Smt. Rita Kumari, New Delhi V. DCIT, New Delhi

ITA 5305/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3776 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 10-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 30-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Keywords: Salary income
• Section: 244A; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 5304/DEL /2014 ASSESSMENT YEAR: 2008-09 ITA NO. 5305/DEL /2014 ASSESSMENT YEAR: 2009-10 SMT. RITA KUMARI, E-1A, MAHARANI BAGH, NEW DELHI. (PAN: AAIPK4790M) VS DCIT, CENTRAL CIRCLE-4, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHOK KUMAR, CA RESPONDENT BY: SMT. PARAMITA TRIPATHY, CIT D R DATE OF HEARING : 14.09.2017 DATE OF PRONOUNCEMENT: 31.10.2017 ORDER PER BENCH: BOTH THESE APPEALS HAVE BEEN PREFERRED BY THE ASSES SEE. ITA NUMBER 5304/DEL/2040 PERTAINS TO ASSESSMENT YEAR 20 08 09 AND ASSAILS THE ORDER DATED 23/05/2014 PASSED BY TH E LD. CIT (APPEALS)XXXIII, NEW DELHI WHEREAS ITA NUMBER 5305/DEL/2014 PERTAINS TO ASSESSMENT YEAR 2009 10 PASSED BY ITA NO. 5304 & 5305/DEL/2014 ASSESSMENT YEARS: 2008-09 & 2009-10 2 THE LD. CIT (APPEALS) XXXIII, NEW DELHI ON 23 RD MAY, 2014. BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEIN G DISPOSED OF THROUGH THIS COMMON ORDER. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 WAS CARRIED OUT ON 21 ST OF JANUARY 2011 IN M/S DHARAMPAL SATYAPAL GROUP OF CASES. IN RESPONSE TO THE STATUTORY NOTICE UNDER SECTION 153A, THE ASSESSEE FILED THE RETURN DECLARING A TOT AL TAXABLE INCOME OF RS. 36,00,547/- FOR ASSESSMENT YEAR 2008 09. SIMILARLY, FOR ASSESSMENT YEAR 2009 10, IN RESPON SE TO THE STATUTORY NOTICE UNDER SECTION 153A, THE RETURN WAS FILED DECLARING AN INCOME OF RS. 24,43,944/-. DURING BOTH THE YEARS, THE ASSESSEE HAD RECEIVED SALARY FROM M/S SAN LOREN ZO AG, SWITZERLAND WHICH WAS DECLARED AFTER DEDUCTING FEDE RAL PENSION, SOCIAL SECURITY CHARGES, ACCIDENTAL INSURANCE, GROU P HEALTH INSURANCE, PENSION, PERSONAL TAX ETC. THE AO WAS OF THE OPINION THAT GROSS SALARY IS TO BE BROUGHT TO TAX AND THERE FORE PROCEEDED TO MAKE AN ADDITION OF RS. 3,52,572/- IN ASSESSMENT YEAR 2008 09 AND OF RS. 3,57,648/- IN ASSESSMENT YEAR 2009 10. THE APPEAL BY THE ASSESSEE BEFORE THE LD. CIT (APPEALS) CHALLENGED THE ASSUMPTION OF JURISDICTION UNDER SECTION 153A O F THE ACT AND ITA NO. 5304 & 5305/DEL/2014 ASSESSMENT YEARS: 2008-09 & 2009-10 3 ALSO CHALLENGED THE ADDITIONS ON MERITS. HOWEVER, T HE APPEALS FOR BOTH THE YEARS WERE DISMISSED AND NOW THE ASSESSEE HAS APPROACHED THE ITAT AND HAS CHALLENGED THE ADDITION S ON THE FOLLOWING GROUNDS ITA 5304/DEL/2014 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN LAW IN CONFI RMING THE IMPUGNED ADDITION OF RS. 3,52,572.00 IN THE SAL ARY INCOME EARNED IN A FOREIGN DOMAIN AND WHICH IS ONLY ADDITION MADE VIDE ORDER PASSED U/S 153 IS BAD IN L AW, WITHOUT JURISDICTION AND VOID AB INITIO AND DESERVE TO BE QUASHED AS SUCH, AS THE SAME IS IN RESPECT OF A CLO SED ASSESSMENT WHICH HAS NOT ABATED AND IS MADE NOT ON THE BASIS OF ANY INCRIMINATING MATERIAL UNEARTHED DURIN G THE COURSE OF SEARCH ( I.E. NOT ON THE BASIS OF ANY CON CEALED MATERIAL WHICH WAS EITHER NOT DISCLOSED OR WAS INTE NDED NOT TO BE DISCLOSED ). RATHER THE ADDITION IS MADE TO THE NORMAL INCOME ALREADY ASSESSED/DISCLOSED AND NOT IN RESPECT OF ANY UNDISCLOSED INCOME DETECTED BASED ON ANY INCRIMINATING MATERIAL SEIZED AS A RESULT OF THE SE ARCH BUT BY MISINTERPRETING THE PROVISIONS OF LAW AND IGNORI NG THE REAL INCOME TEST AND SUBJECTING THE IMPUGNED AMOUNT S TO DOUBLE TAXATION. 2. THAT, WITHOUT PREJUDICE TO THE ABOVE GROUND OF APPEAL IN ANY MANNER WHATSOEVER , THE LEARNED CIT (A) HAS ERRED IN LAW IN NOT ALLOWING THE DELETION OF THE IMPUGNED ADDITIONS OF RS. 3,52,572.00 TO THE SALARY INCOME O F THE ASSESSEE ON THE MERITS OF THE CASE. 3. THAT WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF APPEAL, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) IS NOT JUSTIFIED IN LAW IN CONFIRMI NG THE CHARGE OF INTEREST U/S 234B. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR VARY FROM THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING. ITA NO. 5304 & 5305/DEL/2014 ASSESSMENT YEARS: 2008-09 & 2009-10 4 ITA NO.5305/DEL/2014:- 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) HAS ERRED IN LAW IN CONFI RMING THE IMPUGNED ADDITION OF RS. 3,57,648.00 IN THE SAL ARY INCOME EARNED IN A FOREIGN DOMAIN AND WHICH IS ONLY ADDITION MADE VIDE ORDER PASSED U/S 153 IS BAD IN L AW, WITHOUT JURISDICTION AND VOID AB INITIO AND DESERVE TO BE QUASHED AS SUCH, AS THE SAME IS IN RESPECT OF A CLO SED ASSESSMENT WHICH HAS NOT ABATED AND IS MADE NOT ON THE BASIS OF ANY INCRIMINATING MATERIAL UNEARTHED DURIN G THE COURSE OF SEARCH ( I.E. NOT ON THE BASIS OF ANY CON CEALED MATERIAL WHICH WAS EITHER NOT DISCLOSED OR WAS INTE NDED NOT TO BE DISCLOSED ). RATHER THE ADDITION IS MADE TO THE NORMAL INCOME ALREADY ASSESSED/DISCLOSED AND NOT IN RESPECT OF ANY UNDISCLOSED INCOME DETECTED BASED ON ANY INCRIMINATING MATERIAL SEIZED AS A RESULT OF THE SE ARCH BUT BY MISINTERPRETING THE PROVISIONS OF LAW AND IGNORI NG THE REAL INCOME TEST AND SUBJECTING THE IMPUGNED AMOUNT S TO DOUBLE TAXATION. 2. THAT, WITHOUT PREJUDICE TO THE ABOVE GROUND OF APPEAL IN ANY MANNER WHATSOEVER , THE LEARNED CIT (A) HAS ERRED IN LAW IN NOT ALLOWING THE DELETION OF THE IMPUGNED ADDITIONS OF RS. 3,57,648.00 TO THE SALARY INCOME O F THE ASSESSEE ON THE MERITS OF THE CASE. 3. THAT WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF APPEAL, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, 4. A) THE LEARNED CIT (A) IS NOT JUSTIFIED IN LAW IN NOT DELETING INTEREST U/S 234B, AND B) IS NOT JUSTIFIED IN LAW IN NOT DELETING INTEREST U/S 244A AND 234D. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR VARY FROM THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING. 3. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ADDITION PERTAINING TO SALARY WAS THE ONLY ADDITION WHICH HAD BEEN MADE IN BOTH THE YEARS UNDER APPEAL AND THAT T HESE ADDITIONS WERE BAD IN LAW AND WITHOUT JURISDICTION AS THEY WERE ITA NO. 5304 & 5305/DEL/2014 ASSESSMENT YEARS: 2008-09 & 2009-10 5 MADE IN RESPECT OF CLOSED ASSESSMENTS WHICH HAD NOT ABATED AND WHICH WERE NOT MADE ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH. IT WAS ALSO SUBMITTED THAT THE AS SESSEES APPEALS FOR ASSESSMENT YEARS 2007 08 AND 2010 1 1 IN ITA NUMBERS 5303 & 5306 WERE ALREADY ALLOWED BY THE ITA T DELHI BENCH BY DIRECTING THE DELETION OF ADDITIONS AS NO INCRIMINATING MATERIAL HAD BEEN FOUND DURING THE COURSE OF SEARCH IN RESPECT TO THE ADDITIONS MADE. 4. THE LD. CIT DR SUPPORTED THE ORDERS OF THE AUTHO RITIES BELOW BUT COULD NOT CONTROVERT THE FACT THAT THE IM PUGNED ADDITIONS WERE NOT BASED ON ANY INCRIMINATING MATER IAL FOUND DURING THE COURSE OF SEARCH. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE MATERIAL ON RECORD. IN BOTH THE APPEALS, THE FACT T HAT NO ASSESSMENT WAS PENDING HAS NOT BEEN DISPUTED BY THE LD. CIT DR. IT IS ALSO UNDISPUTED THAT THE AO HAS NOT REFER RED TO ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH WHILE MAKING THE IMPUGNED ADDITIONS. THE ONLY DISPUTE IS WITH REGARD TO THE QUESTION AS TO WHETHER ANY ADDITION COULD HA VE BEEN MADE WITHOUT THERE BEING ANY INCRIMINATING MATERIAL HAVI NG BEEN FOUND AND SEIZED DURING THE COURSE OF SEARCH OPERAT IONS. THE ITA NO. 5304 & 5305/DEL/2014 ASSESSMENT YEARS: 2008-09 & 2009-10 6 ASSESSING OFFICER HAS NOT MENTIONED ANY DOCUMENT FO UND DURING THE COURSE OF SEARCH EVIDENCING THAT ASSESSEE HAD O BTAINED BENEFIT OF PENSION OUT OF SALARY INCOME. IT IS OBSE RVED THAT THE FACT OF DEDUCTION FROM THE GROSS SALARY CAME TO THE NOTICE OF THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS ONLY AND IT CANNOT BE SAID THAT THE ADDITIONS MADE IN RESPECT OF DEDUCTIONS CLAIMED BY THE ASSESSEE WERE ON THE BASI S OF ANY INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH. ITAT DELHI BENCH IN ASSESSEES OWN APPEALS FOR ASSE SSMENT YEARS 2007 08 AND 2010 11 HAD DELETED SIMILAR ADDITIO NS ON IDENTICAL FINDINGS OF FACT. THE ITAT DELHI BENCH IN ITA NUMBERS 5303 AND 5306/DEL/2014, VIDE ORDER DATED 4 TH OF AUGUST 2017, HAVE DELETED IDENTICAL ADDITIONS TO THE SALARY INCO ME OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT NO ADDITION COULD HAVE BEEN MADE IN THE YEARS UNDER CO NSIDERATION AND GROUND NO. 1 AND BOTH THE APPEALS IS ACCORDINGL Y ALLOWED. 6. IN THE FINAL RESULT BOTH THE APPEALS OF THE ASSE SSEE STAND ALLOWED. ITA NO. 5304 & 5305/DEL/2014 ASSESSMENT YEARS: 2008-09 & 2009-10 7 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31ST O CTOBER, 2017. SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) PRESIDENT JUDICIAL MEMBER DATED: 31ST OCTOBER, 2017 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGI STRAR