Sunil Bedi, New Delhi V. ACIT, Faridabad

ITA 6424/DEL/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3883 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 27-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 27-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: S S KALRA
• Keywords: Search and seizure

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'G', NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOU NTANT MEMBER ITA NO. 6424/DEL/2012 ASSESSMENT YEAR: 2009-10 SUNIL BEDI, VS. ACIT, CENTRAL CIRCLE-II, DIRECTOR, M/S JMD LIMITED FARIDABAD 6, UPPER GROUND FLOOR, DEVIKA TOWERS, NEHRU PLACE, NEW DELHI 110 019 (PAN: AAAPB5748E) (APPELLANT) (RESPONDENT) ITA NO. 77/DEL/2013 ASSESSMENT YEAR: 2009-10 DCIT, CENTRAL CIRCLE-II, VS. SUNIL BEDI, FARIDABAD DIRECTOR, M/S JMD LTD., W-24, GREATER KAILASH NEW DELHI 48 ASSESSEE BY : SH. RAJAN BHATIA, AD V. & SH. S.S. KALRA, CA DEPARTMENT BY : SH. S.S. RANA, C IT(DR ) ORDER PER H.S. SIDHU, JM THE ASSESSEE AND DEPARTMENT HAS FILED CROSS APPEAL S WHICH ARE EMANATE FROM THE COMMON ORDER DATED 29.10.2012 OF THE LD. CIT(A) (CENTRAL), GURGAON PERTAINING TO A.Y. 2009-10. S INCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON AND IDENTICAL, HENCE, THE APPEALS 2 WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED IN ASSESSEES APPEAL READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES APPLICABLE TO TH E CASE THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE INFORMATIO N IN RESPT OF UNDISCLOSED WATCHES AND CONFIRMED ADDITION OF RS. 14,92,000/-. THE ADDITION CONFIRMED BY CIT(A) IS UNWARRANTED. 2. APPELLANT CRAVES LEAVE TO AMEND ALTER AND DELETE ABOVE GROUND OF APPEAL. 3. THE GROUNDS RAISED IN REVENUES APPEAL READ AS U NDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDI TION MADE OF RS. 27,26,750/- ON ACCOUNT OF UNEXPLAINED CASH FOUND AT THE RESIDENCE OF THE ASSESSEE AT THE TIME OF SEARCH BY ACCEPTING THE CONTENTION OF THE ASSESS EE. CASH OF THE COMPANY JMD LTD., WAS KEPT FOR SAFEKEEPING AT ASSESSEES RESIDENCE IGNORING THE FA CT THAT THE AO HAD ACTUALLY RECONCILED CASH BOOK OF TH E COMPANY WITH THE BILLS AND VOUCHERS FOR THE PERIOD 15.7.2008 TO 6.8.2009 (DATE OF SEARCH) AND AFTER RECONCILIATION FOUND THAT NO PROOF OF CASH HAVING, BEEN TAKEN FROM COMPANYS OFFICE TO RESIDENCE OF ASSESSE E?. 4. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH A ND SEIZURE OPERATION UNDER SECTION 132(1) OF THE INCOME TAX ACT, 1961 (H EREINAFTER REFERRED AS THE ACT) WAS CONDUCTED AT THE RESIDENTIAL / BUSI NESS PREMISES OF THE PERSONS ASSOCIATED WITH THE JMD GROUP ON 06.8.2008. RESIDENCE OF SH. 3 SUNIL BEDI AND SMT. PINKY BEDI WAS ALSO SUBJECT TO SEARCH AND SEIZURE OPERATION. ASSESSEE FILED HIS RETURN ON 31.12.2009 DECLARING THE INCOME OF RS. 1,87,77,150/- WHICH INCLUDING THE SURRENDER OF RS. 1,40,00,000/- SURRENDERED U/S. 132(4) OF THE ACT. NOTICE U/S. 143 (2) OF THE ACT WAS ISSUED WHICH CULMINATED INTO ASSESSMENT FRAMED AT R S. 2,15,03,900/- U/S. 153A(1)(B) OF THE ACT BY ADDITION OF RS. 27,26 ,750/- AND RS. 16,00,000/- VIDE ORDER DATED 30.12.2010. 5. AGAINST THE ASSESSMENT ORDER DATED 30.12.2010, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A), GURGAON, WHO VIDE H IS IMPUGNED ORDER DATED 29.10.2012 HAS PARTLY ALLOWED THE APPEAL OF T HE ASSESSEE. AGGRIEVED WITH THE IMPUGNED ORDER, THE ASSESSEE AS WELL AS REVENUE ARE IN CROSS APPEALS BEFORE THE TRIBUNAL ON SOME OF THE ISSUES MENTIONED IN THEIR RESPECTIVE APPEALS. 6. LD. COUNSEL OF THE ASSESSEE HAS SUBMITTED THAT L D. CIT(A) HAS FAILED TO APPRECIATE THAT THE INFORMATION IN RESPE CT OF UNDISCLOSED WATCHES AND CONFIRMED ADDITION OF RS. 14,92,000/-, WHICH IS TOTALLY UNCALLED FOR. 6.1 LD. DR RELIED UPON THE ORDERS OF THE AO WITH RE GARD TO DELETION OF ADDITION OF RS. 27,26,750/- PERTAINING TO CASH FOU ND AT THE RESIDENCE OF THE ASSESSEE. LD. DR ALSO FILED THE WRITTEN SUBMIS SIONS IN THE CASE AND RELIED UPON SOME OF THE CASE LAWS. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E RECORDS, ESPECIALLY THE WRITTEN SUBMISSIONS. THE ASSESSEE A ND REVENUE HAS CONTESTED THEIR RESPECTIVE ADDITIONS BEFORE US. 4 7.1 WE FIRST DEAL WITH REVENUES APPEAL AND FIND TH AT IT IS THE ASSESSEE'S CASE THAT THE MONEY WAS KEPT AT THE RESI DENCE FOR SAFE KEEPING, WHICH WAS PRACTICAL, BEING A FAMILY HELD C ONCERN AND THAT LACK OF EVIDENCE OF SAFE KEEPING WAS NOT SUFFICIENT REASON FOR THE ADDITIONS. CERTAIN FACTS WERE FOUND NOT IN DISPUTE THAT THE CA SH BOOK OF THE COMPANY WAS NOT UP-TO-DATE AT TIME OF SEARCH; THE A SSESSEE IS THE CMD OF THE CLOSELY HELD COMPANY; AND IMPORTANTLY, THERE WAS NO PROOF THAT CASH WAS TAKEN FROM THE OFFICE TO THE RESIDENCE. HO WEVER ON UPDATING THE CASH BOOK AS ON THE DATE OF SEARCH THE SAME WORKED OUT TO BE RS. 66,59,750/-, SO THE DIFFERENCE FROM THE CASH FOUND IN THE FIRST INSTANCE WAS RIGHTLY ADDED BACK AS UNEXPLAINED IN THE HANDS OF THE ASSESSEE, THEREFORE RS. 2,00,000/- WAS ADDED BACK. NOW AS REG ARDS THE CASH STATED TO BE KEPT IN THE RESIDENCE FOR SAFE KEEPING THE CONTENTION OF THE ASSESSEE WAS FOUND TO BE ACCEPTABLE IN VIEW OF THE FACTS OF THE CASE. THE ASSESSEE WAS PROVIDED A PART RELIEF OF RS. 27,26,75 0/-, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, HENCE, WE UPHOLD THE SAME. AS A RESULT, THE GROUND RAISED IN THE REVENUES APPEAL IS REJECTED AND ACCORDINGLY, THE REVENUES APPEAL IS DISMISSED. 7.2 AS REGARDS THE ASSESSEES APPEAL IS CONCERNED, IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF ADDITIO N OF RS. 16 LACS ON ACCOUNT OF UNDISCLOSED INVESTMENT IN WATCHES. WE N OTE THAT THIS ADDITION WAS ON THE BASIS OF VALUATION DONE BY SOME SHOPEKEE PER WHO DEALS IN HIGH END WATCHES. WE FURTHER NOTE THAT OUT OF 39 WATCHES WHICH WERE FOUND DURING THE SEARCH OPERATION, A SUM OF RS. 40, 00,000/- STAND SURRENDERED ON THIS ACCOUNT AND TWO WATCHES A ROLEX AND A CARTIER WERE ALREADY DECLARED IN VDIS SCHEME WHICH FACT WAS NOT CONSIDERED BY THE AO. MOREOVER THE ASSESSEE ALSO DISCLOSED THE VALUE OF ROLEX WATCH AND ANOTHER CARTIER OF RS. 1.5 LAC. THE AO HAS TAKEN T HE VALUE OF RS. 56 LAKH ON THE BASIS OF ESTIMATED VALUE ONLY. WE FURTHER N OTE THAT AO RELIED ON THE INFORMATION TAKEN FROM THE INTERNET WITHOUT REF ERRING TO MODEL NUMBER AND TAKEN VALUATION FROM VENDOR BY SHOWING H IM PHOTOGRAPH. 5 MOREOVER, THESE WATCHES WERE VERY OLD AND INFORMATI ON TAKEN BY THE AO FROM INTERNET MAY BE OF LATEST WATCHES, THEREFORE, VALUE ARRIVED AT BY AO IS WRONG. IN VIEW OF THE ABOVE, THE ADDITION OF RS. 16 LACS CONFIRMED BY THE LD. CIT(A) IS TOTALLY WRONG AND THEREFORE, WE D ELETE THE SAME AND ALLOW THE GROUND RAISED BY THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STAND ALLOWED AND APPEAL FILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED ON 27/10/2017. SD/- SD/- (PRASHANT MAHARISHI) (H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 27/10/2017 '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