ITO, Mohali V. Sh. Davinder Singh Gill, Mohali

ITA 465/CHANDI/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6781 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 29-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Loose papers; Document seized; Opportunity of being heard; Documents seized
• Section: 142(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.465/CHD/2015 (ASSESSMENT YEAR : 2008-09) THE INCOME TAX OFFICER, VS. SH.DEVINDER SINGH GILL, WARD-6(3), # 81, SECTOR 70, MOHALI. MOHALI. PAN: ANXPG9419K (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.ZEENIA HANDA, ADDL. CIT DR RESPONDENT BY : NONE DATE OF HEARING :04.10.2017 DATE OF PRONOUNCEMENT :13.10.2017 ORDER PER ANNAPURNA GUPTA, A.M. : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APP EALS)- 2, CHANDIGARH DATED 26.2.2015 RELATING TO ASSESSMEN T YEAR 2008-09. 2. BRIEF FACTS RELATING TO THE CASE ARE THAT A SEARCH OPERATION WAS CONDUCTED BY THE OFFICE OF THE CBI, CHANDIGARH AND DOCUMENTS HAVING FINANCIAL IMPLICAT ION RELATING TO PROPERTY TRANSACTIONS WERE FOUND AND SE IZED FROM THE ASSESSEE. THE DDIT(INVESTIGATION)RECORDED THE STATEMENT OF THE ASSESSEE IN THE OFFICE OF CBI, CHA NDIGARH . DURING THE COURSE OF SEARCH SOME TYPED AND HAND WRI TTEN PAPERS AND A JOINT VENTURE AGREEMENT DATED 25.9.200 7 BETWEEN MR.JAI DEV, MR.SUBHASH CHAND, MR.ASHOK KUMA R ALL RESIDENTS OF HOUSE NO.9, BLOCK B-9, RAJPUR TOWN , DISTT. 2 PATIALA AND M/S SKY HEIGHT LAND PROMOTERS PVT. LTD. , MR.AMARJIT SINGH, RESIDENT OF RAJPURA, MR.TARSEM LA L JOSHI, RESIDENT OF RAJPURA, REGARDING LAND OF 12 BIGHA 6 B ISWAS SITUATED AT VILLAGE NEELPUR, TEHSIL RAJPURA WITH CONSTRUCTION THEREON WAS FOUND AND SEIZED. AS PER THIS JOINT VENTURE AGREEMENT, ALL THE THREE PURCHASERS A GREED TO PURCHASE 75% SHARE OF THE ABOVE SAID PROPERTY AND DEVELOP A COMMERCIAL COMPLEX UNDER THE NAME OF RAJPURA PRID E ON THIS LAND. IT WAS FURTHER STATED IN THE AGREEMENT THAT SHRI DEVINDER SINGH GILL, THE ASSESSEE, WOULD BE ENTITLE D TO MAKE THE BOOKING/SALE OF THE COMMERCIAL PROPERTY AN D GET THE SAME TRANSFERRED TO THE PROSPECTIVE BUYERS. WHE N QUESTIONED ABOUT THE DOCUMENTS, THE ASSESSEE ADMITT ED THAT THEY CONTAINED DETAILS OF EXPENDITURE MADE BY HIS COMPANY AND THAT THE CASH AND CHEQUE AMOUNTS MENTIO NED THEREIN WERE ACCURATE. HE FURTHER ADMITTED THAT TH E HAND WRITTEN PAGES NOS. 4 AND 5 CONTAINED DETAILS OF REC EIPTS FROM THE ABOVE PROJECT AND ITS DISTRIBUTION AMONG T HE VARIOUS PARTNERS. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD NOT DISCLOSED THE ABOVE TRANSACTIONS I N HIS RETURN OF INCOME AND HE, THEREFORE, ISSUED NOTICE U /S 148 OF THE ACT FOR REOPENING THE CASE OF THE ASSESSEE FOR THE IMPUGNED YEAR. DURING ASSESSMENT PROCEEDINGS THE ASSESSEE DENIED BEING AWARE THAT HIS STATEMENT WAS RECORDED BY ANY ONE AND FURTHER STATED THAT THE NOT INGS ON THE DOCUMENTS WERE SIMPLY ASSESSMENTS OF THINGS TO COME IF THE PROJECT MATERIALIZED. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND FURTHER 3 ANALYZING THE NOTINGS ON PAGE NOS.4 AND 5 IN WHICH THE TOTAL REVENUE RECEIPTS WERE WORKED OUT TO RS.4.48 C RORES AND RS.4.78 CRORES RESPECTIVELY WITH THE SHARE OF T HE ASSESSEE AT 40% OF THE RECEIPTS, HE CALCULATED THE SHARE OF THE ASSESSEE AT RS.1,83,20,000/-, RS.1,91,20,000/- ON ACCOUNT OF THE SAID TWO RECEIPTS AND HELD THE SAME TO BE INCOME OF THE ASSESSEE FOR THE YEAR AND NADE ADDITI ON OF THE SAME TO HIS RETURNED INCOME. FURTHER EXPENSES MENT IONED IN THE DOCUMENTS AT RS.25,04,000/- AND RS.60,000/- WERE NOT ALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT NO PROOF OF INCURRING SAID EXPENDITURE HAD BEEN FURNIS HED BY THE ASSESSEE. 3. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD.CIT(APPEALS) WHERE NO SUBMISSIONS WERE FILED BY THE ASSESSEE. THE LD.CIT(APPEALS) THEREAFTER AFTER TAK ING NOTE OF THE DOCUMENTS ON THE BASIS OF WHICH THE ADDITION HAD BEEN MADE HELD THAT THE NOTINGS AT PAGE NOS.4 AND 5 WERE THE SAME AND THAT THE ONLY DIFFERENCE WAS THAT TO THE NOTING OF RS.4.48 CORES AT PAGE NO.5 AN AMOUNT OF RS.30,000/- HAD BEEN ADDED AND THE FIGURE WORKED OU T AT RS.4.78 CRORES AT PAGE NO.5. HE, THEREFORE, HELD T HAT BY TAKING BOTH THE NOTINGS AS INCOME OF THE ASSESSEE, THE ASSESSING OFFICER HAD DOUBLY TAXED THE SAME INCOME AND, THEREFORE, HOLDING THE REVISED CALCULATION AT PAGE NO.5 AS CORRECT, LD.CIT(APPEALS) UPHELD THE ADDITION TO T HE EXTENT OF RS.1,91,20,000/- DELETING THE ADDITION MADE OF RS.1,83,20,000/- ON ACCOUNT OF NOTINGS AT PAGE NO.4 . 4 4. AGGRIEVED BY THIS RELIEF GIVEN BY THE LD.CIT(APP EALS), THE REVENUE HAS NOW COME UP IN APPEAL RAISING FOLLO WING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING APPEAL OF THE ASSESSEE WITHOUT APPRECIATING THE FACTS OF THE CASE . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETIN G AN ADDITION OF RS.1,83,20,000/- THAT WAS MADE BY THE A O ON ACCOUNT OF 40% OF THE RECEIPT RS.4.48 CRORE MENTION ED AT PAGE NO. 4 OF THE DOCUMENT SEIZED DURING THE SEARCH PARTICULARLY WHEN THE ASSESSEE COULD NOT EXPLAIN TH E SAME DURING ASSESSMENT AND ALSO FAILED TO APPEAR OR SUBMIT ANY REPLY DURING THE APPELLATE PROCEEDINGS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE DECISION OF LD. CIT(A) IS PERVERSE IN DELETING AN ADDITION OF RS.1,83,20,000/- THAT WAS MADE BY THE AO ON ACCOUNT OF 40% OF THE RECEIPT RS. 4.48 CRORE MENTIONED AT PAGE NO.4 OF THE DOCUMENT SEIZED DURING THE SEARCH, WITHOUT PROVIDING AN OPPORTUNITY OF BEING HEARD TO AO PARTICULAR WHEN THE ASSESSEE HAS NEITHER APPEARED BEFORE THE CIT(A) NOR SUBMITTED AN Y WRITTEN EXPLANATION DURING APPELLATE PROCEEDINGS. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROU NDS OF APPEAL BEFORE THE APPEAL IS HEARD OR IS DISPOSED OFF. 5. DURING THE COURSE OF HEARING BEFORE US, NONE APP EARED ON BEHALF OF THE ASSESSEE DESPITE SEVERAL OPPORTUNI TIES GIVEN IN THE PAST. NO APPLICATION FOR ADJOURNMENT WAS ALSO FILED BY THE ASSESSEE. THE CASE WAS, THEREFORE, PR OCEEDED TO BE HEARD IN VIEW OF THE VARIOUS OPPORTUNITIES AFFOR DED EARLIER TO THE ASSESSEE. 6. THE LD. DR DURING THE COURSE OF HEARING BEFORE U S POINTED OUT THAT THE LD.CIT(APPEALS) HAD DELETED TH E ADDITION MADE ON ACCOUNT OF RECEIPTS SHOWN AT PAGE NO.4 OF THE DOCUMENTS SEIZED, SUO MOTO WITHOUT PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSING OFFICER MORE 5 PARTICULARLY WHEN THE ASSESSEE HAD NEITHER APPEARED NOR SUBMITTED ANY WRITTEN SUBMISSIONS BEFORE THE LD.CIT(APPEALS). THE LD. DR POINTED OUT FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HAD CATEGORICALLY POINTED OUT DIFFERENCE BETWEEN TWO RE CEIPTS WITH THE RECEIPTS AT PAGE NO.5 BEING MENTIONED AS I NCOME FROM SHOW ROOMS WHILE THE RECEIPT AT PAGE NO.4 AS S HARE OF SHRI DEVINDER SINGH GILL . THE LD. DR DREW OUR ATT ENTION TO THE FINDINGS OF THE ASSESSING OFFICER AT PAGE NOS.9 AND 10 OF THE ASSESSMENT ORDER AS UNDER: THE ASSESSEE HAS IN THIS STATEMENT GIVEN THE DETAILS OF THE RAJPURA PROJECT ON WHICH SUBSTANTIAL INVESTMENT AND SUBSTANTIAL RECEIPT WAS RECEIVED THERE FROM. THE JOI NT VENTURE AGREEMENT IS DATED 25.09.2007 AND EXECUTED AT RAJPURA AMONGST SH. JAI DEV, SH. SUBHASH CHAND, SURESH KUMAR, ASHOK KUMAR AND SATISH KUMAR BEING PARTY OF THE FIRS T PARTY, SKY HEIGHTS LAND PROMOTER (P) LTD SECOND PARTY, SH. AM ARJEET SINGH THIRD PARTY AND TARSEM LAI FOURTH PARTY AND T HE SAME IS IN RESPECT OF RAJPURA PRIDE PROJECT WHERE A SHOWROO M WAS CONSTRUCTED. THE DOCUMENTS ACCOMPANYING THIS PROJEC T PAPERS SHOWS THE WORKING OF REVENUE RECEIPTS ON ONE SIDE AND THE CORRESPONDING EXPENSES INCURRED ON THE SAME. THE ASSESSEE HAS IN HIS STATEMENT CATEGORICALLY STATED THA T D.S. GILL REFERS TO HIMSELF WHICH IS A SUBSTANTIAL ADMISS ION BY HIM. THIS VERY ADMISSION GOES TO SHOW THAT THE RECEIPTS THEREOF BELONG TO HIM. AS PER THIS PAPER THE DETAILS PERTAINI NG TO THE ASSESSEE ARE AS UNDER:- TOTAL REVENUE RECEIPTS 3.78 + 70 4.48 CRORES SHARE OF D.S. GILL 4.58X40% 1.832 CRORES 15 TN MARCH 20 % SHARE FOR EXPENSES D.S. GILL 87,60,000/ - X 40% 35,04, 000/ - ESTI MATED EXPENSES 1.5 CRORES SHARE OF GILL 1 .5 CR X 40% 60,00, 000/ - INCOME ON EACH IN SR SHARE OF GILL 4.78 CRORES X 40% 1,91,20,000/ 6 FROM THE ABOVE DETAILS IN THE PAPERS ACCOMPANYING THE DOCUMENTS IT IS EVIDENT THAT THE ASSESSEE HAS HAD THE FOLLOWING REVENUE RECEIPTS:- SHARE OF D.S.GILL 4.58 CR. X40% 1,83,20,000 SHARE OF GILL VIS-A- VIS INCOME IN SHOWROOMS 4.78 CR X 40% 1,91,20,000/- TOTAL RECEIPT WORKS TO 3,74,40,000/- EXPENSES OUT OF TOTAL EXPENDITURE OF 3.78 CRORES SHARE OF GILL 8 7,60,000/ - X 40% 35,04, 000/ - ESTIMATED EXPENDITURE OF 1.5 CRORES SHARE OF GILL 1.50 CR X 40% 60,00,000/- A TOTAL EXPENDITURE 95,04,000/ - AGAINST THE TOTAL RECEIPT OF RS. 3,74,40,000/- PERT AINING TO THE ASSESSEE THE EXPENDITURE PERTAINING TO HIS SHARE AS S TATED IN THE LOOSE PAPERS IS RS. 95,04,000/-, NO PROOF OF TH E INCURRING OF THE SAID EXPENDITURE HAS BEEN FURNISHED BY THE ASSE SSEE. NO ADEQUATE RESPONSE TO THE NOTICE U/S 142(1) OR NOTIC E U/S 148 ISSUED EARLIER HAS BEEN FORTHCOMING FROM THE ASSESSE E. IN THE ABSENCE OF ANY ADEQUATE PROOF OF THE EXPENDITURE IN CURRED HAVING BEEN FURNISHED THE SAME IS NOT ALLOWABLE. THE AB OVE ENTIRE REVENUE RECEIPT OF RS. 3,74,40,000/- IS TREA TED AS HIS INCOME FROM SOURCES NOT DISCLOSED TO THE DEPARTMENT . 7. THE LD. DR, THEREFORE, STATED THAT WITHOUT CLARIFYI NG THE FACTS OF THE RECEIPT SHOWN AT PAGE NOS.4 AND 5 FROM THE ASSESSING OFFICER THE LD.CIT(APPEALS) HAD ERRED IN SUO MOTO COMING TO THE CONCLUSION THAT THE FIGURES IN BOTH T HE PAGES RELATED TO THE SAME INCOME OF THE ASSESSEE. THE LD . DR URGED BEFORE US THAT THE MATTER BE REMANDED TO THE LD.CIT(APPEALS) FOR A FRESH HEARING AFTER GIVING DU E OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER. 8. HAVING HEARD CONTENTION OF THE LD. DR AND ON PER USING THE ASSESSMENT ORDER WE FIND MERIT IN THE CONTENTIO N OF THE LD. DR. CLEARLY THE ASSESSING OFFICER AND THE CIT( APPEALS) HAVE INTERPRETED THE DOCUMENTS DIFFERENTLY AND THE LD.CIT(APPEALS) WHILE DOING SO, SHOULD HAVE INVITED THE 7 COMMENTS OF THE ASSESSING OFFICER BEFORE GIVING A F INDING ON THE ISSUE. WE DO NOT FIND REFERENCE TO ANY SUCH CO MMENTS INVITED FROM THE ASSESSING OFFICER BY THE CIT(APPEA LS). THEREFORE, WE RESTORE THE ISSUE BACK TO THE CIT(APP EALS), WITH THE DIRECTION TO DECIDE IT AFRESH AFTER CALLIN G FOR A REMAND REPORT ON THE MATTER AND AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 13 TH OCTOBER, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)S 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH