ACIT, New Delhi V. Sh. Brij Kumar Aggarwal, New Delhi

ITA 4363/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5714 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-02-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 13-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA SENIOR
• Assessee Lawyers: P N MEHTA
• Keywords: Income from undisclosed sources
• Section: 142(1); 69; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A : NEW DELHI) SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBE ITA NO.4363/DEL./2009 (ASSESSMENT YEAR : 2005-06) ACIT, CIRCLE 9 (1), VS. SHRI BRIJ KUMAR AGGARWAL, NEW DELHI. C/O M. PAL & COMPANY, 4850/24, ANSARI ROAD, DARYAGANJ, NEW DELHI. (PAN : ABAPA8282H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.N. MEHTA, CA REVENUE BY : SHRI A.K. MONGA, SENIOR DR ORDER PER R.P. TOLANI, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT (APPEALS) FOR THE ASSESSMENT YEAR 2005-06. THE SOL E GROUND TAKEN BY THE REVENUE IS AS UNDER : LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED, I N LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN DELE TING THE ADDITION OFRS.30,25,000/- MADE BY THE A.O. U/S 69 O F THE INCOME TAX ACT. 2. BRIEF FACTS ARE THAT THE ASSESSEE IS ASSESSED TO INCOME-TAX SINCE LAST MORE THAN 30 YEARS. FOR THE IMPUGNED YEAR ALSO, TH E ASSESSEE HAS FILED ITS RETURN OF INCOME WITH DCIT, CIRCLE 9 (1), NEW DELHI WHICH WAS PROCESSED ITA NO.4363/DEL./2009 2 BY THE A.O. ANOTHER A.O., ITO, WARD 22 (4), NEW DE LHI RECEIVED AN INFORMATION FROM THE CENTRAL INVESTIGATION BUREAU ( CIB) OF THE INCOME-TAX DEPARTMENT TO THE EFFECT THAT THE ASSESSEE HAS PURC HASE PROPERTY WORTH RS.30,25,000/-. THIS A.O. WITHOUT VERIFYING THAT T HE ASSESSEE WAS ALREADY ASSED WITH OTHER OFFICER ISSUED A NOTICE TO FILE TH E RETURN OF INCOME. ACCORDING TO A.O., NOTICE REMAINED UNCOMPLIED WITH. THEREFORE, EX-PARTE ASSESSMENT WAS MADE HOLDING THAT THE INVESTMENT OF RS.30,25,000/- FOR PURCHASE OF THE PROPERTY BY THE ASSESSEE WAS HELD A S INCOME FROM UNDISCLOSED SOURCES U/S 69. 3. AGGRIEVED ASSESSEE PREFERRED FIRST APPEAL. CIT (A) ALLOWED THE APPEAL OF THE ASSESSEE BY FOLLOWING OBSERVATIONS :- 7. THUS, THE NOTICE ISSUED BY THE LEARNED ASSESSIN G OFFICER UNDER SECTION 142(1), DATED 20.9.2007 WAS BASED ON THE ASSUMPTION THAT THE ASSESSEE HAD NOT FILED THE RETU RN OF INCOME, UNDER SECTION 139 OF THE ACT. . DURING THE COURSE O F HEARING, AND THE POWERS BESTOWED ON ME U/S 250(4) OF THE ACT , THE RETURN OF INCOME FILED BEFORE THE SAID CIRCLE 9(1) WAS REQUISITIONED. IT IS OBSERVED THAT THE RETURN FOR THE YEAR IN QUESTION HAD BEEN FILED ON 24.3.2006 IN THE OFFICE OF CIRCLE 9(1) DELHI, VIDE ACKNOWLEDGEMENT NO.9100001107. THE ADDRESS OF THE ASSESSEE HAS BEEN GIVEN AS D-59 AND 60, KAUSHAMBI, GHAZIABAD. IN OTHER WORDS, THIS RETURN HAD BEEN FILED PRIOR TO THE ISSUANCE OF NOTICE UNDER SECTION 142(1) DATED 20.9.2007 BY THE ITO, WD. 22(4)/DAO-42. SIMILARLY, RETURNS OF INCOME OF EARLIER YEARS AND SUBSEQUENT YEAR HAD ALSO BE REQUISITIONED. EVEN FOR FIR ASSESSMENT YEAR 2006-07 , THE ASSESSEE HAS FILED HER RETURN OF INCOME WITH CIRCLE 9(1) ON 30TH MARCH, 2007. FOR ASSESSMENT YEAR 2003-04 RETURN HAS BEEN FILED IN OFFICE OF ADDL.CIT, RANGE-9, DELHI ON 30.0 9.03. WE NEED NOT DELVE FURTHER WITH THE DETAILS OF RETURNS FILED IN EARLIER ITA NO.4363/DEL./2009 3 YEARS. ONCE THE RETURN, FOR ASSESSMENT YEAR 2005-06 , HAD BEEN FILED VOLUNTARILY BY THE ASSESSEE, THE CORRECT POSI TION OF LAW WOULD BE THAT THE SAID RETURN OUGHT TO HAVE BEEN CO NSIDERED FOR REGULAR ASSESSMENT WHEREIN THE INFORMATION RECEIVED FROM CIB SHOULD HAVE BEEN CONSIDERED. IN OTHER WORDS, THE NO TICE ISSUED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 142( 1) AS VEHEMENTLY CONTENDED BY THE ASSESSEE, IS NOT BASED ON A FOUNDATION OF CORRECT APPRECIATION OF LAW AND FACTS . ASSUMING FOR A MOMENT, NOTICE IS INDEED ACCEPTED TO BE VALID , IT WOULD LEAD TO DOUBLE TAXATION, WHICH IS NOT MANDATED IN T HE INCOME TAX ACT, 1961. IN LAXMIPAT SINGHANIA VS. CIT [1969] 72 ITR 291 (SC), IT HAS BEEN OBSERVED BY THE APEX COURT TH AT IT IS THE FUNDAMENTAL RULE OF LAW OF TAXATION THAT UNLESS OTH ERWISE EXPRESSLY PROVIDED, INCOME CANNOT BE TAXED TWICE. S IMILARLY, IN CIT VS. R. DALMIA [1982] 135 ITR 346 (DEL), THE JUR ISDICTIONAL HIGH COURT HAS CATEGORICALLY HELD THAT THE TAXING O F THE SAME ITEM TWICE IS NOT ALLOWED IN LAW. THE HON'BLE DELHI HIGH COURT APPLIED THE DECISION OF SUGDEN VS. LEEDS CORPORATIO N [1913] 6 TAX CASES 211 (HL), TO CONCLUDE THAT TAXING TWICE F OR THE SAME PURPOSE CANNOT BE PERMITTED. THUS, THE NOTICE ISSUE D BY THE LEARNED ASSESSING OFFICER UNDER SECTION 142(1) DATE D 20.9.2007 IS HELD TO BE VOID AB INITIO. THE LEARNED ASSESSING OFFICER DID NOT HAVE JURISDICTION TO ISSUE THE SAID NOTICE UNDER SECTION 142(1)(I). THUS, THE ASSESSEE DESERVES TO S UCCEED, IN GROUND OF APPEAL NO. 1. 4. AGGRIEVED REVENUE IS IN APPEAL. LEARNED DR CONT ENDS THAT ITO, WARD 22 (4), NEW DELHI HAD VALID JURISDICTION OVER THE ASSESSEE AS BY CBDT NOTIFICATION DATED 6.9.2007 CONCURRENT JURISDICTION WAS CONFERRED ON THIS AUTHORITY. THEREFORE, ITO, WARD 22(4) HAD A JURISD ICTION TO ISSUE NOTICE ON THE ASSESSEE AND TAKE FURTHER PROCEEDINGS. 5. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, VEHEMENTLY CONTENDED AS UNDER : ITA NO.4363/DEL./2009 4 THE APPELLANT IS AN INDIVIDUAL WHO IS BEING REGULA RLY ASSESSED TO INCOME-TAX AT PAN NO. ABAPA8282H FOR THE LAST MO RE THAN 30 YEARS. THE RETURN OF INCOME FOR THE ASSESSMENT Y EAR 2005- 2006 WAS FILED WITH THE DY. COMMISSIONER OF INCOME- TAX, CIRCLE 9(1) ON 24TH MARCH, 2006 VIDE ACKNOWLEDGEMEN T NO.91 000011 07 BEING THE ASSESSING OFFICER OF THE COMPANY M/S.SPARK ENGINEERING PRIVATE LIMITED WHERE THE APP ELLANT IS A DIRECTOR. THE APPELLANT STAYS AT D-59 & 60- KAUSHAMBI, GHAZIA BAD THE ADDRESS OF WHICH IS AVAILABLE ON RECORDS. THE LEARN ED ASSESSING OFFICER ON RECEIPT OF THE SYSTEM GENERATE D INFORMATION HAS SENT ALL NOTICES/LETTERS TO 2- KRIP A NARAIN 'MARG, DELHI WHICH ADDRESS PERTAINS TO THE PROPERTY REGISTERED WITH THE SUB-REGISTRAR' AND FOR WHICH THE LEARNED A SSESSING OFFICER HAD INFORMATION. THUS THE SERVICE OF THE NO TICES IF ANY, WERE NOT PROPER AS THE SAME WERE NEVER RECEIVED BY THE APPELLANT TO WARRANT AN EXPLANATION/INFORMATION ON THE PURCHASE OF PROPERTY. THE APPELLANT HAD PURCHASED THE PROPERTY JOINTLY WI TH MRS. MADHUR AGGARWAL VIDE AGREEMENT TO SELL DATED 14TH DECEMBER, 1993 FOR A SUM OF RS.30,25,000. THE INCOM E-TAX CLEARANCE IN FORM 371 WAS TAKEN ON 18TH FEBRUARY, 1 994, BUT THE MATTER WENT INTO LITIGATION IN THE LOWER COURT/ HIGH COURT AND WAS PENDING SINCE 1993. SUBSEQUENTLY' A FRESH A GREEMENT TO SELL ALONGWITH POWER OF ATTORNEY IN THE NAME OF HIS SON SHRI PRADEEP KUMAR AGGARWAL WAS EXECUTED AND PAYMENTS MA DE AND POSSESSION TAKEN. THE INJUNCTION MADE BY THE HI GH COURT WAS VACATED ON 7.10.2004 AND THE PROPERTY WAS REGIS TERED ON 21.10.2004 BY THE POWER OF ATTORNEY HOLDER ON BEHAL F OF THE ERSTWHILE OWNERS. THE SALE OF THE PROPERTY FROM THE ORIGINAL OWNERS H AS TO BE TAKEN AS ON 14.12.1993 OR SEPTEMBER, 1997 AND NOT I N 2004. THE CAPITAL GAINS WAS TO BE PAID BY THE SELLER I.E, PRABODH NATH HUF. THE SOURCE OF INVESTMENT MADE BY SHRI BRIJ KUMAR AG GARWAL, THE APPELLANT HAS BEEN SHOWN IN THE RETURNS FILED W ITH THE INCOME-TAX DEPARTMENT WHICH WERE MADE DURING THE PE RIOD FROM 1993 TO 1997. NO PAYMENT HAS BEEN MADE IN ASSE SSMENT ITA NO.4363/DEL./2009 5 YEAR 2005-2006 TO WARRANT AN ADDITION OF RS.30,25,0 00/- IN THE YEAR UNDER CONSIDERATION. THE APPELLANT IS HALF OWNER OF THE PROPERTY AND HAS MADE A PAYMENT OF RS.15,12,500/- AND NOT RS.30,25,000/- AS ASSESSED BY THE LEARNED ASSESSING OFFICER. 6. IT WAS FURTHER CONTENDED THAT EVEN IF ITO, WARD 22 (4) HAD CONCURRENT JURISDICTION, IT WAS INCUMBENT UPON HIM TO FIND OUT WHETHER THE ASSESSEE HAD FILED ANY RETURN OR NOT. WITHOUT VERIFYING THE REC ORD AND MERELY ON A CIB INFORMATION ABOUT REGISTRATION OF A PROPERTY, IT IS CONTENDED THAT THE ASSESSING OFFICER WAS NOT RIGHT IN MAKING THE EX-PA RTE ASSESSMENT RESULTING IN GREAT INCONVENIENCE TO ASSESSEE AND FACING DOUBL E ASSESSMENT 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. AS THE FACTS EMERGE, IT HAS NOT BEEN DISPU TED THAT THE ASSESSEE HAD ALREADY FILED RETURN OF INCOME AND ASSESSMENT WAS F RAMED ON HIM. THE ISSUE ABOUT PURCHASE HAS BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE BEFORE THE CIT (A) AND US. SINCE THE ASSESSEE WAS RESIDING AT GHAZIABAD THE NOTICE OF FILING RETURN FROM ITO, WARD 22 (4) WAS NOT SERVED ON THE ASSESSEE WHICH WAS MECHANICALLY SENT ON THE ADDRESS OF PURCHASE OF PROPERTY. IN OUR VIEW, THE ISSUE ABOUT CONCURRENT JURISDICTION OF ITO, WAR D 22 (4) DOES NOT HAVE MUCH SIGNIFICANCE. INASMUCH AS EVEN THOUGH HE HAD CONCURRENT JURISDICTION IT WAS INCUMBENT UPON HIM TO VERIFY WHETHER THE ASS ESSEE WAS ALREADY ASSESSED TO TAX OR NOT. THE NOTICE HAS BEEN SENT M ECHANICALLY WHICH HAS ITA NO.4363/DEL./2009 6 RESULTED IN DOUBLE TAXATION AND LITIGATION TO BE FA CED BY THE ASSESSEE WHICH, IN OUR VIEW, HAS CAUSED GREAT INCONVENIENCE TO THE ASSESSEE. 8. IN OUR VIEW, THE TRANSACTION OF IMPUGNED PURCHA SE OF PROPERLY HAS BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE. THE ORDER OF CIT (A) HAS TO BE UPHELD. WE ORDER ACCORDINGLY. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF MARCH, 2010. SD/- SD/- (A.K. GARODIA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 12 TH DAY OF MARCH, 2010 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-XXIII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.