K.R. Pulp & Papers Ltd, New Delhi V. ACIT, Central Circle-19, New Delhi

ITA 5852/DEL/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5450 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 10-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Search and seizure; Additional evidence
• Section: 132; 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘C’ BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER ITA No. 5852/DEL/2018 [A.Y 2014-15] M/s K.R. Pulp & Paper Ltd Vs. The A. C.I.T. 304, Roots Tower, Community Centre Central Circle - 19 District Centre, Laxmi Nagar New Delhi New Delhi PAN: AAACK 5861 C (Applicant) (Respondent) Assessee By : Shri Gautam Jain, Adv Department By : Shri Rajesh Kumar, CIT- DR Date of Hearing : 20.07.2022 Date of Pronouncement : 20.07.2022 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the CIT(A)-27 dated 06.08.2018 pertaining to Assessment Year 2014-15. 2 2. The assessee has raised three substantial grounds of appeal with sub-grounds. But, at the very outset, the ld. counsel for the assessee stated that he is not pressing Ground Nos. 2 and 3 with their sub- grounds. On such concession, the same are dismissed as not pressed. 3. The solitary ground that survives relates to the addition sustained by the ld. CIT(A) amounting to Rs. 18,79,420/- on account of unexplained investment in cash in hand. 4. Briefly stated, the facts of the case are that a search and seizure operation u/s 132 of the Act was conducted on 08.07.2015. During the course of search and seizure operations, one of the incriminating documents found from the premises of the assessee showed cash of Rs. 21 lakhs received in various denominations. 5. Scanned copy of the same is exhibited in the assessment order at page 3 of the assessment order which is as under: 3 6. The aforementioned scanned copy was confronted to the Director of the company Shri Madho Gopal Agarwal. Shri Agarwal, in his statement, submitted that the working mentioned in this loose paper does not pertain to any transaction entered into by the assessee group 4 or individual family member and seems to be rough working of the person having the possession of the same. 7. Proceeding further, the assessee submitted list of all properties purchased and sold by the assessee group entities, promoters/family members and investment in properties. The assessee explained as under: “In this regard, during the course of assessment proceedings through notice u s 142(11 alongwith questionnaire dated 23.21.2017, the assessee was requested provide source of cash transaction, it the source of investment is loans or advances received from other group entity, please provide first source from which this amount flow. Corresponding to loans and advances provide a proof that these are recorded in financial statement of the assessee and requested to submit the reply by 28. H 2017. 5 Name and address of setter L . Particular of property Date of booking Date wise detail s of payme Total investment Source of Invest ment’ Khurram. Aziz Khan R/o Mahnand : Gatta No 901/2 Area 0 308 Hr- ! 08.11.201 Cash . Rs.41,320/ Own Funds Khurratxn Aziz Khan RJo M«Jhmand Jarsgla Gatta No 3QKHA, 37KHA. 8KAA, 38KHA, 34,33,39 K.A AREA 1.248 MECT 0815 2013 Cash Rs. 1.96.020/- Own Fund Khurram Aziz Khan Mahmand Jangta Gar.a No 7 and Onus No ? Village. Chakmamrez Area 0,075 fleet and 1! 11.2013 Cash R* 3.49,520/- Own Funds Khurram Aziz Khan 8/0 Mahmand Jangla Gann No 8 . Vili Chrtkmamrez Seder SPN Area 0,2915 fleet 11.11 2013 Cash Rs. 2,58.520/- Own Funds Khurram Aziz Khan R/o Mahrrmnd dangla 0.401 Heel Gatta No 11, Vtll Chaktrsajnrez Sadar 21.11 2013 Cash Rs 3,50.520/- Own Funds Khurram Aziz Khan R/o Mahmand Jarigta Oana No 172,2,162 Area 0.283 Heel Village Chakma.tr, rex Sadar 28.11.2013 Cash Rs2.51.520/- Own Funds Jansher r/o Village Akhtva Nagar Gatta No 1410, Village Akhlvar Nagar Sadar Area 0 2025 Meet 05.02.201 4 Cash Rs 4,32,000/- Own Funds Total Ra.18.79.420/- 6 8. In its reply, the assessee submitted that the source of cash was from own funds and submitted sale/purchase agreement for property transaction. But the same were dismissed by the Assessing Officer who was of the opinion that the assessee has failed to provide cash book in support of its claim that the cash used was from own funds and treating the transaction as devoid of any documentary evidence, Rs. 18,79,420/- was added to the total income of the assessee. Assessment was framed u/s 153A r.w.s 143(3) of the Act vide order dated 29.12.2017. 9. Before the ld. CIT(A), the assessee sought permission for admission of additional evidence u/r 46A of the I.T. Rules claiming that the assessee had furnished reply dated 30.12.2017 wherein copy of ledger account of land and copy of relevant cash account showing source of payment for purchase of land and all related details were furnished. 10. In its application, the assessee strongly contended that such details were furnished before the Assessing Officer on 30.12.2017 not knowing that the assessment order has already been framed by the Assessing Officer on 29.12.2017. 7 11. The ld. CIT(A), without much consideration to the additional evidence, sustained the addition by holding as under: “The ground no- 6 taken by appellant pertains to the addition of Rs.18,79,420/- made on account of unexplained cash against the properties purchased/sold by the assessee and group entities. The AO has given a chart in the assessment order showing that the cash amounts were paid against the properties purchased on different dates and during the assessment proceedings, appellant failed to explain the source of said cash amounts. However, during the appellate proceedings, appellant submitted that during the search proceedings cash book was seized as part of seized material and the AO himself could have examined the source of cash amounts. The appellant further submitted that vide reply dated 30.12.2017, the year-wise details of land purchased by appellant company along with copy of ledger account of land a? d source of payment was furnished for verification by AO. The copy of the same has been submitted during appellate proceedings also. Thus, as can be seen from the assessment order as well as submissions of appellant that the assessment proceedings were completed by AO as on 29.12.201 an till that date appellant had failed to give any relevant details/evidence or provide the cash book, explaining the source of cash payments made against the pieces of land purchased by it on different dates during the year under consideration. During the appellate proceedings also, appellant has tried to substantiate his stand with the contention that the cash book 8 was seized as part of seize material and the AO should have examined it. However, lie details of land purchased, copy of ledger account and source of payment were submitted by appellant only after the completion of assessment proceedings and the AO had no occasion to examine the sanctity and genuineness of details/evidence provided by appellant. The appellant could not give my reason for not submitting these details/evidence during the assessment proceedings before AO. In such situation, these details cannot be taken into consideration while examining the issue and deciding the matter. T us, since the appellant failed to explain the source of cash payments ac negating to Rs. 18,79,420/- made against the sale of lands on various dates during the assessment proceedings, before AO, the conclusion drawn by him was justified and deserves to be sustained. I, therefore, u hold the conclusion drawn by him and confirm the addition made, The grot id taken by appellant is dismissed.” 12. Before us, the ld. counsel for the assessee vehemently stated that the ld. CIT(A) ought to have considered the documentary evidences furnished by the assessee which were also furnished before the Assessing Officer but after a day of passing the assessment order and without the knowledge of the assessment order which was passed on 29.1.22017. 9 13, The ld. counsel for the assessee furnished the details as under; Sr. No. Name and address of Seller Particular of property Total sale considerati on Source Cash (As per Assessmen t Order) i) Khurram Aziz Khan R/o Mahmand Jangla, SPN Gatta NO. 901/2 Area 0.308 Hect 3,41,320 (30) Own funds (30) 41,320 ii) Khurram Aziz Khan R/o Mahmand Jangla, SPN Gatta No. 39 KHA, 37 KHA, 8 KAA, 38KHA, 34, 33, 39 KA Area 1.248 Hectare 16,96,020 (30) Own funds (30) 1,96,020 iii) Khurram Aziz Khan R/o Mahmand Jangla, SPN Gatta No. 7 and Gatta No. 1 Village Chakmamrez Area 0.075 Hect and Area 0.3148 Hectare 1,05,98,080 (30) Own funds (30) 3,49.520 iv) Khurram Aziz Khan R/o Mahmand Jangla, SPN Gatta No. 8 Village Chakmamrezsadar at SPN area 0.2915 Hect. 37,17,040 (31) Own funds (31) 2,58,520 v) Khurram Aziz Khan Ro Mahmand Jangla, SPN 0.401 Hect Gatta No. 11 Village Chakmamrezsadar 51,01,040 (31) Own funds (31) 3,50,520 % s i vi) |Khurram Aziz Khan R o Mahmand Jangla, SPN Gatta No. 172.2.162 area 0.283 hect Village Chakmamresad 21,51,520 (32) Own funds (32) • 2,51,520 vii) |Jansher R/o Village Akhtya Nagar Gatta No. 1410, Village Akhtyar Nagar Sadar Area 0.2025 Hect 7,09,061 (32) Own funds (32) 4,32,000 Total Addition made 18,79,420 14. Per contra, the ld. DR supported the findings of the ld. CIT(A)/Assessing Officer, stating that sufficient opportunity was given to the assessee for furnishing the details but he did not furnish the same and, therefore, there is no error or infirmity in the findings of the ld. CIT(A). 10 15. We have given thoughtful consideration to the orders of the authorities below and have carefully perused the details of properties exhibited elsewhere. There is no dispute that the assessee furnished complete cash book and respective ledger account before the Assessing Officer on 30.12.2017. It is also not in dispute that the Assessing Officer has passed assessment order on 29.12.2017. 16. Be that as it may, when the details were furnished before the ld. CIT(A) with a reasonable explanation of not furnishing the same, before passing of the assessment order, it was incumbent upon the ld. CIT(A) to examine those details by calling for a remand report from the Assessing Officer as the powers of the ld. CIT(A) are co-terminus to those of the Assessing Officer. 17. We find that the ld. CIT(A) has simply rubbished the details filed by the assessee, which is not acceptable in the interest of justice. We, therefore, restore this quarrel to the file of the Assessing Officer. The assessee is directed to furnish the details before the Assessing Officer and the Assessing Officer is directed to verify/examine the same and decide the issue afresh as per the provisions of law. 11 18. In the result, the appeal of the assessee in ITA No. 5852/DEL/2018 is allowed for statistical purposes. The order is pronounced in the open court on 20.07.2022. Sd/- Sd/- [N.K. CHOUDHRY] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 20 th July, 2022. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 12 Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr.PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order