ACIT, Faridabad V. M/s. Survival Die Cast (Pvt.) Ltd, Faridabad

ITA 4769/DEL/2009

• Counselvise Citation: 476920114 RSA 2009
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 20-10-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 17-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C JAIN
• Assessee Lawyers: S MOHANTHY
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 69B; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 4769/DEL/2009 ASSESSMENT YEAR: 2001-02 ASSISTANT COMMISSIONER OF IT, VS. M/S. SURVIVAL DI E CAST (P) LTD. CIRCLE-II, 3284,NANGLA ROAD , FARIDABAD. JAWAHAR COLONY, FARIDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SC JAIN, CA RESPONDENT BY: SHRI S. MOHANTHY, DR DATE OF HEARING : 21.11.2011 DATE OF PRONOUNCEMENT : 09.12.2011 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 13.11.2009 PASSED FOR ASSESSMENT YEAR 2001-02. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LEARNED C IT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.8,41,000 WHICH WAS ADDE D BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INCOME UNDER SEC. 69B OF THE INCOME-TAX ACT, 1961. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HIS RETURN OF INCOME ON 12.10.2001 FOR ASSESSMENT YEAR 2001-02 IN WARD NO.2, FARIDABAD. LEARNED ASSISTANT COMMISSIONER OF INCOME -TAX, CIRCLE-2, 2 FARIDABAD, HAD RECEIVED AN INFORMATION FROM THE DCI T, CENTRAL CIRCLE, FARIDABAD WHEREBY IT WAS INTIMATED TO THE ASSESSING OFFICER THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED UNDER SEC. 132 OF THE ACT IN THE CASE OF MANAV RACHANA GROUP AT FARIDABAD. A LOOSE PAPER WAS FOUND FROM THE RESIDENCE OF SHRI NAVNEET JHAMB WHICH CONTAINS THE LIST OF CERTAIN SALE AND PURCHASES OF PLOTS. THE ASSESSEE HAD PURCHASED A PL OT OF LAND MEASURING 1213 SQ. YDS. AT VILLAGE JHARSAITLY, DISTRICT FARID ABAD FROM ONE M/S. INDO- AMERICAL ELECTRICALS LTD. ON 28.2.2001. ACCORDING T O THE ASSESSING OFFICER, THE SALE DEED WAS EXECUTED FOR A CONSIDERATION OF R S.4,90,000 BUT AS PER THE DETAILS AVAILABLE IN THE SEIZED MATERIAL, THE LAND WAS PURCHASED FOR AN AMOUNT OF RS.13,31,000. THE AMOUNT OF RS.8,41,000 W AS PAID IN CASH AND IT CONSTITUTES UNDISCLOSED INVESTMENT BY THE ASSESSEE WITHIN THE MEANING OF SEC.69B OF THE ACT. HE ISSUED A SHOW-CAUSE NOTICE U NDER SEC. 148 AND REOPENED THE ASSESSMENT. IN RESPONSE TO THE NOTICE, IT WAS CONTENDED BY THE ASSESSEE THAT THE RETURN FILED ORIGINALLY BE TREATE D AS RETURN FILED IN RESPONSE TO THIS NOTICE. THE ASSESSEE HAS CONTENDED THAT IT HAS PURCHASED THE PLOT FOR A SUM OF RS.4,90,000. IT HAS MADE THE PAYMENT THROUGH ACCOUNT PAYEE CHEQUES AND STAMP DUTY WAS ALSO PAID ON THIS AMOUNT. ASSESS ING OFFICER, HOWEVER, DID NOT CONCUR WITH THE SUBMISSIONS MADE BY THE ASS ESSEE. SHE OBSERVED THAT IN THE SEIZED MATERIAL, THE RATES OF VARIOUS LAND H AVE BEEN NOTED WHICH VARY 3 FROM RS.293 PER SQ. YD. TO RS.800 PER SQ. YD. THE R ATES SHOWN AGAINST THE PLOT OF ASSESSEE IS 13,31,000 UNDER THE COLUMN CASH , A SUM OF RS.8,41,000 HAS BEEN NOTICED. THUS, THE SEIZED DOCUMENT DULY DE PICT THAT ASSESSEE HAS PURCHASED THE PLOT FOR A SUM OF RS.13,31,000. SHE M ADE AN ADDITION OF RS.8,41,000. ON APPEAL, LEARNED CIT(APPEALS) DELETE D THE ADDITION ON THE GROUND THAT SEIZED PAPER WAS NOT FOUND AT THE PREMI SES OF THE ASSESSEE OR VENDOR. SHRI NAVNEET JHAMB IS A PARTNER OF RELIANCE ESTATES AGENCY. WHEN ASSESSING OFFICER WROTE A LETTER TO HIM ABOUT THE D EAL MATERIALIZED WITH THE ASSESSEE, IT WAS REPLIED THAT THEY DO NOT KNOW M/S. SURVIVAL DYE CAST LTD. I.E. THE ASSESSEE. THEY HAVE REPRESENTED THE SELLER ONLY M/S. INDO AMERICAN ELECTRICAL LTD. AND RECEIVED THE COMMISSION. ACCORD ING TO THE LEARNED CIT(APPEALS), THERE IS NO EVIDENCE POSSESSED BY THE ASSESSING OFFICER TO DEMONSTRATE THAT PLOT IN DISPUTE WAS PURCHASED BY T HE ASSESSEE FOR A SUM OF RS.13,31,000. 3. LEARNED DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SEIZED MATERIAL CONTAINS INFORMATION IN A TABULAR FORM WHICH IS AVAILABLE AT PAGE 27 OF THE PAPER BOOK. A LARGE NUMBER OF PLOTS ALLEGED TO HAVE BEEN NOTED BY SHRI NAVNEET JHAMB IN THESE DETAILS. THIS PAPER WAS CONSIDERED B Y THE ITAT IN THE CASE OF 4 DUA AUTO COMPONENTS IN ITA NO.4802/DEL/2009 FOR ASS ESSMENT YEAR 2003- 04 AND ITAT HELD THAT IT IS NOT SUFFICIENT EVIDENCE WITH THE ASSESSING OFFICER WHICH CAN DEMONSTRATE THE UNEXPLAINED INVES TMENT BY AN ASSESSEE. HE RELIED UPON THE ORDER OF THE ITAT. 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT AN IDENTICAL ENTRY I N THE SAME SEIZED MATERIAL HAS FALLEN FOR CONSIDERATION OF THE ITAT IN THE CAS E OF M/S. DUA AUTO COMPONENTS. THE ITAT HAS DISMISSED THE APPEAL OF TH E REVENUE BY RECORDING FOLLOWING FINDINGS: 6.1 WE FIND THAT THAT THE ASSESSING OFFICER HAS NOT BROUGHT EVEN A SINGLE WORD REGARDING THE NATURE OF DOCUMENT AND HO W HE HAS CONCLUDED THAT THEY BELONG TO THE ASSESSEES AND TH AT ON MONEY TRANSACTION HAS BEEN TAKEN PLACE. HE HAS SIMPLY RE LIED UPON THE REASONS RECORDED WITHOUT SHOWING ANY APPLICATION O F MIND ON HIS PART. 6.2 IN THIS REGARD WE NOTE THAT IT IS ALSO NOT THE CASE THAT THE SELLER HAS MADE ANY STATEMENT OR HAD ACCEPTED THE RECEIP T OF ON MONEY I.E. CONSIDERATION OVER AND ABOVE THAT DISCLOSED. IT I S ALSO NOT THE CASE THAT THE SEIZED DOCUMENTS WERE IN THE HANDWRITING O F THE ASSESSEE OR THE SELLER OR WERE SEIZED FROM THE PREMISES OF SELL ER AND PURCHASER. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS BROUG HT OUT VARIOUS 5 DISCREPANCIES IN THE SEIZED DOCUMENTS RELIED UPON BY THE REVENUE AND STRIKING FEATURE OF THESE ANOMALIES IS THAT IN THE SEIZED DOCUMENTS, IT HAS BEEN MENTIONED THAT THE IMPUGNED PLOT WAS N OT SOLD. THUS, THE WORKING AND THE FIGURES MENTIONED THEREIN CAN AT B EST BE SAID TO BE TENTATIVE OR EXPECTED AMOUNT. THIS BY NO STRETCH OF IMAGINATION CAN BE TREATED AS CONCLUSIVE PROOFS OF ON MONEY TRANSA CTIONS. MOREOVER, IT IS AN ADMITTED FACT THAT THE DOCUMENTS BEING RE LIED UPON SHOWED ACCOUNT AS ON 31.10.2001, WHILE AS PER THE REGISTER ED SALE DEED THE PLOT WAS SOLD ON 23.5.2002. UNDER THE CIRCUMSTANC ES, THESE ADDITIONS HAVE BEEN MADE ON THE BASIS OF DOCUMENTS FOUND DU RING SEARCH AT THE PLACE OF A THIRD PARTY WHICH AT BEST ONLY SHOWED TH E TENTATIVE /PROJECTED PURCHASE CONSIDERATION. IT IS NOT THE C ASE THAT THE CIRCLE RATE OR THE VALUE AS PER STAMP REGISTRATION AUTHORI TIES OF THE IMPUGNED PROPERTY IS MORE THAN WHAT HAS BEEN DISCLOSED. I T IS ALSO NOT THE CASE THAT UNACCOUNTED CASH HAS BEEN FOUND TO BE PAID BY THE ASSESSEE OR RECEIVED BY THE SELLER. THERE IS ALSO NO STATEM ENT OF THE SELLER ON RECORD THAT HE HAS OBTAINED ON MONEY. UNDER THE C IRCUMSTANCES, THE ADDITIONS MADE IN THIS REGARD IS NOT SUSTAINABLE. 6.3 IN THIS REGARD, WE PLACE RELIANCE UPON THE HON BLE APEX COURT IN THE CASE OF K.P. VARGHESE VS. INCOME TAX OFFICE R, ERNAKULAM AND ANOTHER 131 ITR 597 (SC), WHEREIN IT HAS BEEN HELD THAT THE BURDEN OF PROVING IS THAT OF REVENUE WHEN THERE IS ALLEGAT ION OF UNDERSTATEMENT ON CONCEALMENT IN THE CONSIDERATION SHOWN. 6.4 WE ALSO PLACE RELIANCE UPON THE JUDGEMENT OF TH E HONBLE APEX COURT IN THE CASE OF C.I.T. VS. P.V. KALYANASUNDARAM IN (2007) 294 6 ITR 49 (SC) IN WHICH ALLEGATIONS OF ON MONEY TRANSACTION ON THE BASIS OF NON-CONVINCING LOOSE SHEETS FOUND DURING THE COU RSE OF SEARCH AND CONFLICTING STATEMENT OF THE SELLER, WAS DELETED BY THE TRIBUNAL (TO WHICH, ONE OF US THE ACCOUNTANT MEMBER WAS THE PART Y) AND THE SAME WAS AFFIRMED BY THE HONBLE HIGH COURT AND HON BLE APEX COURT. 6.5 WE ALSO FIND THAT IN THE GROUNDS OF APPEAL TH E REVENUE HAS URGED THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS. 60,36,000/- PAID IN CA SH AS THE SOURCE OF INVESTMENT WERE NOT PROVED BEFORE THE ASSESSING OFF ICER IN SPITE OF SEVERAL OPPORTUNITIES AFFORDED TO THE ASSESSEE. IN OUR OPINION, THIS GROUND ITSELF IS MISCONCEIVED, IN AS MUCH AS THE Q UESTION OF PROVING THE SOURCE OF INVESTMENT WILL ARISE ONLY WHEN THE INVESTMENT IS CONCLUSIVELY PROVED. WE HAVE ALREADY FOUND ABOVE T HAT THE CLAIM OF ON MONEY TRANSACTIONS HAS NOT AT ALL PROVED IN THIS CASE. AS HELD BY THE HONBLE SUPREME COURT DECISIONS ABOVE, THE ONUS IS THAT OF REVENUE TO PROVE THE SAME AND AS CLEARLY FOUND BY U S ABOVE THE REVENUE HAS FAILED TO DO SO THE SAME. 6.6 ACCORDINGLY, IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENTS, WE UPHOLD THE ORDER OF THE LD. COMMISS IONER OF INCOME TAX (APPEALS). 7. IN THE RESULT, APPEAL FILED BY THE REVENUE STA NDS DISMISSED. 7 5. APART FROM THE ABOVE, WE FIND THAT MR. NAVNEET J HAMB IS NEITHER THE VENDOR NOR IN ANY MANNER CONNECTED WITH THE ASSESSE E. THE PAPER WAS NOT FOUND EITHER FROM THE PREMISES OF THE ASSESSEE OR T HE VENDOR. MR. NAVNEET JHAMB WAS NOT SUBJECTED TO CROSS-EXAMINATION. TO OU R MIND, ASSESSEE CANNOT BE BURDEN WITH TAX LIABILITY ON THE BASIS OF NARRAT IONS NOTED BY ANY THIRD PERSON. ASSESSING OFFICER WAS UNABLE TO LEY HIS HAN DS ON ANY CONCRETE MATERIAL EXHIBITING THE FACTS THAT ASSESSEE HAS PAI D SOMETHING MORE THAN THE ONE REFLECTING IN THE REGISTERED SALE DEED. THE ALL EGED PAPER COULD BE A STARTING POINT OF INVESTIGATION BUT ADDITION CANNOT BE MADE SOLELY ON THE BASIS OF PAPERS FOUND FROM THE PREMISES OF SHRI NAV NEET JHAMB. IT SHOULD HAVE BEEN CORROBORATED WITH OTHER CIRCUMSTANTIAL EV IDENCE. THE DEPARTMENT FAILED TO COLLECT ANY OTHER EVIDENCE. THEREFORE, IN OUR OPINION, LEARNED FIRST APPELLATE AUTHORITY HAS RIGHTLY DELETED THE ADDITIO N. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. DECISION PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( K.G. BANSAL ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09/12/2011 MOHAN LAL 8 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR