Adesh Tyagi, Uttar Pradesh V. ITO, Ghaziabad

ITA 477/DEL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7283 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 30-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 22-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHISH GOEL; VED JAIN SHRI ASHISH CHADHA
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-3 : NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO.477/DEL/2015 ASSESSMENT YEAR :2009-10 ADESH TYAGI, S/O SHRI KARAN SINGH TYAGI, VILLAGE CHAPPAULLA, NEAR PNB, DADRI, GB NAGAR, UTTAR PRADESH. PAN: AFFPT8534E VS. ITO, WARD-1(1), GHAZIABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN, ADVOCATE, SHRI ASHISH CHADHA, CA & SHRI ASHISH GOEL, CA DEPARTMENT BY : SHRI ANIL SHARMA, SR. DR DATE OF HEARING : 30.08.2016 DATE OF PRONOUNCEMENT : 31.08.2016 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A) DATED 18.9.2014 FOR THE ASSESSMENT YEAR 2009 -10. ITA NO.477/DEL/2015 2 2. THE ASSESSEE IS AN INDIVIDUAL AND IS IN THE BUSI NESS OF PROPERTY DEALING AND TRADING. HE FILED HIS RETURN OF INCOME ON 28.7.2009 DECLARING INCOME OF RS.1,49,540/-. AS CERTAIN CASH DEPOSITS WERE FOUND IN HER SAVINGS BANK ACCOUNT, THE AO CALLED UPON THE ASSESSEE TO EXPLAIN THE SOURCES OF THESE CASH DEPOSITS. THE ASSESSEE F ILED DETAILED EXPLANATION BEFORE THE AO. A COPY OF THE SAME IS F URNISHED BEFORE ME. AT THE FAG END OF THE ASSESSMENT PROCEEDINGS, THE A SSESSEE, WHILE REITERATING HIS DETAILED SUBMISSIONS EXPLAINING THE SOURCES OF DEPOSITS MADE VIDE LETTER DATED 27.7.2011, SURRENDERED AN AM OUNT OF RS.20 LAC ON A CONDITION THAT THE AO SHALL NOT LEVY PENALTY U/S 271(1)(C) OF THE ACT, AS PER MUTUAL DISCUSSIONS. IT WAS DECLARED THAT THIS OFFER IS MADE IN ORDER TO BUY PEACE OF MIND. BASED ON THIS SURRENDER, THE LD.AO MADE ADDITION OF RS.20 LAC. HE INITIATED PENALTY PROCEEDINGS U/S 271(1)(C). AS THE AO HAD NOT COMPLIED WITH THE CONDITIONS LAID DOWN BY T HE ASSESSEE FOR SURRENDER, AN APPEAL WAS FILED BEFORE THE LD.CIT(A) CHALLENGING THE ADDITION MADE OF RS.20 LAC. THE LD.CIT(A) UPHELD T HE ADDITION ON THE GROUND THAT THE ASSESSEE HAD MADE A SURRENDER. THE AO IN THIS CASE HAD ITA NO.477/DEL/2015 3 ALSO DOUBTED THE OPENING BALANCE CLAIMED BY THE ASS ESSEE. THE LD.CIT(A) CAME TO A CONCLUSION THAT THE ASSESSEE HA D TAKEN INTO ACCOUNT THE OPENING BALANCE WHILE SURRENDERING THE AMOUNT O F RS.20 LAC. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. AFTER HEARING THE RIVAL CONTENTIONS, I FIND THAT AS FAR AS THE OPENING BALANCE IS CONCERNED, THE ASSESSMENT OF THE EARLIER ASSESSMENT YEAR WAS REOPENED AND THE CLAIMS OF THE ASSESSEE WAS ACCEPTE D. ORDER WAS PASSED U/S 143(3) READ WITH SECTION 148 OF THE ACT ON 25.2 .2014. THUS, THE OPENING BALANCE CANNOT BE ADDED. COMING TO THE SUR RENDER MADE BY THE ASSESSEE, I FIND THAT THIS IS A CONDITIONAL SURREND ER. THE ASSESSEE, IN HIS DETAILED REPLY DATED 27.12.2011, EXPLAINED THE SOUR CES OF CASH DEPOSIT MADE DURING THE YEAR. IT WAS SUBMITTED THAT THE AS SESSEE WAS HAVING SUFFICIENT CASH IN HAND AT THE BEGINNING OF THE YEA R AMOUNTING TO RS.22,36,415/-. AS ALREADY STATED, THIS OPENING BA LANCE WAS EXPLAINED BY FILING THE FINANCIAL STATEMENT AS WELL AS THE AS SESSMENT ORDER FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSEE, IN HIS DETA ILED EXPLANATION, HAD EXPLAINED MONTHWISE, THE CASH DEPOSITS MADE IN THE SAVINGS BANK ITA NO.477/DEL/2015 4 ACCOUNT ALONG WITH THE CORRESPONDING SOURCES. THIS EXPLANATION RUNS INTO TEN PAGES. CASH MEMOS WITH REGARD TO THE SALES MADE OF MS BARS WAS ALSO FURNISHED. THE AO HAS NOT POINTED OUT ANY DEFECT OR DISCREPANCY IN THESE DETAILS SUBMITTED BY THE ASSES SEE. THE ENTIRE ADDITION WAS BASED ON THE CONDITIONAL SURRENDER MAD E BY THE ASSESSEE. THE AO DID NOT HONOUR THE CONDITION OF NOT LEVYING PENALTY AND WENT AHEAD AND ISSUED NOTICE FOR LEVYING PENALTY U/S 271 (1)(C). THE AO, IN MY VIEW, SHOULD HAVE ENTIRELY REJECTED THE OFFER OF THE ASSESSEE AND GONE AHEAD WITH HIS FINDING BASED ON EVIDENCE OR, IN THE ALTERNATIVE, DESISTED FROM INITIATING PENALTY PROCEEDINGS. IN THIS CASE, THE AO CHOSE TO ACCEPT ONLY A PART OF THE STATEMENT. THIS, IN MY VIEW, IS NOT CORRECT. 4. THE HONBLE SUPREME COURT IN THE CASE OF NARAYANAN VS. GOPAL AIR 1960 SC 235, HAS HELD THAT IF AN ADMISSION OR SURRENDER MADE BY THE ASSESSEE IS SHOWN TO HAVE BEEN IMPELLED BY THE MIST AKEN BELIEF OR MISUNDERSTANDING, ETC., THE SAME CANNOT ACT AS AN E STOPPLE. IN THE CASE OF ASIT KUMAR GHOSH VS. CIT 24 ITR 576 (CAL) AND IN MA THURAPRASAD & SONS VS. STATE OF PUNJAB (1962) 13 STC 280 (SC), IT IS HELD THAT AN ITA NO.477/DEL/2015 5 ADMISSION MADE IS ONLY A PIECE OF EVIDENCE AND CANN OT BY ITSELF BE A CAUSE OF ACTION AND THAT AN AMOUNT CANNOT BE ASSESS ED MERELY ON ADMISSION. THE WORTH OF THE ADMISSION HAS TO BE CO NSIDERED ALONG WITH OTHER MATERIAL. IN THE CASE OF CIT VS. BHARAT GENE RAL INSURANCE COMPANY LTD., 81 ITR 303 (DEL), IT IS LAID DOWN THA T EVEN IF THE ASSESSEE SHOWS INCOME IN HIS RETURN, THE INCOME-TAX OFFICER CANNOT ASSESS IT MERELY ON THAT ACCOUNT AND HAS TO CONSIDER THE TAXA BILITY OF THE AMOUNT DE-HORS THE SAID ADMISSION. 5. AS THE SUBMISSIONS OF THE ASSESSEE VIDE LETTER D ATED 27.12.2011 WERE NOT FACTUALLY CONTROVERTED BY ANY OF THE AUTHO RITIES, THE ADDITION MADE MERELY ON THE GROUND OF DISCLOSURE CANNOT BE S USTAINED. THE ASSESSEE HAS EXPLAINED THE SOURCE OF EACH DEPOSIT W ITH EVIDENCE AND THE AO HAS NOT FOUND ANY FAULT IN THE CLAIM MADE BY THE ASSESSEE. NO DEFECTS WERE POINTED OUT. HENCE, THE ADDITION IN Q UESTION IS HEREBY DELETED. ITA NO.477/DEL/2015 6 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 31.08. 2016. SD/- [J. SUDHAKAR REDDY] ACCOUNTANT MEMBER DATED, 31 ST AUGUST, 2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.