S.N. Arora/Sapra, New Delhi V. ITO, Ward- 23(2), New Delhi

ITA 5748/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2720 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 06-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RATAN SINGH
• Keywords: Unexplained cash credit; Unexplained investment
• Section: 271(1)(c); 142(1); 143(1); 143(2); 48; 147; 68; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 5748/DEL/2018 : ASSTT. YEAR : 2008-09 S. N. ARORA/SAPRA, H-1481, 1 ST FLOOR, C.R. PARK, NEW DELHI-110019 VS INCOME TAX OFFICER, WARD-23(2), NEW DELHI-110002 (APPELLANT) (RESPONDENT) PAN NO. A RQPS5550E ASSESSEE BY : SH. R. S. SINGHVI, CA REVENUE BY : SH. RATAN SINGH, SR . DR DATE OF HEAR ING: 2 1 . 10 .20 2 1 DATE OF PRONOUNCEMENT: 27 .10 .20 2 1 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-31, NEW DELHI DATED 31. 07.2018. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSES SEE: 1(I). THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND UNDER THE LAW, THE ASSESSING OFFICER HAS WRONGL Y ASSUMED JURISDICTION U/S. 148 WITHOUT PROPER APPRECIATION OF FACTS, RECORDING OF SATISFACTION AN D REQUISITE APPROVAL IN TERMS OF PROVISIONS OF SEC. 1 51 OF THE ACT. (II) THAT THERE IS NO CASE OF ANY INCOME ESCAPING ASSESSMENT AND WHOLE BASIS OF REASSESSMENT IS ILLEG AL AND WITHOUT JURISDICTION. 2(I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING ADDITION OF ITA NO. 5748/DEL/2018 S. N. ARORA/SAPRA 2 RS. 56 LAKHS AS UNEXPLAINED INVESTMENT IN TERMS OF PROVISIONS OF SEC. 69 OF I.T. ACT, 1961. (II) THAT THERE IS NO CASE OF ANY UNEXPLAINED INVESTMENT AND FINDING AND CONCLUSION OF THE CIT(A) IS WITHOUT PROPER APPRECIATION OF FACTS, APPLICATIO N OF MIND AND OPPORTUNITY TO THE APPELLANT. (III) THAT ADDITION OF RS. 56 LAKHS IS HIGHLY ARBIT RARY AND UNJUSTIFIED. 3(I) THAT CIT(A) IS ALSO NOT JUSTIFIED IN CONFIRMIN G ADDITION OF RS. 55,03,285/- AS UNEXPLAINED CASH DEPOSIT IN TERMS OF PROVISIONS OF SEC. 68 OF THE I. T. ACT, 1961. (II) THAT THERE IS NO FACTUAL OR LEGAL BASIS FOR AL LEGED CASH DEPOSIT OF RS. 55,03,285/- AND ASSESSING OFFIC ER HAS CONSIDERED THE SAME IN ARBITRARY MANNER WITHOUT ANY REFERENCE TO BANK ACCOUNT OR ANY OTHER MATERIAL . 3. THE REASONS RECORDED FOR REOPENING U/S 148 ARE A S UNDER: REASONS RECORDED FOR INITIATING PROCEEDINGS U/S. 1 48 OF THE IT ACT, 1961 IN THE CASE OF SH. S N ARORA/SAPRA (AROPS 5550E, ASEPS5018G) FOR THE A.Y. 2008-09 {PAPER BOOK PAGE N O. 31] THE ADDL. DIRECTOR INCOME TAX (INV.), UNIT-V, NEW D ELHI VIDE HIS LETTER F.NO.ADDL. DIT(INV.)/U-V/2011-12/251, DATED 16.03.2012 HAD SENT A REPORT IN THE CASE OF SH. S N ARORA / SA PRA. AS PER THE INVESTIGATIONS MADE, THE ASSESSE HAD DEP OSITED UNACCOUNTED CASH IN HIS BANK ACCOUNT AND ALSO MADE LARGE INVESTMENT IN ASSETS. THE DETAILS ARE AS FOLLOWS:- 1. UNEXPLAINED CASH DEPOSIT: A.Y. 2008-09 RS. 55,03,285/- 2. UNEXPLAINED INVESTMENTS: RS. 56,00,000/- TOTAL RS. 1,11,03,285/- AS PER THE ABOVE FACTS, THE UNEXPLAINED CASH DEPOSI TS AND UNEXPLAINED INVESTMENTS ARE LIABLE TO TAX U/S. 68 & 69 OF THE INCOME TAX ACT, 1961. THE INCOME HAS ESCAPED ASSESS MENT IN THE CASE OF SH. S N ARORA/SAPRA FOR A.Y. 2008-09 TO THE EXTENT OF RS. 1,1,03,285/-, AS PER THE PROVISIONS OF THE INCO ME TAX ACT, 1961. ITA NO. 5748/DEL/2018 S. N. ARORA/SAPRA 3 IN VIEW OF THE ABOVE MENTIONED FACTS, I HAVE REASON TO BELIEF THAT INCOME TO THE TUNE OF RS. 1,11,03,285/- HAS ES CAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 1961. ACCORDINGLY, NECESSARY PERMISSION/APPROV AL UNDER SECTION 151(2) OF THE INCOME TAX ACT, 1961 MAY KIND LY BE ACCORDED FOR ISSUANCE OF NOTICE U/S. 148 OF THE INC OME TAX ACT, 1961 FOR A.Y. 2008-09. ANNEXURE C {PAPER BOOK PAGE NO. 32} NOTE: THE ASSESSING OFFICER IS REQUESTED TO GO THRO UGH THE BANK STATEMENT AND OTHER DOCUMENTS FORWARDED HEREWITH TO ARRIVE AT THE INCOME ESCAPING ASSESSMENT BEFORE ISSUING NOTIC E U/S 148. 4. THE FIRST ISSUE PERTAINS TO DEPOSIT OF CASH IN T HE BANK. THE ASSESSING OFFICER REOPENED THE CASE HOLDING THAT TH E ASSESSEE HAD CASH DEPOSITS TO THE TUNE OF RS.55,03,285/-. ON GOING THROUGH THE BANK ACCOUNT MENTIONED BY THE ASSESSING OFFICER IT IS UNDISPUTEDLY PROVED THAT THERE WERE NO SUCH CASH DEPOSITS AS ALLEGED BY THE REVENUE IN THE REASONS RECORDED FOR REOPENING. 5. WE HAVE GONE THROUGH THE BANK STATEMENT AND SUBMISSIONS AND FIND THAT THE REASONS RECORDED BY T HE ASSESSING OFFICER WHILE REOPENING THE CASE HAVE BEE N GROSSLY ERRONEOUS AS AT THE FIRST INSTANCE THERE WERE NO SU CH CASH DEPOSITS OF RS.55,03,285/- IN THE BANK ACCOUNT. FUR THER, AN AMOUNT OF RS. 37,96,000/- HAS BEEN DEPOSITED THROUG H CHEQUES WHICH PERTAIN TO REGULAR COURSE OF BUSINESS OF THE ASSESSEE. HENCE, IN VIEW OF THE ERRONEOUS REASONS RECORDED ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS BY THE ASSESSING OFFICER, THE ADDITION MADE ON THIS ACCOUNT CANNOT BE UPHELD. 6. THE SECOND ISSUE PERTAINS TO RECEIPT OF RS.56,00 ,000/- RECEIVED BY THE ASSESSEE VIDE AGREEMENT DATED 10.04 .2007 WITH ONE SH. NILAMBER RUDRAPAL FOR PROPERTY NO. 1481, C. R. PARK, NEW DELHI. THIS SAME TRANSACTION HAS BEEN TREATED A S UNEXPLAINED INVESTMENT IN THE A.Y. 2006-07 BASED ON THE ITA NO. 5748/DEL/2018 S. N. ARORA/SAPRA 4 COLLABORATION AGREEMENT ENTERED IN THE A.Y. 2006-07 . THE PAYMENTS MADE ON VARIOUS DATES AMOUNTING TO RS.46,0 0,000/- HAS BEEN ASSESSED IN THE A.Y. 2006-07 AND NO FRESH PAYMENT HAS BEEN MADE IN THE INSTANT YEAR. THE SAID ASSESSM ENT ORDER IS AS UNDER: RETURN DECLARING TAXABLE INCOME OF RS 292643/- WAS MANUALLY FILED ON 04.01.2007. THIS WAS ASSESSED U/S 143(1) OF I.T ACT. THE CASE WAS RE-OPENED U/S 148 OF I.T. ACT ON THE BASIS OF I NFORMATION RECEIVED FROM ADDL. DIRECTOR INCOME TAX(INV.), UNIT -V, NEW DELHI VIDE HIS LETTER F.NO.ADDL.DIT(INV.)/U-V/2011-12/251 AND AFTER OBTAINING NECESSARY APPROVAL FROM ADDL. CIT RANGE-2 3, NEW DELHI. ACCORDINGLY, NOTICE U/S 148 OF I.T WAS ISSUED ON 26 .03.2013. SUBSEQUENT NOTICE U/S 143(2) OF I.T ACT WAS ISSUED ON 28.01.2014 FIXING THE CASE FOR HEARING ON 30.01.2014. FURTHER NOTICE U/S 142(1) OF I.T ACT ALONG WITH QUESTIONNAIRE WAS ISSUED ON 1 9.02.2014 FIXING THE CASE FOR 25.02.2014. IN COMPLIANCE TO THESE NOT ICES SHRI S.N. ARORA/SAPRA AND SHRI VINOD BANSAL, CA/A.RS OF ASSE SSEE ATTENDED THE SCRUTINY PROCEEDING ON 28.01.2014, 10.02.2014 A ND 24.02.2014 AND FURNISHED PART DETAILS AS CALLED FOR WHICH WERE EXAMINED AND PLACED ON RECORD. SHRI AVINASH KUMAR ALOK, C.A FILE D HIS POWER OF ATTORNEY ON 11.03.2014 AND FILED COPY OF AN FIR ST ATING THAT THE RELEVANT DOCUMENTS HAVE BEEN STOLEN AND HE NEED FUR THER TIME TO SUBMIT THE SAME. AS REGARDS TO ENTRIES IN PASS BOOK HE EXPRESSED HIS INABILITY TO EXPLAIN ANYTHING. THE CHANGE OF A.R AT THIS STAGE IS NOTHING BUT A DELAYING TACTIC ADOPTED BY THE ASSESS EE. 2. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E CLAIMED TO HAVE DERIVED INCOME FROM BUSINESS AND PROFESSION ON LY. 3. AS PER THE INFORMATION RECEIVED FROM ADDL. DIREC TOR INCOME TAX(INV.), UNIT.-V NEW DELHI VIDE HIS LETTER F.NO.A DDL.DIT(INV.)/U- V/2011-12/251 DATED 16-03-2012 THAT THE ASSESSEE HA D DEPOSITED ITA NO. 5748/DEL/2018 S. N. ARORA/SAPRA 5 UNACCOUNTED CASH IN HIS BANK ACCOUNT AMOUNTING TO R S. 28270090/- DURING THE FINANCIAL YEAR 2005-06 AND HAD MADE INVE STMENTS AMOUNTING TO RS.9400000/- FROM UNEXPLAINED SOURCES, THE CASE WAS REOPENED U/S 148 OF THE I.T. ACT 1961 AND NOTICE U/ S 148 OF THE I.T. ACT, 1961 WAS ISSUED TO THE ASSESSEE ON 26.03.2013. IN RESPONSE TO WHICH VIDE ORDER SHEET ENTRY DATED 28-01-2014, IT H AS BEEN INFORMED BY THE AR OF THE ASSESSEE THAT THE ORIGINALLY FILED RETURN MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S 1 48 OF THE I.T. ACT, 1961. A NOTICE U/S 143(2) OF THE I.T. ACT, 1961 WAS ISSUE D FIXING THE CASE FOR HEARING ON 30-01-2014. SHRI VINOD BANSAL, CA AN D AR OF THE ASSESSEE ATTENDED ON 10-02-14 AND FILED INCOMPLETE DETAILS. A QUESTIONNAIRE ALONGWITH NOTICE U/S 142(1) OF THE I. T. ACT WAS ISSUED TO ASSESSEE ON 19-02-2014 FIXING THE CASE FOR HEARI NG ON 25-02-2014 BUT THE SAME ALSO REMAINED UN-COMPLIED WITH. SINCE THE CASE WAS GETTING BARRED BY LIMITATION, A FINAL SHOW CAUSE NO TICE WAS ISSUED ON 06.03.2014 MAKING IT VERY CLEAR THAT IF NO REPLY IS RECEIVED FROM HIS SIDE ON OR BEFORE 11.03.2014 THE CASE WILL BE DECID ED ON THE BASIS OF INFORMATION AVAILABLE ON RECORDS. THE ASSESSEE, HOW EVER FAILED TO AVAIL THE FINAL OPPORTUNITY GIVEN TO HIM SINCE THE NEW AR APPOINTED BY HIM ASKED FOR FURTHER TIME IN VIEW OF HIS TAKING THE CASE RECENTLY, AS A RESULT OF WHICH HIS INCOME HAS BEEN COMPUTED O N THE BASIS OF INFORMATION AVAILABLE ON RECORDS. ON THE BASIS OF THE COPIES OF THE PASS BOOKS PLACED ON RECORD AND INFORMATION RECEIVED FROM INVESTIGATION WING THERE IS CASH DEPOSITS OF RS.28270090/- FOR WHICH NO EXPLANATION HAS BEEN PROVIDED BY THE ASSESSEE. AS SUCH AN AMOUNT OF RS. 28270090/- IS AD DED TO THE INCOME OF THE ASSESSEE U/S 68 OF THE I.T. ACT, 1961 . PENALTY PROCEEDING U/S 271(1)(C) OF I.T ACT FOR CONCEALMENT OF INCOME OF FILING INACCURATE PARTICULARS OF SUCH INCOME WITHIN THE MEANING OF ITA NO. 5748/DEL/2018 S. N. ARORA/SAPRA 6 EXPLANATION 1 TO SUB-SECTION 1 OF SECTION 271 (1)(C ) OF I.T ACT IS INITIATED IN THIS CASE. 4. IT IS ALSO PERTINENT TO MENTION THAT THE SOURCE OF THE FOLLOWING INVESTMENTS AMOUNTING TO RS.9400000/- MADE BY THE A SSESSEE DURING THE RELEVANT PERIOD HAVE REMAINED UNEXPLAINE D, AS SUCH THE SAME IS ALSO ADDED BACK TO THE INCOME OF THE ASSESS EE U/S 69 OF THE INCOME TAX ACT, 1961. S.NO. DESCRIPTION OF INVESTMENT AMOUNT 1. AGREEMENT DATED 08.06.2005 WITH SHRI GURDEV SINGH FOR PROPERTY NO. 493, E-BLOCK, GREATER KAILASH-II, NEW DELHI RS 48 00000/ - 2. AGREEMENT DATED 13.09.2005 WITH SHRI NILAMBER RUDRAPAL FOR PROPERTY NO. 1481, C.R. PARK, NEW DELHI RS.4600000/ - TOTAL RS. 9400000 PENALTY PROCEEDING U/S 271(1)(C) OF I.T ACT FOR CON CEALMENT OF INCOME OF FILING INACCURATE PARTICULARS OF SUCH INC OME WITHIN THE MEANING OF EXPLANATION 1 TO SUB-SECTION 1 OF SECTIO N 271(1)(C) OF I.T ACT IS INITIATED IN THIS CASE. 5. IN THE LIGHT OF THE ABOVE, HIS TAXABLE INCOME IS RECOMPUTED AS UNDER: INCOME RETURNED AS PER ITR RS.292643/ - ADD: 1. UNEXPLAINED CASH CREDIT U/S 68 AS DISCUSSED IN PARA 3 ABOVE RS.28270090/ - 2. UNEXPLAINED INVESTMENT U/S 69 AS DISCUSSED IN PARA 4 ABOVE RS.9400000/ - TOTAL TAXABLE INCOME RS.37962733 ROUNDED OFF U/S 288A RS.37962730 7. WE HAVE PERUSED THE ASSESSMENT ORDER DATED 19.03 .2014 WHEREIN THE PROPERTY HAS BEEN TAKEN AS UNEXPLAINED INVESTMENT U/S 69 TO THE TUNE OF RS.56,00,000/-. SINCE, THE AM OUNT STANDS ITA NO. 5748/DEL/2018 S. N. ARORA/SAPRA 7 ASSESSED IN THE HANDS OF THE ASSESSEE FOR THE A.Y. 2006-07, THE PROPERTY INVOLVED IS THE SAME AND THERE WAS NO EVID ENCE OF PAYMENT OF RS.10,00,000/- BY THE ASSESSEE, WE HOLD THAT NO FURTHER ADDITION IS REQUIRED TO BE MADE IN THE INST ANT ASSESSMENT YEAR. IN VIEW OF THESE FACTS, THE ORDER OF THE LD. CIT(A) CANNOT BE SUSTAINED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/10/2021. SD/- SD/- (AMIT SHUKLA) (DR . B. R. R. KUMAR) JUDICIAL MEMBER ACCOU NTANT MEMBER DATED: 27/10/2021 *SUBODH KUMAR, SR. PS* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR