ACIT, New Delhi V. Sh. Raj Kumar Singhania, New Delhi

ITA 4770/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5438 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 17-02-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 08-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M B REDDY
• Assessee Lawyers: AMIT GOELCA
• Keywords: Gift; Income from undisclosed sources; Search and seizure; Period of limitation; Onus to prove
• Section: 153A; 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F: NEW DELHI) BEFORE SHRI J. S. REDDY, ACCOUNTANT MEMBERAND SHRI RAJPAL YADAV, JUDICIAL MEMBER ITA NO.4767/DEL/ 2013 (ASSESSMENT YEAR :2005-2006) ACIT VS. PRIYANKA SINGHANIA CENTRAL CIRCLE-03, 104, RAJDHANI ENCLAVE ROOM NO..355, 3 RD FLOOR, ARA CENTRE JHANDEWALAN EXTN. NEW DELHI. NEW DELHI. PAN: ANEPS7705E (APPELLANT) (RESPONDENT) CROSS OBJECTION NO. 19/DEL/ 2014 IN ITA NO. 4767/DEL/2013 (ASSESSMENT YEAR:2005-06) PRIYANKA SINGHANIA VS. ACIT 104, RAJDHANI ENCLAVE CENTRAL CIRCLE-03, ROOM NO. 355, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTN. NEW DELHI. NEW DELHI PAN: ANEPS7705E (APPELLANT) (RESPONDENT) ITA NO.4770/DEL/ 2013 (ASSESSMENT YEAR :2005-2006) ACIT VS. RAJ KUMAR SINGHANIA CENTRAL CIRCLE-03, 104, RAJDHANI ENCLAVE ROOM NO..355, 3 RD FLOOR, ARA CENTRE JHANDEWALAN EXTN. NEW DELHI. NEW DELHI. PAN: AHPPS0940R (APPELLANT) (RESPONDENT) CROSS OBJECTION NO. 21/DEL/ 2014 IN ITA NO. 4770/DEL/2013 (ASSESSMENT YEAR: 2005-06) ITA NOS.4767& 4770/DEL/2013 & C.O NOS.-19 &21/DEL/2013 2 RAJ KUMAR SINGHANIA VS. ACIT 104, RAJDHANI ENCLAVE CENTRAL CIRCLE-03, ROOM NO. 355, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTN. NEW DELHI. NEW DELHI PAN: AHPPS0940R (APPELLANT) (RESPONDENT) ASSESSEE BY :SHRI AMIT GOEL,CA. REVENUE BY :SHRI M. B. REDDY, SR. DR. ORDER PER J. S. REDDY, A M: THESE APPEALS FILED BY THE REVENUE ARE DIRECTED A GAINST SEPARATE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-IV, NEW DELHI DATED 10.05.2013 FOR THE ASSESSMENT YEAR 2005-06. 2. THOUGH THE APPEALS PERTAIN TO TWO DIFFERENT ASSE SSEES, AS THEY ARE RELATED AND AS THE FACTS ARE THE SAME, FOR THE SAKE OF CONVENIENCE WE HAVE HEARD THEM TOGETHER AND WE DISPOSE OFF THE SAME BY WAY OF THIS COMMON ORDER. 3. BRIEF FACTS ARE THAT BOTH THE ASSESSEES ARE INDI VIDUALS. SHRI RAJ KUMAR SINGHANIA DERIVES INCOME BY WAY OF SHARE INCOME AND INCOME FROM OTHER SOURCES. A SEARCH AND SEIZURE ACTION U/S 132 WAS CO NDUCTED IN THE CASE OF BOTH THE ASSESSEES ON 23.06.2006. NOTICES U/S 153A WAS ISSUED. IN THE CASE OF SHRI RAJ KUMAR SINGHANIA, A RETURN OF INCOME WAS FILED DECLARING INCOME ITA NOS.4767& 4770/DEL/2013 & C.O NOS.-19 &21/DEL/2013 3 OF RS.1,67,700/-. IN THE CASE OF MS. PRIYANKA SINGH ANIA RETURN OF INCOME WAS FILED DECLARING INCOME OF RS.2,27,840/-. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON A PERUSAL OF THE BANK STATEMENT FILED BY THE ASSESSEE, THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE HAD RECEIVED GIFTS. NO EVIDENCE OR RECORD WAS FOUND DURING THE COURSE OF SEARCH. IN THE CASE OF SHRI RAJ KUMAR SIN GHANIA A GIFT OF RS.15 LAC WERE RECEIVED FROM SHRI HARISH KUMAR. IN THE CASE O F MS. PRIYANKA SINGHANIA, THE ASSESSING OFFICER NOTICED FROM THE C OPY OF BANK ACCOUNT THAT THE ASSESSEE HAS RECEIVED GIFT OF RS.15 LAC FROM MR . SUSHIL KUMAR, RS. 15 LAC FROM ONE SHRI GURINDER SINGH AND RS.10LAC FROM ONE SHRI HARISH KUMAR. THE ASSESSING OFFICER ASKED TO THE ASSESSEE TO DISC HARGE THE BURDEN OF PROOF U/S 68 OF THE I. T. ACT. 5. IN REPLY THE ASSESSEE FILED A COPY OF BANK STATE MENTS OF THE DONORS, GIFT DEEDS AND BALANCE SHEET OF THE DONORS. THE ASS ESSING OFFICER SENT A NOTICE TO THE DONORS, WHICH WAS RETURN BACK UNSERVE D. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE DONORS BEFORE HIM . AS THE ASSESSEE FAILED TO PRODUCE THE DONORS BEFORE THE ASSESSING OFFICER, HE MADE ADDITIONS OF THE GIFTS AS UNDISCLOSED INCOME. ITA NOS.4767& 4770/DEL/2013 & C.O NOS.-19 &21/DEL/2013 4 6. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APP EAL, BEFORE THE LD. CIT (A). THE ASSESSEE RAISED ADDITIONAL GROUNDS BEF ORE THE LD. CIT (A) ON THE ISSUE OF JURISDICTION. 7. AFTER CALLING REMAND REPORT THE ASSESSING OFFICE R, THE LD. CIT (A) CONSIDERED THE ASSESSEES REJOINDER AND ADJUDICATED THE ADDITIONAL GROUND RAISED BY THE ASSESSEE HE HELD THAT : A) THERE IS NO WARRANT OF SEARCH IN THE NAME OF THE ASSESEE AND IN THE CONSEQUENT PANCHNAMA, TO DEMONSTRATE THAT THERE WAS A SEARCH ON THE ASSESSEE . B) THAT NO ASSESSMENT OR PROCEEDING WAS PENDING FOR THE YEAR UNDER CONSIDERATION AS ON THE DATE OF SEARCH AND HE NCE THERE IS NO ABATEMENT OF ASSESSMENT. (C) HE IS ALSO RECORDED, THAT IT IS NOT DISPUTED B Y THE ASSESSING OFFICER THAT, NO MATERIAL WHAT SO EVER, (INCRIMINAT ING MATERIAL OR OTHERWISE) WAS FOUND DURING THE COURSE SEARCH. HE H ELD THAT UNDER THOSE CIRCUMSTANCES NO ADDITION CAN BE MADE. (D) WHILE HOLDING SO HE FOLLOWED THE DECISION OF TH E DELHI BENCH OF THE TRIBUNAL IN THE CASE OF KUSUM GUPTA VS. DCIT , ITA NO. 4873/DEL/2009, 2501/DEL/2009 ORDER DATED MARCH, 201 3 AND GRANTED RELIEF. AGGRIEVED THE REVENUE IS IN APPEAL ON THE FOLLOWING GROUNDS: GROUNDS OF ITA. NO.4767/DEL/2013 1. THE CIT (A) ERRED IN HOLDING THAT THE ADDITION O F RS.40,00,000/- MADE ON ACCOUNT OF GIFTS HELD TO BE INCOME FROM UNDISCLOSED SOURCES IS BEYOND THE JURISDICTION OF S ECTION 153-A OF THE ACT,1961. ITA NOS.4767& 4770/DEL/2013 & C.O NOS.-19 &21/DEL/2013 5 GROUNDS OF ITA NO.4770/DEL/2013 1. THE CIT (A) ERRED IN HOLDING THAT THE ADDITION O F RS.15,00,000/- MADE ON ACCOUNT OF GIFTS HELD TO BE INCOME FROM UNDISCLOSED SOURCES IS BEYOND THE JURISDICTION OF S ECTION 153A OF THE ACT,1961. 10. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED T HAT FOR THE ASSESSMENT YEAR IS 2005-06, THE LAST DATE FOR FILIN G OF THE RETURN OF INCOME WAS 30 TH JUNE, 2005 ( AS THE ASSESSEE IS AN INDIVIDUAL) AND THAT TIME FOR ISSUE OF NOTICE U/S 143(2) WAS 30 TH JUNE, 2006 AND WHEREAS THE SEARCH HAD TAKEN PLACE ON 23.06.2006 WHICH MEANS THAT THE ASSESSING OFFICER HAD TIME TO INITIATE SCRUTINY PROCEEDING BY ISSUE OF NOTICE U/S 143(2) AND UNDER SUCH CIRCUMSTANCES THE ASSESSMENT IN QUESTION DOES NOT A BATE. HE RELIED ON THE JUDGMENT OF GURINDER SINGH BAWA VS. DCIT (2012) REP ORTED IN 28 TAXMANN. COM 328. HE SUBMITTED THAT, AS THE ASSESSMENT HAS N OT ABATED, DUE TO REASON THAT THE ASSESSING OFFICER STATUTE A TIME FOR ISSUI NG NOTICE U/S 143(2), NO MATERIAL NEED TO BE FOUND DURING THE COURSE OF SEAR CH, FOR ASSESSING INCOME. HE ARGUED THAT ALL ISSUES, BOTH DISCLOSED AND UNDIS CLOSED ARE OPEN FOR THE ASSESSMENT. HE EXPRESSED A DOUBT WHETHER A STATEMEN T WAS RECORDED AT ALL DURING THE COURSE OF SEARCH. 11. THE LD. COUNSEL FOR THE ASSESSEE, MR. AMIT GOEL , MADE STATEMENT AT THE BAR THAT NO STATEMENT WAS RECORDED FROM THE ASS ESSEE DURING THE COURSE ITA NOS.4767& 4770/DEL/2013 & C.O NOS.-19 &21/DEL/2013 6 OF SEARCH. HE POINTED OUT THAT THE LD. CIT (A) HAS AT PAGE 12 RECORDED THAT THE ASSESSING OFFICER IN THIS CASE HAS NOT DISPUTED THAT, NO MATERIAL INCRIMINATING OR OTHERWISE WAS FOUND DURING THE COU RSE OF SEARCH. HE SUPPORTED THE ORDER OF THE LD. CIT (A) AND SUBMITTE D THAT, AS NO NOTICE WERE ISSUED U/S 143(2) OR ANY OTHER SECTION, THERE WAS N O PENDING CASE FOR THIS ASSESSMENT YEAR AND HENCE THERE IS NO ABATEMENT IN THIS CASE. HE RELIED ON THE CASE LAWS REFERRED TO BY THE LD. CIT (A). HE VE HEMENTLY CONTENDED THAT NO PROCEEDING IS PENDING AND UNDER SUCH CIRCUMSTANC E, THIS IS NO ABATEMENT. HEARING POWER TO ISSUE A NOTE U/S 143(2), AS PER TH E COUNCIL, DOES NOT AMOUNT TO A CASE WHERE PROCEEDING ARE PENDING. 12. ON THE CROSS OBJECTION, HE SUBMITTED THAT THEY WERE FILED IN SUPPORT OF THE ORDER OF THE LD. CIT (A). ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUM STANCES OF THE CASE AND ON A PERUSAL OF THE CASE LAWS CITED AND PAPERS ON RECORD, WE HOLD AS FOLLOWS: THIS IS A CASE, WHERE ADMITTEDLY NO PROCEEDING IS PENDING BEFORE THE ASSESSING OFFICER OR ANY OTHER AUTHORITY FOR THESE ASSESSMENT YEARS. THE ASSESSING OFFICER HAS A RIGHT TO ISSUE A NOTICE U/S 148 OR A NOTICE U/S 143(2) IN EVERY CASE, IF THE PERIOD OF LIMITATION PERMITS HIM TO DO SO, AND IF THE ITA NOS.4767& 4770/DEL/2013 & C.O NOS.-19 &21/DEL/2013 7 OTHER CONDITIONS SPECIFIED IN THE ACT, ARE SATISFIE D. JUST BECAUSE AN AUTHORITY HAS A RIGHT OF INITIATING CERTAIN PROCEEDINGS, IT D OES NOT FOLLOW THAT ASSESSMENT PROCEEDINGS ARE OPEN AND ARE PENDING AS ON THE DATE OF SEARCH. IN OUR VIEW, WHEN THE ASSESSING OFFICER HAS NOT ISSUED A NOTICE U/S 143(2) AS ON THE DATE OF SEARCH, IT FOLLOWS THAT NO PROCEEDIN G IS PENDING. 13. THE ISSUE WHETHER IT CAN BE SAID THAT AN ASSESS MENT IS PENDING IN CASES WHERE THE ASSESSING OFFICER HAS TIME UNDER THE STAT UE TO ISSUE A NOTICE U/S 143 (2) WAS ADJUDICATED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. PRATIVA INDUSTRIES LTD. WHICH IS REPRODUCE D PARA 11TO 15 OF THE CIT (A) PAGE ORDERS AND THE JUDGMENT OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO LOGISTIC LTD. THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. 14. AS NO ASSESSMENT WAS PENDING IN THE IMPUGNED AS SESSMENT YEARS, THERE IS NO ABATEMENT. ADMITTEDLY, THERE IS NO MATE RIAL FOUND DURING THE COURSE OF SEARCH, MUCH LESS INCRIMINATING MATERIAL. UNDER THESE CIRCUMSTANCES, WE UPHOLD THE ORDER OF THE FIRST APP ELLATE AUTHORITY WHO FOLLOWEDS THE ORDER OF THE ITAT IN THE CASE OF KUSU M GUPTA (SUPRA) AND HELD THAT THE ADDITION MADE BY THE ASSESSING OFFICE R IS ERRONEOUS. ITA NOS.4767& 4770/DEL/2013 & C.O NOS.-19 &21/DEL/2013 8 15. IN THE RESULT THE APPEALS, THE APPEAL FILED BY THE REVENUE ARE DISMISSED. 16. THE CROSS OBJECTIONS ARE ON THE FOLLOWING GROUN DS: GROUND OF CO. NO.19/DEL/2014 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSING OFFICER ERRED IN MAKING ASSESSMENT U/S 15 3A OF INCOME TAX ACT, 1961 AS THERE HAS BEEN NO SEARCH/ V ALID SEARCH IN THE CASE OF ASSESSEE AND, THEREFORE, THE COMMISS IONER OF INCOME TAX (APPEALS) SHOULD HAVE QUASHED THE ISSUE OF NOTICE U/S 153A AND ASSESSMENT ORDER PASSED BY THE ASSESSI NG OFFICER U/S 153A OF INCOME TAX ACT,1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) SHOULD HAVE HE LD THAT EVEN OTHERWISE ON MERITS, THE ADDITION OF GIFTS RS. 40,00,000/- MADE BY THE ASSESSING OFFICER AS ALLEGED INCOME FRO M UNDISCLOSED SOURCES WAS ERRONEOUS AND LIABLE TO BE DELETED. GROUND OF CO. NO. 21/ DEL/ 2014 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) SHOULD HAVE HE LD THAT EVEN OTHERWISE ON MERITS, THE ADDITION OF GIFTS RS. 15,00,000/- MADE BY THE ASSESSING OFFICER AS ALLEGED INCOME FRO M UNDISCLOSED SOURCES WAS ERRONEOUS AND LIABLE TO BE DELETED. 17. THE ASSESSEE SUBMITS THAT THESE CROSS OBJECTION S ARE FILED ONLY TO SUPPORT THE ORDER OF THE LD. CIT (A). IN VIEW OF O UR FINDING IN THE REVENUE APPEAL THESE CROSS OBJECTIONS NEED NOT TO BE ADJUDI CATED AND ARE DISPOSED OFF ITA NOS.4767& 4770/DEL/2013 & C.O NOS.-19 &21/DEL/2013 9 AS SUCH. IN THE RESULT BOTH THE REVENUE APPEALS AS WELL AS THE CROSS OBJECTIONS ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 21 ST /02/ 2014. SD/- SD/- (RAJPAL YADAV) (J. S. REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 21 ST DAY OF JANUARY, 2014 S.SINHA COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT(ITAT), NEW DELHI. AR,ITAT NEW DELHI.