSED BY LEARNED CIT(A), AMRITSAR, DA TED 18.03.2014 FOR ASST. YEAR 1997-98 TO 2003-04. 2. SIMILAR ISSUES ARE INVOLVED IN THESE APPEALS AND THESE WERE HEARD TOGETHER, THEREFORE, FOR THE SAKE OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. ITA NOS.382 & 387 (ASR)/2 014 ASST. YEARS: 1997-98 & 2003-04, 1998-99 TO 2001-02 2 3. THE BRIEF FACTS OF THE CASES AS NOTED IN THE ASS ESSMENT ORDER PASSED IN VARIOUS YEARS IS THAT THE ASSESSEE ALONG WITH SH HARI OM DHANUKA AND OTHERS WERE AGENTS OF CITI CABLE AND WE RE OPERATING THE CABLE NETWORK IN JALANDHAR, KAPURTHALA, FEROZPUR, B ATALA, PATHANKOT, GURDASPUR IN THE NAME OF M/S AMIRTSAR COMMUNICATION NETWORKS PVT. LTD. THE ASSESSING OFFICER HAS NOTED DOWN A LETTER NO.1870 DATED 29.03.2004 WRITTEN BY DEPUTY DIRECTOR OF INCOME TAX (INV.) WHEREIN THE ASSESSING OFFICER WAS CONVEYED THE INFORMATION THAT VARIOUS CABLE OPERATORS HAD FILED AFFIDAVITS BEFORE PUJAB HUMAN R IGHTS COMMISSION STATING THEREIN THAT ASSESSEE HAD BEEN COLLECTING P ROTECTION MONEY FROM VARIOUS CABLE OPERATORS. THE ASSESSING OFFICER OBSE RVED THAT ASSESSEE HAD NOT DECLARED SUCH INCOME IN HIS P& L ACCOUNTS A ND THEREFORE, ON THE BASIS OF THESE AFFIDAVITS CALCULATED THE INCOME OF ASSESSEE WHICH HAD ESCAPED ASSESSMENT AND MADE ADDITIONS ACCORDINGLY I N ALL THE YEARS AFTER REOPENING OF THE CASES U/S 148. 4. AGGRIEVED WITH THE ORDERS THE ASSESSEE FILED APP EALS BEFORE LEARNED CIT(A) AND SUBMITTED VARIOUS SUBMISSIONS. THE ASSES SEE ALSO SUBMITTED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REL YING UPON THE AFFIDAVITS FILED BY A HANDFUL OF CABLE OPERATERS. IT WAS FURTH ER SUBMITTED THAT ASSESSING OFFICER DID NOT HAVE IN HIS POSSESSION AN Y OTHER COMPREHENSIVE MATERIAL IN SUPPORT OF CONTENTS STATED IN THESE AFF IDAVITS. IT WAS ALSO SUBMITTED THAT ALL THE CABLE OPERATORS WHO HAD APPE ARED BEFORE ITA NOS.382 & 387 (ASR)/2 014 ASST. YEARS: 1997-98 & 2003-04, 1998-99 TO 2001-02 3 ASSESSING OFFICER HAVE CATEGORICALLY IDENTIFIED THA T THEIR AFFIDAVITS WERE BOGUS AND UNTRUE. IT WAS FURTHER SUBMITTED THAT THE SE CABLE OPERATORS HAD EXPLAINED THAT NO PAYMENTS HAD BEEN MADE TO THE ASSESSEE AND THEREFORE, IT WAS SUBMITTED THAT THE ADDITIONS MADE BY ASSESSING OFFICER BE DELETED. HOWEVER, THE LEARNED CIT(A) DID NOT CON SIDER THE ARGUMENTS OF ASSESSEE AND DISMISSED THE APPEALS BY HOLDING AS UNDER: IT WOULD, AT THIS STAGE, BE RELEVANT TO CONSIDER TH E ADMISSIBILITY AND USE OF CIRCUMSTANTIAL EVIDENCE IN INCOME TAX PROCEEDINGS. CIRCUMSTANTIAL EVIDENCE IS EVIDENCE OF THE CIRCUMSTANCES, AS OPPOSED TO DIRECT EVIDENCE. IT MAY CONSIST OF EVIDENCE AFFORDED BY THE BEARING ON THE FACT TO BE PROVEJD, OF OTHER AND SUBSIDIARY FACTS, WHICH ARE RELIED ON AS INCONSISTE NT WITH ANY RESULT OTHER THAN THE TRUTH OF THE PRINCIPAL FACT. IT IS EVIDENCE OF VARIOUS FACTS, OTHER THAN THEFACT IN ISSUE WHICH ARE SO ASSOCIATED WITH THE FACT IN I SSUE, THAT TAKEN TOGETHER, THEY FORM A CHAIN OF CIRCUMSTANCES LEADING TO AN INFEREN CE OR PRESUMPTION OF THE EXISTENCE OF THE PRINCIPAL FACT. IN THE APPRECIATI ON/OF; CIRCUMSTANTIAL EVIDENCE, THE RELEVANT ASPECTS, AS LAID DOWN FROM TIME TO TIM E ARE (I) THE CIRCUMSTANCES ALLEGED MUST BE ESTABLISHED BY SUOH EVIDENCE, AS IN THE CASE OF OTHER EVIDENCES (II) THE CIRCUMSTANCES PROVED MUST BE OF A CONCLUSI VE NATURE AND NOT TOTALLY INCONSISTENT WITH THE CIRCUMSTANCES OR CONT RADICTORY TO OTHER EVIDENCEE. (III) ALTHOUGH THERE SHOULD BE NO MISSING LINKS IN TH.E CASE, YET IT IS NOT ESSENTIAL THAT EVERY ONE OF THE LINKS MUST APPEAR O N THE SURFACE OF THE EVIDENCE ADDUCE; SOME OF THESE LINKS MAY HAVE TO BE INFERRED FROM THE PROVED FACTS ; (IV) IN DRAWING THOSE INFERENCES OR PRESUMPTIONS, THE-A UTHORITIES MUST LAVE REGARD TO THE COMMON COURSE OF NATURAL EVENTS, TO H UMAN CONDUCT IND THEIR RELATION TO THE FACTS OF THE PARTICULAR CASE. (5)THE CIRCUMSTANTIAL EVIDENCE CAN, WITH EQUAL FACI LITY, BE RESORTED TO IN PROOF OF A FACT IN ISSUE WHICH ARISES IN PROCEEDINGS FOR THE ASSESSMENT OF TAXES BOTH DIRECT AND INDIRECT, CIRCUMSTANTIAL EVIDENCE- CAN B E MADE USE OF IN ORDER TO PRQVE'OR DISPROVE A FACT ALLEGED OR IN ISSUFE. IN F ACT, IN WHATEVER PROCEEDINGS OR CONTEXT INFERENCES ARE REQUIRED TO BE DRAWN FROM TH E EVIDENCE, OR MATERIALS ITA NOS.382 & 387 (ASR)/2 014 ASST. YEARS: 1997-98 & 2003-04, 1998-99 TO 2001-02 4 AVAILABLE OR LACKING, CIRCUMSTANTIAL EVIDENCE HAS I TS'PLACE, TO ASSIST THE PROCESS OF ARRIVING AT THE TRUTH. IT WILL ALSO FEE WORTHWHILE TO CONSIDER T HE NATURE OF BURDEN OF PROOF ON THE AO FOR PROVING A FACT OR CIRCUMSTANCE IN THQ IN COME TAX PROCEEDINGS. THE QUESTIONS RAISED ABOUT THE TAX LIABILITY BY THE AO ARE TO BE ANSWERED BY THE ASSESSEE BY FURNISHING REASONABLE -AND PLAUSIBLE EX PLANATIONS. IF ASSESSEE IS NOT FORTHCOMING WITH PROPER BR COMPLETE FACTS OR HIS ST ATEMENT OR EXPLANATION IS CONTRADICTORY,, DRAWING OF SUITABLE INFERENCES AND ESTIMATION OF FACTS IS INEVITABLE. JUDICIAL AUTHORITIES GENERALLY WILL NOT INTERFERE WITH SUCH ES.TIRRIATE OF FACTS, UNLESS THE INFERENCES'OR ESTIMATES ARE PE RVERSE OR CAPRICIOUS. THE ASSESSEES TECHNICAL CONTENTION ABOUT ADMISSIBI LITY AND RELIANCE ON MATERIAL AVAILABLE ON THE AOS RECORD ARE IN THE NA TURE OF CONTENTIONS CHALLENGING CRIMINAL OR CIVIL LIABILITIES IN A COUR T OF LAW. I AM DEALING WITH A PROCESS OF ADJUDICATION OF ASSESSES TAX LIABILITY I .E. ASSESSMENT UNDER INCOME TAX ACT RATHER THAN CONDUCTING CRIMINAL OR CIVIL CO URT PROCEEDINGS. AS HELD BY THE HONBLE SUPREME .COURT IN THE CASE OF S.S. GADG IL, (SUPRA) NO TIS IS INVOLVED IN ADJUDICATION OF TAX LIABILITY. NEV. INF ORMATION AND MATERIAL DID INDEED COME ON RECORD. IN OUR VIEW, EVEN A SINGLE C LUE OR REVELATION CAN BE OF GREAT IMPORTANCE. IN VIEW OF OBSERVATIONS. I DO NOT ACCEDE TO THE ASSESSEES PLEAS IN THIS BEHALF. THE ASSESSEES CONTENTIONS AN D OBJECTINS IN THIS BEHALF THAT THE MATERIAL AVAILABLE ON RECORD WAS NOT ADMISSIBLE AS EVIDENC AND THAT IT CANANOT BE RELIED ON BY THE AO, ARE DEVOID OF ANY M ERIT AND ARE REJECTED OUTRIGHT. IN VIEW OF THE ABOVE, ACTION OF AO IS CONFIRMED IN ASSESSING UNACCOUNTED INCOME IN ALL OF THE ASSESSMENT YEARS. 5. AGGRIEVED WITH THE ORDER THE ASSESSEE IS IN APPE AL BEFORE US. 6. AT THE OUTSET, LEARNED AR INVITED OUR ATTENTION TO AN APPLICATION UNDER RULE-29 OF THE ITAT RULES IN RESPECT OF PRODU CTION OF ADDITIONAL EVIDENCE AND IT WAS SUBMITTED THAT THE CASE INITIAT ED AGAINST THE ITA NOS.382 & 387 (ASR)/2 014 ASST. YEARS: 1997-98 & 2003-04, 1998-99 TO 2001-02 5 ASSESSEE BY CBI HAS BEEN DECIDED BY SPECIAL JUDICIA L MAGISTRATE, CBI, PUNJAB ON 18.04.2016 AND HAS ACQUITTED THE ASSESSEE AND IN THIS RESPECT FILED A COPY OF ORDER OF THE SPECIAL JUDICIAL MAGIS TRATE, CBI AND SUBMITTED THAT THE HONBLE SPECIAL JUDICIAL MAGISTR ATE HAD DECIDED THIS ISSUE ON 18.04.2016 AND THE JUDGMENT ITSELF GOES TO THE ROOT OF THE MATTER AND IT HAS BEEN RECEIVED SUBSEQUENT TO THE A PPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A), THEREFORE, THE SAME COUL D NOT BE FILED BEFORE LEARNED CIT(A) AND THEREFORE, IT WAS PRAYED THAT T HE SAME MAY BE TAKEN ON RECORD AND THE CASES OF THE ASSESSEE BE DECIDED KEEPING IN VIEW THE JUDGMENT PASSED BY THE SEPCIAL JUDICIAL MAGISTRATE. IT WAS SUBMITTED THAT THE HONBLE SPECIAL JUDICIAL MAGISTRATE HAS AC QUITTED THE ASSESSEE AND OTHERS AND THEREFORE, THE ALLEGATIONS AGAINST T HE ASSESSEE DID NOT STAND PROVED AND THEREFORE, THE ADDITIONS MADE ON T HE BASIS OF AFFIDAVITS DO NOT SURVIVE. THE LEARNED AR TOOK US TO THE PARA 120 OF THE SAID ORDER TO HIGHLIGHT THE OPERATIVE PART OF THE ORDER. IN VI EW OF THE ABOVE, IT WAS SUBMITTED THAT THE ADDITIONS MADE MAY BE DELETED. 7. THE LEARNED DR, ON THE OTHER HAND, HEAVILY PLACE D HIS RELIANCE ON THE ORDERS OF AUTHORITEIS BELOW. 8. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE INCOME TAX PROCEEINGS AGAIST THE ASSESSEE WERE INITIATED IN THESE YEARS U/S 148 OF THE ACT ON THE BASIS OF AFFIDAVITS FILED BY VARIOUS CABLE OPERATERS WITH THE PUNJAB HUMAN ITA NOS.382 & 387 (ASR)/2 014 ASST. YEARS: 1997-98 & 2003-04, 1998-99 TO 2001-02 6 RIGHTS COMMISSION AND CBI ALSO INITIATED CASE AGAIN ST THE ASSESSEE AND OTHER PERSONS AGAINST WHOM THE ALLEGATINS WERE MADE . ON THE BASIS OF THESE FACTS THE ASSESSING OFFICER HAD MADE THE ADDI TIONS IN VARIOUS YEARS AS THE AFFIDAVITS ALLEGED THAT ASSESSEE HAD OBTAINE D CERTAIN PAYMENTS FROM VARIOUS CABLE OPERATORS WHICH HAD NOT BEEN DEC LARED IN THE INCOME TAX RETURNS. WE FIND THAT IN THE ORDER PASSED BY SP ECIAL JUDICAL MAGISTRATE VIDE HIS ORDER DATED 18.04.2016 THE ASES SEE HAS BEEN ACQUITTED FROM THE CHARGES AND THIS BEING THE BASIS OF ADDITIONS THE JUDGMENT PASSED BY SPECIAL JUDICIAL MAGISTRATE IS A DMITTED AS ADDITIONAL EVIDENCE AND IN VIEW OF THE JUDGMENT OF THE SPECIAL JUDCIAL MAGISTRATE THE ADDITIONS MADE BY ASSESSING OFFICER AND CONFIRM ED BY LEARNED CIT(A) ARE DELETED AS THE BASIS ON WHICH THE ADDITIONS WER E MADE DOES NOT SURVIVE AS THE HONBLE COURT HAD ACQUITTED THE ASSE SSEE AND OTHER PERSONS. FOR THE SAKE OF CONVENEINCE THE OPERATIVE PART OF THE JUDGMENT OF SPECIAL JUDICIAL MAGISTRATE IS REPRODUCED BELOW. 120. SO, NO COGENT AND CONVINCING EVIDENCE PROVIN G THE CHARGES OF CRIMINAL CONSPIRACY, EXTORTION AND CRIMINAL INTIMID ATION AGAINST THE ACCUSED HAS COME ON RECORD. IN THESE CIRCUMSTANCES, THE INEVITABLE CONCLUSION FOLLOWS THAT THE PROSECUTION HAS NOT BEE N ABLE TO PROVE ON RECORD BY LEADING COGENT EVIDENCE THAT ACCUSED SARA BJIT SINGH @ RAJU, PARVEEN CHANDHA AND GAGAN BEDI ENTERED INTO CRIMINA L CONSPIRACY TO DO ILLEGAL ACTS WITH ACCUSED HARI OM DHANUKA, THE MANA GING DIRECTOR OF M/S AMRITSAR COMMUNICATION NETWORK PVT. LTD., AND IN PU RSUANCE OF THEIR CONSPIRACY, THEY EXTORTED MONEY TO THE TUNE OF RS.1 ,71,21,767/- BY INTENTIONALLY PUTTING THE CABLE OPERATORS (FRANCHIS EE OF M/S AMRITSAR COMMUNICATION NETWORK PVT. LTD.) IN FEAR OF DISCONN ECTION OF TV CHANNEL ITA NOS.382 & 387 (ASR)/2 014 ASST. YEARS: 1997-98 & 2003-04, 1998-99 TO 2001-02 7 SIGNALS. SO, CHARGES FRAMED AGAINST THE ACCUSED FOR THE OFFENCES UNDER SECTION 120-B, 384 AND 506 OF THE INDIAN PENAL CODE HAVE REMAINED UNPROVED ON RECORD. THE POINTS OF DETERMINATION ARE , THEREFORE, ANSWERED IN NEGATIVE. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DE LETE THE ADDITIONS SUSTAINED BY LEARNED CIT(A). THE LEARNED AR HAD NOT ARGUED AGAINST REOPENING OF THE CASES U/S 147 AND THEREFORE, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 9. IN VIEW OF THE ABOVE, THE APPEALS FILED BY ASSE SSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 .07.2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:13.07.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER