ACIT, New Delhi V. Sh. Krishan Pal Singh, New Delhi

ITA 6470/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3371 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 27-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY VERMA
• Keywords: Search and seizure
• Section: 153A; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D , NEW DELHI BEFORE SH. BHAVNESH SAINI , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO. 6470 /DE L/ 2014 ASSESSMENT YEAR: 2008 - 09 ACIT, CENTRAL CIRCLE - 25, NEW DELHI VS. SH. KRISHAN PAL SINGH, 402, SKYLARK BUILDING, NEHRU PLACE , NEW DELHI PAN : ALBPS 5044E ( APPELLANT ) (RESPONDENT) APPELLANT BY SH. VIJAY VERMA, CIT(DR) RESPONDENT BY NONE DATE OF HEARING 05.02.2018 DATE OF PRONOUNCEMENT 15.02.2018 ORDER PER O.P. KANT , A. M. : THIS APPEAL PREFERRED BY THE R EVENUE IS DIRECTED AGAINST ORDER DATED 05/09/2014 PASSED BY THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) - I, NEW DELHI , FOR ASSESSMENT YEAR 2008 - 09 RAISING FOLLOWING GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN: - 1. THE ORDER OF THE CIT(A) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.46,50,000/ - MADE BY AO ON ACCOUNT OF UNDISCLOSED INVESTMENT. 2 ITA NO.6470/DEL/2014 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF APPEAL. 2. A T THE OUTSET, WE MAY LIKE TO MENTION THAT WHEN THE APPEAL WAS CALLED FOR HEARING, NONE ATTENDED ON BEHALF OF THE ASSESSEE AND NEITHER ANY REQUEST FOR ADJOURNMENT WAS FILED NOR ANY WRITTEN SUBMISSION WAS FILED. THE ASSESSEE WAS NOTIFIED BY REGISTERED POST ON 27/07/2017 FIXING THE DATE OF HEARING ON 09/11/20 17, HOWEVER NONE ATTENDED ON THE SAID DATE. ON SAID DATE AGAIN A FRESH NOTICE WAS ISSUED THROUGH REGISTERED POST FIXING THE DATE OF HEARING ON 5/02/2018. IN VIEW OF NON - REPRESENTATION, WE ARE OF THE VIEW THAT NO PURPOSE WOULD BE SERVED IN AGAIN ADJOURNING THE MATTER AND THUS WE PROCEEDED TO HEAR THE CASE EX - PARTY QUA THE ASSESSEE . 3. B RIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE IS A INDIVIDUAL AND FILED ORIGINAL RETURN OF INCOME DECLARING INCOME OF RS. 5, 32, 594/ - ON 16/10/2008 CONSISTING OF INCO ME UNDER THE HOUSE PROPERTY, INCOME FROM BUSINESS, INCOME FROM SHORT - TERM CAPITAL GAIN AND INCOME FROM OTHER SOURCES. A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) WAS CARRIED OUT AT THE PREMISES OF THE ASS ESSEE ON 31/01/2011 ALON GWITH THE CASES OF THE BULLAND G ROUP . CONSEQUENT TO THE SEARCH ACTION, NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER ON 8/02/2012 DIRECTING THE ASSESSEE TO FILE RETURN OF INCOME FOR RELEVANT ASSESSMENT Y EAR. IN RESPONSE THE ASSESSEE FILED A LETTER DATED 17/05/2012 STATING THAT THE ORIGINAL RETURN OF INCOME FILED MIGHT BE TREATED AS RETURN 3 ITA NO.6470/DEL/2014 FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT. SUBSEQUENTLY, STATUTORY NOTICES WERE ISSUED, WHICH WERE COM PLIED AN D ASSESSMENT WAS COMPLETED UNDER SECTION 15 3A OF THE ACT AFTER MAKING ADDITIONS/DISALLOWANCES OF RS.46,63, 227/ - . AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT - A WHO ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED WITH THE RELIEF ALLOW ED BY THE LD. CIT - A, THE R EVENUE IS IN APPEAL BEFORE THE TRIBUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 4. THE GROUND NO. 1 AND 3 OF THE APPEAL ARE GENERAL IN NATURE, AND THEREFORE WE ARE NOT REQUIRED TO ADJUDICATE UPON SPECIFICALLY. 5. THE GROUND NO. 2 RELA TES TO ADDITION OF RS. 46,50,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNDISCLOSED INVESTMENT. 6. THE LD. SR. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE ORDER OF THE ASSESSING OFFICER SUBMITTED THAT LD. CIT (A) WAS NOT JUSTIFIED IN ALLOWING REL IEF TO THE ASSESSEE WITHOUT ANY EXPLANATION IN SUPPORT OF THE INVESTMENT MADE BY THE ASSESSEE. 7. WE HAVE HEARD THE SUBMISSION OF THE LD. CIT (DR ) AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE CASE, A DOCUMENT RELATED TO COURT CASE AND FIRST INFORMATION REPORT (FIR) FILED WITH POLICE BY THE ASSESSEE, WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH FROM THE PREMISES OF THE ASSESSEE. IN THE CONTEXT OF THE FIR FILED BY THE ASSESSEE, THE OPPONENT PARTIES FILED LITIGATION IN THE HON BLE ALLAHABAD HIGH COURT AND IN WHICH, THEY DENIED CLAIMS OF THE ASSESSEE. ACCORDING TO THE ASSESSING OFFICER , AS APPEARING IN THE DOCUMENTS ANNEXURE A - 1 SEIZED FROM THE RESIDENCE OF THE ASSESSEE, THE ASSES SEE MADE ADVANCE PAY MENT OF RS.46, 50,000/ - FOR PURCHASE OF THREE FLATS, AS UNDER ,WHICH THE ASSESSEE FAILED TO EXPLAIN DURING ASSESSMENT PROCEEDING : 4 ITA NO.6470/DEL/2014 CHEQUE NO. AMOUNT 470069 450000/ - 470069 450000/ - 010086 850000/ - 0604128 850000/ - INTEREST CLAIM ON THE ABOVE 205 0000/ - PAYMENT IN OUR FIR WHICH IS ADMITTED BY ONE IN THE IKRARNAMA & ALL THE PARTIES DENIED THIS IKRARNAMA I N THE COURT. TOTAL 4650000 8 . BEFORE THE LD. CIT - ( A ) , THE ASSESSEE EXPLAINED THAT HE ADVANCED AMOUNT OF RS. 26,00, 000/ - TO M/S SOHO CONSTRUCTION PRIVATE L IMITED (SOHO) AGAINST ALLOTMENT OF THREE FLATS, BUT M/S SOHO SOLD THESE THREE FLATS TO OTHER PARTIES. M/S SOHO , HOWEVER , CLAIMED THAT PAYMENT WAS TOWARDS INVESTMENT IN SHARE CAPITAL. ACCORDING TO THE ASSESSEE, HE MADE A CLAIM OF INTE REST OF RS.20,50,000/ - IN THE FIR FILED ON THE BASIS OF THE IKRARNAMA, HOWEVER, OPPONENT PARTIES DENIED THE SAID IKRARNAMA IN THE COURT. FURTHER, THE ASSESSEE CLAIMED THAT OUT OF ADVANCE OF RS. 2 6,00,000/ - , AN AMOUNT OF RS. 8, 50,000/ - WAS CONTRIBUTED BY HIS B ROTHER, SH. JAYPRAKASH SINGH AND BALANCE AMOUNT OF RS. 17, 50,000/ - WAS ADVANCED THROUGH CHEQUE FROM HIS OVERDRAFT ACCOUNT MAINTAINED WITH PUNJAB NATIONAL BANK, NEW DELHI. THE LD. CIT - A VERIFIED THE S OURCE OF ADVANCE PAYMENT OF RS. 17,50,000/ - MADE OUT OF THE BANK ACCOUNT OF THE ASSESSEE. REGARDING THE SOURCE OF RS.8,50,000/ - ADVANCED BY THE BROTHER OF THE ASSESSEE ON BEHALF OF THE ASSESSEE, THE LD. CIT - ( A ) DIRECTED THE ASSESSING OFFICER TO INFORM THE ASSESSING OFFICER OF BROTHER OF 5 ITA NO.6470/DEL/2014 THE ASSESSEE. REGARDING INTE REST AMOUNT , THE LD. CIT - ( A ) , HELD THAT IT WAS NOT LOAN AND IT WAS A ADVANCE AGAINST THE PROPERTY AND THEREFORE INTEREST AMOUNT CANNOT BE TAXED ON ACCRUAL BASIS AND IT CAN BE ONLY TAXED ON RECEIPT BASIS WHEN IT IS AWARDED BY THE COURT. WITH THE SE DIRECTIONS, HE ALLOWED THE GROUND RAISED BY THE ASSESSEE. THE RELEVANT FINDING OF THE LD. CIT - ( A ) IS REPRODUCED AS UNDER: 4. I HAVE CONSIDERED THE ASSESSMENT ORDER, THE SUBMISSIONS MADE AND THE RELEVANT DOCUMENTS PRODUCED DURING THE COURSE OF HEARING. F ACTS ARE THAT THE APPELLANT ADVANCED A SUM OF RS.26,00,000/ - TO ONE M/S SOHO CONSTRUCTION PRIVATE LIMITED, APPARENTLY AGAINST ALLOTMENT OF THREE FLATS AT 221, GAYAN KHAND. INDIRAPURAM, GHAZIABAD. M/S SOHO SOLD THOSE THREE FLATS TO OTHER PARTIES AND, DUE TO THIS, IT APPEARS THAT A DISPUTE AROSE BETWEEN THE APPELLANT AND THE PROMOTERS OF M/S SOHO. THE APPELLANT FILED A CASE OF CRIMINAL MISAPPROPRIATION WITH THE JURISDICTIONAL POLICE STATION AGAINST WHICH THE DEFENDANTS APPROACHED HON'BLE ALLAHABAD HIGH COURT TO GET THE CRIMINAL PROCEEDINGS QUASHED AS IT WAS BASICALLY A CASE OF CIVIL DISPUTE. THE DEFENDANTS ARE ALSO CLAIMING THAT THEY HAVE ALLOTTED SHARES OF EQUIVALENT AMOUNT TO THE APPELLANT AGAINST THE ADVANCE RECEIVED. THE APPELLANT, ON THE OTHER HAND, IS CL AIMING INTEREST IN DAMAGES AMOUNTING TO RS.20,50,000/ - IN ADDITION TO RETURN OF THE PRINCIPAL AMOUNT OF RS.26,00,000/ - . THE REVENUE HAS GONE AHEAD AND ADDED THE ENTIRE AMOUNT OF RS.46,50,000/ - AS UNEXPLAINED INCOME OF THE APPELLANT. IT IS SEEN FROM THE REC ORDS THAT OUT OF RS.26,00,000/ - , RS. 17,50,000/ - WAS ADVANCED BY THE APPELLANT FROM HIS OD ACCOUNT WITH PUNJAB NATIONAL BANK, KHANPUR BRANCH. NEW DELHI. THE REMAINING AMOUNT OF RS.8,50,000/ - WAS PAID BY THE APPELLANT'S BROTHER SHRI J.P. SINGH (PAN AXXPS242 5F). THE SOURCE OF THE APPELLANT IS DULY ACCOUNTED FOR AND THE AMOUNT PAID BY HIS BROTHER CANNOT BE TAXED IN THE APPELLANT S HANDS. THE INTEREST AMOUNT ALSO CANNOT BE 6 ITA NO.6470/DEL/2014 TAXED ON ACCRUAL BASIS AS IT WAS NOT A LOAN BUT ADVANCE AGAINST PROPERTY. THEREFORE, THE INTEREST AMOUNT CLAIM BY THE APPELLANT IN THE LEGAL DISPUTE CAN ONLY BE TAXED ON RECEIPT BASIS WHEN IT IS AWARDED BY THE COURT. THE ADDITION MADE IS NOT BASED ON PROPER APPRECIATION OF FACTS OR LAW, IS ILL FOUNDED AND IS DELETED. THE AO IS DIRECTED TO INFO RM THE AO OF SHRI J.P. SINGH (PAN: AXXPS2425F) TO EXAMINE THE SOURCE OF RS.8,50,000/ - ADVANCED BY HIM ON BEHALF OF THE APPELLANT. 9 . IN OUR OPINION , THE LD. CIT - ( A ) HAS VERIFIED THE SOURCE OF THE RS. 17,50,000/ - OUT OF RS. 26,00,000/ - ADVANCED BY THE ASSESSEE OUT OF ITS OVERDRAFT ACCOUNT. REGARDING THE BALANCE AMOUNT OF RS. 8,50,000/ - , LD. CIT - ( A ) DIRECTED THE ASSESSING OFFICER TO INFORM TO THE ASSESSING OFFICER OF THE BROTHER OF THE ASSESSEE. REGARDING INTEREST AMOUNT ALSO, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO TAX ON RECEIPT BASIS. IN OUR OPINION, THE DIRECTION OF THE LD. CIT - ( A ) ON THE ISSUE IN DISPUTE IS WELL REASONED AND WE DO NOT FIND ANY ERROR IN THE SAME AND ACCORDINGLY , WE UPHOLD THE SAME. T HE GROUND OF THE APPEAL OF THE R EVENUE IS D ISMISSED. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 1 5 T H FEB . , 201 8 . S D / - S D / - ( BHAVNESH SAINI ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 5 T H FEBRUARY , 201 8 . RK / - (D.T.D) COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI