ACIT, New Delhi V. M/s I.G. Builders & Permoters (P) Ltd., New Delhi

ITA 4282/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3387 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 03-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Search and seizure; Document seized; Corroborative evidences; Block assessment
• Section: 69C; 143(3); 69A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: C NEW DELHI BEFORE SHRI O.P. KANT, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.4282/DEL/2016 ASSESSMENT YEAR: 2007-08 ACIT, CIRCLE-12(2), NEW DELHI VS. M/S. I.G. BUILDERS & PROMOTERS (P) LTD., C-581, DEFENCE COLONY, NEW DELHI PAN :AAACI1640K (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDE R DATED 06/05/2016 PASSED BY THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS)-4, NEW DELHI [IN SHORT THE LD. CIT(A)] FOR ASSESSMENT YEAR 2007-08, RAISING FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE AMOUNTING T O RS.1,90,50,000/- ON ACCOUNT OF PAYMENT MADE FROM AN UNACCOUNTED SOURCES. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT AN Y TIME BEFORE OR DURING THE HEARING OF THE APPEAL. APPELLANT BY MS. ANIMA BARNWAL, SR.DR RESPONDENT BY SH. VINOD RALHAN, CA DATE OF HEARING 27.09.2021 DATE OF PRONOUNCEMENT 14.10.2021 2 ITA NO.4282/DEL/2016 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT ASSESSMEN T UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHOR T THE ACT) WAS COMPLETED ON 30/12/2009 AT TOTAL INCOME OF 17,85,843/-. SUBSEQUENTLY, THE ASSESSING OFFICER NOTICED THAT AS SESSEE ENTERED INTO AN AGREEMENT FOR PURCHASE OF LAND IN DEFENCE C OLONY, NEW DELHI, FOR A TOTAL CONSIDERATION OF 2,90,50,000/-, HOWEVER, IN THE BOOKS OF ACCOUNT VALUE OF THE SAID LAND WAS RECORDE D ONLY AT 1 CRORE. IN VIEW OF THE INFORMATION, THE ASSESSING OF FICER RECORDED REASONS THAT INCOME HAS ESCAPED THE ASSESSMENT IN T ERMS OF SECTION 147 OF THE ACT AND ISSUED NOTICE UNDER SECT ION 148 OF THE ACT, ASKING THE ASSESSEE TO FILE RETURN OF INCOME. THE ASSESSEE VIDE ITS LETTER DATED 06/05/2014 SUBMITTED THAT RET URN FILED ON 29.10.2007 MIGHT BE TREATED AS RETURN FILED IN PURS UANT TO NOTICE UNDER SECTION 148 OF THE ACT. THE OBJECTION FILED B Y THE ASSESSEE AGAINST ISSUANCE OF THE NOTICE UNDER SECTION 148 OF THE ACT WAS DISPOSED OF BY THE ASSESSING OFFICER. AFTER CONSIDE RING SUBMISSION OF THE ASSESSEE, THE ASSESSING OFFICER MADE ADDITIO N OF 1,90,50,000/- AS PAYMENT MADE FROM UNDISCLOSED SOUR CES AND ASSESSED TOTAL INCOME OF THE ASSESSEE AT 2,08,35,840/- IN HIS ORDER DATED 09/03/2015 PASSED IN TERMS OF SECTION 1 47 READ WITH SECTION 143(3) OF THE ACT. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) AND FILED DETAILED SUBMISSION . THE ASSESSEE SUBMITTED THAT ADDITION HAS BEEN MADE ON THE BASIS OF A DRAFT DEED, A SOFT COPY OF WHICH WAS SEIZED FROM THE COMP UTER OF DEED WRITER SH. NARESH GUPTA. IT WAS FURTHER SUBMITTED T HAT SH. NARESH GUPTA HIMSELF STATED OF NOT HAVING AWARE ABO UT ANY SUCH TRANSACTION OF PURCHASE BY THE ASSESSEE AT QUANTUM RECORDED IN THE DRAFT DEED. AFTER CONSIDERING SUBMISSION OF THE ASSESSEE, THE 3 ITA NO.4282/DEL/2016 LD. CIT(A) DELETED THE ADDITION HOLDING THAT UNSIGN ED DEED FOUND IN THE COURSE OF THE SEARCH MAY NOT BE SUFFICIENT F OR THE REVENUE TO PROVE THAT THE ENTRIES REPRESENTED UNDISCLOSED I NCOME OF THE ASSESSEE. AGGRIEVED, THE REVENUE IS IN APPEAL BEFOR E THE TRIBUNAL, RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. BEFORE US, THE PARTIES APPEARED THROUGH VIDEO CONF ERENCE FACILITIES. WE HAVE HEARD RIVAL ARGUMENTS AND PERUS ED THE MATERIAL ON RECORD, INCLUDING ORDERS OF THE LOWER A UTHORITIES. THE FACTS IN BRIEF IN RELATION TO ADJUDICATION OF THE G ROUND HAVE BEEN SUMMARIZED BY THE LEARNED CIT(A) IN PARA 4 OF THE I MPUGNED ORDER, WHICH HAVE NOT BEEN DISPUTED BY THE PARTIES. THE RELEVANT PART OF THE ORDER OF THE LEARNED CIT(A) IS REPRODUC ED AS UNDER: 4. THE AO RELIED ON THE SEIZED DEED AND MADE THE ADDITION OF RS. 1,90,50,000/- ON THE BASIS OF DOCUMENTS FOUND D URING THE SEARCH AND SEIZURE OF AKN GROUP. ACCORDING TO THE D OCUMENT SEIZED THE LAND BEARING NO. 387 , BLOCK- A, DEFENCE COLONY , NEW DELHI WAS PURCHASED BY THE COMPANY HAVING TOTAL CONSIDERATION OF RS. 2,90,50,000/- BUT PROPERTY WAS REGISTERED BY ASSESS EE FOR RS. 1,00,00,000/-. THE AO AFTER CONSIDERING THE REPLY O F THE APPELLANT HELD THAT THE PAYMENT WAS OF RS 1,00,00,000 + 1,90, 50,000 = 2,90,50,000/- AS PER THE SEIZED DOCUMENT. THE APPELLANT HAS SUBMITTED THAT IT IS ENGAGED IN C ONSTRUCTION BUSINESS. CONSEQUENT TO THE SEARCH OPERATION OF AKN GROUP, A SEARCH OPERATION WAS CARRIED OUT ON THE BUSINESS AN D RESIDENCE PREMISES OF SH. NARESH GUPTA, A DOCUMENT DEED WRITE R OF THE PROPERTIES IN AKN GROUP. DURING THE COURSE OF SEARC H OPERATION DIGITAL DATA WAS SEIZED FROM WHICH AN AGREEMENT WAS FOUND GIVING DETAILS OF TRANSACTION OF PURCHASE OF RESIDENTIAL P LOT BY THE ASSESSEE COMPANY M/S I.G. BUILDERS & PROMOTERS PVT. LTD. FRO M SMT. DAMYANTI SHARMA, SMT. NEELAM DHINGRA, SMT. VISHWA K ANTA SHARMA AND SH. SANJAY KUMAR SHARMA. IT IS IN RESPEC T OF LAND BEARING NO. 387 IN BLOCK A SITUATED AT DEFENCE COLO NY, NEW DELHI FOR TOTAL CONSIDERATION OF RS. 2,90,50,000/- AND ENTIRE FIRST FLOOR OF THE PROPOSED BUILDING IN FAVOR OF SECOND PARTY I.E. SMT . VISHWA KANTA SHARMA AND SH. SANJAY KUMAR SHARMA. SH. NARESH GUPTA, DOCUMENT DEED WRITER IN HIS STATE MENT RECORDED ON OATH U/S 131(1A) OF THE INCOME TAX ACT, 1961 HAS 4 ITA NO.4282/DEL/2016 ADMITTED THAT THE DURING THE DRAFTING OF VARIOUS IN STRUMENTS, DATA FROM MASTER DOCUMENTS IS COPIED AND WHILE CUTTING/P ASTING/ DATA OF SOME OTHER CLIENTS ARE ALSO COPIED BY MISTAKE WHICH SHOWS VARIOUS DISCREPANCIES/VARIANCE AS PER ACTUAL FIGURES/AMOUNT S/TERMS. FURTHER, THE DOCUMENT DEED WRITER, MR. NARESH GUPTA HAS SUBMITTED HIS LETTER IN WRITING ON 16.02.2015 WHICH IS REPROD UCING HERE: 'THIS IS IN REFERENCE OF THE CASE OF M/S I G BUILDE RS & PROMOTERS PVT. LTD FOR A.Y. 2007; DOCUMENTS UNDER REFERENCE SEIZED FROM THE HARD DISC HAVE NO EVIDENTIARY VALUE IN THE EYE OF LAW. IT DOES NOT RE FLECT TRUE NATURE OF TRANSACTION. I AM NOT AWARE OF ANY MONEY TRANSACTION BETWEEN THE PARTIES. I AM IN CONSULTANC Y AND DRAFTING OF VARIOUS DEEDS FOR THE SALE/PURCHASE OF PROPERTIES OF MY VARIOUS CLIENTS. SOMETIMES CUT/PASTE OF VARIO US DOCUMENTS IN THE COMPUTER SHOWS DISCREPANCY AND NOT TRUE CHARACTER OF THE DOCUMENTS. TRUE CHARACTER OF THE D OCUMENTS MAY BE ASCERTAINED FROM THE CONCERN PARTIES. REGARDS, NARESH GUPTA, (ADVOCATE) {R-36, GREATER KAILASH-1, NEW DELHI)' FURTHERMORE, AUTHORIZED REPRESENTATIVE OF ASSESSEE' S COMPANY ALSO SUBMITTED THE LETTER DATED 13.03.2015 FROM SH. NARESH GUPTA WHICH IS REPRODUCING HERE:- 'THIS IS IN CONTINUANCE OF MY STATEMENT DATED 16.02 .2015, GIVEN TO YOU. I FURTHER STATE THAT I AM IN TO PROFE SSION OF PROVIDING CONSULTANCY SERVICES TO MY VARIOUS CLIENT S, REGARDING REAL ESTATE MATTERS. DURING THE COURSE OF CONSULTANCY, I DO DRAFT VARIOUS DOCUMENTS UNDER THE INSTRUCTION OF CLIENTS. SOMETIMES UNDER THE INSTRUC TION OF SELLER, SOMETIMES UNDER THE INSTRUCTIONS OF PURCHAS ER AND SOMETIMES UNDER THE INSTRUCTION OF REAL ESTATE AGEN TS. I DO NOT REMEMBER AS TO UNDER WHOM INSTRUCTION I DRAFTED THE DOCUMENT PICKED UP FROM MY HARD DISK. THAT DURING THE COURSE OF DRAFTING OF VARIOUS INSTR UMENTS, DATA FROM THE MASTER DOCUMENT IS COPIED AND SOMETIMES DU RING SUCH CUTTING/ PASTING, DATA OF SOME OTHER FILE IS A LSO COPIED BY MISTAKE, WHICH SHOWS VARIOUS DISCREPANCIES/ VARIANC E AS PER THE ACTUAL FIGURES/ AMOUNTS/ TERMS. THEREFORE, SIMP LY PICKING UP FILE FROM THE HARD DISK OF THE COMPUTER WILL NOT REFLECT TRUE 5 ITA NO.4282/DEL/2016 NATURE OF THE CONTRACT TRUE NATURE OF THE CONTRACT CAN ONLY BE GATHERED FROM THE CONTRACTING PARTIES ONLY.' THE FOLLOWING CASE LAWS WITH SIMILAR FACTS WHICH SU PPORT THE ASSESSEE'S CONTENTION ARE MENTIONED BELOW-: CIT VS. JAIPAL AGGARWAL [2013] 212 TAXMAN 1 (DEL HI) SHARAD CHAUDHARY, NEW DELHI VS DEPARTMENT OF INC OME TAX (ITAT, DELHI) (25.07.2014) DELHI TRIBUNAL IN CASE OF MAHAN FOODS LTD. VS. C IT [2009] 27 DTR 185. GUJARAT HIGH COURT IN CASE OF CIT VS. MAULIK KUM AR K. SHAH 307 ITR 137 HONORABLE SUPREME COURT IN THE CASE OF MOHD. YUS UF & ANR. VS. D & ANR. AIR 1968BOMLL2 DECISION OF DELHI TRIBUNAL IN CASE OF SK GUPTA V /S DCIT 63 TTJ 532 THE APEX COURT IN CENTRAL BUREAU OF INVESTIGATIO N V. V.C. SHUKLA (1998) 3 SCC 410. 4. IN THE BACKGROUND OF THE ABOVE FACTS, THE LD. CIT( A) DELETED THE ADDITION OF OBSERVING AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, THE FINDINGS OF THE A.O., THE FACT INCLUDING THE RELEVANT SEIZED DO CUMENTS ON RECORD. NARESH GUPTA, THE DEED WRITER, ALSO SUBMITTED HIS S TATEMENT DATED 16.02.2015 AND 13.03.2016 STATED THAT HE IS NOT AWA RE ABOUT THE TRANSACTIONS BETWEEN THE PARTIES. FURTHER, HE IS US ED TO COPY /PASTE METHOD FOR DRAFTING THE DOCUMENTS ON THE INSTRUCTIO N OF PARTIES/BUILDERS/ DEALER. THE PRINCIPLE LAID DOWN BY THE SUPREME COURT AND VA RIOUS OTHER TRIBUNALS IS THAT AS PER SECTION 34 OF THE EV IDENCE ACT, 1872 LOOSE SHEETS OF PAPERS ARE NOT TO BE CONSIDERED AS 'BOOK' AND HERE DEED SEIZED IS IN ADMISSIBLE AS EVIDENCE AND CANNOT BE RELIED UPON. ADDITION MADE ON UNSIGNED DEED IS NOT JUSTIFIED AND REVENUE HAS TO BRING SOME CORROBORATIVE EVIDENCE TO SHOW THAT THE DOCUMENT SEIZED ACTUALLY SHOW SOME TRANSACTION AND THE ASSESSEE EAR NED INCOME FROM UNDISCLOSED SOURCES. THE REVENUE CAN TAX ONLY THOSE RECEIPTS, WHICH MUST HAVE BEEN PROVED TO BE INCOME IN THE HAN DS OF RECIPIENT. REFERENCE MAY BE MADE TO THE DECISION OF THE SUPREM E COURT IN CENTRAL BUREAU OF INVESTIGATION V. V.C. SHUKLA (199 8) 3 SCC 410 HAS LAID DOWN THAT FILE CONTAINING LOOSE SHEETS OF PAPE RS IS NOT BOOK AND HENCE ENTRIES THEREIN ARE NOT ADMISSIBLE UNDER SECT ION 34 OF THE EVIDENCE ACT, 1872. SIMILAR VIEW HAS BEEN ALSO TAKE N BY HONORABLE SUPREME COURT IN THE CASE OF MOHD. YUSUF & ANR. VS. D & ANR. AIR 1968 BOM 112 AND BY GUJARAT HIGH COURT IN CASE OF C IT VS. MAULIK KUMAR K. SHAH 307 ITR 137. IN THE FOLLOWING CASES T HE TRIBUNAL 6 ITA NO.4282/DEL/2016 HAVE HELD THAT MERELY ON THE BASIS OF DUMB DOCUMENT S SEIZED, I.E. FROM WHICH NOTHING COULD BE CLEARLY UNDERSTOOD, CAN NOT FORM A JUSTIFIED BASE FOR MAKING ADDITIONS -SHARAD CHAUDHA RY, NEW DELHI VS DEPARTMENT OF INCOME TAX (ITAT, DELHI) (25.07.20 14); DELHI TRIBUNAL IN CASE OF MAHAN FOODS LTD. V. CIT (2009) 27 DTR 185. THEREFORE, MERELY UNSIGNED DEED FOUND IN THE COURSE OF SEARCH MAY NOT BE SUFFICIENT FOR THE REVENUE TO PROVE THAT THE ENTRIES REPRESENT UNDISCLOSED INCOME OF THE ASSESSEE. AS FAR AS THE EVIDENTIARY VALUE OF THE ENTRIES IN T HE ABOVE BOOKS OF ACCOUNTS ARE CONCERNED THE MATTER OF TAXABILITY CANNOT BE DECIDED ON THE BASIS OF ENTRIES WHICH THE ASSESSEE MAY CHOO SE TO MAKE IN HIS ACCOUNTS BUT HAS TO BE DECIDED IN ACCORDANCE WI TH THE LAW. THE TAXABILITY OF THE AMOUNT ON THE BASIS OF UNSIGNED S EIZED DOCUMENT DEPENDS ON THE CREDIBILITY AND TAXABILITY OF THE SA ME IN ACCORDANCE WITH THE LAW AND NOT ON THE BASIS OF UNSIGNED DRAFT ED DEED. THE INCOME TAX AUTHORITIES CANNOT ASSESS ALL RECEIPTS, THEY CAN ASSESS ONLY THOSE RECEIPTS WHICH MAY AMOUNT TO BE INCOME. THEREFORE WHERE THEY ASSESS A RECEIPT, THEY MUST FIND IT TO B E INCOME AND THEY CANNOT DO ASSESS THEY HAVE SOME MATERIAL TO JUSTIFY THEIR FINDINGS. IN PUSHKAR NARAIN SARAF VS CIT [1990] 86 CTR (ALL) 110:[1990]183 ITR 388 (ALL): TC 61R. 433, THE COURT HAS HELD THAT PROVISIONS OF SECTION 132(4A) IS AVAILABLE ONLY FOR THE LIMITED PURPOSE OF SEIZURE. IN THE COURSE OF BLOCK ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER LABEL THE ENTRIES AS INCOME UNDER PROVISIONS OF ACT OR DEEMING SECTIONS 68, 69, 69A AND 69C ETC. BUT TH E BURDEN IS ON THE DEPARTMENT TO PROVE THAT THE ENTRIES REPRESENT UNDISCLOSED INCOME OF THE ASSESSEE. THEREFORE, AFTER CONSIDERING ALL THE ABOVE FACTS TH E UNSIGNED SEIZED DOCUMENT DOES NOT SHOW THE TRUE AND FAIR VIE W OF ACTUAL MONEY TRANSITIONS BETWEEN THE PARTIES. THUS THE ADD ITION OF RS 1,90,50,000/- IS HEREBY DELETED THE GROUND OF APPEA L IS ALLOWED TO THE ASSESSEE. 5. ON PERUSAL OF THE ABOVE FACTS OF THE CASE AND FIND ING OF THE LD. CIT(A), WE FIND THAT THE ASSESSING OFFICER HAS REOPENED THE CASE AND MADE ADDITION OF 1,90,50,000/- ON THE BASIS OF SOFT COPY OF A DEED FOUND FROM THE COMPUTER OF DEED WRIT ER SH. NARESH SHARMA. NO COPY SIGNED BY THE ASSESSEE AND SELLER P ARTIES WITH A TRANSACTION OF RS.2,90,50,000/- HAS BEEN FOUND DURI NG THE COURSE OF THE SEARCH OF SH NARESH GUPTA. THE DEED W RITER, HIMSELF 7 ITA NO.4282/DEL/2016 HAS DENIED OF HAVING AWARE OF ANY MONEY TRANSACTION BETWEEN THE PARTIES, WHICH WAS RECORDED IN THE COMPUTER. HE STA TED DURING THE COURSE OF SEARCH THAT AMOUNT MENTIONED MAY BE A S A RESULT OF CUT/PASTE OF VARIOUS DOCUMENTS IN THE COMPUTER. WE FIND THAT THE ASSESSING OFFICER HAS MADE ADDITION ONLY ON THE BAS IS OF SAID UNSIGNED DEED AND NO CORROBORATIVE EVIDENCES HAVE B EEN BROUGHT ON RECORD TO SHOW THAT PURCHASE TRANSACTION WAS EXE CUTED BY THE ASSESSEE AT THE RATE MENTIONED IN THE COMPUTER OF S H. NARESH SHARMA. THE ASSESSING OFFICER HAS NOT CARRIED OUT A NY INQUIRIES FROM THE SELLER OF THE LAND ALSO. THE ASSESSEE CANN OT BE PENALISED MERELY ON THE BASIS OF AN UNSIGNED DEED FOUND FROM THE PREMISES OF A THIRD-PARTY. IN OUR OPINION, THE FINDING OF TH E LD. CIT(A) ON THE ISSUE IN DISPUTE IS WELL REASONED AND WE DO NOT FIND ANY ERROR IN THE SAME. ACCORDINGLY, WE UPHOLD THE FINDING OF THE LD. CIT(A) ON THE ISSUE IN DISPUTE AND DISMISS THE GROUND NO.1 OF THE APPEAL OF THE REVENUE. THE GROUND NO. 2 BEING GENERAL IN N ATURE, IS DISMISSED AS INFRUCTUOUS. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH OCTOBER, 2021 SD/- SD/- (KULDIP SINGH) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14 TH OCTOBER, 2021. RK/- (DTDC) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI