Sandeep Kumar alias Sanju, Ratia V. ITO, Fatehabad

ITA 5459/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58783 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 07-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS S MOHANTHY
• Keywords: Reopening of assessment; Reason to believe
• Section: 142(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `G: NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER I.T. A. NO.5459/DEL/2011 ASSESSMENT YEAR : 2005-06 SHRI SANDEEP KUMAR ALIAS SANJU, INCOME-TAX OFFICER , S/O SHRI SUBHASH CHANDER GROVER, VS. WARD 2, FATEHA BAD. R/O KHATIK MOHALLA, RATIA. PAN NO. BEHPK4160B (APPELLANT) (RESPONDEN T) APPELLANT BY : SHRI GAUTAM JAIN, CA. RESPONDENT BY : MRS. S. MOHANTHY, DR. O R D E R PER K.D. RANJAN, ACCOUNTAT MEMBER: THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 200 5-06 ARISES OUT OF THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S), ROHTAK. THE GROUNDS OF APPEAL RAISED ARE REPRODUCED AS UNDER:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN CONFI RMING THE ADDITION OF RS.9,50,000/- IN THE HANDS OF THE APPEL LANT ON ACCOUNT OF INVESTMENT MADE AS ADVANCE FOR PURCHASE OF PROPERTY WHEREAS THE SAID INVESTMENT WAS MADE BY HI M ALONGWITH OTHER 5 CO-SHARERS. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS GROSSLY ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE INITIATION OF PROCEEDINGS U/S 147 OF THE ACT AND, A SSESSMENT FRAMED U/S 147/144 OF THE ACT, DESPITE THE FACT THA T THERE WAS NO 2 TANGIBLE AND, RELEVANT MATERIAL ON RECORD TO ENABLE THE LEARNED OFFICER TO HAVE REASON TO BELIEVE THAT INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT AND, AS SUCH BOTH ARE WITHOU T JURISDICTION AND, DESERVE TO BE QUASHED AS SUCH. 2. THE ONLY ISSUE FOR CONSIDERATION RELATES TO CONF IRMING THE ADDITION OF RS.9,50,000/- ON ACCOUNT OF INVESTMENT MADE FOR PUR CHASE OF PROPERTY. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSE SSING OFFICER INITIATED PROCEEDINGS UNDER SEC. 147 ON THE BASIS OF CIVIL SU IT FILED AGAINST SHRI PARMANAND GIRDHAR WHO DENIED TO HAVE REGISTRATION O F THE SHOP FOR WHICH ADVANCE OF RS.9,50,000/- WAS PAID BY THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THERE WAS NO RESPONSE FROM T HE ASSESSEE. NOTICES ISSUED UNDER SEC. 142(1) DATED 26.07.2010 AND 30 TH SEPTEMBER, 2010 REMAINED UN-COMPLIED. THE AO ISSUED NOTICE UNDER S EC. 143(2)/142(1) ALONG WITH DETAILED QUESTIONNAIRE FIXING THE CASE F OR HEARING ON 30.11.2010. THERE WAS NO RESPONSE TO THE QUESTIONNAIRE AND THE NOTICES ISSUED BY THE AO. THE AO THEREFORE, PROCEEDED TO COMPLETE ASSESS MENT EX PARTE. THE AO OBSERVED THAT ADVANCE MONEY OF RS.4,50,000/- WAS PAID TO SHRI PARMANAND GIRDHAR OF RATIA ON 24.01.2005 AND 25.01. 2005 FOR PURCHASE OF SHOP. SINCE THE ASSESSEE DID NOT COOPERATE THE AO PROCEEDED TO COMPLETE ASSESSMENT BY MAKING ADDITION OF RS.9,50,000/- IN T HE HANDS OF THE ASSESSEE. 3. BEFORE THE CIT(A) IT WAS SUBMITTED BY THE ASSESS EE THAT THE ASSESSEE WAS DERIVING INCOME FROM DAIRY AND TUITION AND SINC E THE INCOME WAS BELOW 3 TAXABLE LIMIT, NO RETURN OF INCOME WAS FILED. THE ASSESSEE ALONG WITH HIS FIVE OTHER ASSOCIATES NAMELY (1) RAM PARSHAD MONGA S/O SHRI SATI RAM MONGA; (2) DHARMENDER S/O SHRI HUKUM CHAND; (3) SUB HASH S/O SHRI NANAK CHAND, (4) PRADEEP S/O SHRI BRIJ LAL; AND (5) GOBIN D S/O SHRI CHANDER BHAN, HAVE ENTERED INTO A VERBAL AGREEMENT WITH SHRI PARM ANAND GIRDHAR AND NEELAM RANI FOR PURCHASE OF A SHOPPING COMPLEX FOR RS.37 LAKHS AND A SUM OF RS.9.5 LAKHS WAS PAID IN ADVANCE (RS.2.5 LAKH ON 24.01.2005 AND RS.7 LAKH ON 25.01.2005). AS THE SELLER DENIED THE TRAN SACTION, AN FIR WAS FILED ON 10.05.2006 AND THE CASE WAS FILED IN THE CRIMINA L COURT WHICH WAS DISMISSED. THE OTHER PARTY APPROACHED THE SESSION S COURT FOR PRE-ARREST BAIL ON 12.05.2006 AND THE ADDITIONAL SESSIONS JUDG E ACCEPTED THE BAIL VIDE ORDER DATED 16.05.2006. SINCE THE ASSESSEE COULD NOT GIVE ANY CONCRETE EVIDENCE, THE COURT WAS OF THE OPINION THAT EVEN I F THE ALLEGATION HAS ANY TRUTH, NO CRIMINAL OFFENCE IS MADE OUT AND THE APPELLANT WAS AT LIBERTY TO SEEK CIVIL LIABILITY. IN VIEW OF THESE FACTS IT WAS SUBMITTED BY THE LEARNED AR OF THE ASSESSEE THAT THE AO REOPENED THE CASE ONLY IN THE CASE OF ASSESSEE ALONE AND NOT IN OTHER CASES. THEREFORE, THERE WAS NO JUSTIFICATION TO ADD THE TOTAL AMOUNT IN THE HANDS OF THE ASSESSE E. THE LEARNED AR OF THE ASSESSEE FILED THE COPY OF FIR ALONG WITH COURT ORD ER AND AFFIDAVIT DATED 30.08.2011 BY ONE SHRI RAM DASS. THE LEARNED CIT(A ) HOWEVER, NOTED 4 CERTAIN DISCREPANCIES IN THE AFFIDAVIT. SOME OF TH E DISCREPANCIES WERE THAT THE NAME IN THE AFFIDAVIT WAS SHRI RAM DASS S/O SHR I SATI RAM WHEREAS THE ASSOCIATED PERSON WITH THE ASSESSEE IS SHRI RAM PAR SHAD MONGA S/O SHRI SATI RAM MONGA. THE PAYMENTS WERE MENTIONED AS RS. 2.5 LAKHS ON 25.01.2005 AND RS.7 LAKHS ON 26.01.2005 WHEREAS THE SE PAYMENTS WERE MADE ON 24.01.2005 AND 25.01.2005 RESPECTIVELY AS P ER THE COURT ORDER AND THE FIR. NO SHARE OF INVESTMENT WAS GIVEN IN THE A FFIDAVIT. THE LEARNED CIT(A) IN VIEW OF THE ABOVE MENTIONED DISCREPANCIES REJECTED THE CONTENTS OF AFFIDAVIT FILED BY SHRI RAM DASS. IT WAS ALSO S UBMITTED THAT FIR AND THE COURT ORDER REVEALED THAT THE COMPLAINT WAS MADE BY THE ASSESSEE ALONG WITH FIVE OTHERS. IT WAS ALSO SUBMITTED THAT NEITHER IN FIR NOR IN THE CASE BEFORE COURT THE INVESTMENTS/ADVANCES GIVEN BY EACH OF SIX PARTIES WERE MENTIONED. NO SUCH DETAILS WERE FILED EVEN DURING THE APPELLAT E PROCEEDINGS. THE ASSESSEE HAD NOT GIVEN ANY EVIDENCE IN SUPPORT OF I NVESTMENTS. ONLY ARGUMENT TAKEN BY THE LEARNED AR OF THE ASSESSEE WA S THAT INVESTMENT WAS MADE BY SIX PERSONS AND THEREFORE, ENTIRE AMOUNT CO ULD NOT HAVE BEEN ADDED IN THE HANDS OF THE ASSESSEE. THE LEARNED CIT(A) I N VIEW OF THESE FACTS UPHELD THE ADDITION MADE IN THE HANDS OF THE ASSESS EE. 5 4. BEFORE US, THE LEARNED AR OF THE ASSESSEE DID NO T ARGUE THE REOPENING OF ASSESSMENT UNDER SEC. 147. HENCE, THIS GROUND I S DISMISSED AS NOT PRESSED. 5. AS REGARDS THE CONFIRMATION OF ADDITION OF RS.9, 50,000/-, IT WAS SUBMITTED BY THE ASSESSEE THAT THE AO HAS INITIATED ASSESSMENT PROCEEDINGS ON THE BASIS OF CIVIL SUIT. THE ASSESSEE ALONG WIT H HIS OTHER FIVE ASSOCIATES HAS ADVANCED RS.9,50,000/- TO SHRI PARMANAND GIRDHA R. THE BASIS FOR REOPENING OF ASSESSMENT IS CRIMINAL SUIT AGAINST TH E OWNERS OF THE PROPERTY. THEREFORE, IT WAS NOT JUSTIFIED ON THE PART OF THE AO TO MAKE AN ADDITION IN THE HANDS OF THE ASSESSEE ALONE. NONE OF THE ASSOC IATES WAS RELATED TO THE ASSESSEE. HE THEREFORE, PLEADED THAT AT THE BEST A DDITION CAN BE MADE TO THE EXTENT OF 1/6 TH OF RS.9,50,000/- IN THE HANDS OF THE ASSESSEE. ON THE OTHER HAND, THE LEARNED SR. DR STRONGLY SUPPORTED THE ORD ER OF THE CIT(A). SHE SUBMITTED THAT THE ASSESSEE HAD NOT PRODUCED ANY EV IDENCE IN SUPPORT OF INVESTMENT MADE BY THE ASSESSEE. THE ASSESSEE HAD NOT APPEARED BEFORE THE AO AND HAD NOT PRODUCED ANY EVIDENCE EXPLAINING THE INVESTMENT IN THE SHOPPING COMPLEX. THEREFORE, SHE STRONGLY SUPPORTE D THE ORDERS OF THE LEARNED CIT(A) AND ASSESSING OFFICER. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE AO HAS INITIATED PROCEEDI NGS UNDER SEC. 147 ON THE 6 BASIS OF CRIMINAL SUIT FILED AGAINST THE OWNERS OF THE PROPERTY WHO REFUSED TO TRANSFER THE PROPERTY. THE SOURCE OF INFORMATION I S CRIMINAL SUIT FILED AGAINST SHRI PARMANAND GIRDHAR AND SMT. NEELAM RANI W/O SHR I PARMANAND GIRDHAR. IT IS ALSO A FACT THAT THE ASSESSEE ALONG WITH OTHER FIVE ASSOCIATES HAD STRUCK BARGAIN FOR PURCHASE OF SHOP IN THE SHOPPING COMPLEX AND FOR THAT HAD GIVEN ADVANCE OF RS.9,50,000/-. SINCE NONE OF THE ASSOCIATES IS RELATED TO THE ASSESSEE, THE ASSESSEES SHARE IN THE ABSENCE OF A NY CONTRARY MATERIAL COMES TO 1/6 TH OF RS.9,50,000/-. WHEN A DEAL WAS STRUCK BY SIX P ERSONS WHO HAVE MADE ADVANCE TO THE OWNERS OF THE PROPERTY, IT WILL BE HIGHLY IMPROPER TO ASSESS THE ENTIRE AMOUNT OF RS.9,50,000/- IN THE HA NDS OF THE ASSESSEE ALONE. WE THEREFORE, ARE OF THE CONSIDERED OPINION THAT ON LY 1/6 TH OF RS.9,50,000/- BEING THE SHARE OF THE ASSESSEE CAN BE ADDED TO HIS INCOME. WE WOULD LIKE TO MAKE IT CLEAR THAT THE AO WILL BE FREE TO TAKEN ACTION AGAINST OTHER FIVE PERSONS AS PER LAW. IN VIEW OF THE ABOVE, THE ASSES SING OFFICER IS DIRECTED TO ASSESS ONLY 1/6 TH OF RS.9,50,000/- BEING THE SHARE OF THE ASSESSEE I N THE ADVANCE GIVEN FOR PURCHASE OF SHOP IN THE SHOPPING COMPLEX. WE ORDER ACCORDINGLY. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS P ARTLY ALLOWED. 8. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 29 TH FEBRUARY, 2012. 7 SD/- SD/- (I.P. BANSAL) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH FEBRUARY, 2012. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.