DCIT, New Delhi V. Sh. Surender Singh Nagar, Ghaziabad

ITA 4455/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4273 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 13-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: SALIL AGRAWAL
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Search and seizure
• Section: 143(3); 50C; 153A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI. G. D. AGRAWAL, PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO.4455 & 4456/DEL/2014 ASSESSMENT YEAR:2005-06 & 2009-10 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-15 NEW DELHI V. SURENDER SINGH NAGAR C/O VRS FOODS LIMITED B-56, INDUSTRIAL SITE-IV, SAHIBABAD GHAZIABAD TAN/PAN:ABZPS0425P (APPLICANT) (RESPONDENT) APPLICANT BY: SHRI S.S. RANA, CIT (DR) RESPONDENT BY: SHRI SALIL AGRAWAL, ADVOCATE DATE OF HEARING: 29 08 2017 DATE OF PRONOUNCEMENT: 15 09 2017 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST SEPARATE IMPUGNED ORDERS OF COMMON DATE 12.5.2014, PASSED BY THE LD. CIT (APPEALS)-XXV, NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 153A OF THE INCOME TAX ACT FOR ASSESSMENT YEARS 2005-06 AND 2009-10. 2. WE WILL FIRST TAKE UP THE REVENUES APPEAL FOR ASSESSMENT YEAR 2005-06, WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE LD. CIT (A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS.34,82,000/-. I.T.A. NO.4455 & 4456/DEL/2014 2 2. (A) THE ORDER OF THE LD. CIT (A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 3. THE FACTS IN BRIEF ARE THAT, THE ASSESSEE FILED HIS ORIGINAL RETURN OF INCOME ON 17.3.2006 DECLARING INCOME OF RS.17,07,868/-. SUBSEQUENTLY A SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) WAS CARRIED OUT AT THE ASSESSEES PREMISES AND PARAS GROUP OF CASES ON 9.9.2010. IN PURSUANCE OF SEARCH AND SEIZURE ACTION, NOTICE UNDER SECTION 153A WAS ISSUED ON 30.1.2013; IN RESPONSE TO WHICH ASSESSEE HAD FILED COPY OF RETURN FOR ASSESSMENT YEAR 2005-06 ALONG WITH STATEMENT OF AFFAIRS AND COMPUTATION OF INCOME DECLARING SAME INCOME. IN THIS CASE, AS NOTED BY THE ASSESSING OFFICER, INFORMATION WAS GATHERED THROUGH AIR THAT DURING THE YEAR, ASSESSEE HAD MADE INVESTMENT OF RS.42.52 LAKHS FOR PURCHASE OF PROPERTY AT VILLAGE KHURJA ON 16.9.2004 WHICH, AS PER THE ASSESSING OFFICER, WAS NOT SHOWN IN THE RETURN OF INCOME. THE ASSESSEE HAD SHOWN PURCHASE OF THE PROPERTY IN THE BOOKS AT RS.12.10 LAKHS WHICH INCLUDED STAMP DUTY OF RS.4,25,200/-. HOWEVER, THE ASSESSING OFFICER NOTED THAT AS PER CIRCLE RATE, THE VALUE OF THE PROPERTY WAS RS.42.52 LAKHS AND ACCORDINGLY, HE ADDED THE DIFFERENCE AMOUNT OF RS.34.82 LAKHS TO THE INCOME OF THE ASSESSEE. 4. A PERTINENT FACT TO BE NOTED HERE IS THAT ON THE BASIS OF THE SAME INFORMATION, ASSESSEES CASE WAS REOPENED UNDER SECTION 147 AND ASSESSMENT WAS MADE BY MAKING THE SAME I.T.A. NO.4455 & 4456/DEL/2014 3 ADDITION OF RS.34.82 LAKHS PRIOR TO COMPLETION OF ASSESSMENT UNDER SECTION 153A, WHICH WAS COMPLETED ON 26/3/2013. 5. THE LD. CIT (A), TOOK NOTE OF THIS FACT AND HELD THAT IN THE PROCEEDINGS UNDER SECTION 147, THE LD. CIT (A) HAS DELETED THE SAID ADDITION. THE RELEVANT OBSERVATIONS AND FINDINGS OF THE LD. CIT(A) IN THIS REGARD READ AS UNDER:- WITH REFERENCE TO GROUNDS 1.2, 1.3, 1.4 & 1.5, THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER U/S 153A AND 148 WERE DULY CONSIDERED. UPON A CRITICAL EXAMINATION OF THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE APPELLANTS DEFENSE WAS MUCH STRONGER THAN THAT OF THE ID.AO ON ACCOUNT OF THE FOLLOWING FACTORS (I) THE COMMISSIONER OF INCOME TAX (A), GHAZIABAD WHILE PASSING THE ORDER U/S 250 OF THE INCOME TAX ACT HAS OBSERVED AS UNDER GOING THROUGH THE ASSESSMENT ORDER AND SUBMISSION OF DOCUMENTS ON RECORD, I IMMEDIATELY FIND THAT THERE IS NO MERIT IN THE ADDITION MADE OF RS.34,82,000/-. THERE IS NO PROVISION IN THE ACT WHICH HELPS THE A .O. TO DERIVE THE CONCLUSION THAT THE DIFFERENCE BETWEEN THE VALUE OF THE PROPERTY AS PER STAMP DUTY ACT AND THE VALUE OF THE PROPERTY AS PER PURCHASE DEED CAN BE STRAIGHT WAY CONSTITUTED AS ASSESSEE HAS PAID EXCESS PURCHASE CONSIDERATION THAN WHAT DECLARED IN THE PURCHASE DEED. THE PURCHASE HAS BEEN EFFECTED THROUGH REGISTERED DEED AND THE VALUE OF PURCHASE, LEGALLY DECLARED THEREIN AT RS.1,70,000/- HAS TO BE ACCEPTED AS THE ACTUAL SALE CONSIDERATION PAID BY THE ASSESSEE, UNLESS ANY SPECIFIC INCRIMINATING EVIDENCE IS BROUGHT ON RECORD BY THE A .0. THERE IS NO SUCH MATERIAL WITH THE A.O. AND HENCE THE ADVERSE CONCLUSION DERIVED BY THE AO IS NOT WARRANTED. THE SUBSTANTIAL DIFFERENCE BETWEEN THE VALUE AS WORKED OUT I.T.A. NO.4455 & 4456/DEL/2014 4 BY THE REGISTRATION AUTHORITIES AND THE VALUE OF PURCHASE AS DECLARED BY THE ASSESSEE, IS AT BEST, A STARTING POINT FOR ANY FURTHER INQUIRY/ INVESTIGATION, BUT CANNOT BE THE BASE FOR ADDITION. THE AO HAS NOT PROVED ANY SUCH UNDER-HAND DEALING, AND THUS, THE ADDITION IS NOT TENABLE. IN SUCH CASE OF DIFFERENCE, THERE IS A SPECIFIC PROVISION WITH SECTION 50C OF THE INCOME TAX ACT WHICH APPLIES TO THE SELLER AND THE AO WILL BE ADVISED TO ENSURE THAT SUCH APPLICATION OF SECTION 50C HAS BEEN MADE IN THE CASE OF THE SELLER. BUT NO PROVISION OF INCOME TAX ACT, AS ON TODAY, GIVES ANY LEVERAGE TO MAKE THE IMPUGNED ADDITIONS IN THE HANDS OF THE BUYER'. (II) FROM THE PERUSAL OF THE ORDER OF THE ASSESSING OFFICER IT IS CLEAR THAT THE ADDITION OF RS.34,82,000/- MADE BY HIM U/S 69B OF THE INCOME TAX WAS PURELY BASED ON THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT AND NOT ON THE BASIS OF ANY INCRIMINATING MATERIAL RECOVERED IN RESPECT OF THE ALLEGED INVESTMENT DURING THE COURSE OF SEARCH. (III) IT IS INTRIGUING TO NOTE THAT EXCEPT ASSESSMENT ORDER PASSED U/S 143(3) THE ID.DOT CC-15, NEW DELHI HAD NO EVIDENCE OF UNACCOUNTED INVESTMENT IN THE PROPERTIES PURCHASED BY HIM. (IV) THE FOLLOWING JUDICIAL RULINGS ALSO WERE FOUND TO BE OF ASSISTANCE TO THE APPELLANT:- (A) IN THE CASE OF MEGHMANI ORGANICS LTD VS DEPUTY COMMISSIONER OF INCOME-TAX 2010 006 ITR (TRIB) 0360 IT WAS HELD BY ITAT DELHI THAT SECTIONS 153A TO 153C OF THE INCOME- TAX ACT, 1961 WERE INTRODUCED TO AVOID MULTIPLICITY OF PROCEEDINGS AND HAVE ONLY SINGLE ASSESSMENT. IF THE ORIGINAL COMPLETED ASSESSMENTS WHICH ARE THE SUBJECT MATTER OF FURTHER LITIGATION ARE RE-AGITATED UNDER SECTION 153C PROCEEDINGS, IT WILL NOT ONLY MULTIPLY ASSESSMENT PROCEEDINGS BUT ALSO APPELLATE PROCEEDINGS. THE ASSESSING OFFICER IS PRECLUDED FROM RE-AGITATING THE ISSUE WHICH HAS ATTAINED I.T.A. NO.4455 & 4456/DEL/2014 5 FINALITY IN ORIGINAL ASSESSMENT PROCEEDINGS. THE ORIGINAL ASSESSMENT PROCEEDINGS ARE SUBJECT TO FURTHER APPEALS. SO FAR AS THE ORIGINAL ASSESSMENTS ARE CONCERNED, THE JURISDICTION OF THE ASSESSING OFFICER IS OUSTED AND HE IS 'FUNCTUS OFFICIO'. (B) IN THE CASE OF MRS. UTTARA S. SHOREEWALA, PLACED IN THE UNREPORTED PORTION IN'[2011] 48 SOT 6 (MUM), THE ADDITIONS MADE BY THE ASSESSING OFFICER WERE DELETED BY THE COMMISSIONER OF INCOME-TAX (APPEALS). ADDITIONS MADE IN THE 153A PROCEEDINGS WERE HELD TO BE NOT VALID. THE RELEVANT OBSERVATION THAT THE THE INTENTION OF SECTION 153A IS NOT TO DISTURB MATTERS THAT HAVE REACHED FINALITY BETWEEN THE PARTIES. IN THE ASSESSMENTS MADE UNDER SECTION 153A, THEREFORE, THE ASSESSING OFFICER HAD NO JURISDICTION TO INCLUDE THE SAME ADDITIONS, WHICH WERE DELETED BY THE COMMISSIONER (APPEALS) EARLIER AND WHOSE ORDERS HAVE BECOME FINAL''. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE, I DO NOT FEEL INCLINED TO DIFFER FROM THE STAND TAKEN BY THE ERSTWHILE LD. CIT(A), GHAZIABAD THE RELEVANT PORTIONS OF WHOSE ORDER WERE QUOTED ABOVE. 6. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER, WE HOLD THAT WHENCE SAME ADDITION MADE BY THE ASSESSING OFFICER STANDS DELETED BY THE LD. CIT(A) IN THE REGULAR ASSESSMENT PROCEEDINGS UNDER SECTION 147, THEN SAME ADDITION CANNOT BE ROPED IN THE ASSESSMENT UNDER SECTION 153A. THUS, ON THIS GROUND ALONE, THE REVENUES APPEAL CANNOT BE SUSTAINED AND ACCORDINGLY THE SAME IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. I.T.A. NO.4455 & 4456/DEL/2014 6 8. NOW WE WILL COME TO THE APPEAL FOR ASSESSMENT YEAR 2009-10 WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DELETING THE ADDITION OF RS.12,26,79,753/- MADE BY THE ASSESSING OFFICER. 2. (A) THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 9. HERE IN THIS YEAR ALSO THE ORIGINAL RETURN OF INCOME WAS FILED ON 25.11.2009 AND THE LAST DATE FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT WAS 30.9.2010. THUS, ON THE DATE SEARCH AND SEIZURE ACTION IN THE CASE OF THE ASSESSEE ON 9.9.2010, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2009-10 IN TERMS OF PROVISO TO SECTION 153A STOOD ABATED. IN THE IMPUGNED ASSESSMENT ORDER, THE ASSESSING OFFICER OBSERVED THAT DURING THE YEAR ASSESSEE HAD TRANSFERRED IMMOVEABLE PROPERTY TO M/S VRS FOOD LTD. ON 30/6/2009 AND FOR SALE CONSIDERATION, HE WAS ALLOTTED 1,35,886 SHARES WORTH RS.1,69,85,750/ WHICH WAS SHOWN IN THE RETURN OF INCOME. APART FROM THAT, WHILE WORKING OUT THE LONG TERM CAPITAL GAINS, HE HAS TAKEN THE SALE PRICE OF THE LAND @ RS.790/- PER SQ. METER. THE ASSESSING OFFICER HELD THAT SINCE THE LAND IN QUESTION IS SITUATED NEAR BULANDSHAHR, WHICH CAN BE RECKONED AS COMMERCIALLY POTENTIAL AREA AND THIS LAND IS BEING USED BY THE COMPANY FOR ITS BUSINESS PURPOSES, THEREFORE, THE CIRCLE RATE OF THE PROPERTY WHICH IS AROUND RS.10,000/- TO RS.11,000/- PER SQ. METER, THE SAME SHOULD HAVE BEEN TAKEN. AO HELD THAT THE VALUE OF THE PROPERTY SHOULD HAVE BEEN TAKEN AT RS.6,500/- PER SQ. I.T.A. NO.4455 & 4456/DEL/2014 7 METER AND ACCORDINGLY, MADE AN ADDITION OF RS.12,26,79,753/-. IN THIS CASE, REGULAR ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED VIDE ORDER DATED 30.2.2011, WHEREIN EXACTLY SIMILAR ADDITION WITH SIMILAR OBSERVATION WAS MADE BY THE ASSESSING OFFICER AND EXACT SAME ADDITION OF RS.12,26,79,753/- WAS MADE. 10. WE FIND THAT IN THE SAID QUANTUM PROCEEDINGS U/S 143(3), THE TRIBUNAL HAS DELETED THE SAME ADDITION VIDE ORDER DATED 5.4.2013 IN ITA NO. 6163/DEL/2012 FOR THE SAME ASSESSMENT YEAR 2009-10. THIS FACT HAS BEEN NOTED BY THE LD. CIT (APPEAL) ALSO IN THE IMPUGNED ORDER THAT ADDITION MADE IN THE REGULAR ASSESSMENT PROCEEDINGS HAS BEEN REPEATED IN THE ASSESSMENT PASSED UNDER SECTION 153A. THUS, FATE OF SUCH ADDITION IN THE REGULAR ASSESSMENT PROCEEDINGS WILL FOLLOW IN THE PRESENT PROCEEDINGS ALSO, BECAUSE THE SAME ADDITION HAS BEEN REITERATED AND WHENCE THE SAID ADDITION STANDS DELETED BY THE TRIBUNAL THEN, THE SAID ADDITION CANNOT BE NOW ROPED IN THE ASSESSMENT ORDER PASSED UNDER SECTION 153A. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD. CIT (A) IN DELETING THE SAID ADDITION ON THIS GROUND. 11. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH SEPTEMBER, 2017. SD/- SD/- [G.D. AGRAWAL] [AMIT SHUKLA] PRESIDENT JUDICIAL MEMBER DATED: 15 TH SEPTEMBER, 2017 I.T.A. NO.4455 & 4456/DEL/2014 8 JJ:2908 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR DATE 1. DRAFT DICTATED ON 2. DRAFT PLACED BEFORE AUTHOR 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE COMES BACK TO PS/SR. PS 8. UPLOADED ON 9. FILE SENT TO THE BENCH CLERK 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER.