ACIT, New Delhi V. Smt. Rashmi Wadhwa, New Delhi

ITA 453/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6859 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 22-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJIT SINGH
• Keywords: Search and seizure; Salary income; Tax effect
• Section: 69C; 143(3); 142(1); 153A; 132

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH F, NEW DELHI BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 6793/DEL./2014 ASSESSMENT YEAR: 2007-08 RASHMI WADHWA, C/O M/S. RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI. PAN- AAGPW6899R (APPELLANT) VS. DCIT, CENTRAL CIRCLE - 8, NEW DELHI (RESPONDENT) ITA NO. 453/DEL./2015 ASSESSMENT YEAR: 2007-08 DCIT, CENTRAL CIRCLE - 8, NEW DELHI (APPELLANT) VS. RASHMI WADHWA, C/O M/S. RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI. (RESPONDENT) A SSESSEE BY SH. TARUN KUMAR, ADVOCATE RE VENUE BY SH. SANJIT SINGH, CIT/DR ORDER PER L.P. SAHU, A.M.: THESE TWO APPEALS HAVE FILED BY THE ASSESSEE AS WE LL AS THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-XXXII, NEW DELHI DA TED 10.10.2014 FOR THE ASSESSMENT YEAR 2007-08. 2. AS FAR AS THE APPEAL OF THE REVENUE IS CONCERNED , THE LD. DR, ALTHOUGH SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT C OULD NOT CONTROVERT THE FACT THAT TAX EFFECT INVOLVED IN THIS APPEAL IS LESS THA N RS.20,00,000/- AND THAT THE DATE OF HEARING 19.07.2018 DATE OF PRONOUNCEMENT 25 .07.2018 ITA NO. 6793/DEL./2014 & 453/DEL./2015 2 SAME IS NOT MAINTAINABLE IN VIEW OF RECENT CIRCULAR OF CBDT NO. 3/2018 DATED 11 TH JULY, 2018, WHEREBY THE MONETARY LIMIT OF TAX EFFE CT FOR NOT FILING APPEALS BEFORE THE TRIBUNAL HAS BEEN REVISED TO RS.20,00,00 0/-. THIS CIRCULAR CONTAINS CLEAR INSTRUCTIONS TO THE DEPARTMENT TO WITHDRAW OR NOT TO PRESS SUCH APPEALS FILED BEFORE THE ITAT WHEREIN TAX EFFECT INVOLVED D OES NOT EXCEED RS.20,00,000/- IT IS NOT THE CASE OF THE REVENUE THAT THE PRESENT APPEAL COMES WITHIN THE SWEEP OF EXCLUSION CLAUSES AS GIVEN IN PARA NO. 10 & 11 O F THIS CIRCULAR. THUS, GOING BY THE PRESCRIPTION OF THE AFORE-NOTED CIRCULAR, AND W ITHOUT GOING INTO MERITS OF THE CASE, WE DISMISS THE APPEAL FILED BY THE REVENUE, B EING NOT MAINTAINABLE, AS THE TAX EFFECT INVOLVED IN THIS APPEAL IS LESS THAN RS. 20.00 LACS. 3. THE ASSESSEE IN ITS APPEAL HAS RAISED FOLLOWING GROUNDS : 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACT ION OF LD. AO IN FRAMING THE IMPUGNED ASSESSMENT ORDER U/S 153A/143(3) WITHO UT ASSUMING JURISDICTION AS PER LAW AND WITHOUT SERVING THE VAL ID NOTICES AS PER LAW AND WITHOUT RECORDING REQUISITE SATISFACTION AS PER LAW AND WITHOUT OBTAINING REQUISITE APPROVAL AS PER LAW AND WITHOUT COMPLYING WITH OTHER MANDATORY CONDITIONS UNDER THE ACT AND WITHOUT SERVING THE MA NDATORY NOTICES U/S 143(2) AND 142(1) OF INCOME TAX ACT, 1961. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACT ION OF LD. AO IN MAKING NOTIONAL ADDITION OF RS.2,90,000/- ON ACCOUNT OF FO REIGN TRAVEL U/S 69C AND THAT TOO BY DISREGARDING THE EVIDENCES/SUBMISSIONS FILED BY THE ASSESSEE AND BY RECORDING INCORRECT FACTS AND FINDINGS AND IN AN Y CASE IMPUGNED ADDITION IS BEYOND THE SCOPE AND JURISDICTION OF THE IMPUGNE D ASSESSMENT ORDER. 3. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITION OF RS.2,90,000/- ON ACCOUNT OF FOREIGN TRAVEL AND FRAMING THE IMPUGNED ASSESSMENT ORDER IS CONTRARY TO LAW AND FACTS, VOID AB INITIO, AND WITH OUT GIVING ADEQUATE ITA NO. 6793/DEL./2014 & 453/DEL./2015 3 OPPORTUNITY OF HEARING, BY RECORDING INCORRECT FACT S AND FINDINGS AND THE SAME IS NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUA L GROUNDS. 4. THE BRIEF FACTS OF THE CASE AS CULLED OUT FROM T HE ORDERS OF THE AUTHORITIES BELOW ARE THAT THE ASSESSEE IS AN INDIVIDUAL, AND D URING THE YEAR UNDER CONSIDERATION DERIVED INCOME FROM SALARY AND OTHER SOURCES. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT ACT, 1961 WAS C ONDUCTED BY THE INVESTIGATION WING OF THE DEPARTMENT IN NUSSLI (SWI TZERLAND) LTD. GROUP OF CASES ON 19.10.2010 AND SINCE THE APPELLANT WAS A MEMBER OF THIS GROUP, HER PREMISES WAS ALSO SIMULTANEOUSLY SEARCHED. THEREAFTER, THE C ASE OF THE APPELLANT WAS CENTRALIZED WITH THE ASSESSING OFFICER OF CENTRAL C IRCLE-8, NEW DELHI U/S 127. ON THE BASIS OF THIS SEARCH OPERATION, NOTICE U/S 153A WAS ISSUED AND SERVED UPON THE ASSESSEE ON 08.01.2013. IN RESPONSE TO THE SAME , THE ASSESSEE FILED HER RETURN OF INCOME ON 31.03.2008 DECLARING AN INCOME OF RS.1,89,665/-. THEREAFTER, NOTICES U/S 143(2) AND 142(1) ALONG WIT H THE DETAILED QUESTIONNAIRE WERE ISSUED AND SERVED UPON THE ASSESSEE. IN RESPON SE TO THE SAME, THE AR OF THE APPELLANT ATTENDED THE ASSESSMENT PROCEEDINGS A ND FILED VARIOUS INFORMATION AND EXPLANATIONS. THE ASSESSMENT WAS CO MPLETED IN TERMS OF AN ORDER U/S 153A R.W.S 143(3) OF THE I T ACT, 1961 AT A TOTAL INCOME OF RS.43,09,670/- AS AGAINST THE RETURNED INCOME OF RS .1,89,665/- WHEREIN THE ASSESSING OFFICER MADE THE FOLLOWING ADDITIONS OF R S.35,00,000/- ON ACCOUNT OF SALE OF LAND, RS.2,90,000/- U/S. 69C ON ACCOUNT OF FOREIGN TRIP EXPENSES AND RS.3,30,000/- ON ACCOUNT OF LOW HOUSEHOLD EXPENSES. IN APPEAL, THE LD. CIT(A) SUSTAINED THE ADDITION OF RS.2,90,000/- MADE ON ACC OUNT OF FOREIGN TRIP EXPENSES MADE U/S. 60C OF THE ACT AND DELETED REMAINING TWO ADDITIONS, AS NOTED ABOVE. AGGRIEVED BY THE SUSTENANCE OF THE ADDITION, THE AS SESSEE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO. 6793/DEL./2014 & 453/DEL./2015 4 5. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE AT THE OUTSET STATED THAT THE ISSUE UNDER CONSIDERATION IS COVERE D VIDE ORDER DATED 19.10.2015 OF COORDINATE BENCH IN ITA NO. 501 & 502 /DEL./2015 FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10. (COPY OR ORDE R PLACED ON RECORD) AS WELL AS THE ORDER DATED 18.01.2016 IN ITA NO. 5184/ DEL./2014 FOR A.Y. 2005-06 AND DATED 21.01.2016 IN ITA NO. 500/DEL./2015 FOR A .Y. 2006-07 IN ASSESSEES OWN CASES. COPY OF THESE ORDERS IS ALSO PLACED ON R ECORD. 6. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE LOWER AUTHORITIES. 7. AFTER HEARING BOTH THE SIDES AND PERUSING THE EN TIRE MATERIAL AVAILABLE ON RECORD AND THE ORDERS OF THE COORDINATE BENCH OF TR IBUNAL RELIED BY THE ASSESSEE, WE FIND THAT THE ISSUE UNDER CONSIDERATION IS SQUAR ELY COVERED BY THE ABOVE DECISIONS OF THE TRIBUNAL. FOR READY REFERENCE, WE THINK IT APPROPRIATE TO REPRODUCE THE DECISION IN THE CASE OF ASSESSEE FOR A.Y. 2006-07, WHEREBY THE TRIBUNAL AFTER RELYING ON EARLIER DECISION OF THE C OORDINATE BENCH HAS DELETED THE SIMILAR ADDITION IN THE IDENTICAL FACTS AND CIR CUMSTANCES OF THE CASE. THE OBSERVATIONS OF THE COORDINATE BENCH READ AS UNDER : 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IT IS NOTICED THAT THE FACTS OF THE PRESENT CASE ARE IDEN TICAL TO THE FACTS INVOLVED IN THE ASSESSEES OWN CASE FOR THE ASSESSM ENT YEAR 2005- 06, WHICH WE HAVE ALREADY DISPOSED OFF VIDE OUR ORD ER DATED 18.01.2016 IN ITA NO. 5184/DEL/2014 AND THE ISSUE H AS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY OBSERVING IN P ARAS 7 & 8 AS UNDER: 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IT IS NOTICED THAT A SIMILAR ISSUE HAVING IDENTICAL FA CTS WAS A SUBJECT MATTER OF ADJUDICATION IN ITA NO. 501 & 502 /DEL/2015 FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10 RESPEC TIVELY IN ITA NO. 6793/DEL./2014 & 453/DEL./2015 5 ASSESSEES OWN CASE WHEREIN VIDE ORDER DATED 19.10. 2015, ITAT DELHI BENCH SMC-2, NEW DELHI, BY FOLLOWING THE ORDE R OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS KAB UL CHAWLA PASSED IN ITA NOS. 707, 709, 713/2014 ORDER DATED 2 8.08.2015 DELETED THE ADDITION AND THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARAS 5 & 6 OF THE ORDER DATED 19.10.2015 WHICH READ AS UNDER: 5. ADMITTEDLY NO INCRIMINATING MATERIAL WAS FOUND OR SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION U /S. 132 OF THE ACT IN THE CASE OF THE ASSESSEE. IT IS ALSO NO T IN DISPUTE, THAT THE ASSESSMENT FOR BOTH THESE ASSESSMENT YEARS HAVE NOT ABATED. UNDER THE CIRCUMSTANCES, I FIND THAT THE I SSUE IS COVERED IN FAVOUR OF THE ASSESEE AND AGAINST THE RE VENUE BY THE DECISION DATED 28.8.2015 OF THE HONBLE DELHI H IGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA PASSED IN ITA NO. 707, 709 AND 713/2014 HELD HAS UNDER:- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW E XPLAINED IN THE AFOREMENTIONED ITA NOS. 707, 709 AND 713 OF 201 4 OF DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UN DER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF T HE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MAND ATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEA R RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS W ILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHI CH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED S IX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEAR S. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RE SPECT OF EACH OF THE SIX AYS IN WHICH BOTH THE DISCLOSED AN D THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INF ORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE E VIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY ITA NO. 6793/DEL./2014 & 453/DEL./2015 6 OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEI ZED MATERIAL. OBVIOUSLY AN ITA NOS. 707, 709 AND 713 OF 2014 OF ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECT ION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PEND ING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETE D ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND T HE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ON LY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIA L EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONL Y ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURI NG THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UN DISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005 -06 AND 2006-07.ON THE DATE OF THE SEARCH THE SAID ASSESSME NTS ALREADY STOOD COMPLETED. SINCE NO INCRIMINATING MAT ERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 6. RESPECTFULLY FOLLOWING THE PRECEDENT OF THE HON BLE JURISDICTIONAL HIGH COURT AS AFORESAID, I ALLOW TH E APPEAL OF THE ASSESSEE, AS THE ASSESSMENTS IN BOTH THESE CASE S PASSED U/S. 153A R.W.S. 143(3) WERE NOT MADE, BASED ON ANY INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE C OURSE OF SEARCH OF THEREAFTER. THE ADDITIONS ARE PURELY BA SED ON THE MATERIAL ALREADY AVAILABLE ON RECORD. HENCE, ALL T HE ADDITIONS IN BOTH THE CASES ARE DELETED AND THE GROUND RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE ALLOWED. 8. SINCE THE FACTS FOR THE YEAR UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS INVOLVED IN ASSESSEES OWN C ASE FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10 IN ITA NOS. 50 1 & ITA NO. 6793/DEL./2014 & 453/DEL./2015 7 502/DEL/2015 (SUPRA) SO RESPECTFULLY FOLLOWING THE ORDER DATED 19.10.2015, THE IMPUGNED ADDITION IS DELETED. 9. SO, RESPECTFULLY FOLLOWING THE AFORESAID REFERRE D TO ORDER DATED 18.01.2016 IN ITA NO. 5184/DEL/2014 FOR THE ASSESSM ENT YEAR 2005-06 IN ASSESSEES OWN CASE, WE ALLOW THE APPEAL IN FAVOUR OF THE ASSESSEE AND THE ADDITION MADE BY THE AO AND SU STAINED BY THE LD. CIT(A) IS DELETED. 8. IN THE INSTANT CASE ALSO, NO ANY INCRIMINATING M ATERIAL WAS FOUND DURING THE COURSE OF SEARCH REGARDING ADDITIO N MADE BY THE ASSESSING OFFICER OF RS.2,90,000/- ON ACCOUNT OF FO REIGN TRIP EXPENSES. THE ASSESSMENT FOR THE YEAR UNDER CONSIDE RATION WAS ALSO NOT ABATED. THERE IS NO CHANGE IN THE FACTS AND CIR CUMSTANCES OF THE CASE. ACCORDINGLY, RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF CO- ORDINATE BENCH, THE ISSUE IS FOUND COVERED IN FAVOU R OF THE ASSESSEE AND AGAINST THE REVENUE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED AND THAT OF THE REVENUE IS DISMISSED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JULY, 2018. SD/- SD/- (BHAVNESH SAINI) ( L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25 TH JULY, 2018 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI