Mr. Nitin Kumar Gupta, New Delhi V. ACIT, Meerut

ITA 4412/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6692 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 12-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEODAN SINGH BHDDORIA
• Assessee Lawyers: PRASHA NT NARANG SH R P NARANG
• Keywords: Opportunity of being heard
• Section: 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH MEERUT CAMP, NEW DELHI BEFORE SHRI I.C.SUDHIR, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER ITA NO. 4412/DE L./2014 ASSESSMENT Y EAR : 2009-10 NITIN KUMAR GUPTA VS. ACIT A-2/83, CENTRAL CIRCLE SAFDARJUNG ENCLAVE MEERUT NEW DELHI PAN : AEEPG7895K ASSESSEE BY : SHRI PRASHA NT NARANG, SH. R.P. NARANG, CA REVENUE BY : SHRI SHE ODAN SINGH BHDDORIA, SR. DR DATE OF HEARING : 16/12/2015 DATE OF PRONOUNCEMENT : 29 .02.2016 ORDER PER I.C.SUDHIR, J.M. THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST ORDER OF CIT(A)- MEERUT DATED 19.05.2014 AND PERTAINS TO ASSESSMENT YEAR 20 09-10. 2. THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORD ER ON THE FOLLOWING GROUNDS : 1. THAT ON THE FACTS AND AS PER THE CIRCUMSTANCES OF THE CASE, BOTH THE LOWER AUTHORITIES I.E. AO & CIT(A), HAVE ERRED IN ASSESSING THE INCOME OF THE APPELLANT AT RS. 15,56,180/- AS AGAIN ST RETURNED ITA NO.4412/DEL/2014 NITIN KUMAR GUPTA 2 INCOME OF RS. 8,80,908/-. AS SUCH THE AGGREGATE ADD ITIONS MADE OF RS. 6,75,272/- THEREON MAY PLEASE BE DELETED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE & IN LAW, THE LOWER AUTHORITIES BEING LD. CIT(A) & AO HAVE ER RED IN MAKING THE ADDITION OF RS. 6,75,272/- UNDER SECTION 69A OF THE ACT. AS SUCH, THE ADDITION OF RS. 6,75,272/- MAY PLEASE BE DELETE D. 3. THAT ON FACTS AND IN CIRCUMSTANCES OF CASE THE LEARNED A.O. HAS ERRED IN MAKING AN ADDITION OF RS. 3,75,272/- OUT O F THE CASH SEIZED OF RS. 40,44,820/- CONSIDERING THE SAME AS UNEXPLAI NED MONEY U/S 69A OF THE INCOME TAX ACT, 1961. 4. THAT ON FACTS AND IN CIRCUMSTANCES OF CASE THE LEARNED A.O. HAS ERRED IN MAKING AN ADDITION OF RS. 3,00,000/- TO TH E TOTAL INCOME OF THE APPELLANT FOUND FROM THE JOINT LOCKER BELONGING TO APPELLANT AND HIS WIFE DURING THE SEARCH CONSIDERING THE SAME AS AN UNEXPLAINED MONEY U/S 69A OF THE INCOME TAX ACT, 1961. 3. AT THE OUTSET OF HEARING THE LD. AR POINTED OU T THAT ISSUE RAISED IN THE PRESENT APPEAL IS FULLY COVERED BY THE DECISIONS OF THE TRIBUNAL IN THE CASES OF GOLDEE GUPTA VS. ACIT, ITA NO. 4411/DEL/2014 (AY 20 09-10) ORDER DATED 31.8.2015 AND ARUN KUMAR GUPTA VS. ACIT, ITA NO. 44 13/DEL/2014 (AY 2009-10) ORDER DATED 6.10.2015, COPIES OF WHICH HAV E BEEN FURNISHED BY THE LD. AR. 4. THE LD. SR. DR ON THE OTHER HAND PLACED RELIA NCE ON THE ORDERS OF THE AUTHORITIES BELOW. 5. ON PERUSAL OF THE ABOVE GROUNDS IT APPEARS TH AT THE MAIN GRIEVANCE OF THE ASSESSEE IS ASSESSMENT OF INCOME BY THE AO AT RS. 1 5,56,180/- AS AGAINST RETURNED INCOME OF RS. 8,80,908/-, THUS, RESULTING INTO THE ADDITION OF RS. 6,75,272/- IN AGGREGATE. THE LD. CIT(A) HAS UPHELD THIS ADDITION AGAINST WHICH ASSESSEE IS IN APPEAL. ITA NO.4412/DEL/2014 NITIN KUMAR GUPTA 3 6. THE FACTS IN BRIEF ARE THAT A SEARCH AND SEI ZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED IN THE CASES OF SUPERTECJ & CROSSIN G INFRASTRUCTURE GROUPS OF COMPANIES COVERING ITS OFFICES AS WELL AS RESIDENCE S OF DIRECTORS / PROMOTERS OF THE GROUP. SURYA MERCHANTS LTD. BEING ONE OF THE SISTER CONCERNS OF SUPERTECH & CROSSING INFRASTRUCTURE LTD. WAS ALSO C OVERED BY SUCH OPERATION ALONG WITH ITS DIRECTORS AND THEIR FAMILY MEMBERS, WHICH AMONGST OTHERS INCLUDED THE RESIDENCE AT A-2/83, SAFDARJUNG ENCLAV E, NEW DELHI, OF SHRI ARUN KUMAR GUPTA, NITIN KUMAR GUPTA AND GOLDY GUPTA BEIN G DIRECTORS IN SURYA MERCHANT LTD. IN COMPLIANCE OF THE NOTICE ISSUED, T HE ASSESSEE DECLARED TOTAL INCOME OF RS. 8,80,908/-. THE AO HAS HOWEVER, ASSES SED THE INCOME AT RS. 15,56,180/- AFTER MAKING ADDITION OF RS. 6,75,272/- ON ACCOUNT OF UNEXPLAINED CASH U/S 69 OF THE IT ACT. THE LD. CIT(A) HAS UPHEL D THE SAME, WHICH HAS BEEN QUESTIONED BEFORE THE TRIBUNAL. 7. UNDER SIMILAR SET OF FACTS ADDITION WAS MADE IN THE CASE OF GOLDY GUPTA (SUPRA) WHEREIN THE MATTER HAS BEEN SET ASIDE BY TH E TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE VERACITY OF THE SU BMISSION OF THE ASSESSEE IN ITS ENTIRETY AND DISPOSE OF THE MATTER AFTER AFFORD ING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THAT CASE BEFORE THE TRIBUNAL, THE LD. CIT(A) HAD DENIED THE EXPLANATION OF THE ASSESSEE THAT CASH OF RS. 20,57, 056/- BELONGED TO THEIR COMPANY, STAR REALCOM PVT. LTD. AND ORS ON THE BASI S THAT AFFIDAVIT OF CASHIER OF STAR REALCON PVT. LTD. AND A CHARTERED ACCOUNTA NT CERTIFYING THAT CASH OF RS. 21,00,0730/- ON 5.2.2009 WAS AVAILABLE AS PER T HE BOOKS OF STAR REALCOM PVT. LTD. WERE NOT CORROBORATED BY CONVINCING EVI DENCE. THE LD. CIT(A) HAD ALSO NOT CONSIDERED THE ALTERNATIVE ARGUMENT OF THE ASSESSEE THAT AFORESAID CASH MAY BE CONSIDERED OUT OF THE CASH ON MONEY RECEIVED IN RESPECT OF SALE OF FLATS/SHOPS IN CASE OF SURYA MERCHANT LTD. IN WHICH THE ASSESSEE, ARUN GUPTA, NITIN GUPTA ARE THE DIRECTOR AND THE OTHER ARGUMENT S. FINDING SUBSTANCE IN THE ITA NO.4412/DEL/2014 NITIN KUMAR GUPTA 4 ABOVE CONTENTION OF THE ASSESSEE, THE TRIBUNAL HAS SET ASIDE THE MATTER TO THE FILE OF THE AO TO EXAMINE THE VERACITY OF SUBMISSIO N OF THE ASSESSEE IN ITS ENTIRETY AND DISPOSE OF THE MATTER AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. SIMILAR ARE THE FACTS IN THE PRESENT CASE BEFO RE US AS IN THE PRESENT CASE ALSO DURING THE COURSE OF SEARCH AT THE RESIDENCE OF THE ASSESSEE, CASH OF RS. 40,44,820/- WAS FOUND, OUT OF WHICH 35,00,000/- WA S SEIZED. THE CASH AMOUNT OF RS. 40,44,820/- ( 20,57,050/- + RS. 19,87,770/-) WERE FOUND IN THE CUSTORY OF MR. ARUN GUPTA, GOLDY GUPTA, AND NITIN GUPTA (ASSES SEE). THE AO FOUND THE EXPLANATION OF THE ASSESSEE REGARDING CASH BALANCE OF RS. 19,46,399/- AS PER BOOKS OF ACCOUNT OF SURYA MERCHANT PVT. LTD. AS ON 05.02.2009 AND OUT OF WHICH RS. 10,950/- WAS FOUND IN THE LOCKER FROM THE OFFICE OF SURYA MERCHANT LTD. AS EXPLAINED AND HENCE DID NOT MAKE ANY ADDITI ON ON THIS AMOUNT. THE AO, HOWEVER, DID NOT FIND THE EXPLANATION OF THE AS SESSEE REGARDING CASH OF RS. 20,57,050/- ON AS FULLY SATISFACTORY AND ADDED RS. 6,75,272/- (RS. 3,75,272/-+ RS. 3,00,000/-) OUT OF SAID AMOUNT ON ACCOUNT OF UNEXPLAINED CASH U/S 69(A) OF THE ACT. RS. 3,75,272/- WAS MADE OUT OF THE CASH SEIZED AND RS. 3,00,000/- ADDED WHICH WAS FOUND FROM THE JOINT LOCKER BELONGI NG TO THE ASSESSEE AND HIS WIFE OF THE EXPLANATION OF THE ASSESSEE IN RESPECT OF CASH OF RS. 20,57,050/- FOUND FROM THE BED ROOM OF SHRI ARUN KUMAR GUPTA IT WAS SUBMITTED THAT CASH OF RS. 17,00,000/- OUT OF THE ABOVE BELONG TO STAR REALCOM (P) LTD. AND THEIR ASSOCIATE COMPANY, IN WHICH THE ASSESSEE AND GOLDY GUPTA ARE ALSO THE DIRECTORS. THE AFFIDAVITS OF CASHIER AND CHARTERED ACCOUNTANT TO THIS EFFECT WERE FILED. IT WAS FURTHER EXPLAINED THAT, IN CASE, THE AO DID NOT AGREE WITH THE ABOVE EXPLANATION CASH SHOULD BE CONSIDERED OUT OF THE CASH MONEY RECEIVED IN RESPECT OF SALES IN CASE OF SURYA MERCHANT LTD. IN WHICH ALL THE ABOVE CAPTIONED ASSESSEE ARE THE DIRECTORS. IT WAS FURTHE R EXPLAINED THAT THE ASSESSEE ITA NO.4412/DEL/2014 NITIN KUMAR GUPTA 5 HAD OFFERED AN INCOME OF RS. 5,81,42,294/- FOR THE ASSESSMENT YEARS 2004-05 TO 2009-10 IN THE CASE OF SURYA MERCHANT LTD. IT WAS A LSO EXPLAINED THAT SURYA MERCHANT LTD. HAD RECEIVED CASH ON MONEY OF RS. 16 ,50,000/- IN RESPECT OF SALE DURING TWO MONTHS ONLY PRECEDING THE DATE OF SEARC H I.E. 06.02.2009 WHICH CLEARLY SHOWS THAT THE ABOVE CASH FOUND IN THE CUST ODY OF THE ASSESSEE WAS BELONGING TO SURYA MERCHANT LTD. HENCE, NO ADDITION IS REQUIRED TO BE MADE IN THE HANDS OF THE ASSESSEE AS IT WOULD AMOUNT TO B E A DOUBLE ADDITION, ONCE IN THE HANDS OF SURYA MERCHANT LTD. AND SECOND IN THE HANDS OF THE ASSESSEES, SHRI ARUN KUMAR GUPTA, GOLDY KUMAR GUPTA AND NITIN KUMAR GUPTA ( PRESENT ASSESSEE). THE AO DID NOT AGREE AND HELD THAT IF TH E AMOUNT OF CASH OF RS. 19,35,450/- IS DEDUCTED FROM THE CASH OF RS. 19,87, 770/- FOUND DURING THE COURSE OF SEARCH THERE REMAINS CASH BALANCE OF RS. 42,320/- WHICH WAS UNEXPLAINED. HE, THUS, ADDED THIS UNEXPLAINED AMOUN T OF RS. 42,320/- WITH THE OTHER UNEXPLAINED AMOUNT OF RS. 20,57,050/- MAKING THE TOTAL UNEXPLAINED CASH AT RS. 20,99,370/- FOUND DURING THE COURSE OF SEARC H BELONGING TO SHRI ARUN KUMAR GUPTA, GOLDY GUPTA AND NITIN GUPTA. SINCE TH E AMOUNT BELONGED TO 3 PERSONS, 1/3 RD OF CASH OF RS. 20,99,370/- AMOUNTING TO RS. 6,99, 790/- WAS HELD BELONGING TO THE ASSESSEE. SINCE THERE WAS CASH BAL ANCE OF RS. 3,24,518/- AS ON 05.02.2009 IN THE BOOKS OF ASSESSEE, HENCE, THIS A MOUNT WAS DEDUCTED FROM THE UNEXPLAINED CASH AND THUS, BALANCE REMAINED AT RS. 3,75,272/- HELD AS UNEXPLAINED INCOME. THE AO FURTHER ADDED RS. 3,00,0 00/- WHICH WAS FOUND AND SEIZED FROM THE LOCKER BELONGING TO THE ASSESSE E, SMT. SONIA GUPTA AND SMT. SASHI GUPTA. THE ADDITION IN TOTAL COMING TO R S. 6,75,272/- HAS THUS, BEEN UPHELD BY THE LD. CIT(A). WE FIND THAT THE LD. CIT( A) HAS ALSO NOT CONSIDERED THE ABOVE EXPLANATION OF THE ASSESSEE, WHICH IN OUR VIEW SHOULD NOT HAVE BEEN OUT RIGHTLY REJECTED. WE, THUS, IN THE INTEREST OF JUSTICE SET ASIDE THE MATTER TO THE FILE OF THE AO TO EXAMINE THE VERACITY OF THE A BOVE EXPLANATION OF THE ITA NO.4412/DEL/2014 NITIN KUMAR GUPTA 6 ASSESSEE AND DISPOSE OF THE MATTER AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE REGARDING THE ADDITION OF RS. 6,57,620 /- MADE ON ACCOUNT OF UNEXPLAINED INCOME, AS IT WAS ORDERED BY THE TRIBUN AL IN THE CASE OF GOLDY GUPTA AND ARUN KUMAR GUPTA. THE GROUNDS ARE ACCORDI NGLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE COURT ON 29/02/2016). SD/- SD/- (PRASHANT MAHARISHI) (I.C.SUDHIR) ACCOUNTANT MEMEBR JUDICIAL MEM BER DATED: 29 / 02/2016 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) DR: ITAT ASSISTANT REGISTRAR 5. ITA NO.4412/DEL/2014 NITIN KUMAR GUPTA 7 DATE INITIAL 1. DRAFT DICTATED ON 26.02.2016 2. DRAFT PLACED BEFORE AUTHOR 24.02.2016 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON 29.02.2016 PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.