ITO, New Delhi V. Shri Surinder Kumar Minocha, Gurgaon

ITA 478/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3709 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 29-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGAINST DATED PASSED
• Keywords: Unexplained investment
• Section: 143(1); 147; 148

Judgement Text

1 ITA NO. 478/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 478/DEL/201 6 (A.Y 2006-07) (THROUGH VIDEO CON FERENCING) ITO WARD-51 (3), ROOM NO. 1414, 14 TH FLOOR, E-2 BLOCK, DR. S. P.M. CIVIC CENTRE, J. L. N. MARG, NEW DELHI (APPELLANT) VS SURINDER KUMAR MINOCHA DELHI RUBBER CHEMICAL CO. S-6/11 (2 ND FLOOR), DLF CITY, PHASE-III, GURGAON AAGPM1536P (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST ORDER DATED 03/11/2015 PASSED BY CIT(A)-17, NEW DELHI FOR ASSESSMENT YEAR 2006-07. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE LD.CIT(A) HAS ERRED IN DELETING ADDITION OF RS . 3,62,30,962/- ON ACCOUNT OF UNACCOUNTED PURCHASED AS UNEXPLAINED INV ESTMENT. 2. LD. CIT(A) HAS ERRED IGNORING THE REPORT OF RUBBER BOARD WHICH CLEARLY REPORT THAT THE ASSESSEE HAS MADE UNACCOUNTED PURCH ASES AND NOT RECORDED THIS IN HIS BOOKS OF ACCOUNTS. APPELLANT BY SH. ROCKTIM SAIKIA, SR. DR RESPONDENT BY SH. S. K. SINGH, ADV & SH. SOURAV VIG, ADV DATE OF HEARING 06.09.2021 DATE OF PRONOUNCEMENT 12.10.2021 2 ITA NO. 478/DEL/2016 3. LD. CIT(A) HAS ERRED IN RELYING ON REPORT OF VAT D EPARTMENT AND IGNORING FACT THAT THE VAT DEPARTMENT SUBMITTED THAT IT HAS NO DETAIL OF THE ASSESSEE AS HIS REGISTRATION AS REGISTERED DEALER HAS BEEN C ANCELLED. 4. LD. CIT(A) HAS ERRED IN RELYING ON INFORMATION REC EIVED BY THE ASSESSEE FROM RUBBER BOARD UNDER RTI ACT, WHICH SPEAK THAT T HE BOARD HAS COLLECTED EXCISE (CESS) FROM SOME OF THE RUBBER DEALERS AND I GNORING THE FACT THAT RTI DOES NOT DENY THAT THESE PARTIES HAVE NOT MADE SALE S TO THE ASSESSEE. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY/ ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARIN G OF THE APPEAL CERTIFIED THAT THE COPY OF THE ORDER OF CIT(A)-17, NEW DELHI IN THE ABOVE MENTIONED CASE WAS COMMUNICATED ON 02.12.2015. LIMI TATION EXPIRES ON 01.02.2016. 3. THE ASSESSEE DERIVES INCOME FROM THE BUSINESS OF PURCHASE AND SALE OF RUBBER, RENT FROM PROPERTY AND INTEREST FROM SAVING S BANK A/C. THE ASSESSEE FILED HIS INCOME-TAX RETURN FOR THE ASSESSMENT YEAR 2006-07 ON 30.03.2007 DECLARING AN INCOME OF RS.97,140/-. THE INCOME-TAX RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT. A NOTICE U/S 148 OF I . T. ACT WAS ISSUED FOR THE ASSESSMENT YEAR 2006-07. THE ASSESSMENT WAS COMPLET ED AT AN INCOME OF RS.3,62,30,942/- AS INCOME FROM UNDISCLOSED INVESTM ENT VIDE ORDER DATED 28.03.2014 PASSED U/S 147/143(3) OF THE ACT. 4. BEING AGGRIEVED BY THE PENALTY ORDER, THE ASSESS EE FILED APPEAL BEFORE THE CIT(A). THE CIT (A) PARTLY ALLOWED THE APPEAL OF T HE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NOT P ROVED THAT THE INFORMATION RECEIVED FROM THE RUBBER BOARD IS BOGUS . THE LICENSE OF THE ASSESSEE WAS ALSO SUSPENDED W.E.F. 8/4/2007 WHEN IT WAS FOUND THAT HIS EXPLANATION FOR HIS FAILURE TO COUNT THE RUBBER PUR CHASED FROM DIFFERENT SOURCES WERE NOT SATISFACTORY AND CONVINCING. THUS , THE ASSESSING OFFICER HAS 3 ITA NO. 478/DEL/2016 RIGHTLY MADE ADDITION OF RS. 3,62,30,945/- ON ACCOU NT OF UNACCOUNTED PURCHASE/UNDISCLOSED INVESTMENT OF THE ASSESSEE. T HE LD. DR FURTHER SUBMITTED THAT THE CIT(A) HAS TOTALLY IGNORED HIS F ACT AN ALLOWED THE RELIEF THEREBY DELETING THE ADDITION. 6. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A) A ND FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT GIVEN THE OPPORTUNIT Y TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD. AR FURTH ER SUBMITTED THAT THE RELEVANT INFORMATION OF THE RUBBER BOARD AS RELATED TO THE MISUSE OF THE NAME OF THE ASSESSEE PROPRIETORSHIP FIRM WAS BEFORE THE CIT(A)AND CIT(A) HAS RIGHTLY DELETED THE ADDITION. THE LD. AR SUBMITTED THAT THE ASSESSEE HAD NO INCOME, WHICH ESCAPED ASSESSMENT UNDER THE PROVISIONS OF SE CTION 147 READ WITH SECTION 148 OF ACT FOR THE ASSESSMENT YEAR 2006-07. AS SUCH, THE NOTICE ISSUED U/S 148 WAS ILLEGAL, VOID AND WITHOUT JURISDICTION. NEVERTHELESS, THE ASSESSEE FILED A LETTER DATED 10.4.2013 REQUESTING THE ASSES SING OFFICER TO TREAT THE INCOME-TAX RETURN, WHICH WAS FILED ON 30.03.2007 FO R THE ASSESSMENT YEAR 2006-07 TO HAVE BEEN FILED IN RESPONSE TO NOTICE U/ S 148 OF THE ACT UNDER PROTEST. HOWEVER, THE REASSESSMENT HAS BEEN MADE AT AN INCOME OF RS.3,63,28,082/- VIDE ORDER DATED 28.03.2014 PASSED U/S 147/143(3) OF THE ACT. THE ASSESSING OFFICER HAS ARBITRARILY ADDED RS .3,62,30,942/- TO THE INCOME OF THE ASSESSEE AS INCOME FROM UNDISCLOSED I NVESTMENT. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIALS AVAILABLE ON RECORD. THE CIT(A) HELD AS UNDER:- AFTER GOING THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE, SUBMISSION/REJOINDER OF THE ASSESSEE AND PERUSAL OF THE ASSESSMENT ORDER/REMAND REPORT AND INFORMATION RECEIVED FROM T HE DEPARTMENT OF TRADE AND TAXES, I FIND MERIT IN THE ARGUMENT OF THE APPE LLANT THAT NAME OF HIS PROPRIETORSHIP WAS MISUSED BY THE ABOVE MENTIONED R UBBER DEALERS TO GET THE BENEFIT OF CONCESSIONAL RATES OF RUBBER WHEREAS NO PURCHASES WERE MADE BY THE APPELLANT FROM THOSE PARTIES. THE APPELLANT HIM SELF COLLECTED INFORMATION UNDER RTI ACT FROM THE RUBBER BOARD TO PROVE THAT H E HAD NOT MADE ANY 4 ITA NO. 478/DEL/2016 PURCHASES FROM THOSE PARTIES. SINCE, NO PURCHASES W ERE MADE, NO 'C' FORM WAS ISSUED BY THE APPELLANT, THIS FACT FURTHER GETS CONFIRMED THAT THE RUBBER BOARD. M/S. KANAK ENTERPRISES LICENSE WAS SUSPENDED BY THE RUBBER BOARI APPELLANT HAD MADE ONLY ONE PURCHASE DURING THE YEA R WHICH WAS FROM M/S. MAHAJAN TRADING CO., KOCHIN TO WHOM PAYMENT OF RS.4 ,01,904/- WAS ALSO MADE THROUGH CHEQUE ISSUED FROM THE STATE BANK OF T RAVANCORE, KAROL BAGH, NEW DELHI AS HE ULTIMATELY CLOSED DOWN THE BUSINESS AND THIS FACT SHOWS THAT HE NEVER MADE ANY TRANSACTION IN CASH. FROM TH E ABOVE DISCUSSION, IT IS CLEAR THAT THE APPELLANT HAS PROVED WITH THE RELEVA NT SUPPORTING DOCUMENTS/DETAILS THAT HE HAD NOT. MADE ANY PURCHAS ES FROM THOSE PERSONS. FURTHER, THE AO COULD NOT BRING ANY MATERIAL ON REC ORD TO CONTRAVERT THE SUBMISSION OF THE APPELLANT OR TO PROVE THAT THE SU BMISSIONS GIVEN BY THE APPELLANT ARE NOT CORRECT. AFTER CAREFUL CONSIDERAT ION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED V IEW THAT SINCE HIS NAME WAS FORGED WHEREAS NO PURCHASES WERE MADE BY HIM, T HEREFORE, THE ADDITION MADE BY THE A.O AS UNEXPLAINED INVESTMENT IN PURCHA SES WAS NOT JUSTIFIED. FROM THE PERUSAL OF THE RECORDS IT CAN BE SEEN THA T THE ASSESSEES NAME WAS MISUSED AND THE PURCHASES WERE NEVER MADE FROM ANY OF THOSE PARTIES. IN FACT, ALL THE DEALS WERE BEFORE THE REVENUE AUTHORI TIES SUBSEQUENT TO THE RUBBER MANUFACTURER ASSOCIATION AND THE BOARD CONST ITUTED FOR RUBBER MANUFACTURERS. THEREFORE, THE CIT(A) HAS GIVEN A P ROPER FINDING AND THERE IS NO NEED TO INTERFERE WITH THE SAME. 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF OCTOBER, 2021 SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 12 /10/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 5 ITA NO. 478/DEL/2016 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI