Pawan Kumar Bansal, New Delhi V. ACIT, New Delhi

ITA 742/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8122 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 03-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 10-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R B MEENA
• Assessee Lawyers: DR RAM SAMUJH
• Keywords: Loose papers
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 742/DEL/2014 AY: 20 07-08 SHRI PAWAN KUMAR BANSAL, VS ACIT, A-156, FIRST FLOOR, CENTRAL CIRCLE-16, NEW FRIENDS COLONY, NEW DELHI. NEW DELHI. (PAN: AEMPB1879C) (APPELLANT) (RES PONDENT) APPELLANT BY : DR. RAM SAMUJH, ADV. RESPONDENT BY : SHRI R.B. MEENA, CIT DR DATE OF HEARING: 03.02.2016 DATE OF PRONOUNCEMENT: 29.04.2016 ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THE PRESENT APPEAL IS PREFERRED BY THE ASSESSEE A GAINST THE IMPUGNED ORDER DATED 12.12.2013 PASSED BY THE LD. C IT(A)-VI, NEW DELHI CONFIRMING THE IMPOSITION OF PENALTY OF R S. 8,72,243/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAF TER CALLED THE ACT). 2. THE FACTS IN BRIEF ARE THAT AN ACTION U/S 132 WA S CARRIED OUT ON 26.07.2006. THE APPELLANT FILED HIS RETURN OF IN COME ON 31.10.2008 FOR THE A.Y. 2007-08 U/S 153A SHOWING NE T INCOME OF RS. 66,58,040/- AGAINST WHICH THE ASSESSEES INCOME WAS I.T.A. NO. 742/D/2014 ASSESSMENT YEAR 2007-08 2 ASSESSED AT RS. 7,46,58,035/- VIDE ORDER DATED 31.1 2.2008 PASSED U/S 153A/143(3) OF THE INCOME TAX ACT, 1961. AS A RESULT OF APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSM ENT ORDER DATED 31.12.2008, THE ADDITION OF RS. 20,00,000/- W AS DELETED. HOWEVER, THE LD. CIT (A) UPHELD THE ADDITION OF RS . 27,58,000/- AND THE AO IMPOSED A PENALTY OF RS. 8,72,243/- U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 AGAINST THE SAID UPHELD AM OUNT OF RS.27,58,000/-. 3. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE FIL ED AN APPEAL BEFORE THE CIT (A)- VI. THE LD. CIT (A), HOWEVER, DISMISSED THE APPEAL. THE ASSESSEE HAS APPROACHED THE TRIBUNAL A GAINST THE CONFIRMATION OF THE PENALTY. THE LD. AR SUBMITTED T HAT IN THIS CASE, CERTAIN LOOSE PAPERS WERE SEIZED WHICH WERE I N THE NATURE OF DUMB DOCUMENT. THE TOTAL AMOUNT IN SUCH LOOSE PA PER WORKED OUT AT RS.47,58,000/-. THE APPELLANT HAD DISCLOSED RS.20,00,000/- IN THE RETURN AGAINST THESE LOOSE PA PERS AND OTHER EVIDENCES FOUND DURING SEARCH. THE A.O. HAD M ADE AN ADDITION OF RS. 47,58,000/-BASED ON THESE LOOSE PAP ERS. THE LD. CIT (A) DELETED THE ADDITION TO THE EXTENT OF RS. 2 0,00,000/- BUT WRONGLY UPHELD THE ADDITION OF RS. 27,58,000/- AGAI NST WHICH AN APPEAL HAD BEEN FILED BEFORE THE ITAT WHEREIN THE I TAT HAD I.T.A. NO. 742/D/2014 ASSESSMENT YEAR 2007-08 3 SUSTAINED THE ADDITIONS ONLY TO THE EXTENT OF RS. 7 ,90,000/-. THE LD. AR ALSO SUBMITTED A CHART CONTAINING DETAILS OF THE LOOSE PAPERS SEIZED DURING THE SEARCH AND THE SAME IS BEI NG REPRODUCED AS UNDER- THE LD. AR SUBMITTED THAT AS PER THE ABOVE CHART, T HE FIGURE OF RS.36,30,000/- HAS ALREADY BEEN CUT. THE FIGURE OF RS.8,78,000/- FALLS IN A.Y. 2004-05, AS MENTIONED IN A16, PAGE 14 3. ON THE BASIS OF SUCH DATES, IF AT ALL THE ADDITION WAS REQ UIRED TO BE MADE, THE SAME COULD HAVE BEEN MADE FOR A.Y. 2004-05 AND 2006-07 AND NOT IN THE YEAR CONSIDERATION I.E. AY 2007-08. 4. THE LD. AR ALSO SUBMITTED THAT IN VIEW OF THE FI NDINGS OF THE ITAT E BENCH, NEW DELHI IN THE QUANTUM PROCEEDING S WHEREIN S. NO. ANNEXURE AND PAGE DATE MENTIONED CUT FIGURES UNCUT FIGURES TOTAL 1. ANNEXURE-6, PAGE 77 NO DATE 5,40,000.00 2,50,000.00 7,90.000.00 2. ANNEXURE-6, PAGE 79 13.05.2005 6,50,000.00 - 6,50,000.00 3. ANNEXURE-6, PAGE 80 12.05.2005 7,00,000.00 7,00,000.00 4. ANNEXURE-6, PAGE 81 10.12.2005 9,00,000.00 9,00,000.00 5. ANNEXURE-6, PAGE 82 14.05.2005 8,40,000.00 - 8,40,000.00 6. ANNEXURE-16, PAGE 143 24.12.2003 - 8,78,000.00 8,78,000.00 TOTAL 36,30,000/ - 11,28,000/ - 47,58,000/ - I.T.A. NO. 742/D/2014 ASSESSMENT YEAR 2007-08 4 ADDITIONS HAVE BEEN SUSTAINED TO THE EXTENT OF RS. 7,90,000/- ONLY, THE PENALTY SHOULD BE WORKED OUT AFRESH. HE ALSO SUBMITTED ON MERITS THAT THE ISSUE WAS A DEBATABLE ONE AND TH EREFORE NO PENALTY WAS IMPOSABLE IN VIEW OF THE DECISION OF TH E HON'BLE DELHI HIGH COURT IN THE CASE OF DCIT VS RAHUL SIEMSEEN EN G. PVT. LTD. 140 TAXMAN 100 (DELHI). 5. THE LD. DR, ON THE OTHER HAND, SUPPORTED THE OR DER OF THE LD. CIT (A) BUT IN ALL FAIRNESS ADMITTED THAT THE PENAL TY AMOUNT HAS TO BE REWORKED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PER USED THE MATERIAL BEFORE US. THE ITAT E BENCH, NEW DELHI IN ITS ORDER DATED 30.9.2014 IN I.T.A. NOS. 5201/DEL/2010 AND 5375/DEL/2010 HAS DISCUSSED THE QUANTUM ADDITIONS I N PARAGRAPH NOS. 12-15 OF THE ORDER WHICH ARE BEING R EPRODUCED FOR READY REFERENCE:- 12. SHRI PAWAN KUMAR BANSAL IS AN INDIVIDUAL WHO IS NOT CARRYING ON ANY BUSINESS IN HIS INDIVIDUAL CAPACITY . THE BUSINESS IS CARRIED ON BY CAPITAL GROUP OF COMPANIE S INCLUDING CAPITAL POWER SYSTEMS LTD. WHOSE CEO IS S HRI PAWAN KUMAR BANSAL, I.E., THE ASSESSEE. THE ORIGINA L DISCLOSURE MADE VIDE LETTER DATED 1ST SEPTEMBER, 20 06 WAS I.T.A. NO. 742/D/2014 ASSESSMENT YEAR 2007-08 5 FOR AND ON BEHALF OF CAPITAL POWER SYTEMS LTD. THE ASSESSEE SIGNED THE ABOVE LETTER IN HIS CAPACITY AS CEO OF THE SAID COMPANY. IN THE STATEMENT DATED 8TH SEPTEM BER, 2006, HE DEPOSED BEFORE THE REVENUE AUTHORITIES IN WHICH HE AFFIRMED THE VOLUNTARY DISCLOSURE OF ADDITIONAL INCOME OF RS.7 CRORES ON BEHALF OF CAPITAL GROUP OF COMPANIES . THUS, EVEN IN THE STATEMENT DATED 8TH SEPTEMBER, 2006, TH ERE WAS NO DISCLOSURE IN THE INDIVIDUAL CAPACITY OF SHR I PAWAN KUMAR BANSAL. IN ANOTHER STATEMENT DATED 12TH SEPTE MBER, 2006, HE REITERATED HIS EARLIER STATEMENT VIDE LETT ER DATED 1ST SEPTEMBER, 2006 AND STATEMENT DATED 8TH SEPTEMB ER, 2006. THUS, THE DISCLOSURE OF INCOME WAS BY CAPITAL GROUP OF COMPANIES. HOWEVER, IN REPLY TO ANOTHER QUESTION IN HIS STATEMENT DATED 12TH SEPTEMBER, 2006, HE DISCLOSED THE INCOME OF RS. 3,55,00,000/- IN HIS INDIVIDUAL CAPAC ITY AND THE INCOME OF RS. 3,45,00,000/- IN THE NAME OF SHRI MAHESH KUMAR GUPTA. THE REVENUE AUTHORITIES WHO RECORDED T HE STATEMENT DID NOT BOTHER TO POINT OUT THE CONTRADIC TION BETWEEN THE REPLY TO QUESTION NO.2 AND QUESTION NO. 4. IN REPLY TO QUESTION NO.2, HE REITERATED HIS LETTER DA TED 1ST SEPTEMBER, 2006 AND STATEMENT DATED 8TH SEPTEMBER, 2006 WHEREIN NO INCOME WAS DISCLOSED IN THE INDIVIDUAL N AMES OF SHRI PAWAN KUMAR BANSAL AND SHRI MAHESH KUMAR GUPTA. BUT, IN REPLY TO QUESTION NO.3, THE INCOME W AS DISCLOSED IN THE INDIVIDUAL NAMES. IT IS A SETTLED LAW THAT THE STATEMENT HAS TO BE CONSIDERED AS A WHOLE AND REVENUE CANNOT CHOSE TO RELY UPON ONLY ONE PART OF THE STATEMENT IGNORING THE OTHER STATEMENTS. MOREOVER, STATEMENT DATED 12TH SEPTEMBER, 2006 IS NOT THE ONL Y STATEMENT BUT IT IS ONLY ONE PART OF THE SERIES OF LETTER/STATEMENTS. IN THE STATEMENT DATED 8TH SEPTE MBER, 2006, SHRI PAWAN KUMAR BANSAL HAS STATED THAT THE DETAILS OF THE DISCLOSURE WOULD BE GIVEN AFTER GOIN G THROUGH THE SEIZED MATERIAL. THEREFORE, THE STATEMENT HAS A RELEVANCE WITH THE SEIZED MATERIAL AND STATEMENT IS MADE BY HIM TO DISCLOSE THE INCOME AS REPRESENTED BY THE SEIZED MATERIAL. NO OTHER CORROBORATIVE EVIDENCE TO SUPPOR T THE INCOME OF RS.7 CRORES IN THE HANDS OF THE ASSESSEE AND SHRI MAHESH KUMAR GUPTA IS FOUND. IN THE ABOVE CIRCUMSTA NCES, AFTER CONSIDERING THE CUMULATIVE EFFECT OF THE LETT ER DATED 1ST SEPTEMBER, 2006 AND BOTH THE STATEMENTS, THE PROPER COURSE WOULD BE TO DETERMINE THE UNDISCLOSED INCOME ON THE I.T.A. NO. 742/D/2014 ASSESSMENT YEAR 2007-08 6 BASIS OF LOOSE PAPERS FOUND AND SEIZED AT THE TIME OF SEARCH. THE CIT(A) DID THE SAME. 13. WE, THEREFORE, UPHOLD THE ORDER OF LEARNED CIT( A) TO THE EXTENT WHEREIN HE HELD THAT THE INCOME OF THE ASSES SEE I.E. SHRI PAWAN KUMAR BANSAL IS TO BE DETERMINED ON THE BASIS OF UNDISCLOSED INCOME AS PER THE NOTING ON THE LOOS E PAPERS. WITH THIS REMARK, THE REVENUES APPEAL VIDE ITA NO.5375/DEL/2010 IS DISMISSED. HOWEVER, THE ASSESSE E IN HIS APPEAL VIDE ITA NO.5201/DEL/2010 HAS ALSO DISPU TED THE CORRECTNESS OF THE INCOME DETERMINED ON THE BAS IS OF THE LOOSE PAPERS. THE BRIEF DESCRIPTION OF THE TRANSACT IONS OF VARIOUS PAGES OF SEIZED MATERIAL IS GIVEN BY THE AS SESSING OFFICER AT PAGE 4 OF THE ASSESSMENT ORDER WHICH REA DS AS UNDER: ANNEXURE A-6: PAGE 77 DETAILS OF DIFFERENT FIGURES IN DIFFERENT N AMES SHOWING RS.7.90 LACS, AND THE BACK SIDE IS SHARE TRANSACTION DETAILS OF G.S. CONTROL PVT. LTD. PAGE 80 SLIP CONTAINS THE DETAILS OF NAMES AND PAYM ENTS OF RS.7 LACS MADE ON 12.05.05. PAGE 81 SLIP CONTAINS THE DETAILS OF NAMES AND PAYM ENTS OF RS.9 LACS MADE ON 10.12.05. PAGE 82 SLIP CONTAINS THE DETAILS OF NAMES AND PAYM ENTS OF RS.8.40 LACS MADE ON 14.05.05. ANNEXURE A-16 PAGE 143 DETAILS OF INDORE & JABALPUR REGARDING CAS H SECURITY DEPOSIT OF RS.8,78,000/- AND OTHER MONETAR Y DETAILS AND BACK SIDE IS NAME AND ADDRESS. 14. FROM THE ABOVE, IT IS EVIDENT THAT PAGES 80, 81& 82 DO NOT BELONG TO THE YEAR UNDER APPEAL. THE ACCOUNTING YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION IS 1.4.2006 TO 31.3.2007 WHILE ALL THE THREE DOCUMENTS I.E., PAGES 80, 81 & 82 PERTAIN TO THE ACCOUNTING YEAR 1. 4.2005 TO 31.3.2006. THEREFORE, THE ADDITION SUSTAINED BY THE LEARNED CIT(A) VIDE PAGES 80, 81 & 82 IS DIRECTED T O BE DELETED. 15. SO FAR AS PAGE 77 IS CONCERNED, THE ASSESSING OFFICER HAS NOT GIVEN THE DATE OF THE SAID TRANSACTION. HOW EVER, THE COPY OF THE LOOSE PAPER IS GIVEN AT PAGE 46 OF THE I.T.A. NO. 742/D/2014 ASSESSMENT YEAR 2007-08 7 ASSESSEES PAPER BOOK FROM WHICH WE FIND THAT VARIO US NAMES ARE WRITTEN, AMOUNT IS WRITTEN AND NO DATE IS GIVEN ON ANY OF THE TRANSACTIONS. THE TOTAL OF SUCH TRANS ACTIONS WAS RS. 7,90,000/-. NO EXPLANATION RELATING TO NATU RE OF THOSE TRANSACTIONS IS GIVEN BY THE ASSESSEES COUNS EL AT THE TIME OF HEARING BEFORE US. THEREFORE, IN OUR OPINIO N, THE ADDITION OF RS. 7,90,000/- IN THE HANDS OF ASSESSEE DUE TO VARIOUS TRANSACTIONS RECORDED AT PAGE 77 OF ANNEXUR E A-6 IS REQUIRED TO BE MADE 7. IT IS SEEN THAT THE QUANTUM ADDITION HAS BEEN CURTAILED TO RS. 7,90,000/- ONLY BY THE ITAT AND WE CONCUR WITH THE SUBMISSIONS OF THE LD. AR THAT THE PENALTY SHOULD A LSO BE REWORKED ON THIS AMOUNT FINALLY SUSTAINED. THE LD. AR HAS ALSO SUBMITTED A CHART SHOWING DETAILS OF FIGURE IN SEIZ ED MATERIAL (PRODUCED ELSEWHERE) AND HAS SUBMITTED THAT OUT OF THE AMOUNT OF RS. 7,90,000/- SUSTAINED BY THE ITAT, RS. 5,40,0 00/- IS TO BE EXCLUDED AS IT IS THE CUT AMOUNT AND THE REMAINING AMOUNT OF RS. 2,50,000/- IS COVERED BY THE ALREADY DISCLOSED A MOUNT OF RS. 20,00,000/-. IN VIEW OF THE SUBMISSIONS MADE BY T HE LD. AR, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE T HE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR A DE NOVO CONSIDE RATION OF THE ISSUE AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE TO PRESENT HIS CASE. I.T.A. NO. 742/D/2014 ASSESSMENT YEAR 2007-08 8 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL, 2016. SD/- SD/- (N.K. SAINI) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED: THE 29 TH OF APRIL, 2016 GS COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 4. DR, ITAT BY ORDER ASSTT. 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