Sh. Devinder Singh Gill, Mohali V. DCIT, Chandigarh

ITA 498/CHANDI/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0015 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-01-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 08-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Unexplained investment; Document seized; Principle of natural justice; Source of fund; Documents seized
• Section: 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 498 & 499/CHD/2015 ASSESSMENT YEARS: 2007-08 & 2008-09 SH. DEVINDER SINGH GILL, VS. THE DCIT, MOHALI CIRCLE 5(1), PAN NO. ANXPG9419K (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SH. S.K. MITTAL DATE OF HEARING : 19.04.2016 DATE OF PRONOUNCEMENT : 19.04.2016 ORDER PER SANJAY GARG, JM THE ABOVE TITLED APPEALS HAVE BEEN PREFERRED BY TH E REVENUE AGAINST THE SEPARATE ORDERS OF THE CIT(A)-2, CHANDIGARH DATED 26.02.2015 RELATING TO ASSESSMENT YEARS 2007-08 AND 2008-09 RESPECTIVELY. 2. SINCE THE FACTS AND ISSUES INVOLVED IN THESE APP EALS ARE IDENTICAL, THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER. FIRST, WE WILL TAKE UP APPEAL IN ITA NO. 498/CHD/2015. 2 2. AT THE TIME OF HEARING OF THE APPEAL, NO ONE CAM E PRESENT ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE THROUGH RAPD. A PERUSAL OF THE ORDER SHEET REVEALS THAT EVEN NO ONE HAD CAME PRESENT ON BEHALF OF ASSESSEE EVEN ON THE EARLIER DATE OF HEARING I.E. 27.1.2016. IT SEEMS TH AT THE ASSESSEE IS NOT INTERESTED IN PURSUING HIS APPEAL. EVEN THE PERUSAL OF THE IM PUGNED ORDER REVEALS THAT THE SAME IS AN EX. PARTE ORDER OF CIT(A), AS THE ASSESS EE HAD FAILED TO ATTEND THE PROCEEDING BEFORE THE LD. CIT(A) ALSO. WE, THEREFO RE, PROCEED TO DECIDE THE APPEAL ON MERITS AFTER HEARING THE LD. DR. FIRST, WE TAKE UP ITA NO. 498/CHD2015. THE ASSESSEE IN THIS APPEAL HAS TAKEN THE FOLLOWING GROUNDS:- 1. THAT THE ORDER PASSED U/S 250(6) OF THE INCOME-TAX ACT, 1961 BY THE WORTHY CIT(A) IS BAD IN LAW AND AGAINST THE FACTS OF THE CASE AND THUS AGAINST THE PROVISIO NS OF THE ACT. 2. THAT THE ADDITION OF RS. 1.50 CORES MADE BY THE LD. ASSESSING OFFICER AND UPHELD BY THE WORTHY CIT(A) I S ON PRESUMPTIVE BASIS AND NOT DUE TO FILING OF ANY INACCURATE PARTICULARS OR DUE TO CONCEALMENT OF INCOME. 3. THAT THE ADDITIONS MADE BY THE LD. ASSESSING OFFICE R IS NOT CORRECT AS HE HIMSELF HAS MENTIONED IN HIS ASSESSMENT ORDER, THE RECEIPT OF PAYMENT OF RS. 25 LACS INSTEAD OF RS. 1.50 CORES. THUS, THE ADDITION MADE BY LD. ASSESSING OFFICER OF RS. 1.50 CRORES IS WRONG A ND AGAINST THE FACTS AND PROVISIONS OF INCOME-TAX ACT, 1961. 4. THAT THE ADDITIONS UPHELD BY THE WORTHY CIT(A) IS O N THE BASIS OF EX-PARTE DECISION AND THE ASSESSEE HAS NOT BEEN GIVEN NATURAL JUSTICE. 3 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH OPERAT ION WAS CONDUCTED BY THE OFFICE OF CBI, CHANDIGARH AT THE PREEMIES OF THE AS SESSEE AND THE DOCUMENTS HAVING FINANCIAL IMPLICATIONS RELATING TO PROPERTY TRANSACTIONS WERE FOUND AND SEIZED. THE DDIT (INV.), CHANDIGARH ALSO RECORDED S TATEMENT OF SHRI DEVINDER SINGH GILL IN THE OFFICE OF CBI, CHANDIGARH. IN THE SEIZED DOCUMENTS, ONE AGREEMENT TO SELL DATED 17.8.2006 REVEALED THAT ASS ESSEE AGREED TO PURCHASE CERTAIN CHUNK OF LAND FROM FARMERS NAMELY SHRI NIRM AL SINGH, UJJAR SINGH AND OTHERS AT THE RATE OF RS. 1,06,00,000/- PER ACRE. T HE ASSESSEE HAD GIVEN EARNEST MONEY OF RS. 1.50 CRORES FOR THE SAID LAND TO THE O WNERS SHRI NIRMAL SINGH AND OTHERS. THE ASSESSEE EXPLAINED THE SOURCE OF FUNDS AS LOAN FROM VARIOUS PEOPLE BUT ASSESSEE COULD NOT GIVE DETAILS OF PERSONS FROM WHOM THE LOANS WERE RAISED. THE ASSESSING OFFICER THEREFORE, REOPENED THE ASSES SMENT U/S 147 OF THE ACT. DURING THE REOPENED ASSESSMENT PROCEEDINGS, THE ASS ESSEE FILED REPLIES IN THIS RESPECT. HOWEVER, THE ASSESSING OFFICER WAS NOT SAT ISFIED WITH THE REPLIES FILED BY THE ASSESSEE AND OBSERVED THAT THE ASSESSEE HAD FAILED TO DISCLOSE THE SOURCE OF FUNDS OF RS. 1.50 CORES. HE ACCORDINGLY MADE ADD ITION OF SAID AMOUNT INTO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED, THE AS SESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). HOWEVER, THE ASSESSEE DID NOT CO ME PRESENT BEFORE THE CIT(A) AND THE LD. CIT(A) PASSED EX. PARTE ORDER AN D CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER OBSERVING AS UNDER:- 6.1 BRIEF FACTS OF THE ISSUE ARE THE DDIT (INV.), CHANDIGARH HAD RECORDED THE STATEMENT OF THE APPELLANT ON 09.05.20 11. IN RESPONSE TO QUESTIONS ON PAGE NOS. 9 TO 12 OF THIS STATEMENT , THE APPELLANT HAD STATED AS UNDER: 'THIS IS A MOU WITH MR. AMRIT PAL SINGH DIRECTOR OF OMEGA INFRA PVT. LTD. DM. MAJRA, KHARAR AND ME. AS PER TH IS MOU I AM LIABLE TO PURCHASE LAND ON BEHALF OF MR. AMRIT P AL SINGH REGARDING 22.5 ACRES OF LAND AT VILLAGE BALIYALI, S ECTOR 74, MOHALI. THE ABOVE LAND IS TO BE PURCHASED FOR THE A BOVE COMPANY @ 1 CRORE PER ACRES. FOR THIS PURPOSE SH . AMRIT 4 PAL SINGH PROP. OMEGA INFRA PVT. LTD. HAS GIVEN RS. 6 CRORES (RS. SIX CRORE) AS THE EARNEST MONEY REGARDING THIS LAND. OUT OF WHICH RS. 4.90 CRORE WAS GIVEN IN CASH AND RS. 1 .10 CRORE THROUGH CHEQUE. THE TOTAL AMOUNT FOR 22.5 ACRES LAN D WAS FIXED AT RS, 34 CRORES APPROX. REMAINING AMOUNT WAS TO BE GIVEN ON OR BEFORE 5.7.2011. FURTHER I HAVE BOOKED LAND FOR OMEGA @ 1.10 CRORE PER ACRE (RS. ONE CRORE & TEN LA C PER ACRE) FROM THE FARMER. I HAVE GIVEN BIANA AMOUNT OF RS. 1.50 CRORE FOR BOOKING OF LAND TO THE FARMERS. THAT MONE Y WAS PAID FROM THE SOCIETY A/C AND SERVING OF LOANS FROM VARIOUS PERSONS. I WILL PROVIDE THE DETAILS LATER ON.' 6.1.1 THUS, THE APPELLANT HAD ADMITTED TO HAVE GI VEN THE ADVANCE OF RS.1.50 CRORES FOR BOOKING OF THE LA ND. THE APPELLANT HAD SUBMITTED THAT THE AMOUNT WAS PAID OU T OF THE LOANS TAKEN FROM VARIOUS PERSONS, BUT DID NOT FILE DETAILS OF THE SAME EITHER BEFORE THE DDIT (INV.), CHANDIGARH OR SUBSEQUENTLY BEFORE THE ASSESSING OFFICER IN THE AS SESSMENT PROCEEDINGS. 6.2 NO SUBMISSION HAS BEEN FILED IN THE APPELLATE PROCEEDINGS. THE APPELLANT HAD HIMSELF ADMITTED IN THE STATEMENT BEFORE DDIT (INV.), CHANDIGARH THAT HE HA D GIVEN BIYANA AMOUNT OF RS. 1.50 CRORES TO THE FARMERS FOR BOOKING THE LAND. THIS STATEMENT WAS AN ADMISSION BY THE AP PELLANT AND IS AN EXTREMELY IMPORTANT PIECE OF EVIDENCE, WH ICH CANNOT BE IGNORED. THE APPELLANT WAS BOUND TO EXPLA IN THE SOURCE OF THIS AMOUNT AND IF IT WAS TAKEN AS LOAN F ROM OTHERS, IT WAS INCUMBENT UPON THE APPELLANT TO PROVIDE THE DETAILS THEREOF. IN THE ABSENCE OF ANY SUCH DETAILS, THE AM OUNT HAS TO BE TREATED UNEXPLAINED IN THE HANDS OF THE APPELLAN T AS UNEXPLAINED INVESTMENT. HENCE, THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ACCOUNT IS CONFIRMED. GRO UNDS OF APPEAL NOS. 4 AND 5 ARE DISMISSED. 4. NO ONE HAS COME PRESENT BEFORE US ON BEHALF OF T HE ASSESSEE. AFTER GOING THROUGH THE ORDER OF THE ASSESSING OFFICER AND THE IMPUGNED ORDER OF THE 5 CIT(A), WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNE D ORDER AND WE UPHELD THE SAME. 5. IN THE, RESULT THE APPEAL OF THE ASSESSEE IS HER EBY DISMISSED. ITA NO. 499/CHD/2015: 6. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS:- 1. THAT THE ORDER PASSED U/S 148 OF THE INCOME-TAX ACT , 1961 BY THE LD. ASSESSING OFFICER AND PARTLY ALLOWE D U/S 250(6) OF THE INCOME-TAX ACT, 1961 BY THE WORTH Y CIT(A) IS BAD IN LAW AND AGAINST THE FACTS OF THE C ASE AND THUS AGAINST THE PROVISIONS OF THE ACT. 2. THAT THE ADDITION OF RS. 3,74,40,000/- MADE BY THE LD. ASSESSING OFFICER AND UPHELD BY THE WORTHY CIT(A) AT RS. 1,56,16,000/- AFTER ALLOWING DEDUCTION OF PROPO SED EXPENDITURE ON THE BASIS OF SOME TYPED, HANDWRITTEN PAPERS AND A JOINT VENTURE AGREEMENT NOR EVIDENTLY PROVED WITH PROPER DOCUMENTS IS BAD IN LAW AND AGAINST THE PROVISIONS OF THE ACT. 3. THAT THE ADDITIONS MADE BY THE LD. ASSESSING OFFICE R AND PARTLY UPHELD BY WORTHY CIT(A) IS PURELY ON ASSUMPTIVE BASIS AND NEVER BELONGED TO THE APPELLAN T. 4. THAT THE ADDITIONS UPHELD BY THE WORTHY CIT(A) IS ON THE BASIS OF EX-PARTE DECISION AND THE ASSESSEE HAS NOT BEEN GIVEN NATURAL JUSTICE. 7. IN THIS CASE ALSO, THE ASSESSMENT WAS REOPENED O N THE BASIS OF CERTAIN DOCUMENTS FOUND DURING THE SEARCH ACTION BY THE CBI . THE BRIEF FACTS AS CULLED OUT FROM THE ORDER OF THE CIT(A) ARE AS UNDER:- 6 6.1 BRIEF FACTS OF THE ISSUE ARE THAT THE DDIT(IN V.) HAD RECORDED THE STATEMENT OF THE APPELLANT IN RESPECT OF CERTAIN DOCUMENTS AND A JOINT VENTURE AGREEMENT DATED 25.09 .2007 BETWEEN THE SELLERS WHO WERE RESIDENTS OF RAJPURA, DISTRICT PATIALA AND M/S SKY HEIGHTS LAND PROMOTERS (P) LTD. AND TWO OTHER PERSONS (SEIZED BY THE CBI), WHICH RELATED TO PURCHASE OF LAND OF 12 BIGHAS AND 6 BISWAS. AS PER THIS JOIN T VENTURE AGREEMENT, THE BUYERS 'HAD AGREED TO PURCHASE 75% S HARE OF THIS PROPERTY FOR DEVELOPING A COMMERCIAL COMPLEX I N THE NAME OF RAJPURA PRIDE ON THIS LAND AND THE APPELLAN T WAS ENTITLED TO MAKE BOOKING/ SALE OF THE COMMERCIAL PR OPERTY AND GET THE SAME TRANSFERRED TO THE PROSPECTIVE BUYERS. WHEN QUESTIONED ABOUT THE OTHER TYPING AND HANDWRITTEN P AGES TITLED AS RAJPURA PRIDE, THE APPELLANT HAD REPLIED THAT DOCUMENT CONTAINED DETAILS OF EXPENDITURE MADE BY H IS COMPANY, NAMELY M/S SKY HEIGHTS LAND PROMOTERS (P) LTD. AND THAT THE CASH AND CHEQUE AMOUNTS MENTIONED WHER EIN WERE ACCURATE. REGARDING THE EXPENSES MENTIONED ON THESE PAGES, THE APPELLANT HAD SUBMITTED THAT THE SAME WA S INCURRED FOR MAKING SHOWROOM STRUCTURE, ROADS, GATE S AND CIVIL WORKS LIKE TOILETS ETC, WHICH WERE CARRIED OU T BETWEEN SEPTEMBER 2007 TO OCTOBER 2008. REGARDING THE HANDW RITTEN PAGES (PAGE NOS. 4 AND 5), IT WAS SUBMITTED THAT TH ESE PAGES CONTAINED THE DETAILS OF RECEIPTS FROM THE ABOVE PR OJECT AND ITS DISTRIBUTION AMONG THE VARIOUS PARTNERS. 6.1.1 THE ASSESSING OFFICER QUESTIONED THE APPELLA NT REGARDING NOTINGS ON THE AFORESAID DOCUMENTS AND TH E APPELLANT HAD SUBMITTED THAT HE WAS NOT AWARE THAT HIS STATEMENT WAS RECORDED BY ANYONE AND THAT THE NOTIN GS ON THESE DOCUMENTS WERE SIMPLY ASSESSMENT OF THINGS TO COME IF THE PROJECT HAD MATERIALIZED. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE APPELLANT AND HELD THAT THE APPELLANT HAD GIVEN THE DETAILS OF RAJPURA PROJ ECT IN HIS STATEMENT AND ALSO REGARDING THE RECEIPTS. HE ACCOR DINGLY ANALYZED THE NOTINGS ON PAGE NOS. 4 AND 5 IN WHICH THE TOTAL REVENUE RECEIPT WERE WORKED OUT AT RS. 4.48 CRORES AND 4.78 CRORES RESPECTIVELY AND SHARE OF THE APPELLANT @ 40 % OF RECEIPTS WAS WORKED OUT AT RS. 1,83,20,000/- AND 7 1,91,20,000/-. THE ASSESSING OFFICER ASSESSED THE R ECEIPTS AT SUM OF THESE TWO FIGURES I.E. RS. 3,74,40,000/-(1,8 3,20,000 + 1,91,20,000). ON THESE-VERY DOCUMENTS, THE EXPENSES HAD BEEN MENTIONED AT RS. 35,04,000/- AND 60,00,0007- ( TOTAL BEING RS. 95,04,000/-), WHICH WERE NOT ALLOWED BY T HE ASSESSING OFFICER ON THE GROUND THAT NO PROOF OF IN CURRING THE SAID EXPENDITURE HAD BEEN FURNISHED BY THE APPELLAN T. 7. BEING AGGRIEVED BY THE SAID ADDITIONS, THE ASSES SEE PREFERRED AN APPEAL BEFORE THE CIT(A). HOWEVER, THE ASSESSEE FAILED TO ATTEND THE PROCEEDINGS BEFORE CIT(A). THE LD. CIT(A) PASSED AN EX. PARTE O RDER PARTLY ALLOWING THE APPEAL OF THE ASSESSEE, OBSERVING AS UNDER:- 6.2 NO SUBMISSION HAS BEEN FILED IN THE APPELL ATE PROCEEDINGS. THE APPELLANT HAD CATEGORICALLY ADMITTED IN HIS STATEMENT RECORDED BY DDIT (INV.), C HANDIGARH THAT THE NOTINGS ON THE DOCUMENTS SEIZED BY CBI, CH ANDIGARH CONTAINED THE DETAILS OF PROJECT IN THE NAME OF RAJ PURA PRIDE AND WERE IN RESPECT OF THE PROFITS OF VARIOUS PARTN ERS. THEREFORE, THE SUBSEQUENT CLAIM OF THE APPELLANT TH AT HE WAS NOT AWARE OF ANY STATEMENT HAVING BEEN RECORDED AND THAT THE NOTINGS OF THESE DOCUMENTS WERE SIMPLY ASSESSMENT O F THINGS TO COME, IS MERELY AN AFTERTHOUGHT, WHICH HAS RIGHT LY BEEN REJECTED BY THE ASSESSING OFFICER. THEREFORE, THE A PPELLANT IS TO BE ASSESSED ON HIS SHARE OF PROFIT MENTIONED ON THESE DOCUMENTS. 6.2.1 AS PER NOTINGS ON PAGE 4, THE REVENUE RECEIP TS ARE TO THE TUNE OF RS. 4.48 CRORES, BUT AT PAGE 5, AN AMOU NT OF RS. 30,00,000/- HAS BEEN ADDED TO THIS AMOUNT WITH NOTI NGS FROM SHED' AND THE INCOME HAS BEEN WORKED OUT AT RS. 4.7 8 CRORES. THE SHARE OF THE APPELLANT HAS BEEN WORKED OUT AT R S. 1,83,20,000/- AND RS. 1,91,20,000/- RESPECTIVELY AT THESE PAGES. THESE TWO PAGES CONTAIN RECEIPTS IN RESPECT OF THE SAME PROJECT I.E. RAJPURA PRIDE. IT APPEARS THAT TH E AMOUNT OF RS. 30,00,000/- WAS LEFT OUT TO BE ADDED WHILE MAKI NG 8 CALCULATIONS AT PAGE 4 AND THE REVISED CALCULATION HAS BEEN DONE AFTER ADDING THIS AMOUNT OF RS. 30,00,000/- AT PAGE 5. THUS, IT WAS NOT CORRECT FOR THE ASSESSING OFFICER TO MAKE ADDITION ON THE BASIS OF PAGE 4 AS WELL AS PAGE 5. THE REVISED AND CORRECT CALCULATION IS AT PAGE 5, AS PER WHICH THE SHARE OF THE APPELLANT IS RS. 1,91,20,000/- AND SO OUT OF ADDITION MADE OF RS. 3,74,40,000/-, ADDITION OF RS. 1,91,20, 000/- IS CONFIRMED. THE APPELLANT GETS RELIEF OF RS. L,83,20 ,000/~. GROUNDS OF APPEAL NO. 4 AND 5 ARE PARTLY ALLOWED. 8. WE HAVE GONE THROUGH THE IMPUGNED ORDER OF CIT(A ). THE LD. CIT(A) HAS UPHELD THE ADDITIONS TAKING INTO CONSIDERATION THE REVISED CALCULATION AT PAGE 5 OF THE SEIZED DOCUMENT. HE HAS OBSERVED THA T THE ADDITIONS CANNOT BE MADE IN RELATION TO THE SAME PROJECT ON THE BASIS O F SEIZED DOCUMENTS (PAGE 4 AS WELL AS PAGE 5). HE HAS CATEGORICALLY HELD THAT TH E CALCULATIONS MADE IN SEIZED DOCUMENTS AT PAGE 4 WERE ON ESTIMATION BASIS WHEREA S REVISED AND CORRECT CALCULATION WAS AT PAGE 5. HE THEREFORE, HAS GIVEN RELIEF TO THE ASSESSEE BY WORKING OUT THE INCOME OF THE ASSESSEE AT RS. 1,91, 20,000/- AS PER THE TRANSACTION RECORDED AT PAGE 5. THE LD. CIT(A), T HEREAFTER HAS ALSO DIRECTED THAT EXPENDITURE RELATING TO THE SHARE OF THE ASSES SEE AS PER THE SEIZED DOCUMENT PAGE 5 HE CALCULATED. HE, ACCORDINGLY HAS ALLOWED CORRESPONDING SHARE OF THE EXPENDITURE TO THE ASSESSEE. WE DO NOT FIND ANY INF IRMITY IN THE IMPUGNED ORDER OF LD. CIT(A) AND, HENCE, THE SAME IS UPHELD. THE APPEAL OF THE ASSESSEE IS, THEREFORE, DISMISSED. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE HEREBY DISMISSED. PRONOUNCED IN OPEN COURT ON 19.04.2016. SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : APRIL, 2016 9 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR