DCIT, New Delhi V. Mr. Sudhir Sareen, New Delhi

ITA 6411/DEL/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6948 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 05-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL
• Keywords: Unexplained cash credit; Rule of consistency
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A.NO.6411/DEL/2012 A.Y. : 2009-10 DCIT, CENTRAL CIRCLE-7, ROOM NO. 363, E-2, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI VS. MR. SUDHIR SAREEN B-101, GREATER KAILASH-1, NEW DELHI [PAN: AAAPS5842A] (APPELLANT) (RESPONDENT) DEPARTMENT BY : SMT. ANIMA BARNWAL, SR. DR ASSESSEE BY : SH. U.N. MARWAH, CA DATE OF HEARING : 05-07-2016 DATE OF ORDER : 08-07-2016 ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST T HE IMPUGNED ORDER DATED 29/10/2012 PASSED BY THE LD. COMMISSIO NER OF INCOME TAX (APPEALS)-I, NEW DELHI PERTAINING TO ASSESSMENT YE AR 2009-10 ON THE FOLLOWING GROUNDS:- 1. THE ORDER OF THE LD. CIT(A) IS NOT CORRECT IN LAW A ND FACTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN HOLDING THE RESIDENTIAL STA TUS OF ITA NO. 6411/DEL/2012 2 THE ASSESSEE AS NON-RESIDENT AGAINST THE RESIDENT IAL STATUS DETERMINED BY THE AO AS RESIDENT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD . CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 72,58,000/- MADE BY THE AO ON ACCOUNT OF AMOUNT TRANSFERRED FROM ABROAD. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED ON 5.2.2010 DECLARING AN INCOME OF RS. 3,73,770/- FRO M HOUSE PROPERTY, OTHER SOURCES AND CAPITAL GAINS. IN THE RETURN, TH E ASSESSEE CLAIMED THE STATUS OF NON-RESIDENT. THE ASSESSMENT WAS COMPLE TED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED THE ACT) VIDE ORDER DATED 23.12.2011 AT AN INCOME OF RS. 76,31,470/-, ADDING AMOUNTS TRANSFERRED BY THE ASSESSEE FROM ABROAD TO HIS DECLARED INCOME, AND DETERMINING THE STATUS OF THE ASSESSEE TO BE RESIDENT. AGAINST THE AFORESAID, ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A) WHO VIDE HIS IMPU GNED ORDER DATED 29.10.2012 HAS ALLOWED THE APPEAL FOR STATISTICAL PURPOSE. 3. AGGRIEVED WITH THE AFORESAID ORDER DATED 29.10. 2012, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, LD. AUTHORISED REPRESENT ATIVE OF THE ASSESSEE, SHRI UN MARWAH, CA HAS STATED THAT THE S IMILAR ISSUES IN ITA NO. 6411/DEL/2012 3 DISPUTE HAVE ALREADY BEEN ADJUDICATED AND DECIDED BY THE ITAT G BENCH, NEW DELHI IN ASSESSEES OWN CASE IN ITA NO. 5216/DEL/2013 (AY 2010-11) VIDE ORDER DATED 27.8.2015. THEREFORE, HE REQUESTED THAT THE ISSUES INVOLVED IN THE PRESENT APPEALS ARE SQUARELY COVERED BY THE ITAT DECISION DATED 27.8.2015, HENCE, THE PRESENT APP EAL FILED BY THE REVENUE MAY BE DISMISSED BY UPHOLDING THE ORDER OF THE LD. CIT(A). 5. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND REITERATED THE CONTENTION RAISED IN THE GROUNDS OF APPEAL, RAISED BY THE DEPARTMENT. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD, ESPECIALLY THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) ALONGWITH THE ORDER PASSED BY THIS BENCH AS STATED IN PARA 3 AS AFORESAID. WE ARE OF THE VIEW THAT THE LD. FIRST AP PELLATE AUTHORITY HAS ELABORATELY DEALT THE ISSUES AT PAGE 14 TO 15 VI DE PARA NO. 4.5 TO 5.3 VIDE HIS IMPUGNED ORDER DATED 29.10.2012 AND DECIDE D THE ISSUES IN DISPUTE IN FAVOR OF THE ASSESSEE. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PARAGRAPH NO. 4.5 TO 5.3 OF THE IMPUGNED O RDER IS REPRODUCED HEREUNDER:- 4.5 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE APPELLANT AND THE ASSESSMENT ORDER. IT IS POINTED O UT THAT THE FACTS IN THE CASE OF SH.SURESH NANDA AND T HAT OF THE APPELLANT ARE NOT THE SAME AND; THEREFORE, R ES JUDICATA WILL NOT APPLY TO THESE TWO CASES. NO DOUB T RULE OF CONSISTENCY, AS BROUGHT OUT BY THE HON'BLE SUPRE ME ITA NO. 6411/DEL/2012 4 COURT IN THE RADHASWAMY SATSANG CASE ( 193 ITR 321 ), IS A CARDINAL LEGAL PRINCIPLE AND NEEDS' TO BE FOLL OWED TO AVOID MULTIPLICITY OF LITIGATION AND TO END LITIGAT ION. IT MUST ALSO BE REMEMBERED, AS HELD BY THE HON'BLE SUPREME COURT IN BHARAT SANCHAR NIGAM LTD. V. UNION OF INDIA (2006) 282 ITR 275, THAT 'RES JUDICATA DOE S NOT APPLY IN MATTERS PERTAINING TO TAX FOR DIFFEREN T ASSESSMENT YEARS BECAUSE RES JUDICATA APPLIES TO DE BAR COURT'S FROM ENTERTAINING ISSUES ON THE SAME CAUSE OF ACTION WHEREAS THE CAUSE OF ACTION FOR EACH ASSESSM ENT YEAR IS DISTINCT. THE COURTS WILL GENERALLY ADOPT A N EARLIER PRONOUNCEMENT OF THE LAW OR A CONCLUSION OF FACT UNLESS THERE IS A NEW GROUND URGED OR A MATERIAL CH ANGE IN THE FACTUAL POSITION.' THEREFORE, FOLLOWING THE RULE OF CONSISTENCY AND JUDICIAL DISCIPLINE AND IN ACCORDAN CE WITH THE ORDERS OF MY LD. PREDECESSOR IN THE APPEAL S IN ASSESSES OWN CASE FOR A.YS 2002-03 TO 2008-09, I HO LD THE STATUS OF THE APPELLANT TO BE 'NON-RESIDENT'. NEEDLESS TO SAY THAT IF THE DECISION IN THOSE YEARS IS REVERSED AND THE APPELLANT TREATED AS 'RESIDENT', T HIS ORDER WOULD STAND MODIFIED ACCORDINGLY. THIS GROUND OF THE APPELLANT IS ALLOWED. 5.1 THE SECOND GROUND OF APPEAL (NUMBERED 2.1 AND 2.2 IN THE GROUNDS OF APPEAL) IS AGAINST THE DETERM INING THE TAXABLE INCOME AT RS. 76,31,470/- AGAINST THE RETURNED INCOME OF RS.3,73,470/- BY MAKING ADDITION ON ACCOUNT OF REMITTANCES FROM ABROAD AGGREGATING RS. 72,58,000/- ON THE ALLEGED GROUND THAT THE SAME- CONSTITUTED INCOME OF THE APPELLANT TAXABLE IN INDI A. 5.2 IT WAS SUBMITTED ON BEHALF OF THE APPELLANT THAT: ITA NO. 6411/DEL/2012 5 'THAT IN LAW AND ON FACTS THE APPELLANT BEING 'NON-RESIDENT', THE AMOUNT TRANSFERRED FROM ABROAD OF RS. 72,58,500/- CANNOT BE TAXED AS INCOME DURING THE YEAR. THAT ON MERITS THE APPELLANT VIDE LETTER DATED IS DECEMBER, 2011 HAD EXPLAINED THAT HE HAS SOLD HIS INVESTMENTS IN SHARES/MUTUAL FUNDS IN INDIA, PURCHASED OUT OF REMITTANCES ABROAD IN EARLIER YEARS AND WAS DULY ONSIDERED BY THE AO WHILE FRAMING ASSESSMENT IN EARLIER YEARS. THEREFORE, THE APPELLANT REMITTED FUNDS OUT OF FUNDS TRANSFERRED FROM HSBC A/C MAINTAINED AT NEW DELHI REMITTED BACK TO INDIA $1,50,000/-. MOREOVER, THE APPELLANT HAS NO INCOME EARNED ABROAD DURING THE YEAR WHICH IS TAXABLE IN INDIA.' 5.3 I HAVE GONE THROUGH THE SUBMISSION FILED BY THE APPELLANT AS WELL AS THE ASSESSMENT ORDER. AS IN TH E ASSESSMENT STATUS OF THE APPELLANT WAS HELD AS 'RESIDENT', THE AMOUNT TRANSFERRED BY THE APPELLANT FROM HIS OVERSEAS ACCOUNT TO INDIA HAS BEEN BROUGHT TO T AX. FOLLOWING PRECEDENCE, I HAVE HELD THE STATUS TO BE 'NON- RESIDENT'. CONSEQUENTLY, THIS AMOUNT WOULD NOT BE TAXABLE. HOWEVER, IF THE DECISION IN THE APPELLANT' S CASE FOR A.YS 2002-03 TO 2008-09 IS REVERSED AND THE APPELLANT TREATED AS HIS ORDER WOULD STAND MODIFIED ACCORDINGLY. THIS GROUND OF THE APPELLANT IS ALLOWE D. 6.1 WE ALSO FIND THAT THE TRIBUNAL IN ASSESSEES OW N CASE IN ITA NO. 5216/DEL/2013 (AY 2010-11) VIDE ORDER DATED 27.8.20 15 HAS ADJUDICATED THE SIMILAR ISSUES AND DECIDED THE SAME IN FAVOUR O F THE ASSESSEE. THE ITA NO. 6411/DEL/2012 6 RELEVANT PARAS 3 TO 7 ARE REPRODUCED HEREUNDER FOR THE SAKE OF CONVENIENCE. 3. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THIS CASE IS COVERED IN ASSESSEES FAVOUR VIDE ORDER DATED 15.9.2014 IN ITA NOS. 3120-26/DEL/2011 AND CO NOS. 207- 210/DEL/2013 FOR THE ASSESSMENT YEAR 2002- 03 TO 2008-09 IN ASSESSEES OWN CASE WHEREIN THE DEPARTMENTAL APPEALS ON THE SAME ISSUE WERE DISMISSED AND WHEN THE DEPARTMENT PREFERRED APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT IN ITA NO. 280-284 AND 289/ 2015 THE ORDER OF THE TRIBUNAL DATED 15.9.2014 WAS AFFIRMED BY FOLLOWING THE EARLIER JUDGMENT IN THE CASE OF CIT VS. SURESH NANDA REPORTED IN 340 ITR 611 (DELHI). THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY THE LD. DR. 4. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND MATERIAL ON RECORD IT IS NOTICED THAT THE MAIN CONTROVERSY IN THIS APPEAL ITA NO. 6411/DEL/2012 7 REVOLVES AROUND THE STATUS OF THE ASSESSEE AND THE ADDITION ON ACCOUNT OF NRE INCOME. THE SIMILAR ISSUE HAVING IDENTICAL FACTS HAD ALREADY BEEN ADJUDICATED BY THE ITAT DELHI BENCH G, NEW DELHI IN ITA NOS. 3120-26/DEL/2011 AND CROSS OBJECTION NOS. 207-10/DEL/2013 FOR THE ASSESSMENT YEARS 2002-03 TO 2008-09 VIDE ORDER DATED 15.09.2014 IN ASSESSEES OWN CASE AND THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 33 AND 34 OF THE SAID ORDER WHICH READ AS UNDER :- 33. THE STATUS ON FACTS OF THE PRESENT CASE DETERMINED BY THE CIT(A) AS NRI HAS BEEN UPHELD AS DEPARTMENTAL APPEALS HAVE BEEN DISMISSED AS ADMITTEDLY NOTHING HAS BEEN FOUND IN THE SEARCH. THE STATUS CHANGE ACCORDINGLY ON FACTS WAS NOT CORRECTLY MADE BY THE AO. THE SAID ACTION HAS NOT BEEN UPHELD THE ISSUE FRAMED IN SERIAL NUMBER (4) ACCORDINGLY IS DECIDED IN ASSESSEES FAVOUR. ITA NO. 6411/DEL/2012 8 34. SINCE THE ADDITIONS DELETED BY THE CIT(A) WHICH STOOD MADE ONLY ON ACCOUNT OF THE STATUS CHANGE MADE IN THE ASSESSMENT ORDER DEHORS FACTS AND THE CROSS OBJECTIONS FILED ARE PARTLY SUPPORTIVE OF THE IMPUGNED ORDERS AND THE IMPUGNED RODERS IN EACH OF THE YEARS STANDS UPHELD IN TOTO THE CROSS OBJECTIONS FILED ARE PARTLY ALLOWED AND THE ISSUE FRAMED IN SERIAL NUMBER (7) IS ANSWERED IN ASSESSEES FAVOUR. 5. THE SAID ORDER WAS UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT WHILE DECIDING THE APPEALS OF THE DEPARTMENT IN ITA NO. 280-284 & 289/DEL/2015 VIDE ORDER DATED 6 TH JULY, 2015 (COPY OF WHICH IS PLACED ON THE RECORD) AND THE RELEVANT FINDINGS ARE GIVEN IN PARA 4 TO 7 WHICH READ AS UNDER :- 4. THERE WERE TWO QUESTIONS THAT AROSE BEFORE THE ASSESSING OFFICER. ONE WAS REGARDING THE ADDITION ON ACCOUNT OF NRE INCOME AND THE SECOND WAS REGARDING ADDITION MADE ON ACCOUNT OF ITA NO. 6411/DEL/2012 9 UNEXPLAINED CREDIT. BOTH WERE ANSWERED AGAINST THE REVENUE BY THE CIT(APPEALS) AND THE ITAT FOR THE RELEVANT AYS. HOWEVER, THE ONLY GROUND URGED BY THE REVENUE AS FAR AS THESE APPEALS ARE CONCERNED IS THE ADDITION ON ACCOUNT OF NRE INCOME. 5. ADMITTEDLY, THE FACTUAL FINDING OF THE CIT(APPEALS) AS AFFIRMED BY THE ITAT IS THAT THE ASSESSEE RESIDED IN THE COUNTRY FOR LESS THAN 182 DAYS IN EACH OF THE RELEVANT PREVIOUS YEARS. 6. LEARNED COUNSEL ON BOTH SIDES AGREE THAT THE CASE IS SQUARELY COVERED AGAINST THE REVENUE BY THE JUDGMENT OF THIS COURT IN COMMISSIONER OF INCOME TAX VS. SURESH NANDA 352 ITR 611 (DEL.) 7. CONSEQUENTLY, THESE APPEALS ARE DISMISSED IN TERMS OF THE AFOREMENTIONED DECISION. 6. WE, THEREFORE, BY RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDERS, DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. ITA NO. 6411/DEL/2012 10 7. IN THE RESULT APPEAL IS DISMISSED. 7. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS A ND RESPECTFULLY FOLLOWING THE PRECEDENT OF THE ITAT, WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME . 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/7/2016. SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 08/7/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES