Sh. Narender Singh Nagar, Ghaziabad V. DCIT, New Delhi

ITA 6949/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2980 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 24-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U C DUBEY SENIOR
• Keywords: Search and seizure; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE HONBLE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.6949/DEL./2014 (ASSESSMENT YEAR : 2011-12) SHRI NARENDER SINGH NAGAR, VS. DCIT, CENTRAL CIRCL E 15, B 56, INDUSTRIES SITE IV, NEW DELHI. SAHIBABAD, GHAZIABAD (UP). (PAN : AAVPN4993Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SALIL AGGARWAL, ADVOCATE REVENUE BY : SHRI U.C. DUBEY, SENIOR DR DATE OF HEARING : 09.11.2017 DATE OF ORDER : 07.12.2017 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, SHRI NARENDER SINGH NAGAR (HEREINAF TER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 01.10.2014 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, NEW DELHI QUA THE ASSESSMENT YEAR 2011-12 ON THE GROUNDS INTER ALIA T HAT :- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED BOTH ON FACTS AND IN LA W IN CONFIRMING THE ASSESSMENT FRAMED BY THE LEARNED ACI T CIRCLE 47(1), NEW DELHI AT AN INCOME OF RS.71,54,39 5/- AS AGAINST THE DECLARED INCOME OF RS.67,04, 395/-. ITA NO.6949/DEL./2014 2 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH IN LAW AND ON FACT S IN CONFIRMING THE ADDITION OF RS.4,50, 000/- ON ACCOUN T OF ALLEGED UNEXPLAINED CASH FOUND DURING THE COURSE OF SEARCH PROCEEDINGS, WHICH IS CONTRARY TO MATERIAL AVAILABLE ON RECORD. 2.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED THE ADDITION BY FAILING TO APPRECIATE THAT THE SAID SUM OF CASH OF RS.4,50,000 /- WAS DULY EXPLAINED BY THE ASSESSEE - APPELLANT, AND , THEREFORE THE ADDITION SO SUSTAINED IS TOTALLY ILLE GAL, UNTENABLE AND UNWARRANTABLE. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : SEARCH AND SEIZURE OPERAT ION WAS CARRIED OUT IN PARAS GROUP OF CASES ON 09.09.2010 BY THE DI RECTOR OF INCOME TAX (INVESTIGATION), NEW DELHI. DURING THE SEARCH, A CASH AMOUNT OF RS.4,50,000/- WAS SEIZED FROM THE RESIDEN CE OF THE ASSESSEE. ON FAILURE OF THE ASSESSEE TO EXPLAIN TH E SOURCE OF RS.4,50,000/-, THE SAME WAS ADDED BACK TO THE INCOM E OF THE ASSESSEE AS UNDISCLOSED INCOME. 3. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS CONFIRMED THE ADDITION BY D ISMISSING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME U P BEFORE THE TRIBUNAL BY CHALLENGING THE IMPUGNED ORDER PASSED B Y LD. CIT (A) . 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ITA NO.6949/DEL./2014 3 ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. ASSESSEE IN ORDER TO EXPLAIN THE CASH AMOUNT OF RS.4,50,000/- SEIZED FROM HIS PREMISES FURNISHED TH E EXPLANATION BEFORE THE LD. CIT (A) AS UNDER :- 1.3.3 NOW WE WOULD LIKE TO DRAW YOUR KIND ATTENTIO N TO THE FACTS OF THE CASE. THE ASSESSEE IS ONE OF THE D IRECTORS OF THE COMPANY VRS FOODS LTD. AND IS ACTIVELY INVOL VED IN THE BUSINESS OPERATION (THIS FACT HAVE ALSO BEEN ADMITTED BY THE ASSESSING OFFICER WHILE PASSING TH E ORDER). THE COMPANY VRS FOODS LTD IS ENGAGED IN THE BUSINESS OF THE MANUFACTURING AND TRADING OF MILK AND MILK PRODUCTS. THE COMPANY VRS FOODS LTD HAS GIVEN IMPREST OF RS.5,00,000 /- TO SHRI NARENDRA NA GAR FOR DAY TO DAY OPERATION ON 7/09/2010. OUT OF THE IMPREST RECEIVED OF RS.5,00,000/-, IMPREST OF RS.50 ,000/- HAVE BEEN UTILIZED BY THE ASSESSEE AND BALANCE AMOU NT HAVE BEEN KEPT BY THE ASSESSEE AT THEIR RESIDENCE. HOWEVER ON 09/0912010 SEARCH OPERATION WAS CARRIED OUT BY THE INVESTIGATION WING AND AS SUCH THE CASH OF RS.4,50,000/- HAVE BEEN FOUND BY THE INVESTIGATION WING. THE IMPREST OR RS.5,00,000 GIVEN BY THE COMPA NY IS PART OF BOOKS OF ACCOUNTS OF THE COMPANY VRS FOO DS LTD. THE COPY OF CASH ACCOUNT OF VRS FOODS LTD AS W ELL AS COPY OF THE BALANCE SHEET OF VRS FOODS LTD IS ENCLOSED FOR YOUR KIND PERUSAL. 6. UNDISPUTEDLY, NO SUCH EXPLANATION HAS BEEN FURNI SHED BY THE ASSESSEE BEFORE THE AO NOR AT THE TIME OF SEARCH RA THER THIS EXPLANATION HAS SEEN THE LIGHT OF THE DAY FIRST TIM E ON 05.09.2014 DURING THE APPELLATE PROCEEDINGS. LD. CIT (A) REJE CTED THE EXPLANATION THAT THE CASH AMOUNT OF RS.5,00,000/- S EIZED IS OUT OF THE IMPREST MONEY OF VRS FOODS LIMITED IN THE HANDS OF VAIBHAV ITA NO.6949/DEL./2014 4 JAIPURIA AS THE ENTRY IN THE CASH BOOK WAS MADE AFT ER THE DATE OF SEARCH AND IS NOT A RELIABLE PIECE OF EVIDENCE. 7. LD. AR FOR THE ASSESSEE CONTENDED THAT WHEN THE AMOUNT OF RS.5,00,000/- HAS BEEN DULY RECORDED IN THE CASH BO OK OF M/S. VRS FOODS LIMITED HAVING BEEN GIVEN TO ASSESSEE AS IMPR EST MONEY BEING DIRECTOR OF M/S. VRS FOODS LIMITED, THE MEANI NGFUL ENQUIRY IS REQUIRED TO BE CONDUCTED. BUT THE CIT (A) HAS N OT CALLED ANY EVIDENCE TO DECIDE SUBMISSION MADE BY THE ASSESSEE. 8. PERUSAL OF THE CASH ACCOUNT BOOK, AVAILABLE AT P AGES 6 & 7 OF THE PAPER BOOK, THE BALANCE SHEET, PROFIT & LOSS AC COUNT ALONG WITH SCHEDULES OF M/S. VRS FOODS LIMITED APPARENTLY SHOW S THAT THE ASSESSEE WAS GIVEN IMPREST OF RS.5,00,000/- ON 07.0 9.2010 WHEREAS DATE OF SEARCH WAS 09.09.2010, THE CIT (A) WAS REQUIRED TO CONDUCT THE DISCREET ENQUIRY BY CALLING UPON EVI DENCE. PARTICULARLY IN THE FACE OF THE FACT THAT ACCOUNT B OOKS AND BALANCE SHEET OF M/S. VRS FOODS LIMITED HAVE BEEN DULY ACCE PTED IN THE ASSESSMENT OF M/S. VRS FOODS LIMITED COMPLETED U/S 143 (3) OF THE INCOME-TAX ACT, 1961, AVAILABLE AT PAGES 16 & 1 7 OF THE PAPER BOOK. 9. LD. CIT (A) BEING A QUASI-JUDICIAL AUTHORITY WAS REQUIRED TO DECIDE THE ISSUE AFTER COMPLETE APPRECIATION OF FAC TS BROUGHT ON RECORD AND NOT TO DECIDE THE ISSUE ON THE BASIS OF SURMISES THAT THE ITA NO.6949/DEL./2014 5 EXPLANATION HAS BEEN FILED AFTER A PERIOD OF FOUR Y EARS AND AS SUCH, IS AN AFTER-THOUGHT ONLY. 10. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT THE MATTER IS REQUIRED TO BE R EMITTED BACK TO THE LD. CIT (A) TO DECIDE AFRESH AFTER PERUSING THE DOCUMENTS BROUGHT ON RECORD BY THE ASSESSEE AS WELL AS AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ORD ER ACCORDINGLY. 11. RESULTANTLY, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 7 TH DAY OF DECEMBER, 2017. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) PRESIDENT JUDICIAL MEMBER DATED THE 7 TH DAY OF DECEMBER, 2017 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-II, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.