Varun Gupta, New Delhi V. ITO, Ward-47(4), New Delhi

ITA 7058/DEL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7726 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 05-11-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: A K JAIN
• Keywords: Set aside
• Section: 234B; 250; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER ITA NO. 7058/DEL/2018 ASSESSMENT YEAR: 2006-07 VARUN GUPTA C/O ANIL JAIN DD & CO., CAS, 611, SURYA KIRAN BUILDING, 19-K.G. MARG, NEW DELHI. PAN NO. AEPPG7835J VS ITO WARD 47(4) NEW DELHI. APPELLANT RESPONDENT ASSESSEE BY SH. A.K. JAIN, FCA REVENUE BY SHRI S.L. ANURAGI, SR. DR ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(APPEALS)-16, NEW DELHI DATED 21.08.2018 FOR AY 2006- 07. 2. GROUND NOS. 1 & 2 OF THE APPEAL ARE GENERAL IN N ATURE AND, THEREFORE, DOES NOT REQUIRE SEPARATE ADJUDICATION B Y ME. 3. IN GROUND NO. 3 OF THE APPEAL THE GRIEVANCE OF T HE ASSESSEE IS THAT THE CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS. 45,66,602/- RELYING ON THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S BALAJI PERFUMES AND COMPUTING THE INCOME AT RS. 48,60,000/ -, WHEREAS DATE OF HEARING 10.04.2019 DATE OF PRONOUNCEMENT 25.04.2019 2 ITA NO. 7058/DEL /2018 THE APPEAL OF THE REVENUE IN THE ASSESSEES OWN CAS E WAS DISMISSED BY THE TRIBUNAL. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE AO OBSE RVED AS UNDER: THE ASSESSEE HAS MOVED APPLICATION U/S 154 OF THE INCOME TAX ACT, 1961 ON 19.09.2017 SUBMITTING AS UN DER: WHILE REVIEWING THE ORDER PASSED U/S 250 DATED 16.05.2017 FOR AY 2006-07 WHICH WAS RECEIVED ON 11.09.2017 WE HAVE OBSERVED THAT IN THE ORDER U/S 250 ERRONEOUSLY ADDITION OF RS. 45,66,602/- HAS BEE N MADE WHEREAS THE DEPARTMENTS APPEAL ITA NO. 3655/DEL/2011 HAS BEEN DISMISSED BY THE HONBLE ITAT DELHI BENCH. ACCORDINGLY, THE ABOVE SAID ADDI TION SHOULD NOT HAVE BEEN MADE. NOW YOUR KIND HONOUR IS REQUESTED TO PLEASE RECTIFY THE SAME AND REDUCE THE DEMAND. A COPY OF ORDER PASSED U/S 250 AND COPY OF ITAT ORDER IS ENCLOSED FOR YOUR KIND CONSIDERATION. THE APPLICATION OF THE ASSESSEE HAS BEEN CONSIDERE D IN THE LIGHT OF FACTS OF THE CASE AND FINDING OF THE HONB LE ITAT GIVEN IN THE COMBINE ORDER IN ITA NOS. 3655/DEL/201 1, 935/DEL/2010 AND 1013/DEL/2010 PASSED ON 10.06.2017. IN THE ABOVE CITED COMMON ORDER WHILE DECIDING THE ITA NO. 935/DEL/2010 THE HONBLE ITAT HAS OBSERVED THAT : UNDISPUTEDLY, M/S BALAJI PERFUMES OWNED/RUN THE BUSINESS OF ABOUT FOUR MONTHS AS PER ADMISSION MADE BY ABHAY GUPTA RELIED UPON BY THE AO TO COMPLETE ASSESSMENT WHICH HAS BEEN FURTHER ENDORSED BY VARUN GUPTA REGARDING TURNOVER OF RS. 4,00,00,000/- APPROXIMATELY DURING THE FY 2005-06. ADMISSION MADE BY ABHAY GUPTA AND VARUN GUPTA RELIED UPON BY AO TO COMPLETE THE ASSESSMENT MAKES IT APPARENTL Y CLEAR THAT FOR REMAINING 8 MONTHS, THE BUSINESS WAS OWNED BY VARUN GUPTA. WHEN THIS FACT HAS NOT BEEN DISPUTED BY THE REVENUE, THE CIT(A) HAS RIGHTLY ACCOUNTED THE TURNO VER IN THE CASE OF ASSESSEE FIRM FOR FOUR MONTHS I.E. 1 /3 RD OF 3 ITA NO. 7058/DEL /2018 RS. 4,00,00,000/- AND REMAINING UNACCOUNTED TURNOVE R OF RS. 2,70,00,000/- OF M/S BALAJI PERFUMES HAS BEE N ACCOUNTED FOR IN THE HANDS OF SHRI VARUN GUPTA. THE ORDER WHICH ASSESSEE HAS SOUGHT TO BE RECTIFIE D HAS BEEN PASSED DULY FOLLOWING THE OBSERVATION OF THE H ONBLE ITAT AS CITED ABOVE. HENCE, THE ASSESSEES APPLICA TION FOR RECTIFICATION IS FOUND TO BE NON TENABLE AND BEING REJECTED. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 6. THE CIT(A) HAS DECIDED THE ISSUE AS UNDER: GROUND NO. 3: I HAVE CAREFULLY EXAMINED THE SUBMISSION OF THE APPELLANT, OBSERVATION OF THE AO MADE IN ORDER PASSED U/S 154 AND THE APPEAL EFFECT ORDER. I HAVE ALSO E XAMINED THE ORDER PASSED BY THE HONBLE ITAT DELHI IN THE C ASE OF THE APPELLANT AND ALSO IN THE CASE OF M/S BALAJI PE RFUMES PARTNERSHIP FIRM. IN APPEAL THE LD. AR ARGUED THAT THE AO HAS NOT CO RRECTLY UNDERSTOOD THE ORDER OF THE ITAT AND ALSO NOT GIVEN CORRECT APPEAL EFFECT TO THE ITAT ORDER. I HAVE PERUSED TH E ORDER OF THE HONBLE ITAT. IN THIS CASE THERE IS NO DISPUTE THAT ITAT HAS CONFIRMED THE ADMISSION OF UNACCOUNTED TURNOVER OF RS. 4 CRORES FOR THE YEAR UNDER CONSIDERATION. OUT OF THAT RS. 1.30 CRORES IS CONFIRMED IN THE HANDS OF M/S BA LAJI PERFUMES AND THE BALANCE RS. 2.70 CORRES FOR 8 MONT HS IN THE HANDS OF SHRI VARUN GUPTA. THE ITAT HAS ONLY CONFIRMED THE GP RATE APPLIED ON THIS TURNOVER TO T HE EXTENT OF 18% NOT 25% WHICH WAS ADOPTED BY THE AO. I AM O F THE CONSIDERED VIEW THAT THE AO HAS CORRECTLY INTERPRET ED THE ITAT ORDER AND HE HAS ADDED 18% OF RS. 2.70 CRORES IN THE HANDS OF APPELLANT WHILE GIVING APPEAL EFFECT WHICH COMES TO RS. 45,66,602/-. WHEN THE ENTIRE AMOUNT OF UNACCOUNTED SALE ADMITTED DURING THE COURSE OF SEAR CH, HAS BEEN UPHELD BY THE ITAT, THEN THE AO HAS TO GIV E EFFECT IN THE HANDS OF SHRI VARUN GUPTA BY APPLYING 18% OF GP. THE SAME HAS BEEN DONE BY THE AO BY APPLYING 18% TO 2.70 CRORES UNACCOUNTED TURNOVER WHICH COMES TO RS. 4 ITA NO. 7058/DEL /2018 45,66,602/-. SO FAR AS CONFIRMATION OF CIT(A) ORDE R DELETING THE ADDITION OF RS. 1 CRORES ON THE BASIS OF STATEM ENT OF VARUN GUPTA IS CONCERNED, THE ITAT HAS CATEGORICALL Y STATED THAT WHEN INCOME OF BALAJI PERFUMES AND VARU N GUPTA FOR FY 2005-06 HAS ALREADY BEEN ASSESSED ON T HE BASIS OF STATEMENT OF ABHAY GUPTA, THE ADDITION AGA IN ON SOLITARY STATEMENT OF SH. VARUN GUPTA CANNOT BE MAD E. THEREFORE, SEPARATE ADDITION OF RS. 1 CRORE IN THE HANDS OF VARUN GUPTA HAS BEEN DELETED BY THE ITAT. IN THE P RESENT CASE THE AO HAS ONLY GIVEN EFFECT BY TAKING 18% GP OF 2.70 CRORES OF UNACCOUNTED SALE IN THE HANDS OF VARUN GU PTA. THEREFORE, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE AO, THEREFORE, THE APPEAL OF THE APPELLANT IS DISMISSED . GROUND NO. 1, 2 & 4 ARE GENERAL. IN THE RESULT, THE APPEAL IS DISMISSED. 7. BEFORE US, THE ONLY ARGUMENT OF THE AR OF THE AS SESSEE IS THAT THE AO AS WELL AS THE CIT(A) ERRED IN CONFIRMING TH E ADDITION IN THE HANDS OF THE ASSESSEE WHEN THE TRIBUNAL IN THE APPE AL FILED BY THE REVENUE HAS DISMISSED THE APPEAL OF THE REVENUE BY GIVING FOLLOWING FINDING: 23. AO MADE ADDITION BY ESTIMATING THE BUSINESS I NCOME AT RS.1 CRORE ON THE BASIS OF SURRENDER. LD. CIT(A ) VIDE IMPUGNED ORDER THRASHED THE ISSUE THREADBARE AND CA ME TO THE CONCLUSION THAT ASSESSEE HAS NOWHERE STATED IN HIS STATEMENT RECORDED ON 12.03.2006 THAT ENTIRE AMOUNT OF RS. 1 CRORE BELONGS TO HIM AND THE DECLARATION WAS MADE BY HIM ON BEHALF OF COMPLETE FAMILY. CIT(A) HAS ALSO OBSERVED THAT APART FROM STATEMENT DATED 22.03.2006 OF THE ASSESSEE, VARUN GUPTA, THERE IS NO DOCUMENT/MATERIA L ON RECORD TO CORROBORATE THE ESTIMATION OF INCOME OF M /S BALAJI PERFUMES AT RS. 1 CRORE BASED ON ABOVE SURRENDER. 24. FURTHERMORE, WHEN THIS FACT IS EXAMINED IN THE LIGHT OF THE ORDER DATED 14.12.2009 PASSED BY CIT(A) CHALLEN GED VIDE ITA NO. 935/DEL/2010 DECIDED BY THIS BENCH, TH E UNACCOUNTED TURNOVER OF RS. 2,70,00,000/- OF M/S BA LAJI 5 ITA NO. 7058/DEL /2018 PERFUMES FOR THE FY 2005-06 HAS ALREADY BEEN TREATE D IN THE HANDS OF VARUN GUPTA, ASSESSEE OF THE PRESENT C ASE. THE ORDER DATED 14.12.2009 (SUPRA) HAS ALREADY BEEN CONFIRMED BY THE TRIBUNAL IN ITA NO. 935/DEL/2010 T O THE EXTENT THAT OUT OF UNACCOUNTED TURNOVER OF RS. 3,50,00,000/- TO RS. 4,00,00,000/- DURING FY 2005-0 6 IN CASE OF M/S BALAJI PERFUMES, THE TURNOVER OF RS. 1,30,00,000/- HAS BEEN HELD TO BE IN THE HANDS OF M /S BALAJI PERFUMES BEING OWNER OF THE SAME FOR FOUR MO NTHS AND REMAINING UNACCOUNTED TURNOVER OF RS. 2,70,00,0 00/- HAVE BEEN HELD TO BE IN THE HANDS OF VARUN GUPTA, T HE ASSESSEE, WHO HAS ADMITTEDLY TAKEN OVER M/S BALAJI PERFUMES AS A PROPRIETOR FOR REMAINING EIGHT MONTHS OF FY 2005-06. FURTHER ADDITION OF RS. 1,00,000/- ON THE BASIS OF SOLITARY STATEMENT OF VARUN GUPTA CANNOT BE MADE. 25. SO, WE ARE OF THE CONSIDERED VIEW THAT WHEN INC OME OF M/S BALAJI PERFUMES AND VARUN GUPTA FOR FY 2005- 06 HAS ALREADY BEEN ASSESSED ON THE BASIS OF STATEMENT OF ABHAY GUPTA RECORDED ON HIS OWN BEHALF AND ON BEHAL F OF HIS OTHER FAMILY MEMBERS WITH THEIR CONCURRENCE INC LUDING VARUN GUPTA, AS DISCUSSED IN THE PRECEDING PARAS IN ITA NO. 935/DEL/2010, ON PRORATA BASIS I.E. FIR FIRST F OUR MONTHS, THE TURNOVER TO THE TUNE OF RS. 1,30,00,000 /- HAS BEEN ATTRIBUTED TO M/S BALAJI PERFUMES AND FOR REMA INING EIGHT MONTHS, THE SAID TURNOVER OF RS. 2,70,00,000/ - HAS BEEN ATTRIBUTED TO VARUN GUPTA, THE ASSESSEE, THE A DDITION AGAIN ON THE SOLITARY STATEMENT OF VARUN GUPTA CANN OT BE MADE AND CIT(A) HAS RIGHTLY DELETED THE SAME. SO, WE FIND NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNE D BY THE LD. CIT(A) SO FAR AS ADDITION OF RS. 1 CRORE ON THE MER E STATEMENT OF VARUN GUPTA IS CONCERNED. 8. IT WAS, THEREFORE, THE PRAYER OF THE LD. AR TO R EMAND THE MATTER BACK TO THE FILE OF AO FOR GIVING EFFECT TO THE ORDER OF THE TRIBUNAL. 6 ITA NO. 7058/DEL /2018 9. THE DR HAD NO OBJECTION TO THE ABOVE SUBMISSION OF THE AR OF THE ASSESSEE. 10. IN VIEW OF THE ABOVE SUBMISSIONS MADE BY THE AR OF THE ASSESSEE, I SET ASIDE THE ORDERS OF THE LOWER AUTHO RITIES AND RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR GIVING EF FECT TO THE ORDER OF THE TRIBUNAL DATED 10.02.2017 PASSED IN ITA NO. 365 5/DEL/2011. THUS, THIS GROUND OF APPEAL IS ALLOWED FOR STATISTI CAL PURPOSES. 11. GROUND NO. 4 THE AR OF THE ASSESSEE HAS CHALLEN GED THE CHARGING OF INTEREST U/S 234B AND 220(2) OF THE ACT . 12. AT THE TIME OF HEARING, NO ARGUMENTS WERE ADVAN CED BY THE AR OF THE ASSESSEE ON THIS GROUND OF APPEAL. THERE FORE, THIS IS DISMISSED FOR WANT OF PROSECUTION. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25/04/2019 SD/- (N.S. SAINI) ACCOUNTANT MEMBER DATED: 25.04.2019 *KAVITA ARORA 7 ITA NO. 7058/DEL /2018 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 24/04/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 24/04/19 25/04/19 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 25.4.19 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 25.4.19 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 25.4.19 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.4 .19 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER