Sh. Pramod Kumar, New Delhi V. ACIT, New Delhi

ITA 6126/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90936 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 10-04-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 14-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Keywords: Unexplained cash credit; Search and seizure; Accommodation entries
• Section: 68; 69; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : F NEW DELHI BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO: 6126/DEL/2013 ASSTT. YEAR : - 2004-05 PRAMOD KUMAR VS. ASSTT. COM MISSIONER OF INCOME TAX 13/34, WEA, CENTRAL CIRCLE-4, KAROL BAGH, NEW DELHI. NEW DELHI 110 005. (PAN ALJPK6448A) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.P. GUPTA, ADVOCATE RESPONDENT BY :SHRI VIKRAM SAHAY, SR. DR DATE OF HEARING :10.4.2015 DATE OF PRONOUNCEMENT : 17 .4.2015 O R D E R PER INTURI RAMA RAO, AM THIS IS AN APPEAL FILED BY THE ASSESEE R AISING THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE CIT(A) ERRED IN NOT APPRECIATING THAT SIN CE THE APPELLANT IS ADMITTEDLY PART OF TARUN GOYAL GROUP , IT HAD TO BE CONSIDERED AS SUCH AND DECISION IN THE CASE OF ASSESSEE COULD BE TAKEN CON SIDERING THE FACTS IN TOTALITY AS HAVE BEEN NOTED AND DISCUSSED BY THE AS SESSING OFFICER IN THE ASSESSMENT ORDER AND ADDITION COULD NOT BE MADE AND UPHELD CONSIDERING THE APPELLANT AS A SEPARATE INDEPENDENT ASSESSEE. 2. THAT THE CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS. 12,97,500/- BEING THE CASH DEPOSITS IN THE BANK ACCOUNT OF THE APPELLANT COMPANY WITHOUT APPRECIATING THAT ADMITTEDLY THE APPELLANT WAS BEIN G CONTROLLED BY MR. TARUN GOYAL AND HE WAS CARRYING ON THE BUSINESS OF PROVID ING ACCOMMODATION ENTRIES THROUGH VARIOUS ENTITIES, INCLUDING THE APP ELLANT AND THE CASH WAS ITA NO.6126/DEL/2013 PRAMOD KUM AR VS. ACIT 2 DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT DURI NG THE COURSE OF THE ABOVE BUSINESS AND FOR PROVIDING ENTRIES FROM THE A CCOUNT OF APPELLANT AS WELL AS FROM OTHER COMPANIES AND , THEREFORE , CASH DEPOSITED IN THE FACTS OF THE CASE COULD NOT BE ADDED UNDER SECTION 68 OF THE INCOME TAX ACT IN THE CASE OF THE APPELLANT. 3. THAT THE CIT(A) ALSO FAILED TO APPRECIATE THAT IN T HE FACTS OF THE CASE OF THE APPELLANT THERE IS NO POSSIBILITY TO EARN SUCH AN A MOUNT AS AN INCOME AND THEREFORE ADDITION ON ACCOUNT OF CASH DEPOSIT COULD NOT BE MADE AS UNDISCLOSED INCOME U/S 68 OF THE ACT IN VIEW OF THE DECISION OF SUPREME COURT IN THE CASE OF CIT VS. BHARAT ENGINEERS & CON STRUCTION CO. 83 ITR 187 (SC). 4. THAT THE CIT(A) ALSO FAILED TO APPRECIATE THAT, WIT HOUT PREJUDICE TO GROUNDS HEREINABOVE, THERE COULD ONLY BE COMMISSION INCOME IN RESPECT OF TRANSACTIONS OF CASH DEPOSITS AND THAT TOO WAS ASSE SSABLE IN THE ASSESSMENT OF MR. TARUN GOYAL, WHO, IN FACT, HAD ALREADY DISCL OSED COMMISSION INCOME IN HIS RETURN OF INCOME. 2. THE BRIEF FACTS LEADING TO THE PRESENT A PPEAL ARE AS FOLLOWS :- THE APPELLANT IS AN INDIVIDUAL. HE HAS FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 ON 15.10.2004 DECLARING TOT AL INCOME OF RS. 1,04,631/-. SUBSEQUENTLY SEARCH AND SEIZURE OPERATION PASSED U/ S 132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED ON 15.9.2008 AT THE GROUP CONCER N OF ONE MR. TARUN GOYAL . AS A RESULT OF SEARCH AND SEIZURE OPERATION, IT WAS FO UND THAT BANK ACCOUNT NO. IB4005- 111250-050 WITH INDUSING BANK LTD. BELONGS TO THE A PPELLANT. FROM THE BANK STATEMENT, IT WAS FOUND THAT A SUM OF RS. 12,97,500 /- WAS DEPOSITED IN CASH ON VARIOUS DATES. CONSEQUENT THIS INFORMATION, THE ASS ESSMENT PROCEEDINGS WERE REOPENED BY ISSUING NOTICE U/S 148 ON 29 TH MARCH, 2011. 3. DURING THE COURSE OF REASSESSMENT PROCEED INGS, APPELLANT WAS PUT ON NOTICE AS TO WHY SAID CASH DEPOSITED SHOULD NOT BE ADDED A S INCOME AND CASH DEPOSIT SHOULD NOT BE BROUGHT TO TAX. IT WAS EXPLAINED TO T HE AO THAT THE APPELLANT WAS ONLY ITA NO.6126/DEL/2013 PRAMOD KUM AR VS. ACIT 3 EARNING COMMISSION UNDER SUCH CASH DEPOSITS AND NO OTHER EXPLANATION IS FURNISHED TO THE AO. THEREFORE, THE AO MADE ADDITION OF RS. 1 2,97,500/-. REASSESSMENT WAS COMPLETED VIDE ORDER DATED 30.11.2011. AGGRIEVED B Y THIS ORDER OF ASSESSMENT, THE APPELLANT HAD FORWARDED AN APPEAL BEFORE THE COMMIS SIONER OF INCOME TAX (APPEALS) XXXIII, NEW DELHI WHO VIDE ORDER DATED 19 TH AUGUST, 2013 DISMISSED THE APPEAL BY HOLDING THAT THE APPELLANT NOT OFFERED A S SATISFACTORY EXPLANATION FOR THE SOURCE OF THE CASH DEPOSITS IN BANK ACCOUNT. AGGRIE VED, THE PRESENT APPEAL WAS FILED BEFORE US. 4. IT WAS SUBMITTED ON BEHALF OF THE APPELL ANT THAT IN THE SIMILAR CASES THIS HONBLE TRIBUNAL IN ITA NO. 4636 & 4637/DEL/2012 HA S RESTORED THE MATTER TO THE FILE OF AO FOR FRESH ADJUDICATION. THE OPERATIVE PO RTION OF THE ORDER IS AS UNDER :- 22. ADMITTEDLY CERTAIN ASSESSMENT OF SHRI TARUN G OYAL, THE KIN PIN ARE AT VARIOUS STAGES AND HAVE NOT REACHED THE TRIBUNAL. U NDER THESE CIRCUMSTANCES, IT WOULD NOT BE POSSIBLE TO HAVE IN OVER ALL VIEW OF THE MATTER AND ELIMINATE CHAIN / MULTIPLE TRANSACTION, FOR ARRIVING AT THE CORRECT ASSESSABLE AMOUNT. THUS WE HAVE NO OTHER AL TERNATIVE BUT TO SET ASIDE ALL THESE APPEALS TO THE FILE OF THE AO F OR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. 23. THE AO SHALL AFTER EXAMINING THE EVIDENCE SUBMI TTED BY THE ASSESSEE, CONSIDER ALL THE CASES TOGETHER AND; A) RESTRICT THE ADDITION U/S 68 TO ONLY THE PEAK UNEXPLAINED CREDIT IN EACH CASE AFTER ELIMINATION CIRCULAR TRANSACTION. B) TO ELIMINATE TAXATION OF THE SAME AMOUNT MULTIP LE TIMES, DUE TO THE CHAIN TRANSACTIONS WHICH RESULTED DUE TO LAYERI NG INDULGED BY THE ASSESSEE. C) CONSIDER THE MATERIAL ON RECORD AND THE PRECEDE NCE AVAILABLE ON THE ISSUE AND DETERMINE THE PERCENTAGE OF COMMISSIO N, WHICH THE ASSESSEES WOULD HAVE EARNED AND BRING THE SAME TO T AX. ITA NO.6126/DEL/2013 PRAMOD KUM AR VS. ACIT 4 5. THEREFORE, IN THIS CASE ALSO SINCE THE CASE AL SO BELONGS TO THE SAME GROUP AND HAVING NEXUS WITH THE ASSESSMENT PROCEEDINGS OF MR. TARUN GOYAL, WE RESTORE THE MATTER TO THE FILE OF THE AO WITH A DIRECTION T HAT TO CONSIDER THE EXPLANATION OFFERED, IF ANY, IN THE LIGHT OF PROVISION OF SECTI ON 69 OF THE INCOME TAX ACT AND REDO THE ASSESSMENT. 6. IN THE RESULT, THE APPEAL IS ALLOWED FOR ST ATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH APRIL, 2015. SD/- SD/- (G.C. GUPTA) (INTURI RAMA RAO) VICE PRESIDENT ACCOUNTANT MEMBER DATED: THE 17 TH APRIL, 2015 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR